House of Commons
Wednesday 4 February 2004
The House met at half-past Eleven o'clock
PRAYERS
[Mr. Speaker in the Chair]
PRIVATE BUSINESS
London Local Authorities Bill [Lords]. (By Order)
Order read for resuming adjourned debate on Question,
- That the promoters of the London Local Authorities Bill [Lords] may, notwithstanding anything in the Standing Orders or practice of this House, proceed with the Bill in the present Session; and the Petition for the Bill shall be deemed to have been deposited and all Standing Orders applicable to it shall be deemed to have been complied with;
That, if the Bill is brought from the Lords in the present Session, a declaration signed by the agent shall be deposited in the Private Bill Office, stating that the Bill is the same in every respect as the Bill brought from the Lords in the last Session;
That the Clerk in the Private Bill Office shall lay upon the Table of the House a certificate, that such a declaration has been deposited;
That in the present session the Bill shall be deemed to have passed through every stage through which it passed in the last Session, and shall be recorded in the Journal of the House as having passed those stages;
That no further fees shall be charged to such stages.—[The Chairman of Ways and Means.]
Debate to be resumed on Wednesday 11 February.
Oral Answers to Questions
DEPUTY PRIME MINISTER
The Deputy Prime Minister was asked—
Local Government Finance (Elderly People)
1. Mr. Andrew Turner (Isle of Wight) (Con): If he will make a statement on the formula funding settlement component for elderly people. [152479]
The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister (Phil Hope): A new formula for older people's social services was introduced this year, 2003–04, following research and wide discussions with interested parties. The new combined older people's formula is a better reflection of the way in which social services are delivered to the elderly.
Mr. Turner : I thank the Minister for that answer. His formula provides Isle of Wight council with £82 a head
for old folks' deprivation and Hackney with £568 a head. Before he top-sliced the funding, the objective calculation for those councils, on the new formula to which he referred, was £544 and £1,031 respectively. Why has top-slicing cost old people in Hackney 45 per cent. of their entitlement but those on the Isle of Wight 85 per cent.?
Phil Hope: One criticism from authorities such as Isle of Wight council about the previous residential formula for older people was that it did not take account of the number of people that the authority was supporting in care homes. The new combined formula uses a new population measure calculated to include the number of over-65s resident in households plus the number of residents supported by the local authority. The new formula also includes a series of age and deprivation indicators, such as the numbers of elderly receiving income support or attendance allowance, the number of pensioners in rented accommodation and the number of elderly people with limiting long-term illnesses. That is a very different way of providing resources for local councils such as Isle of Wight, and it drives up council services. I might add that Isle of Wight has received a 7 per cent. increase in next year's grant.
Mr. Tom Harris (Glasgow, Cathcart) (Lab): Can my hon. Friend tell the House whether any of the formula funding settlement is used to pay for safety features such as sprinklers or smoke detectors in care homes? After the terrible events in Uddingston at the weekend, will his Department propose new measures to improve safety in care homes?
Phil Hope: I thank my hon. Friend for his question. First, may I say that our thoughts are with the families and friends affected by the terrible tragedy at Rosepark nursing home? I have spoken to my right hon. Friend the Member for Hamilton, North and Bellshill (Dr. Reid), who visited the home recently, and to the First Minister of the Scottish Parliament, and I made a written statement on the fire this morning. It is too early to speculate on its cause or on whether a sprinkler system would have prevented any loss of life. However, we will study closely the findings of the investigation now under way, and consider the implications for England and Wales.
I might add that we were already actively investigating the effectiveness of sprinkler systems in tackling fires in residential properties. A report of that work, which is being undertaken by the Building Research Establishment, will be published later this month. Sprinklers may well have a role to play in protecting homes for vulnerable groups such as children, elderly people and people with disabilities.
Balance of Funding Review
2. Ms Meg Munn (Sheffield, Heeley) (Lab): What progress has been made with the balance of funding review. [152480]
The Minister for Local Government, Regional Governance and Fire (Mr. Nick Raynsford): The balance of funding review is making good progress, and is now looking at a number of proposals, suggested in the
public consultation, for reforming current local authority funding arrangements. The review will report in summer 2004.
Ms Munn : I thank my right hon. Friend for his answer. I understand that one option being considered is local income tax, which is particularly favoured by the Liberal Democrats. I urge him to ensure that the administrative difficulties of such an arrangement are fully explored, including what it would entail and its likely cost. I am sure that he would not want to repeat any of the problems of the poll tax.
Mr. Raynsford: I can confirm to my hon. Friend that we are considering a range of options proposed during the consultation, including the suggestion of a local income tax. However, although we are ready to look at options that will take greater account of people's income, unlike the Liberal Democrat party, we are not seduced by back-of-the-envelope calculations and unrealistic assumptions about administrative costs. The Lib Dem proposals for a local income tax would not only create huge administrative complexities and costs but open serious loopholes, enabling large numbers of people, including some of the wealthiest in the country, to evade any contribution to the cost of local services. That is not a sensible way forward.
Mr. David Curry (Skipton and Ripon) (Con): It is nice to see that the Minister had prepared such a good impromptu response to that question. Does the review include an examination of capping powers? Does he intend to cap every council and preceptor, with the exception of combined fire authorities, that seeks an increase in council tax revenue of more than 5 per cent?
Mr. Raynsford: The right hon. Gentleman will know that the balance of funding review is looking at the long-term issues relating to the balance of funding between central and local government sources. The specific issue of capping is topical, for obvious reasons. The Government have made it clear that we expect all authorities, including fire and police authorities, to budget prudently. We have also made it clear that we expect local authorities to look for council tax increases in low single figures, and I have already written to some 54 authorities that have indicated that they were considering unreasonably large increases. We take our responsibilities seriously, and we are determined to ensure that the levels of council tax are brought down so that people are not confronted with unreasonably high tax demands.
Mr. Curry: That is an interesting choice of words. The Minister is now talking about budgeting prudently. A few weeks ago, he was waving a big stick at anyone who proposed an increase of more than "low single figures"—that was the expression that he used over and over again. He has sent out letters to some councils that are proposing increases of barely more than 5 per cent. and to others proposing increases in the teens. However, some councils that propose increases in the teens have not received a letter. Who is going to get all these billets-doux? Should not the Minister employ a better cuttings service, so that he can find out more about what is
happening? When is he going to send a billet-doux across the river to the new Labour candidate for the mayoralty of London?
Mr. Raynsford: It is appropriate for the right hon. Gentleman to talk about getting a better cuttings service, given the Conservatives' record in power of cutting services. [Interruption.] That was not a rehearsed answer, either. We have written to 54 authorities about which we have had indications that they might be considering increases in excess of 5 per cent. That is not necessarily an indication of the level at which we will cap, but it is right that authorities should be aware that the Government attach great importance to achieving increases in low single figures. That is the basis on which I have written to those authorities, and if there are others considering large council tax increases to whom I have not already written, I hope that the right hon. Gentleman will help to supply that information in respect of Tory authorities—which are among those proposing the highest increases—and I will be very happy to write to them.
Andrew Bennett (Denton and Reddish) (Lab): Will my right hon. Friend consider placing in the Library the working documents for the balance of funding review? Will he also make it clear that we shall continue to have a problem with local government finance until someone can come up with a practical, buoyant and progressive system of local taxation?
Mr. Raynsford: All the working papers for the balance of funding review are already on our website, and I shall have no difficulty in meeting my hon. Friend's request for copies to be placed in the Library. As I said in response to an earlier question, we are looking at a range of options, including those that would allow greater consideration to be given to income, but I would not want him to underestimate the complexities involved in the Liberal Democrat proposal to substitute a local income tax for the current council tax. The whole field of local government finance is littered with examples of over-optimistic and ill-thought-out proposals for change that have produced perverse and unsatisfactory consequences. The Conservatives were responsible for the poll tax; the Liberal Democrats seem to be rushing into a rather similar proposal. We will look at the matter prudently and take decisions based on a sensible appraisal of realistic options.
Mr. Edward Davey (Kingston and Surbiton) (LD): I am glad that the Minister is looking at our proposals so carefully. If he wants to work with me, I would be happy to take him to those countries that have a local income tax system that is cheaply administered, fair and effective. Will he comment on a document on his Department's own website, produced by the New Policy Institute, which talks about the effects of council tax band revaluation in 2007? In particular, will he comment on the finding that council tax bills for Londoners in band C properties will increase by an average of 15 per cent. because of revaluation alone, while bills for those in band H properties will remain the
same? Does he think that that is fair? If not, why do not the Government save the £200 million cost of the revaluation and scrap this unfair tax?
Mr. Raynsford: I am glad that the hon. Gentleman has looked at the evidence on the website relating to the items discussed at our last balance of funding review. Perhaps he would like to go further and consider the detailed analysis of the New Policy Institute, which suggested various amendments to the current banding system to address exactly the problem that he has identified. It is because we are looking seriously and intelligently at problems, and seeking ways of finding effective solutions, that we will come up with sensible suggestions, rather than the half-baked proposals that the hon. Gentleman's party comes up with.
Mr. Jon Owen Jones (Cardiff, Central) (Lab/Co-op): Will my right hon. Friend reject as completely unfair and unprogressive any system of taxation that allowed millionaires to live in mansions and pay no council contributions at all, while hard-working families with modest means would pay thousands of pounds more?
Mr. Raynsford: I can give my hon. Friend a very simple answer: yes.
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