RESTRICTIONS ON RATING AND PRECEPTING (Hansard, 11 March 1987)

§ Dr. Boyson
I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker
With this amendment we are to discuss Lords amendments Nos. 5 and 7 to 15.

§ Dr. Boyson
These amendments provide for a new formula for determining rate limits for newly selected authorities, or are drafting amendments to schedule 2 designed to facilitate comprehension of a highly technical text. Everyone will agree with that.
The effect of the amendments is that newly selected authorities will have headroom to spend up to at least a level equivalent to their grant-related expenditure plus 9 per cent. On the basis of my right hon. Friend's current intentions for the 1987–88 RSG settlement, two authorities are affected by this change in formula—Gateshead and Newham, with increases in their intended rate limits of some 3p and 44p respectively.

§ Mr. Ron Leighton (Newham, North-East)
These amendments are of major importance for Newham. I can think of no single issue that I have dealt with in Parliament which has had a greater direct impact on the borough. This flawed Bill, which was introduced in great haste and which is being rushed through both Houses because of the legal mess would, unamended, have had a devastating effect on the borough, robbing it of resources.
Immediately, a movement was mobilised in Newham to campaign for a better deal and an amendment to the Bill. On 4 February, a great demonstration, complete with meetings and a march of some 7,000 people, took place, followed by a lobby of Parliament. Many who participated must have wondered whether such effort and activity was worth it and would have any effect. I can only say to any doubters, in view of what has transpired: Say not the struggle naught availeth", for the very next day the Minister of State's office contacted me to accept my previous invitation and to make arrangements for the Minister to visit Newham to see things for himself.
428 In the various debates that we have had on the different stages of the Bill, all three Newham Members have played a full part, as did the noble Lord, Lord Elwyn-Jones, in another place. A proper modesty forbids me from saying too much about their speeches, but I hope it can he said that they were persuasive and informative and laid out the facts in detail and accuracy.
It would be churlish not to recognise the constructive role of the Minister of State. Above all, he was prepared to listen it is no use speaking if no one is prepared to listen. I for one appreciate the fact that he was prepared to listen and to visit the borough. Hence we have these amendments, which will allow the borough an expenditure limit some £7 million higher than it otherwise would have had—£7 million that is badly needed.
I do not pretend that the amendments will solve the borough's financial problems, for they will not. For example, we now lose even more block grant and the borough will still have to make many cuts. But the amendments will limit the damage and will avert the catastrophe that threatened us, and we cannot but appreciate that.
For the future, the three Newham Members will continue vigilantly to watch over the interests of the borough, strive to obtain a fair share of resources and justice for our area, and exert ourselves for the people who sent us here.

§ Mr. Cash
I am delighted that the Government have helped Newham. On the other hand, I must say quickly that the comprehension to which the Minister referred completely escapes me. I find the whole formula incredibly complicated, as I am sure does everyone else. But I wish my hon. Friend well, because apparently the formula achieves its objective.

§ Mr. Nigel Spearing (Newham, South)
May I first associate myself with what my hon. Friend the Member for Newham, North-East (Mr. Leighton) said about these amendments? I do so though with mixed feelings, as I am sure that the Minister of State will understand. It is mainly because we have avoided an unforseen quirk in the formula which was imposed upon newly capped[authorities. It reminds hon. Members of the powers that the Minister is taking. That matter was referred to in regard to the first group of amendments. In fact, the executive is advancing into areas hitherto the responsibility of the courts. Of course, we thought that that was achieved in 1688, but we are going backwards, apparently, into the year 1988. Indeed, the high court of Parliament, in its deliberations in the House and in another place, has at least dealt with a difficulty. For that— I echo the words of my hon. Friend—we are grateful.
Of course, the amendment only brings us back to the position that the Government intended us to be in before the amendment was accepted. When I moved the original amendment—to give a sum of grant-related expenditure plus about 10 per cent.— the Under-Secretary of State refused it for reasons that he thought were important. He referred to happenings in Newham and produced some figures. When my hon. Friend the Member for Newham, North-West (Mr. Banks) and I wished to intervene, he would not permit us to do so.
I shall quote but one instance to show the well-known flaws involved in quoting statistics without having background knowledge. For instance, the Under- 429 Secretary of State said that 2,420 empty dwellings were in the possession of Newham council. He said that it was one of the worst, if not the worst, areas in the country. He had forgotten, did not know, or did not find out, that about 1,000 of such dwellings in my constituency were in empty tower blocks of the Ronan Point type. He mentioned other matters, as did Lord Skelmersdale when he replied to an amendment moved by Lord Elwyn-Jones. Since that date, and on the occasion of the Minister's welcome visit, the borough has supplied facts and figures that completely contradict the point made by the Under-Secretary of State. Hon. Members have not referred to the figures tonight. I shall not refer to them at length, but I shall give one example of the use of what I regard as flawed statistics. Unless we hear from the Minister or the Under-Secretary of State, who may reply to the debate, I shall take it that the statistics are broadly accepted.
The moral is that there seems to be some lack of communication between Newham and Marsham street, where my hon. Friends and I and, indeed, the Minister have done our best to bridge the gap. I do not know whether there has been more than one level of information flow or whether the sources of information on which the Under-Secretary of State and, sometimes, others have relied have perhaps not been as official as they might be. For instance, there has been concern about the speed of council house sales. Obviously, the council does not like it, but there is a legal obligation so to do. On 18 February the policy and resources committee of the London borough of Newham gave authority for private estate agents to speed up such sales. That is an illustration of the fact that sometimes what appears to be in figures is not present in fact or intent.
My hon. Friend the Member for Newham, North-East said that the Bill is only an amelioration. I understand from the borough that the gap of £33 million in next year's budget has now been reduced to £26 million. In terms of actual cash revenue, what was to be a gap of around £14 million has been reduced to £10 million. A reduction in one year of a needed £10 million is hurtful.
Newham's expenditure in the current year is £167 million. I understand from the borough that if services are to be held at the same level, taking into account inflation and rising bed and breakfast and other costs to cover matters that require statutory attention, the revenue for the forthcoming year should be about £175 million.
This amendment will provide for expenditure of £165 million, leaving a gap of£10 million. Painful cuts will therefore have to be made in Newham, the second most deprived borough in the country. There will have to be education and social services cuts and there will also have to be cuts in the services provided for the elderly and infirm who live in their own homes. I do not see how those cruel cuts can be avoided if the borough is to keep within the law.
Most hon. Members, including Conservative Members, will be glad to know that at its last council meeting the council adopted a budget that falls within the legal constraints of this Bill. However, that legal budget will involve cruel injustices being meted out to the people of Newham. Conservative Members may think that they are penalising those of a different political colour from themselves. That is one way of looking at it. However, they are penalising some of the best but some of the least 430 privileged people in this country, however they may vote—and some of them do not vote. I am not surprised that they get fed up with politicians. Sometimes the difficulties that are caused by the cuts that are imposed by Marsham street are thought to be due to the council. Many people do not distinguish between Members of Parliament and councillors, let alone between those who are in Government and those who are in Opposition. People do not necessarily see where the responsibility for these cuts lies. It lies with the Government—nowhere else.
The rates figures are also significant. Despite these urgent needs, there is to be a rates reduction of 11 per cent. That will be welcomed by many but, as my hon. Friend the Member for Newham, North-East pointed out, one of the difficulties is that although we are being given an additional £15 million in rate support grant, there is to be an increase of £7.5 million in what the Chartered Institute of Public Finance and Accountancy calls flowback, but which I prefer to call clawback or a rates tax.
Despite the amelioration that this formula provides, there will be very real problems. I am glad to see that the Secretary of State has arrived in the Chamber. I want to ask him what would happen if the same thing were to happen in Gloucestershire. I have been looking at the figures, and I understand that the equivalent expenditure in Gloucestershire to Newham's £167 million is about £183 million. If Gloucestershire were faced with an £8 million cut in its revenue in the forthcoming year, I wonder how Gloucestershire county council would cope? I wonder, too, how the Secretary of State, the right hon. Member for Cirencester and Tewksbury (Mr. Ridley), would cope. What would people think of him and of the Government? I cannot imagine that the Gloucestershire cuts, if there were to be any at all, would come anywhere near to those in Newham.
I conclude this mixed speech of thanks by saying something that I believe ought to be said. It has been said on a number of occasions, but now that the Secretary of State is here it ought to be said very clearly indeed. I do not believe that by their actions this Government show that they believe in local government. In bulk financial terms, most of the services that are provided for our people arise from the interface between local government and local people. Yes, there is a DHSS office, Ministry inspectors for this and people in bowler hats, metaphorically speaking, who come from Marsham street and other Ministries. But most community services—50 per cent. as opposed to 60 per cent.—are paid for by taxpayers. The Government are responsible, and how responsible they are now that the Secretary of State has an iron grip on how the money should be used!
I cannot imagine how any Government who believe in the democratic accountability of services can produce such a succession of debilitating Acts of Parliament, confusions and procrustean activities, yet continue to think that the machine can work. Even if we did not have this last minute recantation there would be terrible strains on local government in Newham and elsewhere.
People are beginning to doubt whether the Secretary of State and his friends are wedded to local democracy. They ask, "Is this not a plot to give local government a bad name and to make it impossible for it to work, so that central Government powers become greater and local 431 government powers diminish? Does that not fit in with the Government's philosophy of reducing public involvement and centralising democratic accountability?"
Some hon. Members may think that a Mephistophelean approach, and the way in which the Government have proceeded suggests that that is, indeed, the case. The way in which the Secretary of State has dealt with the Bill, Newham and some of the most needy areas has confirmed that that view, not only has content, but nearly has proof.

§ Mr. Tony Banks (Newham, North-West)
I shall be brief because most of the points have been made by my hon. Friends the Members for Newham, North-East (Mr. Leighton) and for Newham, South (Mr. Spearing).
We must acknowledge that the Minister of State has through his actions, particularly his visit to Newham, granted some of our requests. We proposed a major part of Lords amendment No. 4 in this House, but at that time the Government chose not to concede the point. Clearly, as the facts emerged, the Government realised that a major error was being made. If the amendment is passed— naturally, we shall not vote against it—Newham will be about £7 million better off than it would otherwise have been.
The amendment will still require Newham to cut its expenditure to a level closer to the GREA than 16 of the 20 rate-capped local authorities and to cut its rates by more than those of 16 of the 20 rate-capped local authorities. We must still find about £10 million-worth of cuts. In a borough such as Newham, that will cause great distress, pressure and hardship, when little more hardship can be borne by the people who live there.
We shall accept the amendment—naturally, we must take whatever we can possibly get in these straitened times—but it will nevertheless mean that next year Newham will face a disaster rather than a catastrophe.

§ Mr. David Clelland (Tyne Bridge)
I am grateful to have the opportunity to say a word or two on behalf of the metropolitan borough of Gateshead. Until this moment, this has been a Newham debate. Perhaps that is just, because, as my hon. Friend the Member for Newham, North-East (Mr. Leighton) said, the Bill has major importance for Newham. Unfortunately, it is of minor importance to the metropolitan borough of Gateshead. If Ministers expect the borough to be teeming with gratitude, I must disappoint him.
Ministers are aware that the metropolitan borough of Gateshead has been badly treated in this exercise. At the council's budget meeting tomorrow, the amendment will make no noticeable difference to the borough's problems.
The council faces a £12 million reduction on what it would need to stand still on last year's budget. It cannot be described as a high-spender; it is not a profligate council. It is a local authority with needs, which are recognised by the Government through the inner area partnership and the national garden festival, which is to be held in the borough in 1990.
What the measure means to the metropolitan borough of Gateshead is no extra Government support; indeed, it means a reduction in block grant. It means an increase in an already inadequate expenditure level of some £500,000 from £98 million to £98.5 million. It means that instead of the council being forced to reduce its rate by 9 per cent. next year, it will have to reduce it by about 8 per cent.
Hundreds of jobs will still be lost and services will still suffer. The analogy as to Gateshead is of a man who was 432 to have 10 fingers amputated and is told that he is to have only nine fingers amputated. I do not think the Ministers can expect such a man to feel much relief from that prospect.

§ Mr. Meadowcroft
Looking at the complicated formulae in schedule 2, I am glad to find that the printers have as much problem as hon. Members and that we had to have a correction slip. If I raise questions from an inquiring spirit, wishing to know answers, I hope that the Minister will take that in good part.
Why, if some help was given to the London borough of Newham, was there not a way of giving some help to the London borough of Tower Hamlets? The London borough of Tower Hamlets has been told by officers that out of its rate-capped sum of £124 million, £24 million, as a net sum, will have to be spent on housing 1,500 homeless families. It has no way of avoiding that.
The Minister may also be aware that his hon. Friend the Minister for Housing, Urban Affairs and Construction, by his midnight deadline at the appropriate date in February, cut off a scheme which might have been of great help to 600 families. It seems to me monstrously unfair to deal with a problem relating to a London borough nearby— which I welcome—but not with a borough which is affected just as much as Newham.
As far as I can make out from the formulae, there has been no increase in assistance under that formulae for the problems of the fire service. I told the Under-Secretary of State for the Home Department that I would be happy if the west Yorkshire fire service were able to meet Home Office standards. Unfortunately, because of the limits imposed by the Department of the Environment, it is unable to do so. The Under-Secretary believed that there was enough money under the provisions of the rules of the Department of the Environment for the west Yorkshire fire service to be able to operate effectively. What he may not have known at that time was that the fire service has now announced that it has mothballed a number of fire appliances. It will not be able to run them and, therefore, it will be unable to meet Home Office standards.
It seems odd that we are faced with a set of Lords amendments, which alter in some detail the complicated formulae yet which do not deal with the precise question that any logical person would find difficult not to accept. There has been a mistake, which should be put right so that the fire service can run effectively.

§ Mr. Straw
This group of amendments makes provision for Newham and Gateshead not to receive additional funds but to spend more of their ratepayers' money at a saving to the Government. In addition, it rewrites the 13ill on rate capping.
We are glad that the Minister listened carefully to the representations that were made to him and was able to agree to these changes. I say that with no qualification. Like my hon. Friends from Newham and Gateshead I must also say that those authorities will still unfairly be placed in difficulties. It is important that while we thank the Minister for listening we should not give the impression that the Minister has provided any money. Indeed, the Treasury is probably smiling all the way to the bank because it saves on this arrangement.

§ Mr. Meadowcroft
The Treasury never smiles.

§ Mr. Tony Banks
It smirks.

§ Mr. Straw
No doubt it will be pleased. In many ways it will have supported Newham's representations because of the saving of rate support grant. That illustrates one of the many bizarre aspects of the rate support grant system. An apparent Government concession to ease the rate-cap limit saves the Treasury money. The people at a disadvantage are the ratepayers in Newham and Gateshead.
From the start, my hon. Friends the Members for Copeland (Dr. Cunningham) and for Houghton and Washington (Mr. Boyes) and I were concerned about the situation in Newham and Gateshead which was drawn forcefully to our attention by our hon. Friends the Members for Newham, North-East (Mr. Leighton), for Newham, North-West (Mr. Banks), for Newham, South (Mr. Spearing) and for Tyne Bridge (Mr. Clelland), and I want to pay tribute to them for the way in which they and their authorities ran their campaigns so intelligently to bring the plight of their areas to the Government's attention to ensure that there was a change of mind by Ministers.
My hon. Friend the Member for Newham, South spoke of the situation in Newham. He knows that I had a family connection with Newham because for many years my mother was a headmistress of a nursery school in a deprived part of Newham. No one can say that at any stage of its existence Newham has been a profligate authority— to use the standard term of abuse. In comparison with adjoining authorities of different political complexions Newham has had a reputation for economy to say the very least. On many occasions I went to see my mother's school— [Interruption.] The maintenance of school buildings in Newham does not compare well with other authorities, nor does the overall level of resources available to that authority.
It is no good the Secretary of State smiling. None of us has thanked the Secretary of State tonight and none of us intends to. One of the Secretary of State's problems, on which he is no doubt reflecting after yesterday's little episode, is a stupefying degree of insensitivity to problems of which he has no direct experience and a desire not to comprehend the fact that many people in Britain live in conditions in which no hon. Member would wish to live, certainly, not in the high rise or low rise accommodation of Newham that was forced on such areas by the right hon. Member for Leeds, North-East (Sir K. Joseph) when he was the Minister responsible for housing in the early 1960s.
The amendments raise other problems. They illustrate an arbitrariness in the way in which rate capping has been pursued this year because, it is said, of the problems and defects in previous legislation which require the Bill and because of the rules on hybridity which prevented Ministers from making individual judgments on individual cases. It was the Opposition's contention in amendments that we moved earlier in the proceedings, that it would still have been possible for Ministers without facing the dangers—from their point of view—off hybridity, to apply a re-determination process that took account of individual circumstances, but without the need for extra limbs to the algebraic formulae that appear on pages (2) and (3) of the amendment paper.
Rate capping was sold to a very sceptical House, and that scepticism was felt on both sides of the House not least on the basis that while the principles would apply to all authorities, individual Ministers would consider the 434 merits of cases of authorities individually, case by case. They have not been able to do that within the framework of this legislation and they have introduced greater arbitrariness into the rate capping system.
My final point relates to an issue that I raised in the short debate on the guillotine motion.

§ Mr. Meadowcroft
The hon. Gentleman referred to the reluctance of the House at the time to accept the principle of rate capping. Does he regret the absence of the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark), who has been a formidable opponent of such matters for some time? He said that if the Government believed that they could hurt those in need to benefit those without need, they had another think coming. It is a shame that the hon. Member for Selly Oak is not here to make his case this evening.

§ Mr. Straw
I certainly regret that the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) is not present. I dare say that he took part in the earlier debate on the motor industry. However, unlike the Ministers in the Department of the Environment today, the hon. Member for Selly Oak takes the old Conservative view of local government and considers that a local government invested with substantial degrees of independence is an idea that is wholly consistent with, and indeed underpins, the old Conservative tradition. The hon. Member for Selly Oak has sought to defend that against the centralists, the Poujadists, who now occupy most of the Treasury Bench.
After that short diversion, I want to consider the issue that I raised in the debate on the guillotine motion and I would be grateful if the Minister would reply to this point. My point relates to the Greenwich decision and any appeal by authorities that are rate-capped. I spelt this out in the debate on the guillotine motion, but I want to repeat the point. Greenwich went to court because of an argument with the Secretary of State about the way in which the grant-related expenditure assessment for road maintenance, which had previously been held by the GLC, should be distributed between the various London boroughs. It is quite untrue, as the Department of the Environment press office has tried to dissemble was the case, that Greenwich had been given GREAs for roads that did not exist. That was never the case and no formula—

§ Dr. Boyson
Greenwich stole the money.

§ Mr. Straw
That is very interesting. From a sedentary position the Minister has just said that Greenwich stole the money from other authorities.

§ Dr. Boyson
As I understand the position—and the Opposition often makes great play of moral cases—money either belongs to someone or it does not. If the Government cannot legally give that money to the person who is entitled to it and someone else takes it gratefully, it would not be stealing in the sense of the law, but to the ordinary person it would appear that the latter had money that belonged to someone else. That is my interpretation of the Greenwich case.

§ Dr. John Cunningham (Copeland)
But it is not stealing.

§ Dr. Boyson
It is keeping money that one knows one should not have.

§ Dr. Cunningham
It is not stealing.

§ Dr. Boyson
If the hon. Gentleman had listened, he would have heard me say clearly—[Interruption.] If the hon. Gentleman wishes to intervene, he can do so, but it is a limited debate and it will only stop others from talking.
If someone receives money which, in justice, should go to someone else, and keeps it, many people may not consider that to be stealing in the eyes of the law, but they would say that it was unjust. That is how I see the case. Bromley had the 90 km of roads allocated to it, but the money was not allocated to it as it should have been and it went elsewhere, including to Greenwich and other boroughs. They kept it, legally, but I still believe that the money should have gone to the borough that was allocated the roads. I answered the point in the previous debate. That is my understanding of the case. The interpretation of the courts is a legal, not a moral interpretation.

§ Mr. Tony Banks
Let us have another Local Government Bill then.

§ Mr. Straw
I am almost at a loss for words after hearing the Minister parodying the position of Greenwich—[Interruption.] I shall give way to the Secretary of State, too, if that is why he is shifting in his seat.
The Minister sought to parody the position of Greenwich by suggesting that it took money from Bromley. I remind him that Greenwich was in a position to receive money not as a result of any action that it had taken, but as a result of decisions taken by Ministers.

§ Dr. Boyson
They knew that it was not their money, but they kept the money. The hon. Gentleman would not have done it, and I would not have done it—or would he?

§ Mr. Straw
It may not have been a decision of this Minister, because there have been so many changes at the Department of the Environment that we cannot keep track of them. Let me spell out what happened. First—the Minister was not responsible for this policy— the Government decided to abolish the GLC. Greenwich did not participate willingly in that decision; indeed, it opposed the abolition. The GLC's grant-related expenditure assessments for highway maintenance had to be transferred to the boroughs, and that was done pro rata to the borough's GREA. The GLC's expenditure had to be spread among the boroughs and then a multiplier was set to equalise the cost to each authority. The formula for highway maintenance GREAs was improved as a result of negotiations between the local authority associations and the Department, with Ministers approving the change. Does the Minister deny that Ministers approved that change? I think that the answer is coming from his officials.

§ Dr. Boyson
This is a hymn sheet.

§ Mr. Straw
I wish it was. Does the Minister deny that Ministers approved that improvement in GREAs?

§ Mr. Meadowcroft
Let him read the answer first.

§ Dr. Boyson
It does not even answer it.

§ Mr. Straw
It is the wrong answer to the wrong question. The Minister had better see his officials afterwards.
The Minister must understand that the change in the formula took into account not only the length of the roads but the extent to which they were used and the greater intensity of traffic in inner London compared with outer London.
436 The point is simply that it was Ministers who agreed the original change in the GREA formula, which had the affect of benefiting Greenwich. Ministers encapsulated that in decisions which were then validated by the Rate Support Grants Act 1986, retrospectively, and it was the courts which then said that that validation meant that a subsequent change could not be overturned by Ministers. It was for that reason that the judge in the case said that the Minister had been hoist on his own petard.

§ The Secretary of State for the Environment (Mr. Nicholas Ridley)
I intervene only to congratulate the hon. Gentleman on having talked for about 10 minutes, without having mentioned the fact that that was the case arising out of the Bromley error. He does not seem to acknowledge that it arose out of an error, rather than any determined judgment.

§ Mr. Straw
Of course, it is true that almost every decision that Ministers make on rate support grant is an error and has to be changed.— [Interruption.] I have thick files on the Bromley error. I corresponded with the Minister's predecessor but two on that errror, as his own private office files will show. It is not our fault that Ministers or the Department make errors and then bring forward legislation such as the Rate Support Grants Act 1986, which sets all those errors in concrete—[Interruption.] We shall await the final transcript of the case but I can say only that on the details of the judgment I have received, that is a fact of the case. If the case is as the Secretary of State describes it, it is a matter of surprise that a High Court judge could not only have found for Greenwich, but have said all the things that he did about the Secretary of State.
However, the Secretary of State, having lost on Greenwich, has now revised the rate support grant tables. If the Secretary of State wins on appeal, what happens to the rate support grants for each authority, particularl) to those authorities which are in tight circumstances and which are rate-capped.

§ Dr. Boyson
I shall try not to get bogged down in the debate on any other error anywhere else.
The hon. Member for Leeds, West (Mr. Meadowcroft) raised the question of help being given to rate-capped authorities, particularly those rate-capped for the first time. We have to have a formula because otherwise we risk hybridity. That is obvious to anybody. The formula we set seemed to be the fairest and most just in so far as GRE is an indication of what should be spent to provide equal services throughout the length and breadth of the country. We came upon the formula, which had been discussed at an earlier stage of the Bill, to put a new piece in the Bill—grant related expenditure plus 9 per cent. If Tower Hamlets had come into that category, the authority would have had the advantage of the formula. However, it did not. The two authorities that did come into the category were Newham and Gateshead.

§ Mr. Meadowcroft
Why did the hon. Gentleman not consider—given that it is a legal definition—including the homeless families under the Housing (Homeless Persons) Act 1977 as a factor in setting the limits higher?

§ Dr. Boyson
The formula was already so complicated that if we had put all those in one, could have included another 51 and be back to GRE. All the aspects referred to by the hon. Gentleman are part of the GRE formula.
The hon. Members representing Newham have not been over-gracious this evening and we began to wonder whether we should vote against the amendment. I shall put that gently on the record. When one does something to try honestly to help somebody else, both sides should accept that.
The hon. Member for Blackburn (Mr. Straw) referred to the Greenwich judgment. An electoral judgment was made in Greenwich as well as the one we are discussing tonight.— [Interruption.] Greenwich was not a Conservative seat. It has been a Labour seat for 50 years. If we had won the seat it would have been even more amazing and a third Greenwich judgment would have had to be taken.
The rate support grant has to be changed because of the Greenwich judgment, and because we obey the law. What is legally right has been interpreted. If we win on appeal—we hope that we shall— in the first supplementary report we shall have to look at the matter again and put it right, otherwise someone else will object. But the decision has been made. If there is a change, we shall have to meet it, we hope on appeal, in a supplementary report.

§ Mr. Straw
If there is such a change and then a supplementary report, and if there is a loss of grant to the ratecapped authorities, those authorities could run into deficit as a result of the loss, through no fault of their own. Will that be taken into account in any subsequent decisions?

§ Dr. Boyson
I cannot deal with that now. We shall look at it within the law and the rules that have been laid down in this and other Acts. We cannot go into the details at present.
The decision on the change of formula was made not by me as Minister of State but by the Secretary of State after we had all discussed it together. The three hon. Members who represent Newham—the hon. Members for Newham, North-West (Mr. Banks), for Newham, North-East (Mr. Leighton) and for Newham, South (Mr. Spearing)—have represented their authority as well as any hon. Members could represent anywhere. I trust that I am not risking their reselection by saying that in the House. That decision was made by the Secretary of State when we met at the time. I thank my right hon. Friend for his co-operation after my visit there. He had to take my work for what was happening in Newham. We now know 438 that Newham will catch up on the sale of houses. There has been a quid pro quo. We look forward to the fulfilment of the sale of houses over the next six months.

§ Mr. Spearing
I am grateful to the Minister for his words about the Secretary of State. Indeed, we are glad and grateful that the anomaly in the formula has been rectified. We made that clear during the Minister's visit. The hon. Gentleman will also realise, in case it be misunderstood, that there will still be great difficulties. In due course I shall acquaint the Secretary of State, the Minister of State and the Parliamentary Under-Secretary with some of the unfortunate consequences of the Bill, to which this is an amendment, which I am afraid cannot be avoided. Perhaps the Minister will understand the spirit behind the thanks, and the difficulty that characterised my words.