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Mr. Martin Salter (Reading, West) (Lab): It is a matter of some regret that the three Front-Bench spokespeople have between them taken so much time. To be blunt, all three have been unnecessarily indulgent, and I shall take no interventions and be as brief as possible to allow other Members to speak.
The council tax is the sonor, in these politically correct days, the daughterof the poll tax. It was brought in in a blind panic by the previous Deputy Prime Minister. To fund the expenditure gap, value
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added tax, one of the most regressive taxes known to mankind, was increased from 15 to 17.5 per cent. Council tax is not a tax of which we can be proud, although its introduction in place of poll tax saw the end of Margaret Thatcher, which happened on one of the happiest days of my political career.
The fact that council tax was introduced in such a hurry meant that, in their essence, the valuations were hurried. In fact, at the time, they were referred to as second-gear valuations. Estate agents and valuers, employed quickly by local authorities and valuation offices, drove around communities in second gear deciding which row of houses were in bands B, C, D, A and whatever.
Perhaps the most popular I ever became in my 12 years as a councillor was when I uncovered fundamental flaws in the banding assessment for the Newtown part of Park ward, which I represented. We were able to get about 2,000 properties re-banded from band C down to band B. If there is anything that the public likeas the Conservatives' current policy indicatesit is being handed money back. The fact that my endeavours got back £65 for each council tax payer in my ward is something that will stay with me for some time.
In a debate on council tax, it is fair to look at how councils of different political persuasions have sought to implement it. We should also ask what value for money they give. My constituency is known as Reading, West, but it includes 24,000 electors in west Berkshire, which, as we all know, has one of the worst-performing Liberal Democrat councils. Sadly, I have to say to the Minister that it is very well rewarded for that; its revenue support grant is some 11.1 per cent. We have certainly rewarded incompetence in west Berkshire.
West Berkshire council uses the 24,000 electors who actually live in the Greater Reading area but fall under the local authority boundaries as little more than a milch cow to raise funds. The difference between the standard service in a Labour-controlled authority such as Reading and the service provided by West Berkshire council is pretty stark. Pensioners in west Berkshire do not benefit from free bus travel, as there is a derisory token system that runs out after a couple of months for the regular bus traveller.
Even worse, more recently, West Berkshire Liberals have taken the extraordinary decision to use up to £900,000 of council tax payers' money to subsidise a privately operated cinema in the centre of Newbury and Thatcham. It is a cinema that most of my constituents in Reading, West who fall under the West Berkshire council area will probably never see, never mind use. That is an extraordinary decision to use £900,000 of council tax payers' money as a subsidy.
I want to address the Conservative plans, because council tax is historically a Tory tax. It is a flawed tax that depends on too narrow a base. I make no mistake about that, and I look forward to the outcome of the Lyons review. It is fair to use an Opposition day debate to analyse the effect on council tax levels of the Opposition spending plans. I have with me a copy of the Conservatives' expenditure strategy for 2005 to 2008, which is snappily entitled, "Better public services, better value: Conservative spending plans 200508". The Conservatives have scored a massive own goal in publishing those plans.
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The Tories propose a cash freeze on the Office of the Deputy Prime Minister. They are pledged to match this Government's expenditure plans over the next three years on education, health and police. There is no doubt or argument about that, but that is not the case when it comes to the amount that will be available from the Office of the Deputy Prime Minister through the revenue support grant to local authorities. According to the Conservatives' own figures, the budget for the Office of the Deputy Prime Minister would rise by a mere 1 per cent. by 2008. It would now be frozen for the next two years, and in the final year of the three-year period, it would rise by 1 per cent. from £39.4 billion to £42 billion. That must be set against the current comprehensive spending review expenditure pledge to increase the figure to £50.7 billion by 2008 under this Government.
That is a massive cut, and it would have an impact on council tax levels. It is a sad fact of life that Parliament and the country have not yet woken up to the impact on council tax of the ODPM Tory cash freeze. Council tax would go through the roof.
Mr. Patrick Hall : Is not the position with regard to the Opposition's spending plans even worse than my hon. Friend has outlined? By 201112, we would have had £35 billion of cuts year on year. Would that not put even more pressure on local government?
Mr. Salter: I am sure that it would, but let us concentrate on the three years for which we have published figures and on the facts before us. Let us ensure that the Conservative party stands condemned by its own statements.
The impact of the Conservatives' flawed policy on council tax bills in England and Wales is simply horrendous. It works out at a massive £4.2 billion cut in revenue support grant for every single local authority in England and Wales. I am no expert in local government finance, but my hon. Friend the Member for Southampton, Test (Dr. Whitehead), who is also my office mate and a former local government Minister, undoubtedly is, and I pay tribute to his work on this issue. We have taken a look at the impact on council tax in the south-east. Sadly, because he is no longer a Ministerin my view, he should be[Interruption.] He should not necessarily be a Minister at the current Minister's expense. Sadly, my hon. Friend the Member for Southampton, Test does not have a bevy of special advisers or civil servants to do his number crunching, so we have prepared numbers only for the whole south-east. I think that they are worth reading into the public record.
The average increase for the 13 south-east unitary authorities as a direct result of the proposed £4.2 billion cut in the ODPM budget for revenue support grant would be a massive 44.29 per cent. over the next two years. For the 55 district councilsthis is worked out on the basis of billing districts and takes into account the fire and police precepts, as well as accounting preceptsthe increase is a massive 30.35 per cent. None of that allows for inflation, for which it would be perfectly accurate to add 5 per cent.
Let me read into the public record some of the figures for council tax that the poor people in the following unitary authorities would have to bear if we were
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unfortunate enough to have a Conservative Government after the next election. Bracknell Forest would see a council tax increase of 21.6 per cent. in 200506, and of 33.4 per cent. in 200607. That would be a massive Tory tax rise of 55 per cent. Brighton and Hove would see increase of 35 per cent. over that two-year period. The Isle of Wight's council tax would increase by 25 per cent., and that of Medway by 41 per cent. The increase in Milton Keynes would be an incredible 59.28 per cent. Portsmouth's increase would be 33 per cent., while Reading's would be 50.48 per cent. Slough would see an increase of 44.68 per cent., and Southampton an increase of 41.48 per cent. Swindon's increase would also be 41.48 per cent. over the two years.
The increase in west Berkshire would be 57.48 per cent.as if its council tax is not high enough alreadywhile Windsor and Maidenhead's increase would be 43.28 per cent. Wokingham would see an increase of 48.28 per cent. The average increase across the unitary authorities in the south-east of England would be 49.29 per cent. These increases represent an incredible tax burden for people to bear.
The Conservatives' proposal to hand back to pensioners a little bit, or perhaps quite a substantial amount, of their council tax is clever politics, but one of the reasons why it is fundamentally dishonest is that the Conservatives have not come clean about how much the council tax will rise as a result of their expenditure plans. Their policy simply involves robbing Peter to pay Paul. Let us look at how it would work for band D council tax payers in Reading. The council there is not particularly profligateit certainly levies a council tax rate lower than that of west Berkshire, and lower than that in parts of Wokingham.
Over the past three years, Reading borough council has kept council tax rises as low as possible, and I have to say that it has not been particularly favoured by the amount of Government grant that it has received. None the less, in 200304 council tax in Reading rose by 7.5 per cent., in 200405 by 3.7 per cent., and in 200506 by 4.75 per cent. Under a Conservative Government, however, there would be a 50 per cent. increase over the next two years. In cash terms, band D council tax would rise from the current level of £1,270 to a massive £1,902, so a £632 price tag is attached to voting Conservative in Reading, or in any other council tax-paying area.
I hope that the Minister will help me and my hon. Friend the Member for Southampton, Test to ensure that every pensioner and council tax payer in the country is made well aware of the consequences of the Conservatives' fundamentally flawed and dishonest policy.
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