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Mr. Nigel Waterson (Eastbourne) (Con):
We had a relatively short speech from the Minister commending the virtues of the Bill and it is a relatively short Bill, but one that says much about where the Government find themselves at this point in the electoral cycle. Make no
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mistake: the Bill is a panic measure in the face of the Government's failure on local government finance and in the face of campaigning by people like 83-year-old Devon pensioner, Elizabeth Winkfield, who memorably said that she would rather go to prison than pay her increased council tax.
The Bill is a straightforward electoral bribe. Furthermore, it is based on a misapprehension about the way the payment could be paid. It dawned on the Government only late in the day that they needed primary legislation to put through the payment. I will hear in correspondence, apparently, when the Minister became aware that that would be necessary. I cannot help feeling that it was one of those days when civil servants brought unpalatable news to the Minister and that he might have remembered it. I suspect that there might have been the odd expletive, but we will find out in due course.
Malcolm Wicks: The hon. Gentleman meant that as a joke, but I do not use expletives and I talk to my officials as sensibly as I am sure he would.
Mr. Waterson: I am happy to accept that, bloodless and restrained as ever, the Minister does not use expletives. Perhaps he contented himself with saying, "Oh dear."
Mr. Bellingham: Does my hon. Friend agree that there probably were expletives among the Government party managers? They must have been furious that the Treasury had made a mistake. The Chancellor introduced his Budget and made a great announcement, then all of a sudden we are dealing with primary legislation. Surely that shows staggering incompetence on the part of the Government.
Mr. Waterson: My hon. Friend is right. There was certainly some incompetence, but it is obvious that the Bill is a panic measure. We do not yet know, because the Minister is being so reticent, when he heard for the first time about the £100 payment. [Interruption.] As my hon. Friend the Member for Tatton (Mr. Osborne) says from a sedentary position, I have a shrewd suspicion that the Minister learned about it at the same time as everybody else, during the Budget statement. Most of all, the Bill is a panic measure that seeks to tackle, in a clumsy way that I shall describe in more detail, a problem created by the Government.
Before I remind the House of the Government's record on local government finance in detail, may I say how disappointed I am that someone with the Minister's academic credentials should still be trotting out the old canard about how to compare like with like in respect of council tax? We have all heard the arguments before but, for the sake of repetition, I remind hon. Members that the House of Commons Library, no less, says:
"to compare year-on-year increases council taxes are expressed in terms of the average Band D council tax for a 2-adult dwelling."
In The Sunday Times, Mr. Peter Kellner memorably wrote:
"Homes in Labour areas tended to fall into lower council tax bands and this was why average council tax was lower. . . The proper way to judge the figures was to compare like with like—say, Band D figures, council by council".
He went on to state that Labour's claim
"is as misleading as it ever was . . . On this issue, Labour is wrong and Tories are right".
Mr. Chope: Does my hon. Friend accept that Labour areas often get a lot more grant from a Labour Government than Conservative councils? For example, Sedgefield council gets eight times more grant than East Dorset district council.
Mr. Waterson: My hon. Friend is right. One of the great unfairnesses faced by those of us who represent constituencies in the south, and particularly in the south-east, is the decision, which was clearly political, to switch resources from our areas to the north and other parts of the country.
The Parliamentary Under-Secretary of State for Work and Pensions (Mr. Chris Pond): Did the hon. Gentleman examine the figures before asserting that Labour councils get larger grants than Conservative councils and that more funds go to councils in the north than those in the south? Is he aware that the 5.9 per cent. average grant increase for Labour councils was slightly lower than the 6.1 per cent. increase for Tory councils? Councils in the three northern regions received slightly lower grant increases than those in the south-east and London. Is he aware of the facts, or is he trotting out the mantra?
Mr. Waterson: The Under-Secretary speaks for the Government, but perhaps he should speak for Kent.
Sir Paul Beresford: My hon. Friend will know that, although the Under-Secretary's point was helpful, he was discussing this year's increase on last year's deficit. Having taken away £30 million year on year from Somerset and £39 million year on year from Surrey, the Government gave those areas a tiny little increase compared with that for the north in the previous year.
Mr. Waterson: My hon. Friend speaks with his usual authority on such matters, and some of my hon. Friends and I recently met a Minister from the Office of the Deputy Prime Minister to raise that unfairness. Without wishing to bore the House with details from East Sussex, the Government recognise that the first attempt to give grants from central Government resulted in inequities, so they came up with a second tranche of funding. The only problem is that the entire population of East Sussex received the princely sum of £5,000 as a result of that exercise, which piled incompetence on top of incompetence.
The figures are clear: since the Government came to power, council tax bills for the average band D home have increased by 70 per cent. A typical household now pays almost £500 extra a year under this Government. One third of the increase in the basic state pension for the typical pensioner has been taken up by higher council tax, which is a point that relates to this Bill.
In his introduction, the Minister rightly touched on council tax benefit, which, as we all know, is traditionally the means-tested benefit with the lowest
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take-up. Government figures produced in February show that the position is getting worse, because the take-up of council tax benefit is between 66 and 72 per cent. by case load. Older pensioners are less likely to claim the benefit, which makes the situation worse, and take-up is a particular problem with older pensioners who are owner-occupiers. Low take-up affects the poorest pensioners most severely.
We welcomed the attempts led by the Under-Secretary of State for Work and Pensions, the hon. Member for Gravesham (Mr. Pond) to boost take-up. Although they were welcome, they did not alter the fact that the figures are getting worse, not better. Perhaps the storm of protest, particularly among pensioners in the south of England, was not surprising. I have already referred to 83-year-old Elizabeth Winkfield from Devon, who refused to pay the full 17.9 per cent. increase in her council tax bill—she said that she would rather go to jail than pay more than an inflation-based increase.
It was no surprise, except possibly to the Minister, when the Chancellor set out his understanding of the difficulties faced by older pensioners on fixed incomes. He said:
"The evidence shows that their council tax bills take a higher share of their income than the rest of the population."—[Official Report, 17 March 2004; Vol. 419, c. 336.]
Welcome to the real world. The Government clearly took a political decision to make the £100 payment, which is a nice round figure, although it is difficult to see where it came from. It bears no relation to the different levels of council tax up and down the country or individual pensioners' means, because it was plucked out of the air. All the evidence points to a panic measure included in the Budget at the last minute, possibly without the knowledge of DWP Ministers and certainly without the knowledge of DWP officials.
When the Budget statement was drafted, the assumption that clearly underlay the decision to make the payment was that the money could simply and easily be added to the winter fuel payments by an amendment to the Social Fund Winter Fuel Payments Regulations 2000. As the Minister says, the problem was that the Government's legal advice stated that that was not possible and that the Government must introduce primary legislation. When the Chancellor made his statement, issued the accompanying press notices and released the Red Book, no one had properly addressed how those payments were to be coupled with the winter fuel payments and the precise mechanism had yet to be examined—a panic measure, if ever there was one.
In a written answer, the Minister stated:
"We are looking at the most cost-effective and efficient way to deliver payments. It is intended that a single one-off payment is made in 2004–05."—[Official Report, 31 March 2004; Vol. 419, c. 1490.]
That leaves a question mark, Mr. Speaker, and I am sure that it has occurred to you, as well as to me. The Minister used the phrase "one-off" again in his speech this afternoon, but the Bill seeks powers to make payments to the over-60s, as opposed to the over-70s, on various terms.
I must press the Minister further and I shall return to the question whether the payment is a one-off or whether the Government simply intend to make similar
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payments year on year. It is a harsh fact of political life that once one gives a payment for cold weather or TV licences, for example, pensioners, not unreasonably, become attached to it, and it becomes politically difficult to take it away. [Interruption.]
Perhaps I can quell the hilarity on the Government Benches by examining the reaction of pensioners and pensioners' organisations to the Bill and to the £100 payment. The under-70s are not terribly impressed. Why should a 69-year-old not receive the payment? What is the logic behind that? As my hon. Friend the Member for Christchurch (Mr. Chope) says, if the husband in a retired couple sadly passes away before the qualifying date and the widow is slightly under 70, why should she not get the payment?
On the face of it, the measure involves an element of discrimination. We know that the Government are wedded to dealing with discrimination: they signed up to the European convention on human rights, article 14 of which makes it clear that discrimination should not occur on a range of different grounds. However, the Secretary of State for Work and Pensions feels able to make a standard statement on the Bill that, in his view, the provisions are compatible with convention rights.
For once, the explanatory notes to the Bill are interesting:
"The setting of age 70 for entitlement is justified on the grounds that members of this age group are less likely to be in work, have less money and have fixed incomes."
There is, of course, some truth to that statement, but one could say the same about the over-65s or even the over-60s—many more people now take early retirement. It is not clear why only the over-70s should be included.
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