Rates

HC Deb 26 February 1975 vol 887 cc478-82

11. Mr. Michael Morris

asked the Secretary of State for the Environment if his estimate of the average 25 per cent. increase in rates refers to domestic late-payers or not.

Mr. Crosland

As I made quite clear in our debate in the House on 12th December last, my estimate of a 25 per cent. average increase was for domestic rate bills in England and Wales in 1975–76. The estimate allowed for the special domestic relief scheme introduced in 1974–75, excluded water and sewerage charges and was based on the essential proviso that all authorities fixed their budgets in accordance with the guidance on expenditure levels subsequently set out in my Department's Circular 171/74.

Mr. Morris

I thank the right hon. Gentleman for that answer. Would it not have been more honest, however, if right at the beginning he had said to the House and to the nation that the average increase in domestic rates would be 35 per cent. to 40 per cent.? Knowing now that that is the situation, what help does he propose to give to domestic ratepayers?

Mr. Crosland

We cannot possibly know whether that is the situation as we have had final rate determinations from only 48 out of more than 400 rating authorities. Therefore, any guess as to the final outcome is purely speculative. If in the latter part of his supplementary question the hon. Gentleman was suggesting—I do not know whether this reflects Tory Party policy—that after the additional £2,000 million grant given this year, given the country's desperate economic situation and the constant pleas from the hon. Gentleman and his colleagues for more constraint in public expenditure, we should find yet more money this year, I am not in agreement with him.

Mr. Cryer

Will my right hon. Friend confirm that the bigegst rate support grant ever contains a proportion to be spent on education, so that no local authority should cut back on existing education services in an endeavour to keep within the guidelines of the 25 per cent. which he laid down?

Mr. Crosland

There is no reason why authorities should cut back on services. The grant settlement assumed that there would be an increase in real terms of 4 per cent. in spending to meet inescapable commitments. Therefore, there is no reason why there should be a cutback of existing services.

Mr. Raison

Does the Secretary of State accept that not only domestic ratepayers but also small businesses and shopkeepers face a grim picture? Does he also accept that it is not merely a question of controlling local government extravagance but that there is a desperate need for central Government not to im- pose additional expensive services on local authorities?

Mr. Crosland

Of course the non-domestic ratepayer is also much concerned. That is why we have so arranged things this year that the non-domestic ratepayer is likely to have a smaller increase than is the domestic ratepayer. The non-domestic ratepayer was hard hit last year and that is why we deliberately made a difference for this year. In reply to the second part of the hon. Gentleman's supplementary question, circular 171/74 makes clear—and I have repeatedly made clear—to the associations that we shall desist from the bad practice of all Governments of asking for economy on the one hand and on the other hand charging round the country making pleas for pet projects.

17. Mr. Arthur Jones

asked the Secretary of State for the Environment on what evidence he based his prediction that the total rate demand for 1975–76 should not on average exceed that for the current year by more than 25 per cent.

Mr. Crosland

I ventured no such prediction. I said, and have repeated, that a 25 per cent. average increase in domestic rates was possible if, and only if, local authority spending was restrained within the totals set out in the rate support grant settlement of last November.

Mr. Jones

Averages are misleading, and sometimes are meant to be. Is the right hon. Gentleman able to say whether the average rate increase in the Greater London area will lie somewhere between 40 and 86 per cent. for all authorities and whether countrywide the water and general services increases are likely to be from 25 to 50 per cent.? What will happen now that there is to be no special rate relief in the coming financial year—a relief which amounts to £150 million in the current year? What will be the general effect on the situation?

Mr. Crosland

Averages are not misleading; they are simply averages, which implies that some are above and some are below. That is a fact about averages. We all appreciate that the London rate increase will be substantially higher than the average. On the other hand, we also know that there are cases which are lower than the average—such as, for example, Leeds, Lincoln and others of which I have a list. It would be foolish to speculate on the final result for the year because as yet we lack adequate information. On the question of special relief, I must emphasise that the Government have already contributed an additional £2,000 million to assist ratepayers compared with the previous year. That is a substantial sum to be going on with.

Mr. Jim Marshall

Has my right hon. Friend any advice to offer to local authorities whose commitments next year may lead them to have rate poundages in excess of an additional 25 per cent. following their decision to go in for civic buildings and other projects which by no stretch of the imagination can be termed "inescapable commitments"?

Mr. Crosland

I cannot comment on any particular case, but I must confess that I am taken aback by the plans of a number of local authorities at present in respect of huge expenditure on new town halls, city halls, county halls and office blocks. I must be fair and say that this is sometimes the consequence of local government reorganisation, which means that in certain cities two headquarters are needed where only one was needed before. But a number of councils are being near to reckless with ratepayers' money in expenditure on these luxury items.

25. Mr. Hurd

asked the Secretary of State for the Environment what is his latest estimate of the national average of rate increases in 1975–76.

Mr. Oakes

As so many authorities have yet to decide their rate levels for 1975–76, there is not sufficient information to enable an estimate to be made.

Mr. Hurd

Will the Under-Secretary please go on another journey, this time to the local branches of the Labour Party, which in county after county are trying to frustrate the Government's wishes by opposing the councils which are restraining increases in local government expenditure? Is it not time that those Labour Party branches learned the truth about our national situation?

Mr. Oakes

I totally repudiate what the hon. Gentleman has said about the Labour Party branches. If time allowed I could give many instances of Labour groups on councils which have not only co-operated with the Government but have done their best, sometimes against Conservative-controlled councils, to abide by the Government's guidelines. The majority of councils are doing that. There are exceptions, as my right hon. Friend has said. I have no doubt that the electorate in those areas will bear due regard to what the Government have said and what their councils are doing.

Mr. Rooker

Does not my hon. Friend agree that it is nothing short of a public scandal that local government officers and employees earning in excess of £200 a week are claiming threshold payments?

Mr. Oakes

That depends on the size of the authority and the responsibility of the officer concerned, bearing in mind that local government and the level of administration of local government must compete with the private sector.