HC Deb 09 May 2000 vol 349 cc639-41
10. Mr. David Heath (Somerton and Frome)

What is the average percentage increase in council tax for residents of band D properties in shire districts of England in 2000–01 from the previous year. [120149]

The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Ms Beverley Hughes)

The average band D council tax for residents in shire districts is £848, an increase of 6.6 per cent. However, I think that a more accurate representation of what people really pay is the average council tax per dwelling. For shire districts, that figure is £735, an increase of 6.7 per cent.

Mr. Heath

Whether the figure is 6.6 or 6.7 per cent, is it not true that the ordinary member of the public does not understand a word that we say about area cost adjustments and standard spending assessments? The public understand only that—regardless of who controls their council, and of their council's location and efficiency—each year, their council tax increases, while councils struggle to maintain services. Is that situation not the result of the fact that the current Chancellor, and previous Chancellors in previous Governments, have shifted the taxation burden from central Government to local government? Is it not time that we had a system that was transparent and honest?

Ms Hughes

The hon. Gentleman says that it does not matter who controls a council, but the fact is that in Labour-controlled authorities, the average council tax per dwelling is lower by about £100 than it is in Conservative-controlled or Liberal Democrat-controlled authorities. As for the Government's record—I shall not even begin to try to speak for the previous Government—we have increased the grant to local authorities by 8 per cent. in real terms. Moreover, in the three years since the previous general election, unlike the three years leading up to it, that increase has allowed local authorities to increase spending by about 20 per cent, compared with a real-terms spending cut and diminution in service standards under the previous Government.

Mr. David Taylor (North-West Leicestershire)

Is the Minister aware of the formation, last month, of the all-party fair deal for shire districts group, which I have the honour to co-chair? Does she agree that part of the problem is the fact that the SSA system fails to recognise the needs of smaller urban and semi-rural areas—areas such as North-West Leicestershire—which have growing populations and significant levels of unemployment and deprivation? Is she confident that the reform to which the Minister for Local Government and the Regions referred a moment ago will produce a better and more effective system for shire districts?

Ms Hughes

As my right hon. Friend the Minister for Local Government and the Regions said, we are hoping that the creation of a fairer system will be the outcome of our review. However, such a system will depend on co-operation from all types of local authorities. If we are talking about a system that distributes money differently, we must be able to reach agreement not only with the authorities that might benefit from a different system, but with those that might feel that the current system is in their interests. Achieving that consensus is important.

I acknowledge my hon. Friend's work in promoting the interests of shire districts, and I can tell him that, while working on the review, the Government have given shire districts a much fairer settlement than they have received in previous years. This year, I myself met representatives of the district councils, and they were very pleased with the settlement, which is well above the average for English authorities.

Miss Julie Kirkbride (Bromsgrove)

The Minister for Local Government and the Regions told my hon. Friend the Member for Eastbourne (Mr. Waterson) that he was wrong to say that the Government were starving shire counties of funds. Can the Under-Secretary therefore explain why, this year, residents of the shire district of Worcestershire—which has a Labour-controlled council—are facing a council tax increase of almost 10 per cent? Are they facing that increase because the Labour-controlled council is inefficient? Are they facing it because the Government are starving the shire district of Worcestershire of funds that rightfully belong to it? Or is the increase—as Opposition Members believe—part of the Government's programme of stealth taxes? Can the Minister also explain to the pensioners of Worcestershire how they will pay that increase with the measly 75p increase in their pensions?

Ms Hughes

Perhaps I can begin to attempt to unravel that ragbag of a question. I remind the hon. Lady that a council tax increase in any local authority is a direct consequence both of Government grant—which has increased—and of councils' decisions on their spending. It is right that local people, as well as Government, should contribute to the improvement of local services. The Tories are pursuing the argument—[HON. MEMBERS: "Answer the question."' I am answering the question as I choose to answer it. The Tories are pursuing the argument about stealth tax, but their figures are absolutely wrong. The Government have increased grant to local authorities in real terms by 8 per cent., compared with a real-terms cut of more than 4 per cent. by the previous Government. That demonstrates the different commitment of this Government to local government and local services.