Previous SectionIndexHome Page

Mr. Dennis Skinner (Bolsover): Is my right hon. Friend aware that in Derbyshire, Bolsover and areas that used to have a lot of pits but now have none, unemployment is still the order of the day? In my part of Derbyshire, we have got a big job to do if we are to provide jobs for the future. Will the settlement ensure that people can get on with infrastructure projects like junction 29A, which could provide 9,200 jobs in the north of the county? One thing is certain—the settlement is far in excess of those in the 1980s. Five Tory MPs for Derbyshire used to get up on a day like today and demand cuts in the rate support grant for their own county. Those days, thank God, are far behind us. What is the settlement today?

Mr. Byers: For a number of years, my hon. Friend has been a powerful advocate for Derbyshire and Bolsover. I am pleased to tell him that there will be a 6 per cent. increase for Derbyshire; an extra £21 million will go to Derbyshire county council, which the county will welcome. In addition, it will not lose as a result of scaling back; it will be able to retain £875,000 as part of today's settlement. That is a good settlement and it is good news for parents, teachers and the communities in Derbyshire. I know that for many years Derbyshire has felt that it has not had a fair deal from the local government settlement, but we have done our best for the county today.

My hon. Friend mentions junction 29. I have been made acutely aware of that. I suggest that he waits for the local transport settlement next week, and I hope that he will be as pleased then as he is today.

Mr. Don Foster (Bath): Will the Secretary of State acknowledge that councils throughout the country will be disappointed that we have had another settlement based on the same outdated, flawed, virtually impenetrable and unfair system? I welcome his belated statement that next year there will be a different system.

Despite all the right hon. Gentleman's talk of setting councils free, will he acknowledge that the settlement represents a tightening of the Government's iron grip on local councils? It increases the level of special and specific grants by 15 per cent., which means that the proportion of Government funding that comes through those grants is 22.8 per cent. Will the Secretary of State also acknowledge that local councils will have to find well

4 Dec 2001 : Column 174

over £1 billion of their own money to provide their share of matching funds so that they can access even the standards funds?

Is it not the case that the Liberal Democrats and the Treasury are better than anyone else at predicting council tax rises? Does the Secretary of State accept that in the Red Book, the Treasury shows that council taxes are set to rise next year by 6.8 per cent.? The Minister for Local Government shakes his head, but that is what the Red Book shows. Does the Secretary of State acknowledge that while Government spending is likely to go up by 6.2 per cent., council tax payers will have to increase their spending by 6.8 per cent. and that businesses will contribute by 9.8 per cent.?

On council taxes—a matter that was raised by the hon. Member for Maidenhead (Mrs. May)—will the Secretary of State confirm that based on band D, which the Conservatives always say is the best indicator, the council tax rises of Labour and Liberal Democrat authorities were 6.3 per cent. last year, while those of Tory authorities were a whopping 8.6 per cent.?

Will the right hon. Gentleman nevertheless confirm that social services departments will be bitterly disappointed by the settlement? Although the increase of £684 million may seem generous, when that is set against the more than £1 billion that social services departments are already spending above SSA, it is clear that many of them will fall far short in their ability to deliver high quality services to children, elderly people and other vulnerable groups.

Overall, the settlement is undoubtedly better than we would have expected under a Tory Administration, but it will still mean significantly higher council taxes, an inability to provide services to many of the most vulnerable, and another massive erosion of local democracy.

Mr. Byers: I begin by agreeing with the hon. Gentleman's figures for band D increases. I understand that in Labour and Liberal Democrat authorities, the rise in council tax was about 6.3 per cent. and that in Conservative authorities it was about 8.6 per cent., which gives the lie to the argument of the hon. Member for Maidenhead (Mrs. May).

On ring fencing, I agree with the hon. Gentleman: this year and in the settlement for next year, there will be a significant rise in ring-fenced funding going to local authorities. There will be extra money going in, but it will reflect the national priorities established by the Government. I believe that we have come to a stage where ring fencing has gone far enough. I would like to think that this will be the final year in which there is an increase in ring fencing. I hope that in subsequent years, it will be reduced as an element of local authority finance.

When hon. Members have the White Paper in a few weeks time, they will see that that is the direction in which we intend to go.

The hon. Gentleman was wrong about the details of the pre-Budget report, which referred to a 6.8 per cent. increase in council tax yield, rather than in council tax charges. The yield is increasing for a number of reasons, but mainly because more dwellings now come within council tax. We estimate that the number will increase by about 130,000 next year. The collection rate for council tax is also improving. It is increasing significantly and the yield will improve as a result.

4 Dec 2001 : Column 175

The hon. Gentleman raised specific concerns about social services. There will be an increase of some £680 million, or 6.5 per cent., in the standard spending assessment and ring-fenced grants. That sum will be seen as a genuine improvement by many people working in social services, to which it will make a very real difference. We do not, however, ignore the growing pressures on social services, which will need to addressed, especially in respect of care for the elderly and for children.

This is the final year in which the arrangements will operate under the present funding regime. I hope that the new regime to which we will move in 2003 will more accurately reflect the needs of individual local authority areas. That simply is not the case with the present funding formula, which is why we have had to introduce a minimum level for authorities, reflecting the unfairness of the present system. This is the last time that we shall do so. In the circumstances of the existing funding regime, we have produced a set of proposals that will be good news for council tax payers and excellent news for people who use council services.

Mr. Mike Hall (Weaver Vale): I welcome my right hon. Friend's statement, especially the £3 million extra for Halton borough council, which will be greatly welcomed in the local authority area that I share with my hon. Friend the Member for Halton (Derek Twigg). However, what would happen if the Government were to cut public spending to 35 per cent. of gross domestic product? What would be the impact on the local government settlement announced today, which provides a £3.3 billion increase? Would a cut be made?

Mr. Byers: That is exactly the implication of the Conservatives' spending position. They shed crocodile tears about the need to provide finances for local authority services, yet we know full well that their objective—it was stated by the shadow Chancellor and by the shadow Home Secretary during the election campaign—and hidden agenda is to make huge cuts in support for local authorities and other areas of public expenditure.

Opposition Members may shake their heads, but that is the reality and they cannot ignore the fact that that is the position of their party. If they want to reduce the percentage of GDP that goes into public spending, the implication is that public services will be affected. They cannot have it both ways. They seek to do so, but the public will see through them.

The good news for Halton is not only the increase that I have announced and our introduction of the minimum level, from which it will benefit, but the rather technical change that we have made in the way in which capital credit approvals are dealt with, from which it will also benefit.

Mr. David Curry (Skipton and Ripon): The right hon. Gentleman would do well to seek to repair his own credibility before he starts impugning that of other people. In all his cooing to local government about its freedoms, is he aware that we will this afternoon debate a Bill that will give the Government power to direct education spending? Would not his sweet words be more credible if

4 Dec 2001 : Column 176

the Government dropped that part of the Bill and made it clear that they would not attempt to hypothecate any form of spending? Furthermore, does he recognise that social services have a serious backlog of crises and that care homes have been trying to increase their fees because they cannot make money under the present level of funding? Many local authorities do not have the funding to meet those demands, and the consequence is that many old and vulnerable people now face a very uncertain future. That must be dealt with.

In his reforms, will he recognise that there are very serious problems in rural areas, especially in the aftermath of foot and mouth disease, and desist from the constant leaking of money from rural areas into Labour-controlled urban areas?

Next Section

IndexHome Page