Local Government Finance Bill

Debate between John Healey and Lord Stunell

Monday 21st May 2012 Commons Chamber

[Andrew Stunell]

I am delighted to be taking part in the resumption of the debate from the previous Session, as it is good to be resuming our consideration of this important Bill and these important provisions. The Bill is a major step forward in localising fundraising and decision making to local councils and restoring to them local control. Discussing local government finance is very much an acquired taste, albeit one that I can see has not been acquired by too many hon. Members today.

May I draw the House’s attention to the publication of the statements of intent, which the Department has tabled for the benefit of hon. Members over the past few days? The statements bring to the House’s attention a great deal of the technical work behind the Bill and of how the Government intend that the scheme should be implemented over the coming months.

[John Healey (Wentworth and Dearne) (Lab)]

The Minister mentions the seven technical notes. Dozens and dozens of pages about how the Government are going to approach this were released on the working day before Report and Third Reading in this House, and three and a half months after this House finished its Committee stage. Does the Minister accept that to anyone outside this House it looks as though, at every stage, this Government are going out of their way to avoid people being able to take a proper look at this and to avoid this House being able to do its job of scrutinising this Bill properly? We will be leaving too much to the other House to do.

[Andrew Stunell]

I am extremely disappointed by the right hon. Gentleman’s intervention. May I just remind him that when I assured the House that these papers would be published, there was universal astonishment that we proposed to do that before the Bill left this House? There was a universal assumption that I had somehow misspoken and that we actually meant to do this at a later stage. It is very much for the convenience of this House today that it should have these very important documents available for consideration, but the right hon. Gentleman is right to say that Members of the other place will have every opportunity to give further consideration to the information. Of course, the reason for publishing these papers in advance of the Bill completing its passages through the two Houses is to give local authorities and those who have to work on these schemes the maximum length of time to implement the necessary provisions, so that an appropriate and speedy commencement can be made next year.

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[Andrew Stunell]

The hon. Gentleman has made his point. I should make it absolutely clear that, from the Government’s point of view, it is right for local councils to take account of the local circumstances in their communities and to draw up a scheme that they believe is appropriate for them. I again make the point that other measures in the Bill give greater discretion to local authorities on raising council tax on second and empty homes. The vast majority of local authorities potentially have a substantial stream of additional income, if they believe they will face difficulties because of the reductions in income resulting from this part of the Bill. The Bill has to be taken as a whole.

[John Healey]

The Minister has just said that the Government want councils to be able to draw up schemes to take account of local circumstances. Why then is he putting this funding noose around their necks by cutting the available money by 10% from the start?

[Andrew Stunell]

I dealt with that point a minute or two ago, when I pointed out that the UK-wide reduction announced in the 2010 comprehensive spending review of some £500 million—with an impact of approximately £440 million in England—was part of the Government’s deficit reduction programme. Of course that has implications, as Opposition Members have pointed out. We think that pensioners are the important group to safeguard, which is why we are putting the statutory safeguard in the scheme and saying that local authorities should have regard to the most vulnerable in their area when drawing up their schemes.

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[John Healey]

How can the Minister say that? He talks about protecting pensioners. In Rotherham, there are 2,600 people who are in work but on incomes so low that they need the support of council tax benefit to get by, week to week and month to month. They will lose out as a result of this measure, and they will do so by significantly more than 10% of the overall cut, so how can the Minister piously say that work incentives matter to this Government?

[Andrew Stunell]

It would be interesting to hear the right hon. Gentleman tell the House how many of those 2,000 people received an income tax rebate as a result of the decisions taken by this Government. Indeed, I suspect that many of them will have been taken out of income tax altogether.

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[John Healey]

I hesitate to disagree with my right hon. Friend, but I am not sure that they have forgotten it, because earlier the Minister said from the Dispatch Box that the scheme will somehow preserve work incentives. The whole design of the proposal, the framing of the legislation and everything the Government have published do not match the claims he has made from the Dispatch Box. They are hollow words that will hurt many people who are working at the moment and others who are not pensioners but who rely on the council tax benefit to help make ends meet, week to week and month to month.

[Andrew Stunell]

rose—

[John Healey]

The Minister wants to intervene. Perhaps he will give the House the straight account of the figures for Rotherham, on which I challenged him five minutes ago.

[Andrew Stunell]

I was going to intervene on the right hon. Gentleman’s last point, but I am happy to respond to the other one as well. On the last point, it is absolutely not the case that the Government have made explicit anything relating to disadvantaging working recipients. On the contrary, the statement of intent—I appreciate that he might not have got to this section—makes it clear that it is important for schemes devised by local authorities to link with universal credit and preserve exactly that protection.

On the other point, Rotherham council, according to the figures it submitted to the Department, will lose approximately £1.8 million of funding, but the discounts and exemptions that it will be able to recover in future will amount to £1.9 million. That is all in the Bill before the House today. Whether the council chooses to join those two things together is a matter for it, but it is absolutely the case that, taking the Bill as a whole, the council will in fact have a greater capacity to meet the needs of the people it serves.

[John Healey]

The Minister has just told the House and me that, to run the new scheme from April next year, Rotherham will have available no less funding than it has during this financial year. I will look very carefully at the facts, and, if they match the Minister’s words, I will welcome them; if they do not, I shall demand that he puts the House straight and offers an apology.

On work incentives, will not the Secretary of State therefore use his powers under schedule 4 to specify that people in work must, and work incentives will, be protected as he proposes, and has pledged, to use them for pensioners? If that is the case, the Minister’s actions will match his words. If that is not the case, exhortations on the importance of local government schemes reflecting needs and not damaging work incentives will not be worth the paper of the circular on which they are sent out, because there will be no protections guaranteeing the preservation of work incentives until and unless the Secretary of State chooses to use his powers as he has pledged to use them for pensioners.

Until that point, it is reasonable for Opposition Members, who are concerned about the future of this support for council tax payments, to continue to press the Minister and to be concerned that non-pensioners are likely to bear a heavy cut in their current support. Those on low incomes who are not pensioners, but who would get the full council tax benefit under the current system, will, as the Barnsley advice network has told me, have to find 20% of their council tax bill from their basic income, whatever they earn, as councils try to make less go further.

The Minister is old enough, experienced enough and has been involved in local government long enough for this measure to sound a warning to him and his colleagues. This is the return of the poll tax—[Interruption.] There are a few groans from Tory Members, but let us remember that a 20% minimum payment expected of all people, whatever their means, was part of the flaw in, and at the heart of the unfairness of, the community charge a couple of decades ago. In practice, that is what we are building in for non-pensioners: a requirement to cover for themselves, whatever their income, about 20% of the council tax costs in their local area.

Given the way in which the measure will work for many, it is a return of the poll tax: rushed into law and rushed into practice, with a deaf ear to local government, to charities, to experts and to Members, who warn the Government, “You’re pushing too far, too fast with these changes.” I will return in a moment to the amendments on the legislation’s commencement tabled by my right hon. Friend the Member for Greenwich and Woolwich, but first let me do my job and introduce new clause 2 and the amendments that stand in my name.

With new clause 2 and amendment 2, I seek to challenge the Secretary of State’s powers over, and prescription of, the new council tax support schemes. My purpose is this: I believe that the House and local government require a justification for the inclusion in this Bill of such powers of prescription from the centre over the local, otherwise their removal from the Bill is justified. None of the arguments that I have heard from Ministers, on Second Reading, in Committee or today, justifies the extent of the centralised powers vested in the Secretary of State to design and to enforce a particular manner of council tax support scheme.

The Government claim that the reform is a localising one. If it is, they should localise the decisions on the design of, and procedure for preparing, the scheme. They should localise the decisions and let the local authorities that will run the scheme devise them, in the Minister’s words, to suit local circumstances.

Local Government Finance Bill

Debate between John Healey and Lord Stunell

Tuesday 31st January 2012 Commons Chamber

[John Healey]

The Minister talked about the IT suppliers and working to ensure that their new systems are in place by April next year, but they are going to need to be ready, fully designed, tested and operational well before the end of this year during the period when local authorities will be consulting on and designing their schemes and reassuring themselves that they can be put in place. Is not the reality more likely to be that the options on schemes will be restricted by the designs that the software suppliers will have ready to go?

[Andrew Stunell]

That is an important consideration for local authorities when they look at the speed and pace of change in the schemes they devise, but I have to say that practically everything that Labour Members have contributed to the debate has been on the basis of trying to preserve the existing scheme and associated costs. [Interruption.] I think that local authorities will probably take a cautious approach to changing their local schemes in the first year. I have to say, however, that we believe it is absolutely the case that those that wish to make a more radical change will be able to do so. I am encouraged to hear that IT suppliers are considering the possible changes to existing software and are working with local authorities to—[Interruption.]

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[Andrew Stunell]

Thank you, Ms Primarolo.

As I was saying, IT suppliers are considering possible changes to existing software and they are working with local authorities. I recognise, of course, that local authorities and suppliers need as much information as possible as soon as possible. For that reason, we intend to publish draft regulations while the Bill is still before the House. We shall shortly make available a design tool to make it easier for local authorities to model their case load and the impacts of any changes to the framework, which should also clarify the extent of any IT changes that the design of their scheme might require.

[John Healey]

I must say that it is welcome to hear the Minister say that the Government are committing themselves to draft regulations published while the Bill is before the House. Will he make it clear whether that means this House or the other House?

[Andrew Stunell]

I am looking for a nod somewhere, but let us stick with this House.

Amendment 71 states that the Secretary of State should have regard to the impact of any guidance on those of pensionable and working ages and those on benefits, particularly disability benefits. However, the Government have already made clear their intention to use the guidance to set out the importance of supporting work incentives through the design of local schemes and will consider how to ensure that local authorities are aware of their duties in respect of vulnerable groups. It is unclear whether amendment 71 would add to the Government’s commitment in this regard.

There are things that councils can begin to do now to help in their preparation—in understanding the circumstances of those in their area who currently claim support, in ensuring that elected members are aware of the decisions they need to take and in engaging with precepting authorities such as police and fire authorities. The Government have been clear that local authorities must ensure that they are on the front foot in preparing for this reform.

In summary, I must recommend that the Committee reject the Opposition amendment on this occasion.

Local Government Finance Bill

Debate between John Healey and Lord Stunell

Tuesday 24th January 2012 Commons Chamber

[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.

[John Healey]

The Minister may have meant it lightly, but he has just said a serious thing. It suggests that Ministers in this Government make arbitrary and personal decisions about the funding going to local councils, that are not based on any fair, open or objective formula.

[Andrew Stunell]

That is of course wilfully misunderstanding the point I made. The damping mechanism means that Knowsley does not get what the Labour Government decided it should get if the formula of need was applied correctly. The damping formula is protecting Knowsley from full implementation of the needs formula that the Labour Government introduced, and the right hon. Member for Knowsley wants me to keep it. Let us be quite clear. I am sorry if my lightly enunciated remark was taken as meaning anything other than that the right hon. Gentleman advanced a contradictory argument to the one he was making a few minutes ago.

Oral Answers to Questions

Debate between John Healey and Lord Stunell

Thursday 15th July 2010 Commons Chamber

[Andrew Stunell]

The whole point—or at least a significant part—of what we are doing is based on restoring accountability for the decisions that these bodies have been taking. In some cases, we are ensuring that functions return to the local authorities, where they should have been. If we take, for example, the Standards Board, it cost £8,000 per complaint upheld. We are saying that we can sweep that away completely and restore the monitoring of standards to local councils; in addition, we are getting support from our colleagues in local government to provide a peer review process at a much reduced cost.

[John Healey (Wentworth and Dearne) (Lab)]

The Department’s biggest agency is the Homes and Communities Agency. That has had not one, but two cuts to its budget this year in just two months—more than 10% of the money agreed and set aside to build new, affordable housing. Why was it that no Minister made a statement in public or to this House about those cuts? The details were snuck out on the HCA website. Will the Minister confirm now to the House that the £450 million cut in the HCA’s budget this year will mean that nearly 6,000 new affordable homes will not be built and 5,000 house building jobs will go?

[Andrew Stunell]

I have a lot of respect for the right hon. Gentleman, but when it comes to counting, he is not quite so good. We need to understand the dire situation this country was in. Emergency action was essential. However, my right hon. Friend the Minister for Housing will shortly be able to give details of all the developments that will go ahead, now that we have had a chance to assess the financial situation fully.

[John Healey]

I shall give the Minister the chance to put the record straight. There was no black hole and no house building commitments were made without the money having been agreed and set aside, as he and other colleagues have claimed. If there had been, I would have received an accounting officer’s letter, but I did not. Will he confirm, therefore, that there was £540 million in the Department’s budget last year that we planned and agreed with the Treasury to spend this year on affordable housing, and that it has been cut back by a further £220 million? Will he now admit that his Ministers and team have not had the strength to stand up to the Treasury and have not had the courage to come to the House to tell us about the cuts they are making?

[Andrew Stunell]

I read in the newspapers that it was the previous Chancellor who could not persuade the Prime Minister of the day that he needed to stop borrowing and start tackling the deficit—but of course, that might have just been a press report. As I understand it, the housing pledge that the right hon. Member for Wentworth and Dearne (John Healey) brought to the House was for £1.5 billion. We have now authorised the release of £1.25 billion of that pledge. There will be housing built on a scale that the Labour party never achieved while in power.

Oral Answers to Questions

Debate between John Healey and Lord Stunell

Thursday 10th June 2010 Commons Chamber

[Andrew Stunell]

Yes.

[John Healey (Wentworth and Dearne) (Lab)]

Why did Ministers not make an announcement about the first £230 million of cuts to the affordable housing investment programme instead of sneaking them out on the Homes and Communities Agency website? Do they not accept that the hardest-hit areas are the poorest, and that the poorest families will be hit first? Given that the Prime Minister said this week that the Government’s cuts will be open, responsible and fair, can the Minister not see that that fails each one of those three tests?