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Mr. Kevan Jones: Does the hon. Gentleman agree that those of his constituents and mine who are on average earnings would pay more under a local income tax scheme? During the general election, the Liberal Democrats' website verified that two average earners in my constituencya policeman and a nurse, let us saywould pay more. Alas, that evidence has been removed from the website, as it became an embarrassment to the party.
Mr. Turner: The hon. Gentleman is, of course, absolutely right that they would have to pay more: the lower the average income in the constituency, the higher the rate at which local income tax would have to be levied. I have to say that I did not spend much time during the general election looking at the Liberal Democrat website. I had much better things to do, but perhaps we are about to hear an explanation now.
David Howarth: It is no part of the Liberal Democrat proposals that we remove all equalisation between local authorities. We believe that the amount of equalisation is currently greater than is necessary to overcome the disparities between different councils. Unlike the hon. Member for Brentwood and Ongar (Mr. Pickles), I refer to different councils rather than overall regions.
Mr. Turner: I am grateful to the hon. Gentleman for making that clear. We are drawing out some interesting information from the Liberal Democrats. First, we had business rates for second home owners; now we have the idea that some local authorities do not need equalisation. Perhaps the Liberals would place on their website a list of the local authorities that do not need any equalisation. It would be interesting to voters in those councils to know that they are being targeted by the Liberal Democrats to make a bigger contribution to local tax than before.
The problem with local tax is that the more money is spent, the more has to be raised. That is a fundamental fact that the Liberal Democrats will not accept. They will not accept that if a council spends more or wastes money, more has to be taken from the taxpayer. That is at the root of their troubles. That is why my local authority had to raise local taxation over the last four years by almost 50 per cent. I repeat that the Liberal Democrats raised taxes in the Isle of Wight by nearly 50 per cent.something that even the Chancellor of the Exchequer has not achieved. He managed to achieve a 60 per cent. increase over eight years, but the Liberal Democrats achieved a 50 per cent. increase over four years.
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You will not be surprised, Mr. Deputy Speaker, to know that the Liberal Democrats were roundly rejected in the county council elections, which coincided this year with the general election. Where they, along with their independent allies, had formerly had a majority of seats, they were reduced to five seats out of 48. That is because the people of the Isle of Wight understand that if more is spent and more is wasted, taxation will be greater and it will be local people who have to pay the tax.
By gosh, the Liberal Democrats did waste more. Let us look at how they administered the fire service on the Isle of Wight. It was described as "wholly ineffective" by the Audit Commission, which also pointed out that ideas for change were simply "not taken seriously". Because of the incompetence with which the Liberal Democrats administered the service, we were in danger of losing not only our fire control room, but entire control over the fire service from the island to the mainland.
On highways, the Liberal Democrats were criticised by an Audit Commission report three years ago not only for having some of the worst roads in the country, but for not spending the amount of money set aside to improve the roads.
On schools, we found, in the words of the Liberal Democrat portfolio holder for education, that standards were "too low" and "County Hall leadership wanting". Those were her words, so what was the Liberal Democrat solution? It was to spend £500,000 on a report about how to improve standards in schools. However, that report came up with nothing about improving standards, only with a reorganisation. It produced nothing about standards; it was all about structuresprecisely the sort of thing that the Government criticise. It came up with a £70 million reorganisation with no idea of where that money would come from. It is not surprising that the Liberal Democrats went into the election somewhat lacking in the confidence of my constituents on the Isle of Wight.
The crowning glory of the Liberal Democrat election campaign was their proposal for a tourist tax. You will be aware, Mr. Deputy Speaker, as are many hon. Members who visit my constituency, that the Isle of Wight is a glittering jewel in the tourist industry, which serves many people from all over the country very well. It is a very popular place to visit, but three months before the local election, the Liberal Democrats dreamt up the idea of a tourist tax. They disguised it, of course, as Liberal Democrats often do, and called it a visiting vehicle tax. Whether people arrive by ferry or by air, most use a motor car to get around the island
Mr. Kevan Jones: Have we not had an announcement today of a new tourist tax that would affect the Isle of Wight and many of the hon. Gentleman's constituents, because the Liberal Democrats have announced that they would impose business rates on holiday homes?
Mr. Turner: Indeed, but I am not sure of the consequences. It would take more research than I could expect the Library to do in a few minutes.
The proposal was one of the most un-thought-through of even a Liberal Democrat manifesto, because the consequence of a tourist tax is to drive tourists away.
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Mr. Pickles: Is my hon. Friend aware that that is not the only tourist tax that the Liberal Democrats suggest? They are also suggesting a tax on hotel accommodation.
Mr. Turner: I assume that the Liberal Democrats want everyone who comes to the Isle of Wight to walk there on water and then live in a tent. When they calculated the effect of their tourist tax, they did not allow anything for collection. Eventually, they were forced to claim that the tax would be only about £1 a tourist. How much would it cost to collect £1 from every tourist, but not from those who live on the Isle of Wight? I would imagine that it would cost more than £1 to collect that, so the poor benighted taxpayers of the Isle of Wight, had they been foolish enoughthankfully, they were notto re-elect the Liberal Democrats to county hall, would have paid more to collect that tax than it would have raised.
The record of the Liberal Democrats on the Isle of Wight speaks for itself and it is reflected in Liberal Democrat councils up and down the country. They sold a property for £100,000 that was subsequently sold for £1 million, a loss of £900,000 to the taxpayers of the Isle of Wight. It was the Prince Consort in Ryde, in case anyone wishes to queue up for another property at such a price. They should bear in mind, however, that the new administration will take more care to sell things at their proper value. The Liberal Democrats also rented some office accommodation, called Enterprise House, for £300,000 a year and then left it empty. They built a lay-by for £250,000 and employed four chief executives in four years. They held a very successful pop festival, now in its third year, but they budgeted £30,000 for it in the first year and spent £380,000. They also tried to sell a property known as Northwood House, but they had to pay compensation to the prospective purchaser, because they discovered that they did not own the property after he had incurred considerable expenditure. That is the record of the Liberal Democrats in my constituency.
When the right hon. Member for Greenwich and Woolwich, the former Minister, undertook his balance of funding review three years ago, the county treasurer predicted that the Liberal Democrats would have to put up local taxes by 11 per cent. to account for the loss of money that the Government would take away. In the event, the Government gave the council more moneyunlike most Conservative councilsso I led an all-party delegation to meet the right hon. Gentleman. Out of his munificence, he took £1 million from Hampshire and gave it to the Isle of Wight. The total benefit has been £13 million over the past three years, but the reaction of the Liberal Democrats was not to increase council tax by 11 per cent., but to increase it by 14 per cent.
That is the record of the Liberal Democrats. If one spends more, one has to tax more. That is what drove the Liberal Democrats out of control after 20 years in county hall on the Isle of Wight and will doubtless do so elsewhere. It is said, "If it ain't broke, don't fix it." Well, I recognise that the local government funding system is to some extent broke, and needs to be fixed. If it is to be fixed properly, we need to identify the causes of the breakdown before we try to fix it. The cause of the breakdown, whether it is the Liberal Democrats locally or the Labour Government nationally, is trying to screw
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too much out of the taxpayer. We should all remember the message that if one spends more, one has to tax more.
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