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Local Government

Volume 407: debated on Wednesday 18 June 2003

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What progress he has made with the balance of funding review of local government. [119752]

The steering group's first meeting on 28 April discussed key issues from the local and central Government perspectives. Our next meeting on 25 June will consider papers on principles, accountability, equalisation and international comparisons, along with proposals for further research. We will invite interested parties to submit papers later this summer.

What greater freedoms and responsibilities will that allow local authorities?

As my hon. Friend knows, we set out in our White Paper, which we published 18 months ago, proposed extensions of freedoms and flexibilities to local authorities, and we are legislating for that in our current Local Government Bill. However, the balance of funding review will explore a number of channels in which it is possible to extend that agenda to offer greater freedom for local authorities, particularly where that helps to drive up their performance and deliver higher quality services to their residents.

Does the Minister acknowledge that there can be a significant shift in the balance of funding only if local government has a fair local tax base? Will the Minister's review therefore consider scrapping the unfair Tory council tax? Does he not recognise that for councils like Kingston, which already raises 41 per cent. of its budget through the unfair council tax, the unfairness of the tax means that the burden on pensioners and those on low incomes is already far too harsh?

We have not ruled out any options from the review. We will take a broad view and consider a range of options. However, before rushing to precipitate conclusions, the hon. Gentleman ought to give consideration to one important factor: the ease of collection of forms of taxation. He will realise that there are certain advantages in taxation systems that relate to property, where evasion is much more difficult than with some of the other types of taxation that I know the Liberal Democrats tend to favour.