STATUTORY REFERENCES TO RATING (Hansard, 25 April 1988)

§ Mr. Rooker
I beg to move amendment No. 223, in page 68, line 18, at end insert— `( )In subsection 4 of section 137 of the Local Government Act 1972, for the words from "the product of a rate of 2p in the pound" to the end of the subsection there shall be substituted the following words—

"(a) £4 per inhabitant of the area, except those mentioned in subsections (b) and (c) below;

(b) £8 per inhabitant in the metropolitan counties;

(c) such a sum, not less than £8, as the Secretary of State shall by order prescribe for Greater London; or

(d) such other higher amounts as the Secretary of State may by order provide.".'.

Under the constraints of the guillotine, it is the agreed intention to spend only a few minutes on amendment No. 223 before we move to the major item under the guillotine relating to the Scottish business.
Amendment No. 223 is a further probe in respect of section 137 of the Local Government Act 1972. Effectively, that means discussing the issue of what we all understand to be the product of a penny rate. Local authorities can use the product of a penny rate for a variety of matters outside the normal remit of the legislation.
Obviously the product of a penny rate will have no significance once rateable values have disappeared and the poll tax is introduced. Therefore, amendment No. 223 refers to pounds per inhabitant of an area, whether they be in the metropolitan counties or the Greater London area. We really only want to press the Minister to discover whether the Government have given the matter any more 58 thought. In Committee the Government implied that they did not intend to abolish the concept completely, but obviously the product of the rate poundage would have no significance in future.
The issue is essentially important because local government uses section 137 of the Local Government Act 1972 in three ways. First, it is used for job creation. I understand that about 75 per cent. of section 137 money is used for economic development issues of various kinds. I do not have the time to go into that in detail.
Secondly, section 137 money is used to fund and assist the voluntary sector. That includes grants to citizens' advice bureaux, law centres and other bodies not covered by mainstream funding. That includes voluntary groups working on issues not related directly to the responsibility of local authorities, for example, local voluntary groups opposing projects—although I have never heard of a local voluntary group "proposing" such projects—such as the siting of a new airport or nuclear power station. Those groups may want to put a case at a public inquiry or lead a campaign.
Airport construction and nuclear power generation are not local government issues. However, it is possible for local authorities to assist voluntary groups in work related to those issues which are of crucial importance to the local communities.
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Thirdly, section 137 money is used valuably where one tier of local authority funds a voluntary group related to another tier of local government. I refer to the examples given in Committee in which a district council would fund work relating to social services or education projects. A district council in the shire areas would not deal with those matters because that would be a county council function.
Section 137 money is not a great deal of money in terms of local government expenditure. However, it gives discretion and a degree of flexibility. It enables parts of local government to help and cope with the unexpected. It assists innovation and variety at local government level. I sincerely hope that the Government will not try to impose a complete block on those aspects of local government. I hope that the Government will consider or accept amendment No. 223—if they do accept it, I would probably fall through the floor—because it would meet the thrust of the arguments. Indeed, both sides of the Committee shared an understanding of the arguments on these points.
I hope that the Minister will not say that the Government will leave this matter to another place. If Ministers are to be believed about the other place, the other place will not be able to touch the Bill as it relates to money. Therefore, the other place will not be able to cope with the replacement of section 137 effectively. Therefore, we must deal with section 137 in this House.

§ Mr. Simon Hughes
I support the amendment and the arguments put by the hon. Member for Birmingham, Perry Barr (Mr. Rooker). I remember the old days when we debated this matter in other Committees, on other Bills, in years past. The issue is the same. I have read what the Minister said in Committee.
The issue remains that local authorities should he given a greater amount of discretionary power within a small limit to raise the spend on things that they regard to he important locally. The hon. Member for Perry Barr 59 referred to citizens' advice bureaux. I visited Warwickshire a year or so ago. Warwickshire county was very keen to fund the increasingly important network of citizens' advice bureaux. It is the voluntary sector and voluntary services which most need the expansion of the tuppenny rate, as it is coloquially called.
The argument across the Floor of the House has concerned how much discretion local authorities should have. The Minister will know that some local authorities have reached their ceiling and are already committed. There are some good voluntary sector agencies whose requests have been turned down because there is no capacity to grant-fund them. The Minister will know also that the argument that extra money will be used only to fund lunatic and fringe activities is not supported by any evidence and that 67 per cent. of the total of section 137 money has been used for promoting economic development and employment. A substantial percentage was for legal, advisory and other welfare services.
All the indications are that one of the key areas that will need help if poll tax is to be enacted is that of money advice. With the increasing amount of debt that there is and the growing volume of difficulties into which people get, the services of the voluntary sector in particular will be needed in respect of consumer advice and financial counselling. Those are just examples of where discretionary powers will be necessary in local government.
The Minister has said that the Government will answer questions on that aspect when they know the result of the Widdicombe report. That report was promised early this year and is now overdue, and I should like to know when we shall be receiving it. If we had that information, I would be half happy. If we had that information plus a commitment either to accept this amendment or something similar, for one brief moment during the passage of this Bill there might even be some smiles on the Opposition Benches. I hope that the Minister will take this rare opportunity to find favour at a time when it seems that he and his colleagues on the Front Bench are increasingly unpopular and isolated, even among their own supporters.

§ The Parliamentary Under-Secretary of State for the Environment (Mr. Christopher Chope)
This amendment is unnecessary. It is not necessary to pass an amendment either in this House or in another place because the present basis of section 137 limits can continue until the introduction of the community charge. Following upon that, clause 122 will allow the Secretary of State to make regulations to change the reference in section 137 to the product of 2p in the pound to some other factor, as appropriate.
I have nothing to add to what was said by my hon. and learned Friend about the future of section 137 when we discussed the matter in Committee. He said then that the Government would announce their views in the light of the Widdicombe proposals and recommendations. I hope that it will not be too long before those announcements are made. When they are, we can discuss alongside section 137 powers the specific issue of local authority development activity and the other pertinent points raised during this short debate. I give way to my hon. Friend.

§ Mr. William Cash (Stafford)
I would rather speak when my hon. Friend has finished.

§ Mr. Chope
In that case, it might be better if I conclude my remarks at this point and ask the House to reject the amendment.

§ Mr. Cash
This amendment deals with a clause in the Bill that refers to statutory references to rating. It raises an important question relating to my own constituency of Stafford, with particular reference to an area named Knighton, which is governed by an Act of Parliament passed in 1660, when Charles II was on the throne.
The significance of that provision, in referring the application of section 137 in the context of clause 122, is this. Under the terms of the 1660 Act, residents of Knighton are not liable to rates, taxes, assessments or charges, whether passed by Acts of Parliament or otherwise. Furthermore, that provision was granted in good faith in 1660, in recognition of services rendered by the local inhabitants to Charles II.
It so happens that in 1927 Gnosall rural district council itself continued that exemption under the then Rating and Valuation Act 1925. Furthermore, and with specific reference to the General Rate Act 1967, to which reference is made in the statute in question, section 117 further continues the exemption for those constituents of mine. They comprise 31 occupiers, a pub, and a smithy. The pub is known as the Haberdasher's Arms. There is also a factory, together with——

§ Mr. George Foulkes (Carrick, Cumnock and Doon Valley)
Will the hon. Gentleman repeat that name?

§ Mr. Cash
The pub is known as the Haberdasher's Arms, in the parish of Knighton.

§ Mr. Foulkes
I am most grateful to the hon. Gentleman —I must make a visit there.

§ Mr. Cash
Since 1660, its inhabitants have been under no obligation to pay rates. I appreciate that we are under the guillotine, so I shall bring my remarks to a swift conclusion. It would be most unfortunate if the Henry VIII clause, normally used to revoke, amend or repeal an Act, should be used in this instance to remove an exemption that was granted in such express terms in 1660. I look to the Minister to continue the exemption for my constituents on the grounds that it was made in good faith and has been continued on numerous subsequent occasions. I ask my hon. Friend, when he replies, to give the assurance that I seek.

§ Mr. Rooker
With the leave of the House, we accept the Minister's reply as far as it goes, but I recommend that all right hon. and hon. Members find time to read amendment No. 237, which relates to the speech that we have just heard and to the bunch of free-loaders in the constituency of the hon. Member for Stafford (Mr. Cash) who do not pay any rates. How do they benefit from the product of the tuppenny rate anyway, under section 137, if they are not paying rates? There is a point to be made here about accountability and democracy, but I shall not make it now —otherwise I shall have my hon. Friends from Scotland down on me like a ton of bricks. I take it as being implicit in the Minister's reply that the same amount of money will be available under some equivalent form of procedure 61 when the poll tax is introduced as currently exists under section 137 of the Local Government Act 1972. That being the case, I beg to ask leave to withdraw the amendment.