Local Government Finance

Debate between Ian Mearns and Andrew Gwynne

Tuesday 5th February 2019 Commons Chamber

[Andrew Gwynne]

My hon. Friend is absolutely right. This is what Government Members really need to get about some of the authorities that we represent—although, to be fair, a number of Conservative Members represent authorities with very similar deprivation statistics to those represented by my hon. Friends.

The fact is that if we want to tackle health inequalities, narrow the gap between the richest and the poorest, and actually do the things that the Conservative Prime Minister said were her main aim and ambition on the first day that she took office, we have to ensure that local authorities have the resources they need.

[Ian Mearns (Gateshead) (Lab)]

When the Conservatives were in government in the early ’90s and they had to consign the community charge to the dustbin of history, they brought in the council tax and everyone breathed a sigh of relief. The trouble with the council tax is that it depends on there being a median band D council tax raising power in every part of the country. Just under 70% of the properties in my area are in band A; we cannot raise the revenue locally, so by taking away our revenue support grant, the Government are really crippling councils like mine in Gateshead.

[Andrew Gwynne]

My hon. Friend is absolutely right. Scandalously, council tax now equates to 7% of the income of a low-income family, compared with just 1% for a higher income family. That is unfair. Some people say that we can merely reform the council tax by adding extra bands to the end. Let me tell my hon. Friend—I imagine his area is very similar to mine—that we can add as many extra bands on the end as we like, but it will not raise a single penny more for my council because we do not have houses that would fall into those bands.

Finance (No. 3) Bill

Debate between Ian Mearns and Andrew Gwynne

Tuesday 3rd May 2011 Commons Chamber

[Ian Mearns]

That is exactly what I am suggesting such a report could achieve.

The VAT chargeable on the duty element of the fuel price brings the total impact of fuel duty to about 69p a litre—that figure is a few days old, so it might be more or less than that now, depending on the daily price rate. Using a typical fuel consumption rate for road haulage of 8.5 miles per gallon, that means that each kilometre travelled provides 22p to the Exchequer; given an average load of 10 tonnes, each tonne of freight transported into or out of the north-east region delivers £4.30 to the Exchequer in fuel taxes, compared with an average for goods moved between English regions of only £3.52. We are already starting to see the impact on an economically deprived region in terms of businesses developing there and on its prospects for employment, given its peripherality to the bulk of the English economy.

Many hauliers in the North East chamber of commerce membership have no choice but to pass a proportion of those costs on to their customers, the vast majority of whom tend to be based in the north-east region. The chamber of commerce has argued that decisions on fuel duty need to take greater account of the impact on businesses in each part of the UK, and that a more considered approach is needed than that of the automatic increases that have been fixed into Government policy for the upcoming period. The figures I have quoted exclude those for goods transported within regions, as the impact of fuel duty would be the same in each region for that type of journey.

If the amendment were accepted, I would ask that a detailed analysis be included of the introduction of a measure that would help to stabilise fuel duty. In fact, that is exactly what the Federation of Small Businesses has been calling for. We have had debates in the past about some sort of fuel duty stabiliser, and it remains to be seen whether that would be a workable option, but surely when carrying out such an analysis, the Government could look at measures that would stabilise fuel duty and the cost of fuel.

[Andrew Gwynne]

My hon. Friend is making a superb case stating the competitive disadvantage that the Government’s policies are placing on the road haulage industry in the north-east of England and in other English regions. Does he think that the reporting proposed in the amendment could help to determine Government policies for supporting economic growth in regions such as his?

[Ian Mearns]

I am trying to point out to Ministers that fuel duty imposed nationally has a differential impact across the different regions and indeed nations of the United Kingdom in terms of contacting the main hub of economic growth, the south-east of England. There has been a debate in my region about the dualling of the A1 north of Newcastle upon Tyne, but the main driver of growth in the north-east economy is actually to the south and west of the region in terms of the contact with the main drivers of our economic future.