§ Sir K. Joseph
I beg to move in page 80, line 20, to leave out "sixpence" and to insert "fivepence".
I think, Sir William, that this Amendment might be explained in conjunction with the next Amendment, in line 26, to leave out from "to" to "of" in line 32 and to insert:seven-eighths of that excess;
- (c) in the year 1967–68, an amount equal to three-quarters of that excess;
- (d) in the year 1968–69, an amount equal to five-eighths of that excess;
- (e) in the year 1969–70, an amount equal to half that excess;
- (f) in the year 1970–71, an amount equal to three-eighths of that excess;
- (g) in the year 1971–72, an amount equal to a quarter of that excess;
- (h) in the year 1972–73, an amount equal to one-eighth".
§ Sir K. Joseph
These Amendments arise from a rather fierce debate during the Committee stage about the implications for the truncated counties of the extra rate burden that may fail upon their ratepayers due to the survival of rather more expensive services for a number of years than might be justified for the remaining population and size of those truncated counties. I think that it was generally agreed that there might be a burden here upon the truncated counties. There was a dispute as to how much of the burden should be borne, for how long and by whom. In the outcome, the Government undertook to reconsider both the amount and, slightly more enthusiastically, the length of tapering period over which the truncated counties might look for relief.
The Government have now reconsiderd the whole question and still believe firmly that there will be a great deal that the truncated counties will be able to do over the years in order to reduce the cost that would otherwise fall upon their ratepayers. Indeed, it is absolutely inevitably in their own interests that the counties will seek to minimse the cost of this operation to their ratepayers. Nevertheless, it may be true that some cost falls upon them for a period of years until they can fully adjust themselves. Consequently, the Government maintain their view that some contribution should be made, and they maintain their view, also, that that contribution should go on the broad shoulders of Greater London as a whole.
In view of the strong and persuasive arguments of my right hon. Friend the Member for Reigate (Sir J. Vaughan-Morgan), however, the Government have reconsidered the level of the threshold over which the payments shall begin to be made; that is to say, the threshold in excess of which any probable extra rate burden on a county, on account of reorganisation, shall be entitled to compensation from the citizens of Greater London. The Amendment reduces the threshold from 6d. to 5d.
This may appear to my right hon. Friend to be a small recompense for the vigour and precision of the case that he argued, but I hope that he will look upon it as quite a significant move by 47 the Government, imposing a small additional burden on London ratepayers if it proves to be necessary. I say "if it proves to be necessary" because in the welter of figures with which hon. Members have been assailed on this subject we must still recognise that the extra cost is estimated only, and there are many estimates of what the cost will be. I believe that it may well turn out that the cost proves to be very much less than pessimists at the moment fear.
The Amendment fixes the threshold at 5d., which, in terms of 1962–63 rateable value, is three times as much—namely, 1s. 3d.—so that the threshold stands, in the rateable terms of yesterday as opposed to today, at 1s. 3d. as against 1s. 6d.
If I may now move to the period over which the payments shall be made—this is covered by the next Amendment—my righ hon. Friend urged that the period should be extended from five years to twelve years, but he said that if the Government were seeking a compromise, ten years would be an admirable halfway between five and fifteen. The Government have come nearer to the mathematical mean and are proposing, in view of my right hon. Friend's argument, that the tapering period should be extended from five to eight years.
I hope, therefore, that, bearing in mind that someone has to pay and that in this case it will be the ratepayers of Greater London, my right hon. Friend will feel that the Government have moved towards the objective which he has put in front of us and that these two Amendments will be satisfactory.
§ 4.0 p.m.
§ Mr. Michael Stewart (Fulham)
My hon. Friends and I are still of the opinion that this burden should have been placed, not as the Minister put it, on the broad shoulders of Greater London, but on the still broader shoulders of the Exchequer. However, we have fought that battle out in Committee and the Government are apparently not prepared to give way on that issue.
I think that, disappointed and indignant as we are about that state of affairs, it would be unjust for us to try to retaliate by objecting to the slightly more generous treatment now accorded to the truncated counties, but I would not wish to let this 48 occasion go by without saying that the burden does not only hit the truncated counties. It hits the greater part of Greater London as well, and that is why it ought to be borne by the Exchequer.
§ Sir John Vaughan-Morgan (Reigate)
I suppose that I should express a mead of gratitude to my right hon. Friend, but I cannot honestly say that this proposal is acceptable. I am very appreciative of the fact that he has looked at the term of years, but the "6d. bar", which is now reduced to 5d., is quite unacceptable. There is no reason for this at all. I do not know by what process of reasoning my right hon. Friend's Department reached the principle of 6d., and I should hate to know by what process of reasoning my right hon. Friend knocked 20 per cent. off and thought that he was doing nicely. There should be no bar whatsoever. There is no principle behind it.
There is some principle behind having a period of years, because we all accept that these are transitional payments, but there is no principle in saying to a county, "You have got to bear a large lump of expenditure without any measure of what is actually concerned". The Government are saying to the ratepayers of the county in question, "You have got to bear an extra 1s. 3d. on the old assessment and 5d. on the new one". It is entirely unjust and quite unacceptable, and I hope that it will be contested in another place.
§ Mr. G. A. Pargiter (Southall)
I cannot help feeling that the Minister has been less than generous in this matter, having regard to the representations that were made to him. I strongly support the view expressed by my hon. Friend the Member for Fulham (Mr. M. Stewart), because, obviously, the people who will bear this burden are not concerned with the matter—the ratepayers of Middlesex and of London. This is essentially a matter which involves taking away part of a county and leaving it without the resources which it otherwise would have.
I am all in favour of the greatest good for the greatest number, and I am not unduly quarrelling with the principle of spreading the burden over the whole of London, but I must say that to reduce the bar at which the burden begins from 6d. to 5d. is rather derisory. I should have thought that the Minister would have accepted that the proper course would be 49 to fix a figure much more in keeping with what was in mind at the time, when these figures were first thought of, and when the rate was on the basis of the old rateable value before the new valuations came into effect.
This will undoubtedly place a very heavy burden on some of the truncated counties. I can only express the hope that the Minister will do a little more thinking and see whether, in another place, a more generous attitude can be adopted.
I still feel, however, that this burden, which will now fall on the ratepayers of London, has not been created at their desire—certainly not in the case of Middlesex. It is undoubtedly the duty of the Exchequer to provide, at least in part if not in whole, some of the assistance which might be necessary.
There was a hint in the Minister's speech that the counties would be more likely to adjust themselves to the new conditions if they were not in receipt of too much in the way of transitional payments. I suggest that this is a little unworthy, because the counties will obviously be concerned, in the interests of their own ratepayers, to readjust their own services as quickly as they can. Obviously, one cannot suddenly come down on the clerks and engineers and say, "Because part of the county has been taken away we are going to take away part of your salary." That sort of thing should not operate in any circumstances. Therefore, the burden is bound to operate in respect of the salaries of a large number of other people for a long time—people on whom expenditure will be reduced in respect of the social services themselves.
I hope, therefore, that the Minister will feel it desirable to look at this matter again and discuss with the Treasury whether, in equity, it ought not to bear some of this burden.
§ Captain Walter Elliot (Carshalton)
I support my right hon. Friend the Member for Reigate (Sir J. Vaughan-Morgan) in his plea. This plan is very radical, far more radical than we usually indulge in, and as such it ought to be tempered.
As to the counties—and I can only speak for Surrey—certain areas of considerable rateable value have bean lost. In time they will, no doubt, accept this 50 situation, provided that the transitional arrangements are smooth and take place over a long period and that regard is paid to the cost on the county. I should like the transitional period to be longer than has been proposed. I also support my right hon. Friend the Member for Reigate in asking that further consideration shall be given to the financial position.
§ Mr. Tom Driberg (Barking)
While conceding that this is a slight improvement—although I agree with what my hon. Friend the Member for Fulham (Mr. M. Stewart) said about it—I should like to express concern at the opening part of the Minister's speech. I refer particularly to the sentence—I cannot quote it verbatim, of course—in which he used the word "justified".
It seems to me that the right hon. Gentleman was implying, perhaps unintentionally, that people who are foolish and backward enough to prefer living in the country are not entitled to such good social and general services as people who are wise and fortunate enough to live in large towns. This seems to me to be a very improper view even to hint at, and I hope that the Minister did not really mean to imply it.
These truncated counties will have very serious financial difficulties. The advance of services in the rural areas will inevitably be slowed down. I do not know whether the Minister knows what some of these slum rural schools in remote Essex are like. They are really disgraceful, in A.D.1963. I am sorry that by taking the action he has taken, and by saying what he seemed to be saying, he has expressed complacency about that state of affairs.
§ Dr. Barnett Stross (Stoke-on-Trent, Central)
I should like to know whether the Minister has had pressure brought to bear upon him from sources other than those which he described in his speech, namely, from the boroughs themselves and from organisations such as the Association of Municipal Corporations. The attitude of that body is that the country as a whole welcomes the fact that in 1948 there was a repeal of this type of compensatory grant and that the right thing to do is that if a county is truncated and is still rich enough to be quite viable, there is no 51 need for the county borough to compensate it.
If, however, like Essex, it is obvious that help must be given, it should be given from the Exchequer and the compensation ought to come through the rate equalisation fund. Will the Minister help me to understand why new legislation of a type which differs very much from the 1948 legislation is now brought forward, bearing in mind—this is the important point—that other areas will be involved and this may well be a precedent?
§ Sir K. Joseph
The hon. Member for Stoke-on-Trent, Central (Dr. Stross) has reminded us that there used to be a quite different set of financial conditions attached to local government reorganisation. The late Mr. Aneurin Bevan, in one of his vivid phrases, welcomed the departure from the old principle of compensation, saying that it had introduced into local government reform all the huckstering of an Eastern bazaar. I think that I have his words right. He said it much better than that, of course, but the words "Eastern bazaar" came into it.
We are now proceeding on the basis of helping counties, by transitional arrangements, to adjust themselves to the new load. Over the years, it may not be a heavier load. It may be a load which is different on both the expenditure and the income side. Certainly, over the first few years, until the adjustments are made, it may be heavier. This is the argument for making some such arrangements as are in the Bill.
My right hon. Friend the Member for Reigate (Sir J. Vaughan-Morgan) says that he cannot understand why there should be any threshold at all. I will try once again to explain it. Local government reorganisation does, in the service of the interests of the citizen, as seen by the Government of the day, cause a number of alterations to the rate burden. In some cases it reduces what might have been a higher rate burden; in other cases it increases what might have been a lower burden. In all cases, I hope, it goes in parallel with improvement of services.
If, therefore, within each local reorganised area there are, as it were, 52 random movements of rates, why should other areas which are also affected escape some random movement? It is only when that random movement exceeds a certain level that it becomes. I think, proper for, in this case, the truncated counties to receive some help.
The hon. Member for Fulham (Mr. M. Stewart) commendably restrained himself from arguing the full case put forward in Standing Committee that the transitional payments should come from the taxpayer. Equally briefly, I reply that the operation is conducted for what the Government of the day believe to be the benefit of the citizens of the reorganised area and, therefore, the burden such as it is should fall upon them.
In answer to the hon. Member for Barking (Mr. Driberg), I wish totally to disclaim the interpretation which he put upon any words which I used.
I hope that my right hon. Friend the Member for Reigate will feel that it would not be right to save any part of the reorganised area from any consequences on the rates, but that it is right to save it from severe consequences. This threshold reduces the level at which those consequences are judged to be severe, spreading out the transitional payment. I hope that, on reflection, he will not feel as dissatisfied as he at first indicated.
§ Sir J. Vaughan-Morgan
With respect, my right hon. Friend has not dealt with the argument at all. All the arguments which he used apply to the question of the length of the transition period. I accept that. I accept that one cannot compensate for ever and ever. Under the old Act, to which Aneurin Bevan was referring, it could relate, perhaps, to a period of twenty-one years, where roads were concerned. I ask my right hon. Friend to consider the fact that the truncated counties will, in fact, have to bear a very much bigger burden where roads are concerned, because they have been—I accept this—subsidised by other areas, some poorer and some richer, in the metropolitan area.
I still see no reason whatever for the bar. I hesitate to use an anology, but if one is paying alimony one does not put up this sort of bar, or, for instance, if one is paying compensation of some 53 kind one does not say to the other person that he is sufficiently rich and need not have it. I am not a lawyer, and I have no experience of these matters, but it seems to me to be a quite wrong principle.
I should willingly have accepted a shorter period of compensation if there were no bar. It seems to me that the bar is quite wrong. I think that my right hon. Friend will find, in the case of one county, at least, that the consequence of what he proposes will be that it receives no transitional help at all.
§ Amendment agreed to.
Further Amendment made: In page 80, line 26, leave out from "to" to "of" in line 32 and insert:
seven-eighths of that excess;
§ Question proposed, That the Clause, as amended, stand part of the Bill.
§ 4.15 p.m.
§ Dr. Stross
I plead with the Minister to recognise that by the Clause he is introducing a principle which will have ill consequences in many other parts of the country, apart from the particular problem we have before us now. I have in mind particularly the north of England, on Tyneside, for instance, where there is the possibility of truncation, and also parts of the Midlands.
Compensatory payments of this kind from boroughs to counties or from one type of local authority to another have, in the past, created a good deal of argument and a lot of bad feeling. I cannot recall the vivid phrases of Aneurin Bevan, but I know that bad feeling has existed in the past.
§ Sir J. Vaughan-Morgan
Is the hon. Gentleman suggesting that bad feeling will be abolished by the compensation provisions of the Bill? I cannot accept that. There will be a great deal of bad feeling among the truncated counties.
§ Dr. Stross
If I may continue, I shall, perhaps, placate the right hon. Gentleman.
In the past, bad feeling has been created between authorities. This cannot be denied. Nevertheless, it cannot be denied, also, that, if one truncates an authority which is not rich enough or viable enough to conduct its work properly—the prime example of Essex is before us in this context—somebody should find the financial wherewithal to assist. The Minister is asking the newly created county boroughs to help in this. He should be aware that they consider that they themselves will have additional expenses in these formative years, and this will be an additional burden upon them.
This is the view which, I am advised, is held by the Association of Municipal Corporations. The Association feels that the Minister's proposal is not equitable and that the principle associated with the Clause is wrong. Obviously, if additional finance is needed, as it certainly is in parts, this should come from the Exchequer rather than from the newly created county boroughs.
I beg the right hon. Gentleman to consider this matter again and try to find a more just method of proceeding.
§ Mr. G. W. Reynolds (Islington, North)
I agree with my hon. Friend the Member for Stoke-on-Trent, Central (Dr. Stross) in what he has just said, but the main point I wish to make is this. We are here discussing financial matters which will affect 8½ million people in Greater London. We are constantly told in the newspapers of the bad attendance in this Chamber at various times. At this moment, none of the people who write this sort of stuff is in the Press Gallery.
§ Question put and agreed to.
§ Clause, as amended, ordered to stand part of the Bill.