Provisional Local Government Finance Settlement

Lord Liddle Excerpts

Wednesday 6th January 2021 Lords Chamber

[Lord Greenhalgh (Con)]

My Lords, I thank my noble friend for mentioning the Oxford-Cambridge arc. Unlike the Prime Minister, I err more towards the Cambridge end of it. My noble friend is absolutely right to draw our attention to the importance of getting the infrastructure right to unlock growth and the prosperity of this country. That is why, as part of planning for the future—we discussed this at length in connection with the Planning for the Future White Paper—we are looking at an infrastructure levy, which would be much more transparent and streamlined, as a way of raising the funds that local areas need to ensure that they have the infrastructure to unlock their potential.

[Lord Liddle (Lab) [V]]

My Lords, I declare an interest as a member of Cumbria County Council, and I seek the Minister’s advice, because we have a meeting on Monday morning about whether to proceed with the 3% supplement on council tax to fund social care. Does he agree that, in total, a 5% increase in council tax is a very considerable real-terms increase at a time of great economic stress? Secondly, does he agree that council tax is an unfair tax, because it does not make the broadest backs bear the heaviest burden, which should be a fundamental principle of taxation? Thirdly, does he agree that, given the desperate position of social care, made worse by the Covid crisis, local authorities have little real choice in whether to implement the 3%? Finally, will he make a commitment that this will be the last year when this grossly unfair mechanism for funding social care will be applied, and that in 2021 the Government will produce their long-promised plan for putting the funding of social care on a long-term sustainable basis?

[Lord Greenhalgh (Con)]

My Lords, I have never heard so many questions poured in with such economy, but I refuse to give advice to any council, or any councillor, on how they should tax their local communities. I could point to my own record as the leader of Hammersmith and Fulham Council. For six years we cut council tax by 3%, and for one year we froze it. That was because I believed that our council tax level was too high. I did not understand why neighbouring boroughs such as Wandsworth and the Royal Borough of Kensington and Chelsea had substantially lower council tax than Hammersmith and Fulham. I chose the route of being able to tax less and provide better services, through more efficiency and driving greater productivity. So I would say that it is down to local leaders to decide how they set their council tax. My advice would be: what do you think is in the interests of your people? I agree that council tax is a regressive tax—but it is particularly ridiculous to see how some councils have to raise their funds largely through council tax increases, because they receive so little grant as a proportion of their combined budget. I shall give more examples of that later.