HC Deb 27 June 1974 vol 875 cc1721-3
Q3. Mr. Marks

asked the Prime Minister if he will set up a Royal Commission on the reform of local government finance.

The Prime Minister

My right hon. Friend the Secretary of State for the Environment will be making a statement later today on these matters during the debate on rates.

Mr. Marks

I appreciate that a Royal Commission may take too long, but is the Prime Minister aware that an increasing number of people do not accept the Conservative Opposition's dishonest campaign on rates and do not believe the Government or their local councils, but would welcome an independent review or inquiry in the hope that it would abolish the rating system and introduce in its place a tax based on income?

The Prime Minister

In reply to my hon. Friend's reference to the Conservative Party, while there is room for disagreement about the incidence of rates between particular areas on the basis of need, the total national increase in rates which the country has seen and is concerned about is exactly the same as it would have been under the Conservatives, but it is differently distributed. That being so, the Conservatives cannot say that rates have risen too much this year, because that was a decision of the Conservative Government before we came into office.

The anxiety and general cynicism that are felt about the whole rating system are, I am sure, shared by right hon. and hon. Members on both sides of the House. We all know that the position is unsatisfactory, and about 30 years of endeavour have not yet produced a satisfactory alternative. I should like to leave the question in the hands of my right hon. Friend who will be speaking in the debate today.

Sir David Renton

Is the Prime Minister aware that one particular aspect of this problem requires special and immediate inquiry? There are certain areas of the country, like the new county of Cambridgeshire, which, because of town development and new towns, are rapidly expanding and therefore have a higher-than-average educational burden but happen to be areas, generally, of below-average rateable value? There is a particular problem here worth a special inquiry. What will the Prime Minister do about it?

The Prime Minister

That is a problem also for overspill areas outside some of the great conurbations. Indeed, my own local authority probably has to bear the highest education burden because of the past high birth rate. We all know that this is a serious problem. I do not know, but it may be that when these matters are further considered the widening of local government areas will help to produce the opportunity to spread the burdens more equitably, although we all recognise that the coming into force of the new local authority areas has led to a considerable increase in the salaries paid to local government officers generally, compared with the position before 1st April. That is certainly part of the increased national burden, however it is distributed.