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Mr. Gordon Prentice (Pendle) (Lab): Other colleagues want to speak, so I shall be brief. Although I do not want to be the only person to spoil the party on this side of the House, there are certain things that I want and need to say.

The 6.6 per cent. increase for Pendle is welcome and we need it. Pendle is a deprived area, sitting next door to Burnley, with a huge number of social problems that need to be tackled, but our difficulty goes back to the introduction of the new formula grant system in 2003–04. It has produced such a situation—my hon. Friend the Member for Chorley (Mr. Hoyle) outlined this—that money that should come to Pendle and other district councils in Lancashire, and indeed across the country, is being withheld.

As the right hon. Member for Skipton and Ripon (Mr. Curry) said, the introduction of the new formula grant system has a purpose. That purpose is to redistribute resources to those parts of the country that need the extra money. The perversity is that, three years into the new system, a lot of resources that should come to local authorities in Lancashire such as Pendle, Chorley, Burnley and Hyndburn have been withheld.
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We are talking about significant sums, and we are entering the third year of transition. Pendle borough council is waiting—I do not know whether we will ever get it—for £1.8 million that would have come to it had the new formula grant system been applied. My hon. Friend the Member for Chorley spoke earlier about the £1.3 million that would have gone to Chorley; my hon. Friend the Member for Burnley (Mr. Pike) spoke earlier about the £1.5 million withheld from Burnley, with all its problems; my hon. Friend the Member for Hyndburn (Mr. Pope) spoke about the £1.5 million withheld; and so it goes on.

Those are significant sums. For a small district council such as Pendle, whose budget comes in at about £13 million, £1.8 million is significant, so while we celebrate the 6.6 per cent. increase, we want to know when we will get the money that was promised to us as a result of the move over to the new funding system. It is all a question of fairness and giving local authorities the resources that they need to tackle the problems that we face.

The Under-Secretary will say, I am sure, that there is not a big pot of cash somewhere that we can raid. He will say, I am sure, that the money must be used to ease the pain of the losers under the new system, and that we must let the losers down gently. The Minister for Local and Regional Government told us at the beginning of the debate that one of the losing authorities is Preston in Lancashire. It is totally unacceptable, however, that local authorities such as Pendle, Chorley and Burnley—for God's sake—should be bailing out local authorities such as Preston. That is the reality. It is the Government who should ensure that local authorities such as Preston do not go into financial free fall, not local authorities such as mine which should gain from the new financial system.

I want to finish on the Liberal Democrats and local income tax. My hon. Friend the Member for Normanton (Mr. O'Brien) tried to coax some information out of Liberal Democrat Members about how that would work in practice, but got absolutely nowhere. Local income tax is an idea that is shrouded in mist. When we try to get details about how this local income tax would work in practice, those details are not forthcoming. We heard today from one Liberal Democrat Member that all sorts of tiers would be able to vary the rate of local income tax—not just county councils or district councils, but parish councils.

Mr. Edward Davey: Will the hon. Gentleman give way?

Mr. Prentice: Not unless the hon. Gentleman wants to correct that for the record. That did not relate to council tax but specifically to local income tax. The cost of administering such a byzantine system is ludicrous. If the hon. Gentleman, who calls himself an expert on such matters, wants to intervene and tell me that I am wrong, I would welcome that.

Mr. Davey: I am more than happy to intervene. We have published a huge amount of details on local income tax and how it would work, dealing with all those issues. The hon. Member for Normanton (Mr. O'Brien) refused to allow us to intervene to answer the question that he posed. The hon. Gentleman is therefore completely wrong, again.
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Mr. Prentice: That was a complete non-answer. I invite the Liberal Democrats to initiate an Opposition day debate on local income tax. Let us discuss it in detail then.

Let me return to the point I made earlier about the sums that have been withheld as a result of the introduction of the new grant system. My hon. Friend the Member for Chorley said that the cost would be only £29 million nationwide. That is de minimis in the context of the Government's budget: it is absolutely nothing. To right the injustices in Lancashire, a derisory £9 million would be required.

I do not know what the answer is. I know that my right hon. Friend the Minister has a busy schedule, but like the hon. Member for Rochford and Southend, East (Sir Teddy Taylor) I tried to arrange a meeting with him and was astonished that his diary was so full that he could not meet me—along with representatives of the six local authorities in Lancashire that are wrestling with this problem. I hope that the Under-Secretary will be able to give some comfort to local authorities such as Pendle that need resources that are being unfairly withheld from us.

7.31 pm

Mr. David Amess (Southend, West) (Con): A year ago I initiated an Adjournment debate entitled "Southend Borough Council (Financial Settlement)", to which the Under-Secretary replied. Sadly, many of the points that I made then are still pertinent this evening.

Southend borough council is an extremely well run local authority, and I pay tribute to all the women and men who work for it, but unless the Government do something to help it in its present financial crisis, services will be decimated in the town of Southend—and let there be no doubt that if that happens the Government will be entirely to blame.

Mr. Raynsford: That is total nonsense.

Mr. Amess: It is not. I will come to the Minister's remark in a moment.

When I first arrived in Southend, the authority had decided to become unitary. At first that worked extremely well financially, but unfortunately—as the Minister of State knows only too well—it has recently not been to the authority's financial advantage.

In Southend we had many brilliant leaders of our council. Norman Harris and Norman Clarke, for instance, are well known as local government pioneers. The leaders who have followed those two gentlemen are every bit as able, but because of the Government's continual interference with local government, they have not been able to develop Southend as they would have liked to. Last year Southend borough council had to make savings of £7 million to bring spending levels down to the formula spending share, and council tax increased by 6.8 per cent.

I would have expected the Under-Secretary to listen to the points I made a year ago about the census. If the Minister of State had allowed me to intervene when he opened the debate—

Mr. Raynsford indicated dissent.

Mr. Amess: The Minister of State is wrong. I am the only Member to whom he did not give way. All I wanted
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to ask was, would he please meet a delegation from Southend to discuss issues relating to the census? In the 22 years for which I have been a Member of Parliament—I have listened to many of his speeches—it has always been common courtesy to see delegations led by Members of Parliament. I think it very regrettable that he is not prepared to meet a delegation from Southend to discuss the census.

Mr. Raynsford: I am sorry that the hon. Gentleman has not understood something that I have explained on several occasions. In a year in which there is no change to the formula and it is therefore not possible to respond for requests for changes of the kind that he and his colleagues sought, it is not right for us to see delegations from some areas and not others. When we accept delegations, we always accept the principle that any local authority that wishes to come and see us is free to do so. We made it quite clear this year that because there were no formula changes we would not see individual delegations from individual authorities but would accept delegations from bodies representing local government—and we did see members of a body representing unitary authorities on which Southend was represented. It is simply not the case that we have not listened to Southend's views.

Mr. Amess: It certainly is the case that the Minister of State has not listened, because he is pre-judging the meeting that would take place. During his opening remarks, he agreed to meet one of his hon. Friends on a specific issue. I ask him to reconsider his decision not to meet a delegation from Southend, because the impact of having 20,000 fewer people on the census than there actually are is tragic in financial terms.

The Minister of State may laugh, but there is nothing funny about the issue. I represent a huge number of elderly people. In fact, my constituency has more people aged between 100 and 120 than any other—[Interruption.] Sorry, between 100 and 112; I was slightly exaggerating. Florence Reeves is the eldest.

Unless the Minister of State meets a delegation and listens to what we have to say, there will be further cuts of £5 million, which will mean redundancies, restructuring of services, withdrawal of free school transport to voluntary-aided schools, with the exception of the transport for disadvantaged children, a reduction in school uniform grants to children from disadvantaged families, closure of the Palace theatre, closure of community centres, closure of a mobile library, a reduction in park ranger services, a reduction in grounds maintenance, the withdrawal of all bus route subsidies for elderly people, and a 3 per cent. increase in charges for Southend borough council services.

It actually gets worse than that. Because there is likely to be a council tax increase of over 9 per cent. and the Government will cap it, there will have to be another £2 million of cuts. A number of libraries will be closed. The boat patrol will be cut. There will be a further 2 per cent. increase in charges for Southend borough council services. All non-statutory services will be abolished and there will possibly be even more redundancies.

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