§ Q3. Mr. Skinnerasked the Prime Minister what recent discussions he has had with leaders of municipal corporations regarding rates and if he will make a statement.
§ Q7. Mr. Kaufmanasked the Prime Minister if he will make a statement on his meeting to discuss rates with representatives of Manchester, Birmingham, Leeds, Liverpool and Sheffield City Councils.
§ Q9. Mr. Duffyasked the Prime Minister when he will meet representatives of the Sheffield City Council to discuss their rating problems as they arise from overall national financial policy.
§ The Prime MinisterI shall be meeting tomorrow representatives of Liverpool. Manchester, Birmingham, Leeds, Sheffield and Bristol. I have also agreed to meet a deputation representing the Association of Municipal Corporations and other local authority associations on Tuesday 13th February.
§ Mr. SkinnerOne thing is certain, that times are changing. The Prime Minister used not to meet anybody. Will the right hon. Gentleman explain to the represen- 642 tatives when he meets them tomorrow and on Tuesday that the Government are mainly to blame for the increases in rates by instructing them to employ as many as 10,000 rent officers to implement the Housing Finance Act rent rebate scheme? Will he also tell them that VAT will result in higher rates, because of the tax on all the purchases that local authorities will have to make? If the right hon. Gentleman wants to do something practical, will he tell them that to restore the balance between industrial and domestic hereditaments a further massive increase on the domstic element should take place?
§ The Prime MinisterNo, Sir. I do not agree with any of those statements. If the hon. Gentleman is saying that the rent rebate scheme should be abolished he should say so publicly and let all those tenants who receive rebates see exactly where he stands.
§ Mr. MadelDo not the difficulties over rates underline the need for local authorities soon to be free to raise revenues by means other than rates?
§ The Prime MinisterThis matter has been debated for many decades by all those interested in local government finance, and by successive administrations. I regret to say that so far no Administration in conjunction with the local authorities has found a satisfactory way to raise additional revenue. It may well be that there is a suitable source. I know that many in London want to consider a lottery for London finance. But I think that in general administrations have come to the view that a local income tax or a local sales tax would only greatly increase the administrative burden without necessarily increasing the revenue.
§ Mr. KaufmanIs the Prime Minister aware that the city of Manchester's finances have been adversely affected by the city's fall in population—[Interruption.] Conservative Members do not care about the ratepayers and about the people of the city of Manchester having to suffer because of the present Government. Is the Prime Minister aware that ratepayers face heavy bills not only because of inflation but also because of the crazy rating revaluation, with its especially heavy impact on the poorer household? 643 When he meets Sir Robert Thomas tomorrow will he promise firm financial aid to keep the Manchester rate increase down to a ceiling of 5 per cent.?
§ The Prime MinisterWhat I shall do tomorrow is to listen to the points the representatives of the six cities raise. I have said here in answer to a Question that one of the problems facing the great cities is that they found as a result of the Census that their population was smaller than they believed it to be. That has made an impact on their calculations.
The hon. Gentleman must acknowledge that the grant has been increased to over £3,000 million, which is larger than it has ever been. It represents 60 per cent. of expenditure, which is a larger percentage than ever.
As regards the domestic ratepayer, the direct subsidy is being increased by about 50 per cent. to 6p in the pound on the new values—equivalent to 15½p on present values, which shows the long way the Government have already gone to help the local authorities with these problems.
§ Mr. RidsdaleIs my right hon. Friend aware that in spite of the rate support grant the education charge is still falling on those who cannot afford to pay it? Would not a much more realistic way to deal with the rating problem be to take much of the national charge for education off the local authorities?
§ The Prime MinisterA balance must always be struck. My hon Friend will be the first to recognise that that would put a heavy burden directly on the taxpayer instead of the ratepayer, and that it would not be possible to put it on indirect taxation because of its effect on prices. It would therefore mean a considerable impact on direct taxation, with the consequential disincentive to increased production. I am not sure whether that is what my hon. Friend wants.
§ Mr. DuffyIs the Prime Minister aware that any relief for domestic ratepayers spread across the board will leave unresolved the financial crisis in Sheffield, and that the needs of Sheffield and all the other cities whose representatives will he meeting the right hon. Gentleman tomorrow may very well compel those representatives to ask him to apply Tory 644 policy, for once, and give them selective help?
§ The Prime MinisterI have already said that I shall listen to each of the individual points that the representatives of the cities have to raise. I can give no undertaking that further help can be given by the Government, but we can consider the points they raise.
When talking about revaluation, the hon. Gentleman and some of his colleagues must recognise that one of the reasons for the particularly steep changes in some towns is that revaluation was postponed by the previous administration. Therefore, there has been an interval of 10 years, which means that the unfairnesses which have undoubtedly existed have been perpetuated for a decade. It is right that some of these matters should be corrected.
We hear a great deal about places where we are told the domestic rate burden is increasing but nothing about the towns and cities where it is decreasing. For example, the effect of rating revaluation, before allowing for increased expenditure or increased grant, would be to cause decreases of 27 per cent. in Barrow-in-Furness, 7 per cent. in Bradford, 11½ per cent. in Grimsby, 7 per cent. in Leeds, 8 per cent. in Leicester, 7 per cent. in Plymouth and 16 per cent. in Sunderland.