HC Deb 24 October 1984 vol 65 cc682-4
11. Mr. Mikardo

asked the Secretary of State for the Environment what representations he has received to date from those local authorities designated under the Rates Act.

12. Mr. Proctor

asked the Secretary of State for the Environment what representations he has received from local authorities and others concerning his rate-capping proposals; and if he will make a statement.

Mr. Patrick Jenkin

I have received a number of representations, but no authority has applied for a redetermination of its expenditure level.

Mr. Mikardo

It is well-known that there has been a great wave of protest from both Conservative and Labour-controlled designated authorities and from members of all parties who are members of those authorities. Is the right hon. Gentleman taking the least notice of such representations, or is he just thumbing his nose at those people?

Mr. Jenkin

Two authorities led by Conservative councillors, Portsmouth and Brent, have told me that it is their intention to tailor their expenditure to live within the limits that we have set. One of those authorities has said that it hopes to get down to its target, and I welcome that. As to the remaining 16 authorities, I can only repeat what I said earlier. The fact that they have not applied for a redetermination means that they are prepared to live within whatever rates limits we set, following the expenditure limits announced in July.

Mr. Proctor

Could one of the reasons why Basildon district council has not exercised its right under the Rates Act to appeal to the Secretary of State be found in the Audit Commission report on Basildon, commissioned by the district council, which showed—

Mr. Willie W. Hamilton

It exonerates the council.

Mr. Proctor

If it exonerates the council, why did the report claim that Basildon district council, compared with an average authority, spends £600,000 more on the administration of housing, or £100 more for every council house that it owns, than an average authority? Does that not make nonsense of prospects of cuts in real essential services in Basildon?

Mr. Jenkin

My hon. Friend is right, and it so happens that the cut in expenditure that Basildon would need to make to comply with the limit that I have set is precisely that sum of £600,000 which the Audit Commission identified as the excess housing administration expenditure compared with the generality of housing authorities.

I do not think that Basildon will find that difficult.

Mr. Chris Smith

If the Secretary of State is so adamant that he does not intend to use the powers given to him by the Rates Act to determine the individual details of local authority spending if local authorities seek redetermination under the Act, can he tell the House why he insisted, during the passage of that measure through the House, on the inclusion of those powers within the Act?

Mr. Jenkin

The hon. Gentleman was a member of the Committee, and he heard both me and my hon. Friends, speaking from the Front Bench on that Committee, explaining precisely the circumstances in which we would use the powers. Those are that, if we felt that an authority which came along and applied for redetermination could not make the necessary reductions in one year, we should put a condition on that it should do so in more than one year. I said that at the Association of Metropolitan Authorities' conference and I say it again now.

I cannot, in compliance with the law, rule out for all time the possibility of using the power in a wider sense. However, at the the moment I cannot see any circumstance in which I should wish to use the power more widely than that. I hope that authorities which genuinely feel that they have been unfairly treated because of their use of funds in the setting of limits will exercise the power. Time is getting short, because we shall soon have to set the rate limits, and by that time it will be too late.

Mr. Peter Bruinvels

Will my right hon. Friend take note that, no matter what representations or bleatings he may receive from Leicester city council, which, as he knows is Labour-controlled, he should ensure that rate capping is proceeded with in Leicester because the ratepayers and citizens alike need it and demand it today, not even tomorrow?

Mr. Jenkin

I can give my hon. Friend precisely the assurance that he seeks. The law is the law on the statute book. The procedures will be applied, and if Leicester does not apply for redetermination, a rate will be set which will be relative to the expenditure limit that we have fixed for it. I can tell my hon. Friend that in that case the rates in Leicester will be lower than they otherwise would have been.

Mr. Straw

Does the Secretary of State understand that local authorities which are rate-capped feel themselves to be caught in a "Catch-22" situation by the Secretary of State's powers to impose lower expenditure limits or higher limits with conditions if a redetermination is applied for? Does he also understand that such is the breakdown of trust of Labour and Conservative authorities of his Department and the Ministers that, in the absence of categorical and bankable assurances that he will not impose conditions or lower limits, authorities are scared about making applications to him?

As the right hon. Gentleman has admitted that the effect of his expenditure limits will be to impose cuts of about 11 per cent. on authorities—because he failed to take account of their use of balances—will he withdraw his original July statement and seek to have proper negotiations on the basis of the real levels of expenditure in the 16 rate-capped Labour authorities?

Mr. Jenkin

Of course I will not. The Act lays down the procedure for those discussions to take place. They need to be initiated by the authorities concerned, and it is up to them to use the procedures.