HC Deb 24 July 1974 vol 877 cc1576-8
7. Mr. Durant

asked the Secretary of State for the Environment if he will consider a freeze on rates for the financial year 1975–76.

Mr. Crosland

No, Sir.

Mr. Durant

Does not the right hon. Gentleman agree that it is essential that there must be tighter control of local government expenditure at local level, and that if that does not happen his announcement this week will be only another twist in the inflationary spiral?

Mr. Crosland

There must be tight control at local level. I have made it clear to the local authorities that next year they will be operating in a very cold financial climate. If the hon. Gentleman is seriously pursuing—I doubt it—the question of a Government-imposed freeze on all rate increases, I must point out to him that this would raise matters of the gravest consequence.

22. Mr. Arthur Jones

asked the Secretary of State for the Environment what evidence he has that some local authorities may find it necessary to demand an increased rate for the second half of the current financial year.

The Under-Secretary of State for the Environment (Mr. Gordon Oakes)

Only a few authorities have told the Department that they are considering supplementary rate levies.

Mr. Jones

Does the hon. Gentleman consider that the proposals for domestic relief announced by the Chancellor of the Exchequer on Monday require some form of monitoring of rate increases in the second half of the year, in view of the fact that these concessions are to be made to the domestic ratepayer?

Mr. Oakes

The rate relief scheme should have no effect on an authority's financial situation, since these payments go direct to the ratepayers. The scheme should not be used as an excuse to levy more rates.

Mr. Hugh Fraser

Doubtless the hon. Gentleman is aware that the county of Staffordshire, which is Socialist-controlled, will be out of pocket by £6 million by the end of the year because of inflation. This will mean a September precept, unless the Government are prepared to make a new central authority grant. I am sure that this will apply to many other counties as inflation gathers momentum as it is doing now. What statement can the hon. Gentleman make about it?

Mr. Oakes

We are aware of the problem in the right hon. Gentleman's county. Later in the year there will be an increase order dealing with some of the effects of inflation, with threshold payments and so on. I understand that I am meeting Staffordshire County Council representatives some time next week.

Mr. Allason

In cases where local authorities find that they have to increase the rates in the second half of the year, will the 60 per cent. increase for domestic ratepayers be equivalent to a 30 per cent. precept on the Government for the increases which are forced on these local authorities?

Mr. Oakes

I am not altogether clear what the hon. Gentleman means. I can tell him that if an authority levies a supplementary rate it must declare the amount of assistance that it has had from the proposals which my right hon. Friend the Chancellor of the Exchequer made on Monday of this week.

Mr. Christopher Price

Is my hon. Friend aware that because of industrial disputes about the London allowance a number of London boroughs have had great difficulty in collecting both rents and rates and have, as a result, had to borrow money at exorbitant rates of interest? Will he keep this problem under review? Some authorities may be in great difficulties in the latter part of the year.

Mr. Oakes

We are aware of the considerable cash flow problems in London. This matter is under consideration.