Local Government Finance Bill

Lord Bichard Excerpts

Tuesday 16th October 2012 Lords Chamber

[Lord Tope]

My Lords, my name is also added to this amendment. The noble Lord, Lord Best, has introduced the amendment characteristically fully, clearly and precisely. Equally characteristically, the noble Lord, Lord Jenkin, has once again confessed to his errors of the past, but more particularly, pleaded with us eloquently to learn from experience. That is so important.

Our discussions on this part of the Bill through all its previous stages have been characterised by the number of speeches that have begun by people saying, “I don’t know anything about local government finance, but”. We will probably hear quite a number of figures quoted and quite a number of complex issues will be raised. It is a complex issue. None of us who has had a lifetime in local government will pretend that local government finance is anything but complex. But what we face today is a very simple and basic question. There is a shortfall. Many councils are facing a shortfall in having to introduce the council tax reduction scheme. Is it fair that the shortfall is met by those who can least afford it in our community, such as those on benefit? As has been explained, they will be affected even more because, quite rightly, pensioners and the most vulnerable, however defined, are excluded from this. They will face a huge disadvantage in terms of their income. Is it fairer that they should meet the shortfall or should it fall on the wider community? I think that everyone here would agree that it is fair and right that that shortfall should be met by the wider community. It is a complex issue but it is a simple question that is at the heart of the debate today.

I was a little surprised at the rather churlish response from the Opposition to the, albeit very late, announcement from the Minister on the transitional funding. I can well understand that there are many questions and difficulties about that, but I would much rather have Ministers coming forward at a late stage saying, “We have been listening and we want to try and help so this is a change”. From that point of view I welcome this move, but is it a solution? Well, £100 million is always welcome to local government. It will help but it will help for one year only. It is not a solution to the problem, as the noble Lord, Lord Best, has rightly said. It will help perhaps for one year. There are a lot of complexities. We will get further details about it later this week or, as I think I heard the Minister say, maybe next week. I hope that it will be here by Monday morning as we certainly need it in time for Third Reading. I hope that it will be this week, otherwise what will be doing next weekend?

The transitional relief will not solve the problem. The amendment, as explained very clearly by the noble Lord, Lord Best, will give local authorities the discretion—it is not a requirement—in the light of their local circumstances, priorities and demographic make-up. In all of those things it will give them the discretion to vary the single-person discount. That will be different across the country. That is the nature of localism. I said earlier that I might have preferred still to have a national scheme with universal credit, but that is not what we will have. We have a localisation of council tax. What could be more in keeping with localism than giving local authorities the discretion and the power to produce a scheme that best suits their local circumstances? That is what this would do. As the noble Lord, Lord Best, said, some may wish to put limits on that discretion. The Liberal Democrats would certainly support a limit on the 20%—no lower than 20% on the single-person discount—so there would be a variation of between 20% and 25%. That alone would solve the problem that most local authorities are facing. Some may feel that pensioners should be exempted. All that is possible but it is only possible if there is some movement and some negotiation on the issue.

One of the surprises is that the Government have thus far been unwilling to negotiate at all on the single-person discount. The Secretary of State has firmly set his mind against any change. That contrasts starkly with the Localism Bill that we spent so many happy hours on in your Lordships’ House last year when we managed to achieve 440 amendments by agreement, albeit on rather a bigger Bill than we are discussing today. Not one of those amendments needed to be carried on a vote. Therefore, I am very disappointed that this year we cannot even negotiate on finding a solution to this issue.

If this amendment is carried today, as I very much hope it will be, obviously it will go to the other place and those negotiations will have to take place before it comes back to this House. I regret that we will have to come right at the end of this to force negotiations in this way, but if that is how it has to be done then so be it. The noble Lord, Lord Best, made this point and I want to stress that this amendment and the relaxation on single-person discount is strongly supported by every political group in the Local Government Association. I stress that that includes the independent group—I am never quite sure whether it is a political group or not, but the party leaders of all four groups have signed a letter to the Secretary of State urging him to accept it. It has all-party support. Nowhere is that support stronger than in the Labour group and on the Labour councils which are facing the real pain of this. It is inexplicable to me, after a lifetime in local government, that the Labour Benches have been unwilling to sign up to this amendment or even to discuss the wording to make it more acceptable to them. That is genuinely quite inexplicable. I hope even at this late hour, having made their stand on the previous amendment, and the House having decided on it, they will reflect on that and recognise that if we can pass this amendment today we can negotiate on it when it eventually comes back to our House.

To summarise, the amendment is fair. It is a far more equitable solution to the problem that local authorities are facing. That is why every local authority of every political complexion that I know of strongly supports it. It is localist, and this is supposed to be about the localisation of council tax benefit. It trusts local authorities and gives them some discretion—perhaps limited—on how to devise the scheme to face what we are legislating for. Above all, it is practical. It can be implemented quite easily even at this late hour. Local authorities have to publish their draft scheme by the end of January although it does not come in until April. They can do that now. Councils choose to vary the single-person’s discount which will be collecting very small sums of money. The figure being quoted by the Local Government Association is 30p a week from people who are already paying council tax and who are already on record, rather than larger sums of money from people who can much less afford it and who in many cases are not paying council tax at all because their income does not justify it.

In our debate on the previous amendment, the noble Baroness, Lady Hollis, referred to a red-line moment. That was perhaps a red-line moment in an unreal world; this is the real red line. It is perhaps an appropriate colour. It is the real red line in the real world and I urge noble Lords on all sides of the House—perhaps particularly those on the Labour side of the House—to support the amendment, as I do.

[Lord Bichard]

My Lords, I support the amendment and declare an interest as a vice-president of the Local Government Association, as many of us are. I support it for two very simple reasons. First, in the light of the previous vote, this is perhaps the last opportunity to offer some help to protect the most vulnerable in our communities, who stand to suffer most from the proposed legislation if it is passed as drafted. Like the noble Lord, Lord Tope, I implore all noble Lords who I know have a passion to protect the interests of the most vulnerable in our society to support the amendment. I suggest that this is not the time for political tactics. Nor could a vote for the amendment be taken as supporting in any way the policy in the Bill. It should and would be taken as a practical way of helping those most in need when they need it most.

The second reason is that I support the cause of localism and devolution, which is after all a key priority of the coalition Government. For me, devolution always involves the devolution of power. It is not just about the devolution of responsibility or, on occasion, of the right to be blamed. The devolution of power is what the amendment moved by the noble Lord, Lord Best, offers.

Devolution is also about devolving choice, and giving local authorities the chance to make a choice about where money is spent and what their priorities are. Once again, that is what the amendment is about. It gives local authorities the chance to make a judgment, taking into account their local knowledge, about what their priorities are and where their money should be spent. For those two simple reasons I implore the House to support the amendment.

[Lord Palmer of Childs Hill]

My Lords, I was pleased to hear the noble Lord, Lord McKenzie, say in debate on the previous amendment that we must stand up for poor people. That is what I, in supporting the amendment of the noble Lord, Lord Best, ask noble Lords to do today. I hope that noble Lords from all sides of the House will do that.

Like other noble Lords, I welcome the £100 million. It is good, but it is transitional. It is good for this year, but it is not the solution for the future.

Points were made about the collection of small sums from people who could least afford it. Comparisons were made with the suggestion that a single-person discount should be varied if the local authority concerned wished to do so. Perhaps noble Lords should look at the simple arithmetic. Let us say that someone who is paying council tax lives in an authority where the council tax is £1,000 per annum. I will keep the figures simple. With a 25% discount, the single person will have a bill for only £750. If the local authority changed the 25% to 20%, instead of having a bill for £750, the council tax payer would have a bill for £800.

If their house was more valuable and highly rated, for example at £2,000, the council tax payer who got a 25% discount would pay £1,500. Under the 20% solution of the noble Lord, Lord Best, they would pay £1,600. One does not have to break one’s brain to see that they would accept this. They would probably not even look at the calculation. They would see that on a bill of £1,000 they were paying £750 and now have a bill for £800. Perhaps they would realise that they had a bill for an extra £50. However, they are used to paying council tax, which does not normally stay the same every year. On £2,000 the bill would be £1,600 rather than £1,500.