Local Government Finance
Debate between Jonathan Brash and Graham Stuart(1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Graham Stuart (Beverley and Holderness) (Con)
It is a pleasure to take part in this debate, which has had a number of distinguished contributions, not least from the hon. Member for Knowsley (Anneliese Midgley). As she rightly said, at a time when the cost of living is biting so much on so many, people really need to feel better off.
The hon. Lady also highlighted the regressive nature of council tax, which is why it is so regrettable that this settlement is built on the basis of putting up council tax on everyone. It is exactly what the previous Labour Government did, too; they doubled the level of council tax over their 13 years in office. In contrast, over the 14 years of the Conservative Government, council tax grew only a little more than inflation, as it was held down for many years, although it did go up and down over time. That is the history: Labour puts up council tax. Its spokespeople speak about how terrible and regressive it is, and then in government it visits that on people in constituencies across the country.
The Government have used the expected 4.99% annual rise in council tax in all their figures to claim that there will be increased spending power. That is based on sticking up tax by 5%, and then another 5%, and then another 5%—it is compounding.
Graham Stuart
I will come to the hon. Gentleman in a while.
The impact for those in the cheapest or lowest-value homes in the East Riding—very often people in rural areas, with poorly insulated homes, costly transport and low income—will, by year three, be £200 a year out of already taxed income. That is the reality of what this Labour Government are visiting on poor people in my constituency and other constituencies around the country, while they crow about it being fair. There is nothing fair about it.
The local government finance settlement will mean only one thing for families in Beverley and Holderness: higher council tax bills, at a time when every other bill is soaring—thanks, again, to this Government. The Secretary of State for Energy Security and Net Zero is signing up for the most expensive deals imaginable and putting up the price of energy, while the jobs tax—one of the most economically irrational taxes imaginable—taxes jobs and brings in no money, because employers simply employ fewer people. That is what that £26 billion hit on the economy comes down to.
Graham Stuart
I will come to the hon. Gentleman, but I will make a little more progress first.
I know the reality from talking to my constituents. Jenny in Cherry Burton says that she cannot really afford to shop for healthy food as half her money is gone before she even gets home, forcing her to make choices that no family should have to make simply to get through the week. Andrew in Beverley faces rising energy bills, which I have touched on, and rising food prices, all while supporting his two children, who are at university and cannot find part-time work; previously, they would have done, but now they cannot find part-time work because those jobs have tended to disappear. There are fewer and fewer opportunities for young people to get on the jobs ladder and, for those at university, to supplement their income while they pile on student debt, which will only go up even more as time goes on.
These are not abstract pressures but lived realities, and this settlement will pour on yet more misery. The Prime Minister says that every minute not spent talking about the cost of living is a minute wasted, but warm words do not warm homes.
Mr Brash
The right hon. Member made a point about core spending power. I share his irritation at the use of core spending power, because such a large percentage of it is in council tax, but it was introduced in 2016 by the last Conservative Administration. The concept of core spending power including council tax was introduced by the Conservatives. What did he say about it at the time?
Graham Stuart
I do not remember the specifics of that, but I can say that, whereas the last Labour Government doubled council tax despite it being regressive, that did not happen under the Conservatives, whatever introductions there were. Those taxes were held down, because that is what conservatives do. They recognise that it is better to leave money in the pockets of people to make their own decisions, not take it away from them.
Families across the East Riding are now asking a very simple question, because they know that promises do not pay bills. How will this local government finance settlement, and the £200 council tax bombshell that follows it, help them cope? Let us be clear about what is happening: the Chancellor underfunds, councils are squeezed, council tax rises, and families pay. Council tax is, as many Labour Members have said, regressive. The lower the income, the heavier the burden. The smaller the home, the sharper the hit. At the very moment that household budgets are tightest, this Government tighten them further.
Nowhere is that clearer than in social care. In the first Budget since Labour came into office, the Chancellor allocated over £20 billion to health. Why did they not recognise that so many of the problems in the NHS actually come from the failure of funding in social care? It could so easily within the same spending envelope have eased the pressure on the NHS by better funding social care so that to keep those who are ready to leave hospital from occupying the beds that they do—they have for the past few years, and they do today.
The Government did not put sufficient additional money into social care, and in Beverley and Holderness, with an ageing population and rising adult care needs, that imbalance matters. Instead of funding care properly at source, Ministers shift the cost on to council tax payers—and then they claim that they have fixed it.
I saw the real-world cost of squeezed council budgets when I visited Sunk Island last month. On Sunk Island Road and Brick Road, residents endure patch upon patch of repairs that are never truly repaired. They are paying more yet still waiting for lasting fixes. This is the pattern: more tax, less certainty, higher bills, patchwork results.
Government should strengthen communities, not squeeze them, so I ask the Minister: when families are stretched to breaking point, why is this Government’s answer yet another bills hike? In Beverley and Holderness, the only change that this Government appear to deliver is the small change left in people’s pockets after the Chancellor has emptied them.