HC Deb 12 June 1974 vol 874 cc1612-5
20. Mr. Durant

asked the Secretary of State for the Environment when he proposes to publish a White Paper on the reform of local government finance.

25. Mr. Biffen

asked the Secretary of State for the Environment what further consideration has been given to the appointment of a Royal Commission on the financing of local government expenditure.

38. Mr. Pardoe

asked the Secretary of State for the Environment if he will publish a White Paper on his proposals for the reform of the rating system in 1975–76.

Mr. John Silkin

I cannot yet say what further studies of these matters the Government may undertake, or when the results will be published, but I am well aware of the extent of public dissatisfaction with the rating system in its present form. My right hon. Friend does not rule out the possibility of a more thoroughgoing long-term examination of local government finance.

Mr. Durant

Does not the right hon. Gentleman agree that this is a disappointing answer, in view of the statement made by the Secretary of State in his speech on 25th March in the House, when he implied that there was going to be a thoroughgoing rate review? Unless the Minister is made aware of feelings in the country the next strike will be a rates strike.

Mr. Silkin

I have much sympathy with the hon. Gentleman. I sometimes do not even myself listen to my replies, but in fact I said—if I may repeat the reply for the hon. Gentleman's benefit—that my right hon. Friend does not rule out the possibility of a more thoroughgoing long-term examination of local government finance—and that, I suspect, is what the hon. Gentleman was asking about.

Mr. Tomlinson

Is my right hon. Friend aware that something must be done before next year because we now have a situation in which there are increases of rates of the order of 96 per cent., which some of my constituents have had to bear and which are completely intolerable in this type of economic climate?

Mr. Silkin

Of course something must be done. One must do it with what weapons and tools are available, which take the form of the rate support grant. This situation has arisen through four factors: first, the greatest inflation in our history; second, the highest interest rates in our history; third, the reorganisation of local government; and, fourth, the reorganisation of water and sewerage services. During the time of the last Government all the opposition parties warned what would happen, and it has been our unfortunate lot to have inherited the chaos.

Mr. Biffen

Does not the right hon. Gentleman agree that the size and style of the domestic residence is increasingly unrelated to the taxpaying capacity of its occupant? If that is his view, is it his hope that the studies which may be in prospect will bring about reforms which will take cognisance of that?

Mr. Silkin

I said that my right hon. Friend would not rule out a study of the whole situation. The trouble is that there have been studies before—for example, there was the famous Green Paper not long ago, when the hon. Gentleman's party was in Government. It was, as my right hon. Friend has just said, rather a shambles. There seem to be so many possibilities that I agree that the case is rapidly being made out on the lines that we need to consider the whole system again.

Mr. Pardoe

Is the right hon. Gentleman aware that the present crisis in the rating system and in local government finance is a direct result of the criminal lunacy of reorganising local government without at the same time reorganising its finances, and that this represented a triumph for Whitehall civil servants, aided and abetted by the Conservative Government, who have long wished to destroy local democracy? In his proposals for the future will he now consider scrapping the rating system and allowing local authorities to raise their money in any way they think fit, thereby abolishing all central Government grants to local authorities with the exception of a contribution to the provincial or regional equalization fund?

Mr. Silkin

On the final point, 1 reiterate that my right hon. Friend has not ruled out a long-term study of the whole situation. On the first two points, I congratulate the hon. Gentleman on having read most of my speeches in Committee on the Local Government Bill. I commend to him every other speech I have made in the House.

Mr. Blenkinsop

I accept completely my right hon. Friend's statement about where responsibility for the situation which we have inherited should lie, but does he not agree that there is a wide consensus that we must give far more attention to the possibility of raising funds by means of income taxation as being preferable to and fairer than the rating system?

Mr. Silkin

I should be very dim indeed if I were not aware that there was a feeling in the country to that effect.

Mr. Gow

Is the Minister aware that his constant repetition of the statement that his right hon. Friend has not ruled out the possibility of a long-term inquiry is wholly unsatisfactory to the overwhelming majority of ratepayers? Will he impress on his right hon. Friend the absolute and immediate urgency of a full-scale inquiry into the whole system of local government finance?

Mr. Silkin

I am sure that my right hon. Friend has his own ideas and is well aware of the situation without my informing him of it. However, I undertake to ensure that he is made aware of the feeling in the House.