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Mr. Clive Betts (Sheffield, Attercliffe) (Lab): I welcome the settlement that my right hon. Friend has announced, especially the £1 billion extra, which was precisely the figure that the now Conservative-led Local Government Association was asking for today. Will my right hon. Friend give me an assurance that if authorities such as mine in Sheffield can show in due course that they had substantial under-recording of the population on the census, as Manchester has proved, it will receive an increase in grant to reflect that fact?

Mr. Raynsford: I thank my hon. Friend for his kind remarks about the impact of the settlement and the fact that it meets the concerns that have been voiced by local government about the adequacy of what was expected before it was announced. As for the census, we can make only one amending report for any year. There is no question of reopening the 2003–04 settlement. We are still looking at the position in respect of 2004–05. It has always been our position that if the Office for National Statistics makes adjustments to population figures we are prepared to reflect them in the settlement so that authorities who have had their population under-enumerated can receive compensation.

Sir Patrick Cormack (South Staffordshire) (Con): Why does this genial and generally affable Minister not deliver a statement that the council tax payers of South Staffordshire and every other district in the country can understand? Why do we have this jargon-led nonsense of "pressure of passporting", "prudential borrowing regime", "ring-fencing" and the ghastly "win-win scenario"? Why does the Minister not speak English so that the people of this country can understand what he is saying?

Mr. Raynsford: If I may say to the genial gentleman, for whom I have a great deal of respect, his councils are in a win-win situation. South Staffordshire, in which I know that he takes a close interest, has a 9.6 per cent. increase in grant and Staffordshire county council a 5.3 per cent. increase. That is surely a cause for congratulation. I apologise to the hon. Gentleman that the technicalities of local government finance are such that a number of concepts such as floors, ceilings and passports are now common currency. I think that the hon. Gentleman will find that most of his local authority officials are familiar with that language. I hope that he will forgive me for using language which is relatively familiar in local government circles.

Judy Mallaber (Amber Valley) (Lab): The Conservative Leader of Amber Valley borough council has urged me to lobby Ministers about what he predicted would be a mere 0.66 per cent increase in funding. As I do not have the figures yet, can my hon. Friend reassure me that the increases for Amber Valley and Erewash, of which I also represent part, are far
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higher than that and that they follow increases for the past four years for Amber Valley of 6.5 per cent., 5.8 per cent., 12.5 per cent. and 3.7 per cent.? That contrasts with the projected cash freeze for two years that the shadow Chancellor proposes.

Mr. Raynsford: My hon. Friend makes a valid point. I am happy to give her that assurance. I am pleased to say that the percentage increase for the coming year for the three authorities in which she has an interest are 4.4 per cent. for Amber Valley, 6.9 per cent. for Erewash and 5.8 per cent. for Derbyshire county council. All those authorities will receive good increases that build on the good settlements in previous years.

Simon Hughes (Southwark, North and Bermondsey) (LD): May we take it that the legislative programme in the Queen's Speech means that the Government have no plans before the general election to change the method of collecting money in local government and that they continue to plan to go ahead with a revaluation of properties in England? What will the average effect on council tax bills be in Greater London and the south-east of England of that revaluation of property values?

Mr. Raynsford: I note that the hon. Gentleman wants to score points rather than show an interest in what the settlement means for his authority. Before I respond to his question, may I remind him of a point that he has chosen to ignore? Southwark council, with a Liberal Democrat leadership, receives a 7 per cent. increase in grant? I would have thought that he would at least acknowledge that the Government are doing well for his local authority. I am sure that the council tax payers in Southwark will be pleased to know that the Labour Government are supporting the area with a generous settlement.

The hon. Gentleman will know that local government finance is the subject of the Lyons inquiry. As I have made clear, we do not intend to make hasty decisions about complex issues. In the past, ill-thought-out and hasty decisions such as the introduction of the poll tax caused enormous difficulty. We will not make the mistake of rushing the implementation of ill-thought-out proposals such as local income tax, to which the hon. Gentleman's party is wedded and which would cause administrative chaos and have serious consequences for distribution. We will be careful to ensure that there is not the upheaval that would flow from the Liberal Democrats' proposals.

Mr. Adrian Bailey (West Bromwich, West) (Lab/ Co-op): I thank my right hon. Friend the Minister for his statement. I welcome it and thank him for what appears to be a generous settlement for my borough of Sandwell. As the former finance chief of Sandwell under a Conservative Government, I can tell my right hon. Friend that I would have preferred to have to deal with the problem of real-terms growth under a Labour Government than with the real-terms cut that I had to deal with under the Conservative Government. Sandwell has historically been under-funded, so I welcome the removal of the ceilings in the grant.
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My right hon. Friend will also be aware that there is an issue with the police grant. While I accept that the announcement of that grant will be made by the Home Office, can he reassure us that the same constructive principles that have underpinned this settlement are being actively considered by the Home Office for the west midlands police? We have had a win in Sandwell; we would like a win for the police and a true win-win situation.

Mr. Raynsford: I am happy to confirm that it is a win-win situation. Sandwell council receives an increase of 6.3 per cent. in its grant, which will enable it to continue to do good work while keeping the council tax down. I congratulate Sandwell on a low increase in council tax last year of just 1.9 per cent. Many other Labour councils secured low increases. I hope that other local authorities of different political persuasions will follow the good example set by Sandwell last year.

The police general grant will increase by about 4.8 per cent. and, with specific grants added on top, the total increase will be 5.1 per cent. So there is good funding for the police and for Sandwell council.

Sir George Young (North-West Hampshire) (Con): In recent weeks, Members on both sides of the House have told the Government that had they stuck with the indicative level of grant, council tax increases would have been unacceptable, and I welcome the fact that they have listened to those representations. Can the Minister shed some light on the third of a billion pounds for local government to which the Chancellor referred two hours ago? Can he confirm that that is not new money but simply the lifting of the ring fence from existing grants?

Mr. Raynsford: I can tell the right hon. Gentleman a little more about that and, as a former Minister who has carried these responsibilities, he will understand that, inevitably, there is a complex pattern of increased funding—some £637 million of increased funding has been provided—and measures to ease pressures. The areas in which pressures have been eased include pensions, which I have highlighted; the passporting obligation in relation to schools funding; the issue of waste management; and other similar issues. We have also introduced measures to enable local authorities to recover more of the costs of delivering certain services, such as planning fees, fees for the licensing function and the other points that the hon. Member for North Dorset (Mr. Walter) raised. It is a combination of those three elements that together ensure that the overall burden on local government has been eased by around £1 billion, which entirely meets the concerns expressed by local government that action should be taken to ease the pressures and enable authorities, in return, to make low council tax increases. I sincerely hope that they will keep their part of the bargain.

Hugh Bayley (City of York) (Lab): Earlier today the Chancellor said in his pre-Budget report that inflation was running at 1.25 per cent. Given that a floor of 4 per cent. has been established for unitary authorities such as the City of York, it is clear that the Government are giving substantially more than inflation to local authorities. Will my right hon. Friend confirm the
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precise amount that the City of York will receive as an increase and state that there can be no possible excuse this year for the council to put an inflation-busting 8.5 per cent. on the council tax? On the expenditure side, does my right hon. Friend accept that there are particular cost pressures in places such as York because of its boom economy, which brings high salaries and high house prices? In the period between now and the review of the formula, those pressures need to be examined very closely by his Department through the area cost adjustment.

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