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David Davies: Labour shows contempt to Council Tax payers of Wales

Speech to the National Assembly for Wales

"In my opinion, and that of many of my constituents, the endless rises in council taxes that we have seen since the establishment of the National Assembly have shown the total contempt that the Labour Party and the Labour Welsh Assembly Government have for the people of Wales.

I could hardly believe my ears earlier when a Labour Member talked about an average rise, or even a total rise, of 8 per cent. What planet is he on? We had a rise of 24 per cent in the first year of the National Assembly alone.

We would be grateful if we only received 8 per cent rises in our council tax, because more years than not they are in double figures.

Over the last six years in Monmouthshire, council taxes on a band D property have gone up by something like 135 per cent—that is the price that we are paying for your policies.

Figures from the Assembly Library will show that in every year bar one the amount of money given to Wales in the form of the block grant increased significantly over and above the rate of inflation.

While I am on that point, Mike German has clearly not understood that the issue of the council tax is devolved. Oliver Letwin could not possibly have been referring to Wales when he made his comments.

If he was talking about Wales, he would have been mistaken, and you would have been better off pointing out that he could not possibly have control in that regard. Council tax is set as a result of how much a local authority receives from the Assembly.

If the Assembly gives a local authority more money, the council tax will decrease; if the Assembly holds money back from a local authority, the council tax will increase. I suspect that Oliver Letwin was referring to reducing the percentages by taking funding away from local authorities in England and allowing areas such as education to be funded directly by Government or allowing Government to fund parents directly.

That is what I believe he was talking about, but I do not know and I do not intend to respond to that.

The reason that council tax has increased and the solution to that problem relates to the formula used to allocate money to each of the 22 local authorities in Wales.

It has been deliberately rigged to take money out of rural areas, such as Monmouthshire, and to give it to some of the authorities that have, I am afraid to say, been run and failed by old Labour for many decades.

Instead of considering the amount of income a household receives, the formula considers how many people in a given area are claiming benefits. That might work well in some areas, such as Peter Law's constituency, but in the constituency of Monmouthshire, while not many people in percentage terms claim Government benefits, many people work in agriculture or tourism and receive the minimum wage.

They may be as badly, or worse, off than some people who claim benefits, but, for the purpose of the formula, they are not counted in any way as being poor.

The formula is also fiddled in terms of the emphasis given to rurality—it used to be 8 per cent; it is now 6 per cent. As anyone could work out, the cost of providing services in a rural area is far greater than it is in an urban area.

However, the formula does not take that into account. It is taking money out of areas such as Monmouthshire and holding money back. It does not matter who is in control—we have had Labour and Conservative councils over the past five years—the council tax has and always will increase because they are not receiving enough money.

Revaluation will mean a double whammy because I believe that local authorities will not be allowed to keep the additional money that comes in as a result of the increasing number of houses that have moved to a higher council tax band. They will be held back.

I wonder whether Peter Law would like to tell us what message he has to constituents who will be hit by high council taxes and fewer services."

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