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I leave the Minister with one specific problem that we find in Bromley. The Minister knows that he has at least achieved one part of the Government’s amendment in relation to Bromley—he has brought it stable funding. It has been at the floor in terms of grant settlement for the past six years and it has consistently had the second lowest level of formula grant support in London for the past six years. That is not a stability that we would welcome, but a peculiar circumstance arises from it. Because it is a floor authority but has
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considerable demands for capital expenditure for education purposes, it is denied access to the supported capital expenditure revenue element of funding that comes from the Department for Education and Skills. So we are in the peculiar situation that, even if we could borrow under the prudential regime, there would not be any central Government funding to pick up the borrowing costs and we would then have to dip into revenue costs to cover that, which would push us even tighter against our settlement because of being at the floor. I suspect that that is an anomaly, and unless the Minister can come up with some explanation, people in Bromley will feel greatly aggrieved about that.

I have deliberately cut my remarks short. I hope that I have dealt with both a matter of principle and a local issue, and that the Minister will be able to assist on both those points.

9.32 pm

Mr. Andrew Pelling (Croydon, Central) (Con): I will keep my comments short as I know that another Back-Bench Member wishes to speak.

The upcoming local elections represent the 25th anniversary of my holding elective office, most of which time has been in local government. But perhaps the debate has not changed very much during those years. In many ways, I wonder whether the Lyons report will end up adding much more than the Layfield report did in terms of changing local government finance.

In many ways, much of this debate could have been repeated 25 years ago, and I am not sure whether we add much to debate when we get involved in ritual condemnatory remarks about one particular local authority or another. [Interruption.] I do wonder whether the hon. Member for Ealing, Acton and Shepherd's Bush (Mr. Slaughter), who speaks so often about Hammersmith and Fulham, ever debates any other subject in the Chamber.

Mr. Slaughter rose—

Mr. Pelling: I shall speak for only a very short time.

Such is the diffusion of power away from local government that there is little value in trying to pin blame on one local authority or another in terms of performance, bearing in mind the fact that so few powers are given to local government in any case.

It is welcome that the number of targets for local authorities have been reduced from 1,200 to 200, but that is still far too high a number if we are to believe that there is real discretion for local authorities.

There must come a time for some change in local government finance. With all the nationalisation that has taken place in local government provision, the quick and dirty approach will be to take much of those funding flows that in reality are national expenditures and to leave far more of the overall budget left for local authorities in the control of local authorities so that there will be much greater accountability.

9.35 pm

Sir Peter Soulsby (Leicester, South) (Lab): Thank you, Mr. Speaker, for allowing me to speak, albeit rather briefly, at the end of the debate.


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I was not intending to contribute, but three elements of the speech by the hon. Member for Meriden (Mrs. Spelman) prompted me to do so. First, she failed to explain precisely what is Conservative policy with regard to the funding of local government. She told us very eloquently what she and her party are against, but did not explain what they are in favour of or what they want to replace the council tax of which she was so critical.

Secondly, the hon. Lady failed to explain why revaluation would of itself lead to higher council taxes or how the total amount paid could somehow be increased by the process of revaluation. It would of course inevitably lead to some paying more, but, equally, to some paying less.

Thirdly—this element most prompted me to get to my feet—the hon. Lady accused the Government of making local councils mere agents of central Government. As somebody who was a council leader for a considerable proportion of the Thatcher and Major years, that accusation seemed pretty rich coming from the Conservative Benches. During those years as council leaders, my colleagues and I did our best to protect the most vulnerable in our communities from the devastation that the Tories caused to the services that we were providing on their behalf. I was well aware of the reality behind the Conservative commitment to local democracy. The reality was savage cuts in services, massive job losses and the devastation of the morale of members and officers in local government—and, of course, the poll tax.

The Government have much more to do to repair the damage that was done during those years. I wanted them to go further and faster, but I recognise that they have at least begun the process of rebuilding local leadership, of rebuilding the investment in local people, and of re-empowering locally elected representatives. I welcome the steps that have been taken. Local government and the political parties, at local and national level, need to respond to the challenge and to play their part, particularly in encouraging and enabling good-calibre candidates to stand for local government.

We must not forget that local government and local democracy are too important to the well-being of our society to be allowed to wither, and certainly too important to return to the denigration and devastation of the Tory years.

9.38 pm

Mr. Eric Pickles (Brentwood and Ongar) (Con): We have had a good debate that has ranged widely from reorganisation to ring-fencing. We heard a particularly elegant speech by my right hon. Friend the Member for Skipton and Ripon (Mr. Curry) about the balance between capacity and accountability. I seek some clarification from the Minister on the “ la carte” nature of the restructuring.

The Government are conducting a review of local government in several English counties, but I am not clear what authority they have to do that. Last Wednesday in a Westminster Hall debate, I had an opportunity to ask the Under-Secretary of State, the hon. Member for Basildon (Angela E. Smith), that very question. I said:


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She replied:

She then suggested that I was well aware of that.

I believed that procedures already existed to change the structure of local government. Indeed, they do. The authority for annual review of local government is set out in the Local Government Act 1992. Section 13 states that the Secretary of State may request the Electoral Commission to undertake a review, which in this context means

Section 17(1) states that structural changes can be effected by order of the Secretary of State on the recommendations of the Electoral Commission. In the case that we are considering, no request has been made to the Electoral Commission and, consequently, no recommendation to consider the structural changes.

I am not aware of any other powers that the Secretary of State has to initiate such a massive task. I know that, after the Budget, we passed special resolutions that any change in tax, rates or duties would have immediate effect. I cannot recall the House passing any special resolutions to enable the Secretary of State to introduce the review. I am confident that the Under-Secretary would have mentioned them had that been the case.

We are not considering an academic question, because local authorities have spent hundreds of thousands—perhaps millions—of pounds preparing for the review. They are responsible to their residents, who will look to them for the authority for expending that money. To have lawful authority, both Houses of Parliament and Her Majesty must agree. A draft law and a law in progress is not enough. Will the Minister for Local Government clearly set out the authority so that we can all understand it?

I am delighted to see the Secretary of State in her place. She suggested that she sought to pull back the powers to restructure. I respectfully remind her that the Local Government and Public Involvement in Health Bill has not returned to the House. Is she giving an undertaking to table an amendment on Report?

Ruth Kelly: Yes.

Mr. Pickles: That is fantastic; I would call that a result. We look forward to the measure’s return to the Floor of the House. If the information is correct, we may well look out for it.

Alistair Burt (North-East Bedfordshire) (Con): We might indeed.

Mr. Pickles: Yes.

My hon. Friend the Member for Meriden (Mrs. Spelman) made a moving speech about the sub-class of pensioners that is being created and the reduction in take-up of council tax benefit. She also emphasised that two thirds of councils report losses in NHS funding and have to make up the shortfall.


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My hon. Friend the Member for Mole Valley (Sir Paul Beresford) spoke with great eloquence about the impact of the comprehensive performance assessment on his small local authority. He also referred to a visit by the hon. Member for Hazel Grove (Andrew Stunell). As a councillor, I also appeared before my hon. Friend and I always found him to be charming and most courteous.

My hon. Friend the Member for Wealden (Charles Hendry) spoke eloquently about the plight of his council and talked movingly of the deprivation in his constituency.

Andrew Stunell rose—

Mr. Pickles: I hope that the hon. Gentleman will not say that my hon. Friend the Member for Mole Valley is not a charming person.

Andrew Stunell: I certainly would not say that the hon. Member for Mole Valley was anything other than charming, but did the hon. Member for Brentwood and Ongar (Mr. Pickles) get a result when he visited his charming colleague?

Mr. Pickles: Oh, I did—I always found that my hon. Friend delivered.

My hon. Friend the Member for Croydon, Central (Mr. Pelling) spoke about greater accountability and wondered whether Lyons and Lichfield would end up as the same thing. At least there is a possibility of a BBC documentary about the Lyons report.

The hon. Member for Leicester, South (Sir Peter Soulsby) asked what evidence we had that revaluation would increase the council tax. The answer is Wales, where 33 per cent. of households went up a band and only 8 per cent. went down. He criticised the suggestion that the local authorities have become the agents of Government, but the right hon. Member for Norwich, South (Mr. Clarke) originally made it. If the hon. Gentleman has problems with that, he should take it up with his party.

The hon. Member for Hazel Grove was a little disingenuous. At least his predecessor admitted that the redistribution effect of equalisation—having a slightly higher local income tax in one part of the country to pay for another—could be a problem. The hon. Gentleman appeared to suggest that that was not the case. With only a week to go before the local elections, I thank him for making it clear that the Liberal Democrats oppose offering special help to pensioners. I will ensure that that appears in our last-minute leaflets to make it clear that the Liberal Democrats have abandoned elderly people.

The hon. Member for North Swindon (Mr. Wills) was very kind about Conservative control in his area, suggesting that everything was right in respect of ring-fencing and central control, but his argument was eloquently demolished by my hon. Friend the Member for Bromley and Chislehurst (Robert Neill).

The hon. Member for Plymouth, Devonport (Alison Seabeck) was too nice about me for me to criticise a single thing that she said, but I have to say to the hon. Member for Ealing, Acton and Shepherd's Bush (Mr. Slaughter) that every time he speaks about
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Hammersmith council I know exactly what the wedding guest felt like in “The Rime of the Ancient Mariner”.

The Secretary of State made an interesting point but was rather unkind about Trafford. I took the opportunity to look into all the metropolitan district councils surrounding Trafford—and guess which authority had the lowest council tax? [Hon. Members: “Trafford.”] Yes, Trafford, and guess which party controls Trafford? [Hon. Members: “The Conservatives.”] Yes, and all the others have levied vastly higher council tax bills.

The Secretary of State went on at some length about all the questions that we have been asking, suggesting that we were scaremongering about a new way of raising council tax and revaluation. Indeed, the Minister for Local Government got rather upset about it all. Yes, we have tabled a number of parliamentary questions and we have taken the opportunity to use freedom of information legislation. We know that the Government are looking into computer-assisted mass appraisal and automated valuation models and that they have spent the best part of £500,000 buying in bulk cameras for their inspectors to have a look at various things.

We also know—the House may be interested in this—that the council tax inspectors in the Valuation Office Agency have been holding high-level talks with local tax inspectors in Hong Kong. That gives a whole new dimension to a Chinese takeaway. The talks included a summit at Hong Kong’s new Disney resort on the logistics of holding annual council tax revaluations.

As my hon. Friends will testify, I have always been of a romantic disposition, dreaming in my youth of far distant places. In my early years, I was much taken with the book “Beau Geste”, and felt that to see the world, a period of recruitment into the French foreign legion was the thing to do. I see now that I was wrong and that the Valuation Office Agency is the place for exotic travel, taking in Disneyworld and Hong Kong. Admittedly, unlike in the foreign legion, in the Valuation Office Agency one is unlikely to be shot at by Tuaregs or the Vietcong, but there are other discomforts. The air conditioning in some of the five-star hotels can be a little tricky after one has spent the day talking to Mickey Mouse. There is surely no distance that the Government will fail to travel in order to rob pensioners of their savings.

There is one sure test that shows how proud Government supporters are and how much they want to win in May. Are they prepared to be associated with Labour policies? Are they prepared to put their names on the ballot paper? Are they prepared to wear the party’s colours? We all know where the Conservative party stands. We are standing in a record number of seats—90 per cent. of all the contests have a Conservative party candidate standing, and it is even higher in some regions. The Liberal Democrats are just treading water, but the Labour party has gone backwards, contesting not far short of half the seats in the election. That is the lowest number of seats contested by any Government party at a local election.
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It is the clearest indication that no one trusts this Government. Nobody believes that their policies are working and their closest supporters are too ashamed of Labour’s record in local government to wear a red rosette.

9.49 pm

The Minister for Local Government (Mr. Phil Woolas): I congratulate the hon. Member for Brentwood and Ongar (Mr. Pickles) on the flourish at the end, which has done for local government policy what George Best did for the soft drinks industry—not much at all. I congratulate him on the flourish, but what is clear from the debate is that the traditional stance of the Conservatives in opposition is not to have a policy. We know that they do not have a policy, because they have not said anything positive in debates over the last two years. We know that it is the job of Her Majesty’s loyal Opposition to oppose Government policy, and we expect them to do that, but if I were Her Majesty, I would want my money back, because they have failed to do it effectively.

The Conservatives are not stopping at opposing our policy, however. They are engaging in a rather dangerous and disingenuous campaign of misrepresenting the Government’s policy. They are misrepresenting the Government’s policy, and they know that they are doing so. The comments made by the Government in debates in Committee on the Local Government and Public Involvement in Health Bill—which my hon. Friend the Member for Plymouth, Devonport (Alison Seabeck) rightly observed was a consensual Bill—have not been passed to the Conservative Front-Bench spokespersons who have been speaking tonight.

On restructuring, the Government asked councils whether they wanted to put forward proposals to move to unitary structures. It has already been pointed out that half the councils that have put forward proposals are controlled by the Conservatives. These are not proposals from the Government. They are the result of a devolutionary approach to restructuring, which stands in stark contrast to the approach taken by the previous Conservative Government, who imposed unitaries on Scotland and Wales without so much as a proper consultation, and who introduced changes following the Banham review, after a helicopter flight by the then Secretary of State, Michael Heseltine, with an Ordnance Survey map and a felt tip pen—his words, not mine. The idea that the Government are putting a gun to the head of councils and threatening to withdraw resources is a scandalous accusation, and it is not true. I understand that there are local elections going on, but I wish that the Conservative party would keep the arguments at local level and not pretend that the proposals are those of the Government.

The power to direct has been agreed with the Conservative-led Local Government Association on a cross-party consensual basis. The commitment has been given to the Committee considering the Local Government and Public Involvement in Health Bill and to the House by the Secretary of State that that will be the case, yet the myth that it is not the case is perpetuated.


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