HC Deb 20 January 1982 vol 16 cc261-2
1. Mr. Cadbury

asked the Secretary of State for the Environment when he expects to complete consultations arising from his Green Paper on local government finance.

3. Mr. Chapman

asked the Secretary of State for the Environment what representations he has received in the last month on reform of the domestic rating system.

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

Comments have been invited by 31 March. By Monday 18 January, 10 representations had been received advocating a variety of solutions.

Mr. Cadbury

Before my right hon. Friend completes his consultations, will he bear in mind that the burden on the ratepayer has been greatly exacerbated by the present two-tier system, which involves two levels of local government competing over the spending of ratepayers' money? Does my right hon. Friend agree that the daunting task facing him and his colleagues in the reform of the rating system would be made much easier if the upper level of local government were abolished and we returned to the unitary system?

Mr. Heseltine

There are pressures to look at the structure of parts of local government. Those pressures would be reduced if some authorities were less free with their spending policies. The Government's immediate priority is to deal with the financial aspects in the Green Paper.

Mr. Chapman

Since domestic rates bring in only 16 per cent. of total local authority revenue, and as they are an inherently unfair tax, does my right hon. Friend agree that their replacement by a tax, or taxes, collected nationally would not be detrimental to local government freedom, because local government has never had any financial freedom?

Mr. Heseltine

My hon. Friend will recognise that that is a controversial assertion. However, there is merit in the underlying argument. I must ask him to wait until the end of the consultation period before expecting me to reach any conclusions.

Mr. Sever

Does the Secretary of State recognise that many of the representations on local government finance that he has received and will receive boil down to the fact that he is starving local government of sufficient funds to carry out the duties for which its members believe they have been duly elected? Will he give prime consideration to ensuring that local government receives more money?

Mr. Heseltine

It is difficult to square that with the thought that the first investigation into an alternative method of financing local government was held when the very reverse policies were in practice.

Mr. Squire

Notwithstanding the observations of try hon. Friend the Member for Chipping Barnet (Mr. Chapman), does my right hon. Friend recognise that for many years local government has been able to determine its level of spending and has been answerable to the ratepayers for any excesses? In the consultations, will my right hon. Friend bear in mind the importance of speedy legislation—preferably in 1982–83?

Mr. Heseltine

I am sure that my hon. Friend will forgive me if I do not intrude into the debate between him and my hon. Friend the Member for Chipping Barnet (Mr. Chapman). When we have reached conclusions, it will be important to advance with dispatch.

Mr. Ward

Will my right hon. Friend continue to consider the problems of commercial and industrial ratepayers, who are mentioned briefly in the Green Paper, who bear a high proportion of local government finance? They are being threatened out of existence by some local authorities.

Mr. Heseltine

I hope that my hon. Friend will not misunderstand me when I say that it is difficult for me to avoid considering the problems of all ratepayers. I am aware that great concern is being expressed by commercial and industrial ratepayers, who find themselves paying ever increasing rate bills without any form of direct representation on authorities. The Government's main concern is to deal with alternatives to, or the reform of, domestic rates. In that context, I shall have to consider the implications for commercial and industrial rates.