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Mr. Eric Pickles (Brentwood and Ongar) (Con): If ever in the early hours of the morning my sleep became troubled by worries about whether the Conservative party had done the right thing with regard to the pensioners discount, those worries have long gone, because it is clear to me that both the Labour party and the Liberal Democrats are rattled by our proposal and realise that we are on to a winner. How else can one explain the grumpy performance today of the Minister, who is usually a ray of sunshine on these occasions? Perhaps the rumours are right. Perhaps he has realised that there is a problem with regard to pensioners and has lobbied the Chancellor to do something about that in the Budget. Only time will tell. Perhaps the Minister will be eating his words in a little while. It is clear that, despite the abuse and the talk about pie-in-the-sky figures, he realises that he faces an enormous problem after the election, either in having to explain why he has left such a lousy legacy for the Conservatives or in having to defend the rapid rise in council tax that CIPFA suggests.

The Minister introduced a new definition of whether the Audit Commission is right or wrong in saying that its suggestion that increases in council tax are largely because of pressures placed on councils by central Government is wholly wrong. If the Audit Commission agrees with the Government, it is right; if it disagrees with them, it is wrong.

The Minister ended his long speech by listing a load of things that the Government have done for pensioners. Unfortunately, he did not address the one fact that pensioners remember—one third of the increase in the state pension has disappeared because of council tax increases.

My hon. Friend the Member for Ribble Valley (Mr. Evans) made a powerful case in discussing the increase in costs for council tax payers in Ribble Valley. He said that council tax has increased from £746 to £1,206 since 1997. From a sedentary position, the Minister says that that is because the example involves a Conservative council, but, as my hon. Friend pointed out, Lancashire county council is controlled by the Labour party, which imposed those increases. I hope that my hon. Friend is right, and that we take control of Lancashire county council and reduce the cost of council tax.

My hon. Friend the Member for North-East Bedfordshire (Alistair Burt) discussed the true effect on local authority expenditure of the squeeze by education spending on other forms of spending.

Sir Paul Beresford: My hon. Friend the Member for North-East Bedfordshire (Alistair Burt) mentioned the overbearing control of local authorities, which imposes an additional cost. In my small local authority, one
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comprehensive performance assessment costs £250,000, and when that figure is translated into council tax, it is multiplied by four. That council must collect £1 million and its budget is less than £12 million.

Mr. Pickles: My hon. Friend has made a powerful point, which further underlines why the Labour party is in such a mess. Our proposals are clear—protection for education, protection for health and protection for law and order. On the elements outside that protection, local authorities will be able to apply £4 billion a year of savings to keep down council tax or to improve services.

The Minister and the Government will be remembered for just one thing: on their watch, council tax increased by 76 per cent. For the first time, an average family in an average home will pay £100 a month in council tax—an independent survey predicts that band D council tax will hit £1,214 in England—but eight short years ago, the average family paid £30 a month in council tax, which shows how viciously the Government have targeted it.

The Government have managed to convert an earnest but dull property tax into an oppressor of pensioners, which is a mark of how cynically they have manipulated it.

Mr. Patrick Hall: Does the hon. Gentleman agree that pressure on residential council tax payers has increased since the business rate was nationalised and increases were capped annually? Does he favour the relocalisation of the business rate?

Mr. Pickles: I have to say that, if I were a Labour Member, the business rate would be the last thing that I mentioned, considering what revaluation means. The hon. Gentleman must already have constituents banging on his door telling him about the problem that they face with revaluation, and that is just a foretaste of what his party plans.

We have been invited to believe that big increases in council tax are a thing of the past and that we have hit sunlit uplands where low-single-figure increases have become the norm. But surely we have been here before, within living memory. In 2001, there was an increase of 6 per cent., only to be followed by an increase of 8.3 per cent. in 2002 and 13 per cent. in the following year. The difference is the general election. Of course things will be reasonable before the general election, but we want to know about Labour's plans for after it. Before Labour was elected, the Prime Minister preached the importance of keeping council tax down, pledging limited rises and preventing big increases. We know what followed—a 76 per cent. increase in council tax under this Government.

As my hon. Friend the Member for North-East Cambridgeshire (Mr. Moss) said, we have already received expressions of concern, including a letter from Sir Sandy Bruce-Lockhart about the £1.5 billion black hole in the Government's spending plans. As he rightly points out,

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The hon. Member for Kingston and Surbiton (Mr. Davey) clearly remains confused about whether he favours rebanding or not. He mentioned what his hon. Friend Baroness Hamwee said in the debate in another place. I quote:

Indeed, that is all she did say, so why do the Liberal Democrats favour rebanding? The last time the hon. Gentleman spoke he said that they did not, but this time he said that it was part of a deliberate policy. I have here the Liberals' official policy—I managed to get it from their website. It says:

Now it is official: rebanding comes courtesy of the Liberal Democrats. We know that their local income tax would hit working families particularly hard and cost them £630. Thanks to the honesty of the hon. Member for Twickenham (Dr. Cable), we know that it would start to bite families who earn in the mid-£30,000 bracket.

Many Members have referred to the plight of older people—a generation that this Government have done so much to airbrush out of modern Britain, and an inconvenient reminder of Labour's neglect. In eight short weeks, pensioners will have a choice, and it could not be clearer: under Labour, massive council tax increases, with a crippling revaluation; under the Liberal Democrats, a massive assault on the incomes of their children and grandchildren through an unfair local income tax; or under the Conservatives, up to £500 in their hands to address the abuses of the council tax—their own money back in their hands to do with what they wish. I am confident that given that choice, they will choose the Conservatives.

4.34 pm

The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister (Phil Hope): Let us cut straight to the main question, shall we? The key political question of the afternoon is the credibility of the Tories and their so-called council tax discount for pensioners. That is what this debate has been all about. The policy has been described by my hon. Friend the Member for Sheffield, Attercliffe (Mr. Betts) as giving more discounts to those who need them least. That is a good summary of the Tories' proposals.

Does the Tories' electoral bribe stand up or is it, as this debate has shown, unravelling? We witnessed the unedifying spectacle of Conservative MPs defending Tory councils that are going to increase their taxes by 13 per cent., 17 per cent., 23 per cent. and 100 per cent. That news will go back to the electorate in those constituencies, so that they know what those Tory councils and Tories really stand for.

What is at stake is the credibility of the Tories overall strategy for public spending. As my hon. Friend the Member for Bedford (Mr. Hall) said, they admit that by 2011–12 they will impose spending cuts of £35 billion per year, as compared with projections based on
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Labour's spending plans. The right hon. Member for West Dorset (Mr. Letwin), the shadow Chancellor, said in November that those spending plans

Leaving aside council tax for a moment, we see that the choice is clear: investment with Labour or cuts under the Tories. It was ever thus.

Then the Tories con trick comes into play. They are going to give some of the money back to particular groups, such as some pensioners in England, through a so-called discount on their council tax. That is a con trick, typical of the "now-you-see-it-now-you-don't" politics of Tory tax pledges. In reality, the Tories are once again being economical with the truth and offering fool's gold to the electorate.

We know that that money will not be found from efficiency savings. The latest edition of the Municipal Journal says that to suggest that the £1 billion cost of the rebate will be met by efficiency savings is pie in the sky. I think that the description given by the hon. Member for Brentwood and Ongar (Mr. Pickles) was pie-eyed, as well as pie in the sky. We know that those cuts can come only from cuts in front-line services. There is no money for those discounts—it must come from such cuts.

The Tories say, for example, that they would cut £1 billion by abolishing all local government inspections. I look forward to hearing a few Tory MPs explaining on the doorstep why they are taking away the service that keeps child protection in place or how they are going to cut £1 billion from local housing. I cannot see too many of them going round the housing estates explaining those things when councils receive a massive cut in the grant.

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