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Mr. Woolas: If the hon. Lady is here, she can speak for herself. Anyway, I was criticised by Opposition Members for making the formula simpler. I remind the House that the formula that I have announced today is a significant simplification of its predecessor, and that it builds on simplifications introduced previously by my right hon. Friend the Deputy Prime Minister.
Madam Deputy Speaker (Sylvia Heal): Order. I seek the help and co-operation of the House. I am mindful of the amount of time that Front Benchers have taken, and I see that a good many Back Benchers wish to catch my eye. I am also aware that we have important business to follow. May I therefore ask for single questions and brief replies? I may then be able to allow more Members to make contributions.
Paddy Tipping (Sherwood) (Lab): What estimate has the Minister made of the effect of the local government pension scheme on council tax levels in 200607 and in subsequent years? Against the background of tomorrow's industrial action in local councils, is he still hopeful that a settlement can be found that will modernise the pension scheme?
Mr. Woolas: Yes, I am hopeful, and the Government, as regulator of the scheme, stand ready to facilitate discussions between the employers represented by the LGA and the representatives of members of the scheme, the trade unions. Our policy is that the taxpayer should not be asked to pick up any additional burdens. This is a funded scheme. We have legal obligations to ensure that it is viable and, of course, legal, and we seek to do that in a way that will secure the future of the final-salary pension scheme to the benefit of all employees and of local authorities.
Mr. David Curry (Skipton and Ripon) (Con):
The crisis in social services is bound to be made worse by the formula because of increasing demands from old people's and, indeed, young persons' services, but that must be seen in the context of the crisis in the NHS as well, owing to increasingly close links between it and social serviceslinks that the Government and most sensible people want. What steps do the Government intend to take to ensure that those two crises do not simply play against each other and cause a steady deterioration in services, both for those who look to the NHS and for those who look to their local councils?
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Mr. Woolas: Of course the Government recogniseand have recognised in their joint work with the LGAthe pressures faced by social services, particularly services for adults and the elderly. It would be nonsensical to deny the existence of those pressures. But those pressures, the result of largely demographic changes, also apply to central Government, which is why our policy is to ensure that budgets are balanced. Behind the right hon. Gentleman's question is a paradox. The solution that he seems to offer is further increases in council tax, but if I were to allow them, his Front-Bench colleague, the hon. Member for Brentwood and Ongar, would no doubt be the first to criticise me. Joint work is required to deal with those very real pressures. Against the background of an increase in the revenue support grant, I must point out that the amount of money going to social services has not been cut, but increased.
Mr. David S. Borrow (South Ribble) (Lab): May I raise with the Minister the impact of the capping criteria on authorities that have historically had a low council tax, or, in the case of the Lancashire police authority, a low precept? Over a number of years, it has wished to raise its precept to its expenditure and to be in the middle rather than at the bottom of the list of authorities in respect of spending, but it has been unable to do so. That will have a considerable impact over the next few years as a result of the merger of Lancashire police authority and Cumbria police authority, which has a much higher precept. Will the Minister comment on the likely impact of the capping criteria in the light of that merger?
Mr. Woolas: I understand my hon. Friend's point. Lancashire police authority has, in common with others, been reasonable in setting balanced budgets. My hon. Friend's question about the impact of the merger of his police force is a matter for my right hon. Friend the Home Secretary, who will shortly take decisions on the future composition of the police. My hon. Friend's point about the historic level of the council tax having a huge impact on the way in which the precepts have been levied has also been raised by several hon. Members. One of the major reasons I took the decision to abolish the formula spending share was to allow greater transparency so that the House and the Lyons review can make decisions on the basis of facts rather than notional figures.
Sir George Young (North-West Hampshire) (Con): Would the Minister agree that the precept that he has just announced has been damaged by the Chancellor's announcement about pensioner rebate last Wednesday? Will he answer this simple question: when the Deputy Prime Minister and the Chancellor agreed the block grant figure last December, did the Chancellor have the courtesy to tell the Deputy Prime Minister that the pensioner rebate was to be abolished?
The Government take their decisions on these matters in the round. One also has to take into account the position of the Department for Work and Pensions, which funds the council tax benefit system. What cannot be dismissed is the fact that 2.5 million pensioners, representing 14 per cent. of the total council tax budget, pay their bills through council tax benefit.
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The hon. Member for Brentwood and Ongar cannot get away from that. As I said in my statement, no one who cannot afford to pay the council tax has to pay it.
John Hemming (Birmingham, Yardley) (LD): The Minister will be aware that it has been Government policy since 1997 to drive up the council tax at a rate faster than inflation. When will council tax be high enough and when will the Government stop driving it up beyond the rate of inflation?
Mr. Woolas: I do not accept the premise of the hon. Gentleman's question. Indeed, it provides a classic example of what I call the Liberal Democrat single transferable argument. When the council tax level is beyond what the hon. Gentleman thinks it should be and Liberal Democrats have influence in local councils, he blames the central Government; but when Liberal Democrats do not have influence in them, he blames the local councils. He cannot have his cake and eat it. The Government have increased revenue support grant to local authorities by nearly 40 per cent. In the four years from 1993 to 1997, it was cut in real terms by 7 per cent.
Dr. Andrew Murrison (Westbury) (Con): What note has the Minister taken of Trowbridge town council's 48 per cent. increase in precept, which means that the precept far exceeds the district council element of the council tax bill? Does he not agree that that is simply unacceptable?
Mr. Woolas: I have not received any praiseI suppose that I should not really have expected anyfor my decision on Aylesbury Vale and Wellingborough. The hon. Gentleman may think that I am going to study the figures for parish and town councils, but I am not; the legislation does not cover that level. That is a matter for the hon. Gentleman's town council, which will doubtless listen to his representations.
Mr. Greg Hands (Hammersmith and Fulham) (Con): Hammersmith and Fulham council has already increased its council tax by more than 60 per cent. since 1997. Everyone knows that today's debt is tomorrow's council tax. Is the Minister aware that council debt in Hammersmith and Fulham, which stood at £297 million at the end of 2003, is scheduled to rise to £500 million by the end of 2009? That is an increase of more than £200 million over six years. Does the Minister agree that this gross irresponsibility on the part of Labour-run Hammersmith and Fulham council will cost council tax payers dearly in future?
Mr. Woolas: I am grateful to the hon. Gentleman for raising that issue, but I advise him not to get into bandying about councils' debt figures. He will doubtless be on the doorsteps in the weeks to come, and I have to say what a superb and well-led council Hammersmith and Fulham is.
Mark Pritchard (The Wrekin) (Con):
What message does the Minister have for pensioners in my Shropshire constituency, given that they have just had a 4.9 per cent. council tax increase from Labour-led Telford and
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Wrekin council, and that they no longer have a £200 rebate? Do the Government not realise that such increases are driving many pensioners into poverty?
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