Local Government Finance

Lord Blunkett Excerpts

Monday 13th December 2010 Commons Chamber

[Mr Pickles]

Increasingly, we will encourage more parish councils to be formed. We believe that the neighbourhood is the natural point to which funding should go for local authorities, and I am very happy to confirm to my hon. Friend that, indeed, parish councils will get a general power of competence. Basically, the chain will turn on its head: the normal presumption is that councils have to find a law to take a particular action; now, they will have to find a law that prevents them from doing so. I think that that will allow for greater flexibility.

[Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)]

I congratulate the right hon. Gentleman, whom I must describe as Eric through the looking glass, on being able to persuade his minority coalition partners that a scorched earth policy is actually fair and progressive. This year, the national business rate will raise just over £22 billion. Is it not the case that, by 2014-15, the amount that central Government distribute will equal the business rate and run very close to breaking the current law, whereby they are required to distribute the whole grant to English local government?

[Mr Pickles]

I thank the right hon. Gentleman for the allusion. He seems to be vying for the title of the Red Queen: judgment first, judgment first, before he hears the facts.

[Mr Blunkett]

Better than the White Rabbit.

[Mr Pickles]

Before the right hon. Gentleman disappears down his own rabbit hole, I will continue.

There is a theoretical surplus in 2013-14, but the right hon. Gentleman knows that we have an obligation to distribute the national non-domestic rate to authorities. The figure of £3 billion is overstated, because the Office for Budget Responsibility has not taken into account the number of grants that we have rolled into the block grant. We have done that because of its distributive effect, and by 2013-14 we hope that a new system of local government finance will be in place.