Cities and Local Government Devolution Bill [HL]

Lord Liddle Excerpts

Monday 29th June 2015 Lords Chamber

[Lord Beecham]

My Lords, perhaps my noble friend would agree with me that a major part of the problem is that the council tax embodies a significant element of the poll tax, and that that is what leads to such narrow banding.

[Lord Liddle (Lab)]

I agree with my noble friends on our side of the House who have spoken about these issues. Council tax is in urgent need of reform. As for anyone who defends its existing basis—it is indefensible. It needs reform, as my noble friends Lady Hollis and Lord Smith have suggested.

I applaud the Government’s commitment to devolution, as I have said before in this House. But the elephant in the room is how to devise a scheme of fiscal federalism within the United Kingdom and within England. That is a very tricky question. It is tricky politically because once we start to look at these issues we see that London and the south-east are transferring considerable amounts of money to the rest of England. The transfers within England are probably much greater than the much talked-about transfers under the Barnett formula to Scotland and Wales.

Some years ago, in my own area of Cumbria, a study was done of all government spending and the estimated tax contribution from all sources. It came to some pretty alarming conclusions. In terms of total government commitment to Cumbria, roughly twice as much money was being spent by the Government in one form or another—this includes the nuclear plant at Sellafield, not just local government—as we were paying in. This issue has to be honestly addressed.

It is also the reason why there is an absolutely compelling need for local authorities to have the powers to contribute to local economic regeneration. That is the way to start building a tax base, rather than living off this drip-feed from London and the south-east.

Some very big issues are being touched on here. It would be interesting to hear from the Minister whether there is any interest from the Government in launching a major study of these questions—royal commissions are rather out of fashion, but I suggest that this would be a suitable subject for one—or whether we will continue with the terribly unfortunate “ad-hockery” that we have. I am sure the Minister agrees with me about the unfairness of the current local government arrangements. I remember, in a meeting in Cumbria County Council when the last settlement came out, quoting that the authority that did best of all was Elmbridge in Kent.

[Noble Lords]

Surrey!

[Lord Liddle]

My apologies—I meant Elmbridge in Surrey. I looked on my iPad at the description of Elmbridge, which started by saying that that part of Surrey,

“is known as the ‘Beverly Hills’ of England”.

The Minister, who is a fair person, must admit that such extraordinary unfairness is where we end up. We need a much more independent and objective look at these questions, and that is of real importance if we are to get an effective devolution of power in this country.