Council Tax Benefit Localisation

Debate between George Howarth and Lord Stunell

Wednesday 27th June 2012 Westminster Hall

[Mr George Howarth (in the Chair)]

The hon. Gentleman is experienced enough to know that that is not a point of order.

[Andrew Stunell]

Wigan does not have to do that, because if it takes advantage of the discounts and exemptions that we have given it, it will be able to carry on with its current scheme.

Local Government Finance Bill

Debate between George Howarth and Lord Stunell

Tuesday 31st January 2012 Commons Chamber

[Andrew Stunell]

On the first point, I agree that it was due to the fact that council tax doubled while Labour was in government. On the second point, as I shall demonstrate—I hope that this expands on the point that my hon. Friend the Member for Bradford East (Mr Ward) made—the Bill not only deals with deficit reduction but creates opportunities for local authorities to collect more council tax in other areas. I will come to that in a minute or two.

Taken overall, our reforms will give local authorities a stake in providing support for council tax, which they have not had before, and will strengthen the incentive for local authorities to support residents back into employment, which in turn will reduce demand for support. Localisation gives local authorities significant control over how that reduction in funding is achieved, and it enables councils to design schemes reflecting local priorities.

I want to pick up on a point made a couple of times about whether the Secretary of State would approve schemes. The Secretary of State is not required to approve schemes, and local authorities do not have to submit schemes for approval. The important points are that the schemes should be transparent and that local authorities should be accountable to the law and local areas but not to the Secretary of State.

Amendments 79, 80 and 85 would, in effect, guarantee that there would be no reduction in funding to local authorities and leave authorities with no plan to reduce that funding. In the context of the wider deficit reduction programme, that is neither affordable nor sustainable.

[Mr George Howarth]

rose—

[Mr Raynsford]

rose—

[Andrew Stunell]

I give way to the right hon. Member for Knowsley (Mr Howarth).

[Mr Howarth]

The Minister just asserted that the Secretary of State does not have any locus in this system. Will he explain, therefore, why paragraph 2(8) of schedule 4 reads:

“The Secretary of State may by regulations prescribe other requirements for schemes”?

What is that if not the power to intervene?

[Andrew Stunell]

It is a power to intervene but the Secretary of State does not propose to intervene on schemes. [Hon. Members: “Why’s it in there then?] The Secretary of State always has reserve powers. Right hon. and hon. Members have asked what is the system of checking, of feedback and of amendment to the scheme, and that is always provided for in regulations. That is the basis on which we are proceeding.

Local Government Finance Bill

Debate between George Howarth and Lord Stunell

Tuesday 24th January 2012 Commons Chamber

[Helen Jones]

rose—

[Andrew Stunell]

I shall give way to the right hon. Gentleman and then to the hon. Lady.

[Mr Howarth]

I need to make two points. First, when I spoke earlier I made the point that as far as I know there is no danger of the two companies I mentioned—Jaguar Land Rover and QVC—not surviving and prospering in future. I mentioned them merely as examples of the sort of investment Knowsley has been able to attract and I was not saying that the inherent volatility is likely to come about because either of them will close. Secondly, the Minister suggests that I should talk to the director of finance at Knowsley, but my speech was based largely on a discussion I have already had with the director of finance. Given the current circumstances, he does not think that the kind of investment we have been able to attract in the past can be guaranteed in future.

[Andrew Stunell]

On the right hon. Gentleman’s first point, I agree and I am sorry if any of my remarks conveyed a different impression. He is absolutely right that the issue is not about the future of particular companies in his constituency. On his second point, it is a good idea for me to tackle this issue of need head-on, as the amendment is about need.

--- Later in debate ---

[Andrew Stunell]

I invite the hon. Lady to check her diary carefully and see exactly when it was that we had to buy all the banks because they had gone bust.

I want to contrast Knowsley with another local authority. Knowsley gets £1,225 per resident in formula grant. I am sure the right hon. Member for Knowsley would say that is not enough, and I understand his point of view, but I want to draw his attention to Wokingham, which is often prayed in aid as one of those rich southern places that benefits from an unfair system. Wokingham had a 3.3% growth in its business rates in the period I have mentioned against Knowsley’s 8.7%, and whereas Knowsley got £1,225 in formula grant per person, Wokingham got £686. That is being built into the system.

The hon. Member for Hyndburn (Graham Jones) said he thought the Government were behaving grotesquely unfairly. He may think that, but I have hon. Friends who think that that outcome is grotesquely unfair for a different reason. We have a system that recognises need, albeit imperfectly and even though we have built in damping. That suits the right hon. Member for Knowsley but does not suit my hon. Friend the Member for Isle of Wight (Mr Turner). That is entrenched in the system and it is important that if the Opposition make criticisms—understandably, because that is their job—they should be based on a sense of reality.

We are introducing a scheme that provides an incentive for growth and localises decisions over the money that local authorities can spend. That growth and localisation is very much better than local authorities standing as beggars at the door of Whitehall, year after year, saying, “We want more money.” Surely it is right that those who have the money can decide how to spend it and those who can promote growth have opportunities not only to do it but to benefit from it.

What about Westminster which the right hon. Member for Knowsley prayed also in aid? Let us be clear: he should rejoice when Westminster gets loads of business rate. Why? Because the authority keeps only the baseline figure. It will keep only its formula grant figure. All the rest will go to help Knowsley, among other places—[Interruption.] The hon. Member for Warrington North (Helen Jones) says it is not true. I am not sure whether she is accusing me of deceiving the Committee.

Westminster gets its formula grant and the rest goes back into the pot. When Westminster has growth, it will be able to keep some of it. If it has disproportionate growth, it will be taken away in the levy. Two things will affect Westminster: it will get only the equivalent of its formula grant in its baseline, and when growth comes, any disproportionate growth will be taken away to fund the right hon. Gentleman’s safety net.

[Mr George Howarth]

Let me make it clear. I am not arguing that Westminster, Wokingham or even the Isle of Wight should be penalised in any way. That is not my point. By making invidious comparisons, the Minister makes the case for the amendment. We are saying not that everybody should get the same, but that what they get should be based on rigorous analysis of the needs of individual areas.

[Andrew Stunell]

The right hon. Gentleman should be careful about making that argument; I might be tempted to take away his damping. That would be the unchallengeable fact in what he said.

--- Later in debate ---

[Mr George Howarth]

I suggest that in the morning, when the Minister has a quiet moment—I am sure that he has them in his life—he reads the Hansard for this debate; he can then decide which of us is being contradictory. For the purposes of absolute clarity, and following the point that my right hon. Friend the Member for Wentworth and Dearne (John Healey) made, will the Minister make it absolutely clear that his was a light-hearted debating remark, and that he does not intend to penalise Knowsley in the way that he described?

[Andrew Stunell]

I am disappointed with that, I have to say. I said very clearly that the Government have reached a settled view about including damping in the formula grant system; I hope that that is very clearly on the record.

Let me turn to the part of the amendment that relates to what should happen to revenue support grant. We are talking about funding outside the local share of the rates retention scheme. We could only use the revenue support grant for other matters. For instance, in the financial year 2013-14, the most likely recipient will be Local Government Improvement and Development. Perhaps the scale of these things needs to be understood: £27.8 billion is being distributed through formula grant—the amount that will, in future, come through the business rates retention scheme. Local government receives funding from outside that, from departmental budgets. For instance, under the provisional settlement for the coming year, the learning disability and health reform grant will be £1.36 billion; that comes from the Department of Health. The local sustainable transport fund will be a much smaller figure—£100 million—and comes from the Department for Transport. The preventing homelessness grant will be £90 million, and comes from the Department for Communities and Local Government. In the great majority of cases, it would be completely inappropriate to do what is suggested in amendment 65 and run those through a needs assessment.

Localism Bill

Debate between George Howarth and Lord Stunell

Monday 7th November 2011 Commons Chamber

[Andrew Stunell]

Given that the right hon. Gentleman spoke and, I believe, voted against the inclusion of that provision in the Bill, I should have thought that he would welcome the fact that the Bill in its present form reflects his point of view more accurately than it did before.

The amendments take the power and local responsibility of local authorities further than the Bill as originally drafted. Although the original Bill set out to achieve that, we always made it clear that there was more to do, and that we were willing to listen when there were sensible arguments for going further. That is what underlies the amendments, all of which—as was pointed out by my right hon. Friend the Minister—secured support throughout the other place. During the debates both here and in the other place, a number of Members of both Houses made sensible suggestions about additional areas in which we could free up local government. Let me highlight two examples in which the Bill now goes even further than we originally proposed in freeing local authorities to manage their own business as they consider appropriate.

Good arguments were advanced in the other place in support of the view that the rules on area committees were too prescriptive. In response, the Government tabled Lords amendments 269, 271 and 272, which remove the Secretary of State’s powers to make regulations in relation to such committees. When we were discussing the earlier group of amendments, the hon. Member for Warrington North (Helen Jones) maintained the argument—which does not bear close examination—that, in some mysterious way, inserting these proposals in the Bill, and improving them today, constituted an act of centralisation. Nothing could be further from the truth: our amendments relating to area committees demonstrate not just our intentions, but our delivery of increased localism for local authorities.

Good arguments were also advanced in the other place for the view that the rules on area committees were too tight. We therefore tabled Lords amendments 263, 267 and 270, which enable an executive of a local authority to delegate its functions to an area committee and to arrange for the discharge of those functions by an officer of the authority. That enables councils to establish whatever area committees they wish to establish, and to give them whatever executive functions they consider appropriate, without asking the Secretary of State for regulations or permission. Lords amendment 273 also removes the restrictions on the maximum size of area committees.

The Bill gives more powers to local authorities in respect of local elections. We have responded to representations about unnecessary restrictions on authorities wishing to change their scheme of elections, and the significant time constraints that were built into that scheme. Lords amendment 14 removes the rules stipulating when authorities may change their scheme of elections. It leaves them to make such decisions at a time that is right for them and their local communities without being dictated to by central government, and enables them to decide the date on which they will hold their first whole council elections.

Members of both Houses expressed the fear that the Government’s proposals would place unnecessary burdens on local authorities. We reflected carefully on those arguments, and discussed them at length with appropriate parties both inside and outside the House of Commons. One example relates to the point raised by the right hon. Member for Greenwich and Woolwich (Mr Raynsford) about the proposed mayoral arrangements. As a result of comments made on Report—by the right hon. Gentleman, among others—and on Second Reading in the House of Lords, we agreed to streamline our proposals for elected mayors. Lords amendment 312 and a number of consequential amendments remove our initial proposals on shadow mayors as precursors to directly elected mayors, while Lords amendments 94 and 296 and a number of consequential amendments remove our proposals on mayoral management arrangements, under which the elected mayor would also have become the chief executive of his or her authority.

[Mr George Howarth (Knowsley) (Lab)]

May I ask the Minister a question about Lords amendment 112? As he will know, there are proposals—which are not universally accepted—for a directly elected mayor for the Liverpool city region. There is some support for them, and I support them in principle. Would the amended provisions make possible the creation of a directly elected city region mayor, but only on the basis that the powers of that person in regard to such important matters as transport, police and fire and rescue services are increased? Otherwise the amendment is pointless.

[Andrew Stunell]

The Bill does not encompass matters relating to city region mayors. That would require a separate provision. Let me, however, draw the right hon. Gentleman’s attention to the amendments with which we will deal shortly relating to core cities, and to my right hon. Friend’s request for the core city regions to consider what powers they might wish to take. There are various options, but I should make it clear that there is no proposal in the Bill for a city region mayor.

Under the Local Government Act 2003, local authorities can already conduct non-binding referendums on matters relating to their services or expenditure. In addition, the Bill gives local people powerful new rights to vote on key issues such as governance changes—for example, mayoral elections, council tax increases and, of course, neighbourhood plans. A number of members of the House of Commons Committee feared that, given those new rights, the provisions on referendums did not add enough to justify the additional burden. Similar observations were made in the House of Lords Committee, and, after careful reflection and discussion, we determined that the right course was to accept on Lords Report amendments 96 to 112 removing the provisions relating to local referendums. That does not change the provisions on council tax referendums, which are the vehicle that switches the power to prevent excessive tax rises from the Government and the Secretary of State to the local communities and electors who will be paying those bills if they vote for them.

Oral Answers to Questions

Debate between George Howarth and Lord Stunell

Monday 31st October 2011 Commons Chamber

[Andrew Stunell]

My right hon. Friend makes a very important point. Both fuel poverty and carbon emissions are major targets of the Government’s policy. That is why we are introducing the green deal next year, which is available to landlords for the private rented sector, and that is also why we have the energy company obligation. My right hon. Friend will know that the Energy Act 2011 provides the opportunity to introduce minimum standards in the private rented sector from 2018 if we need to go further.

[Mr George Howarth (Knowsley) (Lab)]

Is the Minister aware of the growing trend whereby the produce of drugs sales is used to fund the private rented sector and as a means of laundering the money involved? If so, what is he going to do about it.

[Andrew Stunell]

Clearly, if the right hon. Gentleman has evidence of that, I am sure that he will pass it to the proper authorities so that action can be taken. I am well aware that such matters will be vigorously investigated by the police and, if necessary, the Revenue.