Council Tax Increases (Hansard, 6 April 2000)

§ Lord Roberts of Conwy
asked Her Majesty's Government:
By what percentage council tax rates have been increased above their forecasts (a) in England and (b) in Wales.

§ The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Whitty)
My Lords, the Government did not predict council tax increases in 2000–01 for England; nor did we announce any capping criteria in advance. Councils made up their own minds on their budgets, taking account of local circumstances and the views of local people.
I understand that in Wales the National Assembly for Wales has its own arrangements, which are of course a matter for the Assembly itself.

§ Lord Roberts of Conwy
My Lords, is it not a fact that the level of council tax in England has risen by about twice the rate of inflation and in Wales by three times the rate of inflation? Is that not an inflationary pressure in itself, as well as a further burden on taxpayers who can ill afford to pay? Is not all this due to the parsimony of the Government as regards rate support grant?

§ Lord Whitty
No, my Lords, it is not due to the parsimony of this Government. This Government have given an additional £6 billion through the support system to local authorities. That is an increase of 7.8 per cent over the past three years, compared with a cut in the last three years of the previous administration of 4.3 per cent. So there was some ground to make up, and it has been made up by both central government grant and increases in council tax. The figures to which the noble Lord refers are not exactly correct. The average increase in England is about 6.2 per cent per dwelling, 6.1 per cent for Band D, and in Wales 11.3 per cent for Band D.

§ Baroness Whitaker
My Lords, is my noble friend aware that the increase in council tax for the London Borough of Camden is far less than the rate of inflation, having risen from £149 a month to £151 a month? I regret that I cannot give the exact percentage, but it is much less than 6.2 per cent.

§ Lord Whitty
My Lords, I could give the noble Baroness the exact per centage increase if I could read the small print. I am aware of the general increase in the London Borough of Camden, which indicates a degree of good housekeeping in that Labour-controlled borough. Different local authorities face different circumstances and different demands on their resources. The local government finance system needs to reflect that, including the ability of local authorities to make their own judgments as to the level of council tax.

§ Lord Dixon-Smith
My Lords, it has long been the case that at this time of year there is a ritual gavotte: local authorities plead their case one way and the Government consistently plead their case the other way. I should like to return to my noble friend's original Question. It seems that while it is true to say that the Welsh Assembly has an influence on, and indeed is responsible for, what happens in Wales, the interests of this House cover the whole of the United Kingdom. Therefore, it seems proper to ask the Minister whether he can explain what appears to be an extraordinary d: screpancy between the general result in England and that in Wales.

§ Lord Whitty
My Lords, this House, of course, has an interest in what happens throughout the United Kingdom and frequently throughout the rest of the world. However, I respond for the United Kingdom Government, not for the National Assembly for Wales. I feel that there is sometimes a conceptual difficulty among certain noble Lords—among whom I am slightly surprised to include the noble Lord, Lord Dixon-Smith—in regard to the consequences of devolution. It means that the Welsh Assembly and Welsh councils make their own decisions on devolved matters. It is not for the national Government to reply for them on those matters.

§ Baroness Hamwee
My Lords, does the Minister agree that the greater the central control on funding at local level, the greater is the danger to local demoy? If so, does he further agree that the recent announcements of funding for schools going direct to schools from the centre, however welcome the cash, is another symptom of central government control, which does not properly allow for local judgment?

§ Lord Whitty
; My Lords, I do not entirely agree with either proposition. Clearly, a balance needs to be struck between the amount of local government expenditure which is financed by central government and that which is raised locally. We believe that we are moving towards a sensible balance. We are reviewing the whole system of local government finance, and that is a fairly lengthy process. In the meantime, we allow local authorities a degree of stability by setting local government grants at a level for a period of three years. As to the additional money for education, which I am sure the noble Baroness and the whole House welcome, some will go direct and some will go via local authorities. The allocation will depend on the form of the education expenditure for which local authorities and schools can bid. This in no sense undermines the position of local education authorities; rather, it is a way of getting the money to the right place in the most effective way.

§ Earl Russell
My Lords, the Minister said in his first reply that the Government had provided an additional £6 billion. Can the noble Lord tell the House to what it is additional?

§ Lord Whitty
My Lords, the increase is 7.8 per cent. Those noble Lords who have quicker mathematical minds than mine will be able to work out the approximate level in the previous three years. In view of the noble Earl's ancestry, no doubt he has already worked it out. I do not share the noble Earl's ability.