§ Q1. Mr. Alfred Morrisasked the Prime Minister what discussions he has now had with civic leaders from Manchester, Leeds, Sheffield, Liverpool, Birmingham and Bristol about anticipated increases in municipal rates; and if he will make a statement.
§ Q24. Mr. Charles R. Morrisasked the Prime Minister whether he will make a statement on the meeting which he had with civic representatives of Manchester, Leeds, Sheffield, Liverpool and Birmingham on 9th February last, to discuss their municipal budget problems.
§ The Prime Minister (Mr. Edward Heath)I met representatives of the six cities on 9th February and we discussed the problems which they face in fixing their budgets. We agreed that control of inflation was essential in dealing with those problems and they recognised what the Government have already done to help the cities through the rate support grant and the adjustment in the domestic element. I undertook to give careful and urgent consideration to the points which they put to me.
§ Mr. Alfred MorrisWhy is the Prime Minister dithering? Does he recall promising the five cities an early reply about two weeks ago? He now appears to be showing no sense of urgency whatever. If he is unable to offer immediate and substantial help to cities such as Manchester, is he aware that his policies for countering inflation will be increasingly regarded by ratepayers as a carefully organised hypocrisy?
§ The Prime MinisterIf the hon. Gentleman wants to be able to help the city of Manchester that is the worst possible way of going about it. It is exactly the reverse of the attitude adopted by the cities. I told the House, on Tuesday I think, that the cities have sent us three separate lots of memoranda putting forward their statistics, that these are being carefully examined, and that we shall announce the result of that at the earliest possible moment. We are well aware of 678 the urgency of this matter, because of their obligation to fix rate poundages.
§ Mr. RidsdaleDoes my right hon. Friend agree that it is not only the big cities which face rate increases? Is he aware that the county of Essex faces big increases on the rate charge, likely to be 24 per cent. apart from revaluation? May I press my right hon. Friend to do something urgently to bring in some reform of local government finance?
§ The Prime MinisterI mentioned only the cities in this answer, because the Question was about the cities. But on the following Tuesday I saw the representatives of all other local authorities in the country, including the County Councils Association. As far as the general reform of local government finance is concerned, we have only discussed this briefly and not in detail, but it is recognised that a long-term solution to many of the problems of both the cities and local authorities can be reached only in the context of the reform of local government finance.
§ Mr. Charles R. MorrisMay I assure the Prime Minister that by taking these two Questions together he is not contributing by any means to a family conspiracy?
Will the right hon. Gentleman indicate what percentage increase in the domestic rate he would consider to be excessive? Would it be an increase beyond 5 per cent? Regarding the envisaged Government monitoring procedure of municipal rates, is it the Government's intention to recommend to local authorities that they economise on education, social services and social welfare? Will the Prime Minister give the House and the nation his thoughts on this matter?
§ The Prime MinisterThe cities did not ask for any particular figure to be taken into account from the point of view of what would be excessive. They were trying to analyse the different reasons for the burden on the cities and they acknowledged, of course, that in some cases their own expenditure, apart from Government expenditure, had a considerable effect on it. We know that last year Manchester's rate rose 29.4 per cent., or nearly three times the national average, following the change of control on the council.
§ Mr. William HamiltonCome off it.
§ The Prime MinisterWe also know that the GLC, on the other hand, for two consecutive, years has managed to keep its demand the same.
§ Mr. KinseyMy right hon. Friend is quite right to say that the cities should bear the expenditure resulting from their own decisions. Will he please look in particular at the situation in Birmingham, where the differential between industrial rating and domestic rating has got out of step because of revaluation?
§ The Prime MinisterYes. There are certain problems which the cities have in common and others which are peculiar to individual cities. That was also confirmed at the meeting. The question raised by my hon. Friend the Member for Birmingham, Perry Barr (Mr. Kinsey) applies particularly to Birmingham but not, as far as I know, to any of the others present at the meeting.
§ Mr. Harold WilsonWill the Prime Minister, for greater accuracy, remind the House of what he said in the 1970 election about the rate burden, in his exact words as he used them, and will he now tell us how much the rate burden has risen under his administration?
§ The Prime MinisterWhat I can tell the right hon. Gentleman is that this—[HON. MEMBERS: "Answer the question."] I am answering the question in detail. This Government have given a higher grant—60 per cent. of expenditure—[Interruption.]—more than £3,000 million, higher than ever before, and we have also given the highest increase in the domestic element. That is the contribution that this Government have made to taking the burden off the rates. [Interruption.]
§ Mr. WilsonWill the right hon. Gentleman, in a total breach of precedent, answer the question I put to him?
§ The Prime MinisterThe answer is that what local authorities spend is to a considerable extent in their judgment. If the right hon. Gentleman wants to have—[HON. MEMBERS: "Answer the question."] If he wants to have a figure [Interruption.]—a figure for the previous year, I will get it worked out for him. What I am saying, and the right hon. Gentleman knows it well, is that the 680 Government are making a greater contribution than ever before.
§ Mr. WilsonAnswer my question.
§ The Prime MinisterI wish the right hon. Gentleman would stop losing his temper.
§ Mr. WilsonWhat the country is entitled to in answer to the question is not what the Prime Minister has told the House now but what he told the country in 1970. Will he answer that?
§ The Prime MinisterIf the right hon. Gentleman wants to know he can look it up. [Interruption.]
§ Sir Harmar NichollsIf we can get away from the cant put forward by the Leader of the Opposition, is it not a fact which we must face that price increases account for only a part of the rate increase, and that the only way to get rates to a proper level is to reduce expenditure? To give an extra Exchequer grant, if that means extra taxes, is not the answer, because the ratepayers are invariably the taxpayers. That fact must be faced.
§ The Prime MinisterI agree with my hon. Friend, and the cities were at great pains to point out the different factors which were entering into their problems. They emphasised the impact of inflation on their rate expenditure and their support for the Government's policies in dealing with inflation. At the same time, they pointed out some of the other factors I have mentioned, such as the change in population, the balance between industrial and domestic rates, and so on. These are aspects which must be dealt with separately. As for cutting back expenditure, the city of Sheffield representative said they had cut back by £3½ million and that they were therefore keeping their demands the same.
§ Mr. HefferIs not the whole point that the large cities have no wish to cut back on the welfare services but at the same time have the great problem of depopulation—of people moving to the areas outside the city boundaries—and that that is the basis of the crisis facing the cities? Will the Prime Minister give us a clear assurance that the answer will be forthcoming in the near future, in order that the cities can get down to 681 working out their forthcoming budgets, at the same time ensuring that the welfare services, and so forth, are maintained at their present level, if not increased, as they should be?
§ The Prime MinisterI can give the hon. Member an assurance that our conclusions will be announced at the earliest possible opportunity. On the question of declining population, of course there is an allowance for that in the rate support formula. What we discussed with the cities was whether in the circumstances in which Liverpool, for example, finds itself, that formula is satisfactory. The cities agree that this formula cannot be dealt with before the next rate poundage is announced. It can be tackled in the reform of local government finance.
§ Mr. Alfred MorrisOn a point of order. In view of the unsatisfactory nature of those replies I give notice that I shall raise the matter on the Adjournment as soon as possible.