Local Government Finance Bill

Alison Seabeck Excerpts

Tuesday 10th January 2012 Commons Chamber

[Alison Seabeck (Plymouth, Moor View) (Lab)]

I draw the House’s attention to my indirect interests in the Register of Members’ Financial Interests, as previously stated in other debates.

The Bill covers a number of areas including the non-domestic rating of council tax with specific reference to changes to council tax benefit and additional taxation for empty homes. I should have liked to spend more time on the empty homes proposal but unfortunately time does not allow that. I will simply say that although sticks are welcome, the clauses on this issue are poorly drafted and will leave opportunities for smart operators to find their way around the additional charge. For example, the allowance that the property must be substantially unfurnished could leave considerable room for argument.

On the section relating to the localisation of council tax benefit, the Government might package this as being about passing down powers to councils, but the reality, as my right hon. Friend the Member for Wentworth and Dearne (John Healey) said, is that it is a hospital pass to many communities and that the Secretary of State would continue to pull many of the strings. Cuts will come—there is no doubt about that—because if the pensioner element is effectively protected then, as we have heard, the 10% reduction in income will have to be shared out among the remaining groups.

In Plymouth, about 25,000 people are currently in receipt of council tax benefit. Of those, a significant number will have a child dependant, will be single people in low-paid work or will be disabled, but there is no mention in the Bill of protection for people with disabilities. This reform is dressed up as providing discretion and choice, but all it will do is localise cuts and target pain on those who are least able to cope. Unless Plymouth city council can find the money from elsewhere in its budget to make up the lost 10%, it will have no choice but to cut the amount paid to people or to find cuts from other services that have already taken quite a hit and that will see further reductions in the coming years of the current comprehensive spending review.

Plymouth has also seen an increase of over 36% in the last five years in the take-up of council tax benefit, as compared with an England average of 25%. Answers given to Members of the House who have asked parliamentary questions reveal significant disparities in take-up in different areas, and I am not clear from the documents that I have seen that the Government have taken that into consideration. What protection would be offered if in Plymouth, hypothetically, the dockyard failed and the naval base closed, after the scheme had been established by the individual authority? How would it cope with the additional council tax benefit burden and the loss of business rates—a double whammy, and at present with no specified safety net? We have talked generally about a safety net; the detail is not there.

Where will the baseline for these changes be set? Is it possible that it could have perverse outcomes if set in the wrong place? What assessment have the Government made of the potential cut-off points, and are those public? Can the Minister answer the SIGOMA queries that we have heard in the debate? This is complex territory and it is not an area where things should be rushed through, unless we want to see further delays to this legislation as it starts to unravel under scrutiny. I am sure the other place will take a close interest in that.

On business rates, does the Minister not accept that we could see a postcode lottery on a grand scale, where services vary markedly from one authority to another, which could threaten the very ability of some councils in areas of low economic growth to deliver necessary services? That, of course, leads to a downward spiral in those areas, which certainly would not be attractive to inward investment.

What is the role of the local enterprise partnerships in all this? None of that is clear, particularly in relation to pooling, as we have heard. Will the pooling arrangements be allowed to cut across LEP boundaries, and if so, how and where does the risk lie? They will certainly have an interest in that. The hon. Member for Ipswich (Ben Gummer) talked about councils feeling the fire at their feet, but does he understand what will happen if one of the other Government Departments does not do its job? Let us take transport for example and look at the far south-west—how will those local authorities be able to invest in new roads, new rails, new airports? They simply cannot do it. It is unfair. The Bill is not about local choice; it is about local cuts.