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Mr. Nigel Waterson (Eastbourne): I thank the Minister for Local Government and the Regions for providing me with a copy of the statement in advance. I appreciate her observing the usual courtesy.
This is a bad week for local democracy. Today's statement has further undermined local government and local choices. Tomorrow, I understand, we shall see the local government Bill, in which the Government will no doubt persist in their attempt to impose structures on local government. It is also apparent that they are trying to downplay the significance of this announcement. A couple of days ago, they had a compliant Back Bencher table a question for written answer. It seems clear that plan A was to avoid making a statement in the House altogether. Indeed, the timing of the statement says it all: it shows, yet again, their contempt for Parliament, even though the statement is significant for millions of council tax payers up and down the country.
The Government talk about "stability"--that word appears about five times in the first few lines of the statement--and seem to think that, because no changes are proposed this year for the methodology of grant distribution, and because a previous announcement gave funding plans for three years, there is no need for any fuss. Surely the Minister can see that it is no consolation for councils, especially rural ones, that are being treated unfairly in year one to be told by Ministers that they will continue to be treated just as unfairly in years two and three. That means a three-year prison term for rural communities, with no escape and no time off for good behaviour.
May I give a cautious welcome to the Minister's announcements about business rate revaluation? We are pleased that there will be transitional relief, especially for smaller businesses, but it remains to be seen how dramatic the shifts in revaluations across the country will be. Why will the Government not embark on a fundamental review of business rates?
I have a number of questions on the specifics. Why does the Minister perpetuate the fiction that capping has been abolished? The Government maintain reserve powers to cap. In former times, at least local authorities knew the criteria in advance and could plan accordingly. Now they can only await the knock on the door in the middle of the night and the invitation to a ritual ticking off from the right hon. Lady. They are also intent on keeping so-called refined capping in the shape of the council tax benefit subsidy scheme. Will she acknowledge that the Local Government Association was right when it described that as
Even on the Government's figures, council tax will rise by twice the rate of inflation. An average band D household is paying £100 a year more in council tax than when the Government took office. Does the Minister accept that, as a result of the settlement, council tax payers
across the country will face steep council tax rises or cuts in services, or both? Does she also accept that there will be a nominal increase of just under 5 per cent., with some rises in double figures?
Why has £150 million of the extra money for education been stripped out of the budget and recycled as payment for teachers performance-related pay? Why is that not genuinely new money? Is the £64 million announced today really new money? Will the Government meet in full the costs of implementing the teachers Green Paper?
Last year, although we had above-inflation increases for social services, some boroughs social services SSAs decreased. Those included Hackney, Lambeth and Newham--three of Britain's most deprived boroughs.
Does the Minister accept that, despite some increase in funding this year, many social services departments will remain under great pressure? Does she realise that, across the country, needy people are being turned away by their local social services, which simply cannot cope with rising demand? Did she see the report only yesterday that one in 10 social services departments is already under- performing? Why is the figure for environment and culture below the inflation rate?
The Government are consulting on a "single capital pot", but when will they release councils from their hand-to-mouth existence and let them move away from capital expenditure being dealt with on a year-on-year basis?
Does the Minister accept that, over the course of this entire Parliament, the police will receive a real increase of less than 1 per cent.--with the consequence of falling police numbers and rising crime?
Are the Government wedded to specific grants because they give Ministers more power to impose their own agenda on local government? Should not local councils be left to make up their own minds about local priorities? Why do the Government want to stifle local choice?
How can the Government even begin to try to justify robbing the countryside of more than £500 million and letting London down by grabbing £300 million? Surrey has lost £27.5 million because of the Government's fiddling the funding formula, and Oxfordshire and West Sussex have both lost almost £20 million.
In Kent, in the current year, the SSA increase was 4.8 per cent., but the increase in Government grant was only 1 per cent.--a practice that is not always understood by council tax payers. Kent has also had to increase expenditure by 5.8 per cent. to meet national requirements on, for example, firemen's and teachers' salaries--
Mr. Damian Green (Ashford):
And asylum seekers.
This year, Kent expects a council tax increase of 5 per cent.
Finally, will the Minister clear up one mystery? On 29 October, she issued a statement saying that, because the announcement provided figures for three years, she would not receive delegations from local councils. Rather grandly, she said that she would receive submissions in writing or from local government bodies. However,
in answer to written questions tabled by me, and in correspondence, it has emerged that the Minister did not stick to that resolution for very long.
Only four or five days later, on 4 November, the Minister met a delegation from Hammersmith and Fulham, which just happens to be a Labour-controlled authority--[Interruption.] It is a serious matter. Initially, the meeting was denied by the Under-Secretary of State for the Environment, Transport and the Regions, the hon. Member for Stretford and Urmston (Ms Hughes), but the right hon. Lady kindly wrote to me very rapidly to put the matter right. I accept that the denial was a genuine error by the Under-Secretary, although I do not necessarily accept that such errors should be allowed to happen within the Department.
Will the Minister clarify the point for us? Will she accept delegations from Labour-controlled authorities? Would she stretch a point and occasionally meet a non-Labour-controlled authority? I call on her to jettison her absurd statement that she will not receive delegations. Surely she accepts that the whole point of a democracy is that Ministers should be available to meet the elected representatives of local people and hear their genuine concerns. Otherwise, why have Ministers at all?
Ms Armstrong:
I am concerned about the hon. Gentleman, who seems to have come to this House with amnesia. His statements today show that he has neglected the fact that the previous Tory Government were in power for 18 years and that they introduced the council tax and the uniform business rate. [Interruption.] We are all bored and fed up with it, but it is the reality, none the less.
Much of what the hon. Gentleman berated me about today was begun by the Tory Government. The changes that we are making have been overwhelmingly welcomed by local government, and by those outside who know and do not forget the travesty that the Tories wrought upon local government and local democracy in this country.
There was never any attempt to avoid a statement. I approached both of the main opposition parties early on--as the hon. Gentleman well knows, as I talked to him and to his right hon. Friend the Member for Wokingham (Mr. Redwood), the shadow Secretary of State. I said that we were more than happy to have a statement, but that we would not allow a statement to hold back the normal information that ought to go out to local authorities. We have worked exceptionally hard this year to get the information out earlier, so that local authorities are more in control of their budget processes.
We are having a statement today so that information is not delayed until next week. We want to get the information out as soon as possible so that local authorities have as much ability as possible to plan and develop their budgets. It is a pity that the hon. Gentleman wanted that to be delayed until next week.
Local government has overwhelmingly welcomed the period of stability. Those involved feel more in control of their budgets. They know that being able to plan over a three-year period with a clearly established framework has enabled them to engage more effectively with the public. They will continue to do so, so they can plan their spending and their priorities more effectively. Again, it is a pity that the hon. Gentleman is so out of touch with what is going on.
Opposition Members try to raise the subject of rural areas every year. However, it simply bears no relationship to the facts. We have treated all authorities fairly, whether urban or rural. The most sparsely populated authorities have received average SSA increases this year of 4.7 per cent., compared with an average of 4.4 per cent. for England as a whole. Shire areas have received average SSA increases of 4.7 per cent. Shire counties, which provide most of the services in shire areas, have received average SSA increases of 5 per cent. this year. Once again, reality has escaped Tory Members.
I am grateful for the hon. Gentleman's cautious welcome for our business rate proposals. He asked why there was no fundamental review of the uniform business rate. He seems to have forgotten that we have had a White Paper and consultation, and we announced that we would not change the uniform business rate. What I have announced today is a review of the valuation. The world would think that we were rather peculiar if we had another fundamental review within two years after the first one.
We believe that council tax benefit subsidy limitation operated in a more straightforward way than people anticipated at this time last year. We believe in the principle that, where there are excessive increases,the burden of those should not be placed wholly on the tax payer.
It would be cruel to say too much to the hon. Gentleman about capping. We are seeking to establish an effective partnership with local government where we enable it to make decisions about its council tax. However, we reserve the right to intervene when council tax payers are suffering. That has been clearly accepted by local government and, as I say, it meant that last year we did not have to impose any capping. The hon. Member for Eastbourne also made spurious points about council tax rises. Council tax rises declined last year from 8.6 per cent. to 6.8 per cent. and I look for the continued exercise of such restraint from local government.
The hon. Member for Eastbourne obviously wanted to make a point about the £150 million loss of education funding before he had read the statement--but he then tried to recover. Money has been announced today that was not originally in the settlement but which will cover that sum, and the teachers Green Paper arrangements will be funded in full. Some £1 billion has been made available in the comprehensive spending review for that purpose.
I was amazed to hear the hon. Gentleman talk about needy people being turned away, because--as he knows--this settlement is far more generous than any his Government managed to give local government. What is more, he fell into the trap that the Tories fall into again and again--of confusing performance with the level of funding. If the hon. Gentleman had looked carefully at the figures announced yesterday, he would have seen that they demonstrated that half the authorities named yesterday by the Minister of State, Department of Health, my hon. Friend the Member for Barrow and Furness (Mr. Hutton), had gained from the changes made in funding last year, and half had lost. The relationship that the hon. Member for Eastbourne tried to describe does not exist. We are trying to improve performance and give councils the framework to do so through best value, so that they can ensure they get the best performance for the money spent.
The hon. Gentleman mentioned delegations. Some Opposition Members will know that over the years I have met them and their delegations. It has always been my practice and policy, whenever hon. Members request a meeting, to seek to agree to such requests. I do not hold all the meetings in the Department, because the visits frequently take place outside the formal consultation period and the Department could make very little response. I see the delegations in the House so that I do not take up civil servants' time and cost the taxpayer additional money.
"the nearly poor paying for the really poor"?
In contrast, our policy is to have no capping in the next Parliament. [Interruption.] I am glad that that is as popular with those on the Labour Benches as it is with my hon. Friends, so I shall say it again: our policy is to have no capping in the next Parliament.
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