Local Government Funding: Rural Areas

John Redwood Excerpts

Monday 11th January 2016 Commons Chamber

[Graham Stuart]

My right hon. Friend is quite right. That is not the main focus of today’s debate, but that is the context in which it takes place.

We are here today because the situation I have described is also true in local government, which provides so many of the public services on which our constituents depend. The central facts for the debate are these. Urban residents receive 45% more in central Government grant than their rural counterparts and pay £81 less in council tax per head. One may say, “Well, that’ll be because rural residents are better off. They can afford it. It’s reasonable. Their needs are less”, but the Government’s own average earnings figures show that residents in urban areas enjoy higher earnings than their rural counterparts, whereas those living in areas of significant rurality are the very poorest paid. So how can it be fair for poorer rural residents to pay higher council taxes than their richer urban cousins while receiving fewer services? This central unfairness is why, in 2012, along with Liberal Democrat and Labour colleagues, I set up the Rural Fair Share campaign. For many years, rural councils have been underfunded by central Government because of historic political choices and the formidable lobbying power of metropolitan authorities.

[John Redwood (Wokingham) (Con)]

My hon. Friend is doing a great job on this issue. Does he know that in West Berkshire and Wokingham—I am one of the area’s MPs—not only was the adult social care settlement so poor that it went to judicial review, but the Government lost, owe us a load of money, yet will still not pay?

[Graham Stuart]

My right hon. Friend is right. This story can be found in places right across the country, yet this inequity continues year after year. That is why so many colleagues are in their places to talk about it today.

In order to meet the shortfall in grant, of course, rural councils had to respond in the only way they could—and that was, in the past, by increasing their council tax rates. That is why the council tax base is much higher in rural areas, and modest homes in the East Riding of Yorkshire in my constituency can pay higher council tax than is paid on a £1 million property in Westminster. Under the Government’s proposed local government settlement, however, those higher taxes are being used to justify a further shift in support from rural to urban.