George Hollingbery
Main Page: George Hollingbery (Conservative - Meon Valley)Local Government Finance Bill
George Hollingbery Excerpts(12 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Helen Jones
It is no good the Parliamentary Private Secretary chuntering away—it will have no effect. I spent years dealing with stroppy 15-year-olds on wet Friday afternoons, and he is no different.
Let us really look at this. If the Government are serious when they say, as the Housing Minister did when he spoke to the Communities and Local Government Committee, that councils should not avoid paying those who really need it, then they have to be prepared to meet the unforeseen costs. Why should a person living in a particular authority be penalised simply because a major employer in the area closes down or more pensioners claim? My hon. Friend the Member for Sheffield South East said that it is estimated that only between 57% and 66% of pensioners claim because council tax benefit is classed as a benefit. All those who are experienced in this area say that, once it is seen simply as a reduction in the bill, claims from pensioners are likely to rise. That is a good thing, but the costs have to be met, and it is unreasonable that entitlement for other people should depend on how many pensioners live in their area. They will be penalised because of an increase in council tax, cuts in other services or cuts in benefit to working-age people when the scheme is later revised. It makes no logical sense.
George Hollingbery (Meon Valley) (Con)
Purely for the purposes of investigation, does the hon. Lady have any figures—I understand that there will be a wide variety across councils—for the percentage of spending power that is represented by the 10% cut?
Helen Jones
I could give such figures to the hon. Gentleman, but I am afraid that I do not have them at the moment, and they vary greatly from council to council. He raises an important issue. Local authorities that have many council tax benefit claimants will see a bigger cut in their spending power, and that is part of the problem.
George Hollingbery
Does the hon. Lady agree that the spending power of each of those councils is incredibly different and that the percentage change in their spending power represented by a 10% cut in the council tax bill, despite the varying levels of council tax bills, might be roughly similar? We do not know.
Helen Jones
I do not think that is correct. We will debate that with the next group of amendments, but I will make a little progress now.
The point of a national scheme is that risk is spread. If we move to a localised scheme, we must have some way of dealing with risk, but there is no way of doing that in this scheme. The Government cannot seriously argue that the closure of a major employer, for example, is a council’s responsibility. I know that, according to the Government’s “not me, guv” approach, nothing is their responsibility, but even they must accept that they are responsible for the national economy, not Warrington borough council, Nottingham, Carlisle or anywhere else. If a major employer closes, the local authority must have some way of dealing with it.
Our new clause would ensure that the Government’s power to pay a grant is used to meet any shortfall if a scheme costs more in benefit than the Government had originally agreed to pay to a local authority. Ministers ought not to be too concerned about this, because after all they have to approve the schemes, and they are not being asked to make an open-ended commitment. They approve the scheme and how it works, but a cash-limited budget cannot cope with sudden surges in demand. In fact, the Government admit that in their own impact assessment, which states:
“If demographic changes or economic circumstances mean that eligibility for council tax support increases significantly then the consequence of switching”—
from annually managed expenditure to departmental expenditure limits—
“will be that authorities bear more of the risk of a shortfall in funds.”
The risk of a shortfall or serious economic turbulence destabilising a local authority’s finances and, what is more, the poorest people in the area having to pay the price is not something that any Opposition Member, or I suspect a few Government Members, can accept. We have tabled new clause 11 because we believe that it would deal with the problem, and it might be helpful if I let you know, Mr Crausby, that we will seek to divide the Committee on that when the time comes.
George Hollingbery
Some persuasive points have been made in the debate so far and I urge the Government to take them on board. However, I also find the Minister persuasive and I look forward to hearing what he has to say.
I wish to speak briefly about a funding issue that is not strictly related to the amendments. I hope that you will allow me to stray slightly off the selection list, Mr Crausby, on the basis that we are unlikely to have a stand part debate. I wish to talk briefly about parish councils. The hon. Member for Mid Dorset and North Poole (Annette Brooke) talked about horizontal and vertical integration, but I want to go downwards to look at parish councils and where their funding comes from.
At the moment, certainly in my constituency of Meon Valley, several parish councils take in council tax—or rather in precept—pretty much the same as the district council. As far as I can see from the Bill and the consultation on the Bill, there is no provision to pay any of the grant for reducing council tax to parish councils. There is mention of district councils, first-tier councils and precepting authorities such as fire authorities and the police, but as far as I can see there are no arrangements to compensate councils at parish council level for moneys they might forgo because people require council tax benefit. It seems to me that this issue needs to be dealt with.
In my area, Bishop’s Waltham and Denmead parish councils would rely entirely on the beneficence and good nature of the city council to fund their activities if they were not directly grant-aided. I would love to hear the Minister’s thoughts.
John Healey
It is a real pleasure to serve under your chairmanship, Mr Crausby.
I rise to support the amendments and new clause in the names of my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford) and my hon. Friends the Members for Sheffield South East (Mr Betts) and for Warrington North (Helen Jones). The problem, which my right hon. Friend the Member for Greenwich and Woolwich hits on directly in his amendment 79, is that council tax reduction schemes will be undermined from the start by the 10% funding cut and the constraints that the Government are putting in place to compensate for the problem that it will create.
Throughout the part of the Bill dealing with council tax, we consistently see hallmarks of the scheme that run contrary to the Government’s declared aims. It shows a lack of true localism and a transfer of considerable financial risk from central Government to local government, which promises to have a severe impact on support for many current recipients of council tax benefit. The Bill also sets out an unrealistically and unfeasibly tight time scale.
The Secretary of State is more sophisticated than the image and manner that he often cultivates would suggest, but his politics on this matter are brutal and brutish. In my view, the intention is simply to transfer to local authorities the financial risk of the increasing cost of support for council tax costs. The Government want to get local authorities to take the blame for the cuts being imposed by central Government.
Financial risk is crucial for any local authority when it considers the future. Authorities are being asked to take on the new risk without the flexibility to allow them to discharge the responsibilities that they are taking on fairly, effectively or appropriately for their area. Whether the 10% cut leads to pressure on councils’ funding, pressure for them to find cash from other sources or greater cuts for those who are not protected will depend on how the cut is distributed across local authorities, local decisions on the design of the scheme, the make-up of the population within an authority’s area, the proportion of people who are protected by central Government and the degree to which the move from a council tax benefit to a council tax discount encourages take-up among people who are already entitled to support but do not claim it.
Central Government would not make this move if it affected themselves. As my hon. Friend the Member for Warrington North said, they are transferring what is currently annually managed expenditure—the current costs of the council tax benefit scheme are driven by factors that are not under the control of councils—to funding that is covered by the local government departmental expenditure limit. That will put an unrealistic and unfair funding noose around the neck of local government, because the year one base level will involve a 10% cut. My fear is that what could and should be a good move for local government and the people it serves—a locally designed council tax support scheme—is damaged and discredited before it starts by the design of the scheme.
George Hollingbery
I beg to move amendment 72, page 5, line 26, at end insert—
‘(3A) Local authorities will have the right to pool schemes for council tax refund purposes both in terms of administrative arrangements and the pooling of funds.’.
The Second Deputy Chairman of Ways and Means (Dawn Primarolo)
With this it will be convenient to discuss the following:
Amendment 52, in schedule 4, page 47, line 16, at end insert—
(f) the number of persons estimated to be eligible to make an application, and estimated to be entitled to a reduction under the scheme.’.
Amendment 74, line 43, at end insert—
‘(8A) Before making regulations under sub-paragraph (8), the Secretary of State must consult with local authorities regarding any proposed requirements for schemes.’.
Amendment 55, page 48, line 15, at end insert—
(d) notify all persons within their area receiving council tax benefit on or immediately following 1 April 2012, of the implications of the draft scheme, including the estimated impact of that scheme on their living standards.’.
Amendment 75, line 22, leave out sub-paragraphs (4) and (5).
Amendment 53, line 37, leave out ‘about the making of reasonable charges’.
Amendment 76, page 49, line 14, leave out sub-paragraphs (2) and (3).
Amendment 77, line 28, leave out section (6).
Government amendments 86 and 87.
George Hollingbery
It is a great pleasure finally to be able to speak to amendment 72. I have missed a Select Committee visit to the Netherlands to do so—my furthest trip so far has been to Manchester.
It is a pleasure to serve under your chairmanship today, Ms Primarolo. Let me make it clear to the Committee at the outset that the amendment is probing. I do not intend to press it to a vote. My aim is to give the Government an opportunity to clarify their thinking on administrative arrangements for distribution of council tax reduction schemes. There is clearly some sense in local authorities being able to pool their sovereignty—[Interruption.]
The Second Deputy Chairman of Ways and Means
Order. The Committee needs to be a little quieter, so that we can hear Mr Hollingbery moving his amendment.
George Hollingbery
I am grateful, Ms Primarolo. As I was saying, there is clearly some sense in local authorities being able to pool their sovereignty in relation to their schemes to administer council tax rebates, especially in two-tier areas such as mine in Meon Valley. If one accepts that local conditions in, say, Hampshire will be at least somewhat similar, it makes sense for a uniform scheme to be adopted by all councils in the county. That may well allow schemes to be run more cost-effectively: for example, not only could one processing centre rather than many be used, but it would create one point of contact with other agencies that need to be consulted. Furthermore, assuming that fraud investigation is to be run locally, such an arrangement would allow the accumulation of expertise and critical mass that would otherwise be diffused between many offices.
That type of arrangement would also greatly assist the achievement of a commonality of expectation and understanding of a scheme across a wider area. Several right hon. and hon. Members this evening have talked about the potential for confusion in very localised council tax schemes.
John Healey
The hon. Gentleman is making a persuasive case, which is consistent with pooling principles elsewhere in the Bill, and I hope he makes some headway with Ministers. Does he not agree that, with only four minutes left when we started this group of amendments, only the third of 10 on the selection paper, there are some important issues that we have not reached, and that if they are to be aired we will have to return to them on Report?
George Hollingbery
I am grateful to the right hon. Gentleman for his intervention, in which he makes a reasonable point. However, if I may, I shall continue to develop my theme a little further.
I believe we would achieve a commonality of expectation across a pooled area, such that people could begin to understand what they would get from a council tax rebate scheme. Simply put, we would avoid the strange situations where streets are split in such a way that there is one expectation of the scheme on one side of the street and a different expectation on the other. The Bill makes no mention of such schemes, but chapter 3 of the Government’s response to the consultation on localising support covers the issue, and it makes the case that such schemes are possible under existing powers. It would be useful if the Minister briefly outlined his thoughts on how that would work, and which existing powers might allow local authorities to draw up schemes—assuming, of course, that he will have the time to do so, which is unlikely.
Even if legislation allows such schemes to be put together, it might be useful for there to be a standard, approved scheme, produced by Government, to reduce cost still further.