Local Government Finance

HC Deb 18 January 1990 vol 165 cc423-513

Mr. Speaker

I remind the House that these motions must be disposed of by 10 o'clock. Therefore, I propose to allow a general debate on the five motions on the Order Paper. As a large number of right hon. and hon. Members want to take part in the debate I urge hon. Members to limit speeches to five minutes, or it will be difficult to include everyone who wishes to speak in the debate. I propose to put a limit of 10 minutes—the only authority that the Chair has—between 6 o'clock and 8 o'clock, but I ask right hon. and hon. Members who are called to speak before that time to bear the time limit in mind.

Mr. Dennis Skinner (Bolsover)

On a point of order, Mr. Speaker. I wonder how you will conduct this debate. On other occasions it is relatively easy to call one hon. Member on the Government side and one from the Opposition, but, according to various press reports—I do not know whether they are true—a substantial number of Tory Members oppose the Government on this issue. How will you choose one Member who is for the measure and one who is against?

Mr. Speaker

The hon. Member has vast experience of these matters; perhaps he should have come to have a private word with me about it. It is not easy.

4.14 pm

The Secretary of State for the Environment (Mr. Chris Patten)

I beg to move, That the Population Report (England) (House of Commons Paper No. 48), a copy of which was laid before this House on 1lth January, be approved. I understand that it will be convenient for us also to discuss the following: That the Revenue Support Grant Report (England) 1990–91 (House of Commons Paper No. 47), a copy of which was laid before this House on 11th January, be approved. That the Revenue Support Grant Distribution Report (England) (House of Commons Paper No. 49), a copy of which was laid before this House on 11th January, be approved. That the Revenue Support Grant Transition Report (England) (House of Commons Paper No. 50), a copy of which was laid before this House on 11th January, be approved. That the Special Grant Report (House of Commons Paper No. 128), a copy of which was laid before this House on 12th January, be approved. The reports that we are debating form the basis for local government grant settlements for next year. They are similar, although not identical, to the proposals that I reported to the House in an oral statement last November. They are different in two respects. First, we now take account of actual rather than notional capital allocations; secondly, we take account of the number of community charge payers registered with their local authorities, rather than guessing at a figure gauged from the work of the registrar general.

When I announced these decisions last week, I also announced that we intended to pay 25 per cent, of local government grant in the first two——

Mr. Roy Hughes (Newport, East)

On a point of order, Mr. Speaker. Should not the Secretary of State be addressing the Chair rather than turning his back on you?

Mr. Speaker

Order. We have barely started.

Mr. Patten

I announced that we would be paying 25 per cent, of the grant to local authorities in the first two months of the year. That does not fundamentally alter the architecture of the settlement, but it brings forward our grants to local authorities. It provides them with about £2.4 billion in the first two months of the year, about £800 million more than they were anticipating, and is worth about £180 million to them in, for example, increased interest payments.

These debates are a fairly familiar way of beginning the new year in the local government calendar, but my guess is that their nature will change somewhat in the future, for two reasons. First, whatever our views of the new system of financing local government, I think that there is little doubt that local government spending will involve more clarity in future than it has in the past. Secondly, I believe that it will involve more accountability than in the past. I think that one of the reasons for the fuss that we have experienced in the past few weeks is precisely that greater clarity and accountability.

Mr. David Gilroy Bevan (Birmingham, Yardley)

Would my right hon. Friend be kind enough to explain something, for the sake of clarity? If the £248 figure that he announced last week for the community charge in Birmingham is correct, why does Sir Richard Knowles, the council's Labour leader, predict the hugely inflated figure of over £420—nearly double that? My constituents in Yardley are appalled. Will my right hon. Friend supply me with figures under the eight element headings for both this year and next year, explaining where the appalling under-budgeting and discrepancies lie?

Mr. Patten

Birmingham is one of the authorities that will do best under the new system, in relation to both standard spending assessments and aggregate external finance. If there are reasons for the kind of increase to which my hon. Friend refers, one of them is the fact that Birmingham is apparently considering a 20 per cent, increase in expenditure next year. If it increases expenditure by that amount, the pain for the community charge payer will be considerable, and I very much hope that it will have second thoughts.

Mr. Jeff Rooker (Birmingham, Perry Barr)

Birmingham is not facing anything like that kind of increase, and if I am called to speak in the debate I shall explain the position in detail.

The Secretary of State said that there would be greater clarity and he talked about the debate being part of the local government calendar. Is he aware that something else is part of the local government calendar? I telephoned a Government Department about this at lunchtime. When, in the past, the Secretary of State has made statements in the House about poll tax figures nationally—the last; occasion on which he did that was 6 November—the Government, to their credit in the last three years, always deposited in the Library, in answer to a parliamentary question, exemplifications of those figures, gainers and losers by households. As yet, that has not been done following the 6 November figure. Hon. Members simply receive holding answers. It is not as though we have not asked for the details.

How can we conduct this debate in a sense of reality and with clarity when we do not have the Government's exemplifications of the poll tax figures following the 6 November statement, less than a week after the Secretary of State's announcement of these instruments and without an oral statement? When will those figures be available?

Mr. Patten

The final figures on gainers and losers will be available only when local authorities have made their budgets. I have not so far detected among hon. Members the suggestion that we have been providing too little information about the local government settlement. Indeed, a complaint that we have heard time and again is that we have been providing too much information every time we go out to consultation or there is a new set of exemplifications.

Mr. John Townend (Bridlington)

My right hon. Friend said that much more information was being provided. I supported the community charge on the basis that it would be fairer and simpler. Will he explain—I have written to his Department about this and my local authority has written to his Department but has not received an answer—why the standard spending assessment which affects the grant for Hull is £131.70 and for my constituency is £77? I hope that he will not say that it is due to social conditions. I can understand that from the point of view of the county council, with education and social services, but the sort of services with which district councils are concerned—refuse collection, planning, rate collection and so on—do not vary that much. Will he explain the difference?

Mr. Patten

I shall deal later with the whole issue of the move from grant-related expenditure assessments to standard spending assessments. I shall then answer my hon. Friend's question.

Mr. Harry Greenway (Ealing, North)

Is my right hon. Friend aware—[Interruption.]—that, whatever Opposition Members may say, my constituents have already had their rates doubled in two years, and they now face a further probably doubling under the new process, with a community charge of nearly £500, despite unprecedented support from central Government? Will my right hon. Friend condemn Labour councils which behave in such a profligate way, with the encouragement of Labour Members such as those at present seated on the Opposition Front Bench below the Gangway?

Mr. Patten

I totally accept what my hon. Friend says about the consequences of high spending by Labour local authorities—indeed, by any local authorities. My view, given what I said about greater accountability and greater clarity in the new system, is that those matters will have more effect in getting voters to prevent higher spending by local authorities than any amount of ministerial rhetoric. That is an important reason why we should not have these sort of debates indefinitely into the future.

Mr. James Pawsey (Rugby and Kenilworth)

I am grateful to my right hon. Friend for the courtesy that he showed me at two successive meetings. But he will accept that the SSAs are working to the marked disadvantage of many shire counties, with that disadvantage being reflected in the high community charge that will have to be paid by my constituents. It seems that the way in which the SSAs are being calculated is fundamentally incorrect, and flawed, and I hope that my right hon. Friend will deal with that.

Mr. Patten

I assure my hon. Friend that I will address the question of SSAs later. He would be disappointed if I did not. Perhaps questions about SSAs could wait until later in my speech.

Sir Alan Glyn (Windsor and Maidenhead)

rose— —

Hon. Members

Hear, hear.

Sir Alan Glyn

We are debating five motions. Will my right hon. Friend consider making more concessions, first, on SSAs, and secondly, on removal of the safety nets? I represent an area where it is estimated that the charge will be over £500. If my right hon. Friend would make those two concessions, there would be a considerable difference.

Mr. Patten

I am sure that my hon. Friend will be delighted at the enthusiasm that his recent honour has brought from the Opposition, as well as from the Government side.

As my hon. Friend knows, there is an increase in the SSA for the district council in the area that he represents, though it is not as large as he and the council would like. Taking the aggregate external finance, both the contribution from the business pool and the contribution from grants to his county and its district, there is a substantial increase of over 20 per cent. Therefore, I find it difficult to accept the community charge figure that has been mentioned for Windsor, because, for example, it would suggest an increase in spending of over 20 per cent. I am sure that local charge payers would not like that.

Mr. Patrick Cormack (Staffordshire, South)

Perhaps I can help my right hon. Friend. He knows that I am no friend either to the charge or to rate capping, but in view of what some Labour authorities seem to be threatening, is there not a case for capping in this transitional year?

Mr. Patten

Again, I do not wish to disappoint my hon. Friend or other hon. Friends. I assure him that I intend coming to that question with enthusiasm later in my remarks.

Mr. John Battle (Leeds, West)

rose——

Mr. Patten

May I make the point that, after this intervention, I had better make progress? I want to finish my speech before my hon. Friend the Minister for Local Government and Inner Cities replies to the debate.

Mr. Battle

My question is about more information. The standard spending assessment of Leeds has been reduced by £3.5 million, according to the figures that appeared in the original consultative paper. When the Department of the Environment was asked to provide details of the reduction, the reply that Leeds received was that the details of the calculation could be supplied only after the debate. Would it not have been better if we had had the reasons and the details before the debate so that we could have made a proper judgment? What have the Government to hide?

Mr. Patten

I do not suggest that I do not believe the hon. Gentleman, but I find it difficult to believe that answer, because we have been providing an inordinate amount of information about the reasons for particular SSAs. I think that I am right in saying that the SSA for Leeds will be more than 7 per cent, above its existing GRE. I shall be content to see the hon. Gentleman and the leader of his council at more or less any convenient time to discuss the reasons for the existing SSA.

Sir Peter Hordern (Horsham)

Can my right hon. Friend come to the case of low-spending local authorities, such as West Sussex county council, which spend considerably less than the standard spending assessment? Is my right hon. Friend aware that if those local authorities were to spend as the Government think they should, they would spend even further below the SSA? What may be done about that?

Mr. Patten

I shall deal with that point when I deal with the transitional relief scheme. My hon. Friend the Member for Chichester (Mr. Nelson)—who may or may not be present in the Chamber—and my right hon. Friend the Member for Worthing (Mr. Higgins) have raised that important point, which I want to address, with me. It will not be debated until we consider the transitional relief scheme orders later this month.

I shall deal with the two simple issues that are at the core of the debate—first, how we should control local government spending and, secondly, how we raise money for local government in a way that combines efficiency and fairness. Those are not particularly original questions, but they have dominated the debate on the relations between local government and the Government over the past 10 or, arguably, 15 years. They are arguments with which the right hon. Member for Bethnal Green and Stepney (Mr. Shore), who was Secretary of State for the Environment in the late 1970s, will be familiar, although he and I may reach different conclusions about the answer.

None of us doubts that local authorities undertake vital functions and play an important part in the democratic life of our country. None of us doubts that many local authorities—alas, not all—conduct those functions very efficiently and that many act more efficiently than was once the case, but, however many accolades one showers on the heads of local government, it is not reasonable to argue that there should be one rule for financial control on central Government and the rest of the public sector but completely different rules for local authorities. I do not know how one could possibly put that argument.

The argument that has provoked most of the row over the past 10 or 15 years is perfectly simple. Year after year, local authorities say that the Government are not providing them with enough money. They say that they need more money and that they intend to spend more money regardless of the burden on taxpayers or ratepayers. The Government say that they need to constrain local government spending and that local authorities should cut their coats according to their cloth.

That has been the argument, but what has been the record? It is astonishing that, whatever rows we have in the House, whatever the rebellions, whatever the arguments and whatever the petal-soft diplomacy of the Whips, the position is exactly the same year after year: the real level of local authority expenditure, on the whole, increases more rapidly than Government expenditure.

Let me give hon. Members the figures for the past five years; they are chosen on what I hope is a directly comparable basis and omit matters such as the transfer of responsibility for polytechnics. Government expenditure has increased by 2.4 per cent, and total net current expenditure of local authorities has increased by 9.4 per cent. Although the argument is that the Government are attempting unjustifiably to squeeze local authorities until the pips squeak—there are not many signs of pips around town and county halls in this country—local government has taken a larger proportion of total public expenditure year after year.

Mr. Martin Redmond (Don Valley)

It is true that local authorities have had to increase rates, but they have done so to make up the deficit on the rate support grant, which has been reduced by one third since 1979.

Mr. Patten

The issue at the centre of much of the argument is not how money is raised but how it is spent. Two new propositions enter the argument this year. Local authorities say that the reason for high community charges will be not their spending decisions but something inherent in the community charge or the change from GREs to SSAs. Virtually all the spending increases being suggested by local authorities for next year would mean astronomical increases in domestic rates if we were not going over to the community charge system. It is levels of spending that, above all, determine the level of community charge.

Dame Elaine Kellett-Bowman (Lancaster)

Does my hon. Friend realise that current spending by Lancashire county council would mean an extra 82p on the old rate?

Mr. Patten

I have seen astonishing figures for the amount by which Lancashire county council apparently intends to increase its spending next year. I hope that it will have second thoughts, but I will return to that point later.

Mr. Kenneth Hind (Lancashire, West)

My right hon. Friend touches on an important point. If Lancashire county council were setting its rates today, it would have to increase them by 31.4 per cent., because it has increased its expenditure during the past 12 months by 16 per cent. That must surely increase the community charge to be paid by Lancashire ratepayers by £70 or £80. Much of that is unnecessary and casts a burden of hardship on many sections of the community that cannot afford to pay it.

Mr. Patten

I agree with my hon. Friend. As he suggested, the main reason for increases in community charges will be large increases in spending. It is important for the Government to emphasise that point during the next few months. There has been a great deal of dispute about the figures during recent weeks. We are allowing for £32.8 billion of local authority expenditure next year, which represents an increase of 11 per cent, over what we were prepared to provide this year. Is that future unfair because of some meanness with the figure this year? It is difficult to argue that it is because this year's figure is 9.9 per cent, higher than the provision for last year, which itself was 7.3 per cent, higher than the figure for the year before.

There has been a consistent run of high figures for increases in total provision. Even with that 9.9 per cent, increase in provision for this year, all local authorities tell us that, on average, they are intending to budget over that provision by 7 per cent. That is 7 per cent, on top of the 9.9 per cent, increase in provision; that represents an additional £1.9 billion. In those circumstances, it may not surprise my right hon. and hon. Friends to know that about three quarters of the contingency reserve this year has gone in meeting overspending by local government.

Mr. A. J. Beith (Berwick-upon-Tweed)

The Secretary of State must be aware that all local authorities—including all those under Conservative control—have to meet nationally negotiated pay deals for teachers, policemen and firemen. Those are key elements in the contingency fund point that the right hon. Gentleman has just made. The local authorities have to pay higher interest rates. All those charges are falling not just on what ghe describes as profligate Labour authorities, but on the Conservative authorities. The complaints from local government come from all parties.

Mr. Patten

I am coming directly to that point. It was not the Government who negotiated the 8.8 per cent, pay settlement with NALGO last year—it was the local authorities. Presumably they realised the consequences for their charge payers. The basis of the local authorities' case is that whatever the level of overspending, whatever the outturn of spending in one year, that should be taken as the base line for increases in spending for the next year.

The logic of that argument is that local authority public expenditure would never be within control; that it would increase every year as a proportion of public expenditure; and that it would increase every year as a proportion of the gross national product. Taken to its extreme, the logic of the argument is that eventually local authorities would consume the entire gross national product. I do not think that that is an ambition in the breasts of most district treasurers, but I cannot say the same for county treasurers.

Mr. Nicholas Winterton (Macclesfield)

Does my right hon. Friend agree that central Government have placed huge and costly additional burdens on local government, not least in education, and that education is one of the largest elements of local government expenditure? Will he seriously consider transferring the cost of teachers' salaries to central Government, and to taxpayers nationally? That would make the new system much more acceptable.

Mr. Patten

As I am sure my hon. Friend would be the first to point out, as well as giving local authorities new responsibilities, we have taken some burdens off them. Many of those who now own their council homes are, I am sure, particularly grateful for that. We have also given local authorities the opportunities to become more efficient through compulsory competitive tendering, which I know has given so much encouragement to the Opposition.

I come to the point raised by the hon. Member for Berwick-upon-Tweed (Mr. Beith). The best figures to compare year on year are the total amounts of the so-called aggregate external finance going into local government—the total amounts from business ratepayers, revenue support grant and special grants. The external finance going into local government next year will be £23.1 billion, which represents an 8.5 per cent, increase over this year. This year we have seen an 8.9 per cent, increase over last year's amount. On top of that, £1.85 billion goes to pay for the cost of community charge benefits and income support in England and a further £300 million to pay for the cost of the transitional relief scheme. That should mean that, with spending at the levels that we believe are reasonable, the community charge payer would have to meet only about £1 of every £4 of local government spending, which is a reasonable level.

Mr. Alex Salmond (Banff and Buchan)

Will the Secretary of State address the question that the Prime Minister dodged this afternoon—why so many English Conservative Members who were happy to vote for the poll tax in Scotland are in open revolt against these measures, despite the concessions that the right hon. Gentleman parades? Might that be because, when it comes to Scottish legislation, those Members vote whichever way the Whips tell them, regardless of the issue or the views of the Scottish people?

Mr. Patten

I do not believe that. I am content to leave that issue to the judgment of my right hon. and hon. Friends, who I am sure will reach the right decisions in the Division Lobby this evening.

Mr. Toby Jessel (Twickenham)

Will my right hon. Friend give way?

Mr. Patten

After my hon. Friend's intervention, I want to proceed with my speech, or I will be speaking until the end of the debate.

Mr. Jessel

I am grateful to my right hon. Friend. Before he leaves the point about local authority expenditure, may I ask him whether he is aware that my hon. Friend the Member for Richmond and Barnes (Mr. Hanley) and I deplore the extravagance of the Liberal-controlled Richmond upon Thames borough council? That council is constructing a new town hall in Twickenham which it calls a civic centre, at a cost of £12 million, which is certain to increase the community charge for residents throughout the borough. Will my right hon. Friend send for details of this reckless piece of civic extravagance and conceit?

Mr. Patten

That is precisely the type of extravagance on which I hope my hon. Friend's constituents will make their views extremely clear.

Local authorities say that, because we are not providing them with enough money, the community charge will be higher next year than we have suggested it need be. The argument comes down to their proposition that the £278, which we have said should represent a reasonable level of community charge on average across the country, will be exceeded by £50 or £60—some say that on average it will go up to £340; others say that it will go up to £350.

My point is simple: the difference to the country between a community charge of £278 and a community charge of £340 is £2.2 billion of public expenditure. The basic local authority case is that, in addition to the £1.8 billion extra that we are putting into local government this year through external finance, we should put in another £2.2 billion, making a £4 billion increase overall. I cannot believe that anyone really thinks that that would represent a sensible prioritisation of public expenditure or that it would be sensible for the management of the economy.

Mr. Tony Banks (Newham, North-West)

rose——

Mr. Brian Wilson (Cunninghame, North)

rose——

Mr. Michael Welsh (Doncaster, North)

rose——

Mr. Patten

I want to move on, but I shall give way to the hon. Member for Newham, North-West (Mr. Banks) because I like him.

Mr. Tony Banks

The right hon. Gentleman has totally disarmed me. I put it to him in a helpful way that surely the Government's calculation that local authorities will increase their spending by only about 3.8 per cent. next year, when it is known that inflation is about 8 per cent., lies at the centre of the problem for local authorities.

Mr. Patten

I am afraid that either I have been extremely poor in putting my argument across or the hon. Gentleman misunderstands me. I have set out in detail the figures for local standard spending and aggregate external finance—the 8.5 per cent. increase. The hon. Gentleman's figure of 3.8 per cent. is valid only if one assumes that whatever is the outturn of local government expenditure for one year should be taken as the base line for the next. As I have said consistently, that is a recipe for local government taking an increasing share of public expenditure.

Mr. Colin Shepherd (Hereford)

Will my right hon. Friend give way?

Mr. Patten

This is absolutely the last time that I shall give way.

Mr. Shepherd

I am grateful to my right hon. Friend,. Does not the discrepancy partially arise because local authorities are expected to chip in the same amount from balances this coming year as they did last year and that many of the local authorities depleted their balances so they are not able to do it this coming year? Were local authorities advised in early discussions of the consequences of dipping into their balances this year?

Mr Patten

Local authorities have been constantly advised about the consequences of dipping into their balances and of boosting them immediately thereafter. The House knows that the pattern of balances tends to bear some relationship to the electoral cycle. It would be preposterous if whatever an authority decided to do about balances meant that in the following year the taxpayer met the difference. In other words, if a local authority draws down balances one year to boost spending, I do not see why the taxpayer should increase spending the next year by that amount just because of the local authority's behaviour.

I want to come to three issues that allegedly blur the question of accountability. Reference has been made to the first by several of my hon. Friends—the issue of charge capping. Under legislation, we have power to charge-cap, just as we previously had power to rate-cap. Many people argue that it would be wrong to charge-cap because they think that it is wrong to interrupt the transmission mechanism between what a local authority spends and the purse or wallet of the community charge payer. I understand that argument particularly well, but if some of the horrendously high figures for the community charge bandied about are set next year, we will have no hesitation in capping the authorities concerned.

Mrs. Maureen Hicks (Wolverhampton, North-East)

My right hon. Friend has dealt with the issue at the heart of the matter. Is he aware that many of my constituents have lived year after year with double figure increases in rates? Many of them say that if we achieve our objectives with the community charge, it will be fair, but that if we let the likes of Labour-controlled Wolverhampton council continue to get away with murder, not to live within budgets and to set a figure in excess of £400 when we have given a guideline of £268, the Government will be getting away with murder as well.

We must not do what we did with council house sales. We left it too long before we took action and under the authorities that did not push through council house sales, people were left waiting for years. If local authorities do not see sense after April, will my right hon. Friend take action immediately and cap them from day one?

Mr. Patten

That is helpful advice to which I listened keenly. I shall now move on to the second issue.

Mr. David Blunkett (Sheffield, Brightside)

Will the Secretary of State tell the House and the nation how what he has just described as a necessary measure to hold back poll tax charging squares with what he himself described on 6 November 1989 as a poll tax which would put the community in charge?

Mr. Patten

It will put the community in charge. However, the community may need a year of our assistance in some cases before it can make its votes plain in the ballot box.

Mr. John Fraser (Norwood)

Will the right hon. Gentleman give way?

Mr. Patten

No. I like the hon. Gentleman, but not as much as I like his hon. Friend the Member for Newham, North-West.

Sir Hugh Rossi (Hornsey and Wood Green)

Until accountability at the election box begins to work, constituents such as mine still need the protection of central Government from councils such as Haringey, which will have a community charge of about £650 a head.

Mr. Patten

I can understand my hon. Friend's considerable concern and I hope that Haringey council will note what I said.

Mr. Wilson

rose——

Mr. Fraser

rose——

Mr. Patten

I shall give way a little later.

The second issue that has caused some concern is the transitional relief scheme. A number of my hon. Friends and a number of other commentators——

Mr. David Winnick (Walsall, North)

On a point of order, Mr. Deputy Speaker. Is it in order for various Whips and the chairman of the 1922 Committee to go round various Conservative Members to try to persuade them to vote for the Government tonight?

Mr. Deputy Speaker (Mr. Harold Walker)

I call Mr. Patten.

Mr. Patten

Some people say that the transitional relief scheme in some way blurs accountability. They have suggested that we should cover any losses in the transitional relief scheme, whatever the level of overspending by a local authority. That is neither true nor reasonable, as it would lead to the Treasury, in effect, meeting the costs of overspending by local authorities and it might encourage some to spend up. My hon. Friend the Member for Horsham (Sir P. Hordern), my right hon. Friend the Member for Worthing and others have referred to the particular problems that are posed where local authorities have been spending below their grant-related expenditure and are now spending below their SSA.

That is especially difficult. Many of the ramifications are not easy to work out, but I assure my right hon. and hon. Friends that we shall try to find a way through the problems by the time that we debate the order on the transitional relief scheme in a few weeks' time. If we have not been able to do so, we shall have to explain ourselves extremely convincingly to my right hon. and hon. Friends.

Mr. Fraser

Is the Secretary of State aware that, as a result of a mistake by the Inland Revenue, Lambeth borough council has to repay £1 million to the London residuary body? As a result, the poll tax will rise by £30 per person in Lambeth. Lambeth will receive £4 million of transitional relief, whereas Wandsworth will receive £24 million. Would it not be fair at least to increase the transitional relief by £11 million to compensate for the Inland Revenue's mistake and to treat a Labour and a Tory borough even-handedly?

Mr. Patten

I have gathered from what has been said in my left ear that the facts may not be quite as the hon. Gentleman described. I shall ask my hon. Friend to respond to the hon. Gentleman's point in his winding-up speech. I wish that that was the only increase in spending that Lambeth ratepayers or chargepayers were having to meet in the coming year.

The third issue that has caused particular concern to many of my hon. Friends and which is alleged to blur accountability is the safety net.

Mr. Skinner

What about SSAs?

Mr. Patten

I shall come to that.

My hon. Friends will know that, with the ending of resource equalisation, we have ended the hidden subsidies from high rateable value areas to low rateable value areas. We originally proposed that authorities that lost as a result should have their losses phased in over four years, with the cost being met by local authorities that were substantial gainers from the ending of resource equalisation. A number of my right hon. and hon. Friends argued that we should be more generous and we decided, as we announced last autumn, that, after the first year, all the gains would come to local authorities that were benefiting from the new arrangements straight away and that the losers would have their losses met by the Treasury to the tune of about £850 million over the remaining three years. Many of my right hon. and hon. Friends have said that we should go still further and meet the cost of the safety net in the first year as well, at a cost of £650 million.

I want to face the issue squarely. One cannot bring much in the way of scientific judgment to the matter; it is wholly a matter of political judgment and of one's views of priorities. When I considered the other areas in which we need to spend money next year—and in which we shall spend more money—I could not press the case for spending £650 million extra on parts of the country that will benefit from the changes that we are making.

I apologise to my hon. Friends for putting it as bluntly as that when some of them would doubtless have liked me to put it more mellifluously, but that is a fact. It is not unreasonable that people should wait a year for half their gains when the gains coming to many local authorities will be so coinsiderable in year two. Expenditure of £650 million on the safety net in year one would not be justified in comparison with many other areas in which all of us want to see additional spending.

Mr. Dennis Turner (Wolverhampton, South-East)

The people of Wolverhampton will not appreciate that statement. The Secretary of State is not prepared to respond on the £47 surcharge that the Government are imposing on the people of Wolverhampton. Why did the hon. Member for Wolverhampton, North-East (Mrs. Hicks) not support her constituents and ask the Government to remove that surcharge?

The Secretary of State talks about equity and fairness. He is suggesting that Wolverhampton should spend £56 per head of its population—£10 million—below the Government's own assessment of the city's needs. That is on the Government's own figures. Will the Secretary of State tell me whether that is fair?

Mr. Patten

I can tell the hon. Gentleman what is especially fair to Wolverhampton—perhaps some of my hon. Friends may think that it is fairer than some Wolverhampton councillors deserve: Wolverhampton is to gain £88 per head out of the new system and will contribute about half that sum to the safety net in the first year. The best thing that the hon. Gentleman can do for community charge payers in Wolverhampton is to go back to Wolverhampton and tell his council to sort itself out.

Several of my right hon. and hon. Friends have mentioned the consequences of the move from grant-related expenditure assessments to standard spending assessments.

Dame Elaine Kellett-Bowman

What about the uniform business rate?

Mr. Patten

My hon. Friend asks about the UBR——

Dame Elaine Kellett-Bowman

And the phasing?

Mr. Patten

I hope that the House will find it acceptable if the Minister for Local Government and Inner Cities, my hon. Friend the Member for Wirral, West (Mr. Hunt) deals with the uniform business rate, the revaluation and the phasing that was agreed by the House under the Local Government and Housing Act 1989, because I must finish my remarks at some point this evening——

Mr. Wilson

You are doing well.

Hon. Members

Hear, hear.

Mr. Patten

I am grateful to the hon. Member for Cunninghame, North (Mr. Wilson) for his commendation.

We are moving from a system of GREAs to a system of SSAs—I apologise for all the initials—on the ground that the new system is much simpler than its predecessor, although this is another illustration of the fact that all things are relative. For many years, the GREAs were widely condemned for being much too complicated, and many hon. Members on both sides of the House argued that we should move to a very much simpler system. Some suggested that we should go over to a system based entirely on population—that we should distribute all our grant on a population basis.

I do not think that that would be a fair basis for the distribution of all grant. It is reasonable to take some account of need, but as soon as one starts to try to define need and develop a methodology, one finds oneself in a situation in which some people lose and others gain—in other words, a situation such as that in which I find myself at the moment. Excluding the parish councils, there are 426 local authorities in England, and the more deputations I have received concerning SSAs, the more I have realised that there are at least 424 special cases—424 because neither the constituency of my hon. Friend the hon. Member for Wirral, West nor my own of Bath is allowed to count.

It is true that the SSAs probably take a greater account than GREs of additional educational need in inner London and in some inner-city areas, but the ending of resource equalisation means that counties in the south-east, for example, will do rather better out of the new system. We arrived at the SSA system after an inordinate amount of consultation and discussion with local authorities and the local authority associations and it is perhaps understandable if my Department does not view with unbridled enthusiasm the prospect of another round of consultation. I want to make it clear to my right hon. and hon. Friends however, that the SSA methodology is not cast in stone. [HON. MEMBERS: "More."] If my hon. Friends, the local authorities in their constituencies or the local authority associations wish to come to us with fresh evidence in support of a new methodology for SSAs, we shall be quite prepared to consider changes that we can put in place for next year.

Mrs. Ann Taylor (Dewsbury)

For which year?

Mr. Patten

The hon. Lady knows that we cannot do it by next year because we have already made the settlement.

I want to make it clear——

Mr. Ian Bruce (Dorset, South)

Will my right hon. Friend give way?

Mr. Patten

All right, but this is the last time.

Mr. Bruce

My right hon. Friend has rightly drawn attention to many overspending local authorities. If he runs his finger down the SSA column, he will find in table 2 that Dorset—in particular my constituency of Dorset, South—has the lowest SSAs in the country. Can he explain why, although he assured my constituents that the new system would he very much fairer and that they would be receiving more grant, education in Dorset, which must have among the lowest resources in the country, is to lose £6 million in grant? Yet the Government say that we are already underspending. Clearly, the SSA system is not fair to the community charge payers of Dorset.

Mr. Patten

I believe that I am right in saying that the move from GREAs to SSAs will mean an increase of about 7 per cent. overall in Dorset and that there will be a rather larger increase of about 11 per cent. in the total aggregate external finance going to Dorset next year. I am quite prepared to look at new evidence brought by my hon. Friend and other hon. Members concerning the SSAs.

Mr. Bowen Wells (Hertford and Stortford)

rose——

Mr. Ralph Howell (Norfolk, North)

rose——

Hon. Members

Give way!

Mr. Patten

If Opposition Members will allow me, I shall take two final interventions but no more.

Mr. Hugh Dykes (Harrow, East)

rose——

Mr. Patten

No, not a third.

Mr. Wells

I am deeply grateful to my right hon. Friend for giving us the assurance that he will look again at the method of calculating the SSAs. Is not the difficulty with the present method that on the one hand my right hon. Friend claims that the calculation of the SSAs is an objective assessment of what each council should be spending but on the other hand he is forced by Government policies and the needs of inner cities and other areas to alter their SSAs? That being so, the SSA cannot be an objective assessment of what each council needs to spend. That surely invalidates any rhetoric to the effect that councils are overspending on that objective assessment. Is not that what my right hon. Friend needs to alter?

Mr. Patten

I am accustomed to agreeing with my hon. Friend on completely uncontroversial matters such a s overseas development, but, with respect, I do not think that what he says necessarily follows. Any attempt to introduce the concept of need into a distribution methodology can create problems and one has to try to be as scientific about it as possible. One could produce methodologies that were plainly unfair. We think that this one is broadly fair and that we have got things broadly right, but we are quite prepared to look at the evidence again and to make adjustments.

Mr. Dykes

Will my right hon. Friend give way?

Mr. Patten

No, I shall give way for the very last time to my hon. Friend the Member for Norfolk, North (Mr. Howell).

Mr. Howell

I am grateful to my right hon. Friend——

Mr. Wilson

On a point of order, Mr. Deputy Speaker. Would it not help our proceedings if all those Conservative Members who were told that everything was going to be wonderful, who passed that message on to the constituents and who now feel that they have been swindled, rose at the same time?

Mr. Deputy Speaker

That is not a point of order for me.

Mr. Howell

May I ask my right hon. Friend to stop bothering his head with SSAs, or whatever they are, and recognise that the scheme was flawed from the start and that nothing can repair it? Will he scrap the whole idea and replace it with a 6 per cent. charge on VAT, which everybody would pay and which would be totally fair?

Mr. Patten

I am not absolutely convinced that my hon. Friend's methodology for increasing VAT by 6 per cent. would necessarily commend itself to his electors, to mine or, for that matter, to anybody else's.

Mr. Ron Leighton (Newham, North-East)

On a point of order, Mr. Deputy Speaker. Is it in order for the Patronage Secretary continually to intimidate and harass the Secretary of State by instructing him very audibly not to give way to his hon. Friends who are concerned about the inequity of the poll tax for their constituents? Should not the Secretary of State have the right to listen to the worries of his Back Benchers?

Mr. Patten

If what the hon. Gentleman says is true—[HON. MEMBERS: "It is true".] Well, I have plainly blighted my career, because I have given way about 20 times. However, I do not want to give way any more, because we are——

Mr. Dykes

rose,——

Mr. Patten

No, no, no—[HON. MEMBERS: "Give way."] Harrow has a very good settlement.

The reason I am not intending to give way is because none of us can wait for the opportunity, in response to the few remarks that I have made, of hearing the Opposition's alternative to our proposals. We know very well that the hon. Member for Dagenham (Mr. Gould)I has one of the most creative minds in politics. We also know that he was so creative that halfway through the last general election campaign he sank the Labour party's then proposals on local government finance. We are looking forward to the hon. Gentleman bringing forward his new proposals on local government finance. Until he does so, we shall greet the Opposition's contributions to these debates with the genial contempt that they deserve.

I believe that the debate is about the sensible control of public expenditure. It is about priorities for public expenditure and priorities for managing the economy. I very much hope that, bearing those things in mind, my right hon. and hon. Friends will join us in the Division Lobby at 10 o'clock tonight and for some time to come.

5.12 pm

Mr. Bryan Gould (Dagenham)

The House will not need reminding that Opposition Members have conducted a long campaign against the poll tax. We have opposed it on the principle of what the Government have put forward. I am glad that that opposition has been shared not only by Labour Members but, as we have heard demonstrated this afternoon, by hon. Members of other parties, including the Conservative party.

Those who have taken that principled stand have done so because we object to the proposals first, on the grounds that they are costly and complicated; secondly, that they constitute a threat to the unity and cohesion of family life; and thirdly, that they are an obstacle to the full exercise of the rights of citizenship, which gives cause for legitimate concerns on the grounds of civil rights. Fourthly, and most important of all, we have objected to the proposals on the simple, straightforward and fundamental ground that, because they are not in any sense related to the ability to pay, they are grossly unfair and damaging.

Mr. Roger King (Birmingham, Northfield)

Will the hon. Gentleman give way?

Mr. Gould

In a moment.

Today, while we shall certainly adhere to, and intend to continue to press, that campaign on the grounds of principle—and I expect many hon. Members of all parties also to adhere to that position—we have reached a new stage in the debate. We are no longer simply discussing questions of principle. The true significance of the reports that we are debating today is that they now allow us to look at the nuts and bolts and at the hard practical consequences of what will happen in terms of pounds and pence for individual local authorities and, even more importantly, for individual taxpayers when the bills start plopping through the letter boxes on 1 April.

We are now moving to a new phase in the debate, but our objections in principle are maintained and, I believe, will be strengthened by what we are now discovering about the practicalities. However, there is now a further opportunity for those who may never have objected in principle to the Government's proposals—who may, indeed, have endorsed the Government's proposals in principle, perhaps because they understood them or perhaps because they did not fully understand them. For whatever reason, those who may have endorsed the principle, now have an opportunity to make a new judgment about the practical consequences.

Mr. Roger King

I listened with care and attention to the hon. Gentleman's four points, the fourth of which related to the ability to pay. Some of us have discovered what is afoot in the town hall in Birmingham, where councillors have worked out that the community charge arrangements feature the concept of the ability to pay. Of its 683,000 adults, the city treasurer has calculated that 300,000 will get a rebate. We believe that it is because of that that the Labour controlling authority is putting up the rate unnecessarily to cash in on the rebate system.

Mr. Gould

I shall happily take up the case of Birmingham a little later, but I was interested to hear the slight nuance of an attack on the principle of rebates, which is a chilling prospect for any authority and for any individual taxpayer should the hon. Gentleman's view ever prevail.

We must now make—and when I say "we", I mean that the whole House and every individual hon. Member has to make—a judgment about the practical consequences of the new measures. I am delighted to see that at 5.17 in the afternoon, our Benches, and especially the Conservative Benches, are still full. It shows an almost unprecedented interest from the Conservative party in the detail of local government finance.

Mr. Dykes

Will the hon. Gentleman give way?

Mr. Gould

By all means.

Mr. Dykes

I am most grateful to the hon. Gentleman for giving way. Bearing in mind his reputation for holding long-term consistent views on various policies, such as Europe, I advise him that another reason why the Conservative Benches are extremely well populated is not only the importance of the subject, but because we are fascinated to learn his proposed alternatives to these proposals.

Mr. Gould

I am grateful to the hon. Gentleman for his tribute to my consistency. I shall take up his point immediately, because I am glad to have the opportunity of responding to it. I can tell him that we are making very good progress with the work that we have undertaken to prepare our alternative. There will hardly be a more pressing problem for us to face than the total unacceptability of the provisions that the Government are putting in place. We have absolutely no intention of repeating the mistakes that are now so clearly demonstrated by Conservative Members and of hurrying the process simply because——

Mr. Spencer Batiste (Elmet)

rose—

Mr. Gould

Perhaps the hon. Gentleman will at least allow me to answer his hon. Friend the Member for Harrow, East (Mr. Dykes) first.

I want to put this point clearly. We have every confidence that in the coming months we shall reach a conclusion that we shall be able to bring forward with confidence. That conclusion will offer us a fair and effective alternative to the poll tax. When we have that alternative, and, more importantly, when we return to government to implement it, we shall have a debate on those proposals. I hope that at least some Conservative Members who are present today will be present then when we explain the legislative effect of our proposals.

In the meantime, let us be perfectly clear. Our function this afternoon is to debate the important detail of the Government's proposals, which will be of immense importance to the constituents of every hon. Member in the House. I hope that we shall not have a volume of irrelevant interventions on Labour policy on this or that matter—[Laughter.] That would divert attention from matters of great seriousness. Every Conservative Member who is laughing and trying to disrupt the debate reveals only the desperation and embarrassment felt on their Benches about the debate and the scrutiny of the Government's proposals.

Mr. Chris Patten

Will the hon. Gentleman tell the House what happened to the last alternative and how long he expects the next one to last?

Mr. Deputy Speaker

Order. I remind the House that we are debating a specific motion.

Mr. Gould

I am grateful to you, Mr. Deputy Speaker. As I said, when we have our proposals, we shall be happy to debate them.

Mr. Batiste

Will the hon. Gentleman give way?

Mr. Gould

No. I want to make some progress. I shall give way in a moment.

Both Opposition and Conservative Members have an obligation to reach a new judgment on the basis of the facts, as presented in the reports. Unfortunately, that jugdment cannot be made on the basis of anything new or of substance put forward by the Secretary of State or in the reports. The facts remain substantially unchanged. Since 6 November the process of consultation has produced virtually nothing of substance by way of change.

Mr. Batiste

Will the hon. Gentleman give way?

Mr. Gould

I shall give way shortly, but I want to make some progress. I do not want to take an hour, as the Secretary of State did.

Bringing forward the grant is welcome but it is merely a recognition of the transitional problems that local authorities will face. Perhaps the Minister for Local Government and Inner Cities can help us when he replies to the debate. It is hard to understand how bringing forward £800 million-worth of grants by two months is worth anything like £180 million worth on interest rates. The only possible explanation is that there will be some. as yet undisclosed, increase in interest rates. I suspect that he will not wish to enlighten us about that.

Mr. Chris Patten

We have plenty of other things to disagree about, so we need not disagree about this. The local authority associations would not dispute the figures that we have given. I am prepared to show the hon. Gentleman the detailed calculations by which we arrived at them.

Mr. Gould

I shall be interested to hear the detailed explanation. On the face of it, £800 million over two months does not produce an income of £180 million.

The Secretary of State deserves some sympathy from the Opposition. He faces a predicament. As on previous occasions, he revealed in his speech a certain lack of warmth towards his proposals. That is not surprising. He is not the parent of these proposals. They are not his baby. He inherited them and has little power to change them. When he first came to office, he made a brave attempt to change them by introducing a safety net and transitional relief. We must accept that the Secretary of State has reached the end of the road. He cannot, or he is unwilling to, achieve any more and he said as much when he conceded that he was unwilling to find any more money.

There is nothing that the House can do, save to vote tonight to force the Treasury's hand. This is our last chance. We can still come to the aid of the Secretary of State, who clearly lost the battle in Cabinet, by voting against the reports.

Mr. Batiste

The hon. Gentleman repeatedly asks me and my hon. Friends to make a judgment about these proposals. He will agree that, by definition, there is no such thing as a popular tax. Many of us support the proposals, because after extensive consultation lasting many years, we have concluded that they are the least undesirable among many options. May we make our judgment this afternoon on the clear understanding that the hon. Gentleman has no alternative to offer that is less undesirable than the one before us today, and that he is unlikely to produce one before the next election?

Mr. Gould

I am sorry that the hon. Gentleman intervenes to such poor effect. He is trying to divert attention from an important and central difficulty which the House faces and on which, as he conceded, he must make a judgment.

The Secretary of State has a real dilemma. Not only has he lost the battle in Cabinet, but each time he talks about the safety net or transitional relief, each time he talks approvingly of the extent to which the central purse has been opened to help local authorities in their spending plans and about the need to cap the community charge or poll tax, indeed every time that he makes such a move—and he would love to move further—he undermines arid destroys the only original case for introducing the poll tax. The poll tax had only one merit, or claimed merit—that it was simple, that everyone paid it and that it imposed the burden of accountability on those who received services and obliged such people to pay for them. Every move that the Secretary of State makes is a move away from the central simplicity of the poll tax. By every such expression of opinion, he demonstrates what little confidence he has in his proposals.

Mr. Julian Brazier (Canterbury)

Does the hon. Gentleman deny that the community charge will enormously benefit the vast majority of single pensioners? He said that it had only one merit. Is not that another one?

Mr. Gould

The hon. Gentleman should note that at least 1 million single pensioners will be worse off under the proposals.

The Secretary of State has attempted to find an escape route from his difficulties. He has taken refuge in facts and figures that are unreliable. The reports are based on total expenditure, as the Secretary of State described, of £32.8 billion. Everyone in local government accepts that that figure is based on a Government assumption, not on actual spending. The Secretary of State does not dispute that. The reasons for that are instructive. First, the figure based on his assumption takes no account of spending from balances and special funds, which, as some of his hon. Friends have said, had to be made to meet local authorities' spending commitments. The local authority associations estimate that that factor alone accounts for a £1.6 billion shortfall in the figure that local authorities need in order to stand still.

We then pass to the inflation rate of about 4 per cent. that has been used in making the calculation. Yet everybody, even the Secretary of State, knows that inflation is running at 7.7 per cent. and that it may well rise even further in the year at which we are looking. The local authority associations calculate that that factor means a further £900 million shortfall, leaving local authorities, even under the Secretary of State's total standard spending assessment, £2.5 billion short. That is to take no account of yet a further factor based on the further spending commitments that do not appear yet to have been taken into account.

My hon. Friends have mentioned the pay rises for fire fighters, police and teachers, but there are further commitments in the pipeline arising from the Education Reform Act 1988, the "Care in the Community" White Paper and the Environmental Protection Bill, none of which has yet been taken into account. Yet the Secretary of State assumes that local authorities will, somehow or other, be able to freeze their spending in real terms.

Mr. Chris Patten

I want to be clear about what the hon. Gentleman is saying about balances, because it is an important point. Is it the Opposition's policy that, if a council uses its balances this year in order to increase its current expenditure, next year the taxpayer should find a similar amount so that the council's current expenditure does not have to fall by that amount of balance? If so, it will be of interest to the shadow Chancellor.

Mr. Gould

With great respect, the Secretary of State misunderstands my point. When we consider, as the Secretary of State invites us to do, percentage increases on levels of past spending—however strong or weak the case for doing so may be—there is no point for the purposes of that calculation in saying that spending came from this or that source, or this or that justified quarter. The fact is that that spending was undertaken. That is the level of spending. Therefore, anyone, including the Secretary of State, who wants to come to the House to say that the level of spending has been permitted to rise by a certain percentage, has to make that judgment on the basis of the actual figure rather than an assumed figure.

If the Secretary of State wishes to say that they should not have made that spending, by all means let him say so, but that is irrelevant to the question of what percentage increase he has now allowed over the actual level of spending. There is no way that he can duck that. He cannot talk in terms of percentage figures while at the same time basing his judgment on an invented figure. That is the essence of his difficulties.

Ms. Dawn Primarolo (Bristol, South)

While my hon. Friend is dealing with matters that the Government have clearly not taken into consideration in the calculation of the standard spending allowance, let me add another to his list—the police precept. Avon county council, an alliance and Tory-controlled council, budgeting at the moment on a standstill budget which will produce a £500 poll tax, was allowed £34.3 million for its precept under the standard spending assessment. Its current expenditure is £38.8 million and the Home Office has just agreed an increased budget of 13 per cent. for the Avon and Somerset constabulary. That too has not been included in the calculation. The Government are forcing up local government expenditure.

Mr. Gould

I am grateful to my hon. Friend for demonstrating how futile it is to pretend that percentage increases can be based on assumed starting points. The list is long and, as my hon. Friend the Member for Newham, East (Mr. Leighton) said, we could add interest rates as well.

Mr. David Wilshire (Spelthorne)

Will the hon. Gentleman give way?

Mr. Gould

No, I want to make some progress.

Those factors mean that the Government's assumed total standard spending is a substantial under-estimate. No one disputes that. It cannot be used with any confidence as the basis for calculating the impact of the Government's poll tax. Nevertheless, those areas are carried over in the most damaging way conceivable, in particular, into the so-called benchmark of accountability—us, or perhaps I should say infamous, £278 so-called community charge for standard spending.

Not only does that figure reflect all the errors that we have detailed in the assumptions that are at the basis of the total standard spending, as many hon. Members understand very well—the £278 is a direct function of that figure; it is in no sense some detailed and careful totting up of individual spending commitments, as is sometimes assumed—not only is the £278 figure flawed as a consequence of the mistakes made in calculating the total standard spending, but that mistake is exacerbated by further errors.

For example, when we look at the level of collection of the poll tax, the assumption made by the Government is that 100 per cent. will be collected. Yet everybody understands, and all the evidence is, that district treasurers and finance departments throughout Britain are naturally and properly budgeting on the assumption that they will collect no better than 95 per cent., and some may be lucky to achieve that.

Every shortfall in income and every increase in spending will have an immediate, huge and disproportionate effect on the level of the poll tax because there is no other way in which that shortfall or increased commitment can be made up. For every £1 of increased spending that is not accounted for, or every £1 of shortfall in revenue, the poll tax will go up by £4. That means that the £278 figure, to which so much attention has been paid, is, as I said when we first heard of it on 6 November, an invention, a mirage, a fairy tale. It bears no relation to reality and no one believes it.

In case anyone needs a demonstration of that, I need do no more than turn to the Conservative controlled Association of District Councils. The chairman of that local authority association, Councillor Roy Thomason, who is himself a Conservative, in a statement issued yesterday, said: The total spending envisaged by Government remains at an artificially low figure. It does not allow for the actual level of inflation or the fact that many authorities took money from their balances to pay for their spending last year". He concludes by saying: According to the information currently available to us"— we must bear in mind that these are mostly Conservative-controlled district councils— we estimate the community charge across England is going to average about £340. In the Municipal Journal of 12 January we are told: A 'straw poll' at a recent meeting of district treasurers showed that only one out of 246 authorities represented expected to levy a charge 'at or below' the notional figure". It went on to say that Conservative councillor Watson from Horsham prepared a report showing that 120 districts were expecting to exceed Government guidelines by between £76 and £100 per head. A further 65 were expecting overshoot by between £51 and £75 … Only nine were expecting to keep their excess to £50. And, in one instance, a district"— Unnamed— was expecting to overshoot by more than £150 per head. No wonder Councillor Watson concluded that the Government's notional figures appear to have scant regard for the realities of life at the sharp end. That is testimony from people involved in local government, experts in these matters and mostly members of the Conservative party. The real weight of their evidence is that many Conservative Members know that the evidence is accurate because they see it mirrored in their own experience in their own localities——

Mr. Richard Tracey (Surbiton)

No doubt the hon. Gentleman will know that the Association of Labour Authorities n London has been consulting various Labour-controlled boroughs, suggesting that they should go for the highest possible community charge and thereafter blame the Government. Does he agree that the public automatically assume that the highest community charges will come from Labour-controlled authorities?

Mr. Gould

I totally reject that calumny.

The Association of County Councils may be rather more to the taste of the hon. Member for Surbiton (Mr. Tracey). That Conservative-controlled association has today published its comment on the Government's reports and figures. It raises the same range of objections to the accuracy of those figures as did the ADC. Under a heading, The unrealistic nature of the assumed £278 average community charge", the association states: The wide publication by the Government of assumed community charge figures for individual areas is bound to have raised false expectations. We also have the testimony of the much-respected Chartered Institute of Public Finance and Accountancy. It has done a study which shows that if we put together the omission on inflation and accounted for a modest increase in real spending of 1.5 per cent. and allowing for a proportion of 5 per cent. of those registered adults failing to pay the community charge, this would produce an average community charge of about £344, compared with the £278 quoted in the exemplifications. The institute states: local authorities could only deliver an average community charge of £278 per adult by making very substantial cuts in the volume of spending—typically of the order of 8 per cent. to 10 per cent. I am glad that the House is taking notice of the overwhelming evidence which comes from local authorities of all types and colours of political control. During the debate hon. Members will no doubt testify to the experience of their own local authorities. I mention in passing—because it has been drawn to my attention in the past couple of hours—the position in Conservative-controlled Kensington and Chelsea. In a by-election a short time ago the hon. Member for Kensington (Mr. Fishburn) maintained that the poll tax would be about £122 per head. We now find him complaining that the poll tax bill will be at least £400. I have no doubt that Conservative Members will have similar horrific stories to tell.

I can speak for some Labour-controlled local authorities. For example, Birmingham, Wakefield and a range of other authorities have told us in telephone conversations today that for them the £278 figure is simply an invention—an absolute fiction.

Mr. Tony Banks

rose——

Mr. Gould

I shall give way for the last time.

Mr. Banks

If he has the opportunity I should like my hon. Friend to address the calumny perpetrated by the hon. Member for Surbiton (Mr. Tracey) in suggesting that Labour authorities in London were being advised by the Association of London Authorities to go for the highest possible poll tax. My borough, the London borough of Newham, faces the prospect of a £503 poll tax which it realises is totally unacceptable to the poor people of Newham who will be forced to pay it. It knows that it must therefore consider making massive cuts. If the hon. Member for Surbiton thinks that we are so irresponsible that we want to penalise our own supporters, he is a bigger fool than he looks.

Mr. Gould

My hon. Friend offers weighty substance to my rejection of the calumny perpetrated a few moments ago.

Mr. Tracey

On a point of order, Mr. Deputy Speaker. There is documentary evidence for what I said. It has been discussed by the Labour group on Southwark council and, it is likely, elsewhere too.

Mr. Gould

On the central question of the veracity and reliability of the £278 figure, I have produced irrefutable evidence of its rejection by everyone who has considered it. In his recent television interview with David Frost, even the Secretary of State appeared to have some doubts. He said: the figures may fetch up higher. Why does it matter if the figure is an illusion? It matters because it is part of a propaganda battle in which a central Government—who have taken control of virtually every aspect of local government finance—will try to use that figure to show that when bills substantially in excess of £278 plop though letter boxes it has nothing to do with them. The practical consequence is that illusions have been created and expectations raised that will be shattered when the bills arrive. That is why, with that dreadful realisation, many Conservative Members are understandably concerned about what is being done in their name.

The practical consequences go further. The same mistakes that vitiate the £278 figure also affect the notional poll tax figure, on the basis of which the transitional relief is to be calculated. The transitional relief is meant to assure every poll tax payer that he or she will not be more than £3 a week worse off. The use of an inaccurate base figure means that undoubtedly many taxpayers will be more than £3 a week worse off, but will not qualify for transitional relief. There will be others who, having qualified for transitional relief, will still be more than £3 a week worse off. That is the practical consequence of the con-trick being perpetrated on the taxpayers of this country.

The Secretary of State rightly said that he was not going to deal with the national non-domestic rate which he would leave to his hon. Friend the Minister when he wound up. However, the reports set the figure for that rate—the poundage—and, therefore, we are entitled to say briefly that our objections to the national non-domestic rate follow the pattern of our objections to the poll tax. We object to this rate in principle because we see it as a further measure of unwelcome centralisation of the Government and a further attack on the autonomy and independence of local government. It breaks the link between those who receive services and those who pay for them. There is a complete and flat contradiction in the case for the non-domestic rate of the very principle which was said to commend the poll tax.

Mr. Chris Patten

I hear what the hon. Gentleman says about the uniform business rate. Will he confirm that the Opposition support the revaluation,?

Mr. Gould

There is no dispute on that matter. I would go further and congratulate the Government on undertaking that revaluation, which is long overdue.

Mr. Neil Hamilton

rose——

Mr. Gould

I shall not give way, because I am about to conclude.

One interesting fact about the proposals by the Secretary of State is that, as far as I can tell, the inflation rate at which he thought it appropriate to set the total standard spending for the poll tax, 4 per cent., is different from the inflation rate he has used to calculate the revenue to be obtained from the national non-domestic rate. It is extraordinary that a Government who are said to pride themselves on the accuracy of their book-keeping should, in the same set of proposals, operate on inflation rates that differ by almost 100 per cent.

There are other practical problems about the incidence and impact of the national non-domestic rate. The latest Inland Revenue analaysis of 20 December shows that the combined effect of the revaluation and the new business tax will mean that 252,000, or 15.5 per cent., of businesses will face an increase in their bills of more than 100 per cent., and 246,000, or 15.2 per cent., of businesses will face increases of between 50 and 100 per cent. Therefore, nearly a third of all businesses in England and Wales will face business tax increases in excess of 50 per cent.

The Government's only defence is to point to the transitional arrangements, which purport to limit any increase to 20 per cent. in any one year, over a five-year period. Even that obscures the fact that the 20 per cent. increase is to be calculated cumulatively and takes no account of inflation, which must also be added. As a result, instead of a 20 per cent. increase from one year to the next, the maximum increase—at an inflation rate optimistically of only 6 per cent.—will be 26 per cent. in the first year, 59 per cent. in the second, and 100 per cent. in the third.

Mr. Chris Patten

Did the hon. Gentleman criticise Haringey when it increased its business rate by 56 per cent. last year?

Mr. Gould

I can understand the right hon. Gentleman wanting to divert attention from the central weaknesses of his own position, but we are debating his own proposals.

Just as with the poll tax we had the testimony of Conservative and non-Labour local authorities, so today we received a letter from Maidstone borough council—which I imagine many right hon. and hon. Members received—concerning the business rate. Maidstone, which is certainly not a Labour-controlled council, states: This council notes that the recently announced revaluations for non-domestic ratepayers will result in vast rate rises for the majority of local businesses, on average around 69% and in many cases in excess of 100%. This represents the withdrawal by the Government of over £8m. from the local economy". The council goes on to express its concern and dissatisfaction.

Mr. Max Madden (Bradford, West)

Will my hon. Friend comment on how the Government can square their claims that the uniform business rate will benefit the north when figures released this week show that, as a result of the poll tax and uniform business rate, Yorkshire and Humberside will lose more than £300 million per year? Does not that explode the myth that both innovations will greatly benefit the north?

Mr. Gould

My hon. Friend is right. The Local Government Information Unit has produced excellent research material to demonstrate that point.

A huge proportion of small and new businesses—particularly those using new technology, which are at the leading edge of economic advance and on which we need to rely for our future prosperity—face massive rate increases. Even on the basis of the Government's own assertions, the Government should display a decent sense of embarrassment. Year after year they have been saying that businesses were being crippled by rate increases. The situation now is that the Government themselves are imposing increases, of more than 100 per cent. in some cases, on the very type of businesses whose interests they claim to represent.

This evening, we are presented with a last chance to do something about the Government's iniquitous measure. We are opposed, both in principle and in practice, to the Government's proposals. Whatever views we may hold on the principle, we have an opportunity to modify it, by voting down the reports. Unfortunately that would not mean the end of poll tax but—and I hope that this is of interest to Conservative Members—the Secretary of State would be obliged to return to the House with more acceptable proposals, having been strengthened in his battle with his own Cabinet colleagues.

We shall vote in the Lobby against the revenue support grant and revenue support grant distribution order reports. I hope and believe that the House will unite in attempting to improve the prospects for millions of people who are terrified by what they face. I hope that the House will unite by joining us in the Lobby this evening.

5.54 pm

Mr. Teddy Taylor (Southend, East)

One of the joys of being a member of an Administration led by my right hon. Friend the Member for Finchley (Mrs. Thatcher) is that it introduces many reforms and resolves problems that have existed for a long time. Every reform is unpopular and meets with resentment and opposition. People often fear that a reform will work against their interests. If we look back at some great reforms—those made in industrial relations are among them—it can be seen that complaints faded away when they were put into practice. Many of the trade union leaders who objected most strongly to industrial relations reforms acknowledge that responsible trade union leaders can now exercise more power because they are free from the control of Left-wing loonies, district committees, and so-called mass meetings—although they are not mass meetings in any normal sense.

Under a reform such as the community charge, some people will gain, while others will lose. The hon. Member for Dagenham (Mr. Gould) understandably pointed out that some ratepayers will pay more in future, but he surely accepts that the average business or commercial enterprise in Britain will not pay a penny more because of the change, and in future will be protected from the violent inflationary increases imposed by some local councils in the past. For business and commerce generally, the uniform rate represents a good deal and a great step forward.

One of the problems of reforming legislation is that the large number of complaints it prompts are met by concessions. My right hon. Friend the Secretary of State is under huge pressure to make concessions to all kinds of organisations which want to see a return almost to the status quo. It is like this House passing legislation to abolish alcohol but then excluding five categories of consumers—including, as always, farmers—and allowing drinking between 5 o'clock and 7 o'clock in Scotland. If changes are repeatedly made, the principle behind the new tax will be destroyed.

Some of the concessions made by my right hon. Friend will mean that Southend borough council, which has under different parties operated extremely efficiently and is a low spender, will have to charge its ratepayers an extra £67 per person because the benefits that it hoped to enjoy are being undermined by the transitional relief arrangements. The benefits offered by the poll tax that a low-spending council such as Southend should enjoy are being held back because of the concessions made to other areas. To that extent, I hope that my right hon. Friend the Secretary of State will exercise great caution before making further concessions to those of my right hon. and hon. Friends who are concerned about the effects of the reforms.

I ask my right hon. Friend to consider also two other matters. The effects of the new business rate on certain shops in London will be horrific. Shops in some parts of the country will gain but those in London—and even some shops in Southend, where the increase in the general business rate will be hardly anything—will be hit badly. Perhaps my right hon. Friend will reconsider whether the 20 per cent., 26 per cent. or 29 per cent. rate could be lower.

As to rebates, I find it difficult to explain to constituents who are married or who are living together why the £8,000 saving that is allowed in respect of a single person is applied also to a couple. That seems very strange, particularly when compared with the situation of a mother and daughter living together—who are treated differently from a husband and wife living together.

I assure my hon. Friends, who understandably have deep worries about the proposals, that if by any chance the orders are voted down tonight, there would be resentment in Scotland of a kind that we have not seen for a long time, and it would be fully justified.

I get the impression that people in Scotland are not just concerned about cash spending. They think that hon. Members in England are not concerned about their welfare, and that they do not show the same attitude towards Scotland as they show to their own country and their own contituencies.

The community charge has been working in Scotland for some time, and the Scots face exactly the same problems that we are worried may arise in England during the next year. If right hon. and hon. Members who voted for the community charge in Scotland—not one Conservative Member voted against it, although there were three Conservative abstentions—vote against its being applied in England because they are worried about its implications, it could undermine the basis of the Union.

We live in the United Kingdom, and we have a genuine: obligation to treat every part of the country in the same way. Hon. Members may say that we have learnt from the way that the charge is working in Scotland, and we now have the figures for our constituencies. However, that would give credence to the belief that Scotland was used as a scapegoat to try out the measure before it was introduced in England, and that is not the case. The Secretary of State for Scotland—who works so hard for that country—thought that it might be helpful if the new charge was introduced there after the rate revaluation.

The Conservative party believes in the United Kingdom, and I hope that my right hon. and hon. Friends. who want to maintain that unity, will realise that we are not simply discussing whether one area will pay £50 more and another area £60 less, or what the Gallup polls will say next week. Something more significant is at stake.

If a party that almost unanimously supported a measure to apply the charge in Scotland undermines the charge in England, without a great deal of discussion and thought, the party would let down democracy throughout the United Kingdom, and we all believe in democracy.

6.2 pm

Mr. A. J. Beith (Berwick-upon-Tweed)

I think that what the hon. Member for Southend, East (Mr. Taylor) has just said is that, if one makes a ghastly mistake once, one should make it again. People in Scotland would be delighted to see the charge removed in England, and would hope that its removal in Scotland would follow.

It is not the merits of the poll tax that are at issue tonight, but the arrangements that the Government have made to bring it in. There are better alternatives to poll tax. Frankly, even the rating system begins to look attractive when compared to some of its deficiencies. A proper local income tax would be a better alternative.

The poll tax is unfair to individuals, and that unfairness will be multiplied by the deficiencies that have been shown up during the debate. Average earners will pay the same amount as the Duke of Westminster, Richard Branson or the Prime Minister and her husband. That is absurdly unfair.

Worse than that—the Government have pegged relief for the worst-hit individuals and households at a wholly imaginary level of what the poll tax might be. The Government have set that level, and the promise that initially individuals and households will not pay more than £3 a week will not be realised because there will be a huge gap, throughout the country, not just in Labour-controlled areas, between what the Government say the poll tax will be, and what it actually will be.

The standard spending assessment is the fundamental reason for that gap. What an extraordinary title—it suggests that an official from the Department of the Environment has gone round the country, interviewing everybody, to work out which services are needed, and how much it would cost to administer them in each area. Of course that has not happened. A few statistics have been thrown around by the Department. They cover only a handful of the services that local authorities provide at the moment. Some averaging out has been done, and a figure has been plucked out of the air, after a grossly simplified exercise that bears no relation to the real costs of administering those services.

Among the extraordinary features included in the arrangements is an assessment that clearing snow will cost more in Brent than it will in Cumbria.

The Minister for Local Government and Inner Cities (Mr. David Hunt)

The hon. Gentleman is sadly out of date. That is not correct and if he reflects on the figures he will see that it is not the case. Many recommendations have been made about a different way to deal with snow clearance in highway maintenance, and they were accepted. Will the hon. Gentleman please look at the new figures, rather than figures that are some eight weeks out of date?

Mr. Beith

I know that the Government got the same figures completely wrong for Northumberland. They have revised the snow clearance figure and we are glad of that, but it is absurd that they got it so wrong in the first place.

What is more important in relation to the figures, is that inflation is not running at 4 or 5 per cent., but at twice the level that the Government had assumed when they first devised the figures. Each 1 per cent. by which they mistake the inflation figure adds £9 to the poll tax paid by an individual.

Each poll tax payer in Northumberland will pay £80 more than the Government's original forecast, before rebates, because of the failure to allow for the real level of inflation, and how it affects council services, and because of other mistakes and miscalculations in the measurement of spending. Those factors will push up the poll tax in areas such as Berwick.

Local authorities cannot prevent that unless they sack teachers or fail to honour the pay awards for the education, police and fire services. When local authorities study the figures, as they have done in Berwick, they are completely mystified. For example, Teesdale has a higher standard spending assessment than Berwick although, in nearly every way, the two authorities are exactly comparable—for example, in the size of population and its sparsity, and in other rural characteristics.

In many cases the figures are clearly absurd. The East Yorkshire borough council's figures are out of line with all comparable surrounding authorities.

How can the Government insist that everyone in local government has got it wrong and that they have got it right? The Chartered Institute of Public Finance and Accountancy has criticised the figures. The Select Committee on the Treasury has pointed out that the figures are dubious, although they are the only figures that it can use. Conservative local authorities, Conservative councillors throughout the country and the Conservative-controlled Association of District Councils—of which I am the vice-president, a post which carries no salary or fee—says: The Association emphatically rejects the proposition that the DOE's notional figures for Community Charge, based on their assumptions, represent what the charges would be, if authorities continued to provide services at the present level. That body includes members from all political parties, although it is dominated by the Conservative party, and it knows that the figures are wrong.

Local authorities cannot meet the poll tax figures put forward by the Government without cuts, which is not what the electorate wants. One is bound to ask whether that is incompetence on the part of the Government, or a cynical device to limit the amount of relief that they have to pay, under the transitional relief scheme. Or is it a confidence trick? Are they advertising a product at a price at which no one can offer it? If that happened in the marketplace, the Government would attack and criticise it, but that is what they have done. They have said to poll tax payers in Britain, "It's all right, you only have to pay so much." However, they must know, because of all the representations that they have received, that their prophecies will not be fulfilled anywhere in the country.

Are the Government asking local authorities to sack teachers or not to honour the police pay agreement and not to pay their own staff the nationally negotiated rates? Only the most drastic cuts will enable many local authorities to meet the poll charge figures that have been put forward.

Mr. David Hunt

I am not sure whether the hon. Gentleman is arguing that there should be no controls at all on local government spending. Perhaps he could clarify that. Surely there must be some protection for individual charge payers, as there has been for individual ratepayers in the past. Why, for instance, does the hon. Gentleman think that the Liberal-controlled Isle of Wight council decided in 1986–87 to increase spending by 20 per cent.—far more than the rate of inflation? It has never justified that increase.

Mr. Beith

The mechanism for controlling local government spending is called the ballot box. It enables voters to vote out councils that pursue policies that they do not like. That is supposed to be the essence of what the Government are doing, but the system that they have devised does not achieve their aim. I might add that the electors of the Isle of Wight showed confidence in what their council had done by voting it back into office after it had improved the quality of its services.

The safety net provisions have added to the confusion. People whose local authorities provide a lower level of service—many of them not well off—must, in the first year, contribute money to keep the poll tax down in other authorities with higher levels of service. That is evident in Northumberland and other areas.

The Secretary of State opened his speech by saying that it would be clear to everyone that the level of poll tax reflects the spending policy of local councils. Will anyone seriously be able to say that after today's debate? The Secretary of State knows perfectly well that it is not true. The level of poll tax will reflect Government decisions on standard spending assessments; it will reflect safety net provisions; and it will reflect the endless mistakes and miscalculations on the part of the Department of the Environment.

Mr. Chris Patten

Name one.

Mr. Beith

The Secretary of State was not in the Chamber a moment ago when I did name one. His hon. Friend the Minister for Local Government and Inner Cities rose—to point out that the mistake about snow clearance had been corrected. Another obvious mistake was the one related to inflation: the present inflation rate is very much higher than it was when the calculations were made.

The Government's published poll tax figures are a cynical exercise in pretending that local public services could be run at much lower cost if the Secretary of State himself controlled every local authority in the country. Conservative-controlled councils and Conservative councillors around the country tell him that that is not so, and we all know that it is not so. The right hon. Gentleman has left the councils with a choice between a squalid collapse of the services on which our children's education, our environment and our law and order depend, and castigation by him for overspending.

Unless Conservative Members realise the folly of it all this evening, a grossly unfair tax will be made even more unfair by the way in which it is being brought in. That has already done irreparable damage to the future of the Tory party in Scotland; it will do the same in England, as I believe at least some Conservative Members have come to recognise.

6.12 pm

Sir Ian Gilmour (Chesham and Amersham)

The hon. Member for Dagenham (Mr. Gould) certainly found a brilliant solution to Labour's policy-making difficulties: to have no policy at all, and to say magnanimously that if and when he had a policy we would be allowed to discuss it. That strikes me as marvellous technique, and I recommend it to some of his shadow Cabinet colleagues.

My right hon. Friend the Secretary of State opened the debate in a masterly way, and I think that the whole House will agree that any deficiencies that Government policy may contain should not be laid at his door. He and my hon. Friend the Minister for Local Government had a very ugly and unwelcome baby planted on their doorstep, which was certainly not their fault, and they have already done their best to make it slightly more acceptable.

I want to stick to the general point, but perhaps I could illustrate it by means of a local example. As my hon. Friend the Minister for Local Government and Inner Cities has told me, Buckinghamshire, being a rich county, has done very well out of the new system, obtaining an increase of some 30 per cent. in its external finance. The capital guidelines, however, show us something very different. Buckinghamshire has much the same population as Cambridgeshire and is growing in much the same way; its capital expenditure in the current year is only a little less than Cambridgeshire's. According to the guidelines, however, Buckinghamshire is one of the six counties that will experience a reduction—the biggest, in fact, of 24 percent.—while Cambridgeshire will receive an increase of 55 per cent.

As a result, while the present position is one of approximate parity, next year Cambridgeshire will receive nearly two and a half times as much as Buckinghamshire. Already, serious cuts have had to be made, particularly in education spending. I realise that the Department of the Environment is only the umbrella Department, but it is nevertheless the Department holding the umbrella. My right hon. Friend the Secretary of State for Education and Science has spoken of the importance of his capital projects, and of giving more to places with higher populations. Those criteria certainly apply to Buckinghamshire, but, while general LEA expenditure is rising by 38 per cent., that of Buckinghamshire is falling by 42 per cent. Such examples demonstrate, surely, that there is little reason in the system.

On Second Reading of the Local Government Finance Bill, I opposed the whole system, and voted for the amendment tabled by my hon. Friend the Member for Hampshire, East (Mr. Mates). Since then, along with many of my hon. Friends, I have stayed away from debates on subsidiary legislation: we thought that we would let the Government get on with it. We have now reached what could be described as the final coping stone—hardly a triumphal arch, but the last bit of a stone wall into which we shall all be walking, bumping our heads and barking our shins, for some time ahead. In those circumstances, I felt that today's debate required different considerations.

My hon. Friends and I opposed the original legislation——

Mr. Teddy Taylor

In England.

Sir Ian Gilmour

In England. I am happy to tell my hon. Friend that I abstained on every part of the Scottish legislation.

My hon. Friends and I opposed the original legislation on four main grounds. The first was the obvious ground that the tax is wholly unfair. That is obvious from its name, apart from anything else: a Government who were doing something fair and sensible would not need to come up with an Orwellian euphamism line "community charge"; they would simply say, A poll tax is a poll tax is a poll tax," as Gertrude Stein might have said.

Secondly, it is wholly illogical to impose a property tax on businesses and do away with such a tax on individuals. If there is a justification for a property tax on businesses, there must presumably be one for a property tax on individuals. Thirdly, the tax is extremely expensive; fourthly, it is very difficult to collect.

Those are the four grounds of principle. There is a fifth ground that affects only Conservative Members—the political unpopularity of the measure, and the fact that it is potentially disastrous. I understand that that is giving particular concern to my right hon. Friend the Member for Brent, North (Sir R. Boyson), and I agree that the tax is very dangerous for the Conservative party. I disagree with him and his supporters, however, in that I believe that its unpopularity flows from the four dangers and disadvantages that I have already mentioned. They are not separate from it, or an excrescence on the face of it; this tax is innately wrong, and its unpopularity stems from that—although, no doubt, adjustments can and should be made.

I welcome my right hon. Friend and his associates to our colours, although I wish that they had enlisted a little earlier, as we could have done with their help on Second Reading and in the debate on the amendment tabled by my hon. Friend the Member for Hampshire, East. My right hon. Friend's conversion is especially significant because he was in the Department of the Environment at quite a significant moment, and was very much involved in the proposals. In fact, I have a feeling that he even announced some of them himself.

That important conversion leads me to suspect that my right hon. Friend is not the only one to be converted. I cannot help thinking that, now that he is the chairman of the Conservative party, the Chancellor of the Duchy of Lancaster has also changed his mind, although for understandable reasons he cannot express his views very openly. I believe that almost every Conservative Member has been similarly converted. After all, the tax was thought up at a time when it was believed that the Labour party was completely unelectable and that the electoral consequences were therefore of no importance. In my view, the election of the Labour party is still highly unlikely, but no one can say that it is impossible. The terms of political trade have changed fundamentally, which makes the imposition of this tax a political disaster as well as something that is entirely wrong in every other way.

I believe that new Government thinking is necessary. That is not unheard of: we have had 12 or 13 different systems of local government finance since 1979, so one more would not make any difference. The only common feature of the systems so far is that each has been worse than the last. There are now grounds for optimism. Because the present one is so bad, the next one must be better.

I urge on my right hon. Friend some new thinking. For all those reasons, some of my hon. Friends and I will be unable to support him tonight.

6.20 pm

Mr. Bernie Grant (Tottenham)

My hon. Friend the Member for Dagenham (Mr. Gould) made a number of general points with which I agree and which I shall reiterate. The Government's proposals on total standard spending represent their assumption of what local authorities should spend to provide what they consider to be an adequate level of service.

We learned today from the Secretary of State that he has not taken account of the needs element in the new system. The old needs element has been done away with because, according to the Secretary of State, it is not scientific or objective and it is difficult to quantify. Local authorities have been saying for some time that the needs element is indeed difficult to quantify, but that since it exists, it should be taken account of properly.

Ingenious formulae were devised by civil servants to try to represent the needs element in the old system of financing local government. But the Secretary of State has now done away with that element, and the Government say that they will not take account in any scientific way of what local authorities, particularly those in inner cities, need to reflect in their spending because of the situation they face.

That situation, it must be remembered, has been brought about by the Government. Their policies have caused problems for local authorities, such as unemployment, cuts in the housing programme and changes in social security benefits. Those actions by the Government have forced local authorities, particularly inner-city ones, to recognise that the needs of their residents cannot be met in the normal run-of-the-mill way of financing.

The Government have created the needs, but they now refuse to recognise them in the new formula. That is why the Government are in difficulty in squaring the situation between SSAs and the actual expenditure of local authorities, because that expenditure would be based on needs of which the Government will not take account.

In the Government's figures for so-called aggregate external finance—being special grants, revenue support grant, uniform business rate and so on—we find that for 1991, the amount is put at about £23.1 billion, of which the business rate will contribute £10.5 billion, while the revenue support grant will contribute only £9.5 billion. In other words, the uniform business rate will be contributing more than the Government's revenue support grant towards local government expenditure.

Mrs. Edwina Currie (Derbyshire, South)

Why not?

Mr. Grant

The answer to the hon. Lady's question is that business people will be contributing more than the Government's major contribution towards the cost of local government services.

Mrs. Currie

Where does the hon. Gentleman think the Government get their money? Most of it comes from business.

Mr. Grant

The Government get their money from business in a number of ways, including taxes. I suspect that business people will feel injured when they discover that the Government are extracting even more from them, when the Government should themselves be responsible for that aspect of financing local government. The Government have, in effect, conned business people into paying even more towards local government finance.

The Government proportion of local government finance has been reducing steadily throughout the last decade. In 1980–81, the Government were reponsible for about 60 per cent. of local government revenue finance. In 1990–91 they will be responsible for 38 per cent. a decrease of over 22 per cent. in a mere 10 years. In other words, the Government have cut their support for that sector, have forced businesses to increase their share of local government finance and have forced ordinary ratepayers in local authority regions to increase their share of it.

for total standard spending, the Government argue that £32.8 billion is more that adequate to pay for all the services that local authorities provide. The Secretary of State argued today that there had been an increase of 11 per cent. over the level of Government provision for 1989–90. But the Government are not taking into account what local authorities are spending in the current year.

Officers from central and local government estimate that the real amount needed to continue present local authority policies and service levels in 1990–91, including a realistic assumption of inflation at 7 per cent., is about £35.3 billion. That is £2.5 billion more than the Government provision, as my hon. Friend the Member for Dagenham said. If the realistic figure of £35.3 billion were used, the average poll tax would rise to £348, an increase of £70 on the Government's figure of £278.

My hon. Friend the Member for Dagenham spoke of the changes in the spending assessment having a pound-for-pound effect on the amount of revenue support grant that an individual authority will receive. Where actual expenditure differs from standard spending assessment, that difference will be wholly reflected in the poll tax to be levied, and my hon. Friend mentioned a ration of 1:4.

Once a local authority is over the threshold of the SSA, local people will be forced to finance the expenditure of the local council. The Government will accuse any local authority which levies a poll tax in excess of £278 of being profligate, whereas the main reasons for levying such a poll tax will be that the level of Government provision is inadequate and its distribution is arbitrary.

Being a Haringey Member, I wish to discuss the effect of the new scheme on that area. It has been estimated that Haringey council will have the highest possible poll tax, in the region of £550. A reason used by the Government to justify the introduction of the uniform business rate was that it would protect business from high spending and so-called profligate local authorities. Haringey would undoubtedly be included by the Government in that classification.

In 1990–91, the London borough of Haringey will collect about £57 million in rates from local businesses and others. But Haringey council will receive only £41.3 million from the national pot. That will hardly protect local non-domestic ratepayers from so-called greedy Haringey. How can Haringey be more accountable, which is said to be the object of the scheme, when it will receive less than three quarters of the business rate that it collects?

The Government determine rateable values and fix the rate in the pound which must be levied. In 1991, Haringey will lose about £20 million as a result of the switch from rates to the national business rate. In the consultation paper which was issued in November 1989, the Department of the Environment indicated that Haringey would have a standard spending assessment of £171 million approximately and would receive revenue support grant of £111 million——

Mr. Speaker

Order. The hon. Gentleman has had his time.

Mr. Grant

On a point of order, Mr. Speaker. I thought you indicated that I had two minutes.

Mr. Speaker

The limit is 10 minutes. When the lights on the digital clock stop flashing, the hon. Gentleman must sit down.

6.29 pm

Mrs. Edwina Currie (Derbyshire, South)

I have voted consistently for the reform of local government finance, and I intend to support the Government tonight. It is a great pity that many Opposition Members, whose constituencies, like mine, stand to be substantial gainers from the reform, have absented themselves. They will not stand up and say that the reform is good, so some of us on this side have to do so.

The new system of community charge and business rate is a major improvement over the old system, which gave far too much power to local government to soak local businesses without redress. That happened a great deal in my area. It gave far too little power to ratepayers, who in some areas were a minority of voters, to control the actions of spendthrift local councils like the incompetent arid inefficient idiots who are currently running Derbyshire county council.

When it comes to the community charge, in my area of the Derbyshire, South constituency the population has been growing steadily for some years and a large proportion of the people are in newly rated properties. As a result many will benefit considerably from the community charge; I am pleased that that will be the case.

The current domestic rate per hereditament in Derbyshire is £503 on average, 20 per cent. higher than the average domestic rate for comparable county councils. It is considerably more, for example, than the rate in wonderful Wandsworth, which stands at £327. The rate that my constituents have to pay per property is as high as the deprived inner-London average. By no stretch of the imagination can we say that Derbyshire is a deprived area except in so far as its unemployment is higher than unemployment in London. One reason is that for so long our rates have been very high.

The main gainers will be single elderly people. I have many people like that who live in bungalows and who are currently paying £900 or £1,000 in rates. The main losers will be families where there are several working adults, living perhaps in a terraced house. I can live with that. I can explain that to my local people and I believe that it is widely understood and accepted.

Mr. Ralph Howell

How would my hon. Friend explain to my constituent, a lady of 72, who has a total income of £2,000 a year and about £13,000 capital, that she should pay exactly the same as the most wealthy person in north Norfolk?

Mrs. Currie

First, rebates are available for many groups; secondly, with all due respect to my hon. Friend, in my area anyone with £13,000 capital in the bank would not be regarded as poor.

The message that has to go to many people in areas like mine is one that we have been trying to put across for a long time. Recently I spoke to a business club in Derby. Some business men who are not in my area but who will face high charges asked what they could do. The answer is to ask how many of them turned out last May to vote in the county council elections and support sensible policies.

How many people did not bother to vote but stayed at home out of pique or for whatever reason? They find themselves once again with a Labour county council which is one of the most high-spending councils in the country. The message to people like that in my area, as in many other Labour areas, has to be, "If you do not come out and support sensible policies at elections, don't be surprised if you do not like the rate or the community charge that is set; if you did not vote, then don't moan, because that is the way the system works." In my view that is right.

Coming to the real gainers, business people throughout Derbyshire think that the change to the national business rate is super. They are delighted. In my area the business rate has been so high that valuations would have to go up nine times for people to pay as much. That is the break-even point for business—nine times. Most of the factories, warehouses, workshops and shops will see their valuations increase only by two, three or four times. They are set to be big gainers.

I accept entirely that it is right and proper that if we cap the losers we should cap the gainers. If my right hon. Friend ever feels like uncapping the gainers, we will be delighted. We recognise in Derbyshire that it is not just a question of politics, as the Secretary of State said. If we were to do as the Confederation of British Industry suggested—cap the losers but not the gainers—that would put £2 billion extra into the economy all at once. I understand that that would be inflationary. It seems to me odd that that is called for by the Opposition, who never normally listen to the CBI, at a time when they are saying that taxes and income tax should not be cut. Two billion pounds is the equivalent of a 1.5 per cent. cut in income tax. If it is inflationary to do that, it is inflationary also to do what the CBI suggests.

In Derbyshire my business people have given a sigh of relief and a loud call of welcome for the suggested change. We have a small number of losers. Some supermarkets in the out-of-town shopping centres, which were extremely conservatively rated in 1973, will have to pay more. Sainsbury's will be out of pocket. On the whole the supermarkets are doing very well these days and it seems right and proper that they should support the local economy.

The new system will be a big improvement. For my local business people to be on a level footing with the rest of the country is the best news that any of them could have. We do not want subsidies, regional aid or Government grants. We just want a fair crack of the whip, the same as everybody else. I hear colleagues talking about how rates in their areas will go up. Our rates will come down to their levels. Businesses in my area have been paying five to 10 times as much as businesses elsewhere.

I appreciate the concern of my hon. Friends, but it is in Derbyshire that we have the unemployment and derelict sites. We will be able to get cracking on redeveloping our areas and leading the country's resurgence in manufacturing business once again. I am delighted to welcome the reform and I look forward to seeing it in operation as soon as possible.

6.37 pm

Mr. Jeff Rooker (Birmingham, Perry Barr)

I have made enough speeches about the principle of the poll tax in the past few years, so I shall confine myself to my own constituency. I want to explain, and also complain bitterly about, why Birmingham will be forced to levy a poll tax of about £410. We have been told that the average poll tax bill should be £278. The poll tax surcharge, which is called the safety net but which is not a safety net when one has to pay it, will be £69. That puts the charge up to £347. Birmingham is not a high-spending authority. In fact, it spends bang on Government guidelines. Some of us have complained that spending on social services and education has been on the low side. In 1989–90 we are spending £3 million more than the grant-related expenditure assessment of £624 million. Therefore, our expenditure is very close to the Government guideline.

The people of Birmingham will be affected by the Government's underestimate of the rate of inflation and their failure to take account of realistic pay awards. The average pay award for teachers will be 7.5 per cent. The Government's failure will cost Birmingham an extra £6 million. Changes to the debt repayment arrangement and accounting changes to the transport supplementary grant will cost the city £20 million on top of Government assessments.

How is the poll tax figure of £278 reached? Without Government grants, the city would have to levy a poll tax of £1,060 for the standard spending assessment. The joint boards add an extra £88, making a total of £1,148. If the Government grant of £870 is removed, that leaves the average figure of £278. The cost of the safety net is £69, making a total of £347. Inflation and pay awards will add an extra £9; changes to the debt repayment and transport grant add an extra £28; and other items, including the capital programme for the national exhibition centre, overspending by the police and fire brigade and growth, with which I will deal in a moment, add an extra £26, making a total of £410.

Growth is forecast to be 2.4 per cent. or, to be precise, £17 million. Growth in social services will be £2.4 million and in education £8.4 million. There is nothing in Birmingham's SSA to take account of nursery education. We have more places in nursery classes per head of pre-school children than any Tory authority in the country—we are not even the best among Labour authorities—but there is no grant for nursery education provision.

More cash must be spent on social services. Community care is a key element of local government, yet the Government have placed an impost on it. There is no question but that community care will become more expensive. Its purpose is not to save money but to improve the lives of people who can better live in the community.

On Thursday 4 January, Birmingham city council held a seminar at Council house to explain to interested parties the consequences of the community care costs. My city council is rubbished by Tory Members, yet not one of the six Conservative Members of Parliament for Birmingham attended that seminar. That demonstrates their interest in care in the community.

Mr. Roger King

The hon. Gentleman will know that we have various other commitments. I sent a letter to the authority explaining that I could not attend the meeting, which was held at an inconvenient time. It knows well that the best time for such meetings is Mondays and Fridays.

Mr. Rooker

Yes, but Thursday 4 January was during the recess and the invitations were sent out in November. The hon. Member for Birmingham, Northfield (Mr. King) was quoted in one of the midlands newspapers last Sunday as speaking with all the authority of a former number-plate salesman who will not be able to sell the Government's poll tax numbers to the citizens of Birmingham.

Mr. Tim Devlin (Stockton, South)

rose—

Mr. Rooker

I will not give way again because of the time limit.

Assuming a 10 per cent. increase next year, revenue from rates in my constituency would amount to £18 million. Assuming a figure of £410, revenue from the poll tax in my constituency will amount to £29 million. My constituents will be required to pay £11 million more in poll tax than they would have paid in rates. Those figures are irrefutable; I have checked the rateable values of 7,000 dwellings—about 20 per cent. of my constituency. Assuming that half the households were on half rebate, they would still pay £8.5 million more in poll tax than they would have paid in rates. Birmingham will collect the same amount of money—the poll tax is designed only to replace domestic rates. Who will pay £11 million less because of the additional £11 million that my constituents will pay?

The massive dislocation that that will cause to family incomes and finances does not bear thinking about. The Government have said that no one should pay more than £3 extra, which is ludicrous. For a single person in Birmingham to benefit from the transitional payments, he would currently be paying a rate bill of £92—a rateable value of £36. Nowhere in Birmingham has such a rateable value. Other households will not benefit unless their current rates are £340—a rateable value of £133. Average rates in Birmingham are £500, so few people will benefit.

The figures are fiddled. They do not take account of the reality of expenditure, of the population or of the ability to pay, which, as the Secretary of State knows, is Labour Members' central objection.

There must be accountability through the ballot box and annual elections. We in Birmingham would like annual elections again, and there should be annual elections in the shires and in London for a quarter or a third of the councils. That would be one way of achieving true local government accountability. If the Secretary of State wants to improve local government accountability, he should arrange for annual elections for all councils and return to the big cities the missing year of no election resulting from the abolition of county councils.

I want to draw the House's attention to early-day motion 258 on Tory-controlled Mid-Suffolk district council. It has complained bitterly to the Minister and asked its Member of Parliament to take action. It makes exactly the same complaints as Labour Members and Labour-controlled authorities—that the Government have not taken account of the use of balances to cushion the rate levy and have not taken sufficient account of the realistic rate of inflation. Inner-city and rural areas and Tory and Labour-controlled authorities are complaining justifiably about how the Government have introduced the poll tax.

I reinforce what my hon. Friend the Member for Dagenham (Mr. Gould) said about this being the Government's last chance to think again. I ask Conservative Members to do the sensible thing tonight—to vote against the reports and to get a more sensible arrangement for the immediate future.

Mr. Devlin

On a point of order, Mr. Speaker. Was it in order for the hon. Member for Birmingham, Perry Barr (Mr. Rooker) to criticise my hon. Friend the Member for Birmingham, Northfield (Mr. King) for being absent from a meeting when all but eight Labour Members have absented themselves from this important debate?

Mr. Speaker

That is not a point of order for me. What the hon. Member for Birmingham, Perry Barr (Mr. Rooker) said certainly was not out of order.

6.47 pm

Mr. Norman Tebbit (Chingford)

I agree with the hon. Member for Birmingham, Perry Barr (Mr. Rooker) on at least one point. If there is to be accountability in local government, we should again closely reconsider annual elections for quarters or thirds of local authorities. That may be a good path to take. If we are to have such accountability, those who authorise spending should be called upon to pay the bills. If they can pass the bills on to someone else, such as the taxpayer or that lovely creature the Government, who distribute largesse at no cost to anyone, there will be no pressure on voters to consider the cost of the proposals for which they are voting. The hon. Member for Perry Barr will probably agree that voters should know what proposals will cost when they vote. On that basis, he should support the community charge, although I shall return to some of the problems that may arise from that in a moment.

I declare an interest as a director of several public companies, which are listed in the Register of Members' Interests—

Mr. Tony Banks

The right hon. Gentleman has only 10 minutes to list them.

Mr. Tebbit

It was just as well that the hon. Gentleman was in order.

Some of those companies are favourably affected by the introduction of the new business rate and others are unfavourably affected. That has given me an especially good overview of how the national business rate will operate. As I think the House knows, in general it will increase the burden on businesses in the south and decrease the burden on businesses in the north. It will increase the burden on service industries such as retailing, and decrease it on manufacturing. In effect, it will do precisely some of those things that my right hon. Friend the Member for Chesham and Amersham (Sir I. Gilmour) has always asked the Government to do. It will help to close the north-south divide. I am surprised that he is so critical of the measure. Many of us are in favour of proposals in theory, but when we realise how they will work out we often quibble about them. Perhaps my right hon. Friend is suffering from that.

In the domestic area, it is a little more difficult to consider the question of gainers and losers. In some respects, we have moved away from what some of us thoght to be the purity of the concept of the community charge. Why have we done so? Every step taken has been an endeavour to make it easier for those who will be adversely affected. To some extent, that has blunted the effect of the principle upon which we are all agreed—that those who vote for expenditure should pay for that expenditure.

Many of my right hon. and hon. Friends who represent constituents who consistently voted for low expenditure over the years complain that they are now being called upon again to help pay for the high expenditure of other local authorities. My right hon. and hon. Friends have made proper and laudable efforts to ease the impact of the community charge, and especially to do something for those many people who live in low-rated areas and who, until now, have paid a relatively small part of the cost of local government services.

I hope that all my right hon. and hon. Friends will take into account the fact that, if the community charge were not introduced, there would have to be a rating revaluation. I venture to suggest that, had that happened, different hon. Members would be complaining, but that there would no fewer of them. We should make up our minds that this is the system of local government for the future. At the very least, it is no more unfair than the old rating system, which was absolutely absurd and should have been swept away years ago. We should put some of the blame for the excessively high community charge figures where it belongs.

I received a letter today from a constituent who, as a local employer, attended a meeting in the London borough of Waltham Forest to discuss the proposed community charge for that area. I remind those hon. Members who are not familiar with my borough that it has the distinction of being second only to the borough in which the Leader of the Opposition lives for the highest ever rate rise in one year. It chose the year of the general election to increase its rates by more than 60 per cent. Politically speaking, the local Conservatives probably felt that that was a monstrous own goal for the Labour party.

After a 60 per cent. increase in one year, what can the local electors expect other than a high community charge bill? The authority has been a consistent overspender, yet its services are far worse than they were under the previous administration. My right hon. Friend the Member for Brent, North (Sir R. Boyson) is familiar with that local authority because he once served there as a Conservative councillor. At that time the rates were well under control—not because there was a rating system rather than a community charge system, but because it was a well-managed authority that maintained a good level of services and a low level of expenditure.

My constituent said that at the meeting one of those present questioned council expenditure and specifically asked what steps, if any, were being taken to reduce the financial burden on both non-domestic and domestic ratepayers. The answer was none. When there are complaints about the level of the community charge in my borough, the blame should fall upon those who flatly refuse to take any measure to cut expenditure in what has been a grossly extravagant council. Only recently, I was told by a senior member of the town hall staff that, in his opinion as a long-serving local government officer, the community charge in my borough could be reduced by £100 if a sensible administration were in force. That would make the proposed community charge figure very different.

I have no hesitation in supporting the Government tonight in carrying through the final stage of the implementation of the community charge. Of course it will be uncomfortable in places, but I beg my right hon. and hon. Friends to remember that we would also have faced an uncomfortable time with revaluation, which would have shifted the burden in what would have seemed to those who had received arbitrary benefit over the years to be an arbitrary increase in their share of the expenditure.

I hope that tonight my right hon. and hon. Friends, whatever their misgivings about some of the detail, will accept what was said by the hon. Member for Perry Barr—that we want accountability in local government. It is my view that that accountability comes only when those who call for expenditure are called upon to pay for it.

6.57 pm

Mr. Tom Pendry (Stalybridge and Hyde)

By now the Secretary of State must be in no doubt that the Government's attempts to simplify the standard spending assessments for local authorities, and their selective was of calculating the safety net grant, will be disastrous for many local authorities. What my hon. Friend the Member for Leyton (Mr. Cohen) said earlier in a whisper needs repeating in a louder voice—that the SSA has made an ASS of the Government.

The provision of the safety net grant is supposed to protect local authorities such as Tameside from changes in grant between this year and next. Instead, the reverse is likely as a result of direct actions by the Government and Ministers. Although local authorities are facing inflation that is currently running at 8.5 per cent. and rising, the Government have decided that Tameside's spending will increase by only 4.8 per cent. That decision alone will affect the safety net grant by £4.7 million, or £29 per adult.

As a result of Government legislation, local authorities face many new responsibilities such as implementing local management of schools, the national curriculum and others that have been spelt out by hon. Members. Nevertheless, the Government have chosen to ignore that when calculating council's spending figures for next year. In Tameside, that will result in an underpayment in grant of £10 per adult. As the Secretary of State has decided that the first £25 per adult loss in grant is not to be protected, that will cost Tameside poll tax payers £25 per adult, or £4 million, in lost grant.

I wish to illustrate another glaring injustice in my local authority. Tameside recently made a one-off contribution of £2.5 million to the housing revenue account to pay off debt. Hon. Members must agree that it is outrageous that that exceptional payment has been included in the Government's calculations, and so deducted from the safety net grant, not only for next year, but for the next three years. That will amount to £7 million over that period.

All these factors mean that the residents in my local authority area face a poll tax bill of £358 instead of £278. Each adult will have to pay £70 more. Next year new legislative requirements will force the council to spend an additional £1.5 million on debt repayment. On top of that, the poll tax is expected to cost £1.3 million to collect—more than the cost under the previous rating system.

Those two factors will add £17 per adult to the poll tax, without any benefit to the residents. What will happen in 1992, when the safety net grant is no longer available, is clear: the poll tax payers will have to bear the full burden. If the Government believe that the ratepayers will blame all this on local councils, I assure them that that is wishful thinking. We will ensure that the focus of attention is those Members who join the Government tonight in the Division Lobby. That is a promise.

Changes in the formulae used to assess spending needs will cost my local borough about £5 million of its rate support grant. As I am sure the Minister of State knows—when Ministers go to my area, they recognise this fact—my borough is already greatly underfunded and this is a direct result of the policies of this uncaring Government, although Ministers may not agree with that. It is a deprived borough, which needs assistance and better treatment than it gets from the Government. Last year, for example, the Government thought that Tameside should spend £19 million on social services. Under the new rules, this has been slashed by 13 per cent., to £16.6 million. Furthermore, Tameside is suddenly expected to make large cuts of £2.1 million in the so-called minor services—community protection, recreation and the like—and £1 million in education. Once again, the Government are completely out of touch with reality.

Our population is aging rapidly. We need more spending on social services to care for our elderly—not less—yet the Government expect authorities such as Tameside to make cuts of £2.4 million. Such cuts will affect the most vulnerable in our society. Tameside will be forced to restrict the free use by voluntary groups of minibuses which have been specially adapted for the disabled and the handicapped. Meals-on-wheels charges will have to be increased above the inflation rate. The standards of provision of home help services, of which Tameside is proud, will deteriorate.

These are the inescapable effects of the Government's proposals. Councils throughout the country are forced against their will and the collective will of the people whom they represent to take central Government decisions, not local government decisions. So much for setting the people free. The issues which I have highlighted may be considered by many hon. Members to be parochial, but they are real and worrying to the people whom I represent, and I make no apology to the House for raising them.

On a different note, I wish to draw attention to the concern which is widely felt in the sporting world about the Government's decision to include sports clubs in the uniform business rate. The outcome for many clubs could be catastrophic, with many forced into bankruptcy and others forced to raise membership subscriptions to a level that it will be impossible for the less-well-off to afford. Clubs are faced with one more example of the Government's disregard for the future of sport.

It was hoped that, in view of the increasing worry which was expressed across the board about the decline of sport in our schools and the poor standard of fitness among our nation's children, the Government might have thought twice before further jeopardising the 150,000 voluntary clubs that provide sporting opportunities for thousands of people. Such voluntary clubs are non-profit-making and make no demand on the public purse, yet, following the Local Government Finance Act 1988, they are facing higher bills and increased rate charges.

Although local authorities have been urged to give discretionary rate relief to such clubs, senior finance officers throughout the land say that there is little hope of it being granted. The general secretary of the Central Council of Physical Recreation told me today that his initial optimism on receiving the news from the Minister for Sport that sports clubs would get a better deal, following the announcement on 12 September by the Minister of State, has completely evaporated. The Minister failed to tell the CCPR that local authorities would not have the cash to release the kind of money that was necessary and that was expected by sports clubs.

Unfortunately, sport does not come high on local authorities' lists of priorities, as it is clearly in direct competition with many other demands, such as housing and social service provision. I can fully understand the dilemmas faced in choosing priorities, but those choices are made much more difficult by Government legislation that continually burdens them with extra duties while reducing their resources.

If hon. Members want clear evidence of the effect of the uniform business rate on sport, I suggest that they look at this evening's Evening Standard, where they will get plenty of evidence. When I was a Northern Ireland Minister, I introduced a rates order which gave mandatory rate relief of 65 per cent. to sporting clubs in the Province. I hoped that that would merely be a start which would be followed by the rest of the United Kingdom and, 10 years on, be improved upon. Alas, under these proposals, local sporting clubs and associations cannot expect anything like that kind of relief. Charities rightly receive mandatory 80 per cent. rate relief, and I believe that sports clubs should have the same.

If no relief is forthcoming, many clubs will be forced to close. Some increases in rateable values will exceed a staggering 1,600 per cent. Faced with the detrimental effects of compulsory competitive tendering, the selling off of playing fields and the implications of local management of schools for dual-purpose facilities, it is vital that we preserve these voluntary facilities before this country's once world-renowned sporting prowess passes into mythology. The Government have clearly got their rating policy wrong. They should scrap it and think again.

7.6 pm

Sir Rhodes Boyson (Brent, North)

Mr. Deputy Speaker—I mean, Madam Deputy Speaker. I wrote the words down on my notes, rather than made them up.

Madam Deputy Speaker (Miss Betty Boothroyd)

I thought that I made a better impression on the House.

Sir Rhodes Boyson

I was carried away with the impression, Madam Deputy Speaker. In fact, I was speechless, which is rare for me.

I pay tribute to my hon. Friend the Minister of State, who is in the Chamber, and my right hon. Friend the Secretary of State for my meetings with them and their help. I am not saying that more help will not come—we await with great interest the wind-up speech and any extra help that it will give. As always, I am an optimist, and I feel that our views could influence that speech greatly.

I supported the Government on the introduction of the community charge and I still support the principle. Past revolutions were based on the words, "No taxation without representation." The rates position is "representation without taxation"; only one in two, one in three or, as in Brent, one in four of those who vote pay rates. Some people vote to spend other people's money. That is political immorality. I support the community charge principle on the basis of accountability.

The slant of emphasis that I gave to the community charge changed following a conversation that I had with some colleagues, and this shows the importance of not just being in the Chamber but of speaking to one's colleagues. One evening in the Smoking Room, I was approached by a fellow Back Bencher who represents a northern seat. He asked whether three or four people could see me one evening and eat together so that he could show me what the community charge on low-rated properties would mean. I said, "Certainly. Why not tonight?" I am always a man who likes to move quickly, so we met that evening. They showed me figures, which I checked on a computer the following day. The figures were horrific. I had not seen such figures before, including during the eight months when I have been a local government Minister in the Department of the Environment, where I inherited the system and passed it on.

In certain northern seats, instead of what we said as a party—which was that those in households of fewer than 2.1 people would he better off—we now know that approximately 1 million people in single occupancy will be worse off. In low-rated properties in the north which were built before 1939, 60 or 70 per cent. will be worse off and in some cases, 80 per cent. will be worse off.

That was the beginning of my road to Damascus and the realisation of that fact was the blinding light. It seemed to me wrong and politically disastrous that people who looked forward to a system under which they would be better off would be worse off. I know that I have changed my mind on the issue, but if the leader of the Gadarene swine had changed his mind before jumping over the cliff, many of his followers would have lived. All of us make a reassessment of the situation from time to time, and I make no apology for that. People can say that at least I am open-minded, even if my brains may have fallen out on the way. The hon. Member for Newham, North-West (Mr. Banks) should listen to me, because it is good for him. Like my right hon. Friend the Secretary of State, I have respect for him.

I shall give an example, as a northerner. Let us suppose that there is one big house and that the owner pays rates of £1,400. Let us also suppose that there are four small houses with rates of £150. Let us suppose that it is then decided to raise that £2,000 by dividing it among the five houses, so each house will pay £400. The man from the big house who gains so much may feel guilty about it and may vote Liberal. The other four will be worse off and will be horrified that £400 is being taken from each house rather than £150. I respect what has been done. I paid tribute earlier to my right hon. Friend the Secretary of State and to the way in which he dealt with the issue in a brilliant speech this afternoon. As I listened to it, I had to hold on to my seat so that I was not carried away. His speech was fair and generous to right hon. and hon. Members of all parties, and ideal for the House of Commons.

The problem is the £3 maximum loss, and Opposition Members and some of my hon. Friends have referred to that. I am pleased that the most that people will lose is £3, but that presumes that their authorities are spending only at the norm. What came out yesterday from the Chartered Institute of Public Finance and Accountancy is that the figure will be £1.25 a week in community charge more than that. If that is right, people will lose £4.25, which is a lot of money to an old-age pensioner. Some people live in a Labour authority which is spending more than normal—an example of that is Brent, which is a wasteful, spendthrift authority, where people could be £7.75 worse off.

It is no good telling people in my constituency to vote Conservative. Already 19 out of 21 councillors in my constituency are Conservative because the voters have such pride in their Member of Parliament. How can I get 23 out of 21 Conservative councillors? We have done all that we can. We are regularly evangelists in the rest of Brent and I am sorry that the hon. Members for Brent, South (Mr. Boateng) and for Brent, East (Mr. Livingstone) are not with us this evening. Perhaps we shall win a landslide.

I am worried that we shall create a new poor. Twice as many people will require help, yet we came in as a Government who wanted to end or lessen dependency. We are recycling money, which is politically disastrous and morally wrong. When the two are linked, I can speak with confidence that comes from both lungs.

The safety net arrangements were not proposed in the 1986 Green Paper. I was a Northern Ireland Minister at the time and listened to the proposals, which came to me like golden pennies and I thought that my right hon. Friend the Member for Mole Valley (Mr. Baker), who is now Chancellor of the Duchy of Lancaster, was right at that time. It was said that the community charge would come in over 10 to 12 years, that inflation would ease it, that one tenth or one twelfth of rates would be taken up by the community charge each year, and that it would be eased in generally. The safety net proposals came up during my eight months at the Northern Ireland Office, and I thought then that it would help people.

It was only later, after discussions last June when I became involved, that it came to me that the safety net arrangements went against the basis of accountability. For four years we have been giving warnings about accountability and yet we now propose to move money from careful authorities to spendthrift authorities, such as Brent, and to destroy that principle. When the bills go out in April and people see that £70 or £75 is to be transferred to other authorities, we shall find it difficult to sell that change because people will say that they thought that we stood for accountability.

I welcome the fact that my right hon. Friend announced in October that he would take away the safety net in the second, third and fourth years. However, I hope, even at this late hour, that he will end it this year. In the London boroughs, voters will not go to the polls for four years after the poll this year. It is of no help for those of us who represent London constituencies that the safety net will be taken away in the second, third and fourth years.

Other hon. Members have mentioned capping. We must have capping to protect our people in spendthrift Labour areas, or people will leave and the inner city will come out and destroy other areas. If my right hon. Friend proposes to cap at 25 per cent. above the norm—that is £347.50—or at 50 per cent. above the norm—that is £417—he should say so now, so that people can live content and will at least know that help is coming. They will know that those riding off into the sunset will be there to help to some extent. Something should be done immediately after the community charge is introduced to assess the political effect of the charge and its effect on local authority finance.

I have learnt much from this. The Government started out with good intentions. Ministers have passed through and civil servants have passed through, so no one guides the legislation through from beginning to end. Eventually, as the old saying goes, a camel is a horse invented by a committee.

Madam Deputy Speaker

Order. I must call the right hon. Gentleman to order. It hurts me more than it hurts him, but I must point out that he has spoken for 10 minutes and that I am governed by Standing Orders.

7.16 pm

Mr. John Cartwright (Woolwich)

Some of us might have preferred the right hon. Member for Brent, North (Sir R. Boyson) to grasp the basic injustice of the poll tax a little earlier, but it is right that I should pay tribute to his courage in accepting that he was wrong. There is more joy in heaven over one sinner who repents.

Traditionally, this is the time of year for many gloomy predictions about next year's rate levies. It has been normal for borough treasurers—or directors of finance, as we now have to call them—to make our flesh creep as part of the exercise in getting budgets through. However, Ministers will make a serious mistake if they believe that what is happening now throughout the country is another example of that trend.

Ministers may discount what local authorities say because they are interested parties, and they may discount what local authority associations say for the same reason, but they cannot ignore the cool, analytical judgment of a body such as the Chartered Institute of Public Finance and Accountancy, which has been known for years for its careful analysis of problems. It is hard to argue with its judgment, to which other hon. Members have referred, that the Government appear to expect the local authorities to struggle with the additional burdens placed on them by central Government and with the problem of inflation with an increase over last year's spending levels of about 3 per cent. In the real world, we know that retail prices are about 8 per cent. higher and that pay awards are nudging double figures.

I find it hard to dispute CIPFA's suggestion that a sensible estimate of what the impact of inflation will be, a reasonable assessment of the extra burden of new Government policies and a prudent judgment about what will he lost through evasion and avoidance suggests an average poll tax figure not of £278 but of £344 for the country as a whole.

The institute's final assessment is that local authorities could deliver an average community charge of £278 only by making substantial cuts—cuts of 8 per cent. to 10 per cent. CIPFA says—this is important— Even if local authorities wanted to cut spending on such a scale it is doubtful that they could do so, so the most probable outcome is higher community charges … than those indicated by the DOE. My own local authority, Greenwich, appears to have done just as badly out of the much vaunted standard spending assessment as it did out of the late and unlamented grant-related expenditure assessment system. The Government have given Greenwich a standard spending assessment of £153 million, an increase of 16.4 per cent. over its grant-related expenditure assessment. At first glance, that looks generous, but if one excludes education responsibilities, which will be taken over for the first time on 1 April, one finds that for the remaining services the increase is 7.7 per cent, as compared with a national increase of 11 per cent., so Greenwich seems to have missed out compared with some local authorities.

Some inner-London boroughs have education SSAs representing as much as 98 per cent. of their Government-assumed spending, but in the case of Greenwich it is 81.8 per cent. and the discrepancy will have to be made good by the poll tax payers.

The worst impact of the SSA on Greenwich will be in social services, for which Greenwich has a lower SSA per head of population than any other London borough. The figure for Greenwich is £118.66 and the gap between that figure and the next lowest—£153.02 in Lewisham—is substantial. Yet neither the Department of the Environment nor the Department of Social Security has made any suggestion that Greenwich is massively overspending on social services. I would argue that the reverse is true: there are obvious and worrying deficiencies in the council's social service provision.

Let us look at the "other services" block of SSA. For inner-London boroughs generally, the SSA is up 19.5 per cent. on the GREA, but for Greenwich the figure is down by 2.6 per cent. The reasons would appear to be artificially low population figures, a low estimate of social deprivation based on the 1981 census, which is now very out of date, and a low assessment of numbers in private rented housing, again based on out-of-date information. All those errors will have an impact on the likely poll tax in Greenwich.

In the exemplifications before us, the Government have assumed that, allowing for the safety netting, Greenwich poll tax payers will face a charge next year or £252, compared with an average rate bill of £290 per head. That looks like a very good deal, but the longer-term trend is far from encouraging. After the safety net has gone, the Government estimate a poll tax for Greenwich of £537, the second highest in the country. Figures based on the council's current budget show a poll tax not of £252 but of £495, rising to £768 when the safety net is phased out. That is simply not acceptable, even to those who run Greenwich council. The council is now engaged in a programme of last-minute and hasty cuts to try to reduce spending by about 10 per cent, but that will still leave us with a poll tax of about £350—£100 above the Government's prediction and £60 per head above the present rate bills.

The need to cut spending is forcing the council's political leadership to reveal its priorities—and they are very strange priorities. The council seems to be protecting the new, trendy, fashionable services introduced after 1982 and targeting for cuts the basic bread-and-butter services on which many ordinary people depend. For example, there is no proposal to reduce the grant of £105,000 to subsidise entertainment at the Albany, even though that institution is not in the borough, but essential staff in the parks department are to be cut by 18 per cent., library hours are to be reduced and spending on children's playgrounds cut.

The council proposes to close long-established community centres with a long history of service to the community, but donations amounting to almost £80,000 a year are being continued in respect of groups such as the Greenwich mural workshop, Emergency Exit Arts, and a group called—equally unbelievably—"Fooled Again Puppets". Those organisations are to continue to have council help when basic services are being cut. The total sum of those contributions—£80,000—is the cost of running one of the community centres now threatened with closure.

The council is also considering cuts in road sweeping services and increased meals-on-wheels charges, while it continues to publish its own newspaper at a cost of about £300,000 a year.

The Government may succeed in forcing cuts on what they regard as profligate local authorities through the poll tax system—particularly if they use capping—but they may not be the right sort of cuts. The crudity of the system does not allow that to be prevented.

The Government's main claim for the poll tax has never been that it is fair and just. There is no way in which they could make a case along those lines. Their case for the poll tax has always been based on the argument that it introduces a better level of accountability and makes it easier for local electors to judge the financial performance of their councils. The botched settlement before us tonight leaves even that claim in ruins. The mysteries of the standard spending assessment and the safety net and the Government's totally unrealistic estimate of councils' need to spend make it quite impossible for high poll tax charges to be placed at the door of those responsible. Councillors will blame Ministers and Ministers will blame councillors. Tonight's debate underlines the fact that the poll tax is not only inherently unjust in principle but a bureaucratic nightmare in practice.

As we get nearer to the moment at which the bills start dropping through the letterbox, I believe that more and more people will come to accept that the fairest way of paying for local services is the way recommended by Layfield 14 years ago—a local income tax. The sooner that that is accepted, the sooner we shall have a sensible system of local government accountability.

7.26 pm

Mr. Derek Conway (Shrewsbury and Atcham)

We are regularly told that the electors are very unhappy with the community charge. That is good. I hope that my hon. Friend the Minister for Local Government and Inner Cities will reflect on that fact in his reply. I do not see why any of my electors should be particularly happy about paying the community charge, or their national taxes for that matter. When I entered the Tory party at the age of 15, one of my motivations was to get taxation—both national and local—reduced. I am glad if my constituents are unhappy about the community charge.

The question must be whether the community charge is fair, and I believe that it is, although I suggest that the levels are unacceptable. My county council is controlled by an alliance of the Labour and Liberal parties, and I do not believe for one moment that the charge that it levies will be good or acceptable. People write saying, "I shall never vote Conservative again." They are entitled to have a good moan and get if off their chest, but the price of vengeance will be high because they will find that in the county of Shropshire the re-election of a bungling alliance of Labour and Liberal councillors will only serve to increase the charge that they will have to pay. Their vengeance will not taste sweet.

I know that this is not a Second Reading debate and that we must therefore be cautious and not be tempted into discussing the principle of the community charge. Undoubtedly, the mechanics are not only unpopular but extremely confusing. I do not know how many of my hon. Friends have ploughed through the reports. I got as far as the second one and could not make head or tail of it. From now on, I shall leave my hon. Friends on the Front Bench to explain these matters to me.

I appreciate the fact that, under the standard spending assessments system, there is one bit of good news for counties such as Shropshire. Extra weighting has been given to the population sparsity factor. I see that my hon. Friend the Member for Ludlow (Mr. Gill) is in his place. He has one of the largest constituencies in the country and that extra weighting will no doubt be as welcome in his constituency, which lies to the south of mine, as it will be to the 117 villages that lie around the county town that I have the pleasure to represent.

The Department of the Environment's computer is positively lethal, although hon. Members who have served on local councils will know that there is nothing new in that. About 16 years ago, when I first became a councillor, we were suffering under a Government made up—like Shropshire county council—of Labour and Liberal politicians. That Lib-Lab Government used to issue their rate support grants, but then we had a series of clawbacks. First, we had the primary clawback and then, just as the council's budget was settling down, they suddenly realised that the figures were wrong and we had a secondary clawback. The complexities of the system of local government finance cannot therefore be laid at the door of the present Secretary of State for the Environment and those who preceded him, in bringing about the community charge. Complex local government settlements are nothing new to those of us who have experience of local councils.

The one encouraging thing is that councils are now getting £2.3 billion in advance. When I was a councillor, we used to complain about the lateness of the settlement, yet now, when councils are getting that huge sum of nearly £2.5 billion in advance, there has been not an ounce of gratitude from any side about it. Perhaps that shows my hon. Friend the Minister for Local Government and Inner Cities that there is, indeed, little gratitude in politics.

The safety net is undoubtedly unpopular. It is unpopular in my constituency. My right hon. Friend the Member for Brent, North (Sir R. Boyson) expressed the feelings of many who did not realise the unfairness and the imbalance of it, but at least it will be for only a short period. The concession that the Government made in the autumn of last year, to phase out half the safety net this year, is welcome but costly to the taxpayer.

In my constituency, in addition to the £251 assumption that the Government published, which included £4 for the safety net, there will be an extra £30 for the increased spending by Shropshire county council and another £12 for the parish precepts. Many of my right hon. and hon. Friends who represent city areas forget that those of us who have large rural constituencies have an additional charge that is levied by the parish councils.

Mr Christopher Gill (Ludlow)

I am grateful to my hon. Friend for giving way on that point. Hon. Members who represent urban constituencies might be interested to know that many parishes pay only a matter of pence in precepts at the moment but, as my hon. Friend has just pointed out, in The Wrekin district council of Shropshire it is possible that community charge payers will pay £12 instead of a matter of pence.

Mr. Conway

My hon. Friend is quite right. I hope that parish councillors around the country will remember that we in Parliament will be watching the levels of increase to ensure that they do not try to confuse electors with the new system. In addition, my borough council is allowing for a 5 per cent. collection deficit, which amounts to £16 per head. Therefore, straight away the local electors will be paying £62 per head more than the Government assumption. As my right hon. Friend the Secretary of State said, it is for the councils to decide, so the Government should not be defensive about this. In fact, my county spends about 90 per cent. of the money raised on local government services. Its budget, as planned, could be £28 million up on last year, which is a 14 per cent. increase, considerably above the rate of inflation and, I would argue, quite unnecessary.

I agree absolutely with the point made by the hon. Member for Birmingham, Perry Barr (Mr. Rooker), who is clearly not of my party, but who is right to say that we need to look at the frequency of elections. I advised my hon. Friend the Minister that I shall support the Government enthusiastically about the community charge tonight, with no apologies at all, but that we need to look at the frequency of elections for county councils in shire areas because they are not accountable enough on the basis of being elected every four years. That interval does not give the electorate enough of a chance to get at them, which is the whole point of the community charge.

Of course, my constituents can always say, "That's it, Conway, you're out," and they can vote for somebody else. They can turn away from the £250 that my right hon. Friend's Department has calculated that they should be paying in community charge and can turn instead to the one alternative that was published by the Labour party, which would cost my constituents £623 per head, nearly three times as much. That is the alternative.

Mr. Rooker

No, it is not true.

Mr. Conway

That is the alternative.

Mr. Rooker

rose—

Mr. Conway

I would give way to the hon. Gentleman if his party published a policy that we could debate.

We are talking about a fairer system that will undoubtedly bring back voter power because, as my right hon. Friend the Member for Chingford (Mr. Tebbit) rightly told the House, those who vote for expenditure will pay for expenditure.

I have a great deal of sympathy with the plight of my constituents over the level of the community charge because, as I live in the constituency and am married to one of my constituents, I shall hear regularly about the cost of the community charge.

People in the county of Shropshire have a simple option. They can kick out the Labour-Liberal Democrat coalition at the next opportunity because it is forcing up the community charge. I shall make absolutely certain in my area that the blame for the level of the community charge will rest fairly and squarely with the bungling opposition parties that control the local councils. But they will not be there for long.

7.34 pm

Mr. Peter L. Pike (Burnley)

This debate is the last occasion on which the Government can take action to try at least to salvage something from the disastrous poll tax and to prevent some of the difficulties that will be encountered by so many people who are ratepayers at present and who will be poll tax payers from 1 April this year.

One thing is quite clear. Because of the basic unfairness of the Bill that went through Parliament and despite our repeated protestations and attempts at the time to amend the Government's failure to take ability to pay into account, unfortunately whatever the Government do at this stage, they will not be able to overcome the main difficulties of implementing the poll tax.

I hope that the Conservative Members who trooped through the Lobbies last year to support the legislation but who now recognise its implications will at least recognise that if the Government are to do anything to ease the burdens and to assist some of the people who will be penalised, it is no good those hon. Members abstaining tonight. They must vote with Labour and the other Opposition parties against the proposals.

I recognise clearly that the only way in which we shall be able to end the poll tax and the unfairness of the system is by electing a Government who are committed to replacing it with a system that is based on fairness. I am sure that that will be a major factor at the next election, when it comes.

The right hon. Member for Chingford (Mr. Tebbit) referred to accountability and to annual elections. I have always believed that borough councils should be elected annually and I would support any move to make councils more accountable by making them frequently elected and thus more answerable to the electorate. The borough council that I represent already elects one third of its council three years out of four, and in the fourth year the county council elections are held. Therefore, it is accountable.

I should like to say a few words about my local authority because I had experience both as finance chairman of the council and as leader of the council before being elected to the House. Our budgets were never a case of spending for the sake of spending because we used to spend a lot of time trying to achieve a budget that was both fair and reasonable. We tried to achieve a budget that would provide the services that we needed while being fair to the people who had to meet the bills. The expenditure could be roughly divided into three—one third for interest and debt payments; another third for salaries and wages; and the final third for the items that could be adjusted. However, there was not much room for adjustment once one began to analyse those items.

The Minister should recognise that at present two thirds of the expenditure of many councils is for debt and interest payments, and salaries and wages. He should also recognise that the Government are responsible for the level of pay increases that the local authorities have had to make. The Government are also responsible for the level of interest rates, yet they have used the figure of 4 per cent. for inflation in the figures that we are debating. What nonsense.

The Government have moved to a system of standard spending assessments. Of course the old system of grant-related expenditure assessments was unfair and even the Department of the Environment could not explain it. The Secretary of State has repeatedly said that the new system was "simpler". Indeed, he used that word time after time, but the one thing that he did not say—that he could not say—was that the new system is fairer; he could not say that, because it is unfair. Although I welcome any moves towards something that is simpler, if the system is changed, it is much more important that it is changed to something that is fairer. That has not happened, and the Government should think again on that important matter.

I turn now to another important issue that affects Burnley. The Association of District Councils has assessed the total spending of authorities at £32.8 billion. That figure has been used several times. The Association of District Councils, which is not Labour-controlled, says that that is an understatement of about £1.6 billion. The Secretary of State says that it may be £2 billion. Whichever figure is right, we all know that many local authorities supplement their spending from balances. Lancashire county council and Burnley borough council have both done so. Some £800,000 has been spent from balances this year by Burnley council.

The Secretary of State challenged my hon. Friend the Member for Dagenham (Mr. Gould) to say whether spending commitments will have to be met in future if there are no balances to meet them. It was implicit in his comment that the expenditure of local authorities is not necessary. From whatever source it comes, local authorities deem their expenditure necessary. If the Secretary of State is saying that this year's expenditure from balances cannot be repeated next year and must be met by poll tax demands higher than the Government's figures, what services would he cut? Would he close nursery schools or old people's homes? Would he stop grants to citizens' advice bureaux? Would he cut grants for running sports facilities, arts centres and leisure centres? Those are all important services. If he is saying that the level of expenditure of local authorities as a whole or individually is wrong, he must say what should be cut or where additional income should come from. Of course, he cannot do that.

I represent a deprived area. The Government recognise that it is deprived because they have designated it under the inner-area programme. Additional resources have been announced during the past few days. If anything, we are not spending enough money on the problems of dereliction and poverty in my area. Under the present system we cannot spend more because we must take into account what we can ask ratepayers, whether domestic, commercial or industrial, to pay. The Government have got it wrong.

In Burnley, the population figure that the Government have used to calculate the grant, taking into account the non-domestic rate, is the Office of Population Censuses and Surveys figure of 61,000. The population is now 67,000 because we have the highest electoral roll for many years. In some ways the poll tax has encouraged people to register, rather than the reverse. The Government have not taken into account the higher population figure in calculating the standard spending figures. They should have done so, because that figure will continue.

We shall receive relief as a low rateable value property area but the transitional payments, low-rate relief and other help will be phased out. We must tell people what their poll tax bills will be without the safeguards, safety nets and transitional payments which are given to con people that the poll tax is not as bad as it is. The population figures used should be re-examined carefully.

I shall conclude by making a few remarks about low rateable value areas. The hon. Member for Brent, North (Sir R. Boyson) knows north-east Lancashire well. He comes from a Labour background. He is aware of the low rateable values in the area. He knows that the ratepayers of Burnley, Nelson, Colne, Accrington and Rawtenstall will suffer considerably because they will face a massive increase because of the poll tax. Even with safety net protection and relief for low rateable value properties, people will pay heavily from year one and in year two it will be worse. Year three will be even worse and year four will be worse still. The Government must think again.

I hope that Conservative Members who have any doubts and any fairness at all will vote with us against the proposals. This is the last chance that we have to say to the Government, "You have got it wrong."

7.44 pm

Sir Anthony Grant (Cambridgeshire, South-West)

For more than 25 years I have advocated reform of the ludicrous old rating system. I have done so because I have always thought it outrageous that the whole cost of local government expenditure was borne by only one third of the electorate. It was not borne by the richest by any manner of means. Therefore, I have no difficulty in supporting the reform brought in, at last, by this Government, after it had been sunk by previous Governments, both Labour and Conservative.

Those who are dissatisfied and complain about the proposed system should have an alternative system to propose. The reform that I advocated for 25 years was that the cost of teachers' salaries should be borne by the Exchequer. When they opened their rate demands, people always found that the largest item of expenditure was education. The largest item of education expenditure was always teachers' salaries—which now cost about £7 billion a year.

Even under the Education Act 1944, the Secretary of State has a statutory obligation to maintain the supply of teachers. It is absurd to propose that teachers' salaries are negotiated anything but nationally. The idea that they can be negotiated by Hogsnorton borough council is ludicrous. I hope that the Government will not lose sight of that in future as a possible solution to some of the problems. If they did so, inevitably some irresponsible councils would simply take advantage and spend money like water in place of education expenditure. That is why I am wholly in agreement with my colleagues who say that we should not reject the idea of community charge capping. I was glad that, in the Secretary of State's remarkable speech, he seemed to respond to that sympathetically.

Cambridgeshire has been unfairly treated for many years. I remember that, when I first represented my area, Cambridgeshire Members of Parliament had to rebel against the Government. I do not refer to my hon. Friend the Member for Cambridgeshire, South-East (Mr. Paice) but to Lord Pym and my hon. Friend the Member for Cambridge (Mr. Rhodes James). We had to do something that we did not like doing. Unusually for us, we rebelled simply because the Government persistently refused to recognise the problems of Cambridgeshire, which is the fastest growing county in Britain. Many problems arise from that fact. They may be problems of success, but population is the problem in Cambridgeshire.

When Ministers considered the SSAs—as they are now—for last year, I found that they still had not taken Cambridgeshire's population problems into account. We had to tackle the Minister and we had a good argument about it along with local authority officials and councillors. I am grateful for the way in which he responded, and I am happy to say that a change has taken place. The SSA for Cambridgeshire county council is now 8.5 per cent. higher than the grant-related expenditure for 1989–90. It is £2.3 million more than the figure originally proposed in November last year.

The SSAs for the Cambridgeshire districts range from 11.6 per cent. for the city of Cambridge, to 52.3 per cent. for east Cambridgeshire district council. It is right that I should publicly thank the Government and my hon. Friend the Minister of State for that. It is up to the district councils in Cambridgeshire to respond by conducting their affairs prudently and wisely. I am satisfied that they will do so, although I have grave doubts about Cambridge city council where I am a ratepayer, and Peterborough city council, both of which are in alien hands. We hope that all councils will respond properly. In addition, the Government treated our credit approvals favourably.

Only the area cost adjustment is outstanding. Like many south-eastern areas, Cambridgeshire has high labour and high industrial costs. However, we were suprised to find that we did not get an area cost adjustment. We were even more surprised and appalled when we noted that Oxfordshire did. Why on earth should Oxfordshire of all places have an area cost adjustment and Cambridgeshire not? I defy my hon. Friend the Minister for Local Government and Inner Cities to give a reason for that. He has said that the matter has only been dealt with in a rough and ready arbitrary way. In a letter to me he said that the case is somewhat technical and that the results of the new earnings survey were not robust enough to apply county by county. I ask him only to give me an assurance that perhaps next year the matter will be looked at in much greater detail and Cambridgeshire put on the same basis as Oxfordshire.

We in Cambridgeshire have had our rows and we have had to rebel. But in all my time in Parliament, no Minister has responded so carefully and sympathetically and taken so much trouble in dealing with all our complaints as my hon. Friend. He may not have pleased everybody, but he has seen them. On this occasion I shall support the Government because of the concessions that have been made for Cambridgeshire, but I hope that those who are doubtful will show a little gratitude to my hon. Friend for what he has done.

Several Hon. Members

rose—

Madam Deputy Speaker

Order. The 10-minute limit on speeches has now ended, but it would be helpful if all hon. Members speaking from now on would impose a voluntary time limit on their speeches.

7.51 pm

Ms. Hilary Armstrong (Durham, North-West)

I shall endeavour so to do, Madam Deputy Speaker.

Many hon. Members, including the hon. Member for Cambridgeshire, South-West (Sir A. Grant), have highlighted the fact that the Government have simply not met the objectives that they set when they began on this sorry course, the introduction of the poll tax. The poll tax, as Conservative Members have demonstrated today, is far from achieving the Government's initial main aim of accountability. As the tax has been adjusted to try to match one anomaly here and another there, it has achieved less and less accountability rather than more.

Many Conservative Members do not seem to be content with the idea that accountability begins with the ballot box. Many Conservative Members wanted to use the tax to attack those who voted through the ballot box for councils that Conservative Members did not approve of.

The poll tax is no simpler than the system that preceded it. No hon. Member or anyone trying to administer the poll tax believes that there is any sense in the nature of the administration or that administratively it will be more simple or more fair. In addition, it is costing infinitely more than the system that it replaces.

More and more problems are arising each week. The Government talk about wanting to encourage young people to stay on at school, but a 19-year-old at a sixth form college rather than at a polytechnic or a university is not classed as a student and so is not entitled to a rebate. Therefore, a 19-year-old in full-time education in a school will not be entitled to the same rebate as a brother or sister of 20 who happens to be in higher education.

That is the sort of anomaly that the Government keep tripping over which highlights the sort of problems that accompany the poll tax. That is because the tax has never sought to be a fair tax for services received.

Mr. Pawsey

Will the hon. Lady give way?

Ms. Armstrong

I will not give way because I have given a commitment to you, Madam Deputy Speaker.

From the beginning, the Government have had specific aims in mind, and their main aim has been to attack local government. In doing so, they have brought upon themselves enormous problems. They cannot even meet their own objectives. The further down the road they go, the more problems appear and the more difficulties they get into. They are discovering that the poll tax does not simply attack Labour-controlled local government; it undermines any commitment that the Government might have had toward local democracy. That is one of the major problems that the tax is now bringing. It never set out to be fair, and that is why no Conservative Members can find an element of fairness when they look at their position. Having set out to be so unfair, it is not surprising that Cambridgeshire, Brent, or wherever, ends up with problems. The problem is the tax and the way in which it has been implemented.

Let me illustrate my point with Durham. Durham is a Labour-controlled authority. It is solidly Labour, but even so we won a further seven seats in the county council elections in 1989 and we won a seat in my constituency which the Labour party has never held in the history of that county council. Durham is not known as a high spender. It has never been castigated by the Government for high spending. Yet if Durham were to spend within the SSA as most recently presented—an exact account of which the Government cannot give me—there would, in real terms, be an increase of less than 3.2 per cent. over this year's figure. That would mean a cut in services.

If Durham stuck to the SSA, the cut would be equivalent to closing down the social services department or the police and fire services. We are talking not about cutting a little spending here and there, but about substantial amounts, and that is if the council manages to collect all the poll tax that is due to it. There has always been a reasonably good collection under the rating system, but now we shall be collecting for more than twice that number, so the default rate is likely to be higher and the implications will be greater than ever before.

We are left with enormous problems. There are problems of collection, but most of all there are problems with delivering the service. When the original SSAs came out at the end of November or the beginning of December, I calculated that overall in the northern authorities we would lose about 15 per cent. for education spending. I was corrected by the Minister of State, Department of Education and Science. She said that it would be about 12.9 per cent. But even if I am wrong and she is right, a cut of 12.9 per cent. in education spending at a time of teacher shortages—

Mr. Richard Holt (Langbaurgh)

Not in Durham.

Ms. Armstrong

Even Durham has problems in recruiting science and language teachers in order to deliver the national curriculum. I was there last week talking about that. [Interruption.] Hon. Members seem to think that I am making these things up, but I am not. There are teacher supply problems in every authority throughout the country. Even in Durham we have to implement the national curriculum. In Durham we have been asked to take specific action by Her Majesty's inspectors following their latest report.

If authorities are to stick to what the Government say, there will be the equivalent of a 12 per cent. cut in education. The Minister knows that that is nonsense and will leave an authority totally unable to meet its statutory responsibilities. He has the opportunity this evening to demonstrate that he cares more about the lives and opportunities of people in this country than he does about sticking by something which he knew from the beginning was wrong. I hope that he is big enough and magnanimous enough to take that opportunity.

8 pm

Mr. Robin Maxwell-Hyslop (Tiverton)

I shall certainly abide by your injunction, Madam Deputy Speaker, as if the 10-minute rule were in force.

This is the first of these debates in which I have had a sporting chance of understanding what is happening, because the revenue support grant distribution report is quite the clearest that I have ever seen. That has to be an improvement for people inside, as well as outside, the House who wish to understand what the new system is and how it works.

What happens to county councils is much more important than what happens to district councils, because of the effect on the ratepayer. A besetting sin of the Government has been to increase more and more the duties of local authorities, particularly of county councils, without transferring proportionate resources to them. For example, the changes in the national education curriculum have resulted in a massively increased need for new books and computers. Some of the need for new computers arises because often we can no longer get spare parts for the first generation of computers purchased. That is not reflected in changes in the cost of living index. These massive changes in expenditure were knowingly brought about by the Government when they changed the curriculum.

The golden rule should always be, "If you can't afford it, don't do it." That should apply as much to Government as it does to private individuals. We have seen expensive changes made in the respective responsibilities of district health authorities and county councils. Those health authorities started with joint funding and are ending up with unique funding by the county councils. Those changes are not embraced by a figure of 6 per cent. or by looking at the cost of living index. They represent a quantum change.

The counties which were traditionally low spenders were caught by rate capping, so that they had to run down their capital assets because they had no alternative. If a road surface is allowed to remain broken up for more than a certain time, the road's understructure suffers damage which will be much more expensive to repair than it would be to maintain the road surface in the first place. But councils such as Devon had knowingly to permit this to happen to many of the lanes because it was not allowed to spend the necessary money to keep them in good repair.

In Devon there are still a large number of schools with outside lavatories which can freeze over in winter. I am not talking just about discomfort but about the fact that, when frozen, the lavatories will not work. There is a backlog of capital expenditure which has never been spent.

There was an era when architects believed that, owing to a change of Government, water no longer flowed downhill. We had an era of flat, rather than pitched, roofs. They saved money originally, but the rooks have now come home to roost in the form of maintenance costs which were never incurred when we had pitched roofs, when the worst that happened was for a slate or two to come adrift after a storm.

We can get away with this for a certain number of years, but then we have to raid our reserves. If the formula is applied not to expenditure, but to the previous year's revenue, such realities are totally ignored. My right hon. Friend the Member for Norfolk, South (Mr. MacGregor) is the present Secretary of State for Education and Science; a series of Secretaries of State for Education and Science have imposed frightening new costs on education authorities. Although it has been said that teachers' pay is negotiated nationally, that is not so for supply teachers. The more teachers who have to go to committee meetings or training courses, the greater the need for supply teachers. In some counties, such as—I regret—Devon, financial constraints on the local education authority have resulted not only in teachers being paid a miserable rate per hour but in their not being paid at all for those hours in between classes when they were not teaching as supply teachers. They often have to travel long distances, uncompensated.

Is it not utterly incongruous that we are moving to individual taxation in terms of national tax, so that husbands and wives will have their own allowances and be taxed separately, yet for the community charge, a couple have only half the capital exemptions? They each have half of the £8,000—a total of £8,000 between the two of them—compared with the £8,000 for an individual. It is utterly incomprehensible that the Government are quite rightly moving in one direction in terms of central Government taxation, but defy the logic of that when they bring in a new taxation system for local government. If £8,000 was the right capital limit for income support when that was introduced, it cannot still be the right limit, without valorisation, for the tapering of community charge.

When I wrote to my hon. Friend the Minister about this matter, I was more than surprised to receive an interim reply saying that my letter had been passed from him to the Department of Social Security because his Department did not accept responsibility for the £8,000 limit.

Mr. David Hunt

I was unaware of that letter. The £8,000 limit, which I thought was increased from £6,000 for income support, is consistent with social security policy. If we were to make any move it would be a matter for my right hon. Friend the Secretary of State for Social Security. That is probably why my hon. Friend received the interim reply and I shall ensure that he receives a much fuller reply as soon as possible.

Mr. Maxwell-Hyslop

I have received a full reply, but it is utterly unconvincing. There is no essential reason why community charge—based on a poll tax system abated by rebates—should have the same limit as income support. There is no logical reason for that. Income support is related to the many different circumstances of a person, as are family credits, but the community charge is not. Therefore, there is no essential, self-evident reason why the figure at which the taper starts should be the same for both.

When the community charge was voted by the then Government, it was understood that grants to enable students to pay it would be increased by 20 per cent. of the national average community charge. Students would then have the same incentive as others to encourage economical local government and to punish extravagant local government. However, that got lost in the wash.

I wrote to my right hon. Friend the Secretary of State for Education and Science asking what has happened to the proposal to add that 20 per cent. to student grants, but I am still waiting for a reply—which I thought someone would take the trouble to see that I received before this debate. The question of where the money is to come from that will allow students to pay the charge has, at this moment in time, received no answer.

The points that I have raised are not trivial but are very serious. Taken together, they constitute the basic reason why I shall not be able to vote with the Government tonight.

8.10 pm

Mr. Harry Barnes (Derbyshire, North-East)

For some time, I have wanted to make a long speech on the constitutional and democratic implications of the poll tax.

I shall not do so tonight, because although the poll tax is of relevance to the revenue support grant, it is technically secondary to the main subject of tonight's debate.

The revenue support grant is an injustice inside an injustice. If one could imagine that the initial injustice did not exist and that the poll tax was fair—which it cannot be—there would still be something very peculiar about the operation of the revenue support grant. I would only add that the poll tax is the unfairest general form of taxation that has ever been introduced into any western democracy, which is why it has serious implications for our democratic and constitutional system. However, that is for another occasion.

On 19 December, I wrote to the Minister for Local Government and Inner Cities asking him to meet a deputation from North-East Derbyshire district council. I wrote to him again on 12 January. We do not wish to discuss the poll tax or the national business rate; we specifically want to discuss the 1990–91 revenue support grant.

On the basis of information published on 6 November, it appears that the poll tax in north-east Derbyshire will, in accordance with the Government figures, be £297—or £366 when the safety net is removed. However, because the revenue support grant will be so low, it will be impossible for north-east Derbyshire district council, which is not a profligate authority, to observe those figures—no matter how carefully it behaves. As the revenue support grant will be woefully inadequate, the poll tax will be nowhere near the figure suggested by the Government but closer to the figure of £400—unless the deputation that I hope the Minister will meet can persuade him to alter north-east Derbyshire's poll tax figure and the revenue support grant formula.

When the Local Government Finance Bill was in Committee, the Conservative party made a party political broadcast about the benefits of poll tax and produced a rough and ready formula. It was never meant to be exact, but was intended to give a general idea of how the new arrangements would work. It was estimated that about 50 per cent. of an authority's income would come from revenue support grant—25 per cent. from the national business rate, and 25 per cent. from poll tax. The Government's standard spending assessments show a revenue support grant for north-east Derbyshire of £9 million, which is less than 20 per cent. of the amount required. Poll tax will contribute £21 million, as will the uniform business rate. Together, they will account for more than 80 per cent. of total income, which represents a dramatic change for that authority, brought about by the nonsensical rate support grant formula.

One aspect of the formula relates to population, including inflow and outflow. During the working day, the area covered by north-east Derbyshire district council loses many people to their places of work in Chesterfield; to Markham pit, near Staveley; and to Sheffield. East Staffordshire authority, which is of comparable size to north-east Derbyshire district council, gains from that because its area experiences a net inflow of the working population. Nevertheless, east Staffordshire can raise money because of the car parking and other facilities that it must provide for people working in its area. No such revenue is available to north-east Derbyshire, whose residents will have to contribute to the costs incurred by other local authorities in the provision of certain services. What district council services are so dramatically changed by either a net inflow or outflow of its working population? Dustbins must still be emptied, houses repaired, and other general services provided.

The revenue support grant formula also incorporates a density and sparsity factor. A highly populated area naturally requires additional money to provide adequate services. Likewise, a sparsely populated area such as the Derbyshire dales in west Derbyshire will incur higher costs in the provision of refuse collection services, for example. North-east Derbyshire is an intricate mix of areas that are either densely or sparsely populated, so it will lose out. It still has to cope with problems of communications and congestion in respect of its sparsely populated and densely populated areas respectively. That aspect of the formula makes no sense to north-east Derbyshire or, I suspect, to many other areas.

The revenue support grant formula also takes into account an all-age social index. Its parameters include the numbers of persons sharing a property, the number of baths and lavatories available, the number of lone-parent families, whether more than one person occupies a room, and the number of Commonwealth residents. North-east Derbyshire is divided into east and west. The "EastEnders" comprise the working population, while the west of the district is more rural and middle class. The working class areas could benefit considerably from the all-age social index, as neighbouring Bolsover does, but the social mix of the district means that they will lose entirely. That makes a nonsense of the revenue support grant formula.

The formula's social deprivation factor is more appropriate to county councils than to district councils in terms of education and social services, yet compared with other authorities in Derbyshire, north-east Derbyshire will lose out considerably. On 12 January we were given a fresh set of figures for the special grant. Bolsover will get a low-rateable-value-area grant of £1,216,000. North-east Derbyshire and the other authorities in the area will get nothing, but the heartland of north-east Derbyshire is identical in its social characteristics to Bolsover. I am happy that Bolsover will get the money, as it obviously needs it, but at least 50 per cent. of north-east Derbyshire needs that money as well. That shows that the whole arrangement is nonsense.

Some of the new arrangements are supposed to overcome the problem of high poll taxes for people who are relatively socially deprived.

Socially deprived people who live in a rich area will suffer, but rich people who live in a socially deprived area will gain from a slight alleviation in the charge.

I hope that the Minister will agree to meet the deputation from north-east Derbyshire, and that he will discuss seriously with it the technical problems, which will cause financial difficulties for authorities in my constituency. I am sure that similar problems exist in many other areas.

8.21 pm

Dame Elaine Kellett-Bowman (Lancaster)

Since 1981, Labour-controlled Lancashire county council has been taking those citizens who are unfortunate enough to pay rates, manufacturing and service industries, hospitals, education colleges and the university to the cleaners. The only way to get a lower community charge is to kick out the Labour county council.

Labour's first act on taking office in 1981 was to slap an extra 18p on the rates above the already budgeted spending. It has continued to increase that burden every year until, oddly enough, last year when there was a county election, and the council raided the reserves to keep the rates increase down. Now there is only three hours' county spending left in the kitty because the Socialists have been spending merrily since then.

The massive rates increases that the council has imposed have placed a huge burden on our industries, which had no vote and could do nothing to protect themselves. The rates increases have also been a terrible burden on the local hospitals, which had to pay millions more—money that should have been spent on patient care. Similarly, the university had to divert funds that should have been devoted to education to feed the insatiable county council appetite.

As long as there was no connection between demanding services and paying for them, the county council could get away with it. It was essential to change the system so that everyone paid for the services that they demanded. I am happy to say that the new system will achieve that.

However, those on low incomes must be protected from sudden steep rises—

Mr. Ronnie Campbell (Blyth Valley)

Will the hon. Lady give way?

Dame Elaine Kellett-Bowman

No.

People who live in small terraced houses must be protected. Many of them will be among the 9.5 million who are eligible for rebates, and others may be eligible for the transitional relief to cushion rates that was announced in the autumn.

Although rebates apply to the whole charge, transitional relief applies only up to the amount that local councils are supposed to need to provide proper local services. Any excess is not covered. People will still have an incentive to vote for a council which will not spend charge payers' money as though there were no tomorrow, which is what is happening now in Lancashire.

Businesses, especially manufacturing industry, in our part of the world will benefit substantially, but the new revaluation is designed to give equal treatment to everybody. It has put the fear of death into many business men, who have not yet understood transitional protection or the lower poundage. They do not all appreciate that in future the unified business rate will rise only by the rate of inflation, and we ought to stress that. That will prevent the robber barons at county hall from holding them to ransom, as they have done for the past nine years.

Businesses in the northern and north-western areas will gain £900 million in transfers from southern England. This is the best general regional policy for the north-west since the war, and it is better than anything that Labour has ever brought in. Even so, I think it is wrong that companies in my constituency, which have had too high a rate burden for too long, will not get the whole relief at once. I have raised that matter with the Minister on several occasions, and I shall continue to do so.

Transitional relief for those in the south who are hard hit by the rises should be paid for by the Exchequer and not by stallholders in Lancaster market or small firms on Caton road.

The Labour-controlled Lancashire county council is having a field day. It has increased its estimates three times since September, and it proposes to increase expenditure by 31.5 per cent., which is equivalent to an 82p rate under the old system, which it will gaily blame on the new community charge—fibbing as usual. The council has to refill the county coffers, which it emptied to cushion rate rises before last year's election. It also has to pay for the above-average wage settlement that it persuaded the local authorities to concede.

Mr. David Hunt

Lancashire was in the chair.

Dame Elaine Kellett-Bowman

As the Minister observes, Lancashire was in the chair at the time. On top of the 8.8 per cent., which was well above the going rate when it was conceded, the council is handing out an extra 20 to 30 per cent. on the salaries of higher paid officers. It cannot be justifiable to ask lower-income charge payers for some £15,000 extra for a pay increase for the chief executive.

The administration at county hall has become increasingly top-heavy. The number of teachers employed in our schools has gone down, while the number of staff in the county education department has steadily increased. That was before the Education Reform Act 1988, which it might have used as an excuse for more staff. In future, the Labour group will not be able to rob industry in Lancashire to pay for its extravagant spending, and everyone will have an interest in keeping spending down since everyone will pay, and those who pay the piper call the tune.

For those reasons, I support this long overdue measure of justice.

8.27 pm

Mr. Harry Cohen (Leyton)

What is the standard spending assessment—the SSA that has been referred to today—which is so essential to the whole tax figures for individual boroughs? It is the amount that the Government say that local councils should be spending.

My council, Waltham Forest, is spending £30 per head less than the Government's SSA for it. Judging by that criterion, Waltham Forest must be a low or a reasonable spender, according to the Government. However, the poll tax will go through the roof—the latest estimate is £488 per head and that is with a standstill budget. That is a long way from the £297 that the Government have mentioned. Why is that? One reason is that Waltham Forest will have to put £42 for everyone who pays the tax into a safety net. That is grossly unjust. The neighbouring borough of Redbridge will pay nothing; nor will other boroughs in the surrounding area which are in a better position than Waltham Forest. The money will go to Conservative-controlled Wandsworth council to help with the Conservative election effort, and that is grossly unfair.

There are many other reasons, and they are all factors that are outside the control of Waltham Forest council. For example, high interest rates will add £1.1 million. Inflation is 7 per cent. this year and is forecast at 8 per cent. for next year, but the Government have only allowed for 4 per cent. That adds another £5.5 million. The police precept is £2.5 million, the cost of setting up and running the poll tax is £1.7 million and budgeting for non-payment will mean another £3.5 million. As my hon. Friend the Member for Dagenham (Mr. Gould) pointed out, the Government have said that every penny will be collected. That is ludicrous—every local authority accountant knows, as many other people do, that there will be bad debts.

Thus we have a total of £14.3 million to cover factors outside the council's control—and, for every £1 million, £6 can be added to the individual's poll tax bill. On top of that, there is the cost of the Government's new legislation—the Children Act 1989, the Education Reform Act 1988 and the National Health Service and Community Care Bill. Presumably the Government want local authorities to implement their laws, but that will add another £1 million. To arrive at the Government's figure of £297, the authority would have to cut services by £32 million. Even its Conservative members are discussing cuts of only £11 million, and that would require major education and social service closures. If they had their way, the poll tax bill would still be £420 per person, far above the Government's assessment.

The poll tax is a redistribution of money from the poor to the rich. Let us compare the results of the rating system in Leyton with the poll tax figure of £450—and, as I have said, the latest estimate is £488. Two adults will pay 79 per cent. more, and three will face an increase of 169 per cent. In Chingford, in the same borough, the increases—although large—are much smaller than those in poor areas such as Leyton. Few of my constituents will qualify for transitional relief, which is granted to those paying £3 more than they paid in rates—according to the Government's unreal poll tax figure of £297.

The Secretary of State could not even justify SSAs in his speech; he said that they were not cast in stone and could be changed next year. That is not surprising, when we consider some of the facts. Tory Gloucester, for instance, receives £5.3 million for under-fives, but provides no services for them. It receives its grant on the same basis as councils that do provide such services. Similarly, seaside resorts contain many old-age pensioners but provide no direct services for them, as such services are provided privately. They are treated in the same way as boroughs that provide old people's homes, home helps, day centres and so on.

SSAs are ludicrous. I have just put out a press release in which I have observed that the SSAs are making an ASS of the Government—and that is the truth.

8.33 pm

Mr. Timothy Wood (Stevenage)

I shall be supporting the Government tonight. In debates such as this, it is all too easy to lose sight of the problems and inequities that have existed for years in the domestic rating system. Over the years, I have attended a multitude of conferences and meetings at which pleas have been made for an end to that system. In Hertfordshire and the other home counties, huge levels of rates have been paid, suggesting a level of disposable income far beyond the reality.

I must confess that the huge differences between payments per adult in Stevenage and those in other parts of the country staggered me. The treatment of different areas has involved massive injustices, and there have also been great injustices on an individual basis. It has been said many times before—but there is nothing wrong with repeating it—that single elderly people have, typically, been severely disadvantaged. In contrast, many young adults—who are the main users of subsidised local authority sport and leisure facilities—have not been required to pay anything.

Mr. Pawsey

May I draw my hon. Friend's attention to the fact that there is not a single Liberal Member in the Chamber? I find that staggering, and I am sure that he will as well. Is it not disgraceful that there is not a single Liberal Member present to comment on a debate that touches every constituency?

Mr. Wood

I agree with my hon. Friend. Not only have we seen hardly any Liberal Member apart from the one Liberal contributor to the debate, but we have seen large expanses of green Bench owing to the sparse attendance of Opposition Members in general.

I am convinced that sweeping away the domestic rating system, together with the paraphernalia of penalties and so forth, will dramatically improve both accountability and equity. Having said that, however, I do not wish to give the impression that some great Utopia has arrived in local government finance. Further improvements can and should be made in the standard spending assessments, and I welcome my right hon. Friend's willingness to consider further the methodology by which such assessments are set.

First, the formulae used to define SSAs run to excessive and spurious numbers of significant figures. I remember complaining about exactly the same features of grant-related expenditure assessment. For example, page 7 of the relevant report informs us that the number of students aged over 16 is multiplied by £2,315.54. To that figure is added £33.42 multiplied by an "additional needs" factor, and to that is added £347.33 multiplied by a "scarcity" factor. The result is taken with another table for 11 to 15-year-olds and multiplied by "area cost adjustment for education"; that result is then scaled to a control total given in annex B of the report.

As a science graduate in mathematics, I see no satisfactory justification for the pseudo-accuracy implied in some of those figures. Furthermore, I am convinced that such spurious accuracy confuses both local councils and hon. Members. I had hoped that the introduction of the SSA would lead to a simplification and clarification of the figures in comparison with GREA. Some of the frustration and discontent that such assessments sometimes reveal is a result of the opacity of the calculations.

Secondly, greater clarity in the tabulations presented to Parliament would be helpful. I suggest, for example, that to give the SSA per capita in each local authority area would aid ready comparison. I have observed during the debate that some people have obviously made the appropriate calculations and presented them, but it would surely be easier to assess the expenditure that was relevant to a particular area if the figures were readily to hand.

Thirdly, and perhaps most important, I believe that the SSA figures contain anomalies. I shall tolerate that this year, but I feel that rectification will be necessary in due course. My constituency contains three local authorities: Stevenage, North Hertfordshire and East Hertfordshire. For some reason, North Hertfordshire is given the highest per capita SSA. I live in that district, and I know it well. I do not believe that its per capita needs are greater than those of Stevenage or much greater than those of East Hertfordshire.

I also know both the borough of Stevenage and Bracknell district very well. They are both new town areas; I have been leader of one, and I now represent the other. Bracknell has the higher per capita SSA, but I am convinced that Stevenage's per capita needs are greater than those of Bracknell.

Perhaps most extreme is the amazingly high standard spending assessment per capita for the borough of Slough. I can see no justification for the Slough borough spending needs to be set at double the per capita figure for such areas as Bracknell and Stevenage. It appears that Slough borough shares my view, as council spending is significantly less than the standard spending assessment.

Mr. Wilshire

Slough is next to the borough which I represent. Does my hon. Friend share my view that when a borough such as Slough, controlled by the Labour party, is able to suggest that it will be setting such low charges, it is extraordinary that a thrifty and sensibly run neighbouring authority, Spelthorne, should be faced with a charge of £400? Does he agree that that proves his point that something is sadly amiss?

Mr. Wood

I said that there was great need for a further detailed examination of some of the anomalies that emerge from the figures. Clearly—one does this in any scientific assessment of anything—if one finds exceptions, one looks for the causes of them and assesses whether there is a factor that is playing an excessive part. That must be happening in view of some of the effects that we are seeing. I hope that during the next year some of those factors will be sorted out and that a better position will be presented.

I press those points because Stevenage borough council spends excessively and I do not wish to defend that extravagance. But equally, I hope that a reconsideration of the SSA methodology will remove the anomalies and thus more readily enable me to criticise the council for not doing what it should in giving value for money.

In relation to safety nets, I welcome the response of the Government to the representations that were made in the autumn. A great political error would have been made if safety net contributions had been made by local authorities for a period of four years. One of the principal objectives of the community charge is to improve local accountability. Just one year of safety net contribution will enable local residents to make easy comparisons of local government spending more quickly.

I confess that there seems to be some curious safety net anomalies in the first year, even though they have been reduced since the first proposals were published. I have drawn the attention of the Minister of State to some of those. Regrettably, those anomalies seem to favour the high, rather than the low, spending authority.

For example, in Copeland the average rate bill per adult is £191. In Kerrier, Cornwall, the figure is £194. Copeland overspends by £28 per adult, while Kerrier spends at £50 below the SSA. But Kerrier will receive a £9 safety net payment per adult and Copeland a massive £91 and a special grant of £25.

As a result, the residents in the prudent Kerrier district will have to pay at least £216, while in high-spending Copeland the figure will be £191—no change, assuming that spending is not increased excessively. It seems that the safety net arrangements are often over-generous to the high spenders. While this matter will automatically reduce in significance, I hope that a further look will be taken at the methodology before the figures are set for next year.

I have raised those concerns because I want to see the new system of local government finance work with even greater effectiveness in future years. I am convinced that there will be much improved accountability. I am also convinced that the uniform business rate should boost the position of manufacturing industry in the north of England, which we wish to see. Councils will no longer be able to indulge in rash spending without regard to the local consequences.

The measures may not bring perfection, but a giant stride forward is being made to give us better value for money in local government spending, and they deserve our support tonight.

8.43 pm

Mr. Tony Banks (Newham, North-West)

It is interesting to speak after any Conservative Member who has suddenly realised that he has been sold a pup by the Government. I recall that in the early days of this matter there were a few Conservative Members who were consistent in their opposition to the poll tax, but in the main they were those who just saw it as unfair and inequitable. The great majority of them were swept along by the Government's propaganda. Here was another way to get at the spending patterns of Labour local authorities, they thought, and they went into the Division Lobby with great glee.

As those Conservative Members saw the proposals unwind, they realised with a degree of horror and shock—which we have taken great pleasure in witnessing today and which we witnessed in subsequent days after the original decision—that it would be a bad deal for them. Then the whingeing started. I await with interest what happens tonight. One often hears of a Tory rebellion, though often it is more mooted in the press than turning into reality in the Division Lobby.

I suspect that the Government have a serious situation on their hands tonight. The way in which the whole of the Cabinet was reeled in to sit on the Front Bench, stoically listening, gave one food for thought. I watched the Prime Minister look at her watch—she does not often stumble into local government debates; I am sure that the way in which the new system will work is as clear to her as it is to the rest of us—as she sat there in a sort of demonstration of support for her beleagured Secretary of State, hoping to quell with one of her icy glances the rebellion on her Back Benches. I hope that she has not succeeded because, as my hon. Friends have pointed out, this is the last chance Conservative Members have to do something about the iniquitous poll tax and bring the Government up short.

Sir Nicholas Bonsor (Upminster)

rose—

Mr. Banks

I give way to a man who is obviously suffering badly.

Sir Nicholas Bonsor

That is extremely kind of the hon. Gentleman. Opposition Members should appreciate why some of us will be in the same Lobby as him tonight. The reason is not because we do not like the community charge but because the SSA has been geared in such a way that it is having precisely the opposite effect to that which we were promised it would have. Authorities such as mine, which are low-spending, well-run Conservative councils, are being penalised, and authorities run by the Labour party, which overspend and waste taxpayers' money to a huge extent, are benefiting. That is why some of us will reluctantly be walking alongside the hon. Gentleman in the Lobby tonight.

Mr. Banks

I wish that I had not taken pity on the hon. Gentleman, in view of the unkind remarks he made about my local authority. As I said, the hon. Gentleman has been sold a pup and he and many of his hon. Friends have suddenly realised that, especially in view of the way in which the whole system has been moved around, tinkered with, manipulated and pulled and pushed to try to meet all the objections. Those movements have made it all the more grotesque and absurd.

But I shall be pleased to be in the same Lobby as the hon. Gentleman, and at that time he may care to tell me how he sprained his wrist. Perhaps he was picking up some of those heavy wine crates that I know he disposes around—[Interruption.] I appreciate that the hon. Gentleman is a very good vintner.

My hon. Friends and I object to the poll tax in principle, basically because it is unfair. How can anyone defend a system by which someone in a castle, and there are not many of those in London, pays the same as someone in a damp flat, of which there are many hundreds of thousands in London? That is grotesquely unfair and why we shall oppose it throughout.

We are now confronted with a new system of local authority finance. Frankly, if that is designed to make the whole thing simpler, the Schleswig-Holstein question would now be a good candidate for an entry in "Trivial Pursuit" or would be easy meat for some readers. I say that because the new system does not make any more sense than some of the other ridiculous systems that went before it.

How do these systems work and who devises them? There must have been an outbreak of acromania at the Department of the Environment. That source gave us GREAs—granted-related expenditure assessments—and now we have SSAs, standard spending assessments. What does it all mean and how has it been calculated? A bunch of number crunchers at the Department of the Environment in Marsham street have decided that my borough has a certain sort of need and that this is how much our standard spending assessment should be. It bears no relation to reality for Newham people and councillors. Indeed, I suggest that SSA could easily stand for "some silly sod's assessment," because it bears no relationship to what goes on in the London borough of Newham.

Mr. Wilshire

rose—

Mr. Banks

I will not give way, because other hon. Members wish to take part in the debate.

Mr. Wilshire

It is a good point that I wish to make.

Mr. Banks

It will be the first one the hon. Gentleman has ever made, so I had better give way to him.

Mr. Wilshire

I am fascinated by the hon. Gentleman's debunking of the attempts of other people to assess what Newham needs. Can he confirm that it is Labour party policy that Newham should simply state the figure that it wants and the Government should provide it, irrespective of whether the borough needs it?

Mr. Banks

I am rarely consulted over Labour party policy, but were I consulted, I certainly would not argue for such a ridiculous idea. That is not what we want. We want a realistic assessment of the needs of the area, determined by councillors who know and who have to stand for election—

Mr. Wilshire

And then have the Government pay it.

Mr. Banks

No, not at all. The Government will always set the broad parameters. The hon. Gentleman should bear in mind that those parameters have been very much narrowed by the Government. In 1981 central Government used to contribute about 60 per cent. to local government expenditure; the contribution is now down to about 38 per cent. That is the essence of the problem. Local government finance has been squeezed and squeezed as the ground rules have been changed over and over again at the will of the Government.

We cannot have properly organised, efficient local government finance when councillors do not know what the rules will be from one year to the next. That is the ridiculous rubbish trotted out from the Dispatch Box every year since 1979. As we all know, the position has not got better; indeed, it is far worse.

I take a close interest in what the London borough of Newham does. I am proud to say that it is a Tory-free zone. We have no fears of the Dispatch Box. There is not a Tory on the local council. The Tories could not win in Newham for the simple reason that the people can see through them every day of the week. Looking through the budget papers of Newham, I notice that in the second most deprived local authority area in the whole country, according to the Department of the Environment's indices, if we just maintained our current services for next year at £220 million of expenditure, the poll tax would be £503 per person against the Government's estimate of £337. The average rate bill in Newham is £628. Therefore, with a poll tax of £503, two adults in a household will have to pay £378 more. The increase for three adults will be £881, and so it goes on.

Newham's standard spending assessment has been reduced to £195 million. At the current rate of expenditure we will spend £25 million or about 13 per cent. over the SSA. I understand that we might be capped at that level. The old capping used to start at about 12.5 per cent. As the Secretary of State mentioned the possibility of capping, I should like the Minister to tell us how it will work. At what level will capping be triggered? What mechanisms exist for it? We do not know how the mechanism of capping will work for the poll tax.

What really rankles is that Newham, despite its manifest problems, will still have to make a net contribution to the safety net of £21 per head. Next-door Tory Redbridge, which has far more facilities and is a more affluent area, will make only a £1 per head contribution. The Minister has had complaints from his own side, but what about the complaints from our side? How have we got into a position where a deprived local authority area is contributing more than an affluent area? Why is the money going to the London borough of Waltham Forest? When my hon. Friend the Member for Leyton (Mr. Cohen) mentioned it, the hon. Member for Lancaster (Dame E. Kellett-Bowman), who has nipped out to get a fresh pint of blood, said, "Good, that is what we want." That aside demonstrates the manipulative nature of the Government and the way they are prepared to twist the system to suit their party political purposes. That is what it is all about.

I objected strongly to the hon. Member for Surbiton (Mr. Tracey) saying that London Labour boroughs, which must include mine, as the strongest Labour borough, would go for the highest possible poll tax and then try to blame it on the Government. We would have great difficulty trying to put the blame on the Government because part of the strategy is to shift all the blame on to local authorities. The Government strategy is to keep attacking and vilifying local authorities, and to keep taking money away from them. As the services deteriorate, people are expected to blame the local authorities when the Government are entirely responsible. We know what is going on. We are not stupid.

We will not impose great burdens on the people who live in Newham. We will have to consider cuts of about £17 million so that we can get down to a poll tax that is at least reasonably acceptable. We do not need lectures. We are not playing politics with the people. We are trying to protect the people from the vicious, avaricious and disreputable Government who are attacking them.

It is not just the poll tax that we face. Council tenants also face an increase of £10 a week in rents because of Government diktat. Then the Government start lecturing us about high-spending and spendthrift local councils. We do our best in Newham and we get very little assistance from the Government; indeed, we usually get a great deal of abuse.

The poll tax, which has been dreamt up by some halfwit in the Department of the Environment, is unfair, unloved and unclear. That is a reasonably good description of the Minister and of the Government.

8.56 pm

Sir George Young (Ealing, Acton)

I want to deal head on with the question that is legitimately posed to those on the Conservative side who plan to vote against the report. We are asked what we hope to achieve, given that defeating the report would not remove the community charge but would simply deprive local government of resources. I hope to answer the question in three parts.

Some of us have consistently opposed the policy that underpins the report. We voted against Second and Third Readings of the Bill, and we voted in favour of the amendment moved by my hon. Friend the Member for Hampshire, East (Mr. Mates). We came within 25 votes of changing Government policy. Nothing that has happened since has allayed our fears. On the contrary, those fears are now shared by more colleagues in the party who at the time were prepared to give the Government the benefit of the doubt, but who have seen some of our predictions come true. At a time when more colleagues are voicing their unhappiness, when there is a better chance than ever of defeating a policy-related motion, it would be absurd to abandon one's opposition and support the Government. For that reason I plan to vote against the report.

It is said that opposing the report is not a vote against the poll tax but a vote against local government, and that the House should give local authorities the resources to carry through the reform. Conservatives voted against the RSG measures between 1974 and 1979 without being accused of being anti-local government. We did not do that because we were anti-local government. How could we? We controlled most of local government then. We did it because the RSG contained a broad political statement with which we disagreed. We took a broader view then and we are entitled to take a broader view now.

Conservative Members who feel squeamish about voting against the RSG report should read a speech that was made against the RSG order. It says: The Secretary of State"— which of course was a Labour Secretary of State— claims that his is an equitable solution. We claim that he has abandoned equity and substituted an arbitrary decision. He claims rough justice. We say that he has abandoned any semblance of justice in what he is doing in the Rate Support Grant Order. The speaker continued: It is no good trying to explain to them our constituents— an increase in rates by reference to the resources element, the domestic element, the needs element, the relevant expenditure, and so on. They say 'I still have to bear a certain percentage of the increase in rates, and what are you going to do about that?"' The action urged on me and my hon. Friends was to protest in the only way possible and to vote against the order tonight."—[Official Report, 25 March 1974; Vol. 871, c. 60-61 and 70.] My right hon. Friend the Prime Minister led the Conservative party into the Lobby against the RSG order, having made that excellent speech. Therefore, let us not lean too hard on the argument that Conservatives should not vote against the RSG report. That argument does not hold up.

The final reason for voting against the report is not just about money. This is the first time that we have debated the new style RSG—the new regime and structure for funding local government. A better grant system was an intergral part of the reforms, of which the poll tax was but a part.

I shall quote from "Paying for Local Government", which was written in the optimistic prose of the present chairman of the Conservative party almost exactly four years ago. It says: Effective local government must be the cornerstone of successful local government. All too often this accountability is blurred and weakened by the complexities of the national grant system. Amplifying that criticism, the Green Paper says: Central Government grants are calculated in a complicated say that conceals the real cost of local services from the electorate. Looking ahead to the new system, we were promised a grant system which compensates for real differences in local authorities' needs, and provides additional help in the form of a flat-rate sum per adult. Chapter 10 stressed the need to develop a grant system which was more understandable and did not obscure the link between changes in local spending and changes in local taxation. The House is entitled to ask whether the report lives up to those high expectations.

I listened to my hon. Friends say that they can live with the community charge but do not like the RSG settlement, but the reasons why they do not like it are inherent in the philosophy of the community charge—the jump in taxes for those who live in low-rated property in the north-west; the redistribution of wealth from the less-well-off to the better-off; the problems for those who move to smaller accommodation to reduce their costs but find it not worthwhile; the increase in the number of people on benefit—that objection was voiced by my hon. Friend he Member for Brent, North (Sir R. Boyson)—the sheer bureaucracy and expense of a tax designed to catch everybody, regardless of means; and the problems of evasion and enforcement. Those are objections not to he RSG settlement but to the principle of the community charge.

Tonight, the House is asked to pay the bill for this reform. Despite the respect and admiration that I have for my right hon. Friend the Secretary of State, that cheque will not have my signature on it.

9.2 pm

Mr. Eddie Loyden (Liverpool, Garston)

I shall try to be brief. All the fears that we had about the poll tax have been more than confirmed by the reports before us. The figures bandied about by Ministers will be meaningless to many people. We should concentrate on why the Government decided to introduce the poll tax, which has no friends of any standing in the political, industrial or economic world. It stands condemned by almost every section of society. The revaluation in Scotland panicked the Government into taking ill-thought-out measures, the evidence of which is before us tonight.

I want to deal with the points made by my hon. Friend the Member for Newham, North-West (Mr. Banks). The Government have conducted warfare against local authorities since 1979. They have made it virtually impossible for local government to fulfil the needs of people at a time when public expenditure has become more necessary for several reasons. One reason of which we are all aware in my area—and it is probably true of all the major conurbations—is the aging population, which requires more help from social services. A commitment from local authorities is necessary to relieve the worst excesses of unemployment. Changes are taking place in local government because of falling rolls. Although the population is declining, it is still the responsibility of local government to maintain excess school buildings, arid roads. That has created great problems for local authorities. I wonder whether the Prime Minister ever visits an inner city? If she did, she would realise that since the Government came to power inner cities have become impoverished to the extent that there is not a road to walk down in my constituency that is not riddled with potholes and in a state of decline and decay.

Government policy has left local government incapable of providing for the needs of the people whom it represents. When the Liverpool city council decided to tackle the prevailing slum conditions and the badly designed post-war housing, and it began building bungalows for elderly people and pulling down the worst types of multi-storey flats, it was accused of being irresponsible. If the Government think that it is irresponsible to house people decently or to make provision for leisure centres, there is something wrong with their thinking. Those changes were necessary to benefit the local people.

The Government know nothing about what is happening in the inner cities. If they did, they would not introduce the poll tax. In my area and those of all my hon.

Friends, it will be a question not of people not paying, but of being unable to pay, the poll tax—they will have no choice in the matter. With existing levels of poverty in our towns and cities, that is the inevitable consequence of the imposition of the poll tax for many people. The party that is supposed to represent the retention and sanctity of the family unit will be responsible for parents chasing their children from home because they cannot afford to pay the additional costs of having two or three young people living with them. The Prime Minister should accept that the responsibility for that lies at the door of the Government.

I hope that tonight it will not simply be a question of the nitty-gritty of the poll tax that is opposed by Conservative Members. No comprehensive view has been expressed by the Tory party on the poll tax. Conservative Members are looking for minimum concessions to satisfy their constituents while they are biting on the ballot before the next general election.

The tax is unfair and iniquitous and has no right to be introduced. If this is an honourable House—as it is supposed to be—the No Lobby will be packed and this legislation ditched in the dustbin of history, where it belongs.

9.3 pm

Mr. Neil Hamilton (Tatton)

I have had two unusual experiences this evening, one of them pleasurable. The pleasurable experience was that I agreed totally and enthusiastically with my right hon. Friend the Secretary of State for the Environment. The unpleasurable experience was that, unfortunately, I had to disagree with my right hon. Friend the Member for Brent, North (Sir R. Boyson), whom I have known for a long time. I used to have even more in common with him as, when we first met, I also had whiskers. We have diverged in few other respects during the past 20 years, so I am sorry to have to diverge from him this evening.

Some Conservative Members take a principled view on the reform of local government expenditure. My hon. Friend the Member for Ealing, Acton (Sir G. Young) has a principled objection to the basis of the change to the community charge. Other Conservative Members, who will oppose the Government in the Division Lobby, do not take the principled view against the change in the tax but object to a facet of it. I regret that some of my hon. Friends will join the principled rebels in the Division Lobby, because that is unnecessary.

Unfortunately, there is an air of utopianism about those who oppose the change to the community charge. They seem to seek a perfect solution. As my wife continually reminds me, when she was looking for a husband she was realistic and sought the least imperfect of the available options, so she chose me. In respect of local government finance, we must choose the least imperfect of all the options. The community charge corresponds to that description. Everyone knows that the existing system is arbitrary and incomprehensible. Because of that arbitrariness and incomprehensibility, the system lacks any meaningful accountability. Most of the complaints that we have heard in the debate arise from the revelation of the arbitrariness and incomprehensibility not of the new system but of the old. The revaluation of the rateable values of property, above all else, reveals for the first time the iniquity and inequity of the previous system.

I shall support in the Division Lobby not the move to a perfect system but the move from an unfair system to a less unfair system. The virtue of the new system is that it has simplicity and transparency. That transparency is to some extent diluted because of the introduction of community charge benefit. One in four of all community charge payers will receive some form of benefit to cushion the effect of the change. That will cost nearly £2 billion next year. In addition, transitional relief will cost £700 million over three years and will have 6 million beneficiaries. No Conservative Member can say that the Government have not attempted to meet the criticisms of those who oppose the new system, many of whom will, alas, vote in the Division Lobby against us this evening.

The Government are correct to keep the lid firmly down on aggregate local government expenditure, because it constitutes about one quarter of all Government expenditure. Any Government who believe in keeping tight, firm control over public spending as a macro?-economic tool must appreciate that local authorities cannot run riot with public spending, because that undermines the Government's economic policy. That tight, firm control must be the aim of any Government, even a Labour Government. Previous Labour Governments had difficulties of this kind, too. I welcome the change from the incomprehensible old system of GREA to the new standard spending assessments.

No one can argue that the increase in SSAs for next year is unreasonable. The Government have accepted that an 11 per cent. increase in local government spending for the coming year is reasonable—that is much higher than inflation. The total amount that local government should spend, according to the Government, can increase by what I regard as a more than reasonable amount.

There are local authorities—usually Labour—that intend to spend a good deal more than that. My council, Cheshire county council, which is responsible for 92 per cent. of all local government spending in the county, proposes to increase its spending next year not by 11 per cent. but by more than 19 per cent. In addition, it will have to find the equivalent of another 5 per cent. of its total spending because, having emptied the tills last year in advance of the county council elections in order to blow the lot on a vote-buying spree, it will have to top them up again. Next year, Cheshire county council will have to find the equivalent of a 25 per cent. increase in its income. My prophecy about the likely levels of the community charge has been undermined by that proposal.

Mrs. Ann Winterton (Congleton)

My hon. Friend has been describing the overspending of Cheshire county council. Does he agree that to make the county councils more accountable, we should have elections every year rather than once every four years? Does he agree further that the time is fast approaching when the county councils should be abolished and that many of their services should be devolved to the boroughs or to central Government?

Mr. Hamilton

I have no difficulty in agreeing with my hon. Friend and neighbour, the Member for Congleton (Mrs. Winterton). The role of county councils will diminish gradually and "wither away", to use a Marxist phrase which is now out of fashion in the Labour party. As more and more schools opt out of the local education authority system, the rationale for the county councils will ultimately disappear.

Cheshire county council is controlled by an alliance of the Labour party and Liberal Democrat councillors. In my constituency, the Liberal Democrat councillors are now squealing about the high level of community charge that the county council will impose on us, which is the direct result of spending decisions that they themselves have taken. They are now trying to disclaim any responsibility and are trying to have the penny and the biscuit. Fortunately, they will not get away with it. In future local government elections, the electors will have a simple choice—whether they want the council to spend more or less. That will not only make local government more accountable, but will restore the importance of local government issues in local government elections. They will no longer be the equivalent of opinion polls on the standing of the Government at Westminster, but will restore interest in local government and accountability. That will transform the basis of local government, which will benefit everyone.

As my hon. Friend the Member for Congleton pointed out, we shall not have county council elections for several years. The results of the county council elections last year will prevent the community charge from having the beneficial effects for which we all hope for at least another two or three years, not because we are stuck with this Government, but because the decisions that local government electors took last year were not based on sensible local government issues, but on national issues. In the case of a county council such as Cheshire, which intends to spend enormously above the standard spending assessment, my right hon. Friend the Secretary of State should seriously consider charge capping. There is every reason for doing so. If the electors do not have the opportunity for several years to pass their judgment on the spending pattern of the local authority, that is the only way in which the interests of the community charge payers in Cheshire can be protected.

I also very much welcome the change from the old business rate to the national non-domestic rate, which will especially benefit the north. I am astonished that Opposition Members object in such vocal terms to the change in the business rating system as there is no bigger boost for the north and for the midlands. Manufacturing industry especially will have enormous reductions in its charges in cities such as Liverpool and Manchester.

I had much sympathy for the hon. Member for Dagenham (Mr. Gould) when I heard him earlier because he was unable to demonstrate a policy in opposition to the policy that my right hon. Friend put forward. I had thought that the Labour party policy review was intended to decide what policies the Labour party should propose, but in fact the Labour party policy review was intended to decide whether to have a policy. It seems that the Labour party has decided that it is far safer not to have a policy. I hope that the hon. Member for Dagenham will be present tomorrow for the debate initiated by my hon. Friend the Member for Eastbourne (Mr. Gow), when we shall be debating a motion which says that the Labour party's policy deserves scrutiny by the House. He may then be able to give some of the answers that he was unable to give us today.

It is utter hypocrisy for the Labour party to oppose the motions tonight, as it is unable to offer an alternative and only criticises for the sake of it. However, the day of reckoning will come for all those overspending Labour authorities because at the general election, the people will see the cynical trick that the Labour party is trying to impose on us and once again, they will restore a Conservative Government to Westminster. These motions and our policy on the community charge will contribute considerably towards that.

9.19 pm

Mr. David Blunkett (Sheffield, Brightside)

First, let me thank the Minister for Local Government and Inner Cities and his office for providing me with information in a Brailleable form.

I understand from the media that he has been invited to advise the Polish Government on decentralisation and the establishment of democratic local government. I wish the Poles well. Once they have learnt about our system they may well feel that General Jaruzelski has a great deal to offer. I imagine that they will yearn for a poll tax and for water privatisation like a hole in the head. I wish the Minister luck with his advice.

It is 11 years since the big experiment in tinkering with local government and local democracy began. Today's debate and its subjects—the standard spending assessment, the safety net and the new distribution system—are the culmination of 11 years of interference and muddle. As we have said on a number of occasions, each change has brought its own nightmare for the Ministers responsible. Ministers have asked civil servants again and again to devise new ways round the labyrinth that they have created. They have created new obstacles that have had to be overcome. They have tried to find ways of preventing local government from using ingenuity. Then they have blamed local government for using ingenuity. Then they ensured that there were low spending targets that bore no resemblance to reality, and blamed local government for not managing to meet those targets. When local government could not meet those targets, the Government cut grant and suggested that local government was to blame for not managing the impossible.

We have come full circle since the Local Government, Planning and Land Act 1980 and the introduction of the new block grant system—all the way round to the poll tax and the new standard spending assessments. Environment Ministers are facing the dilemma that every Environment Minister has faced since 1979. If they are determined to block the local democratic system and to fix the amount that local authorities should spend, they must take the consequences.

Earlier today, we had the challenge from the Secretary of State: if local authorities do not spend near to the targets that they have been set, the Government will introduce poll tax capping. The chairman of the Conservative party advised strongly against rate capping four years ago. He was rapidly moved from his post, but since then he has undergone a resurgence, so perhaps there is hope yet for the Secretary of State for the Environment. The chairman of the Tory party advised that capping was undemocratic and intellectually unjustifiable. Of course it is, especially coming from a Government who claimed that the poll tax brought new accountability and new choice to the voter.

The Government cannot have it both ways. They cannot suggest that local electors will be able to choose the local administration that they want and determine the amount that it spends through the new system and then, in the next breath, propose to stop that happening. Matters are made worse by the fact that the Secretary of State has so often repeated the brief that he was originally given, which said that the community charge puts the community in charge. It was a trite phrase when it was used on 6 November. Now that poll tax capping has been dreamt of so that the Government may wave a stick over local authorities, and that phrase has seemingly been forgotten, it is shown in a hypocritical and disgraceful light.

One Conservative Member had the audacity to let the cat out of the bag when he said that capping would be necessary until democracy "started to work better". In other words, democracy is fine, so long as it yields results for the Conservative party. As the right hon. Member for Brent, North (Sir R. Boyson) would put it, that is quite immoral. It is unnecessarily provocative and leads to the assumption that the Government have not only got their figures wrong, but their assumptions that the poll tax would prevent public spending and hold down spending levels by resulting in further cuts in public services have also been proved wrong.

I challenge the Secretary of State on the figures he gave this afternoon in relation to whether central or local government has increased its spending most in recent years. Taking 1978–79 as the base level—the year the Conservative Government came in to office—and the current financial year of 1989–90, central Government spending has increased by 177 per cent. in cash terms, whereas local government spending in cash terms, even taking into account the transfer of housing benefit to local government, has increased by 146 per cent.

Those figures come from table 4.4 of the public expenditure White Paper and they are the honest truth. Under the Conservatives, central Government have increased their spending whereas local government has had to cut its spending. Of course, it is central Government who have increased the overall general level of taxation and local government which has got the blame for what has happened at local level. As inflation has risen, as the problems of local government have increased, as grants have been cut to the tune of 5p on national income tax, local government and the rating system have been blamed for the resulting anomalies and difficulties.

However, tonight, some Conservative Members have had the audacity to say that, if the electors of Conservative authorities are faced with large poll tax bills, it is because of a mistake in the way in which the Government have operated the safety nets, the transition, or the standard spending assessment formula. However, if Labour authorities are likely to be spending over the Government's targets, they say that that is because of profligacy and uncontrolled public spending. The Government cannot have it both ways. If Tory authorities are miles over the likely spending targets—if Conservative boroughs cannot keep down to the £278 level—and if neighbouring Labour-controlled authorities are in exactly the same position, the same reasons must, of course, apply.

The reasons that apply tonight are simple. The system is not working properly. Indeed, it cannot work properly because it was predicated on the wrong assumptions in the first place. If a tax initially attempts to take a flat rate from every adult, but rebates, transition, and safety nets then have to be introduced, if the standard spending assessments then have to be altered to try to help, and if there is then something called special grants, which are commonly known in the Department of the Environment as "the Pendle factor", which means "saving Conservative seats", all that adds up not only to muddle and confusion, but to an impossibility for local government which is already struggling with a variety of problems and difficulties.

Mr. Thomas Graham (Renfrew and Inverclyde)

Does my hon. Friend know that in Scotland many people who are entitled to a rebate are not getting it? When I wrote to the Minister, I was told that rebates were too costly to administer if they were for less than, say, £25. Many people in Scotland, including elderly and disabled people and desperately poor people, are not getting their rebate because the Government do not think that £25 is enough for them to claim. That is lamentable. The problem is that the Government are taking from the poor. Although they guaranteed to give folk their rebates, people who are entitled to them are not getting them.

Mr. Blunkett

I appreciate the particular problems that have already been experienced in Scotland, and especially the difficulty and confusion that there has been about the rebate system.

I advise the Secretary of State and his Minister of State that if they introduce poll tax capping this year on top of the existing administrative chaos that will result from transition, special help and the rebate system, they will create the most incredible havoc in local government, which could not possibly have been envisaged, as local authorities try to return to poll taxpayers the amount that the Government have specified, while cutting services to make that possible.

I must make it clear that the rebate system already results in major confusion. Even in a Tory borough such as Harrogate, which is fairly well off, the Government's television advertising has resulted in 5,000 coupons being returned. The district treasurer believes that only 2,000 people will be found to be entitled to relief.

There is already a problem in local government administration. District treasurers across the country are spelling it out. Two thirds of local councils will have to raise between £60 and £100 on top of the Government guidelines in order to maintain their present level of spending. The Chartered Institute of Public Finance and Accountancy has already spelt out in a recent study that the Government's belief that only 15 local authorities in England will spend over £350 in the coming year is sheer mythology. At least 139 authorities, and probably many more, will spend more than £350. If the Secretary of State chooses to rate-cap authorities on the basis that they spend 25 per cent. or more above their assessment or notional figure, he will have to rate-cap in excess of a quarter of local authorities in England.

On the figures currently available, the Secretary of State will have to rate-cap his own district council in Bath. I look forward to his going to Bath, Roman helmet in hand, to say that the figures that he dreamed up, upon which the council will be rate-capped, are right.

Mr. Chris Patten

The hon. Gentleman will be interested to know that if it was left to the district council in Bath, it would have no difficulty in coming within the figures that we have suggested. If there are problems in Bath, it will be because of the overspending by the county council, which proposes a budget increase of 15.7 per cent. next year.

Mr. Blunkett

It is always someone else when it is a Tory council. The burghers of Bath must be seething about what is happening to them. Whatever the reason, it will be the district council that the Government will have to cap. It would have to levy that particular rate in that district. The Secretary of State should face his poll tax capping with open eyes. As we advised the then Secretary of State six years ago that rate capping would not achieve its goal, I advise this Secretary of State that poll tax capping will not achieve its goal. He will have to invent something else. That something else in the end will be that central Government will take over direction of local government spending and will fix local authority budgets. When that happens, the Government will be held accountable for massive cuts in education spending, and social service spending on care of the elderly, the disabled and the disadvantaged.

It is interesting that, whenever the Government want to say that they have done something good, for example, in education, care of the elderly or taking care of the environment, they are happy to parade how much local government spends. When the tables are turned, and people talk about high-spending local authorities—which are responsible for the statistics that the Government wheel out on education spending, pupil-teacher ratios and spending on books and equipment in schools—it is always the Labour authorities who are to blame.

Let us get the matter clear. Local government spending is spending on our children, our parents, the family next door and creating a decent, caring community. The poll tax was devised to prevent that and to push down public spending. When the Government do that, even in their most-favoured authorities such as Wandsworth, in which I live when I am in London, the worm will turn. When that council saw its figures, it dissociated itself from the Secretary of State's spending assumptions. Next time the Secretary of State wheels out Wandsworth, he should remember what it told him. Even with a favourable safety net, it does not agree with the Secretary of State.

The figure of £278 is a myth. The spending assessments are compiled out of fairyland. The safety net does not work. The special grants have failed to mollify the Secretary of State's own Back Benchers. The electorate are not fools. They have woken up to what is happening. The simplified system has turned out to be a sillier system. Assessment of needs has become political gerrymandering.

In the end, that will catch up with everyone in the Conservative party. That is why tonight it is important that those who have wavered, those who are unsure, should make a concrete decision, not simply on the spending assessments or on the safety net, but on the Government's failure to spell out what their cushioning effect will mean to the unified business rate.

Conservative Members from the north must not delude themselves. After five years, manufacturing industry in their areas will reap the bitter fruits of the revaluation. In the end they will not benefit. The combination of redistribution of cuts in grants and the delay in implementing the revaluation will cost them dear.

When the safety nets are off, Yorkshire and Humberside will lose £289 million, the north will lose £171 million, the east midlands will lose £41 million, the north-west, I must tell the hon. Member for Lancaster (Dame E. Kellett-Bowman), will lose £113 million and inner London will lose £515 million. Far from there being automatic gains and windfalls, if hon. Members examine the figures more closely they will see what is really happening in their own back yards.

Mr. Rooker

As my hon. Friend is appealing to Tory business men and reflecting on the back yards of Conservative Members, would he care to reflect in his final few minutes on the dwellings of Conservative Members, not one of whom will lose under the poll tax? They will march into the Lobby for massive personal gains under the poll tax at 10 o'clock tonight. The larger the property in which they live, the bigger their gain. They will vote for themselves at 10 o'clock.

Mr. Blunkett

If they vote for themselves, they might have a lower poll tax for two years, but in two years' time they may not have a job in the House to come to. As we have seen with some Cabinet Members, that may mean for some a trebling of their salaries rather than a downturn, so there may not be the interest in that which we would expect. But perhaps tonight Conservative Members will take cognisance of what the right hon. Member for Brent, North had to say about that shining light on the "Rhodes" to Damascus that he described. Perhaps they will have in their minds the moral wrong and the political ineptitude that he described as they go through the Lobbies tonight. Perhaps they will hear in their minds his words about a "death-inducing draught". Perhaps they will take on board that immovable and ingenious phrase "the big fleece"—the big fleece that attempts to pull the wool over the eyes of the electorate, the big fleece that comes from those who, like sheep, will go into the Lobby with their tails between their legs tonight.

The challenge to every Conservative Member is not to be frightened of the Whips, not to be worried about what will happen to them next week, but to be more concerned with what will happen to them in their localities at the local elections and in their constituencies at the general election.

The challenge tonight is to those who care, to those who have a conscience about what is happening to those who cannot afford the poll tax. It may be that tonight cowards will flinch and their colleagues will sneer, but tomorrow the electorate will ensure that they have something to fear.

9.30 pm

The Minister for Local Government and Inner Cities (Mr. David Hunt)

Every year we have an interesting and vigorous debate about the level of support for local government. I have had the opportunity of sitting through 26 speeches. Although I cannot say that I agreed with all those made by Conservative Members, I disagreed with every one made by Opposition Members. The debate has been of a high standard. Points have been made effectively and competently and, where a divide has been exposed, it has been done clearly to enable us to make the decisions which we have to take tonight.

Although I welcomed the kind, opening words of the hon. Member for Sheffield, Brightside (Mr. Blunkett), he did not follow the debate as arguments were developed on each side of the Chamber. If he looks at his speech and some of the statistics, he will see that he made a series of statements which are not borne out by the way in which the debate has progressed.

My right hon. Friend the Secretary of State started the debate with a quite brilliant speech. It was so good that the hon. Member for Bolsover (Mr. Skinner), whose absence is now noticed, was heard to shout, "My God, this is a seminar." I always pay close attention to what the hon. Member for Bolsover says, and I rushed to the dictionary. A seminar is defined as an opportunity for education and advancement. I do not know where the hon. Gentleman has gone, but he has missed an opportunity.

My right hon. Friend has asked me to deal with the point raised by the hon. Member for Norwood (Mr. Fraser). Lambeth faces not a mistake involving £11 million, but an appeal result on the rateable value of county hall. That has meant that Lambeth will bear half the reduction and must pay back money which the appeal decided it should never have received. That was not the way in which the hon. Member for Norwood put it. I hope that he will accept the facts as I have presented them.

Mr. Fraser

Does the Minister accept that, whatever caused it, that is a huge loss of income which, because of the way in which the system operates, will not be compensated for in the same way as Wandsworth or any other local authority will be compensated for a rise in expenditure of more than £25 per head per annum?

Mr. Hunt

We shall have to consider elsewhere—between officials—the points which the hon. Gentleman has made. I was making the point that the hon. Gentleman described the incident as an error on the part of the revenue valuation office officials. I am putting that in context.

My hon. Friend the Member for Dorset, South (Mr. Bruce) and—

Mr. Graham Riddick (Colne Valley)

Does my hon. Friend agree that it seems quite clear that a number of Labour councils, including my own of Kirklees, are intending to set as high a comunity charge rate as possible so that they can try to score party political points by blaming the Government for the high level of community charge? Does my hon. Friend agree that councils which act in such a way and penalise many people on modest and low incomes will be acting in a wholly immoral and cruel way? Will he assure me now that he will not flinch from capping those irresponsible Labour authorities?

Mr. Hunt

I give my hon. Friend the assurance that he seeks. I am told by my officials that this is not a time of year when district and county council treasurers are known to underestimate the level of spending that lies ahead. What is wrong is that this year certain Labour councils made a policy decision to increase spending—as in the case of Kirklees, with an increase of about 18 per cent.—with the result that there will be a high community charge.

Mr. John Evans (St. Helens, North)

Is the Minister aware that St. Helens has suffered a £9.8 million reduction in its revenue support grant? That represents an extra payment of £65 for every poll tax payer. St. Helens borough council, which, as the Minister knows, is not a profligate authority, faces imposing a poll tax of more than £400 per person. Is that fair on St. Helens?

Mr. Hunt

I do not accept that from the hon. Gentleman. I ask right hon. and hon. Members who want to intervene to allow me to respond first to those right hon. and hon. Members in all parts of the House who attended the entire debate. I have evidence to show that Labour councils are artificially inflating the community charge that they intend to impose. I shall return to that point.

I believe that the hon. Member for Dagenham (Mr. Gould) misunderstands the figure of £32.8 billion for total standard spending. He stated, as he will discover if he reads his speech in Hansard, that that figure did not take into account balances. The hon. Gentleman should have compared spending against spending, not spending against the way in which the money is raised. The figure of £32.8 billion represents an 11 per cent. increase over the equivalent figure in this year. That is why my right hon. Friend the Secretary of State clearly made the point that there has been an adequate increase in the assumed and appropriate levels of spending to produce the standard level of service.

The hon. Gentleman mentioned the CIPFA report, which illustrated what the situation would be if spending were substantially increased on top of the overspending this year. The point has been echoed in speech after speech, particularly by my right hon. and hon. Friends, that CIPFA is suggesting overspending on top of overspending. In 1989–90, local authorities budgeted to increase spending by 9 per cent., making a total increase over two years of 20 per cent. The 1989–90, budgeted overspend was 4 per cent., so CIPFA is building overspending on top of overspending.

What would have been the effect if we had accepted those figures and had continued with the existing system? I reiterate the point made by my right hon. Friend the Member for Chingford (Mr. Tebbit) that there would have needed to be a domestic revaluation. If the domestic rate system had continued, on CIPFA's figures, rates would have increased this year by an average of 24 per cent.

Mr. Gould

The Minister's 11 per cent. increase is meaningless because it is an increase on an assumed level of spending for the current year by comparison with the total standard spending of £32.8 billion for the forthcoming year. It is a comparison between two assumed levels of spending rather than a comparison with the actual level of spending, which is what local authorities must face.

Mr. Hunt

The hon. Member for Dagenham ought to think again about my right hon. Friend's speech. It was a seminar to which he should have paid more attention.

The hon. Member for Dagenham also came to the House in an irresponsible manner to give us what he described as a progress report on Labour's alternative. He said, "I'm coming to give you a progress report on where we are." The progress report was—no progress at all.

Ms. Armstrong

Before the Minister gets himself into real trouble, will he tell the House why he assumes that any decisions taken in local government are automatically against the interests of people and that therefore the Government have to protect people? That is his attitude to local government, and how it makes its decisions. Local government has been accountable to the electorate since the election of the Government. Why is he so against local government? Why is he right and it is wrong?

Mr. Hunt

I think that that was a brave attempt by Durham to move to the aid of Dagenham. I shall return to that subject in a moment.

If the hon. Member for Dagenham intends to be taken seriously then—[Interruption.] I am winding up the debate and I am responding to points that hon. Members have made. If the hon. Member for Dagenham wants to be taken seriously by the House, he should explain what has happened to the policy that the hon. Member for Copeland (Dr. Cunningham) announced at a press conference. [Interruption.] I am responding to the point that the hon. Member for Dagenham made. The Opposition may not like it, but next time the hon. Gentleman makes a progress report, would he please report progress, because we are getting impatient and so is the country?

Dr. John Reid (Motherwell, North)

Will the hon. Gentleman give way?

Mr. Hunt

In a moment.

We heard an excellent speech from my hon. Friend the Member for Southend, East (Mr. Taylor), who pointed out the importance of making the same decision in this debate as we did when we debated the introduction of the charge in Scotland.

The hon. Member for Berwick-upon-Tweed (Mr. Beith) made an interesting speech and proposed an alternative to the charge, as did the hon. Member for Woolwich (Mr. Cartwright). They proposed a local income tax, but I do not think that that is a proper alternative because, as I have pointed out on many occasions, it would mean having a "Chancellor of the Exchequer" in many town halls, and that is unacceptable.

Dr. Reid

Will the hon. Gentleman give way?

Mr. Hunt

Just one second.

The hon. Member for Tottenham (Mr. Grant) made a good speech, and I give him credit for staying in the debate for some considerable time. He said that the amount of money provided is not sufficient. He missed the point that my right hon. Friend made—that, if one considers the aggregate external finance coming in to local authorities, one sees that the figure in the coming year of £23.1 billion will mean 8.5 per cent. more financing coming in from outside than in this financial year.

My hon. Friend the Member for Derbyshire, South (Mrs. Currie) made a good speech, and she reminded us of the profligacy of Derbyshire county council.

The hon. Member for Birmingham, Perry Barr (Mr. Rooker) made an interesting speech on wage increases. My record is reasonably good on that issue. When the 8.8 per cent. National and Local Government Officers Association settlement was announced, on the casting vote of Lancashire, as a result of Labour forcing through an inflationary pay increase that took no account of productivity, all the employers met afterwards, and said that it was a disaster. I said that the settlement was bad news for the community charge payer. How can the hon. Gentleman now expect me to fund that increase in full? The comunity charge payers now realise the price that they will have to pay for that inflationary pay award.

I think that the hon. Member for Stalybridge and Hyde (Mr. Pendry) was wrong about sports clubs, which pay rates at present. Some will experience a drop in value. The hon. Gentleman's main point, however, was that some local authorities—I think that he meant Labour authorities—did not, sadly, recognise the importance of sports clubs. I have given local authorities more power to give sports clubs greater preference, and it is to that that the hon. Gentleman should address his comments.

I listened carefully to what was said by my right hon. Friend the Member for Brent, North (Sir R. Boyson). I recognise that he is one of the most distinguished of my predecessors as Minister for Local Government, and that he did much to sell the principle of the community charge during the 1987 general election campaign. I commend him for that. He would have introduced the charge in a different way, but I hope that he will give us credit for having introduced a transitional relief scheme which, I believe, will provide real relief for just the people he mentioned.

Mr. Robert Boscawen (Somerton and Frome)

Before my hon. Friend leaves the subject of overspending by Labour councils, will he consider the overspending by Liberal councils? One of the issues that worry us in the west of England is that of the many dwellings that will face the standard community charge. Is that taken into account in revenue support grant, or is it a bonus for the councils? If it is a bonus, will the councils be able to return it to the ratepayers in reduced community charge, or will it encourage higher spending?

Mr. Hunt

My hon. Friend is right to recognise that the standard community charge is not included in the settlement that we are debating tonight. According to our calculations, it represents an increase of about £80 million over and above this settlement. It is concentrated in particular parts of the country, such as my hon. Friend's constituency. I have, however, set a discretion for local authorities to use the multiplier in the way that they think fit for local considerations, and they now have the power to reduce the standard charge in a number of cases. I should be happy to deal with that point, and others that I cannot cover now, by writing to the hon. Members concerned. [Interruption.] I have to do that only because of the time constraint.

Responding to my hon. Friend the Member for Surbiton (Mr. Tracey), the hon. Members for Dagenham and for Newham, North-east (Mr. Leighton) sad that it was an outright calumny to suggest that Labour authorities were trying to push up the community charge level that they were now announcing in an attempt to turn people against the community charge. [Interruption.] A document has come into my hands—unfortunately, someone seems to have left it behind after a meeting in Southwark—which advises Labour councillors to consider: What is more important—short term protection of people by setting low community charges, which the document calls poll taxes"— [Interruption.] This is a genuine document— or longer term protection by getting rid of the poll tax? It refers to the highest rate you can get away with". I readily make this available—[Interruption.]

I say to my hon. Friends, let us turn the attack where it belongs. Let us concentrate our fire on the Opposition Benches. It is a generous settlement in the present financial climate. It will give local authorities 8.5 per cent. more in business rates and government grants. There is the most generous form of rebates and community charge rebates. We have decided to accelerate the payout to local authorities in payment of grant this year. It is a good settlement. I have no hesitation in recommending it to the House, and I urge my right hon. and hon. Friends to join me in the Lobby tonight in voting for what I sincerely believe will be a simpler and fairer system.

Mr. Speaker

I shall put the Question on each of the motions separately. I understand that it is desired to have a Division on motions Nos. 2 and 3. I shall put motion No. 1 first.

Question put and agreed to.

Resolved, That the Population Report (England) (House of Commons Paper No. 48), a copy of which was laid before this House on 11th January, be approved.

It being Ten o'clock, MR. SPEAKER proceeded, pursuant to the Order [12 January], to put forthwith the Questions necessary to dispose of proceedings on the motions.

Motion made, and Question put forthwith, That the Revenue Support Grant Report (England) 1990–91 (House of Commons Paper No. 47), a copy of which was laid before this House on 11th January, be approved.—[Mr. Fallon.]

The House proceeded to a Division—

Mr. Joseph Ashton (Bassetlaw) (seated and covered)

On a point of order, Mr. Speaker. Because they find themselves in severe difficulties tonight, the Government have asked the hon. Member for Littleborough and Saddleworth (Mr. Dickens) to come to the House on his crutches and the hon. Member for Harborough (Sir J. Farr) also to be here, although I understand that he has not been well. Do you agree, Mr. Speaker, that, in those circumstances, it would be right to nod those two Members through the Lobby, thereby helping the Government to maintain their majority? That would be preferable to the disabled being dragged through to save the Government.

Mr. Speaker

That is a matter for the usual channels. I am sure that it could be arranged.

The House having divided: Ayes 318, Noes 272.

Division No. 39]	[10.00
AYES
Aitken, Jonathan	Bennett, Nicholas (Pembroke)
Alexander, Richard	Bevan, David Gilroy
Alison, Rt Hon Michael	Blackburn, Dr John G.
Amery, Rt Hon Julian	Blaker, Rt Hon Sir Peter
Amess, David	Body, Sir Richard
Amos, Alan	Boscawen, Hon Robert
Arbuthnot, James	Boswell, Tim
Arnold, Jacques (Gravesham)	Bottomley, Peter
Arnold, Tom (Hazel Grove)	Bottomley, Mrs Virginia
Ashby, David	Bowden, A (Brighton K'pto'n)
Aspinwall, Jack	Bowden, Gerald (Dulwich)
Atkins, Robert	Bowis, John
Baker, Rt Hon K. (Mole Valley)	Braine, Rt Hon Sir Bernard
Baker, Nicholas (Dorset N)	Brandon-Bravo, Martin
Baldry, Tony	Brazier, Julian
Banks, Robert (Harrogate)	Bright, Graham
Batiste, Spencer	Brooke, Rt Hon Peter
Bellingham, Henry	Brown, Michael (Brigg & Cl't's)

Browne, John (Winchester)	Hague, William
Bruce, Ian (Dorset South)	Hamilton, Hon Archie (Epsom)
Buck, Sir Antony	Hamilton, Neil (Tatton)
Budgen, Nicholas	Hanley, Jeremy
Burns, Simon	Hannam, John
Burt, Alistair	Hargreaves, A. (B'ham H'll Gr')
Butcher, John	Harris, David
Butler, Chris	Haselhurst, Alan
Butterfill, John	Hawkins, Christopher
Carlisle, John, (Luton N)	Hayes, Jerry
Carlisle, Kenneth (Lincoln)	Hayward, Robert
Carrington, Matthew	Heathcoat-Amory, David
Carttiss, Michael	Hicks, Mrs Maureen (Wolv' NE)
Cash, William	Higgins, Rt Hon Terence L.
Chalker, Rt Hon Mrs Lynda	Hill, James
Channon, Rt Hon Paul	Hind, Kenneth
Chapman, Sydney	Hogg, Hon Douglas (Gr'th'm)
Chope, Christopher	Holt, Richard
Churchill, Mr	Hordern, Sir Peter
Clark, Hon Alan (Plym'th S'n)	Howard, Rt Hon Michael
Clark, Dr Michael (Rochford)	Howarth, Alan (Strat'd-on-A)
Clark, Sir W. (Croydon S)	Howarth, G. (Cannock & B'wd)
Clarke, Rt Hon K. (Rushcliffe)	Howe, Rt Hon Sir Geoffrey
Colvin, Michael	Howell, Rt Hon David (G'dford)
Conway, Derek	Hughes, Robert G. (Harrow W)
Coombs, Anthony (Wyre F'rest)	Hunt, David (Wirral W)
Coombs, Simon (Swindon)	Hunt, Sir John (Ravensbourne)
Cope, Rt Hon John	Hunter, Andrew
Couchman, James	Hurd, Rt Hon Douglas
Cran, James	Irving, Sir Charles
Critchley, Julian	Jack, Michael
Currie, Mrs Edwina	Jackson, Robert
Curry, David	Janman, Tim
Davies, Q. (Stamf'd & Spald'g)	Jessel, Toby
Davis, David (Boothferry)	Jones, Gwilym (Cardiff N)
Day, Stephen	Jones, Robert B (Herts W)
Devlin, Tim	Jopling, Rt Hon Michael
Dickens, Geoffrey	Kellett-Bowman, Dame Elaine
Dorrell, Stephen	Key, Robert
Douglas-Hamilton, Lord James	Kilfedder, James
Dover, Den	King, Roger (B'ham N'thfield)
Eggar, Tim	King, Rt Hon Tom (Bridgwater)
Emery, Sir Peter	Kirkhope, Timothy
Evans, David (Welwyn Hatf'd)	Knapman, Roger
Evennett, David	Knight, Greg (Derby North)
Fairbairn, Sir Nicholas	Knight, Dame Jill (Edgbaston)
Fallon, Michael	Knowles, Michael
Farr, Sir John	Lamont, Rt Hon Norman
Favell, Tony	Lang, Ian
Fenner, Dame Peggy	Latham, Michael
Field, Barry (Isle of Wight)	Lawrence, Ivan
Finsberg, Sir Geoffrey	Lawson, Rt Hon Nigel
Fishburn, John Dudley	Leigh, Edward (Gainsbor'gh)
Fookes, Dame Janet	Lennox-Boyd, Hon Mark
Forman, Nigel	Lightbown, David
Forsyth, Michael (Stirling)	Lilley, Peter
Forth, Eric	Lloyd, Sir Ian (Havant)
Fowler, Rt Hon Sir Norman	Lloyd, Peter (Fareham)
Fox, Sir Marcus	Lord, Michael
Franks, Cecil	Luce, Rt Hon Richard
Freeman, Roger	Lyell, Rt Hon Sir Nicholas
French, Douglas	Macfarlane, Sir Neil
Fry, Peter	MacGregor, Rt Hon John
Gale, Roger	MacKay, Andrew (E Berkshire)
Gardiner, George	Maclean, David
Garel-Jones, Tristan	McLoughlin, Patrick
Glyn, Dr Sir Alan	McNair-Wilson, Sir Michael
Goodson-Wickes, Dr Charles	McNair-Wilson, Sir Patrick
Gorman, Mrs Teresa	Madel, David
Gow, Ian	Major, Rt Hon John
Grant, Sir Anthony (CambsSW)	Malins, Humfrey
Greenway, Harry (Ealing N)	Mans, Keith
Greenway, John (Ryedale)	Maples, John
Gregory, Conal	Marland, Paul
Griffiths, Sir Eldon (Bury St E')	Marlow, Tony
Griffiths, Peter (Portsmouth N)	Marshall, John (Hendon S)
Grist, Ian	Marshall, Michael (Arundel)
Ground, Patrick	Martin, David (Portsmouth S)
Grylls, Michael	Maude, Hon Francis
Gummer, Rt Hon John Selwyn	Mawhinney, Dr Brian

Mayhew, Rt Hon Sir Patrick	Shersby, Michael
Mellor, David	Sims, Roger
Miller, Sir Hal	Skeet, Sir Trevor
Mills, Iain	Smith, Tim (Beaconsfield)
Mitchell, Andrew (Gedling)	Soames, Hon Nicholas
Mitchell, Sir David	Speed, Keith
Moate, Roger	Spicer, Sir Jim (Dorset W)
Monro, Sir Hector	Spicer, Michael (S Worcs)
Montgomery, Sir Fergus	Stanbrook, Ivor
Moore, Rt Hon John	Stanley, Rt Hon Sir John
Morris, M (N'hampton S)	Stern, Michael
Morrison, Rt Hon P (Chester)	Stevens, Lewis
Moss, Malcolm	Stewart, Allan (Eastwood)
Moynihan, Hon Colin	Stewart, Andy (Sherwood)
Mudd, David	Stewart, Rt Hon Ian (Herts N)
Neale, Gerrard	Stokes, Sir John
Needham, Richard	Stradling Thomas, Sir John
Nelson, Anthony	Sumberg, David
Neubert, Michael	Summerson, Hugo
Newton, Rt Hon Tony	Tapsell, Sir Peter
Nicholls, Patrick	Taylor, Ian (Esher)
Nicholson, David (Taunton)	Taylor, John M (Solihull)
Nicholson, Emma (Devon West)	Taylor, Teddy (S'end E)
Norris, Steve	Tebbit, Rt Hon Norman
Onslow, Rt Hon Cranley	Thatcher, Rt Hon Margaret
Oppenheim, Phillip	Thompson, D. (Calder Valley)
Page, Richard	Thompson, Patrick (Norwich N)
Paice, James	Thornton, Malcolm
Parkinson, Rt Hon Cecil	Thurnham, Peter
Patnick, Irvine	Townend, John (Bridlington)
Patten, Rt Hon Chris (Bath)	Townsend, Cyril D. (B'heath)
Patten, Rt Hon John	Tracey, Richard
Pattie, Rt Hon Sir Geoffrey	Tredinnick, David
Porter, Barry (Wirral S)	Trippier, David
Porter, David (Waveney)	Trotter, Neville
Portillo, Michael	Twinn, Dr Ian
Powell, William (Corby)	Vaughan, Sir Gerard
Price, Sir David	Viggers, Peter
Raffan, Keith	Waddington, Rt Hon David
Raison, Rt Hon Timothy	Wakeham, Rt Hon John
Redwood. John	Waldegrave, Rt Hon William
Renton, Rt Hon Tim	Walden, George
Rhodes James, Robert	Walker, Bill (T'side North)
Riddick, Graham	Walker, Rt Hon P. (W'cester)
Ridley, Rt Hon Nicholas	Waller, Gary
Ridsdale, Sir Julian	Ward, John
Rifkind, Rt Hon Malcolm	Wardle, Charles (Bexhill)
Roberts, Wyn (Conwy)	Warren, Kenneth
Roe, Mrs Marion	Watts, John
Rossi, Sir Hugh	Wheeler, Sir John
Rost, Peter	Whitney, Ray
Rowe, Andrew	Widdecombe, Ann
Rumbold, Mrs Angela	Wilkinson, John
Ryder, Richard	Winterton, Mrs Ann
Sackville, Hon Tom	Winterton, Nicholas
Sainsbury, Hon Tim	Wood, Timothy
Sayeed, Jonathan	Woodcock, Dr. Mike
Scott, Rt Hon Nicholas	Yeo, Tim
Shaw, David (Dover)	Younger, Rt Hon George
Shaw, Sir Giles (Pudsey)
Shaw, Sir Michael (Scarb')	Tellers for the Ayes:
Shelton, Sir William	Mr. Alastair Goodlad and
Shephard, Mrs G. (Norfolk SW)	Mr. David Lightbown.
Shepherd, Colin (Hereford)

NOES
Abbott, Ms Diane	Beggs, Roy
Allason, Rupert	Beith, A. J.
Allen, Graham	Bell, Stuart
Anderson, Donald	Benn, Rt Hon Tony
Armstrong, Hilary	Bennett, A. F. (D'nt'n & R'dish)
Ashdown, Rt Hon Paddy	Benyon, W.
Ashley, Rt Hon Jack	Bermingham, Gerald
Ashton, Joe	Bidwell, Sydney
Banks, Tony (Newham NW)	Blair, Tony
Barnes, Harry (Derbyshire NE)	Blunkett, David
Barnes, Mrs Rosie (Greenwich)	Boateng, Paul
Barron, Kevin	Bonsor, Sir Nicholas
Battle, John	Boyes, Roland
Beckett, Margaret	Boyson, Rt Hon Dr Sir Rhodes

Bradley, Keith	Hargreaves, Ken (Hyndburn)
Bray, Dr Jeremy	Harman, Ms Harriet
Brown, Gordon (D'mline E)	Hattersley, Rt Hon Roy
Brown, Nicholas (Newcastle E)	Hayhoe, Rt Hon Sir Barney
Brown, Ron (Edinburgh Leith)	Haynes, Frank
Bruce, Malcolm (Gordon)	Healey, Rt Hon Denis
Buchan, Norman	Heffer, Eric S.
Buckley, George J.	Henderson, Doug
Caborn, Richard	Hicks, Robert (Cornwall SE)
Callaghan, Jim	Hinchliffe, David
Campbell, Menzies (Fife NE)	Hoey, Ms Kate (Vauxhall)
Campbell, Ron (Blyth Valley)	Hogg, N. (C'nauld & Kilsyth)
Campbell-Savours, D. N.	Home Robertson, John
Canavan, Dennis	Hood, Jimmy
Carlile, Alex (Mont'g)	Howarth, George (Knowsley N)
Cartwright, John	Howell, Rt Hon D. (S'heath)
Clark, Dr David (S Shields)	Howell, Ralph (North Norfolk)
Clarke, Tom (Monklands W)	Howells, Geraint
Clay, Bob	Howells, Dr. Kim (Pontypridd)
Clelland, David	Hoyle, Doug
Clwyd, Mrs Ann	Hughes, John (Coventry NE)
Cohen, Harry	Hughes, Robert (Aberdeen N)
Coleman, Donald	Hughes, Roy (Newport E)
Cook, Frank (Stockton N)	Hughes, Simon (Southwark)
Cook, Robin (Livingston)	Hume, John
Corbett, Robin	Illsley, Eric
Corbyn, Jeremy	Ingram, Adam
Cousins, Jim	Janner, Greville
Cox, Tom	Jones, Barry (Alyn & Deeside)
Crowther, Stan	Jones, Ieuan (Ynys Môn)
Cryer, Bob	Jones, Martyn (Clwyd S W)
Cummings, John	Kaufman, Rt Hon Gerald
Cunliffe, Lawrence	Kennedy, Charles
Cunningham, Dr John	Kinnock, Rt Hon Neil
Dalyell, Tam	Kirkwood, Archy
Darling, Alistair	Knox, David
Davies, Rt Hon Denzil (Llanelli)	Lamond, James
Davies, Ron (Caerphilly)	Leadbitter, Ted
Davis, Terry (B'ham Hodge H'l)	Lee, John (Pendle)
Dewar, Donald	Leighton, Ron
Dicks, Terry	Lestor, Joan (Eccles)
Dixon, Don	Lewis, Terry
Dobson, Frank	Litherland, Robert
Doran, Frank	Livingstone, Ken
Douglas, Dick	Livsey, Richard
Dunnachie, Jimmy	Lloyd, Tony (Stretford)
Dunwoody, Hon Mrs Gwyneth	Lofthouse, Geoffrey
Dykes, Hugh	Loyden, Eddie
Eadie, Alexander	McAllion, John
Evans, John (St Helens N)	McAvoy, Thomas
Ewing, Mrs Margaret (Moray)	McCartney, Ian
Fatchett, Derek	Macdonald, Calum A.
Faulds, Andrew	McFall, John
Field, Frank (Birkenhead)	McGrady, Eddie
Fields, Terry (L'pool B G'n)	McKay, Allen (Barnsley West)
Fisher, Mark	McKelvey, William
Flannery, Martin	McLeish, Henry
Flynn, Paul	Maclennan, Robert
Foot, Rt Hon Michael	McNamara, Kevin
Foster, Derek	McWilliam, John
Foulkes, George	Madden, Max
Fraser, John	Mahon, Mrs Alice
Fyfe, Maria	Mallon, Seamus
Galloway, George	Marek, Dr John
Garrett, John (Norwich South)	Marshall, David (Shettleston)
George, Bruce	Marshall, Jim (Leicester S)
Gilbert, Rt Hon Dr John	Martin, Michael J. (Springburn)
Gill, Christopher	Martlew, Eric
Gilmour, Rt Hon Sir Ian	Mates, Michael
Godman, Dr Norman A.	Maxton, John
Goodhart, Sir Philip	Maxwell-Hyslop, Robin
Gordon, Mildred	Meacher, Michael
Gorst, John	Meale, Alan
Gould, Bryan	Michael, Alun
Graham, Thomas	Michie, Bill (Sheffield Heeley)
Grant, Bernie (Tottenham)	Michie, Mrs Ray (Arg'l & Bute)
Griffiths, Nigel (Edinburgh S)	Mitchell, Austin (G't Grimsby)
Griffiths, Win (Bridgend)	Molyneaux, Rt Hon James
Grocott, Bruce	Moonie, Dr Lewis
Hardy, Peter	Morgan, Rhodri

Morley, Elliot	Short, Clare
Morris, Rt Hon A. (W'shawe)	Sillars, Jim
Morris, Rt Hon J. (Aberavon)	Skinner, Dennis
Morrison, Sir Charles	Smith, Andrew (Oxford E)
Mowlam, Marjorie	Smith, C. (Isl'ton & F'bury)
Mullin, Chris	Smith, Rt Hon J. (Monk'ds E)
Murphy, Paul	Smith, J. P. (Vale of Glam)
Nellist, Dave	Smyth, Rev Martin (Belfast S)
Oakes, Rt Hon Gordon	Snape, Peter
O'Brien, William	Soley, Clive
O'Neill, Martin	Spearing, Nigel
Orme, Rt Hon Stanley	Squire, Robin
Owen, Rt Hon Dr David	Steel, Rt Hon Sir David
Paisley, Rev Ian	Steen, Anthony
Parry, Robert	Steinberg, Gerry
Pawsey, James	Stott, Roger
Pendry, Tom	Strang, Gavin
Pike, Peter L.	Straw, Jack
Powell, Ray (Ogmore)	Taylor, Mrs Ann (Dewsbury)
Prescott, John	Taylor, Matthew (Truro)
Primarolo, Dawn	Temple-Morris, Peter
Quin, Ms Joyce	Thomas, Dr Dafydd Elis
Radice, Giles	Thompson, Jack (Wansbeck)
Randall, Stuart	Turner, Dennis
Rathbone, Tim	Vaz, Keith
Redmond, Martin	Wall, Pat
Rees, Rt Hon Merlyn	Wallace, James
Reid, Dr John	Walley, Joan
Richardson, Jo	Wardell, Gareth (Gower)
Roberts, Allan (Bootle)	Watson, Mike (Glasgow, C)
Robertson, George	Welsh, Andrew (Angus E)
Robinson, Geoffrey	Welsh, Michael (Doncaster N)
Robinson, Peter (Belfast E)	Williams, Rt Hon Alan
Rogers, Allan	Williams, Alan W. (Carm'then)
Rooker, Jeff	Wilson, Brian
Ross, Ernie (Dundee W)	Winnick, David
Rowlands, Ted	Wise, Mrs Audrey
Ruddock, Joan	Worthington, Tony
Salmond, Alex	Wray, Jimmy
Sedgemore, Brian	Young, Sir George (Acton)
Sheerman, Barry
Sheldon, Rt Hon Robert	Tellers for the Noes:
Shepherd, Richard (Aldridge)	Mrs. Llin Golding and
Shore, Rt Hon Peter	Mr. Ken Eastham.

Question accordingly agreed to.

Motion made, and Question put forthwith, That the Revenue Support Grant Distribution Report (England) (House of Commons No. 49) a copy of which was laid before this House on 11th January, be approved.—[Mr. David Hunt.]

The House divided: Ayes 313, Noes 277.

Division No. 40]	[10.17 pm
AYES
Aitken, Jonathan	Bottomley, Peter
Alexander, Richard	Bottomley, Mrs Virginia
Alison, Rt Hon Michael	Bowden, A (Brighton K'pto'n)
Amery, Rt Hon Julian	Bowden, Gerald (Dulwich)
Amess, David	Bowis, John
Amos, Alan	Braine, Rt Hon Sir Bernard
Arbuthnot, James	Brandon-Bravo, Martin
Arnold, Jacques (Gravesham)	Brazier, Julian
Arnold, Tom (Hazel Grove)	Bright, Graham
Ashby, David	Brooke, Rt Hon Peter
Aspinwall, Jack	Brown, Michael (Brigg & Cl't's)
Atkins, Robert	Browne, John (Winchester)
Baker, Rt Hon K. (Mole Valley)	Buck, Sir Antony
Baker, Nicholas (Dorset N)	Budgen, Nicholas
Baldry, Tony	Burns, Simon
Banks, Robert (Harrogate)	Burt, Alistair
Batiste, Spencer	Butcher, John
Bellingham, Henry	Butler, Chris
Bennett, Nicholas (Pembroke)	Butterfill, John
Blackburn, Dr John G.	Carlisle, John, (Luton N)
Blaker, Rt Hon Sir Peter	Carlisle, Kenneth (Lincoln)
Body, Sir Richard	Carrington, Matthew
Boscawen, Hon Robert	Carttiss, Michael
Boswell, Tim	Cash, William

Chalker, Rt Hon Mrs Lynda	Hind, Kenneth
Channon, Rt Hon Paul	Hogg, Hon Douglas (Gr'th'm)
Chapman, Sydney	Holt, Richard
Chope, Christopher	Hordern, Sir Peter
Churchill, Mr	Howard, Rt Hon Michael
Clark, Hon Alan (Plym'th S'n)	Howarth, Alan (Strat'd-on-A)
Clark, Dr Michael (Rochford)	Howarth, G. (Cannock & B'wd)
Clark, Sir W. (Croydon S)	Howe, Rt Hon Sir Geoffrey
Clarke, Rt Hon K. (Rushcliffe)	Howell, Rt Hon David (G'dford)
Colvin, Michael	Hughes, Robert G. (Harrow W)
Conway, Derek	Hunt, David (Wirral W)
Coombs, Anthony (Wyre F'rest)	Hunt, Sir John (Ravensbourne)
Coombs, Simon (Swindon)	Hunter, Andrew
Cope, Rt Hon John	Hurd, Rt Hon Douglas
Couchman, James	Jack, Michael
Cran, James	Jackson, Robert
Critchley, Julian	Janman, Tim
Currie, Mrs Edwina	Jessel, Toby
Curry, David	Jones, Gwilym (Cardiff N)
Davies, Q. (Stamf'd & Spald'g)	Jones, Robert B (Herts W)
Davis, David (Boothferry)	Jopling, Rt Hon Michael
Day, Stephen	Kellett-Bowman, Dame Elaine
Devlin, Tim	Key, Robert
Dickens, Geoffrey	Kilfedder, James
Dorrell, Stephen	King, Roger (B'ham N'thfield)
Douglas-Hamilton, Lord James	King, Rt Hon Tom (Bridgwater)
Dover, Den	Kirkhope, Timothy
Eggar, Tim	Knapman, Roger
Emery, Sir Peter	Knight, Greg (Derby North)
Evans, David (Welwyn Hatf'd)	Knight, Dame Jill (Edgbaston)
Evennett, David	Knowles, Michael
Fairbairn, Sir Nicholas	Lamont, Rt Hon Norman
Fallon, Michael	Lang, Ian
Farr, Sir John	Latham, Michael
Favell, Tony	Lawrence, Ivan
Fenner, Dame Peggy	Lawson, Rt Hon Nigel
Field, Barry (Isle of Wight)	Leigh, Edward (Gainsbor'gh)
Finsberg, Sir Geoffrey	Lennox-Boyd, Hon Mark
Fishburn, John Dudley	Lightbown, David
Fookes, Dame Janet	Lilley, Peter
Forman, Nigel	Lloyd, Sir Ian (Havant)
Forsyth, Michael (Stirling)	Lloyd, Peter (Fareham)
Forth, Eric	Lord, Michael
Fowler, Rt Hon Sir Norman	Luce, Rt Hon Richard
Fox, Sir Marcus	Lyell, Rt Hon Sir Nicholas
Franks, Cecil	Macfarlane, Sir Neil
Freeman, Roger	MacGregor, Rt Hon John
French, Douglas	MacKay, Andrew (E Berkshire)
Fry, Peter	Maclean, David
Gale, Roger	McLoughlin, Patrick
Gardiner, George	McNair-Wilson, Sir Michael
Garel-Jones, Tristan	McNair-Wilson, Sir Patrick
Glyn, Dr Sir Alan	Madel, David
Goodson-Wickes, Dr Charles	Major, Rt Hon John
Gorman, Mrs Teresa	Malins, Humfrey
Gow, Ian	Mans, Keith
Grant, Sir Anthony (CambsSW)	Maples, John
Greenway, John (Ryedale)	Marland, Paul
Gregory, Conal	Marlow, Tony
Griffiths, Sir Eldon (Bury St E')	Marshall, John (Hendon S)
Griffiths, Peter (Portsmouth N)	Marshall, Michael (Arundel)
Grist, Ian	Martin, David (Portsmouth S)
Ground, Patrick	Maude, Hon Francis
Grylls, Michael	Mawhinney, Dr Brian
Gummer, Rt Hon John Selwyn	Mayhew, Rt Hon Sir Patrick
Hague, William	Mellor, David
Hamilton, Hon Archie (Epsom)	Miller, Sir Hal
Hamilton, Neil (Tatton)	Mills, Iain
Hanley, Jeremy	Mitchell, Andrew (Gedling)
Hannam, John	Mitchell, Sir David
Hargreaves, A. (B'ham H'll Gr')	Moate, Roger
Harris, David	Monro, Sir Hector
Haselhurst, Alan	Montgomery, Sir Fergus
Hawkins, Christopher	Moore, Rt Hon John
Hayes, Jerry	Morris, M (N'hampton S)
Hayward, Robert	Morrison, Rt Hon P (Chester)
Heathcoat-Amory, David	Moss, Malcolm
Hicks, Mrs Maureen (Wolv' NE)	Moynihan, Hon Colin
Higgins, Rt Hon Terence L.	Mudd, David
Hill, James	Neale, Gerrard

Needham, Richard	Spicer, Michael (S Worcs)
Nelson, Anthony	Stanbrook, Ivor
Neubert, Michael	Stanley, Rt Hon Sir John
Newton, Rt Hon Tony	Stern, Michael
Nicholls, Patrick	Stevens, Lewis
Nicholson, David (Taunton)	Stewart, Allan (Eastwood)
Nicholson, Emma (Devon West)	Stewart, Andy (Sherwood)
Norris, Steve	Stewart, Rt Hon Ian (Herts N)
Onslow, Rt Hon Cranley	Stokes, Sir John
Oppenheim, Phillip	Stradling Thomas, Sir John
Page, Richard	Sumberg, David
Paice, James	Summerson, Hugo
Parkinson, Rt Hon Cecil	Tapsell, Sir Peter
Patnick, Irvine	Taylor, Ian (Esher)
Patten, Rt Hon Chris (Bath)	Taylor, John M (Solihull)
Patten, Rt Hon John	Taylor, Teddy (S'end E)
Pattie, Rt Hon Sir Geoffrey	Tebbit, Rt Hon Norman
Porter, Barry (Wirral S)	Thatcher, Rt Hon Margaret
Porter, David (Waveney)	Thompson, D. (Calder Valley)
Portillo, Michael	Thompson, Patrick (Norwich N)
Powell, William (Corby)	Thornton, Malcolm
Price, Sir David	Thurnham, Peter
Raffan, Keith	Townend, John (Bridlington)
Raison, Rt Hon Timothy	Townsend, Cyril D. (B'heath)
Redwood, John	Tracey, Richard
Renton, Rt Hon Tim	Tredinnick, David
Rhodes James, Robert	Trippier, David
Riddick, Graham	Trotter, Neville
Ridley, Rt Hon Nicholas	Twinn, Dr Ian
Ridsdale, Sir Julian	Vaughan, Sir Gerard
Rifkind, Rt Hon Malcolm	Viggers, Peter
Roberts, Wyn (Conwy)	Waddington, Rt Hon David
Roe, Mrs Marion	Wakeham, Rt Hon John
Rossi, Sir Hugh	Waldegrave, Rt Hon William
Rost, Peter	Walden, George
Rowe, Andrew	Walker, Bill (T'side North)
Rumbold, Mrs Angela	Walker, Rt Hon P. (W'cester)
Ryder, Richard	Waller, Gary
Sackville, Hon Tom	Wardle, Charles (Bexhill)
Sainsbury, Hon Tim	Warren, Kenneth
Sayeed, Jonathan	Watts, John
Scott, Rt Hon Nicholas	Wheeler, Sir John
Shaw, David (Dover)	Whitney, Ray
Shaw, Sir Giles (Pudsey)	Widdecombe, Ann
Shaw, Sir Michael (Scarb')	Wilkinson, John
Shelton, Sir William	Winterton, Nicholas
Shephard. Mrs G. (Norfolk SW)	Wood, Timothy
Shepherd, Colin (Hereford)	Woodcock, Dr. Mike
Shersby, Michael	Yeo, Tim
Sims, Roger	Younger, Rt Hon George
Skeet, Sir Trevor
Smith, Tim (Beaconsfield)	Tellers for the Ayes:
Soames, Hon Nicholas	Mr. Alastair Goodlad and
Speed, Keith	Mr. Tony Durant.
Spicer. Sir Jim (Dorset W)

NOES
Abbott, Ms Diane	Blunkett, David
Allason, Rupert	Boateng, Paul
Allen, Graham	Bonsor, Sir Nicholas
Anderson, Donald	Boyes, Roland
Armstrong, Hilary	Boyson, Rt Hon Dr Sir Rhodes
Ashdown, Rt Hon Paddy	Bradley, Keith
Ashley, Rt Hon Jack	Bray, Dr Jeremy
Ashton, Joe	Brown, Gordon (D'mline E)
Banks, Tony (Newham NW)	Brown, Nicholas (Newcastle E)
Barnes, Harry (Derbyshire NE)	Brown, Ron (Edinburgh Leith)
Barnes, Mrs Rosie (Greenwich)	Bruce, Ian (Dorset South)
Barron, Kevin	Bruce, Malcolm (Gordon)
Battle, John	Buchan, Norman
Beckett, Margaret	Buckley, George J.
Beggs, Roy	Caborn, Richard
Beith, A. J.	Callaghan, Jim
Bell, Stuart	Campbell, Menzies (Fife NE)
Benn, Rt Hon Tony	Campbell, Ron (Blyth Valley)
Bennett, A. F. (D'nt'n & R'dish)	Campbell-Savours, D. N.
Benyon, W.	Canavan, Dennis
Bermingham, Gerald	Carlile, Alex (Mont'g)
Bidwell, Sydney	Cartwright, John
Blair, Tony	Clark, Dr David (S Shields)

Clarke, Tom (Monklands W)	Howell, Ralph (North Norfolk)
Clay, Bob	Howells, Geraint
Clelland, David	Howells, Dr. Kim (Pontypridd)
Clwyd, Mrs Ann	Hoyle, Doug
Cohen, Harry	Hughes, John (Coventry NE)
Coleman, Donald	Hughes, Robert (Aberdeen N)
Cook, Frank (Stockton N)	Hughes, Roy (Newport E)
Cook, Robin (Livingston)	Hughes, Simon (Southwark)
Corbett, Robin	Hume, John
Corbyn, Jeremy	Illsley, Eric
Cousins, Jim	Ingram, Adam
Cox, Tom	Janner, Greville
Crowther, Stan	Jones, Barry (Alyn & Deeside)
Cryer, Bob	Jones, Ieuan (Ynys Memberôn)
Cummings, John	Jones, Martyn (Clwyd S W)
Cunliffe, Lawrence	Kaufman, Rt Hon Gerald
Cunningham, Dr John	Kennedy, Charles
Dalyell, Tam	Kinnock, Rt Hon Neil
Darling, Alistair	Kirkwood, Archy
Davies, Rt Hon Denzil (Llanelli)	Knox, David
Davies, Ron (Caerphilly)	Lamond, James
Davis, Terry (B'ham Hodge H'I)	Leadbitter, Ted
Dewar, Donald	Lee, John (Pendle)
Dicks, Terry	Leighton, Ron
Dixon, Don	Lester, Jim (Broxtowe)
Dobson, Frank	Lestor, Joan (Eccles)
Doran, Frank	Lewis, Terry
Douglas, Dick	Litherland, Robert
Dunnachie, Jimmy	Livingstone, Ken
Dunwoody, Hon Mrs Gwyneth	Livsey, Richard
Dykes, Hugh	Lloyd, Tony (Stretford)
Eadie, Alexander	Lofthouse, Geoffrey
Evans, John (St Helens N)	Loyden, Eddie
Ewing, Mrs Margaret (Moray)	McAllion, John
Fatchett, Derek	McAvoy, Thomas
Faulds, Andrew	McCartney, Ian
Field, Frank (Birkenhead)	Macdonald, Calum A.
Fields, Terry (L'pool B G'n)	McFall, John
Fisher, Mark	McGrady, Eddie
Flannery, Martin	McKay, Allen (Barnsley West)
Flynn, Paul	McKelvey, William
Foot, Rt Hon Michael	McLeish, Henry
Foster, Derek	Maclennan, Robert
Foulkes, George	McNamara, Kevin
Fraser, John	McWilliam, John
Fyfe, Maria	Madden, Max
Galloway, George	Mahon, Mrs Alice
Garrett, John (Norwich South)	Mallon, Seamus
George, Bruce	Marek, Dr John
Gilbert, Rt Hon Dr John	Marshall, David (Shettleston)
Gill, Christopher	Marshall, Jim (Leicester S)
Gilmour, Rt Hon Sir Ian	Martin, Michael J. (Springburn)
Godman, Dr Norman A.	Martlew, Eric
Goodhart, Sir Philip	Mates, Michael
Gordon, Mildred	Maxton, John
Gorst, John	Maxwell-Hyslop, Robin
Gould, Bryan	Meacher, Michael
Graham, Thomas	Meale, Alan
Grant, Bernie (Tottenham)	Michael, Alun
Greenway, Harry (Ealing N)	Michie, Bill (Sheffield Heeley)
Griffiths, Nigel (Edinburgh S)	Michie, Mrs Ray (Arg'l & Bute)
Griffiths, Win (Bridgend)	Mitchell, Austin (G't Grimsby)
Grocott, Bruce	Molyneaux, Rt Hon James
Hardy, Peter	Moonie, Dr Lewis
Hargreaves, Ken (Hyndburn)	Morgan, Rhodri
Harman, Ms Harriet	Morley, Elliot
Hattersley, Rt Hon Roy	Morris, Rt Hon A. (W'shawe)
Hayhoe, Rt Hon Sir Barney	Morris, Rt Hon J. (Aberavon)
Haynes, Frank	Morrison, Sir Charles
Healey, Rt Hon Denis	Mowlam, Marjorie
Heffer, Eric S.	Mullin, Chris
Henderson, Doug	Murphy, Paul
Hicks, Robert (Cornwall SE)	Nellist, Dave
Hinchliffe, David	Oakes, Rt Hon Gordon
Hoey, Ms Kate (Vauxhall)	O'Brien, William
Hogg, N. (C'nauld & Kilsyth)	O'Neill, Martin
Home Robertson, John	Orme, Rt Hon Stanley
Hood, Jimmy	Owen, Rt Hon Dr David
Howarth, George (Knowsley N)	Paisley, Rev Ian
Howell, Rt Hon D. (S'heath)	Parry, Robert

Pawsey, James	Snape, Peter
Pendry, Tom	Soley, Clive
Pike, Peter L.	Spearing, Nigel
Powell, Ray (Ogmore)	Squire, Robin
Prescott, John	Steel, Rt Hon Sir David
Primarolo, Dawn	Steinberg, Gerry
Quin, Ms Joyce	Stott, Roger
Radice, Giles	Strang, Gavin
Randall, Stuart	Straw, Jack
Rathbone, Tim	Taylor, Mrs Ann (Dewsbury)
Redmond, Martin	Taylor, Matthew (Truro)
Rees, Rt Hon Merlyn	Temple-Morris, Peter
Reid, Dr John	Thomas, Dr Dafydd Elis
Richardson, Jo	Thompson, Jack (Wansbeck)
Roberts, Allan (Bootle)	Turner, Dennis
Robertson, George	Vaz, Keith
Robinson, Geoffrey	Wall, Pat
Robinson, Peter (Belfast E)	Wallace, James
Rogers, Allan	Walley, Joan
Rooker, Jeff	Wardell, Gareth (Gower)
Ross, Ernie (Dundee W)	Watson, Mike (Glasgow, C)
Rowlands, Ted	Wells, Bowen
Ruddock, Joan	Welsh, Andrew (Angus E)
Salmond, Alex	Welsh, Michael (Doncaster N)
Sedgemore, Brian	Wiggin, Jerry
Sheerman, Barry	Williams, Rt Hon Alan
Sheldon, Rt Hon Robert	Williams, Alan W. (Carm'then)
Shepherd, Richard (Aldridge)	Wilson, Brian
Shore, Rt Hon Peter	Winnick, David
Short, Clare	Wise, Mrs Audrey
Sillars, Jim	Worthington, Tony
Skinner, Dennis	Wray, Jimmy
Smith, Andrew (Oxford E)	Young, Sir George (Acton)
Smith, C. (Isl'ton & F'bury)
Smith, Sir Dudley (Warwick)	Tellers for the Noes:
Smith, Rt Hon J. (Monk'ds E)	Mrs. Llin Golding and
Smith, J. P. (Vale of Glam)	Mr. Ken Eastham.
Smyth, Rev Martin (Belfast S)

Question accordingly agreed to.

Resolved, That the Revenue Support Grant Transition Report (England) (House of Commons Paper No. 50), a copy of which was laid before this House on 11th January, be approved.

Resolved, That the Special Grant Report (House of Commons Paper No. 128), a copy of which was laid before this House on 12th January, be approved.—[Mr. Fallon.]