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Mr. Oliver Heald (North-East Hertfordshire) (Con): On a point of order, Mr. Deputy Speaker. You will know that strong representations were made at last week's business questions that today's important business should not be taken on the shortest day of the week, especially as the business for the week was light. As you know, both last Thursday and this Monday the business did not carry and the time was not used. Could you bring that to Mr. Speaker's attention so that he can
use his influence to bring it to the attention of the Government and the usual channels, and try to protect the interests of Back Benchers for the future? You will know, Mr. Deputy Speaker, that not a single Conservative Back Bencher was able to speak in the important debate on the local government settlement.
Mr. Eric Forth (Bromley and Chislehurst) (Con): Further to that point of order, Mr. Deputy Speaker. Is it not bad enough that the Government scheduled business in a way that allowed very little time for it? They compounded that felony when the Minister for Local Government, Regional Governance and Fire spoke for an excessively long time. Twice, therefore, the Government managed to squeeze out Back Benchers, from their own party as well as Opposition parties. Can nothing be done to protect the House and Back Benchers from such activity by the Government?
Mr. Deputy Speaker: Order. The original point of order is not strictly a point of order for the Chair, but it is certainly a matter of concern for the Chair, whose interest is to protect the interests of Back Benchers. The hon. Member for North-East Hertfordshire (Mr. Heald) and the right hon. Member for Bromley and Chislehurst (Mr. Forth) will know that the Chair does not organise the business of the House. The House's agenda and the time allocated for it are usually determined through the usual channels. There is a difficulty, because when a time limit is imposed, which Mr. Speaker has been encouraged to do by the Modernisation Committee, Back Benchers take a cue and intervene on Ministers. If Ministers are generous in taking interventions, time on a day when there is at most half a day for business is very severely curtailed for Back Benchers. I am sure that Mr. Speaker will read Hansard and the points that Members have made. In essence, the matter must be resolved by amicable negotiation through the usual channels.
EUROPEAN UNION DOCUMENTS
Motion made, and Question put forthwith, pursuant to Standing Order No. 119(9)(European Standing Committees),
Trans-European Transport Network
- That this House takes note of European Union Document No. COM (03) 132, Commission Communication on developing the trans-European transport network: innovative funding solutions and interoperability of electronic toll collections systems and draft Directive on the widespread introduction and interoperability of electronic road toll systems in the Community; and endorses the Government's approach to discussions on this document.—[Paul Clark.]
Local Government Finance (Mid-Dorset and North Poole)
Motion made, and Question proposed, That this House do now adjourn.—[Paul Clark.]
6.16 pm
Mrs. Annette L. Brooke (Mid-Dorset and North Poole) (LD): I am extremely pleased to be able to make points directly to the Under-Secretary of State, Office of the Deputy Prime Minister, the hon. Member for Corby (Phil Hope) on behalf of my constituents. He will no doubt have heard all the previous debate and might be thinking, "Not more of the same." However, week after week, I receive letters from constituents who are extremely worried about future council tax increases; it is certainly the biggest single issue that is raised with me.
The second biggest issue is the provision of services locally, whether people are waiting to be rehoused, need better support from social services, want to know why the revenue funding per school pupil is much lower than in neighbouring Hampshire—about £100 per pupil—or why we do not have a more visible and accessible police force. It an important part of my representative role to tell the Minister about my constituents' deep concerns.
I should like to start by outlining briefly some of the characteristics of my constituency, which includes parts of four principal council areas—Poole unitary authority, East Dorset district council, Purbeck district council and Dorset county council. There are four parish councils and two town councils and area committees within Poole unitary authority, as well as the Dorset police and fire authorities. About two thirds of the population live in the urban area, but two thirds of the land area could be classed as rural.
From afar, my constituency would be judged an affluent area. The current level of unemployment is less than 1 per cent., so why do I stand up every year in the House and argue that my constituents have had a bad deal? In previous debates, I have focused on pensioners and I must make some further points today, bearing in mind that more than 20 per cent. of the population of Mid-Dorset and North Poole are of pensionable age.
The area has the characteristics of a low-wage and high house-price area, as was confirmed last May, when the Joseph Rowntree Foundation published a report entitled "Can Work—Can't Buy" on the affordability of homes in different parts of the country, taking into account the cost of living and wages. The report concluded, according to the press release, that
- "the asking price for modest homes in Purbeck, East Dorset or North Cornwall demands almost as big a share of the typical pay packet for local workers under 40 as higher priced homes in the fashionable London boroughs of Westminster, Camden and Islington."
On Monday this week, I was pleased to be able to attend the opening of Jobcentre Plus in Poole, and I was very impressed by the services on offer. Having been
invited to play with the job-search machines, I printed details of a few local jobs: "Branch advisers, 37.5 hours a week, £11,500 to £13,000 per annum"; "Production labourers, £5.50 per hour"; "Sales adviser, £3.87 to £5.22 per hour"; "Waiting staff, up to £5 per hour, depending on experience". Those examples are taken from just a preliminary look through what was on offer. There were plenty of jobs, but the problem was the salaries—although the picture is mixed, because wages are considerably higher in the public sector, IT and financial services.To put those characteristics in people terms, I should like to quote from some letters that I have received over the past week. Mr. W writes:
- "I understand that the council tax bill for Dorset is likely to be increased by a staggering 7 per cent. I feel that I must put on record my concerns with regard to such an increase, firstly we are told by Government that inflation is running at around 2 per cent. I myself have a fixed income and have no way of increasing it, so that I have to balance my affairs which is increasingly difficult when taking into account massive rises in local taxation".
- "Having been to several of the council tax public meetings I can see the County and District Councils have got a really difficult task to set the budget without losing too many services. The government formula does not appear to distribute funding in a fair way throughout the country. Despite being confirmed by the Audit Commission as an excellent authority, Dorset County Council's grant is one of the lowest in the country. How can it keep up its high standards? In addition there is talk of increases being capped at 5 per cent. This would surely terminate important services, I am particularly concerned about proposed cuts in the Outdoor Education Service, young people will be deprived of a valuable and integral part of their education".
- "I wish to add my voice to the many from Dorset who will be encouraging you to speak up for this lovely County. What a good place it is to live in? What a good County for its services. But we urge the Government to reward us with higher grants to encourage our Council and enable our older citizens to pay their Council Tax and live!"
On Saturday, I made a home visit to a family with three children living in a two-bedroomed first-floor flat with no garden—an East Dorset Housing Association property. The husband is a fully qualified social worker earning £18,000 per year. It is impossible for the couple to raise a big enough mortgage even to part buy/part rent a three-bedroom house in the area. The housing association has said that rehousing may take five years: the couple are desperate, but what can they do? The combination of the low wage economy, high house prices and a shortage of affordable housing is producing the saddest and most insoluble cases in my constituency. The couple went on to tell me how their standard of living would be further eroded by a big increase in council tax. Many constituents come to my surgery on manufacturing wages of around £13,000, in fear of what is ahead of them.
I believe that my constituents are suffering for the following reasons: there is inadequate funding for services from central Government; the shortfall in
funding puts extra pressure on the council tax, which is unrelated to the ability to pay; and the shortage of affordable housing forces young local people to move from the area or, in some cases, be trapped in unsuitable accommodation for long periods. The local councils cannot be judged as inefficient. Last year, Dorset was judged excellent, and Poole only one point less than excellent.Last year, in line with national trends and because of the implementation of the new formula, council tax increases were in double figures. This year extra windfalls, such as levying the council tax on second homes at 90 per cent., mean that council tax increases will be considerably lower. However, in an ideal world, the bulk of the second home council tax would have been used to support more affordable social housing. Instead, a large proportion is being used to keep the council tax down. In addition, Dorset county council is considering some drastic cuts in services. As well as outdoor education, which I mentioned earlier, a day centre for those with mental disabilities and libraries may be closed. Support for bus services may be reduced and day centres may be closed for one day a week. Any such cuts inevitably hit the most vulnerable residents.
Dorset county council receives both the lowest formula spending share and the lowest revenue support per head of population of all county councils. Council tax payers have to pay for 45 per cent. of spending, compared with 32 per cent. in the average county council. Dorset is the ninth lowest spending county council per head of population this financial year and cannot be judged as a high spender. It faces specific spending pressures in social services as a result of having the highest proportion of older people of all county councils.
Some of the problems that face Purbeck district council include financing the continuing deficits of the superannuation scheme and increasing responsibilities and demands from central Government. The 3 per cent. increase in Government grant is welcome, but it is simply not enough. The council cannot implement its recycling plan because of the additional costs that are likely to take the council into capping. Similar issues arise in East Dorset, including concerns about the cost of the new licensing regime.
The main additional expenditure for East Dorset is recycling, and it has plans for phased implementation. However, as in much of Dorset, recycling facilities are already good and the county therefore starts from a high base of 18 per cent. The Government have set new targets for East Dorset of 40 per cent. The council estimates that it will cost an extra £1 million to extend recycling to 40 per cent. of the district, but there are no additional grants or funds to help attain such a target. At a cost of approximately £30 per household, the district council faces a problem of phasing and spreading costs and implementation over a long period.
Poole is in a better position this year, and I hope that that is partly as a result of my previous representations. The Liberal Democrats ran the council efficiently until May last year. Windfall gains this year mean that the new administration will not face the previous year's
tight budgetary constraints. However, the council tax increase is likely to be considerably more than the rate of inflation.Concern remains about low funding for education. Poole primary school funding is the lowest in the country, despite the fact that there are deprived areas. One ward in my constituency is in the lowest deprivation quartile and there are pockets of deeper deprivation in the area. Earlier this year, a group of Poole head teachers met the Minister for School Standards, and I hope that he is dealing with some of their concerns. The head teachers were pleased with his attention to their anxieties.
Much uncertainty has been created in all councils because they do not know the position on capping. That is unhelpful for budgeting.
The overall increase in central grant of less than £2 million is wholly inadequate even to meet unavoidable costs such as pay and pension changes. It does not tackle the problem that Dorset police, who receive the second smallest amount of central funding per head of the population, remain underfunded in comparison with other forces. Consequently, Dorset's police expenditure is low; it traditionally spends the lowest per head of population of all but five forces. The police element of the council tax may increase by 9.7 per cent. Dorset is an efficient force, but so much more could be done with better funding. Residents expect a better service when they are asked to pay more.
The change to precepting status for Dorset fire authority, as for the other combined fire authorities, brings new responsibilities and duties, about which we have heard this afternoon, such as the need to provide for reserves and balances. To meet an increase of no more than 5 per cent. in the precept, Dorset fire authority would be able to set a budget only on the basis of present policies, while making a contribution to setting up a general reserve. It would have to bring to a halt progress on the Government's modernisation agenda and, after taking account of transitional funding, would still need to make further cuts of £1.25 million. Those cuts are equivalent to 50 whole-time posts, which is 16 per cent. of the whole-time establishment, or 167 retained posts, which is 50 per cent. of the retained establishment. The limited transitional funding does little to meet that agenda or the pay award, and it is totally unrealistic to expect rural authorities such as Dorset to find evidence-based savings to repay the transitional funding in the time suggested.
Dorset fire authority has asked me to represent its serious concerns to the Minister and the Deputy Prime Minister. It recognises the need to limit the burden on council tax payers, but believes that it is unrealistic to expect combined fire authorities to deliver a modernised fire service, and move to precepting status, with the limited funds allocated in this year's grant settlement. My residents are faced with a grim prospect: either a hefty increase in one part of their council tax or unacceptable cuts in services, with implications for safety and lives. I am pleased to hear that there is a meeting tomorrow, and I hope that my representations on behalf of Dorset fire authority are therefore timely.
We have unfair funding and an unfair tax. The Government could address the formula by revisiting the idea of resource equalisation, or by revisiting area cost
adjustment to take on board high house prices and low wages. The forthcoming year will be the second year of the new formula, and I should like the Minister to look at those important possibilities for following years. It would make an enormous difference to my constituency if the area cost adjustment could take into account high house prices, and be applied to my councils.I am sure that the Minister can predict that, before I sit down, I shall suggest amendments to the council tax system. Council tax should be scrapped and replaced with a tax related to the ability to pay. Local income tax was recommended for this country in 1974 by the Layfield committee. Baroness Thatcher, aided by the right hon. and learned Member for Folkestone and Hythe (Mr. Howard), chose to introduce the poll tax. The people revolted over that, as they are now doing over council tax. Even a 5 per cent. increase is unacceptable to those on low or fixed incomes. It is still more than twice the rate of inflation, and will mean the erosion of living standards.
Nationally, the poorest 10 per cent. pay more than four times more in council tax than the richest 10 per cent., as a proportion of their income. The poorest 20 per cent. of pensioners pay nearly six times more than the richest 20 per cent. of non-pensioners, as a proportion of income. The time has come to axe that tax. Local income tax operates successfully in the United States, Sweden, Switzerland, Norway, Japan, Finland and Denmark. Why should it not do so here?
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