RATES

HC Deb 27 June 1974 vol 875 cc1791-876

Question again proposed, that the amendment be made.

6.23 p.m.

Sir Geoffrey de Freitas (Kettering)

Like the hon. and learned Member for Runcorn (Mr. Carlisle), I have received a large number of letters from constituents. Most of them on this topic have gone right to the root of the matter in criticising the rating system. I am particularly pleased at what my right hon. Friend the Secretary of State said this afternoon.

I was elected to a local authority nearly 35 years ago. At that time I thought the rating system was ridiculous. Nothing has passed since then to revise my opinion. In many ways it is far worse.

The hon. and learned Member for Runcorn spoke for a constituency and a particular county. I speak as a Northamptonshire Member. Northamptonshire has a formidable problem. Over the last five years we have had the fastest growth of any county in Britain. My friends from West Sussex, Bedfordshire and Berkshire complain that their counties have experienced a rapid growth rate too. But not one of them has had an increase of even as much as 10 per cent. in population over the last five years, whereas in Northamptonshire that growth rate has been 12 per cent.

If we look at the increase in the number of children it is obvious why the county's expenses are soaring. The number of children increases by 5 per cent. each year. That may not sound much, but the national average is only 1½ per cent. We have experienced a 5 per cent. increase in the birth rate as opposed to 1½ per cent. nationally.

It is not as if we have brought this on ourselves. The people in Northamptonshire are not exceptionally fertile. The increase is due to the people who come from London and Birmingham. The increase in the population is directly due to people coming from those places because both Labour and Conservative Governments' policies over the years have been that we should receive tens of thousands of people from those cities.

Since both Governments have done us down, the five Northamptonshire Members of Parliament—two from the Government side and three from the Opposition—have preserved a united front. I see that one of my constituents, the hon. Member for Wellingborough (Mr. Fry), is present.

On 21st May we visited No. 10 Downing Street bearing a letter signed by my hon. Friend the Member for Northampton, North (Mrs. Colquhoun), by me and the hon. Members for Daventry (Mr. Jones). Wellingborough (Mr. Fry) and Northampton, South (Mr. Morris), by the leader of the county council, by the leader of the opposition on the county council and by the chief executive officer. This was a united all-party protest. The last paragraph of our letter read: We urge Her Majesty's Government to recognise the unique position of Northamptonshire as the fastest growing county in this country and to provide additional financial relief. On the same day during an Adjournment debate my hon. Friend the Under-Secretary for the Environment who is on the Government Front Bench, in replying to a speech by the hon. Member for Daventry, made several points. I shall refer to two of them. He accepted that Northamptonshire is the fastest growing county in Britain. Indeed, he agreed that in Western Europe it has the fastest growing population of any local authority. Secondly, he agreed that we should look at the rating problems from an all-party point of view because it is a problem which has been caused by both parties.

On 12th June the Prime Minister wrote to me. The first paragraph of his letter reads: On 21 May you led a deputation from Northamptonshire to 10 Downing Street to hand in a petition and a letter setting out the case for additional financial support to the county to meet the problems associated with its rapid growth of population. The last sentence reads: your constituents"— that is, all the Northamptonshire constituents— "may be assured that the Government knows about"— the wording is important— the particular problems the county and the districts have to face in coping with the rapid growth of population. The people of Northamptonshire have suffered from both Governments. They expect particular consideration in this particular problem. They are entitled to it.

6.28 p.m.

Mr. Peter Fry (Wellingborough)

It is very rare that one can rise to speak after hearing one's Member of Parliament put one's own case. As a ratepayer living in the constituency of the right hon. Member for Kettering (Sir G. de Freitas), I find that unusual. I endorse what he said, because we in Northamptonshire constitute an extra special case.

Unlike the people in many counties, we have discovered that our rates have risen not only because of inflation, not simply because of the cut in domestic rate relief, but because of the enormous expansion programme that has been imposed on us. My constituency has experienced rate increases of not less than 50 per cent. and of up to 100 per cent.

It would be wrong to use this debate to make party political capital. The country and the ratepayers in my constituency do not want me to make a series of party political points.

When the Under-Secretary graciously received the three Opposition Members from Northamptonshire, together with the protest representatives, he said that he would take up the question of the four expanding towns and the extra help we would require. I am disappointed that he has not felt himself able to persuade the Secretary of State that extra help should be offered this year. I hope that the representations made this afternoon will mean that he thinks again on this point as to why our ratepayers are more aggrieved than those in other parts of the country. It is because the county treasurer has already announced that next year we are likely to face a further increase of 60 per cent. in our rate burden, without allowing for inflation.

It would not be so bad if the people at present living in the county were to benefit. Someone living in one of the rural areas of my constituency, who will probably have a bucket lavatory and will be waiting for a bypass to be built goodness knows when, is paying to house the people from outside the area and supply the new schools, roads and other local government services. That is why there is the gravest discontent. What good is it to a shopkeeper in Rushden High Street to be told that Northampton will be developed and that more trade will go there to the benefit of the whole county?

Therefore, the existing population are emphatically saying to the Government that unless there is more Government aid the expansion should stop. In the short term, if there is no help, I believe that there will be a cry from all the political parties and from the district and county councils to cut back existing expansion programmes. This can be done because the premise of the South-East Study is now false. London's declining population means that more people could be absorbed in the empty dockland areas, people who will be needed anyway if London Transport is not to collapse through lack of staff.

If I am told that one reason why this cannot be done is that the reduction in population is not matched by a fall in the number of households, it is about time the Government considered why the latter is not falling. My personal observation—I make no moral judgment here—leads me to conclude that the permissive society has aggravated our problems. A growing number of broken families means that husbands and wives need separate homes. Although I do not object to early marriages, young people who marry and have children at an earlier and earlier age show some irresponsibility which they turn to local government to put right.

Although I have said that we can take short-term action by cutting expansion, I should not restrict myself entirely to parochial affairs. There are three myths associated with the rates and local government. The first, which one almost always hears at rates protest meetings or when a district official or councillor makes a speech, is that we cannot cut services. Why not? For years the education and health services have been administered centrally. Would anyone put his hand on his heart and say that services in those two areas have not been reduced recently, in some cases drastically? The electorate has a perfect right to demand cuts in services rather than enormous rate increases. No council, no official, has any right to say that services are sacrosanct no matter what they cost. That is the way to ruination and it is one reason why the country is in its present dire economic state.

The second myth is that the sates are the easiest way of collecting local government finance. That is now an illusion. The strength of feeling nationally is such that the unfairness that now exists by far exceeds any merits which that argument might once have had. The public demand action. It is no good taking refuge in claims that the previous Government did nothing. The Labour Party are now the Government and it is their job to do something.

The third myth is that if too much money is paid from the centre, there will be little local independence. The real danger is the reverse. If 80 or 90 per cent. of the money spent by local government were allocated from the centre and local councils were told to settle their own priorities according to local needs within that budget, the problem would be not how to give them independence but what to do when they overspent or spent too quickly and came back for more, if they were denied the opportunity to raise money themselves.

We must therefore dispose of those myths before we investigate this knotty question. I have some suggestions for meeting the problem. It is not profitable to talk about removing this or that charge from one ratepayer. Rates are taxes, and sooner or later they have to be paid. If we were to say that someone without mains drainage should not pay for sewerage, what would we say to the childless couple about the education part of their rates? In the long run we should end up in a blind alley if we were not careful.

My main suggestion is that the bulk of local government finance should be provided from the centre. There is no one simple answer, but perhaps a mixture of direct and indirect taxation would be best. It would be wrong to transfer most of the burden simply to direct taxation. Then many small firms that are being crippled by the rates burden would pay the same amount in another way. We have to seek alternatives which would not cripple the small business.

I should like to commend the way in which continental countries finance their road building programmes. A system of road bonds guaranteed by the Government means that money is raised on the open market and the expense is taken off local authorities or the State. If it is argued that that is merely taking up resources that would otherwise be employed, I would answer that much of that money has gone into property or income bonds which do nothing to further the country's economic well-being. I commend my idea to the Government.

Local authorities must have some means of raising money themselves. That is why I welcomed the Local Revenue Bill introduced by my right hon. Friend the Member for Crosby (Mr. Page). Lotteries alone, however, are not the answer. After much thought on the subject I would defend a proportion—perhaps as low as 10 per cent.—of local finance being raised still by the existing system. I do so for two reasons. First, if local authorities can raise only 10 per cent. of their own income any large increase that they themselves have caused will be immediately obvious. A council which is profligate will soon be seen to be exceeding what others think it should spend. At the moment, if it is profligate that fact is lost in the mass of the rates. If there were still a small local element the electors could see whether councillors were doing a good job financially.

Second, in an age when the planners so largely decide our fate—decide to put a motorway within 400 yards of our house, for example, or to allow a factory to be built at the bottom of our garden—the only way that the ordinary citizen can gain redress is to have his rates reduced by appealing against the valuation. If we do away with the rates altogether, how will we recompense somebody whose property has genuinely lost value due to circumstances beyond his control? That is why, despite the major fundamental reform which must take place, some local money-raising must continue. Perhaps it should be based on the rates system.

I shall vote for the motion and against the amendment because I believe that the Government have failed. They have failed to introduce any similar measure to that of the former Chancellor which gave help to areas with extra large increases. We accept that help for any increase over 10 per cent. is perhaps too much to ask, but why not help those paying more than the national average of 30 per cent.? Why have not the Government acceded to that simple request? I shall go into the Lobby because the Government have neglected the areas with particular problems, because they have done nothing.

If the present Government and any future Government do not radically reform the rates, they will discover to their horror that they have done great harm to the cause of democracy in Britain.

6.40 p.m.

Mr. James Lamond (Oldham, East)

Like my right hon. Friend the Secretary of State I welcome the remarkable conversion of the Opposition as illustrated in the motion, in which they stress the need for a fundamental reform of the rating system. Those of us who served on the Committee stage of the Bill which dealt with local government reform will remember how often the point was made to the then Government Minister that reform of local government finance was much more necessary and urgent than reorganisation of local government. Unfortunately that plea fell on deaf ears.

Why, therefore, has there been this conversion so soon after the Tory Party lost office? It is obvious from speeches in the debate that pressure put upon Opposition Members by their constituents has forced them to abandon the stubborn stance they have taken over the years and to realise at long last that radical reform is necessary.

Unlike some hon. Members who have spoken, I cannot say that I have had a lot of letters from my constituents about this matter, because my constituency was one of those which benefited from the change made by the Labour Government. I make no bones about that. But I also make the point that I am convinced of the need for a radical change, without having to have the pressure of my constituents applied upon me. I have believed in this need for many years. During the whole of the time that I served on a local authority, including my years as chairman of its finance committee, I considered that the present system was unfair and must be changed. There has been resistance to this proposal for a long time.

We have heard today one of the defences of the present system—almost the only defence—that it is simple to operate and that it is easy to collect the rates. But the mounting cost of local government has forced us all to try to ensure that a radical change must be made. We need not take a blind jump into a new system which is completely untried. This matter has attracted the attention of many local authority bodies, including the International Union of Local Authorities, for many years, and on a number of occasions reports have been prepared comparing different rating methods used throughout the world.

I attended a conference in Vienna in 1969. I admit that that now seems to be a little out of date, but at that conference we were presented with an extensive report of the rating methods used in no fewer than 33 countries. Those methods varied widely, as one would expect. The method used in this country was not very popular. Only three other countries used our system in the main—South Africa, Canada and to a great extent the United States.

The difficulty of our system is that because it is based on the taxation of owners or occupiers of property it is not at all buoyant. It does not expand with a buoyant economy. That is the difficulty from which all the complaints about it stem.

At the conference to which I have referred, the system which was most popular, and which was demonstrated to be the most efficient was that operated in Sweden and Finland. That was a local income tax system which gave the local authority the greatest flexibility, allowing it to select the tax, within certain limits, which it wished to apply. There were limits to the amount which could be applied to any individual's income tax, and those limits were recognised as necessary by all the local authority representatives who took part in the conference. It was recognised that while local authorities would wish to be able to fix their own rate of tax and the amount to be collected, they must operate within a total national taxation policy of the central government and that restrictions must therefore be imposed. There are rating methods much superior to that used in this country.

My right hon. Friend the Secretary of State today indicated that he is to instigate an inquiry and that he will try to do this as quickly as possible. He said that he would not have a Royal Commission because of the time it would take before it reported. I suggest that members of the inquiry should be given details of rating methods used throughout the world to enable them to make comparisons and to look at systems which are not untried but which have been used for many years. The members of the inquiry would be able to compare the efficiency or otherwise of other systems as against our own.

We should recognise that local government plays an important part in the affairs of our constituents and that it should be given the utmost freedom to carry out the voters' wish. In giving local government freedom, we must relinquish some of the control we have over it.

I am sure that everyone interested in focal government will give a warm welcome to my right hon. Friend's announcement of an inquiry. That decision is many years late—perhaps both sides of the House should take blame for that—but it is nevertheless a welcome move.

6.48 p.m.

Mr. Percy Grieve (Solihull)

I am deeply disappointed that the Secretary of State has not today promised us a measure of interim relief immediately for those adversely affected by the actions taken by the Government this year. My disappointment arises because my constituency is one of the worst affected, and the way that Solihull has been treated by the Secretary of State lends a great deal of substance to the charge which the hon. Member for Stoke-on-Trent, South (Mr. Ashley) referred to when he said that the Government were being accused of injustice and callous indifference.

In Solihull rates have gone up by 92 per cent., 36 per cent. of which was due to the direct arbitrary action of the Gov ernment in withdrawing £1,500,000 from Solihull's rate support grant. The arbitrary nature of the decision can be seen in a West Midlands context when we compare what happened to Solihull, a metropolitan district in the West Midlands metropolitan county, with what has happened in other metropolitan districts in the area. Only two, Birmingham and Walsall, have benefited from redistribution of the rate support grant. They have benefited to the extent of £4,376,000. The other five areas within the metropolitan county have lost £3,450,000, of which Solihull has lost £1,500,000.

It is absolutely crazy that parts of Birmingham—such as Sutton Coldfield, which is in a similar situation to Solihull and has a similar kind of residential district and similar problems of development—should have benefited by the Government's arbitrary measures while Solihull should have been disadvantaged in the way it has.

I said that Sutton Coldfield has similar problems to Solihull, but that was an exaggeration and indeed perhaps a misstatement in favour of Sutton Coldfield and other parts of Birmingham, because Solihull is a rapidly developing area with considerable problems of its own in trying to deal with a growing population. In this context, if I may take the words from the right hon. Member for Kettering (Sir G. de Freitas), I believe that the people of Solihull are themselves responsible for the growth of their population. The school figures for 1972–73 were 39,145, for this year they are 41,494 and for next year it is expected that there will be another 5,600 pupils.

In addition, the newly created enlarged district of Solihull has an enormous financial burden resulting from a large overspill population at Chelmsley Wood of people from Birmingham desperately needing schools, social services, libraries and all the other things with which local government should and ought to provide them.

I speak passionately in the cause of Solihull, but everyone here has problems of a like kind. In the circumstances, it is extraordinary that there should have been no recognition by the Government of the damage they have done by the redistribution of the rate support grant this year and by their refusal to give a measure of interim relief from it. There was a time when it was possible to obtain transitional grants in matters of this kind. No transitional grant is offered this year. Why not? It surely is not beyond the bounds or means of the Department to tide over local authorities in this position with transitional grants.

I echo the words of my hon. and learned Friend the Member for Runcorn (Mr. Carlisle) in saying that the Secretary of State has been singularly reluctant to receive a deputation from Solihull to put to him its problems and the way in which it has suffered. Not surprisingly, the people of my constituency are angry and bitter at the way they have been treated. Like many of my hon. Friends, I have heard threats to withhold rates, and I have stood out against such threats. But the Government have only themselves to thank for such threats when they supported the illegal activities of the councillors at Clay Cross and the Leader of the House himself came out in their support.

These matters have been raised not by me but my constituents with me in threatening action of this kind. I hope very much that the inquiry which we are promised into the rating system will be speedy and urgent. I hope that we shall have interim relief before long.

6.53 p.m.

Mr. Kenneth Marks (Manchester, Gorton)

The interesting thing about the debate so far is that while Tory Members have talked about their constituency problems not one has mentioned the rates actually paid in their constituencies. Part of my constituency had a rise of only 1p in the rates this year, and the rates are now 58.8p in the pound. The greater part of the constituency paid 35p last year and this year it will pay 52.3p, a considerable increase of 17.3p.

I served on the Standing Committee which dealt with the Local Government Act 1973 and I have attended all the rate support grant debates since I first came to the House. I can only describe the Conservative position as one of ineptitude and delay in government and hypocrisy in opposition. It is one of ineptitude and delay because the Act under which the new grants were to be made was pro duced a year later than it should have been. The Green Paper was produced in 1971. In the Gracious Speech of November 1972 we were promised a Bill. It did not appear until November 1973, and then we were told that it would have to be rushed through, because if we did not get on with it the local authorities would not know what their grants would be, and so on.

The Conservative Government mixed up all kinds of things in that measure, including an ombudsman for local government. It was described by the Minister responsible as five Bills in one. We co-operated in getting it through the House even though we put down important amendments designed to provide an alternative to the system and to assist the ratepayers. Before the Bill became an Act the Conservative Government informed the local authorities of the proposed rate support grant.

At the end of December 1973 the right hon. Member for Altrincham and Sale (Mr. Barber) brought in new cuts and there had to be a new rate support grant. On 22nd January 1974 the Conservative Government announced a new figure, and the present Government have kept to it. The total of the grant which the councils receive themselves as opposed to individual ratepayers on the individual domestic rate is exactly what the Conservative Government proposed.

Only one change was made by the new Labour Government. In the determination of the 7 per cent. applying to domestic rate relief, the Government thought it unfair to subsidise some domestic ratepayers—some of them well off, some even with two homes—as much as six or seven times as the city dweller. Rightly, therefore, the Government gave the citizens of Liverpool, Manchester, Birmingham and elsewhere a 13p domestic rate relief. That was social justice. But, of course, it meant some increases elsewhere. Yet not one Tory Member has said exactly how much. All Opposition Members who have spoken have merely quoted percentages.

Mr. Maxwell-Hyslop

The hon. Gentleman says that none of us has stated how much. In my constituency we are having to pay 15½p in the pound more, entirely as a result of the change made by the Government and for no other reason.

Mr. Marks

The hon. Gentleman had not yet spoken when I made that point, and he still has not given the figures for the rates paid last year and those which will be paid this year. I have accused the Opposition of hypocrisy. It emerges very early in the motion in the call for a fundamental reform of the system, for interim relief this year and for water and sewerage to rank for rate rebate. The Opposition could have done every one of those things before 28th February. But they did not. Instead, Conservative Members went into the Lobbies time and time again in support of their Government probably not even knowing what they were voting about. They opposed our amendments to the Local Government Bill and to the Water Bill.

On 25th March last the rate support grant was put up for approval or rejection by the House. The present Leader of the Opposition voted against it. So did the Liberals—perhaps all of them. But 70 Conservative Members were missing. Where were they? Why did they not oppose the grant, as their leader did? This is hypocrisy. It is "phoney" war.

There was dishonesty too during the General Election. On 20th February the right hon. and learned Member for Hexham (Mr. Rippon), then Secretary of State for the Environment, issued a Press release. In it he said that there would be no rise in rates of over 9 per cent. That statement was completely untrue. It was not even what he had earlier said in the House.

I want now to deal with the problems of Greater Manchester. Most of my constituency is in the new metropolitan borough of Tameside, which has particular problems because it is a new borough with no former county borough basis; it is like Trafford and Knowsley in the Merseyside area. In the part of the borough in which I live, the rates have gone up from 35p to 52.3p. The prospective Conservative parliamentary candidate has sent telegrams to the local newspapers from London, where he lives, saying that this is because of the wastefulness and extravagance of the Labour-controlled council.

On the other side of Manchester there is the metropolitan district of Trafford, and there the rate has gone up from 35.7p to 55p, an even bigger increase. Whose fault is it there? According to the hon. Member for Stretford (Mr. Churchill), it is all the fault of the Labour Government. They cannot both be right. The fact is that they are both wrong. I shall give way to the hon. Gentleman, though I assure him I have not yet finished with him. Without that level of rate, neither Trafford nor Tame-side council could have done the job which the Conservative Government placed on them. The hon. Member for Stretford spoke in the House on 25th March. Let me deal with his speech and the so-called information he has given to his constituents and the Press. Either he has an immense lack of knowledge about the rating system or he has an intention to mislead the House.

I suggest that the very numerous claims made by the hon. Member of cuts that would be forced on the Trafford council because of the Labour Government's decision were entirely misleading. He read from a statement by the chief executive officer but he did not tell us the date of that statement, which complained that There would be redundancies of staff; including professional staff; replacement and maintenance provision would have to be reduced to levels which would result in forced deterioration of property … there would be no grants to voluntary bodies. One of the two teaching centres would have to be closed … In the public health service, reductions would involve significant staff vacancies, including five public health inspectors …—[OFFICIAL REPORT, 25th March 1974; Vol. 871. c. 127.] All those were cuts that were insisted upon by the hon. Gentleman's colleague in the Trafford borough, his right hon. Friend the Member for Altrincham and Sale (Mr. Barber). These were the cuts he was proposing on 17th December, cuts which the hon. Member for Stretford went into the Division Lobby to support.

Mr. Churchill

The hon. Gentleman has not stated the facts as they were. As he will see if he reads the relevant part of the OFFICIAL REPORT, the letter from the chief executive of Trafford district from which I quoted at the time of the last rates debate was based on cuts that would have been required had the council sought to remain within the 9 per cent. increase within which the previous Government had indicated in their letter to me it was their firm intention to remain. This is why the hon. Gentleman is misleading the House. As regards his earlier point, he suggests that there was a similarity between the Tameside situation and the Trafford situation. This is not so. In the case of the Conservative-controlled Trafford authority the expenditure from local government reorganisation resulted in a saving of £1½ million.

Mr. Marks

The hon. Gentleman is saying that those cuts should have been restored. He voted for them. He is saying that it was quite impossible for the Trafford borough to carry out its task with a rates increase of only 9 per cent., given the grants which the Conservative Government had sanctioned and which we maintained. So far as Trafford was concerned the domestic rate relief was different by only 1½p. I asked the right hon. Lady the Member for Finchley (Mrs. Thatcher) if there would have been any extra money coming from the Conservative Government had that party won the election. The answer is there would not be any extra money, because the Conservative Government were, perhaps in their view rightly, insisting on cuts in public expenditure and not more expenditure. But I suggest that those cuts were published in a Press release by the Department of the Environment on 4th February 1974.

The hon. Gentleman has said the Conservative Government were determined to ensure that rate increases for householders in Trafford were limited to 9 per cent. compared with last year. But he has not brought any evidence, and neither has the right hon. Lady, that that would have been the case. Whatever my right hon. Friend might have done, it would have been quite impossible for Trafford, Tameside or a vast number of authorities to have restrained the growth in rates to 9 per cent. In any case it would have been in the neighbourhood of 50 per cent. for both Trafford and Tameside.

I want to thank my right hon. Friend for accepting the proposal that there should be an immediate review. I believe that for next year he should examine whether water should not only be separated from local government expenditure but should be precepted directly to the Government from the water authorities. I also welcome his statement that local authorities with particular problems resulting from local government reorganisation—Trafford and Tameside are similar here—will have special recognition. I hope, however, that the Inland Revenue will not altogether be taken out of the reckoning when this is being examined and that someone from the Inland Revenue will serve on the inquiry, because in the end we want to see a change from an unfair system of rates to a fairer system of taxation on income.

The figures are remarkable. If we did away altogether with domestic rating and transferred it to income tax, the increase in the tax rate would be only from 33 to 37½ per cent., so that anyone now paying £10 tax a week would pay only £70 a year more and not a domestic rate. This is the main thing we should examine.

7.7 p.m.

Mr. Anthony Steen (Liverpool, Wavertree)

I am proud to succeed a man so respected in this House, so loved in his constituency and with such a reputation for public service in this country and overseas. Sir John Tilney was Member of Parliament for Wavertree for 24 years. He had the special distinction of speaking not only in this House but immediately outside it in Parliament Square at the unveiling ceremony of the statue of Sir Winston Churchill, having played a great part in seeing that it was built there. He set a high standard and established a great reputation in Wavertree with his wife, Guinevere. I hope my wife, Carolyn and I will be able to live up to this standard in forthcoming years.

I have delayed intervening in this House for some time, as some hon. Members may have noticed, awaiting an appropriate opportunity to bring to the notice of the House a serious and grave issue, one which has a direct bearing on this debate, which faces my constituency, the city of Liverpool, and the major part of this country. Since John Tilney's day the size of local authority districts has greatly changed. In his day people identified with a small unit which was accessible and comprehensible to them. These small units have now been superseded by giant authorities where fundamental decisions on strategic policy affecting the lives of ordinary people are taken by what seems to them a remote authority no longer representing them.

It is this lack of identity and sense of distance from those who make decisions that is creating an alienation foreign in this country and endangering the democratic process. Post-Beveridge and more recently post-Seebohm we have seen new and increasing pressures placed on local authorities by this Chamber which in turn have given rise to new levels of expenditure. In 1963 the rate per head, including central Government grant, was £48. By 1972 this figure had risen to £128. The location of power and the ratio between central Government and local government expenditure have also changed in that today more than 65 per cent. of all public expenditure is incurred directly by central Government. This in turn results in over-dominance of central Government on the local authority and of the local authority on the community.

Does this increase in dependence on central Government matter? I believe that it does. It takes away local authority control in determining the destiny of the people whom it was elected to represent. This undermines the democratic process which is at the cornerstone of our local government system and is admired by countries throughout the world.

But perhaps more important—a view which I imagine is shared by hon. Members on both sides of the House—it takes away the self-reliance, motivation and willingness of the individual to take action for himself and for his neighbours. It also reduces his incentive to take action for the benefit of the community.

If the increased power of central Government had removed injustices at local level there might have been some justification for the Government's financial dominance, but that is not borne out by the facts. More than 4½ million people live in more than 1¼ million homes which are unfit for human habitation. One in six homes lacks one or more of the basic amenities. In Liverpool, 5 per cent. of the population live in overcrowded conditions, according to the 1971 census. It has been estimated that about 30 per cent. of the disabled still do not get help. About 43.6 per cent. of all children leave school without educational attainment, and 2 million adults are estimated to be illiterate. Tens of thousands of old people remain isolated and neglected, and an increasing number die alone. During 1972 at least 7 million supple- mentary benefit claims were made. The social conditions in which our people are living are a terrible indictment of our times, and the situation is getting worse.

Surely the time has come for a radical reappraisal of how we spend public money at local level and what level of services can be expected to meet the demands of a primarily urban society. It is apparent that public services are not tackling the fundamental human and urban problems, but are designed, albeit unintentionally, to reinforce the dependency syndrome to which I have already referred.

I want to suggest an entirely new style, new process, new social philosophy—not a new political party—to tackle this kind and scale of problem. I can claim firsthand experience of what I am advocating as a youth and community worker and founder of Task Force.

Task Force has recruited about 100,000 young volunteers in London alone to care for neighbours and to befriend the old, the lonely and the handicapped. It has reinforced the importance of involving young people in understanding and caring for the needs of the individual and shows what can be done.

I think that you, Mr. Speaker, know the importance of this work, having been actively involved in helping to found Task Force. The Prime Minister—if he were here—would recollect, as would my own Leader—if he were here—the all-party programme that was launched from 10 Downing Street six years ago—YVFF—the Young Volunteer Force Foundation. Lord Houghton of Sowerby, formerly of this House, the right hon. Member for Orkney and Shetland (Mr. Grimond) and you, Mr. Speaker, played a major part in building YVFF into the largest major community work foundation in Britain today sending small teams of community workers into areas of severe urban stress where the ordinary channels of communication have broken down. There they tackle social anomalies through a variety of action projects and have helped to reduce risks to the community. It was my privilege to be involved as director of that foundation since its inception. I retire from that post tomorrow.

It is this spirit of social responsibility, kindled by YVFF, Task Force and many other similar community organisations, which may provide some guidelines on how to handle the problems of alienation and resentment which are now so prevalent and increasing rapidly.

The changes that I am advocating at the local authority level would see a new style of approach adopted which would engage every person in the decision-making processes and evoke hope within them that they have power over their own destinies. This spirit of hope opens new political possibilities. Instead of public philanthropy, which some of the major Government community programmes of recent years have offered, resources could be used by communities, especially for residents in high stress areas, in a way which would bring dignity instead of despair.

I have been trying to persuade the Liverpool City Council to encourage the tenants of a new council estate known as the Belle Vale Estate—rather inappropriately named—to tackle their own problems: for example, vandalism in car parks, lack of play facilities, refuse bins on fire, no grass and no trees, unmade-up roads, and broken pavements.

I have asked the Liverpool City Council not about administrative reorganisation but about adopting a completely new way of thinking. Instead of waiting for officialdom to take action—now almost too late—the new approach could have had an immediate impact.

It is not only housing estates that produce some of the worst urban problems, but new constructions like the Rocket Flyover in my constituency at the end of the M62. The Department went ahead with that without utilising the knowledge or experience which has been accumulated over past years. It did not properly consult the residents, and this has directly affected the attitude of local people. The residents have still not had a rate reduction, their homes are still not sound-insulated, they do not know when they are to get compensation, telephone kiosks have been removed overnight, trees have been dug up without authority, and the site office, which is there to establish good relations with the community, is just failing in its public relations.

Public participation is still regarded by many as a hindrance and delay rather than as an enrichment of the democratic process. This short-sightedness and lack of vision directly results in huge social and financial costs. This can be illustrated in the acceleration of rate expenditure. Officials are being paid to handle a deluge of dissatisfied and unhappy ratepayers who, understandably, are complaining about the blunders of officialdom which could have been avoided if genuine participation had taken place. The community and the ratepayers pay twice: first for the blunders and, secondly, for the face-saving operations which follow.

Public participation and community involvement would make public services less expensive. I speak from experience of 14 years of community work at the rock face, the grass roots—call it what one will. More community involvement could result in a saving of expenditure which we all so much desire today.

The cold hand of bureaucratic indifference has stifled the latent British talent of finding solutions to urban problems. I recognise that it is possible to justify the increased size and scale of local authorities, but that does not absolve them for failing to recognise the attendant problems that result.

By mobilising local people to do things for themselves, it is possible to envisage neighbourhood development groups which would have delegated powers from these huge councils and be responsible for the day-to-day running of council estates. The make-up would be heavily biased towards the people in the local community and the leaders of the community groups. By all means let us have professional guidance from the social work area team leaders, the local councillors and someone from the treasurer's department to see that the books are in order. But they must have power and money to deal with the blocked gutter and the broken paving-stone, to plant trees. finance play schemes and run community centres. They would have their own labour force. They would be there for and of the people. This would introduce an important new element into local government with which people would be able to identify and feel once more that the neighbourhood was truly part of their lives.

Unless we introduce this kind of innovation the nerveless hand of bureaucratic inertia will demand more money from us for a poorer quality service and at ever-increasing cost. The decision facing the House today is whether it will send a message of hope to all those people who have come to despair of politicians and Government.

7.19 p.m.

Mr. Joseph Dean (Leeds, West)

May I first apologise for the wording I used in an interjection during the speech of the right hon. Member for Finchley (Mrs. Thatcher). My wording was perhaps not correct. If any offence was taken at my use of non-parliamentary language, I offer an apology.

Looking at the signatories of the motion, I am rather surprised to see the name of the Leader of the Opposition. I have had some experience of dealing with rate support grant negotiations over the last two years as a representative of an association of local authorities. I should not have thought that the Leader of the Opposition was the best person to become involved in predictions of rates and at what figure they ought to be levied.

The Leader of the Opposition made a speech on 13th December, 1972 at a luncheon to celebrate the centenary of the Association of Municipal Corporations. Quite a number of Cabinet Ministers were also there in support of the right hon. Gentleman, who was then Prime Minister. At that time the worry about rates was the effect of the revaluations. An average revaluation of two-and-a-half times the original rateable value was being done nationally. The then Prime Minister said in his speech that he saw no reason why, because of revaluation, rates would increase at all.

It was just after that time that the imbalance in the rate support grant formula showed itself so drastically biased against some areas that a deputation from the large conurbations went to see the right hon. Gentleman, who agreed that the formula showed that instead of receiving 58 per cent. of their expenditure in rate support grant some authorities were receiving a proportion as low as 39 per cent. The then Prime Minister conceded that this was a very grave injustice which ought to be put right.

But what did the right hon. Gentleman do? That was in January 1973, three or four months before the rates were to be levied by the local authorities. He said that the time factor would not allow for any such alteration but that it would be put right by the Government in the 1974–75 rate support grant negotiations. Those negotiations started to emerge last autumn. They were based almost identically on the grants that have been levied, or a portion of them, by the Secretary of State. But what happened? The money had been apportioned and it was obvious that if the large conurbations which were then to receive domestic relief of 7p were to be given a further 6p or an across-the-board 13p levy, it could be done only at the expense of some authorities that were receiving a tremendous amount of domestic rate relief. Some authorities which are now receiving 13p, like others, over the last two years have suffered rate increases of tremendous dimensions.

Conservative Members have spoken of the action of the previous Chancellor in helping certain areas in distress. But he did not help any of the large conurbations which sent representatives to see him. The equalisation that has been brought about is entirely just. In the financing of local government there will have to be a great increase in the amount of money that is found to enable local government to operate. That is why the motion is almost meaningless. A large number of hon. Members were absent from the House when the subject was debated some time ago. It is clearly very difficult for a Conservative Member who represents a city constituency which has now received rate relief at a level that it ought to have had years to go into the Lobby in denial of that and then to have to tell his constituents in, for example, Leeds, Liverpool or Birmingham that they must find another £3 million or £4 million because they will not get the same domestic rate relief as, for instance, Yeovil, Cornwall and similar areas.

I am not crowing about the fact that the rates of some people have risen dramatically. I understand their chagrin and dismay. In the major conurbations, however, one still finds that the person living in an ordinary three-bedroom house is still paying more in rates than someone living on the periphery in one of the metropolitan districts who is occupying the same type of house.

I could not understand the point made by the hon. and learned Member for Runcorn (Mr. Carlisle) when he said that one of the grumbles in his area was that people had no facilities in return for their rates. If that is so, why do they need this massive injection of rate relief? What is it for if they have no facilities?

I welcome the Secretary of States' announcement that he is to set up an inquiry. I hope that it will report very quickly indeed. In view of the rate of inflation there is a sense of urgency, and this matter cannot wait for 12 or 18 months. There has now been enough examination of the alternative forms of financing local government for us to come up with something better than the present rating system.

However, overnight the Secretary of State has put right a grave injustice. It is unfortunate that some authorities were made to suffer. But it is still only a measure of justice. People in inner London boroughs are still paying higher rates, as a proportion of outgoings from the family budget, than those living in outer London boroughs. A person living in the centre of Birmingham will be paying out more in rates than people in the constituency of the hon. and learned Member for Solihull (Mr. Grieve) and those in many other constituencies. This is part of the imbalance that has always existed. Part of it has been put right.

When I began my speech I was not sure that I was following a maiden speaker. I have been informed that I have done so. I should like to compliment the hon. Member for Liverpool, Wavertree (Mr. Steen) on a very good maiden speech. Clearly, as a social worker and in view of all the work he has been doing, he has tremendous knowledge of the subject and an appreciation of people's rights to run their own affairs. I compliment him on the content of his speech. We shall look forward to hearing him again.

7.28 p.m.

Mr. W. Benyon (Buckingham)

I start by adding my congratulations to my hon. Friend the Member for Liverpool, Waver-tree (Mr. Steen) on his maiden speech. His predecessor as Member for Wavertree was held in great affection by the House. From what my hon. Friend has said this evening, it is clear that we shall be look ing forward to hearing him many times in the future.

Criticism of the rating system is not new. It has been rising steadily over the years. It has concentrated on two main aspects—first, that not everyone pays rates; second, that rates are not a buoyant tax but a regressive tax. When rates were low these criticisms were muted. It is only since the imposition has increased that we have the situation in which this tax imposes quite unacceptable burdens on certain citizens just because they are householders.

Like many other hon. Members, I have had a number of letters and petitions on this subject—more than I have had on any other issue since I became a Member of the House in 1970. Although local authorities realise the situation, they are relatively powerless to do anything about it. I have been working in local government for 10 years. That experience has taught me that most councillors are more concerned with keeping up the standard of services than with effecting economies in expenditure.

I was most interested when the hon. Member for Stoke-on-Trent, South (Mr. Ashley) raised the problem of the threshold agreements, because these are adding, and will continue to add, an enormous extra burden on local authorities. Yet all the alternatives to the rating system have significant disadvantages. Although I believe that some form of locally-based income tax or sales tax will eventually come, while retaining some form of property tax, these changes cannot come quickly, as my right hon. Friend the Member for Finchley (Mrs. Thatcher) explained. Therefore, these are no easy solutions to our present problem.

I was pleased to hear the Secretary of State refer to the inquiry he is to set up, but apparently it cannot report until 1975 and cannot, therefore, help us in our immediate difficulties. I believe that the last Government were right to introduce a variable rate of domestic support. It was an attempt, albeit an imperfect attempt—and we all realise that—to iron out some of the special problems of individual authorities. In my county, Buckinghamshire, it took into account the loss from that county into a neighbouring county of a high rated area. It also took into account the point made by two Northamptonshire Members that we are establishing a new city which requires very heavy initial expenditure, and, therefore, imposes a heavy burden in these early stages of development. Even with this variable relief the domestic rate increase would have been substantial, and industry and commerce, of course, would have been subject to the full amount. That point has not been raised today and is sometimes overlooked. Then, for reasons best known to themselves, the Government swept it all away, and in my constituency that meant an extra imposition on the domestic ratepayers under my two local authorities of 8.5p and 7.5p respectively.

My right hon. Friend was correct to say that there could be no return to the original levels of domestic support. That would be impossible. The only answer that makes sense, therefore, is for additional relief to be made available during the second half of the current financial year so that at least the worst inequalities can be removed.

There is one other aspect I wish to raise which the House should consider carefully. Nothing typifies more the general character of this country or the way we run our affairs than the way the taxes and rates are paid by the population. That is now at risk. I have been approached over the last few weeks by responsible people asking for my support for some form of rate strike, and citing instances where this has been done elsewhere. I have strenuously refused to have anything to do with this because the law is completely indivisible. We cannot obey some parts and disobey others, in spite of the examples I have referred to. If, on top of the strains imposed by inflation, the ratepayers of this country are to be subjected to this additional unjust imposition we are courting disaster. On behalf of my constituents I must tell the Government that it does not matter what they do, but they must do something, and they must do it quickly.

7.35 p.m.

Dr. Edmund Marshall (Goole)

I wish to address a number of remarks to my right hon. Friend the Secretary of State over the broad canvas of the need for a complete reform of the rating system as it affects the domestic householder. There is no doubt that the recent anger we have seen throughout the country—and this has been particularly acute in my constituency—is directed to the fact that the whole system is anachronistic, unjust and quite inadequate for providing the necessary finance for modern local government.

It is a system which goes back to the Statute of Artificers of 1601 in the reign of Good Queen Bess. It is a system of regressive taxation, taking no account of people's ability to pay and bearing particularly hard on retired people with fixed incomes which are declining in real value.

As my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) said, the system takes no account of the number of people who are resident in a property or the number of income earners there. It is a system based wholly on hypothetical criteria like the fictitious rent of a property, and people find it ludicrous that they should have to contribute more to the running of local authority services simply because they have more windows or because they install central heating or make other adjustments to their house. Coupled with these factors is the fact that the rating system is not generally understood. Hon. Members will gather from the correspondence they have received on the subject that people are almost completely unaware of how the system operates, and I have found an increasing number of people who do not know how to go about getting a reduction in the rateable value of their property.

Because of this unpopularity the system puts a severe brake on a lot of initiative that should be shown by local authorities. Local authorities see the need for better roads and better schools, or water authorities see the need for new enterprise in particular areas—the introduction of new sewerage schemes, for example. Yet all this is damped down because of the effect that the authorities feel it will have on the local rates. Because the rating system is unpopular there is less inclination on the part of people to press local government for necessary improvements in their areas. Their way out of the dilemma is always to call for increased financial help from the central Government, so that when some new initiative is required to expand local authority services the initiative is always left to the Government.

This leads to arguments over the rate support grant and dispute with the central Government over who should pay what. In any alternative system which is designed to replace the present rating system, finance must as far as possible be given a local base. I believe strongly in the principle, which is perhaps a constitutional one, that he who pays the piper should call the tune, and therefore the person who tries to call the tune in local government should essentially be the one who pays the piper.

The difficulties caused by the rate support grant in certain areas stem from the fact that the money is coming from the central Government to pay for a lot of schemes which are determined locally. There difficulties are reflected in some of the sections of the Kilbrandon Report on the Constitution where it discusses the possibilities of financing the new regional authorities, and all these difficulties apply with equal force to the system of financing local government.

I think, therefore, that those who cry out for a transfer of the cost of main local authority services to national funds are dodging the issue and that if there were to be a transfer of the cost of, say, education we should seriously consider whether it would be right for education to be maintained under the control of local government.

If we are to maintain local government in its present form, with its present functions, we must have a financing of local government based on locally-raised revenue for those specifically local purposes. I agree with the right hon. Member for Finchley (Mrs. Thatcher) that the Chancellor of the Exchequer must have overall control of public expenditure because of the need to operate demand management in the economy as a whole, but I think that with that one proviso we must have the greatest possible local flexibility in the financing of local government.

My right hon. Friend the Secretary of State announced this afternoon the setting up of a committee of inquiry with the broadest terms of reference into the whole of local government financing. I welcome the decision to set up the inquiry but I am a little worried about the breadth of its terms of reference. As one of my hon. Friends said, most of the information is already available. The matter has been talked over for many years. Even though the Green Paper was a very green document in metaphorical terms, at least the information is there.

I hope that the committee may be given more specific terms of reference, and told to direct its attention to particular means of raising local government revenue and the practicalities entailed so that when the report becomes available an alternative system can be put into practice rapidly.

As I consider all the various alternative ways of raising local government finance, I have no doubt that the only equitable solution to the problem is a local income tax. I find that that solution has the widest agreement among the people of my constituency. It would be a buoyant means of taxation. I agree with my hon. Friend the Member for Oldham, East (Mr. Lamond) that we should examine particularly how local income tax is applied in Sweden and Finland. I hope that details of the system there will be scrutinised by the committee of inquiry so that it can make detailed recommendations on how it might be applied here.

Mr. Daniel Awdry (Chippenham)

I agree with the hon. Gentleman—I think that some form of local taxation is the answer—but does he think that it would be centrally or locally organised and administered?

Dr. Marshall

I was just coming to those points. I think not only that local income tax would be widely acceptable but that in general it would be far more easily understood, certainly much more easily understood than the present system. Therefore, it would be a system that people would be prepared to operate.

There are difficulties in the application of such a tax. We should have to look into the details of how it would be raised. Would it be operated through the Inland Revenue? Would the collection of local income tax be carried out at the same time as the collection of national income tax, with a return from the Inland Revenue to treasurers of local authorities? All those practical difficulties must be ironed out within the terms of reference of the committee. There would be much more work for employers who operated PAYE systems as their personnel departments would have to take into consideration all kinds of factors, such as the local authority areas within which employees lived.

In addition there would be the need to retain a means of Government support to equalise the local income tax revenue to different local authorities. It would be wrong for some local authorities to be penalised because people in their areas had much lower incomes than people elsewhere. That problem could be dealt with through the machinery of the resources and needs elements of the present rate support grant. I would retain the rate support grant in that form, but I should like to see as far as possible the rest of local government expenditure depending on locally-raised revenue by means of a local income tax.

I hope that the committee will do its work not only rapidly but in great practical detail and that it will go particularly thoroughly into the means of raising local income tax, which I see as the only remedy to the desperate situation in which we are placed.

7.46 p.m.

Mr. James Allason (Hemel Hemstead)

In Hertfordshire there is unprecedented dismay over rating. Domestic ratepayers in my constituency face increases of up to 40 per cent., a figure which represents personal hardship for many people. Those increases, combined with earlier rate increases, of which Hertfordshire has had more than its fair share, have meant that Hertfordshire has recently suffered desperately in the matter of rates.

The result is that, instead of paying 4 per cent. of their income in rates, most people find themselves paying 6 per cent., which is equivalent to an extra week's pay being taken from them each year. That is intolerable.

Mr. John Ovenden (Gravesend) rose—

Mr. Allason

I will not give way. I promised Mr. Speaker that I would take four minutes, and I intend to keep my promise, as so many other hon. Members have tried to do.

What is the Government's feeling about capital expenditure? The previous Government called on local authorities to reduce their capital expenditure by 20 per cent. What do the Government say to a local authority which instead raises additional rate poundage to spend on capital projects? Is that legitimate, or is there a justifiable complaint against an authority which does that, and does it in a substantial way?

Some parts of my constituency are in the area of the Anglia Water Authority, which charges a 6.8p water rate, whereas other parts—happily, most—are in the area of the Thames Water Authority, which charges a 3.8p water rate. One can understand the immense discontent felt by people over that difference, which depends on the watershed on which they are situated.

What is the position over consumer consultation for the water authorities? I know that they report at the end of the year, but is there not a case for a consultative body, such as exists in other industries, so that there can be some protection for the consumer against possible extravagance by authorities?

I cannot now deal with what will happen next year. However, there is still time to put matters right this year. The Secretary of State has made a £200 million switch from the rural areas to the urban areas, and he could not take it back again even if he wished to. But he can introduce a rate support grant increase order to restore to the rural areas what has been taken from them. If he does that in time for the autumn rate demand he can remedy the situation. I ask him to do that, and my constituents demand that he does it.

7.50 p.m.

Mr. John Ovenden (Gravesend)

We have heard today some tremendous examples of humbug. We are faced with a motion which is a supreme example of political opportunism. We on the Labour benches have not spent the past few months bemoaning the inheritance willed to us by the former Government, because that inheritance was probably no worse than that which we should have expected.

It is not fair that my right hon. and hon. Friends should be asked to carry the can for decisions of the Conservative Government when we have had no opportunity to make any effective changes. This Government came into office only four weeks before the new local authority financial year was due to start. In such a position, the Government could not make changes to the needs and resources element of the rate support grant. What Conservative Members are saying is that the special needs of their areas are not being properly looked after by the rate support grant system. They say there are inaccuracies and mistakes in the allocation of the needs and resources element. These decisions were made by the former Government. Hon. Members can hardly ask for a special grant to compensate them for something to which they originally agreed.

My right hon. Friend has made only one change, and that is in the allocation of the domestic rate support grant. It may be that Conservative Members representing specific areas may object to that action. Can they really blame my right hon. Friend for taking back a bit of the money which was allocated by them in the reverse direction? Can they blame us for taking from Paul some of the money robbed from Peter in the first place? There is no justification whatever, if the calculations of the resources and needs element are correct, for a variable domestic grant.

I have not heard one hon. Member try to justify this. What they are saying is that some of their areas are now being forced to take a higher share of the rate burden, and in some way they should be compensated for this. If another of my right hon. Friends decides to introduce a progressive form of redistributive taxation, which we hope he will, will it be said that those from whom money has been taken should be compensated for perhaps the first or second year? I hope not.

In many areas the effect of what was done by the Secretary of State pales into insignificance when compared with the other factors which have forced rates up—local government reorganisation and inflation. There are many of us who believed, when the previous Government forced local government reorganisation upon reluctant local authorities—I accept that some local authorities are always reluctant about reorganisation but a large number were right to be reluctant about the half-baked and half-hearted system forced upon them on this occasion—that the Government should have been prepared to carry a bigger share of the burden of the costs of reorganisation. This is what hon. Members opposite should have campaigned for during the period of the last Government.

There is also the inflation factor. It looks to me as though the calculations which municipal treasurers made and the views which they took about inflation will prove to be far more correct than decisions taken by the last administration. We have to look at local government finance as a whole.

I am disappointed that there has been little discussion on what I thought was the major item in the motion. Instead we have had a repeat of the debate on the rate support grant at the end of which the Government had a comfortable majority. I would have thought that it could have been concluded from that majority that they had the confidence of the House.

Today we have had a discussion about local government finance generally. Some people are falling into the trap of thinking that there is a magic wand in local government which can produce a system acceptable to everyone and which will relieve people of the burden of paying for local services. There is a reluctance on the part of many people to face up to the harsh and unpalatable facts of life in local government.

Mrs. Kellett-Bowman

If the Secretary of State could freeze rents on the ground that incomes were restricted should he not also compensate local authorities such as my own which have to pay another £20,000 because of the rent freeze? Should he not reduce rates because incomes are restricted?

Mr. Ovenden

I understand that the hon. Lady supported her party when in Government. This is another example of the political humbug of which I spoke earlier. She did not oppose the actions taken by her party.

However, I was about to move away from this rather sterile debate about the rating position this year and look at local government finance generally. The harsh, unpalatable fact of local government finance which we must face up to, if we are not to delude ourselves, is that the cost of local government services must rise over the years, and at a faster rate than the average rise in prices. This is because if the general level of wages in this country rises at a higher rate than that of prices, and presumably hon. Members hope that they will, then, since 75 per cent. of local authority expenditure goes on labour costs, it follows that the rise in wages must be higher there than the rise in prices in manufacturing industry, where the labour content is far less.

There are only three other solutions. Those are that local authority wages should be depressed below the level of general wages, that the services which they provide should be cut back or that central Government should bear a larger share of the expenditure. There is a serious conflict, which we have not faced up to, when we talk about shifting a bigger burden of expenditure to central Government and at the same time believe that local independence can be maintained. Those who believe that any Government, of whatever political complexion, will foot a bigger share of the Bill and yet allow decisions on these services to remain in local hands are living in cloud-cuckoo-land.

The Minister of State, Department of the Environment (Mr. Denis Howell)

It is interesting to note that the right hon. Member for Finchley (Mrs. Thatcher) relied heavily in her speech on the fact that the previous Government gave help to the National Health Service by moving it from local government to the central Exchequer, which makes my hon. Friend's point. When that is done local democratic control is also removed.

Mr. Ovenden

I am sure that there are many other instances of such action. Those who believe that they can send the bill to central Government and maintain control could not be further from the truth. If we are to provide the services needed in local government—and we all know that, although we get letters protesting about the rates we get an almost equal number demanding improvements in services—then we will have to provide a larger share of our resources for local authority services. We are under tremendous pressure to make more money available for the disabled. Every local authority is under pressure to improve or make available sport and leisure facilities. Local authorities have to find the money for this from somewhere. Under our present system every local election becomes a dutch auction on the level of rates. Parties vie with each other about who can depress the services most to keep the level of rates constant.

We must look for a new system of financing local government. We want a dynamic system which can provide revenue and which keeps pace with the general level of wages, or possibly does better than that if we are to improve the services. Our present system is agreed by everyone to be archaic and nonsensical.

I read the report of the Second Reading debate on the Rating and Valuation Bill which took place 11 years ago. After reading it, I was no wiser about what was meant by "gross values" than were the hon. Members who took part in the debate. It is a meaningless term which can be defined by no one.

The Liberal Party suggested site value rating. I fail to see how a change of that type will achieve a more equitable system. All it will achieve is a system which is as unjust in its operation as is the present system, added to which we we shall have the cost of introducing site value rating. That suggestion holds no benefit; it holds only extra expense for us.

Besides being dynamic, the new system must also be fair. It must be based on the ability of individuals to pay. I have received letters from old-age pensioners who complain that they have to pay the same rates as do households further up the road in which there are two or three wage-earners. That is a valid point. It is equally valid to take into account not only the number of individuals but the income within a household. I can point to some households in which there is only one wage-earner but the income is as great as it is in households which have two or three wage-earners.

Mr. Jim Lester (Beeston)

The comparison is constantly being drawn between a single-person household and a household which consists of several wage-earners. It must be remembered that 60 per cent. of the rate is supported by central Government taxes, and if four people are living in a house they pay substantially more in taxes than does the single person living in a house. It may be rough justice, but inadvertently a balance is achieved. It is wrong to say that the people who pay rates are the only ones to make a contribution, because taxes also play a part and four people living in one household contribute very much more through taxation.

Mr. Ovenden

That is the supreme example of illogicality. Those individuals bear their own fair share of national income tax but pay only a quarter of the rates, which is totally unfair. The system which I want to see adopted would be based on income.

There is no panacea which will solve the problems of local government finance overnight. Many questions on local income tax remain to be answered. For example, should it be a flat-rate system or a sliding-scale rate as it is within the national Exchequer? I favour the sliding scale rather than the flat-rate taxation system. There is also the problem raised by my hon. Friend the Member for Goole (Dr. Marshall) of how to offset the differences which arise between wealthy and poorer areas. Nothing will discredit a system of local income tax more than large variations between areas. If people working side by side take home at the end of the week vastly different earnings because of the local income tax they have to pay, that will undermine the system faster than anything.

In the context of a system of local taxation no one has mentioned what is to be done about the contribution which comes from industry in the form of rates. No one would suggest that we should relieve industry of its contribution so that the whole burden is put on local income tax. We must find an equitable way of getting industry to pay its share of the burden. That will be a problem for the inquiry which has been set up.

It will be a long, difficult job to reform a system which we have been trying to reform for decades. We must not hold out to people the hope of a quick and easy solution. We must not hold out to them that the problems of local government finance will go away if we change the system. All we can honestly say to people is that if we are to achieve expanding services in local government they will be asked to pay a higher proportion of their incomes towards the maintenance of local authority services. That may be harsh and unpalatable, but it is a fact of life. We cannot hide our heads in the sand and avoid it.

8.06 p.m.

Mr. Peter Temple-Morris (Leominster)

This is an important subject upon which I made my maiden speech in March. I congratulate the hon. Member for Gravesend (Mr. Ovenden) on his contribution. He began in a partisan way and I thought that I might have to be partisan in replying to him, but about one-third of the way through his speech took on a constructive form. He said that the cost of the services will rise. In speaking from the Opposition benches my task tonight is to make a small contribution towards ensuring that there is a fair system of taxation to meet those costs.

As the hon. Member for Gravesend said, what is to be done with industry is a matter for the inquiry. Once more we may get into the position where the towns which possess industry have much higher taxation, just as now they have a higher rateable value. Rural areas have no industry. The local taxation system will therefore have to be framed so that money can be taken from the richer areas and given to the rural areas. That problem will exist whatever system is adopted.

I am against the rating system. In addressing the House, I hope constructively, I want to accept responsibility for the actions of the previous Government, not having been here at the time, and I shall invite hon. Members on the Government benches to accept their responsibility. I use the word "responsibility", not "blame", because that must be the keynote. The previous Government were responsible for the removal of 10p in the pound from the grant for country areas such as Hereford and Worcester. We are responsible for taking that away. We shall serve no constructive purpose if we argue about money going from the towns to the country and vice versa.

We are also responsible for the rate of inflation until 28th February. I shall not go beyond that date. I shall try to approach this in a reasonable and sensible way. We are, therefore, responsible for the official allowance to local authorities for inflation at that time, which amounts to 9p to 10p in respect of my own authority.

I sound a warning note on the urgency of the problem. Hereford and Worcester already, on the present rate of inflation, are between £5 million and £6 million "in the red ", which does not augur well for next year unless we get a fairer system into operation quickly. My right hon. Friend the Member for Hereford (Mr. Gibson-Watt) well knows this too.

I accept responsibility for water reorganisation. There was too little control of last-minute expenditure. Water mains were being put in, the bill for which had to go to the new authority. Hardly a council in the country was ready properly to audit those precepts. The net result in my area is that the water rate has soared. I have accepted my share of the responsibility, and I invite Labour Members to accept their share of responsibility for the cut in domestic rate relief in the rural areas.

The hon. Member for Gravesend asked for the figures to be given. I can tell him that in Hereford and Worcester there is a variable rate relief for the domestic element ranging from 19½p to 29p. Some people have suffered a cut to 13p, making a maximum loss of 16p. Translated in terms of the rateable value on a council house or small private house in Leominster with, say, a rateable value of £202 this means an extra sum of 58p per week. On a house with a £240 rateable value, 70p extra will be paid. In the rural areas we have our poor as well as our rich. Indeed, we happen to be one of the lowest wage-earning areas in the West Midlands.

Mr. Ovenden

I should like the hon. Gentleman to tell the House the rate in his area last year and what it is this year so that we can compare that figure with the burden placed on some of the cities and towns.

Mr. Temple-Morris

I have a file of figures in front of me, and I can tell the hon. Gentleman that many of my constituents are suffering increases ranging from 80 per cent. up to 115 per cent. The average figure in the 600 square miles of my constituency comes out at something like 90 per cent. That is causing a serious problem in Herefordshire, and particularly in the Leominster district. We have heard a lot already of figures like 40 per cent. or 60 per cent., I count myself modest in not having mentioned mine sooner.

There is a feeling in the usually non-complaining country areas, which normally take these things in their stride, that the towns are beginning to get on top of them. This applies not only to rates but right across the argicultural spectrum. We saw this plainly during the last debate on this subject when a number of my hon. Friends abstained. It must be said that we have many town Members, and indeed there are more town Members than country Members. As this feeling gains momentum and people's rates increase by an average of almost 100 per cent., there is bound to be protest. I protested rather peacefully when on Monday of this week the Under-Secretary of State for the Environment was kind enough to visit my constituency. That protest was an orderly one, but the point I wish to emphasise is that the situation in the local authorities will not hold out for very much longer. That is why our motion asks for immediate relief to be given now.

The country is in a state of almost rebellion. I know that there is a letter waiting for me, which I have not yet read but about which I have heard, saying that from October in Herefordshire a rates strike is threatened. That is the position in my constituency and I know that hon. Members in all parts of the House are aware of similar protests.

Mr. Nicholas Winterton (Macclesfield)

My hon. Friend makes the strong point that there is an urgent need for action on rates and that this matter cannot wait until next year. Does he not concede that the present Government—and I am sure that Conservatives would accept responsibility during their term of office—have a responsibility for the rate of inflation now being encountered by local councils? Inflationary budgets have triggered off a threshold which has put many councils, particularly those in Cheshire, in tremendous financial difficulties. Does not my hon. Friend agree that the Government should now bring in an interim supplementary rate support grant?

Mr. Temple-Morris

I am grateful to my hon. Friend for that intervention. I agree with him that the greater the rate of inflation, the greater is the urgency for action to be taken.

I wish to mention the problems of the Welsh National Water Development Authority. I am sorry that the Secretary of State for Wales is not present. I raised this matter with him in an earlier debate, and to be fair, he did not then have much of chance to say anything when he wound up the debate. However my constituents would like to have a reply in regard to the Welsh National Water Development Authority.

Perhaps I may briefly explain the position. Our water rates have risen from a figure of 4.6p to 13.8p. We are just over the hill from a development area, and that area has a domestic rate relief of 33½p compared with our 13p. What makes the situation worse is that in Montgomeryshire, which happens to be in the Severn-Trent Water Authority area and which pays a water rate of 3.6p, the authority there still receives 33½p in domestic rate relief. That does not go down very well in my area.

Mr. Ted Leadbitter (Hartlepool)

Will the hon. Gentleman tell the House whether he is aware of any rate increase announced at the end of the financial year on 31st March which has been changed since that date arising from any action of the Labour Government? If not, will he confirm that the rate increases arose as a result of the actions of the Conservative Government?

Mr. Temple-Morris

I was hoping for a slightly more worthy intervention than that. This problem was dealt with a little earlier in my speech. One of the major points touched upon in this debate concerns the variable clement. I was asking Labour Members, including the hon. Member for Hartlepool (Mr. Leadbitter), to accept part of the responsibility for that.

I was about to make a point about the Welsh Water Authority. I have been speaking for too long, and I shall soon complete my remarks. With regard to the sewerage rate, I seek to provide that people are not double charged or that local authorities and district councils should introduce a septic tank-emptying service. I believe that the Government should ensure that either one course or the other should be adopted.

We are facing a crucial time in the country areas. I repeat that we face the possibility of a rates strike. We face widespread inflation. We also face the fact that many towns, which until recently have been quiescent on these matters, dislike a system in which rates are constantly rising. If inflation continues at its present rate, action must be taken and changes will have to be made in the system. Unless something is done to cope with the situation, and done soon, there will be a gradual loss of national party control in all local government, from whichever side it comes. We shall see a further fragmentation of democracy. This is very much our responsibility in this debate today.

8.20 p.m.

Mr. John Garrett (Norwich, South)

I wish to be brief, but first I must observe that any discussion of the future of the rating system should be set in the context of the future of local government itself. There is what I believe to be an alarming and continuing loss of local democratic control over locally-administered services. Local government is becoming progressively less local. Its recent history is the steady erosion of local authority powers. Unless the House takes some decision to the contrary, the process of bureaucratic centralisation, which was actively encouraged by the previous Government, will continue to gain in strength. The two-tier system of local government will inevitably encourage the shift of power away from the district to the county and we now have regional government in prospect. What is needed is a shift of power from the county to the district and from the district to the neighbourhood.

Local autonomy has been diminished as much as anything else because the revenue from rates is less and less adequate to support the tasks laid upon local government by central Government. That makes the need for a supplementary form of revenue most pressing. It seems to me that the most satisfactory form would be a local income tax similar to that which has been proposed by other hon. Members and which is successfully operated in other countries.

The Opposition's motion is the most remarkable piece of political bandwagoning since last week's debate on night storage heating charges. My right hon. Friend the Secretary of State has described its basic hypocrisy. However, there is no profit to the ratepayer in bandying charge and counter-charge across the Floor of the House. What we must do is consider rating reform in the short term and in the long term. In considering the arrangements for next year I should like the Government to increase the total rate support grant as a high priority for public expenditure planning. Second, I ask that special arrangements be made to relate the grant to income levels. I am glad to know that my right hon. Friend has something like that in mind. Third, it is essential to base the needs element on more sensitive measures of need.

My right hon. Friend asked us to be specific in our recommendations, and I shall be. I believe that the resources element, which favours the authorities with a below-average rateable value, should be complemented by an income equalisation grant for areas with particularly low wage levels. First, there should be within the grant an allowance for each percentage point which a district falls below average national earning levels. That would ensure that the regressive nature of the rate burden which is so heavily felt in low wage areas, such as my constituency, would not continue. The reforms required in the needs element would be somewhat reduced in total as a result of the institution of an income-equalisation grant. That grant should provide that all the basic data on which the rate support grant is based, such as the total population, children and the over 65s, should be up-dated to the year of account. The 1974–75 grant was based on 1972 figures and failed to take account of the dynamic of population growth. The latest available figures should be up-dated by the average annual rate of increase in population in recent years. The very fast-growing county of Norfolk was penalised by the present arrangement of using historic figures which fail to take account of the lag between growth of population and growth of rateable values.

Second, the allowance for sparcity of of population is inadequate and fails to allow for the costs of servicing a scattered population, for developing new services in rural areas or for staffing small rural schools. Third, there is inadequate justification for the sizeable weighting in favour of the South-East. Household costs are certainly not lower in Norfolk than in the South-East, and in such matters as transportation Norfolk's costs may well be higher. I ask the Department of the Environment to look again at the weightings in the needs element and to produce factors which more closely relate to the cost of services and the general cost of living.

Local government will require a continually growing share of the national income for many years ahead. The demand for environmental and personal services aimed at enhancing the quality of life will increase faster than the average rate of increase of the gross national product. That is something with which we must learn to live. Internationally we are a country with a wide range of local services but with a low local revenue base. As local government becomes more concerned with comprehensive environmental planning, renewal and the control of the environment, the more important local direction becomes, subject, of course, to central Government influence on total expenditure in the interests of the economy as a whole and the maintenance of standards of service.

The power of local direction will be much enhanced by a source of income additional to the rates. Local income tax is the best proposition. If local democracy is to be strengthened—and I believe that strengthening it is essential—a new and fairer source of revenue, locally raised, is crucially important. There would still, of course, have to be redistributive arrangements between rich areas and poor areas on the general lines of the present rate support grant.

Giving economic power back to local authorities and giving them increased autonomy, which I believe to be right, calls for a response from the authorities. As they grow larger they become more remote. It seems essential that they try to create neighbourhood councils or associations based on a ward, a parish of a group of city streets, and to give those local neighbourhood councils powers to spend and provide local environmental and social services, each based on a community centre or meeting place.

It seems important that councils provide more information to their people by an annual report, which was suggested by the Bains Report but never taken up. It seems important that they adopt a modern system of expenditure planning and control by programme in which the attempt is made to describe services as programmes of expenditure and to show the community their impact and. effectiveness and benefits.

It is important that the authorities open up the town halls and their administrative services to the community. The local authority scene should be one of innovation and experiment with new services, and not just an interpretation of statutory requirements. There should be a continual search to understand and satisfy the needs of the community. We want local authorities that are less subservient to Whitehall and more accountable and responsive to the communities that they serve. Such change will take place only if the authorities are given greater freedom, and that can only follow from a new source of revenue.

Mr. Deputy Speaker (Mr. Oscar Murton)

Before I call the next lion. Member, may I remind the House of Mr. Speaker's suggestion at the beginning of the debate that it would be helpful if speeches were short. There are still many right hon. and hon. Members who wish to speak and the time is very limited.

8.28 p.m.

Mr. Anthony Kershaw (Stroud)

The hon. Member for Norwich, South (Mr. Garrett) displays a good knowledge of local government from which I am sure his constituents will benefit. However, like some of his hon. Friends, he made two propositions which I find it difficult mutually to reconcile. The first is that more money should be spent locally and the second is that rates or local tax should somehow be lowered. I do not believe that any sleight of hand could make that a sound system.

In Gloucestershire the rates have gone up by about 52 per cent. Such increases have been described today by hon. Members opposite as entirely "just" and as "social justice". There are various causes. Reorganisation of local government undoubtedly has played a part, but that is not the basic cause. Inflation has played its part. The appetite of the people has played its part in that we demand better services, and it is difficult to refuse. Central legislation by the present Government has played its part. The rent freeze has been a heavy impost and has added substantially to local costs, as my hon. Friend the Member for Lancaster (Mrs. Kellett-Bowman) said. But the most important part has been the decision of the Secretary of State about the variable domestic relief. In Gloucestershire this has meant that an additional £9 million has had to be found, and that has accounted for 22 per cent. of the increase we have suffered. It must not be forgotten that that has occurred in the countryside, where there are far fewer amenities than there are in our cities and where we cost the country far less. It reflects no doubt the estimate of the Secretary of State of where support lies for his Government.

The result has been a great burden, all in one year and too heavy to be borne in one year. It is grossly unfair. In the short term we must have a bigger Government grant to get over it. Furthermore, the rates are bound to go up again next year. The estimate of the hon. Member for Dearne Valley (Mr. Wainwright) is 25 per cent. Other hon. Members put it at a much higher figure. It would be quite intolerable if we had to face such a state of affairs next year.

I was disappointed that the Secretary of State appeared to have no sense of urgency. He has appointed a committee of inquiry which will not report for two years. If that is the best he can do, he should consider resigning. For the short term it is an impossible proposition. I hope that we shall hear what is to be done. So far we have heard nothing of value.

In the long term we should reduce the costs falling upon the rates. First of all, education should come off the rates entirely. In the old days education was a local service. It is no longer that now. It is subject to central direction. In the Stroud area we have two good grammar schools. Some of the people paying rates want to keep them though that cannot be said of everyone. But at present the people are paying rates to close down those schools or to make them comprehensive, because that is the order of the Secretary of State for Education and the people can do nothing about it. If the Secretary of State insists on telling the local authority what to do, it is the taxpayer who should find the necessary money and not the ratepayer.

Fire and police services should be looked at as well to see whether the weighting is fair.

Like other hon. Members, I believe that if in the end we are to give any kind of local responsibility and independence, some form of local tax will have to be devised. There have been suggestions about a local income tax about a poll tax and about a mixture of the two. They are all sound ideas, and they work in other countries. I welcome the suggestion that we should study the methods adopted in other countries. At the moment, we pay our taxes in sorrow but our rates in anger. That is unnecessary. After all, they are both taxes, and we should be sorrowful about both, not angry about one.

We could at the same time keep some form of household tax. I do not rule that out. But whatever is done will have to be done right away if the countryside is not to be decimated and driven to despair by the actions of present Government.

8.32 p.m.

Mr. Robert Kilroy-Silk (Ormskirk)

I wish to strike a parochial note, which is not inappropriate in a debate about rates, and to draw attention again to a matter which is of deep concern to my constituents. In doing so I address myself to my own Front Bench.

I refer to the difficulties encountered by the metropolitan borough of Knowsley, which is one of those anomalies of which there are only five in the country—a new council which has no county basis on which to base its expenditure for future years.

In determining the rate support grant for Knowsley, I contend that the Government applied figures which meant that the costs attributable to Knowsley were far too low, with the result that the figures for rate support grant were far too low. That may seem a contentious assertion. Thanks largely to the efforts of my hon. Friend the Under-Secretary, Knowsley received an additional 7p in rate support grant. Although we are very grateful for my hon. Friend's efforts, we contend that we should have a further 7p to meet the needs of the area and its very clear and specific problems. They are problems specific to that council, and they are shared by few others in the country. The domestic element in the rate support grant should be 20p.

In announcing his variation of the rate support grant, my right hon. Friend the Secretary of State referred to it as "rough justice". For my constituents the justice was damned injustice. As I say, the metropolitan borough council of Knowsley has no base on which to determine its expenditure. The Government grant for this year was based upon a proportion of expenditure by the Lancashire County Council for the year 1972–73. Clearly that was an absurd calculation, because in the intervening period the population and with it the responsibilities and services increased enormously.

It is even more absurd when one takes into account certain other factors. In education, for example, the apportionment was made pro rata to the population of each new district. That is not a principle with which I would normally quibble. Nor would I expect that many other hon. Members would quibble with it if the school population per thousand of the population was the same throughout the area of the Lancashire County Council. Yet that is not the case. In the Knowsley Borough Council area the figure is one in four whereas throughout the county it is one in five. That figure makes the point more forcibly.

The estimated expenditure for education for 1974–75 in respect of the additional pupils remaining at school due to the increase in the school leaving age was calculated on a national basis, which gave an average of 34 per cent. Yet in the Knowsley council the figure is double that at 68 per cent.

We contend that that part of the rate support grant based on the social services statistics is again too low. The apportionment should have been made on a case work basis and not the basis employed by the Government. In Knowsley, for various reasons the case load is excessively high. Knowsley Borough Council has had to provide new headquarters because of its lack of any former borough status. There were no headquarters for education, the libraries or the social services administration. The council had to take on the provision of a wide variety of ancillary services in order to carry out those functions.

The burdens imposed by the previous administration's reorganisation of local government on those of my constituents who live in the area of Knowsley Borough Council are excessive and require greater Government assistance than has been forthcoming so far. This is even clearer if we look at the problems of that area of Knowsley Borough Council that is in my constituency. I refer to the town of Kirkby—whose domestic rate is higher than that of any other district in Knowsley. We have a differential rate system. The rate is 71.1 per cent. The whole purpose behind the reorganisation of local authorities was to create, in the words of Lord Redcliffe-Maud, a new community of interests, a new identity of interests.

We have one authority, one set of services, yet we have different rates for different areas within that authority. That is clearly inequitable. If the same services are provided and enjoyed in common, they should be paid for on the same uniform basis. We object very strongly to a differential rating system that applies to the detriment of my constituents in Kirkby. I do not consider that differential system to be fair. I want the same rates for the same ratepayers in the same authority. I should like the Government to give a clear commitment to ending what Opposition Members have referred to as the iniquitous system of differential rating.

Kirkby is the highest-rated town on Merseyside. It is one of the highest-rated towns in the country. It is an area which has the highest rate of unemployment. It has the highest number of low-paid people. It has a larger number of children under the age of 16 than any other town in Western Europe. It has enormous social problems. We have high unemployment, low pay, a large number of children and tremendous social problems; yet that area has to pay a higher rate than any other district in the same metropolitan borough, a higher rate than is paid by any comparable area on Merseyside.

My constituents will have a wry smile when they hear of some of the complaints addressed in this House tonight, when they compare their services and the rates they have to pay with the rates paid by the constituents of those Members who have been most vociferous and most opportunistic in their claims. What we need is positive discrimination in favour of areas of need and not based upon a series of abstract figures.

I turn now to the purpose of the debate—[HON. MEMBERS: "Ah.'] Of course, if one hears too many cries of "Ah" one reacts and tends to speak for longer. As my hon. Friend the Member for Gravesend (Mr. Ovenden) said, rating as a system has been attacked for a long time. It is an inequitable and regressive tax. But we have been talking about getting rid of it for a good 50 years, ever since the old Board of Inland Revenue reported in 1913 on various suggestions for ending the system.

Few people would disagree in principle with the need to shift the burden of financing local government away from rates and on to ability to pay. There have been many suggestions for forms of local income tax, pay-as-you-earn and entertainments tax. But what the House should remember is that this is no simple proposition. There is certainly a need to move the burden away from rates and on to ability to pay, but it will be a difficult and cumbersome process. There is no easy answer. All the suggested solutions encompass many difficult administrative problems.

What I am very pleased about, ironically, is that the furore caused by the tremendous rate increases this year has at last galvanised one Government into action. I am in favour of far more support for ratepayers and for their being far more vociferous in their demands, so that we can at last end the rating system and achieve a more equitable system based on income rather than home. What has been lacking in the past and what I believe is present in the Secretary of State today is the political will, the guts and the courage to implement those proposals.

8.42 p.m.

Mr. Patrick Cormack (Staffordshire, South-West)

As my hon. Friends are here to make their speeches and not to listen to mine, I will try to be as brief as possible. The hon. Member for Ormskirk (Mr. Kilroy-Silk) spoke eloquently on behalf of his constituents and I shall seek to speak for mine.

We have all been inundated with letters. We have attended meetings with hundreds of people present. I have been asked to present a petition to the House next week, which I shall gladly do, signed by thousands of my constituents. Even today, 20 members of my council came down to make their representations on this issue, so deep is the feeling in my part of the world, where we face an increase of some 70 per cent.

I was stimulated into trying to do something about this problem when I got so many letters which underlined the absolute inequity of the present system. An old lady wrote to say that there were four wage earners and three cars next door, yet she had to pay the same rates. We have all heard of similar examples. This year, they have been exaggerated by the wanton disregard of rural areas displayed by the Government in redistributing the rate support grant. That alone has made a difference on average of £9 per year to every ratepayer in my constituency—and they know who is responsible for that bill.

These increases are a blow to the owner-occupiers; the people who are most hit are the young marrieds struggling to buy their own homes, and the elderly who, in the evening of their lives, feel that they should be allowed to enjoy what they have struggled to buy.

What has thrown this matter into disturbing perspective is the Government's action, on taking office, in freezing council rents. I am not commenting on that, but the contrast between the two things has been an insult to owner-occupiers.

Mr. Denis Howell

Council house tenants pay their rates.

Mr. Cormack

The Minister loves shouting from the Front Bench. Of course they pay their rates, but their rents were frozen. Their rents are subsidised—and under this Government's proposals will be more subsidised—by the rates.

There is a danger of a revolt of the middle classes throughout the country. I deplore this trend. At every meeting that I attend I say that I will have absolutely nothing to do with any rates strike or the withholding of payments. This is outside the law, and, as my hon. Friend the Member for Buckingham (Mr. Benyon) said, the law is indivisible. That cannot be said often enough or too fiercely and firmly.

Nevertheless, people are suffering. Over the years we have seen a massive redistribution of wealth. The middle classes have suffered relatively in their standard of living compared with the period before the war. My hon. and learned Friend the Member for Solihull (Mr. Grieve) earlier obtained some interesting information. We are now in a situation in which an investment of £2,000 in 1939 would require £83,500 to be matched today. That is a measure of the sort of redistribution that has taken place. If we are sincerely to preach about national unity—as we are—we should remember that there are many interests in this country to be considered which have been neglected and ignored in recent years.

We want two things. First, we want first aid. It is outrageous and totally unsatisfactory that the Secretary of State should have said today, in effect, that he is not proposing any first aid measures. That attitude comes from a Government who have spent £700 million on food subsidies—that cannot be too firmly emphasised; from a Government who at the moment are indulging in the grotesque irrelevance of proposing more nationalisation. This point ought to be hammered home, because my constituents feel about it bitterly.

I am glad, however, that the Secretary of State is to have a review of the rating system. I hope that the committee which is to carry out the review will meet quickly and will complete its deliberations before the end of 1975. One of its tasks should be to study the modest proposals which my hon. Friends and I have put forward and which will, hopefully, be debated in the House tomorrow. Their proposals seek to do two things. First, they seek to get away from the iniquitous system in which a person is penalised for carrying out internal improvements to his home, and secondly, they suggest that consideration should be given to the number of adult wage earners in a household, either in the form of a poll tax or some other method. I am not pretending that this measure is a panacea or perfection, but it is worthy of consideration.

Over and above all, there is the need to consider the cost of the education service, and perhaps the police and fire services, being at least in part removed from the ratepayer.

If the committee of inquiry can get down to its task quickly and report within a year we shall have some cause to thank the right hon. Gentleman for what he said today, but at the moment he has given us short commons and the people of this country will realise that that is so.

8.48 p.m.

Mr. Frank Hatton (Manchester, Moss Side)

I must reveal to the House that have not had a single letter of complaint from any of my constituents regarding the rating system. I am certain that if the action which the Government took, and which I strongly supported, in substituting a common level of domestic relief had not been taken I would have had many complaints.

However, I welcome the unanimity which now exists for a review of local government finance. My city of Manchester was always at the top of the league table for rates. Manchester was the highest-rated authority in the country. I point out to members of the Opposition who are so worried about this matter that my party found itself in almost complete control of the local authority in Manchester year in and year out.

We have heard in the debate about the revolt of the middle classes. Some members of the middle classes reside in surrounding areas of the city of Manchester, but we have never previously heard any complaint from them about the rating system. They have been happy to live on the backs of their big city brothers. But now, of course, finding themselves in a somewhat different situation, they are welcoming the prevailing unanimity for the reform of local government finance.

I deeply resent the attacks which have been made on my right hon. Friend the Secretary of State for the Environment. The needs formula simply did not provide for the needs of the cities, including London. The inner city area problems were such that the needs element distribution formula became quite unsatisfactory. Indeed, the Conservative Government accepted without question the necessity for some redistribution.

I was present at many of the discussions in the House which took place on the rate support grant last year. They went on and on but ended in a totally unsatisfac- tory manner that produced very great variations in relief, quite unjustified and unfair by any standards. The plain truth is that we had reached a situation in 1973–74 when the ill-distribution of the rate support grant was resulting in some areas paying far too much in rates and other paying far too little.

Average domestic rates in London and several other cities were about £75 to £100 but in large parts of the rest of the country they were between £35 and £50. Yet the education service, the most expensive of all local government services, was universally available throughout the country.

It is just 12 months since I had the honour of being elected to this House. I remember my maiden speech, which was on the subject of education. At that time the right hon. Member for Finchley (Mrs. Thatcher) was Secretary of State for Education and Science. I referred to the horrific situation facing chief education officers in preparing their rates. We all knew 12 months ago that this situation was upon us, but no action was taken by the Conservative Government. I believe, therefore, that it is humbug and hypocrisy to talk as Tory Members have done today about the rating situation.

I sincerely welcome this new-found unanimity for the reform of the rating system. As someone who has spent 20 years in local government, I know that the local government services at present are on the point of breakdown. Housing, education, social services, the arts and recreation are indeed the lifeblood of the nation, and hon. Members know from the letters they receive from constituents that these are the issues which interest and affect them from day to day.

We have before us a very complex situation in trying to solve the problem. As some of my hon. Friends have said, it is nonsense to believe that we can solve the problem very easily. I say to those who are in favour of a form of local income tax—which I believe is the road we have to take if we are to have a better system—that, whatever we do, we have to find a massive sum, and it will not be easy to find. As well as local income tax, we should also consider carefully the contributions that industry and commerce have to make to the rating of our big cities and towns.

8.55 p.m.

Mr. Jim Lester (Beeston)

One supports the terms of this motion rightly because this year my own constituency faces a rate increase of some 60 per cent., but I will address my remarks particularly to what I believe is the breaking point, next year. I support what was said by the hon. Member for Stoke on Trent, South (Mr. Ashley). because the House has to recognise, if it believes in the fundamental place of local government in our society, that the rate of increase this year, to which my constituents object, and the anticipated rate of increase next year could deal a body blow to local government which while it may not administer a knockout—and Muhammad Ali has been mentioned—may make recovery difficult.

It is not always understood outside this House that some of the problems facing local government today are generated here, particularly because we pass eminently desirable legislation requiring local authorities' support and action and a share of the finance without anticipating the expenditure to be generated in terms of capital or revenue. As a consequence the build-up locally is inexorable. It may interest hon. Members to know that from March to June this year there have been before this House 13 Bills affecting local government, seven of them Government measures, six Private Members' Bills, some having a profound effect, some a minimal effect; but there are 13 Bills which could be listed to illustrate my point.

Secondly, the Government bear some responsibility because of their inability to indicate the level of national support in terms of grant until the budgetary procedures in local authorities are well under way, particularly in terms of expansion. Certainly, the example of this year will not bear repeating. Having had responsibility for producing budgets, I submit to Governments that they must produce indicative figures on a much clearer basis than is done at the moment in September and October of the year in which one is working if they want anything to happen in realistic terms of control. I suggest local government itself must bear some responsibility. Though one should not generalise, there are still local authorities which enter into expansive capital programmes, again without looking at the revenue implications and the effect on their own rates in two or three years' time, and also because when they establish guidelines they do not take into account the national situation or the national interest when they calculate their future programmes. They pursue foolhardy levels of expansion.

Local government has the responsibility to act within a national framework and if the Government try, certainly for the next year, to declare and implement a moratorium on legislation unless supported with extra grant, and certainly if the Government will give an early indication of the level of grant, the response from local government as a body would be very much more realistic. During this debate many hon. Members have mentioned local income tax as a solution to our problem. Sweden has been talked of. It may interest the House to know that over the past two years there has been a freeze in the rate of local income tax in Sweden because of public pressure. This freeze has been brought about for precisely the same reasons as we are debating tonight. The shortfall has not been made up by national grant. The freeze has been genuine as a cut-back on actual local government action.

I say this only because when we talk of a fundamental review we all know there are no easy answers. To transfer services finishes local government. There may be better but not painless taxes. Those who complain about the rates system would sound more genuine if they did not use the pressent current of feeling to campaign against the system without costing and debating the alternatives and leaving it to the judgment of those who feel strongly about it to say which they prefer. The situation is so critical that it is in the long-term interests of local government as a body through its associations, not as individuals authorised to accept part of the discipline for next year, which I believe is critical, as has been done in Sweden. There are difficulties about alternative taxes. Even Sweden is looking for other ways than local income tax and national tax to finance local government in future.

The third element in the problem is the public. There is pressure for better standards. I have great sympathy with parents who want new schools for their children and with pleas for greater levels of support for the elderly.

I think that we should have a standstill, or a near standstill, of expansion while the review takes place. I do not believe that we can afford to go further down this road without fundamental consequences to the checks and balances of our political system, without a rapid deterioration in the standards of service provided by local government, and without a continuation of this remorsless, mad, merry-go-round of inflation, which, when all is said and done, is the root cause of the problem.

9.1 p.m.

Mr. John Tomlinson (Meriden)

I shall be brief, but my brevity does not mean that I am unaware of the serious problem facing my constituents.

It is a tragedy that much of the argument in the debate has tended to become a slanging match between rural and urban interests. There have been suggestions that the rural concern has not been shared by the Government and others, and vice versa. I am concerned that this Government and Parliament should legislate in the interests of all the people in our community and that we should get a balanced approach to the financing of local government. We should not try to represent constituency interests at the expense of others in the community.

I represent a largely rural constituency. I am deeply concerned about a number of factors which in combination have led to an almost 100 per cent. increase in rates in my area. However, it would be wrong for anyone who is trying to be rational about the situation to attempt to attribute the failure of local government finance this year to the actions of my right hon. Friend in three and a half months in government, notwithstanding that the decision on the variable domestic element did nothing to help what was already a bad situation. Basically five major causes, one of which is the variable domestic element, have led to this situation in my constituency.

I am somewhat nauseated by the hypocrisy of Opposition Members, who with crocodile tears complain about the effects of what was largely their own creation, call for reform of local government finance and castigate the Government for failing to do in three and a half months what they failed to do in three and a half years.

I hope that in his reply to the debate my right hon. and learned Friend the Secretary of State for Wales will indicate not only the long-term solution that will have to be found by reform of the rating system but the short-term amelioratives that my constituents can expect from a Labour Government, because they find it intolerable that, at a time when we are seeking to curtail expenditure and to control inflation, a combination of factors, many of which are outside the Government's control, has caused a substantial increase in their rates. [Interruption.] I suggest that hon. Members opposite should read the resolutions and make their judgment on the complete record of what has been done.

The present Government inherited the worst record of inflation and the highest level of interest rates that the country has known and the criminal insanity of a reorganisation of local government that did not reorganise the financial basis of local government. Tory Members would do well to accept their responsibility for those matters and not to shout too loudly. There are a number of important issues which ought not to be the subject of jeers and laughter. While Conservative Members are indulging in that, my constituents and others are suffering from things which originated from their decisions.

I hope that my right hon. Friend will give further indication not only of long-term solutions but of some short-term amelioratives. I hope he will deal with two specific points, to one of which my hon. Friend the Member for Norwich, South (Mr. Garrett) referred—the problem of areas which are growing in population, where the needs element is based on statistics which are out of date. We have a two-year time lag in statistics. My constituency has grown in population to 98,000 electors, despite boundary changes. That kind of growth is causing major suffering there because the statistical basis upon which grants have been determined is two years out of date. I hope that we have specific proposals from my right hon. Friend about updating these figures.

Secondly, what is my right hon. Friend prepared to see done about the extension of central Government financing of key services such as education, the police and fire services? We already have some national services which are administered by local government, such as the health service. We already have a much more democratic base in local government, and we could have more democracy in locally-financed services.

I hope we shall have sufficient assurances on the short-term problems as well as for the long term so that we can continue to do the job in our constituencies of assuring people that the Labour Government are concerned about their problems and are seeking to remedy the defects which they inherited from the previous administration.

9.7 p.m.

Mr. Michael Morris (Northampton, South)

The motion calls for interim relief. It calls for interim relief because there are hundreds of thousands of ratepayers in this country, not least in Northamptonshire, who find the increase in rates unacceptable. We on the Opposition side of the House know full well that, had a Conservative Government been in power, they would have listened sympathetically to the representations which we have made and would have taken some action on an interim basis. That is why people are concerned.

We look for certain other assurances tonight, in addition to that overall assurance. Let me be practical and to the point. Let us have a needs element which reflects the needs of the area more accurately. Mention has been made of bringing it up to date. Let us do that. That is not all that difficult. Let us also have some factors which more adequately reflect certain dimensions of particular areas. For example, one quarter of the needs of Northamptonshire is based on the needs of social services which take only 6 or 7 per cent. of the expenditure—and, to forestall comments, may I add it is a Labour-controlled authority? May we have an assurance that the cities lobby will not just steamroller the rural areas?

Mr. George Cunningham (Islington, South and Finsbury)

The hon. Gentleman would not be saying that if he lived in Islington.

Mr. Morris

We should like an assurance that for once local government can be given the chance to plan ahead—I take up here the point made by my hon. Friend the Member for Beeston (Mr. Lester). Can we have some indication in the early autumn of what the level will be for next year?

It has also been said that we are now helping the inner areas. But Northamptonshire is growing in importance. We have four new towns. Will they have special help? It is no good the Secretary of State smiling. That will not help the ratepayers of Northamptonshire, nor will it help people in the inner London areas who are coming to Northamptonshire. We need practical financial help for the second half of this year.

9.10 p.m.

Mr. Teddy Taylor (Glasgow, Cathcart)

This has been an interesting and at times passionate debate with certain outstanding features. First, there was an excellent maiden speech from my hon. Friend the Member for Liverpool, Waver-tree (Mr. Steen), who spoke of the amount of local government service to the community and participation of individuals in decision making. It was a remarkable debate because my right hon. Friend the Member for Crosby (Mr. Page) did not participate, as he usually does in local government debates. It was a shame that Labour Members took exception to his absence. I am sure they will be fully aware that throughout the day and this evening my right hon. Friend has been in the Finance Bill Standing Committee putting forward important amendments about local government finance. If there is one Member of this House who does not deserve to be criticised for being absent from the debate it is my right hon. Friend.

It has been an astonishing debate because we heard from the Secretary of State the most astonishing, complacent and insensitive speech. He gave the impression that he did not appreciate the urgency or seriousness of the problem, and the only real meat we had from him was that there would be an inquiry and that rates would go up by about 30 per cent. this year overall. That figure surprised me, because it seemed to conflict directly with a parliamentary answer that I received from him two days ago. However, he has courteously explained to me that the figures appear to be wrong. The other point that made the debate special is that not one Scottish Member has taken part from any of the parties in the House. That might give the impression that the problem of rate increases is an English one, and that is certainly far from the case, although the situation in Scotland is somewhat different.

We have not yet had local government reform in Scotland. That does not come until 1975, but the problems this has caused in England are creating concern for what might happen in Scotland. There was industrial derating in Scotland to the extent of 50 per cent., and, although that appears to be a generous concession, the indications are that industries in Scotland will pay at least as much in rates as industries in England.

Mr. William Baxter (West Stirlingshire)

The hon. Member will recognise that this matter will be discussed in the Scottish Grand Committee next Thursday, when Scottish Members will have the chance of putting their point of view about the Scottish rating system.

Mr. Taylor

I am aware of that, and I remind English Members that there are many public seats in the Committee room, and I hope that they will be there to listen to the Scots talking about their problems.

The situation in Scotland is different because our organisation of water is different. Until recently we had water boards, but under local government reform we shall transfer them back to the local authorities, which is somewhat the reverse of what happened in England. Another difference is that in Scotland we have regular revaluations instead of the once-for-all revaluation which took place in England. However, all the indications are that in Scotland by and large, by any comparison, the amount of rates paid for comparable dwellings is considerably higher than in England and Wales. The burden of rates per head of the population is also greater, and we have the prospect of local government reform next year, which will mean considerable increases if events in England are a guide.

What we do not have, which probably explains why there has not been an explo sion so far from Scotland, is the rate demands. Most of them have still to come in. With one or two exceptions the rate poundage has yet to be fixed. One was announced in the last 24 hours. We have also not had the peculiar injustice in our rate demands that was inflicted in England by the Secretary of State in his treatment of the variable grant.

We achieved a partial victory in the debate today in having secured a clear assurance from the Secretary of State that there will be an inquiry into the rating system. It has been generally agreed that, while there has been dissatisfaction with the rating system in many areas, recent events, particularly the dramatic increases in rate poundages, have now created a special situation which demands urgent Government action. I believe that if the Secretary of State had not made that announcement there would have been a major outcry.

Certain of my hon. Friends—my hon. Friends the Members for Buckingham (Mr. Benyon), Bournemouth, West (Sir J. Eden), Wellingborough (Mr. Fry) and Staffordshire, South-West (Mr. Cormack)—and the hon. Members for Goole (Dr. Marshall) and Gravesend (Mr. Ovenden) spoke about the injustices of the present system of rating. They pointed out that it has no direct regard to ability to pay and that many people are entirely excluded from making a direct contribution to rates. They said that it discriminates against the improvement of property. It is also a disincentive to regional development and can undermine national economic policy.

Consideration has been given to various alternatives. The one that has been mentioned most is the possibility of a local income tax, first suggested in the debate by the hon. Member for Stoke-on-Trent, South (Mr. Ashley). That alternative could have serious repercussions, although the advantages have also been spelt out in the debate. The obvious repercussion which stands out a mile to someone representing a Scottish constituency is that if there were a local income tax there would inevitably be a relatively high rate of tax in areas where wages and profits tended to be lower and a relatively low rate where there was prosperity, with high wages and high profits.

Another serious problem is that of taxing industry and commerce when some multinational firms and British firms have factories in some areas, shops in other areas and warehouses in others. There is also the difficulty that a local income tax might be a frightening weapon to give into the hands of spendthrift local authorities.

We heard a little about the sales tax from my hon. Friend the Member for Buckingham. It is an interesting suggestion, but it would be difficult to administer, and there is the problem that people in a rating area do not necessarily spend their money in the same area.

We heard nothing from our Liberal friends about site values, but we are all grateful to the hon. Member for Gravesend for making up for that by mentioning the subject himself.

I think that there has been general agreement that what is required, and the most useful avenue for consideration, is the transfer of some, if not all, of the burden of local government expenditure to the national Exchequer. Some of my hon. Friends have said "Let's think of transferring the burden of education or teachers' salaries." Some have gone even further and asked "Couldn't we transfer the major slice of spending to the national Exchequer?"

The advantages are obvious. First, there would be an equal burden of tax throughout the nation. No areas would have high or low rates; everyone would pay on the same basis. Secondly, it would be easier to pay for local government services through PAYE or through an expenditure tax in the shops. Thirdly, everyone would make a contribution to local government expenditure. One of the matters that cause most resentment is that some people do not make a direct contribution. Fourthly, the Government would have a more effective control of general spending.

However, one point has been rightly mentioned. We know the problems we have had in achieving distribution formulas. If we had a simple 100 per cent. block grant from the Government to every local authority to cover all its expenditure, it would be very difficult to arrive at the right formula, and there would be a considerable reduction in local freedom.

All those matters explain how difficult it has been to find an easy solution. There is no easy solution. The money must be found from somewhere, but what has happened over the past few months has made it clear that an alternative must be found to relieve some of the burden and prevent some of the savage rises in rates that there have been.

The Secretary of State was a little unkind in his attacks on the previous Government for their apparent sins of omission, and other sins. The one thing he cannot say about the last Government is that they were insensitive to the problem created by the rate burden. Just look at some of the measures introduced recently by the Conservative Government. First we had the massive improvement in the rate rebate scheme, which ensured that 3 million people who were unable to pay savage increases received special help. That was a major step forward. Second there was the system of variable domestic relief, of which we are not at all ashamed. Indeed many of us are rather proud of it. This was introduced to ensure that if there were to be increases they would be fairly shared across the country so as to ensure, as far as possible, a uniform increase.

Obviously, it was difficult to aim at that in advance, but the principle showed that our aim was to ensure that there would not be wide variations between the increases in different parts of the country. Third, we made a definite attempt to restrict unnecessary local government spending. Under the Counter-Inflation Act we had a procedure whereby local authority expenditure was reviewed by the Government and strong representations could be made. In Scotland the accounts of Dunbarton County, Renfrewshire and Edinburgh were challenged, and there is no doubt that this counter-inflation procedure resulted in reductions in expenditure. It was a deterrent against local authorities going ahead with extravagant schemes.

Fourth, we made substantial increases in the amounts of expenditure which were covered by Government grants. In England last year the grant which we agreed was the largest percentage in the history of the country—60.5 per cent. of total expenditure compared with only 57 per cent. in 1970 when we came into power. The global amount was much greater. In Scotland the figure rose from 65 per cent. to 68 per cent. of total expenditure. We made a change, through the Local Government Act 1974, whereby the cost of mandatory student grants and teacher-training awards were transferred to the Exchequer, as were local authority health service charges.

One thing we cannot be accused of is being insensitive to the problem or being unwilling to act when a special situation arose. A special situation has certainly arisen now. We have had quite dramatic increases in rate poundages. In different parts of the country it has been 70 per cent., 80 per cent. and even 100 per cent. It is little wonder that my hon. and learned Friend the Member for Runcorn (Mr. Carlisle) has said that a new militancy is being expressed by our ratepayers, who are demanding action.

If some of them had been listening to the Secretary of State tonight they would have been appalled at the complacent way in which he approached this urgent problem. It was suggested by one Labour Member that the changes made by the Secretary of State, when he changed the variable relief order, involved only 7 per cent. of total rate support grants. That sounds a small amount. But try to put that across to someone who was facing a 30 per cent. rate increase but who, because of the change, faces an 80 per cent. Increase! This is serious and urgent.

Mr. Tomlinson

Give us the figures.

Mr. Taylor

I will. In Cheshire the rates were up by 70 per cent. In Lincoln, before the change by the Secretary of State, the relief was to be 20p to 26p. It was cut to 13p.

Mr. Tomlinson

What were the rates?

Mr. Taylor

There has thus been an increase in the rate burden of 80 per cent., half of which is the direct result of the action taken by the Secretary of State. In Somerset the rates were to go up by between 10 per cent. and 41 per cent. They are now to rise by between 33 per cent. to 85 per cent. Others will be paying more. Much of this is the result of the action of the Secretary of State. He said that there was a higher rate burden in the cities and there should be a redistribution. He also said that there was a need for a fundamental re distribution of wealth and asked: if the Socialists would not do it, who would? He must accept that with the evidence that the general level of services provided in cities and counties is vastly different, there may be a case for a change, but surely the time to make a dramatic and sudden change which can put up some people's rates by 30 per cent., 40 per cent. or 80 per cent. is not a time of rampant inflation when we are trying to control expenditure.

If it is said that there should be a uniform 13 per cent. throughout the country, why did the Secretary of State set a separate percentage for Wales and England? If there is a case for uniformity, surely it should apply to Wales as well as England. Once again the Secretary of State has shown that as well as having flexible language he has flexible principles.

What about Scotland? Not many rate increases have been declared in Scotland. There have been a few within the last 24 hours, and I will mention one or two. For example, Dunbarton county has just announced a 38 per cent. rise in rates. We have had an indication from provosts—[HON. MEMBERS: "How much?"]—I have the detailed infromation here. The county rate is 97p in the pound, an increase of 27p on the flat rate. That is for Dumbartonshire and it is the first Scottish declaration we have had.

It is sometimes suggested that we deliberately pick out the worst cases just to show how bad the Government are. I should like to read something which appeared in the Glasgow Herald today. It is not a statement by a Tory, by Aims of Industry or by the Conservative Central Office. It was made by the hon. Member for Central Ayrshire (Mr. Lambie), who cannot be here because he is speaking to the Scottish district councils. The heading reads as follows: Rates may rise by 50 per cent. says MP This is a Tory paper printing a speech made by a Labour Member of Parliament. It is crystal clear that we have a desperate situation.

I am glad that the Secretary of State for Scotland has come in. It is unfortunate when these savage rate increases are being announced in Scotland that no hon. Member on the Government benches representing a Scottish constituency has taken part in the debate. But I know that the Secretary of State will be glad to listen to what I have to say and will do what can be done.

The Secretary of State for Scotland (Mr. William Ross) rose—[Interruption.]

Mr. Speaker

Order. If the hon. Gentleman gives way to the Secretary of State, he must be heard in some degree of silence.

Mr. Ross

I heard every word the hon. Gentleman said. I have been listening to his speech in the corridor. In quoting my hon. Friend the Member for Central Ayrshire (Mr. Lambie) the hon. Gentleman should have made plain that my hon. Friend was talking about the likely result of the reorganisation of local government that was put through by the Conservatives.

Mr. Taylor

The Secretary of State could not have been listening with care and attention, as he will appreciate if he reads the remarks made by the city treasurer of Glasgow—a Labour Party treasurer—who was talking not about the increases arising from local government reorganisation but about increases which were the direct result of the Labour Government's actions through the Budget and which will be paid by Glasgow ratepayers.

We have put forward a case for income relief. We have done so, first, because there have been massive increases in rates of as much as 100 per cent. We accept that some of those increases are not the responsibility of the Government. Some of them are the direct result of Government action. Secondly, we have an argument in logic. Hon. Gentlemen on the Government benches who said that this was something we would have to live with were the ones who brought forward arguments that because the rents of council house tenants had been increase by £26 a year immediate action should be taken to ensure that the rents were frozen. Surely one cannot say that when people are facing massive rate rises they deserve no help or relief. [An HON. MEMBER: "YOU opposed relief before."] We did not.

Thirdly, there is the contribution to the control of inflation which such interim relief would bring. We cannot hope to expect people to exercise restrain in wages or prices if they face, either in their homes or in industry, unprecedented rate rises.

Fourthly, we have a sound precedent for action being taken by the Conservative Government when unexpected results flowed from revaluation. It would cost money, but, bearing in mind that the Secretary of State admitted that if the Government were to pay half of all the extra rates above a 10 per cent. increase the figure would amount to £100 million, I suggest that this would be a cheap price for Government to pay when apparently they are prepared to spend hundreds of millions on worthless nationalisation of industry and to give £10 million of taxpayers' money as a straight bribe to trade unionists.

At the beginning of the debate the Secretary of State for the Environment gave a jolly, elegant and highly political and amusing speech, which was inappropriate in view of the serious human problem and hardship caused by the alarming, unprecedented, and, indeed, unexpected rises in rates. The right hon. Gentleman said that he would listen to ideas and suggestions. This must surprise some of my hon. Friends, including a former Chancellor of the Duchy of Lancaster, who were apparently unable to obtain an interview with the right hon. Gentleman. They were not able to put their ideas to the Secretary of State. However, we have given the right hon. Gentleman some ideas tonight. We ask him to accept that a serious and alarming situation exists. Some of these matters are outside his direct control, but others are certainly within his direct control.

We ask the right hon. Gentleman not for sympathy but for action to give interim relief to those who are hardest hit. We ask him to accept that many ratepayers are alarmed by the situation and that there is a militancy which has never existed before. We are traditionally a law-abiding and non-militant nation, and the tragedy is that the present Government who came to power on a pledge to surrender to militancy, have created a situation in which all sections of society believe that only by the exercise of militancy can they get results. It is a disastrous course which is poisoning our society.

In those circumstances I appeal to the Government and to the House to say that we understand the problems of ratepayers, some of whom are facing staggering rises in rates. We must show them that in this Parliament we have a true understanding of their grievances and that their justified plea will be met by urgent action. If we do not have urgent action by the Government expressed in the Minister's reply tonight, we shall vote for the motion and make clear to the nation that this urgent problem must be urgently dealt with and treated seriously, so that justice may be done to ratepayers.

9.34 p.m.

The Secretary of State for Wales (Mr. John Morris)

I have great pleasure in joining in the congratulations to the hon. Member for Liverpool, Wavertree (Mr. Steen) on a delightful speech. We listened intently to his comments on public participation and public interest. The only regret I had was that he failed to mention that Liverpool had benefited by 6p in the pound because of the changes in rate support grant.

The hon. Member for Glasgow, Cathcart (Mr. Taylor) made a passionate speech. He began with a peroration and seemed to end with a peroration. He conceded that a lower rate existed in Scotland at present, but because of the imminence of reorganisation he said that the rates there were likely to be much higher next year. That perhaps is the best evidence that I can call. Local government reorganisation is a major factor which bedevils the rates that have been levied in the whole of England and Wales.

I am sure that the hon. Member for Cathcart did not consult his colleagues who represent English constituencies before he made that statement. I am sure that the attack that he made on the Welsh rating system caused great embarrassment to his right hon. Friend who looks after the interests of Wales on behalf of the Opposition, the right hon. and learned Member for Hendon, South (Mr. Thomas). In any event, he does his best.

I thought—and I am being most charitable—that in the course of the examination which the hon. Gentleman made of the inquiry which my right hon. Friend has set up he knocked down the possible alternative sources of finance for local government one after the other. He seemed to be placing his excuses on the record to justify the inability of the previous administration to do anything about local government finance. Perhaps that was the object of the exercise. He told us that the rates had gone up in some areas by 70 per cent. and 80 per cent. Of course, some of the water rates in the Principality have gone up as a result of the Water Act 1973, which the right hon. Member for Hereford (Mr. Gibson-Watt) supported—

Mr. David Gibson-Watt (Hereford) rose—

Mr. Morris

From time to time the hon. Gentleman the Member for Cathcart supported the previous Government and it may well be that he supported the Water Act 1973. I am not sure whether he was in favour or out of favour at the time. In Anglesey there were increases of 400 per cent. as a result of the Water Act which the right hon. Gentleman supported.

Mr. Gibson-Watt

I am grateful to the right hon. and learned Gentleman. I shall intervene but not interrupt. Water rates may be high in Wales, but, because of the action of the right hon. Gentleman and his Government, and because of the low amount of domestic rate support in Herefordshire, the water rates in Hereford are far higher than in the rest of the Wye Valley. That is damnably unfair. What will he do about it?

Mr. Morris

Mr. Deputy Speaker, I and my—

Mr. Gibson-Watt

Answer.

Mr. Morris

The right hon. Gentleman said that he would not interrupt but intervene. Now let me reply. I have to defend all sorts of things at this Dispatch Box, but one thing that I do not have to defend is the Water Act 1973. The right hon. Gentleman was jointly in charge of that measure, and he knows full well that the present water rating system is the direct result of that iniquitous Act.

Perhaps it will help to lower the temperature a little if we examine with some care the points at issue between the Government and the various motions which have been tabled by the Opposition parties. My right hon. Friend the Secretary of State has drawn attention to the absence of certain signatories whom we would have expected to see. For instance, the right hon. and learned Member for Hexham (Mr. Rippon) has been conspicuous by his absence all day. We note that he is not a signatory. In the same way we have listened with interest to the alibi of the right hon. Member for Crosby (Mr. Page). I am sure that he is doing well in Committee on the Finance Bill. The reason for their absence is clear. Both right hon. Gentlemen have made it known where they stand.

I remind the House of what the right hon. and learned Member for Hexham said on the Second Reading of the Local Government Bill: The system of rates, the local authorities' own tax, is well tried, well known and easy and cheap to administer."—[OFFICIAL REPORT, 12th November 1973; Vol. 864, c. 35.] It is no wonder that his name is not among the signatories to the motion.

When that same debate was wound up by the right hon. Member for Crosby, he knocked down the idea that there should be a Royal Commission. I find it odd to read the motion, the first limb of which stresses the need for a fundamental reform of the rating system. This is the cavalier manner in which this idea was thrown out by the official spokesman of the previous administration. He said: We should only have discussion before the Royal Commission, repeating the discussion on local government finance, which the Government stimulated by issuing that Green Paper; it would be both disastrous and defeatist to put the whole matter back into the melting pot."—[OFFICIAL REPORT, 12th November 1973; Vol. 864, c. 148.] It is no wonder that the Opposition are fielding a new team in seeking to put forward the need in 1974 for a fundamental reform of the rating system.

Mr. Peter Tapsell (Horncastle)

The right hon. and learned Gentleman is giving us an amusing knock-about speech but I am sure that he realises that for millions of ordinary people and certainly for my constituents this is a matter of deadly seriousness. To many of my constituents it is giving rise to the most acute anxiety. I hope that he will now address himself seriously to the problem and give some reassurance, especially to rural ratepayers, who are desperately anxious about the rate demands that they face.

Mr. Morris

I do not know how long the hon. Member for Horncastle (Mr. Tapsell) has been listening to the debate. I observe him now for the first time, though perhaps I am being unfair to him. That should go on the record, I think. In any event, if the hon. Gentleman feels so passionate today and intends to join his colleagues in voting for the Opposition motion about the need for a fundamental reform of the rating system, I wonder why he did not do so three or four years ago and why he did not object when on that occasion the right hon. Member for Crosby said that to have a Royal Commission on this matter would be defeatist and disastrous and would put the whole matter back into the melting pot. Is there not humbug and hypocrisy on the part of Opposition supporters?

Let me deal with another limb of this ill-drafted motion. It urges the need to provide that water and sewerage charges should rank for rate rebates. However, they cannot rank for rate rebates because that part of the rate was taken away from local government in the Water Act introduced by the previous administration. That is why it is not possible to make the rebates which have been prayed in aid as a very important assistance to people who are in difficulties. We are doing the utmost to ensure the greater use, the greater availability, and ensuring that this is brought to the attention of more and more people.

Mr. F. A. Burden (Gillingham)

What does that mean?

Mr. Morris

But it must be humbug and hypocrisy on the part of the Opposition now, in 1974, to call for water and sewerage charges to rank for rate rebate. This relief was available until the Act came into being on 1st April, 1974.

Why this conversion, this death-bed conversion on the road to Damascus, whereby the Opposition have seen this shining light? The outside world will know of the humbug and hypocrisy of hon. Gentlemen opposite.

Mr. Hugh Fraser (Stafford and Stone)

How can someone have a death-bed conversion on the road to Damascus?

Mr. Morris

By means of my somewhat colourful description, I pointed out the idiotic posture of right hon. and hon. Gentlemen opposite.

It is not a late gesture on our part in setting up a fundamental review. There was no mention of rating reform in the Conservative Party election manifesto; there was not a word about local government finance. Indeed, during the local government debates the Tories resisted any inquiry or examination into local government finance.

The Labour Party made its position clear in its 1973 programme. We have to look afresh at the whole system of rating and of Exchequer grants to local authorities. That is an illustration of the consistency of the approach we are adopting urgently and speedily to try to grapple with an unfair tax, a tax which is based not on ability to pay, not on need, but on the premises one occupies and depends upon the part of the country in which one lives or operates. That has been the general tenor of the debate. Both sides of the House now accept the need for a fundamental inquiry of that kind.

Perhaps it would be of interest if I were to set out some further material regarding the inquiry. Perhaps it would be helpful if at this stage I were to give an indication of what we stress about this inquiry. First, I stress that we are placing no restrictions on the work of the inquiry. It will be open to its members to re-examine any of the suggestions made in the past, to formulate new ones of its own on every aspect of local government finance, or, as has been suggested today, to inquire into practice overseas.

There is one point we do not accept. Perhaps the only major difference between the Liberal Party and the Government is in this respect. The Liberal Party put forward very strongly the need for a Royal Commission. In reply to the speech made by the hon. Member for Colne Valley (Mr. Wainwright) I would say that we do not accept that the inquiry will suffer any lack of authority through not being dubbed a Royal Commission. When we announce the membership it will be recognised that the committee is well able to stand on its own feet and make its views carry weight.

Furthermore, we do not consider the formal machinery of a Royal Commission and its powers to call for evidence to be either necessary or appropriate in this case. The problem will lie not in gathering evidence but in the sifting of it. There has never been a shortage of advice to Governments on these matters. During the course of today's debate advice has been freely proffered by organisations and people on all sides. The prime need now is for constructive analysis, not a further agglomeration of material.

Mr. Richard Wainwright

I am glad that the Secretary of State agrees on the importance of the inquiry taking account of valuable overseas experience. Does he think that an independent inquiry without Royal Commission status will meet with the same co-operation from foreign countries?

Mr. Morris

In my view and that of my right hon. Friend there will be no difficulty. The need on occasion is for a Royal Commission with powers to summon persons and call evidence, but the lack of those powers will cause no difficulty in this kind of inquiry. There is so much evidence. What is needed now is to sift it, reach conclusions and make recommendations. I anticipate no difficulty on the score the hon. Gentleman mentioned. He and others have spoken about the need for urgency. The charge is often made that a Royal Commission loses not months but years. The kind of inquiry, with the kind of time scale indicated by my right hon. Friend, will report much earlier and be able to bring before the Government the examination which is needed. I hope that that will reassure the hon. Gentleman. My right hon. Friend's suggestion will more than meet the case for a fundamental inquiry.

The hon. Member for Colne Valley also suggested that we should negotiate individually with the local authorities instead of consulting the local authority associations. I may have misunderstood him, but I think he will agree that in that extreme form his suggestion would be a recipe for confusion. It is essential for the Government to take the collective views of local government on these matters. We simply cannot have 400 or more separate grant settlements. Besides, there is a statutory requirement on the Secretary of State to consult the local authority associations in making the settlement.

However, we fully accept that there is a need for us to have a clear picture in our minds of the problems confronting individual authorities during our discussions with the associations. That is why my hon. Friend the Member for Widnes (Mr. Oakes) is visiting a wide range of authorities to talk about the prospects for next year. The hon. Member will recall that he visited the new district of Kirklees, which I understand falls within the hon. Member's constituency.

Many hon. Members have pressed us to take account of income levels in next year's distribution arrangements. It seems to be true that local authority spending per head is artificially depressed in low income areas and unusually high in many areas which have a high level of rateable resources—presumably a reflection of the ability of the local people to pay. We very much hope that in consultation with the local authority associations we can find ways of adjusting the formulae to take account of this.

Hon. Members on both sides have raised the problem of areas with rapidly-growing populations, the new and expanding towns and the need for early and speedy action to help those areas. My hon. Friend the Member for Meriden (Mr. Tomlinson) and my right hon. Friend the Member for Kettering (Sir G. de Freitas) and a number of other hon. Members raised this matter. A case has been forcibly put here for more help for areas with rapidly-growing populations, particularly those areas with planned overspill development. We are again reviewing the evidence of the effect of population growth on expenditure levels and we are seriously considering the possibility of using more up-to-date data on population and other matters in the rate calculations for 1974–75.

My hon. Friend the Member for Ormskirk (Mr. Kilroy-Silk) made a similar point. I understand that there is a particular problem in Knowlsley because there was no former county borough base on which to build. We are discussing with the local authority associations whether there is any way we can reflect in the grant distribution the heavy burden which some new authorities suffered from reorganisation, and we are exploring the possibility of using more up-to-date data on expenditure, popula- tion and other matters in preparing next year's distribution.

It is obvious to all hon. Members who have taken part in the debate that the ratepayers have been taken in as a result of the deception of the Opposition. The Opposition prophesied a maximum 9 per cent. and an average 3 per cent. increase in rates, and now we have had crocodile tears from one end of the Opposition benches to the other because of the staggering increase in rates. The Opposition have misled local authorities regarding inflation. Local authorities were told to plan for a 9 per cent. inflation rate, but it has been running at 15 per cent. and more.

We have inherited an appalling economic situation—

Mr. Carlisle

In the last two minutes at his disposal will the right hon. and learned Gentleman tell us, instead of what he has been saying, what he will do to help those parts of the country where people are facing increases of 70, 80 and 90 per cent.? Those people cannot understand why a Government who throw money about like confetti are unwilling to do anything about the rates.

Mr. Morris

I would have thought that the hon. and learned Gentleman would be blushing, having been in office for four years and having been party to a rejection of a fundamental review. How dare he stand there, with crocodile tears seeping out of his eyes, over rate increases of 70 or 80 per cent. when he knows, about the cost of local government reorganisation, the appalling mismanagement of his Government and the way they deceived people in their prophecy of the extent of the rate increase? They now seek to put the blame on the Government.

In the last debate on this matter, 80 or more Opposition Members were absent from the Lobbies. No doubt many of them represented areas which have benefited from the Government's proposals. What a change there has been since the last debate. The whole of the responsibility for the present situation lies with the Opposition.

Question put, That the amendment be made:—

The House divided: Ayes 289, Noes 298.

Division No. 57.]	AYES	[9.59 p.m.
Abse, Leo	Evans, Fred (Caerphilly)	Mabon, Dr. J. Dickson
Allaun, Frank	Evans, Ioan (Aberdare)	McCartney, Hugh
Archer, Peter	Evans, John (Newton)	McElhone, Frank
Armstrong, Ernest	Ewing, Harry (St'ling, F'kirk & G'm'th)	MacFarquhar, Roderick
Ashley, Jack	Fitch, Alan (Wigan)	McGuire, Michael
Ashton, Joe	Flannery, Martin	Maclennan, Robert
Atkins, Ronald	Fletcher, Raymond (Ilkeston)	McMillan, Tom (Glasgow, C.)
Atkinson, Norman	Fletcher, Ted (Darlington)	McNamara, Kevin
Bagier, Gordon A. T.	Foot, Rt. Hn. Michael	Madden, M. O. F.
Barnett, Guy (Greenwich)	Ford, Ben	Magee, Bryan
Barnett, Joel (Heywood & Royton)	Forrester, John	Mahon, Simon
Bates, Alf	Fowler, Gerry (The Wrekin)	Mallalieu, J. P. W.
Baxter, William	Fraser, John (Lambeth, Norwood)	Marks, Kenneth
Benn, Rt. Hn. Anthony Wedgwood	Freeson, Reginald	Marquand, David
Bennett, Andrew F. (Stockport, N.)	Galpern, Sir Myer	Marshall, Dr. Edmund (Goole)
Bidwell, Sydney	Garrett, John (Norwich, S.)	Mason, Rt. Hn. Roy
Bishop, E. S.	Garrett, W. E. (Wallsend)	Mayhew, Christopher (G'wh, W'wch, E)
Blenkinsop, Arthur	George, Bruce	Meacher, Michael
Boardman, H.	Gilbert, Dr. John	Mellish, Rt. Hn. Robert
Booth, Albert	Ginsburg, David	Mendelson, John
Boothroyd, Miss Betty	Golding, John	Mikardo, Ian
Bottomley, Rt. Hn. Arthur	Gourlay, Harry	Millan, Bruce
Boyden, James (Bishop Auckland)	Graham, Ted	Miller, Dr. M. S. (E. Kilbride)
Bradley, Tom	Grant, George (Morpeth)	Milne, Edward
Broughton, Sir Alfred	Grant, John (Islington, C.)	Mitchell, R. C. (S'hampton, Itchen)
Brown, Bob (Newcastle upon Tyne, W.)	Griffiths, Eddie (Sheffield, Brightside)	Molloy, William
Brown, Hugh D. (Glasgow, Provan)	Hamilton, William (Fife, C.)	Moonman, Eric
Brown, Ronald (H'kney, S.& Sh'dtch)	Hamling, William	Morris, Alfred (Wythenshawe)
Buchan, Norman	Hardy, Peter	Morris, Charles R. (Openshaw)
Buchanan, Richard (G'gow, Springb'rn)	Harper, Joseph	Morris, Rt. Hn. John (Aberavon)
Butler, Mrs. Joyce (H'gey, WoodGreen)	Harrison, Walter (Wakefield)	Moyle, Roland
Callaghan, Rt. Hn. James (Cardiff, S.E.)	Hart, Rt. Hn. Judith	Mulley, Rt. Hn. Frederick
Callaghan, Jim (M'dd'ton & Pr'wich)	Hattersley, Roy	Murray, Ronald King
Campbell, Ian	Hatton, Frank	Newens, Stanley (Harlow)
Cant, R. B.	Healey, Rt. Hn. Denis	Oakes, Gordon
Carmichael, Neil	Heffer, Eric S.	Ogden, Eric
Carter, Ray	Hooley, Frank	O'Halloran, Michael
Carter-Jones, Lewis	Horam, John	O'Malley, Brian
Castle, Rt. Hn. Barbara	Howell, Denis (B'ham, Small Heath)	Orbach, Maurice
Clemitson, Ivor	Huckfield, Leslie	Orme, Rt. Hn. Stanley
Cocks, Michael	Hughes, Rt. Hn. Cledwyn (Anglesey)	Ovenden, John
Cohen, Stanley	Hughes, Mark (Durham)	Owen, Dr. David
Coleman, Donald	Hughes, Robert (Aberdeen, North)	Padley, Walter
Colquhoun, Mrs. M. N.	Hughes, Roy (Newport)	Palmer, Arthur
Concannon, J. D.	Hunter, Adam	Park, George (Coventry, N.E.)
Conlan, Bernard	Irvine, Rt. Hn. Sir A. (L'p'l, EdgeHill)	Parker, John (Dagenham)
Cook, Robert F. (Edinburgh, C.)	Irving, Rt. Hn. Sydney (Dartford)	Parry, Robert
Craigen, J. M. (G'gow, Maryhill)	Jackson, Colin	Pavitt, Laurie
Crawshaw, Richard	Janner, Greville	Peart, Rt. Hn. Fred
Cronin, John	Jay, Rt. Hn. Douglas	Perry, Ernest G.
Crosland, Rt. Hn. Anthony	Jeger, Mrs. Lena	Phipps, Dr. Colin
Cryer, G. R.	Jenkins, Hugh (W'worth, Putney)	Prentice, Rt. Hn. Reg
Cunningham, G. (Isl'ngt'n & F'sb'ry)	Jenkins, Rt. Hn. Roy (B'ham, St'fd)	Prescott, John
Cunningham, Or. John A. (Whiteh'v'n)	John, Brynmor	Price, Christopher (Lewisham, W.)
Dalyell, Tam	Johnson, James (K'ston upon Hull, W)	Price, William (Rugby)
Davidson, Arthur	Johnson, Walter (Derby, S.)	Radice, Giles
Davies, Bryan (Enfield, N.)	Jones, Barry (Flint, E.)	Rees, Rt. Hn. Merlyn (Leeds, S.)
Davies, Denzil (Llanelli)	Jones, Dan (Burnley)	Richardson, Miss Jo
Davies, Ifor (Gower)	Jones, Gwynoro (Carmarthen)	Roberts, Albert (Normanton)
Davis, Clinton (Hackney, C.)	Jones, Alec (Rhondda)	Roberts, Gwilym (Cannock)
Deakins, Eric	Judd, Frank	Robertson, John (Paisley)
Dean, Joseph (Leeds, W.)	Kaufman, Gerald	Roderick, Caerwyn E.
de Freitas, Rt. Hn. Sir Geoffrey	Keiley, Richard	Rodgers, George (Chorley)
Delargy, Hugh	Kerr, Russell	Rodgers, William(Teesside, St'ckton)
Dell, Rt. Hn. Edmund	Kilroy-Silk, Robert	Rooker, J. W.
Dempsey, James	Kinnock, Neil	Rose, Paul B.
Doig, Peter	Lomborn, Harry	Ross, Rt. Hn. William (Kilmarnock)
Dormand, J. D.	Lamond, James	Rowlands, Edward
Douglas-Mann, Bruce	Latham, Arthur(City of W'minster P'ton)	Sandelson, Neville
Duffy, A. E. P.	Lawson, George (Motherwell & Wishaw)	Sedgemore, Bryan
Dunn, James A.	Leadbitter, Ted	Selby, Harry
Dunnett, Jack	Lee, John	Shaw, Arnold (Redbridge, Ilford, S.)
Dunwoody, Mrs. Gwyneth	Lestor, Miss Joan (Eton & Slough)	Sheldon, Robert (Ashton-under-Lyne)
Eadle, Alex	Lewis, Arthur (Newham, N.)	Shore, Rt. Hn. Peter(S'pney & P'plar)
Edelman, Maurice	Lewis, Ron (Carlisle)	Short, Rt. Hn. E. (N'ctle-u-Tyne)
Edge, Geoff	Lipton, Marcus	Short, Mrs. Renée (W'hamp'n, N.E.)
Edwards, Robert (W'hampton, S.E.)	Loughlin, Charles	Silkin, Rt. Hn. John (L'sham, D'ford)
Ellis, John (Brigg & Scunthorpe)	Loyden, Eddie	Silkin, Rt. Hn. S.C. (S'hwark, Dulwich)
Ellis, Tom (Wrexham)	Lyon, Alexander W. (York)	Sillars, James
English, Michael	Lyons, Edward (Bradford, W.)	Silverman, Julius
Ennals, David
Skinner, Dennis	Tierney, Sydney	Willey, Rt. Hn. Frederick
Small, William	Tinn, James	Williams, Alan (Swansea, W.)
Smith, John (Lanarkshire, N.)	Tomlinson, John	Williams, Alan Lee (Hvrng, Hchurch)
Snape, Peter	Torney, Tom	Williams, Rt. Hn. Shirley (H'f' d & St'ge)
Spearing, Nigel	Tuck, Raphael	Williams, W. T. (Warrington)
Spriggs, Leslie	Urwin, T. W.	Wilson, Alexander (Hamilton)
Stallard, A. W.	Varley, Rt. Hn. Eric G.	Wilson, Rt. Hn. Harold (Huyton)
Stewart, Rt. Hn. M. (H'sth, Fulh' m)	Wainwright, Edwin (Dearne Valley)	Wilson, William (Coventry, S.E.)
Stoddart, David (Swindon)	Walden, Brian (B'm'ham, Ladywood)	Wise, Mrs. Audrey
Storehouse, Rt. Hn. John	Walker, Harold (Doncaster)	Woodall, Alec
Stott, Roger	Walker, Terry (Kingswood)	Woof, Robert
Strang, Gavin	Watkins, David	Wrigglesworth, Ian
Strauss, Rt. Hn. G. R.	Weitzman, David	Young, David (Bolton, E.)
Summerskill, Hn. Dr. Shirley	Wellbeloved, James
Swain, Thomas	White, James	TELLERS FOR THE AYES
Taverne, Dick	Whitehead, Phillip	Mr. Michael Cocks and
Thomas, Jeffrey (Abertillery)	Whitlock, William	Mr. James Hamilton.
Thorne, Stan (Preston, S.)
NOES
Adley Robert	Dodds-Parker, Sir Douglas	Hooson, Emlyn
Aitken, Jonathan	Dodsworth, Geoffrey	Hordern, Peter
Alison, Michael (Barkston Ash)	Douglas-Home, Rt. Hn. Sir Alec	Howe, Rt. Hn. Sir Geoffrey (Surrey, E.)
Allason James (Hemel Hempstead)	Drayson, Burnaby	Howell, David (Guildford)
Amery, Rt. Hn. Julian	du Cann, Rt. Hn. Edward	Howell, Ralph (Norfolk, North)
Ancram, M.	Durant, Tony	Howells, Geraint (Cardigan)
Archer, Jeffrey	Dykes, Hugh	Hunt, John
Atkins, Rt. Hn. Humphrey (Spelthorne)	Eden, Rt. Hn. Sir John	Hurd, Douglas
Awdry, Daniel	Edwards, Nicholas (Pembroke)	Hutchison, Michael Clark
Baker, Kenneth	Elliott, Sir William	Iremonger, T. L.
Balniel, Rt. Hn. Lord	Emery, Peter	Irvine, Bryant Godman (Rye)
Banks, Robert	Eyre, Reginald	James, David
Barber, Rt. Hn. Anthony	Fairgrieve, Russell	Jenkin, Rt. Hn. P. (R'dge W'std &W'fd)
Beith, A. J.	Farr, John	Jessel, Toby
Bell, Ronald	Fell, Anthony	Johnson Smith, G. (E. Grinstead)
Bennett, Dr. Reginald (Fareham)	Fenner, Mrs. Peggy	Johnston, Russell (Inverness)
Benyon, W.	Fidler, Michael	Jones, Arthur (Daventry)
Berry, Hon. Anthony	Finsberg, Geoffrey	Jopling, Michael
Biffen, John	Fisher, Sir Nigel	Joseph, Rt. Hn. Sir Keith
Biggs-Davison, John	Fletcher, Alexander (Edinburgh, N.)	Kaberry, Sir Donald
Blaker, Peter	Fletcher-Cooke, Charles	Kellett-Bowman, Mrs. Elaine
Boardman, Tom (Leicester, S.)	Fookes, Miss Janet	Kershaw, Anthony
Body, Richard	Fowler, Norman (Sutton C'Field)	Kilfedder, James A.
Boscawen, Hon. Robert	Fraser,Rt.Hn.Hugh (St'fford&Stone)	Kimball, Marcus
Bowden, Andrew (Brighton, Kemptown)	Freud, Clement	King, Evelyn (Dorset, S.)
Boyson, Dr. Rhodes (Brent, N.)	Fry, Peter	King, Tom (Bridgwater)
Braine, Sir Bernard	Galbraith, Hn. T. G. D.	Kitson, Sir Timothy
Bray, Ronald	Gardiner,George (Reigate & Banstead)	Knight, Mrs. Jill
Brewis, John	Gardner, Edward (S. Fylde)	Knox, David
Brittan, Leon	Gibson-Watt, Rt. Hn. David	Lament, Norman
Brocklebank-Fowler, Christopher	Gilmour, Rt. Hon. Ian (Ch'sh' & Amsh'm)	Lane, David
Brown, Sir Edward (Bath)	Gilmour, Sir John (Fife, E.)	Langford-Holt, Sir John
Bruce-Gardyne, J.	Glyn, Dr. Alan	Latham, Arthur (Melton)
Bryan, Sir Paul	Godber, Rt. Hn. Joseph	Lawrence, Ivan
Buchanan-Smith, Alick	Goodhart, Philip	Lawson, Nigel (Blaby)
Buck, Antony	Goodhew, Victor	Le Marchant, Spencer
Budgen, Nick	Goodlad, A.	Lester, Jim (Beeston)
Bulmer, Esmond	Gorst, John	Lewis, Kenneth (Rtland & Stmford)
Burden, F. A.	Gow, Ian (Eastbourne)	Lloyd, Ian (Havant & Waterloo)
Butler, Adam (Bosworth)	Gower, Sir Raymond (Barry)	Loverldge, John
Carlisle, Mark	Grant, Anthony (Harrow, C.)	Luce, Richard
Carr, Rt. Hn. Robert	Gray, Hamish	McAdden, Sir Stephen
Chalker, Mrs. Lynda	Grieve, Percy	MacArthur, Ian
Channon, Paul	Griffiths, Eldon (Bury St. Edmunds)	McCrindle, R. A.
Chataway, Rt. Hn. Christopher	Grimond, Rt. Hn. J.	Macfarlane, Neil
Churchill, W. S.	Grist, Ian	MacGregor, John
Clark, A. K. M. (Plymouth, Sutton)	Grylis, Michael	McLaren, Martin
Clark, William (Croydon, S.)	Gurden, Harold	Macmillan, Rt. Hn. M. (Farnham)
Clarke, Kenneth (Rushcliffe)	Hall, Sir John	McNair-Wilson, Michael (Newbury)
Cockcroft, John	Hall-Davis, A. G. F.	McNair-Wilson, Patrick (New Forest)
Cooke, Robert (Bristol, W.)	Hamilton, Michael (Salisbury)	Madel, David
Cope, John	Hampson, Dr. Keith	Marshall, Michael (Arundel)
Cordle, John	Hannam, John	Marten, Neil
Cormack, Patrick	Harrison, Col. Sir Harwood (Eye)	Mather, Carol
Corrie, John	Harvie Anderson, Rt. Hn. Miss	Maude, Angus
Costaln, A. P.	Hastings, Stephen	Maudling, Rt. Hn. Reginald
Critchley, Julian	Havers, Sir Michael	Mawby, Ray
Crouch, David	Hayh[...]e, Barney	Maxwell-Hyslop, R. J.
Crowder, F. P.	Heath, Rt. Hn. Edward	Mayhew, Patrick (RoyalT'bridge Wells)
Davies, Rt. Hn. John (Knutsford)	Henderson, J. S. B. (Dunbartonshire, E.)	Meyer, Sir Anthony
d'Avlgdor-Goldsmld, Maj.-Gen. James	Heseltine, Michael	Miller, Hal (B'grove & R'ditch)
Dean, Paul (Somerset, N.)	Higgins, Terence	Mills, Peter
Deedes, Rt. Hn. W. F.	Hill, James A.	Miscampbell, Norman
Dixon, Piers	Holland, Philip	Mitchell, David (Basingstoke)

Moate, Roger	Renton, R. T. (Mid-Sussex)	Taylor, Robert (Croydon, N.W.)
Money, Ernle	Rhys Williams, Sir Brandon	Tebbit, Norman
Moore, J. E. M. (Croydon, C.)	Ridley, Hn. Nicholas	Temple-Morris, Peter
Morgan, Geraint	Ridsdale, Julian	Thatcher, Rt. Hn. Margaret
Morgan-Giles, Rear-Adm.	Rifkind, Malcolm	Thomas, Rt. Hn. P. (B'net, H'dn, S.)
Morris, Michael (Northampton, S.)	Rippon, Rt. Hn. Geoffrey	Thorpe, Rt. Hn. Jeremy
Morrison, Charles (Devizes)	Roberts, Wyn (Conway)	Townsend, C. D.
Morrison, Peter (City of Chester)	Ross, Stephen (Isle of Wight)	Trotter, Neville
Mudd, David	Rossi, Hugh (Hornsey)	Tugendhat, Christopher
Neave, Airey	Rost, Peter (Derbyshire, S. E.)	Tyler, Paul
Neubert, Michael	Royle, Sir Anthony	van Straubenzee, W. R.
Newton, Tony (Bralntree)	Sainsbury, Tim	Vaughan, Dr. Gerard
Normanton, Tom	St. John-Stevas, Norman	Viggers, Peter
Nott, John	Scott-Hopkins, James	Waddington, David
Onslow, Cranley	Shaw, Giles (Pudsey)	Wainwright, Richard (Colne Valley)
Oppenheim, Mrs. Sally	Shaw, Michael (Scarborough)	Wakeham, John
Orr, Capt. L. P. S.	Shelton, William (L'mb' th, Streath'm)	Walder, David (Clltheroe)
Osborn, John	Shersby, Michael	Walker, Rt. Hn. Peter (Worcester)
Page, Rt. Hn. Graham (Crosby)	Silvester, Fred	Walker-Smith, Rt. Hn. Sir Derek
Page, John (Harrow, W.)	Sims, Roger	Wall, Patrick
Pardoe, John	Sinclair, Sir George	Walters, Dennis
Parkinson, Cecil (Hertfordshire, S.)	Skeet, T. H. H.	Warren, Kenneth
Pattie, Geoffrey	Spence, John	Weatherill, Bernard
Percival, Ian	Spicer, Jim (Dorset, W.)	Wells, John
Peyton, Rt. Hn. John	Spicer, Michael (Worcestershire, S.)	Whitelaw, Rt. Hn. William
Pink, R. Bonner	Sproat, Iain	Wiggin, Jerry
Price, David (Eastleigh)	Stainton, Keith	Winstanley, Dr. Michael
Prior, Rt. Hn. James	Stanbrook, Ivor	Winterton, Nicholas
Pym, Rt. Hn. Francis	Stanley, John	Wood, Rt. Hn. Richard
Quennell, Miss J. M.	Steel, David	Woodhouse, Hn. Christopher
Raison, Timothy	Steen, Anthony (L'pool, Wavertree)	Worsley, Sir Marcus
Rathbone, Tim	Stewart, Ian (Hitchin)	Young, Sir George (Ealing, Acton)
Rawlinson, Rt. Hn. Sir Peter	Stodart, Rt. Hn. A. (Edinburgh W.)
Redmond, Robert	Stokes, John	TELLERS FOR THE NOES:
Rees, Peter (Dover & Deal)	Stradling Thomas, John
Rees-Davies, W. R.	Tapsell, Peter	Mr. Walter Clegg and
Renton, Rt. Hn. SirDavid (H't'gd'ns're)	Taylor, Edward M. (Glgow, C'cart)	Mr. Paul Hawkins.

Question accordingly negatived.

Main Question put:—

The House divided: Ayes 298, Noes 289.

Division No. 58.]	AYES	[10.12 p.m.
Adley Robert	Carlisle, Mark	Fidler, Michael
Aitken, Jonathan	Carr, Rt. Hn. Robert	Finsberg, Geoffrey
Alison, Michael (Barkston Ash)	Chalker, Mrs. Lynda	Fisher, Sir Nigel
Allason James (Hemel Hempstead)	Channon, Paul	Fletcher, Alexander (Edinburgh, N.)
Amery, Rt. Hn. Julian	Chataway, Rt. Hn. Christopher	Fletcher-Cooke, Charles
Ancram, M.	Churchill, W. S.	Fookes, Miss Janet
Archer, Jeffrey	Clark, A. K. M. (Plymouth, Sutton)	Fowler, Norman (Sutton C'Field)
Atkins, Rt.Hn. Humphrey (Spelthorne)	Clark, William (Croydon, S.)	Fraser, Rt. Hn. Hugh (St'fford & Stone)
Awdry, Daniel	Clarke, Kenneth (Rushcliffe)	Freud, Clement
Baker, Kenneth	Cockcrott, John	Fry, Peter
Balniel, Rt. Hn. Lord	Cooke, Robert (Bristol, W.)	Galbraith, Hn. T. G. D.
Banks, Robert	Cope, John	Gardiner, George (Reigate & Banstead)
Barber, Rt. Hn. Anthony	Cordle, John	Gardner, Edward (S. Fylde)
Beith, A. J.	Cormack, Patrick	Gibson-Watt, Rt. Hn. David
Bell, Ronald	Corrie, John	Gilmour, Rt. Hon. Ian (Ch'sh' & Amsh'm)
Bennett, Or. Reginald (Fareham)	Costain, A. P.	Gilmour, Sir John (Fife, E.)
Benyon, W.	Critchley, Julian	Glyn, Dr. Alan
Berry, Hon. Anthony	Crouch, David	Godber, Rt. Hn. Joseph
Biffen, John	Crowder, F. P.	Goodhart, Philip
Blggs-Davison, John	Davies, Rt. Hn. John (Knutsford)	Goodhew, Victor
Blaker, Peter	d'Avlgdor-Goldsmid,Maj.-Gen. James	Goodlad, A.
Boardman, Tom (Leicester, S.)	Dean, Paul (Somerset, N.)	Gorst, John
Body, Richard	Deedes, Rt. Hn. W. F.	Gow, Ian (Eastbourne)
Boscawen, Hon. Robert	Dixon, Piers	Gower, Sir Raymond (Barry)
Bowden, Andrew (Brighton, Kemplown)	Dodds-Parker, Sir Douglas	Grant, Anthony (Harrow, C.)
Boyson, Dr. Rhodes (Brent, N.)	Dodsworth, Geoffrey	Gray, Hamish
Braine, Sir Bernard	Douglas-Home, Rt. Hn. Sir Alec	Grieve, Percy
Bray, Ronald	Drayson, Burnaby	Griffiths, Eldon (Bury St. Edmunds)
Brewis, John	du Cann, Rt. Hn. Edward	Grimond, Rt. Hn. J.
Brittan, Leon	Durant, Tony	Grist, Ian
Brocklebank-Fowler, Christopher	Dykes, Hugh	Grylis, Michael
Brown, Sir Edward (Bath)	Eden, Rt. Hn. Sir John	Gurden, Harold
Bruce-Gardyne, J.	Edwards, Nicholas (Pembroke)	Hall, Sir John
Bryan, Sir Paul	Elliott, Sir William	Hall-Davis, A. G. F.
Buchanan-Smith, Allck	Emery, Peter	Hamilton, Michael (Salisbury)
Buck, Antony	Eyre, Reginald	Hampson, Dr. Keith
Budgen, Nick	Fairgrieve, Russell	Hannam,John
Bulmer, Esmond	Farr, John	Harrison, Col. Sir Harwood (Eye)
Burden, F. A.	Fell, Anthony	Harvie Anderson, Rt. Hn. Miss
Butler, Adam (Bosworth)	Fenner, Mrs. Peggy
Hastings, Stephen	Marten, Neil	St. John-Stevas, Norman
Havers, Sir Michael	Mather, Carol	Scott-Hopkins, James
Hayhoe, Barney	Maude, Angus	Shaw, Giles (Pudsey)
Heath, Rt. Hn. Edward	Maudling, Rt. Hn. Reginald	Shaw, Michael (Scarborough)
Henderson, Douglas (Ab'rd'nsh're, E)	Mawby, Ray	Shelton, William (L'mb'th, Streath'm)
Heseltine, Michael	Maxwell-Hyslop, R. J.	Shersby, Michael
Higgins, Terence	Mayhew,Patrick(RoyalT'bridgeWells)	Silvester, Fred
Hill, James A.	Meyer, Sir Anthony	Sims, Roger
Holland, Philip	Miller, Hal (B'grove & R'dltch)	Sinclair, Sir George
Hooson, Emlyn	Mills, Peter	Skeet, T. H. H.
Hordern, Peter	Miscampbell, Norman	Spence, John
Howe,Rt.Hn.Sir Geoffrey (Surrey, E.)	Mitchell, David (Basingstoke)	Spicer, Jim (Dorset, W.)
Howell, David (Guildford)	Moate, Roger	Spicer, Michael (Worcestershire, S.)
Howell, Ralph (Norfolk, North)	Money, Ernie	Sproat, Iain
Howells, Geraint (Cardigan)	Moore, J. E. M. (Croydon, C.)	Stainton, Keith
Hunt, John	Morgan, Geraint	Stanbrook, Ivor
Hurd, Douglas	Morgan-Giles, Rear-Adm.	Stanley, John
Hutchison, Michael Clark	Morris, Michael (Northampton, S.)	Steel, David
Iremonger, T. L.	Morrison, Charles (Devizes)	Steen, Anthony (L'pool, Wavertree)
Irvine, Bryant Godman (Rye)	Morrison, Peter (City of Chester)	Stewart, Ian (Hitchin)
James, David	Mudd, David	Stodart, Rt. Hn. A. (Edinburgh. W.)
Jenkin, Rt. Hn. P. (R'dgeW'std&W'fd)	Neave, Airey	Stokes, John
Jessel, Toby	Neubert, Michael	Stradling Thomas, John
Johnson Smith, G. (E. Grinstead)	Newton, Tony (Braintree)	Tapsell, Peter
Johnston, Russell (Inverness)	Normanton, Tom	Taylor, Edward M. (Glgow, C'cart)
Jones, Arthur (Daventry)	Nott, John	Taylor, Robert (Croydon, N.W.)
Jopling, Michael	Onslow, Craniey	Tebbit, Norman
Joseph, Rt. Hn. Sir Keith	Oppenheim, Mrs. Sally	Temple-Morris, Peter
Kaberry, Sir Donald	Orr, Capt. L. P. S.	Thatcher, Rt. Hn. Margaret
Kellett-Bowman, Mrs. Elaine	Osborn, John	Thomas, Rt. Hn. P. (B'net, H'dn. S.)
Kershaw, Anthony	Page, Rt. Hn. Graham (Crosby)	Thorpe, Rt. Hn. Jeremy
Kilfedder, James A.	Page, John (Harrow, W.)	Townsend, C. D.
Kimball, Marcus	Pardoe, John	Trotter. Neville
King, Evelyn (Dorset, S.)	Parkinson, Cecil (Hertfordshire, S.)	Tugendhat, Christopher
King, Tom (Bridgwater)	Pattie, Geoffrey	Tyler, Paul
Kitson, Sir Timothy	Percival, Ian	van Straubenzee, W. R.
Knight, Mrs. Jill	Peyton, Rt. Hn. John	Vaughan, Dr. Gerard
Knox, David	Pink, R. Bonner	Viggers, Peter
Lamont, Norman	Price, David (Eastleigh)	Waddington, David
Lane, David	Prior, Rt. Hn. James	Wainwright, Richard (Colne Valley)
Langford-Holt, Sir John	Pym, Rt. Hn. Francis	Wakeham, John
Latham, Arthur (Melton)	Quennell, Miss J. M.	Walder, David (Clitheroe)
Lawrence, Ivan	Raison, Timothy	Walker, Rt. Hn. Peter (Worcester)
Lawson, Nigel (Blaby)	Rathbone, Tim	Walker-Smith, Rt. Hn. Sir Derek
Le Marchant, Spencer	Rawlinson, Rt. Hn. Sir Peter	Wall, Patrick
Lester, Jim (Beeston)	Redmond, Robert	Walters, Dennis
Lewis, Kenneth (Rtland & Stmford)	Rees, Peter (Dover & Deal)	Warren, Kenneth
Lloyd, Ian (Havant & Waterloo)	Rees-Davies, W. R.	Weatherill, Bernard
Loveridge, John	Renton,Rt.Hn.SirDavid(H't'gd'ns're)	Wells, John
Luce, Richard	Renton, R. T. (Mid-Sussex)	Whitelaw, Rt. Hn. William
McAdden, Sir Stephen	Rhys Williams, Sir Brandon	Wiggin, Jerry
MacArthur, Ian	Ridley, Hn. Nicholas	Winstanley, Dr. Michael
McCrindle, R. A.	Ridsdale, Julian	Winterton, Nicholas
Macfarlane, Neil	Rifkind, Malcolm	Wood, Rt. Hn. Richard
MacGregor, John	Rippon, Rt. Hn. Geoffrey	Woodhouse, Hn. Christopher
McLaren, Martin	Roberts, Wyn (Conway)	Worsley, Sir Marcus
Macmillan, Rt. Hn. M. (Farnham)	Ross, Stephen (Isle of Wight)	Young, Sir George (Ealing, Acton)
McNair-Wilson, Michael (Newbury)	Rossi, Hugh (Hornsey)	TELLERS FOR THE AYES:
McNair-Wilson, Patrick (New Forest)	Rost, Peter (Derbyshire, S.-E.)	Mr. Walter Clegg and
Madel, David	Royle, Sir Anthony	Mr. Paul Hawkins.
Marshall, Michael (Arundel)	Sainsbury, Tim
NOES
Abse, Leo	Bottomley, Rt. Hn. Arthur	Coleman, Donald
Allaun, Frank	Boyden, James (Bishop Auckland)	Colquhoun, Mrs. M. N.
Archer, Peter	Bradley, Tom	Concannon, J. D.
Armstrong, Ernest	Broughton, Sir Alfred	Conlan, Bernard
Ashley, Jack	Brown, Bob (Newcastle upon Tyne,W.)	Cook, Robert F. (Edinburgh, C.)
Ashton, Joe	Brown, Hugh D. (Glasgow, Provan)	Craigen, J. M. (G'gow, Maryhill)
Atkins, Ronald	Brown, Ronald (H'kney,S. & Sh'ditch)	Crawshaw, Richard
Atkinson, Norman	Buchan, Norman	Cronin, John
Bagier, Gordon A. T.	Buchanan, Richard (G'gow, Springb'rn)	Crosland, Rt. Hn. Anthony
Barnett, Guy (Greenwich)	Butler, Mrs. Joyce (H'gey.WoodGreen)	Cryer, G. R.
Barnett, Joel (Heywood & Royton)	Callaghan, Rt.Hn. James (Cardiff.S.E.)	Cunningham, G. (Isl'ngt'n & F'sb'ry)
Bates, Alf	Callaghan, Jim (M'dd'ton & Pr'wich)	Cunningham, Dr. John A. (Whiteh'v'n)
Baxter, William	Campbell, Ian	Dalyell, Tam
Benn, Rt. Hn. Anthony Wedgwood	Cant, R. B.	Davidson, Arthur
Bennett, Andrew F. (Stockport, N.)	Carmichael, Neil	Davies, Bryan (Enfield, N.)
Bidwell, Sydney	Carter, Ray	Davies, Denzil (Llaneill)
Bishop, E. S.	Carter-Jones, Lewis	Davies, Ifor (Gower)
Blenkinsop, Arthur	Castle, Rt. Hn. Barbara	Davis, Clinton (Hackney, C.)
Boardman, H.	Clemitson, Ivor	Deakins, Eric
Booth, Albert	Cocks, Michael	Dean, Joseph (Leeds, W.)
Boothroyd, Miss Betty	Cohen, Stanley	de Freltas, Rt. Hn. Sir Geoffrey

Delargy, Hugh	Jones, Dan (Burnley)	Radice, Giles
Dell, Rt. Hn. Edmund	Jones, Gwynoro (Carmarthen)	Rees, Rt. Hn. Merlyn (Leeds, S.)
Dempsey, James	Jones, Alec (Rhondda)	Richardson, Miss Jo
Doig, Peter	Judd, Frank	Roberts, Albert (Normanton)
Dormand, J. D.	Kaufman, Gerald	Roberts, Gwilym (Cannock)
Douglas-Mann, Bruce	Kelley, Richard	Robertson, John (Paisley)
Duffy, A. E. P.	Kerr, Russell	Roderick, Caerwyn E
Dunn, James A.	Kilroy-Silk, Robert	Rodgers, George (Chorley)
Dunnett, Jack	Kinnock, Neil	Rodgers, William(Teesside, St'ckton)
Dunwoody, Mrs. Gwyneth	Lamborn, Harry	Rooker, J. W.
Eadie, Alex	Lamond, James	Rose, Paul B.
Edelman, Maurice	Latham, Arthur (City of W'minster P' ton)	Ross, Rt. Hn. William (Kilmarnock)
Edge, Geoff	Lawson, George (Motherwell & Wishaw)	Rowlands, Edward
Edwards, Robert (W'hampton, S.E.)	Leadbitter, Ted	Sandelson, Neville
Ellis, John (Brigg & Scunthorpe)	Lee, John	Sedgemore, Bryan
Ellis, Tom (Wrexham)	Lestor, Miss Joan (Eton & Slough)	Selby, Harry
English, Michael	Lewis, Arthur (Newham, N.)	Shaw, Arnold (Redbridge, Ilford, S.)
Ennals, David	Lewis, Ron (Carlisle)	Sheldon, Robert (Ashton-under-Lyne)
Evans, Fred (Caerphilly)	Lipton, Marcus	Shore, Rt. Hn. Peter (S'pney&P'plar)
Evans, Ioan (Aberdare)	Loughlin, Charles	Short, Rt. Hn. E. (N'ctle-u-Tyne)
Evans, John (Newton)	Loyden, Eddie	Short, Mrs. Renee (W'hamp'n, N.E.)
Ewing, Harry (St'ling, F'kirk&G'm'th)	Lyon, Alexander W. (York)	Silkin, Rt. Hn. John (L'sham,D'ford)
Fitch, Alan (Wigan)	Lyons, Edward (Bradford, W.)	Silkin, Rt. Hn. S. C. (S'hwark, Dulwich)
Flannery, Martin	Mabon, Dr. J. Dickson	Sillars, James
Fletcher, Raymond (Ilkeston)	McCartney, Hugh	Silverman, Julius
Fletcher, Ted (Darlington)	McElhone, Frank	Skinner, Dennis
Foot, Rt. Hn. Michael	MacFarquhar, Roderick	Small, William
Ford, Ben	McGulre, Michael	Smith, John (Lanarkshire, N.)
Forrester, John	Maclennan, Robert	Snape, Peter
Fowler, Gerry (The Wrekin)	McMillan, Tom (Glasgow, C.)	Spearing, Nigel
Eraser, John (Lambeth, Norwood)	McNamara, Kevin	Spriggs, Leslie
Freeson, Reginald	Madden, M. O. F.	Stallard, A. W.
Galpern, Sir Myer	Magee, Bryan	Stewart, Rt. Hn. M. (H'sth, Fulh'm)
Garrett, John (Norwich, S.)	Mahon, Simon	Stoddart, David (Swindon)
Garrett, W. E. (Wallsend)	Mallalieu, J. P. W.	Stonehouse, Rt. Hn. John
George, Bruce	Marks, Kenneth	Stott, Roger
Gilbert, Dr. John	Marquand, David	Strang, Gavin
Ginsburg, David	Marshall, Dr. Edmund (Goole)	Strauss, Rt. Hn. G. R.
Golding, John	Mason, Rt. Hn. Roy	Summerskill, Hn. Dr. Shirley
Gourlay, Harry	Mayhew, Christopher (G'wh,Wch, E)	Swain, Thomas
Graham, Ted	Meacher, Michael	Taverne, Dick
Grant, George (Morpeth)	Mellish, Rt. Hn. Robert	Thomas, Jeffrey (Abertillery)
Grant, John (Islington, C.)	Mendelson, John	Thorne, Stan (Preston, S.)
Griffiths, Eddie (Sheffield, Brightside	Mikardo, Ian	Tierney, Sydney
Hamilton, James (Bothwell)	Millan, Bruce	Tinn, James
Hamilton, William (Fife, C.)	Miller, Dr. M. S. (E. Kilbride)	Tomlinson, John
Hamling, William	Milne, Edward	Torney, Tom
Hardy, Peter	Mitchell, R. C. (S'hampton, Itchen)	Tuck, Raphael
Harper, Joseph	Molloy, William	Urwin, T. W.
Harrison, Walter (Wakefield)	Moonman, Eric	Varley, Rt. Hn. Eric G.
Hart, Rt. Hn. Judith	Morris, Alfred (Wythenshawe)	Walnwright, Edwin (Dearne Valley)
Hattersley, Roy	Morris, Charles R. (Openshaw)	Walden, Brian (B'm'ham, Ladywood)
Hatton, Frank	Morris, Rt. Hn. John (Aberavon)	Walker, Harold (Doncaster)
Healey, Rt. Hn. Denis	Moyle, Roland	Walker, Terry (Kingswood)
Heffer, Eric S.	Mulley, Rt. Hn. Frederick	Watkins, David
Hooley, Frank	Murray, Ronald King	Weitzman, David
Horam, John	Newens, Stanley (Harlow)	Wellbeloved, James
Howell, Denis (B'ham, Small Heath)	Oakes, Gordon	White, James
Huckfield, Leslie	Ogden, Eric	Whitehead, Phillip
Hughes, Rt. Hn. Cledwyn (Anglesey)	O'Halloran, Michael	Whitlock, William
Hughes, Mark (Durham)	O'Malley, Brian	Willey, Rt. Hn. Frederick
Hughes, Robert (Aberdeen, North)	Orbach, Maurice	Williams, Alan (Swansea, W.)
Hughes, Roy (Newport)	Orme, Rt. Hn. Stanley	Williams, Alan Lee (Hvrng, Hchurch)
Hunter, Adam	Ovenden, John	Williams, Rt. Hn. Shirley (H'f'd & st'ge)
Irvine, Rt. Hn. Sir A. (L'p'l,EdgeHI)	Owen, Dr. David	Williams, W. T. (Warrington)
Irving, Rt. Hn. Sydney (Dartford)	Padley, Walter	Wilson, Alexander (Hamilton)
Jackson, Colin	Palmer, Arthur	Wilson, Rt. Hn. Harold (Huyton)
Janner, Greville	Park, George (Coventry, N.E.)	Wilson, William (Coventry, S.E.)
Jay, Rt. Hn. Douglas	Parker, John (Dagenham)	Wise, Mrs. Audrey
Jeger, Mrs. Lena	Parry, Robert	Woodall, Alec
Jenkins, Hugh (W'worth, Putney)	Peart, Rt. Hn. Fred	Woof, Robert
Jenkins, Rt. Hn. Roy (B'ham,St'fd)	Perry, Ernest G.	Wrlgglesworth, Ian
John, Brynmor	Phipps, Dr. Colin	Young, David (Bolton, E.)
Johnson, James (K'ston uponHull, W)	Prentice, Rt. Hn. Reg	TELLERS FOR THE NOES:
Johnson, Walter (Derby, S.)	Prescott, John	Mr. Thomas Cox and
Jones, Barry (Flint, E.)	Price, Christopher (Lewisham, W.)	Mr. Laurie Pavit
	Price, William (Rugby)

Question accordingly agreed to.

Resolved, That this House, in view of the massive increases in rates in many areas greatly in excess of the growth of incomes, stresses the need for a fundamental reform of the rating system; and urges Her Majesty's Government to introduce a measure of interim relief this year for the benefit of the worst affected and to provide that water and sewerage charges should rank for rate rebate.

Mrs. Thatcher

On a point of order, Mr. Speaker. In view of the decision of the House in favour of the motion, will the Secretary of State undertake to make a statement on what he proposes to do about interim relief for the overburdened ratepayers during the next few days?

Mr. Crosland

I shall take the most careful note of all the points made in this bizarre debate, in which the Tory Opposition voted against all the policies of the Tory Government. I shall certainly consider the question that the right hon. Lady has raised, as a matter of courtesy to her and to the House, but the final verdict on all this will be given by the electorate, and they will well understand how much cant, humbug and hypocrisy has been spoken today.