HL Deb 24 July 1984 vol 455 cc187-200

4.35 p.m.

The Minister of State, Department of the Environment (Lord Bellwin)

My Lords, with the leave of the House, I wish to repeat a Statement made in another place by my right honourable friend the Secretary of State for the Environment. The Statement reads as follows:

"With permission, Mr Speaker, I should like to make a statement about local government finance for 1985–86. It contains my proposals for the rate support grant settlement in England and my decisions on selective rate limitation under the Rates Act 1984.

"I am today issuing to local authorities proposals for the main features of the RSG settlement for next year. Copies of the material sent to them are in the Libraries and the Vote Office. This early announcement should give authorities plenty of time to budget sensibly in 1985–86. It is the first time that I have been able to set out so much of the framework of the settlement so early in the year. I hope this is welcomed. It is also the first time that the Rates Act provisions for constraining the rates—and hence the expenditure—of high spending authorities have been available to the Government. They have strongly affected the overall shape of the settlement.

"This year's budgets show a continuing real terms increase in the level of local authority current expenditure. The Government remain committed to the constraint of public expenditure. This is essential if we are to put the economy on to a sound footing for the longer term. We must continue to seek economies.

"For 1985–86, for the first time, the Rates Act enables me to start curbing the worst excesses of the highest spenders. Until now, even the lowest spenders have had to be asked to make significant savings because of the irresponsible behaviour of the minority of high spenders. The Rates Act makes it possible for me to begin to change that. As I promised at last year's settlement, it gives me the scope—within the overall continuing need for restraint—to see fairer targets for low spenders. At the same time, the Government are determined to ensure that these realistic targets are not overspent, and the holdback proposals reflect that determination.

"First, rate limitation. The new powers given me by the Rates Act enable me to set rate limits for the worst overspenders and thus protect their ratepayers. I am today laying before the House a report describing the basis of selection of authorities for rate limitation. I will select for rate capping those authorities spending more than £10 million, whose budgets for the current year are more than 4 per cent. above their targets, and more than 20 per cent. above their grant related expenditure assessment. On the basis of these criteria the following 18 authorities are designated: Basildon, Brent, Camden, GLC, Greenwich, Hackney, Haringey, ILEA, Islington, Lambeth, Leicester, Lewisham, Merseyside, Portsmouth, Sheffield, Southwark, South Yorkshire, and Thamesdown.

"I am setting expenditure levels for these authorities which will form the basis of their rate limits. In most cases they will have to contain their expenditure at the same level in cash terms as their budget for 1984–85. In the case of the three authorities which are budgeting to spend more than 70 per cent. above GRE this year and which have increased their budgets by more than 30 per cent. since 1981–82 I am setting expenditure levels 1½ per cent. below their effective 1984–85 budgets. These authorities arc the Greater London Council, the Inner London Education Authority and the London Borough of Greenwich. The 18 designated authorities are being formally notified of their expenditure levels. I shall of course consider any representations which they may wish to make to me asking for a redetermination of their expenditure level.

"This announcement is good news for ratepayers: the 18 highest spending authorities will have their spending levels controlled. Furthermore, as I said during the passage of the Bill, because the Rates Act enables me to control the expenditure of the highest spenders I can set fairer targets for the low spenders, as I promised earlier this year. For the current year, the maximum cash increase over 1983–84 budget is 3 per cent. For the next year I am proposing to allow most low spenders to increase their spending by 4î per cent. over budget this year. On the best estimate of the rate of inflation over the period—the GDP deflator—this should require no further real terms cuts from those authorities. This has only been made possible by the headroom provided by rate limitation. High spenders will have tougher targets but no authority is asked for more than a 1½ per cent. cash reduction on its 1984–85 budget.

"These targets add up to about £21.8 billion, which implies an increase in current expenditure provision in excess of £800 million. This takes account of the setting up of London Regional Transport: on last year's basis the increase would be nearer £900 million. The equivalent increase for 1984–85 was some £500 million. The increase in the 1985–86 provision will be contained within the established aggregate public expenditure plans.

"These targets are therefore realistic, and must not be seen as an invitation to increase spending. For that reason I am proposing a much tougher holdback tariff for the first percentage points of overspend. The tariff will entail reductions in block grant equivalent to 7p at ratepayer level for the first 1 per cent. of overspend, another 8p for the second per cent. overspend and another 9p will be added for each 1 per cent. of spending after that. This is a strong deterrent to overspending. But I think there will be a wide recognition—at least on this side of the House—of the fairness of this proposal, I am proposing reasonable, realistic targets. It is only fair in return to expect that they will be met; and to take a firm line with anyone who sees this as an opportunity to boost spending.

"The effect of these proposals on services provided by local authorities will depend on their ability to use resources efficiently. The Government look to local authorities to do their utmost to contain their pay and other costs and to manage their resources in a way which ensures that the best possible value for money is obtained.

"Finally, aggregate Exchequer grant will be £11.7 billion, about the same amount after adjustments as the corresponding figure for 1984–85. This represents a grant percentage of about 48.8 per cent. for 1985–86, compared with 51.9 per cent. this year. This continues the trend we have set over recent years of shifting the burden of local authority expenditure away from the taxpayer and towards the ratepayer, thereby increasing local authorities' accountability to the local electorate.

"I am now consulting local government on my proposals for targets, holdback and aggregate Exchequer grant before presenting a rate support grant settlement to Parliament at the end of the year. Consultation on grant distribution will take place in the autumn.

"The Government remain determined to restrain the level of current expenditure of local government. We are now seeing the benefits of the Rates Act. Because it allows us at last to get to grips with the excesses of the highest spenders, responsible low spending authorities will no longer have to carry the can for them. As I promised, I am proposing fairer targets for them. My proposals mean that if authorities spend within their targets—and the capped authorities will have to stay below their spending levels—the average rate increase in England should be lower than this year's average increase. This will be welcomed by hard pressed ratepayers everywhere. I commend my proposals to the House."

That, my Lords, completes the Statement.

Baroness Birk

My Lords, may I first thank the Minister for repeating the Statement made in another place by his right honourable friend. This is a landmark in the history of local government. It is the first time in 380 years of rating history that a Secretary of State has possessed powers of this kind. This marks the beginning of a disastrous future for the hit list authorities, and it will inevitably mean a cut in essential services. Is the Minister aware that four of those authorities—namely, Haringey, Thamesdown, Sheffield, and Portsmouth—have increased their expenditure by less than the average of all local authorities? Why are they included when the City of London is spending at 247 per cent. above its grant-related expenditure and is by far the biggest overspender?

We must not be lulled into thinking that the expenditure limits which have been imposed for 1985–86 are reasonable, possible, or, indeed, realistic, as the Statement says. But, alas, worse is yet to come. Is the Minister aware that there is an 11 per cent. gap between what local authorities need to spend in 1986–87 and the Government's public expenditure provision? Will the Government be closing this gap by increased public expenditure provision? If not, those on the hit list will become permanent founder members of an ever-increasing hit list, starting with those who just missed it this year; authorities such as, for example, Tower Hamlets and Newcastle, to name but two.

The Government have said that rate capping is essentially to protect the ratepayers, but the Statement itself says: This continues the trend we have set over recent years of shifting the burden of local authority expenditure away from the taxpayer and towards the ratepayer, thereby increasing local authorities' accountability to the local electorate". This seems rather odd coming from a Government one of whose not so distant manifestos contained the abolition of the domestic rating system in one Parliament.

Lord Stoddart of Swindon

What about that manifesto commitment?

Baroness Birk

Is the Minister also aware that any reductions in rates will largely be achieved at the expense of the Exchequer and therefore the ratepayers because of the manipulation of targets and penalties? This Statement goes far beyond the immediate rate capping. The Government are imposing a 4½ per cent. cut in local services which will be enforced by an unprecedentedly harsh penalty regime, starting at 7 per cent. for the first per cent. of overspend—an enormous increase on the present position—with 8 per cent. for the second, and then 9 per cent for each per cent. after that. However, rate capping will still be totally unable to provide this level of cuts. Therefore, today's Statement cannot be taken as being aimed solely at the 18 hit list authorities; it cuts deeply into all local government.

The Statement says: The Government look to local authorities to do their utmost to contain their pay and other costs and to manage their resources in a way which ensures that the best possible value for money is obtained". Nothing is wrong with that sentence. but it does not tie up with the Statement overall. The Statement indicates a further recipe for the conflict between local and central government which, unfortunately, adds to the increasing store of resentment, strongly felt by elected local authorities, and this can be only harmful to good government.

Baroness Stedman

My Lords, I, too, should like to thank the noble Lord for reading the Statement made in another place. I should also like to say "Thank you" for the fact that we have something about the structure of the rate support grant earlier in the year than is usual. But there, I am afraid, my thanks must cease. Is the Minister sure that the named authorities can maintain their services and meet their statutory obligations with the severe cuts that have been imposed? This is a very sad day for local democracy with the arbitrary announcement of a formula that takes no account of the local authorities concerned, of their bad housing, of their high unemployment, of their social deprivation, of their large ethnic populations, and so on.

Authorities cannot realistically make large cuts in one year. We have argued that in earlier local government debates this Session. Have the Government accepted it? If so, does that indicate that the current settlement will still mean that some of the rate-capped councils will be allowed a rate rise higher than that which is needed by many of the uncapped authorities? If local authorities respond to targets this year by spending all their balances and thus need a very much higher rate demand the following year, what will be the Government's attitude or reaction? What will the Government do if the authorities refuse to levy a high enough rate and default on their loan repayments? Will they get a windfall, as Liverpool did?

The rate support grant is now, for the first time, below 50 per cent. This is the seventh percentage reduction we have had in seven years. On these Benches we have argued for less dependence on central government for finance. But this is not the way to do it, in a piecemeal, arbitrary fashion. It should be done only after a proper, in depth review of the future role of local government and of its structure, its functions, its services and its finances, as well as of how, and to what extent, authorities can raise money. In our view, local income tax would be a much more credible method. Local government should be local and should be accountable to the local electors. The central control that they experience today is the negation of such accountability.

In earlier debates the noble Lord promised more generous spending targets for the low spenders such as my county of Cambridgeshire, although, at first sight, it still looks rather like jam tomorrow—next year—and not very much jam today. We shall have to wait and see. The noble Baroness, Lady Birk, has said that the tougher penalties will mean a 7p increase on the rates for the first 1 per cent. of overspend, 8p for the second 1 per cent. and 9p for each 1 per cent. after that. This will mean that the burden is being switched from central taxation to the rates; and it will add to the burden of the domestic ratepayers, as it will also add to the burden of business and commerce alike. Is that really what the Government mean when they talk about helping small businesses? It has been a sad week for local government and local democracy, and today's announcement has solved absolutely nothing. It is merely one more nail in the coffin of real local government and local democracy.

4.50 p.m.

Lord Bellwin

My Lords, I am grateful to both noble Baronesses for their observations, and I will try to respond to them. In reply to the noble Baroness, Lady Birk, I would say that the City of London is not selected because it does not reach the target criteria set. The whole philosophy is that the criteria must be those which apply to all authorities. If the noble Baroness has any doubt about that, I am quite sure that I would be able satisfactorily to assure her that she is mistaken.

She mentioned the 11 per cent. gap. Of course she was referring there to the local authorities' estimate that a £1.7 billion uplift on the PESC provision is required to continue with present policies. After adjustment for classification changes, and using the GDP deflator rather than the local authorities' own estimates of pay and price increases, the local authority bid of £1.7 billion is actually equivalent to £1.4 billion. In any case, the uplift in excess of £800 million which I have announced today goes more than halfway to meet them. We all know that there is scope for savings, and surely it is not unreasonable to ask local government to try to come the rest of the way to meet us.

The noble Baroness referred to, "permanent founder members of the club"; that was her term. I think she meant those which are designated. There is nothing that the Government would want to see more than that authorities be not within this category of designation—that there be no authorities in it. Certainly it will be very difficult to get out within one year, although it is very much possible. The hope is that authorities will now be able to move in that direction, and we will most certainly do anything that we can to encourage and to help them.

The noble Baroness referred also to, "manipulation of targets and penalties"; again, I quote. "Manipulation" is not a word I would accept. These are criteria which, I say again, are applicable to all authorities and are there to be seen as such. The noble Baroness then said that this adds to the store of resentment. I would say that that applies only to those who, if one likes, become designated. But they really should not be surprised. In every case, they are authorities whose spending is so much higher than that of other authorities that clearly they have known that this was the position and that this was a likelihood.

The noble Baroness, Lady Stedman, was concerned about authorities' ability to maintain services and said that the proposals take no account of the problems. This is the old one, if one likes, that we discussed so much when we were in Committee on the Bill. I should have to talk at great length and give illustrations to indicate that this is not so. First of all, GREs take account of the basic problems, the extra problems that authorities have. I should gladly elaborate, if called upon so to do, to illustrate that.

Furthermore, there are like authorities who do manage. What one then has to look at is the cost of provision of services and how some local authorities do so much better than others. We cannot turn away from the fact that this is a great problem, because so many authorities—I am glad to say that it is the majority—do try very hard and, in the main, succeed. But this relates to authorities which do not try hard, which constantly point to the needs and are not so willing to look at the ways. That is why, in the main, they tend to be the ones which are designated today.

The noble Baroness was quite right when she said that one cannot make large cuts in one year. That is precisely why we are not calling for something that is not realisable and realistic. In the main, we are calling for the same cash level, although of course there is inflation. Only in three cases are we calling for a 1½ per cent. reduction. Of course it is not easy, but nevertheless it has to be reasonable, and I think one would say that it is. Indeed, I would suspect that the greatest criticism would come from those who feel that it should have been much more. I say again that we felt it had to be reasonable and capable of attainment. If there are any cases where an authority feels it is not, they must come along and we will talk. I assure the noble Baroness that we shall listen very carefully and look into their circumstances.

The noble Baroness asked what would be the position if authorities used balances and then next year the amount was higher. That is always a possibility, but at the same time they have a clearer indication than they might ever have had as to what are the criteria, and therefore they will know what they have to do. I am confident that, in the main, they will do that. I must put the noble Baroness right on one point. Liverpool did not get a windfall at all. I will gladly send the noble Baroness a copy of the detailed statement, which sets out precisely why that is so. I know that she will read it with great interest.

The noble Baroness referred to tougher penalties. Indeed, they are tougher penalties, and the holdback point does start earlier, and it is severe. But that is because we have been able to make the targets more realistic and capable of achievement. It is really as the corollary to that that the penalties for overspending are so severe. In any case, many local authorities do achieve it. I hope that what I have said answers the questions so far. The noble Baronesses, Lady Birk and Lady Stedman, felt that this Statement was a setback. Frankly, I do not see it that way at all. I see it as a step forward, because now we can have a realism and be fair to all concerned.

Lord Dean of Beswick

My Lords, I, too, join in thanking the noble Lord for repeating the Statement that was made in another place. During the course of the Statement the noble Lord said that later they would be having the usual consultations with the local authorities and their associations. Based on what has been said today, I would suggest that there is very little to consult about, because in this case it appears that the local authorities are faced with a coup d''etat.

The noble Lord mentioned the rate support grant. I am glad that the noble Baroness, Lady Stedman, touched on this subject, because, if my calculations are correct, since this Government came to office the rate support grant has been reduced by 16 per cent., which by any account is a tremendous amount. I think it was in the middle 60s—60-plus per cent.—at the end of the last Labour Government. According to the figures given today, it is down to less than 49 per cent. That is an indication of the level of the attack on local government.

Noble Lords ought to be aware of what is involved in the punitive measures, The Minister talked about 7 per cent. at ratepayer level for the first 1 per cent. of overspend. I wonder if noble Lords understand that a penny rate in a local authority in England would normally raise about three-quarters of a million pounds. So we are talking of a multiple of seven times three-quarters of a million, if, for instance, Sheffield overspends by 1 per cent. This is supposed to be in the name of democracy. It goes up by another 7p for the second 1 per cent. That would represent approximately £6 million for a city like Sheffield if it went to 2 per cent. over the given targets. The 9p for each further 1 per cent. would be completely punitive. It is hard to believe that anybody could make these proposals.

The Minister must have a batting list. Certain local authorities are already saying that next year they are going to break the law. I want to make it quite clear that that is not the course that I or my party would officially suggest. But I want to make the point that there are statements in the press. I believe that one authority is going to decide tomorrow to give nine months' notice that it will be breaking the law next year when the time comes round. They do not know which law, but they say that it will be one law. So could the Minister indicate where, for instance, Manchester and Leeds figure in his batting list?

Finally, is this not a peculiar way for a democratic society to deal with these matters? Those who will be hit by these measures will not be those who are breaking the law. The councillors who institute budgets far in excess of the Government's 3guidelines or of the limit which the Secretary of State declares will be in violation of the law. It seems a strange way of applying the law that the people who will pay the piper will be completely innocent, and, through their rates, will be called upon to pay the tremendous fines, which will be levied by the Government. I am glad that later in the year we shall have an opportunity to debate the rate support grant; but, in view of what the noble Lord has said today, I do not think that there will be very much about it to debate.

Lord Bellwin

My Lords, the noble Lord, Lord Dean, said that there would be little need to consult about a coup d'état. I have never heard that any rate support grant settlement was other than what he calls a coup d'état. I remember very well, on behalf of local authorities, discussing with Secretaries of State of another colour and being told exactly what it was to be. Yes, we were allowed to talk and indeed we did, and we tried to influence, although I do not know with what effect—in fact, I do know with what effect. I assure the noble Lord that the intention is to listen and that there is more in this settlement that calls for a greater degree of consultation than in the past, and we intend to listen and to take account of what representations are made. So I am not worried about that.

The noble Lord referred to the rate support grant, but he actually meant the aggregate Exchequer grant reduction. It is quite true that it has been reduced, and he spoke of it as an attack on local government. I do not see it that way at all. He will remember very well when the AEG was reduced from 66 per cent. to 61 per cent. by the Labour Government, because they felt that the level of spending was more than the country could afford, and I am sure it was. When we came to office in 1979 we set down certain forward projections for local government spending. Not only have they not been achieved, but year by year the figure goes on increasing more and more and is now into billions of pounds. We are saying that there must come a point when enough is enough.

No one ever mentions the authorities which are trying so hard to meet their targest and their levels, and the majority do so. They must be protected. That is part of what this particular settlement is all about. The noble Lord was quite right when he spoke about the product of a penny rate. In my own authority and his it is very much more than the figure he mentioned. I think that today the figure is about £1½ million. So the penalty is severe. That is why one tries to set targets higher than before—to make sure that they are realistic and capable of achievement. I am very confident that, as in the past, most authorities will achieve that.

The last point the noble Lord made was about authorities breaking the law. I have more confidence in local government.

Lord Dean of Beswick

My Lords, I am grateful to the noble Lord for giving way. Would he be prepared to give us some information on the order of batting of the two authorities that I have mentioned?

Lord Bellwin

My Lords, Manchester and Leeds are not among the designated authorities. In view of the legacy which, if I may immodestly say, my own administration left them, I think that Leeds still has some way to go. They are doing their best to catch up and I have little doubt that they will, but those two authorities are not designated authorities. On the point of breaking the law, even the abolition authorities have been concerned not to do so, and I am confident that local government is not in that business. I know that we hear the threats and all the talk, but there is far too much at stake for them in the broader context, and I remain confident that they will not do so.

On the point of the fines, what are high rates but fines on ratepayers? This is not about fines; this is only about asking authorities—and only those authorities which do not heed this advice—not to add a burden to everyone else by overspending beyond their limits.

Lord Sandford

My Lords, I am grateful to my noble friend for this announcement. First, the earlier date which his right honourable friend has chosen will be very welcome, giving as it does greater time for consultation and deliberation on the issues raised by it. It must be right to take a further step in shifting the burden for local services from the taxpayer to the ratepayer, and that move is also welcome. It would, of course, be much better if it were linked with the first instalment of some proposals towards a thorough reform of local government finance, and we look forward to hearing announcements of that kind on future occasions of this sort. I conclude by expressing the hope that a substantial number of the 18 authorities on that list will now bestir themselves so as to get off it, which I am sure many of them can do if they try.

5.5 p.m.

Lord Bellwin

My Lords, I am grateful to my noble friend for his remarks. I certainly endorse the last point that he made. I made it myself and it is very much the Government's wish. Indeed, we shall be only too pleased to talk and discuss the matter with them. I also know what he refers to when he speaks about its being part of a broader reform in due course. The Secretary of State has said that nothing is forever, and certainly we shall listen with interest to what is said on that by local authorities.

Lord Sefton of Garston

My Lords, when replying to the noble Baroness, Lady Stedman, the noble Lord, Lord Bellwin, said that he would gladly send her information to show that Liverpool had not received a windfall following the dialogue, if it can be so called, between the Government and that city. I hope that when he used the word "gladly," he did not really mean that he would gladly demonstrate that Liverpool had not received a windfall, because if there is any city that needs a windfall, it is Liverpool. The amazing thing is, as I said in another debate this week, all these Ministers keep going to Merseyside and Liverpool and keep saying how terrible the situation is there and that it is not the fault of the people of Liverpool. Then, when it comes to a measure such as this, they treat Liverpool exactly like all the others. From what I have read into and seen of the designation principles, they say that Merseyside will be treated in exactly the same way as any other local authority area in the country. Yet the Government have demonstrated over and over again—as did previous governments—that Merseyside is a special case. But we can never reach a situation where, when we talk about this kind of measure, governments treat it seriously and as a special case.

I read in the Daily Telegraph this morning that St. George's Hall, which is acknowledged to be one of the finest tributes to local government in this country, will now be closed because the Liverpool City Council cannot afford the running expenses and still keep within the limits set down by the Government. The right honourable Minister Mr. Patrick Jenkin said that he agrees. When I read the news item this morning I thought that perhaps this was a situation where the whole of Merseyside could have taken responsibility for St. George's Hall, because St. George's Hall is a Merseyside institution. Now that has gone out of the window.

The Government go to Merseyside and set up an International Garden Festival on Merseyside, and they expect Liverpool to take responsibility for it. Liverpool cannot afford to take responsibility for maintaining the International Garden Festival. It should be a Merseyside function, and now that has gone out of the window.

The noble Lord opposite said that these local authorities should try to get off the list. Some of them are going off the list whether they like it or they do not. The noble Lord said that nobody mentions all these other authorities which are keeping within the limit laid down by the Government. Well, people have mentioned them. The situation there is that over countless years local authorities have gone through these problems if they have been talked to rightly, if the correct dialogue has been entered into, and if there is an acceptance there is a collective responsibility in local government to keep within the area laid down by central government.

But what happened in this case? In this case this Government never made any serious attempt to enter into a serious dialogue with the whole of local government so that local government itself could discipline those few members who were breaking the rules. That is the real key. The noble Lord opposite said that that was rubbish. Well the noble Lord opposite who said that that was rubbish should stand up and say it; but he will not, because he knows in his heart of hearts that that is true. That is how it is got over, over and over again.

We hear about the recognition of fairness on this side of the House and what is reasonable. Fairness and reasonableness are coming to mean what the Government think are fairness and reasonableness. I understand that one should only ask questions at this stage of the proceedings, but as nobody else confined himself to questions I do not see why I should not elaborate a little. The noble Lord the Minister said that he was sure that it was good for ratepayers. Let me tell him something: test it. I can tell him from personal knowledge that if he thinks it is good for ratepayers to abolish Merseyside County Council and to rate-cap Merseyside County Council, then he had better go to Merseyside and see if an election is held, because the ratepayers of Merseyside will not agree with him. So far as I am concerned on the issue of Merseyside it is the ratepayers who count, and I believe that their thumbs would go right down to the Government on this issue.

Lord Bellwin

My Lords, I always listen with great respect to the noble Lord, and I really do not mind at all, so long as nobody else objects, to the noble Lord putting his questions in the way that he does. He knows very well that that will not trouble me one bit. In actual fact when he talked about Liverpool getting a windfall and that I said "gladly", he knows the context in which I said "gladly". It was the context of wanting to give information to the noble Baroness. That is the context in which I used the word.

Lord Sefton of Garston

My Lords, does the noble Lord the Minister agree that if it was not for the existence in Liverpool of some moderate-minded councillors the situation would have been very different indeed? At this moment the Government should be trying to persuade those moderate councillors to stay with local government, and not frighten them away.

Lord Bellwin

My Lords, I do indeed pay tribute to the people to whom the noble Lord refers. I take my hat off to them now, as I have done before. It took a lot of courage for them to do what they did. The noble Lord said that Liverpool needs it, but you cannot differentiate between authorities as such. There are ways in which you can provide additional help, as he knows. Through the urban programme, for example, some £24 million of specific help goes in. If you look at the amount of money provided over the last five years, you are measuring it in hundreds of millions of pounds. The whole of Merseyside had had before this year £650 million.

There is no area in the country which has had such specific grants and assistance of that kind. That is not to say that it was not needed. It would not have been put there if we had not thought that it was needed, but in that it is there do not deny the fact that it is so. Yes, we have to treat Liverpool the same as all others for the generality of grant. And that is what we, shall go on doing.

I cannot comment on the St. George's Hall point because I do not know it. It is the same principle as applies to so much: you can decide that there are many things you cannot afford to do. The local authority will decide its priorities. But before you do that, if you are going to plead that you cannot afford something, then you must be willing to have a look at all the things you think you can afford and decide where the priorities lie, and where is the cost of provision. This is something that I would come back to again and again. The noble Lord and I talk about this, and I know that he agrees with me about it.

As for not being able to afford to maintain the Garden Festival, the decision will be that of the authority at the end of the day. It is quite the most magnificent and fantastic festival, which is bringing people, tourists, to Merseyside and Liverpool. It has brought employment; it is bringing funds. It can do more for Liverpool than most things have done in the past. Everybody who has been there says that. I am sure that the noble Lord agrees with that. As to the cost of maintaining it afterwards, he knows that there are many pluses to be sold off, many lands which will bring in resources and money; so the argument that they will not be able to really does not stand up. But we shall see. Time will tell.

When the noble Lord speaks about dialogue with local government, I do not say it is rubbish at all. I do not use that kind of terminology, anyhow. The noble Lord does not talk rubbish. He knows his subject very thoroughly. and more so than almost anyone I know in this field. But the fact is that there has always been the problem of the correct dialogue with local government, and the noble Lord knows it. He was having problems in his day. I hope that they are now smaller problems. Certainly no government I have ever known and no group of Ministers in my department have been more easily accessible that the present lot. Never, ever. Never in my time, anyhow, in the last 20, 25 years. I hope that that at least answers the noble Lord as best I can.

Lord Hatch of Lusby

My Lords, may I ask the noble Lord one brief question on this Statement? He included in his Statement the assertion that this policy was designed to move the financial onus from central government taxation to local government rates, and that those rates should be levied responsibly from an electorate. Can he now answer the question which my noble friend Lady Birk put to him, at least by implication in her first rejoinder: when are the Government, and when are the honourable and right honourable friends of the noble Lord—including the noble Viscount the Leader of the House—who were elected on the mandate to abolish the domestic rating system, going to carry out this mandate?

Secondly, how does this Statement square with the work that the Government have been doing over the last few weeks in abolishing the elections in the GLC and the metropolitan counties, consisting of councillors who are responsible to an electorate for the rates that they levy? Finally, would the noble Lord respond a little more positively to the question put by his noble friend Lord Sandford: when are the Government going to produce the extensive review of local government structure and local government finance—which is all that the metropolitan counties have been asking for—which this Statement demonstrates is way past the time for being conducted?

Lord Bellwin

My Lords, two quick answers. On the last point, the Government have no plans for the kind of review that is mentioned. I said in answering my noble friend that this must be something that one day I am sure will come about. I understand that local government are making approaches even now through the associations, and the Government will hear what they have to say. I am personally not unsympathetic to that being done one of these days.. What local government now needs is some stability and to settle down with what they have got; and that stability we intend to provide.

On the noble Lord's first point about the mandate, all I would say to him—and had I not been so tired yesterday, and the hour so late, I would have said it then—is that if he wants a list of all the items in the manifestoes over the years that his party did not live up to, and if he wants to compare it with the fact that my Government, my party, have fulfilled so many of their manifesto commitments, I shall be glad to give it. But that is very wide of the subject of the rate support grant settlement Statement.

Lord Diamond

My Lords, as I understand from a reply to an earlier question that the Government have settled their policy in this area, could the noble Lord give us an indication of what the levels of Exchequer grant, Exchequer contribution, to the rates will be over the next two or three years?

Lord Bellwin

My Lords, no, I cannot do that at all. The noble Lord knows, better than—I will not say most, but almost anyone, that this is something which is only settled on an annual basis.