HC Deb 31 March 1999 vol 328 cc1076-8
4. Mr. Simon Hughes (Southwark, North and Bermondsey)

If he will list the band D council tax rate for each local authority for 1999–2000 and the percentage increase in each case for (i) 1998–99 and (ii) 1997–98. [78062]

The Parliamentary Under-Secretary of State for Wales (Mr. Jon Owen Jones)

As the information requested is too extensive for an oral answer, I have arranged for the hon. Gentleman to be sent the details in tabular form, and for a copy to be placed in the Library.

Mr. Hughes

First, will the Minister tell the House why the council tax figures for Wales were given to the press before they were given to Parliament? Will he then explain why council tax increases—which, in December, Ministers predicted would average 7.5 per cent.—turned out to be about 8.5 per cent.? Will he also explain why, on average, the increases are higher in Wales than in England? Will he also explain why—for the second year in a row under the Labour Government—the increases are more than twice the rate of inflation for everyone except those who are on council tax benefit? Whom should Labour voters blame—local councils, or Labour Ministers and the Labour Westminster Government?

Mr. Jones

The hon. Gentleman's carping is very familiar to the House. The reality is that we have seen an extremely good settlement for local government in Wales—the best for very many years. Central Government support for local government is 4.8 per cent., which is well above the rate of inflation. Government support has also allowed a record increase in service spending—15 per cent. over 3 years, and a £145 million increase in the next year alone. That is more money for schools, more money for social services—[Interruption.] I know that the hon. Gentleman does not want to hear this—it will adversely affect the Liberal Democrats' likelihood of winning any elections—but additional resources of £300 per person in Wales over the next three years come as very good news indeed.

Tax incre0ases in Wales are lower than they were last year. Moreover, tax levels in Wales are far lower than they are in England, although service spending in Wales is significantly higher. It is a good deal for Welsh local council tax payers.

Mr. Llew Smith (Blaenau Gwent)

Would the Minister care to comment on the formula which determines how much central Government money goes to local authorities? That formula discriminates against the poorest communities in Wales and puts authorities such as mine in Blaenau Gwent at a massive disadvantage. I accept that we inherited the formula from the previous Government, but will the Minister give a commitment to look at it again so that the poorest communities get the biggest amount of money from central Government?

Mr. Jones

I thank my hon. Friend for those comments. The Secretary of State and I met local government leaders, including those from my hon. Friend's constituency, in the past few days. Although we have agreed a formula with Welsh local government, it may well be unfair particularly towards areas such as the one represented by my hon. Friend. We agree that we need to work towards a new formula which better reflects real spending needs. Moving towards that formula is likely to take more than one year and the Secretary of State has, therefore, indicated that we need to address the anomalies to which my hon. Friend referred. Hopefully we will be able to do that in the next financial year.

Mr. Ieuan Wyn Jones (Ynys Mk)

Is this not just another example of Labour pandering to the rich and clobbering the poor? Does the Minister not realise that the tax cuts being given to the richest in society are being paid for by the poor of Blaenau Gwent and Holyhead, in my constituency? Why does not the Minister ensure that there is more money from central Government for local authorities instead of making the poor local taxpayers pay for tax cuts for the rich?

Mr. Jones

The formula is agreed by local government across Wales, including the hon. Gentleman's area. We have agreed that we need to reform the formula. The hon. Gentleman must accept that money does not grow on trees. If we take money from one pot for use elsewhere, that money has to be denied to existing spending priorities such as health.

Mr. Alan Clark (Kensington and Chelsea)

On a point of order, Madam Speaker—

Madam Speaker

Order. I can take points of order only after questions and statements.

Mr. Nigel Evans (Ribble Valley)

The Minister has just said that this is a good settlement for Wales. When will he join the real world? In Blaenau Gwent the council tax increase will be over 13 per cent., in Anglesey it will be 11.9 per cent., in Merthyr it will be 11.4 per cent., in Powys it will be 10.2 per cent., in Rhondda it will be 12.2 per cent. and in Wrexham it will be over 10 per cent—all this at a time when people are facing a standstill in their pay, or increases of 2 to 3 per cent.

One group who may be able to pay the council tax increases this year will be Members of the Welsh Assembly. I understand that an announcement is being made at 3.30 pm today—at the end of questions—about the rate at which Members of the Welsh Assembly will be paid. Why was that statement not made this morning so that hon. Members could have questioned the Minister about it? We now have to wait a whole month before we can scrutinise the pay of Members of the Welsh Assembly.

Mr. Jones

This is a good settlement for Wales for the reasons I have given. It allows local government to spend more money on schools and social services. It is considerably more money than was ever allowed by the Government supported by the hon. Gentleman.