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Mr. Chris Mole (Ipswich) (Lab): I welcome the new burdens approach that my right hon. Friend described, and as a practitioner in local government in the 1990s, I contrast it with the introduction of legislation by the Opposition. For example, the child protection legislation required social services authorities to respond to orders of the court placing children in secure accommodation, but gave local authorities no control over the high individual weekly costs of that accommodation. Local authorities could not budget properly for those costs and the then Government made no provision.

Mr. Raynsford: My hon. Friend was of course leader of a council and has practical experience of such
 
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matters, so he speaks with great authority—[Interruption.] It was a worthwhile and sensible contribution and I should have thought that the hon. Member for Witney (Mr. Cameron) would have wanted to listen to it. He is on a learning curve in respect of local government and he would learn a great deal by listening to my hon. Friend, who has great experience in such matters.

My hon. Friend made a valid point, which was that when the Conservatives were in government, they used to impose new burdens on local authorities. He mentioned child protection, but I could add examples of legislation on housing, disability discrimination and health and safety. Legislation on all those issues imposed new burdens on local authorities up to 1997—the difference was that, at the time, the Conservatives were cutting grants to local authorities. The Conservatives said to local authorities, "Do more, and we will give you less. And if you increase your council tax by too much, we will cap you." It is sheer hypocrisy for them now to present themselves as the champions of localism.

We are putting in place a framework to ensure that local authorities can improve services and are fully funding the new burdens that we are placing on them. We are also ensuring that local government has new powers and greater flexibility to act for the benefit of its areas. The Local Government Act 2003 provided a raft of substantial new freedoms that help authorities to deliver services in new and innovative ways, engage with their communities on local priorities and work more closely with local business. They also help authorities to improve value for money and drive down costs.

The first—the showpiece element of the 2003 Act—is the new prudential borrowing regime, which puts local authorities in the driving seat in taking decisions about their borrowing. Opposition Members do not like to be reminded that the prudential regime replaces the strict centralist controls over local authority capital spending that their Government introduced in the 1980s, when the father of the hon. Member for North Essex was Secretary of State.

Secondly, there are the new freedoms to charge and to trade, which will increase choice in the delivery of public services and, in the case of trading, generate additional income. Authorities are already benefiting from the retention of revenue from fixed penalty notices and they can retain the income from reducing discounts on second homes, an option which has been widely taken up by local authorities this year.

While we are on the subject of charges, let me remind the hon. Member for Runnymede and Weybridge, who today poses as the champion of local authority discretion, of the very different line he took as recently as this February when we debated the Fire and Rescue Services Bill. He did not argue for discretion then. Indeed, he tabled amendments that would have specifically prevented fire and rescue authorities, many of which currently charge for certain services, from doing so; so much for the thin veneer of localist rhetoric. Behind the fac"ade, there still lurks the old Tory centralising tendency.

We have not forgotten about partnerships with business. The 2003 Act provided the enabling powers to set up business improvement districts, which allow local
 
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authorities to work with local business. The local authority business growth incentives scheme will allow authorities to retain part of the increases in their business rate revenue. That scheme will give councils a real incentive to work with business to encourage growth.

Mr. Mole: My right hon. Friend mentioned the two schemes to assist business. Does he recall that only yesterday the CBI gave evidence to the Office of the Deputy Prime Minister: Housing, Planning and Local Government Committee about how it welcomes those schemes as positive forces to improve the relationships between business and local government?

Mr. Raynsford: I am grateful to my hon. Friend for pointing out the widespread support that those new initiatives receive from all interested parties. Those powers can make a real difference to the way authorities operate and the way that they can work with their partners. They also give councils the scope to provide more services and to engage with business to improve the local environment.

The Government are also acting to cut bureaucracy and reduce unnecessary controls. So far, we have abolished 39 consent regimes and are currently proceeding to eliminate a further 54 such obligations, 22 of which are covered by the Planning and Compulsory Purchase Act 2004, which has already received Royal Assent.

Mr. Bill Wiggin (Leominster) (Con): If the Minister is really concerned about cutting bureaucracy, can he explain why he has capped Herefordshire council to the tune of £253,000, when the rebilling cost will be £100,000?

Mr. Raynsford: I am surprised that the hon. Gentleman has not asked Herefordshire council why it increased its council tax by an amount that the Government concluded was excessive. It is the subject of discussion. The authority has made representations and I shall consider them. After the purdah period associated with the local elections, I shall make our decisions clear. I shall address the issue of unreasonable council tax increases in a moment, and I hope that he will be interested in what I have to say.

We are working with the Audit Commission to ensure that the inspection process is proportionate and targeted, and to cut back on unnecessary inspection burdens. Overall, the volume of inspections this year will fall, and high performers will benefit from dramatic reductions. For example, Hampshire has received only one voluntary inspection in 2003–04, compared with nine inspections over the previous two years. Similarly, with ring-fencing, we have unfenced a total of £750 million of grants this year, reducing the percentage of grants that are ring-fenced from more than 13 per cent. to around 11 per cent. We are on course to get it below 10 per cent. next year. We are committed to a framework that encourages and empowers local authorities to do more and to do it better, to give leadership to their communities and deliver high quality
 
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services. But we are also absolutely clear that authorities must deliver value for money, and keep the demands that they make on council tax payers as low as possible.

As hon. Members know, after last year's unacceptably large council tax increases, my right hon. Friend the Deputy Prime Minister made it clear that we expected local councils to come in with much lower increases this year and that we would if necessary use our capping powers if authorities set excessive budgets. I am glad to say that the vast majority of local authorities heeded that warning and, led by Labour councils, have set much lower increases this year. The figures speak for themselves. Labour councils increased their council tax on average by 4.7 per cent., Conservative councils by 5.4 per cent. and Liberal Democrat councils by 6 per cent. That is clear evidence that Labour councils cost less as well as delivering better services for their communities.

Mr. Hammond: The Minister's figures would not stand up to scrutiny by any schoolboy statistician. Does he recognise that, to give in to pressure from the Deputy Prime Minister, local authorities have had to sacrifice the priorities of local people? Local authorities have had to accommodate the priorities of central Government and the burdensome pressures from Whitehall.

Mr. Raynsford: The hon. Gentleman is talking nonsense. Local authorities that increased their council taxes by unreasonable amounts last year have this year recognised the reality that the public will not accept unreasonable large council tax increases and moderated their demands. That is good and I am surprised that he does not welcome the trend—[Interruption.] The hon. Member for North Essex mentions capping. I do not know how he has the cheek to do so, given his party's stance. When the Conservatives were in government, they capped and capped and capped. We voted against universal, crude capping, which is what they used to do. Authorities were capped, year after year. We have taken a different approach: we reserved powers and we have used them selectively this year.

The Conservatives have tried by selective use of statistics to hide from the harsh truth. They tried to claim that Labour councils benefited from more generous grant increases. That is not true. Labour councils received an average 5.9 per cent. increase, but Conservative councils received 6.1 per cent. They tried to pretend that the Government had rigged the grant system so that all the money "went north". That is not true—[Interruption.] Such comments have been made time and again—[Interruption.] The hon. Gentleman seems to want to ignore what he and his colleagues said last week—

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