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4.21 pm

Mr. David Heath (Somerton and Frome): It is a genuine pleasure to follow the hon. Member for Nottingham, North (Mr. Allen). I agree with much of what he said, and if he had included Crown prerogative in his discussion of the role of enhanced scrutiny, I would be able to agree with all of it. He has done the House a great service.

I always become concerned on behalf of the Parliamentary Secretary at this stage because it seems that he needs such an encyclopaedic knowledge of the workings of government that it will be almost impossible for him to respond to all the points that hon. Members have raised. To assist his economy of thought, I will touch on elements that have already been discussed by the hon. Members for West Derbyshire (Mr. McLoughlin) and for South Swindon (Ms Drown).

My subject concerns almost the fundamental point of why we are here—to represent our constituencies in matters of taxation. The taxation that I have in mind is not nationally derived income tax, but the council tax, demands for which are currently landing on everybody's doorsteps. Our constituents would expect us to have an opportunity to discuss that before we adjourn for Easter.

As the hon. Member for West Derbyshire said, this year's council tax increases are unsustainable and unfair to individuals—as they were last year and the previous year, and have been for a considerable time. Those increases have the greatest impact on people with fixed incomes, limited incomes, or both—especially pensioners who find that whatever minimal increase they receive in their pensions is more than wiped out by their council tax demands.

The Government have two traditional responses when the size of council tax increases is discussed. First, they announce to an inquiring world that some completely mythical figure will be the average council tax increase across the country. This year they suggested that it would be about 5 or 6 per cent. Yet we have only to look at district and county council tax increases across all our shire counties to realise that that is a myth. The vast majority are having to impose an increase that is greater than the suggested average, and many are hugely in excess of that.

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The second defence is that those councils are uniquely incompetent or profligate. It is often suggested that that depends on local political control, and that a party in one part of the country has simply decided to impose massive increases on council tax payers in that area. That will not wash any more. It is not true, and the public increasingly understand that because newspapers are getting their heads around local government finance and are not prepared to accept Government announcements at face value. That applies to successive Governments, not only the current Administration.

The Daily Express announced an increase in council tax of 15 per cent. in a banner headline. The Times considered the reasons for the changes in council tax and the shift from national to local taxation. In my area, the Western Daily Press reports that all councils in the south-west face the same problems. It does not matter whether councils are controlled by Liberal Democrats, the Conservative party or the Labour party because they have the same problems. No council wishes to increase the council tax any more than it has to; every council finds that it has to do that, not to improve services or to add value to them but because the system functions in that way.

People in Somerset are upset by the increases there, but that also applies to our neighbours in Dorset. For example, the newly elected Conservative district council in Christchurch—elected on a manifesto commitment to cut council tax—has increased the council tax by more than 30 per cent. It did that because it had no choice; taxation has been transferred from national to local level. That applies to many councils.

Shire counties that are increasing their council tax by more than 20 per cent. include district councils in East Sussex, Hampshire, Kent, Lancashire, Northamptonshire, Cambridgeshire, Surrey, Worcestershire and Staffordshire. Such increases are universal.

Mr. Eric Forth (Bromley and Chislehurst): To help our deliberations, let me give the example of Bromley borough council, where a Liberal Democrat-Labour coalition managed to increase the council tax by 35 per cent. in the past three years. The Conservatives regained control last summer and announced an increase of 4.5 per cent. for this year, as well as the ridiculous Assembly surcharge. How has it managed to do that?

Mr. Heath: The right hon. Gentleman shows what a lottery the council tax is. One Conservative council increases it by more than 30 per cent. and others decrease it. For example, Islington and Liverpool, which are urban, Liberal Democrat councils, have cut the council tax this year, unlike the Conservative council in Bromley. A system whereby decisions are taken nationally and based on a clearly defective formula is nonsensical.

I am making the same argument as the hon. Member for West Derbyshire when he objected to the impact on Derbyshire. The formula is currently dysfunctional. Local thrift and good management are not rewarded, and many councils face impossible decisions about providing services that people want. That is wrong. I shall not go into detail about Somerset because that would overtire hon. Members. There has also been an Adjournment debate on the subject.

The Government are in denial about social services expenditure and the effect of delayed discharges and closures of elderly persons' homes. They do not appear to

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understand the impact of what is happening, especially in the south-west and the south-east, on social services departments. It is no good saying that much more money has been spent and that the problem is therefore solved. It is not; the extra money was given with one hand and taken away with the other.

Flooding is another example of such denial. Everyone is aware of the effects of flooding over the last few years, and of the need to invest more in flood defences, yet the Government are not providing the cash for that. That is a matter of great concern.

Another small, but important illustration of this phenomenon was provided when I visited the Cary environmental site in my constituency last week. It is a marvellous area, and I put on my wellies and trudged through the bulrushes in the marshes, which have been created from a waste disposal site. The site has been restored, recovered and put to good environmental use—an excellent concept, brilliantly executed—in providing real environmental advantage and educational opportunities for children.

I was in the company of the chairman of the trust that runs the site, and he told me about his tee-shirt, which says on it, "Somerset Levels Mountain Rescue Team". For those who do not know the Somerset levels, the concept of a mountain there is a rather strange one. This was a joke. There is, however, a mountain of fridges—of all things—developing next door on the Dimmer waste disposal site, about which I have had my doubts for all sorts of reasons associated with its situation, rather than its management.

It is ludicrous that local authorities have to pay for the storage of mountains of fridges. It is estimated that it is going to cost this country £75 million this year to store them. Why? Because a Minister and our civil service could not, apparently, read the piece of paper that was put in front of them to sign by the European Union, and because they did not understand the consequences for the country of signing it. This will have an impact on local council tax payers, and on the environment, which could have been avoided but was not, because it was not foreseen, and because the Government have been slow to come forward with solutions.

Other Members wish to speak, so I shall draw my remarks to a close. I would, however, like to make just one more point. I have spoken at length about the aggregates levy in the past, because I represent the Mendip area and the limestone aggregate quarried from there supplies the products from which a great deal of the infrastructure of the south-east is probably built. The three counties of Somerset, Leicestershire and Derbyshire between them provide the majority of the stone that is quarried in this country.

I have my quarrels with the way in which the aggregates levy has been imposed, and is to be administered. I am greatly disturbed at the moment by the so-called sustainability fund, which was supposed to be the reason behind the levy. The argument was that people who lived near quarries suffered unacceptable detriment to their environment and amenities, and that the levy would be recycled to provide a solution to some of those problems. Apparently, however, the Government now intend to siphon off all the money into national funds for

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national purposes—all very worthy ones, I am sure, but it will not be used to make a jot of difference to the people who live cheek-by-jowl with the quarrying industry in the three counties that bear the brunt of its activities.

That cannot be right in principle, because that was not the basis on which the aggregates levy was sold to us. It cannot be right in detail, because the levy is due to come into effect in a couple of weeks' time and we still do not know how the sustainability fund will operate, which again shows extraordinary incompetence on the part of the Government. Furthermore, it cannot be right because, even if Somerset, Leicestershire and Derbyshire were to take up the offer on the table from the Government to have a certain amount of money top-sliced from the sustainability fund, that would still be less than half of what the Government had proposed, and less than half of the additional cost to those counties of the operations of their local authorities in terms of the effect of the aggregates levy on building in the counties.

This so-called environmental tax is, therefore, not going to have the desired effect at quarry level, for the reasons that we have debated at length. It will not even have the effect of environmental betterment on localities, because of the way in which the Government propose to operate the funds. I ask the Government to reconsider this issue as a matter of urgency, and I hope that this message will be delivered to the Treasury and to the Department for Environment, Food and Rural Affairs. I also hope that we will develop a system for funding local government that is transparent and fair, and that does not include the absurd addition of the area cost adjustment, which so distorts the funding systems in this country at the moment.

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