§ Mr. John Carlisle (Luton, North)I am delighted to take this opportunity to bring before the House the situation that is now facing my constituents and other residents and businesses in Bedfordshire following the steep rate increase that has been levied upon us in the past few days. I should say at the outset how delighted I am to see my hon. Friend the Member for Bedfordshire, South-West (Mr. Madel) in the Chamber I hope that he may catch your eye a little later, M r. Deputy Speaker. We are here with the full support of our hon. Friends the Members for Luton, South (Mr. Bright) and Bedfordshire, North (Sir T. Skeet) and our hon. and learned Friend the Member for Mid-Bedfordshire (Mr. Lyell). I see that my hon. and learned Friend the Parliamentary Under-Secretary of State for Health and Social Security is in the Chamber. My other two hon. Friends have pressing constituency engagements.
Normally a constituency Member will rise with some pride to represent his constituents' interests and that of his county. I was born in Bedfordshire. I was educated there and spent the majority of my working life there. I have lived in the county all my life. However, it is with a sense of shame that I rise today because of what has happened in my county over the past few years and particularly over the past few months.
We are now represented by the Labour and alliance parties, by men and women who are not fit for office They have shown a total irresponsibility in the way in which they have treated the county's affairs, they have abused the privileged system in which they find themselves and have acted with no thought for others. Indeed, in Bedfordshire with the way in which the political wind is blowing in the Labour and alliance parties, we may well find that we might begin—in fact we are already beginning — to suffer the extraordinary systems and policies that have been followed by what is popularly known as the loony Left. I think that my hon. Friends will agree that it may not be too long before we see the red flag flying over county hall in Bedford. For a county with a proud record of achievement and of looking after its residents and businesses, that is a disgrace. Therefore, we thought it fit to bring the matter before the. House this morning.
We have suffered the highest rate increase of any shire county in the country—21.3 per cent. For the domestic ratepayer that means an additional 23.4 per cent. That comes on top of a rate increase last year of 18.4 per cent. In other words, in real terms, including inflation, my constituents are facing a rate increase of nearly 50 per cent. over two years. That is a record of which we are not proud and one that the House should look at in relation to other rate increases that have taken place in surrounding counties.
During the various Budget deliberations that took place, my own group on the council proposed an increase of 10.7 per cent. That is rather higher than many of us would like to see but it would have been a standstill budget that retained services and would have meant that the people of Bedfordshire would not have had quite such a levy to bear. The Labour group proposed 23.8 per cent. and the alliance group 23 per cent. The two groups came together, I believe in a private house not far from where I live, and cobbled together an agreement that has meant 601 this massive swingeing increase. It was, of course, passed by those two groups in the face of the fiercest opposition from the Conservative group.
At this point I should like to pay tribute to Councillor Philip Hendry, leader of the Conservative group on the Bedfordshire county council, who has done a splendid job over the past few years trying to keep our affairs in order.
After the budget had been agreed there was a split among the Liberal members, which may be enlarged upon by my hon. Friend the Member for Bedfordshire, South-West. However, the alliance leader, Mrs. Janice Lennon, who I believe is a prospective parliamentary candidate for Bedfordshire, North, said,
I support this budget totally.Therefore this budget, which to the outside observer would be considered a Labour budget, has full alliance support and never let it be said otherwise.The record of spending in Bedfordshire is not good. That record goes back to pre-1977 days when the Labour council was in office spending money like water and using resources that it did not have. That council left as a legacy to the incoming Conservative group in 1977 a debt charge that, in effect, made Bedfordshire, at that time, the highest spending county. Between 1977 and 1986 the then Conservative-controlled council tried desperately, in the face of fierce opposition from the other parties, to rein Bedfordshire's spending. The Conservative group pulled Bedfordshire back from being first in the league of high spenders to being about 10th or 11th in the league in 1986.
Recent Audit Commission reports for 1984–85 and 1985–86 confirm that, in seven services out of eight, the county council of Bedfordshire was spending more than the others of the family of five —my hon. Friend the Minister will know what I mean by that. On education, social services, police, fire, libraries and highways and other services Bedfordshire was overspending against the other counties. It was only in the matter of refuse disposal, which used the county's resources, that it was at any advantage.
In 1985–86 the council's spending on education was 15 per cent. more than the family average — that is the latest figure available from the Audit Commission. The county was spending 14 per cent. more than the family average on social services. Overall there was an overspend of 11 per cent. If the children of Bedfordshire were receiving a better education than the children of other counties perhaps my complaint would not be so loud. If our schools were in better order than other counties perhaps I would have some support for that spending spree. If the old people and those in residential care were better off than those in other counties and were receiving better care perhaps one might be able to say that such expenditure was justified. However, when that money is being spent and the services are still not up to the family average I believe that we have cause to complain.
Within the past few months we have learnt, as a result of a survey carried out by the university of Sheffield on O- level results, that Bedfordshire comes 87th out of the 91 local education authorities. The county council has overspent every single year, but it has not given the ratepayers value for money.
Indeed, since 1985 when the Conservatives lost control at the election, the county council has seen fit to spend money on what many would describe as spurious 602 objectives. For example, Bedfordshire has become a nuclear-free zone. Some £50,000 was spent to achieve that end. I should like to say in passing that I am delighted to note that the Conservative group of the council has put down a motion for the next council meeting congratulating my right hon. Friend the Prime Minister on her talks in Moscow. I hope that those talks will make the people of Bedfordshire sleep more easily in their beds and I hope that those talks will do away with the necessity of the nonsense of the nuclear-free zone in Bedfordshire.
The council has also spent money on anti-South African activities. It has spent money to support the anti-apartheid movement and on distributing literature to local district and parish councils. It has spent money to try to encourage African National Congress speakers to come to Bedfordshire. It has spent money encouraging the Bedfordshire youth orchestra, of whom we are very proud, to play, as described by the council. "anti-racist tunes". That represents money and time that should have been spent in other ways. If the councillors were spending the money wisely perhaps the luxury of worrying about people some 6,000 miles away would be justified. However, that money has not been spent wisely. Moreover, I have not been able to discover, at any time, exactly how much money has been spent.
Even the education department at county hall is now dictating what type of films should be shown in schools. I am indebted to my friend councillor Philip Hendry who informed me that, only last week, two films were to be shown to the children at a local school in the Bedford constituency. One was a pro-CND film and the other was a NATO film. The former film, the CND film, was the only film that was allowed to be shown by the school.
In the past few weeks the council has produced various forms of literature that are published under the names of the three leaders. However, as a result of the majority verdict, the Labour and alliance leaders outvote the Conservative leader every time. However, the literature is still produced as if it comes from the county council. Needless to say, the literature is full of untruths. I go so far as to say that much of it is downright lies. Nowhere does it give credence to the policy that the council has followed. Indeed, most of it is anti-Government and misleading to the electorate of Bedfordshire.
The great cry all the time from the Labour and alliance groups is on the basis that the blame for the rate support grant cuts that we have experienced lies entirely with the Government. In none of the literature is the truth explained.
The truth is simply this. I am indebted to my hon. Friend the Minister for the reply that he gave to my hon. Friend the Member for Bedfordshire, South-West on 1 April, when he said :
Bedfordshire county council's grant entitlement for 1987–88 amounts to £3.72 million at the level of expenditure we estimate it has budgeted for. This is £8.2 million less than it would have received if it spent at the settlement spending assumption — that is a 5.25 per cent. increase on current expenditure—and £9.9 million less than if it had increased expenditure in line with inflation. These entitlements and Bedfordshire's budget include the estimated effects of the teachers' pay deal."—[Official Report, 1 April, 1987: Vol. 113, c. 549.]In other words, the overspend that those two groups have made their policy in Bedfordshire has meant that for every pound that they overspend, a further 73p has to be found from the ratepayers. How they have the gall to 603 blame the Government for such an overspend when they have deliberately gone out of their way to increase expenditure by some 12 per cent., one begins to wonder.The most tragic thing about the rate increase is its effect upon the people of Bedfordshire. I know that my hon. Friends will support me in that, from the correspondence and literature that they have received from constituents. For example, pensioners, who at all times are on a tight budget, but many of whom have prudently saved and live in their own homes, are now faced with a massive increase of 23 per cent. Those on low incomes who have saved hard to buy their own homes, particularly first-time buyers, now find a tremendous burden put upon them, over which they have no control.
Perhaps most telling of all is the fact that businesses in Bedfordshire are bound to suffer. I am indebted to Luton chamber of commerce, which covers the whole county, for giving me various figures for the businesses that will be affected by the rate increases. The chairman of the rates committee told me that at the committee's most recent meeting the members sat in horrified silence to hear the size of the rise that they faced, whith which they and their businesses would have to cope.
A consultation process was put into being by the Government in 1983, so that certain sections of the community could have a say or express an opinion on what the rates should be. That process has broken down completely in Bedfordshire. There was short notice of consultation. People were informed on the Friday of a meeting the following Tuesday. At that time, the proposed rate increase was about 16.7 per cent. The chamber of commerce is bitter that the protests that it made went unheard by the Labour and Liberal groups. Indeed, those groups do not seem to have any idea of the effect that their rate increase will have on commerce in the county.
New firms are bound to be discouraged. In particular, we in the south of the county are trying to encourage new businesses into an area where we have an excellent railway and road system, an international airport, offices and premises at cheap rents, and a pleasant environment. Those businesses will be discouraged because of the proposed rate increase.
Ironically, on local radio this morning, I heard the prospective Labour candidate for Luton, South say that he was concerned that the rate of unemployment in the Luton area was now above the national level, so there must be urgent talks about what to do about that. That was said by someone with a great responsibility for his party and those whom he hopes to represent in the area. It is nonsense for him and others to talk about loss of jobs at the same time as handing out such a rate increase to local businesses. Vauxhall Motors, the largest employer in my constituency faced a rate increase of more than £2 million. I can tell the work force that if the wage increase that they are looking forward to this year is cut, they must look to the Labour and alliance councillors to discover where some of the money that might have gone into their pockets has gone.
Only last week I had a meeting with small shopkeepers in one part of Luton. Three or four of them said quite emphatically that this would probably be the last 12 months that they will be in business because they cannot cope with such a rate increase. The only way in which they can hope to save any money is by laying people off or sacking them. In other words, there will be a direct loss of jobs as a result of what has happened.
604 I have no doubt that the villains of the piece of this particular sorry tale are those members of the alliance party within the county. We expect Labour councils to act irresponsibly, to spend money that they do not have arid not to consider the welfare or well-being of their constituents. We perhaps do not expect that from the. alliance. Bedfordshire has shown without any doubt that the alliance councillors are as much villains of the piece as their Socialist counterparts. They went along with the budget and are completely oblivious of the misery and devastation that the budget will cause to my constituents and others throughout the county. The blame must lie with those alliance councillors. The only hope is that when the Government are returned after a general election —probably within the next few weeks—we might through the new community charge and rating system be able to bring some relief to those particularly hard-pressed ratepayers. Those ratepayers must remember where the blame lies in this sorry tale.
§ 12.2 pm
§ Mr. David Madel (Bedfordshire, South-West)I am grateful to my hon. Friend the Member for Luton, North (Mr. Carlisle) for allowing me to intervene for a few minutes in the debate. I congratulate him on winning a place in the ballot. We are both delighted that my hon. and learned Friend the Member for Mid-Bedfordshire (Mr. Lyell) is present to support us in this very important debate about Bedfordshire's rates.
It is important to consider a little of the history to understand how the 1987–88 settlement was decided. The history of the past six or seven months is so often distorted by those people who have supported the huge rate increase.
In October 1986, the Government put forward proposals for the 1987–88 rate support grant settlement: and invited representations. The October proposals —and I stress "proposals" —caused immense concern in Bedfordshire. While others were complaining and grizzling about the position, the Conservatives in Bedfordshire were acting. By that I mean that the Conservative group leader Philip Hendry and some of my hon. Friends and myself went to see my hon. Friend the Minister who will be replying to this debate to discuss the October proposals. As a result of those discussions, I received a letter from my hon. Friend the Minister for Local Government dated 3 December 1986 in which my hon. Friend states:
After full consideration…we have decided to revise the earlier proposals.In other words, he had decided to revise the October proposals. My hon. Friend went on to say in his letter :Bedfordshire County Council was one of those authorities who, under our original proposals, stood to lose a substantial amount of grant. Although…the new proposals for a tighter safety net wouldresult in Bedfordshire having—an improvement of £3.1 million.I stress that my hon. Friend said that there would be "art improvement of £3.1 million" on the October proposals.Those members of the county council who study those matters knew about the letter and the improvement. Some reacted predictably by simply saying that it would make no difference and they started up their new proposals for more big spending. Some, in my view, acted with what: would call hesitant indignation. They were not sure how to play this one. They did not know how it would affect what rate they would levy. They did not expect an 605 improvement. Having spent from October to December, complaining and grizzling about the position, but not doing anything, when the Conservatives did something —to which I have already referred—they did not know how to play it.
The Conservatives then got on with preparing a budget for the forthcoming year, which provided for a rate increase of 10.7 per cent. They arrived at their budget using precisely the same process as they used in 1986. They took the level of inflation and the percentage of loss of grant, and arrived at a percentage rate increase as a result. They took a 6 per cent. loss of grant and a 4 per cent. to 5 per cent. rate of inflation. When they considered the large percentage of the education budget covered by teachers' salaries and the fact that the education budget represents between 65 per cent. and 70 per cent. of Bedfordshire county council's total budget, the Conservatives at county hall thought that the proposed rate increase of 10.7 per cent. was as reasonable as possible.
The question then follows : why are we having this argument about the loss of rate support grant? Instead of concentrating on that budget and what it would have meant for Bedfordshire, the alliance and Labour members constantly went on about the loss of grant. That point was adequately covered by my hon. Friend the Minister in answer to a question from me on 1 April. He said :
It is Bedfordshire county council's decision to increase expenditure by 12.0 per cent. including additional expenditure arising from the teachers' pay deal, which has resulted in the reduced grant entitlement.Earlier in his answer, my hon. Friend said :Bedfordshire county council's grant entitlement for 1987–88 amounts to £37.2 million…This is £8.2 million less than it would have received if it spent at the settlement spending assumption."—[Official Report, 1 April 1987, Vol. 113, c. 549.]County councillors know how the system works. They know that if they spend above a certain level, grant will be lost. They know the consequences of their actions, but they will not face up to them. The ratepayers will have to face the consequences of the actions of the Bedfordshire county councillors who voted for this huge rate increase. They are forgetting the people whom they represent.My hon Friend the Member for Luton, North mentioned the effect on businesses. I can quote the rate bill for Delco Products—an extremely important firm in Dunstable and one of the largest employers in the county. In 1986–87, Delco's rate bill was £464,779 — or nearly half a million pounds. For 1987–88, it will have to pay another 21 per cent., which is bad news for such a major firm.
But there is more to come. In the Beds and Bucks Observer of 7 April, Mr. J. M. Hudson of the National Federation of Self-Employed and Small Business wrote to the editor saying this :
I would advise you that the first casualty of this 23.4 per cent. increase has been reported to us this week. A small engineering workshop is closing at the end of the March as it is unable to finance a further rate increase of just over £500 a year. The owner, having taken a salary cut to cope with last year's increase, does not feel inclined to accept another of £10 per week this year. No doubt those Labour and Liberal councillors who forced through this totally unacceptable and unwarranted increase will be delighted that their policy is already taking effect and has put three more people on the unemployment register.606 I say to the county councillors who voted for the rate increase, "Read that letter carefully and ask yourselves about your attitude to employment in Bedfordshire in 1986. Did you express immense concern as we went through all those difficulties with General Motors? Do you mean it when you say that you want more jobs in Bedfordshire, and that you are 'very worried' about the position? If you do mean it, you should pay attention to Mr. Hudson's letter, and see where the policies for which you voted are leading Bedfordshire."Before deciding the rate increase for 1987–88, the county councillors should have considered a number of factors. First, they should have considered the employment level in the county, especially after all the difficulties in 1986 caused by the loss of jobs in General Motors. Members of Parliament constantly receive propaganda notices from county hall saying that such and such a committee is very worried about the increase in unemployment. County councillors rush around Bedfordshire and down to London for meetings, hardly pausing for breath as they tell us how worried they are. But when they had the chance to do something, what did they do? That is what this debate is about : they made a huge increase in the rates.
The county councillors should also have considered owner-occupiers of modest means. Many families in Bedfordshire can just manage to afford a house and to pay the mortgage, but the price tag to a house incorporates not only the mortgage and the capital cost, but the rates. The county councillors should have taken that into account.
Thirdly, the county councillors should have considered the need to attract skilled people to the county. I include teachers in that definition, as teaching is a skilled profession. That is another grumble that we hear constantly : county councillors are very worried because it is difficult to attract teachers to such and such a school, as teachers living in other parts of the country cannot afford houses in Bedfordshire. They write letters to newspapers and talk about their concern on the radio, but when it comes to doing something to help, they do something that does not help at all.
Finally, the county councillors should have considered, and should consider again and again, that houses in Bedfordshire are not cheap. Why make them still more expensive with a large increase in the rates?
But the county councillors did none of those things. Instead, they drew up a shopping list of spending, made a clumsy attempt to hide the price and eventually came out with the rate increase. Before fixing the rate, they should have asked a central, guiding question : what could they reasonably ask domestic and business ratepayers to pay, bearing in mind the general economic position in Bedfordshire? People's ability to pay should be uppermost in county councillors' minds.
I used the words "general economic position"; that means employment, and the need to bring more businesses into the county. But that issue was not considered, or, if it was, it was not put at the top of the list. People in Bedfordshire are being asked to pay an unreasonable amount. The inescapable truth is that Bedfordshire county council is living beyond its means—or, rather, beyond the domestic and commercial means of its ratepayers, for it is they who are carrying the can.
607 It need not have happened. There was an improvement in December, and the rate increase could have been much more reasonable. However, the planned Conservative budget for a more reasonable increase was voted down.
My hon. Friends and I are constantly bombarded by county councillors with suggestions of what we should do to help Bedfordshire. We know that there is plenty to be done, and we are trying to do it. But the supreme thing that we are trying to do—it is why we are here today—is to ensure that the county council lives within its means, and that the cost of living for the people of Bedfordshire is reasonable. We think that what has been proposed is unreasonable and unacceptable. It will do no good for domestic or business ratepayers, and the county councillors who voted for it will have to face the consequences one day.
§ The Parliamentary Under-Secretary of State for the Environment (Mr. Christopher Chope)I congratulate my hon. Friend the Member for Luton, North (Mr. Carlisle) on securing this debate and on giving me the opportunity to explain the rate support grant settlement for Bedfordshire county council for 1987–88. Also I congratulate him and my hon. Friend the Member for Bedfordshire, South-West (Mr. Madel) on telling the House so vividly of the horror story for the Bedfordshire ratepayer at present of a socialist council—comprising those who call themselves Socialists, the Labour party, and members of the alliance parties who deny that they are Socialists—that is implementing Socialist policies with a vengeance.
I remind the House of what my right hon. Friend the Secretary of State for the Environment said about the settlement in the debate on the rate support grant settlement for 1987–88. He said :
we have provided a generous settlement for local authorities. The aggregate Exchequer grant of £12,842 million is an increase of over £1 billion — 9 per cent. more than in the settlement for 1986–87. Provision for local authority current expenditure at £25,251 million is 13 per cent. more than last year. Those figures exclude the additional provision of £460 million, and the grant of £183 million which we have said will be made available for the teachers' pay settlement for 1987–88." — [Official Report, 25 March 1987; Vol. 113 c.440.]The settlement allows for non-rate-capped authorities to increase their current expenditure by 5.25 per cent. When teachers' pay is taken into account, that will allow education authorities to increase their expenditure by 7.75 per cent. Those increases are more than the rate of inflation that we expect next year, which my right hon. Friend the Chancellor of the Exchequer forecast in the Financial Statement and Budget report to be 4.5 per cent. on the GDP deflator. Therefore, there is no reason why prudent and responsible authorities could not have chosen to set reasonable budgets and rates.As we have heard, Bedfordshire county council has set a precept for the current year of 232.20p in the pound, a 21.3 per cent. increase on its precept for 1986–87. This is the largest increase of any shire county and follows the 18.8 per cent. increase in its precept for 1986–87. Bedfordshire now has the fifth highest precept of all shire counties.
It seems that the people who are now running the county council are determined to undo the fine work that was done by the Conservatives when they were running the 608 county council. I take this opportunity to pay tribute to the fine work of Philip Hendry and the members of the Conservative group not only when they were running the council but also now, when they are trying to expose the absurdities that are being perpetrated by those who are running Bedfordshire county council.
Between 1978–79 and 1985–86, the level of expenditure in Bedfordshire was kept constant, in real terms. That was a real achievement by the Conservatives, because most other councils were increasing their expenditure to some extent. However, they managed to use the fat that they had inherited to ensure that good services were provided at reasonable cost. However, within the space of two years since the Conservatives lost overall control of the council, expenditure has increased by over 20 per cent., in real terms.
The increase this year of 12 per cent. is nearly three times the expected level of inflation. As has already been pointed out, that has resulted in a reduction in its grant entitlement and to a 21 per cent. increase in the precept. If Bedfordshire had budgeted to increase its expenditure in line with inflation and to finance the teachers' pay deal, it would have received £47.3 million in grant—slightly more than for this year. In those circumstances, it would have needed to increase its precept by only 5.3 per cent. However, the county has decided to increase its expenditure by 9.5 per cent. to £230.3 million, excluding the costs of the proposed teachers' pay deal.
We estimate that this year Bedfordshire's expenditure, including an allowance for the teachers' pay deal, will be about £235 million. At this level of expenditure, it will receive a block grant of about £37.4 million. The county's decision to increase expenditure above the level of inflation has thus cost it £9.9 million in reduced grant. This grant loss, together with its £25.2 million of increased expenditure, has led to the 21.3 per cent. increase in its precept.
It is significant that while my hon. Friends, together with the leader of the Conservative group, lobbied hard to try to persuade my right hon. Friend the Secretary of State to adjust his original proposals for the October settlement — successfully and forcefully acting as always in the interests of their ratepayers— it seems that behind their backs the alliance and Labour parties which were running the council had planned massive increases in expenditure, totally irrespective of the needs and concerns of the people of Bedfordshire. Those Members of Parliament might not have bothered to try to lobby, because I suspect that if we had not listened to their representations the increase might not have been greater than the 21.3 per cent. that was imposed because the Labour and alliance parties might have thought that a higher increase would have been too much, even for them.
While many authorities have sought to restrain their expenditure and have managed to keep their precept increase to low single figures, Bedfordshire and a few other authorities have pursued profligate spending policies at the expense of their ratepayers. It may help if I put that in a national context, because my hon. Friend the Member for Luton, North has not only served his constituents well in bringing this matter before the House today but has served the nation well, too. It is a reminder of what happens when the local electorate have short memories and forget that the Liberals and the SDP, when combining with the Labour party in local government, pursue high-spending policies.
609 That is reflected in other precept increases in the shire counties. The average shire county precept increase is 7.9 per cent. In Conservative-controlled counties, precepts will increase, on average, by below that amount, by 6.5 per cent. In Labour-controlled counties, they will increase by an average of 8.7 per cent. In Lib-Lab pact counties, they will rise by 9.1 per cent., and in the one Liberal-controlled county, the Isle of Wight, that figure is 10 per cent. Thus, as my right hon. Friend the Secretary of State said on 26 March, there is a premium for living in a Socialist county and an additional premium for the price of alliance support. Bedfordshire illustrated well the effect of the high —spending policies of authorities that are controlled by a labour and Liberal pact. As I have already stated, its precept increase for this year is the highest of any shire county.
We have already heard of some of the priorities of the new councillors of the alliance and Labour parties. It may be quite a surprise to many people to know that, in Bedfordshire, Liberal and SDP councillors support spending on nuclear-free zones. How absurd such expenditure is, especially when the consequences are so grave for local people.
Examples of other areas in which substantial savings could be made are set out in the Audit Commission's profiles. I invite my hon. Friends to look at the most recent figures for 1986–87, which have just been published. They show, for example, that in primary education, non-teaching costs per pupil in Bedfordshire are £251, which compares with a family average of £230, suggesting potential savings of about £800,000. In secondary education, the non-teaching costs per pupil in Bedfordshire are £408, compared with the family average of £384 which suggests, prima facie, potential savings of £1.1 million. Similarly, there is higher expenditure on the costs per meal of school meals and of the costs per head to the social services of children in care. The cost per head for children in care in Bedfordshire is £6.79, whereas average counties with similar circumstances charge only £3.89. Therefore, there is a potential saving of about £1.5 million.
§ Mr. John CarlisleMy hon. Friend may also care to note that despite the 16,000 spare school places in Bedfordshire, the Lib-Lab-controlled council now proposes to increase the number of teaching posts. That is yet another example showing that the council has no concern for the education service and is trying to buy votes by increasing the number of posts without taking account of the spare places that exist within the system.
§ Mr. ChopeThat is further evidence of the horror story about the present council and of gross mismanagement. That is not the sort of behaviour that anyone in the private sector would contemplate if there was pressure on the budget. Individual householders living in the county must make real cuts in expenditure to accommodate the increased rates burden. While that sort of attitude prevails, I understand the despair of my hon. Friend for his constituents.
610 In 1985–86 Bedfordshire spent 0.1 per cent. above its grant-related expenditure; in 1986–87 the figure increased to 3.9 per cent.; and for 1987–88 the overspend seems likely to increase still further to about 9 per cent. above GRE. An objective assessment for grant purposes of the various needs of the counties shows how Bedfordshire's needs are nothing like sufficient to warrant the high and rocketing expenditure of the present council.
My hon. Friends rightly drew attention to the implications of that for businesses. However, there is welcome news on the horizon. After the general election, in the first Session of the next Parliament, we shall introduce the community charge and the national non-domestic rate Bills. It will then no longer be possible for local authorities to fleece business ratepayers who do not have a vote or to impose substantial increases on them above the rate of inflation. We are pledged to limit national non-domestic rate increases each year to the rate of inflation and that will be included in the primary legislation. That means that in Bedfordshire there will be a reduction in the national non-domestic rate, if the substantial increase this year is taken into account. There will be the certainty that in future small businesses will not find themselves suddenly landed with a 20 per cent. increase in their overhead in one area. I sympathise enormously with the plight of all those people in Bedfordshire who are losing their jobs as a direct result of the council's actions.
I understand the problem at AC Delco. Indeed, I have a Delco plant in Southampton which, similarly, has been suffering from the effects of a Labour council and a hung county council, as rates have increased much faster than they should have done.
We recognise the problem of resource equalisation, which is a reason why my hon. Friends made representations to me. One effect of introducing the community charge will be to remove the resource equalisation problems. The community charge for a two-person household in Bedfordshire will be about equivalent to the present rate bill for a two-person household. That means that if a local authority wishes to increase its expenditure significantly above the rate of inflation the burden will fall directly on all adults in the area. We hope that that will lead to increased accountability and will concentrate the minds of electors to a greater extent than perhaps was the case two years ago.
As my hon. Friends said, although in 1977, before the Conservatives won control, the council had a record of high spending and extravagance of which people were well aware, seven or eight years later they had forgotten about it. Now they find that they must repent at leisure because it will be two years before they can oust the present council.
To sum up, Bedfordshire county council had a good settlement this year. If it had budgeted to increase its expenditure in line with inflation and finance the additional cost of the proposed teachers' pay deal, the precept increase could have been about 5 per cent., which is below the average county increase. Instead, the ratepayers of Bedfordshire are paying the highest increase of all the counties, and are paying for the alliance and Labour council's high-spending policies.