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27 Mar 2008 : Column 337

Lembit Öpik (Montgomeryshire) (LD): In order to get through all the amendments to the Housing and Regeneration Bill on Monday, we will have to cover one page full of amendments every nine minutes. Even John McCririck cannot speak that quickly. The Leader of the House attempts to reassure us by saying that those are drafting amendments responding to concerns expressed in Committee. It is not for her to say that. Does she agree that we need more time for us to be able to carry out our function of scrutiny, rather than reducing the scrutiny process to a lottery, whereby we will not have a proper chance to consider more than 100 amendments that the Government say are necessary but do not have the time to justify?

Ms Harman: I note that the hon. Gentleman is adding to the points that have been made by other hon. Members; I will not take up any further time by repeating what I have already said in response.

Mr. Mark Field (Cities of London and Westminster) (Con): I endorse the comments of my right hon. Friend the Member for Maidenhead (Mrs. May) about maternity and midwifery services. The issue is the quantity, not of the quality, of those services. I hope that the Leader of the House will give some attention to that. On the regulation of supermarkets, the right hon. and learned Lady knows that there have been a plethora of Competition Commission and Office of Fair Trading reports over the past decade or so. Will she ensure that we have a full debate in Government time on all the issues to do with the regulation of supermarkets?

Ms Harman: That is a good idea. I am glad if the hon. Gentleman’s party is going to support regulation, which it previously seemed to be wholly against. If the Opposition have seen the point of proper regulation of markets I welcome that, and I will consider his proposal. He also mentioned maternity services. I note that the hon. Member for Buckingham (John Bercow) will personally sample those maternity services next week, and we will expect a report back to the House. May I wish him and his wife the very best of luck?

Mr. David Heath (Somerton and Frome) (LD): May we have a debate on the Rural Payments Agency? We all know about the fiascos of previous years, but I have recently being trying to help one of my constituents, Mrs. Portch of Gilcombe farm near Bruton, and neither she nor anyone in my office can contact anyone in the Rural Payments Agency who has any authority, or even knowledge of their own systems. At least two of the people who answered the helpline indicated that their short-term contracts were about to end, and they did not know whether anyone would be in post this time next month. Is it all going wrong again?

Ms Harman: I will raise the point that the hon. Gentleman makes with my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs, and in particular I will ask him to deal with the individual case that the hon. Gentleman mentions, and ensure that he writes to him forthwith in respect of that case and the system generally.

Mr. Julian Brazier (Canterbury) (Con): I welcome the right hon. and learned Lady’s earlier pledge of a debate on the Byron report. May we have a Government
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response to the very worrying announcements by a group of former airline pilots yesterday, supported by a growing number of scientists, about the dangers of contamination of the air supply in airliners by organophosphates from the engines? The scientist who most recently joined the supporters of that case is the chief scientific adviser to the Royal Australian Air Force. For months and months the matter has gone from one committee to another, meeting behind closed doors. There has been a refusal to co-operate with the American inquiry by the Federal Aviation Administration. Is it not time we had a full public inquiry?

Ms Harman: I will refer the hon. Gentleman’s comments to my colleagues in the Department for Transport. Perhaps the subject is one that Ministers there might consider for a written ministerial statement.

Dr. Julian Lewis (New Forest, East) (Con): When the Leader of the House has had a chance to check the figures, may we have a statement from her on how much it costs each year to screen letters and packages sent to Ministers and Members of the House for explosive or other hostile devices? Does she agree that it will be possible to save all that money in future if the process becomes redundant—if, for any reason, a comprehensive list of Members’ private addresses is ever published on the internet?

Ms Harman: I do not want to say too much on the matter of hon. Members’ addresses because, as the hon. Gentleman knows, the question whether there is an obligation under the Freedom of Information Act to publicise hon. Members’ addresses is before the courts, and they will adjudicate on it. However, I recognise the points that he makes about security, and no doubt those points will be made strongly before the court.

Mr. Mark Harper (Forest of Dean) (Con): Is the Leader of the House aware that in the draft Constitutional Renewal Bill, part 6—the ominously named “Final Provision”—resurrects a clause that was in the Legislative and Regulatory Reform Bill to give Ministers the power to revoke Acts of Parliament by order? One of the well-known political websites says that, like a vampire, the “Destroy Parliament” clause has returned. Will she take the opportunity today to drive a stake through its heart?

Ms Harman: No, I certainly will not. If it is agreed, as I propose, that the Bill should be handled in this way, the Joint Committee, which will have 11 Members of this House and 11 Members of the House of Lords, will have time to scrutinise it in great depth.

Mr. Philip Hollobone (Kettering) (Con): Proposals have been advanced to transform two schools in Kettering into academies. The extra investment in local education will be widely welcomed by local residents. May we have a statement from the Secretary of State for Children, Schools and Families about when a final announcement about the proposal will be made, and an assurance that it will indeed be two schools that are transformed into academies, not just one?

Ms Harman: I suggest that the hon. Gentleman write to the Secretary of State for Children, Schools and Families on that matter.

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Council Tax

12.20 pm

The Minister for Local Government (John Healey): With permission, Madam Deputy Speaker, I should like to make a statement on council tax and the action that the Government propose to take with authorities that have set excessive budgets for 2008-09.

Today the Department for Communities and Local Government has released figures showing that the average council tax increase in England next year will be 4 per cent. That continues the downward trend in council tax increases, and it is the lowest average increase in council tax for 14 years. There are three reasons for that. The first relates to central Government funding: next year will be the 11th successive year in which central Government have increased funding for local government by more than the rate of inflation. Since 1997 our funding for councils has risen by 39 per cent. in real terms; by 2010-11 the central Government grant for local government will have increased by 45 per cent. above inflation.

The second reason relates to local authorities. Local councils, not central Government, set their own budgets and council tax. The figures show that, in the main, local authorities are recognising their responsibility to local residents, making hard choices about local priorities, and above all, continuing to achieve efficiencies. I very much welcome that. We have made £385 million available over the next three years to support local government improvement and efficiency.

The third reason is council tax capping itself. I know that it is unpopular among authorities, but they know that the Government are prepared to use their reserve powers to protect taxpayers from excessive council tax increases. We said that for 2008-09 we expected to see average council tax increases of substantially below 5 per cent. We said that we were prepared to act if necessary. We said that that would apply to all authorities. The Chancellor made that clear in his comprehensive spending review statement, and I made it clear on 6 December during my statement to the House on the provisional local government settlement. I set it out again in a letter to all local authority leaders that month.

Next year will see the second lowest average increase since council tax was introduced in 1993. I welcome that. Almost two thirds of authorities have set council tax increases below 4.1 per cent., nearly one in six have set increases below 2.5 per cent., and a further 21 have either set no increase at all or are reducing their council tax bills. I know, however, that many householders are finding that their finances are under pressure—particularly those on fixed incomes, such as pensioners. So given that some authorities are setting double-digit increases, it is right that we should step in to help protect council tax payers. That is why I want to set out for the House today the action that we propose to take over the weeks ahead.

The legislation requires the Secretary of State to determine her excessiveness principles, one of which must relate to an authority’s budget requirement—which, broadly speaking, is the authority’s spending financed through formula grant and council tax. The Secretary of State can also determine other principles and, as in previous years, the Government have decided
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to set a second principle based on council tax. The principles, applied equally to all classes of authority, are that an authority’s budget next year will be excessive if it has set a budget requirement increase of more than 5 per cent. for next year compared with 2007-08, and a council tax increase of more than 5 per cent. in the same period.

Only authorities that have exceeded both principles are subject to action. For 2008-09, eight authorities have exceeded those principles. They are Portsmouth city council and the police authorities of Bedfordshire, Cheshire, Leicestershire, Lincolnshire, Norfolk, Surrey and Warwickshire. Those have all set budget increases above 5 per cent., up to almost 7 per cent.—with the exception of Lincolnshire, which has set a budget requirement increase of 29 per cent.

In addition, four police authorities have set council tax increases of more than 10 per cent. Warwickshire’s is 13 per cent., Leicestershire’s 15 per cent., Cheshire’s 17 per cent., and Lincolnshire’s 79 per cent. That list of designated authorities is made up predominantly of police authorities, yet in the past 10 years we have seen a massive increase in police numbers—an extra 14,000 since 1997. We have also more than doubled investment in policing, by an extra £3.6 billion over the same period. In addition, in December the Government announced the police funding settlement for the next three years, which will give each police authority a guaranteed increase of at least 2.5 per cent. in each of the next three years, with more going to those with the greatest need.

Let me be clear: today I am not announcing a cap on the council tax of those authorities, although I am confirming the start of a process that could lead to that. I am announcing the start of that process, not its conclusion. During the coming weeks, we will listen carefully to the representations that all authorities make to us. All authorities now have a right under the legislation to challenge our proposal. They have a right to raise any specific issues that they believe justify their budget and council tax increases. Before reaching final decisions we will consider carefully and seriously all representations that authorities make. Today I am writing to the chairs of all eight authorities confirming that my right hon. Friend the Minister for Security, Counter-Terrorism, Crime and Policing and I will meet them should they wish to make their case in person.

Our final decision could be to nominate an authority, which means either capping the authority for the following year or setting a notional budget for 2008-09 that would provide the basis for judging future increases. In this case, there would be no re-billing and authorities would also have a further chance to make representations. Our final decision could be to cap an authority in-year. We could either confirm the cap proposed today or set a different cap. Capped authorities would then need to re-bill for a lower council tax.

Today my officials are writing to the designated authorities, and that will provide the legal basis for informing them of the principles that the Secretary of State has proposed. At the end of the process, I will either inform or seek the approval of the House, as required. It will be the House that takes the final decision on any contested in-year capping.

In conclusion, although I am disappointed that it has been necessary to take action this year, I make no
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apologies for it. Authorities can have been in no doubt about the Government’s approach. Keeping council tax under control is and will remain a top priority for the Government, and we will act to protect council tax payers from excessive increases.

Robert Neill (Bromley and Chislehurst) (Con): I thank the Minister for his courtesy in giving me advance sight of the statement. That said, there is rather more behind the bald lines of the statement than meets the eye. The background is this: the Government inherited a system of local government finance that worked. Ministers declared in 1998:

However, after 10 years of hard Labour—as we are going to debate policing later, the phrase “hard Labour” is not inappropriate—council tax is now the most unpopular tax in Britain. That is not because the concept is flawed, but because people have been ground down by the year-on-year increases in council tax.

The Minister talked about increases. Will he confirm that an increase of “only” 4 per cent. actually means a £53 increase on band D bills from April ? Furthermore, does he accept that council tax bills have exactly doubled since 1997, taking the typical bill on a band D home to almost £1,400 a year? Can he tell us where the £14 billion extra a year raised in council tax has gone? Will he concede that council tax rises are equivalent to an extra 4p on the basic rate of income tax?

Does the Minister accept that his comments about pensioners and those on fixed incomes will ring a little hollow to the many people already pressed by council tax increases and other costs of living under this Government? Is it not right—as he hints, but did not explicitly say—that, added to utility bills, council tax hikes will hit those on fixed incomes hardest? Is he prepared to admit that, for a typical pensioner, one third of the increase in the basic state pension has been snatched back by higher council tax? If he is serious about helping pensioners, will he explain why the Government provided a £200 payment for pensioners’ council tax in March 2005, but never repeated it? In the absence of an explanation, the less charitable might feel that that was an example of pure pre-election cynicism by the Government. Has the Department estimated the number of pensioners who are likely to end up going to court, and perhaps to jail, as a consequence of their difficulties in paying this year?

The Minister referred to funding settlements. Perhaps he also ought to think about the funding drivers of council tax. Will he concede that beneath the bald figures is the continuing pressure of increased funding demands on local government? For example, there is cost-shunting from health service organisations, and the passing on from central Government to local government of commitments and obligations that are not fully funded, with council tax taking the strain as a consequence. Those commitments and obligations come from Whitehall initiatives, regulations and burdens imposed from the centre, but with the council tax payer picking up the bill.

The Minister commended the behaviour of local authorities in seeking to restrain council tax. I agree with that, but might he have the grace to concede that that downward trend is undoubtedly linked to the fact
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that my party now controls more local authorities than his party or the third party, and has more councillors? Will he put his rhetoric into action and encourage more councils to follow the example of Hammersmith and Fulham council, which has cut council tax for a second year, but has, none the less, invested about £1.5 million over two years in 24-hour, seven-day-a-week neighbourhood policing? Will he tell his party’s mayoral candidate not to make such ill-informed attacks on local authorities in his own bailiwick in future? [ Interruption. ] The hon. Member for Ealing, Acton and Shepherd's Bush (Mr. Slaughter) must not get so excited. I know that he has wandered in and is in a state of some agitation, but we are dealing with a statement.

Let us consider the consequences of capping. I agree with the Minister that some of the rises in police precepts are unacceptable, but will he accept that drivers to which he does not refer include unfunded initiatives from Whitehall, such as the 101 non-emergency number, a failure to fund neighbourhood police community support officers, and the consequences of 24-hour licensing? I agree that it is no coincidence that unelected police authorities have generally imposed the highest rises in council tax. Does he accept that that says something about the nature of governance in such circumstances? He might want to consider that a strong argument for my party’s proposal that directly elected police commissioners set those levels. Rather than the Minister imposing a cap centrally, would he be prepared to consider the far more responsive, democratic and localist solution of submitting council tax increases to a democratic referendum?

Families throughout the country are already struggling to cope with the rising cost of living, and council tax increases will not help. When the Minister checks the figures, I hope that he will concede that even a £4 increase pushes bills up to £115 for a typical household. For the sake of completeness, will he confirm that council tax has doubled under this Government, while councils have been obliged to cut or to impose charges for libraries, social services and weekly rubbish collections? Will he concede that the underlying thrust of his statement is that people are paying more and getting less?

John Healey: I thank the hon. Gentleman for his courtesies, but I am astounded by his assertion that we inherited from the last Conservative Government a system that worked for local government. He should ask local government what it was like, in the four years before 1997, under the last Tory Government, not to have real terms increases in funding, such as the ones they have had under Labour, but to have four successive years of real-terms cuts. He talks about council tax rises in the year ahead, yet, despite professing concern about the level of the rises, he fails to welcome the fact that it is the second lowest level of rises since council tax was introduced. He does not recognise that that has happened through a combination of increasing investment in local government and increasing freedom for local government to set and run its finances.

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