HC Deb 08 July 1981 vol 8 cc397-8
11. Mr. Dover

asked the Secretary of State for the Environment if he will introduce further measures to protect ratepayers from the consequences of the high spending policies of some local councils.

The Secretary of State for the Environment (Mr. Michael Heseltine)

As I told the House on 2 June, I am considering further measures, including the possibility of legislation next Session, to bring home to individual authorities and their electorate the consequences of high spending policies.

Mr. Dover

Is my right hon. Friend aware that following the recent county council elections Lancashire county council, by its new policies, is levying an 18p supplementary rate? Does he realise what effect that will have on businesses and householders? Will my right hon. Friend accept that the ratepayers and electors will fully support any measures that he wants to take?

Mr. Heseltine

I am grateful for my hon. Friend's view that the incidence of supplementary rates of the sort to which he refers will lead to further worsening of an already difficult economic situation. That will undoubtedly worsen unemployment.

Mr. Eastham

Is it not a fact that the crisis from which local government is suffering is not so much to do with its spending policies as with the savage cuts of the rate support grant and high interest rates—another factor introduced by the Conservative Government?

Mr. Heseltine

The hon. Gentleman is aware that interest rates throughout the world are higher than we have been accustomed to. The real crisis facing large parts of local government is that they are not prepared to accept that, Britain's ability to maintain present living standards has been seriously eroded by the world recession. The longer that they refuse to accept that the longer it will take this country to recover.

Mr. Pawsey

I recognise the need to retain local democracy, but will my right hon. Friend consider imposing an absolute ceiling on rates increases, thereby ensuring that the hard-pressed ratepayers of Labour-controlled authorities do not have to suffer increased hardship?

Mr. Heseltine

I am being pressed to take the sort of measures to which my hon. Friend refers. That is a possibility that the Governmnent must consider seriously. The difficulty that faces us is that a limited number of local authorities appear to feel that they can act outside the restraints of Government policy. Thus, they are changing the traditional relationship of freedom that has existed between central and local government.

Mr. Kaufman

Is it not a fact that of the local authorities that the right hon. Gentleman says are, according to his criteria, overspending, 70 per cent. are Conservative Party-controlled? Is it not a further fact that 14 councils of which Labour obtained control in May are, according to the right hon. Gentleman, overspenders to the extent of £186 million? That overspend is on Conservative budgets. Why should Labour councillors be penalised for Tory budgets?

Mr. Heseltine

The right hon. Member will know full well that the effect of the holdback arrangements that I have put forward is incidental to the party control of the authorities concerned. He will be aware that I have shown to each authority, irrespective of its political control, the level of holdback that is proposed if the budget should not change from the original submission, and I have acted in a totally non-political way in this sense.