HC Deb 24 October 1984 vol 65 cc680-1
8. Mr. Dobson

asked the Secretary of State for the Environment when he next proposes meeting the chairman of the Association of Metropolitan Authorities to discuss the designations made under the Rates Act.

Mr. Patrick Jenkin

The AMA has not asked for such a meeting; if it does I will be happy to meet the chairman.

Mr. Dobson

Does the Secretary of State recall that when he announced the expenditure levels for the designated authorities he gave the impression that they would have to cut their expenditure by 5 or 6 per cent.? Does he now accept that the average reduction being sought from them is 11 per cent., and that Camden council is expected to cut its spending by 15 per cent., Lewisham by 14 per cent. and Leicester by 15 per cent.? Does the right hon. Gentleman not accept that he is trying to perpetrate a totally monstrous deception on the people in those areas, and on the House?

Mr. Jenkin

It is nothing of the sort. We made it clear that our intention is that the real spending of local authorities should be held to the same cash level next year as this year. Of course, we do not have information, and the authorities are not obliged to supply any information, on their use of funds and other balances and accounting devices which they may have used to reach this year's expenditure. That is precisely why the House provided those authorities which felt that the limit which we had set was unreasonable with an opportunity to come along and seek a redetermination of it. However, it is a fact that none has done so. I must assume from that that the authorities are perfectly prepared to live within the limit that I have set.

Mr. Cartwright

Does the Secretary of State not yet understand that rate-capped authorities are effectively prevented from seeking formal derogation, because to do so would automatically bestow on him wide-ranging powers of interference in their internal affairs? Given that, is he willing to hold informal discussions with those rate-capped authorities which are anxious to show him that the expenditure ceilings imposed on them are unreasonably harsh?

Mr. Jenkin

The hon. Gentleman knows that such informal discussions are taking place in a number of cases. I am aware of the anxiety that some councils have expressed and that is why I have made it abundantly clear—I shall send the hon. Gentleman a copy of what I said to the AMA at Doncaster — that it is no part of the Government's intention to interfere in the details of local authority spending. My only concern is to set the upper limit in accordance with the powers that the House has conferred on the Government Any authority which is worried that to apply for a redetermination will allow me to interfere right across the board can dismiss its concern. That is not my intention. I should add that it is not too late for those who feel that the limit is unreasonable to come along and apply for a redetermination.

Mr. Tracey

In addition to discussing any of the points raised by Opposition Members, will my right hon. Friend never lose an opportunity to put it to the chairman of the AMA that high penal rates on industry inevitably mean lost jobs?

Mr. Jenkin

That is one of the main reasons why we introduced, and the House passed, the Rates Act giving us powers to cut the rates of the highest spending local authorities.

Dr. Cunningham

Is it not dishonest of the Secretary of State to say that he did not have information from local authorities about their expenditure from balances and reserves? Was not such information given to him by authorities in the normal returns that they send to his Department? Was not he admitting, at the AMA conference at Doncaster, that he had that information and that his statement to the House that cuts in budgets of 5 per cent. were all that were required was patently dishonest? As he very well knows, the average cut being required of local authorities is of the order of 10 to 11 per cent. Why does he not come clean and admit it?

Mr. Jenkin

My officials do not have the details on the use of funds and balances and other accounting devices that are used by local authorities to arrive at this year's budget—[Interruption] We do not have a complete picture. I am sure that it was right to start from the published figures and to say that our intention was that authorities should spend no more next year than they are spending in cash this year.

Of course, because of the use of balances—many authorities have made it clear that that is how they arrived at this year's figure—it may be appropriate for them to apply for redetermination. The House has given them that escape hatch. The burden will fall upon them and the communities which they serve if they fail to use that opportunity and have to make bigger cuts than we ever intended. Local authorities are empowered to ask. I hope that they will ask, because our intention is not that they should have to make cuts of anything like the proportion referred to by the hon. Gentleman.