Kensington and Chelsea: Proposed Rate Increase (Hansard, 21 May 1981)

§ Lord Boyd-Carpenter
My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

§ The Parliamentary Under-Secretary of State, Department of the Environment (Lord Bellwin:)
My Lords, I am of course aware of the rate increase in Kensington and Chelsea this year. The greater part of it can be attributed to the requirements of the precepting authorities, particularly the Inner London Education Authority.
The Government are concerned about the high level of rate increases this year and the burden that places on ratepayers. We are now actively examining all the ways in which we could respond to this situation. Ultimately, excessive rate increases can most satisfactorily be avoided if expenditure at all levels is constrained.

§ Lord Boyd-Carpenter
My Lords, while thanking my noble friend for his Answer and disclosing the interest that I have the misfortune to live in the borough in question, is my noble friend aware that the rate poundage for private citizens is being increased by 52 per cent. over the rate poundage for the preceding year and that the local authority concerned in its circular to ratepayers puts a large part of the blame on Her Majesty's Government? In the circumstances, is not my noble friend prepared to consider use of the powers given under recent legislation to secure that this authority does in fact take effective steps to restrain its own expenditure?

§ Lord Bellwin
My Lords, I should say at once that I have the same interest in this matter as does my noble friend. I am also aware, as he is, of what the local authority said in their letter to ratepayers. In fairness to them it ought to be said that they have come out on the wrong end, as they see it, of the block grant allocation this year. But at the end of the day, rates come down to spending. That is the issue. As to whether or not the powers contained in the Local Government, Planning and Land Act are sufficient to deal directly with the matter in the way my noble friend would wish, I have to say that they are not. They are powers as to what one does about grant, not about what one does regarding putting ceilings or anything of that kind upon the domestic rate. To that extent the Act does not allow the Government to do what my noble friend is seeking. I hope, however, that the grant effects and other measures which the Government have taken will bring home to local authorities the fact that impositions of rate increases of this kind do impose intolerable burdens upon individuals. This is the problem.

§ Lord Shinwell
My Lords, as a matter of interest, may I ask the Minister whether he agrees that this area is Labour controlled?

§ Lord Bellwin
My Lords, of course I do not agree, because it is not Labour controlled.

§ Lord Grimston of Westbury
My Lords, may I ask my noble friend whether outside management consultants have yet been brought in at Kensington and 1010 Chelsea—where I do not have an interest to declare—as they have been in one or two other instances in the country?

§ Lord Bellwin
My Lords, I do not know whether that is so.

§ Lord Davies of Leek
My Lords, is the noble Lord aware that, for heaven's sake, some of us would ask him not to have outside controlled management? I saw it once in Chicago, where teachers had not received their wages for two years.

§ Lord Bellwin
My Lords, I understand the lighthearted way in which the noble Lord makes the point, but in fact it is important. As always it is perhaps not right to generalise. There are obviously situations where it could be most helpful, but there are others where it might not be so helpful.

§ Lord Orr-Ewing
My Lords, can my noble friend remind the House—and I declare an interest—what percentage of the total rate comes from ILEA and what from the police precept? These two precepts surely represent the majority of the rate burden. And is it not true that under the new Left-wing dominance of the GLC the intention has been announced that it is intended to have no financial restrictions in these areas and this will probably necessitate an extra rate demand in the autumn as a result of their policies?

§ Lord Bellwin
My Lords, as to the second part of my noble friend's question, I understand exactly that that is the declared intention. Indeed it was the declared intention, before they did so, of those who have now taken control of the GLC. It is also right, as my noble friend reminds us and as I hoped I had intimated in my original Answer, that certainly more than half of the increase in the rate in Kensington and Chelsea is due to the very high level of the Inner London Education Authority's spending. In fact, the consequent loss of grant and the increase in the precept costs ratepayers there 20p.

§ Lord Leatherland
My Lords, is it not a fact that the increased rates which are being imposed by Tory councils throughout the country are largely due to the fact that the Government have cut by about £97 million the grant which normally would be paid to councils?

§ Lord Bellwin
No, my Lords, that is not correct. In fact the mass—and I think that is the proper word to use in this context—of large rate increases throughout the country have come from Labour-controlled authorities and not from Conservative ones. There are individual special situations such as the one we are now discussing, mostly in London, because the emphasis of grant in London which had switched away in previous years to other parts of the country has now been marginally redirected back to London. That is the reason why it is mostly the London authorities which have had this problem with grant, but I do not accept the first part of what the noble Lord has said.

§ Lord Robbins
My Lords, would the Minister agree that, whatever the distribution of blame between central 1011 and local authorities for this intolerable burden, the fact is that the rating system, given the enlarged functions of local government authorities this century, has become totally obsolete?

§ Lord Bellwin
My Lords, the Government are very alert to that. I tried to imply that in my original Answer to my noble friend. It would, I think, be proper for me to say with perhaps more emphasis than I did initially, because it is no secret, that we are looking very closely indeed at exactly what might be done about this whole matter. I am sure that the noble Lord will accept from me that these are difficult issues and, whatever might or might not be done, they must stand the test of time. Therefore, although it is perhaps frustrating in that it seems to take more time, I think it is more important that we should try to get it right and that where we can we should be in close consultation with all concerned about the matter.

§ Lord Underhill
My Lords, as the Minister said that half the rate increase was due to the demands of the precepting authorities, is he able to tell the House what the other half is for, bearing in mind that this borough council does not have quite the severe inner city problems that other borough councils have; and also can he tell the House what representations the borough council has made to the Secretary of State?

§ Lord Bellwin
My Lords, I said—and I say again—that more than half the increase (not just half) was due to the precepting authorities. Quite clearly, it would not be right at Question Time for me to go into the individual figures pertaining to this—or, for that matter, any other—authority, but if the noble Lord would like to have more detailed information and he would care to write to me, I shall be glad to give it to him.

§ Lord Harmar-Nicholls
My Lords, so that the cause and effect may be properly assessed, can the Minister say what proportion of the 50 per cent. increase mentioned by my noble friend results from the reduced block grant?

§ Lord Bellwin
My Lords, it is hard to give the proportion off hand; it is not information that I have available at this moment, but I should be glad to write to my noble friend if he so wishes.

§ Lord Leatherland
My Lords, does the noble Lord recall that at the last election the Conservative Party said that it was pledged to abolish rates, and is he aware of the fact that instead of abolishing them it is putting them up?

§ Lord Bellwin
My Lords, it is not the Government who put rates up at all; it is the local authorities concerned. As I said originally, what puts rates up is spending, and, however you fool around with grants and adjust them, at the end of the day it is still a matter of how much you spend. That is the major factor in deciding what the rate levels will be.

§ Lord Boyd-Carpenter
My Lords, arising out of that answer, can my noble friend say whether or not he is 1012 satisfied that the local authority concerned has exercised the kind of restraint that has been very properly exercised in the adjoining City of Westminster?

§ Lord Bellwin
My Lords, it is difficult for me to answer that question and thereby to give an opinion upon that. What it is fair for me to say is that the council in question has quite a good record if we compare its spending and its achievement in relation to employees per head of the population and in many other ways. Its record really is a very good one. I think it is proper to say that. When we talk of increases we talk of percentages and percentages can be misleading because they are percentages on what? Where do you start? I happen to know that the authority in question is very concerned about this whole matter. Would that all others were as concerned as it is. It is looking very closely at all its spending.

The Minister of State, Ministry of Agriculture, Fisheries and Food (Earl Ferrers)
My Lords, I think, with respect, that it might be appropriate to move on. We have given this Question a fairly long run.