Local Government Finance (Rural Authorities)

Anne Marie Morris Excerpts

Monday 11th February 2013 Commons Chamber

[Neil Parish]

My hon. Friend raises an interesting point about how we define the rural population and how we define depravity— [Interruption.] Perhaps I should refer to those who are deprived, rather than to depravity. I still want to make a serious point, because there is a problem with how the statistics are compiled and how judgment is made on rural areas. We in rural areas are all supposed to be wealthy and are asked to pay a great deal more of overall local government spending in our council tax.

[Anne Marie Morris (Newton Abbot) (Con)]

Does my hon. Friend agree that sometimes the rural authorities that have been the most careful—doing the right thing—are the most penalised? For example, Devon has saved £100 million in the past three years, yet its gross value added has declined over seven years and is now 78% of the UK average.

[Neil Parish]

Again, one of my hon. Friends raises a good point, because this has been going on for a long time. It went on under the previous Government and, dare I say, probably went on slightly under the previous Conservative Government. In those days, I was in local government. Savings were made and we cut our cloth accordingly, but along came the Government saying, “You have been so careful with your spending that you can now cut it some more.” I wonder whether central Government recognise those authorities, such as Devon and others, that have spent money wisely and made savings, yet are asked to make further reductions. The Minister is extremely concerned to make this fair, but we need not only to talk about it, but to sort it out.

Let us consider, for instance, the amount raised in council tax. Rural authorities such as Mid Devon and East Devon, which I represent, will raise in council tax nearly twice as much as, say, a local authority such as Greenwich. Therefore, rural populations are not only not getting a fair share of grant, but have to fund much more of local government spending from council tax.

The Government spend a lot of time talking about the overall spending power of a council, but I would argue that it is how we get to that spending power that matters. If we are asking our local residents and council tax payers to provide much more of that spend via their council tax than those in urban authorities do, we in the countryside are being over-taxed and, dare I say, urban authorities are being slightly under-taxed. We were told last year that that would be put right.