It is a pleasure to take part in this debate, which has had a number of distinguished contributions, not least from the hon. Member for Knowsley (Anneliese Midgley). As she rightly said, at a time when the cost of living is biting so much on so many, people really need to feel better off.
The hon. Lady also highlighted the regressive nature of council tax, which is why it is so regrettable that this settlement is built on the basis of putting up council tax on everyone. It is exactly what the previous Labour Government did, too; they doubled the level of council tax over their 13 years in office. In contrast, over the 14 years of the Conservative Government, council tax grew only a little more than inflation, as it was held down for many years, although it did go up and down over time. That is the history: Labour puts up council tax. Its spokespeople speak about how terrible and regressive it is, and then in government it visits that on people in constituencies across the country.
The Government have used the expected 4.99% annual rise in council tax in all their figures to claim that there will be increased spending power. That is based on sticking up tax by 5%, and then another 5%, and then another 5%—it is compounding.
The impact for those in the cheapest or lowest-value homes in the East Riding—very often people in rural areas, with poorly insulated homes, costly transport and low income—will, by year three, be £200 a year out of already taxed income. That is the reality of what this Labour Government are visiting on poor people in my constituency and other constituencies around the country, while they crow about it being fair. There is nothing fair about it.
The local government finance settlement will mean only one thing for families in Beverley and Holderness: higher council tax bills, at a time when every other bill is soaring—thanks, again, to this Government. The Secretary of State for Energy Security and Net Zero is signing up for the most expensive deals imaginable and putting up the price of energy, while the jobs tax—one of the most economically irrational taxes imaginable—taxes jobs and brings in no money, because employers simply employ fewer people. That is what that £26 billion hit on the economy comes down to.
I know the reality from talking to my constituents. Jenny in Cherry Burton says that she cannot really afford to shop for healthy food as half her money is gone before she even gets home, forcing her to make choices that no family should have to make simply to get through the week. Andrew in Beverley faces rising energy bills, which I have touched on, and rising food prices, all while supporting his two children, who are at university and cannot find part-time work; previously, they would have done, but now they cannot find part-time work because those jobs have tended to disappear. There are fewer and fewer opportunities for young people to get on the jobs ladder and, for those at university, to supplement their income while they pile on student debt, which will only go up even more as time goes on.
These are not abstract pressures but lived realities, and this settlement will pour on yet more misery. The Prime Minister says that every minute not spent talking about the cost of living is a minute wasted, but warm words do not warm homes.
whereas the last Labour Government doubled council tax despite it being regressive, that did not happen under the Conservatives, whatever introductions there were. Those taxes were held down, because that is what conservatives do. They recognise that it is better to leave money in the pockets of people to make their own decisions, not take it away from them.
Families across the East Riding are now asking a very simple question, because they know that promises do not pay bills. How will this local government finance settlement, and the £200 council tax bombshell that follows it, help them cope? Let us be clear about what is happening: the Chancellor underfunds, councils are squeezed, council tax rises, and families pay. Council tax is, as many Labour Members have said, regressive. The lower the income, the heavier the burden. The smaller the home, the sharper the hit. At the very moment that household budgets are tightest, this Government tighten them further.
Nowhere is that clearer than in social care. In the first Budget since Labour came into office, the Chancellor allocated over £20 billion to health. Why did they not recognise that so many of the problems in the NHS actually come from the failure of funding in social care? It could so easily within the same spending envelope have eased the pressure on the NHS by better funding social care so that to keep those who are ready to leave hospital from occupying the beds that they do—they have for the past few years, and they do today.
The Government did not put sufficient additional money into social care, and in Beverley and Holderness, with an ageing population and rising adult care needs, that imbalance matters. Instead of funding care properly at source, Ministers shift the cost on to council tax payers—and then they claim that they have fixed it.
I saw the real-world cost of squeezed council budgets when I visited Sunk Island last month. On Sunk Island Road and Brick Road, residents endure patch upon patch of repairs that are never truly repaired. They are paying more yet still waiting for lasting fixes. This is the pattern: more tax, less certainty, higher bills, patchwork results.
Government should strengthen communities, not squeeze them, so I ask the Minister: when families are stretched to breaking point, why is this Government’s answer yet another bills hike? In Beverley and Holderness, the only change that this Government appear to deliver is the small change left in people’s pockets after the Chancellor has emptied them.
The one thing that unites the House, including the Government Front Bench, is a recognition that the funding system is broken. I spent many years campaigning, across different funding pots, on the distribution. Everyone looks at the quantum, but they do not look at the distribution. It is easy to get into a world of complexity, and the number of people who turn up for meetings on distribution gets very small, but it is actually critical. We need a new funding settlement, and how we deliver that, given the political realities, is to go in early and hard. Unfortunately, this Government have not done that. They are delaying and delaying, and as their political potency weakens, it becomes harder and harder to deliver. It is a bit like the police reorganisation we touched on earlier today. It is unlikely to happen in the dribs and drabs of a Government who are struggling.
We need a long-term settlement that is based on need. There is no perfect assessment of that, but what we have is complexity, as we heard in the brilliant speech from the hon. Member for North Norfolk (Steff Aquarone) on the Lib Dem Benches earlier. The system has elements about how many pubs there are and what some level of cost was in 1991 and all sorts of other things. The truth is that, in this most fundamental set of services—my hon. Friend the Member for Ruislip, Northwood and Pinner (David Simmonds) rightly identified 800 of them—for the constituents in the deprived areas of the hon. Member for St Helens South and Whiston (Ms Rimmer) and in mine, nobody can see the transparency. Perhaps we should look on the Back Benches initially for a cross-party view on building a fairer funding system.
There is one more thing, and I do not know why no one has talked about it very much in my 21 years in this place. The fact that a £200,000 house in Beverley pays a lot more council tax than a £2 million flat in central London is absurd, and very rarely does anybody mention it. We need to fix things, but if we cannot fix something as absolutely inexcusable as that—and, collectively, we have not—it is no wonder the public are looking at us so askance.
I would be happy to talk to the hon. Members for St Helens South and Whiston and for Hartlepool (Mr Brash) and others to see where we can make some common ground on having a more rational system, because at the end of all this, the complexity and lack of transparency end up in social failure. As the hon. Lady rightly and passionately says, it is those who are the most vulnerable and the least able who pay the highest price, and whether that is in her part of the world or in mine, that is not acceptable. We have all come here to make it a better place, and one of the things we need to fix is this.
Graham's speech in Parliament of 11th February 2026. Text taken from Hansard.
