That is not an academic or pedantic point of debate; it is one of substance and may significantly affect council tax payers in my area. At the moment, East Dorset district council is spending £160,000 a year on concessionary travel as a result of the Government's minimum statutory standard, in addition to the £97,000 that it has previously spent on its local discretionary targeted scheme. There are a lot of pensioners in East Dorset22,740, representing more than 25 per cent. of the population. How much did East Dorset district council get back as a contribution to the additional cost of £160,000? The answer is a big round zero; it got nothing back at all because it does not get any revenue support grant, just redistributed business rates. The idea that the Government are going to reimburse East Dorset district council and its council tax payers for the cost of those concessionary fares is pie in the sky.
Is my hon. Friend aware that his small district council will be required by law to provide those schemes? The de facto situation is that it is not being fully reimbursed, so it will have to make up the difference with an even bigger increase in council tax. I believe that my hon. Friend's local authority is already proposing one of the larger rises in council tax in the country in any case.
My hon. Friend is right. East Dorset district council is not getting back any money at all from the Government to compensate for the additional statutory duty placed on it by concessionary fares legislation. Under the Bill, additional costs will be incurred and, again, the council will not receive any additional money from the Government. Ironically, the additional cost of £160,000 must be paid for by council tax payers, many of whom are pensioners. The Minister will know that the impact of council tax on pensioners is twice as severe as it is for people who have not yet reached pensionable age. As I said in the House the other day, as a result of Labour policies, more than 1 million pensioners now spend more than 10 per cent. of their disposable income on council tax. The position for East Dorset residents is getting worse as a result of those Government impositions.
The situation in Christchurch is a little better. The Minister may know that we have 14,287 pensioners, constituting 32 per cent. of our population. Christchurch
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borough council spent £74,000 on a targeted concessionary fares scheme before legislation was introduced. In the current year, it had to make an additional budget provision of £93,000 for the mandatory scheme, which was restricted to travel within the borough boundary. That limited and narrow scheme did not go down well with local people, who much preferred the previous scheme, which offered more generous concessions for those in greatest need. The consequence now is that Christchurch borough council is thinking about whether it can afford to introduce a Dorset-wide scheme. If it did so, however, the costs would increase from an additional £93,000 to an additional £150,000 a year. How much do you think the council received in reimbursement under the revenue support grant formula, Madam Deputy Speaker? It received £20,000 in respect of additional costs of £93,000costs that will continue to increase as a result of the new statutory requirements in the Bill.
Mr. Bill Wiggin (Leominster):
My concern is that council tax will have to be increased most in the areas where the largest number of pensioners live and that those who win on their bus passes will therefore lose when they get their council tax bill. Does my hon. Friend share that concern?
My hon. Friend is absolutely right. The largest proportion of my correspondence is currently from pensioners on fixed incomes who are again faced with the prospect of council tax increases that are significantly above the rate of inflation and far higher than their pension increases will be. That is happening at a time when the interest on their savings and investments is declining significantly as a result of low inflation. I enthusiastically support the policy of low inflation, but it has had a devastating impact on the budgetary arrangements of a number of pensioners who had planned on the basis that their investments would produce a rather higher yield than that which they are now receiving. In order to pay for these new impositions, such pensioners are having to cut back on other items of expenditure. Council taxes are, by definition, unavoidable, so they have the first call on the limited resources of the individuals concerned.
In Committee, the Minister for Transport said:
"We are committed to the new burdens principle, which means that we will reimburse local authorities for the extra cost that they face as a result of local authority concessionary fare schemes requiring action under the Bill."
He went on to say:
"If it is an existing scheme that must be amended to comply with the Bill, the Government will reimburse local authorities for the extra cost."[Official Report, Standing Committee A, 20 November 2001; c. 30.]
Unfortunately, it does not appear that that will happen. The amendment gives us the opportunity to press the Under-Secretary for a commitment that she will reimburse local authorities for the extra cost. We all know that the House has a system whereby hon. Members are reimbursed out of taxpayers' money for the cost of stationery and office equipment. It would be extraordinary if, in pursuance of the principle of reimbursement, the House authorities said that some hon. Members were to receive more than they had spent and that others were to receive less or indeed nothing. If the word "reimbursement" means anything, surely it is putting the
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local authorities or individuals in the position in which they would have been before the new imposition. If the new burdens principle to which the Minister for Transport referred means anything, surely it should apply to each local authority on an equal basis. I cannot believe that that principle was intended to mean that the burden on one local authority would be reduced by imposing fresh burdens on another.
The Minister for Transport used opaque expressions in Committee to try to parry the probing questions of my hon. Friends the Members for Cotswold and for Isle of Wight (Mr. Turner). He said:
"The mechanism will be that the extra costs will be fed into the rate support grant, at the lower end of the environment protection and cultural services block. All other things being equal, local authorities will broadly receive additional funding in proportion to their current share of the EPCS local tier."
My hon. Friend the Member for Isle of Wight asked:
"Is the Minister saying . . . that he will pay to authoritiesbroadly or otherwiseonly the sum that enables them to pay for the minimum laid down by the Government?"
The Minister for Transport said:
"No. We are saying clearly that the change in legislation places an additional burden on local authorities. Accordingly, the Government will make money available to cover that additional cost."
I see the Under-Secretary nodding. I hope that that indicates that she will undertake on behalf of the Government to reimburse East Dorset district council and Christchurch borough council for the additional costs of the new statutory requirements imposed by the Government.
The Minister for Transport went on to say:
"We are in discussion with the local authorities as regards the methodology involved, following the well-established procedure for the rate support grant. If that procedure throws up significant anomalies, local authorities, as the hon. Gentleman will probably accept, will not be backward about raising the issue."[Official Report, Standing Committee A, 20 November 2001; c. 27-29.]
I quote extensively from what the Minister for Transport said because I do not want the Under-Secretary to start using the same language. That language was no doubt designed to give the impression of reasonableness and to comfort the victims of unjust distribution, but effectively the words were a sham; indeed they were a confidence trick calculated to deceive. We know that the procedure for reimbursing local authorities under existing legislation has thrown up significant anomalies, some of which I have drawn to the House's attention already and which continue to be drawn to the Government's attention by local authorities and local authority associations. What are the Government doing about it? Absolutely nothing. That is totally unacceptable. I hope that the Under-Secretary will have some words of comfort for my local authorities and citizens in my area.
My hon. Friend is making a compelling case for the amendment. Is he aware that the Minister for the Environment recently said that
"under the previous Government . . . more and more burdens were placed on local authorities and allegedly funded from efficiency savings."
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This is the important bit:
that is the Government
"are abandoning that practice and taking the realistic view that if extra duties are imposed they should be reasonably funded. That is the Government's policy."[Official Report, 14 January 2002; Vol. 378, c. 125.]
Does my hon. Friend agree that, as the Minister for the Environment made that statement to the House, there is no reason why the Government should not accept the amendment?