Local Government Finance Bill

First, may I draw attention to my interest, as declared in the register? The Bill speaks volumes about the Government responsible for introducing it. First, it is largely incomprehensible, and I challenged the Secretary of State, when he was in his place, to explain, in plain English, the meaning of the first seven clauses. Of course he immediately had to rush to get a copy of the explanatory notes, which he read out in a rather tedious way, because it is impossible for the lay reader to understand the clauses. They are phrased entirely in terms of amendments to existing legislation. Interestingly—this is perhaps why he was unwilling to rise to the challenge—the very first piece of legislation referred to, in clause 1, is the Local Government Finance Act 1988. Some people will know what that was—it was the Act that introduced the poll tax. So the people responsible for the poll tax are back with us again, only this time they have the Liberals on board with them. The Bill is incomprehensible as legislation and it is contradictory in that its effects will be very different from what it claims to do. It talks the language of localism but, as my right hon. Friend the Member for Leeds Central (Hilary Benn) ably pointed out from the Front Bench and as was equally highlighted by my hon. Friend the Member for Sheffield South East (Mr Betts), the Chair of the Select Committee on Communities and Local Government, it is actually a deeply centralising measure that gives huge powers to the Secretary of State to determine what amounts of local revenue can be retained by individual local authorities and, crucially, how much will be clawed back by the Treasury. One of the key provisions, which the Chair of the Select Committee highlighted, is the erosion of grant support from the Government to local authorities. The main source of revenue to local authorities will now be business rates but authorities are not even going to have the benefit of retaining all those rates because of the claw-back provisions in the Bill. The Bill is a deeply flawed, centralising measure that does not do what it says on the tin; it covers itself in the language of localism but is a profoundly centralising measure. Let us address the part of the Bill that deals with council tax benefit, which is a nasty little piece of legislation and which does not just cut 10% from the benefits of people who depend on this for support with the cost of their council tax. There are large numbers of these people—almost 6 million—and, on average, they are getting about £15 a week, or £800 a year. A very large number of vulnerable people depend on this revenue, some of whom will have all of it taken away and some of whom will have some of it taken away. We do not know what the consequences will be, because the Government have not yet set out the detailed rules. Therefore, local authorities, which are expected to introduce the provision in just a year's time—they are to have the scheme in place by the end of January 2013—do not know how to begin to plan the scheme because they do not know what the Government's reserve requirements are. I must say to the Government that the approach being taken is horrifyingly reminiscent of another disaster of the 1980s: the introduction by the then Conservative Government of housing benefit. The Conservatives like to forget or obscure the fact that it was the Thatcher Government who introduced housing benefit and were responsible for the scheme which Conservatives are now attacking, criticising and saying needs reforming. Its introduction was done in just the same way that the current Government are proposing to introduce these changes: in a rush, without adequate consultation and with a lot of the detail unavailable until very much the last minute. The consequence then was administrative chaos, which was described by some of the country's most respected newspapers as the"““biggest administrative fiasco in the history of the welfare state.””" I have to say to this Government that they are on track to repeat that experience now. They are rushing ahead with a highly complex scheme without giving local authorities the time to prepare properly, and they are going to do it in a way which imposes steep cuts and therefore affects the living standards of people who depend on this benefit for their welfare. The approach is profoundly irresponsible and I sincerely hope that the Government will at least use one of the powers that they have given the Secretary of State in this Bill and, by order, amend the date on which this scheme can be introduced. I sincerely hope that they will listen to the good advice of the Select Committee and defer what otherwise promises to be an administrative fiasco that will cause immense hardship.