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No tax is ever popular, and I recognise the resistance to the level of certain council taxes. The issue provokes strong feelings, but council tax benefit provides help for those on low incomes, including pensioners, and we are working hard to improve take-up. From October, we will change the system so that more pensioners who are
entitled to help get it, and I would have hoped that we could get the hon. Gentleman’s support, and all-party support, for that move.
The hon. Gentleman accepts that some of the rises are unacceptable, which I welcome. He would accept, therefore, that we are right to take a tough stance at this stage. Although he did not say it, I hope that he accepts that we are right to ensure that all eight authorities I mentioned have the chance to put their case about the specific circumstances that they believe justify the increase in budget and council tax they propose. My right hon. Friend the policing Minister will do just that over the next three weeks.
Finally, I turn to some of the party political points that the hon. Gentleman tried to make. He cites bills for band D properties, but he knows that fewer than one in six households throughout the country pay council tax at band D. If one looks at the average cost of council tax per household, one finds that this year, as last year, Labour councils cost households less, and that rises for households under Labour-controlled authorities are lower than those in Tory areas. Despite what he says, low bills have little to do with Tory-controlled councils. Of the authorities that are setting either zero-increase or reduced council tax for next year, half are Tory and half are Labour, including Labour-controlled Hackney, Labour Oldham and Labour Bolton. There is even one that is controlled by the Liberal Democrats.
The idea that a referendum is a new proposal, or the right way ahead, is faintly ridiculous. It is a double con. It is not new, and it does not change the fact that it will be the Government, through Parliament, who ultimately take decisions about the appropriate level of council tax capping.
Julia Goldsworthy (Falmouth and Camborne) (LD): I, too, thank the Minister for advance sight of the statement and for letting the “Today” programme know this morning, which gave me considerably more notice.
The Minister spoke about the generosity of the funding settlement for local government. Will he acknowledge that, as I think he said, this year’s settlement is the tightest for a decade and that it will leave millions of pensioners and families facing inflation-busting council tax increases, which they will struggle to pay? Below 5 per cent. is still above inflation, and there are still problems with the uptake of council tax benefit.
Will the Minister also acknowledge that today’s statement will leave millions of households, as well as the affected authorities, in confusion? Bills are already on doormats, direct debits have already been set up and it is probably too late to change them, and we still do not know what the end result of the process that he has initiated today will be, yet we are now just a week away from the new financial year.
Does the Minister accept that the statement represents an above-inflation increase in the costs that local government faces, at a time when it is taking on additional responsibilities that the Government have imposed without sufficient resources? The experience of Portsmouth, which was named in the statement, is a
case in point. The Secretary of State promised a rise in Government support of 1 per cent. above inflation. The reality was a 1 per cent. cash-terms—that is, below inflation—increase, or a real-terms cut. Will he acknowledge that?
In addition, 2 per cent. of the 5 per cent. rise that Portsmouth city council has proposed will be spent on bailing the Government out of the concessionary bus fare scheme that they are imposing, which we discussed earlier this week. Will the Government accept that that is their responsibility? The city council set a zero precept, which reduced council tax to 4.8 per cent. The council has been responsible not because of the Government’s actions, but in spite of them?
The other named authorities are all police authorities. Will the Minister acknowledge that after this statement police authorities will remain underfunded? The tight police funding settlement has left police authorities with little choice. I notice that rural authorities, rather than metropolitan authorities, consistently face such difficulties. This year’s and next year’s settlements represent a real-terms freeze rather than a real-terms increase. That highlights the fundamental flaw in the funding formula. Rural areas are having to make up the shortfall through council tax.
There is a need for more democratic accountability, but as well as the measures that the Minister has announced in the statement, will he commit to undertake a fundamental review of the funding formula, which might turn out to be the problem at the heart of the announcements that the named police authorities have made? Does he accept that there is a need for investment in those areas, including Cheshire, where Garry Newlove was murdered outside his home? The council tax rise was earmarked to provide £1.6 million for neighbourhood policing and £2.6 million to recruit additional officers. Is the Minister saying that that additional investment is not required in those areas? Will he confirm that a total of about £20 million of funding will be cut from the named authorities?
The decision announced today, at the last possible moment, is an attempt to claim that the council tax system, which the Conservatives support, is a success. Does the Minister accept that the decision will create administrative chaos? The Department is denying the inescapable fact, which the Lyons report pointed out but which the Government are ignoring, that council tax is not fit for purpose and never was, not even when the previous Conservative Government created it. Will the Minister accept that it is pointless tinkering with a broken system? Capping is misleading and it conceals the truth about rising bills, many of which exceed 5 per cent. when precepts are included.
Will the Minister acknowledge that it is time that the council tax was abolished and replaced with a fairer system of local income tax, which would be based on the ability of pensioners and those on fixed incomes to pay? Would it not be better to give local authorities responsibility and do the right thing by axing the unfair council tax?
John Healey: As the Minister previously responsible for the Office for National Statistics and legislation to reinforce and protect the integrity of national statistics, I and my Department respect absolutely the fact that the deadline for the publication of our council tax increases was 9.30 this morning, whatever the “Today” programme may have run.
Secondly, every authority knows that it must take into account the risk and potential cost of re-billing if it chooses to set budget or council tax rises that may be excessive. I encourage local authorities to examine and explain that over the next three weeks, if they choose to make a general case to us, as I hope they will.
Thirdly, the hon. Lady put in some special pleading—getting in early, I guess—for Portsmouth. She would probably be best advised to let Portsmouth city council do that for itself. Indeed, the council leader will receive a letter from me inviting it to do just that.
The new right to free travel, which will be available to more than 11 million pensioners and disabled people from next week, will be funded in full by the Government, through an extra £212 million next year.
In December, the Home Secretary guaranteed every police authority an increase of at least 2.5 per cent. in each of the next three years, with more money going to those areas that need it most.
Finally, on local policing, I would have thought that the hon. Lady welcomes the fact that there will be a greater front-line policing presence in every neighbourhood in the country, with a dedicated local team in each one from next week.
Madam Deputy Speaker (Sylvia Heal): Order. Many hon. Members are hoping to catch my eye. May I therefore ask that we have single, brief supplementary questions, with brief replies accordingly?
Mr. Andy Reed (Loughborough) (Lab/Co-op): My hon. Friend the Minister is a generous person and has already agreed to take some recommendations and representations. Leicestershire’s rurality is not necessarily taken into account in the formula, so will he ensure that he considers not just the 15 per cent. increase but whether the funding formula is fair, which is why Leicestershire has responded as it has?
John Healey: I reassure my hon. Friend that I will consider any representations that Leicestershire police authority wishes to put over the next three weeks. If he or any other hon. Member wishes, I will also consider any representations that they make in support of any the authorities that I am designating today.
Mr. Edward Leigh (Gainsborough) (Con): Will the Minister acknowledge that policing in Lincolnshire is in crisis? As my hon. Friend the Member for Bromley and Chislehurst (Robert Neill) said from the Front Bench, the 76 per cent. rise is unacceptable, but so is the fact that we are the lowest funded police authority per head of population, at £11 million lower. The Minister must act and acknowledge our difficulties by increasing our grant by £3.4 million, as he did last year, and capping the authority.
John Healey: I do not and will not accept that policing in Lincolnshire is in crisis. I accept that there are problems with policing in Lincolnshire; indeed, my right hon. Friend the policing Minister and I have looked at financing for the policing authority. If, over the next three weeks, the police authority wants to make the case that it believes can justify that budget and council tax increase, I would welcome that and we would give it all due consideration.
Christine Russell (City of Chester) (Lab): Chester has just been named as one of the safest places to live in the UK. That is due in large part to the commitment and effectiveness of Cheshire constabulary, which has made neighbourhood policing a top priority. However, Cheshire constabulary probably has the lowest shire county precept. The Minister has generously said that he will meet hon. Members, so I hope that he will meet a delegation of Cheshire MPs.
John Healey: I will indeed meet a delegation of Cheshire MPs, when my hon. Friend might want to reiterate that crime in Cheshire is down, that police officer numbers are up and that investment in community policing is strong, as she rightly said, with more than 230 community support officers in the county, none of whom were there 10 years ago.
Mr. Douglas Hogg (Sleaford and North Hykeham) (Con): May I reinforce the point made by my hon. Friend the Member for Gainsborough (Mr. Leigh)? The Lincolnshire force is indeed in crisis, due to serious underfunding as a result of the inadequate formula. If the Minister is going to cap Lincolnshire police authority, he must bring in additional funds, this year and in the long term, through an adjustment in the formula. If additional funds are not forthcoming, the Lincolnshire force will have to address its financial problems through a substantial reduction in manpower, which would be very unsatisfactory.
John Healey: I do not make the assumption that the funding formula is somehow flawed in the case of Lincolnshire. Next year, Lincolnshire will get a rise that is significantly above the floor and therefore significantly above the level that other police authorities are receiving. However, if Lincolnshire police authority feels that it has a particular case to make, I invite it to make its case to Ministers over the next three weeks. We will then consider it.
Helen Southworth (Warrington, South) (Lab): I welcome the fact that my hon. Friend has said that this will be an open process and that he will take representations. Will he take into account the fact that, despite having the lowest precept of any shire force, Cheshire police have taken a very responsible approach to the increase process, including engaging in wide public consultation? A MORI poll showed 87 per cent. support for an increase of at least £1.50 towards increased policing. The proposal received very strong support, particularly from pensioners and people on low incomes, who felt that they would most benefit from an increased police presence.
John Healey: I will take any such information into account, but I must point out to my hon. Friend that, while we are conscious of the budgets and council tax precept increases proposed by certain police authorities, it is the overall council tax bill that households are most concerned about. That is the bill that they have to pay, so it is important to keep that context in mind as well.
Mr. Henry Bellingham (North-West Norfolk) (Con):
Is the Minister aware that Norfolk constabulary is doing a superb job of policing a large rural area? However, Her Majesty’s Government, in the form of
the policing Minister, are putting more tasks, obligations and targets on to its plate, many of which are not properly funded. The constabulary is therefore in an invidious position: either it cuts important police initiatives or puts more pressure on the hard-pressed council tax payer. What advice does the Minister have for that police force?
John Healey: The recorded crime and burglary statistics suggest that the hon. Gentleman is right: Norfolk constabulary is doing a good job. It is helped not least by the fact that funding for police numbers and community support officers has risen, and that the number of police support staff in the county has also risen.
Fiona Mactaggart (Slough) (Lab): I am glad that the Minister is not taking action against Slough council, despite the fact that it is putting its council tax up by 4.99 per cent. As he is aware, we are concerned about the impact on Slough of inaccurate counting. Will he look into whether Slough council tax payers are getting value for money? We receive more than twice as much per head as the average Berkshire council. We receive £87 more than Reading, which is a three-star authority, yet we are only a two-star authority. Nevertheless, my electors face a significant increase in their council tax bills next year.
John Healey: All councils expect to explain not only to Ministers but to their own residents exactly how the services they provide are improving and represent good value for money. I was able to join my hon. Friend in Slough earlier this month, and experience for myself how the borough feels about the present council. I dare say that, post 1 May, we can look forward to a Labour-led council looking hard at the value for money that the present Conservative-led council has provided to the residents of Slough.
Mr. Mark Field (Cities of London and Westminster) (Con): I must confess that I am relieved, if not surprised, that neither of my two local authorities is on the potential capping list. That is partly because City of London police will yet again need to dig into reserves, as a result of the unsatisfactory funding arrangements. Will the Minister meet me and representatives of the Corporation of London, not least because of the important national and international work in relation to anti-terrorism and white-collar crime that City of London police performs on behalf of all police and the Home Office at large?
John Healey: At the risk of annoying my diary secretary, may I say that I am sure that my right hon. Friend the policing Minister and I will find time to meet the hon. Gentleman and his authority? If he will allow it, however, we will give priority over the next three weeks to the eight authorities that I have designated this afternoon.
Mr. Mike Hall (Weaver Vale) (Lab):
May I refer my hon. Friend back to the subject of Cheshire police authority? Even if the proposed 17 per cent. rise remains uncapped, the increase for a band D property will be £1.64 a week. Sixty-five per cent. of households
in Cheshire are in band C or below. The average council tax for policing in Cheshire will be £132, while the national average is £180, so council tax payers in Cheshire will still pay £52 a year less in council tax for policing if the rate remains unchanged. The fundamental problem is that Cheshire has historically had very low council tax for policing. I believe that the Department needs to adopt a more sophisticated approach to ensure that these considerations can be taken into account before any decisions on capping are made.
John Healey: My hon. Friend speaks cogently on behalf of his county. I will take his points into account, particularly if they are captured in any case that the police authority wishes to make to me and my right hon. Friend the policing Minister over the next three weeks.
Mr. Philip Hollobone (Kettering) (Con): As a member of Kettering borough council, may I ask the Minister to look again at the planning application fee regime for large-scale housing developments? If someone wants to build a house, the planning application fee is £265, but if they want to build 4,000 houses the application fee per dwelling is £12.50. Small councils such as Kettering borough council simply cannot cover the cost of processing large-scale applications. The sensitivity of these councils’ budgets is such that every £50,000 of expenditure saved represents 1 per cent. on the council tax.
John Healey: I have to admit that I had not expected to take questions on Kettering borough council, but I will ensure that my right hon. Friend the planning Minister is made aware of the hon. Gentleman’s comments. The charging system for planning services is precisely calibrated to allow councils to recover their reasonable costs, but to do no more. Kettering borough council is likely to act consistently with that principle, but if a case is made for looking into the matter we will do so.
Andrew Miller (Ellesmere Port and Neston) (Lab): My hon. Friend the Member for Weaver Vale (Mr. Hall) set out cogently the historical difficulty Cheshire police authority faces. The authority nevertheless provides services in a complex, disparate community, which requires a huge amount of co-operation with adjacent forces. My hon. Friend the Minister has been very generous in his comments and with his time, but will he make a special effort to look at the historical anomalies in Cheshire created by factors that he inherited and seek to find a way of creating an authority that has a basis for going forward over some years?
John Healey: I will look at any element of the case that an authority wishes to make to justify the budget or council tax increase that is being proposed.
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