HC Deb 06 February 1985 vol 72 cc933-5
15. Mr. Proctor

asked the Secretary of State for the Environment what representations he has received from ratepayers concerning the likely level of rates for 1985–86; and if he will make a statement.

Mr. Kenneth Baker

I have received a variety of representations. If authorities budget to spend at target the average increase in rates should be in low single figures.

Mr. Proctor

Does my right hon. Friend agree that high rates are inimical to job creation and that there is much support for the Government's rate-capping proposals in areas such as Basildon, which is spending £600,000 on housing administration, and Lewisham, which has just commissioned a report that will cost the ratepayers of Lewisham about £5,000, into the psychological impact of golliwogs on children in Lewisham?

Mr. Baker

My hon. Friend has to suffer under the district council of Basildon, which is living in an unreal world, having increased its planned spending last year by 20 per cent. Undoubtedly, the ratepayers of Basildon will be helped considerably by the rate-capping that we are introducing this year.

Mr. Fatchett

rose—

Mr. Boyes

Does the Minister agree that the natural solution to the level of rates is to let those who have to pay them speak through the ballot box? Through various measures, such as the abolition of the GLC and metropolitan councils, and now rate-capping, the Government seem to think that democracy can be thrown out of the window at their whim. They will suffer as a consequence of that in future.

Mr. Baker

Only 18 out of the 413 local authorities will be rate-capped this year. This means that some 390 will be living within the system. Some of those authorities will be allowed—and are already predicting—very large rate increases. For example, Liverpool city council, which is not rate-capped this year, is predicting a very substantial rate increase. We feel that the Government share the responsibility for protecting ratepayers in the hard-pressed areas.

Mr. Forth

Could not my right hon. Friend hold out hope for hard-pressed ratepayers, and avoid the necessity for future rate capping, by bringing forward proposals to reform local Government finances in such a way as to reestablish the connection between voting and paying tax, the lack of which is one of the main reasons for the current problems in local government?

Mr. Baker

My hon. Friend is absolutely right. The link between the rate demand and the ballot box has grown very thin in many areas. This is one of the many matters that I am considering in my review of local government. I hope that it will be possible to bring forward proposals later this year for public discussion.

Mr. Loyden

Does the Minister not understand that at a time of mass unemployment, when thousands of people are awaiting housing, and when, in many towns and cities, there is an aging population, local authorities need not less but more finance to provide for those problems, which have been directly caused by the present Government?

Mr. Baker

The hon. Gentleman represents part of the city of Liverpool. His city council is making such demands upon the national Exchequer that no Government could possibly meet them. I hope that that will not result in a grave crisis in the city of Liverpool later in the year. If the hon. Gentleman wishes to help to solve the housing crisis in Liverpool, he should persuade the city council to end its policy of buying co-operatives and instead to encourage co-operative housing development, which is what many of the people of Liverpool want.

Mr. Peter Bruinvels

In Leicester, which is to be rate-capped, I have received fewer than 12 letters expressing opposition to rate capping and more than 150 expressing approval of it. Will my right hon. Friend assure his Department that the majority in Leicester believe that rate capping is important for the future of the city?

Mr. Baker

I thank my hon. Friend for his robust defence of Government policy.

Mr. Speaker

I must correct a wrong. I call Mr. Fatchett.

Mr. Fatchett

I am most grateful to you, Mr. Speaker. Despite the embarrassment that you caused my hon. Friend the Member for Houghton and Washington (Mr. Boyes), I thought that he did very well with his question.

Is not the reality that the Minister has had to introduce rate capping because the Government have totally failed to honour their commitment in relation to local government expenditure? They have failed to abolish rates. They have lifted the burden of local authority expenditure away from the taxpayer and on to the individual ratepayer. Rather than helping the ratepayer, the Government have made themselves the enemy of the ratepayer by ensuring that they are paying more for less in terms of services.

Mr. Baker

Since 1979 we have succeeded in restraining the rate of growth in local government expenditure to 1 per cent. a year in real terms. In the 1960s and 1970s there was growth of about 3 per cent. a year in real terms. The 18 rate-capped authorities together account for excess spending this year of £550 million.

Mr. Straw

When Mr. John Clout, the leader of Conservative-controlled North Yorkshire county council, complained last month that of the 8.6 per cent. increase in the rates more than half was due to cuts in central Government grants, was he telling the truth?

Mr. Baker

Speaking from memory, I believe that in North Yorkshire there was an increase in grant this year. Several shire counties have suffered a reduction in grant this year, including my own county of Surrey, which has just announced a rate increase of 4.9 per cent.