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Mr. Eric Pickles (Brentwood and Ongar) (Con): I thank the Minister for early sight of his statement, and particularly of the supporting documents. It has been a good and worthy tradition that we get plenty of time to respond to this particular statement, and it is partly due to him giving me so much information that I missed the first 15 seconds of his statement. No disrespect was intended.

I welcome the move towards a three-year programme and settlement, which is extremely sensible, and the Opposition support the Government in their aim to achieve that in the long term.

About a month ago, we were regaled with headlines in the national press suggesting that the hon. Gentleman and his friends in the Department were wandering around Whitehall with a begging bowl for local government, as previous settlements had proved to be inadequate. That followed the same practice last year. The House will recall the views last year of a senior and, sadly, anonymous mandarin, who, when asked to spare additional funds for the hon. Gentleman's Department, told the asking official to vacate his office as expeditiously as possible. To emphasise the point, the mandarin preferred to use the shorter Anglo-Saxon version of that request, and it seems that the spirit and the gesture remain firmly embedded in this settlement.

We were told that this year things would be different. We were told that the one-off bung of £1.4 billion would be added permanently to the local government
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settlement. It now looks like a £2 billion bung over two years. It was a settlement and then an amendment, but it need not be so. In the pre-panto season, we were promised a Robin Hood settlement in which hard-pressed local authorities would receive resources to do their job properly. On examination of the hon. Gentleman's statement, it is clear that the settlement would not please Robin Hood, but would find considerable favour with Guy of Gisborne, chief torturer to the sheriff of Nottingham.

The settlement envisages an increase in council tax of twice the rate of inflation. This year, council tax payers will see their bills approach an 80 per cent. hike since Labour came to office. Will the hon. Gentleman confirm that the small print in the Chancellor's pre-Budget report, on page 229, reveals that council tax receipts are forecast to rocket by a massive 7.1 per cent.—an extra £1.5 billion snatched from hard-working families and pensioners? That is an intolerable burden, particularly at a time when the Government have allowed a shameful drop in the take-up of council tax benefit.

Next year, like this year, we will see the sad parade of old-age pensioners being threatened with jail. Next year, like this year, we will see significant cuts in services by councils trying to keep their tax increases to as reasonable a level as possible. Next year, like this year, we will see that the optimism of the Minister's statement, as council budget meetings are held, will prove to be a false hope and a bitter reality.

Last year, we were promised that Sir Michael Lyons would have reported on this year's settlement. In October, we were promised an interim report this autumn. In today's pre-Budget statement, there was not a mention of that interim report. When will we receive it? Will it be before Christmas, after Christmas or in the early spring?—[Interruption.] It seems that the Minister of Communities and Local Government suggests early spring. It is no use to talk about an increase in funding without talking also about an increase in burden. The Minister's predecessor, the right hon. Member for Greenwich and Woolwich (Mr. Raynsford), who I am pleased to see in his usual place, became a late convert when addressing this problem. Some of the right hon. Gentleman's handiwork can be detected in the statement, and I am sure that many councillors will be grateful for that.

I understand that there will be a written statement today from the Secretary of State for Culture, Media and Sport on the levels of licence fees that a local authority can charge. I understand also that there will still be a lack of clarity on the level of costs that local authorities face. Will the Minister give an undertaking that local authority taxpayers will not have to fund any part of the burden? How will the Government ensure that the full start-up costs or new licensing burdens on local authorities will be fully met? In particular, how will the cost of appeals be fully met?

Last year, the Chancellor of the Exchequer announced a discretionary fare scheme for pensioners. The Minister will recall that I raised the problem of floor authorities, which he has mentioned. These are authorities that are in the process of losing grant across the board. Each year their losses are limited to the amount that is specified for the floor.
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If the money designated for concessionary fares was simply included in the floor calculations, many district councils would effectively receive nothing for concessionary fares. Will the Minister clarify the position? Will he confirm that the £200 pensioners' discount was a pre-election, one-year wonder and has now disappeared? Were not the promises made to pensioners by the Government of a £200 discount on their council tax merely a simple one-year pre-election bribe? Will he further confirm that that has now gone? The Deputy Prime Minister tabled an order bearing on the local authority pension scheme. It is identical to the one submitted, only to be withdrawn, a year ago. That created a unique double U-turn, separated only by a general election.

We have heard about the 85-year-old rule, but what of the rest? Can the Minister give an assurance that no part of the burden of the Government's change of approach to the local government pension scheme will fall on council tax payers?

The Government, against the wishes of the public, are seeking to impose a regional police force. Will the Minister give an indication of how large the increase is expected to be on the police precept to pay for the rearrangement of the furniture in police headquarters? Does he recognise that the money would have been better spent on catching criminals rather than wasting it on Powerpoint presentations at headquarters?

There is the issue of external finance. The new planning gain supplement is nothing more than a new Labour land tax and, just like the old Labour land tax, it will fail. No doubt the House will have an opportunity to debate the issue in some detail. However, I have a few questions about the financial division of the tax. How will it be divided between the Government, the regions and local councils? It looks like a rip-off by the regions. Given that it is to be collected by HM Revenue and Customs, can we be sure that there will be a return to local people? It has the appearance of another stealth tax.

Given that there is a fragile housing market, is the Minister worried that, perversely, the approach might dry up housing developments? As for London, does the increase include the Olympic precept? What protection is there from the excessive city hall demands by Mayor Livingstone on the people of London?

The council tax is now in deep trouble. There is no sign of it coming out of intensive care. It is kept going by whip-rounds and the odd bone from the Chancellor of the Exchequer. It is not a strategy for independent living; it is a recipe for delay in the hope that something will turn up or that Ministers will move on to a new job. There will be another year with bills going through the roof; another year with increases that are twice the rate of inflation; another year with the council tax being Labour's stealth tax. The Government have yet again let down the people.

Mr. Woolas: I believe that the contribution of the hon. Member for Brentwood and Ongar (Mr. Pickles) has left the House in some confusion. I am not sure whether he welcomes the extra money that will enable council taxes to be kept down, or whether he is privately gritting his teeth so greatly as to rattle his fillings with anguish at the rug being pulled from under his feet. His
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authority in Brentwood will receive 3.1 per cent. and 2.7 per cent. increases, while in Epping Forest, which I believe forms part of his constituency, the increases will be 9 per cent. and 6.1 per cent.

Mr. Pickles: What about pensioners?

Mr. Woolas: I intend to tell the hon. Gentleman about pensioners. First, let me say that I am grateful for his welcome for the two-year settlement, and—I think that he said this as well—for the indication of our intention to move towards three-year settlements in line with the spending review periods. Our policy is to provide predictability and stability for funding, so that local authorities and their partners can deliver services at stable council tax levels.

I reject the hon. Gentleman's interpretation of the 7.1 per cent. figure. This hoary old chestnut comes up every year, and is based on regressive estimates of council tax receipt. Again, the hon. Gentleman seems to be seeking to sow confusion—I do not say that he is doing so intentionally, although I have my own views—about the differences between council tax yield and council tax levels. The two are, of course, entirely different.

The hon. Gentleman said again that OAPs had been threatened with jail. Let me repeat, for the benefit of the House and the honourable ladies and gentlemen from the press, that no pensioner has been or will be jailed for not being able to pay council tax. There have been two instances this year of pensioners' receiving prison terms for being unwilling to pay the tax. I am surprised that the hon. Gentleman and his party should seem to seek to promote the idea that those who are unwilling to pay taxes should not do so. It is, of course, the hard-working, honest majority who suffer. [Interruption.] I am coming to the point about which the hon. Gentleman is shouting at me from a sedentary position. He asked 17 questions; 13 of them made sense, so I shall answer those.

I covered the hon. Gentleman's serious point about licensing fees in my statement. The written statement today from the Under-Secretary of State for Culture, Media and Sport, my hon. Friend the Member for Stalybridge and Hyde (James Purnell), the Minister who is responsible for creative industries and tourism, confirms that the system will be self-funding under the new licensing regime.

The hon. Gentleman talked about the £200 discount that was announced in this year's Budget—in the last financial year, but the current calendar year. I am sure he will join me in welcoming the fact that, as we speak, cheques for £200 are arriving on the doormats of his constituents. I note that his party is very silent on the policy for the future.

A statement on the local government pension scheme was laid before the House on Friday. The hon. Gentleman accused the Government of a double U-turn, but I can give him the assurance that he seeks. The scheme is funded, and the changes proposed following discussions between employers and employees will impose no extra burden on the taxpayer.

The hon. Gentleman asked about planning gain supplement. I can reassure him that the money is to pay for infrastructure, as requested constantly and
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sometimes reasonably by Opposition Members for their constituencies, and that the majority will go straight to the local area. That which is regional is, of course, for the local area, if the funding stream must inevitably be at a higher level.

I confirm that the precept for the Olympics is not included in the figures that I have given today. In answer to the hon. Gentleman's proposition that the council tax is in deep trouble, it is his policy that is in deep trouble. The predictability, the stability of funding and the extra money that is being provided following reasonable discussions with the Local Government Association mean that the Government will not tolerate excessive increases. We see no reason now why council tax increases should be above 5 per cent. Indeed, average increases could be well below that.

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