HC Deb 21 May 1974 vol 874 cc333-46

11.4 p.m.

Mr. Arthur Jones (Daventry)

I very much welcome the opportunity which this Adjournment debate gives me to refer to a number of particular problems in Northamptonshire associated with this year's rates and also the four town expansion schemes in the county. I want to draw attention particularly to the level of the rate for the county and to try to assess the effects on the finances of all the local authorities involved arising from the four town expansion schemes in the county.

The question of local government finance has taken on particular significance this year due to the substantial rate increases generally throughout the country and particularly in rural areas. The level of this year's rate demand derives primarily from the inflationary processes at work in local government as elsewhere, but other factors have contributed and I want to look at both short- and long-term considerations.

In the short term, undoubtedly the reorganisation of local government, the establishment of regional water authorities and the new arrangements for the National Health Service are involving significant initial expenditures. In personal terms we all know the added costs of moving house or moving an office from one site or unit to another. In addition, high interest rates are playing havoc with council budgets and treasurers are anxious in their judgments as to future trends. We hope that they may be making provision beyond what may be required in the out-turn.

I have been able to discuss the circumstances, both publicly and privately, with colleagues in Northamptonshire from both sides of the House. There are five of us representing constituencies in the county. With regard to rates I speak particularly for that part of the county which forms my constituency, comprising the two new districts of Daventry and South Northamptonshire. The term most commonly used to describe the rate increases this year is "staggering", the precept being 43p, an increase of about 80 per cent, on the 1973-74 figure.

Under the rate support grant, shifting resources from rural England into the great conurbation areas where so many of our problems lie meant in Northamptonshire a reduction in support for local government funds of 5p. My right hon. and learned Friend the Member for Hexham (Mr. Rippon), under his varying domestic relief arrangements, provided relief for the domestic ratepayers of 22p in the Daventry district and 21-5p in South Northamptonshire. The rearrangement of the domestic relief by the present Government, which allocated 13p for all rating authorities in England, resulted in a loss of support amounting to 9p and 8-5p respectively.

This late, unheralded and, I consider, irresponsible decision, clearly prejudiced in favour of the cities, for which significant aid had already been provided, resulted in a doubling of the original rate increase from 40 per cent, to the present 80 per cent. As for water, sewerage and sewage disposal services, the previous arrangements have led to an increased demand varying considerably between localities, but in general the poundage for Daventry is 16-3p, an average increase of 80 per cent., and for South Northampton 15-4p, an increase of 62 per cent.

It is understandable in these circumstances that individuals and communities have expressed their deep concern. A widely based and strongly organised Northamptonshire rate protest has gathered momentum during the last two or three weeks. At the many protest meetings which have been held, although the rate level is the main target of criticism—clearly an increase of 80 per cent, is a severe blow to all and a real hardship to many—there has been in addition a questioning of rates as a means of raising local revenues. The rate is levied on buildings regardless of the degree of occupation, is regressive and has no regard to ability to pay. The revaluation last year resulted in significant changes in relative values, and some ratepayers are having to meet well over double the rate demand they paid two years ago.

Protest gatherings have been held in a large number of villages in the Daventry constituency, at one of which it was said that most revolts in history had been caused by unjust taxation. That reflects the general feeling in the county at the moment. One of the first meetings was organised by Mr. Frank Beers in Scald-well, a small village in the north of the county, and he has continued to play a prominent role in the protest. Ratepayers have been anxious to sign the many petitions which have been and are circulating throughout the towns and villages.

I am grateful to the Minister, the hon. Member for Widnes (Mr. Oakes), for having kindly received a deputation just after midday today. On behalf of all those who were there, I should like to thank him for his courtesy, for the time he gave and for the consideration that he was clearly prepared to give to the presentations made to him.

Meetings have also been organised by industrial and commercial ratepayers, and chambers of commerce have added their voices to the rising and angry criticism of the rating system and the level of expenditure met from local revenues. Urgent consideration is clearly required. Many of us on both sides feel that the Royal Commission under Lord Redclifre-Maud should have been required to extend its recommendations to include reform of local government finance. Regret that it did not do so has been expressed in the House on many occasions.

I turn now to a wider issue which concerns Northamptonshire as a whole. I have always been surprised that in the county there are no less than four town expansion schemes. I refer to Corby, which lies in the constituency of the right hon. Member for Kettering (Sir G. de Freitas), Wellingborough, Daventry and Northampton.

When replying to an Adjournment debate initiated by my hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller), the Minister for Planning and Local Government told the House: the main objective of a new town is to provide jobs, houses and other urban facilities for people who are prepared to move from overcrowded conurbations. In an erudite and well-informed speech my hon. Friend said: It is clear that there is a burden and that it results from central Government policy. Therefore, there is a natural feeling that the central Government should be doing rather more to meet it."—[OFFICIAL REPORT, 28th March 1974; Vol. 871, c. 773, 772.] That is a statement with which I entirely agree, and it is germane to the circumstances in Northamptonshire and the case I hope to make for significant Government assistance.

The circumstances are exceptional. There are no less than four expanding towns in the county, and a view that is widely held, with which I agree, questions the wisdom of the county authority over the whole of the post-war period in supporting expansion to this extent without central Government aid on a contractual basis. Furthermore, outgoings must arise from the development at Milton Keynes, which is adjacent to Northamptonshire to the south-west, and Peterborough, on the county's north-east boundary.

The first of the four towns involved is Corby, which was designated under the New Towns Act in April 1950 and is planned to grow from a population of 16,743 in 1951 to 83,000. The only contribution to local expenditure made by the development corporation over the past 25 years amounts to about£½million in respect of road schemes. I am told that there have been no further direct contributions of any sort.

The second town is Wellingborough, which was the subject of an agreement in 1962 between the then London County Council and the local authority. Wellingborough is to provide 11,500 dwellings for Londoners by 1981. The county council is not a party to the agreement but nevertheless has an obligation to provide statutory services for incoming population, with no obligations resting upon or contributions flowing from the development by the old urban district council.

Daventry—the town after which my constituency was named—was selected by the Government in 1961 for expansion under the Town Development Act 1952 to relieve overpopulation in the Birmingham area. The anticipated growth in the population is from 12,000 to 36,000 by 1981, and the agreement contains no provision for support for local rates either from Birmingham or from the central Government. Birmingham Corporation acquires land and builds houses, factories and shops, together with estate roads, and for a 30-year term it manages property acquired and remits half the net profits—if there are any—to the county council, which has a responsibility to contribute a proportion thereof to Daventry. At the end of 30 years—or earlier if the original outlay is recouped —Birmingham has to transfer all land in its ownership to Daventry.

I come now to the old county town of Northampton, and I very much welcome the presence of my hon. Friend the Member for Northampton, South (Mr. Morris). Northampton was designated in 1968 and is planned to provide homes for 70,000 Londoners by 1981. The development corporation in this case has made significant contributions—to roads£3-1 million, to drainage schemes£300,000 and, in the last financial year,£396,000 to the old county borough to assist in education, health, welfare and child care. A partnership agreement entered into between the old county borough and the development corporation on an informal basis provides that the corporation shall make financial contributions of such a size as to restrict rate increases to a reasonable level. It is believed that the Treasury did not accept any commitment which involved the propping up of the county borough rate.

The combined effects of these plans for the reception of communities into the county has been to make Northamptonshire the fastest-growing area in the United Kingdom, the population having increased by 12 per cent, over the past five years. The next on the list are Bedfordshire, with an increase of 10-4 per cent., Berkshire with 9-3 per cent, and West Sussex with 9-2 per cent.—all in the South-East.

The predicted figures for the 20 years 1961 to 1981 make Northamptonshire the third highest growth area in the whole of Europe. This position was established in papers submitted to the European conference of Ministers responsible for regional planning, held in Bonn in September 1970. The highest growth rates for the period from 1961 to 1981 were given as Turin, 72 per cent.; Rome, 70 per cent.; Northamptonshire, 58 per cent.; and Milan, 55 per cent. This adds significant substance to my case.

From a 1971 census figure of 486,625, the population growth in the country will accelerate in the period up to 1991 to an estimated 794,400, a 70 per cent, increase. The existing stock of 160,000 dwellings will increase up to 1981 by 50,000 and by a similar figure in the next decade.

During the 1950s and 1960s, it was generally felt that the arrangements for Government grants were adequate to ensure that no undue burden fell on the ratepayers of the county. This was a serious misassessment, and I draw attention to the fact that no central Government direct contribution to the support of the rates has been made or is available. The merging of fast-growing Northampton into the new county creates a situation in which the widening of the basis of charge for education, social services and highways means that it is spread over the county as a whole and effectively negates the unwritten guarantee given by the development corporation in relation to rates.

This unparalleled growth rate is imposing heavy burdens on the ratepayers of Northamptonshire and in the opinion of the county council cannot be sustained at the present rate, still less accelerated, without special and additional financial assistance from funds other than local rates. I draw attention to early-day motion No. 122, standing in my name and the names of right hon. and hon. Members representing other Northamptonshire constituencies.

The main increases in county council expenditure are for education, roads and social services. The school population is increasing at the rate of 5 per cent, per annum, over three times the national annual rate of increase. Highways expenditure is almost totally committed to the new and expanding towns. The capital programme for 1974-75 includes schemes for construction or advance land acquisition totalling£38 million.

The present basis of the distribution of the rate support grant does not have sufficient regard to rapid growth. The population figure fixed at mid-1972 is two years out of date. The resentment on the part of domestic as well as industrial and commercial ratepayers is understandable and there is growing resistance to the expansion schemes.

We are at a threshold of decision. Within the next two years conclusions must be reached by the county council as local planning authority on whether to sanction the next phases of land release in each of the four expanding towns. The county council must consider what the real costs involved will be and whether these can be met without serious detriment to existing services or excessive rate demands.

A statement of the county's case, prepared by Mr. Jeffrey Greenwell, the chief executive of the county council, was handed in at No. 10 Downing Street this morning on an all-party basis, and I hope that we shall have an assurance from the Under-Secretary of State on behalf of the Government that the whole case will be given immediate and careful consideration.

On the question of rates the hon. Gentleman will, I think, agree with me that local government finance requires to be dealt with as a matter or urgency. I hope that this is recognised and will be admitted and that we shall not be asked to accept assurances of consultation. I submit that the facts are well known. The whole subject has been under review for a number of years. We have had a Green Paper. Clearly it is not consultation but decision-taking which is now required.

I appreciate that a review of the whole rating system is an involved matter which requires considerable and careful investigation, and I wonder whether the hon. Gentlemen will consider whether it could not be done on an all-party basis. We cannot afford to have party differences and divisive decisions on something which is the bedrock of our democratic system. We do not want all power to be congregated here at Westminster. We need to have it diffused over the country as a whole. I think that there is a great deal to be said for an all-party approach on a matter of this kind.

With regard to financial support for local authorities where there is a need for expenditure to meet the requirements of new and expanded towns, the case is both obvious and proven. The cost of the new towns in relation to the county rate can be isolated and can be presented on a basis of poundage per 10,000 of the population increase. In Northamptonshire we look for help which will be effective in the second half of the present financial year. Powers to reduce the rate lie in section 16 (6) of the Counter-Inflation Act of last year.

Finally, I quote from the letter addressed to the Prime Minister by the five Members of Parliament in the county: There should in 1974-75 be a special grant for Northamptonshire in advance of the revised arrangements for next year, in recognition of the country's unique and exceptional financial circumstances. These are matters to which I ask the Government to give urgent consideration——

Mr. Tom Boardman (Leicester, South)

I must apologise to my hon. Friend for not being here to listen to the earlier part of his speech. It may be that he has dealt with this matter already. I have to declare an interest in that I am a ratepayer in Northamptonshire. It is the general view that the gerrymandering tactics of this Government have added substantially to the burden of ratepayers. Can my hon. Friend give the House any idea of the amount involved?

Mr. Jones

I dealt with that matter earlier in my remarks. I hope that I covered it adequately.

Mr. Deputy Speaker (Mr. George Thomas):

Mr. Gordon Oakes.

Mrs. Maureen Colquhoun (Northampton, North) rose——

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

My hon. Friend the Member for Northampton, North (Mrs. Colquhoun) has promised to detain the House for only two minutes.

Mr. Deputy Speaker

If the hon. Lady has made an arrangement with the Minister, well and good. Mrs. Colquhoun.

11.21 p.m.

Mrs. Colquhoun

It must be said at once that there is a case for special rating relief for Northampton and Northamptonshire and that it is an overwhelming one.

The hon. Member for Daventry (Mr. Jones) has set out the facts of the situation. Northamptonshire is the only county afflicted by such far-reaching expansion, involving, as it does, four new and expanding towns. This is a formidable commitment for the county and one that no Government can expect local ratepayers to bear.

I speak from the point of view of Northampton itself. As a result of the special clause which the elected representatives of the old Northampton borough council had written into the agreement with the development corporation, Northampton itself is, and was before the Opposition began their organised rating lobby, in negotiation with the Northampton Development Corporation to work out the special help due to it as a result of expansion. We are grateful to my hon. Friend the Under-Secretary for allowing those negotiations to be set up. It is a state of affairs which Northampton Borough Council was unable to bring about and, indeed, it was refused by the previous administration——

Mr. Michael Morris (Northampton, South)

Will the hon. Lady give way?

Mrs. Colquhoun

No, I shall not give way.

As we have heard, the county has not been so fortunate. The previous Conservative administration there did not make the same good deal as the borough did, and rumour has it that it was asleep.

I draw my hon. Friend's attention to the water board and reorganisation——

Mr. Deputy Speaker

Order. If the hon. Lady wants to give the Minister time to reply, she had better draw her remarks to a conclusion.

Mrs. Colquhoun

I ask my hon. Friend to look into the situation in which Northampton Borough Council finds itself as a result of the creation of the reorganised water board. It has no elected representative on the Anglian Water Authority. It is unable to obtain information about the almost£2 million in rates that it has to pay. It does not know how it is to be spent or on what. Will my hon. Friend publish a list of the members of the board and ask it to inform the elected representatives on Northampton Borough Council where the money is going?

11.25 p.m.

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

My time is unfortunately limited. I understood that my hon. Friend the Member for Northampton, North (Mrs. Colquhoun) would take only one minute. However, I must now condense what I was proposing to say.

I am delighted that the right hon. Member for Finchley (Mrs. Thatcher) and her hon. Friend the Member for Hornsey (Mr. Rossi) are present for the debate on this important subject. We also had a debate on rates last week.

The hon. Member for Daventry (Mr. Jones) is right to raise this subject, which is of vital concern not only in Northamptonshire but in his constituency. I pay tribute to the delegation that he brought to see me today. They offered constructive suggestions on rating and concisely and precisely put the problems of Northamptonshire as the hon. Member so often has done in the Chamber and in Committee.

It would be easy to talk about gerrymandering, as the hon. Member for Leicester, South (Mr. Boardman), attempted to do, and to turn the debate into a political hoo-ha between one side of the House and the other. First, I do not think it is desirable to do that, because that is not what the public at large would want, and secondly I would not do that since the hon. Member for Daventry has raised this debate.

Had some of the suggestions made by the hon. Gentleman, which we backed, been adopted by the previous Government, we might not have been in the difficulty in which we find ourselves today. I pay tribute to the hon. Gentleman for the constructive rôle he has played in so many local government matters.

The hon. Gentleman suggested that we should look at the whole question of rating on a non-party basis. I am inclined to agree with him. I think that constructive suggestions could come from both sides of the House, from local government associations and from individual councils. I believe that the time is rapidly approaching, bearing in mind the burdens on the rating system, which were clearly pointed out by the deputation which came to see me today, when there must be such an approach to what is agreed to be an archaic system of levying a tax in the 1970s.

The hon. Gentleman knows—I shall not labour the point—that there was a reasonably constructive Green Paper on this subject, that a White Paper was issued by the previous Government which diminished the suggestions in the Green Paper, and that there was a Bill which virtually adopted none of the suggestions in either the Green Paper or the White Paper. That is to be regretted. Let us start again in future, possibly on an all-party basis, to deal with the whole question of our archaic taxation system.

In the few minutes available to me I should like to deal with some of the points made by the hon. Gentleman regarding Northamptonshire. I accept that it is the fastest-growing county in the country—indeed, as he pointed out, in Europe. It has four new or expanding towns. In considering the effects of the previous Government's rate support grant system, particularly the needs element, I found that counties in which there are new or expanding towns—I concede that Northamptonshire is probably the worst example—have been hit the most. I refer to Cheshire, Lancashire and other areas where there are new or expanding towns.

I am urgently looking at the rate support grant formula to see whether anything special can be done next year to deal with new and expanding towns and areas where there is a growth in popula- tion. This matter will have to be dealt with on a different basis from the last rate support grant, which was based on 1971-72 figures, because where there is an explosive expanding rate, as in Northamptonshire, those figures are too out of date.

My right hon. Friend the Prime Minister once said that in politics a week was a long time. Three years is an age for rating purposes. Therefore, we must pay special attention to this element. The hon. Member referred, in his delegation and in the House, to the peculiar and difficult problems of a county which has to provide the infrastructure for new towns and for developments for other areas. Such counties are performing a service for London and the nation as a whole. They are providing facilities for other people but the ratepayers of the counties concerned must pay.

Can we do something about it in this year's rates? As I promised the hon. Member this morning, I shall put the matter to my right hon. Friend the Secretary of State. I must be frank with the House: this is a matter in which we have to deal with the Treasury. We are in a difficult situation at present. I think we decided correctly that we could not increase the total amount of the rate support grant bequeathed to us by our predecessors. Whether it would be possible to do this I very much doubt, but I shall consider the hon. Member's suggestion.

Because of the peculiar nature of the system, which means that Northamptonshire and other counties are helping their neighbours by taking in populations at considerable expense and difficulty to the ratepayers of their areas, we shall certainly consider the matter, but I cannot give any undertaking on the question whether any money can be forthcoming this year.

What I can and do promise—and what I have promised—is that of the many factors concerning the rate support grant a crucial one which must be taken into account is the question of the expansion of the new towns.

To my hon. Friend I say that we were opposed to the whole undemocratic arrangement of water authorities as set up by the previous Government. We are certainly giving active consideration to the way in which to deal with the question of sewerage charges—when people who are not connected with a main sewer find themselves having to pay a sewerage rate. They have had to pay it as part of the ordinary rates in the past, but if it is a sewerage charge it is a charge for services. I shall certainly consider this question actively, because my constituents and many other people in rural areas find themselves facing this problem.

I thank the hon. Member and my hon. Friend for the contributions they have made to this debate. I regret that my reply has had to be a very short one, but I can assure the hon. Member and my hon. Friend, and the other hon. Members representing Northamptonshire constituencies, that the points put to me in the petition and the deputation this morning and the points raised by the hon. Member tonight will be taken into consideration by me and by my right hon. Friend.

Question put and agreed to.

Adjourned accordingly at twenty-seven minutes to Twelve o'clock.