RATES

HC Deb 20 March 1973 vol 853 cc262-322

4.24 p.m.

Mr. Denis Howell (Birmingham, Small Heath)

I beg to move, That this House, recognising the essential services provided by local government, regrets the additional financial burdens being imposed upon substantial numbers of ratepayers by Her Majesty's Government's failure to control inflation, and as a direct result of increased interest charges and such measures as the Housing Finance Act; in particular, deplores the worsening financial plight of the big cities and Her Majesty's Government's refusal to act immediately, so as to provide them with increased financial assistance which the size of their social problems demands; and condemns as inadequate the proposals of Her Majesty's Government for dealing with those domestic ratepayers worst hit by rating revaluation.

The Under-Secretary of State for the Environment (Mr. Eldon Griffiths)

It is too long.

Mr. Speaker

I would inform the House that I have selected the amendment in the name of the right hon. Gentleman the Prime Minister and his hon. Friends, in line 1, to leave out from 'government' to the end of the Question and to add instead thereof, Endorses Her Majesty's Government's decision to make a substantial increase in the rate support grant to local authorities to enable their essential services to develop at a reasonable rate; welcomes the help to be given to domestic rate payers both by the biggest ever increase in the domestic element of rate support grant, and by the special relief for those worst hit by revaluation; and calls upon local authorities to support Her Majesty's Government's measures to counter inflation by avoiding unnecessarily high rate levies.

Mr. Howell

The Under-Secretary says that the motion is too long; but it is not a word too long, since every word is absolutely valid. It is as well to remind ourselves as we do in this motion of the importance of local government to the people of this country. It provides most of our citizens with a home or the means of servicing a home, and education for their children, welfare for the sick and old, care and compassion for the deprived and an environment in which to work and to live. Local government is not a luxury. It is the essence of life for most of the people of this country, and it costs money. It is our case today that the financing of local government has never been in a more critical state; and that, instead of bringing support and relief to ratepayers, the policies of the Government have brought intolerable burdens and financial confusion.

Rates cannot be discussed in isolation from other Government policies. We are in the midst of a policy of severe wage restraint, and the obligation upon the Government is beyond doubt. It is to maintain existing services and to expand them where necessary and to keep down the cost to the ratepayer. That the Government recognised and accepted these obligations is beyond doubt. What is now also quite clear is that the Government have obviously failed in their obvious obligation to keep rates down to a reasonable average. We now have to hand information, particularly that provided last weekend by the Rating and Valuation Association, that the average increase in rates for the ratepayers of this country this year will be 11 per cent., in the midst of what is supposed to be a policy of severe wage and price restraint by the Government.

It is indicative of the state of affairs we have reached in this country at the moment that the 11 per cent. increase, which is the last intolerable burden for many people, was hailed by so many newspapers as a victory since they had feared even worse proposals. That is commentary enough.

Of the 666 local authorities which took part in the survey of the Rating and Valuation Association, 346 found that the rates in their area were going up by between 10 and 15 per cent., 220 found that the rates were going up by between 15 and 20 per cent., 87 found that the rates were going up by between 20 and 30 per cent. and 47 authorities, in this year of wage restraint, found that the rates were going up by more than 30 per cent. In other words, more than half the ratepayers will face rate increases of more than 10 per cent., and nearly one-quarter of the ratepayers will face increases of more than 20 per cent. That is the measure of the Government's failure.

What has brought about this situation? It is not the extravagent, expansionist policies of local authorities. The Government introduced what some of us thought at the time was a ridiculous proposal for monitoring the expenditure of every local authority. The Minister sent out 1,419 letters, one to each local authority in the country. The overwhelming majority of those authorities are now receiving another letter from the Department which says that the Secretary of State has considered their precept of rates for next year and he has no comment to make upon the proposal.

Let the ratepayers be in no doubt that their local authorities' proposals have been examined in the greatest detail by the Government and in the overwhelming majority of cases the Government can find no fault with them. The only satisfactory feature of this ludicrous monitoring exercise is that the local government rating proposals have been examined in great detail with a fine-tooth comb and the local authorities have come out of this exercise with a clean bill of health.

I am told that the Government have suggested cuts in the expenditure of less than 20 per cent. of the authorities to whom the Minister wrote. Here again the Government take up an unsatisfactory position. Where they have suggested cuts they have not suggested how those cuts should be made. They are running away from the issue. The Government have not said which services are to be cut back. Is it to be education, housing, welfare or police? Who are the people to be sacked? Are they teachers, doctors or policemen? Now that we have seen the Government monitoring proposal in action, our judgment is that it is a piece of meaningless and irrelevant political public relations.

To return to the question why rates are going up, if the cause is not to be found in local government, clearly it must be found in national Government. As the motion says, rates are going up for two or three simple reasons. First, there are the inescapable local needs, the commitments that local authorities cannot avoid, such as building more houses, urban renewal, new schools, roads and drainage schemes, every one of which has been approved by a Government Department, otherwise the local authority could not embark on it.

Apart from the inescapable commitments, there is inflation. The total failure of the Government to keep prices down and to control inflation is being felt more by local authorities than by anyone else. Then there are the higher interest charges and the additional debt repayments, which are monumental. Finally, to add to the woe of local authorities there are the Government-imposed measures, particularly the Housing Finance Act, the administration of which costs the local authorities millions of pounds, apart from any benefit that might accrue to the citizens.

The Government's policies are forcing up rates. I am glad to say that all the signs are that the people have rumbled the Government, and the Government know it. How else can we explain the remarkable attitude of the Minister of State last week in Birmingham? Last weekend there was a political charade in Birmingham when the Minister for Local Government and Development met two of his hon. Friends, the hon. Members for Birmingham, Perry Barr (Mr. Kinsey) and Birmingham, Selly Oak (Mr. Gurden) and announced that Birmingham would this year get an extra £7½ million, an extra £7.50 for every man, woman and child. The hon. Member for Selly Oak said that we must know where all that money was going to, as if Birmingham had a profligate city council which was pouring money down the drain.

I have taken trouble to find out what is the additional burden for every man, woman and child in Birmingham, because the same burdens will apply in every other local authority area. Of that extra £7.50 for every man, woman and child, £2.20 is to meet the cost of administering the Housing Finance Act. The city treasurer of Birmingham receives the money only to pay it out again. Putting that on one side, the additional burdens on the citizens of Birmingham this year are made up in the following order.

First, there are the increased pay awards about which the council can do nothing because they are nationally negotiated. The additional burden on every man, woman and child in Birmingham arising from pay awards is £4.90. Then there are increased interest charges and debts for which every man, woman and child in Birmingham this year has to pay an extra £2.90 in rates. In addition, there are other unavoidable commitments, including the cost of the Housing Finance Act, which amount to £3.20. If we add up those figures, we find that the additional cost on the people of Birmingham this year will be £11 per head. If we subtract the £7.50 which the Minister said he was providing, that leaves an imposition not catered for by the Government of £3.50 for every person living in Birmingham.

In the course of my investigations I discovered an alarming fact which should be of the greatest concern to every ratepayer in the country. The estimates I have just given, which show an additional £3.50 over and above any help provided by the Government, were based on estimates formulated by the treasurer in November or December of last year on the basis of interest rates prevailing at that time. When the city treasurer of Birmingham made his estimates he was borrowing short-term money at 7¾ per cent., but today he is having to borrow money at 11 per cent., and has even been borrowing it at 12 per cent. Most treasurers based their proposals on the belief that they would be borrowing long-term money at 9¼ per cent., whereas today the rate of interest is 10¼ per cent. If the present interest rates are likely to continue—and many people think that they will increase further—and if those rates are applied to Birmingham's rating proposal, there is an under-estimation of what will be needed for this year's work of at least £2 million. That is an additional £2 per head to add to the £3.50 which will have to be borne by every citizen of Birmingham. After taking full account of all Government help already offered or coming within the next 12 months, every man, woman and child in Birmingham will have to find an additional £5.50—a most serious matter.

If we apply that situation to the country as a whole, again a most alarming position is seen, because the Birmingham experience which I have just related means that interest charges are putting an additional 3 per cent. burden on the whole of local government even since the treasurers did their sums at the turn of the year, and that is equivalent to an additional burden on the ratepayers of the country of £180 million. In due course the Government will provide 60 per cent. of that by an interim order, but that will still leave the local authorities to find £72 million.

Another point of importance which I mention in passing is that the Government are not providing their 60 per cent. of this £180 million now. They do not pay a penny until 12 months from now. The local governments have to raise the money at 11 per cent. or 12 per cent. interest to fund this additional burden. It is interest on top of interest —a most ludicrous position, which shows the chaos which local government has got into as a result of this situation.

I turn now to the question of the big cities, which is the automatic thing to do. The Government's answer to our case— and they have put it in their amendment —is that they are giving more help than ever before to local government because last year they paid 58 per cent. of the local government burden and this year they are providing 60 per cent. But it is part of our case, and it must now be accepted by everybody in the House, that the present formula for distributing local government aid is totally inadequate to deal with the situation facing most of our cities. These are the people who are left with all the burdens, all the social problems, and because the formula is based largely on population at a time when the population is, on the whole, moving out, yet leaving the problems behind, we have the situation which I can reveal to the House.

The big cities of this country are receiving nothing like 60 per cent. of their total expenditure from the Government next year. Birmingham is going to get 51 per cent.; Bristol is going to get 45 per cent. Manchester, excluding the domestic element, is interesting. I make my point about the imposition on the big cities by illustrating what has happened there over three years: in 1970–71, Manchester got 51.2 per cent. of its money from the Government; the following year, 1971–72, it got 48 per cent. of its money from the Government; this year, 1972–73, it is going to get only 46 per cent., not 60 per cent. Newcastle is going to get only 33.7 per cent. of its money from the Government, so it is in an absolutely intolerable position. Liverpool got 54.25 per cent. of its money in 1970-71 by means of Government grant and, again a disturbing position, this year it will get only 51.5 per cent. This shows the trend all the time against the interest of the big cities. Leeds, the last city I want to mention, is to get 52 per cent. of its money from the Government.

It is in these cities that all the industrial and commercial strength of this country is to be found. That is where the industrial workers reside; it is where the great burdens of urban decay, multiracial societies and ageing populations are. These cities need more money, not less, and they need it now, this year. Indeed, our charge against the Government is that they have shown a monumental complacency which is going to hit the cities, and particularly the ratepayers in those cities, hard.

I want to move now to the question of the formula. The formula on which we distribute money to our cities is, as I have said, obsolete because it is based upon various population factors and leaves totally out of account such matters as the financial imposition with which I have been dealing and the social problems. But the Government have not even started to put this right. They are only now rushing around to get the first discussions going in order to find something to replace this formula.

My own view is that one has to go back to some form of relationship between the money that is to be spent and the help which the Government are going to give. There has to be some sort of percentage relationship between the problems and the burdens and the financial help available. I cannot see any other way of meeting the problems of the big cities. I shall be interested to hear if the Minister has any other ideas.

The one thing we must know is when the Government are going to produce their proposals. The local governments are faced with a most serious financial situation. We have had a massive reform of local government, which comes into force in a year's time. Within three weeks the electors of this country will be going to the polls to decide the new councils. That process will start within the next three weeks. We have pointed out time and again in this House, especially when the Bill for the reform of local government came before it, that it is nonsense to reform the structure before making financial provision for local government. How on earth can any of the newly-elected councils, councils which are to be elected in three weeks' time, decide what their policies are to be if they do not know the basis on which they are to receive financial help from the Government? It is total nonsense. We are adding confusion to confusion. Local authorities will not know what sort of policies, what sort of structure, their local council should have, because they will not know what sort of help they are to get or the principles on which it will be forthcoming. It is a chaotic situation.

The Government promised us a local government finance Bill; it was promised in the Queen's Speech. Not only have we not seen the Bill; we have not even seen a White Paper which might tell us what the Bill would be like. The least we should have had, and months ago, is a White Paper outlining the Government's proposals so that there could be some sensible discussion and so that the new local authorities could do some sensible planning.

Finally, I turn to the subject of revaluation. There can be little doubt that here the Government intended to take firmer action. The Prime Minister himself, in his speech at an AMC celebration at Guildhall, made a challenging declaration that there was no excuse for any local authority using revaluation in order to put its rates up, and he said that the Government would give assistance to those worst affected. What a piece of nonsense this system turned out to be. We find a considerable switch in most of our large cities from the domestic ratepayer in favour of the industrial and commercial ratepayer, and the result has been a tremendous additional burden. I refer again to the Government's proposals, which are to do nothing for the first 10 per cent, but to give half to those affected over 10 per cent. What that means in practice is that if one is a ratepayer in Birmingham one has no hope whatsoever of getting a penny under this proposal of the Government unless one's rates go up by 25 per cent, at least. If one lives in Manchester or Newcastle one's rates will have to go up by 26 per cent, before one qualifies for a penny. If one lives in Southampton they will have to go up 27.9 per cent., in Liverpool 31 per cent., in Newport, Mons., 35 per cent, and in Bristol 37 per cent. That is the percentage by which one's rates have to go up before one qualifies for a penny under this ludicrous proposal of the Government.

There are one or two observations to be made about this proposal. This £10 million may be almost worthless. Indeed, most treasurers tell me that it will cost more to administer this scheme than the relief handed out at the end of the day by the Government, because they have to vet every single rate demand and every single ratepayer in the economy. So that is ludicrous nonsense to start with. In addition, they cannot do it in time. They should be sending out rate demands now. So they are in the position of having either to send out demands now and give a rebate later, or not to sent them out, adjust their rate demands as quickly as they can and borrow the necessary money in the meantime at 11 or 12 per cent. What sort of economics is this? It is absolutely ridiculous.

Coming back to the Prime Minister's promise to keep down rates, the other important matter to notice is what is now being said about the 10 per cent, additional impost as a result of revaluation. The Prime Minister and his Government are saying to ratepayers " In our view a 10 per cent, burden is all right for you to bear. We expect you to carry the first additional 10 per cent." Incidentally, the Government do not tell the hospital ancillary workers or the gas men that a 10 per cent, increase is all right. When they deal with local rates and with wages and salaries they adopt quite different standards.

It is a totally incredible situation. The Government's scheme in this matter is nonsense. Local government has asked for help. Representatives of the big cities went to see the Prime Minister. The Prime Minister, who offered so much, has been humbled by his own proposals and has had to eat his offers of help. That is a very serious situation.

The additional rate burdens are bad enough. But this House cannot consider them in isolation. The additional rate burdens come on top of all the other burdens that this Government are imposing. The ratepayer is also a householder. His rent has been forced up by the Government. His mortgage rates are going up in an extraordinary manner and apparently the Government are impotent. The ratepayer is also a consumer. Prices are going up. Food prices have gone up, and the Government say that they can do nothing. VAT will be coming into force on 1st April, with his rate demand, assuming that it is sent out on time. The ratepayer is also a wage-earner. He sees increases in rents, house charges, mortgages, food prices, VAT and additional rates being imposed upon him and at the same time the Government insist that he exercises restraint as a wage-earner. That again is totally unrealistic.

If anyone requires some more eloquent commentary than I can give he has only to look at the Budget. The local authorities are selling housing, welfare and education, so they are to have an extra £10 million. If they were selling icecream and pop-corn they would have got £110 million from the Budget. That is the measure of the Government's policies.

No wonder ratepayers everywhere are up on arms. They judge correctly that the Government are to blame for their predicament. The ratepayers will deal with this Government in the forthcoming local elections. In the meantime on their behalf the Opposition intend to censure the Government tonight.

4.53 p.m.

The Minister for Local Government and Development (Mr. Graham Page)

I beg to move, in line 1, to leave out from 'government' to the end of the Question and to add instead thereof, endorses Her Majesty's Government's decision to make a substantial increase in the rate support grant to local authorities to enable their essential services to develop at a reasonable rate; welcomes the help to be given to domestic rate payers both by the biggest ever increase in the domestic element of rate support grant, and by the special relief for those worst hit by revaluation; and calls upon local authorities to support Her Majesty's Government's measures to counter inflation by avoiding unnecessarily high rate levies. As the House knows, the cost of providing local government services is shared between the central Government and the local councils; that is to say, between the taxpayer and the ratepayer. The ratepayer's share is again divided between the domestic ratepayer and industrial, commercial and other miscellaneous ratepayers. But before considering how and in what proportions the costs should be divided, I am sure that the public would wish Parliament and the Government to consider the bounds within which local government expenditure can be contained. There will always be a conflict between the alliance of Ministers and local councils to provide the best local government services and to expand those services, and the general body of taxpayers and ratepayers who naturally do not want to pay more taxes and more rates.

This limitation of the total rate bill was examined last autumn as usual in the discussions between the Government and the local authority associations in settling the rate support grant, which is the taxpayers' contribution to local government expenditure. The basic figure that has to be agreed in those discussions is the figure of relevant expenditure—which is expenditure upon the great majority of local government services.

Last autumn that figure was settled at £5,216 million, that being the total expenditure of local government on the great majority of its services. Inevitably that is an increase upon the total rate bill for the current year. I think that everyone recognises that there is an annual growth in local government services and therefore an annual growth in expenditure. On that occasion the local authorities wanted at first a further increase of £36.5 million. The difference between the Government and the local authority associations was subsequently reduced to a figure of £26.5 million, which is not a great difference in a matter of £5,000 million odd.

The hon. Member for Birmingham, Small Heath (Mr. Denis Howell) is not quite accurate when he says that the Government's duty in considering local government expenditure is to maintain local government services, to expand them, and to keep down the cost to the ratepayer. It is to keep down the cost in general, both to the ratepayer and to the taxpayer, who contributes the 60 per cent.

In arriving last autumn at that figure of £5,216 million relevant expenditure, neither the Government nor the local authority associations professed to gaze into the crystal ball. Normally in the following winter there is a Rate Support Grant Increase Order which takes into account any increases in wages, the cost of goods and interest rates during the year. But the point is that central Government and local government sit down together to consider what should be the total expenditure on local government services.

The figure for relevant expenditure on which the rate support grant settlement for 1973–74 was based took into account the pay awards up to November last. The hon. Member for Small Heath mentioned a substantial amount in respect of pay awards in Birmingham. The rate support grant took into account all the pay awards of teachers and of manual workers up to that time. There have not been any substantial pay awards since November of last year. So to a great extent that item is taken into account in the rate support grant, and that takes us up to the commencement of phase 1 of the counter-inflation policy —the start of the wage freeze. It also took into account the demands for improvement and development of local government services, especially those which the Government had been directly encouraging. It allowed for more teachers and policemen. It allowed for an increase in expenditure on social services of as much as 20 per cent, over the coming two years. It allowed for loan charges relating to the services in the relevant expenditure. With those kinds of reasonable allowances the Government urged local authorities to practice economies and restraints in expenditure.

In view of the need to intensify the counter-inflation policy we renewed that request to individual local authorities by means of the so-called monitoring procedure, which consisted merely of asking local authorities to let us know for what expenditure they were budgeting in the year 1973–74 and what their rate poundage would be.

As in the rate support grant negotiations, I am happy to say that we have had the greatest co-operation from local authorities. I do not know why the hon. Gentleman called this a ludicrous monitoring proposal or procedure with meaningless public relations. It has been an extremely happy procedure in that what he considered to be a failure of the procedure I consider to be a success. I was pleased to find that, on the whole, local authorities were not being extravagant and had taken heed of our urgings during the rate support grant negotiations.

Mr. Norman Atkinson (Tottenham)

Will the Minister give way?

Mr. Page

The hon. Member for Birmingham, Small Heath, did not give way, and we are short of time.

Mr. Atkinson

Before the right hon. Gentleman starts singing the Government's praise, may I relate the experience of the London borough of Haringey? On 26th February the London borough of Haringey submitted to the Government the information for which it had been asked. The Government did not reply to the council until 11.30 a.m. on 12th March—they knew that the rate for the borough was to be announced that afternoon—when they asked the council to reduce its expenditure by £660,000. At 11.30 in the morning they asked the council to have another look at its expenditure. Is that a serious operation or merely a political stunt?

Mr. Page

I hope that the hon. Gentleman will catch your eye, Mr. Deputy Speaker, so that he may make the speech which he has made in an intervention. I do not want to sit down for interruptions as long as that in future.

There has been a shortage of time in these discussions with local authorities, but whenever an authority has informed my Department sufficiently soon of the date on which it hopes to fix the rate poundage, we have made every effort to confer with it well before that time. There have been occasions when conferences have had to take place by telephone, not by letter, and, indeed, by personal contact.

I will give the House the figures. Of 1,419 authorities only 33 had not replied up to yesterday. As a result of our request to a number of the 1,386 who had replied to think again, 125 have reduced their proposed expenditure. The reductions so far recorded as a result of that request amount to over £8 million. I have no doubt that many more than those 125 have responded well to the general call by the Government in their counter-inflation policy. So much for the total local government expenditure.

I turn now to the division of that total between the taxpayer and the ratepayer. In the rate support grant for this coming year the Government are contributing 60 per cent, towards the relevant expenditure on local government services. That is £400 million more than the contribution in the current year, which is certainly a substantial figure by any reckoning. That was certainly intended to take into account the desirable expansion of local government services, the realisation that there had been inflation in the past year, not wholly taken into account, perhaps, in the increase order, and a real effort to meet what we recognised would be an increase in expenditure on local government services. On the division between one kind of ratepayer and another, the domestic element has been increased by 50 per cent, bringing it up to a subsidy of 6p on the rate poundage which any local authority chooses to fix.

So, on the first part of the motion, which regrets the additional financial burdens being imposed upon substantial numbers of ratepayers by Her Majesty's Government's failure to control inflation there is a threefold answer. First, the Government are indeed controlling inflation by their counter-inflation policy. Secondly, they took into account the inflation, so far as it had momentum when the rate support grant was settled, by the extra £400 million in the grant. Thirdly, the normal procedure for dealing with current inflation is by the Rate Support Grant (Increase) Order later in the year. Indeed, that procedure was always adopted by the Labour Government, except in one year when they failed to bring in such an order.

The increase relating to interest charges will be upon loans raised since last November. That comparatively small figure will be taken into account in a Rate Support Grant (Increase) Order.

The motion complains of such measures as the Housing Finance Act". As the House knows, income to a housing authority's revenue account comes from rents, rates and subsidies. Under the Housing Finance Act, if rent income is sufficient to balance expenditure there are no contributions from either rates or subsidies. If not, the deficit is met either by subsidy with an associated contribution from the rate fund, or by a compulsory rate fund contribution, or by both.

I recognise that certain local authorities have difficulty where their rents are already up to fair rent levels and they cannot count on any increased rent income over the next three years when the contributions will be rising by 5 per cent, steps. But there have been some fairly substantial subsidies to local authorities to assist them with their housing problems, particularly to those which have the great problem of urban renewal. The rising costs subsidy, for example, will be of substantial help. Under the previous system no subsidy was available to meet increased costs arising from higher interest rates. The increased costs had to be met by either higher rents or a bigger rate contribution to the account. That will not be so in future.

There are also the subsidies, again under the Housing Finance Act, for payment to the rate fund, not to the housing revenue account. I have in mind the slum clearance subsidy which meets 75 per cent, of an authority's net costs of slum clearance activities. Therefore, there is quite a substantial subsidy and grant on the other side of the Housing Finance Act account.

The motion refers to the big cities and deplores the worsening financial plight of the big cities ". The hon. Member for Small Heath scoffed at a comment I made about an increase in the rate support grant to Birmingham compared with the previous year. It is important to realise that each of the big cities, and Newcastle—which did not go with the other six to see the Prime Minister—received quite substantial increases in rate support grant compared with last year. I have mentioned the Birmingham figure. Bristol received £2⅔ million more rate support grant this year than last year. Leeds received £5¼ million more this year than last year. Liverpool received £3 million more, Manchester £3½ million more, Newcastle £1¾ million more and Sheffield £6 million more. Bristol, Sheffield and Leeds were given a substantial increase. Bristol received a resources element of rate support grant for the first time ever.

We have met, on the figures worked out last November for the rate support grant, quite a substantial part of the problem of the big cities. We have provided an increase in the rate support grant in every case. But I recognise that there is a worsening in the financial plight of the big cities. The House will know that my right hon. Friend the previous Secretary of State for the Environment set up a study on the six towns. Of course, not only the big cities have problems; the smaller ones do. However, three big cities were chosen, Liverpool, Birmingham, and Lambeth, which was selected to represent London. Of the large towns we chose Oldham, Rother-ham and Sunderland.

The studies are on a scale of partnership between central and local government that has never occurred before. The studies are throwing up some useful information, on which we hope to base the revision of the formula for rate support grant as well as a lot of other assistance to the cities.

That is only one point, which is of immense value, that is coming from the studies. Although the cities have benefited from the rate support grant this year, it does not take into account their special problems; namely, urban renewal and increased social services. I give the assurance that we are proposing to amend the formula to take into account difficulties of that sort in both the big cities and the large towns. I must proceed with discussions with the local authority associations to get the right formula.

The motion mentions aid to domestic ratepayers. This year, whilst the rate bill will go up, domestic ratepayers will received a direct benefit to tide them over the transition period for this one year. The jump would not have been so great if revaluation had taken place five years ago instead of 10 years ago. For that reason we wish to assist those whose rate bill will go up next year compared with the current year.

The circular which we distributed shows a number of examples. For example, an increase in the rate bill of £40 in £100 will attract, on the basis of certain figures, a contribution of about £12. That is the sort of scale on which the assistance is to be given. I agree that it is not a great scale. We are not cushioning against all the increase attributable to revaluation. We think that the increase is fair and just in many cases. However, it is assistance direct to the ratepayer.

In the amendment we ask that the House endorses Her Majesty's Government's decision to make a substantial increase in the rate support grant to local authorities I have explained the very substantial increase in grant which has been given for the year 1973–74 for the purpose of enabling the essential services to develop at a reasonable rate. We ask the House to welcome the help to be given to domestic ratepayers in the form of the biggest ever increase in the domestic element of rate support grant, which goes up to 6p, and by the special relief for those worse hit by revaluation. We ask the local authorities to support Her Majesty's Government's measures to counter inflation by avoiding unnecessarily high rate levels. I assure the House that we are having co-operation in that request.

What of the future? I have mentioned the ordinary procedure of an increase order to take account of inflation during the year 1973–74. That may be unnecessary if the Government's counter-inflation policy is successful. The House will know that in April 1974 the rates will be relieved of certain local government services, which now cost about £350 million, such as personal health and water. A local government finance Bill will be presented which will amend the rate support grant formula. It will bring about a fairer distribution of the grant. If the legislative programme delays the presentation of the Bill—and we have reason to think that that might be so because of an announcement earlier today about Northern Ireland legislation—the House and the local authorities might find it convenient if we issued a White Paper, to which might be attached a draft of the Bill, to indicate the legislation which we have in mind.

Local authorities already have some ways in which to supplement normal rates—for example, the rating of empty premises. I was surprised to find recently that at present only 59 local authorities raise rates on empty premises. Between them that rating raises £5¼ million at quite a small cost. I should have thought that if all the 1,400 local authorities rated empty premises we might have multiplied £5¼ million by about 25 and produced about £130 million. I commend that form of rating to local authorities. Perhaps we shall see that being done more under the legislation which will be introduced.

I know that many people wish to see additional revenue-raising powers in the hands of local councils. It is argued that the Government should allow them to supplement the rates by some direct taxation, such as a local income tax or a poll tax, or by some indirect taxation, such as a local petrol or beer tax, or by such a pleasant form of extraction of money as a local lottery or sweepstake. I think that the majority of hon. Members would be content to permit local councillors to provide that sort of fund-raising fun if they wished to do so. Of course, there is the risk that any tax supplementary to rates may become additional to rates. I do not think that that would be very popular. What the majority of people are demanding, I think, is a more equitable spread of the burden of rates according to the resources of the occupying household. To this the Government are giving earnest attention. I ask the House to reject the motion and accept the amendment.

5.20 p.m.

Mr. R. B. Cant (Stoke-on-Trent, Central)

I feel slightly upset about the amount of talk that there has been about large cities and large towns. I want to be a little parochial and talk about a medium-sized city, Stoke-on-Trent. I told Mr. Speaker that I would make my speech brief, so I want to speak only about the impact of revaluation.

My main thesis is quite simple—that, even after the additional aid that they have given, what the Government have done is fundamentally unjust. It is unjust between local authorities and between individuals within each local authority area. When we talk about the increase in local government expenditure, we should recognise that this issue is not worthy of discussion. Certainly since most local authorities have been monitored and have been given a clean sheet, presumably their expenditure has the Government's blessing.

The big problem, of course, is very simple. Whereas the expenditure of Stoke-on-Trent has risen by 18 per cent., the rates have risen by 23 per cent. We have had a lot of talk about the domestic element of the rate support grant, but what has not been stressed is that, as a consequence of revaluation, the grant to an authority like Stoke has been substantially reduced by £750,000 and we have had no redress for that.

I want to deal with the great burden which in certain cases—Stoke-on-Trent is one—has fallen on the domestic ratepayer. This burden has come about for two reasons. The first is the switch between the industrial ratepayer, whose rates have risen by a magnificent 6 per cent., and the domestic ratepayer, whose rates have risen by 43 per cent. If there is any element of justice in this, I should like the right hon. Gentleman to explain it.

This is an admirable team dealing with the debate. The Minister for Local Government and Development, a right hon. Gentleman who is a gentleman in every sense of the word, always opens the batting. He pours the oil to calm the troubled waters or uses the healing balm, or whatever other metaphor one wants to use, and then the Under-Secretary, who resents any criticism, comes in at the end with a barbed tipped with vitriol. It should be the other way around.

Simply in money terms, the situation that I have described has placed on the ratepayers of Stoke, before the Government's recent gesture, an additional burden of £1,300,000, only £300,000 of which is met by this little bit of help.

The other aspect is the appalling inequality of burden experienced by domestic ratepayers in a city like Stoke. Part of the reason, although the right hon. Gentleman would never admit it, is the fact, to use the technically elegant language of The Economist, that some members of the Inland Revenue have "boobed" as they did in 1963. Then, of course, they lapsed because they got the rateable values of flats all wrong. This time they forgot to increase the statutory deduction. They left it the same, despite all the inflation of the last 10 years. Being humanitarian, I hope that not too many of them have been sacked. But this is one of the reasons for this terrible situation.

I should like to give two figures. Houses in Stoke with previous rateable values of £36 have had them raised by nearly four times, whereas a house with £106 rateable value has had it increased by two-and-a-half times. The consequence of this—-having a house with a rateable value of £106, I am very happy about it—is that, even after the Government have assisted us, the poorer people living in houses with low rateable values still face a 44 per cent, increase, whereas I shall get a credit. I am sure that that is not social justice.

As for council houses, even after the Government's help, at the lower end of the scale, pre-war council houses will have their rateable values raised by 46 per cent., and at the other end of the scale the rise will be 32 per cent. This has produced serious social injustice, and I am surprised that the Government did nothing to put it right.

But it has also done something else. It has given rise to bogus arguments about which are the efficient and which the inefficient authorities. Where some authorities have kept their rates level as a consequence of purely fortuitous circumstances, they point themselves out as the efficient authorities. But these claims are totally irrelevant in the context of this discussion.

The prices and incomes policy, of course, is one big laugh, and I will not go into it.

Perhaps because I have been in local government for 21 years I have an affection for the rating system. Whatever bright ideas the boys in the Civil Service produce, they will never get rid of this system of taxation, which produces nearly £1,700 million a year. I hope that they do not. But this Government have brought the rating system into disrepute, and that is a great pity.

I am asking the Government to give local authorities yet another subsidy so that they pay not half of anything over a 10 per cent, increase but the whole of it. Even if they did that, of the 91,000 houses in Stoke, 86,000, including 29,000 corporation houses, would still face a rates increase of more than 24 per cent, and 37,000 of them would face an increase of more than 36 per cent. That is unjust and is bringing the whole of the Government's prices and incomes policy into disrepute.

5.29 p.m.

Mr. Julian Ridsdale (Harwich)

When the hon. Member for Birmingham, Small Heath (Mr. Denis Howell) was speaking, I wanted to interrupt to ask about the Opposition's present policy on education.

Mr. Denis Powell

That would have taken me another three days.

Mr. Ridsdale

That may be. The question I wanted to ask the hon. Gentleman was whether it was the Opposition's intention, one day, to honour the obligation they gave in the 1966 General Election when they said that it would be their policy when they formed a Government to take a large part of teachers' salaries off the rates and make them a national charge. I hope that that question will be answered today.

In Essex we face a 24 per cent, increase in rates. Half of that is due to rising costs, one quarter is due to loss of revenue because of reorganisation, and one quarter arises because of improvement in the service. I ask my hon. Friend the Undersecretary to say what talks he has had with the Essex education authority and whether he has been able to help that authority over the loss of revenue, which is certainly placing a particular difficult burden at present upon the domestic ratepayer.

The question about which I really want to talk this afternoon would be more easily answered not by my right hon. Friend the Minister for Local Government and Development or my hon. Friend the Under-Secretary but by a Treasury Minister. The main question confronting ratepayers as a whole is whether they are prepared to face the huge educational charge which is being placed upon many people who are not able to pay this increasing charge. It is becoming more and more a very heavy burden on them.

We face an unprecedented bill for Government spending as a result of national policies, particularly the spending on education. The total of local government expenditure which attracted Government grant in 1973–74 was £5,216 million. The rate support grant for 1969–70 was £2,976 million. In 1970–71 it was £3,128 million.

One cannot help but be disturbed when one sees the vast increase of this bill of over £2,000 million in a few years. That is why I feel sorry for my hon. Friend the Under-Secretary at his having to reply to the debate because no Treasury Minister is present. This is a big question of policy and not a question about which one can quibble in a debate of this nature.

The commercial and domestic ratepayers have had to find over the last year £2,000 million. Five years ago they had to find £1,300 million. Fifteen years ago the figure was £400 million. The large portion of this increase is due to the cost of educational spending.

My right hon. Friend the Secretary of State for Education and Science has promised us that in 1980 we shall have 514,000 teachers. I welcome that fact. But what I am concerned about is that 70 per cent, of the cost of education is teachers' salaries and pensions. Is it right that this vast number of teachers, 514,000, should have this money found for them by the domestic ratepayer? Many domestic ratepayers are finding it very difficult to meet their bills because of inflation and other causes.

The number of teachers has increased in 10 years by 100,000, which is more than the number of our pre-war Army, and it will soon be equal to all the Armed Forces together. Would we ever think of putting this kind of bill on the domestic ratepayer? That is why I appeal to the Government to stop thinking about subsidisation through the rate support grant. The kind of policy which the Government are pursuing, which is an inheritance from the previous Government, is causing extravagance. It is not getting value for money in education. It is putting a very unfair burden on the domestic ratepayer.

I certainly welcome the promise of the reform of local government finance. I was very disturbed, however, by the few words about this which my right hon. Friend said. It did not seem to me very much like a reform in local government finance that we may be having. Will we really face up to the question of taking the educational burden off the rates? If the Government continually take the attitude that they have at present, I shall find myself ultimately being forced to vote against them on this matter, because it is an unfair burden which falls on many of my domestic ratepayers.

The Government have it in their power to alter this policy. I hope that they will alter it very soon and will not treat this matter so complacently. It is far fairer that the larger part of this burden should be paid for by people who can afford it and not by those who cannot.

5.36 p.m.

Mr. David Steel (Roxburgh, Selkirk and Peebles)

I agree very much with the points made by the hon. Member for Harwich (Mr. Ridsdale). There is no time like the present for him to make his gesture in defiance of the Government, and we look forward to seeing him in the Lobby in support of the censure motion this evening.

I have a particular personal reason for welcoming the debate. We recently had a debate on the rating system, which arose on a Private Member's motion. I was due to speak in that debate on behalf of the Liberal Party, but the aeroplane bringing me from my constituency was two hours late and I did not arrive here in time. That is hardly worth a mention but for the fact that the hon. Member for Hampstead (Mr. Geoffrey Finsberg) and the hon. Member for Hackney, Central (Mr. Clinton Davis) were unkind enough to express regret at the absence of a Liberal contribution. However, their grief cannot have been so deep-seated, because they have not thought fit to come to listen to my contribution today. That shows how childish it is to draw attention to the absence of certain other hon. Members.

I have been anxious to make a contribution on this subject for some time, and the motion has enabled me to say something on behalf of the Liberal Party on the problem of rates.

It is right that we should divide our consideration of the problem into two distinct categories—short-term problems and long-term problems. It is right that we should put forward some short-term suggestions to the Government because of the particular situations with inflation, revaluation and the depopulation of city centres which have been occurring over the last couple of years.

I take up the Minister straight away on something that he said about the rating of empty properties. I was very interested in the figure which he gave of the relatively small number of local authorities which are using their power to rate empty properties. Much more should be done in this direction to raise revenue from empty properties.

Is not one of the reasons why there is no real encouragement on local authorities to rate empty properties that any revenue that they raise from this source is discounted in calculating rate support grant? If that is so, this is something which the Government could put right by positively encouraging local authorities to use their existing powers for rating empty properties as one of the possible methods of raising finance.

Second, the Government ought to consider empowering local authorities to rate land which is already scheduled for development, and to rate it on a sliding scale, after the first year in which no development has occurred, up to a very steep rate, perhaps after three years, when compulsory purchase ought to be available. Apart from adding to the Chancellor of the Exchequer's improvements in bringing development land forward for development, this would be another source of revenue.

Third, the Government ought to give some further relief to the large cities by agreeing to calculate the rate support grant on last year's population figures to help to alleviate the problems faced by the big city centres due to urban depopulation. It is a cruel fact that those local authorities which have been most assiduous in their redevelopment schemes are the authorities which find that their rating potential has fallen in the city centres.

Fourth, and returning to the point made so powerfully by the hon. Member for Harwich, it does not make sense in this day and age, when teachers' salaries are no longer negotiable at different levels by local authorities, for teachers' salaries to continue to be a burden at all on the rating system. If one is looking for ways of trying to make the burden of rates less severe, surely, above everything else, it is a simple matter to transfer them to the national Exchequer. There are certain areas of police expenditure where the same considerations should apply. As long as the rating system continues the Government ought to be willing to look at methods of relieving local authorities of certain financial expenditure.

The Government should consider giving local authorities specific powers to raise income from alternative sources and I hope that when we see the White Paper we shall find that they have considered that. One obvious candidate is motor vehicle taxation. This could be com- bined with a policy of rating motor vehicles according to areas in which they are kept. The GLC, for example, might welcome a provision of that kind. Although I am not personally in favour of any great extention of public revenue through betting and gaming, as long as it exists it is an area where local authorities might derive benefit.

These are all short-term palliatives, measures which the Government could take this year to help the present situation, but the main point I want to make on behalf of the Liberal Party is that, unlike the hon. Member for Stoke-on-Trent, Central (Mr. Cant), we have no affection for the rating system. I believe that in the White Paper which the Government will bring forward they will cause great disappointment if they show that they intend to continue the rating system unchanged. I have always been attracted by the thought of a local income tax, but if that is ruled out one can fall back on the stock Liberal position of site value rating, which is more equitable than the present system on properties.

The present system penalises the good property owner who decides to improve his property and his standard of living, by building an extension or making use of house improvement grants. It benefits the slum landlord who can apply for a reduction in his rating liability when his property deteriorates. It leaves unrated empty office blocks in our city centres. A survey in Whitstable by the Rating and Valuation Association showed that if a system of site valuation had been brought into effect there would have been a reduction of about 33 per cent, to 50 per cent, in the rates paid by local householders.

It is to a more radical solution that we must look, and, while we will support the Opposition in the Lobby tonight, we consider that both this Government and the last must stand condemned for having failed to tackle the basic injustices of the rating system.

5.43 p.m.

Mr. Arthur Jones (Northants, South)

I am always nervous when we begin to discuss responsibility for expenditure in local government services as between central and local government. To challenge local responsibility is to begin to undermine the whole concept of local government. The essence of local government is accountability, and if that is to exist we must have a system that enables the electors to judge between good housekeeping and otherwise. No arrangements that we come to in the reform of local government must be allowed to interfere with that relationship. No responsible person would advocate such a course.

That is where I depart a little from my own Front Bench colleagues on their scheme to monitor increases this year. It places in some doubt the responsibility of locally elected representatives. I was interested to hear what my right hon. Friend said about the effects that were found when some 125 authorities made reductions which totalled £8 million after Government advocacy. Averages, of course, always present difficulties, but that produced an average figure of roughly £64,000 per authority. It would be interesting to know, and perhaps later when an analysis is found possible we could get to know, what services were affected by those reductions.

To ask local authorities to engage in this exercise is not generally rewarding. There are no sanctions which the central Government could or should bring against local government. I took the point raised in an intervention during my right hon. Friend's speech about the circumstances which arose when the Government were making representations at 11.30 in the morning before a rating decision which had to be taken at 2.30 the same day. I do not think that is an appropriate way to conduct public affairs. There has been no great merit in the whole concept of monitoring and there was not adequate time to handle something like that even if one agreed with the principles, which I think I have made it clear I do not.

We heard in the speech by the hon. Member for Birmingham, Small Heath (Mr. Denis Howell) that average rates have increased by 11 per cent, according to figures produced by the Rating and Valuation Association. But the averages cover up tremendous differences. I understand that Derbyshire has increased its rating precept by less than 1 per cent. Essex, as my hon. Friend the Member for Harwich (Mr. Ridsdale) told us, had an average increase of 24 per cent., Lancashire 8 per cent, and Worcestershire nearly 26 per cent. That reinforces the fact that in local government there is an almost infinite variety of place and circumstance and it is an unrewarding exercise to pass any judgment on comparatives.

I have an example from my constituency in a brief comment taken from a letter from the clerk of the Towcester Rural District Council which he addressed to the Secretary of State. The letter was dated 23rd February. It said: The proposed rate levy for 1973–74 represents an increase of 38 per cent, over that for 1972-73 and is due entirely to the reduction from 4705 per cent, to 30.54 per cent, in the amount of rateborne expenditure met from the resources element of the Rate Support Grant, since the whole of the Council's increased expenditure due to inflation and other factors, will be met by the appropriation of some £49,000 from balances. That is an unexpected result of revaluation. It is strange that there were no predictions that there would be variations of that magnitude. I think that the homework could not have been done adequately if there was no foreknowledge of such variations.

There was a bit of a song-and-dance act from the leaders of the six largest cities in the country when they saw the Prime Minister. The wording of the motion that we are discussing deplores the worsening financial plight of the big cities but this plight is nothing new. It is a situation that has been growing over recent years and I cannot think it has come suddenly to a head for the next financial year.

I am sure that there is recognition of the growing problems in the great cities. The hon. Member for the Scotland Division of Liverpool (Mr. Marsden) emphasised this point when the House last discussed rates. The problem of depopulation of city centres has been with us not merely over the last two years, as the hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) said, but over a much longer period.

Having examined the rate support grant arrangements, which were developed as far back as 1966, I believe that we should have considered proposals for reorganisation of the support grant procedures, having regard to the increasing problems which the cities are now facing. Things have been allowed to run on without any adequate consideration being brought to bear on the overall solution.

There is no instant cure for these shortcomings. The rate support grant is a sophisticated instrument which has served us well, but it must be said that in the last couple of years it has served us less well than it did in previous years.

This problem was referred to in The Times on 22nd November 1972 in an article by Mr. Peter Jay, economic editor of that newspaper. In referring to the study undertaken by Godley and Rhodes of the Department of Applied Economics, Cambridge, Mr. Jay said: it is difficult to measure how far differences in local unit costs are due to different degrees of local efficiency, which should not be compensated, and how far they are due to independent factors (such as higher costs in London), which deserve to be 'equalised'. This is a difficult problem, but we were assured in a recent circular, No. 34/73 of 13th March, that an improved formula should be used for the distribution of grant to the new authorities from April 1974. I was glad to hear my right hon. Friend give an assurance on this matter this afternoon. Tremendous work is involved and time is short. My right hon. Friend made a positive point about the rating of empty premises, which depends so much on local authorities. Many authorities have found that it does not pay to collect rates on empty properties. This is not the case in other parts of the country, but certainly some authorities face that situation.

There are three urgent tasks ahead of us. The first is the review of the rate support grant formula. The second is the review of the rating system to see whether it can be a viable system of revenue raising for local government services. Many people are sceptical on this point. My right hon. Friend referred to the ability to pay and how that requirement can be built into the rating system as we know it today. We have yet to see what will happen. Thirdly, there is the question of additional resources. We require a far more buoyant response to changed circumstances in the rating system, rather than a static attitude.

I was pleased to hear about the consultations which are being carried on by the Government with the local authority associations. I have no doubt that they will carry their consultations outside local government and will consult, for example, the Institute of Municipal Treasurers and Accountants, a body which represents a well-informed branch of public servants. I hope that the net will be cast widely to take in the tremendous problems of local government financing. So many variables are involved that it is difficult to devise a formula to meet the tremendous variety of circumstances, but I hope that nothing will be allowed to stand in the way of the solution of this problem, since solution is essential to the welfare and viability of local government.

5.55 p.m.

Mr. Roy Hughes (Newport)

It is generally agreed that many local authorities are in a serious position and that help is urgently needed lest services suffer. I emphasise that this problem applies not only in large cities but in towns of medium size. The burden falls on the domestic ratepayer—the onus has been taken off the industrial ratepayer—and bears particularly heavily on council house tenants. As my hon. Friend the Member for Stoke-on-Trent, Central (Mr. Cant) said, there is no justice in the Government's proposals.

It must be agreed that a certain amount of help was given in the Budget, but in the light of the overall problem it was no more than a fleabite, amounting to only £10 million of assistance. This figure must be compared with the figure of £3,130 million of total Government grant to local government.

I represent a town comprising nearly 120,000 people. Originally the finance committee proposed to increase rates by over 30 per cent., but I understand that it is now talking in terms of an increase of around 15 per cent. This will mean a severe restriction of services and a limit on expansion, and it is nowhere near the 5 per cent. originally laid down by the Prime Minister as the yardstick for increases. Following the Chancellor's Budget Statement we shall receive the paltry sum of £11,375. It appears that 3,165 ratepayers will benefit by an average of £3.59. Such meagre assistance will cause resentment in my area, and I am sure that similar sums will be resented in many other districts.

In his Budget Statement the Chancellor of the Exchequer referred to the effects of revaluation. He said: the Government therefore propose to phase the effects for those hardest hit by meeting half the cost above 10 per cent. of any increases in domestic rate bills in 1973–74 which are attributable solely to the effects of revaluation." —[OFFICIAL REPORT, 6th March 1973; Vol 852, c. 268.] Out of that statement came the mighty mouse of £10 million.

The formula for paying that sum is complicated. The Association of Municipal Corporations is right to comment that it is inadequate, complicated and confusing. That association suggested a way out. It is said that a limit should be placed on the increase which any domestic ratepayer had to bear and that a flat percentage should be applied over the whole country. It thought that a figure of 10 to 15 per cent. would be acceptable. I align this with the constructive suggestion made in the House by my hon. Friend the Member for Willesden, East (Mr. Freeson), who said in the debate on the rating system that the Government have power under the Local Government Act 1966 to increase rate support grant if they find that an unforeseen increase has taken place in the level of prices, costs and remuneration."— [OFFICIAL REPORT, 12th February 1973; Vol. 850, c. 1041.] At no time has such an intervention been more necessary and more justified than it is now. This need to assist local authorities is particularly urgent when in the Budget the Chancellor has announced a concession of £110 million in respect of confectionery. There was in addition the concession of no less than £300 million for those with an income of over £4,000 a year. Urgent action is now necessary to help our local authorities.

6.2 p.m.

Mr. Roger Moate (Faversham)

The hon. Member for Newport (Mr. Roy Hughes) referred to the £10 million help to ratepayers as a "fleabite" and then a "mighty mouse". It is an interesting example of the thinking of Labour Members that they can brush aside so lightly such considerable sums of money. It is also a little ungracious of them to sneer at this assistance which is necessary only because they took the action when in Government five years ago of postponing revaluation. This should be said a little more often.

The right hon. Member for Coventry, East (Mr. Grossman) admitted the other day that the revaluation was postponed because he, as a cynical politician, had calculated that it could do nothing but lose votes. Let us put these factors into perspective. We must recognise that the postponement of revaluation, rating relief and many other devices are all really designed as short-term measures to overcome the anomalies and unfairnesses of the rating system. I very much agree with the hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) who expressed the hope that before long we would see a much more radical measure designed to reform the whole of the rating system.

Like the hon. Member, I disagree with the hon. Member for Stoke-on-Trent, Central (Mr. Cant) who must be almost unique in having an affection for the rating system. Of all the forms of taxation I, and I am sure the majority of people, consider it to be the most unfair in its impact, cumbersome in administration, expensive to collect, and altogether a very archaic tax system.

Successive Governments have tried to introduce devices to make it rather more fair. There have been schemes for monthly instalments, the rent rebate scheme, the domestic element factor, the rate relief help which is now being offered and the postponement of revaluation. There is also the high level of rate support grant which the Government are introducing. All of these are aimed at lessening the effect of rate increases on the ratepayer. The simple fact is that these do very little to help in the long term. The tax is founded on a complete fiction and the search for a substitute for the tax, for a local tax, is founded on a fallacy. The fiction consists of the idea of notional rental values. The more we try to adjust that system the more nonsensical it becomes. I do not believe that anyone trying to devise a modern tax system would found a property tax at all, let alone found it on something which is purely a product of the imagination.

The fallacy is that it is necessary to have local accountability through a local source of revenue. I do not believe that local democracy depends upon our finding some source of locally-raised revenue. What we are talking about in local democracy is accountability to the domestic ratepayer, in other words the voter. We should examine the facts of the present situation. At the moment the domestic ratepaper contributes only 14 per cent of total local government expenditure. Such expenditure has soared considerably over the years and just as that has risen so has the relative contribution of the domestic ratepayer declined.

Last year local government spent £6,270 million to which the domestic ratepayer contributed 14 per cent. Ten years ago the gross revenue of local government was £2,000 million to which the domestic ratepayer contributed 18 per cent. In other words year after year, with every new device we introduce, the amount paid by the local domestic ratepayer reduces. I do not believe that, because the balance of that money is received from the central Government, our local councillors are therefore profligate, inefficient or incompetent. If they waste money in that sector they will be held accountable by the ratepayers just as if the money was being raised through the rates. I wonder when a party last lost control of a council just because it put up the rates. I suspect it was a long time ago.

This has long ceased to be a major factor in local politics. That is not surprising. Nearly all the money which is administered locally comes either from the central Government or is money raised and spent locally, and much of that money is spent in a way dictated by national policies. This trend is not likely to end. Rather it is a continuing trend. My hon. Friend the Member for Harwich (Mr. Ridsdale) put forward a strong case for a large element of educational expenditure to be transferred back to the national Exchequer. I would argue that that should be done with all educational expenditure. We know that water and sewerage functions are soon to be transferred to the new regional water authorities and the cost of funding those will obviously at some stage move out of the rating system. The same applies to a great deal of health expenditure. I tabled a Question the other day asking what would be the effect on local government expenditure if water and sewerage, health and education were taken out of the rating system. The answer was that local government expenditure would be reduced by 60 per cent.

That means in practice that if we transferred such functions back to the central Government we would reduce the local government revenue requirement to about £2,000 million, the balance coming from its ordinary trading revenue. At least half of that £2,000 million comes from the commercial ratepayer. Although it could be argued that the commercial ratepayer could perhaps pay it through corporation tax or some other source, I can see no good grounds for changing the present system. What we have to look for is another source of raising the £1,000 million, equivalent to the amount paid at present by the domestic ratepayer.

I asked a further Question about this the other day. I asked what would be required if we abolished that and raised a similar amount in equal proportions from VAT and income tax. The answer was 3½p in the pound on income tax and about an extra 3 per cent. on VAT. I would argue that we could increase income tax by 3½p but leave VAT alone and progressively, over two or three years, use the general buoyancy of the tax system to replace the balance of local government requirements.

It is not nearly as difficult as some people make out, as long as we accept the fact that no longer does a local tax play an important part in our financial system and that the more we search for a local substitute for rates, the more complicated life will become, whether it is a local VAT sales tax, a local income tax or a lottery. Every one of them can be rejected for a host of reasons. Just as we are now introducing a system whereby local authorities will have a transport grant allocated to them to spend as they think fit in terms of bus services, road requirements and so on, I do not believe that it is beyond our capabilities to devise a system whereby every town, city and new district should receive a proportion of revenue, perhaps on a per capita basis, which they could spend at their discretion on the services they will continue to fulfil. They would be just as accountable to the local voters and they would be readily accused of waste if they were careless about spending that money.

This is one suggestion. It is not necessarily the right one. However, I hope very much that, whichever party is in power, we will stop tinkering with the problem and will face up to the basic principles of reform and end the rating system in the next few years. It certainly could be done. For that reason I hope that we will not be faced with a Local Government Finance Reform Bill this Session as my right hon. Friend earlier intimated might be the case. Rather do I hope that the second alternative—a White Paper—will be adopted so that we can consider this once more. Better still, let us have a Green Paper as a discussion document, because the last one was not a very helpful contribution to the reform of the rating system.

6.9 p.m.

Mr. Michael Cocks (Bristol, South)

There seemed to be some inconsistency in the speech of the hon. Member for Faversham (Mr. Moate) because at one time he said that it must be a long time since any election was lost as a result of a rate increase and then he went on to ascribe motives for the postponement of revaluation when Labour was in power. He has fallen into the trap into which all politicians sometimes fall, that of believing his own propaganda. The revaluation was postponed because at that time the Government were trying to operate a prices and incomes policy.

I was shocked by the remarks of the Minister when he spoke about the future Local Government Finance Bill because I thought that the burden of his remarks —and he put it rather shamefacedly— was that it would be "business as usual". After all the complaints about the rating system, the Government are to bring forward a slightly tarted up version of the same thing. This is to be deplored. To a certain extent the Government have recognised the problems of the big cities, especially in the provision of roads and housing, but they have done little to help them. The 60 per cent. which has been mentioned is only an average and in Bristol only 40 per cent. comes from Government support.

Because of the shortness of time I will deal only with revaluation. During the debates on rate rebate schemes I pointed out some of the anomalies and said that the Government had let down the people by not postponing revaluation. It seems that the general public regard the revaluation as extremely unfair. After inspecting the new valuation lists, they have no confidence in how it is being done. It seems to be very much a rule of thumb. A great deal of the revaluation is done on a theoretical basis. Some work has been done out of doors. At one time a corner property was given different assessments because the work had been done on two sides of a triangle by two different people.

The kind of traffic chaos in parts of my constituency because of the failure to complete the M5 bridge has not been taken into account. People do not realise this and they do not appeal. It seems that it is always the ratepayer who has to challenge a revaluation.

The anomalies pointed out by my hon. Friend the Member for Stoke-on-Trent, Central (Mr. Cant) are quite grotesque. I give one example to show that rating differentiates not only between one house and another but between one area and another. It will hit far harder houses and flats in, for instance, Hartcliffe in the south than Westbury-on-Trym in the north. This is to happen at a time of freeze when the Government say that there must be restraint on incomes and people must be prepared to accept a standstill, yet at the same time a burden such as this is being loaded on to people least able to afford it.

The people of Bristol will not get help from the Government's measures unless they are facing an increase of 37 per cent. This help is too little and too late. A far better solution to the whole problem would have been postponement of revaluation.

6.12 p.m.

Mr. J. R. Kinsey (Birmingham, Perry Barr)

It is rather strange that the problems itemised by the hon. Member for Birmingham, Small Heath (Mr. Denis Howell) were exactly the same under the Socialist Government as they are today. Although I cannot commend the Government because these factors still apply, I condemn the Opposition for the hypocrisy of their motion. The things that were mentioned by the hon. Member for Small Heath applied with the same force under his Government as they do today. Wage increases are still with us. That surely emphasises the need for the Government's intention through their incomes policy to reduce wage increases, which bear heavily on local government in Birmingham. Distribution of Government help was as bad in the days of the Labour Government and the cost to Birmingham was £1 million in one year.

Mr. Denis Howell

indicated dissent.

Mr. Kinsey

It is no use the hon. Member shaking his head. I was on the council at that time, and the interest rates imposed by the Socialists were as high as they had ever been. We have reduced interest charges under this Government and only now are they beginning to climb back.

The hon. Member mentioned a £3 million increase in debt charges. That must be due to the heavy debt problem in the city of Birmingham. In the statistics for the city we see that in 1971 £437,834,417 was outstanding. That debt represented £403 16s. 9d. per head. If we are to do anything to redress the position, our object should be to reduce that indebtedness. The Conservative administration did that when it was in office but the situation is now being busily redressed in the other direction.

We sold council houses and other properties within the ownership of the city to reduce our indebtedness and there were objections from the Socialist side. Now, the Socialists have taken control and are busily building up the stock of properties owned by the corporation. That of course means increasing the indebtedness which they say they wish to control. If the suggested policies of buying more rented properties in the cities are implemented, there will be an enormous debt burden. There is a letter in today's Birmingham Post about the suggested policy of the Socialists for free travel which would cost £25 for every family each year. This would mean an increase of the debt that the Socialists condemn but to which they would add so heavily.

I join in the objection expressed today to the way in which Government help is distributed to local authorities. This is why cities are doing so badly but it is not remarkable that other authorities are not complaining. It is right this should be so, because in some areas, to quote the chief agent of the Birmingham Conservative Association, they are "tickled to death" at the help given by the Government. Of course they are in no position to complain. This fairer distribution would prevent the Government coming under so much fire were they trying to remedy the situation.

Birmingham and other cities have been badly hit by revaluation. My right hon. Friend must face this fact. He knows that I am not happy about revaluation because with my hon. Friend the Member for Birmingham, Selly Oak (Mr. Gurden) I came to see him about the position. The help given in the Budget was really a waste. It was not needed. I join with an hon. Friend who said that £10 million was a considerable sum of money in any language and not to be dismissed lightly, but we could have got away without it. The Birmingham newspaper suggested that we should have a standstill. If it were the fact that we should have this help simply because the rest of the country wanted it, an order should have been brought in to adjust the position in relation to industrial and domestic ratepayers. I ask my right hon. Friend to look at that part of the problem.

6.19 p.m.

Mr. Eric S. Heffer (Liverpool, Walton)

I have one comment to make on the speech of the hon. Member for Birmingham, Perry Barr (Mr. Kinsey). Apparently he has never heard of what was referred to at the time as the Crossman bounty. It was brought in in 1966 and it was ultimately abolished by the present Government without anything being put in its place.

During those years of the Labour Government the local Conservative Party in Liverpool boasted at every municipal election that it had been able to keep the rate at the same level. Never once did the Conservative members say that that was because of the financial aid given to local authorities by the Labour Government. Perhaps they did not argue in Birmingham in the same way as they did in Liverpool. It was always the local Labour Party in Liverpool which pointed out the reality of the situation and demonstrated why the rates were kept at a constant or reasonable level.

In the few moments available to me I want to deal with the problems facing the big cities, Liverpool in particular. Earlier this afternoon the Minister admitted that there was a serious problem in the big cities. He said that the Government were taking a further look at the situation and that later they would come up with proposals to overcome the difficulties.

If the Government recognise the difficulties it is no good their saying that at some time in the future they will come forward with their proposals. There will be a hiatus between now and the time when the review is completed and the new proposals are brought forward. In the meantime, the situation of the big cities will get worse and their rate problems will get bigger.

In a letter dated 22nd December to the Prime Minister, Alderman Sefton, the leader of the Liverpool City Council, said: If we may take as a starting point the Government's expectation that rates should so far as possible be increased next year by no more than 5 per cent., we can calculate that on this basis our rate increase for the coming year should be no more than 6p. The facts are, however, that if we do no more than ensure that the standards we have reached this year are maintained, and only provide in addition for commitments for debt charges that we cannot avoid, our rate increase as we forecast it at the present time would be of the order of 31 p … we in Liverpool must think in terms of over £73 million next year as compared with £60 million 12 months ago. By far the biggest element in this increase of £13 million is inflation, which alone accounts for £7 million … but a local authority which hopss to be in a position to claim a full share in any increased Government grant must be able to count upon a stable population situation. In the last 10 years we have lost 130,000 of our population. We have built vast new council estates on the outskirts of our city. No one would suggest that Liverpool City Council, under both Tory and Labour administrations, has not done its job effectively in building the houses that are required. With extra Government aid, and perhaps with a different system of Government financing, we could have done even better, but the point is that we have done the job, and it is because we have done it that we are now faced with a serious problem. We must provide our people with the necessary welfare services, but even to maintain them at their present level presents a serious problem.

Mr. Frank Marsden (Liverpool, Scotland)

Does my hon. Friend agree that the land taken for motorways, river crossings and other schemes has contributed to the situation that 130,000 people have left the city?

Mr. Heffer

That has been a contributory factor in the loss of population. There has been a certain amount of Government assistance towards the building of roads, but in the long run we have lost some of our population and this has meant a loss of revenue to the city.

I ask the Government to accept the plea made by Alderman Sefton, the leader of Liverpool City Council. In the letter from the Prime Minister to Alderman Sefton it was clearly indicated that further assistance would be provided in the autumn of 1974. Alderman Sefton has said that he would like the date brought forward to the autumn of 1973. That is not asking for a great deal. It is merely asking for the date to be brought forward by one year so that as from the autumn of this year we may get greater assistance than we are receiving now.

That is the plea which I am asking the Government to accept. We have a problem which is recognised by the Government and by the Minister. The right hon. Gentleman admitted it this afternoon. If our people are not to have this enormous rate burden imposed upon them, the only answer is to get more aid from the Government.

6.27 p.m.

Mr. Norman Atkinson (Tottenham)

I propose to deal with only two points in the time allocated to me.

I am grateful to the hon. Member for Faversham (Mr. Moate) for what he said. He is an intelligent lad. He used most of the figures which we have discussed at length. I am grateful to him not only for putting them on record and saving me the trouble of doing so, but also for spelling out some of the facts.

I should like to take up the point made by the Minister in opening the debate about the whole business of monitoring. I protest as strongly as I can on behalf of my local authority, Haringey, at the political chicanery and the way in which the matter was dealt with.

The borough was asked to submit evidence and information to the Government, which it did on 26th February. The Government were not in communication with Haringey until 12th March, the day on which the borough had announced that it would declare its rate. At 11.30 a.m. there was a telephone call from the Department. There was a great deal of publicity in the borough about this. Some character in the Department telephoned suggesting that Haringey was overspending by £660,000 and asked whether the council would like to adjust its rates accordingly.

This appeared in the Press as though, in the opinion of the Government—which I do not believe had considered this in any detail—the Labour authority in Haringey was overspending by £660,000. It is fantastic that somebody should telephone in that way and then leak it to the Press and inform opposition Conservatives that that was the Government's view, even though there had been no discussions and the Government had had the information for more than a fortnight. The Department did not have the decency to inform the council what it proposed to do until the date of the announcement. So much for the monitoring referred to by the Minister. In our opinion it was a political stunt. I hope that it will backfire on the Government and that they will get no mileage out of it.

One would not believe that we were discussing this issue against the background of not only a wage freeze but also a period of rocketing house prices during a period of freeze, as well as increased rents, in our case to the extent of something like £2 million, because the Government have also raised council rates by £890,000 and have reduced housing subsidies by £130,000. So it goes on and it is no wonder that ratepayers are bewildered that the Government should be attempting to convince the people that they are determined to do something about inflation and to minimise the burden to be placed upon them when ratepayers, and council tenants particularly, are on the receiving end to that extent.

We now see a multiplication of the injustices and inequalities of this whole system perpetrated by the Government. That was why the Labour Government left it alone. Because of the built-in injustices they decided not to proceed at that time with their own ideas.

I wish to make three brief points on our attitude towards what many of us feel should be done. Following on the figures given by the hon. Member for Faversham, with which we concur, it is the belief of many hon. Members on this side of the House that, as a process towards possibly a method of local rating or some other equitable system of assessing local rate funds, there should be a total increase in Government grant of up to something like 75 per cent. of total expenditure. There is a body of opinion inside the Labour Party that believes that the domestic contribution should be reduced from what we believe at the moment to be 14 to 15 per cent., according to the figures given by the hon. Member for Faversham. We believe that no more than about 5 per cent. should be placed upon the domestic ratepayer. Therefore we look upon our proposal as a progressive method of trying to solve some of the inequalities in the present system. I hope that we shall get a commitment from the Labour Party before very long about a massive shift of this kind, reducing the amount paid by the domestic ratepayer to no more than some 5 per cent. of the total required by the local authorities.

In that sense, in this debate we are talking to the wrong people. There should be Treasury Ministers on the Government Front Bench. The things about which we are concerned are the cost of money to local authorities, especially to authorities concerned with urban renewal, and the funding of the cost of education and particularly teachers' salaries. Not only do we need more teachers, but teachers deserve a much better salary structure than they have at the moment. Therefore, this burden should be shifted away from the ratepayer to the central Government. We believe this to be a progressive way of equalising much of the injustice that has been built into the whole system of rate contribution. I hope we are moving towards a solution of the problem, but that solution can be achieved only if the Government give a much greater contribution than they are giving at present.

6.34 p.m.

Mr. Gordon Oakes (Widnes)

This has necessarily been a short debate, but it has been a very interesting debate in that every hon. Gentleman on either side of the House has, to a greater or lesser degree, expressed criticism of the Government. Even the hon. Member for Birmingham, Perry Barr (Mr. Kinsey), who sits on the other side of the House and is entitled to be critical of our policy, expresses criticism of the Government's policy. A lot of facts, figures, percentages, products of penny rates, reasons and excuses have been presented during the course of the debate. We have heard a lot about what local authorities think of the existing rating system and the present Government policy.

I want to look at this from the point of view of the ordinary ratepayer, because the majority of ratepayers in this country are going to face an increase in their rates over the next 12 months; and very many of them are going to face very substantial increases. The ratepayer cares not whether this results from inadequate rate support grant, from high interest rates or from the effect of revaluation. All he knows is that he has to pay out a lot more money in rates at a time when the Government have almost frozen his income and salary. He sees it as just another example of rising costs which the Government have totally failed to deal with adequately.

While we have been debating the question of rate rises an announcement has been made, I understand, that the Government accept a 10 per cent. increase in the cost of flour and flour products, which is yet another example so far as the ordinary person in the street is concerned of having his wages frozen while the cost of food is going up. Hon. Gentlemen opposite have argued consistently that when they are dealing with foodstuffs they are not in a position to control the cost of food because rises in the cost of raw materials are beyond their control. Rates are a subject on which the Government could intervene directly in order to prevent any escalation. The right hon. Gentleman said in his speech that some of the effects of the revaluation would have to be borne by the ratepayer because he considered that they were fair and just. The hospital workers' claim is fair and just. The gasworkers' claim is fair and just. But the words "fairness" and "justice" do not come in when it is a question of a rate increase resulting from the Government's inability or refusal to act. Then any such increase to be borne by the ratepayer suddenly becomes fair and just.

In the course of the debate the hon. Member for Harwich (Mr. Ridsdale) asked me whether under the Labour Party's policy on education we still propose that teachers' salaries should be borne from national expenditure. My answer to the hon. Gentleman is "Yes"; but, of course, we want to discuss this more fully with local government organisations, educational bodies and others. The hon. Member for Faversham (Mr. Moate) and the hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) spoke of the present rating system and its anomalies. I agree with much that was said, particular by the hon. Member for Roxburgh, Selkirk and Peebles. But the point of the debate is that we are dealing not with the far distant future but with the present. We are dealing with rates and rate demand notices that will be going out in the next few days. It is on this that we censure the Government for their failure to act to curb the rise in rates at a time when they have a nil norm to be followed by phase 2 of their prices and incomes policy.

Hon. Gentlemen opposite in their amendment to our motion mention the rate support grant. Throughout these debates on rates and prices it has continued to be their boast that they have increased the rate support grant from 58 to 60 per cent. and that more money is going out to local authorities. That is so; but local authorities have to provide more services because the Government tell them to do so. They have to increase the standards of those services which they have to provide, and, therefore, they need more money. So it is an empty boast for hon. Gentlemen on the Front Bench and benches opposite to say they are giving more money when they are doing so only because it is essential for local authorities to have that money to carry out their statutory duties.

Little has been said in this debate by the Government Front Bench on the effect of interest rates. Here again in considering the rate support grant given to local authorities it must be remembered that at the present time they have to pay about 9 per cent.—and probably that will be increased in future—for money they necessarily borrow to carry out their civic duties. I believe that at this time last year the rate was in the region of 6 per cent. This, again, is a direct burden which local authorities have to face.

The Government did not mention the non-relevant expenditure to the rate support grant, or expenditure which the Government do not consider relevant. These are such things, for example, as the housing rate fund contribution, the concessionary fares for old people, and transport defects. These are borne 100 per cent. by the local authorities. Are the Government saying that where a city decides, for example, to implement a transport scheme to relieve traffic congestion, the scheme is unnecessary? Of course the scheme is necessary to the local authority conerned, but it will get no relief from the rate support grant for it.

The second claim for consideration in the amendment is that the Government have given special relief for revaluation. The hon. Gentleman said that we were somewhat contemptuous of large figures, especially the £10 million which the Government are spending on this special relief. Yes, we are contemptuous, because that figure represents a product of 0.16p rate taken over England and Wales as a whole.

Mr. Eldon Griffiths

Irrelevant.

Mr. Oakes

The hon. Gentleman may say "Irrelevant", but that is the figure.

Recently, the Association of Municipal Corporations proposed that the Government should step in as a ratepayer and pay in any sum greater than a 10 per cent. rise. However, the Government are paying only half of a sum greater than a 10 per cent. rise. My hon. Friend the Member for Stoke-on-Trent, Central (Mr. Cant) rightly pointed out that the poorer one is the more one is hit by revaluation. We heard the same from my hon. Friends the Members for Newport (Mr. Roy Hughes) and Bristol, South (Mr. Michael Cocks).

Last night I received a resolution from the Kirkby Urban District Council, in the constituency of my right hon. Friend the Leader of the Opposition, strongly condemning the Government and pointing out the effects of circular 34/73, granting relief to domestic ratepayers on account of revaluation. The council stated that they were irrelevant in Kirkby because of the limited nature of the formula for obtaining relief, with only an insignificant number of people being eligible for relief. That sort of situation can be related time and again.

Again, as my hon. Friend the Member for Birmingham, Small Heath (Mr. Denis Howell) said, the figures of relief will be eroded and wiped away by administrative expenditure. Because the Government were so late in producing their proposals, the local authorities had already prepared their rates. If a local authority has a computer, it has to feed into it an alternative programme to deal with the Government's scheme; if it has not got a computer, it has to do it through long manual labour by the staff, spending hours on each rate demand.

As the local authority associations have said, the rate demands will go out on time. If they do not, there is a loss of revenue which has to be met by short-term borrowing. But the price of money for local authorities for a seven-day period is 11¼ per cent., rising to 12 per cent. That will soon wipe away the £10 million which the Government are giving on account of revaluation.

Liverpool suffers from declining population and has great social needs, as my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) pointed out. Liverpool estimates that it will need another £11 million this year without increasing a single service. It will require an extra £7 million because of the monitored effect of inflation on the interest rates, the cost of wages and so on, taking account of the pay freeze and phase 2; it will require another £1½ million for special statutory services, including £900,000 which the city has to pay because of the effects of the Housing Finance Act; and another £2½ million relates to rating prospects over which it has no control. Yet Liverpool is to get not a penny from the Government in its great need.

Alderman Sefton, Sir Robert Thomas and other great civic leaders saw the Prime Minister. One wonders whether their journey was really necessary. Was the Prime Minister listening? Did they waste their time and the ratepayers' money on their fares in order to come to London to see him? The fact is that not a thing of substance has emanated from him or from the Government, and there is no mention in the amendment of the problems of the big cities.

The insult in the amendment comes with the final words asking local authorities to avoid "unnecessarily high rate levies." All local authorities avoid unnecessarily high rate levies. Are the Government aware of the procedure which goes into making a rate? Are they not aware of how, in the competing schemes between the various committees of a local authority, estimates are pruned by each committee, further pruned by the finance committee and maybe still further pruned by the council? That is the procedure. But it seems that the Government can simply get in contact by telephone with the great city of Manchester while the council is deciding upon its rate and tell it to cut £2 million off its estimates. Do the Government think that that is how to deal adequately with local authorities? They did the same with Haringey, as my hon. Friend the Member for Tottenham (Mr. Atkinson) pointed out.

However, many local authorities have ignored the Government. For example, that citadel of Socialism, Kingston-upon-Thames, when told to take £460,000 off the rates, treated the request with the contempt that it deserved and refused to do so. That hotbed of red revolution, Hampshire County Council, was told to take off £3 million; it said that it could not do so and that the Government's proposal was administrative rubbish.

Careful pruning goes on in all local authorities, as the hon. Member for Northants, South (Mr. Arthur Jones) hinted when he spoke of the monitoring procedure. But I go further than he did. I say that it is a gratuitous insult to local authorities, both Labour and Conservative, to suggest in the amendment that they would unnecessarily increase their rates.

The Government are tonight facing a motion of censure. No doubt their Whips will attempt to deal with it, no matter who goes into the Lobby. What the Government need to fear is the censure of the ratepayers, who will be able to exercise their power of censure in the GLC and county council elections on 12th April, the metropolitan district elections on 10th May and yet again in the non-metropolitan district elections on 7th June. In those successive votes of censure, the Government will not be able to put their Whips on and the British people will decidedly tell the Government what they think of their present rates policy.

6.47 p.m.

The Under-Secretary of State for the Environment (Mr. Eldon Griffiths)

After a generally quiet debate the hon. Member for Widnes (Mr. Oakes), to his credit, did his best to stir it up in order to justify the extravagant language of the motion. I congratulate him on his effort in the last few moments of his speech. Unfortunately he got some of his facts wrong. I do not complain but perhaps I should let him know that it was important to get in touch with Manchester, by telephone or otherwise, to tell it that the figures on which it was working—its own figures—were £2 million out. Manchester, being a sensible authority, recognised that this was so and agreed to correct them. That is surely a relatively cheap telephone call at the price.

Listening to the hon. Gentleman, one would have thought that our great cities were receiving less help from the Government. I have with me the figures of the increase they have received. Birmingham's figure went up by £7 million.

Mr. Denis Howell

Proportionately it went down.

Mr. Griffiths

We are talking about whether the cities got any more money, and Birmingham got £7 million more, Liverpool £3 million more, Manchester £3½ million more, Sheffield £6 million more and so on. It is, therefore, an inaccurate picture to suggest that our great cities have been provided with less support by the Government. On the contrary, they have had more.

My hon. Friend the Member for Harwich (Mr. Ridsdale), who has spoken frequently in the House and has a great knowledge of rates, recommended the Government to take more of the burden of education, in particular teacher's salaries, on to the national Exchequer. That is one of the many points to which my right hon. Friend is giving consideration. My hon. Friend's argument was at once countered to some extent by my hon Friend the Member for Northants, South (Mr. Arthur Jones) who stressed the need for local government to accept a measure of accountability. If teachers' salaries were to be removed from the local authority to the national authority the local education authority might conclude that it no longer had effective control over one of the most vital services.

The hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) had all our sympathy when he said that he was unable to be here before because his aeroplane was late. He rightly complained that several hon Members who had aspersed him in his absence were not here to listen to what he had to say. While I understand his feelings, I am not sure that they missed a great deal because what he had to tell us comprised only what we have heard, with remarkable consistency, from the Liberal benches for a number of years.

My hon. Friend the Member for Faversham (Mr. Moate) said that he wanted a comprehensive and radical reform of the rating system. I take note of his wish that a White Paper should be published, with the draft Bill appended, so that there would be an opportunity for full discussion within the House before any legislation was brought forward. I am sure that my right hon. Friend will have noted what he said.

The hon. Member for Bristol, South (Mr. Michael Cocks) let the cat out of the bag when he said that revaluation was postponed by the Labour Government because they were trying to operate a prices and incomes policy. That is a revealing remark and I am glad to hear it. I was under the impression that the principal reason for the postponement of revaluation was that the then Government were trying to set up the Land Commission and were short of valuation officers at the time.

The debate has revealed a fundamental dilemma. On the one hand there are those who say that the best way forward with local government finance is to transfer more local government expenditure to the national Exchequer and, on the other hand, there are those who say that there is a need for more local sources of revenue so that local authorities will feel that more money is available from their own resources. The transfer from local to central funds might involve education, police and other services. We are looking at these, and before the Bill dealing with local government finance is produced we shall give full consideration to all the views that have been expressed. Similarly, we shall give full consideration to looking for other sources of buoyant local revenue.

In taking up a point made by the hon. Member for Liverpool, Walton (Mr. Heffer), I remind the House of what my right hon. Friend said about the studies that have been made within my Department of three old towns—Oldham, Sunderland and Rotherham—and three parts of great conurbations—Lambeth in London, a portion of Birmingham and a portion of Liverpool. Each of those studies has been under the general command of a Minister within the Department of the Environment and we have been developing some useful urban guidelines for the future. Arising partly from that and partly from the arguments put forward within the House, my right hon. Friend has said that following discussions with the local authority associations we shall expect to adjust the formula to take account of the special needs of the large cities. He went on to remind the House that there will be, in all likelihood, a rates increase order—subject to the success of the counter-inflation policy—and that next April the rates will be relieved of the local authority services at present costing £350 million relating to personal health and water. This of course would be bound to have a relieving effect on the rates.

My right hon. Friend referred to the rating of empty promises—I am sorry, I should have said premises—[Laughter.] There are many hon. Members who have had a good deal of experience of that. My right hon. Friend referred to the rating of empty premises, and I am advised that in fact more than 100 local authorities are now rating empty premises. As my right hon. Friend said, there may well be advantage in further developments along that line.

I will briefly summarise some steps we have taken and some of the policies which my right hon. Friend has in mind for the future. We have increased by a record amount the contribution of the central Government to local authority spending. Today, £3 out of every £5 spent by local government is provided by the Exchequer. I beg leave to doubt whether local government—meaning local responsibility in the full sense of the word— could have real meaning if this proportion of national to local government expenditure were to go much higher. It is an old but true maxim that he who pays the piper calls the tune. I doubt whether those who really care—as the hon. Member for Widnes and I both care—for the independence of our locally-elected authorities are doing a real service to them by arguing that the national element should go on increasing and the local element should dwindle further. But be that as it may, the Government have increased the national contribution to the highest figure ever.

We have provided in this year's settlement—and this goes some way to meet the hon. Gentleman's anxieties—for full coverage, within the Government's proportion, of higher costs and wages. Local government services are labour-intensive, but in the negotiations the Government met the full increase in wage costs up to the point of settlement.

We have provided for the extra costs of developing and improving local services, especially in those sectors where the House has urged local authorities to do better. We have allowed for more teachers, for 4,000 more policemen and for an increase in expenditure on social services of 20 per cent, over two years, with special weighting for the handicapped, where the relevant expenditure is to be increased by 50 per cent. We have substantially improved the domestic element for the individual ratepayer. We have done the same with rate rebates, where the income limits have been raised to the highest figure ever, and through the monitoring exercise—in spite of the re- marks that have been made about it— 125 authorities have so far made a saving of over £8 million.

In fairness, as many hon. Gentlemen on the Opposition benches have seen fit to asperse some of the things that the Government have done, it is reasonable to look at what the Labour Government did when they had the responsibility. They provided, in their very best year, a total of £1,760 million in support for local government. That was in their best year, 1969–70. We have provided £3,130 million, virtually twice as much. And what about the proportion of local spending from the national Exchequer? The best that the Labour Government were ever able to do was some 57 per cent. We are providing 60 per cent, of the total from the national Exchequer. As far as the domestic element is concerned—the rate relief for the individual —the best they were ever able to do was 6p in the pound. We have provided the equivalent of 15p in the pound, which is two and a half times as much.

In their motion the Opposition talk about inflation, but what is their solution to this problem? In office they tried —or at least the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) tried—to operate an incomes policy. But their incomes policy was not £1 plus 4 per cent.; it was a norm of nil for one period and 3 per cent, afterwards. Today many Labour Members have run away from an incomes policy, just as they ran away from revaluation and from industrial relations as well. But while they are running away we find that we have a situation in which, in every local council chamber in the land, it is the Labour Party which is demanding every inflationary increase in expenditure, and then they have the plain nerve to come to this House and suggest that the consequences—higher rates—are somebody else's fault.

It is for that reason that I regard the motion that the Opposition have put on the Order Paper as no more than electioneering humbug, and I recommend the House to reject it and accept our substitute, the very much better amendment of my right hon. Friend.

Question put, That the amendment be made: —

The House divided: Ayes 288; Noes 266.

Division No. 86.]	AYES	[7.2 p.m.
Adley, Robert	Fisher, Nigel (Surbiton)	Lloyd, Ian (P'tsm'th, Langstone)
Alison, Michael (Barkston Ash)	Fletcher-Cooke, Charles	Longden, Sir Gilbert
Allason, James (Hemel Hempstead)	Fookes, Miss Janet	Loveridge, John
Amery, Rt. Hn Julian	Fortescue, Tim	Luce, R. N.
Archer, Jeffrey (Louth)	Foster, Sir John	McAdden, Sir Stephen
Astor, John	Fowler, Norman	MacArthur, Ian
Atkins, Humphrey	Fox, Marcus	McCrindle, R. A.
Awdry, Daniel	Fraser, Rt.Hn.Hugh (St'fford & Stone)	McLaren, Martin
Baker, Kenneth (St. Marylebone)	Fry, Peter	Maclean Sir Fitzroy
Baker, W. H. K. (Banff)	Galbraith, Hn. T. G. D.	McMaster, Stanley
Balniel, Rt. Hn. Lord	Gardner Edward	Macmillan,Rt.Hn.Maurice(Farnham)
Barber, Rt. Hn. Anthony	Gibson-Watt, David	McNair-Wilson, Michael
Batstord, Brian	Gilmour, Ian (Norfolk C.)	McNair-Wilson, Patrick (New Forest)
Beamish, Col. Sir Tufton	Gilmour, Sir John (File, E.)	Maddan Martin
Bell, Ronald	Glyn, Dr. Alan	Madel, David
Bennett, Sir Frederic (Torquay)	Goodhart, Philip	Marples Rt. Hn. Ernest
Bennett, Dr. Reginald (Gosport)	Goodhew Victor	Marten, Neil
Benyon, W.	Gorst, John
Biffen, John	Gower, Raymond	Mather, Carol
Biggs-Davison, John	Grant, Anthony (Harrow, C.)	Maude, Angus
Blaker, Peter	Green Hamish	Mawby, Ray
Boardman, Tom (Leicester, S.W.)	Green Alan	Maxwell-Hyslop, R. J.
Body, Richard	Grieve, Percy	Meyer, Sir Anthony
Boscawen, Hn. Robert	Griffiths, Eldon (Bury St. Edmunds)	Miscampbell, Norman
Boscawen, Hn. Robert	Grylls, Michael	Mitchell,Lt.-Col.C.(Aberdeenshire,W)
Bossom, Sir Clive	Gummer, J. Selwyn	Mitchell, David (Basingstoke)
Bowden, Andrew	Gurden, Harold	Moate, Roger
Braine, Sir Bernard	Hall, Miss Joan (Keighley)	Money, Ernie
Bray, Ronald	Hall, John (Wycombe)	Monks, Mrs. Connie
Brewis, John	Hall-Davis, A. G. F.	Monro, Hector
Brocklebank-Fowler Christopher	Hamilton, Michael (Salisbury)	Montgomery, Fergus
Brown, Sir Edward (Bath)	Hannam, John (Exeter)	More Jasper
Bruce-Gardyne, J.	Harrison, Brian (Maldon)	Morgan, Geraint (Denbigh)
Bryan, Sir Paul	Harrison, Col. Sir Harwood (Eye)	Morgan-Giles, Rear-Adm.
Buchanan-Smitn, Alick(Angus,N&M)	Haselhurst, Alan	Morrison, Charles
Buck, Antony	Hastings, Stephen	Mudd, David
Bullus, Sir Eric	Havers, Sir Michael	Murton Oscar
Burden, F. A.	Hawkins, Paul	Nabarro, Sir Gerald
Butler, Adam (Bosworth)	Hayhoe, Barney	Neave, Arey
Campbell, Rt.Hn.G.(Moray& Nairn)	Heseltine, Michael	Nicholls Sir Harmar
Carlisle, Mark	Hicks, Robert	Noble, Rt. Hn. Michael
Cary, Sir Robert	Higgins, Terence L.	Nott, John
Channon, Paul	Hiley, Joseph	Onslow Cranley
Chapman, Sydney	Hill, John E. B. (Norfolk, S.)	Oppenheim, Mrs. Sally
Chichester-Clark, R.	Hill, S. James A.(Southampton,Test)	Osborn, John
Clarke, Kenneth (Rushcliffe)	Hordern, Peter	Page, Rt. Hn. Graham (Crosby)
Cockeram, Eric	Hornsby-Smith.Rt.Hn.Dame Patricia	Page, John (Harrow, W.)
Cooke, Robert	Howe, Rt. Hn. Sir Geoffrey	Parkinson Cecil.
Coombs, Derek	Howell, David (Guildford)	Percival, Ian
Cooper, A. E.	Howell, Ralph (Norlolk, N.)	Pike, Miss Mervyn
Cordle, John	Hutchison, Michael Clark	Pink, R. Bonner
Corfield, Rt. Hn. Sir Frederick	Iremonger, T. L.	Powell, Rt. Hn. J. Enoch
Cormack, Patrick	Irvine, Bryant Godman (Rye)	Price, David (Eastleigh)
Costain, A. P.	James, David	Prior, Rt. Hn. J. M. L.
Critchley, Julian	Jenkin, Patrick (Woodford)	Proudfoot, Wilfred
Crouch, David	Jennings, J. C. (Burton)	Pym, Rt. Hn. Francis
Crowder, F. P.	Jessel, Toby	Quennell, Miss J. M.
d'Avigdor-Goldsmid, Sir Henry	Johnson Smith, G. (E. Grinstead)	Raison, Timothy
d'Avigdor-Goldsmid,Maj.-Gen.Jack	Jones, Arthur (Northants, S.)	Ramsden, Rt. Hn. James
Dean, Paul	Jopling, Michael	Rawlinson, Rt. Hn. Sir Peter
Deedes, Rt. Hn. W. F	Joseph, Rt. Hn. Sir Keith	Redmond, Robert
Digby, Simon Wingfield	Kaberry, Sir Donald	Reed, Laurance (Bolton, E.)
Dixon, Piers	Kellett-Bowman, Mrs. Elaine	Rees, Peter (Dover)
Dodds-Parker, Sir Douglas	Kershaw, Anthony	Rees-Davies, W. R.
Drayson, G. B.	Kimball, Marcus	Renton, Rt. Hn. Sir David
du Cann, Rt. Hn. Edward	King, Evelyn (Dorset, S.)	Rhys Williams, Sir Brandon
Dykes, Hugh	King, Tom (Bridgwater)	Rippon, Rt. Hn. Geoffrey
Eden, Rt. Hn. Sir John	Kinsey, J. R.	Roberts, Michael (Cardiff, N.)
Edwards, Nicholas (Pembroke)	Kirk, Peter	Roberts, Wyn (Conway)
Elliot, Capt. Walter (Carshalton)	Kitson, Timothy	Rodgers, Sir John (Sevenoaks)
Elliott, R. W. (N'c'tle-upon-Tyne.N.)	Knight, Mrs. Jill	Rossi, Hugh (Hornsey)
Emery, Peter	Knox, David	Rost, Peter
Eyre, Reginald	Lamont, Norman	Royle, Anthony
Farr, John	Lane, David	Russell, Sir Ronald
Fell, Anthony	Langford-Holt, Sir John	Sandys, Rt. Hn. D.
Fenner, Mrs. Peggy	Le Marchant, Spencer	Scott, Nicholas
Fidler, Michael	Lewis, Kenneth (Rutland)	Scott-Hopkins, James
Shaw, Michael (Sc'b'gh & Whitby)	Taylor, Sir Charles (Eastbourne)	Wall, Patrick
Shelton, William (Clapham)	Taylor,Edward M.(G'gow,Cathcart)	Walters, Dennis
Shersby, Michael	Taylor, Robert (Croydon, N.W.)	Warren, Kenneth
Simeons, Charles	Tebbit, Norman	Wells, John (Maidstone)
Sinclair, Sir George	Temple, John M.	White, Roger (Gravesend)
Skeet, T. H. H.	Thatcher, Rt. Hn. Mrs. Margaret	Wiggin, Jerry
Smith, Dudley (W'wick & L'mington)	Thomas, John Stradling (Monmouth)	Wilkinson, John
Soref, Harold	Thomas, Rt. Hn. Peter (Hendon, S.)	Winterton, Nicholas
Speed, Keith	Thompson, Sir Richard (Croydon, S)	Wolrige-Gordon, Patrick
Spence, John	Trafford, Dr. Anthony	Wood, Rt. Hn. Richard
Sproat, lain	Trew, Peter	Woodhouse, Hn. Christopher
Stainton, Keith	Tugendhat, Christopher	Woodnutt, Mark
Stanbrook, Ivor	Turton, Rt. Hn. Sir Robin	Worsley, Marcus
Stewart-Smith, Geoffrey (Belper)	Vaughan, Dr. Gerard	Wylie, Rt. Hn. N. R.
Stodart, Anthony (Edinburgh, W.)	Vickers, Dame Joan	Younger, Hn. George
Stoddart-Scott, Col. Sir M.	Waddington, David
Stokes, John	Walder, David (Clitheroe)	TELLERS FOR THE AYES:
Stuttaford, Dr. Tom	Walker, Rt. Hn. Peter (Worcester)	Mr. Walter Clegg and
Sutcliffe, John	Walker-Smith, Rt. Hn. Sir Derek	Mr. Bernard Weatherill
Tapsell, Peter
NOES
Abse, Leo	Dunnett, Jack	Jones, Gwynoro (Carmarthen)
Allaun, Frank (Salford, E.)	Eadie, Alex	Jones, T. Alec (Rhondda, W.)
Archer, Peter (Rowley Regis)	Edelman, Maurice	Judd, Frank
Armstrong, Ernest	Edwards, Robert (Bilston)	Kaufman, Gerald
Ashley, Jack	Edwards, William (Merioneth)	Kelley, Richard
Ashton, Joe	Ellis, Tom	Kerr, Russell
Atkinson, Norman	English, Michael	Kinnock, Neil
Bagier, Gordon A. T.	Evans, Fred	Lambie, David
Barnes, Michael	Ewing, Harry	Lamborn, Harry
Barnett, Guy (Greenwich)	Faulds, Andrew	Lamond, James
Barnett, Joel (Heywood and Royton)	Fernyhough, Rt. Hn. E.	Latham, Arthur
Baxter, William	Fisher,Mrs.Doris(B'ham,Ladywood)	Lawson, George
Benn, Rt. Hn. Anthony Wedgwood	Fitch, Alan (Wigan)	Leadbitter, Ted
Bennett, James(Glasgow, Bridgeton)	Fletcher, Raymond (Ilkeston)	Lee,Rt. Hn. Frederick
Bidwell, Sydney	Fletcher, Ted (Darlington)	Leonard, Dick
Bishop, E. S.	Foot, Michael	Lestor, Miss Joan
Blenkinsop, Arthur	Ford, Ben	Lewis, Ron (Carlisle)
Boardman, H. (Leigh)	Forrester, John	Lipton, Marcus
Booth, Albert	Fraser, John (Norwood)	Lomas Kenneth
Bottomley, Rt. Hn. Arthur	Freeson, Reginald	Loughlin Charles
Boyden, James(Bishop Auckland)	Galpern, Sir Myer	Lyon, Alexander W. (York)
Bradley, Tom	Garrett, W. E.	Lyons, Edward (Bradford, E.)
Broughton, Sir Alfred	Ginsburg, David (Dewsbury)	Lyons Edward (Bradford. E.)
		Mabon, Dr. J. Dickson
Brown, Robert C. (N'c'tle-u-Tyne,W.)	Golding, John	McBride Neil
Brown, Ronald(Shoreditch & F'bury)	Gourlay, Harry	McCartney Hugh
Buchan, Norman	Grant, George (Morpeth)	McElhone, Frank
Buchanan, Richard (G'gow, Sp'burn)	Griffiths, Eddie (Brightside)	McGuire, Michael
Butler, Mrs. Joyce (Wood Green)	Griffiths, Will (Exchange)	Machin, George
Callaghan, Rt. Hn. James	Hamilton, James (Bothwell)	Mackenzie, John
Campbell, I. (Dunbartonshire, W.)	Hamilton, William (Fife, W.)	Mackie, John
Cant, R. B.	Hamling, William	Mackintosh, Josh P.
Carter, Ray (Birmingham, Northfield)	Hannan, William (G'gow, Maryhill)	Maclennan, Robert
Carter-Jones, Lewis (Eccles)	Hardy, Peter
Castle, Rt. Hn. Barbara	Harper, Joseph	McMillan, Tom (Glasgow, C.)
Clark, David (Colne Valley)	Harrison, Walter (Wakefield)	McNamara, J. Kevin
Cohen, Stanley	Hart, Rt. Hn. Judith	Mahon, Simon Bootle)
Concannon, J. D.	Hattersley, Roy	Mallalieu, J. P. W. (Huddersfield.E
Corbet, Mrs. Freda	Healey, Rt. Hn. Denis	Marks, Kenneth
Cox, Thomas (Wandsworth, C.)	Heffer, Eric S.	Marsden, F.
Crawshaw, Richard	Hooson, Emlyn	Marshall Dr. Edmund
Cronin, John	Horam, John	Mason, Rt. Hn. Roy
Crosland, Rt. Hn. Anthony	Houghton, Rt. Hn. Douglas	Mayhew, Christopher
Crossman, Rt. Hn. Richard	Howell, Denis (Small Heath)	Meacher, Michael
Cunningham, G. (Islington, S.W.)	Huckfield, Leslie	Mellish, Rt. Hn. Robert
Cunningham, Dr. J. A. (Whitehaven)	Hughes, Rt. Hn. Cledwyn (Anglesey)	Mendelson, John
Dalyell, Tarn	Hughes, Mark (Durham)	Mikardo, Ian
Davidson, Arthur	Hughes, Roben (Aberdeen, N.)	Millan, Bruce
Davies, Denzil (Llanelly)	Hughes, Roy (Newport)	Miller, Dr. M. S.
Davies, Ifor (Gower)	Hunter, Adam	Milne, Edward
Davis, Clinton (Hackney, C.)	Irvine, Rt. Hn. Sir Arthur (Edge Hill)	Mitchell, R. C. (S'hampton, Itchen)
Davis, Terry (Bromsgrove)	Janner, Greville	Molloy, William
Deakins, Eric	Jay, Rt. Hn. Douglas	Morgan, Elystan (Cardiganshire)
de Freitas, Rt. Hn. Sir Geoffrey	Jeger, Mrs. Lena	Morris, Alfred (Wythenshawe)
Delargy, Hugh	Jenkins, Hugh (Putney)	Morris, Charles R. (Openshaw)
Dell, Rt. Hn. Edmund	Jenkins, Rt. Hn. Roy (Stechford)	Morris, Rt. Hn. John (Aberavon)
Doig, Peter	Johnson, Carol (Lewisham, S.)	Moyle, Roland
Dormand, J. D.	Johnson, James (K'ston-on-Hull, W.)	Mulley, Rt. Hn. Frederick
Douglas, Dick (Stirlingshire, E.)	Johnson, Walter (Derby, S.)	Murray, Ronald King
Douglas-Mann, Bruce	Johnston, Russell (Inverness)	Oakes, Gordon
Driberg, Tom	Jones, Barry (Flint, E.)	Ogden, Eric
Duffy, A. E. P.	Jones, Dan (Burnley)	O'Halloran, Michael
Dunn, James A.	Jones,Rt.Hn.Sir Elwyn (W.Ham.S.)	O'Malley, Brian

Oram, Bert	Rodgers, William (Stockton-on-Tees)	Tinn, James
Orbach, Maurice	Roper, John	Tomney, Frank
Orme, Stanley	Rose, Paul B.	Tope, Graham
Oswald, Thomas	Ross, Rt. Hn. William (Kilmarnock)	Torney, Tom
Owen, Dr. David (Plymouth, Sutton)	Rowlands, Ted	Tuck, Raphae
Padley, Walter	Sandelson, Neville	Urwin, T. W.
Paget, R. T.	Sheldon, Robert (Ashton-under-Lyne)	Varley, Eric G.
Palmer, Arthur	Shore, Rt. Hn. Peter (Stepney)	Wainwright, Edwin
Pardoe John	Short,Rt.Hn.Edward(N'c'tle-u-Tyne)	Walden, Brian (B'm'ham, All Saints)
Parker, John (Dagenham)	Silkin, Rt. Hn. John (Deptford)	Walker, Harold (Doncaster)
Parry, Robert Liverpool, Exchange)	Silkin, Hn. S. C. (Dulwich)	Wallace, George
Peart Rt Hn Fred	Sillars, James	Watkins, David
Pendry Tom	Silverman, Julius	Weitzman, David
	Skinner, Dennis	Wellbeloved, James
Perry, Ernest G.	Small, William	Wells william (walsell, N.)
Prentice, Rt.Hn. Reg.	Smith, Cyril (Rochdale)	while, James (Glasgow, Pollok)
Prescott, John	Smith John (Lanarkshire, N.)	Whitehead, Phillip
Price, William (Rugby)	Spearing, Nigel	Whitlock, William
Probert, Arthur	Spriggs, Leslie	Willey, Rt. Hn. Frederick
Radice, Giles	Stallard, A. W.	Williams, Alan (Swansea, W.)
Rankin, John	Steel, David	Williams, Mrs. Shirley (Hitchin)
Reed, D. (Sedgefield)	Stoddart, David (Swindon)	Williams, W. T. (Warrington)
Rees, Merlyn (Leeds S.)	Stonehouse, Rt. Hn. John	Wilson, Alexander (Hamilton)
Rhodes, Geoffrey	Strang, Gavin	Wilson, Rt. Hn. Harold (Huyton)
Richard, Ivor	Strauss, Rt. Hn. G. R.
Roberts, Albert (Normanton)	Summerskill, Hn. Dr. Shirley	TELLERS FOR THE NOES:
Roberts,Rt.Hn.Goronwy(Caernarvon)	Taverne, Dick	Mr. Donald Coleman and
Robertson, John (Paisley)	Thomas,Rt.Hn.George (Cardiff.W.)	Mr. Michael Cocks
Roderick, Caerwyn E.(Brc'n&R'dnor)	Thomas, Jeffrey (Abertillery)

Question accordingly agreed to.

Main Question, as amended, put:—

The House divided: Ayes 290; Noes 266.

Division No. 87.]	AYES	[7.14 p.m.
Adley, Robert	Cockeram, Eric	Goodhew, Victor
Alison, Michael (Barkston Ash)	Cooke, Robert	Gorst, John
Allason, James (Hemel Hempstead)	Coombs, Derek	Gower, Raymond
Amery, Rt. Hn. Julian	Cooper, A. E.	Grant, Anthony (Harrow, C.)
Archer, Jeffrey (Louth)	Cordle, John	Gray, Hamish
Astor, John	Corfield, Rt. Hn. Sir Frederick	Green, Alan
Atkins, Humphrey	Cormack, Patrick	Grieve, Percy
Awdry, Daniel	Costain, A. P	Griffiths, Eldon (Bury St. Edmunds)
Baker, Kenneth (St. Marylebone)	Critchley, Julian	Grylls, Michael
Baker, W. H. K. (Banff)	Crouch, David	Gummer, J. Selwyn
Balniel, Rt. Hn. Lord	Crowder, F. P.	Gurden, Harold
Barber, Rt. Hn. Anthony	d'Avigdor-Goldsmid, Sir Henry	Hall, Miss Joan (Keighley)
Batsford, Brian	d'Avigdor-Goidsmid,Maj.-Gen.Jack	Hall, John (Wycombe)
Beamish, Col. Sir Tufton	Dean, Paul	Hall-Davis, A. G. F.
Bell, Ronald	Deedes, Rt. Hn. W. F.	Hamilton, Michael (Salisbury)
Bennett, Dr. Reginald (Gosport)	Digby, Simon Wingfield	Hannam, John (Exeter)
Benyon, W.	Dixon, Piers	Harrison, Brian (Maldon)
Biffen, John	Dodds-Parker, Sir Douglas	Harrison, Col. Sir Harwood (Eye)
Biggs-Davison, John	Drayson, G. B.	Haselhurst, Alan
Blaker, Peter	du Cann, Rt. Hn. Edward	Hastings, Stephen
Boardman, Tom (Leicester, S.W.)	Dykes, Hugh	Havers, Michael
Body, Richard	Eden, Rt. Hn. Sir John	Hawkins, Paul
Boscawen, Hn. Robert	Edwards, Nicholas (Pembroke)	Hayhoe, Barney
Bossom, Sir Clive	Elliot, Capt. Walter (Carshalton)	Heseltine, Michael
Bowden, Andrew	Elliott, R. W. (N'c'tle-upon-Tyne,N.)	Hicks, Robert
Braine, Sir Bernard	Emery, Peter	Higgins, Terence L.
Bray, Ronald	Eyre, Reginald	Hiley, Joseph
Brewis, John	Farr, John	Hill, John E. B. (Norfolk, S.)
Brocklebank-Fowler, Christopher	Fell, Anthony	Hill, James (Southampton, Test)
Brown, Sir Edward (Bath)	Fenner, Mrs. Peggy	Holland, Philip
Bruce-Gardyne, J.	Fidler, Michael	Holt, Miss Mary
Bryan, Sir Paul	Fisher, Nigel (Surbiton)	Hordern, Peter
Buchanan-Smith, Alick(Angus,N&M)	Fletcher-Cooke, Charles	Hornsby-Smith,Rt.Hn.Dame Patricia
Buck, Antony	Fookes, Miss Janet	Howe, Hn. Sir Geoffrey (Reigate)
Bullus, Sir Eric	Fortescue, Tim	Howell, David (Guildford)
Burden, F. A.	Foster, Sir John	Howell, Ralph (Norfolk, N.)
Butler, Adam (Bosworth)	Fowler, Norman	Hutchison, Michael Clark
Campbell, Rt.Hn.G.(Moray & Nairn)	Fox, Marcus	Iremonger, T. L.
Carlisle, Mark	Fraser.Rt.Hn.Hugh (St'fford & Stone)	Irvine, Bryant Godman (Rye)
Carr, Rt. Hn. Robert	Fry, Peter	James, David
Cary, Sir Robert	Galfaraith, Hn. T. G. D.	Jenkin, Patrick (Woodford)
Channon, Paul	Gardner, Edward	Jennings, J. C. (Burton)
Chapman, Sydney	Gibson-Watt, David	Jessel, Toby
Chichester-Clark, R.	Gilmour, Ian (Norfolk, C.)	Johnson Smith, G. (E. Grinstead)
Churchill, W. S.	Gilmour, Sir John (Fife, E.)	Jones, Arthur (Northants, S.)
Clark, William (Surrey, E.)	Glyn, Dr. Alan	Jopling, Michael
Clarke, Kenneth (Rushcliffe)	Goodhart, Philip	Joseph, Rt. Hn. Sir Keith
Kaberry, Sir Donald	Murton, Oscar	Spence, John
Kellett-Bowman, Mrs. Elaine	Nabarro, Sir Gerald	Sproat, lain
Kershaw, Anthony	Neave, Airey	Stainton, Keith
Kimball, Marcus	Nicholls, Sir Harmar	Stanbrook, Ivor
King, Evelyn (Dorset, S.)	Noble, Rt. Hn. Michael	Stewart-Smith, Geoffrey (Belper)
King, Tom (Bridgwater)	Nott, John	Stodart, Anthony (Edinburgh, W.)
Kinsey, J. R.	Onslow, Cranley	Stoddart-Scott, Col. Sir M.
Kirk, Peter	Oppenheim, Mrs. Sally	Stokes, John
Kitson, Timothy	Osborn, John	Stuttaford, Dr. Tom
Knight, Mrs. Jill	Owen, Idris (Stockport, N.)	Sutcliffe, John
Knox, David	Page, Rt. Hn. Graham (Crosby)	Tapsell, Peter
Lamont, Norman	Page, John (Harrow, W.)	Taylor, Sir Charles (Eastbourne)
Lane, David	Parkinson, Cecil	Taylor,Edward M.(G'gow,Calhcart)
Langford-Holt, Sir John	Percival Ian	Taylor, Frank (Moss Side)
Le Merchant, Spencer	Pike, Miss Mervyn	Taylor, Robert (Croydon, N.W.)
Lewis, Kenneth (Rutland)	pink, R. Bonner	Tebbit, Norman
Lloyd, Ian (P'tsm'th, Langstone)	Powell Rt. Hn. J. Enoch	Temple, John M.
Longden, Sir Gilbert	Price David (Eastleigh)	Thatcher, Rt. Hn. Mrs. Margaret
Loveridge, John	Prior, Rt. Hn. J. M. L.	Thomas, John Stradling (Monmouth)
Luce, R. N.	Proudfoot Wilfred	Thomas, Rt. Hn. Peter (Hendon, S.)
McAdden, Sir Stephen	Pym, Rt Hn Francis	Thompson, Sir Richard (Croydon, S.)
MacArthur, Ian	Quennell, Miss J. M.	Trafford, Dr. Anthony
McCrindle, R. A.	Raison Timothy	Trew, Peter
McLaren, Martin	Ramsden, Rt. Hn. James	Tugendhat, Christopher
Maclean, Sir Fitzroy	Rawlinson, Rt. Hn. Sir Peter	Turton, Rt. Hn. Sir Robin
McMaster, Stanley	Redmond, Robert	Vaughan, Dr. Gerard
Macmillan,Rt.Hn.Maurice(Farnham)	Redd, Laurance (Bolton, E.)	Vickers, Dame Joan
McNair-Wilson, Michael	Rees, Peter (Dover)	Walder David (Clitheroe)
McNair-Wilson, Michael	Rees-Davies, W. R.	Walker, Rt.Hn. Peter (Worcester)
Maddan, Martin	Rendon, rt. hn. Sir David	Walker-Smith, Rt. Hn. Sir Derek
Madel, David	Rhys Williams, Sir Brandon	Wall, Patrick
Marples, Rt. Hn. Ernest	Rippon, Rt. Hn. Geoffrey	Walters Dennis
Marten, Neil	Roberts, Michael (Cardiff, N.)	Walters, Dennis
Mather, Carol	Roberts, Wyn (Conway)	Warren Kenneth
Maude, Angus	Rodgers, Sir John (Sevenoaks)	Wells, John (Maidstone)
Mawby Ray	Rossi Hugh (Hornsey)	White, Roger (Gravesend)
Maxwell-Hyslop, R. J.	Rost, Peter	Wiggin Jerry
Meyer, Sir Anthony	Royle, Anthony	Wilkinson, John
Miscampbell, Norman	Russell, Sir Ronald	Winterton Nicholas
Mitchell,Lt.-Col.C.(Aberdeenshire,W)	Sandys, Rt. Hn. D.	Wolrige-Gordon Patrick
Mitchell, David (Basingstoke)	Scott, Nicholas	Wood Rt. Hn. Richard
Moate, Roger	Scott-Hopkins. James	Woodhouse, Hn. Christopher
Money, Ernie	Shaw, Michael (Sc'b'gh & Whitby)	Woodnutt Mark
Monks, Mrs. Connie	Shelton, William (Clapham)	Worsley Marcus
Monro, Hector	Shersby, Michael	Wylie Rt. Hn. N. R.
Montgomery, Fergus	Simeons, Charles	Younger, Hn. George
More, Jasper	Sinclair, Sir George
Morgan, Geraint (Denbigh)	Skeet, T. H. H.	TELLERS FOR THE AYES:
Morgan-Giles, Rear-Adm.	Smith, Dudley (W'wick & L'mington)	Mr. Walter Clegg and
Morrison, Charles	Soref, Harold	Mr. Bernard Weatherill.
Mudd, David	Speed, Keith
NOES
Abse, Leo	Carter, Ray (Birmingh'm, Northfield)	Driberg, Tom
Allaun, Frank (Salford, E.)	Carter-Jones, Lewis (Eccles)	Duffy, A. E. P.
Archer, Peter (Rowley Regis)	Castle, Rt. Hn. Barbara	Dunn, James A.
Armstrong, Ernest	Clark, David (Colne Valley)	Dunnett, Jack
Ashley, Jack	Cohen, Stanley	Eadie, Alex
Ashton, Joe	Concannon, J. D.	Edelman, Maurice
Atkinson, Norman	Corbet, Mrs. Freda	Edwards, Robert (Bilston)
Barnes, Michael	Cox, Thomas (Wandsworth, C,)	Edwards, William (Merioneth)
Barnett, Guy (Greenwich)	Crawshaw, Richard	Ellis, Tom
Barnett, Joel (Heywood and Royton)	Cronin, John	English, Michael
Baxter, William	Crosland, Rt. Hn. Anthony	Evans, Fred
Benn, Rt. Hn. Anthony Wedgwood	Crossman, Rt. Hn. Richard	Ewing, Harry
Bennett, James (Glasgow, Bridgeton)	Cunningham, G. (Islington, S.W.)	Faulds, Andrew
Bidwell, Sydney	Cunningham, Dr. J. A. (Whitehaven)	Fernyhough, Rt. Hn. E.
Bishop, E. S.	Dalyell, Tam	Fisher,Mrs.Doris(B'ham,Ladywood)
Blenkinsop, Arthur	Davidson, Arthur	Fitch, Alan (Wigan)
Boardman, H. (Leigh)	Davies, Denzil (Llanelly)	Fletcher, Raymond (Ilkeston)
Booth, Albert	Davies, Ifor (Gower)	Fletcher, Ted (Darlington)
Bottomly, Rt. Hn. Arthur
Boyden, James (Bishop Auckland)	Davis, Clinton (Hackney, C.)	Foot, Michael
Bradley, Tom	Davis, Terry (Bromsgrove)	Ford, Ben
Broughton, Sir Alfred	Deakins, Eric	Forrester, John
Brown Robert C. (N'c'tle-u-Tyne.W.)	de Freitas, Rt. Hn. Sir Geoffrey	Fraser, John (Norwood)
Brown, Ronald (Shoreditch & F'bury)	Delargy, Hugh	Freeson, Reginald
Buchan, Norman	Dell, Rt. Hn. Edmund	Galpern, Sir Myer
Buchanan, Richard (G'gow, Sp'burn)	Devlin, Miss Bernadette	Garret, W. E.
Butler, Mrs. Joyce (Wood Green)	Doig, Peter	Ginsburg, David (Dewsbury)
Callaghan, Rt. Hn. James	Dormand, J. D.	Golding, John
Campbell, I. (Dunbartonshire, W.)	Douglas, Dick (Stirlingshire, E.)	Gourlay, Harry
Cant, R. B.	Douglas-Mann, Bruce	Grant, George (Morpeth)

Griffiths, Eddie (Brightside)	McElhone, Frank	Richard, Ivor
Griffiths, Will (Exchange)	McGuire, Michael	Roberts, Albert (Normanton)
Hamilton, James (Bothwell)	Machin, George	Roberts,Rt.Hn.Goronwy(Caernarvon)
Hamilton, William (Fife, W.)	Mackenzie, Gregor	Robertson, John (Paisley)
Hamling, William	Mackie, John	Roderick, Caerwyn E.(Brc'n&R'dnor)
Hannan, William (G'gow, Maryhill)	Mackintosh, John P.	Rodgers, William (Stockton-on-Tees)
Hardy, Peter	Maclennan, Robert	Roper, John
Harper, Joseph	McMillan, Tom (Glasgow, C.)	Rose, Paul B.
Harrison, Walter (Wakefield)	McNamara, J. Kevin	Ross, Rt. Hn. William (Kilmarnock)
Hart, Rt. Hn. Judith	Mahon, Simon (Bootle)	Rowlands, Ted
Hattersley, Roy	Mallalieu, J. P. W. (Huddersfield.E.)	Sandelson, Neville
Healey, Rt. Hn. Denis	Marks, Kenneth	Sheldon, Robert (Ashton-under-Lyne)
Heffer, Eric S.	Marsden, F.	Shore, Rt. Hn. Peter (Stepney)
Hooson, Emlyn	Marshall, Dr. Edmund	Short,Rt.Hn.Edward(N'c'tle-u-Tyne)
Horam, John	Mason, Rt. Hn. Roy	Silkin, Rt. Hn. John (Deptford)
Houghton, Rt. Hn. Douglas	Mayhew, Christopher	Silkin, Hn. S. C. (Dulwich)
Howell Denis (Small Heath)	Meacher, Michael	Sillars, James
Huckfield, Leslie	Mellish, Rt. Hn. Robert	Silverman, Julius
Hughes, Rt. Hn. Cledwyn (Anglesey)	Mendelson, John	Skinner, Dennis
Hughes, Mark (Durham)	Mikardo Ian	Small, William
Hughes, Robert (Aberdeen, N.)	Millan, Bruce	Smith, Cyril (Rochdale)
Hughes, Roy (Newport)	Miller, Dr.M. S.	Smith, John (Lanarkshire, N.)
Hunter, Adam	Milne, Edward	Spearing, Nigel
Irvine, Rt. Hn. Sir Arthur (Edge Hill)
Janner, Greviffe	Mitchell, R. C. (S'hampton, Itchen)	Spriggs, Leslie
Jay, R . Hn. Douglas	Molloy, William	Stallard, A. W.
Jeger, Mrs. Lena	Morgan, Elystan (Cardiganshire)	Steel, David
Jenkins, Hugh (Putney)	Morris, Alfred (Wythenshawe)	Stoddard, David (Swindon)
Jenkins Rt Hn. Roy (Stechford)	Morris, Charles R. (Openshaw)	Stonehouse, Rt. Hn John
		Strang, Gavin
Johnson, Carol (Lewisham, S.)	Morris, Rt. Hn. John (Aberavon)	Strauss, Rt. Hn. John
Johnson, James (K'ston-on-Hull, W.)	Moyle, Roland	Summerskill, Hn. Dr. Shirley
Johnston, Walter (derby, S.)	Mulley, Rt. Hn. Frederick	Thomas, Rt. Hn. George (Cardiff, W.)
Johnston, Russell)Inverness	Murray, Ronald King	Thomas, Jeffrey (Abertillery)
Jones, Barry (Flint, E.)	Oakes, Gordon	Tinn, James
Jones, Dan (Burnley)	Ogden, Erie	Tomney, Frank
Jones,Rt.Hn.Sir Elwyn (W.Ham, S.)	O'Halloran, Michael	Tope Graham
Jones, Gwynoro (Carmarthen)	O'Malley, Brian	Torney Tom
Jones, T. Alec (Rhondda, W.)	Oram, Bert	Tuck Raphael
Judd, Frank	Orbach, Maurice	Urwin, T. W.
Kaufman, Gerald	Orme, Stanley	Varley Eric G
Kelley, Richard	Oswald, Thomas	Wainwright, Edwin
Kerr, Russell	Owen, Dr. David (Plymouth, Sutton)	Walden, Brian (B'm'ham, All Saints)
Kinnock, Neil	Padley, Walter	Walker, Harold (Doncaster)
Lambie, David	Paget, R. T.	Wallace George
Lamborn, Harry	Palmer, Arthur	Watkins, David
Lamond, James	Pannell, Rt. Hn. Charles	Weitzman, David
Latham, Arthur	Pardoe, John	Wellbeloved, James
Lawson, George	Parker, John (Dagenham)	Wells, William (Walsall, N.)
Leadbitter, Ted	Parry, Robert (Liverpool, Exchange)	white, James (Glasgow, Pollok)
Lee, Rt. Hn. Frederick	Peart, Rt. Hn. Fred	Whitehead, Phillip
Leonard, Dick	Pendry, Tom	Whitlock, William
Lestor, Miss Joan	Perry, Ernest G.	Willey, Rt. Hn. Frederick
Lewis, Ron (Carlisle)	Prentice, Rt. Hn. Reg.	Williams, Alan (Swansea, W.)
Lipton, Marcus	Prescott, John	Williams, Mrs. Shirley (Hitchin)
Lomas, Kenneth	Price, William (Rugby)	Williams, W. T. (Warrington)
Loughlin, Charles	Probert, Arthur	Wilson, Alexander (Hamilton)
Lyon, Alexander W. (York)	Radice, Giles	Wilson, Rt. Hn. Harold (Huyton)
Lyons, Edward (Bradford, E.)	Rankin, John
Mabon, Dr. J. Dickson	Reed, D. (Sedgefield)	TELLERS FOR THE NOES:
McBride, Neil	Rees, Merlyn (Leeds. S.)	Mr. Donald Coleman and
McCartney, Hugh	Rhodes, Geoffrey	Mr. Michael Cocks.

Question accordingly agreed to.

Resolved, That this House, recognising the essential services provided by local government, endorses Her Majesty's Government's decision to make a substantial increase in the rate support grant to local authorities to enable their essen- tial services to develop at a reasonable rate; welcomes the help to be given to domestic ratepayers both by the biggest ever increase in the domestic element of rate support grant, and by the special relief for those worst hit by revaluation; and calls upon local authorities to support Her Majesty's Government's measures to counter inflation by avoiding unnecessarily high rate levies.