Rate Support Grant (England)

HC Deb 18 July 1984 vol 64 cc355-414 5.58 pm

The Secretary of State for the Environment (Mr. Patrick Jenkin)

I beg to move, That the Rate Support Grant Supplementary Report (England) 1984/85 (House of Commons Paper No. 536), a copy of which was laid before this House on 12th July, be approved. I understand Mr. Speaker, that the two other motions might be debated at the same time: That the Rate Support Grant Supplementary Report (England) (No. 4) 1981/82 (House of Commons Paper No. 534), which was laid before this House on 12th July, be approved. That the Rate Support Grant Supplementary Report (England) (No. 2) 1982/83 (House of Commons Paper No. 535), which was laid before this House on 12th July, be approved.

Mr. Speaker

If that is for the convenience of the House, so be it.

Mr. Jenkin

It was almost exactly six months ago, on 23 January, that we debated the Rate Support Grant Report for 1984–85. That gave effect to the rate support grant settlement for the current year, the details of which I had announced on 14 December. I should like to remind the hon. Member for Copeland (Dr. Cunningham) of what he said on that occasion. He said: It was clear when the right hon. Gentleman made his announcement to the House on 14 December 1983 that most ratepayers would face steep rate increases in the spring as a direct result of the Government's policy. Later in the same debate the hon. Member for Blackburn (Mr. Straw) said that the Government alone are responsible for the fact that there will be rate rises of at least 8p in the pound—and, in many cases, up to 40p in the pound".—[Official Report, 23 January 1984; Vol. 52, c. 646–725.] In fact, the average general rate increase by local authorities in England was 5.5 per cent., the lowest average increase for 10 years. But, of course, the hon. Member for Blackburn might have been looking a little too near home, because the third highest domestic rate increase outside London was levied by the Blackburn borough council. It was 16.2 per cent. That is the background——

Mr. Jack Straw (Blackburn)

The Secretary of State will accept that that very large increase in the Blackburn rate was a direct result of his cuts in the rate support grant, because Blackburn authority incurred no penalty and was within 1 per cent. of target. Is that correct?

Mr. Jenkin

It was a very high rate increase indeed. That is the background to today's debate. For all their bluster, Opposition Members simply cannot get away from the fact that the average general rate increase of 5.5 per cent. is an achievement which was not matched in any year of the last Labour Government. Indeed, it is local government's achievement and I applaud it.

Yet a number of councils have exceeded their targets and, as in 1983–84, it is only a handful of authorities which account for the overwhelming bulk of the total overspend which the report shows of £841 million. Just 11 authorities are planning to overspend by £633 million. They account for no less than 75 per cent. of the total budgeted overspend in 1984–85. Indeed, the two London authorities alone, the Greater London council and the Inner London education authority, contribute nearly 60 per cent. —nearly £500 million—of the total.

That handful of authorities have a reckless approach to spending. The House will be familiar with a long list of the Labour local authorities' wanton extravagance with the money that they raised from their ratepayers. Everyone knows and can see the £5.7 million which the GLC has voted to spend on its advertising campaign to oppose the abolition of the GLC and other authorities. [Interruption.] That is Labour party propaganda at the ratepayers' expense, and it is a scandal. Other Labour councils have done the same. If that figure is added to the sums that are being spent by the metropolitan county councils, they are now spending on their advertising campaigns more than the entire advertising of both the Conservative and Labour parties at the general election. That is the measure of what is being spent and it is an outrage.

Mr. D. N. Campbell-Savours (Workington)

Is the Minister aware that, as a resident of Pimlico, I receive a news sheet from Westminster city council every month or so which could equally be said to be full of political propaganda, and that is a Tory-controlled authority?

Mr. Jenkin

Is the hon. Gentleman complaining because somebody is answering back?

The GLC has become notorious for its grants to bizarre organisations. I came across a new one the other day. It is spending nearly £42,000 on a body called Police Accountability for Community Enlightenment — what-ever that may mean. The London borough of Lewisham is contributing £326,000 towards what it calls "artistic features" for new buildings. Hackney has set up a police support unit to monitor complaints against the police, employing a £16,000-a-year lawyer.

Mr. William O'Brien (Normanton)

rose——

Mr. Jenkin

I must get on.

Islington spent more than £100,000—[Interruption.] I can understand that Labour Members do not like to hear about such things, but they will hear about them. Islington spent more than £100,000 on a free newspaper which collapsed after six months, leaving a reported 40-year liability to the ratepayers of £13,000 a year. So it goes on and on. Do not tell me that those authorities cannot save money. Of course they can.

We have made every effort to try to persuade, to encourage and to be reasonable. An overwhelming number of local authorities have heeded our advice. They have responded to our measures. But a substantial overspend persists. It is an intolerable burden for the ratepayers affected.

The continuing irresponsibility of that small minority of authorities is the most compelling justification for Parliament's enactment of the Rates Act 1984. They continue deliberately to flout all the guidelines that we have set. Their ratepayers have faced colossal increases. The Government were re-elected to take powers for selective control and Parliament has now granted those powers.

We need now to press the hon. Member for Copeland on the law. Does he support those councils which are threatening to break the law? It is only a month since the Rates Act became law. The hon. Gentleman participated at every stage of the parliamentary procedures, but, as we read in The Times of 9 July: Many Labour councillors have decided to risk breaking the law in defying the Government's next spending squeeze". I understand that the hon. Gentleman was present at the conference in Sheffield to which that report referred. The press does not say whether the hon. Gentleman, who sits on the Opposition Front Bench, stood up and spoke in defence of the law—[Interruption.] It has a lot to do with the rate support grant. "Labour Weekly" said: It is no longer the question of whether they break the law, but which law they have to break". If the hon. Gentleman is not going to encourage Labour councils to break the law, I shall gladly give way and allow him to say so.

Dr. John Cunningham (Copeland)

I am not sure what that has to do with the right hon. Gentleman's rate support grant report, but as he has asked the question I shall answer it. He knows very well from his recent experiences with Liverpool city council, painful as they are, exactly what my attitude is to the law. Let me put something to him. I do not in any way condone lawlessness, but I can understand it. The foundation of law is justice, and the law will be obeyed only if there is acceptance of the justice on which it is based. If that consensus collapses, so will the law. The right hon. Member for Cambridgeshire, South-East (Mr. Pym) said that, and I agree with it.

Mr. Jenkin

The hon. Gentleman has not been as specific as he might have been. He needs to recognise that people will not treat seriously the words of those who preach about democracy while undermining the very foundation of democracy, which rests on the rule of law. No doubt the hon. Gentleman will give us a clearer explanation of where he stands.

The most important of the reports that we are debating today is the first 1984–85 supplementary report. I emphasise at the outset that the report does not represent any new decisions by the Government. The report withholds block grant from those authorities which budgeted to exceed their 1984–85 expenditure targets. Those proposals were announced last December. They were debated and approved by the House last January. Authorities had ample notice of them before finalising their budgets. Therefore, the contents of the report will come as no surprise to any authority. I have no doubt that every authority's treasurer will have told his councillors precisely what the impact would be.

Perhaps the only surprise might have come from the citizens of Somerset when they read in The Times on 13 July that Somerset had suffered a grant holdback of £8.1 million. I am happy to reassure them. The real figure was £0.81 million. A correction may have been published, but if so I have missed it.

The budgets that I have received from local authorities show a total overspend of £841 million. On that basis, the 1984–85 holdback amounts to £452 million. Sometimes we are inclined to take those figures a little for granted, but £841 million is a huge sum. Let me put it in a context which people may more readily understand. It is equivalent to the capital cost of building 18 850-bed district hospitals. That is the measure of the local authorities' current overspend in just one year. Furthermore, the burden often proves to be unnecessary because reductions in spending can be achieved without cutting services by cutting out waste.

Dr. Cunningham

It is reported today that the Audit Commission, established by the right hon. Gentleman's Administration, is about to report that the Government have got it wrong in considering that there has been excessive overspending by local authorities. It is authoritatively stated in the Financial Times today that real overall local government spending last year was probably in line with target. Is that the right hon. Gentleman's understanding of the Audit Commission's view?

Mr. Jenkin

Neither I nor my Department have seen the Audit Commission's report on local authority finance. The commission tells me that the report in the Financial Times appears to be based on a working draft which has not yet been considered by members of the commission. I have no means of knowing how accurate the article is, but perhaps we had better wait and see what the Audit Commission says. The report is clearly based on an early draft and Miss Duffy might have been wiser to wait for the final report. I do not know what it will say, because I am not privy to these matters, but I think that the final report might be a better guide to what the Audit Commission really thinks.

Mr. Allan Roberts (Bootle)

If the right hon. Gentleman cannot confirm or deny the report of what the Audit Commission is to say, will he at least agree that the supplementary report takes about £188 million in holdback from the shire counties and that the vast majority of those authorities are Conservative controlled?

Mr. Jenkin

The share of the overspend attributed to the shire counties is absolutely tiny.

I was referring to cutting out waste. I have a quotation for the House: It is in everyone's interest that local services should be provided as efficiently and economically as possible. Waste, extravagance, and inefficiency must lead to higher taxes and lower standards of service. I agree with every word of that comment, which appeared in the Labour Government's Green Paper in 1977.

Those of us who have some experience of the private sector know that even efficient companies can cut costs. No one believes that that is impossible, and no one is surprised when it is done, yet if the same is asked of local government, one is told that it cannot be done. Local government spends more than £30 billion and employs 2.5 million people. The chairman of the Audit Commission has recently strongly criticised the growth of rent arrears from less than £100 million in 1980–81 to £240 million last September. The most important factor is the quality of management performance.

Similarly, if councils looked more seriously at competitive tendering they would find great financial benefits. The number of services put out to tender in the private sector is still far too small. I quote some wise words which I read the other day: The public sector has not had a good name for efficiency". If the public service had been less apparently self-serving, less complacent and more efficient", the climate for cuts and privatisation would have been far less favourable. The words that I have quoted are those of the hon. Member for Blackburn. He was plumb, bang right. The hon. Gentleman knows that local authorities can save money and deliver services more efficiently, so do not let us hear a lot of nonsense about it being impossible for authorities to save money without cutting the standard of services.

The hon. Member for Bootle (Mr. Roberts) implied that the 1984–85 report was a blitz on the shire counties. That is just not so. If an authority spends at or below target, it is not subject to grant penalties. Each authority has the choice, and each authority was given due notice. Eight shire counties chose to spend at or below target and a further 21 are within 2 per cent. of their target. I hope that that latter group will spend less than they budgeted for, and if they do come in at or below target any holdback will be paid back to them in the next supplementary report.

Sir Dudley Smith (Warwick and Leamington)

I agree with almost everything that my right hon. Friend has said in his just criticism of high-spending authorities. However, does he agree that there is a case for more realistic spending targets for low-spending authorities such as Warwickshire?

Mr. Jenkin

I recognise that point. The House will recall that in the rate support grant debate on 23 January I gave an undertaking, repeated by my right hon. Friend the Parliamentary Under-Secretary at the end of the debate, that, as the Rates Act would give us power to curb the excesses of the high spenders, we would hope to set fairer targets for the low-spending authorities, whose targets are below GREA in 1985–86 and thereafter. I accepted then, and I accept now, the force of the arguments, which persuaded me that it was right to give that undertaking. I intend to honour that undertaking when I make an announcement about targets for next year within the next few days.

Mr. Michael Shersby (Uxbridge)

Will there be an examination and sympathetic consideration of the problem faced by some outer London boroughs which are high-resource authorities and, as a result of a quirk of the rate support grant system, incur penalties at a far steeper rate than do other authorities of a similar character?

Mr. Jenkin

I am well aware of the problem facing the local authority in whose area my hon. Friend's constituency lies. The problem is that the spending of such authorities is still above their GRE and a system aimed primarily at those below GRE cannot apply in the same way to those above it. However, I have my hon. Friend's constituency firmly in mind and I ask him to await next week's announcement.

Mr. Simon Hughes (Southwark and Bermondsey)

So that we may be clear on this issue, will the Secretary of State confirm that the overspend of Tory authorities is not minimal, but is actually about £188 million out of the total overspend of about £500 million? It is not true to say that all the blame lies on one side of the political fence.

Mr. Jenkin

The percentage of overspending by the shire counties is tiny, because their budgets are very much larger than those of the generality of local authorities.

When I signed the report we did not have the figures from Liverpool city council and, therefore, the figures in the report are based on an assumption that the council would spend the budget which it originally threatened to introduce. We shall need to take account of the Liverpool figures in the next report.

There has been enormous amount of misinformed—one is almost tempted to say malicious—comment about the position of Liverpool city council. I wish to put the record right.

In the local elections in May, the Labour party in Liverpool offered the electorate a fraudulent prospectus—a growth budget of £261 million, matched by a rate increase of only 9 per cent. That would have left a huge gap of £164 million which, the council said, the Government would have to fill. The council has now resolved to accept a budget of £223 million, with a matching district rate increase of 18 per cent.

I emphasise yet again that none of that reduction of £38 million was financed by any special concessions to Liverpool from the Government. The council demanded all manner of concessions. It wanted special treatment an its rate support grant; it did not get it. It asked for favourable treatment on its targets; it did not get it. It asked for concessions on its holdback; it did not get them. It asked for a long list of special disregards; it did not get them. It sought an increase in its housing allocations in the current year; I made it clear that I was not prepared to withdraw housing allocations from other authorities so that I could improve Liverpool's allocation. Liverpool is being treated for rate support grant purposes in no different way from any other local authority.

Mr. Allan Roberts

Will the right hon. Gentleman stand by his letter of 29 June in which, although making no promises, he said that he would do his "very best" to ensure that allocations to Liverpool for next year's housing investment programme would: enable the council to make positive progress in dealing with the city's severe needs"? Was that a promise to give more on the housing investment programme and enable the council to capitalise its repair accounts?

Mr. Jenkin

The hon. Gentleman recognises fairly that that was just an expression of good will towards a local authority which has, without doubt, some of the most severe housing problems in the country. I have seen the problems, as has my hon. Friend the Minister for Housing and Construction.

The urban programme allocation is allotted each year on the basis of our assessment of needs and resources. We are treating Liverpool no differently from any other local authority. Any local authority which thinks that it will get something by aping Liverpool's antics and going to the brink of civil bankruptcy has another think coming.

Mr. Robert N. Wareing (Liverpool, West Derby)

My hon. Friend the Member for Bootle (Mr. Roberts) quoted the letter of 29 June, but the right hon. Gentleman knows that discussions were taking place in January and February this year. At the first meeting that I attended there was no sign that the right hon. Gentleman would write a letter such as that which he wrote on 29 June. That letter can only be a response to the resistance by Liverpool city council and to its decision not to take no for an answer. Whatever the right hon. Gentleman says, Liverpool is financially better off in terms of Government grant than it would have been.

Mr. Jenkin

The hon. Member for Liverpool, West Derby (Mr. Wareing), has heard the criticisms by some of the hard Left groups in Liverpool, which have condemned the council for selling out to the Government, because it received nothing that it could not have obtained by ordinary, sensible negotiations with my Department. Liverpool is a partnership authority. I chair some of the partnerships, as do some of my hon. Friends. Nothing happened in that discussion which could not have beer, done through ordinary partnership discussions. I hope that the citizens of Liverpool, many of whom were made apprehensive by threats of civic bankruptcy, will realise where the blame lies and take retribution in due course.

Like any other authority, if Liverpool spends less it will suffer less penalty. That is automatic under the rate support grant scheme. Liverpool's budget came down from £261 million to £223 million. With less penalty it receives more rate support grant, automatically. There is no special privilege in that. I emphasise that point. Liverpool city council had not made a budget by the time the report was published. I shall need to make adjustments when I receive the full details.

There is some risk that we shall come to treat excess spending by local authorities as being of little consequence. Some people think that since overspending happens every year it is now an acceptable part of the scenery. The Government do not accept that view. Indeed, in the last 10 years successive Governments have taken seriously their responsibility for the totality of local authority current spending. That is not surprising, because about 25 per cent. of total public spending is involved. No Government since the mid-1970s have been willing to stand idly by while local authority spending frolicked ahead.

This Government have taken a more purposeful approach than their predecessors. We introduced the block grant system. The Opposition should be the first to acknowledge that this achieves a far greater equalisation of needs and resources than the previous arrangement. It results in a fairer distribution of grant between more than 400 local authorities.

As part of our objective to bring local authority spending under control and make authorities more accountable, we have reduced steadily the proportion that rate support grant represents of total Government spending. That has reduced the burden on the taxpayer and enhanced local accountability. Targets and holdback encourage authorities to keep within what the country can afford.

Before the House rises for the long recess, I intend to follow the practice of the last two years by making an announcement about expenditure targets for next year. I also intend to table a report under the Rates Act, which will designate a small number of authorities for rate limitation. That will be the first stage in the statutory process leading to rate limitation for next year.

I shall refer briefly to the two other reports which we are debating today. The fourth supplementary report, for 1981–82, closes the books on the first year of the block grant arrangements. A year ago the House approved the third supplementary report, which put local authorities' grant entitlements and holdback on to a provisional outturn basis. The fourth report alters entitlements and holdback to reflect the audited outturn expenditure information for the year, which all authorities have now provided. The report also makes a number of final adjustments, but nationally only small changes are involved for all authorities.

The 1982–83 report is a little more significant. It is the second supplementary report for that year and adjusts authorities' grant and holdback in the light of outturn information. Until now grant and holdback have been based on local authorities' budgets, and most authorities have now provided audited accounts.

The report finally authorises an increased payment of block grant to the Greater London council of about £100 million in respect of 1982–83. The only reason why that happens is that the council's outturn expenditure for that year was a staggering £177 million less than expenditure for which it had budgeted. I suppose that one should be relieved that even that extravagant regime could not manage to spend at the level of its budget. However, the council's irresponsible approach to budgeting entailed raising from London's ratepayers both that overspend of £177 million and the loss of grant of a further £100 million. That meant that £277 million more than was needed was paid by London's ratepayers. Many people have urged the GLC to repay that money to the ratepayers, but so far it has failed to do anything by way of repayment. That £100 million has nothing to do with holdback. It is part of the normal operation of the block grant system, under which an authority's grant entitlement rises or falls according to the level of its expenditure, and depending on the resources which it can raise locally.

The GLC's original budget was so high that it took itself out of any entitlement to rate support grant because of the operation of the taper provisions. The council's spending was so far above the level of its GRE that its entitlement to RSG was tapered to nil. The actual outturn, however, showed considerably lower spending and brought the authority back to entitlement for grant. That is why the payment now has to be made. I understand the chagrin of some of my hon. Friends about that. They ask why that payment should be made at the expense of other authorities. The answer is that block grant is a close-ended, cash-limited sum. It is distributed initially on the basis of budget. If outturn differs from budget, as it always does, it has to be redistributed on the basis of outturn. Some authorities gain and some lose. If that were not so, block grant would have to cease to be close-ended over the total.

I doubt whether even one local authority treasurer was taken by surprise at this unwelcome development. Most treasurers spotted what was coming and wisely made provision, as soon as they knew the GLC's outturn figure. They took that into account when planning finances for this year and future years.

Mr. Tony Banks (Newham, North-West)

I hope that later I might catch your eye, Mr. Deputy Speaker, to answer the travesty which the Secretary of State has just presented to us. Why does the Secretary of State not say something about the £2,500 million which Londoners have lost through rate support grant reductions since 1978–79?

Mr. Jenkin

I saw the figure which Mr. Livingstone quoted when the report was published. It is not a figure which I or any of my officials can begin to recognise. It is pure fantasy. We have to remember that between 1981 and 1982 and its budget for 1984–85 the GLC's total expenditure more than doubled. That compared with an estimated increase in local authority costs of 20 per cent. over the same period. That of itself is scandalously irresponsible squandering of ratepayers' money, and it has to be stopped.

The House will not be deceived by the Opposition's claim to be the sole guardians of local authority services and the only representatives of the people who make use of local authority services. That is humbug. The targets for local authorities this year totalled more than £20,000 million. They have plenty of scope for providing a reasonable standard of service, as the majority of local authorities do, without indulging in wasteful and unnecessary expenditure or pursuing damaging cuts in the level of services.

If the authorities all spent at the level of their targets the rate support grant would amount to £8,631 million. That is the measure of support from the Government. Because of the overspending the sum is reduced by the operation of holdback by about 5 per cent. —£452 million—but that still leaves the Government funding for local authorities' support for their current expenditure at £8,179 million. If, as I expect on previous form, a good many local authorities spend less than their budgets, the penalty will be reduced and the grant will be increased.

This Government were returned to office 15 months ago with an overwhelming mandate to sustain the policy on which we had embarked — restoring the prosperity of Britain by the firm control of public spending and public borrowing. Local government, accounting as it does for 25 per cent. of public spending, cannot be exempted. The overwhelming majority of local authorities are loyally playing their part in this. We see the result in the lowest rate increase for 10 years—since the reorganisation of local government. For the tiny minority which continue to spend up and rate up heedless of the Government's guidelines, the Rates Act is now on the statute book, and the first list of authorities to be capped will, I hope, be announced next week. Meantime, these three reports come before the House for approval, and I ask for the support of right hon. and hon. Members in the Division Lobby.

6.32 pm

Dr. John Cunningham (Copeland)

Such is the complexity, if not absurdity, of the Government's system of local government finance that today the House is debating the fifth rate support grant report for 1981–82, the third rate support grant report for 1982–83 and the second such report for 1984–85. We have five reports already for 1981–82. That is a record of some kind, which shows how much the complexity of the existing financial interface between central and local government requires revision, rechecking, alteration of relevant expenditure, and changes in GRE assessments and block grant entitlements even three years after the original decisions were made.

The third report for 1981–82 does similar things and both have in common on pages 8 and 9 the evidence that the Secretary of State has been forced to increase significantly the relevant expenditure to take account of actual outturn and the fact that in each year budgets were well in excess of the targets that he set. In one bizarre result of all these changes he has managed, by changing GRE, to convert Reigate and Banstead, which closed its accounts thinking that it had spent below GRE, into overspending authority. This means that it could now be in some jeopardy because it will not qualify on his four-year test under the Rates Act. That is one of the incredible outcomes of his system of local government finance.

In 1981–82 the increase in relevant expenditure, as the right hon. Gentleman has had to recognise, is £1.3 billion. In 1982–83 it is £1.4 billion. What better evidence does anyone need of the unreality of the targets which this Government imposed on local authorities in those years and which they continue to seek to impose in the current financial year? Is it any wonder that, by his insensitive and dogmatic pursuit of these policies, the Secretary of State has united local government—the Association of County Councils, the Association of District Councils and the Association of Metropolitan Authorities—against him?

Ironically, and, as it turns out, hopelessly wrongly, the then Secretary of State for the Environment, the right hon. Member for Henley (Mr. Heseltine), when speaking on Second Reading of the Local Government, Planning and Land Bill, said: Electors will more easily be able to judge the nature of the decisions being taken by an authority as a result of the Bill. Does anyone believe that now? The right hon. Gentleman also promised: The new system in no way sets limits to what an authority spends, nor does it fix the level of an authority's rates. These decisions remain with the authority. Things have moved on inexorably since those facile statements were made. As a consequence of their policies and approach, the present Government have made a mockery of those claims in the same way as they have ratted on their promise to abolish domestic rates altogether.

In the same speech the right hon. Member for Henley said: No cash is actually removed from an authority, but authorities that wish to pursue abnormally high levels of expenditure will have to bear a much higher proportion of the burden directly through rates or charges."—[Official Report, 5 February 1980; Vol. 978, c. 251–2.] That statement and the assurances that it contained have also been cast aside by the present Secretary of State and his legislation.

When the right hon. Gentleman talks about overspending, does he not realise that, in terms of current expenditure volume increases, in the last year Conservative councils have shown a larger increase than Labour councils? Does he not also recognise that, since he has been talking about an increase in the rates, as has been pointed out in an article in the CIPFA magazine in June of this year, if the Government had maintained their share of local authority income, no rates increases would have been necessary. That is further evidence that the Government's system of automatic withdrawal of rate support grant is the principal reason why rates are being increased throughout the United Kingdom.

Mr. Jenkin

The hon. Gentleman made a comparison between Conservative and Labour local authorities. He may like to know that the average domestic poundage levels in the various classes of authority show that in the non-metropolitan areas Labour authorities have rates 27 per cent. above those of Conservative authorities, that in metropolitan areas Labour authorities' rates are 32 per cent. above those of Conservative authorities, and that in London Labour authorities have rate poundages 59 per cent. above Conservative authorities. I think that the public know where they will get good value for money. It is with Conservative authorities.

Dr. Cunningham

The right hon. Gentleman ignores my point, which was about the increase in expenditure. It is obvious that he was not listening in the first palce and he is not listening now. I repeal that Conservative councils have increased current expenditure more than Labour councils. I repeat that statement, because it is true.

The second report for 1984–85 shows clearly that the Government have been responsible for increases in the rates because, based on the current year's budgets, they clobber local authorities, including many Tory-controlled councils. The penalties are substantial—5 per cent. of block grants, totalling £452 million. Shire counties especially, despite what the right hon. Gentleman said, are substantial losers. They suffer penalties of £188 million because three quarters of them have refused to cut their budgets to the Government-imposed targets.

In metropolitan areas outside London, councils will lose £151 million, while in London the people of the capital are robbed of another £103 million, with some of the harshest penalties falling on many of the most desperately needy communities, including some with black and ethnic populations who urgently need assistance.

The right hon. Gentleman mentioned partnership. Excluding Liverpool, partnership authorities are to be deprived of a further £70 million of block grant. The most needy and deprived of communities, designated by the right hon. Gentleman as areas requiring essential additional support because of stress, are given Government help with one hand, only to have it snatched away by the other hand—a classic example of political and bureaucratic insanity.

In non-metropolitan districts, two authorities —Harlow and Basildon—lose their entire block grant, and Tory-controlled Portsmouth faces a penalty of £940,000, which is more than 10 per cent. of its grant.

The Parliamentary Under-Secretary of State for the Environment (Mr. William Waldegrave)

Will the hon. Gentleman remind the House of the three partnership authorities that have hit their targets, and explain why the other partnership authorities cannot do the same?

Dr. Cunningham

The Minister is well aware that this report removes £70 million from partnership authorities. They are being given assistance with one hand and having it taken away with the other. Does that make any sense? Is it a rational way to proceed in helping inner-city areas and authorities in conurbations? The total penalty of £452 million is a record—and one of which the Government should be ashamed.

The report is another milestone in and demonstration of the unreality and unacceptability of the Government's approach to local government finance and the increasingly difficult tasks councils face in trying to provide the standards of service that people desire, and often so desperately need—such as home helps for the elderly and the disabled, nursery provision for youngsters, public transport, meals on wheels for those unable to care properly for themselves, day centres for community groups and concessionary travel arrangements. Those services take the overwhelming bulk of expenditure and more, and they are being undermined by this Administration.

It is no wonder that more and more Tory-controlled councils are joining the revolt against this stupid, compassionless and authoritarian Government. Despite all the assurances from the right hon. Gentleman and his predecessors, no council is safe from these punitive policies.

In Cambridgeshire, Essex, Surrey, Hampshire, Hillingdon and Portsmouth—all Tory-controlled—Tory councillors have responded with anger as well as anguish to the assault on local democracy and freedom inherent in the Government's approach to local government. Councillor Roger Parker-Jervis, the Tory leader of Buckinghamshire, said: We've gone as far as we can. We're running at the absolute minimum now and there is no room for more cuts … We've got an intelligent population who expect decent schooling and we're now running at the lowest level sustainable by a Conservative party which actually cares about people. In Cambridgeshire, which has lost £4.3 million in penalties—more than its so-called overspend—cuts in schools on books, equipment and staff have been widespread. The council leader, Emily Blatch, has publicly expressed her anger and dismay at what the Government are doing to local authority services. The story is the same in Essex. Indeed, 29 out of 39 non-metropolitan counties are hit by penalties in this financial year.

Perhaps the best — or worst — example is Surrey, where block grant has fallen from £73.06 million in 1981–82 to £49.02 million in the current financial year—a fall in cash terms of £24 million, but a cut in real terms of 47 per cent. The county precept in 1981–82 was 111.6p and is now 14.4p—an increase of 34p, or 30 per cent. The loss of grant is equivalent to a Surrey precept of 25p, which is a 75 per cent. increase on the county precept. Ironically, exactly one year ago, on 18 July 1983, the Under-Secretary of State for the Environment readily confessed all that in a letter to the council leader, when he said: We have estimated that virtually all of the reduction in Surrey's share of grant since 1980–81 can be attributed to the effect of successive reductions in the grant percentage". Indeed, if the 1980–81 grant percentage had been maintained, Surrey's grant in 1983–84 would have been almost two thirds higher. The Minister continued: I recognise that this has marked effects on the share of grant, and on percentage increases in rates for authorities like Surrey. Quite so——

Mr. Waldegrave

This is a little ritualistic. The hon. Gentleman is running out of speech writers. He has made this part of his speech before and we dealt with it then. The Government's policy is not that which the hon. Gentleman would like it to be—it is that public spending should be cut. That is why the signal of the cuts in the block grant percentage has been made.

Dr. Cunningham

I well understand the Government's policy. The consequence of that policy is to shift the burden from taxes to rates, and the ratepayers are suffering. I am happy to have the hon. Gentleman's agreement on that.

The leader of Hillingdon wrote in a letter to The Times on 6 July: The 1984–85 Government assessment of Hillingdon's need to spend is £79.4 million. Hillingdon's budget is £87.8 million … If we cut social services we will force both the health authority and supplementary benefits to spend more, at substantially greater cost to public funds than Hillingdon's service. What sense is there in this? What prospect too for the people of Hillingdon if control over the level of local services moves from their elected representatives to Whitehall mandarins or to less democratically controlled health authorities and costs more in so doing? That letter was written by the Conservative leader of one of the most loyal Tory authorities in Britain.

The Government's approach to local government finance and services is now too much even for their own supporters to stomach. It is no wonder, because Government policy has failed, is failing and will continue to fail. The Government have reduced support to councils across the board, and in a deceitful way they have switched burdens from the taxpayer to the ratepayer. The Government have become more draconian each year in their attack on the provision of services. They have become increasingly more authoritarian in attitude as more and more powers are concentrated in Whitehall.

Genuine local democracy and effective response of local government are being progressively undermined by the right hon. Gentleman's addiction to growing centralism. And for what purpose? There is no discernible effect on macroeconomic indicators, nor can there be.

As the Audit Commission report apparently shows, the commissioners concluded that the present arrangements for distributing central Government grants to local authorities are not conducive to good management and are actually leading to higher rates than may be necessary under a different system. I understand that that may amount to as much as £500 million a year. The arrangements that the Government have introduced are serving to undermine confidence in GRE which is likely to be central to the Government's future approach on grant distribution, and that can hardly inspire confidence in what the right hon. Gentleman says and does. In general, the Government have not succeeded in motivating local authorities to grasp the opportunities that exist to improve economy, efficiency and effectiveness.

Mr. Matthew Parris (Derbyshire, West)

I would readily concede the hon. Gentleman's point that, if the effect of the measure was only to alter the manner in which local authorities raise revenue so that it would no longer come from the Treasury, but would be placed on the local rates, there could be no overall effect on macroeconomic policy. Is that not what the Rates Act that the House will be considering later is to remedy?

Dr. Cunningham

The short answer to that is no, but I shall say something about that later.

The Audit Commission says clearly that the Government have it wrong, and that there is no case for the repeated assertions that many local authorities are engaged in massive and persistent overspending. The commission was set up by the Government, and it seems to be producing a damning indictment of the present policies on local government finance that have cost the ratepayers up to £1.5 billion over the last three years. What price now the Prime Minister's promise that her Government would abolish domestic rates? The Government have double-crossed and betrayed ratepayers the length and breadth of the country.

Mr. Patrick Jenkin

The hon. Gentleman has again made repeated reference to the article in this morning's Financial Times by Hazel Duffy, who made it perfectly clear that she had got hold of some kind of preliminary draft. The information that I have had—I hope the hon. Gentleman will accept this—is that this document has not yet been considered by the commission. I am sure that the hon. Gentleman, who is an honourable man, will not wish to saddle the commission with the views of a draft that it has not yet seen.

Dr. Cunningham

We shall see what the commission eventually reports, and whether what I am saying is borne out by the contents of the report.

Throughout their approach to local government finance, far from helping domestic ratepayers, the Government have betrayed them. They have forced up rates, they have shifted burdens to the ratepayers and they have ratted on their promise to abolish the rates; yet more of the same is to follow. The Rates Act will soon fall with a heavy and authoritarian bureaucratic crash on a number of councils—but to what effect? Not only is it likely to be an administrative nightmare but, as the Chartered Institute of Public Finance and Accounting has shown recently, it will not deliver the right hon. Gentleman's promise to his Tory friends in the shires—that is, if he has any left.

If the Rates Act was in effect now, according to an article in the CIPFA magazine, London authorities would increase their share of grant from 13.7 per cent. to 14.3 per cent. of that awarded to English councils. Shire counties, on the other hand, would obtain 47.3 per cent. with the implementation of the Act as against 47.7 per cent. now. How does the right hon. Gentleman square that with his promise to his friends in the shire counties that the Rates Act would benefit them in the distribution of grant without introducing more biased political chicanery and legislating purely on the basis of party political advantage? We have pointed this out many times. The right hon. Gentleman smiles. His hon. Friends are not smiling, if he would care to look at them.

Ironically too for the right hon. Gentleman, in spite of all his blustering, the Audit Commission has recently confirmed that the Greater London council is the authority with the most efficient policy on purchasing, and, overall, Labour authorities come out well in the report. Another one of his myths is destroyed.

Furthermore, as he has confirmed in answers to parliamentary questions, the right hon. Gentleman's assertion that "high spending means high rates" is not true. There are many examples to demonstrate that. I cite what has happened in my own local authority of Copeland, which has increased its expenditure by 5.2 per cent. over a four-year period. That is similar to Tory-controlled Sevenoaks in Kent, but Copeland has cut its rate in the same period, whereas in the Tory authority rates have gone up. Hansard is full of such comparisons.

What does this show? The right hon. Gentleman will say simplistically that one authority is more efficient and gives better value for money, but without additional information—for example, on changes in block grant, use of balances and fees and charges—it is impossible to draw anything other than superficial conclusions. Nevertheless, on the basis of facile and meaningless comparisons of the movement in expenditure rates, the Secretary of State intends to use authoritarian power to take control of council budgets. Local authorities are unable to plan with any certainty in the present system which, as we have seen today, is barely consistent even on an annual basis.

The right hon. Gentleman in his statement today announced new cuts in capital spending.

Mr. Patrick Jenkin

New curbs.

Dr. Cunningham

The right hon. Gentleman says "new curbs". He is going to reduce the capital programmes of many local authorities.

I remind the right hon. Gentleman what his right hon. Friend the Prime Minister said in the debate on the Loyal Address: We need more capital spending by local government and in the public sector generally."—[Official Report, 3 November 1982; Vol. 31, c. 21.] How does that square with what the right hon. Gentleman announced today? The Prime Minister wrote to local authorities conceding this argument in a letter of 2 November. She said: I recognise that authorities are still developing their expertise in operating the capital allocation system"— she can say that again— and that there are difficulties in planning forward programmes when it is not possible for us to give firm indications of future levels of provision. Long lead times and the need to provide for the revenue consequences of higher capital spending are also significant factors. All that is made nonsense by what the right hon. Gentleman has announced today, and he knows it only too well.

The Government are exposed by their own failed promises. More freedom, more choice, and less government were the election slogans coined by Saatchi and Saatchi, but the reality is less freedom, less local self-determination and much more domination and control from Whitehall.

Even now, in amendments to the Local Government (Interim Provisions) Bill, the Government are proposing more powers to control the GLC and the metropolitan counties from Whitehall for the remainder of their existence. Government cuts in support have, paradoxically, resulted in less freedom for local authorities, not more. The more local authorities contribute to their own expenditure under the present system, the more they are likely to fall into the trap of central control. That is the reality. Is it sensible, is it fair, is it democratic, does it improve accountability and the understanding of ratepayers and local electors? Of course not. It is the very antithesis of what the right hon. Gentleman says he is anxious to bring about. In my view, the answer to all those question is no, and it can only remain no as long as the Government persist with these policies. The Government's destruction of local democracy must be stopped and reversed.

Is it any wonder that participation in local government is less and less attractive? Is the right hon. Gentleman surprised that public service and public services are increasingly attacked? Is anyone surprised by the disillusionment among communities, as graphically demonstrated by the turnout at elections? The health and quality of local democracy is at risk as a result of all this and we must fundamentally rethink the role of councils and councillors if we are to reinvigorate our democratic institutions and produce better and more effective local government.

We must redefine the role of local government and restore genuine local freedom and democratic control. More decision-taking should be returned to local communities and elected representatives. We should review the means of providing the services that people need and decide what comes better from the centre and what from democratically elected regional or local government.

Those are not only my views but those of many people in the Labour party. We must redemocratise Britain so that we can have the genuine local devolvement of power in health, water and industrial affairs. We need, in effect, a new deal for local government, and we shall provide that deal when the next Labour Government take office.

We shall sweep away the Rates Act and the system of penalties and targets. Local authorities will be given a general competence to carry out duties not expressly forbidden by statute, and an elected authority for London will be re-established if the GLC is abolished. The revenue base of local government will be restructured, and a rolling programme of RSG and capital allocations will be introduced. With all the local authority associations, we believe that the policies of the present Government are manifestly a disastrous failure. That is why we oppose the reports.

7.2 pm

Mr. Christopher Murphy (Welwyn Hatfield)

I shall concentrate on the report for 1984–85 and the difficulties associated with the calculation of RSG.

While the domestic rating system continues — I believe that it should be abolished and the search for an acceptable alternative reactivated—the assessments still appear not to be accurate enough to reflect local authorities' profligacy or prudence.

The supplementary report talks of "consultation". Since I previously raised this matter, with particular reference to the Hertfordshire and Welwyn Hatfield district, my hon. Friends at the Department of the Environment have been kind enough to see delegations from those councils, which I joined and supported, and I am grateful for their understanding and courtesy.

The supplementary report also talks of "adjustments," but the essence of their problems is still the consequences of a 40 per cent. higher rateable value than average, yet only an 11 per cent. higher income level than average, to which are added the difficulties, among many, resulting from the growth of the new towns and the distortions created by certain of the formula factors not accurately reflecting local needs.

The Jekyll and Hyde situation on rate support grant has yet to be overcome, as the supplementary report well illustrates. One face is that of sweet moderation and of recognising the requirements of a council. The other is that of apparent attack and of potentially endangering services.

The Government are right to impose certain financial constraints, and disciplines where necessary, to ensure that local government expenditure is in line with the national economic situation. Hence the importance attached to the supplementary reports and the motion before the House. The Government are wrong, however, after their consultations, not to make necessary adjustments such as introducing a new towns factor, if that theory works out inaccurately and unfairly in practice.

I fully accept that better value for money must be obtained, with the assistance of management consultants and privatisation. However, with very real regret I must take the opportunity of this debate to declare that if an improvement is not made available for Welwyn Hatfield district and Hertfordshire for the future, my support over RSG settlement must then be withheld.

7.5 pm

Mr. Peter Pike (Burnley)

I shall not delay the House because many other hon. Members wish to take part in this important debate.

I took strong exception to the reference by the Secretary of State to "reckless and wanton extravagance" by local government. That does not represent the true facts. Indeed, throughout local government there is frustration because authorities cannot meet the needs of their local communities.

Having spent many years in local government, I am well aware of the hours that councillors spend in determining the budget that they can pass on to their ratepayers. They must balance the needs of the community against what the ratepayers will consider reasonable, and I have never witnessed any degree of irresponsibility in local government.

Many services which are vital to communities are not being adequately provided because of the inability of authorities to meet the revenue implications, and the responsibility lies solely with the Government. Consider, for example, the urgent need for homes for the elderly. In my county of Lancashire the provision is utterly insufficient, with many people being forced into private nursing homes that they cannot afford.

Burnley borough council has two important priority areas, housing and employment. Housing presents major problems for all areas of Britain and I appreciate that our problems in Burnley are repeated throughout the country. We have an urgent need for sheltered accommodation for the elderly. Councils cannot provide that type of accommodation because they cannot obtain the capital, and the revenue implications are too great.

Many council houses are waiting for improvement. In Burnley, it will take 15 years to improve the pre-war council housing stock. Because we were a mining area in the 1920s, many houses built at that time had outside toilets and bathrooms. That state of affairs cannot be considered suitable in 1984. We must bring those properties up to the standard that is considered reasonable today. It will be at least the year 2000 before we in Burnley are able to complete that work.

Two years ago the Government had a bonanza with improvement grants, encouraging councils to spend as much as possible and urging people to apply for grants. I have said in the House before that that was one of the best actions of the Tory Government in trying to improve the nation's housing stock. Now, however, councils throughout Britain have either to call a halt to applications for improvement grant or introduce methods to regulate the giving of grants. People waiting for grants must lay the blame squarely on the Government.

In Burnley, we have £15 million worth of grant applications in the pipeline. We have called a halt to new applications for improvement grants. This year we have available for grant purposes about £3.8 million. Many people will wait years before being able to improve their homes. I fear that we are rapidly approaching a time when the housing stock will deteriorate rather than be improved, and there will be a housing crisis in a few years' time. It will cost a great deal more to solve that problem than it would to provide the necessary capital today.

Burnley, like many other areas of deprivation, is trying to keep industry and attract new industry. That is a priority for the Burnley council, and it is prepared to spend money from rates to do so. We are not ashamed of the fact that Burnley is the highest-rated authority in Lancashire, because we do not believe that that is wrong. Burnley council has always tried to fix rates at a reasonable level for domestic ratepayers and industrialists. We accept that the level of rates is an important factor to consider when encouraging people and industries to remain in the borough.

I have invited the Parliamentary Under-Secretary of State to look at the building next to the town hall. The building, which is council-owned, is being converted in an ambitious project into a multi-purpose arts centre to provide much-needed amenities. The project will cost £1.7 million. If the council is unable to proceed with the project, because of the measures announced by the Secretary of State for the Environment, the blame will lie at the Government's door. Because of the revenue implications of the project, we were anxious for the Parliamentary Under-Secretary of State to look at the project, note why it was needed and what we intended to do. If the hon. Gentleman had gone to Burnley, he would have found that the Burnley council is not reckless or wanton but is trying to meet the community's needs.

Burnley council is only touching on some of the problems that must be urgently tackled. On many occasions, we have chased the Department of the Environment with questions about grant-related expenditure assessment. We discussed the matter with the Under-Secretary of State. Any grant-related expenditure scheme must be fair and understood, but that is not the case with the present scheme. We are not convinced about the reasons why the factor E7 for the housing revenue account varies from one local authority to another. The housing factor for Burnley varies considerably from the housing factor for Blackburn and many other authorities If the figure were altered, Burnley's rating system would be considerably changed. This year, Burnley's grant -related expenditure assessment is £5,472,000. Once local authority spending increases beyond that level, local ratepayers face a greater percentage of expenditure costs because the state meets a lower percentage. That affects their rates.

We welcome the fact that, because the Burnley local authority spends less than £10 million—I referred to this when the House debated the Lords amendments to the Rates Bill — it is excluded from the rate-capping proposals. Burnley spends 56 per cent. above its grant-related expenditure assessment, and will not be affected by ratecapping, but because Blackburn's population is larger, it will be so caught, even though it spends only 20 per cent. above its GREA. On one factor used by the Government, Burnley could be considered to be a big, overspender, but on its cash targets it is only a marginal. overspender. Lancashire county council is in the reverse' position to Burnley, because it spends less than the grant-related expenditure assessment figure but more than its cash targets. The system needs to be rethought and to be more fair.

Local government tries to tackle the problems faced by the community. The Government's measures are regressive, and the blame for the problems building up in local government and faced by people generally must he laid at their door.

7.15 pm

Mr. Michael Shersby (Uxbridge)

I am grateful to my right hon. Friend the Secretary of State for what he said in response to my earlier intervention on the high-resource outer London boroughs, of which Hillingdon, in which my constituency is situated, is one. We know that my right hon. Friend has very much in mind the problems of the shire counties. Those problems were referred to last year in the debate on the rate support grant settlement. Hon.Members who represent constituencies in the outer London boroughs believe that the Government will consider our strange and special problems.

None the less, I am disappointed that in the first supplementary report for 1984–85 my right hon. Friend has been unable to moderate the swingeing effects of penalties on high-resource authorities. I draw the attention of the House to the fact that a nominal overrun caused by, for example, national pay settlements, such as the teachers' award, exceeding the guidance figures can cost my constituent ratepayers up to five times their actual cost. That is a significant figure. I hope that my hon. Friend the Parliamentary Under-Secretary of State will say something about the fact that my local authority is out of grant when its spending is 6.3 per cent. above target, or 17 per cent. above grant-related expenditure assessment.

The recent discussion in the House about the position in Liverpool gives rise to an intriguing comparison which I hope my hon. Friend the Parliamentary Under-Secretary of State will consider. Liverpool has below average resources. If my sums are correct, it would not run out of grant until spending was 26 per cent. above target—38 per cent. above GREA. Does my hon. Friend agree with me that that difference is caused by the slavish adherence to the principle of rate poundage equalisation at all levels of spend?

The main thrust of block grant is surely the achievement of grant-related expenditure assessments, inadequate though they may be. It may not be equitable for poundage equalisation to operate above that level when it produces the curious effects that I have identified. When my hon. Friend the Parliamentary Under-Secretary of State tells the House his plans to rectify this position, I shall be a much happier man than I am tonight. It is vital that steps are taken to rectify the problem and thus ensure greater equity in the treatment of ratepayers.

The hon. Member for Copeland (Dr. Cunningham) drew attention to the recent letter in The Times from Councillor Norman Hawkins. I am glad that he drew attention to that letter, because it is important. The letter has my full support. It is important that not only the Leader of the Opposition and his right hon. and hon. Friends, but my right hon. Friend the Secretary of State should recognise that a letter of that character from a Conservative-controlled borough council such as Hillingdon is highly significant.

I shall give some more examples which were mentioned in the letter but were not referred to by the hon. Member for Copeland. When the Department of the Environment is considering representations from the borough of Hillingdon it is wont to say, "Ah, well, Hillingdon is spending on its social services about £5 million above its assessment." I should like to examine the services for the elderly which are provided by Hillingdon. Comparable authorities are assessed to spend £130 for each elderly person. Hillingdon is assessed, without explanation, at £111 per elderly person. If Hillingdon had been assessed at the higher average figure it would have received £900,000 additional grant this year.

To cut expenditure to the Government's assessment is virtually impossible for an authority which, as I have said, is Conservative-controlled and has responsibly managed its social services since the administration took office six years ago. It has made enormous efficiency savings, cut the bureaucracy and redistributed money in the budget to develop high priority services, especially care in the community for the elderly and mentally handicapped. That policy has always had my strong support, as one of the three Members of Parliament to represent constituencies in the borough of Hillingdon. I should like to remind my hon. Friend that in doing so Hillingdon has saved the Health Service money and put into effect explicit Government policies to care for people in their own homes and in other forms of community care rather than in expensive hospitals. I could give other examples in education, but I shall not do so because I know that many hon. Members wish to speak.

I shall summarise Hillingdon's position by reminding my hon. Friend that the borough lost £4 million in grant this year after doing everything the Government had asked it to do since the council came into office. Hillingdon faces a quirk of the rate support grant system. We have the honour of having London Heathrow airport in our borough. That is a good thing. It is good for Great Britain, and it is good for Hillingdon, because of the rates and employment that it produces. Long may it prosper. Nevertheless, it produces the most extraordinary result when one considers the penalties when the target is exceeded.

When my hon. Friend is next studying these matters in the privacy of his office, I invite him to compare the London borough of Hillingdon with the London borough of Bexley. It has a similar population, social structure, need for social services and need for educational provision. Let him consider the way in which the penalty applies to those two boroughs and ask himself whether it can be explained as fair and reasonable that the grant penalty that applies to Hillingdon is so much steeper that that which applies to Bexley.

This is not an entirely new problem. It was identified when the block grant system came into operation. The Government have therefore had a considerable time to consider how to deal with such a problem. I invite my hon. Friend and the Government to consider inserting into the formula for the calculation of grant a performance factor which would reward those authorities which, like the one I have described, has adhered to Government policies and cut public expenditure sensibly, but which is now incurring substantial penalties. If no performance factor is included in the formula for calculating rate support grant settlements, what incentive is there for local councillors and the community to back the policy which the Government have advocated and which many people believe is important if local government expenditure is to be maintained at a sensible level?

My colleagues who serve on the Hillingdon borough council face a pretty awful position tonight. On present figures, they face the possibility of a rate increase of some 47 per cent. next year. The alternative is to make substantial and sweeping reductions in services, but they will be difficult to achieve, given the best will in the world, by honourable men and women who have set out to serve their community in local government.

I have told my constituents that we must face difficult circumstances in local government in the same way as Governments of all parties, at one time or another, have to face difficult circumstances and have to make difficult and often unpopular decisions. My local councillors are willing to face their responsibilities, but they would feel much happier in doing so, and I believe that my constituents would be far more understanding of the position, if the difficulties to which I have referred, and the curious position which forces us to incur penalty at such a steep rate, were to be rectified. They must be rectified, because unless they are it is impossible to carry out sensible local government.

The reports that we are debating do not correct a serious position. I believe that the time has come for the Government to say, not just to the shire counties, but to the other local authorities, which are equally and severely affected, that steps will be taken to remedy the position. I suppose that all of us in the House are pretty good at claiming that our local authorities are in a special position. In the 11 years or so during which I have been here I have not attempted to claim a special position, but I am afraid that I must do so tonight, because my hon. Friend is well aware that we face unusual difficulties which must be remedied if local government in the areas involved is to continue.

It is my experience in local government and in Parliament that one can ask the community to accept difficult decisions, to support and go along with them, provided that they are fair and reasonable and everyone understands why they must be taken. I am prepared to play my part and so are the members of the Hillingdon borough council. I ask the Government to play their part in return.

7.26 pm

Ms. Harriet Harman (Peckham)

The Government increasingly repeat slogans. I should like to give a couple of them and measure them against the reports that we are discussing. One is "care in the community". We hear the Government talk a great deal about that. Let us measure it against the facts. For care in the community to mean anything, it must mean practical help. Far from helping the community to care, through these measures the Government are preventing it.

The Government make assumptions about the need to spend, based upon a formula which ignores local needs and local democracy. The formula bears no relationship to the position that pertains on the ground.

In Southwark, for example, the Government say that we should prepare 244,000 meals on wheels a year, but we have to prepare 608,000. According to the Government's formula, we should have 252 home helps. We have 345 and we need many more. The money is not going on lavish wages for home helps, who work extremely hard on low pay. The Government say also that we should have no more than 181 places for the elderly in day centres. We need 787. Without those meals on wheels, home helps and day centres people will be forced into institutions. That is the opposite of care in the community.

We also have 53 more old people in residential care than the Government say that we should have. What an irony it is that the Ministers in the Department of the Environment should cut councils trying to provide places in old folks' homes when Ministers in the Department of Health and Social Security are providing an open sesame with money for people in private old folks' homes.

The grant-related expenditure figure for Southwark social services means that we are allowed only 65 per cent. of what the borough spends. There is a £12 million shortfall. For trying to meet needs, as Southwark is trying to do, and for being responsible, responsive and caring, Southwark is called irresponsible. Those living in Southwark are penalised.

The total loss of block grant for exceeding the GREA and target has been £71 million since 1981. That has cost each person in Southwark £331, which is a back-door tax that Southwark residents can ill afford. The picture is the same around the country.

If this year's Government targets on social services were met, it would mean 11,600 fewer places in local authority old folks' homes, 52,000 fewer meals on wheels and 42,000 fewer home helps. Those are not luxuries or fripperies, but basic necessities. Meeting the targets would also mean 8,300 fewer day nursery places for the under-fives.

That leads me on to the next slogan that the Government are always using—the concept of people being "responsible parents".

Mr. Martin M. Brandon-Bravo (Nottingham, South)

Perhaps the hon. Lady will estimate for the House how many of those laudable objectives could have been satisfied by using the £6 million—or is it million? —that the GLC has just wasted on its absurd advertising campaign.

Ms. Harman

I was just going to mention day care facilities for the under-fives. In relation to the Greater London council, if the council was abolished, £3 million would be taken from day care facilities in London in the voluntary sector.

The Government are always saying that people should be "responsible parents". Most parents want to work and have to work if they are not to rely on benefits from the DHSS—and the community needs their work. Yet clay care provision for children under the age of five is totally inadequate. The Government's own figures show not just that that provision is needed by a small minority of uncaring parents who cannot carry out their responsibilities, but that more than 90 per cent. of parents want some sort of day nursery places for their three to four-year-olds. Over half of parents want some sort of day nursery place, whether part-time or full-time, for their three-year-olds and under-threes. Yet in some areas of the country there in no provision whatsoever.

Instead of castigating the local authorities that are trying to make provision, why do not the Government turn their attention to places such as the Isle of Wight, Kent, West Sussex, Wiltshire, Cornwall and Devon, which have no local authority day nursery places for children under five? In those places, if one has plenty of money, one can make private arrangements for going out to work. That is fine. Otherwise, parents can lump it. What a terrible sense of Government priorities that they are pursuing the councils that are trying to make provision. Our under-fives are already Europe's poor relations in respect of nursery care, and the rate support grant figures will force yet further cuts.

Mr. Waldegrave

I am sure that, if we intervened in one direction on service provision, the hon. Lady would be the first to say that that was an attack on local autonomy. Now she invites us to intervene in local autonomy and to increase spending. Is she not saying, "You believe in lots of spending and we believe in expenditure constraint."?

Ms. Harman

I believe that the Government should enable local authorities, by providing proper finance from central Government, to meet minimum standards for the basic needs of children under five in their areas.

It is also difficult to be a good parent without after-school facilities or school holiday provisions. Instead of encouraging councils, the Government are penalising authorities such as Southwark and ILEA, which are struggling to provide them.

The Government say that they are a "Government of the family". It is very difficult to play happy families in crowded, small flats, especially if one or more members of the family are unemployed. In Southwark, land lies empty and building workers are unemployed, because of the Government's policies of cutting local authority spending. People are overcrowded because of the council's inability to maintain dwellings. More and more people live in three-bedroom flats, but can occupy only one of those bedrooms because the council cannot repair the place. Two bedrooms in a dwelling fall into disrepair.

The Government also say that they are the Government of "law and order", yet they prevent councils from having maintenance programmes to strengthen front doors and make estates more secure, to improve lighting and lifts on estates, so that people do not need to spend a long time at the bottom of tower blocks, where they feel that they might fall prey to muggers. The councils are prevented from providing more caretakers and warden-controlled housing. That is the sort of thing that the Government should be allowing councils to provide if they really were the Government of "law and order" that they claim to be.

It is hypocrisy for the Government to call themselves the Government of "law and order" when they prevent councils, through rate support grant penalties, from taking practical steps to make people feel safe. We have just heard the Minister call councils such as Southwark irresponsible. He accused them of reckless spending. The Government call themselves responsible and caring, but the situation is the reverse. In hard practical terms, councils such as Southwark and ILEA are responsible and caring. The Government are preventing them from being so.

7.36 pm

Mr. Martin M. Brandon-Bravo (Nottingham, South)

I rise to support these reports but I do not do so blindly, as I have some of the reservations which were touched upon vaguely by my hon. Friend the Member for Welwyn Hatfield (Mr. Murphy).

In his opening remarks the hon. Member for Copeland (Dr. Cunningham) referred to the complexities and absurdities of the system. There is more than a little truth in that phraseology, but sorting out those absurdities has defied minds—dare I say it?—as great as that of the hon. Member for Copeland.

The famous GRE is supposed to be an estimate of what it would cost an authority to provide a typical standard of service, having regard to its general circumstances and responsibilities. That sounds eminently sensible, but somehow it gets chewed up in the washing. We accept that the methodology by which that GRE is finally assessed cannot possibly take into account all the factors relevant to an authority, nor do I believe that it was ever intended to do so. Therefore, as a base point for distributing grant it is probably as good as any other method previously devised, but as an explicit target it has many weaknesses, as we all accept.

The famous word "target" is a very different kettle of fish. Among other things, it is based upon the authority's budget for the previous year. Because of the different methodology that is used for arriving at those two different items, the relationship between the two lovely words is purely accidental in any individual auhority. Perhaps my hon. Friend the Member for Welwyn Hatfield hoped that the Government would address themselves to that area, so that we can have sanity in and understanding of those two words.

I do not think that anybody on either side of the House is challenging the Government's right to control the totality of expenditure. I was on — and still am — our local authority when the right hon. Member for Bethnal Green and Stepney (Mr. Shore) held the high office of the present Secretary of State. It caused no surprise to our local authority when the right hon. Gentleman asked us to reduce our expenditure in the national interest. That was the custom and practice in those days and, as the right hon. Member for Manchester, Gorton (Mr. Kaufman) said at the time, no one challenged the right of Parliament to exercise its proper control over local authorities. It is a matter of some sadness that, simply because those two gentlemen have passed into opposition, somehow or other it is a different ball game for them.

With the estimated overspend of £841 million, it would be irresponsible for this or any other Government not to take the necessary action to restrain it. One of my reservations about being satisfied and confident of that £841 million is that I do not know to what extent balances and reserves affect that figure. It has always been a source of puzzlement to me — I addressed this matter to the Secretary of State earlier this year—why we take a view of balances and reserves in Government spending which no commercial undertaking would dream of applying.

If a local authority overspends, it goes into penalty and the grant is reduced. That is fair and reasonable, and I have no complaint about it. Unfortunately, that overspend becomes a basis for next year's target. I am sure I will be told that that is not the Government's intention. Equally, if an authority underspends, it receives less grant. Therefore, in order to maximise its grant, a local authority wants to reach target.

If a local authority does its homework and underspends, it will promptly transfer the gap to reserves. In that way, on paper it has spent its target, so it does not go into penalty. If it does not transfer the gap to reserves, but puts it into balances, that is an underspend, as my right hon. Friend the Secretary of State will tell me, and the authority reduces target. After exercising excellent financial restraint, it finishes up with less grant in the following year. Perhaps my hon. Friend the Member for Welwyn Hatfield was asking for better treatment in such a situation. I hope that during the next 12 months we shall try to refine the method by which we calculate GRE. I hope that we shall redefine target to remove that strange anomaly.

My right hon. Friend rightly referred to Liverpool, and was chastised by an Opposition Member on that account. I think that I speak not just for my own city but for most other cities which play fair with the Government when I say that we shall not accept a system under the guise of so-called local democracy which allows one local authority to vote for itself money which rightly should go to others. That seems to be the logic of hon. Members representing Liverpool. They argue that their local people have a right, at a local election, to vote that their local council can spend in a way that means that resources will be siphoned off from Nottingham, Leicester, Derby and other cities. That must be wrong.

Mr. Straw

Does the hon. Gentleman not understand that exactly the reverse is true? The more some authorities overspend, in the Government's terms, the lower are the rate levels in the underspending authorities. Therefore, if the hon. Gentleman's authority underspent it would benefit in its rate support grant from the overspending of other authorities.

Mr. Brandon-Bravo

I am sorry if I have not made my point clear. I apologise to the House. If, as the Secretary of State said, the totality of spending and of rate support grant are fixed, and if Liverpool takes a bigger slice of the cake, someone else gets a smaller one. That is the point that I was trying to make.

I should like to refer to disregards. I welcome the reference to two items. The first is the disregard in terms of expenditure under urban programmes and joint projects which are rightly entered into with local health authorities. Secondly, I welcome very much the disregard which has been promised on the policing costs incurred by many local authorities as a result of the civil and criminal activities of a minority of our people.

I sincerely urge the Secretary of State to give much clearer long-term guidance on disregards. It has been said that we tend to get caught in annuality, the one year at a time budgeting, which makes long-term planning difficult for a responsible authority. I shall quote an example. A scheme might start with 75 per cent. Government grant and 25 per cent. from the local authority. That exercise represents an expression of confidence by the Government in the justice of what the local authority is doing. They are encouraging the local authority to make provision where general need has been established. We all agree that that is a sensible approach.

The problem is that the local authority finds that after the third or fourth year, when it must pick up 100 per cent. of the cost—it does not mind that in many cases—that 100 per cent. is included in its normal calculation of target when it receives its rate support grant. That should not happen. If there was a disregard in the first year because it was the wish of Government that that local authority should make the provision, after three years that should not suddenly cease to be the will of the Government so that in a sense the authority is penalised. Inevitably the local authority's other services are squeezed; services which the local people, and perhaps the Government, wish to be continued.

The one area of disregard which does not appear to be mentioned in the report is matters over which local authorities have no control. If they are precepted by parishes or for land drainage, they have no way of avoiding those charges. The charges go into the system of local expenditure and are therefore totted up when the authority joins the list of good or bad boys. The local authority has no choice about those expenses—they are precepts upon it. However, they should also be a disregard, as well as charges connected with housing benefit, participation in Manpower Services Commission schemes and increased activity in housing improvement grants. Clearly, those are areas which will affect the cities much more than the rural areas, but they are precisely the areas to which the Government are encouraging the direction of spending. I feel, therefore, that they should be placed firmly within the area of disregard.

Particularly in relation to those disregards, I should like to see a reconsideration of section 137. The whole House is well aware of the abuse of the 2p rate, for which many local authorities are responsible. Nevertheless, there are many legitimate uses for section 137 and it is sad that some centrally inspired activities have to be funded under that section. In the original concept, that section was intended to enable local authorities to do that which was specific to them. They should not have to use it for inner area programmes and so on.

Ms. Harman

Will the hon. Gentleman accept that Basildon council uses the whole 2p rate to provide services for the elderly partly because Essex county council provides no day centres for the elderly in that area? Basildon has been designated by the Government as an overspender, but it has spent its whole 2p rate on services for the elderly which should be provided by the county council.

Is the hon. Gentleman aware that in Basildon we have joint funding with the health authority for an emergency alarm scheme for elderly people to enable them to remain in their own homes, and that that scheme might be subject to rate penalties for overspending, as might be the jointly funded expenses for volunteers who cut the elderly people's toe nails and keep them mobile? Is that lavish overspending which the Government are trying to reduce?

Mr. Brandon-Bravo

No, of course not. The hon. Lady should have read the report before making her last point. She would have learnt that joint projects connected with local health authorities are specifically named as being disregarded.

Ms. Harman

Not if there is an increase.

Mr. Brandon-Bravo

I believe that I have answered the hon. Lady's question.

I cannot comment on Basildon or Essex. I can speak only for my own patch. However, the hon. Lady's remarks in that respect were entirely in line with my own views. Section 137 should not be needed to provide such necessary services.

Whenever this House discusses rates, one matter is referred to time and time again. I refer to the effect on commerce and industry. It seems to be the tactic of the Opposition to suggest in some way that rates are irrelevant to commerce and industry. They take the most convenient statistic, suggesting that rates amount to only 1 per cent. of the gross turnover of industry and therefore they are irrelevant. I could choose an equally irrelevant yardstick and produce precisely the opposite result. I have spent most of my life in the textile industry, which operates on a profit of about 2 or 3 per cent. of its total turnover. I could therefore argue that rates amounted to between 33 and 50 per cent. of the textile industry's profits, but that would be an argument as absurd as that advanced by the Opposition.

I draw the attention of the House to an investigation into this matter by our regional CBI, which made a survey of 41 Nottinghamshire companies. Those companies, which employ 74,000 people, pay £17.6 million in rates. The regional CBI states that if one were to take rates as a percentage of total costs, one would find that the average figure was 2.6 per cent. and the maximum was 5 per cent. If one were to work out the rate as a percentage of costs, ignoring labour and raw materials, one would find that the average figure was 4.7 per cent. and the maximum 14.5 per cent. I suggest that those figures are far more objective and meaningful than any which take rates as a percentage of turnover, because the survey also made it clear that, whereas the average family pays £224 a year in rates, commerce and industry pay £240 for every person employed. To argue that rates can in no way affect employment is sheer nonsense.

I wish that the system which was in operation five or perhaps 10 years ago was still with us. By consensus, discussion and agreement with the local authorities the House was able to keep the ship of state financially on course, and the local authorities played fair. Sadly, we have gone beyond that, and we are now obliged to use a rather blunt instrument. I therefore agree without hesitation that the reports under discussion should be approved.

7.57 pm

Mr. Simon Hughes (Southwark and Bermondsey)

The Secretary of State asks us to approve three reports and effectively to approve decisions in those reports which will have a direct effect on the services provided by local authorities throughout England. It is clear to those of us on these Benches who, about twice a year, take part in such debates that the only proper option that we have is not to approve the reports. Every time the Government lay reports such as these before the House, they are seeking to defend the indefensible.

One of the reports is about the most recent financial year—1984–85. The implications of this report for the local authorities are serious. A report produced in December and discussed in January told the authorities by how much money the Government would penalise them if they overspent in this financial year. Now, a quarter of the way through the financial year, those estimates and assessments are being revised.

We are also discussing two reports about a financial year four years ago and a financial year three years ago, both of which will have retrospective effects on the budgets and finances of the local authorities.

As we frequently complain, it is impossible for the local authorities and their treasurers and other officers to decide in a practical, sensible and intelligent way how best to plan local services if, four years after the event, central Government are still tampering with the books and altering the figures.

That is even more ludicrous because of the existence of an Act which has only recently received the approval of this place despite the opposition of all Opposition parties in both places and much criticism from Conservative Back Benchers. The Rates Act has taken its place on the statute book and we have been told this afternoon by the Secretary of State that next week he is to announce the first list of authorities to be rate-capped, as the Act will require him to do.

We want to know how it will be possible for the Government to reconcile an amazingly complicated and Byzantine system of local government finance, which is set out in the report before us, with their proposals for rate capping. If, for example, 14, 15 or 16 rate-capped authorities all fall within a certain category according to their overspend, the targets and the penalties, the supplemental report on the actual budget and the recalculation might reveal that they have not, in fact, fallen within the category that falls to be capped. If that happens, how will the Government compensate those authorities? How will they combine rate capping proposals that will bear on local government's expenditure for next year on the basis of its expenditure this year with the ever-changing pattern of retrospective local government financial adjustments that the present system continues year after year?

We believe that it is impossible to combine rate capping proposals with ever-changing adjustments that will add even more to the burden of the authorities which will be listed as rate-capped. It will increase the burden that even now they are finding almost impossible to discharge.

The number of adjustments that are made in the reports and the number of variations for which the Secretary of State is seeking support illustrate that the Government's proposals are ludicrous. The 1981–82 report—it is the fourth supplemental report for that year—adjusts the totals of relevant expenditure, of aggregate Exchequer grant, of estimated specific and supplementary grants and of rate support grants, and alters individual local authority block grant entitlements. It makes a number of changes to grant-related expenditure and re-determines grant-related poundage and multipliers.

One of the implications of the 1982–83 second supplemental report is the repayment of a substantial sum to the Greater London council. That has been determined three years after that council budgeted for and was embarked on expenditure decisions on the 1982–83 figures. That is ludicrous.

The Secretary of State was content this afternoon to enter into a political knock-about. He did not begin to try to defend our indefensible system of local government finance. He spoke only of the expenditure plans of a few specific authorities.

We must have some sign that the Government are beginning to think about a logical system of local government finance.

Can we not have a rolling programme of the sort that exists for capital expenditure programmes for a set number of years, which establishes financial constraints on local government, the grant that it will receive from central Government, the proportion of its expenditure that will be guaranteed by central Government and how much it will pay if the Government wish to impose penalties?

Why cannot the Department of the Environment create a system that will give at least three years of certainty? That was thought possible by the right hon. Lady the Prime Minister as long ago as 1974. The Department could produce a report which would state, if it insisted, "For the next three years this will be the Government's contribution to local authority finance, and in three years' time we shall introduce cuts so that public expenditure, in as much as it is affected by local government finance, will be altered by this amount."

Why do local authorities have regularly to suffer because the Government cannot get the system right? It is not fair that they should do so and the Government's failings have a direct effect on services, which is often felt halfway through a financial year. It is about time that the Government decided how to assess the needs of local authorities. Members on both sides of the House have already made it clear that the Government merely provide arbitrarily a figure and a level for local authority expenditure.

There are many statutory duties on local authorities. Every borough, every district, every county and every metropolitan county has by law to make certain provisions. They must by law provide personal social services, environmental health services and public sector housing. They are not allowed by law to let property go into a state of statutory disrepair. By law they have to provide home helps and assistance for the elderly.

We never hear from the Government any statement of the cost at which such services should be provided. For example, Southwark council may decide that it wants to provide a decent library service. What sum should it spend on its libraries? Do the Government wish there to be only 100 books a branch or do they want the council to provide a library service that meets the reading needs of its population? Should it provide a service that will allow ratepayers to work in libraries in the evenings if they cannot work at home because of overcrowding and the lack of facilities for quiet study?

The elderly in Southwark are clearly in need of home helps, but what are the criteria for providing home helps? Should there really be home helps only for those who are totally unable to pass through their front doorways? There are no criteria and there are no guidelines. The ludicrous lack of principle that the Government perpetuate year after year is the result of pulling a figure out of the air, juggling with it, producing formulae at the Department of the Environment and producing an ever more complicated set of proposals by which to determine what local authorities could spend.

There is no proper assessment of quality of service. It is not said that a particular service is too good or that it is not as good as it should be. It is about time that the Government produced a statement of principle to make clear whether they expect local authorities to implement the services that they are bound to provide by law in a way that provides a good service for the population or, alternatively, made it clear that they are to provide minimal services. It is unfortunate that the figures that the Government impose on local authorities suggest that often only the poorest services should be provided.

We have heard something about the report that will be produced next month by the Audit Commission. When we debated RSG in January the Secretary of State laid great store by the commission. The Government set up the commission and the Secretary of State said: I want to say something about a new factor in the equation—the Audit Commission … the Commission was given a specific remit to look at value for money in local authority spending. He added: I consider the Audit Commission handbook one of the most powerful tools for efficiency ever put into the hands of local councillors." — [Official Report, 23 January; Vol. 52, c. 643–44.] When we debated the subject in January, the great complaint that was made by local authorities up and down the land, many of which were Tory-controlled, was that they did everything that the Audit Commission required them to do. Warwickshire county council, for example, desperately urged the Government to tell it how, having had auditors in to look at the books and having cut its services to the bone, it was to meet the additional needs of the county without eating into the services. The hon. Member for Uxbridge (Mr. Shersby), in speaking earlier about the Tory-controlled Hillingdon borough council, made exactly the same points.

It is not possible for the Government to persuade the country—it is not possible for them even to persuade Conservative members of local authorities — that the present system can be perpetuated. It is a system that all authorities find unsatisfactory. The more it is perpetuated, the more unsatisfactory it becomes.

I ask the Secretary of State, through the Parliamentary Under-Secretary, to tell authorities such as mine in Southwark and others in inner London—and authorities in other parts of the country which would not appear, on the face of it, to be suffering under the Government's financial regime — how they are expected to manage their finances when they have no reserves left. Is the Under-Secretary's advice that local authorities should raid their reserves completely, as Southwark has done? Or is it that they should keep some money in their reserves to spend on necessary services, as some authorities have done but now very few are enabled to do?

What is the advice as to the planning that local authorities should enter into? Throughout the country, local authorities ask, almost unitedly, when the Government are to give them the ability to plan to meet the services which, in large measure, the Government have imposed on them the duty to fulfil. When will the Government give up the pretence that their present system of presenting report after report, more and more complicated, is helping the provision of services for the people of England? When will the Government replace the present system, which has long outgrown either its usefulness or its intellectual justification, with a system that allows money to be directed where need is, so that services can be met, and so that people in local government may understand how they are meant to do the job that the Government have given them to do?

8.12 pm

Mrs. Edwina Currie (Derbyshire, South)

I am delighted to be called to speak in the debate, Mr. Deputy Speaker. Despite the fact that I have tried to speak in every debate on rates and rate support grant in this Session, I have never managed previously to catch the eye of the Chair.

I am not a rates reformer; I actually like the rates system the way it is. I feel that if we did not have a property tax we would probably have to invent one. The Customs and Excise and the Inland Revenue for centuries have been taxing everything that moves. It is so much easier, therefore, to tax something that does not move. Rates are easy to levy, cheap to collect, and difficult to evade "hi better set of criteria for a tax-gathering system would be difficult to devise.

Nor do I think that the rate system is necessarily so unfair. We often hear the story of the old lady paying the same rates as the family of four or five working people living next door. But, of course, by taxation they are paying for the rate support grant through half of the public expenditure of their local authority. They are probably not receiving an equal amount of service. Indeed, as the hon. Member for Peckham (Ms. Harman) has shown this evening, elderly people may well be receiving services substantially in excess of those received by the people next door to them.

The rates system is a roughly progressive system, in the sense that the larger the house the more rates the owners are likely to pay. Also, there is rates relief through rates rebate.

What has been wrong has been the abandonment of the traditional parochial wariness—the hesitancy to spend ratepayers' money — which used to be a feature of Conservative and Labour councils alike. The reason is partly to do with the fact that we now have a substantial gap between ratepayers and voters. As people would say in Derbyshire, "Those as vote don't pay". In a city such as Birmingham as many as 40 per cent. of the voters are no longer ratepayers, because they are in receipt of benefit, and "Those as pay don't vote". That is particularly the case with business people. I have often said, for example, to the CBI that one of the ways in which it should get round the problem is by ensuring that business people and senior management are encouraged to sit on their local councils. Where they do, a more businesslike aspect is apparent.

Mr. O'Brien

rose——

Mrs. Currie

The hon. Gentleman can try to catch Mr. Deputy Speaker's eye, as I have.

I recall an occasion when there were five employees of British Leyland sitting on Birmingham council, and not one of them was in management. It was the fault of management that no one in management was encouraged to sit on the council.

Another problem is that of increasing expectations. I was very much involved in the allocation of money for improvement grants in the city of Birmingham. We were able to achieve, as were councils all round the country, record levels of expenditure. Unfortunately, we also generated record levels of demand. I have come to the conclusion that if we could not maintain a steady level of input of expenditure, it might have been better to let sleeping dogs lie. One of the results of the gaps between the voters and the payers has been the rapid increase in spending, which has ignored not only need, but Government guidelines and ratepayers' ability to pay.

Today we have been doing two things. First, we have been allocating grant based on estimates. Secondly, we have been making adjustments based on outturn. If the implications of fiddling around in 1984 with the 1981–82 figures are to be projected to the future, we shall be fiddling around with today's 1984–85 figures in 1988 and beyond.

My hon. Friend the Member for Ealing, Acton (Sir G. Young) will recall the occasions not so long ago when I sat on the opposite side of the table to him and argued for Birmingham's housing subsidy back to 1975. The only reason that we could not go back any further was that local authority reorganisation in 1974 had effectively destroyed the papers. I say to my right hon. and hon. Friends on the Front Bench that we seem now to have a system which, far from being rigid, as Labour Members seem to think, has become indefinitely flexible, and that is not a desirable development.

It would be helpful if there could be two improvements. First, local authorities should not deliberately overestimate — and they do. The GLC did just that for 1982–83. That is why we are now offering it the £100 million grant. It was not because the GLC was incompetent. I think it was done deliberately, because the GLC after 1981 decided to indulge a taste for yah-boo politics with the Government. If an authority can show, in some spurious way, that the budget that it is required to spend is too little for its needs, it can say that the Government are wrong. If the authority then comes back later to the Government and says, "Guess what—we didn't manage to spend it", I suggest that the Government were right in the first place and in the last place.

Mr. Tony Banks

I have heard that said many times. I have here the GLC's 1982–83 budget and its outturn. The hon. Lady might be interested to know that the service expenditure budget for 1982–83 was £1,341 million and its outturn was £1,313 million — a difference of £28 million. That is not the sort of figure that the Minister was talking about. The hon. Lady should bear in mind that interest rates, a larger contingency balance, and the special profits that accrued from the service contracts meant that the GLC had more money. It did not deliberately set out to over-budget.

Mrs. Currie

I still say that either way it was too darned big. Indeed, the provisional outturns for 1983–84 show that many local authorities are likely to have underspent. Sometimes that cannot be helped; I accept that. When a local authority has needed to increase expenditure and when, year after year, a budget has been increased—as were the housing investment programmes for which I was responsible — it is quite difficult to spend up to the limit, because one is always in the position of recruiting more staff, developing more programmes, and getting more people involved. Therefore, it is not all that surprising if sometimes we get a situation that is euphemistically dignified with the term "slippage", which in many local authorities has become a way of life, and is in fact institutionalised underspending.

All Governments must work with what local authorities say they will spend. Indeed, even in 1984–85 there is evidence that the same thing is happening. Evidence given to the Select Committee on Social Services shows that local authorities are budgeting to spend substantially more on personal social services than the White Paper allowed them. In my experience, they will not spend it. Therefore, I counsel my right hon. and hon. Friends on the Front Bench not to panic but to exercise a little patience, tinged perhaps with justified irritation.

The gap between the estimates and the outturns might be improved if the Government did not keep changing the rules. I refer particularly to the treatment of cash receipts, which we dealt with earlier this afternoon. Many local authorities have generated huge cash receipts. Under the Housing Act 1980 Birmingham has realised £100 million from the sale of council houses alone. It cannot spend it all in the year in which that money is generated. Sometimes it does not wish to because it wants to accumulate a large sum of money in order to carry out a major development such as the proposed city centre redevelopment.

Therefore, it is a little difficult to understand why it is all right to have retrospective changes on the revenue accounts but not on the capital accounts. In other words, why cannot we simply allow the money that is sitting in banks all over the country to be used for the improvement of our housing?

The county of Derbyshire in which I live is not currently any place for the prudent ratepayer to be living. Rate poundages there have increased dramatically over recent years. Again, I allege that that is done deliberately. In 1981–82 we suffered a 13.3 per cent, rise, the following year a 25 per cent. rise, the year after that a 12 per cent. rise and this year a 13 per cent. rise. That gives us an overall increase in those four years of 59 per cent. That is diabolical. We are the most highly rated authority of our kind in the Midlands. We are the third highest rated authority among the non-metropolitan counties in England and Wales. Yet all our figures and calculations are similar to Nottinghamshire, Staffordshire and Warwickshire which have had much smaller increases. I must ask why Warwickshire, which had a higher rate poundage in 1981 and which is a similar county nearby, can manage now with 143.3p in the pound while Derbyshire has a rate poundage of 176.5p in the pound. Again, the answer is deliberate overspending.

The proportion of overspending each year in Derbyshire has gone up. In 1982–83 it overspent to the tune of 3.5 per cent. I exclude disregards. In 1983–84 it was 4.3 per cent. and this year it is 4.8 per cent. In other words, Derbyshire's ability to keep to budget has either got worse or its ability to defy the Government has got better. I strongly suggest that it is the latter. The result has been a substantial loss of grants and a substantial holdback which this year amounts to some £27.9 million. If Derbyshire had not overspent so wildly and deliberately, we would have received that grant, which is the equivalent of a 27p rate. We would have had a rate poundage of 149p, and, guess what, that is roughly the same as the other midland counties with which we are comparable.

Derbyshire will blame the Government. I blame the county, and, especially since 1981, its Labour leader, Mr. Bookbinder. He stood as a parliamentary candidate for Amber Valley and it turned out that he was worth more than 3,000 votes to the Conservative party. I hereby invite him to stand for my seat. I shall be delighted to take him on. If he cannot oblige, I hope that he will persuade one of the many brothers of the hon. Member for Bolsover (Mr. Skinner) to come and join me there.

I am not being in the least partisan in all this. I wish to put on record the fact that Labour-controlled Derby city council and Labour-controlled South Derbyshire district council have almost forgotten how to increase the rates. They have not put them up for several years. I must say to them, "Well done."

I have here a letter from Southern Derbyshire health authority to the Derbyshire county council which points out that the health authority is one of the council's largest ratepayers and will have to find a further £68,000 this year over and above that included in its financial allocation. It says in that letter that the Council should be mindful of the fact that any percentage rates increase which is greater than the allowance granted to the Authority for movements in the Health Services prices index (rates element) must have a detrimental effect on the level of health care services that this Authority can provide". The health authority also draws attention to section 13 of the Rates Act 1984. It makes an important point when it says that industrial business ratepayers are now obliged to be consulted by the rate-setting council, but that it, as one of the largest ratepayers in the county, is not included. It feels that that section should be extended to include a requirement for the council to consult health authorities as well. That is a fair point.

Public spending by local authorities is a large and now permanent part of our national expenditure. For that reason it must be kept under control. Every £5,000 extra given to the local authority is a job gone in industry. Every £5,000 spent in Derbyshire to send a social worker to Greenham common for nine months, or to provide free newspapers at a cost of £100,000, or to fund CND displays at the local carnival, is a job lost in industry. Worse, it is a job lost in the health authority. If I had to choose between parts of the public sector—which we all have to pay for — I would rather have 10 nurses on duty at Aston Hall hospital or at the other seven hospitals in my constituency, provided by that £68,000 extra that the health authority will have to find than fancy peace signs sported at I he entrance to the county three miles down the A6. That is wrong. I would rather have a man working at Swadlincote Electronics, generating employment for other people, than see that company having to find additional rates. It is easy for a council to spend other people's money and to wreck the local economy while it does it.

On those grounds I warmly support the Government.

8.26 pm

Mr. Robert N. Wareing (Liverpool, West Derby)

I sometimes wish that my hon. Friend the Member for Great Grimsby (Mr. Mitchell) could get his way and that the proceedings of the House were televised. In a debate such as this viewers would see a complete absence from the Conservative Benches of Members to discuss the services which have to be provided by local authorities. Their talk is of targets, penalties and rate capping. Their talk is of a saving on the rates. There is no discussion at all of what it means to councils to have imposed upon them grant-related expenditure figures which are in no way related to the real needs of the people.

One reason for that is that the people who are in government at the moment and those who advise them are more used to wining and dining at the Oxford and Cambridge club and at White's than they are to witnessing the real problems of poor people who do not know when their houses will be repaired, who live with leaking roofs and with rat-infested middens. There is no talk of people on waiting lists such as constituents of mine who are suffering from cancer, and who will die long before their housing needs are met. Such things are foreign to Conservative Members. Basically, they are ignorant of the facts.

There was a look of alarm on the faces of the Secretary of State and the Minister for Housing and Construction when they were dragged round the streets of Liverpool and saw what it is really like to live in an inner city. in the desolation which is the case: in so many of our housing estates. That was partly why concessions have been made to Liverpool in the past few weeks.

Mr. Malcolm Thornton (Crosby)

What concessions?

Mr. Wareing

In his statement on 10 July the Secretary of State said that there would be no concessions to Liverpool on targets, GRE, block grant, penalties, or disregards, that the rules would apply to Liverpool, that the Government were not reopening this year's HIP allocation to give Liverpool extra, but the fact is that the right hon. Gentleman, whom we have seen in the House today, is quite chastened by the struggle which has been carried on in Liverpool over the past months.

Is it not the same Secretary of State who met Liverpool councillors and MPs during February and March? The intransigence of those days has given way to a sense of reality. The right hon. Gentleman realised that Liverpool was leading a fight which was the fight of all local authorities faced with the gauleiter politics of the Tory party. Local authorities have never been more bound by central Government control.

In 1981, when the Government set unrealistic GREs, they planned a 6 per cent. cut in social services. Most local authorities resisted cuts in services for the elderly, for children in need and for the handicapped. As a result, their rate support grant was cut. Liverpool lost £120 million between 1979 and 1983.

Local authorities were forced to compensate for that loss with higher rates. The cut in rate support grant, for which the Government are responsible, has brought about the rate increases in the past few years. Now even that freedom of local authorities to respond to the wishes of local electors is to be removed. A safeguard was provided for local services by the fact that local authorities could use the rating system, which has many faults, but which the Government have been unable to replace, despite their election pledge of 1979.

The only choice within the law left to local authorities which refuse to defy the Government will be to cut vital local services. Cuts in home help and meals-on-wheels services and reductions in the number of staff at residential homes and day centres for the elderly and disabled are likely to occur in the immediate future if there is not resistance such as that conducted by Liverpool city council.

Mr. Roland Boyes (Houghton and Washington)

May I draw my hon. Friend's attention to a parliamentary answer of which he may not be aware? My right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris) asked the Secretary of State for Social Services to make a statement on the progress being made towards the further implementation of the Chronically Sick and Disabled Persons Act 1970. The reply was: Implementation of the main provisions of the Act rests with local authorities who are in the best position to recognise local needs and make arrangements for meeting them."—[Official Report, 10 July 1984; Vol. 63, c. 474.] Is it not two-faced and hypocritical for the Government to say that it is the duty of local authorities to provide services for chronically sick and disabled people when, at the same time, another Government Department is taking cash away from local authorities so that they cannot carry out that duty?

Mr. Wareing

I am indebted to my hon. Friend. That reply is typical of a Government who, when asked about a proposal to close the neuro-pharmacological unit at Cambridge, say that it comes within the budget of the Medical Research Council. They do not say that the MRC budget is affected by the cuts which they are imposing on the council. In the same way, when the Government say that dealing with the problems faced by disabled people is the responsibility of the local authority, they do not add, "We destroyed all hope for those disabled people by cutting the rate support grant."

Mr. Brandon-Bravo

The hon. Gentleman probably did not bother to attend the House not many days ago when my right hon. Friend the Prime Minister corrected the Leader of the Opposition, who was also trying to spread false information about cuts in the research budget. If my memory serves me right—I am sure that I shall be corrected if I am wrong—the research budget was £57 million when the Labour Government left office, and this year it is £117 million. It is false to suggest that there has been a cut in that budget. On the contrary, it has been increased in line with inflation and beyond.

Mr. Wareing

When my party was in government there was no threat to the neuro-pharmacological unit at Cambridge or to the pneumonocosis unit in South Wales. If the MRC had approached that compassionate Government, there would have been a positive response and no thoughts of cuts in vital services.

I often think that the present Government are the sort of Government whom Sir Winston Churchill had in mind when he referred to three types of lie—lies, damned lies and statistics. We have had volumes of statistics from the Government, but the realities of life are different, as the Secretary of State discovered in Liverpool. If Liverpool had succumbed to the Government, it would have been tantamount to driving large sections of the working class population into a sub-culture and into ghettos of multiple deprivation.

The Secretary of State said in his statement on 10 July that if Liverpool reduces overspending, then it benefits automatically from reduced penalties and therefore higher rate support grant. If the Secretary of State believes that Liverpool is overspending, let him tell the city council where it is overspending. So far, he has refused to do that.

Mr. Waldegrave

Will the hon. Gentleman give way?

Mr. Wareing

In a moment. I know that the Minister is anxious to do a little more chuntering at the Dispatch Box.

After the Secretary of State had been dragged round Liverpool to see some of the 17 priority areas designated by the Labour-controlled city council, he said: I emphasise the need for all available resources to be applied to meeting housing conditions. He did not say that there had been any overspending by the city council.

Mr. Waldegrave

I know that the hon. Gentleman will wish to correct himself, because he has not been fair to my right hon. Friend the Secretary of State, who said, for example: Liverpool is an authority which, in 1982–83, compared to the Metropolitan District average, spent two and a half times more per head on environmental services, 50 per cent. more per head on waste collection, 30 per cent. more per head on social services … spent £2,547 to sweep a mile of its streets compared with £784 in Sheffield. There is a good list for the hon. Gentleman to start on.

Mr. Wareing

The hon. Gentleman should come to Liverpool to see whether it is overspending. Overspending must be measured against the reality of deprived social conditions. Let the Minister come with me to Falmouth road or Regal towers in Gilmoss. I will easily find a tenant who will allow him to reside there for a week. A week in Falmouth road or in Regal towers would teach him far more than he could learn from his civil servants or his acquaintances in West End clubs.

The hon. Member for Nottingham, South (Mr. Brandon-Bravo) said that Liverpool had received concessions, which had resulted in losses for other local authorities. Let me read from the letter which the Secretary of State sent to Councillor John Hamilton, the leader of Liverpool city council. It is the surrender document of the Secretary of State. He said: I have decided to relax the housing subsidy arrangements to enable subsidy to be claimed by authorities on the reckonable proportion of loan charges and demolition costs relating to demolished dwellings, where the circumstances have been approved by my Department in accordance with certain guidelines. Liverpool has struggled in the last few months and at least it has gained a real concession from the Secretary of State.

We must resist the Government's policy. In his intransigent period in February and March the Secretary of State told Labour councillors in Liverpool that they must not break the law, but must set a rate within the law. Had they done that, the Secretary of State would not have made a concession and local authorities with social problems would not have been given the hope that if they fight and resist the Government the Rates Act 1984 can be as immobilised as the Industrial Relations Act was in 1971.

The real reason why the Secretary of State gave up the struggle and decided to negotiate as an equal with members of the Liverpool city council was that when the district auditor sent a letter to each Liverpool city councillor explaining what would happen if they set an illegal rate the Tory Government realised what would happen to the capital market if they had to send in commissioners. They realised that a foreclosure on Liverpool by the banks would result in a monetary crisis of a proportion that we have not seen in Britain for generations. That is why the Government gave in.

The Government claim that they have achieved a great victory. I have been in the House for only about a year. I hope that in each subsequent year I shall see the Secretary of State for the Environment achieve similar victories. If that happens, the death knell will toll for the Tory Government.

8.41 pm

Mr. Patrick Thompson (Norwich, North)

I welcome the opportunity to speak in this debate. I shall support the reports when it comes to the vote. My reason for wanting to take part is not that in my year in Parliament I have suddenly mastered the complexities of local government finance. That is far from the truth. I have a love-hate relationship with this deplorable muddle. The other day I felt that I qualified for speaking in such a debate when I was challenged in public to explain what GREA stood for. To my astonishment, I discovered that I knew. That was a major step forward in my understanding of parliamentary matters.

I want to put some straightforward points to the House. As usual, the contributions from the Opposition Benches have, like an inefficient source of illumination, generated more heat than light. That is no better illustrated than by the contribution by the hon. Member from Liverpool, West Derby (Mr. Wareing). The humbug and cant with which he approached the subject was deplorable and lowered the standard of debate, which so far has been reasonably high.

I listened with fascination to the hon. Member for Southwark and Bermondsey (Mr. Hughes). In his opening remarks he rightly said that deep thinking was needed. I agree that we need much deep thinking about local government in the coming years. The hon. Gentleman then talked vaguely about rolling programmes and other equally incomprehensible matters and I realised that I should not gain much enlightenment from him.

I was astonished that no alliance Members were in the Chamber a few moments ago and that the number of Labour Members present is astonishingly low considering the interest that they are supposed to have in the issue.[Interruption.] Throughout the debate, my hon. Friends and I have been in the majority.

Mr. Simon Hughes

The hon. Member obviously has not done his maths, because for most of the debate the alliance has been represented by a higher proportion of hon. Members than the two other main parties. If the hon. Gentleman reads the debate on 23 January he will see that I explained clearly what I thought should be done, as well as what should not be done.

Mr. Thompson

I conceded that at one stage two Members of the alliance were present but when no Members were present, that was a low proportion.

I was interested in the remarks by the hon. Member for Copeland (Dr. Cunningham), who talked about the dreadful way in which the Government were pushing the imposition away from the taxpayer towards the ratepayer. I found that astonishing, since the reason that we are in difficulty is that the burden of increasing local government expenditure has been bearing more and more severely on the taxpayer than the ratepayer. His remarks carried no weight.

The debate takes place against a background of local government overspending on a large scale. Spending has increased much faster than inflation. It is welcome news that at least the Secretary of State has been able to announce that the rate of increase has been moderated this year. According to my mail, there is resistance from domestic and business ratepayers to the ever-increasing rates burden. The problems will not go away just because of comments by Opposition Members.

We all know where more money should be spent. We can all make lists of priorities. We can address ourselves to those priorities only if public expenditure is kept firmly under control. No amount of huffing and puffing by Labour Members will alter that basic arithmetical truth.

I welcome the disregards in the report for 1984–85. En particular, I welcome the disregard for any increase in expenditure on civil defence. On more than one occasion I have said that I want more support for civil defence volunteers. Any move to support the excellent work which such volunteers do must be supported. I am delighted that their work is recognised.

I support the disregard for joint spending with the health authorities, to which the hon. Member for Peckham (Ms. Harman) referred earlier. She talked about community care. We must give the Government credit for that disregard. We must put more emphasis on community care, whether through spending policies or other ways.

I understand that there might be disregards for expenditure on policing the mining dispute. In Norwich at this time of the year we look forward to an annual event—the arrival in the next month or so of the hippy, or peace, convoy. That creates problems in the Norwich area. Policing and law and order problems are created. Drugs and trespassing also cause problems. Members of the Norfolk county council and Norwich city council hope that the Government might disregard expenditure on such problems.

My constituents in Norwich, North and those of all hon. Members representing Norfolk constituencies will look forward to an announcement from the Secretary of State during the next week or so that the Government intend in the future to give much fairer treatment to low-spending shire counties such as Norfolk than they have in the past. I place on record my hope that my right hon. Friend will go a long way to meeting the representations on this matter that we have had in the last few months.

To anyone who believes in the importance of local government our recent debates must have been somewhat depressing. At a time when we should be wrestling with the major issue of the future of local government, we seem to have become bogged down in party political bickering of a kind which does the House little credit. I believe that more long-term thinking about local government will be necessary during the next few years.

At some time during the coming years we shall have to debate again methods of raising finance locally—and I do not duck the term "rating reform". Before long we shall also have to debate ways of increasing public interest in local government. We shall have to debate ways of simplifying and rationalising the ludicrous system of local government finance that we are discussing today and that can only be the result of fudge after fudge going right back to the 1945 Labour Government and, for all I know, well before then. We shall also have to debate education. In 1981–82, expenditure on education was £11,300 million. Without pressing the point too far, at least we shall have to consider whether there is any way of financing education other than through the rates. Finally, we shall have to debate the question raised earlier about annuality. I shall not develop the point now. I simply say that it is nonsense, and I support hon. Members on both sides of the House who have spoken against it.

The debate in the country has been lowered in many ways by the party political posturing of Opposition Members. I refer to one example which will make my point. I have had a number of complaints from constituents in Norwich who have received their rates bills. This is one, which I did not see until a week or so ago. When I began to read it, I thought that I had been handed an election address. It is full of party political propaganda. If I had time to quote it, it would raise cheers from Opposition Members, which proves that it has no business in a rates document. It has happened in London and in Norwich, and we can do without it.

The Opposition must take the largest share of the responsibility for the present unsatisfactory state of affairs in local government. I support the Government for that reason.

8.55 pm

Mr. William O'Brien (Normanton)

When I watched and listened to the Secretary of State it was brought home to me what a vicious, back-stabbing attack the right hon. Gentleman had made and no doubt will continue to make on local government. It is done in the name of constraining public expenditure. The Minister cut a pathetic figure at the Dispatch Box, and his presentation did not convince anyone that his argument was right, or that it was accepted, because local authority services will be cut even further as a result of these reports.

At the beginning of his speech the right hon. Gentleman referred to the publicity put out by local authorities exposing the work of central Government and their attacks on local government. The right hon. Gentleman went to great lengths to explain the amount of money being spent by local authorities on this exposure of the Government's policies. At the time I wanted to intervene, but the right hon. Gentleman would not allow me to. I think that he realised that, since I was a member of the National Union of Mineworkers, I was about to remind him of the amount of public money being spent by the National Coal Board on a campaign to try to expose the weaknesses in the NUM. The Government criticise what local government does to try to expose central Government's attitude to it, yet they remain very quiet about what the National Coal Board is doing during the miners' dispute. Having contacts with NUM members who are on strike, I can tell the House that that campaign is doing very little and that the money being spent on it would have been better directed to the provision of vital services in local government.

I am sorry that the hon. Member for Derbyshire, South (Mrs. Currie) is not in her place. She said that the Inland Revenue taxed everything that moved, but implied that rates were not a tax. That assertion shows how little knowledge the hon. Lady has of local government. She tries to convince people who serve in local government that rates are not a tax. If she really believes that, she is living in cloud-cuckoo-land. Rates are a tax, and a regressive one. It was clear that the hon. Lady realised that she had misled the House because, when I attempted to intervene to put her right, she refused to give way.

I represent a constituency in west Yorkshire, and I am involved with the Leeds city council and the Wakefield district council because both form part of my constituency. In the Carlton, Rothwell, Oulton and Woodlesford area a number of local authority services are required. The demand for them arises because of increasing unemployment. Young people are leaving school with no job opportunities and they demand a number of services. Old people also want further services provided. Because of the restrictions on local government expenditure those facilities are denied them. Roadworks are required, but the Government restrict the resources that can be put to providing them. The result is a serious lack of services in areas of great need. The same applies in the Wakefield area, where there are demands for further services. We want better services for the elderly and the chronically sick and disabled. The Government's policy, which was outlined from the Dispatch Box this afternoon, means that my constituents will be denied valuable services that are desperately needed.

When people realise the way in which the Government are attacking the very fabric of local government—which they have done since 1979—it will not be long before my hon. Friend the Member for Copeland (Dr. Cunningham) is sitting on the Government Benches presenting Budgets that will provide the growth and services demanded by local authorities.

My hon. Friend referred to the shiftiness of the Secretary of State and the number of changes that have been made to the rate support grant orders during the past two or three years. Between 1979 and December 1982, there were nine changes in the rate support grant orders. The Government decided to replace the old rate support grant order in May 1979; in December of that year they introduced the new block grant system; and in March 1980 they introduced transitional arrangements for over-spenders. Those changes show, beyond any shadow of doubt, that the Government have no concept of what local authority is about. They are like shifting sand in trying to resolve the problem of rate support grant. Penalties have been imposed on the local authority in Wakefield. In 1983–84, a 1p rate brought a 1 per cent. penalty—that has doubled for 1984–85. The penalties were introduced to try to suppress local authorities which wished to implement necessary services.

Charges have been increased in an attempt to maintain services, yet we have not heard anything about that from the Secretary of State. Those services should be provided free of charge for the unemployed, the chronically sick, the elderly and the disabled.

Such services are now at a premium and many local authorities — and Liverpool is typical — are facing immense problems. If the order of the day is that to secure more benefit from the Department of the Environment local authorities have to fight the Department, I think that more local authorities will join that campaign.

Conservative Members have compared local government expenditure with Government expenditure. I have the figures up to 1982–83, and they show that in 1974–75 the central Government percentage of gross domestic product was 33 per cent., while it was 30.2 per cent. for local authorities. In 1982–83, the figure for central Government had risen to 37.2 per cent. while that for local authorities had fallen to 25.6 per cent. There can be no doubt, therefore, that the Government have increased their expenditure while local authorities have reduced theirs. We must nail the lie here and now—it is not in local government but in central Government that expenditure has increased.

People are now becoming aware of that fact. Indeed, they have demonstrated their awareness in both the local election and the EEC election. There is no doubt that they will demonstrate it at the next general election.

Public expenditure figures have been presented by CIPFA in the form of a graph. These show that public expenditure in local government has decreased by 17.1 per cent., and in central Government has increased by 12.5 per cent.

We heard from Conservative Members that there has been a general outcry about the contributions that industry is making to rates expenditure. First, I will give the figures for rates payable in England. Up to March 1983–84, industry paid £1,258 million, commerce, £3,127 million, and other non-domestics £1,881 million, making a total of £6,266 million. However, we find that local authorities in England and Wales will spend on maintenance £880 million, on advanced further education £700 million, and on the police service £2,300 million. The people who say that industry is paying the lion's share should get their facts right.

I will give a further illustration that industrial costs are not presented in a true form by the Government. First, let us take 1975 as £100 million. For 1982, the industrial rates were £248 million. If the rate support had been maintained, that would have been £213 million. The cost of material was £244 million and the cost of output £240 million. The index of average earnings was £250 million.

The real problem that arises on the rate support grant lies not with local authorities. The cry that is so often heard from industry that high rates create the problems in industry is a false one. The problem lies in the reduction of the rate support grant. I appeal to the Government to take these figures on board, because it is important that the House should have correct information when making its decisions.

9.7 pm

Mr. John Maples (Lewisham, West)

I wish to spend the short time available to me examining the affairs of one council, which is my council. Lewisham borough council is a Labour-controlled high spender which has consistently been subject to penalty, and I suspect that it is likely to be rate-capped. It has just imposed on my constituents a 14.5 per cent. rate rise on top of 25 per cent. last year. When one disaggregates all the special funds and moving expenditure from one year to another, one sees that its spending has risen in cash terms from £78 million to £88 million from last year to this year, yet this is a council which says that it cannot find any savings. It says that it can do nothing without dramatically affecting the services which it gives to the people of the borough.

I wish to consider two areas where I think that it and other councils could find savings. The first is what would call frivolous political expenditure. From a council which cannot make any savings there was a campaign costing £100,000, of which £15,000 has been spent on making a video to persuade the people of the borough that, instead of having about half a dozen council offices, they need 35. This is at a time when we are so short of money that we cannot make any savings and have to impose a 15 per cent. rate rise.

The council has recently converted a children's climbing frame into a bulldozer, at a cost of £550 to the ratepayers, because it was thought that it looked like a war toy. I am glad that the hon. Member for Blackburn (Mr. Straw) is present, because the last time I mentioned the borough artist, and the sexism awareness training programme, he accused me of vulgar abuse of the council. The hon. Gentleman need not make excuses for the borough, because it is proud of both programmes.

In the local newspaper it has been announced that the borough artist will be continued for a further two years, to be funded partly by the council and partly by the Greater London art association, and another £130,000 will be devoted to tackling sexism. The hon. Gentleman need not make apologies for that, because the council is proud of it. This is frivolity on an irresponsible scale. It is deeply resented by ratepayers, who have just had a 15 per cent. rate rise on top of a rate rise of 25 per cent. last year.

Real savings in the management of my local authority's affairs would come simply from conducting those affairs in a better way, either by doing the same for less, which I should like to see, or by doing more for the same amount of money, which presumably Opposition Members would like to see. By considering a few areas of its operations, one can see that substantial savings could be made without in any way affecting services.

The housing department is one of the council's two big spending departments. We have 2,600 empty houses and the cost in lost rent and rates is £3 million, yet we have a large council house waiting list. We have rent arrears of more than £5 million. They have increased by £1.7 million in the last 12 months. The council has decided, however, not to use any of the legal procedures open to it to recover those arrears.

Not surprisingly, the unit cost of managing and maintaining a council house has risen, from £582 two years ago to £766 this year, an increase of 32 per cent. If any Opposition Member or I were to ask any of the council tenants in my constituency if they felt that the service being delivered to them had been improved by 32 per cent. during that time they would laugh, because the exact opposite is the truth. In other words, the additional expenditure is not spent on delivering a better service, but is largely wasted.

I cannot believe, it being one of the council's biggest spending departments, that an efficiency saving of about 5 per cent. is not available in those operations. That would yield about £2 million, which could be used to reduce the rates, or, as Opposition Members might like, be spent on some other service. At least it would not be wasted on the overheads of running the housing department.

Another test is the number of people employed by the council, which has risen between 1982–83 and 1983–84 from 4,132 to 4,606, an increase of 11 per cent., at a time when the council has been supposed to be cutting its services "to the bone," to use its own words. The number of new officer posts since April last year has risen by 168. This is not a council which is trying to find the most efficient way of conducting its affairs. It is a council which is refusing to make management savings that are available to it.

There is a good example of that in the transfer of GLC housing to the London borough of Lewisham. When GLC officers came with their London weighting money, the Lewisham officers who were not paid the inner London weighting allowance — because they did not work in what was defined as inner London—demanded the same weighting. One would have expected the council to put up a fight over that, because it meant a difference of £2.5 million a year to the ratepayers, but it did not—because it is in the pockets of the unions in regard to its manpower policies — and it gave in, and that has cost the ratepayers £2.5 million a year. It is an absolute abdication of management responsibility to make such decisions.

The council is in the process of buying some sophisticated computer equipment to enable it, one would expect, to do things more efficiently. However, as part of its agreement with the unions, it has agreed that the Council will not reduce its overall work force as a result of the new technology. That is staggering.

Mr. Wareing

Do elections take place in Lewisham?

Mr. Maples

The hon. Gentleman knows that the relationship between voters and ratepayers is not exactly perfect, but I do not want to be distracted in the few minutes that are available to me.

Rubbish collection is another good example to consider. The council's own report, produced by its officers, described it as "staggeringly inefficient" and said that drivers who were paid for doing 44 hours' work were doing 25 and that gangs which were supposed to be averaging 20 loads a week were averaging 14.

All of that comes from rank bad management. There is no general management of the council's affairs. There is no budget responsibility, no accounting system and no reporting system by which those responsible for budgets must answer for the spending of their departments.

A borough council such as Lewisham is a large organisation. It spends £200 million a year and employs 8,000 people. It must be managed properly, as anyone who has been involved with the running of a large organisation will agree. If only that happened, there would be massive opportunities for savings and improvement.

At the beginning of this year, when it was going through its budget exercise, the Labour group on the council said that it could find only £0.5 million of savings which would not affect services. Out of a total budget of £200 million, that is laughable. The Conservative group worked out an alternative plan under which there would have been savings of just over £4 million, which would not have affected services. That would have gained £3 million of additional Government grant and there would have been a rate rise of 7p instead of 29p without in any way affecting services.

We all acknowledge that some balance must be struck between the services needed and what the ratepayers can pay. At the moment, the Government's overwhelming objective must be to foster our economic recovery. That involves the control of public expenditure. [Interruption.] The Opposition perhaps know less about economics than about rates, because a recovery is going on. I should like to know the definition of "recovery" if it is not growth of 3 per cent. per year and 5 per cent. inflation. I do not wish to be sidetracked down that line.

There must be some limit on council spending. Whatever one's views about services and rates, there is no excuse for the rank waste of money, through inefficiency, that we have seen. I am afraid that there is no sign that councils such as Lewisham will be more efficient unless their spending is in some way limited. When forced to do so, they will examine their choices and make the tough decisions which are necessary to control public expenditure. The ratepayers of Lewisham will measure the success or failure of the Government's policies by the size of their rates bills. We must act to stop those bills increasing.

9.16 pm

Mr. Jack Straw (Blackburn)

This debate is unusual in that the Government Whips' position has been manned by a series of irregulars, because today is the day for the annual dinner of the Government Whips' service. The Whips are out having a celebration as the rest of the Government fall apart. What a great deal they have to celebrate.

The debate has been characterised by a serious split on the Conservative Benches. The Under-Secretary of State has adopted a new tack, and is seeking to attack us in the hope of covering up the disastrous system of local government financing.

Mr. Tony Banks

He wants the job.

Mr. Straw

My hon. Friend said that he wants the job. The Under-Secretary of State is seeking to attack us.

The Conservative Benches have been split between those Conservative Members, such as the hon. Member for Lewisham, West (Mr. Maples), who seek slavishly to support the Government and the majority who in today's debate, as ever, seek to criticise the Government, because they know the damage and insanity of the local government system. I do not resile from my allegation that the hon. Member for Lewisham, West has vulgarly abused the London borough of Lewisham. The hon. Gentleman was in error the last time he spoke, as was the hon. Member for Derby, South (Mrs. Beckett) who claimed that Lewisham ratepayers had had to pay £100,000 towards a pantomime. It turned out that the pantomime had made a profit.

I shall cite the figures for expenditure and rate increases for Lewisham that were provided by the Secretary of State. The figures tell their own story about the way in which the Government have operated against inner city authorities. They show that rates increased between 1983–84 and 1984–85 by 32 per cent. but expenditure increased by less than half that amount. Other published figures, of which the hon. Member for Lewisham, West is well aware, show that, since 1978–79, Lewisham's expenditure has increased alongside the average increases for all local authorities. Lewisham is not in any sense the overspender to which the hon. Gentleman referred.

The hon. Member for Uxbridge (Mr. Shersby) made a sensitive speech, expressing his full support for the criticisms which the Conservative leader of Hillingdon borough council made of the Government. The hon. Gentleman pointed out that, even to stand still next year to keep services going in the Conservative borough of Hillingdon, the ratepayers would face in increase in rates of 46 per cent.

That increase has also been faced by many Labour-controlled authorities. The Secretary of State characteristically shot into his foot during his opening remarks when he said that the borough of Blackburn had to increase its rates this year by 49 per cent. That is true, but the Labour-controlled borough of Blackburn has been in no different position than the Conservative-controlled borough of Hillingdon. Both have sought to meet the Government's targets, and the penalty that they have paid, because of the capricious nature of the rate suppor grant, has been to see their rates increased by 46 or 50 per cent.

The past four years have witnessed an unprecedented and unparalleled attack not just on the financing of local authorities but on the vital services they provide and the system of government upon which they are based. The attack has shaken the foundations of our democratic system and turned into reality the horrifying spectre raised by the Lord Chancellor of an elective dictatorship seeking to abuse the absolute power which its large majority in the House gives it, to weaken and then crush opposition wherever it appears, including the ranks of the Conservative party.

Mr. Boyes

I wish to remind my hon. Friend of the opinion poll published in The Observer on 29 April 1984 which emphasises what he was saying. The questions were asked—does the Prime Minister act too much like a dictator? The answer was that 62 per cent. of the British people thought so. Does she refuse to listen to advice? The answer from 63 per cent. of the people was that she did. Is she too Right wing? Of those asked, 59 per cent. thought that she was. That emphasises and underlines what my hon. Friend is saying.

Mr. Straw

I am grateful to my hon. Friend for that intervention. The Conservative party, having believed, with some justification, that because of the Falklands factor the Prime Minister was an asset to them in the last election, is now discovering that she is a serious liability.

An attack against local government, spearheaded by the Secretary of State, is without justification. It has, moreover, been carried out so incompetently and with such disregard for the principles of justice and fair play that its results have been capricious and arbitrary.

The administrative monster that the Secretary of State has created is now so out of control that it will not just wreck Labour-controlled local authorities, as the Secretary of State intends, but the Conservative-controlled ones as well. The only comfort for the House and the country, so beyond control is this monster, is that ultimately, and sooner rather than later, it will devour its creator—the Secretary of State.

It is written that Whom the Gods wish to destroy they first make mad. A better, more rational system of regulating local government would be more likely to have emerged from Bedlam than the one which has come from the fevered imagination of the Secretary of State.

At the heart of the Government's ostensible justification for the present draconian controls imposed upon local authorities lies their claim that for reasons of macroeconomic policy—a point referred to by the hon. Member for Lewisham, West—local authority current expenditure must be strictly controlled. That is the Government's first error and one which, I hope, is slowly dawning upon Conservative Members.

It is entirely consistent with the responsibilities of central Government that they should determine and close-end what they grant to local government. Those sums are paid out of central taxation granted by the House or from borrowing against the public sector borrowing requirement. What local authorities spend from their local taxation has no effect upon the borrowing requirement, as they are prohibited by law from borrowing to meet their current expenditure. The Treasury asserts that such local authority spending has an infinitesimal effect upon other financial measures, such as the money supply, which the Treasury holds so dear.

What wholly explodes the Government's case is that other western nations, including those whose economies have performed far more successfully than ours, and those following similar monetarist policies, do not, at central Government level, even account for the expenditure of their local authorities, let alone seek to control it. That is true of West Germany and the United States, and it is increasingly the trend in other OECD countries. The rejoinder that West Germany and the United States are constitutionally federations is irrelevant. In economic terms, those nations are as unified as Great Britain.

If there is no basis for the ostensible economic case that the Government advance, what is the real reason for the unrelenting and unremitting attack on Community freedoms and local services? The Government have no parallel, in their philosophy or style, in post-industrial British history. The decent, Conservative principles of freedom, democracy and choice have been jettisoned, even the principle of rolling back the frontiers of the state. What is more illustrative of state power than the powers that the Secretary of State has taken unto himself? These are alien ideas that have been imported from pre-war Europe.

We no longer have a Prime Minister who is primus inter pares; instead, we have a pastiche of a president who treats democracy, in the Conservative party and the Cabinet room, with the contempt with which she has treated democracy in local communities. The Secretary of State knows that only too well.

The measures that we are debating tonight have nothing to do with economic policy, and everything to do with the Prime Minister's personal vendetta against those who dare to disagree with her. Alongside the trade union movement there has been no greater source of opposition to the Government than the towns, cities and rural areas that have been sensible enough to elect Labour authorities to protect the local services that they hold dear.

Democracy, by its nature, presupposes diversity, difference and choice. Because those local authorities have chosen to do things differently from the Prime Minister, she is seeking to oppose them and snuff them out. What makes the Government attack on local choice all the more horrific is that it has not worked, even on its own terms. Rates have increased overall, rather than gone down. The Government are responsible for that, as the Conservative controlled Association of County Councils has shown only too clearly.

The relationship between rate levels and expenditure has been destroyed by the Government. That is why Forest Heath's expenditure has increased by 47 per cent. but its rates have decreased by 14 per cent. That is why Slough's expenditure has decreased by 2.5 per cent., and its rates have increased by 95 per cent. The Government, in pursuit of a policy that is claimed to ensure a much closer correlation between rates and expenditure, have ensured the opposite. Expenditure can go up and rates go down if an area is Tory. Expenditure can go down and the rates shoot up in a Labour area. Low-spending Conservative authorities have been hit arbitrarily by policies that were designed principally, and inexcusably, to hit the higher-spending Labour authorities. The evidence for that is that the Secretary of State has not only savagely penalised Labour areas, but has taken £188 million from Conservative areas.

None of that appears to be necessary, even in the Government's own terms, because local authorities may not have been spending over target at all. When the Secretary of State replies to the debate, we need to hear a much more serious and studied response to the report in the Financial Times today by the Audit Commission.

Mr. Waldegrave

That is an early draft.

Mr. Straw

It is no good the Minister saying that it is an early draft. If the Audit Commission, which is the creature of the Secretary of State and was appointed by the Government, has done calculations, at whatever level, that suggest that local authorities have been spending on target and not spending over target by £500 million, as the Secretary of State suggests, he should be conducting his own examination with the Audit Commission to find out who is right. The right hon. Gentleman would save himself a great deal of trouble if he did so, and perhaps even his reputation. It may turn out that all his fights with the Treasury, Conservative Back Benchers and Cabinet colleagues have been for nothing, because authorities have not been overspending.

Despite the insanity of the system, it charges on rather like the train yesterday, crashing at 100 miles an hour into a nuclear flask. The Secretary of State charges on like that, unaware that destruction is so near. [HON. MEMBERS: "But it stayed intact."] The train did not stay intact—it was destroyed. I was comparing the Secretary of State to the train. The Labour authorities are the flask and the Secretary of State is the train.

The local government finance system of which the three reports form a part, designed to reduce overspending in Labour authorities, has these mind-bending and wholly contradictory results. I ask Conservative Members to think carefully about them. First, the Treasury now has an inbuilt incentive to ensure that local authorities overspend. If they do so, the Treasury claws back money, which in turn reduces the PSBR. That figure, not total public sector spending, exercises the Chancellor and financial markets. This year, so-called overspending by local authorities has reduced the PSBR by over £500 million. If local authorities had been able to meet the Government's targets, the PSBR would be £500 million higher and the financial crisis that the Government face all the worse.

Secondly, Conservative local authorities have a vested interest in some Labour authorities' overspending because it has meant lower rates and more rate support grant in Conservative areas. That is excellently illustrated by what has happened to the Greater London council's repayment of £100 million in respect of 1982–83. The GLC was entitled, as it now turns out, to the £100 million that has been taken from every other area, including pre-eminently Conservative shires. That illustrates the way in which high spending in Labour authorities under this system keeps the rates down in Conservative areas.

I hope that Conservative Members will weigh this with great care. My third point is that, if rate capping works, it will force up the rates in the non-rate-capped Conservative areas. If it works, more rate support grant will go to the so-called high-spending Labour areas and less will go to the lower-spending Conservative areas. Mr. Noel Hepworth, the respected director of the Chartered Institute of Public Finance and Accountancy, said: The uncapped authorities will consequently have to levy a higher level of rates than would otherwise be the case. Is that what the Government seek? Is that what they want?

The House is right to mock the Secretary of State, but it must also take most seriously the damage to our national fabric over which he has presided. By his policies, he has undermined faith in democracy as well as faith in and respect for the law. The House has repeatedly placed duties upon local authorities to provide vital services to a high standard. Because of the system of financial penalties, authorities are now being forced, in the eloquent words of my right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris), to Obey Whitehall, break the law". That quotation was referred to by the Conservative leader of Hillingdon council, Mr. Norman Hawkins, in a letter that my hon. Friend the Member for Copeland (Dr. Cunningham) quoted. Councillor Hawkins's remarks have the full support of the hon. Member for Uxbridge (Mr. Shersby). He said: Alfred Morris, MP (`Obey Whitehall, break the law' …) draws attention to a problem facing many local authorities, not just the few much-quoted Labour-controlled councils faced with rate-capping. We know that the Jenkin law is capricious, arbitrary and unjust. It changes the rules and moves the goalposts in the middle of the game. The Secretary of State must bear the responsibility for the consequences.

Many of the remarks of the Secretary of State and the Under-Secretary have shown that they believe that they have the wisdom and knowledge to replace the decisions of thousands of councillors up and down the land. The Under-Secretary asked, almost rhetorically, why some partnership areas had met targets while others had failed to do so. The reason is that targets take no account of local circumstances, nor can they ever do so. What the Prime Minister and the Secretary of State have, in their arrogance, failed to understand is that of which Sir Karl Popper warned in "The Poverty of Historicism". He said: It is easy to centralise power, but impossible to centralise the knowledge which is distributed over many individual minds, and whose centralisation would be necessary for the wise wielding of the centralised power. This fact has far-reaching consequences. Unable to ascertain what is in the minds of many individuals, he must try to simplify his problems by eliminating individual differences: he must try to control and stereotype interests and beliefs … the greater the gain in power, the greater will be the loss in knowledge".

Mr. Waldegrave

Does the hon. Gentleman agree with that?

Mr. Straw

The question is not whether we agree with it, but whether the Under-Secretary, with his background, agrees with it.

The Secretary of State has sought to replace the knowledge and wisdom of 24,000 councillors in 400 communities by the mind of one man—himself. He has gained in power, but he has lost in knowledge—to the point where he controls more and more but comprehends less and less. He is wrecking local government, and in the process wrecking himself. The reports before the House are an offence to reason, decency and democracy. We shall vote against them tonight.

9.36 pm

The Parliamentary Under-Secretary of State for the Environment (Mr. William Waldegrave)

The hon. Member for Blackburn (Mr. Straw) should be more careful when he attacks historicism. A number of Back Bench Opposition Members believe in the principal modern historicist theory. A number of other historicists are engaged in trying to de-select him in his constituency.

My hon. Friend the Member for Lewisham, West (Mr. Maples) made an admirable speech about waste in the public sector. The hon. Member for Blackburn accused him of vulgar abuse. But the hon. Gentleman has accused the whole public service of being self-serving, complacent and lacking in efficiency. Is that not vulgar abuse? When the hon. Gentleman was indulging in personal abuse of my right hon. Friend, I thought that he was not up to his best standard. I was reminded of what one of his right hon. Friends once said to me about him. He said that, when the hon. Gentleman is in that mood, there is something about him that reminds one irredeemably of the student debating society.

There is something profoundly distasteful about the structure of much of the argument that we have heard from the Opposition today. It is not good enough for Opposition Members to quote the words of admirable Conservative councillors such as my friend Councillor Parker Jervis, my hon. Friend the Member for Uxbridge (Mr. Shersby)) and the leader of Hillingdon council. Those councillors criticise the Government for not cutting enough out of high-spending Labour councils. The Buckinghamshire council thoroughly supports a programme of expenditure cuts. It believes that it has cut spending in its area and that it should not be asked to do more.

It would be much more honourable — as well as making for a more interesting debate—if Opposition Members would say that the Labour party believes in high spending and that that is why it does not like spending controls. They should not hide behind the skirts of Conservative councillors who thoroughly support overall Conservative policy and say that more should be cut from the Labour high spenders. That is a dishonest argument.

Mr. Straw

Why does not the Parliamentary Under-Secretary quote Mr. Roger Parker Jervis correctly? He was complaining about the cuts in his own budget. What about Essex county council, which said that it was going to overspend and to set a rate that allowed for Government penalty? Does the Parliamentary Under-Secretary approve of that, or does he think that Essex should be allowed to overspend but not other authorities?

Mr. Waldegrave

That does not answer my point at all. What is more, Councillor Parker Jervis has nothing to do with Essex county council, and the hon. Gentleman cannot pronounce his name. The Essex district and the county believe in expenditure control. Their argument is that they have made cuts and should get credit for doing so.

The most profoundly unsatisfactory argument from the Opposition side was their attempt to call in aid my hon. Friend the Member for Uxbridge and the leader of Hillingdon council. At the heart of that criticism is an attack on one thing which the Labour party supports in the rate support grant system—the principle of equalisation. That is what my hon. Friend the Member for Uxbridge and the leader of the Hillingdon council are unhappy about. If Labour is to abandon equalisation, it will launch itself into a revolution. It is a proposal that will not find much support on the Opposition Back Benches.

The hon. Member for Copeland (Dr. Cunningham) forgot, as well he might, that, unfortunately, the Labour party controls one or two shire counties. He made a great to-do about the overspending of shire counties, as if that must all be something to do with the Conservatives. In fact, of the £188 million holdback, £113 million derives from Labour-controlled shire counties. Only £30 million of the £140 million of overspend comes from Conservative-controlled shire counties.

The hon. Member for Copeland talked about the introduction of reports and further reports and the years that it takes to clear up the accounts. There is nothing new in that. The hon. Member for Blackburn will remember that that happened when he was at the Department of the Environment. There used to be increase orders under the previous system. The first one was introduced after 12 months and the second after 24 months. Before we become sentimental about the old system, with its black box and regression analysis, let us not forget how profoundly unsatisfactory it was seen to be by Members on both sides of the House, including the late and lamented Anthony Crosland.

The hon. Member for Liverpool, West Derby (Mr. Wareing) made one of his classic speeches but he did not take up examples of West End clubs where he imagines I live and compare them with places such as Sheffield, which manages its services much more efficiently than Liverpool manages its services.

Mr. Wareing

rose——

Mr. Waldegrave

No, I shall not give way. The hon. Gentleman will have plenty of opportunity to conduct this debate in future.

Mr. Wareing

rose——

Mr. Speaker

Order. I do not think that the Minister is giving way.

Mr. Wareing

rose——

Mr. Waldegrave

No, I shall not give way. There will be plenty of opportunity——

Mr. Wareing

rose——

Mr. Speaker

Order. The hon. Member for Liverpool, West Derby (Mr. Wareing) must not persist if the Minister is not giving way.

Mr. Wareing

On a point of order, Mr. Speaker.

Mr. Speaker

Order. I think that the hon. Gentleman is about to ask me why the Minister is not giving way, and that is a question I cannot answer.

Mr. Waldegrave

Very well, I shall give way to the hon. Gentleman.

Mr. Wareing

I am pleased that the Minister has mentioned Sheffield, which for many decades has had a Labour-controlled council. Liverpool had to suffer for a decade from Liberal-Tory domination. Now that a Labour council has been elected we shall alter all that.

Mr. Waldegrave

The hon. Gentleman can still learn about how to run a more efficient waste disposal system and a street cleaning service from many of his hon. Friends.

My hon. Friend the Member for Norwich, North (Mr. Thompson) made an excellent and thoughtful speech. I agree that we were all rather disappointed when the hon. Member for Copeland came to the end of his speech and set out the broad strategic direction of his thinking. We were all at once in the most frightful gobbledgook and felt rather let down. My hon. Friend is right when he says that we must think further about all the underlying arguments.

My hon. Friend the Member for Norwich, North was right to remind us that, despite all the Government's efforts, the volume of local authority spending has increased since 1979. There has been a reduction in manpower levels as a result of our efforts, but only by about 3 per cent. My hon. Friend is right to remind us that much further work must be done in the long term. I know that that work will be done.

My hon. Friend also mentioned the disregard for civil defence and welcomed it. My hon. Friend the Member for Nottingham, South (Mr. Brandon-Bravo) and the hon. Member for Peckham (Ms. Harman) spoke about disregards in certain areas of spending. Before signing supplementary reports, my right hon. Friend considers carefully all the representations that he receives from local authorities about items of expenditure which, in their view, should be disregarded. He has not been persuaded at this stage that he should grant any completely new disregards.

A common link between the speech of the hon. Member for Peckham and that of my hon. Friend the Member for Nottingham, South, and with the speeches of other hon. Members, was care in the community. In response to a number of representations about the 1984–85 disregard for certain expenditure on projects that are being jointly financed with health authorities, my right hon. Friend proposes to make a change to the present definition. In future it will apply to increases in authorities' expenditure on individual jointly financed schemes rather than to aggregate increases as at present. This will make it easier for authorities to fulfil their obligations and to absorb schemes into their main programmes. Effect will be given to the change in the next 1984–85 supplementary report.

My right hon. Friend mentioned briefly the situation that has arisen over Liverpool's budget. I want to make it clear that the figure in the report is £261 million. In the way that he put it, it may have sounded as though my right hon. Friend referred to the £261 million, which was the original budget figure. The figure in the report is the original target figure, and we shall have to come back to that in due course.

Several of my hon. Friends, including my hon. Friend the Member for Welwyn Hatfield (Mr. Murphy) and my hon. Friend the Member for Uxbridge who explained why he could not be here for the winding-up speeches, have put us on notice that they are looking for fairer treatment for the low spenders. That is a matter for the statement which my right hon. Friend will make next week. We know that we are under the obligation.

I am not sure that we can meet my hon. Friend the Member for Uxbridge in his suggestions about revolutions in relation to the central principle of equalisation. I am not so sure that we can meet those demands in a short time scale; nor am I convinced that we should do so.

I have to say to my right hon. and hon. Friends that, although we recognise the efforts made by many genuinely low-spending authorities, and will be taking steps in due course to ease some of the pressures on them, there are still many opportunities for the good performers among the low spenders to achieve the performance of the best.

I was born in the county of Somerset, which has £800,000 of penalty. I know that if that admirable county council could find ways of reducing its considerable budget expenditure by £1.5 million it could still avoid that penalty. If it did so, it would still be spending more per head on its transport systems than Gloucestershire and Wiltshire, the neighbouring counties. [Interruption.] Even now it could still — and may well — find ways of avoiding the penalties which are set out in the reports. That is just one example of the kind of sum that is involved in avoiding the penalties that have been imposed on some Conservative authorities.

I suspect that, when the final outturn figures are seen, we shall find that a good many of the authorities avoid holdback. I suspect that they will have found, during the course of the years, ways of cutting their budgeted expenditure. I believe that they will have found the relatively small savings that are required.

The shires, with one or two Labour exceptions—I am sorry to say that my own constituency shire county of Avon, which is Labour-controlled, is one of them—are not the source of the real problem. The whole shire county overspend of £140 million is not that much more than the single overspend of ILEA, at £125 million. That puts the shire county overspend—even including those such as Avon—in perspective.

Among the shire counties and the shire districts there is what one might call a roll of honour. There are cases in which not only the county but the shire districts within the county have all avoided holdback penalties. For example, in Berkshire, Dorset, Gloucestershire and Oxfordshire, the county and every district has avoided holdback penalties. In East Sussex, Shropshire, Hampshire, North Yorkshire, Leicestershire, Suffolk and Norfolk, virtually all the districts and the counties have avoided penalty. At the other extreme, in South Yorkshire and in Tyne and Wear, the counties and every district are in penalty.

I find the situation most interesting in counties such as Avon, where my constituency is. Not one of the districts is in penalty, yet the county has completely squandered the benefit of sensible district council spending by landing the ratepayers in £25 million of penalty. That is because of the absurd way in which the county council has been run. The county cannot use the argument that it is in an area of unsupportable economic stress, or something of that sort, because the district councils in the same area have managed to provide their different services satisfactorily within the targets.

Take again the west midlands. My hon. Friend the Member for Derbyshire, South (Mrs. Currie) knows the west midlands and Birmingham well. Six of the seven districts are on target. They are not all Conservative; some are Labour. Birmingham, Coventry and Wolverhampton are all on target. Yet the absurd West Midlands metropolitan county has landed its ratepayers with penalties of £32 million. Three of the inner city partnership authorities—Birmingham, Manchester and Salford—and many programme authorities have hit the target. That has proved that overspending against target is not a problem of city government, despite the fact that that argument has been put again and again by Labour Members.

Targets can be met in every shape and type of council, regardless of political control, to the great benefit of the ratepayers. Many cities — Bristol, Oldham, Doncaster, Dudley, Leeds—are all on or just about on target, but the situation is completely different in some Labour urban councils. My hon. Friend the Member for Lewisham, West made an excellent speech which showed that that could have been repeated for a wide range of other Labour-controlled inner city constituencies.

Overspend is caused by an amazing mixture of the sort of incompetence which my hon. Friend detailed and the sort of political fantasy about the role of local government which we usually hear from the hon. Member for Newham, North-West (Mr. Banks). He came in, was not called and went away again. That is principally a phenomenon of those Labour-controlled councils where the local Labour parties have been dead on their feet for so many years that they have been taken over, quite easily, by a collection of cranks and extremists. Some of them even make their way into the House. The great thing is that they always make it easy to identify them by emitting amazing whoops, hoots, screams, and such noises, thereby proving the argument. An ostensive definition of them is available.

The irony is that right hon. and hon. Gentlemen on the Opposition Front Bench, who, without insulting them too much, represent a certain tradition in the Labour party which, to put it at its mildest, is rather different from the tradition of Mr. Derek Hatton and Mr. Kenneth Livingstone, find themselves defending the very people who are driving them out of the Labour party, the whole of whose efforts are directed at securing that they do not remain in their seats, let alone on the Opposition Front Bench.

The irony is that the shells which the dead Labour party left in the cities — the admirable biography of Mr. Livingstone shows how half a dozen people took over the London Labour party within a few years, and the hen. Member for Newham, North-West was one of them — are the origin of the change in local government's style and objectives which we now face. That is rather little understood in some parts of the country which have not yet seen the phenomenon but which think that it is the old Labour boys who are still running the Labour city councils. They are not and those who are will not allow people such as the admirable hon. Members on the Opposition Front Bench to be their spokesman for very much longer.

My hon. Friend the Member for Lewisham, West described what happens when such people are put in charge. My hon. Friend the Member for Derbyshire, South, with her experience of local government, and my hon. Friend the Member for Nottingham, South, who also has great experience of local government, said that we must have the weapons with which to deal with these councils. If we do not, local government in the cities will become even more of a scandal than it is at present. It is a mixture of incompetence and political fantasy about the role of local government. It is those councils which have compelled the Government, with no joy whatever, to embark on rate capping. It is those councils which have compelled the Government to seek to maintain the whole structure of targets and penalties.

Next week my right hon. Friend the Secretary of State will come forward with proposals which will deal with the pledge that we gave to meet some of the objectives and aspirations of the low-spending councils. We shall be able to demonstrate how the weapons which we sought, and were forced to seek by the developments in city government, in the rate-capping Bill have given us a little room to help those at the lower spending end which have a justifiable right to say that they have done what the Government have asked, have looked at their programmes and have genuinely sought to make savings.

Again, that reminds one of the dishonesty—that is not too strong a word—of the arguments that Labour Members try to use when they deploy the case put by the low-spending Conservative councils. We even had a quotation from Winston Churchill, who would not have been quoted with approval by the hon. Member for West Derby when he was alive. In addition, there were quotations from Mr. Roger Parker Jervis and the leader of Hillingdon council. That was profoundly unsatisfactory and dishonest.

I urge the critics on the Government Benches who are fairly putting to us the case of the low-spending councils —to which we must listen—not to fall into the trap of believing that there is anything in common between their arguments and those of Labour Members who are arguing against any controls on expenditure. Labour Members are making a feeble and foolish attempt to build a tactical alliance.

Mr. Simon Hughes

Is it an example of paucity of argument that the Under-Secretary has finished his prepared speech and still has five minutes left of his allotted time?

Mr. Waldegrave

The hon. Member makes a fair point. I had a sheet of paper in front of me earlier. On one side I wrote the names of Labour Members who had spoken and on the other side I left spaces for their original and interesting points which I would answer. Not only had I heard all the speeches before—some were repeated almost verbatim — but the points made by Labour Members were even less compelling today than they had been before.

Unfortunately, I was out of the Chamber when the hon. Member for Southwark and Bermondsey (Mr. Hughes) spoke. No doubt his uncharacteristically short speech was a powerful and weighty contribution. If so, it was alone on the Opposition side. The paucity and thinness of the contributions of Labour members were not impressive.

Some of my hon. Friends rightly remind the Government that we have commitments towards low-spending councils. My right hon. Friend the Secretary of State will meet those commitments, but they must be seen against the background of the overwhelming importance of maintaining public expenditure controls. There is no easy or painless way of stopping the growth of spending in powerful organisations that are devoted to spending. Trade unions, lobbies and Labour Members can make all the easy speeches in favour of spending. There is no easy or painless way of holding back that spending, and no system of restraint on spending, promised by my right hon. Friend or anyone else, can remove all conflict in this area.

To those who seek consensus, I say by all means let us have consensus, but if one argument says, "Control expenditure" and the other argument says, "Increase expenditure", there can be no consensus between those points of view. There must be consensus about the way in which we go about things, but we cannot disguise the facts and seek easy popularity or plaudits from the Opposition by denying that control of expenditure is difficult and will always involve conflict.

Mr. Simon Hughes

On a point of order, Mr. Speaker. Is the Under-Secretary allowed to indulge in repetition, deviation, and hesitation without limit?

Mr. Speaker

I did not hear any repetition. I call the Minister to finish his speech. It is rather good.

Mr. Waldegrave

If there was not repetition from Opposition Members of the same old cry of more spending under every circumstance, I do not know what repetition is.

The reports are part of the necessary and difficult process of restricting and restraining the growth of the 25 per cent. of local spending that falls to local authorities. I have no hesitation in commending them to the House.

Question put:—

The House divided: Ayes 335, Noes 195.

Division No. 413]	[10 pm
AYES
Adley, Robert	Arnold, Tom
Aitken, Jonathan	Ashby, David
Alexander, Richard	Aspinwall, Jack
Alison, Rt Hon Michael	Atkins, Rt Hon Sir H.
Amery, Rt Hon Julian	Atkins, Robert (South Ribble)
Amess, David	Atkinson, David (B'm'th E)
Ancram, Michael	Baker, Rt Hon K. (Mole Vall'y)

Baker, Nicholas (N Dorset)	Forth, Eric
Baldry, Anthony	Fowler, Rt Hon Norman
Banks, Robert (Harrogate)	Fox, Marcus
Batiste, Spencer	Franks, Cecil
Beaumont-Dark, Anthony	Fraser, Peter (Angus East)
Bendall, Vivian	Freeman, Roger
Benyon, William	Fry, Peter
Berry, Sir Anthony	Gale, Roger
Best, Keith	Galley, Roy
Biffen, Rt Hon John	Gardiner, George (Reigate)
Biggs-Davison, Sir John	Garel-Jones, Tristan
Blaker, Rt Hon Sir Peter	Gilmour, Rt Hon Sir Ian
Body, Richard	Glyn, Dr Alan
Bonsor, Sir Nicholas	Goodhart, Sir Philip
Bottomley, Peter	Goodlad, Alastair
Bottomley, Mrs Virginia	Gorst, John
Bowden, A. (Brighton K'to'n)	Gow, Ian
Bowden, Gerald (Dulwich)	Gower, Sir Raymond
Boyson, Dr Rhodes	Gregory, Conal
Braine, Sir Bernard	Griffiths, E. (B'y St Edm'ds)
Brandon-Bravo, Martin	Griffiths, Peter (Portsm'th N)
Bright, Graham	Grist, Ian
Brinton, Tim	Ground, Patrick
Brittan, Rt Hon Leon	Gummer, John Selwyn
Brown, M. (Brigg & Cl'thpes)	Hamilton, Hon A. (Epsom)
Browne, John	Hamilton, Neil (Tatton)
Bruinvels, Peter	Hanley, Jeremy
Buchanan-Smith, Rt Hon A.	Hannam, John
Buck, Sir Antony	Hargreaves, Kenneth
Budgen, Nick	Harris, David
Bulmer, Esmond	Harvey, Robert
Burt, Alistair	Haselhurst, Alan
Butcher, John	Havers, Rt Hon Sir Michael
Butterfill, John	Hawkins, C. (High Peak)
Carlisle, John (N Luton)	Hawkins, Sir Paul (SW N'folk)
Carlisle, Kenneth (Lincoln)	Hawksley, Warren
Carlisle, Rt Hon M. (W'ton S)	Hayes, J.
Carttiss, Michael	Hayhoe, Barney
Cash, William	Hayward, Robert
Chalker, Mrs Lynda	Heathcoat-Amory, David
Channon, Rt Hon Paul	Heddle, John
Chapman, Sydney	Hickmet, Richard
Chope, Christopher	Higgins, Rt Hon Terence L.
Churchill, W. S.	Hind, Kenneth
Clark, Hon A. (Plym'th S'n)	Hirst, Michael
Clark, Sir W. (Croydon S)	Hogg, Hon Douglas (Gr'th'm)
Clarke, Rt Hon K. (Rushcliffe)	Holland, Sir Philip (Gedling)
Clegg, Sir Walter	Holt, Richard
Cockeram, Eric	Hooson, Tom
Colvin, Michael	Howard, Michael
Conway, Derek	Howarth, Alan (Stratf'd-on-A)
Coombs, Simon	Howarth, Gerald (Cannock)
Cope, John	Howell, Rt Hon D. (G'ldford)
Cormack, Patrick	Howell, Ralph (N Norfolk)
Corrie, John	Hubbard-Miles, Peter
Couchman, James	Hunt, David (Wirral)
Cranborne, Viscount	Hunt, John (Ravensboume)
Critchley, Julian	Hunter, Andrew
Currie, Mrs Edwina	Hurd, Rt Hon Douglas
Dorrell, Stephen	Irving, Charles
Douglas-Hamilton, Lord J.	Jackson, Robert
Dover, Den	Jenkin, Rt Hon Patrick
du Cann, Rt Hon Edward	Johnson Smith, Sir Geoffrey
Durant, Tony	Jones, Robert (W Herts)
Dykes, Hugh	Jopling, Rt Hon Michael
Edwards, Rt Hon N. (P'broke)	Kershaw, Sir Anthony
Eggar, Tim	King, Roger (B'ham N'field)
Emery, Sir Peter	Knight, Gregory (Derby N)
Evennett, David	Knight, Mrs Jill (Edgbaston)
Eyre, Sir Reginald	Knowles, Michael
Fairbairn, Nicholas	Knox, David
Fallon, Michael	Lamont, Norman
Farr, Sir John	Lang, Ian
Favell, Anthony	Latham, Michael
Fenner, Mrs Peggy	Lawler, Geoffrey
Finsberg, Sir Geoffrey	Lawrence, Ivan
Fletcher, Alexander	Lee, John (Pendle)
Fookes, Miss Janet	Leigh, Edward (Gainsbor'gh)
Forman, Nigel	Lennox-Boyd, Hon Mark
Forsyth, Michael (Stirling)	Lewis, Sir Kenneth (Stamf'd)

Lightbown, David	Rossi, Sir Hugh
Lilley, Peter	Rost, Peter
Lloyd, Ian (Havant)	Rowe, Andrew
Lloyd, Peter, (Fareham)	Rumbold, Mrs Angela
Lord, Michael	Ryder, Richard
Luce, Richard	Sackville, Hon Thomas
McCrindle, Robert	Sainsbury, Hon Timothy
McCurley, Mrs Anna	St. John-Stevas, Rt Hon N.
Macfarlane, Neil	Sayeed, Jonathan
MacGregor, John	Scott, Nicholas
MacKay, Andrew (Berkshire)	Shaw, Giles (Pudsey)
MacKay, John (Argyll & Bute)	Shaw, Sir Michael (Scarb')
Maclean, David John	Shelton, William (Streatham)
McNair-Wilson, P. (New F'st)	Shepherd, Colin (Hereford)
McQuarrie, Albert	Shepherd, Richard (Aldridge)
Madel, David	Shersby, Michael
Major, John	Silvester, Fred
Malins, Humfrey	Sims, Roger
Malone, Gerald	Skeet, T. H. H.
Maples, John	Smith, Sir Dudley (Warwick)
Marland, Paul	Smith, Tim (Beaconsfield)
Marlow, Antony	Soames, Hon Nicholas
Mates, Michael	Spencer, Derek
Maude, Hon Francis	Spicer, Jim (W Dorset)
Mawhinney, Dr Brian	Spicer, Michael (S Worcs)
Mayhew, Sir Patrick	Squire, Robin
Mellor, David	Stanbrook, Ivor
Merchant, Piers	Stanley, John
Meyer, Sir Anthony	Steen, Anthony
Miller, Hal (B'grove)	Stern, Michael
Mills, lain (Meriden)	Stevens, Lewis (Nuneaton)
Mills, Sir Peter (West Devon)	Stevens, Martin (Fulham)
Miscampbell, Norman	Stewart, Allan (Eastwood)
Mitchell, David (NW Hants)	Stokes, John
Moate, Roger	Stradling Thomas, J.
Monro, Sir Hector	Sumberg, David
Montgomery, Fergus	Tapsell, Peter
Moore, John	Taylor, John (Solihull)
Morris, M, (N'hampton, S)	Taylor, Teddy (S'end E)
Morrison, Hon C. (Devizes)	Tebbit, Rt Hon Norman
Morrison, Hon P. (Chester)	Thatcher, Rt Hon Mrs M.
Mudd, David	Thomas, Rt Hon Peter
Murphy, Christopher	Thompson, Patrick (N'ich N)
Neale, Gerrard	Thorne, Neil (Ilford S)
Needham, Richard	Thornton, Malcolm
Nelson, Anthony	Thurnham, Peter
Neubert, Michael	Townend, John (Bridlington)
Newton, Tony	Townsend, Cyril D. (B'heath)
Nicholls, Patrick	Tracey, Richard
Norris, Steven	Trippier, David
Onslow, Cranley	Trotter, Neville
Oppenheim, Philip	Twinn, Dr Ian
Oppenheim, Rt Hon Mrs S.	van Straubenzee, Sir W.
Ottaway, Richard	Vaughan, Sir Gerard
Page, Sir John (Harrow W)	Waddington, David
Page, Richard (Herts SW)	Wakeham, Rt Hon John
Parkinson, Rt Hon Cecil	Waldegrave, Hon William
Parris, Matthew	Walden, George
Patten, Christopher (Bath)	Walker, Rt Hon P. (W'cester)
Patten, John (Oxford)	Wall, Sir Patrick
Pattie, Geoffrey	Waller, Gary
Pawsey, James	Walters, Dennis
Peacock, Mrs Elizabeth	Ward, John
Percival, Rt Hon Sir Ian	Wardle, C. (Bexhill)
Pollock, Alexander	Warren, Kenneth
Porter, Barry	Watson, John
Powell, William (Corby)	Watts, John
Powley, John	Wells, Bowen (Hertford)
Prentice, Rt Hon Reg	Wells, Sir John (Maidstone)
Price, Sir David	Wheeler, John
Proctor, K. Harvey	Whitfield, John
Raffan, Keith	Whitney, Raymond
Rees, Rt Hon Peter (Dover)	Wiggin, Jerry
Renton, Tim	Winterton, Mrs Ann
Rhys Williams, Sir Brandon	Winterton, Nicholas
Ridley, Rt Hon Nicholas	Wolfson, Mark
Ridsdale, Sir Julian	Wood, Timothy
Roberts, Wyn (Conwy)	Woodcock, Michael
Robinson, Mark (N'port W)	Yeo, Tim
Roe, Mrs Marion	Young, Sir George (Acton)

Younger, Rt Hon George	Mr. Carol Mather and Mr. Robert Boscawen.
Tellers for the Ayes:

NOES
Abse, Leo	Foster, Derek
Adams, Allen (Paisley N)	Foulkes, George
Alton, David	Fraser, J. (Norwood)
Anderson, Donald	Freeson, Rt Hon Reginald
Archer, Rt Hon Peter	George, Bruce
Ashdown, Paddy	Gilbert, Rt Hon Dr John
Ashley, Rt Hon Jack	Godman, Dr Norman
Ashton, Joe	Golding, John
Atkinson, N. (Tottenham)	Gould, Bryan
Banks, Tony (Newham NW)	Gourlay, Harry
Barnett, Guy	Hardy, Peter
Barron, Kevin	Harman, Ms Harriet
Beckett, Mrs Margaret	Harrison, Rt Hon Walter
Beith, A. J.	Hart, Rt Hon Dame Judith
Bennett, A. (Dent'n & Red'sh)	Healey, Rt Hon Denis
Bermingham, Gerald	Heffer, Eric S.
Bidwell, Sydney	Hogg, N. (C'nauld & Kilsyth)
Blair, Anthony	Holland, Stuart (Vauxhall)
Boothroyd, Miss Betty	Howell, Rt Hon D. (S'heath)
Boyes, Roland	Howells, Geraint
Bray, Dr Jeremy	Hoyle, Douglas
Brown, N. (N'c'tle-u-Tyne E)	Hughes, Dr. Mark (Durham)
Brown, R. (N'c'tle-u-Tyne N)	Hughes, Robert (Aberdeen N)
Brown, Ron (E'burgh, Leith)	Hughes, Roy (Newport East)
Bruce, Malcolm	Hughes, Sean (Knowsley S)
Buchan, Norman	Hughes, Simon (Southward)
Caborn, Richard	Janner, Hon Greville
Callaghan, Rt Hon J.	Jenkins, Rt Hon Roy (Hillh'd)
Callaghan, Jim (Heyw'd & M)	John, Brynmor
Campbell, Ian	Jones, Barry (Alyn & Deeside)
Campbell-Savours, Dale	Kaufman, Rt Hon Gerald
Carlile, Alexander (Montg'y)	Kennedy, Charles
Carter-Jones, Lewis	Kilroy-Silk, Robert
Cartwright, John	Kirkwood, Archy
Clark, Dr David (S Shields)	Lambie, David
Clarke, Thomas	Lamond, James
Clay, Robert	Leadbitter, Ted
Clwyd, Mrs Ann	Lewis, Ron (Carlisle)
Cocks, Rt Hon M. (Bristol S.)	Lewis, Terence (Worsley)
Cohen, Harry	Litherland, Robert
Coleman, Donald	Lloyd, Tony (Stretford)
Conlan, Bernard	Lofthouse, Geoffrey
Cook, Robin F. (Livingston)	Loyden, Edward
Corbett, Robin	McCartney, Hugh
Corbyn, Jeremy	McDonald, Dr Oonagh
Cowans, Harry	McKay, Allen (Penistone)
Cox, Thomas (Tooting)	McKelvey, William
Craigen, J. M.	Mackenzie, Rt Hon Gregor
Crowther, Stan	Maclennan, Robert
Cunliffe, Lawrence	McNamara, Kevin
Cunningham, Dr John	McTaggart, Robert
Davies, Rt Hon Denzil (L'lli)	McWilliam, John
Davies, Ronald (Caerphilly)	Madden, Max
Davis, Terry (B'ham, H'ge H'l)	Marek, Dr John
Deakins, Eric	Marshall, David (Shettleston)
Dewar, Donald	Maxton, John
Dixon, Donald	Maynard, Miss Joan
Dobson, Frank	Meacher, Michael
Dormand, Jack	Meadowcroft, Michael
Dubs, Alfred	Michie, William
Dunwoody, Hon Mrs G.	Mikardo, Ian
Eadie, Alex	Millan, Rt Hon Bruce
Eastham, Ken	Mitchell, Austin (G't Grimsby)
Edwards, Bob (W'h'mpt'n SE)	Morris, Rt Hon A. (W'shawe)
Ellis, Raymond	Morris, Rt Hon J. (Aberavon)
Evans, John (St. Helens N)	Nellist, David
Ewing, Harry	Oakes, Rt Hon Gordon
Fatchett, Derek	O'Brien, William
Faulds, Andrew	O'Neill, Martin
Field, Frank (Birkenhead)	Orme, Rt Hon Stanley
Fields, T. (L'pool Broad Gn)	Owen, Rt Hon Dr David
Fisher, Mark	Park, George
Flannery, Martin	Parry, Robert
Foot, Rt Hon Michael	Patchett, Terry
Forrester, John	Pavitt, Laurie

Penhaligon, David	Snape, Peter
Pike, Peter	Soley, Clive
Powell, Raymond (Ogmore)	Spearing, Nigel
Prescott, John	Strang, Gavin
Randall, Stuart	Straw, Jack
Redmond, M.	Thomas, Dafydd (Merioneth)
Rees, Rt Hon M. (Leeds S)	Thomas, Dr R. (Carmarthen)
Roberts, Allan (Bootle)	Thompson, J. (Wansbeck)
Roberts, Ernest (Hackney N)	Thorne, Stan (Preston)
Robertson, George	Tinn, James
Rooker, J. W.	Torney, Tom
Ross, Stephen (Isle of Wight)	Wainwright, R.
Rowlands, Ted	Wallace, James
Ryman, John	Warden, Gareth (Gower)
Sedgemore, Brian	Wareing, Robert
Sheerman, Barry	Weetch, Ken
Sheldon, Rt Hon R.	Welsh, Michael
Shore, Rt Hon Peter	White, James
Short, Ms Clare (Ladywood)	Wigley, Dafydd
Short, Mrs H.(W'hampt'n NE)	Williams, Rt Hon A.
Silkin, Rt Hon J.	Winnick, David
Smith, C.(Isl'ton S & F'bury)	Woodall, Alec
Smith, Rt Hon J. (M'kl'ds E)	Wrigglesworth, Ian

Young, David (Bolton SE)	Mr. James Hamilton and Mr. Frank Haynes.
Tellers for the Noes:

Question accordingly agreed to.

Resolved, That the Rate Support Grant Supplementary Report (England) 1984–85 (House of Commons Paper No. 536), a copy of which was laid before this House on 12th July, be approved.

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1. RATE SUPPORT GRANT (ENGLAND) 62 words