Local Government Finance (England)

Lord Watts Excerpts

Wednesday 13th February 2013 Commons Chamber

[Brandon Lewis]

I respectfully suggest that the hon. Gentleman does a bit more research, because the Secretary of State stood at the Dispatch Box at an earlier date to say that it was in the base. The hon. Gentleman misses the point about the settlement. Council tax money is not about lining councils’ pockets—it is hard-working taxpayers’ money. Many councils already have more in reserve than they are losing through cuts. Liverpool, Manchester and Leeds have reserves twice the size of their spending power reductions.

[Mr Dave Watts (St Helens North) (Lab)]

Is it not the case that if councils take up the offer for the next two years they will face bigger cuts and higher council tax at the end of the period?

[Brandon Lewis]

Yet again, we see the difference between the Opposition and the coalition Government. We are protecting the pockets of hard-working taxpayers, and the councils that the hon. Gentleman is talking about should look again and freeze their council tax.

--- Later in debate ---

[Hilary Benn]

I very much hope that the Secretary of State is willing to accept that challenge; it would be good for him to see impact of the cuts.

[Mr Watts]

May I warn my right hon. Friend that the Secretary of State’s record when he was a leader of a council does not stand up to any scrutiny? While people such as me were running three-star efficient councils, he was running an underperforming council.

[Hilary Benn]

I am grateful to my hon. Friend for reminding us. I do not know whether the Secretary of State will indicate whether he will accept the kind invitation he has received. There is no answer at the moment, but perhaps my hon. Friend the Member for Liverpool, Walton (Steve Rotheram) will find out subsequently.

One of the problems councils face is that there is some uncertainty in the system, because of the big change the Government are bringing in as a result of this statement. The truth is that it remains to be seen how local authorities will benefit from business rates localisation, particularly because the Government have given themselves so many ways in which they can take some of that growth in business rates for themselves. The business rate projection for each local authority has been averaged out over two years. Why did the Minister decide on a two-year period, rather than averaging out over a five-year period as his own consultation suggested?

On business rate appeals, although the Government have increased the adjustment of that to £593 million, will the Minister say whether he is confident that that will be sufficient given that the LGA says that appeals in the pipeline could be considerably larger than this, thus exposing local government to an unacceptable level of risk? Why did Ministers change the 2012-13 baseline to include cuts that would not take place until the next financial year? Was it to try to make the reductions in spending power look less than they actually were? I welcome the increased allocation for the public health grant, but because it is ring-fenced it does not really change the reduction being imposed on councils for all the other services for which they are responsible.

Finally—a lot of other Members want to speak—I turn to council tax benefit. Last year in this debate, I suggested to Government Members that they take a long, hard look at what this would mean for their constituents, including in areas where the proportion of pensioners was higher than average. Now that the change is almost upon us, many people in all our constituencies frankly have no idea what the coalition Government have in store for them.