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DEFERRED DIVISION
Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I now have to announce the result of a Division deferred from a previous day.
On the motion "Access to Justice", the Ayes were 224 and the Noes 184, so the motion was agreed to.
[The Division List is published at the end of today's debates.]
20 Jul 2005 : Column 1300
Council Tax
3.18 pm
Alistair Burt (North-East Bedfordshire) (Con): It has been a pleasure to participate in this stupendous debate. The Minister for Local Government made his case, not like Captain Ahab, but like Horatio holding the bridge with a bent rapier. The hon. Member for Sheffield, Attercliffe (Mr. Betts) made a consistent case on rate capping, and, although I do not necessarily agree with him, it would help him and us if he were to join us in the Lobby tonight. The hon. Member for Brent, East (Sarah Teather) made such a good speech that my wife paged me to say how impressed she was, although my wife agrees with me that she should send a copy of it to Councillor Neil Cliff, the Liberal Democrat leader on Mid Bedfordshire district council.
Since then, a succession of living legends have systematically taken apart the Minister's case. There is no case.
This has been a heady few weeks for the Government. First, confronting the dangers of global injustice, the Prime Minister took on the G8. Then, to put the European Union, which was going dangerously off-track, back on the rails, he took on the EU at the summit. Then, to prevent the danger of the Olympic games going to Paris, he took on the collective might of the International Olympic Committee, stepping in at the last moment. Yes, in the past few weeks, the Government have confronted the real dangers in modern life.
Now we come to the apex: to confront the dangers posed to democracy and economic stability by Mid-Beds district council, the Government are proposing the order before us. I feel that, in the manner of a Soviet show trial, I shall have to stand here and admit the crimes of Mid-Beds district council, for which it has been punished by the Minister and the Government. I do so, of course, in shame and degradation.
Led by Councillor Mrs. Tricia Turner, 53 local councillors attend to their work, working locally and diligently for local people. That is their first crime. Last year, the council had the audacity to offer the 10th lowest tax charged by any district council in England. Even after this year's increase, its local council tax would be the 16th lowest. It has also—this is a real horror to confess to the House—returned general fund balances to the council tax payer over the past two years. It has, I am ashamed to admit, identified £2.4 million in savings over the last three years, and a further £800,000 for next year, while making local decisions about the services required to respond to the needs of local citizens. I have to tell the Minister that there is a fifth column operating in his regional office, because the regional office of the Office of the Deputy Prime Minister also thinks that Mid-Beds is a good council.
Now we come to the crime passionel. In setting a budget for this year, Mid-Beds recognised that returning reserves to its citizens and trying to provide services worth £120 for £102 last year necessitated a rise this year, so as to head towards a balanced budget. The crime that I have to report to the House is that Mid-Beds had to propose a £1 per month increase in local tax.
20 Jul 2005 : Column 1301
I understand how this must appear to officials and to the Treasury. Memos must have been winging their way across Whitehall stamped with the Churchillian mark, "Action this day", to prevent such a crime from being committed. Of course, I dissemble to a degree, because I have given only the actual figure. If I give the percentage, it is, of course, as the Minister said, about 13 per cent.—but in real life, that means about £1 a month.
What is it that really requires the Government to intervene? Is it Mid-Beds' desire to run local services locally and efficiently, and to take the inflation-busting decision to charge an extra £1 a week? And what is the impact? At first glance, the Government will require the council to reduce its budget by £341,000 to about £11,193,000, which would reduce band D council tax from the original £102 to £94.57—a saving to the taxpayer of £7.61 per annum, or 15p a week. Worked out on an individual basis for all the residents in Mid-Beds, it means 3.7p a week being saved.
However, the real effect will be greater. Councillor Max McMurdo sent me an e-mail yesterday. Max is an independent councillor representing Sandy. Indeed, he is a living legend in Sandy. If Max decided to stand for Parliament, I would have serious difficulties; he is a great man. His e-mail says:
"Having been a councillor for six years, I have voted for the 'Lean and Mean' approach that we have adopted, trickling reserves into the budget and looking for corporate savings wherever possible, to keep our Council Tax as low as possible. Last year we delivered our full range of services costing £120 at a Band D tax charge of only £102. We have now almost reduced our reserves to the prudent minimum and have been planning the future, to get back to a balanced budget, without the use of subsidy from reserves, by 2007. That is the very essence of prudent financial planning and is surely at the heart of good local government.
It does mean, of course, that as we remove the subsidy each year the percentage increase is above inflation. Indeed it is inflation plus the amount of the withdrawn subsidy and this year our proposed increase was to be 13.3%, but this would still have left us with the 16th lowest District Council tax charge in England.
To impose a cap, any cap, in percentage terms is a nonsense. Surely one must look at the actual tax charge to be levied. A percentage restriction can only be an attack on those Councils that have a low starting point, which surely points to the authority having a tight fiscal policy. If the explanation(s) for an increase above the Central Government target are sound, then, I suggest, good central government should gracefully accept them and approve the local decision.
Well, Max, I think that, sadly, you probably are—because your arguments are absolutely right and fundamentally sound, and if the Government had the good grace they would listen, and do something about them.
The leader of the council and the chief executive have written a memo reminding local ratepayers that
"More and more responsibilities have been placed on Mid-Beds by the Government, with insufficient funding to support them. The Government grant to us this year did not even meet our inflation costs of over £1 million. This enforced capping will lead to very considerable cuts."
Greg Clark (Tunbridge Wells) (Con): Is my hon. Friend aware that the inspection and audit fees faced by local councils such as his have doubled since 1998? Is it not cruelly ironic that those fees imposed on councils are not subject to the capping about which he rightly complains?
Alistair Burt: My hon. Friend makes a very fair point. I have described in the House in the past the ludicrous situation whereby the Government impose all sorts of different charges on local ratepayers, as well as councils, yet no blame or control seems to be attached to them. For example, multiple sclerosis therapy centres face an increase of 300 per cent. in the charges for inspection until 2008, imposed by the Government, who tell the Healthcare Commission that such inspections have to be fully funded by the centres. So there is no capping for the 300 per cent. increase for people who collect voluntarily for multiple sclerosis sufferers, whereas when there is an increase of 3.7p a week for individual residents of Mid-Beds, the Government step in to cap. I do not think that my hon. Friend or I, or Patricia Turner or Max McMurdo, can explain that.
This is not what capping was designed to do—and here we come to the essence of the argument about capping. As you know, Mr. Deputy Speaker, I have been around for a long time—which is the basis of my leadership bid. I was there in the 1980s when capping was first introduced; I was Parliamentary Private Secretary to Ken Baker in the Department of the Environment. We faced challenges from the Greater London council led by Ken Livingstone and Liverpool city council with Derek Hatton, when there was a clear aim on the part of local government to use its power and strength to challenge the elected Government of the day. Derek Hatton firmly believed that if the Government were induced to send in commissioners, the people of Liverpool would go out on the streets and rise up. That was part of the plan.
I knew both Ken Livingstone and Liverpool city council. Councillor Mrs. Turner is no Ken Livingstone—and Mid-Beds district council is no Liverpool city council of the 1980s.
The cap is misused, out of proportion and demeaning to both central and local government. There is still time for the Minister to exercise his evident good sense, as well as good humour, and rip up his brief, turn to his officials and say, "I can't do this; I won't do this. Local democracy and justice must override what the Government are telling me to do."
3.28 pm
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