New
Clause
31
Precepts
‘(1)
The Local Government Finance Act 1992 (c.14) is amended as
follows.
(2) After section
40(9)
insert—
“(9A) The
Greater London Authority shall have printed an explanation and billing
notice dedicated solely to the annual precept raised by the Greater
London Authority.”.’.—[Michael
Gove.]
Brought
up, and read the First
time.
Michael
Gove:
I beg to move, That the clause be read a Second
time.
Almost the best
point in favour of new clause 31 was made in passing, but with some
eloquence, by my hon. Friend the Member for Hammersmith and Fulham. He
pointed out earlier that the London borough of Hammersmith and Fulham
is about to extend to those wise enough to vote for its current
administration—and to those who do not vote for it—a 3
per cent. reduction in the council tax. That is a remarkable
achievement. However, any resident of the borough who anticipates
paying less will be gravely disappointed when the total bill is
presented to them. As we all know, the likely GLA precept is to be 5
per cent. above the current level that is being paid, so the savings of
Hammersmith and Fulham will be wiped out by Mayor Ken’s
extravagance.
We
believe that the new clause would ensure that, for busy council tax
payers, it was clear where responsibility lay when a local authority
was lowering its council tax, but the Mayor is increasing the burden.
It is understandable when a council tax bill comes in and we see at the
top of the bill the crest of our respective local borough that we are
inclined to think, “Bloody Westminster” or, “Dear
me, Hounslow has been overspending again”, when in fact
Westminster and Hounslow may have been keeping their own houses in
order, but have to act, in effect, as tax gatherers for the
Mayor.
Mr.
Slaughter:
I can easily put the hon. Gentleman’s
mind at rest. The extraordinary quantity of Pravda-like
propaganda that comes out of a council in Hammersmith and Fulham leaves
no opportunity not to inform residents in the most colourful language
of exactly the point that the hon. Gentleman is putting forward. I wish
that I had the time to point out the errors into which that council has
fallen, but I fear that Hammersmith and Fulham has already taken up a
lot our time
already.
Michael
Fabricant:
On a point of order, Lady Winterton. It may be
of interest to the Committee to know that Pravda is the Russian
for truth.
The
Chairman:
That is not a point of order for the Chair. I
call Michael
Gove.
Michael
Gove:
Thank you, Lady Winterton. I am grateful to my hon.
Friend for that point of
order.
I must confess
that I would have thought that reading publications similar to
Pravda was an enjoyable recreation for the hon. Member for
Ealing, Acton and Shepherd's Bush. It would have probably reminded him
of his undergraduate days. Nevertheless, he has once again eloquently,
but perhaps unwittingly, provided me with an argument to underwrite the
new clause. The poor residents of Hammersmith and Fulham need to have
pointed out to them where accountability lies. If the new clause were
accepted, there would be no obligation on Hammersmith and Fulham
council to inform its residents exactly where the division of
responsibility lay because it would be there in the council tax
bill.
Mr.
Pelling:
I am very grateful to my hon. Friend for giving
way so speedily. Is he aware that both the Mayor and the London
councils are in favour of separate billing in such a fashion? Does he
not think that the Government should endorse the proposal, since they
are keen to promote maximum participation in local democracy? By making
clear the direct lines of accountability, as he suggests, and allowing
for separate billing, they would only encourage people to participate
in local elections.
Michael
Gove:
As ever, my hon. Friend makes an admirable point.
Once again, it underlines two of the qualities that he has shown
throughout our proceedings: his absolute commitment to improving the
quality of local democracy and a keen understanding of the balance of
opinion within London politics when it comes to the Bill and the new
clauses. His argument could not be clearer or more
effective.
Those
people who might want to shield the Mayor from his own extravagance do
not have an ally in him. This Mayor is proud of his extravagance. He is
in the proud old Labour tradition of big spenders who consider their
level of expenditure to be a virtue. In that respect, the widespread
support for the new clause—given that it favours transparency,
is supported by London councils and that the Mayor wishes to endorse
it—should recommend itself to the
Minister.
Ms
Buck:
Does the hon. Gentleman agree that, in the interests
of transparency, there is the truth and there is the whole truth?
Following his argument, does he support the fact that local authorities
such as mine, Westminster, would also be required to advertise to their
local population something that they strikingly do not? I draw
attention to the fact that 86 per cent. of all funding for services
delivered in the borough of Westminster is delivered through local
government grants. A mere 14 per cent. is actually raised from the
council tax. Does he agree that, if we want a well-informed electorate
who can exercise the need for control over their local authorities,
they should be supplied with all the information and advice about their
local authority finance?
Michael
Gove:
I do, indeed, agree with the hon. Lady; it is a pity
that her Front-Bench colleague does not. Exactly that provision was
contained in the Sustainable Communities Bill, which received its
Second Reading on Friday. I take it from what the hon. Lady said that
she will support that Bill when the opportunity arises, because it is
certainly our wish to do so. It is a tragedy that the Department for
Communities and Local Government is not doing so, and I suspect that it
tells us something about its mixed priorities that last night in the
House of Commons the Minister for Local Government made it clear that
the Department regarded the Bill as overly bureaucratic and beside the
point. To my mind, it was a tragic missed opportunity and a suggestion
that the DCLG does not have at its heart the admirable commitment to
localism displayed by the hon. Member for Regent's Park and Kensington,
North.
Transparency in
billing would serve the interests of accountability by ensuring that
those Mayors who believe that high expenditure is the route to
re-election would have the opportunity to campaign on that basis, and
other Mayors—perhaps such as the Conservative Mayor, who is
likely to triumph at the next poll—would have an opportunity to
advertise their prudence and their value-for-money programme through a
separately billed precept, and as a result would be able to win the
election in 2012 and preside over our successful
Olympics.
Tom
Brake:
I support new clause 31. It is straightforward and
simple. It is about transparency in billing, which is something that we
must all support and recommend. Most local authorities do that well
through the leaflets that come with the council tax bill, certainly in
Sutton, which explain what portion of the pie comes from grants and
council tax and so on. I hope that Labour Members will also be willing
to support the initiative. The fact that it has the support of the
Mayor and London councils is significant. It would also give the
Minister an opportunity to show that the Committee stage is meaningful
and that the Government are willing to take on board sensible proposals
that receive support from all quarters and are about making the
important issue of the precept much clearer to our
constituents.
Our
constituents are very exercised indeed about by council tax increases
above the rate of inflation, but often the arguments about a mayoral
precept that has increased by 100 per cent. over four years are lost.
The focus is on what the local authority is doing, and the Mayor is
fortunate to be let off the hook. This is a sensible proposal. I cannot
for the life of me think why the Minister would possibly want to reject
the new clause, and so I look forward to hearing his message in support
of it.
Jim
Fitzpatrick:
The Government accept that it is important
for local taxpayers in London to understand to whom they are paying
their council tax and the contribution that the GLA as a major
precepting authority makes to council tax bills issued by the boroughs
in London. Local taxpayers rightly need to understand where their
council tax is going and what services it funds. Clear information is a
vital prerequisite for that.
However, the Government cannot
accept the new clause, which would require the GLA to print its own
bill and explanatory notes dedicated solely to the GLA precept. Such a
requirement on the GLA would be costly and potentially more confusing
to council tax payers than the present arrangements. First, it is not
clear how the new system would work in practice, as the boroughs would
still remain legally responsible for the collection of the precept. If
the intention is for the borough as the collecting authority to
continue to issue the demand for payment, and for the GLA to issue an
additional bill that would not actually be a demand for payment, we
would be creating a recipe for potential confusion for the taxpayer.
If, instead, the intention is for Londoners to receive two separate
demands for payment, one in respect of the GLA and one in respect of
the borough, but pay both to the latter, that seems even more confusing
for
taxpayers.
12.30
pm
Secondly, the
GLA has indicated that the additional costs of separate billing could
be up to £10 million a year, depending on how the new duty was
implemented, given that there are more than 3 million eligible
households in London. That additional cost would have to be funded by
either higher taxes or cuts to services, which nobody wants. My advice
is that the Mayor does not support the provision in the new clause,
which is contrary to what Opposition Members have said. I apologise for
the confusion, but that is the information that I have been given.
There is clearly disagreement on
that.
Thirdly, it is
not clear whether requiring the GLA to produce its own billing notice
would improve local taxpayers’ understanding of their council
tax bills. The GLA precept is already clearly identified on the current
bills issued by
boroughs.
Mr.
Pelling:
I do not want to argue with the Minister, but the
Mayor of London has said openly in assembly meetings that he would be
happy for the precepts to be produced separately. I was not trying to
mislead the
Committee.
Jim
Fitzpatrick:
I was not suggesting for a second that the
hon. Gentleman was trying to mislead the Committee. Indeed, his
explanation could well be consistent with the Mayor not supporting the
new clause. He could be happy if it were passed without supporting it.
There is no intention to mislead on either side. There have been
occasions when Conservative Members have supported the Mayor’s
view and we have opposed it, and vice versa. There is no inconsistency
in saying that, whether or not the Mayor supports the new clause, we
sadly do not.
As I was
saying, the GLA precept is already clearly identified on the current
bill issued by each borough. There is also a statutory requirement for
information about the GLA’s budget, expenditure and the impact
of changes in the amount of council tax charged to be included in the
explanatory material that accompanies
bills.
Finally,
the new clause would set a precedent for separate billing for other
major precepting authorities—county councils, police and fire
authorities—which would
be costly and unnecessary. For those reasons the Government consider
that it would be best to continue with the well established and
generally efficient arrangements for collecting council tax in London
whereby boroughs bill and collect the GLA precept on behalf of the GLA
as part of their council tax billing notices. I therefore urge the hon.
Member for Surrey Heath to withdraw the
motion.
Michael
Gove:
I am disappointed to hear the Minister’s
response. It was intriguing that he spent most of it aiming at his
straw man, which was that under the new clause the GLA would be
responsible for separate billing arrangements. I hope that I and the
hon. Member for Carshalton and Wallington made it clear that we wanted
greater transparency within one bill, to be sent by the borough. We
wanted greater detail about how the GLA disposes of public money
through the
precept.
It is clear
that the Minister does not wish to accept the new clause. However, the
hon. Member for Regent's Park and Kensington, North seemed to indicate
in her intervention that she could see the logic in it, so we have hope
and shall press the new clause to a
Division.
Question
put, That the clause be read a Second
time:—
The
Committee divided: Ayes 7, Noes
9.
Division
No.
23
]
Smith,
Ms Angela C. (Sheffield,
Hillsborough)
Question
accordingly negatived.
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