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Lord Bassam of Brighton: My Lords, looking at the education figures, the education increase is some 2billion. That is a 7.5 per cent cash increase; 5.1 per cent in real terms. Since 1997–98 that is a 10.5 billion increase. As a member of the Government I am extremely proud of that significant increase. The noble Baroness asked about the amount being held back. I cannot answer that question, but I am happy to have it researched and to provide the detail to the noble Baroness.

I am sure that all Members of your Lordships' House will welcome the fact that a typical secondary school with 1,000 pupils will see a direct grant payment rise of some 50,000 in the year 2003–04, and a typical primary school with 250 pupils will see its direct grant payments rise by some 10,000 in that financial year. We want to ensure that money for education reaches the front line directly. I am sure that all three major parties are agreed on that. That is what we are attempting to achieve through this settlement and all other settlements.

I understand the noble Baroness's unhappiness on the issue of the census. If particular authorities feel that the quality of the census in their area is not as it should be, no doubt they will have already have made representations. All I can do is to encourage them to continue to do so. I know from my local government experience in Brighton that where we had disagreements with the count we made representations, and, from time to time, governments have recognised the validity of those claims. It is open to local authorities to make such representations. As I said, however, the census provides the best available data to deal with these matters. Unhappiness with the census will undoubtedly continue, but we have to trust and rely on that material.

Baroness Byford: My Lords, I am glad that the Government have recognised the difficulty of sparsity in some of our very remote areas. I shall concentrate on those areas, where it is extremely costly to deliver services. I have three questions. First, what proportion of the new allocation will be used to cover increased pay awards—both for pay and for pensions—for local authority employees? Pay and pensions are two very considerable aspects of the districts' expenditure.

Secondly, what extra funds have been allocated for home-to-school transport and some of the peripatetic services in very remote rural areas?

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Thirdly, how much consideration was given to the fact that the national Government require local government to provide many additional services? I am thinking in particular of the attempt to keep people in their own homes for as long as possible—which in itself is good—with the consequence that people are being moved out of hospital very early. The cost of such a move is very high for those in urban areas, but it is extremely high in very sparse areas. Social services are already much more sparsely allocated in rural areas than in urban areas. I hope that the Minister will address that point.

Lord Bassam of Brighton: My Lords, the noble Baroness asked three good questions, but I am unable to reply in the detail they deserve. Ministers reached a judgment on sparsity based on the best available evidence, and almost all sparse areas have gained from the overall reduction in top-ups and the consequent increases in the basic amounts. We have very carefully taken account of that. It is not particularly relevant to this settlement, but some very careful work relating to Scotland and Wales has been done to identify key settlements. As I made plain earlier, however, this settlement benefits rural areas, with grants to rural areas increasing by 7.5 per cent, I think. We continue to take account of density and sparsity issues.

I cannot answer the noble Baroness's first question on the percentage increase in pay and on pensions. Home-to-school transport, however, will be within the LEAs' central functions and will be part of their internal allocations. I recognise that that is an issue on which representations will undoubtedly continue.

We have tried to adjust the baseline to take account of the extra burdens, and to identify those new burdens within the formula. It is an exercise that governments must take into account every year when trying to establish the rationale behind their formulas.

Lord Greaves: My Lords, I have two points. First, will the Minister answer the question on the extra cost to local authorities arising from their anticipated licensing function, and the question on BIDs which he did not have time to answer earlier?

Secondly, it will take us a long time to come to grips with this mass of figures and information. As noble Lords have said, however, the settlement has been represented as a transfer of new funding from the South to the North. Is that the case?

Lord Bassam of Brighton: My Lords, I think that local authorities have broadly welcomed the new licensing regime. Perhaps the noble Lord himself, when he was more busily engaged in local authority work, campaigned to bring licensing within the local authority ambit. I do not know, but I think that it is the type of issue that exercises the minds of local councillors. My understanding of the licensing regimes is that they will generally be self-funding. I think that that has been understood from the outset of the negotiations to bring the new arrangements within the orbit of local authorities. However, that is all subject to passage of the Bill.

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The noble Lord raised broader issues such as winners and losers and North versus South. We have tried to ensure that we have a formula that works and that operates fairly for all of England. I would contend that this formula is simpler, despite what the noble Baroness, Lady Blatch, and the noble Lord himself have said. We have tried to present a formulation that takes greater account of local circumstances and the ability to increase council tax and that is more easily explained. All formulae are complex, but this one provides for a basic amount per head plus top-ups for deprivation. I do not think that anyone could argue against including top-ups for deprivation in the formula. The formula also takes account of pay costs and other specific needs. As the Statement makes clear, the formula also helps smaller authorities.

Others might disagree, but I would argue that the regional variations fall within a fairly narrow band. In the South East, the increase is 4.5 per cent, whereas in the East Midlands and West Midlands it is at the upper end, at 7.1 per cent. It is 6.3 per cent in the Yorkshire and Humber region; 6 per cent in the North East; and 6.6 per cent in the North West. I think that I made a note earlier that the district authority in Pendle—which the noble Lord, Lord Greaves, represents or represented—did really rather well this year.

Lord Greaves: My Lords, as a Member of your Lordships' House I do not represent anyone but myself.

Lord Dixon-Smith: My Lords, in the light of the figures mentioned by my noble friend Lady Hanham and provided in the background information to last week's Pre-Budget Report, are we to take it that future council tax increases at three times the rate of inflation would be reasonable?

Lord Bassam of Brighton: My Lords, I do not think that it is for me to pronounce from this Dispatch Box what would be a reasonable increase.

Lord Dixon-Smith: My Lords, the penultimate sentence of the Pre-Budget Report states that there,

    "is no reason why councils cannot continue to improve services whilst sticking to reasonable council tax increases".

If the two figures provided by two separate departments are to have any validity, the Minister is obliged to accept the proposition.

Lord Bassam of Brighton: My Lords, I listened to what the noble Lord said, but I do not have to accept his proposition. It is not for me to pronounce on what is an acceptable or unacceptable percentage increase in council tax—I am sure that it will vary across the country. I am also sure that it will vary very much in line with the express wishes of local voters, local electors and those who play a full part in their local authority. There will undoubtedly be larger council tax increases in some areas than in others. It will also reflect their ability to raise council tax, which is an important part of the new formulation.

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So I shall not pronounce. However, I think that the baseline of our settlement, which is well above the current inflation level and has very protective floors and ceilings, ensures a very generous Statement. I challenge the noble Lord, Lord Dixon-Smith, to compare this year's settlement with even the most favourable settlement under the previous Conservative administration. I think that he will find that, in some if not most respects, that settlement is found wanting.

Potato Industry Development Council (Amendment) Order 2002

4.19 p.m.

Baroness Farrington of Ribbleton rose to move, That the draft order laid before the House on 23rd October be approved [40th Report, Session 2001–2, from the Joint Committee].

The noble Baroness said: My Lords, I beg to move the first Motion standing on the Order Paper in the name of my noble friend Lord Whitty.

The Potato Industry Development Council, known as the British Potato Council, is an executive non-departmental public body. It was established by the Potato Industry Development Council Order 1997, under the provisions of the Industrial Organisation and Development Act 1947. It exists to commission potato research and development; to transfer technology; to collect and disseminate market information and to promote potatoes in the UK and overseas markets.

The BPC is self-financing through a statutory levy on growers and purchasers of potatoes which raised approximately 5.85 million in the year 2000–01. It carries out important work for the potato industry and I know that DEFRA Ministers appreciate its achievements at a difficult time for the industry.

The major changes proposed in this order are the raising of the minimum levy thresholds for both growers and purchasers and the establishment of a dual levy rate system. The increased thresholds will relieve smaller players of the financial burden of the levy and reduce the BPC's administrative costs. The dual levy system, with a basic rate, and a higher rate for late payment, will act as an incentive for punctual payment and further reduce the BPC's administrative costs. The order also proposes that when growers and purchasers do not provide annual returns by the due date, BPC estimates based on previous information can be increased by up to 10 per cent. This will allow for estimates to reflect upward planting and market trends as appropriate. The net result of these changes will be to direct more of the levy to the front line tasks of the council. The amendment order also proposes some minor cosmetic changes. The order will come into effect on 1st January 2003. I commend it to the House.

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Moved, That the draft order laid before the House on 23rd October be approved [40th Report, Session 2001–02, from the Joint Committee].—(Baroness Farrington of Ribbleton.)

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