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The Minister for Local and Regional Government (Mr. Nick Raynsford): I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:

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Last week, we had an Opposition day debate on local government finance initiated by the Liberal Democrats. It was not, I have to say, their finest hour. Indeed, the hon. Member for Totnes (Mr. Steen) suggested less than half way through the proceedings that the House should adjourn because the Liberal Democrat case had been so comprehensively demolished.

Today, it is the turn of the Conservative Opposition. Given their own lamentable record in government and their remarkable failure to develop any new policy proposals in this area, it might appear to the impartial observer to have been a rash decision to choose this subject for debate. Now that we have heard the case put by the hon. Member for Runnymede and Weybridge (Mr. Hammond), we know that it was. I do not blame the hon. Gentleman: he is an able and assiduous Member and has made the best he could of the very bad hand that he was dealt.

Of course, that raises the question as to why the hon. Member for Runnymede and Weybridge was asked to lead for the Opposition. Over the past few weeks, we have been entertained by various musings on local government from the hon. Members for Meriden (Mrs. Spelman) and for North Essex (Mr. Jenkin). They would appear to be in the lead for their party. Yet cometh the hour, and cometh neither the man nor the woman! It is perhaps not surprising, given their recent accident-prone outings—the suggestions of a return to the poll tax only yesterday from the hon. Lady, and toe-curling, born-again localism from the hon. Gentleman.

I particularly enjoyed the observation of the hon. Member for North Essex in a speech to the New Local Government Network last month when he said:

I love the use of the word "unwittingly". It must feature in conversations with his own father, who was one of the most senior Ministers in that Government, responsible for many of their extreme centralising tendencies. Let us imagine the discussion between the hon. Gentleman and his father: "Dad, what were you thinking about when you unwittingly abolished the Greater London Council?"

Mr. Bernard Jenkin (North Essex) (Con): I can tell the Minister what he was thinking. He was thinking about smashing the hard left in London, which we succeeded in doing, only for Ken Livingstone to be allowed back into the Labour party. Can the Minister explain that?

Mr. Raynsford: I am delighted to hear the hon. Gentleman acknowledge that his father was taking centralist action to attack local authorities. There we have it. That is the natural tendency of the Tory party.
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Although they try to pretend that they have changed, we know that the reality is that the Conservatives are deep centralisers. It is hardly surprising, then, that neither the hon. Member for North Essex nor the hon. Member for Meriden chose to speak in this debate. Their party's record in government was one of cuts, centralisation and failure. Their attempt to present themselves today as the champion of local government is risible. Local government is not so easily fooled.

Let us first look at the Conservatives' record. Their period in office was marked by year-on-year cuts in funding for local government. The figures speak for themselves. Throughout the 1980s, local authorities experienced continuing real-term reductions in grant, year on year. Then, after the chaos of the poll tax and the rationalisation of non-domestic rates, we saw a further period of real-term cuts in grant. Here are the figures: in 1995–96, minus 1.9 per cent.; in 1996–97, minus 0.1 per cent.; in 1997–98, when they set the grant rates before being ousted from office, minus 2 per cent. The Conservatives were cutting grants and telling local authorities that they expected them to keep council tax down—with threats of capping. That was the position when the Conservatives left office.

Mr. Hammond: Will the Minister confirm that the average band D council tax increase under the last Conservative Government was just less than half the average band D council tax increase during the period of the Labour Government?

Mr. Raynsford: I will confirm that during the 18 years of the Conservative Government there was a chaotic trend, first with huge increases in domestic rates, then abolition of those rates and the chaos and injustice of the poll tax, followed by a vast increase in VAT to 17.5 per cent. in order to cushion the council tax so that the figures that the hon. Gentleman has just quoted could be achieved. As a result of that decision, everyone's VAT bills were subject to a 2.5 per cent. increase. It is pretty rich of the hon. Gentleman to try to claim credit for low council tax figures at that time, when they were achieved at the price of large VAT increases.

Mr. Michael Jabez Foster: As someone involved in local government during the last two years of the Tory regime, I know that the problem was not just the cuts imposed from the central Government. In my own county, over the Tories' final two years, there was a 20 per cent. increase in the council tax along with massive cuts in teacher numbers, in education and across the board.

Mr. Raynsford: My hon. Friend reminds us of what life was like in the mid-1990s when the Conservatives were in power. It was grim. We saw schools that were underfunded, social services that were desperate and local authorities that had to lay off staff. Local authorities were unable to deliver the sort of services that local people expected. That was the atmosphere at the time, but Conservative Members now try to pretend that it has all disappeared and been forgotten. People
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working in local government know the reality and they will go on reminding the Conservatives of their lamentable record in office.

Richard Younger-Ross: Does the Minister realise that there is a trend? I worked in local authorities in the early 1970s, when the Conservative Government were forcing cuts on local authorities and cuts in services. When my wife worked for local authorities in the early 1980s, the Tory party imposed further cuts in services. Is there a trend here?

Mr. Raynsford: The hon. Gentleman is absolutely right. Throughout its period of relatively recent history—my memory may not go back as far as the hon. Gentleman's—the Conservative party has a consistent record of cutting grant to local authorities and, in parallel, telling them that if they do not keep the council tax down, they will be capped. I shall return to the issue of capping in a few moments because it provides an interesting insight into the shape of today's Tory party. Before I do, however, I want to say a little about what has happened since 1997.

Since we came into office, local authorities have received real-terms increases in grant every year, adding up over the seven years of the Labour Government to a cumulative 30 per cent. real-terms increase. That is a wholly different scenario from when the Conservatives were in power. Conservative Members know that that is true and it shows up their own shabby record, so they try to divert attention by claiming that the grant increases have not matched the demands placed on local government.

Mr. Hammond: The Minister has again referred to a 30 per cent. real-terms increase. Will he acknowledge that local government inflation pressures are significantly in excess of the retail prices index? He is right to refer to 30 per cent. in excess of RPI, but is not the real increase in local government inflation very much smaller?

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