Local Government Finance Bill

Nicholas Dakin Excerpts

Monday 21st May 2012 Commons Chamber

[Andrew Stunell]

I dealt with that point a minute or two ago, when I pointed out that the UK-wide reduction announced in the 2010 comprehensive spending review of some £500 million—with an impact of approximately £440 million in England—was part of the Government’s deficit reduction programme. Of course that has implications, as Opposition Members have pointed out. We think that pensioners are the important group to safeguard, which is why we are putting the statutory safeguard in the scheme and saying that local authorities should have regard to the most vulnerable in their area when drawing up their schemes.

[Nic Dakin (Scunthorpe) (Lab)]

Will the Minister acknowledge that yet more demand and stimulus will be taken out of local economies as a result of the measure? Will not the Government then have to revise their borrowing figure yet again, and borrow even more than £150 billion?

[Andrew Stunell]

I think the hon. Gentleman has got that slightly topsy-turvy. We are ensuring that it will always be better to work and that it will always pay to work. One of the statements of intent sets out the Government’s view on how that can sensibly be integrated with universal credit, which will start in a year or two.

--- Later in debate ---

[Mr Jones]

That is a very important point. That will limit the ability of my council in County Durham and my right hon. Friend’s authority to effect any change. That will lock in the unfair and disproportionate effects, which have been caused by no account having been taken of deprivation. We have just heard a Minister saying this Bill takes account of equality, but it must be the first Bill in history that supports a system by which the poorest in our society and those councils with the largest need—growing aged populations and increasing numbers of looked-after children, for example—will suffer the most.

[Nic Dakin]

My hon. Friend is making a powerful case, identifying the regional inequalities at the heart of these proposals.

--- Later in debate ---

[John Healey]

My hon. Friend makes clearly and succinctly the points he made earlier.

I am concerned about the percentages, whether 16% or 19%, and the averages, such as the LGA’s calculation that non-pensioners are likely to lose, on average, £6 a week from the support they currently receive to help pay council tax. Percentages and averages are one thing, but the family, household or individual—the one in eight people currently entitled to council tax benefit who are in work but do not earn enough to cover their council tax bills without help—will face a reduction of perhaps £10, £12 or £15 a week, at a time when other costs are being loaded on them and they are struggling to make ends meet. They will find such a difference really hard to deal with. I hope that we do not lose sight of the sort of pressure that the Bill and the changes the Government are making will put on many households, including many that are working hard and have an entitlement that they simply will not have under the new system.

[Nic Dakin]

My right hon. Friend, as ever, speaks with great clarity and integrity. The core of the issue, as he is showing, is that it appears that there will be unintended consequences that create a disincentive to work for those very people.