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Mr. Clifton-Brown: I am grateful to the Minister for giving way because I want to make a serious point. Does he concede that all councils have cost pressures on their budgets because of the increases imposed by this Government in terms of national insurance and pension contributions, waste obligations, increases in the landfill levy, the redistribution of capital receipts and the abolition of the local authority housing grant, which of course increase their need for a council tax increase?
Mr. Raynsford: The hon. Gentleman has simply read out a list that was read out earlier, and some of those apply to some councils, but not all to all councils. All of them have been taken into account and, as he will know, local government has received a 33 per cent. real-terms increase in grant under the Government, whereas when the Conservative party was in power, local government faced cuts year on year on year. [Interruption.] The hon. Member for New Forest, East (Dr. Lewis), who is again commenting from a sedentary position, would do well to remember that, when his party was in power, it cut local authority spending. It did not increase it.
As the shadow Chancellor has made absolutely clear, the Conservative party is committed to £35 billion of public expenditure cuts. If it was ever elected, those cuts would cause immense damage to local government, which would bear the brunt, as it did when the Conservatives were last in power. The issue is so
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important that I intend to spend a little time on it. The Tories' commitment to slash £35 billion will have a massive impact on public services and a massive impact on pensioners. It is patently obvious that the Conservative party cannot make cuts of that magnitude and at the same time fund the spending pledges and tax cuts that it has promised.
Let us take the example of pensioners, as the hon. Member for Meriden made much play of pensioners in her opening remarks. The pensioners of this country will not forget what the Tories did to them during 18 long years, when the Leader of the Opposition introduced the poll tax and the Tories put VAT on fuel, for example. If any group of people in our society know about the value and importance of money and of living within one's means, it is our pensioners. They know that the Tories cannot spend money that they do not have.
Alistair Burt: Why does not the Minister talk about the £5 billion that has been taken away from the pension funds every year since the Chancellor took office? How much does that add up to now and what difference does he think that that has made to pensioners?
Mr. Raynsford: If the hon. Gentleman will wait a moment, I will tell him more about what the Government have done for pensioners and the very substantial increases in income that pensioners have enjoyed, which is in marked contrast to what happened when the Conservative party was in power.
The Tories cannot spend money that they do not have. No one has to take my word for it. The latest edition of the Municipal Journal has considered the matter in its usual impartial way and it described the Tory party's plans for efficiency savings to pay for its so-called council tax discount as "pie in the sky". That is what local government experts think about its calculations. Pensioners know that, if the Tories win power, the only cut that pensioners and council tax payers can rely on is £35 billion of cuts. The Tories cannot find those cuts from waste, because our plans already assume substantial efficiency savings as a result of the Gershon review. The Tories are double counting the savings that we have already allocated for reinvestment in front-line services.
Mr. John Hayes (South Holland and The Deepings) (Con): Does the Minister regret the increase in means-testing under the Government? Does he acknowledge that those pensioners least likely to take up means-tested benefits tend to be older pensioners and poorer pensioners, often overlapping groups? Why does he reject the Conservative policy of restoring the earnings link for the state pension?
Mr. Raynsford: For reasons that I will describe in a moment. Pensioners have benefited substantially from increases in living standards under this Government far greater than could possibly be delivered by the Conservative party's policies.
The Tories have also made more than £15 billion of additional spending commitments, which means that they have to find an additional £15 billion of cuts elsewhere. That gives a total of more than £50 billion of cuts by 201112. Again, I say that the only cut that
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pensioners and hard-working families will get from the Tories is cuts to hospitals, the police, schools and services delivered to their local communities.
I said that I intended to spend some time on Tory cuts, and I have not finished yet. Let us look in detail at how the Conservative party intends to pay for its pie-in-the-sky council tax discount. It says that it can find the money from the £1 billion that it claims that it has found from the cost of local government inspection. It claims that it will abolish inspection, although the Leader of the Opposition told the Local Government Association in July that
The Conservative party does not include in its spending proposals any costs for the alternative that it intends to put in place. To the best of my knowledge, it has not even begun the consultation promised by the Leader of the Opposition. Perhaps the hon. Lady, when I give way to her, will tell us when this consultation is due to begin.
Mrs. Spelman: I am grateful to the Minister for giving way, because since we announced our discount for pensioners, he has deliberately misunderstood this point. The Institute for Fiscal Studies has costed the pensioner discount at £1.3 billion, which will come out of central Government waste. The £4 billion from waste in local government identified in the James review will remain with local government to use as it sees fit. Among other things, it will be used to hold down council tax for people of all ages. The pensioner discount will come from the £4 billion identified by the shadow Chancellor within £35 billion of savings in central Government. I rest my case.
Mr. Raynsford: The hon. Lady has compounded the problem by showing the Conservative party's utter confusion. Its figures are not credible and it uses them in different combinations that make no sense. The overall effect is an unaffordable series of pledges and promises that they do not have the money to deliver. The prospectus is entirely bogus and comes from a party that has lost all sense of reality and that no longer faces the realities of government, which any party must do when it is in government.
Mr. Edward Davey: Has the Minister talked to any of the 235,000 civil servants who would lose their jobs under the James review? Has he asked how much the redundancy payments would cost? Does he think that those civil servants are pleased by Conservative policy?
The £1 billion figure quoted by the Conservative party comes from a Joseph Rowntree Foundation report in September 2001, which the Conservative party claims
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estimates the annual direct costs of inspection at £600 million per annum. It then adds to that figure an estimate of £400 million that the Local Government Information Unit came up with for compliance costs.
The Conservative party is wrong. The Office of Public Services Reform estimates that the total cost of all inspectorates is around £600 million, but as hon. Members know, many inspectoratesfor example, the Healthcare Commission and four out of five criminal justice inspectoratesdo not inspect local authorities. Even for those inspectorates that do inspect local government, local government inspection makes up only a small proportion of their overall costs. For example, the bulk of Ofsted's costs relate to school inspections, not local authorities. My Department's initial and provisional estimates of the total cost of local government inspection in 200405 is just more than £90 million.
Even if one were to accept the indirect costs of inspection given by the LGIUI have yet to see proper evidence supporting those figuresthe Opposition's sums do not add up. Are they proposing that we should abolish all inspections? Are they proposing that we should abolish Ofsted or the Commission for Social Care Inspection, and, if we were to do so, what would be the implications for school standards or child protection? Even those cuts do not bring them anywhere near their £1 billion pie-in-the-sky saving. Their figures have no credibilitynot a shredand that example is just one of many. Their pie-in-the-sky discount for pensioners for council tax bills has no credibility. They simply do not have the means to deliver their promise, which is a cruel deception.
The Tory cuts would force local authorities to hike council tax massively. As the Tories oppose capping, they would presumably allow council tax to rise unchecked year on year. If there were another Tory Government, pensioners would face cuts in services and uncontrolled increases in council tax.
Unlike the Conservative party, this Labour Government care about pensioners and have been working hard to raise pensioners' living standards. This Labour Government reduced VAT on fuel to help pensioners and gave free TV licences to the over-75s. This Labour Government introduced £200 winter fuel payments to all households containing someone aged 60 or over, with an extra £100 for those aged 80 or over. This Labour Government added the £100 payment for households with a member over the age of 70 to help meet council tax costs. This Labour Government introduced the minimum income guarantee for pensioners and the pension credit to give extra help to those with savings and modest occupational pensions.
The effect of Labour's reforms has been to increase the average income for pensioners by £1,350 a year, and to increase the income of the poorest pensioners by £1,750 a year. Do those hon. Members who criticise the Government on means-testing seriously think that it was wrong to give that extra help to the poorest pensioners? The Conservatives opposed all those achievements and they threaten all those benefits. Their hollow rhetoric and dishonest promises will not convince pensioners, who know more than anyone else that money does not grow on trees and that one should never promise what one does not have the means to deliver. Pensioners, more than any other section of
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society, know the importance of prudent economic management and not pretending that one can live beyond one's means. Along with this House, they will reject the Tory party's blandishments with contempt.
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