Sitting of 25 March 1974

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  GLASGOW CORPORATION (CONTROL OF PARKING ETC.) ORDER CONFIRMATION
  Mr. William Ross presented a Bill to confirm a Provisional Order under Section 8 of the Private Legislation Procedure (Scotland) Act 1936, relating to Glasgow Corporation (Control of Parking etc.); and the same was read the First time; and ordered to be read a Second time upon Tuesday 2nd April, and to be printed. [Bill 7.]
  GLASGOW CORPORATION (MISCELLANEOUS PROVISIONS) ORDER CONFIRMATION
  Mr. William Ross presented a Bill to confirm a Provisional Order under Section 8 of the Private Legislation Procedure (Scotland) Act 1936, relating to Glasgow Corporation (Miscellaneous Provisions); and the same was read the First time; and ordered to be read a Second time upon Tuesday 2nd April, and to be printed. [Bill 9.]
  GREENOCK CORPORATION ORDER CONFIRMATION
  Mr. William Ross presented a Bill to confirm a Provisional Order under Section 8 of the Private Legislation Procedure (Scotland) Act 1936, relating to Greenock Corporation; and the same was read the First time; and ordered to be read a Second time upon Tuesday 2nd April, and to be printed. [Bill 8.]
ORAL ANSWERS TO QUESTIONS
  INDUSTRY

    Strachans Factories, Eastleigh and Hamble
    Mr. R. C. Mitchellasked the Secretary of State for Industry if he will pay a visit to the Strachans factory in Eastleigh.
    Mr. David Priceasked the Secretary of State for Industry whether he has received a letter from the Joint Union Occupation Committee at Strachans Limited, Eastleigh, about the closure of the two factories at Eastleigh and Hamble, dated 8th March 1974; and what reply he has sent.
    The Under-Secretary of State for Industry (Mr. Michael Meacher): I have received the letter to which the hon. Gentleman refers and although I have no

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    plans at present to visit the Eastleigh factory I have arranged to meet representatives of the management and the unions to discuss the closures.
    Mr. Mitchell: I thank my hon. Friend for that reply and for hoping that something useful will come from the meeting. Does he not think it is disgraceful that in 1974 a factory can be closed, several hundred men thrown out of work and the men given only one and a half hours' notice?
    Mr. Meacher: I entirely agree that it is a serious matter that the men were called in only at 11 o'clock on the day of the intended closure and were then told that the management wished to have the plant empty by 12.30 p.m. That is one of the matters I shall certainly be taking up with the management.

    Concorde
    Mr. Biffenasked the Secretary of State for Industry if he will make a statement on the current production and sales of the Concorde aircraft; and what changes are expected in the prospective 12 months.
    Mr. Dalyellasked the Secretary of State for Industry what convenient figures he has for the cost of Concorde.
    Mr. Bruce-Gardyneasked the Secretary of State for Industry if he will make a statement on the future of the Concorde aircraft project.
    Mr. Adleyasked the Secretary of State for Industry if he will make a statement on his policy for the future of Concorde.
    Mr. Michael McNair-Wilsonasked the Secretary of State for Industry if he will make a progress statement on Concorde production.
    Mr. Pattieasked the Secretary of State for Industry if he will make a statement on Government policy on the future of Concorde, in the light of the proposals announced by the French Government on 19th February.
    The Secretary of State for Industry (Mr. Anthony Wedgwood Benn): I have already given the principal facts about Concorde to the House on 18th March.
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    I shall be having my first meeting with M. Achille-Fould and M. Guichard on 29th March.
    Mr. Biffen: When that meeting takes place, will the right hon. Gentleman assure the French that, notwithstanding the strident noises that will emit from the aviation lobby, there is a widespread national acceptance, albeit tinged with regret, that the economics of this aircraft point unerringly to its early cancellation?
    Mr. BennI accept that the hon. Gentleman has taken that view, which he held in anticipation of the latest figures before the recent statement was made. He will recognise that one merit of proceeding as we have done is that a variety of views and interests can be represented, and we intend to take those in hand. My talks with the French will be on the basis of a cordial and frank relationship.
    Mr. Dalyell: What was the nature of the undertaking given by the hon. Member for Henley (Mr. Heseltine) to British Airways in April 1972? Was it in any way suggested that the cost of supersonic operations of Concorde would be undertaken by the British Treasury and underwritten by it?
    Mr. Benn: My hon. Friend will recall that the then Minister for Aerospace and Shipping made a statement in the House on 25th May that year when he made it clear that the Government would be prepared to review the financial position with the board in the light of the outcome of the board's operations and to see that, if necessary, steps were taken to ensure that the British Airways Board maintained a sound financial performance.
    Mr. Bruce-Gardyne: May I sincerely congratulate the right hon. Gentleman on publishing figures which the House would have benefited from having a long time ago? Now that he has published the figures, which confirm what many of us suspected—namely, that any super first-class passenger carried by this aircraft would also carry a fat taxpayer's subsidy —can he assure the House that he will proceed with his ideas when in opposition for a Select Committee of inquiry into the whole bizarre business of this example of State enterprise?
    Mr. Benn: The hon. Gentleman has kindly referred to the fact that the figures were published. It follows from that that views and interests can be represented, but it would not be for me to make any proposals about a Select Committee. It is clear that the Government are ready to hear representations generally.
    Mr. Loughlin: Will my right hon. Friend express an opinion about the newfound enthusiasm for dispensing with Concorde, even amongst Opposition Members who represent Bristol constituencies?
    Mr. Benn: Although I understand my hon. Friend's view, I do not think that in a case of this kind, in which there are complicated decisions to be made, we benefit by probing into the motives of others. We must assume that the House, in common with everyone else, is trying to reach a sensible conclusion to a difficult issue.
    Mr. Adley: Although wholly applauding the right hon. Gentleman's efforts in the attempt to mobilise the workers and the TUC against some of his Cabinet colleagues, whose enthusiasm for Concorde may be less than his, may I warn him that if he fails he is likely to earn for himself a reputation as the butcher of the aircraft industry which would far exceed the reputation which attached to his right hon. Friend the present Home Secretary who dealt with TSR2 in a most unsatisfactory manner?
    Mr. Benn: The hon. Gentleman, who did not remain as a candidate in Bristol during the last election, is not the best person to seek to advise me on the relationships of confidence that I have established. It is accepted that in publishing the figures there will be anxiety, but in parallel with that will be the opportunity for public discussion.
    Mr. Lipton: Will my right hon. Friend agree that, although it is a pity, indeed a tragedy, the time has now come to simplify the situation, scrap the whole project and devote the money to better purposes?
    Mr. Benn: I think it follows that, if the Government publish the information before reaching a decision, there is something to be said for taking advantage of that, for allowing representations to be made about it. To telescope the process
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    of decision with the process of publication would deny the purpose of publication.
    Mr. McNair-Wilson: Will the right hon. Gentleman give us a little more information about the possibility of cancelling the project? As I understand it, the 1962 treaty takes us up to the time of the certificate of airworthiness. If that is the case and we seek to cancel it on this side of the Channel, is there anything to prevent the French from going on with the project? To what extent are our subcontractors already involved in the French production?
    Mr. Benn: I cannot answer the latter part of the question except to say that there is clearly a close connection between subcontractors on both sides of the Channel with the production being undertaken by the two partners. On the legal matters, a question would have to be addressed elsewhere. All I would say to the hon. Member is that my talks with the French would be on the basis that they should he entered into in good faith. That is what the French would expect and, I think, what the House would expect as well.
    Mr. Pattie: Will the Secretary of State agree that, in view of the prevailing uncertainty, he should consider a visit to the BAC work force at Weybridge, in my constituency? Will he also accept that his statement to the House a week ago was defective in the sense that no allowance or mention was made of the possibly huge sums of money that might be demanded by the French Government in compensation if the Government unilaterally withdraw from the project?
    Mr. Benn: I have had the opportunity not of visiting Weybridge but of having talks with people representing the work force at Weybridge. Not only Weybridge but Hurn is affected, quite apart from other parts of the country where Concorde is produced. The latter point in the supplementary question does not arise. I must stress what I said in answer to an earlier Question: that I expect my discussions with the French to be on the basis that as partners we would look together at a problem common to us both.
    Mr. Moonman: It will be clear that the aircraft has already cost six times more

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    than was originally envisaged. To avoid a further £500 million expenditure, will my right hon. Friend consider an alternative manufacturing policy with a number of projects like QTOL?
    Mr. Benn: I think the House recognises that the development of the aircraft industry in this country, which has an important role to play, requires us to look at other projects from time to time, and that would be my programme as well. The House would be misleading itself if it thought that the substitution of another project at this moment would have any bearing on the social and economic consequences that might flow from the failure of the Concorde aircraft.
    Mr. Chataway: Will the right hon. Gentleman say whether British Airways consulted the Department before publishing its estimates of running costs, which are obviously very damaging to the possible sales of Concorde and which will be challenged by many people? Will he also say whether he accepts those estimates?
    Mr. Benn: I am not responsible for figures published by British Airways. In my statement last week I indicated the range of loss in operations that might be sustained by British Airways based on information available to me. What has emerged from publication of the figures is that other people have comments to make on the figures that were published and would like to argue the figures. That is one of the additional advantages of making public information that otherwise would be available only to the Government. All these figures were available to the right hon. Gentleman's Government before they left office.
    Mr. Tebbitasked the Secretary of State for Industry what discussions he has had with the British Aircraft Corporation concerning the future of Concorde.
    Mr. Benn: I have had frank discussions with the senior management of BAC and Rolls-Royce (1971), the trade unions and all levels of staff employed on the project.
    Mr. Tebbit: Which of those discussions took place before the right hon. Gentleman's statement on 18th March?
    Mr. Benn: I can answer that very candidly. I told the House last week that I notified my French colleague as a matter of courtesy on the day before I made the statement in the House, in accordance with the practice at ministerial level. The text of the statement that I made in the House last Monday was not made available to the management until after the statement had been made, and I did not consult the trade unions until I had left the Chamber, when they were waiting for some consultation.
    Mr. Tebbit: On a point of order, Mr. Speaker. I do not think that the right hon. Gentleman heard my question. I asked him what discussions he had had with the British Aircraft Corporation before making his statement. He answered a totally different question.
    Mr. Benn: I am sorry if I misunderstood the hon. Gentleman's question. I thought that he was dealing with whether I had told the House first, as I did. However, I did not have discussions on the basis of the statement with the management before I made the statement, because I thought it right that the statement should be made in the House and that everybody should hear it in the House and not in private discussion.
    Mr. Emery: Will the right hon. Gentleman tell the House whether he has had any further thought about the cancellation charges covering all the subcontracting factors, especially with regard to the question of aircraft electronics? There is a major worry that the figure he gave to the House does not cover many of the subcontracting extra charges which would fall due in the event of cancellation.
    Mr. Benn: The point that the hon. Member makes would no doubt be made to Ministers. All I would say is that, on publication of figures that were previously privy to the Government, it is inevitable that people will either ask questions about those figures or suggest that in some respects they are an overestimate or an underestimate. This is part of the process we had in mind in making available figures hitherto confined to Ministers.

    North Staffordshire
    Mr. Ashleyasked the Secretary of State for Industry what proposal he has to assist industry in North Staffordshire.
    The Minister of State, Department of Industry (Mr. Eric S. Heffer): We intend to give high priority to the stimulation of national industrial expansion. To this end we shall look carefully at the needs of industry in all areas, including North Staffordshire.
    Mr. Ashley: Is my hon. Friend aware that the Conservative Government grossly neglected North Staffordshire because they judged it by the sole criterion of a reasonable level of unemployment although the region is heavily dependent on a few industries that are not expanding? In view of the region's serious position, will my hon. Friend undertake an inquiry into the economic problems of North Staffordshire and ensure that it diversifies its industrial structure?
    Mr. Heffer: At this stage I cannot undertake an inquiry into North Staffordshire as such, but we are looking at the whole subject of the various regions, including the intermediate areas and other areas of great concern, and I assure my hon. Friend that we shall keep his area under close observation.

    Regional Employment Premium
    Mr. William Hamiltonasked the Secretary of State for Industry if he will make a statement on the future of the regional employment premium.
    Mr. Steelasked the Secretary of State for Industry if he will now make a statement on the retention of the regional employment premium.
    Mr. Gwynoro Jonesasked the Secretary of State for Industry if he will make a statement on the future of the regional employment premium.
    Mr. Heffer: We shall maintain the existing arrangements for regional employment premium while considering further possibilities for the future.
    Mr. Hamilton: I am sure my hon. Friend recollects that we consistently criticised the Tory Government for not giving categorical assurances that REP would continue after September 1974. Will he now make sure that he practices what he preaches?
    Mr. Heffer: My hon. Friend has been in the House a long time. He will be
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    aware that tomorrow my right hon. Friend the Chancellor of the Exchequer will be making a statement. I am not in a position to anticipate what he will say. All I can tell my hon. Friend is that REP will continue until other arrangements are made.
    Mr. Hill: Is the hon. Gentleman aware that in the Community the regional policy programme and development fund may well be excellent instruments to replace the regional employment premium? Is he having consultations with his right hon. Friend at the Commission in Brussels?
    Mr. Heffer: As as far the EEC is concerned, all matters of regional policy and other matters are subject to renegotiation. I assure the hon. Gentleman that all aspects of this subject are being discussed and any proposals that anyone wishes to make will be looked at carefully.
    Mr. Anthony Grant: How does the Minister consider that the regional employment premium will help areas such as North Staffordshire and the intermediate areas mentioned in the last Question?
    Mr. Heffer: The regional employment premium helps those areas where it applies. Obviously, it cannot help areas where it does not apply, but it did not apply to North Staffordshire. Legislation would be required to restore those grants.
    Mr. Blenkinsopasked the Secretary of State for Industry what alternatives to the regional employment premium are under consideration by his Department.
    Mr. Heffer: I refer my hon. Friend to the replies I gave earlier concerning REP, but I am ready to consider any effective alternative.
    Mr. Blenkinsop: While welcoming the announcement by the Government that they will continue the regional employment premium until a new proposal is worked out, may I ask whether there has been proper consideration of a concentration tax or other proposals of this nature? Can facilities be made available for a debate on this matter before final decisions are taken?
    Mr. Heffer: Debates in the House are not matters for me; they are matters which should be raised elsewhere. We are considering a number of possibilities, and if hon. Members wish to make representations we shall be pleased to receive them.
    Mr. William Hamilton: Is my hon. Friend aware that we on this side like REP very much and want it to continue? Will he give an assurance that there is nothing within the EEC rules to prohibit its continuation after September of this year?
    Mr. Heffer: As far as I understand, there is nothing in the EEC rules to prevent us from continuing REP. In any case, we shall consider the whole matter on its merits and not necessarily in relation to the EEC.
    Sir J. Hall: Does the hon. Gentleman agree that much could be done to improve the desirability of certain regions by spending the money now spent on REP on improving the infrastructure of those regions rather than giving it in the form of a premium to companies which do not increase their labour force?
    Mr. Heffer: This is a matter that we shall consider along with all the other proposals being made. It is absolutely right that the continuation of REP has been pressed by the TUC and by the CBI, and we take into consideration the opinions of such bodies.

    Gas and Electricity Accounts (Payment at Post Offices)
    Mr. Doigasked the Secretary of State for Industry if he will give a general direction to the Post Office to cease levying surcharges on gas and electricity bills paid in post offices.
    The Under-Secretary of State for Industry (Mr. Gregor Mackenzie): No, Sir. This is a matter for the Post Office.
    Mr. Doig: Is my hon. Friend aware that many people, including many of my constituents, will be disappointed with that answer, since no surcharge is made when these accounts are paid at trustee savings banks because trustee savings banks make private arrangements with the nationalised gas and electricity industries? Why cannot the Post Office do the same?
    Mr. Mackenzie: I am sorry that my first answer at the Dispatch Box to one of my hon. Friends should be "No, Sir". However, I hope he will appreciate that concessions of the sort which he has suggested would be a matter for the Post Office. Also, the Post Office is not in competition with the banks. No doubt the Post Office will look at some of the matters raised by my hon. Friend.

    Employers (Consultations)
    Mr. McCrindleasked the Secretary of State for Industry if, when consulting employers, he will consider the need to have discussions with bodies other than the CBI.
    Mr. Benn: Yes. There is a variety of subjects on which discussions with other organisations might be more appropriate.
    Mr. McCrindle: I thank the right hon. Gentleman for that reply. Will he bear in mind the possibility of engaging in discussions with active trade associations? In that way, would it not be more likely that he would gain an up-to-date impression of business opinion far beyond what is likely to be gained by consulting the CBI alone?
    Mr. Benn: Without allowing the hon. Gentleman to tempt me into criticism of the CBI, I am well aware of the fact that there are many interests, apart from the CBI, which represent the best amalgam of business opinion that is available. However, if I am able, as I indicated in my speech during the debate on the Queen's Speech, to move cautiously towards more disclosure of Government thinking before decisions are made over a wider area, this will provide other opportunities for people to make their comments before final decisions are reached.
    Mr. Dalyell: Is my right hon. Friend aware that one of the criticisms of the last Government, especially from the motor car industry, was that too much attention was paid to the CBI and too little attention was paid to some of the major employers?
    Mr. Benn: I am aware of that. It is difficult for the Government to find everybody with whom they should consult unless they are prepared to be more open about their decision-making. It may be

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    that, if we move in the direction I mentioned a moment ago, people who have an interest which they would like to be considered will find it easier to have it considered, instead of finding that they are always fighting a rearguard action against a decision that has already been taken.
    Mr. Richard Wainwright: Is the right hon. Gentleman aware of the advantages of regularly seeking consultation with bodies which, whilst being associated with management, operate on a professional code of conduct and within a democratic structure inside their own organisations?
    Mr. Benn: The hon. Gentleman must be referring to the trade union movement. I intend to develop and extend consultations with the trade unions. If the hon. Gentleman is also thinking of other professional associations, I would certainly have them in mind as well.
    Mr. Redmond: Would not the right hon. Gentleman get a better view of the problems of industry, particularly in the regions, and also especially of small firms, if he held more discussions with the chambers of commerce than he does with the CBI, simply because the chambers of commerce are nearer to the grass roots of the small firms in industry?
    Mr. Benn: I tried to answer that question in my first reply. I recognise that a very large number of people are directly affected by and hence interested in all Government decisions. That is why the process of moving forward by wider consultation, by indicating the lines of Government thinking in advance, may provide the best guarantee for everybody who would be interested. In so far as it is practicable, it would be my intent to do that.

    Polyvinyl Chloride
    Mr. Lambieasked the Secretary of State for Industry if he will take steps to ban the export of PVC.
    Mr. Meacher: I see no straightforward justification for this.
    Mr. Lambie: In view of that answer, will the Government look again at the growing practice of exporting substantial quantities of PVC while the plastics industry finds itself having to import
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    these quantities back from the Continent at greatly increased prices? Will my hon. Friend look again at this policy? While the Government maintain control of the export of steel and yet discriminate against the plastics industry, will he look again at the position of the exports of PVC?
    Mr. Meacher: In answer to the second part of my hon. Friend's question, I do not think that the parellel with steel is a correct one. In the case of steel, as a result of the three-day working week the country was facing no less than national breakdown. In the case of PVC, however, I do not think that it is the lack of export restrictions which is causing the difficulties but rather the simultaneous world-wide and domestic increase in demand for plastics, and particularly PVC, and also a number of serious plant failures particularly at the BP chemicals plant at Baglan Bay and the ethylene cracker there. I do not expect that demand will increase in 1974 at the same rate as in 1973, and I hone that the problems at these plants will be resolved in the near future.
    Mr. Bruce-Gardyne: If the hon. Gentleman is concerned about the export of PVC and other commodities required for the home market, why does he not study the effect of profit margin controls, which apply exclusively in the home market and not to exports at a time when exporting is highly profitable? If he tackled that, he might begin to make progress.
    Mr. Meacher: If one were to take the hon. Gentleman's advice for action on exports I think that there would be considerable difficulties, first concerning retaliation and, secondly, because we might need a derogation from the EEC, which is one of the problems we inherited.

    Steel Tube and Tube Fittings (Export)
    Mr. Hal Millerasked the Secretary of State for Industry whether he will exclude steel tube and tube fittings from the scope of export licensing.
    Mr. Meacher: I have already arranged for steel tube and pipe with tube and pipe fittings to be placed on an open

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    general licence, which allows export of these products without restriction.
    Mr. Miller: In thanking the Minister for his action, may I ask him whether he was aware that these items were apparently wrongly included in the first place and that the licensing procedure led to serious delay in exports?
    Mr. Meacher: The licensing was initially brought in, of course, on 18th February under the last administration, and I take note of the point made by the hon. Gentleman.

    Three-Day Working Week
    Mr. Huckfieldasked the Secretary of State for Industry what is his latest estimate of the loss of production and earnings because of the three-day week.
    Mr. Benn: From the limited statistical information available, manufacturing output may have been reduced by up to one-fifth in the first quarter, equivalent to a loss of gross domestic product of the order of £1,000 million. For the economy as a whole, the loss will have been substantially greater. The index of average earnings in January, the latest month available, showed a fall of 4½ per cent. compared with December.
    Mr. Huckfield: Has my right hon. Friend made any estimate of by how many times it would have been cheaper to settle the miners' claim in full immediately?
    Mr. Benn: I have not myself done this, but figures were given during the recent election campaign and I have no reason to amend what was said by Government members at that time.
    Mr. Tuck: Was the three-day week really necessary? Is it not a fact that when the three-day week was proclaimed we had reserves of 16 million tons of coal, much more than the year before? Therefore, if a three-day week was necessary in this period it was certainly necessary in the former period when it was not imposed.
    Mr. Benn: I think my hon. Friend knows that I put that very question to the then Prime Minister early in January. In our view—it is a view I do not resile from in any way—the three-day week was intelligible only in terms of the desire
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    to have a confrontation with the National Union of Mineworkers.
    Mr. Emery: Will not the right hon. Gentleman agree that, if the decrease of coal production which had been evident over the six weeks before 16th December 1973 had continued at that rate, without a three-day week we should have been at minimum security levels by the end of January?
    Mr. Benn: Yes, but I think that the hon. Member misses the point that the shortage of fuel derived from a policy which we, then in opposition, believed to be misguided. If he looks at the figures I have just given, he will see that his own Government spent in two months' loss of manufacturing output alone the equivalent of two Concorde programmes.

    Japanese Ball-bearing Factory
    Mr. Watkinsasked the Secretary of State for Industry what proposals he is considering for the construction of a Japanese-owned ball-bearing factory in the north-east of England.
    Mr. Heffer: A Japanese company announced in January its decision to set up such a factory in the United Kingdom, and I understand that it has chosen a site in Peterlee, County Durham—a special development area. The project is planned to provide employment for about 220 people, and the company is prepared to give certain assurances about the way in which it proposes to operate here.
    Mr. Watkins: Is my hon. Friend aware that there is great concern in my constituency that the jobs of workers at the Ransome Hoffmann Pollard plant at Ann-field Plain, and also the long-term prosperity of that plant, might well be threatened by that development? Can he give me a firm assurance that no British money will be used to assist any Japanese threats to British industry and jobs?
    Mr. Heffer: As regards any threat to the workers at Ransome Hoffmann Pollard, at Annfield Plain, I am informed that the ball bearings that would be made by the Japanese company will in no way compete with those made at that factory, and there is, therefore, no question of competition with it. As regards aid and

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    grants to incoming companies, not only from Japan but from other countries, we cannot give a categorical assurance that they would not receive grants. Obviously, we should not now have in many areas, particularly special development areas, American and other companies unless there had been some inducement offered to them.
    Mr. Chataway: Can the hon. Gentleman confirm that what he said, and the way in which he phrased his answer, does not mean that the Government will be discriminating against foreign investors and will continue to give regional development grants and all automatic grants on the same basis to overseas investors as to investors in this country? Is it not better that there should be investment in this country—particularly, as in this case, where over 50 per cent. of the product is to be exported—rather than that investment should go to Eire or Belgium and the product be imported into this country?
    Mr. Heffer: I think that the right hon. Gentleman read more into my reply than was there. Inward investment will continue as before, but, obviously, we are concerned and interested to protect British jobs, as any Government ought to be. The matter is under discussion for the longer term, but there is no question of changing the situation.

    Television and Motor Cars
    Mr. Rostasked the Secretary of State for Industry what forecast he makes of the level of production in the television and motor car industries, respectively, in the coming year.
    Mr. Meacher: Although my Department makes forward assessments for broad industry groups, these are sensitive to changes in economic policies and subject to unpredictable factors at home and abroad. The margin of uncertainty attached to the forecasts is too great to justify their publication.
    Mr. Rost: Is the hon. Gentleman aware that the manufacturers of components for the television and motor industries are getting increasingly concerned about the Japanese export drive? In particular, will he give an assurance that he personally, and his right hon. Friend, will look at the representations he has received from a leading public company in my con-
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    stituency, Pressac Ltd. of Long Eaton, which is extremely concerned at that increasing export drive and the loss of jobs and balance of payments problem that will result unless this is investigated?
    Mr. Meacher: I have not seen the papers to which the hon. Gentleman refers, but I gladly give him confirmation that we shall look at the effect this is having on components for television sets in this country. The balance of payments position over television sets in 1972 and 1973 was adverse for this country, though I suspect that investment in plant and the necessary machinery should bring an improvement in future.
    Mr. Fernyhough: Does my hon. Friend agree that the Japanese export drive began before 1st March 1974, and can he tell us what interest the hon. Member was taking in it before then?
    Mr. Meacher: That is a relevant point, in view of what I have already pointed out about our overseas trade balance in television being adverse for this country in the two years before the last election.

    Seahorse Marine Engine
    Mr. Willeyasked the Secretary of State for Industry what progress has been made in his consideration of providing Government aid to assist the development of the Seahorse marine engine.
    Mr. Heffer: My Department is discussing with those developing the engine certain proposals made by them.
    Mr. Wiley: I am obliged to my hon. Friend, but does he appreciate that this development is crucial to marine engineering in both Sunderland and the North-East Coast? In view of this, will he try to expedite the discussions he is holding? I realise that there are difficulties about any such developments, particularly as the recent redundancies at Doxford's engineering works have caused a good deal of apprehension.
    Mr. Heffer: I can give my right hon. Friend an assurance that we are anxious to reach a decision as soon as possible.
    Mr. Chataway: Does the hon. Gentleman hold out much hope that there will be investment in shipbuilding or marine engineering when there is the threat of nationalisation at some unspecified date?
    Mr. Heffer: The right hon. Gentleman is fully aware that over the years considerable sums of public money have been pumped into the industry and that many of the existing shipyards would not be in existence if such public money had not been so pumped in. I think that the case for ultimate public ownership in the industry is proved conclusively.

    Northern Region
    Mr. Radiceasked the Secretary of State for Industry what plans he has to reduce the total of unemployment in the Northern Region.
    Mr. Heffer: I am giving urgent consideration to the measures needed to stimulate regional development and employment in the areas of greatest need, including the Northern Region.
    Mr. Radice: Is my hon. Friend aware that we in the Northern Region are delighted that the Government have had the good sense to retain the regional employment premium, at least until other arrangements are made? However, will he accept that, if the massive gaps in the levels of unemployment between the North and the South are ever to be closed, a great deal more needs to be done?
    Mr. Heffer: My hon. Friend is absolutely right. We on this side of the House have been arguing for many years that we needed an industrial policy that would deal precisely with narrowing the gap between the North and the South. This is what we intend to do with the positive proposals we shall put before the House in the not too distant future.
    Mr. Hill: Is the hon. Gentleman aware that in the criteria of working out the regional policy programme for the Community unemployment figures feature very largely? Would it not be wise at this stage for him to invite a delegation from the Community's regional policy committee so that it could see for itself the problems of this region?
    Mr. Heffer: The hon. Gentleman is surely aware of the fact that the Expenditure Committee went into the question of the EEC regional policy. Mr. Thomson was invited to give evidence, and he gave it to the committee. The points then raised will be taken note of. I do not think that at this stage there would be any advantage in inviting such a delegation.
    Mr. Leadbitter: My hon. Friend will be aware that questions of unemployment in the Northern Region and development areas in particular are matters of vital importance to us. In this respect, however, he is aware of the closures in the steel industry in my constituency, where 4,500 jobs are involved. Is he able to say at this stage that the promised review of investment programmes in this industry will include the plant in Hartlepool and other plants in the development area?
    Mr. Heffer: My right hon. Friend has made it absolutely clear to the British Steel Corporation that the Government wish to review all planned closures, in accordance with what we said when in opposition. I understand that there is no question of the investment programme being in any way slowed down.

    Steel
    Miss Boothroydasked the Secretary of State for Industry what means there are of identifying the country of origin of steel imported into the United Kingdom.
    Mr. Meacher: In general, there are no practicable means of identifying the origin of imported steel products once these have been distributed from the port of entry.
    Miss Boothroyd: Is my hon. Friend aware of the great concern in the manufacturing industry about British steel, which, having been exported, is then imported and thereby commands the high foreign price, with all the inflationary tendencies which flow from this? Will my hon. Friend consider having talks with the Customs and Excise, or our partners in the Coal and Steel Community or in the EEC, to find a method of identifying steel so that this unscrupulous practice can be stopped?
    Mr. Meacher: I am well aware of the concern felt about the problem. We are anxious to receive all possible accurate information of any activities of this kind. I should make it clear, however, that the basic cause of the problem is the substantial price differential between British Steel Corporation prices and continental prices. The BSC is having consultations with the Government about price increases in order to cover rapid increases in cost.
    Mr. Ridley: Would not the way to deal with the problem be to abolish the price differential mentioned by the hon. Gentleman and to allow the price of steel to reach its market levels? Does not that apply to a number of other commodities as well?
    Mr. Meacher: A reduction in the price differential is certainly to be looked for as a result of the present review. That applies also in the case of other commodities. In the meantime, however, to prevent the situation from getting out of hand we had thought to retain control on all steel exports where such exports might inhibit the recovery of British industry from the trough of the three-day week.
    Mr. John Ellis: Is not my hon. Friend aware that this trade is going on—namely, that British steel is going abroad and coming back to this country at inflated prices? Will he at least make use of the necessary control powers, if he possesses them, to prevent this practice?
    Mr. Meacher: I have already made perfectly dear that in all cases where there is not an ample supply of steel products no open general licence will be granted. Although there was a reduction in steel licensing on 18th March, protection was retained in all those cases where handicaps were likely to be found in future for British industry.
    Mr. Spriggsasked the Secretary of State for Industry whether his attention has been drawn to the price British steel stockists are having to pay to speculators for British Steel Corporation steel; what part his Department plays in the export and import of British steel; whether export and import licences are being issued to facilitate such a situation; and if he will make a statement.
    Mr. Benn: I am aware of allegations that British steel has been exported, re-imported and then offered for sale at the higher prices prevailing abroad. However, steel exports are now subject to control. My Department does not control steel imports.
    Mr. Spriggs: Is my right hon. Friend aware that this reply and the earlier reply by our hon. Friend will simply not do? British firms are unable to buy British steel and are having to bid for it while it lies in the holds of ships off
    22
    foreign ports. That steel is being bid for from time to time by customers in this country who are having to pay foreign prices, which are something like 70 per cent. above British prices. In view of the replies already given to my hon. Friends, what is my right hon. Friend prepared to do to protect British firms against the extortionate prices being demanded by people who are investing in British steel with no intentions of using it for industry?
    Mr. Benn: I am aware of the facts of which my hon. Friend speaks and I have been given details of the case that I think he has in mind from his constituency. As I understand, the steel in question was not exported by the British Steel Corporation but was sold to another firm in this country which itself may have exported it and the steel may have passed through several hands before being offered to the firm in my hon. Friend's constituency.
    As regards the controls, we hope to meet the problem in a practical way by maintaining a control on steel exports until the home market is satisfied. As to the profits made by firms which seek to undertake this undesirable practice, they will fall for control under Price Commission rules about profit margins.
    Mr. Bruce-Gardyne: Will not the right hon. Gentleman confirm that the sort of practice to which he refers is the inevitable consequence of the Government's attempt to interfere with the pricing policies of the British Steel Corporation? Will he further confirm that such interventions are strictly against the rules of the Treaty of Paris?
    Mr. Benn: The hon. Gentleman must know that the problem we have just been discussing relates to what happened under the previous Government when the differential in prices arose between the British Steel Corporation and other price levels in Europe, and at a time when domestic supplies of steel were short. We believe that the methods I have described will now prevent the problem from arising in the same form in the immediate future, but everyone accepts that this Government have inherited a price differential between British and foreign steel, a problem that was neglected by the previous Government.
    Mr. Chataway: Is the right hon. Gentleman saying about steel—and, presumably, about PVC and quite a number of items—that the fault of the previous Government was that they held down prices too much?
    Mr. Benn: As the right hon. Gentleman knows, the argument that I am dealing with now is that if there is a need for exports to get the maximum value added in this country, it does not make sense to export raw materials that British manufacturers would like to use and then find that they have to import raw materials at higher prices.
    Mr. Spriggs: In view of the unsatisfactory reply, I wish to give notice that I shall raise this matter on the Adjournment at the earliest possible moment.

    Industrial Development Grants (Waste Material Recycling)
    Mr. Richard Wainwrightasked the Secretary of State for Industry whether he will alter the policy on grants for industrial development so as fully to include new businesses which recycle reclaimed materials instead of using virgin raw material paid for in foreign currency.
    Mr. Mackenzie: Regional development grants are available in assisted areas where premises are used wholly or mainly for qualifying activities. These activities include the processing of scrap and waste materials. There are certainly borderline cases both in fact and in law and if the hon. Member has a particular case in mind I shall be very ready to consider it.
    Mr. Richard Wainwright: Is the hon. Gentleman aware that, under the policy of the previous and now vanished administration, the use or otherwise of virgin material was perversely used as a test of whether the process was one of manufacturing or repairing?
    Mr. Mackenzie: I did not catch the last part of the hon. Gentleman's supplementary question, but I am prepared to agree with him that whatever the previous Government did was probably wrong. As for his comment about reducing expenditure on imported material, I take his point. But that is
    24
    not actually a function of regional incentives.
    Mr. Dalyell: Whatever the previous Government may have done, will my hon. Friend look at the official amendments of the previous Opposition during the progress of the Finance Bill, aimed at helping those firms that were prepared to undertake recycling? In particular, will he consider the problem of industries in our own area that suffer from shortage of packaging, such as the Scotch whisky industry?
    Mr. Mackenzie: Yes, I will.
    Mr. Edwin Wainwright: Will my hon. Friend take a look at the export of waste paper? Is he not aware that we are short of paper in this country, yet we are exporting it at a price as high as £40 per ton, whereas the price here is about £18 a ton?
    Mr. Mackenzie: My hon. Friend's supplementary questions do not fall within the scope of the Question, but I appreciate his comments and agree with them.

    Electrically-Propelled Vehicles
    Mr. Gryllsasked the Secretary of State for Industry what research is being initiated by the National Research and Development Corporation into the possibilities of an electric car.
    Mr. Meacher: The Board of the National Research Development Corporation has authorised research programmes on integrated motor and control systems and also on an advanced battery. Other research projects in the field of electric vehicles are under consideration.
    Mr. Grylls: I am grateful for that answer. Is the Under-Secretary aware of the real advantages in energy saving and in environmental terms of an efficient electric motor car? Will he make every effort to speed up this development, because it could be a useful factor in saving energy supplies?
    Mr. Meacher: We are well aware of the advantages in terms of noise reduction and freedom from pollution arising out of the development of this kind of vehicle. It is for this reason that nearly £½ million has been devoted to research and development on electric vehicles since 1967.

    JURORS (PAYMENT)
    Mr. McNamaraasked the Attorney-General whether he will consider increasing the amount of compensation to jurors for loss of earnings.
    The Solicitor-General (Mr. Peter Archer): My right hon. and learned Friend the Attorney-General has asked me to explain that his absence is due to the fact that he is appearing before the International Court of Justice. The financial loss allowance was increased last July. It will continue to be kept under review.
    Mr. McNamara: I appreciate perhaps more than most Members why the Attorney-General is in The Hague. Does my hon. and learned Friend agree that in the present state of inflation it is wrong that jurymen, performing a public service, should feel a sense of injustice about the level of wages which they are losing and that, although there has been a review, it should be done on a more regular basis to keep compensation in line with average earnings?
    The Solicitor-General: It is true that those whose earnings are above average are likely to lose financially during jury service. But the matter should be kept in perspective. The loss of earnings allowance is not subject to income tax, as the earnings would have been, and there is a subsistence allowance.

  PRICES AND CONSUMER PROTECTION

    Consumer Advice Centres
    Mrs. Oppenheimasked the Secretary of State for Prices and Consumer Protection if she will take further steps to set up a national network of consumer advice centres.
    The Minister of State, Department of Prices and Consumer Protection (Mr. Alan Williams): Yes, Sir. I am considering how local centres can best be developed as part of such a national network. I plan shortly to meet local authority representatives and the voluntary organisations, to discuss programmes for providing consumer advice centres.
    Mrs. Oppenheim: Does the hon. Gentleman accept that I welcome the fact that his Department agrees with the view that I have often expressed—that the provision of easily accessible comprehensive consumer advice is fundamental to ensuring that consumer protection legislation is as effective as possible? Will he bear firmly in mind, however, that most consumer protection organisations agree that a degree of independence should be preserved, and that a mere local authority service would not be ideal?
    Mr. Williams: All these matters will be discussed during the consultations that I have outlined. The hon. Lady will bear in mind that her views are similar to those that I expressed in opposition.

  TRADE

    Deep-Sea Trawlers (Safety and Search Equipment)
    Mr. McNamaraasked the Secretary of State for Trade whether he will examine the Search Indicator Buoy Regulation 1974 of Canada with a view to introducing similar legislation in the United Kingdom.
    The Under-Secretary of State for Trade (Mr. Clinton Davis): A copy of the regulations is being obtained, and I shall write to my hon. Friend as soon as they have been examined. As my hon. Friend will appreciate, my Department keeps the question of all aids to marine safety under constant surveillance.
    Mr. McNamara: I am obliged to my hon. Friend for that reply. Will he also undertake to say on behalf of his right hon. Friend that there will be a complete review of all procedures relating not only to the search for lost vessels but to the provision of necessary appliances on the vessels to ensure that they are equipped for searches above and below water?
    Mr. Davis: I am obliged to my hon. Friend. As I said in my reply, these matters are kept under constant surveillance and I have no reason to believe that the necessary apparatus invoked from time to time is not fully considered.
    Mr. James Johnson: In view of my later Question, may I be allowed to thank the Minister for his expressions of deep

    27
    sympathy—expressed in a Written Answer last week—to all the dependants and families of the "Gaul" crew who lost their lives in the disaster? In context of the Question, however, is it not a fact that only six months ago the Minister in Canada, Mr. Jack Davis, spoke of legislation on safety at sea and the introduction of an equivalent of the black box used in aeroplanes, and suggested legislation for 1st June this year?
    Mr. Davis: I am grateful to my hon. Friend for those remarks and I am glad to seize the opportunity of reiterating my sympathy orally now. I am sure that all hon. Members are deeply disturbed at the tragedy and wish to express their sympathy to the next of kin. On the specific point raised by my hon. Friend, there are real difficulties about the application of the black box because the similarity between occurrences at sea and accidents in the air is rather remote. Aircraft flight recorders owe their existence to the fact that air accidents rarely leave survivors whilst the same is not true of marine accidents.
    Later—
    Mr. Speaker: Mr. James Johnson. Question No. 32.
    Mr. Johnson: In view of your courtesy a few moments ago, Mr. Speaker, and as I was satisfied by what the Minister said, I thank him for his full answer.

    DC10 Aircraft Accident (Inquiry)
    Mr. Whiteheadasked the Secretary of State for Trade if he is satisfied with the British participation in the inquiries into the crash of a DC10 airliner of Turkish Airlines in France on 4th March.
    Mr. Clinton Davis: Yes, Sir. The French authorities invited the United Kingdom to appoint an observer to be present at their technical inquiry. This observer has had access to all pertinent information which has enabled the Civil Aviation Authority to be kept fully informed of the airworthiness aspects of the DC10.
    Mr. Whitehead: Would my hon. Friend agree that, parallel to that inquiry, there should be an investigation into the reasons why the FAA was persuaded not to issue
    28
    an airworthiness directive to McDonnell-Douglas after a near-fatal accident two years ago? Should not the CAA and the Government Department concerned carefully monitor recommendations by the American NTSB?
    Mr. Davis: The CAA has always carefully monitored these matters. In fairness to the authority, as in the statement of my right hon. Friend the other day, tribute should be paid to it for the work it has done. A general inquiry is now being embarked upon in Washington.

    Company Law
    Mr. Michael Lathamasked the Secretary of State for Trade whether he intends to introduce a Bill to reform company law in the present Session of Parliament.
    Mr. Clinton Davis: We are considering the reform of company law but do not expect to be ready to introduce legislation in the present Session.
    Mr. Latham: Should not such a useful measure, which was already drafted by my right hon. Friend, have priority in the Government's programme over, for example, land nationalisation?
    Mr. Davis: The Conservative Party has, as usual, got its priorities utterly wrong. The Bill that was introduced was of a traditional kind, concerned primarily with the interests of shareholders and creditors and hardly dealt with the responsibilities of a company towards its employees or indeed to the community at large. The nation would require the introduction of a more ambitious Companies Bill than was proposed by the Conservative Government.
    Sir Derek Walker-Smith: Will the hon. Gentleman say whether it is the intention of the present administration, as it was of the late administration, to issue a Green Paper on a possible two-tier structure of companies with provision for employee participation and, if so, when?
    Mr. Davis: That is a matter to which we will give consideration, but it would be premature for me to make a statement at this stage.
    Mr. Heseltine: Surely the hon. Gentleman would agree that in the interests of

    29
    open government a measure of the nature implied by the hon. Member's suggestion would demand at least the publication of a Green Paper. Why is he not able to give the House an assurance now that there well at least be that degree of consultation before the introduction of legislation?
    Mr. Davis: It is always refreshing to hear the hon. Gentleman offering himself as the exponent of open government, particularly after his efforts the other day on another matter. We have been in office for a relatively short time—[HON. MEMBERS: "Too long."] The Opposition had their remedy the other day. A clear study of company law has been undertaken by my party and we are giving full consideration to all these matters.

  ENERGY

    Pit Closures
    Mr. Skinnerasked the Secretary of State for Energy if he will give a general direction to the National Coal Board to stop the closing of any pits until the Government have fully determined their regional policy.
    The Under-Secretary of State for Energy (Mr. Gavin Strang): I would ask my hon. Friend to await the outcome of the tripartite inquiry into the future of the coal industry which my right hon. Friend is setting up with the National Coal Board and the unions. Meanwhile, he will be aware of the NCB's well-established procedure for dealing with closures under which the views of the unions are taken into account.
    Mr. Skinner: Although my hon. Friend might be prepared to wait a while for the tripartite talks, is he aware that the 700 miners of Glapwell Colliery in my constituency are not ready for waiting? Is he further aware that there is at least 7 million tons of coal below ground in that colliery, which is threatened with closure by the National Coal Board, and that that coal is valued at £75 million in total? Will he take all these matters into account when he meets the National Coal Board to ensure that Glapwell Colliery is kept open?
    Mr. Strang: I am sure my hon. Friend will recognise that the nationalisation Act placed responsibility for managing the in-
    30
    dustry on the National Coal Board, and it would be wrong for me to interfere with particular management decisions. Indeed, there are well-worked-out procedures for these matters. But I would also ask my hon. Friend to bear in mind that this tripartite inquiry will be conducted with great urgency and speed and will take all these matters into account.
    Mr. Rost: If there are individual pits which the NCB no longer wishes to operate or own, cannot these be sold to private enterprise if there are individuals who want to manage them for themselves?
    Mr. Strang: No, Sir.

DISABLED PERSONS (SHARP REPORT)
The Secretary of State for Social Services (Mrs. Barbara Castle): With permission, Mr. Speaker, I should like to make a statement.
The report by Baroness Sharp on the mobility of physically disabled people is published this afternoon. Copies are available in the Vote Office.
The report is a very thorough survey of a difficult and complex field, and I am sure that my predecessor the right hon. Member for Leeds, North-East (Sir K. Joseph), at whose instance Lady Sharp undertook the inquiry, will wish to join my right hon. Friends and me—as I am sure the House will—in thanking her for this valuable and comprehensive report. The principal, though by no means the only, matter dealt with in the report is the future of the invalid vehicles service, and, in particular, the question whether the existing three-wheeler should be replaced by a suitably adapted small car. Lady Sharp concludes that it should, mainly on the ground that the car now represents better value for money; but the report also shows that any general move to cars would involve a large increase in the overall cost of the vehicle service, since many more people would be likely to claim them.
As Lady Sharp makes clear in the report, her terms of reference required her to bear in mind that the money available for her purpose had to be limited by competing claims on resources, and Lady Sharp proposes that eligibility for vehicles

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in future should be limited to people who, in effect, need them for the support of themselves or their families. She estimates the extra cost of this at £3 million a year—rather more in the transitional period. Existing holders who did not qualify under the new criteria would retain the right to a three-wheeler as long as stocks last.
Any proposal to withdrawn a vehicle from those now enjoying the use of one, even with the transitional safeguards proposed, would in our view be wrong, especially as we are dealing here in many cases with people who, without their vehicles, will be virtually housebound. Moreover, new rules of eligibility will raise serious problems of definition and interpretation. On the other hand, any change which would have the effect of increasing the cost of the vehicle service clearly has to be considered in the light of the economic situation and other priorities for the public services, including, in particular, improved cash provision for the disabled. It is important that we should obtain the views of the disabled themselves.
The Government therefore propose to consider the recommendations in the report alongside their study of cash benefits for the disabled. In the meantime we will discuss the questions raised by the report, as well as the wider question of the priority to be assigned to the various needs of the disabled, of which mobility is one, with organisations representing the disabled, as well as with local authorities, the medical profession and others interested. I am today sending copies of the report to relevant organisations, and my Department will be getting in touch with them in the near future to arrange for consultations.
I should add that, apart from the central question of vehicles, Lady Sharp's report contains valuable recommendations on other matters, including medical training, the remedial professions, wheelchairs, housing, and general arrangements for making it easier for the disabled to get about. We shall, of course, pursue all these recommendations in consultation with the interests concerned.
One particular aspect of this matter which I know gives concern is the safety of the present invalid vehicle. As hon. Members will be aware, tests of the
32
vehicle covering impact and side wind effects have been carried out at my Department's request by the Motor Industry Research Association. I know that hon. Members have expressed a desire to see its report. I am therefore placing in the Library of the House, and I shall similarly make available to interested organisations, the three parts of the report on impact tests and a synopsis of the fourth part relating to the effect of side winds. The Motor Industry Research Association was not able to agree to my publishing the fourth part in full because other makes of vehicle were involved in the tests, and it felt it would be a breach of commercial confidentiality. The synopsis, however, has been prepared with the MIRA's agreement.
The results of these tests, which are favourable in certain respects but less favourable in others, will be among the factors to be taken into account in the consideration of the future of the vehicle service to which I have referred.
Sir Geoffrey Howe: Is the Secretary of State aware that the whole House welcomes the publication of this important report and would wish to join in expressing thanks to Lady Sharp for her work in preparing it?
We welcome for study the recommendations in relation to measures apart from those relating to motor vehicles. Does the Secretary of State appreciate the need for the whole House and many interested groups outside to study carefully the recommendations, which amount in some respects to a significantly different total approach to the problem of mobility of the disabled, with particular reference, of course, to the costs involved in any change, alongside the many other potential needs of the disabled to which she has referred, especially the possibly competing needs of disabled passengers who are unable, in any circumstances, to drive themselves? Would one be right in thinking that the estimate of £3 million to which the right hon. Lady referred as the additional cost of the Sharp recommendations includes the cost of any measures in relation to disabled passengers, as opposed to disabled drivers?
Finally, can the Secretary of State say —this is a matter about which there will be great concern—whether we are right to conclude that there is no reason, on grounds of safety alone, for saying

33
that the existing three-wheelers should be withdrawn and replaced by cars? I emphasise the phrase "on the grounds of safety alone" because it is important that those who now use these three-wheelers and will go on doing so in future should know exactly the impact of this report on that aspect of the case.
Mrs. Castle: The right hon. and learned Gentleman's last point is very important. I confirm—I think that hon. Members will be glad to study the MIRA report which I have placed in the Library —that there are no reasons on grounds of safety alone why the three-wheeler should be withdrawn. Although the MIRA report indicates the need for some design modification, it does, on the other hand, I think, allay some of the more intense anxieties that have been expressed.
On the £3 million additional cost to which Lady Sharp's report refers, this is, of course, on the basis of an entirely new definition of eligibility, which would be extended over the whole field. Lady Sharp recognises, as we do, that if one introduces cars instead of invalid three-wheeler vehicles, it is clearly impossible to resist the demand, if one wished to do so, for the disabled passenger to be accommodated by the new criteria. That is why Lady Sharp has completely rejigged the criteria for eligibility.
Hon. Members will want to study the report. In the consultations that lie ahead we shall welcome comments from all organisations and individuals, including hon. Members of this House.
Mr. Carter-Jones: I am grateful to my right hon. Friend for producing this report and for brushing the dust off it, for we know that it has been in the Department since last August. I am also grateful to her for allowing hon. Members an opportunity to study the MIRA report. I think it can be said that that report has caused much anxiety outside the House. I am glad to hear that my right hon. Friend will be carrying out consultations with disabled people, and I hope that she will not delay the implementation of the report too long in order to undertake those consultations. May I draw attention to a critical part of the report—namely, the fact that there is no disability in terms of mobility which cannot be overcome in some way or other by technology or finance? Will my
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right hon. Friend consider taking into account the fact that technologists can enable disabled people to become mobile, since there are disabled people who can drive vehicles by using their mouths alone? This means that more people can be mobile and can go out to work. Finally, will she consider the situation of severely disabled people who have no family and therefore need a mobility grant, for example, the situation of Miss Mary Greaves which illustrates this requirement?
Mrs. Castle: Since my hon. Friend asked me to see that there should be no delay in implementing the report, may I ask him in return to study the report? I believe that it will prove to be controversial and that it is not a question of our implementing this report but, in the light of the valuable information that it contains, of our deciding the best way of proceeding with the maximum mobility for the disabled. Part of our consideration in the consultations that lie ahead will relate to the other points raised by my hon. Friend, such as the possibility of help given by technological advances.
Mr. Marten: Is the Secretary of State aware that we are grateful to her for bringing forward this report so quickly, as we are to my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) for having initiated the inquiry during his time as Secretary of State? Will the right hon. Lady bear in mind that when on previous occasions calculations were made of the number of people applying for four-wheelers, particularly when Mr. Kenneth Robinson was Minister of Health, the Department unwittingly grossly exaggerated the number of people likely to apply for four-wheelers? When the right hon. Lady considers the overall cost—and I am sure that the whole House will welcome this expenditure—will she bear in mind the tendency to over-estimate the cost of these vehicles?
Mrs. Castle: I am grateful for the hon. Gentleman's kind remarks about publication of the report; I felt that it was essential for the report to be published as quickly as possible. I have made it available to the House, together with the MIRA report, at the earliest possible moment. On the hon. Gentleman's question about estimates of take-up, if there is a move to cars, again I

35
would ask the hon. Gentleman—and I know that he always takes a keen interest in this subject—to examine the report. I know that my hon. Friend the Under-Secretary of State, with his responsibilities for the disabled, will welcome any comments the hon. Gentleman may care to put to us.
Mr. Raphael Tuck: I must take issue with my right hon. Friend about the safety of three-wheelers. Is she aware that in my constituency of Watford there is a colony known as Kytes Drive and that the members of that colony, having driven these vehicles, regard them as totally unsafe? Will she give serious consideration to those views when making her decision?
Mrs. Castle: Yes, I shall give full consideration to all views expressed to me, but I repeat that I believe it would be valuable for hon. Members to read the MIRA report. I know that there have been anxieties on this matter. Some aspects of the report are less favourable than others and certain design modifications can be made to meet that situation, but I felt that as long as we withheld the results of any tests from the House alarmist views would spread. I think that those views are exaggerated.
Mrs. Knight: Is the right hon. Lady aware that there is a prototype invalid car nearing completion in Birmingham which although three-wheeled has a stabiliser wheel and combines the best features of the three-wheeler with the safety of the four-wheeler? Does the Secretary of State appreciate that the design of this prototype vehicle enables a disabled person to drive into the car from his wheelchair? Will she examine this project which appears to be an interesting advance?
Mrs. Castle: I was not aware of that vehicle, and I am grateful to have my attention drawn to it by the hon. Lady. I shall look into the matter.
Mr. Loughlin: Do we now find, as some of us have believed for a long time, that there has been a great deal of hysteria about the safety of the three-wheeled vehicle? Before my right hon. Friend thinks about any restriction of the present category of people entitled to
36
assisted transport, will she recognise that it is desirable to move to social independence on the part of the patient and his family? Does she not agree that anything that can be done in this direction on a gradual basis will assist the situation, otherwise the estimates of the take-up factor in respect of nominated drivers will be very much of an under-estimate rather than an over-estimate?
Mrs. Castle: I have sympathy with my hon. Friend's point. The most important aspect is to put all these facts before the disabled people themselves and to allow them to examine the problems and potentialities. I realise that the question of mobility is possibly the strongest desire of all among disabled people and their families. I want to discuss the implications of this report with them to see what progress we can make.
Sir D. Walker-Smith: While associating myself with the congratulations and appreciation which have been expressed and welcoming the main recommendations of the report, may I ask the right hon. Lady two short points? First, may we assume that the criteria in respect of the capacity to walk for elegibility for vehicles will be relaxed? Secondly, may we be told what is the position in regard to the point which I raised in the House last November on the criteria for exemption from excise vehicle duty—namely, that a vehicle must be conspicuously and permanently adapted? May we be told whether this requirement can now be dropped and whether the constant attendance allowance will be considered to be sufficient criteria in itself?
Mrs. Castle: On the first point, Baroness Sharp's recommendation would move in the opposite direction from the issue raised by the right hon. and learned Gentleman. Therefore, I must repeat that it is important for the House to study the report and the new criteria for eligibility which the noble Baroness suggests. They are controversial, but we must look into them and also at the implications of proceeding merely on the basis of the present criteria, plus the nominated driver addition. On the other point which was raised, all these matters will be taken into consideration in our consultations.
Mr. Kelley: On the question of priorities for four-wheeled vehicles, will my right hon. Friend consider the fact that certain families have been rendered immobile because of industrial accidents. Does my right hon. Friend appreciate that the provision of a three-wheeled vehicle does not permit the disabled person to take out his wife or any other members of his family? Will she agree to give this matter prior consideration because, had it not been for an industrial accident, the family of the disabled person would never have been put in that situation?
Mrs. Castle: We all appreciate that the main drawback of the three-wheeler to the disabled person is that he or she has to travel alone quite separately from the family. This matter has concerned hon. Members on all sides of the House, and it is one of the reasons why my predecessor as Secretary of State for Social Services commissioned this report. I can only ask the House again to study the report and its details. Let us see what is involved in giving wider mobility, which we should all like to give.
Mr. Pardoe: The right hon. Lady's swift action in publishing the report as soon as she got into office is welcomed in all parts of the House. However, she has set herself an example. Will she say something about the time scale for action. We recognise, of course, that the Government want to consider the report in detail and to consult as widely as possible, but Lady Sharp held widespread discussions and we now need action. Will the Secretary of State say when it will come?
Mrs. Castle: The ideas in Lady Sharp's report will be new to the organisations representing the disabled. I think that they come with a certain amount of surprise and that they will prove controversial. It is important for me to allow myself enough time to work out with the disabled our reaction to Lady Sharp's arguments and our priorities in helping the disabled, bearing in mind that I am already statutorily obliged to produce this autumn a review of social security provisions for the disabled.
There is, therefore, the question of improved cash provision as well as the question of mobility, and I want the disabled to help us make our choices.

AGRICULTURE (EEC MINISTERS' MEETING)
3.51 p.m.
The Minister of Agriculture, Fisheries and Food (Mr. Fred Peart): With permission Mr. Speaker, I should like to make a statement about the outcome of the meeting of the Council of Ministers (Agriculture) in Brussels on 21st to 23rd March at which agreement was reached on prices and other arrangements for 1974–75 under the common agricultural policy. These include certain special measures being taken to fulfil the Government's aim of ensuring that the price increases decided by the Council should not result in increases in the prices of basic foodstuffs to the British housewife. The main changes agreed for the full Community prices and the special arrangements for the United Kingdom are as follows.
In the cereals sector, the Community intervention price for soft wheat is to be increased by 4 per cent. and for barley by 5 per cent. The increased prices are, however, below present world market prices, and these changes will not have any effect on market prices in the United Kingdom this year.
For beef, the Community's guide price is to be increased by 12 per cent. The guide price in the United Kingdom is, however, being increased by only 6·3 per cent. This keeps it well below the present market price and increases the subsidies paid by the Community on exports from other member countries to Britain. It has further been agreed that we should have the option in any event of not taking beef into intervention.
The combined effect of these measures will prevent increases in the price of beef in the shops. In accordance with Treaty procedures the Government have informed the Commission of their intention, subject to Parliamentary approval of the necessary order, to safeguard the position of beef producers in Great Britain by an increase of £10 per calf in the calf subsidy.
Special arrangements are also to be made for Northern Ireland to safeguard the interests of consumers there while preventing the distortion of trade with the Irish Republic. The estimated cost

39
of the additional support for beef producers will be £38 million in a full year.
For milk, the Community's target price is to be increased by 8 per cent. The Community intervention price for butter will be held unchanged, however, and the increase in the target price will be reflected in a higher intervention price for skimmed milk powder. For the United Kingdom, the Community Regulations are being changed to make it possible to increase the general butter subsidy by the same amount as the intervention price in the United Kingdom. This will make it possible to nullify the effect of the transitional increase in the intervention price so that there need be no increases in the price of butter in the shops due to these changes.
For pigs, the Community base price is being increased by 8 per cent. It will still, however, be well below current market prices. In the United Kingdom, special arrangements are being made to safeguard the future supply of bacon and pork to the consumer. The Commission has been informed under Treaty procedure of our intention to introduce a special subsidy to producers with effect from today, although payments will not, of course, reach producers for a week or two. The subsidy will be paid on pigs certified under the fatstock guarantee scheme, and the rates will be 50 pence per score deadweight until the end of May, 35 pence in June, and 15 pence in July. The estimated cost is £15 million. Payments will be made under the authority of the Appropriation Act. A Supplementary Estimate will be presented in due course, with recourse meanwhile to the contingencies fund.
Finally, the Community's intervention price for sugar is to be increased by 7 per cent. The intervention price in the United Kingdom will not be increased till July and will remain below the price which we are now effectively paying for sugar from Commonwealth suppliers. Moreover, the arrangements for the refining margin for our cane sugar refiners have been substantially improved. From July, the new arrangements will enable them to secure an adequate refining margin without recourse to the present Exchequer subsidy and without increasing their selling prices in relation to the United Kingdom intervention price.
40
I regard the outcome of this Council session as satisfactory. There has been no disruption of the essential day-to-day business of the Community. The interests of the British consumer have been fully safeguarded; and we are arranging help for British farmers with their particular problems on beef and pigs. I believe that this is a reasonable settlement.
I pay tribute to my staff in Brussels from the Permanent Secretary down to the most humble typist. They were a fine team and they helped me considerably.
Mr. Pym: I thank the right hon. Gentleman for his prompt statement, which we shall naturally want to study in detail. The Opposition are glad that he believes that he has achieved his objective. In particular, I am glad for what he has done for the pig producers, who have suffered the worst aspects of the market in recent months, and for what he has done for sugar.
The House will note that the whole of these negotiations on which the right hon. Gentleman is reporting are within the terms of the Treaty of Accession and that, of course, many of the price increases agreed in Brussels are below world prices and therefore are at present of no significance.
The housewife will be glad about the limiting of price increases, but may we know more about the implications? Have the Government set any limit to the subsidies bill to be met by the taxpayer? I think that within the last week about £100 million or more additional subsidy has been announced. How far do the Government intend to go? Is it not the case that the taxpayer will contribute extra money to the Common Market farm fund as well as extra money to producers and consumers? We are entitled to know how far the Government intend that the taxpayer should meet this kind of bill.
Will the right hon. Gentleman confirm that this is the first time since the war that there has been no minimum price for beef? There is now no bottom in the market for beef. Does that mean that the right hon. Gentleman does not intend to intervene? If he does intend to intervene, at what price level will that be? I am sure that he will agree that this is a most important matter for the confidence of the beef sector. If the prices are held down here, what is to

41
stop supplies of beef going abroad where prices are better? Is it the right hon. Gentleman's intention to bring in again a guarantee system such as operated before?
Was there any discussion of the Comission's proposals on fruit and vegetables, and did the right hon. Gentleman raise, in particular, the plight of the glasshouse sector which was raised in the debate ten days ago?
Is the right hon. Gentleman satisfied that the deal will lead to an increase in production? It is not only a question of continued supply but of expansion. The consumer is every bit as interested in this as the producer because without adequate supplies, prices would be adversely affected. Therefore, whatever the right hon. Gentleman may feel about the reasonableness of the settlement, the crucial question is whether it will lead to continued expansion in the agricultural industry.
Mr. Pearl: Of course the Exchequer is involved here. Indeed, there are producers' subsidies totalling £53 million. There are also consumers' subsidies in relation to butter, for example. I accept this. It was the right approach.
The Opposition have often been involved in Exchequer support in relation to production grants. Only recently in their award—which I thought was essential to give confidence to the dairy industry—the Opposition did precisely this. They were responsible for the subsidy, and I recognise this, but there is the consumers' point of view. If we can use Exchequer support in this way and it keeps down prices, we shall be able to fight inflation.
The right hon. Gentleman asked about the time limit involved. The agreement is equivalent to our own Annual Farm Price Review and will be for the appropriate period.
The right hon. Gentleman also asked about beef. He must recognise that the Community system in relation to support is different from the old deficiency payments system which was enshrined in our legislation, which was approved by both parties. It is an intervention system. I do not like it. I believe that when there is a need for beef, it is wrong for it to be put into storage. Therefore I asked for an option, which I shall use sensibly.
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Regarding other matters, including those affecting fruit and vegetables, there is a specific problem relating to glasshouses, involving fuel. I hope to have immediate discussions with the industry on this. On matters relating to fruit, I have kept in touch with the industry, and its representatives within COPA who were out there in Brussels.
I am satisfied that this award and the proposals which I have put forward will give confidence in parts of the industry where there was some neglect. I have in mind the pig industry, which should have been dealt with previously but had not been dealt with. I have now given a direct injection to that industry, and this will give confidence to pig producers here as well as in Northern Ireland. For that reason I believe that I have struck the right balance, and I hope that the right hon. Gentleman and his party will support me.
Dr. Mabon: I congratulate my right hon. Friend on his success in these discussions. With regard to sugar, who pays the increased refining margin of £19? Is there an increase in the subsidy which the right hon. Member for Grantham (Mr. Godber) introduced last July, or is it now part of the EEC system? What obstacles now remain before my right hon. Friend can proceed with the Cyrriax report on the reorganisation of the sugar refining industry in this country, which is causing much concern among cane sugar refiners in Britain?
Mr. Pearl: The cane sugar refiners' margin was only £12, so an Exchequer subsidy of £5 had to be provided to bring it up to £17. Now, under the new EEC arrangements, there will be a margin of £19 without Exchequer subsidy.
The future of the sugar industry was not a matter for my discussions in Brussels, but on my coming into office we had discussions immediately with different sections of the industry. This is an urgent matter.
Mr. Hooson: I congratulate the Secretary of State on obtaining this concession in Brussels and I congratulate the other Common Market Ministers on acknowledging and sympathising with our present problems in this country.
Did not the right hon. Gentleman's negotiations lead him to the conclusion

43
that the cheapest food which we could get at the moment is that which is grown in this country? There has been slaughter of breeding animals in the last few months in this country. Should not there now be a long-term review of our agricultural situation?
Mr. Peart: I am grateful to the hon. and learned Gentleman, who I understand leads the Liberal Party, or did lead the Liberal Party, on this matter. [Interruption.]—Indeed, I think he is the Liberal Party spokesman. I had thought that he had moved to another subject.
I should be frank with the House. I negotiated this agreement but I accept that many of my colleagues in the Council and in the Commission played their part. They were helpful and wished to co-operate. I in no way tried to get any major reorganisation of the CAP. What I was concerned with was a continuation of the price review negotiations, within the Treaty and the regulations. It was in that spirit that I approached my negotiations in order to protect British interests—those of the housewife and the consumer—and to balance these with the interests of the producer.
I agree with the hon. Gentleman that we should have a long-term plan on food production. I have already had discussions with the National Farmers' Union on this. It is my wish to have a long period in office in order to implement this plan.
Mr. Cledwyn Hughes: I congratulate my right hon. Friend on his substantial achievement in Brussels. Does he agree that one of the most significant features of the agreement is the acceptance in principle of deficiency payments? Does he see this developing as a permanent feature of Community reviews?
Mr. Peart: My right hon. Friend knows that the Community has previously used the deficiency payments systems on certain commodities. It is not for me to comment now on any long-term arrangements, if we are to seek renegotiation. The reality is that deficiency payments systems have been used.
Mr. Godber: I congratulate the right hon. Gentleman on an agreement which I recognise is a big step as he comes into office, and I also congratulate him on
44
certain aspects of it, including the sugar refining margin, which will be useful.
However, does he agree that acceptance of the agreement will mean that the British taxpayers will have to pay for the national subsidies in full and will also have to contribute their full share to the much larger community figure, which will be involved, particularly in regard to beef and milk, where both of the figures he has announced for the Community are substantially in excess of what the Commission first proposed. The milk subsidy, in particular, could lead to another milk mountain. Is this not where the right hon. Gentleman had to give concessions in order to get agreement on his other points?
Mr. Peart: I thank the right hon. Gentleman for his remarks. I noted with interest his comments in the Daily Telegraph—which were both serious and amusing—regarding my position. However, I do not think that he is right on this. We have prevented through this method much higher prices, which would have harmed the consumer and which, in the end, would not have benefited the producer.
Mr. Milne: Is the right hon. Gentleman aware that his statement represents no substantial shift in Community policy? Can he outline policy on the question of Britain's contribution to the Community budget which still stands at 25 per cent. of the total?
What is the position regarding the 20 per cent. annual increase in foodstuff prices between now and the end of the transitional period? Will my right hon. Friend indicate the benefits to the Commonwealth from the sugar-refining arrangements?
Mr. Peart: I cannot agree, and I cannot comment on whether we have moved towards an acceptance of a different policy in relation to the CAP, which is what my hon. Friend is saying. I achieved in the discussions things which have never been achieved in the Community in an approach to our national problems—a special pig subsidy, a special subsidy on beef and options on intervention prices. Those are examples. In that sense I believe that they constitute an achievement. I cannot comment on other longer-term matters, which are subjects for discussion.
Mr. Morrison: Understandably, the right hon. Gentleman may think that it is wrong to put beef into storage, but the total implication of what he said is that he does not want an expansion of beef production at home. Will the calf subsidy help current producers of beef? How are producers to have renewed confidence in beef production in the future, when it is the end price that matters?
Mr. Peart: If the end price is too high, consumers do not consume beef. The hon. Gentleman should know the market conditions of the industry. That has been one of the great problems. Many of our people are not eating what was once a traditional part of our food supply. Conservative Members must bear that in mind. I believe that the industry needed confidence by the injection of a direct subsidy. I have done that with calf subsidy. I see no reason why there should not be expansion.
Rev. Ian Paisley: On behalf of the people of Northern Ireland, I congratulate the right hon. Gentleman on his statement, which has been long awaited. Will he still keep in mind that the pig industry in Northern Ireland represents 45 per cent. of total agriculture there, and that barley prices are higher in Northern Ireland than in the rest of the United Kingdom? In order that the pig industry may plan ahead, will the Minister give an assurance that when the arrangements are put into effect he will reconsider that matter in the interests of the pig industry in Northern Ireland? I should also like to know how the calf subsidy will work for the Northern Ireland farmer.
Mr. Peart: I believe that the pig subsidy has been welcomed, and I am glad that the hon. Gentleman appreciates that. He and his colleagues lobbied me on the matter, and I know that they feel very strongly about it. I know Northern Ireland very well, and I know the importance of the pig industry. I believe that the calf subsidy will be satisfactory. We shall be making separate arrangements especially for Northern Ireland to prevent distortion of the market in relation to Southern Ireland. I shall keep in touch continually with Northern Ireland on the matter.
Mr. Lee: I congratulate my right hon. Friend on knocking some sense into that
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absurd organisation in Brussels. He has already said in answer to an earlier question that he does not like the intervention principle. May we take it that he made clear to his colleagues over there his dislike of that principle, and that he will make it clear again and again until we are emancipated from the Common Market agriculture policy?
Mr. Peart: I can only repeat what I said earlier. I had to work within the rules and regulations. The reorganisation of the CAP is a matter not only for me but for my right hon. Friend the Foreign and Commonwealth Secretary. In the discussions, my colleages in Europe—I use that term—[HON. MEMBERS: "Hear, hear".]—That is right [Interruption.] It is not a question of truth. I have disagreed over the CAP, but I have always believed in wider European co-operation. There is a difference. All I am saying now is that I believe that they recognised that I had a point about intervention, and it is for that reason that I achieved what in fact I achieved.
Mr. Mills: I welcome what the Minister has done for the pig industry, but does he not agree that the position regarding market stability in the beef sector is far worse, for without the underpinning of intervention or deficiency payments there can be no confidence for the fattener.
Mr. Peart: The hon. Gentleman chastises me on the question of confidence, but it was his Government who let confidence slip. It is precisely for that reason that I have injected a subsidy for pigs, which the hon. Gentleman appreciates. As a former Northern Ireland Minister, the hon. Gentleman knows full well that I am right on that matter. Secondly, I believe that the injection of aid in the form of the calf subsidy will give confidence in the beef sector.
Mr. Harry Ewing: While not wanting to detract from my right hon. Friend's magnificent victory over the weekend, may I ask whether during the negotiations he gained the impression that the previous Government, because of their blind obsession with Europe, had betrayed the British people by accepting conditions that they need not have accepted, and

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that that is the main reason why consumer prices in this country have been so high for the past year?
Mr. Peart: I note what my hon. Friend says. My object was to achieve what I thought was in the interests of my country, and I did that within the rules and regulations.
Mr. Biffen: Can the Minister confirm that the sliding scale of 50p down to 15p being paid per score deadweight on pigs is also available to pig producers from the Republic of Ireland, but that the Irish have managed to get it financed from the common agricultural fund, whilst the right hon. Gentleman is to tax the British taxpayer? What is the charm possessed by the Irish Minister for Agriculture that he can use Community funds, whereas the right hon. Gentleman cannot?
Mr. Peart: I cannot accept that. That comes again from the Irish point of view, which I agreed in relation to Northern Ireland. I was able to do something. There was a recognition in the end that the Southern Ireland Government had a difficulty which we do not have, and that therefore there would have been a distortion of the market. [Interruption.] I am stating their position. I believe
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that what I have achieved is a good thing.
Mr. Anthony Stodart: Is not the most important feature here the question of the guarantee on beef, or the lack of it? Whilst I accept the right hon. Gentleman's point about the injection of the calf subsidy, does not he recognise that a flood of cattle on to the fat market without either intervention or guarantee could cause the price to plunge? If the right hon. Gentleman dislikes intervention, as I am ready to accept that he does, is he returning to the system of guarantees and deficiency payments? There must be one or the other.
Mr. Peart: This involves a major attitude towards the CAP—how we reorganise it. My injection of money into the beef industry through the calf subsidy will, I believe, give confidence. After all, Conservative Ministers did nothing about it, either in the Annual Price Review or in Europe, when we had the unfinished business. I believe that this is essential. I have an option on intervention. I do not like it. But I believe that what I have done in the direct subsidy is right and proper.
Several Hon. Members rose—
Mr. Speaker: Order. We must move on to the next debate, in which more than 40 right hon. and hon. Members wish to speak.

RATE SUPPORT GRANT
4.19 p.m.
The Secretary of State for the Environment (Mr. Anthony Crosland): I beg to move,
That the Rate Support Grant Order 1974, a copy of which was laid before this House on 14th March, be approved.
When I last spoke in a debate on a rate support grant order in 1970, Ministers were accused of attempting to send the House to sleep. That is a tactic not unknown to Ministers who find themselves on a sticky wicket. But if I induce any drowsiness in hon. Members this afternoon it will be an accidental byproduct of the technical complexity of the subject, and not an attempt to bore the House into submission.
The right hon. and learned Member for Hexham (Mr. Rippon), who was responsible for these matters under the previous administration, more than once observed that the only hope of securing an appropriate grant distribution would be to sacrifice a goat before programming the Department of the Environment computer. His right hon. Friend the Member for Crosby (Mr. Page) went further and argued that the most expeditious way of distributing rate support grant would be for him to fly over the country in a helicopter, dropping bags with the appropriate amount of money on local authorities as he passed. I am distressed to see that the right hon. Gentleman has retreated far into the back benches. I am sure that the right hon. Member for Finchley (Mrs. Thatcher), whom I welcome to her new responsibilities on the Opposition benches, will produce equally delightful suggestions for improving the system, using all the ingenuity which she displayed, though not always, in our view, with the right intentions, at the Department of Education and Science.
I should perhaps begin by explaining briefly the underlying basis of the order, which is the first to be made under the Local Government Act 1974. The formulae used for distributing Exchequer grants to local authorities in support of rates are extremely complicated—according to The Times, it is a task for an Einstein. But the broad workings of the system are clear—well, relatively clear.
Each year a forecast is made of local authority "relevant expenditure". That
50
term now covers virtually all net local authority expenditure out of revenue. It is estimated in consultation with the local authority associations. Regard is paid to the evidence of performance in past years, to the probable fluctuations in demand for the different services, and to the best projections which can be made of factors such as the numbers requiring education at various stages, the likely recruitment of police, and so on. That is the starting point, but the Secretary of State is also required by the Act to take into account the extent to which it is reasonable to develop local authority services in the light of general economic conditions.
For 1974–75 local government reorganisation has led to a change in the composition of relevant expenditure. Certain services and their costs—namely, local health, the greater part of the school health service, sewerage and water expenditure—will be transferred to other bodies. On the other hand, certain other services will now come into relevant expenditure for the first time.
When the forecast of relevant expenditure is settled, Exchequer grant is fixed as a percentage of it. My predecessor had proposed a percentage of 60.5. I have no intention to alter that. About 10 per cent. of the grant is then deducted for specific grants towards particular services. The remaining 90 per cent. of the grant is then divided between three elements—namely, needs, resources and domestic.
The needs element is distributed to local authorities on a formula designed to reflect variations in their spending needs. The revised formula produced by my predecessor represents a considerable improvement on the previous formulae or any previous formula, but it is still far from perfect and I shall want to look closely at how it works out. The Secretary of State is required by the Act to prescribe various factors and sums which need to be taken into account in the formula. Many of the factors prescribed in the order are obviously right. However, I am not at all happy about the South-East and outer West Midlands factors. It would be too difficult to change them for 1974–75, but I shall certainly revise or, rather, review them for the following year. The needs

51
element accounts for £1,907 million. That is about 60 per cent. of the total grant.
The resources element is intended to supplement the rate income of authorities whose rateable value per head is relatively low. It is paid when an authority's rateable value per head of population is less than a "national standard" prescribed for the year in the order. The Government, as it were, step in as a ratepayer to pay rates on the deficiency in rateable value. This year it will be paid to most rating authorities, and will take a larger share than usual of the total, increasing from £413 million to £723 million. That is about 25 per cent. of the total. This change, which was proposed by my predecessors and which I welcome, should go some way to removing part of the inequity of the previous system.
The domestic element is very different. Rating authorities are required to levy lower rates on domestic than on non-domestic properties. Every rating authority receives an amount of domestic element grant which matches as closely as possible the authority's loss of rate income from this domestic relief. Under this order it would be more than doubled to £446 million, about 15 per cent. of the total rate support grant. I shall return to the domestic element, which appears to be a subject of some slight controversy.
When on 5th March I arrived at No. 2 Marsham Street, that elegant adornment of London's environment—my right hon. Friend the Member for Deptford (Mr. Silkin) remarked that the one advantage of being in the building was that it was the only place in London from which one could not see it—the first decision I had to make was whether to confirm the package agreed by my predecessor and fully described in the White Paper, Cmnd. 5532. This proposed, to recapitulate, a total rate support grant for 1974–75 of £3,076 million at November 1973 prices, apportioned as to £1,907 million for the needs element, £723 million for the resources element and £446 million for the domestic element.
I decided that it would be wrong to reopen the question of the total amount of the grant. Certainly we in opposition had criticised some of the cuts which
52
the previous Conservative Government had imposed on local authorities. But during the election I had resolutely refused to promise that we would at once rescind these, and I decided not to do so for two good reasons.
The first was a severely practical reason. The new grants become payable, at a rate of £60 million a week, in only six days from today. I was advised that today was the last possible day on which the order could be laid before the House if payment was to begin on time. If I had sought to reopen the whole question of the amount of grant—involving, as that would, lengthy discussions with the local authority associations, the Treasury and so on—we simply could not have been ready with the order today. The new authorities, already sufficiently confused by the previous Government's many changes of policy, would have found that utter financial chaos was superimposed on all the other stresses and strains which reorganisation has imposed. I regarded that as unacceptable.
Secondly, we must face the fact of the economic situation which we inherited. Here I must not anticipate tomorrow's Budget Statement.
As the House knows, I strongly believe that a Labour Government should give a high priority to an adequate rate of growth of desirable public expenditure when deciding how our national resources should be allocated. But, clearly, resources are at present limited. It is equally clear that the Government have to decide what are the priority claims on public expenditure. The current settlement still leaves room for a 2½ per cent. increase in local authority expenditure in real terms. I wish it could be more. During the last Labour Government it was about twice as great on average. In today's circumstances I thought it would be wrong for me to make any change in the total amount to be paid out.
For practical reasons I also ruled out any change in the distribution of the grant as between the needs, resources, and domestic elements, or in the formulae for the needs and resources elements. No such changes could have been made in the time available.
The one aspect of the package about which I had the gravest misgivings was also one that it was possible to change in

53
the time available without serious consequences for the rate-fixing process—namely, the proposed distribution of the £446 million domestic element in the grant.
The previous administration, after a bewildering succession of policy changes which left the local government world dazed, came up with the device of variable domestic rate relief. The charitable explanation of what they had in mind was that they had decided to temper justice with mercy. The new formulae for the needs and resources elements—I give the previous Government credit for this—introduced some sense into the distribution of total grant so that areas with special problems received more help than they had done previously. Of course, giving more to those who had done badly under the old system meant that there was less left for those who had done well under the previous system. It was at that stage that the Conservative Government took fright.
The previous Government decided that there should be no redistribution to domestic ratepayers as a result of the altered formulae. What they had given the worse-off areas with one hand—through the needs and resources element—they took away with the other through the domestic element. Their aim was to legislate for a uniform rate of increase in domestic rates this year, irrespective of the ability to pay of different areas.
In the hope of achieving this aim, the last Government introduced a variable domestic rate relief. In areas which were losing grant, or where water and sewerage charges were likely to rise particularly steeply, the amount in the pound of domestic rate relief would have been very high—as much as 40p in the pound in one well-known instance. But for an area gaining grant the amount in the pound would have been as low as 7p.
This would have taken benefit away from householders in those inner urban areas which were entitled, and, indeed, intended, to gain under the new distribution formulae. The policy of helping the inner cities was surely right and justifiable. But the last Government flinched from the consequences for some of the counties and introduced the variable domestic element. I believe that this was wrong.
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Quite apart from the principle involved, the proposed system of variable domestic relief was complicated, cumbersome and difficult to understand. It was, as The Times commented, a wildly uncertain exercise, based on speculative arithmetic which produced some peculiar results. Moreover, there was never the slightest chance that as a result of this policy, to quote my predecessor's words in the House on 22nd January,
"The average national increase"—
in rates—
"should accordingly be about 3 per cent"—[OFFICIAL REPORT, 22nd January 1974; Vol. 867. c. 1469.]
There was not the slightest chance of that, or that in the hardest-pressed areas rate increases for domestic ratepayers would be limited to the 9 per cent. which he claimed he had in mind. There was no chance at all of achieving that under the last Government's policy.
On the information so far available from the authorities which have fixed their rates, it is clear that under the last Government's proposals, which I am altering, domestic rate increases would have averaged at least 20 per cent. and in some cases might well have been as high as 60 per cent. So much for the 9 per cent. ceiling on rate increases.
Mrs. Elaine Kellett-Bowman rose—
Mr. Crosland: I am reluctant to give way because Mr. Speaker admonished us before we started to be as brief as possible. However, I will do so to the hon. Lady.
Mrs. Kellett-Bowman: Is the right hon. Gentleman aware of the serious effect on the domestic rate of the reduction in domestic relief in Lancaster and many other constituencies in the North-West?
Mr. Crosland: I am in the middle of trying to make the case to the House. If anyone thinks that I am not aware of the strong feelings in a large number of constituencies, I can assure them that they are wrong. I am fully aware of those feelings.
The Conservative proposals would have failed to achieve what was in any case the wrong objective. The variable domestic element was thus highly unsatisfactory in many ways. Given the shortage of time, there was only one practicable change

55
which I could make, and that was to replace the variable relief altogether by a uniform flat-rate relief. This was not an easy decision, but I concluded that on balance—and it was only on balance—it would be right to make the change, because it helps the hard-pressed inner cities where so many of our social problems come together, and it has long been Labour policy—and a policy to which I personally have been deeply committed—to give these inner city areas more assistance.
The Labour Party's election manifesto said:
"Our cities desperately need and must get better services which are properly manned, and the resources to make this possible."
I myself wrote in a book published last week which I warmly commend to the whole House:
"The environmental crisis of the inner cities, affecting the poor much more than the rich, continues unabated."
I see considerable merit in both parties and individuals acting when in Government on the principles they enunciated when in Opposition. So I decided to replace the variable domestic relief by a flat-rate domestic relief of 13p in England. In Wales, where there are special problems, to which my right hon. and learned Friend the Secretary of State for Wales will be referring later, we settled on a flat rate of 33½p.
The result of this decision, I fully concede, is very rough justice, with a strong element of the capricious about it. I could have wished to have a more carefully worked-out proposal. But no one should doubt that the results overall are socially equitable and just.
I will quote some figures as examples. The change gives an extra £2·7 million to Greater Manchester, £3·3 million to Merseyside, £2·6 million to Tyne and Wear, £400,000 to South Yorkshire, £80,000 to the West Midlands and about £25 million to London. Not all districts in these areas benefit, but without exception it is the inner areas of the conurbations which will have relief. As such, on an admittedly rough and ready approach, we have gone back to something nearer the objective approach which the Conservative Government so altered during their last months of office.
Mrs. Sally Oppenheim rose—
Mr. Churchill rose—
Mr. Crosland: I shall not give way any more, because if 40 right hon. and hon. Members want to speak in the debate one must be brief.
The decision I took was given a welcome, albeit a cautious one, in the Press. The Times—which does not agree with the actions of the Labour Party as much as it does with those of the Conservative Party—said that I had
"wisely decided not to make any far-reaching changes in the distribution formulae or in the total amount of Exchequer grant distributed. To have done so at this stage might have been the final undoing of local authorities struggling to get a grip on their new areas and functions."
In relation to the variable domestic element, The Times said that the decision by the last Government
"had a general tendency to take away from householders in inner city areas the benefits which other changes in the formulae had been intended to bring them. Mr. Crosland is replacing the variable element by a straight increase in the flat rate element. It should broadly support the egalitarian purposes which he said would be entertained by the Department of the Environment so long as he is in charge."
The Economist, I think understating the position, wrote:
"Mr. Crosland's system is probably slightly fairer than the Tories' proposal."
I remind the House, therefore, particularly some of my hon. Friends, that I am making a proposal described both as egalitarian and as fair.
Given the redistributive nature of the change, I find the attitude of the Liberal Party towards the order extremely curious. In their manifesto the Liberals called for
"a radical redistribution of income".
They do not seem to realise that one does not redistribute income simply by writing about it. One has to do something about it, and, of course, if one does do something about it some people must lose, and I accept that some Liberal constituencies will lose as a result of the order.
I may add that my own constituency of Grimsby will lose also as a result of what I propose. That is an ironic result

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of the change, especially as the constituency of the right hon. Member for Finchley gains substantially as part of Barnet. One penny in the pound is the loss which will be suffered by the areas represented by a large number of hon. Members, including one or two of my hon. Friends, who have written angry complaints to me.
Grimsby is, naturally, dear to my heart, and the first thing which my officials told me when I proposed to make this change was that Grimsby would be one of the sufferers. Whether they pointed this out to me in a spirit of tender compassion or in an attempt to dissuade me is not for me to decide. I greatly regret that Grimsby should suffer. I am prepared to face up to that in the interests of general fairness. Like many of my hon. Friends who are in trouble, I met my constituency Labour Party on Friday to explain and defend my position. It was not best pleased, of course, but it comprises good Socialists and loyal Labour Party members, and they accepted the broad justice of what I have done.
I fully recognise that the course I am recommending is far from perfect. There are some authorities which have been unfortunate over the distribution of the needs and resources elements, where householders will now face additional burdens as a result of my decision. I am very much aware of the concern of hon. Members, including some of my colleagues, who represent such areas, and I greatly sympathise with them. I am most grateful to them, and here I think particularly of my hon. Friends the Members for Norwich, South (Mr. Garrett), Keighley (Mr. Cryer), Meriden (Mr. Tomlinson), Sowerby (Mr. Madden), and Gloucestershire, West (Mr. Loughlin)—and others of all parties—who have rightly drawn attention to particular rate problems arising in their constituencies from this settlement. I regret that I cannot offer to meet their individual cases this year.
Looking ahead to next year, I intend over the coming months to make a thorough review of the whole grant distribution system and the way in which it is distributed between the three elements. We shall have the representations of all hon. Members and of local authorities very much in mind in seeing how we can
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improve the fairness of the system for 1975–76. This is without prejudice to any wider changes we may make in the longer run to the rating system as a whole.
I must remind the House of two points which have been rather lost to view in the course of the recent outcry. First, and broadly speaking, those areas where the percentage rise in rates this year will be somewhat higher as a result of our proposal to abolish variable domestic relief are those areas which have in the past often enjoyed a low domestic rate burden. For example, in Cornwall the average rate payment for each domestic household in 1973–74 was £40 a year. In County Durham it was about £45, in Norfolk it was £47 and in many of the West Yorkshire areas, where increases will be substantial, the figure was similarly low.
By contrast, in the areas which will benefit from the changes I am making the rates have been very much higher. In Newcastle in 1973–74 they averaged £73 per domestic household, in Birmingham £77, in Manchester £94 and in the GLC area as a whole £91. All of this strongly reinforces my view that we should concentrate our help, as we are seeking to do, on areas where the burden of rates is already a particularly onerous one.
Mr. John Pardoe: Will the right hon. Gentleman give way? He mentioned Cornwall.
Mr. Crosland: I imagine it is possible that the hon. Member will be called. I rather hope not, but it is possible.
Secondly, the total increase in rates in the country as a whole, although it would not be guessed from some of the representations made to me, is part of the legacy which Labour has inherited from the previous Tory Government. The national rate burden remains precisely the same under this order as it was under the proposals of the previous administration. What I have done is to redistribute £200 million of grant out of £3,000 million—7 per cent. of the total rate support grant—back to the areas which needed it. As a result some people in other areas will pay more but by and large, with notable exceptions, these are the areas which have less pressing claims for central Government help.
Mr. Churchill rose—
Mr. Crosland: My reason for not giving way is quite simply that there are

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40 hon. Members waiting to speak. I have vivid recollections of being a backbencher, unable to be called because there was not enough time.
Mr. Churchill: Can the right hon. Gentleman explain, since he has said that by abolishing the variable domestic element he will be helping inner city areas, why this move is benefiting areas such as Sussex and Westminster, while my constituents in part of the metropolitan district of Trafford within Greater Manchester will lose more than £8 million in grant this year, which represents an increase in the domestic rate in excess of 60 per cent.? They will be worse off.
Mr. Crosland: I have already dealt with this. I have explained that Greater Manchester as a whole gains a large sum from the change I am making. I said clearly that not all districts in the metropolitan counties would gain.
Of course, there are anomalies in what I have done, but there were grotesque anomalies in the system I have superseded. A large number of Labour Members were complaining bitterly about the system I have altered.
I am sure that the whole House will wish to join me in paying tribute to the work of local and central Government officials who have jointly collected the information and prepared the analyses which formed the basis for the discussions leading to this settlement. The past year has been exceptionally difficult—indeed, quite awful—for everyone concerned with local government. They have had to cope with the preparations for local government reorganisation, a new grant system and numerous other changes.
This year—a quite unprecedented event—there have been three statutory meetings between the Secretary of State and the associations to determine the settlement, two with my predecessor and one with me. The uncertainty has been greater than ever before, as have the agonies. There must have been many moments when local authorities wondered whether there would ever be a rate support grant at all. On behalf of both sides of the House I express our appreciation for the spirit in which this year's highly complicated consultations have been carried out.
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In presenting this order to the House I find myself in a unique position. Never before has a Minister responsible for the rate support grant settlement brought before the House a measure which represents in part the work of his predecessor and in part his own. Perhaps this may make the order more acceptable to the House. I hope so, for I must warn the House that if this order were not to be carried tonight local government would be plunged into utter chaos. Authorities would not get their money by 2nd April, and would then have to start borrowing £60 million a week in the short-term money market at interest rates of 15 per cent. or higher. This would be a wholly unjustified additional burden on the ratepayers, and we should be thought most irresponsible if by our action tonight we were to impose it.
Furthermore, no one should think that by rejecting this order more money will be available for local government from the Exchequer. Those who vote against the order are asking that money should be taken away from inner urban areas and paid elsewhere. All that they will ensure if they succeed in the vote is that no local authority receives any Exchequer assistance for some weeks until we have relaid the order and argued it all out again.
The changes I have made represent a definite move in the right direction towards the goal of greater fairness and equality to which the Government are committed. I commend the order to the House.
4.50 p.m.
Mrs. Margaret Thatcher: The 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. I must, however, congratulate him on one aspect. No other Minister in his Government has invoked so much opposition from his own back benchers within such a short time.
The right hon. Gentleman claims that he has partly inherited the order, and he hopes that that will make it the more acceptable. It may result in making it unacceptable to both sides of the House.

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The right hon. Gentleman claims that there is variation of rate burden from one part of the country to another, from some rural areas to some centres of cities. Yes, there is. There is, too, a variation of services. Even if there is a variation of burden, one cannot go from a position of considerable variation to the position which he wants to get to without making many transitional steps to protect ratepayers from the considerable increases which he would thereby impose upon them.
I agree with the right hon. Gentleman that the debate on the Rate Support Grant Order tends to be a technical debate—although, because of his action, this will probably be the liveliest debate we have had for many years—but our constituents do not come to us with technical points. It is no good trying to explain to them 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?" That is what many constituents and many hon. Members will be saying to the right hon. Gentleman today.
The letters received by hon. Members are pathetic. My hon. Friend the Member for Honiton (Mr. Emery) tried to intervene in the right hon. Gentleman's speech, and I have a letter in these terms from one of his constituents who moved to Honiton:
"Comfortably settled as I am in this small flat, I carefully worked out provision for my few remaining years only to find now the Labour Government proposing such an increase in the rates that thousands like me will not be able to survive."
Hon. Members: "Rubbish."
Mrs. Thatcher: I am interested to hear that Government supporters say that increases sometimes amounting to between 80 per cent. and 90 per cent. in the domestic rate are nonsense. They are saying that they are not prepared to do anything about it and are displaying callous indifference to the requirements and needs of the constituents concerned.
I agree with the right hon. Gentleman that we come to this year's rate support settlement against an unusual background. There can scarcely have been more
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changes in local government structure and financing than we have to cope with this year. That is common ground. The inquiries about reorganisation were set in train not by the previous Government but by the Government before that. There is little point in either Government or Opposition blaming the previous Government wholly for the difficulties caused by the reorganisation of local government or for the fundamental difficulties in local government finance which we have had for many years and which are likely to continue for many years to come.
This year, the biggest local government reorganisation since the nineteenth century, with different boundaries, different powers, a change of formula for the grant, changes in the organisation for water and sewerage and a miscellany of other factors affecting individual ratepayers, it seemed likely at the outset that there would be a number of sharp increases across the country as a whole in the rate burden from the domestic ratepayer. This increase might not go in any particular geographical pattern but have a random distribution. Unless something was done, it seemed that some ratepayers would face considerable increases. The system adopted by the Conservative Government set out to mitigate those increases wherever they occurred, whether in urban areas like Wolverhampton, Barnsley or Sandwell, or in rural areas in the counties. The variable domestic relief was designed to mitigate certain large increases in rates to a tolerable level. We claim that to be an equitable way of doing it.
The Minister for Housing and Construction (Mr. Freeson): Political.
Mrs. Thatcher: If it is political to reduce sharp rate increases wherever they occur, it was political, but it was equitable as well. But the right hon. Gentleman is doing nothing about the sharp increases in rates which his decisions have produced. He prefers a blanket derating for the domestic ratepayer.
There are other reasons for increases in rates in addition to those I have mentioned. There could be extravagance by local authorities. I have many complaints of extravagance in some cities—Leeds and Sheffield—and some examples where reorganisation occurred enormous increases in the number of staff and in

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the salaries which they were being offered. That is a matter for the local government authority itself to cope with, and it is not one of the special factors to which I referred earlier. There is, of course, an inflation element, but there is normally a rate support grant (increase) order at the end of the year to take account of inflation. Our proposals were designed to mitigate the sharp increases in rates which came from the reorganisation, the change in formula and the change in organisation of the water and sewerage element in the local authority rates—
Mr. A. J. Beith: Will the right hon. Lady confirm—
Mr. T. W. Urwin: Will the right hon. Lady—
Mrs. Thatcher: I give way to the hon. Member for Berwick-on-Tweed (Mr. Beith).
Mr. Urwin rose—
Mr. Deputy Speaker (Mr. Oscar Murton): Order. Perhaps the right hon. Lady might defer afterwards to the hon. Member for Houghton-le-Spring (Mr. Urwin).
Mrs. Thatcher: I will give way to the hon. Member for Houghton-le-Spring (Mr. Urwin) after the hon. Member for Berwick-on-Tweed.
Mr. Beith: I thank the extraordinarily gracious right hon. Lady, and you, Mr. Deputy Speaker. Will the right hon. Lady confirm that among the sharp increases to which she referred were the special negotiations which took place between the Department of the Environment and those authorities that incurred expenditure under the Local Employment Acts, and that part of the domestic element was used to cushion large expenditure of that sort? I have a case in Berwick-on-Tweed which accounts for 5p in the domestic element. Does the right hon. Lady agree that specific negotiations took place in which figures were produced and incorporated in the domestic element because of expenditure on such things as sewerage schemes under the Local Employment Acts?
Mrs. Thatcher: I cannot confirm it because it was not my responsibility at the time—I hope that one day it will be. Perhaps the hon. Gentleman will have a word with my right hon. Friend. I give way to the hon. Member for Houghton-le-Spring.
Mr. Urwin: When the right hon. Lady was dealing with the generosity of the previous administration she tended completely to overlook that in Durham, which is one of the poorer counties and which is badly affected by unemployment, the problems of industrial dereliction and so on, the decision of her Government to reorganise local government cost £4 million in rateable value. Because of her Government's decision to redistribute domestic rate burdens, Durham loses a further £2 million. Durham is absolutely seething with anger against my right hon. Friend for taking away £840,000, but by far the greater responsibility for the massive increase in rates rests with the right hon. Lady's administration, not with my right hon. Friend.
Mrs. Thatcher: Of course, I disagree with the hon. Member. He knows full well that, whatever the problem with rates in Durham, it has been made infinitely worse by the actions of the right hon. Gentleman and his right hon. Friends.
I was talking about the variable domestic relief. I shall not go over the factors on which we are agreed—the separation of the relief into the needs, resources and domestic elements. The purpose of variable domestic relief was described in a circular from my right hon. Friend's Department, as it was then, on 4th February 1974. The object of the variable component is to protect domestic ratepayers against the increases in rate burdens that might otherwise occur because of the effect of changes in rate support grant under the new RSG arrangements and because of the effects of local government boundary changes and water and sewerage reorganisation.
The right hon. Gentleman has wholly abandoned that formula and with it that approach and with it the essential equity of the approach. He claims that we did not benefit the cities, but in his statement to the House on 22nd January my right hon. Friend pointed out that the distribution of the needs element had been

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designed to help—and did help—the cities. Indeed, he came up against criticism from hon. Members on both sides of the House because, by virtue of the needs and resources element, he had already paid too much attention to the cities and too little to the rural areas. It was not surprising after that that he should attempt to bring some equity to the rural areas, too, but not limit it to that. If some urban areas were badly hit by rate increases, they, too, got the benefit. It is not just a difference in figures; it is an essential difference in approach.
Mr. Robert Adley: Is not my right hon. Friend saying that on the whole the previous arrangements were designed to benefit low income areas, for instance, East Anglia and the far West, and that what is happening now is that those areas with lots of people on low incomes and a lot of people on small fixed incomes are being disadvantaged, so that we have the better off in the cities being subsidised by the worse off in the low income areas.
Mrs. Thatcher: I believe that the formula was designed to mitigate severe increases in the rate burden, wherever they occurred, and to reduce them to tolerable levels this year. [Interruption.] There was a formula to calculate the increases and the advice available to us in the arithmetic connected with that formula was the same as is now available to the right hon. Gentlemen and his hon. Friends.
Certainly there were some difficulties in calculating the relief due because first one had to take the amounts of rates payable this year and compare that figure with the amounts payable under all of the new factors next year. There are a number of problematical factors in getting from the existing position to next years position, and I believe that a number of borough treasurers now have different ideas about how it could have been done. In fact, for all areas the projections were made on an average rate of growth, and I think that we might have taken some variable factors into account. Undoubtedly we should have liked to wait until all of the budgets were made up, and then we could have seen exactly how to apply the relief.
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But the right hon. Gentleman now has the budgets made up, and if he really wishes to be equitable, he could apply the relief to the actual figures, not on the basis of the theory which we had to operate.
Like the right hon. Gentleman we know that the local authorities need all the available information to make up their rate demands, and some of them have already made them up and sent them out and are in great difficulty because of the right hon. Gentleman's instant action.
There were some problems in calculation of relief, but those problems would now have been smoothed out if the right hon. Gentleman wished to adopt that approach, because he has the actual figures.
Just to show that it was not an urban versus a rural battle, the Press notice of the Department of the Environment on 20th February gave the variable domestic relief calculated for each area under the system my right hon. and learned Friend used. It showed that the benefit went to areas as different as Barnsley, Sandwell, Calderdale, Havering, Mid-Bedfordshire, Buckinghamshire, Cambridgeshire, Oxfordshire, Cheshire, Cornwall, Cumbria, Derbyshire, including Bolsover, Devon, including Plymouth, Dorset, Durham, Gloucester, Portsmouth—I cannot mention them all—Hereford, Worcestershire, Boothferry, Hull, Rossendale, Norfolk and Leicester. If any city has problems, Leicester certainly has, as anyone in the education world knows. Northampton, Shropshire and the Wrekin benefited but are very badly hit under the right hon Gentleman's edict. Newcastle-under-Lyme, Nuneaton and Rugby were to benefit, but all of those places will now lose. I understood from the Association of District Councils that of the 296 new district councils in the non-metropolitan counties 234 will lose relief. That relief had previously been notified to them and used to make up their rate demand. Other districts may gain.
This change was made without consultation. A statutory meeting was called and told. I quote from the CCA note on 14th March 1974:
"The Secretary of State informed representatives of the change…No prior notice of the Government's intention had been given to the Association."

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Having made the point, I make no further observations. I know what these statutory meetings are like, but it appeared that there were no prior consultations. We know full well that in the time available the right hon. Gentleman and his friends could give the subject only the most cursory examination. On the basis of that cursory examination they were prepared to put many ratepayers in many authorities in difficulties and lead to rate increases of up to 90 per cent. Some of the details I have received from some of the separate authorities make it quite clear that that is the order of increase that will bear upon the domestic ratepayers.
Mr. David Mudd: Would my right hon. Friend go along with me in underlining that one of the effects of this mandatory action will be homelessness and squalor in counties such as Cornwall? Cornwall has been mentioned particularly in the debate. In Cornwall rent is traditionally low. It is on a rent plus rates basis. Therefore, if rates go up, because of the rent freeze the landlord cannot recoup this money. He will be left with less money to carry out modernisation and important repairs to the house. He will be left with no alternative other than to begin an endless trek through the county court for repossession.
Mrs. Thatcher: If one lives in a house which the right hon. Gentleman calls of comparatively low rateable value and budgets to pay rates of about £50 a year this year and is then faced with a demand to pay £75 this year, that is an extremely large increase for many people compared with what they had budgeted for. Some retired people will not be able to meet it. They will have to rely upon the Tory rate rebate provision which is being very well advertised. However, that will not benefit everyone who suffers severe increases under this Act.
I have had details from a number of areas—Somerset in particular, which was the subject of a short debate in the House the other evening. Somerset has done everything asked of it. It has exercised the most stringent economies so that it has only 2 per cent. growth, although it has had a bigger increase than that in population. It has budgeted for less than
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the 9 per cent. inflation, as my right hon. Friend asked. It has implemented all the December cuts. Having done all that, some of its ratepayers have an increase in domestic rates of up to 85 per cent.
The authority does not think much of a Government who say that its ratepayers must pay bigger increases than those paid in some of the cities which have a higher rate of service. In Norfolk, amounts of up to 70 per cent. on the domestic ratepayer are involved. In Portsmouth—an example of an urban area—only one in five will qualify for the rate rebate and four-fifths will have their rates increased by up to 37½ per cent.
A large part of this situation has been brought about by the Secretary of State's action. I have a note from Lincoln, which, referring to the right hon. Gentleman's decision, says:
"This one act of 'instant government' has worsened an unhappy position—because no local authority likes to increase the rates—into a devastating one. In one part of the county the increase is going to be of the order of 80 per cent."
This is caused by the right hon. Gentleman's action.
Increases in rates are always unpopular, and rates are always a very sensitive issue in the House. The right hon Gentleman has abandoned the object of protecting ratepayers against big increases. He has abandoned the flexible approach which would have enabled him to do it. He is relying wholly on our rate rebate scheme. He has worsened, in particular, the position of owner-occupiers, who are already having to bear other increases without protection. In addition to those other increases, they will have to bear the consequence of the rent freeze as it affects the rates. Even if one gets a rate support grant (increase) order—and the right hon. Gentleman has given no such undertaking—a proportion of the increase will fall upon the local ratepayers.
Mr. Crosland: With respect to the right hon. Lady, any deficit is met by the Government to the extent of 80 per cent. in any case, so we are simply talking about the remaining 20 per cent. If there is an increase order, it would cover the 20 per cent.
Mrs. Thatcher: In that case, will there be an increase order to cover this?
Mr. Crosland: In what was a rather longer discussion than perhaps the right hon. Lady implied, I told the local authority associations that I would await proposals from them as to how we dealt with the remaining 20 per cent., whether by an increase order or in some other way.
Mrs. Thatcher: So the right hon. Gentleman has not undertaken to meet the increase. Why? If it is so simple to pay 100 per cent., why does he not give an undertaking that there will be a full rate support grant (increase) order?
The Conservative Government were faced with rate increases due to a similar situation; namely the situation occurring after rating revaluation at this time last year, something which we had to undertake because it had been left aside by the Labour Government and, therefore, there had been a period of 10 years without any revaluation. That, too, threw up unexpectedly severe rate increases on some domestic ratepayers. The difference between the present Government and the Conservative Government is that we did something about mitigating the increases.
We did something of a kind which is still open to the present Government. On 6th March last year, in the Budget Statement, my right hon. Friend the then Chancellor of the Exchequer said:
"the Government therefore propose to phase the effects for those hardest hit by meeting half the cost above 10 per cent. of any increases in domestic rate bills in 1973–74 which are attributable solely to the effects of revaluation".—[OFFICIAL REPORT, 6th March 1973; Vol. 851, c. 268.]
In fact, we were prepared to meet half the cost of the increases.
Mr. Charles Loughlin: It never worked.
Mrs. Thatcher: We were prepared to do that and allocated money for that purpose. That solution is still open to the Government tomorrow, but if it is likely to come about tomorrow there is little point in our debating the Rate Support Grant Order today. One would have thought that he could have announced some such system of mitigation today.
If the Government, knowing that rate increases of up to 90 per cent. will fall on some ratepayers partly because of the Secretary of State's hasty decisions, pro-
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pose to take no action to relieve the burden, many of my hon. and right hon. Friends will feel that the only way they can protest about the Minister's callous indifference is to vote against the order tonight.
5.15 p.m.
Mrs. Renee Short: I welcome the right hon. Lady the Member for Finchley (Mrs. Thatcher) back on the Opposition benches. She gave us a good piece of stuff typical of what we enjoyed from her when we were in Government before, and a good deal of what she has said will be taken with several pinches of salt—certainly on this side of the House.
The right hon. Lady referred to Somerset and the situation there. I understand that, in 1973, the flat-rate domestic relief was 6p, which, under this order, has been increased to 13p—an increase of over 100 per cent. In the January 1974 proposal it was 21p—an increase of 250 per cent.—but to offset that Manchester, Birmingham, Newcastle, Sheffield and a large number of other large towns and cities, and parts of central London, were to get only a 7p domestic rate relief. So it seems that there is a good deal of unfairness in both directions.
I want to be slightly parochial today, and I hope that the House will excuse me, because my authority is one of a considerable number which will lose rather seriously under my right hon. Friend's proposals. The successor body to the Association of Municipal Corporations, the Association of Metropolitan Authorities, has made its comments on my right hon. Friend's proposals, and it makes clear at the outset that it clearly understands—my right hon. Friend should really have made more mileage out of this—that a good deal of the present situation stems directly from the actions of the previous Government in the reorganisation of local government, which was generally not welcomed in many parts of the country and has proved to be extremely expensive to carry out, from the enormous rate of inflation which has proceeded in the last three and a half years under that Government, from the changes under the Housing Finance Act, which are the direct responsibility of the previous Government, and from the changes in the water reorganisation, which also is the direct responsibility of that

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Government. That is plenty to be going on with, all of which has created the situation in which we now finds ourselves.
My right hon. Friend the Secretary of State has made clear that, in the circumstances he found when he took office, he had to do something. I do not agree with what he has done, because, as I have said, my authority suffers, and we must battle for our own authority. The hon. Member for Ipswich (Mr. Money) seems a little disturbed. Does he want me to give way? Given the circumstances which he inherited, and the shortage of time before the need to start paying out money to the local authorities, my right hon. Friend felt he had to do something, and the Association of Metropolitan Authorities makes clear that it accepts this and understands the difficulties.
Mr. Ernie Money: The hon. Lady invited me to intervene.
Mrs. Short: The hon. Gentleman does not have to take advantage of my leniency.
Mr. Money: I never take advantage of the hon. Lady, as she knows. Does not she agree that there are many areas in the older cities and boroughs which need rate support grants as much as the conurbations, and are not getting it?
Mrs. Short: I am not denying that. I said that many authorities were concerned about the effect of this decision of my right hon. Friend. They would have been equally concerned about some of the decisions the hon. Gentleman's Government would have carried out if their proposals had gone through.
The previous Secretary of State was given to making announcements and pronouncements attempting to allay concern. When he was responsible for Common Market negotiations he said precisely the same things, and when he was Secretary of State for the Environment he said the same things. That is why he attracted the name given to him by some hon. Members and which perhaps I ought not to mention. He is very prone to rosy statements, and this was no exception.
On 14th January, when the right hon. and learned Gentleman had a meeting with the local authority associations, he said that the level of Government support
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should be kept to single figures, subject to any exceptional local circumstances, and this should result in there being only a small increase in the rate due. However, the associations made it absolutely clear that a general rate increase in the region of 20 per cent. to 25 per cent. was much more likely than the single figure the right hon. and learned Gentleman had in mind.
This is an extremely difficult situation. We find that some areas have been given an additional weighting which, again, militates against areas like West Midlands authorities. I cannot understand why authorities like Berkshire, Buckinghamshire and Hertfordshire should get an addition of £5·99 per head, whereas the West Midlands counties—Hereford, Worcester, Shropshire, Staffordshire and Warwickshire—get an addition of £1·44 per head. There is no mention, in the West Midlands counties, of Wolverhampton. Why should Wolverhampton be worse off than Warwickshire, Staffordshire or Worcestershire?
Mr. Leslie Huckfield: The district of Nuneaton, which is in Warwickshire, loses 12½p.
Mrs. Short: I am coming to what Wolverhampton will lose. Wolverhampton is concerned that it has to face this situation.
I come to the reasons for the increases in my constituency. There has been an overall increase of 50 per cent. in the rate compared with that in 1973. It runs from 41p for domestic properties to 54p for general properties, making an overall increase of 50 per cent. Then local government reorganisation adds about 8p to the rates bill. Inflation adds a considerable amount. The contributions we have to make to the reorganisation of water also add a considerable amount—4·4pto the general rate that has to be met, an increase of 1·5p. The total net expenditure that has to be met by Wolverhampton is almost £20 million, an increase of over £7½ million. This amount has been added to by the reduction in the needs element of about £2¼ million, which is a considerable burden on the ratepayers in my constituency.
I hope that my right hon. Friend, when he is in a position to look at the provisions he has made, will bear in mind

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that there are areas that will have a reduction in the help given by the Government and where the ability to pay does not necessarily overtake that reduction. The increase in the rate will, therefore, be a serious burden to my constituents.
I understand from the local Press that in my constituency an organisation is being formed proposing that people hit by the increased rate demand should decide to withhold the additional rate—that is, the excess charged over last year's rate demand. [HON. MEMBERS: "Why not?"] Hon. Members were not saying that when local authorities were trying to offset the increase in rents imposed upon them by the actions of their own Government.
We, being law-abiding people, do not want to encourage local authorities or individuals to stand against the Government and withhold money in that way, but I urge my right hon. Friend to exercise his ingenuity and quickly give close attention to the matter. I ask him to examine the possibility of a completely new system of financing local authority expenditure being brought about soon. I consider that to be the most urgent need facing us in local government today.
My right hon. Friend, with some of us in the House and outside, has tried to devise a more equitable method of raising local authority finance. The problem is not easy and is not a subject that can be dealt with at a few meetings, nor is it one to which a solution can be produced overnight. It is highly complicated, and the difficulties that have arisen through the previous Government's proposals in the matter, and because of my right hon. Friend's changes, indicate clearly that the solution is not easy to find. There are many different demands in various parts of the country. The ability to pay and the total resources differ in different areas.
Over the next few months, however, I suggest that my right hon. Friend should devote time to resolving the problem so that we may look forward to more equitable proposals next time we have the opportunity to address the House on the subject.
5.27 p.m.
Sir John Hall: The hon. Lady the Member for Wolverhampton, North-East (Mrs. Short) referred to the
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need for a new look at the rating system, and for examination of the possibility of reorganising rating as we know it. I wholeheartedly agree with that. There is no doubt that increases in rates arouse much more feeling than an increase in income tax or other forms of taxation, largely because they fall unevenly in different parts of the country. People living in one county or area, although they occupy similar types of premises, may be carrying a different rate burden from that carried by people across the boundary in another area. This creates a sense of injustice.
Furthermore, the rating system as now operated pays no attention to ability to pay. That creates considerable hardship among many people who find themselves faced with swingeing rate increases for which they have not budgeted, and which they are incapable of meeting.
I am sure that the House will understand if I, like the hon. Lady, become parochial in my remarks, because I want to concentrate on the problem which has arisen in Buckinghamshire, particularly in my own constituency of Wycombe. I was interested to hear the Secretary of State say that his own constituency of Grimsby had been adversely affected and that he had got into trouble with the members of his local Labour association when he went to talk to them. I am sorry that he did not go and talk to the people of Grimsby, not just to the members of the Labour Party there. I know Grimsby well, as the right hon. Gentleman is aware. If he had talked to the people as a whole, he would have heard some straight talking. If they are as badly affected as the people in my constituency are, the right hon. Gentleman might not have emerged entirely unscathed from his interview.
Mr. Jeffrey Archer: On Saturday I attended a football match with the Secretary of State, and he only just remained unscathed.
Sir J. Hall: All kinds of odd things happen at football matches.
As a result of local government reorganisation Buckinghamshire was severely mutilated. It lost, amongst other things, Slough, which was a source of considerable rating revenue, far in excess of any expenditure it imposed on the county. Additionally, it must meet the

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costs related to the development of the new town of Milton Keynes, which plans to have a population of nearly a quarter of a million people.
The cost to the county of the initial development of a new town and of providing the infrastructure is considerable. These two factors alone—the loss of Slough and the cost of Milton Keynes—have imposed a considerable burden. Furthermore, as we know, Buckinghamshire is one of the fastest-growing counties in the country, and the rating burden placed upon a county faced with rapid population growth with all the attendant social services—particularly educational facilities—is severe.
The county has faced considerable difficulty in trying to keep expenditure within limits, particularly to keep within the previous administration's suggested limit of 9p in the pound. After considerable pruning, in some cases in areas which many people thought inadvisable, the county rate emerged as nearly 40p in the pound. That meant that for Wycombe the county rate element increased by 42 per cent.
Because representations made to the Secretary of State by all the Members for Buckinghamshire highlighted the burdens which the county had to carry, the domestic relief given to Buckinghamshire took account of these special circumstances and reduced the county's expected burden. Under the old system we would have been faced with an increase which we considered unacceptable. The domestic relief given by the previous administration, which was received with great pleasure, meant that the domestic ratepayer would bear an increase of between 4½ per cent. and 15 per cent. That averaged out at about 10 per cent., which was reasonably acceptable, although high in relation to other increases.
The present proposal for a flat-rate domestic element relief means that the increase for the domestic ratepayer in Buckinghamshire will vary between 17 per cent. and 43 per cent.—an average of approximately 30 per cent. for the county. I appreciate that that rate of increase is much less than for other countries, notably Cornwall, and others may face a higher increase. Nevertheless, it is high, and in Wycombe it means that the rates
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will rise by 31·3 per cent. and in the rural areas by 33 per cent.
I cannot understand why it is normally assumed that county areas are inhabited by extremely wealthy people who can carry rate increases without being concerned. Take, for example, my area, Wycombe, which has developed rapidly over recent years with new estates of small private houses, where people are only just making ends meet and must plan their budgets extremely carefully. A sudden increase of this kind puts their budget calculations out and imposes severe hardship.
I do not understand why the Secretary of State, who has been in office a comparatively short time, should suddenly upset all the discussions and negotiations that have taken place over many months to ensure some reasonable fairness, some mitigation of the severe burdens that certain areas have to bear, and should jettison them on the principle that there should be a flat increase because the former system was imperfect.
Of course the old system was not perfect. As the Secretary of State himself said, and as the hon. Lady said, the rating system is full of anomalies. It is a very difficult system to operate. It requires complete review and reorganisation. Nevertheless, to throw the whole of the rating system into chaos in the matter of a few days and to create confusion in the minds of the authorities which are already late in the preparation of rating demands, to put them back to square one, to deny them the relief which has been negotiated so patiently and carefully by local authorities and by Members of Parliament acting on their behalf, is extreme folly. I find it extremely difficult to understand the reasoning behind it.
I am sure that there are a number of speakers who wish to draw the attention of the House to the problems in their own constituencies. I appreciate the difficulty in which the House has been placed by the fact that we have been told that if we do not pass this motion tonight, local authorities somehow will be denied the money they need a week from now, at the rate of £60 million a week.
I find it difficult to believe that it is outside the ingenuity of the Government to deal with this problem if the motion is defeated tonight. I cannot see why

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we cannot revert to the previous arrangement. We could table another motion quickly. Although there might be some slight delay, it would be far better to accept that and have justice done and for justice to be seen to be done than to proceed with this order.
5.35 p.m.
Mr. Ian Wrigglesworth: I hope that the House will bear with me in my maiden speech if I seem somewhat parochial. I am deeply honoured to have this opportunity to address the House as the new Member for the Teesside constituency of Thornaby, particularly as I was born and bred in that area.
As the constituency has a new name, I should explain that it has almost the same boundaries as the old constituency of Middlesbrough, West, which was represented most diligently by my predecessor, Mr. John Sutcliffe, from 1970 until the General Election and prior to that by Dr. Jeremy Bray, a former Parliamentary Secretary at the Ministry of Technology, who is, I know, remembered with respect for his great ability both in the House and in the constituency.
I should point out that, despite the description of my constituency as Teesside, Thornaby, two-thirds of the constituents I have the honour to represent live in Middlesbrough and one-third in Thomaby itself. It is a comprehensive constituency in that it contains a wide range of different types of housing, both old and new, a new town centre, and the old decaying centre of industrial housing. It contains light and heavy engineering, an industrial estate, a racecourse, and various leisure facilities on a comprehensive scale.
I should mention, although I am not happy to do so, that Thornaby has not been able to avoid that plague of modem urban areas which has hit so many parts of the country; namely, planning blight. There are three particular areas in the constituency where I intend to devote a considerable amount of my time and energy to help alleviate the hardship and distress caused by developments.
The first is where the constituency is being carved in half by the new North-South trunk road, the A19. That has had a disastrous effect on the residents in the Ayresome Ward in the constituency.
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The second is in the middle of Middlesbrough, where the polytechnic is being redeveloped. The third is in the old part of Thornaby, where terrible uncertainty and insecurity are being caused and dreadful housing conditions have resulted from the lack of a decision on the future route of the A66.
As the House will no doubt realise, this last weekend has been one of great rejoicing on Teesside, particularly in my constituency, because it is the home of Middlesbrough Football Club at Ayresome Park. As a result of Saturday's victory, Middlesbrough will be returning to the First Division of the Football League after an absence of 20 years. As a long-standing supporter. I am delighted It is a great pleasure to congratulate the first team squad on its magnificent performance. For Jackie Charlton in his first season of management it is a great achievement. He has won the respect and admiration of all Teessiders and footballers throughout the country for the tremendous progress that he has been able to achieve in one season.
But it has not been all good news for my constituents over the past few weeks. I should like to turn for a moment to the Draconian increases in the rates that have been recently thrust upon them, and to plead for action to relieve them. There is intense anger at the size of the increases announced on Teesside. I have on the bench beside me five petitions containing the signatures of approximately 10,000 constituents.
They were brought together in a few days after the announcement of the rate increase. In Thornaby rates are going up from 47·7p to 76p; in the Middlesbrough area from 47·7p to 74·2p, an increase of about 60 per cent. I must express our gratitude to the Secretary of State on his decision to change the basis of the rate support grant, because we are one of the areas to have benefited—Thornaby by 2p and Middlesbrough by 4p. However, like Oliver Twist, I must ask for more.
Teesside is in a unique situation. Most of my constituents regard the reorganisation of local government on Teesside as a complete waste of time and money forced upon an unwilling electorate by the previous Government. Teesside County Borough Council is being split into three

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district councils and a new county council. In other words, the administrative cost of local government in the area is being increased, because three councils have to administer local government. This follows reorganisation in the opposite direction in 1968, when we had a Middlesbrough Council, Stockton Council, and Eston Council, and so on. They were brought together into one Teesside Borough Council. Now it is being split and forced to go back to three district councils and a new county council.
My constituents say, and I say with them, that if Whitehall wants reorganisation, Whitehall can pay for it. On top of the massive cost of reorganisation, other massive increases have brought about the overall 60 per cent. increase in the rates—rising debt charges, the rising costs of services and supplies, and rising staff charges. I hope that during the course of the debate somebody will point out who is responsible for some of the increases that local government has had to bear.
There is intense anger on Teesside that some local government officers are being awarded salary increases way outside anything that residents themselves can receive. I hope that such decisions, which have been taken nationally, and the costs incurred by the local authority but over which it has no control, will be considered by the Secretary of State, and that careful consideration will be given to the case that we shall put to him.
The Minister of State has agreed to meet a deputation of my hon. Friends and representatives of the local councils from Teesside.
After that meeting, I hope that our councils will consider the progress that they have made and any action necessary to ensure that the rate burden is not levied at its present intolerable level. In one way or another the ratepayers of Teesside must be given relief.
5.44 p.m.
Mr. Peter Temple-Morris: In this, my first speech to the House, I should like to begin with a tribute to Sir Clive Bossom, who represented the Leominster constituency very well, not only in the House but as a very diligent and hardworking constituency Member from 1959 until one month ago.
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I thank him not only for the way in which he greeted me when I arrived in the constituency but for the friendship that he bestowed upon me.
In asking for the indulgence of the House, I gather that I should not be controversial. I make no such pledge, but if I am at all controversial my target is not hon. Members opposite but the measure itself. The many words spoken on both sides of the House show that an attack is rapidly developing on this order by hon. Members of both parties. I shall be controversial in terms of the measure itself.
Many hon. Members on both sides of the House are affected by the order. I understand government to be the art of drawing the line, and it is sometimes an effort to get the line in the right place. However, this is about the clumsiest way of drawing the line that I, in my primitive and humble experience, have ever seen. The main theme of the right hon. Member for Grimsby (Mr. Crosland) seemed to be one of apology. I wrote down what he said. He said that it was "on balance right to make the change". He said that it was "rough justice", and added, "I would wish to have more thoroughly worked out my proposals." He said, "It is far from perfect." He said also that there was to be a thorough review of the whole system.
If there is to be such a review, one wonders why we could not have retained the system worked out by my party when in office and left any change until after the review. The Secretary of State ended by saying that of course there were anomalies. If the opening speech is on those lines, I quiver to think how the Secretary of State for Wales will conclude the debate.
Coming from an intensely rural area, I want to point out that the effect of the order will not be confined to rural areas. The areas affected include not just places like Hereford and Worcester but also Stoke—which is represented by hon. Members on the Government benches—which will lose 6p, Portsmouth, which will lose 4·5p and Leicester, which will lose 4p. Leicester has already been mentioned in the context of education, but it has also one of the worst immigration problems. If this is not a clumsy way

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of dealing with things I do not know what is.
My constituency is rural—600 square miles, in which until recently there was not one traffic light. In perhaps their worst fit of progress, the last Government constructed the area's first traffic light, which will start operation in a month. The effect on us will be dire. There is a "league table" among the Hereford and Worcester MP's. Leominster, in my constituency, at one stroke will have a domestic relief cut imposed of 14·5p, Malvern Hills, an area whose representation I share with the hon. Member for Kidderminster (Mr. Bulmer) will lose 10p, Worcester, which is represented by the right hon. Member for Worcester (Mr. Walker) will lose 8p and will face a rate rise of 87 per cent., South Herefordshire, represented by my hon. Friend the Member for Hereford (Mr. Gibson-Watt) who is in his place, will lose 16p, and as such is top of our local "league table". The area of Redditch and Bromsgrove, represented by the hon. Member for Bromsgrove and Redditch (Mr. Miller) who is sitting behind me, as is the hon. Member for Kidderminster, is near Birmingham. This area and Kidderminster are invited to take people from Birmingham under the county development plan, to give them homes and to provide them with services, and then they are expected to pour money into the areas from which they take these people.
I obviously have to justify my claim that the order is bad and anomalous. Coming from an area on the border of Wales, I am particularly glad that my right hon. and learned Friend the Secretary of State for Wales will be concluding the debate. As he knows, on the proposal of the last Government, agreed in principle by his right hon. Friend the Member for Cardiff, West (Mr. Thomas) when in office, a water authority for Wales was implemented in such a way that we in Hereford were drawn in. One reason for our domestic relief was to counteract the immense increase in the water rate. Now, our relief is driven down to 13p, the standard norm, whereas throughout the borders of Wales, many parts of which are prosperous—I say this as someone who was born in Wales, although I represent an English constituency—where many areas have the same problems that
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we have, there will be rate support of 33·5p.
As if that were not enough, across the border, Montgomeryshire, our neighbouring county, has the inestimable advantage of belonging to the Severn-Trent Water Authority, which is much less expensive—its water rate is only 3·6p, whereas ours, under the Welsh Water Authority, is 13·8p. Also, in Montgomeryshire, rate support of 33·5p is still to be given. If the Secretary of State intends to contend that that is fair, he is even a more skilful advocate than I have known him to be.
It is our aim in areas like mine to develop; we have a small population. My electorate is only about 43,000. We are adjacent to Wales, which gets all the benefits of being a development area. We were succeeding. There will soon be a small and thriving industrial estate in Leominster. Kington, sitting on the Welsh border, is desperate for industry and commerce. If once we get depopulation and our young people leave, our area could become some sort of "geriatric ward", with a large influx of retired people. I say that in the full knowledge that those coming in would tend to vote my way. We ask the Government to deal with depopulation more rationally.
I should like to say a word for the dear old middle class. I represent an area which has a large number of retired people who have saved throughout their lives and perhaps have a pension of £1,000 or £2,000 a year. They have been hit silly by inflation. They are particularly defenceless and a word should be said about them from this side.
This leads to something perhaps more serious. Here I want to break out of talking about constituency problems. Many sensible words have been said by the hon. Member for Wolverhampton, North-East (Mrs. Short) about what is happening in the country over the rating system. The Government are contributing to a lack of faith in a system which is no good anyway. The rural areas are already losing faith. I shall not move off the subject by talking about agriculture, but perhaps I could say that what has happened in recent months has not helped. That is not a party point; if

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anything, it is a criticism of my own party.
Someone going through areas like mine might think how prosperous they were—"Gorgeous Tory countryside". Herefordshire, however, has the lowest employment income in the West Midlands, and the average income is below that of Wales. Over 3,000 of these attractive houses do not have baths and 3,437 have no inside lavatory. It is people like this whom the order will harm. Rate-financed services in rural areas are nothing compared with those in towns.
I compliment my right hon. Friend the Member for Finchley (Mrs. Thatcher) on her speech, since she dealt with the question of services and I do not want to repeat this. There is a particular problem in rural areas and a considerable need for money to extend services. I wish to emphasise the need to improve transport facilities. The situation has been complicated by the increased price of petrol in a situation of deterioration in bus services. Discussions are now taking place in the new authorities to find ways of improving transport facilities, and we all know that their task will not be easy.
I suppose it can be truly said that we have had something of a reorganisation trauma. Local authorities have gone in for extra expenditure and balances have been run down by constituent authorities, which last year held down the rates. In other words, balances have been spent in trying to keep the situation in control. Many authorities have gone in with flags flying and have no money left in the new kitty. We in the rural areas are suffering and no doubt many others are, too.
The worst effects are being felt by the ordinary people in my constituency who are losing sympathy with the rating system. It is an unjust system, and I accept the share of the responsibility of right hon. and hon. Members on my side of the House. Any system which can virtually double the rates and increase the burden on small businesses—among small shopkeepers and small firms—must be wrong. I do not put the blame on my right hon. Friends; I am merely emphasising that any system that produces such a result must be wrong. Any new system will bristle with difficulties, since it will involve site value taxes, local taxa-
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tion and all the rest of it. In the long term, if there is a will there must be a way. But in the short term, it would appear that we have to live with this system because successive Governments have not had the will to abandon it. This applies to my hon. Friends on the Conservative benches as well as to hon. Members on the Labour benches. But if we must live with the system, we must make it as dignified as possible. I am sure that all hon. Members, in whatever part of the House they sit, will agree with that view.
The worst feature of this proposal is that the hon. Members are placed in an impossible situation by this proposal. We all know that many Labour Members—"good Socialists" we have heard it said—will go through the Lobbies in support of Labour's proposals. Indeed, many Conservative Members will abstain because they come from the large cities, and it is more than their political life is worth to do otherwise. This is not a question of overthrowing Governments; it is a question for hon. Members to consider for themselves. I regard this order as a shoddy piece of legislation. Therefore, we should be brave enough—this would be a worthy thing for the House to do—to vote against the order.
6.0 p.m.
Mr. Charles Loughlin: It gives me considerable pleasure to be called to speak following the maiden speech made by the hon. Member for Leominster (Mr. Temple-Morris). I know that it is customary for one who follows such a contribution to congratulate the hon. Member who made it. Indeed, it has almost become axiomatic to congratulate a maiden speaker in the most fulsome way. I would normally have congratulated the hon. Gentleman, even though I would have been somewhat hypocrytical, but I know that in this particular instance everybody in the House will agree that the hon. Gentleman's speech was first-class, not only in its content but in the way in which it was delivered. The hon. Gentleman need not worry about the fact that his speech was a little controversial, because the idea that one should never make a controversial maiden speech went out of the window on the day that I made mine. I hope that we shall hear the hon. Gentleman speak often in the House because he obviously has a great contribution to make to our debates.

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As one of the older guard in the House perhaps I may explain to him the difference between "right hon. Gentlemen" and "right hon. Friends". One says "Friends" only when referring to one's own party Members; they are only "Friends" to the hon. Gentleman if they are on his side of the House. On the Government side we are just "right hon. Gentlemen" or "hon. Gentlemen".
Mrs. Thatcher: Are there no "Friends" among hon. Members on the Labour benches?
Mr. Loughlin: I am sorry if I did not make my explanation clear.
I also understand that a Labour Member—the hon. Member for Thornaby (Mr. Wrigglesworth) made a maiden speech. Although I did not hear it, I am told that it was an excellent speech, and I extend my congratulations to him. I understand that he referred to Middlesbrough and Jackie Charlton. It is a good job he does not have to refer to Coleford United because they are not doing as well as they should. [An HON. MEMBER: "What about Leeds?"] Please let us not mention Leeds.
I should like to make my position clear on this order. I know that it is customary for those who speak in opposition to an order of this nature to follow their voice with their vote. There are two reasons why, although I oppose the order, I shall vote for the Government tonight. Nobody on the Labour benches wishes to see the return of the sort of administration that we have just successfully got rid of. Secondly, I understand that there will be confusion unless the order is carried, and that local authorities will find difficulty in securing money at a low rate of interest.
Mr. Jeffrey Archer: Is the hon. Gentleman really saying that if there is brought before the House a subject which he believes to be totally wrong he will vote with his own side, just to keep them in power?
Mr. Loughlin: No. I am not. If the hon. Gentleman had been here long enough he would have known that there is no reason whatever for him to pose that kind of question to me.
I am afraid that my right hon. Friend the Secretary of State for the Environ-
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ment is guilty of instant government. In the final part of his speech he said that this year he would be undertaking a thorough review of the grant system. If that is the situation, and if there has not been time to collect all the information required to make an objective appreciation of the position, then surely there is no reason why he should not have applied the system proposed by the Conservative administration.
It is not good enough simply to look at the receipts in various areas. I appreciate that as a result of this revision some urban areas will be substantial losers. In the rural areas we must relate the rates payable in respect of services to the people living in an area.
As a result of the revaluation in my constituency, particularly in the Forest of Dean, there has been an increase of 30 per cent. in the rate burden. I notice the right hon. Member for Crosby (Mr. Page) on the back bench. Why he should be there I do not know. It was he who answered my Adjournment debate on the rating system and rating revaluation and who admitted that the Forest of Dean was harder hit than most other areas in the country. As a result of the revision almost all my constituency will have to pay a substantial increase over and above that which would have been due had the system remained unchanged. Householders in the Forest of Dean are having to pay a rates increase of 70 per cent. in addition to the increase of 30 per cent. due under revaluation, and they will be not only resentful of the revision but in some instances on a borderline.
The cost of housing in the area has gone up enormously. It may be that a substantial number of people will not be entitled to rate rebate but will have committed themselves almost to the hilt with mortgage repayments and they may find themselves near to insolvency.
I want a complete review of the whole rating system. It may have been all very well in old Elizabethan days to have a rating system based upon a notional rent, but today it is a complete and utter nonsense.
May I remind the Minister of some of the problems of the rural areas? My house has the septic tank system because there is no sewerage in the village. In urban areas the cost of sewerage is borne

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by the rates. If I lived in an urban area I should automatically get my sewerage provided out of the rates, but because I live in a rural area I have to pay to have my septic tank emptied. It costs £7·70—admittedly, only once a year. I get a £2 rebate from my local authority and I have to pay the balance. [Interruption.] My hon. Friend the Members for Islington, South and Finsbury (Mr. Cunningham) may think it is funny. I am using myself as an example, but my constituents also have to pay this sum.
Mr. George Cunningham: Does my hon. Friend not realise that it would cost more than the amount he has referred to to have sewerage provided out of the rates?
Mr. Loughlin: No. I am afraid my hon. Friend has not the slightest knowledge of the economics of these matters.
Part of my constituency borders on Wales. The fantastic situation arises that Wales will benefit from a substantial rates grant and yet people living just over the border in my constituency will be liable to pay much more.
There is something wrong with the situation created by this revision. I charge my right hon. Friend with failing to face up to his full responsibility of taking his time in examining the rating system. It is no use saying that a review is under way this year when rates have to be paid within the next two months. If he is having a review it should be comprehensive, not concerned merely with the grant system. It should deal with the whole principle of the notional rent.
6.11 p.m.
Mr. Joseph Godber: It is some years since I had the privilege of addressing this House from the back benches. I welcome the opportunity of doing so today particularly since we are discussing a matter on which I feel very strongly. I shall endeavour to be brief in view of the large number of hon. Members who wish to speak. I found myself much in agreement with the words of the hon. Member for Gloucestershire, West (Mr. Loughlin) but I shall not be in agreement with his actions later this evening. I shall be going to the other Lobby, and I invite him to join me. I
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add my congratulations to those offered to my hon. Friend the Member for Leominster (Mr. Temple-Morris) and say how much I enjoyed his speech. I had the privilege of hearing both maiden speeches and I congratulate the hon. Member for Thornaby (Mr. Wrigglesworth) on an excellent speech. I hope we shall hear him again many times.
I listened with great care to the Minister when he opened the debate. I agree with the comment already made by my hon. Friend the Member for Wycombe (Sir J. Hall) that it was an apologia of a speech. The right hon. Gentleman was obviously in grave discomfort in making his speech. He was also extremely unconvincing. I am not surprised because it is extraordinary for a Minister within a few days of taking office to take a decision of this kind. He could not have been motivated by a full understanding of the issues. He could have been motivated only by prejudice or by an unfortunate degree of intellectual arrogance. It is only when one understands the full effect of decisions of this kind that one can take such a decision and I do not believe that the new Minister had had the opportunity of assessing the full implications. His speech strengthened my view about that.
The right hon. Gentleman is rightly concerned about the inner urban areas on which he laid much stress, but he must understand that there are other areas where the need is just as great and where the cost is even greater. Those are the more sparsely populated rural areas which have suffered considerably in the past and will continue to suffer because of his decision. The right hon. Gentleman seems to have a fixed idea about rural areas which does not coincide with the examples so graphically outlined by the hon. Member for Gloucestershire, West. My charge against the Secretary of State is that he was not fully aware of the circumstances before reaching important decisions. His action was described by him as rough justice and it was certainly rough, but I have yet to find an element of justice in it.
My speech is related specifically to the county of Lincolnshire and my constituency, which will be as hard hit as most areas by the decisions of the Secretary of State. Much information has been provided for me from various local

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authorities in Lincolnshire. I shall not weary the House with a recitation of it all. It is sufficient to refer to what I have been told by the chief executive of the new Lincolnshire County Council, which will embrace the areas of three previous county councils, plus the city of Lincoln. This authority will have to carry out a large number of new duties and will have some heavy burdens regarding sewerage and water rates. These burdens have all to be borne. As a result of the decisions of my right hon. and learned Friend the Member for Hexham (Mr. Rippon), when Secretary of State for the Environment, there would have been much amelioration of the problem through variable domestic relief. Now that this has been removed there is a most savage increase for Lincolnshire, which narrowly misses the sparcity grant of £2¾ million. The variable domestic relief which should have given some compensation has been taken away. Lincolnshire domestic ratepayers will lose £2·86 million by reason of the decision of the Secretary of State.
Mr. Dick Taverne: Does the right hon. Gentleman not admit that a sum almost as large as that was lost by Lincolnshire because of the way in which the needs element was calculated under the previous Secretary of State's formula—particularly the abandonment of the road mileage system and the substitution of the average system, costing in the region of £2¾ million.
Mr. Godber: I was making precisely that point. I used the figure of £2¾ million. I agree that there would have been a loss due to the decisions of my right hon. and learned Friend. I was not making a party point on the matter, but the present position would have been ameliorated but for the decision of the Secretary of State, which has given Lincolnshire a double blow.
I am told that whereas householders' rate increases would have ranged, under my right hon. and learned Friend's proposal, between 10 per cent. and 43 per cent., under the flat rate they will now range between 35 per cent. and 83 per cent. I am sure all hon. Members will agree that this is an intolerable increase.
My constituency will be hit particularly hard. It will face rate increases of between 61 per cent. and 79 per cent. in
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North Kesteven and between 65 per cent. and 74 per cent. in South Kesteven. In each case even the lowest increase will be over 60 per cent., which is enormous, whereas previously it would have been between 20 per cent. and 35 per cent. Now the removal of the variable grant more than doubles this, and the burden is intolerable in various parts of Lincolnshire.
The chief executive of the new Lincolnshire County Council has told me that the position is regarded as so patently unjust as to warrant some reconsideration. Bearing in mind the figures I have quoted these are modest words, and I hope that the Secretary of State will reconsider this matter.
I presume that in what he said at the end of his speech the Secretary of State was appealing to his own colleagues not to help defeat the order. He said that if the order were not approved local authorities would not get their money, but that is not true. What the Secretary of State said was an intolerable threat.
Mr. Kenneth Marks: During the Committee proceedings on the Local Government Bill in December we were told that the Committee stage would have to be completed by December, otherwise local authorities would not get their money.
Mr. Godber: It is one thing to get a Bill completed and quite another thing to pass this order, which could be reintroduced relatively simply. It is not as easy to bring in another Bill as it is to reintroduce an order, and it seems that the hon. Gentleman still has a little to learn on this point.
We are dealing here with an order which could be quickly reintroduced if there was a will to do so. I hope that hon. Members on the Government side will not accept the threat implied towards the end of the Secretary of State's speech.
I believe that hon. Members on both sides feel that their constituents are being treated grossly unfairly and I hope that they will not hesitate to show their feelings in the Lobbies.
This is a matter in which local interests are strong and in which people are being unfairly treated as a result of an arbitrary decision taken by the Secretary of

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State—newly come to office—without first taking the opportunity to consider the question fully and deeply. It is our duty to give him the opportunity to think again. If we give him that opportunity he may appreciate it in later years, he may become a wiser man, and we may get a more satisfactory order later.
I would have liked to have said much more, but I realise that there are a number of other hon. Members wishing to speak. The essential point is that this order is iniquitous, unjust, improperly considered, and should be rejected.
6.21 p.m.
Mr. Peter Snape: It is always an ordeal for a new hon. Member to make a maiden speech, and I hope that right hon. and hon. Members will be tolerant with me.
I represent the new constituency of West Bromwich, East which is directionally rather confusing, to say the least, and perhaps indicates that the Boundary Commission had a sense of humour. We felt that West Bromwich, North and South would sound rather more sensible, but I admit that that would also have created two safe Labour seats. However, impartiality prevailed and we worked doubly hard to ensure that this new West Bromwich constituency continued the town's long tradition of Labour representation.
The people of my constituency earn their living mainly in industry in factories, foundries and rolling mills making components for motor cars and aircraft and a wide variety of engineering products. They are a special brand of men and women, forthright and honest, with a down-to-earth sense of humour. Although I am not a Black Country man, they have accepted me and my family with warmth and sincerity. They are my kind of people and it is an honour and a privilege to represent them in the House.
The matter under discussion is an emotive subject. If there is one topic which will make hackles rise and tempers flare it is money, or the lack of it—or the extraction of it from the pockets of the ratepayers into the coffers of the local authority. Since my right hon. Friend's announcement regarding the rate support grant I have received two delegations and a considerable increase
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in my post bag from irate ratepayers about the tremendously increased burden which they will be asked to bear in the new Sandwell metropolitan district.
My constituents are facing increases in domestic rates of 89 per cent. and in industrial rates of 95 per cent. I deliberately mention industrial rates because one would think, judging from some of the comments of the Opposition—particularly from the Opposition Front Bench—that the only reason for this tremendous increase was the action of my right hon. Friend. We on the Government side know different. I have had to tell my constituents that they are over two years too late with their protests.
The seeds of the increase and the forthcoming increases in other parts of the country were sown when the previous Government decided on a form of reorganisation totally against the recommendations of a Royal Commission. A more expensive strangulation of local democracy could not have been devised. The redistribution of services into the newly-created authorities has meant wasteful and unnecessary duplication,—which, coupled with the effects of inflation—for which the previous Government have a degree of guilt—have brought about the present horrific financial situation.
The county precept in my constituency for 1974–75 represents an increase of 105 per cent. over the amount required in the current financial year for the services now transferred to the new county. The amount required by the regional water authority, a bureaucratic and undemocratic monster sprawling across the Midlands, has risen by 64 per cent. over the rate- and grant-borne expenditure of the constituent authorities in the current year. For my constituents, local government reorganisation will be a bitter financial experience, the responsibilty for which lies with the Conservative Party.
The decision of my right hon. Friend the Secretary of State for the Environment to amend the previous Government's rate support grant proposals adds a further 6p in the pound to the domestic rate within my constituency. I accept, however, that given the limited time available only the variable domestic relief arrangement was susceptible to change.

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However, nationally, rate support grant amounts to about 54 per cent. of the relevant expenditure of local authorities. For the new Sandwell it will be only 44½ per cent. of district and county expenditure.
The problems of the new Sandwell are many and varied, and in some cases unique. In accordance with the previous Government's requirements, the council has reduced its outlay locally-determined capital schemes by 20 per cent. and cut back its revenue expenditure by about £1·29 million.
There are those who call for further cuts. We on the Government side, at least, know on whose backs those cuts in expenditure fall most heavily. The council has been asked by various people to cut its social services. In fact, it is expanding its social services, and I believe that it is right to do so. It will not cut back spending on the poor, the sick and the disabled, and it should not be asked to do so by this or any other Government.
The county boroughs of West Bromwich and Warley, soon to be combined as the new Sandwell district, are not rich in rateable assets. Their financial problems alone make them worthy of special consideration. I ask my right hon. Friend to give them further assistance or substantial help in the near future under the Increase Order.
For the future, I hope that the Government will consult individual authorities, particularly my own, to reduce the inequalities and anomalies that reorganisation has produced, for truly in my constituency local government reorganisation has been a financial disaster.
I thank the House for its courtesy in listening to me.
6.29 p.m.
Mr. Stephen Ross: As a very new boy myself, I congratulate the hon. Member for West Bromwich, East (Mr. Snape) on his maiden speech. I made my own maiden speech only a few days ago.
I very much agree with what the hon. Gentleman said about industry. We are always increasing the burdens on industry—not only the rate burden but other kinds of burden.
Those of us who serve on local authorities or have experience in matters
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relating to their finance—I had the honour, recently, to make the budget speech for my own authority—must agree that whatever else we do we cannot have a repeat of this year's experience. Decisions have been taken very late in the day which have put the whole future of some of our local government services in jeopardy, and have given near heart attacks to both county and district treasurers.
We on the Liberal bench fully appreciate the difficulties faced by many of our larger urban areas. The point was accepted, albeit reluctantly, when the formula fixing the rate support grant was finally announced towards the end of January by the previous Government. In its needs element that formula takes no account of above-average population growth. This afternoon the Secretary of State for the Environment made a commitment to reconsider that matter, and I welcome his commitment.
I believe that my constituency has the third largest population in the country. Such areas, with a rapidly expanding population putting greater pressures on their social services and education provision, have already suffered particularly badly.
We are also one of the lower income areas. I doubt whether our average wage is more than about £25 a week. By the rate support formula alone we lost about £600,000 from the previous year's allowance. That is a small figure for some areas, no doubt, but for us it was a considerable blow, particularly in view of all the difficulties of inflation.
That inevitably meant that the rate increase would go above the 9 per cent. figure, unless we were to have a complete breakdown in the provision of services. Moreover, as a county authority we honoured every request by the previous Government to make cuts—something that I am not so sure was done throughout the country.
We were, however, somewhat mollified by the stated intention to introduce a variable rate of domestic relief, which would, we were told, take into account the circumstances of individual authorities. I should say in fairness that when it was announced on 20th February that proved to be the case.

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We have two district councils in my constituency. I am not sure that we really need two. For a population of 110,000 that seems to me to be a luxury we could do without.
The South Wight District Council received an extra 4p to cover the high cost of current sewerage schemes and the inflated demands of that expensive luxury, the Southern Water Authority, making a total allowance of 17p.
In the far west, relief varied from as much as 40p down to 29½p. On those figures, rate demands were prepared. Several had actually been printed when the Minister upset the whole apple cart by his announcement of 14th March. As it happened, my authority had only set the type for its demand notices. A few hours later and we should have been even more embarrassed, because we should have had no paper left to work with if they had had to be reprinted. I wonder how many other authorities found themselves in that position.
The water and sewerage element is now completely removed. Water does not even qualify for rate rebate. Some of the hardest-hit face rate increases of 90 per cent. or more, which makes a nonsense of the rate freeze for council tenants and others.
I repeat that we are well aware of the pressures which many of our inner urban areas face, but there are plenty of problems in the non-metropolitan counties as well. Many people of very limited means live in both our rural and our urban areas. We also have enormous housing difficulties, even in places like the Isle of Wight, where we have about 3,000 on our housing list. My postbag is full of letters about such difficulties every day. We have a high proportion of the older population, and our social services are understaffed. We have a rapidly rising school population, and our schools are under increasing pressure.
If the revised proposals had been more flexible towards the worst-hit areas, such as Cornwall, they might have been acceptable, but no such gesture has been made. I am told that ratepayers in the Caradon district in the far West, for example, face an increase of as much as 27p in the pound, and that in the county of Cornwall itself the average increase is about
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65 per cent. No wonder my colleagues are receiving telegrams such as the one which I have before me, which reads:
"Please help. No public transport. No direct waste collection. No electricity. No flush toilet system. No bathroom. No street lights, No streets, just mud. I will not pay any increased rates."
The telegram was sent by Mr. C. A. Stovell from a place in Cornwall which I cannot pronounce.
Mr. George Cunningham: How much does he pay?
Mr. Ross: I cannot tell the hon. Gentleman. I have only the telegram. I shall find out. That telegram represents rough justice. From Berwick to the Needles the cry is much the same.
I listened with intense interest to the Minister. I was hoping that even at this late hour we would receive a promise of future help. Indeed, my colleagues were encouraged to believe that such would be the case. In this morning's edition of the Western Morning News there is a report of a speech which the Secretary of State for Industry made in Exeter. He is quoted as saying:
"While the re-distribution formula in the rate support grant has given enormous aid to the large cities of this country, I am conscious that it has brought disadvantages to cities like Exeter. I am authorised to tell you that this Government will at an early stage be introducing a rate relief measure precisely to aid areas like Exeter which have been disadvantaged by that altered rate support grant formula."
That seems to be at variance with what we heard this afternoon.
Mr. Eldon Griffiths: I wonder whether the hon. Member for Isle of Wight (Mr. Ross) would like to request the Minister to confirm his colleague's statement that an adjustment is to be made to the rates to take care of such problems?
The Under-Secretary of State for the Environment (Mr. Gordon Oakes): I think that what my right hon. Friend was talking about in Exeter was the rate rebate order. He was not speaking about any measure other than that.
Mr. Ross: Perhaps that matter will be elucidated when the Minister concludes the debate. Meanwhile, I refer hon. Members to today's copy of the Western Morning News. We are entitled also to ask why it is that the Principality has

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been so favoured whilst its neighbours across the Bristol Channel seem to have received the cold shoulder. Perhaps it has something to do with the famous try which was denied to the Principality the other day—or it may be another example of the wizardry of the Secretary of State for Employment. If the Secretary of State for Wales is to conclude the debate, perhaps he will enlighten us.
Whatever the outcome of the debate, surely the time has arrived to look at the whole question of the finance of local government. I am delighted to hear so much agreement on both sides of the House. The present rating system is nonsense, and it becomes annually more incomprehensible. I say that as one who has earned considerable fees in the past trying to work the system. The sooner that it is replaced by another more equitable method based on site values, or a form of local income tax, the better.
That is the sort of radical re-distribution which the Liberal Party called for in its election manifesto, which was referred to by the Minister. I ask him to look anew at some of the suggestions in our manifesto. In the meantime, unless he can give a firm undertaking that further relief will be forthcoming we shall have to vote against the order before us.
6.40 p.m.
Mr. Kenneth Marks: I was glad to learn that the hon. Member for Isle of Wight (Mr. Ross) was speaking on behalf of the Liberal Party as well as making a constituency speech. I gather that the Liberal Party has made a crucial decision to vote against the order. It has decided to turn its back on the cities about which it has shed such crocodile tears in the past. No doubt it will be telling the citizens of the flats in Hulme, Manchester that they are not paying enough rates and that they will not be paying enough rates next year. No doubt it will be telling the citizens of Liverpool, Newcastle, Sheffield, Manchester and London that they are not paying enough rates and that it voted against this order.
Mr. Stephen Ross: My last comment was about the needs element. That is an element which is already in the rate support grant which gives aid to inner urban areas. We supported that through-
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out. My authority and many other authorities made the cuts which were requested. We call on the Minister to help areas such as Cornwall. We support the idea that there is a need to give support to such areas. Many authorities have not made the cuts which they should have done and which my local authority has done.
Mr. Marks: I shall go into some of the cuts which the authorities have made. It seems that after all its crocodile tears the Liberal Party has turned its back on the cities. I am wondering whether before they made their decision they consulted Jones the Vote.
I add my tribute to the maiden speeches made by my hon. Friends the Members for Thornaby (Mr. Wrigglesworth), West Bromwich, East (Mr. Snape) and the hon. Member for Leominster (Mr. Temple-Morris). My hon. Friend the Member for Thornaby reminded us that Middlesbrough will be going into the First Division next season. I must hope against hope that they will be meeting Manchester United when they get there.
I must declare an interest. A third of the electorate in my constituency comes into the city of Manchester. It will benefit from my right hon. Friend's proposals. Two-thirds of the electorate live outside the city and they will lose by the same proposals. I believe that the problems of those people making up the third of the constituency which is in the city of Manchester far outweigh the problems of the others. My reason for saying that is that their incomes are, in general, lower. I believe that they should receive any benefit that is available.
I am glad that it has been mentioned that industrial rates in one area are going up by 95 per cent. There is an attempt to blame my right hon. Friend for all the rate increases when in fact his amendment to the previous proposals amount to only a small part of the resulting increases.
On a number of occasions in the 1972–73 Session I raised the question of the financial and social problems of the great cities and the older industrial areas. The bias against them in the previous rate support grant order was obvious and it was getting worse. Much sympathy was expressed. It was the hon. Member for Bury St. Edmunds (Mr. Griffiiths) who

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replied to most of the debates which I raised during Consolidated Fund Bills and on Adjournments. The hon. Gentleman expressed great sympathy. The problem was recognised. It was true that there were people in the cities who paid higher rates and lived under worse conditions than those who lived in the outer suburbs, and many of those living in the country.
The people in the cities have a lot more for which they have to pay. For example, what is paid to the disabled? Last week the National Fund for Research into Crippling Diseases gave the figures for 1973. Manchester provided telephones for 206 disabled per 100.000 of the population, whilst Cornwall provided nine. Manchester provided 330 aids per 100,000 of the population, whilst Cornwall provided 180. Manchester made 280 adaptations to homes per 100,000 of the population, whilst Cornwall made 11.
Those figures may represent some of the extravagances that the right hon. Member for Finchley (Mrs. Thatcher) was talking about. If so, we shall continue with them. It may be as a result of the meanness of the Cornwall County Council, or it may be because there are more disabled—the industrially disabled, those disabled in accidents, and those who are congenitally disabled—in the great cities than in other areas, that the figures apply which I have quoted. The situation was so serious that the former Prime Minister met the leaders of the great cities to consider their problem. He sympathised with them, but nothing was done in the 1972–73 Session.
A new local government finance Bill was promised in the Queen's Speech of 1972, but it never appeared in that Session. That may have been because of delays and the ineptitude of the previous Government. I am not blaming Ministers who were in the Department of the Environment. I think that decisions were made but that ineptitude made the task of the new councils in the reorganisation scheme much more difficult.
In November 1973 the Conservative Government produced their Local Government Bill. It was not only about finance. It was a hotch-potch Bill. It included an ombudsman and referred to a number of other matters. It was des-
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scribed as four Bills in one. The Standing Committee was threatened that if it did not complete its work by 10th December the local authorities would not or might not get their grants. The Standing Committee delivered the Bill in time, and we expected the Report stage to be taken before Christmas—indeed, we almost expected that the Lords would be considering the Bill by Christmas. But the Bill did not reach Third Reading in this House until towards the end of January, and was pushed through the House of Lords on the day on which the General Election was announced.
The measure brought some improvement to the big cities, and not before time. For the first time, some of them got some benefit from the resources grant, and the needs element recognised actual spending on social services, in which the cities have particular problems. We welcome that.
Then the last Government started to whittle away these benefits, with the variable domestic grant. That grant was to be 10p for cities and up to 20p for other places. No mention was made of its being up to 40p for other places or towns, or of being down to 7p for cities. This was to temper the shock of large rate increases to the countryside and the suburbs. But it was not enough to satisfy the Conservative Party as the election approached. The already unfair 10p to 20p variable element was made even more unfair. The subsidy for domestic ratepayers in the cities was reduced to 7p while other people gained as much as 40p. On 29th January the Financial Times commented:
"It is totally indefensible except on grounds of political expediency."
On that day the Financial Times did not know that there was to be an election on 28th February.
There is no logic in this variable domestic subsidy. It is grossly unfair. The occupier of a flat or house in a city will be subsidised to a much less extent than the better-off owner of a second home. Not everyone in Cornwall lives in a rented cottage and on a very low income. Many houses in rural areas and seaside towns are second homes, and they were going to be subsidised up to seven times as much as the dwellings of the slum dweller in our cities.
Mr. Beith: Will the hon. Gentleman impress on the Government the desirability of removing the domestic rate relief from second homes? That would receive support from the Liberal Party.
Mr. Marks: I shall be pressing on the Government a lot more reforms of the rating system, as I have done in the past.
The change in the subsidy to 13p to all domestic ratepayers is a brave decision. It may be somewhat unpopular among hon. Members on the Government side of the House as well as to hon. Members opposite, but it is the right decision if we mean what we say about creating a fairer society. The right hon. Member for Grantham (Mr. Godber) suggested that we should alter the decision and have the old system back in an order tomorrow. If we did that, we should see a different group in this Chamber; the Conservative Members for London, Birmingham and other cities might appear and oppose such a change. At the moment we have no way of knowing how many hon. Members would favour that suggestion.
I want to mention a group of authorities of metropolitan areas, which have particular problems. The problems of local Government reorganisation are difficult enough for a new metropolitan district, but Trafford and Tameside, in the Greater Manchester area, and Knowsley, on Merseyside, have particular difficulties in that they have no county borough base. Tameside consists of nine former non-county borough and urban districts. It includes part of my constituency and the constituencies of Stalybridge and Hyde and Ashton-under-Lyne. It has had the immensely difficult task of bringing together nine local authorities, none of which had experience of larger aspects of local government. It is an expensive as well as a complicated task, and no allowance has been made for this fact in the rate support grant or in locally determined schemes capital allocations.
I hope that my right hon. Friend will consider this matter not only in the rate support grant negotiations but in future capital schemes. For example, the sewerage charge is 30 per cent. above what it was expected to be. The locally determined scheme capital allocation is £400,000 for a population of 223,000. The method of distribution of the needs element in the local social service units
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has particularly affected these three new authorities and no doubt others as well. The chief executive officer of Tameside wrote to the Department on 7th February—perhaps not the best of dates on which to do it—and again on 20th February, but has still received no reply.
Another question concerns the balances left by the old Lancashire County Council, totalling £13 million. They have been handed to the Greater Manchester County Council. They ought eventually to reach those sections of the Greater Manchester County Council that were in the former Lancashire County Council area.
I agree with what the hon. Member for the Isle of Wight said about the rating system. I have long held the view that it is nonsense. Attempts to make it less regressive as it stands usually end in controversy and disaster. The fault is in the system itself, and all the scrambling about with resources grants, needs elements, and domestic grants does not alter the fact that it is a bad tax, by which the people who are worse off pay a larger proportion of their income than those who are well off. It is time we got rid of it.
6.53 p.m.
Mr. Tony DurantI welcome this opportunity to make my maiden speech on so vital a subject for my constituents.
There has not been a Member of Parliament for Reading, North since 1955, when the seat last existed. There have been famous Members of Parliament for Reading. For example, the hon. Member for Bethnal Green and Bow (Mr. Mikardo) was a Reading Member for 14 years before leaving us and going east to his new Tower Hamlets constituency. I understand that he has just been elected Chairman of the Parliamentary Labour Party. I wish him well, and I am sure that he will keep the conscience of the Left. Another famous Member was my hon. Friend the Member for Torbay (Sir F. Bennett). He sat for the old Reading, North for four years before moving to Torbay. Another distinguished Member from Reading was my hon. Friend who is now Member for Honiton (Mr. Emery). My hon. Friend the Member for Reading, South (Dr. Vaughan) was Member for Reading constituency in the last Parliament, and I thank him very much for the

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help he has given me and for the work he did for the Reading constituency as a whole.
Reading is an historic town and has a famous abbey, which between the twelfth and sixteenth centuries sent out its brethren all over the south of England. It is interesting that in this modern age hon. Members who have in the past represented Reading or parts of it and have since left have gone their various ways north, east, south and west just as the old brethren of the abbey did.
Reading is situated 30 miles from London. It is a busy place. Most of its people work locally but a few commute to London. We go in for specialised products, and Reading is the headquarters of a number of national and international companies. The population includes large numbers of Irish, West Indians and Sikhs and we welcome them into our community. Reading is famous for biscuits, bulbs and beer, but the sad thing about it is that its biscuits, bulbs and beer are all moving. We are now becoming known as a town famous for railways, rivers and rates. This brings me to the purpose of my speech tonight.
There is a serious rating situation in Reading, where there has been a rise of 80 per cent. in two years. This is very worrying for the people there. It is not a rich town in the sense that there are a lot of affluent people living there. There are a lot of ordinary people working in the community, many on fixed incomes. There are many young married couples who bought their homes, worked out their finances, and are now finding it difficult to survive because the rate increase has hit them.
It is a great tragedy for the small shopkeeper, for whom I particularly wish to plead. I visited a shopkeeper during the election and returned to see him last Saturday to obtain some figures. He owns a small gift shop in a shopping precinct. Over the past two years his rates have risen from £403 to £785, a rise of £382. He tells me that he makes such a small profit on the business that he sometimes wonders whether it would not be better to quit and do something else. This is a serious matter for the community, particularly in areas such as Reading where there are lots of shopping
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precincts spread around the town. These precincts contain newsagents', small haberdashers', and similar shops providing useful services. The owners of such shops are worried about the rate situation.
It is partly a national picture but not entirely. In Reading we have debts of £51 million; that is £340 for every man, woman and child in the area. The council is taking short-term loans at 13½ per cent. A total of 3 million people borrowed at that rate last year. The council is spending money and paying interest rates before paying out money upon necessary services. It has gone in for extravagant land purchases to build more council housing and has spent money on administration. All leisure activities are running at an enormous loss. There is a national element which comes into this.
When I visited my shoe repairer on the street corner and picked up two pairs of shoes which needed mending after I had walked 200 miles during the election my cobbler said to me, "What will your maiden speech be about?" I said, "Rates." He said, "I am glad. I absorbed the last rise, but, frankly, I do not know whether I can absorb this one. I am not sure if I can go on."
There are great pressures upon all authorities. This pressure comes from the interest rates, from the demand for improved services such as sewerage and water supply. The increased costs of these schemes work against local authorities. There is great public disquiet.
The change in rating policy, made so quickly after the Government came into office, aided our area, but I still believe that it was right to have a formula rather than a blanket increase. Account has to be taken of local circumstances, which the previous proposals did. A number of people have spoken about other methods of raising local finance. This is certainly something we must examine together. Rates are unjust. They work against those on fixed incomes and against young people with large families. There is also the unfairness of the young person who lives at home and uses local authority services without contributing to them.
We should examine the idea that national services ought to be paid for from

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the national Exchequer. Education is a good example. The Green Paper produced in 1971 was an interesting document. I was chairman of a committee which dealt with it. I was disappointed in that nothing resulted from it. There were many ideas but no proposals. Many countries have moved to local taxation, including the United States and Denmark. There are other possibilities, such as a poll tax.
Another suggestion involves a payment for planning applications. Frequently, people who live outside a district will forward a planning application to develop a certain area within it. This costs the local authority a great deal in administration costs, yet there is no revenue. In the local area with which I have been involved, with a population of 76,000, there were 2,500 applications over a period. There could be a great deal of useful income there.
The idea of holding lotteries to help the rates ought to be examined. Two local authorities tried to introduce lotteries, Greater London and Manchester. They were turned down. In Quebec lotteries have raised $133½ million since 1968. In Manitoba they have produced ½3·75 million since 1971. This is money which could well be used to develop local services.
National Government must help local government. In the past six years I have been greatly bamboozled by the flow of White Papers, circulars and edicts from on high. It is a complete nightmare trying to administer a district. There are great difficulties for local government officials. We should seriously examine the idea of a court of appeal for ratepayers. If I want to build a garage I put in an application and if it is turned down I can appeal to the Minister. If a thousand of us do not like the rate increases there is not much we can do about it. It seems wrong that we cannot make some kind of appeal. I know that the Minister can intervene but perhaps there could be an appeal on the local collective rate.
We ought to examine the whole question and work together to find better ways of raising local government revenue because of the injustice and anxiety created by the present system. At present people are deciding not to pay them. That is a terrible situation. I am glad to have had this opportunity of addressing the
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House upon a subject on which I feel so deeply.
7.2 p.m.
Mr. David Ginsburg: The House has listened with great interest to the comments of the hon. Member for Reading, North (Mr. Durant) on the rating system. His knowledge extends far beyond this country. Unhappily, the situation in Manitoba will not get the Government or the House off the hook that they are on tonight.
The hon. Gentleman told us some interesting things about his constituency and about some of his predecessors. He mentioned my hon. Friend the Member for Bethnal Green and Bow (Mr. Mikardo). I do not think he mentioned Mr. Mackay, who was also a member for Reading. My hon. Friend and Mr. Mackay between them evolved an electoral campaigning system called "the Reading system", which the Labour Party has from time to time used to great advantage. It is a matter of note that that system was obviously not used so efficiently in Reading on the last occasion, because the hon. Member is here.
I hope that what I say will also reflect the views of my hon. Friends the Members for Huddersfield, East (Mr. Mallalieu), Huddersfield, West (Mr. Lomas), Batley and Morley (Sir A. Broughton) and Brighouse and Spenborough (Mr. Jackson), all of whom have constituents in the Kirklees authority, and also to some extent my other colleagues with constituents in the Wakefield metropolitan district who are adversely affected by the order, although in a lesser way.
It is a matter of sadness to me that my first speech in this new Parliament cannot be one of thanks to the Government. They have made a brave start in discharging their responsibilities. Before criticising them I ought briefly to put their achievements on the record. There has been the solution of the miners' strike, the return to full employment, the rents freeze, the bread subsidy and the attack on supermarket prices. Nevertheless, the action of the Secretary of State over the rate support grant is most regrettable.
My constituents and those of other hon. Members are being severely penalised at the initiative of the Minister after the local rate had been published.

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That is the gravamen of our charge. A particularly deplorable aspect of this—here my comments apply to the Opposition, too—is the mockery which the Department has made of parliamentary accountability. Indeed, the previous Government are even more blameworthy than the present one. I draw to the attention of the House the fact that the previous Government slipped a differential rating and precepting order in for Thursday 7th February as hon. Members left for their constituencies. The order was not available until we had all gone to our constituencies. It was contrary to the promise that the then Minister made at a meeting held near my constituency. It means that the rates in Dewsbury, for example, and in some other parts of Kirklees go up by 2p in the £, which people can ill afford. The order could not be prayed against until this Parliament met. That in itself is an argument against the Opposition criticising my right hon. Friend for doing at short notice something that has to be done. The Conservative Government did something that cannot be undone by this Parliament.
The former Secretary of State for the Environment announced his plans for the rate support grant during the election campaign, and in the light of that, the local authorities were left to decide their rates. Meanwhile, Parliament had no opportunity to consider the matter until after the election. In effect, the former Minister was seeking to bind his successors. To cap it all, the present Secretary of State in a rush brings in a scheme which cannot be amended and must be passed tonight, otherwise there will be no money for the local authorities.
The record of the two Front Benches in their handling of this matter by the present order, the draft proposal issued during the election and the differential rating and precepting proposals which have not yet been discussed, taken together, make a mockery of parliamentary accountability. Therefore, I ask the Secretary of State, if not tonight then during the next few weeks, to see whether something more can be done.
I am speaking not merely for Dewsbury but for Batley and Morley, which, in comparison with Grimsby, is a low-wage area. One would have to travel a long way before finding a lower wage area.
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An addition of 6p on the rates means more to us than it does to people who live in London or Leeds. From the point of view of some authorities—and Kirk-lees is a classic case—the cost of the reorganisation of local government imposed by the Conservative scheme is a heavy enough burden to bear. The public should not be asked to carry additional burdens. The rates were already to go up sufficiently this year.
Metropolitan districts like Kirklees and Wakefield have to cope with problems similar to those that arise in the big cities—urban renewal, dereliction, the slums and the immigrant problem. We are not allowed to have differential rating within the metropolitan county. So I ask both the Government and the Opposition spokesmen: what is the logic of compelling differential rating within districts—which presumably the Minister will continue—if differential rating within the metropolitan counties is not permitted? The logic surely is that if there is differential rating it should apply to all. Differential rating within metropolitan counties would provide substantial relief for Kirklees, and I should be interested to hear the comments of the Secretary of State on the policy of his administration and his predecessor's administration on that subject.
My constituents are reasonable people, but they cannot understand the logic of the sacrifices they are being asked to make. In a sense one is taking from the less well-off and giving to the better-off. I am sorry to have to do this, but I must quote a comment which appears in The Reporter of Dewsbury:
"Before anyone contests that too strongly, would they care, please, just to…tell its residents over a loudspeaker that they must pay an extra 6p in the £ to help the poor ratepayers of Leeds? For that, nothing more and nothing less, is what Mr. Crosland is saying—from a safe distance."
That is the political reality of what my right hon. Friend has done. I appreciate that he cannot recast his entire scheme, but cannot there be some early relief for metropolitan districts which are worse off? If that, financially, is too wide a request, cannot relief be extended to intermediate and development areas which are adversely affected by the Secretary of State's actions?
The eve of Budget day is a bad time for concessions, but I ask my right hon.

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Friend to do something more positive in areas like ours. Instant Government is not always good Government, and the righting of injustice should not mean the creation of new injustices.
7.11 p.m.
Mr. Graham Page: I congratulate the four hon. Members who have made maiden speeches. The hon. Member for Thornaby (Mr. Wriggles-worth) kept our attention by referring to topical matters. My hon. Friend the Member for Leominster (Mr. Temple-Morris) was forceful and logical, and dealt in an interesting way with previous speeches. The sincerity of the hon. Member for West Bromwich, East (Mr. Snape) was obvious, and my hon. Friend the Member for Reading, North (Mr. Durant) put forward a factual case which appealed to the House. We look forward to hearing all of them again.
I should not have had such an easy passage at the Dispatch Box on the local government reorganisation legislation if the hon. Members for Thornaby and West Bromwich, East had been on the benches opposite. My hon. Friends the Members for Leominster and Reading, North, referred to the rating system as a whole and hoped that the Secretary of State in his review would look more deeply at the rating system as a whole rather than at any new formula for distribution.
The rate support grant system seeks to recognise that the job of governing the country is carved up between central and local government, and that local government needs a subsidy from central government. But the job of government is not carved up into clean slices. As my hon. Friend for Reading, North said, there is education, to which I would add law enforcement and fire fighting. Those services are set out in Cmnd. 5532 on which the Rate Support Grant Order is based. The Minister has 80 per cent., 90 per cent., or perhaps 100 per cent. responsibility for those services, but the work is done by local councils and their employees. We make little or no effort to recognise this in financing local government. We estimate the expenditure of local authorities on all matters which they administer, and the items are set out in Annex B to the Command Paper. We make that estimate regardless of the decision-making power in any of those matters.
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Next year the expenditure will be £5,671 million and we say to the taxpayer, "You will subsidise that by a payment of £3,431 million". We do not say to the ratepayer in this or that local government service, "The council you elect has the responsibility, the discretion, the decision-making power, so you pay for that out of your rates". But in this or that so-called local government service a Minister has the decision-making power, the discretion and the responsibility, and therefore the taxpayer should pay for that in full.
The interesting point is that if we were to say that the taxpayer will pay in full for those matters which I have mentioned—education, law enforcement, fire fighting and so on, which are really central Government services—the taxpayer would contribute to local government almost exactly the same amount as this year's 60·5 per cent. of the aggregate Exchequer grant—roughly £3,400 million.
If the Exchequer were to pay that £3,400 million, how wonderfully simple everything would be. We could let the taxpayer pay for those central Government jobs, we could then cancel the whole rate support grant, and we need not argue about this order at all. We would leave the local authorities to raise finance for the remaining jobs, only £2,240 million—no more than that, and compared to the whole expenditure of local government, it is not a large figure—which they could raise, by local rates or a revised local government finance system.
We have reorganised local government; we have created local government units with the potential resources to meet the responsibilities of truly local government. Can we not now get away from the idea that all local government services need to be subsidised by the central Government?
I am aware that the major purpose—or a major purpose—of the rate support grant is, by its distribution, to iron out the creases between one local authority and another. That is what we hope to do. There are authorities rich in rateable value and there are authorities poor in rateable value, so we have a resources element. There is £723 million to divide up and level that out. There are some local authorities whose obligations are much more expensive than others, so we have the needs element—£1,907 million

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to level that out. Then, we do not want the householder to pay as high a rate as does the occupier of an office, a shop or a factory, so we have the domestic element—£446 million this year.
I wonder whether we need to juggle about with these figures in the rate support grant. If we were to remove from local government the cost of national services to the amount of the rate support grant at present proposed, we could leave local government itself to iron out the creases, on a county basis, perhaps. After all, the Londoner has had an equalisation scheme for 106 years and has done very well with it.
At this stage—perhaps I was going a little wide of the mark on this order in suggesting such massive reform—the Secretary of State has taken over the rate support grant system at a time when, I agree, it was impossible, without some chaos, to abandon it and adopt some other system of financing local government. He has, therefore, stuck to the figure for the total amount of rate support grant which was proposed by the previous Government. Perhaps he will have to take a course in tactics on how to tackle the Treasury.
The right hon. Gentleman has stuck to the figures for the distribution of that total amount between the three elements—needs, resources and domestic. Let us be clear about this. He is not offering to local government one penny more than was being offered by the previous Government.
Mr. Crosland: Or one penny less.
Mr. Page: Or a penny less. But where he wants to shuffle the pack and deal again, that is, in the domestic element, the pack remains exactly the same size—£446 million.
The purpose of the rate support grant distribution formula which was devised by the previous Government was, first, by means of the resources element, to benefit those areas which are low in rateable value. In defining rateable value we did not take the national average. We put a figure far above the national average—£154 per head. To the extent that the rateable value in any district falls below that figure, the Government come in as a ratepayer at the rate
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poundage fixed by the local authority. What is important is whether the local authority can make the figure on that resources element.
Assuming, for example, a rate poundage of 50p—that is quite low in city areas—Leeds could obtain from the taxpayer next year £18 million; Sheffield, £12½ million; Liverpool, £9 million; Birmingham, £6 million; Manchester, £5 million; and Newcastle, £4½ million, which in every case is much more than they had in the current year. They are fairly large figures compared to those mentioned by the right hon. Gentleman. The counties covering the districts which I have mentioned would benefit by the right hon. Gentleman's formula.
To produce the kinds of results which I have quoted, the proportion of rate support grant devoted to the resources element had to be increased substantially. It was increased from about 11 per cent. this year to 27½ per cent. next year. This greatly benefited the cities and the conurbations.
However, the amounts which I have mentioned are small compared with the needs element figures. The previous Government introduced new factors, clearly set out in the White Paper, to reflect the real needs of the urban areas—for example, the new social services unit. I shall not go through it in detail, but it helps the inner cities.
The results for the cities from the new formula for the needs element—I take again the big cities—are: Birmingham, £50 million; Liverpool and Manchester, £32 million; Leeds, £27 million; Sheffield, £21 million; and Newcastle, £14 million. They are substantial compared to the figures mentioned by the Secretary of State. So, out of our formula we are obtaining figures in the range of £20 million, £30 million, £40 million and £50 million, as compared with the flat-rate adjustment pulled out of the air by the Secretary of State to help them further.
These payments, generally speaking, will be made at the expense of what I would call the not-so-urban areas. I believe that that is right while we are still saddled with the rating and rate support grant system. However, the immediate effect of the switch of grant to the inner cities in that way on the

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not-so-urban areas and the domestic ratepapers in those areas would be very severe without a transition stage. Furthermore, the severity would not be evenly spread. We turned to the domestic element to achieve an alleviation of that immediate situation which would otherwise face many domestic ratepayers.
We devised a formula for cushioning that blow transitionally. We took the main items that would oblige councils to increase their rate poundage next year. That was the reduction in the amount to be received next year by a district by way of resources element as compared to this year—the effects of local government reorganisation and the effects of water and sewerage reorganisation. For each rating authority we made this calculation. By how much will the rate poundage have to be increased as a result of those factors? If the increase over this year's rate poundage is more than 9 per cent., that excess, translated into pence in the pound, should be the domestic relief for ratepayers in that rating authority's area. If the difference were 9 per cent. or less—or even as much as 20 per cent. the other way, as it was in Manchester—the relief would not drop below 7p in the pound. The taxpayer comes in again, of course, as a ratepayer for the amount of domestic relief at the rate poundage fixed by the rating authority.
What could be more fair and just than that? Discover how the formula designed to help the urban areas will disappoint authorities in other areas and then compensate each of them for that disappointment. It was a careful calculation to apply to each authority and to compensate it for the transitional period when we were helping the inner cities.
The right hon. Gentleman has cast aside that justice and fairness to each district authority, plucked an arbitrary figure out of the air, and applied it right across the board. He calls it a flat rate—I call it a flat-foot Government—and the reason he gives is that he wants those areas which benefit under our formula by receiving a greater proportion of the needs and resources elements not to be, to use his words, unjustly deprived of much of that benefit.
Let us look at that. We wanted the conurbations to benefit. The right hon. Gentleman cited a number of the metro-
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politan counties as a whole and took the figure as a whole. Under his crude fixed domestic relief formula as compared with our fixed relief plus variable domestic relief formula, he is doing fairly well for Merseyside and for Tyne and Wear. Out of five districts in each of those, four will gain and one will lose. It is not quite so good in Greater Manchester, where, out of 10 districts, five will gain and five will lose. It is a draw there. In the West Midlands, only two of the districts gain out of the right hon. Gentleman's formula and five lose. In South Yorkshire, only one district gains and three lose. In West Yorkshire, one gains and four lose.
That is the evening out which the right hon. Gentleman says he wants to give to the urban areas—the inner cities. He gave some figures on this, and I notice that he left out West Yorkshire. The hon. Member for Dewsbury (Mr. Ginsburg) may be interested to hear this. In West Yorkshire, Leeds will gain about £1¾ million, but the other four—Bradford, Calderdale, Kirklees and Wakefield—will together lose well over £2 million. So that conurbation loses through the right hon. Gentleman's formula.
The right hon. Gentleman is not, therefore, even achieving the result he wants. Of course, he is not. It is just a hit-or-miss effort, instead of dealing with each case individually. It is government by guesswork which the right hon. Gentleman is asking the House to accept.
I should not dream of claiming that our formula was perfect. Indeed, we said in the circular that one could not get complete equity without full knowledge of the figures. But I claim that our scheme was 100 times more equitable than the scheme which the right hon. Gentleman is asking the House to accept.
I am sure that the conclusion which everyone must draw is that no formula scheme for distribution of rate support grant can ever be satisfactorily equitable. The application of formulae to the distribution of rate support grant is a failure, whether it be the right hon. Gentleman's flat-rate one or our variable one. From this, the further conclusion follows that, if we cannot find a formula for making the rate support grant do its job of ironing out the creases created by the rating system itself, the rate support grant system is itself a failure and ought to

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be abolished. The subsidy which it provides for ratepayers, as I have said, could be provided in a much simpler way.
Therefore, I submit that the two purposes of the rate support grant are gone. It is not needed as a subsidy. It can be dealt with in a much simpler way, and it is a failure as an equaliser. So I would abolish it. But that leaves us with the injustice between householders in different areas and between local authorities themselves, caused by and inherent in the rating system itself. So I say "Abolish it", at least in relation to domestic ratepayers and residential property.
In his Press statement the right hon. Gentleman said, as he said again today, that there would be a thorough review of the grant distribution system. I urge him to be bolder than that. The walls of the Department of the Environment are papered with reviews of rates—green paper, mostly. The floors are carpeted with consultative documents about rates. He has all the information he needs in his own mind. For heaven's sake, let him be brave and relieve local authorities of the duty to finance any part of those central Government services like education, law enforcement and fire fighting, which now account for 60 per cent. of local government expenditure. He would thereby make the rate support grant and all its complications unnecessary.
The Secretary of State can leave the commercial and industrial occupier liable for rates, but he must abolish rates on householders eventually and replace the £1,100 million to be raised by a local income tax coupled with a county equalisation scheme, supplemented by a few other forms of revenue such as were mentioned by my hon. Friend the Member for Reading, North—local lotteries, tourist tax, and planning application fees. I am sure that none of these proposals gives rise to anything like the administrative difficulties in bringing about justice and fairness in local taxation that are involved in the system of residential rates and rate support grant. While we are saddled with the rate support grant it must be distributed in a just and fair manner. This order is grossly unjust.
Mr. Crosland: I find a great deal of what the right hon. Gentleman says absolutely fascinating. But the fact is—I say this without disrespect to him, because he knows more about these issues than most people in the House—that we had from the Government of which he was an ornament both a Green Paper and a White Paper on local government finance which, in effect, rejected everything which he is now proposing to the House.
Mr. Page: The Green Paper did not reject it. As for the White Paper, because we were engaged in the reorganisation of local government—this is exactly why the present Secretary of State does not want to make great alterations at present—we did not seek to reorganise local government finance entirely. When in office one learns the difficulties of rating systems, the rate support grant and all the formulae. I was trying to impart to the House what I learned when in office.
7.33 p.m.
Mr. James Boyden: The right hon. Member for Crosby (Mr. Page) said that the present proposal by my right hon. Friend was government by guesswork. Let me tell him what government by design was going to cost County Durham—the cost of the Tory local government reorganisation to Durham.
First, the revised rate support grant distribution formula was to cost £2·33 million. Then there was the extra burden arising out of local government reorganisation. Durham was losing 25 per cent. of its population and had to maintain a considerable amount of overheads, far more than that 25 per cent. compensates for. The county treasurer reckons that this additional burden will cost the county £3·99 million.
The piece of government by guesswork that the right hon. Member mentioned—that is, the new rate support arrangement that my right hon. Friend is introducing within three weeks of taking office—costs £800,000. What the Tories did by design was to cost Durham well over £6 million. That is the difference between the two methods.
That does not excuse my right hon. Friend. He knows perfectly well, as everybody else in the House does, that Durham is a poor county. It has unemployment

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problems, dereliction problems, and problems concerning movement of the population. Yet the total effect of the Tories' extra £6 million and my right hon. Friend's £800,000 is to push the percentage of the rate precept up by 65 per cent.
Looking at these figures, I noticed that Dorset, Durham and East Sussex came together in the same column. I know all those counties extremely well. If ever there was a cloud-cuckoo-land, it is in comparing the increase in rates that these three counties have to make.
Dorset is by no means a wealthy county. When I was at the Ministry of Public Building and Works I had a lot to do with Dorset's stone industry and, incidentally, with some of its industrial problems. It is as poor a county as there is in the South; yet it has to increase its rate by 73 per cent. Durham has to increase its rate by 65 per cent. But East Sussex, with every kind of luxury flat on the coast that can be imagined, a thick stockbroker commuter belt, and where country estates jostle each other in luxury, has to increase its rates by 37 per cent. Where is the sense in that?
I am sure that my right hon. Friend will devote his considerable energies and talent in the next few weeks to finding a solution to the problem with which he has been landed. The steps that he has taken are, I suppose, those that were forced upon him, or he could have done nothing. I suggest to him that the right hon. Gentleman has some good ideas. I should like to put to him one or two other ideas, some of which have come from County Durham.
County Durham was extremely annoyed with the previous Government because, when it was considering the rate propositions put to it by that Government, Durham County made some alternative suggestions and asked to see Ministers, but it was unsuccessful. For example, it had a proposition—my hon. Friend the Member for Dewsbury (Mr. Ginsburg) put it forward—that local unemployment should be taken into consideration; in other words, that the development and intermediate areas had a special call for special rate assistance. Durham also wanted—this, too, is a viable proposition—compensation for truncation in local government reorgani-
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sation to be considered in rate support grant calculations.
There is much to be said for going back to the simpler system of Exchequer equalisation on a number of key factors and percentage specific grants. In that way, the Government, elected by the people, could dictate the tone and speed of local government, and the rates a local authority produces could be dealt with fairly.
Whatever this debate has produced today, there is no doubt that everybody who has spoken is of the opinion that local government finance is in a mess and needs radical reform. I am sure that my right hon. Friend will apply his mind diligently to this subject and that when we have the next debate on this subject he will come forward with constructive proposals.
Domestic ratepayers in all the constituent authorities in my constituency—the new Sedgefield authority, the Wear Valley authority, the new Teesdale authority, Darlington RDC, part of my constituency, and the county council—are facing considerable increases. In the new Sedge-field district the ratepayers must pay an additional 7p as a result of what the Secretary of State has recently announced.
I urge my right hon. Friend to meet the Durham County Council—the Tory Secretary of State refused to do so—to hear the views of county councillors and understand how an area such as Durham has been affected by the new rate arrangement and by local government reorganisation. I hope that he will then put their ideas into the melting pot for new proposals.
I believe that there will have to be a new supplementary order. The Treasury must find money to deal with this serious situation in Durham. It is, frankly, unfair. Durham has nothing against the conurbations, against Newcastle, Birmingham or Liverpool, but it expects to be treated fairly. It has all the problems of the urban authorities in different degrees and has had those problems for many years.
It is most discouraging for a progressive and enterprising county council, which is always making progress, to be faced with these enormous bills out of the clouds. Durham has always tackled its problems with a great deal of financial

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responsibility. I served on its finance committee and as chairman of the education committee for a number of years, and I can tell the House that its estimates were always carefully considered and pruned. It is an authority that needs to be supported as it tackles the problems of poverty, dereliction and unemployment.
So, if I criticise my right hon. Friend now, I am sure that my criticism will be only temporary. I am sure that in the course of a fairly short time he will come out with measures that will satisfy the people of Durham and enable us to go forward as we want. I hope that, as one of the intermediate steps, my right hon. Friend will resume what I am sure has been a quarrel with the Treasury and emerge successfully.
7.41 p.m.
Mr. R. J. Maxwell-Hyslop: I am glad to be called while the Secretary of State is here, because I have an important question to put to him. An hour before the debate began, I was telephoned by the chief executive of the new second-tier Tiverton authority, which is an amalgamation of the old Tiverton rural and urban districts, and the old Crediton rural and urban districts. He read out to me a report in today's Western Morning News. It is headed "State help for rate-hit areas" and says:
"State help is being planned for areas hit by the changes in rate support grants, Mr. Michael Meacher, Under-Secretary for Industry, said when speaking as guest of honour at Exeter Labour Party's annual dinner and dance at the week-end…'I am authorised to tell you that this Government will at an early stage be introducing a rate relief measure precisely to aid areas like Exeter which have been disadvantaged by that altered rate support grant formula'."
As that was an authorised statement by a Minister—he said specifically, "I am authorised to tell you"—the chief executive telephoned the Secretary of State's Department this morning and, referring to that specific quotation, asked when that measure would come into effect. He asked, too, whether it would apply to the new Tiverton areas or only to Exeter. The Secretary of State's Department replied that it had no knowledge of any such statement, let alone of its having been authorised. The Department knew of no such measures and it was unable to give the clerk any information.
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The clerk was concerned because the council had to strike a rate in two days' time, and the rate fixed would depend upon the nature of this measure, which the Under-Secretary of State for Industry was authorised to announce in Exeter on Saturday night. Naturally, the clerk wishes to know whether the Government will be giving details before Wednesday so that, due account can be taken when fixing the new rate.
Mr. Michael Latham: Does my hon. Friend agree that many people like those in my constituency who are threatened by 80 per cent. increases in rates will expect a full statement from the Minister tonight?
Mr. Maxwell-Hyslop: Naturally. Indeed, it would have been helpful if the Minister had intervened before, because, as we are within 48 hours of fixing the rate, and the authorised statement was made by a Minister in Exeter on Saturday night, we naturally want full details of it this evening so that all local authorities can take this measure of relief that was publicly promised and accurately quoted.
Mr. John Hannam: If I may correct my hon. Friend, it was on Friday night that the Under-Secretary spoke. I quote his words, which were printed in my local newspaper:
"I am authorised to tell you that this Government will at an early stage be introducing a rate relief measure precisely to aid areas like Exeter, which have been disadvantaged by that altered rate support grant formula."
Mr. Maxwell-Hyslop: I am most grateful. I read out that quotation, but I am glad that my hon. Friend has put it on the record again because he has read from a different newspaper. The fact that identical words appear in two newspapers adds weight to the quotation.
The chief executive of the Tiverton area is particularly concerned, because, although this includes part of a development area, the increase in rate as a result of the Government's announcement is no less than 15½p in the pound. This dramatic increase makes complete nonsense of the council's plans.
I have also had representations from the new second-tier authority at the south end of my constituency—Teignbridge. This area also covers part of the area of my

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hon. Friend the Member for Totnes (Mr. Mawby), where there are many elderly people living on fixed incomes who have no means of increasing their income when faced with totally unexpected rate increases.
Apart from the shattering effect that this will have on individuals and businesses, and on the prospects for attracting new employment, which is needed if we are to retain our young people in the South-West, there is a principle involved. If the Secretary of State announced that next year he would, if his Government were still in office, alter the basis of local government finance in the manner he has done, I would disagree with his judgment, but I would not say that he was not entitled to make that judgment.
There must be a degree of consistency in local government. Once the Government have announced, within a few weeks of the effective date, what the allocation of funds from central Government is to be, it is quite wrong, as a result of a General Election, that the incoming Minister should completely upset the basis on which the local government finances have been worked out, particularly when he knows that the local government officers concerned are overloaded with work because of the transition from the old structure of local government to the new one. In a case of which I have heard the new local authority is in trouble because it literally cannot get enough paper on which to print the new rate demands, having already sent them to press and printed them on the basis of the circular issued by the previous Minister.
This is an issue of principle as well as of judgment; namely, that the public do not want, and it is disadvantageous to good local government to have, a violent swing of public policy without prior notice. During the last election many people in council houses, for instance, allowed their judgment to be affected by the statement of the Labour Party that the rent increases that they were about to have to pay were to be cancelled. Had they known that the same amount of money would be taken from them by increased rates, that would have completely negated the incentives that they were offered to vote Labour. If ever there was a case of false pretences, it
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was that. It was a matter of disclosing a benefit without disclosing the intention to cancel that benefit by imposing an equivalent increase in rates.
One of two things must be true: either the Secretary of State knew during the election what he intended to do but did not disclose it for reasons which hardly do him credit, or it was an inspiration which he had after 1st March. I hope the latter was the case, but if it was merely an inspiration which he had after 1st March he should have postponed it for another year. My objection would then have been one of judgment and not of principle. I hope we can achieve a greater degree of consistency in local government so that when national Governments change the basis on which local government planning is necessarily made is not disrupted so dramatically and avoidably as that.
This is an even greater issue than the hardship being caused in some areas, particularly in my constituency, by the effect of this dramatic change. It is possible that that harm will last for many more years than the increase in rates, because I hope that with a change in electoral fortunes in the not-too-distant future the Conservative Party will be returned to office to restore the situation which it announced in terms of grants from the central Government.
This must be a day when those who voted Liberal or Labour—it does not matter which since the result was to defeat the Conservative Government—will have cause to reflect on the wisdom of their action.
7.53 p.m.
Mr. Arthur Blenkinsop: I do not blame the hon. Member for Tiverton (Mr. Maxwell-Hyslop) and other hon. Members for quite properly raising the problems of their constituencies—problems which are faced by every constituency. All are facing rate increases of a quite exceptional character. Moreover, they are facing these increases after a period of extraordinary muddle and incoherence.
We are debating the rate support grant for the first time, only a matter of days before the operation starts. I do not believe there has ever been quite such an extraordinary situation before.

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I welcome the right hon. Member for Crosby (Mr. Page) in his new rôle, but he must share responsibility for the fact that the House has not been given an opportunity of discussing the matter in a way that could have had any possible effect. As he knows perfectly well, the then Opposition facilitated his Government in getting the necessary Bills through the House on the clear understanding that sufficient time would be available to the local authorities to deal with the changes. Now we are presented with this extraordinary situation. Although I welcome the interesting comments of the right hon. Member for Crosby, which were missing from the earlier Green Paper, it would have been fair and reasonable for the right hon. Gentleman to refer to the unacceptable delays for which the previous administration were responsible.
I come to the question we all face—whether we benefit or lose by the action of my right hon. Friend. My authority benefits modestly, but that does not mean that we do not have to face a heavy rate increase, for we do. Indeed, we face a heavier rate increase than do many hon. Gentlemen opposite who talked of intolerable burdens. My own authority faces an increase of between 50 per cent. and 60 per cent. over last year.
Let us not have any more hypocritical talk from right hon. and hon. Gentlemen opposite, as if the situation in some of our constituencies had suddenly been dramatically improved and all the difficulties overcome. That is far from true. If the situation had been allowed to remain as it was, constituencies like mine would have been in a more intolerable situation. Instead an increase of between 50 per cent. and 60 per cent., it would have been nearer 80 per cent. In a poor area with relatively low rateable values it was intolerable to see such a situation continue.
There has already been plenty of evidence to suggest that talk of gerrymandering is far from being true, in view of the criticisms of my right hon. Friend and certain notable absences from the Opposition benches in the debate so far. There are some hon. Members opposite who share in the benefits. The right hon. Member for Finchley (Mrs. Thatcher), who opened the debate for the Opposition, after a vigorous and vitriolic attack said that many of her hon.
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Friends would vote against the order. She did not suggest that there was any unanimity on the Opposition benches. The right hon. Lady delivered the philippic, but it was not very effective when it tailed to the end, to say that it was, after all, affecting only some Members.
It is right to call attention to some of the other factors that have not been pressed so far and that are bitterly objected to by bodies such as the Association of Municipal Corporations, of which I am the vice-president. They object not only to the specific domestic element—favouritism they felt that to be—now corrected by my right hon. Friend—but to some of the provisions about the needs element They thought it inexplicable that the Conservative Government had worked out a weighting formula for grants providing exceptional benefits for the outer South-East counties like East and West Sussex—those notable poverty-striken areas—the Isle of Wight, Hampshire, Oxfordshire and Hertfordshire, as well as the inner South-East counties of Kent, Essex, Surrey, Buckinghamshire and Berkshire—not the first examples of extreme poverty that spring to mind. They objected to what they regarded as an unfair weighting of the needs element.
My right hon. Friend has not disturbed this situation. We have to accept it, not because we like it but because it is now too late to make any changes that will be truly fair. But if allegations are to be thrown across the Chamber about the action which my right hon. Friend, I think rightly, took—rough and ready as it inevitably had to be—one is entitled to refer to provisions that we still do not like but which we have not disturbed. In any longer-term review, these matters will have to be considered.
The Conservative Party has to accept a large responsibility for the intolerable timing, the offence of this matter not having been discussed in the time of the last Government, and for the factors that have forced on the whole country a scale of rates increases which have hit nearly every constituency hard.
Local government reorganisation was carried out in a form to which many of us strongly objected. The two-tier system, which in my area created many authorities which we did not want, has forced enormous duplication, particularly in

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planning. This is the responsibility of the Conservative Party. We all face the enormous burden of inflation and of interest rates up from even 10 per cent. to about 16 per cent.—what someone in The Times the other day seemed to imagine was a 6 per cent. increase but is in fact a 60 per cent. increase. These are burdens for which the Conservative Party must accept some if not all responsibility.
Last year the Conservatives urged local authorities to use up balances so as to hold down rate increases. Many of them did so, and those balances are gone. They also imposed many administrative charges on housing. So let us have no more nonsense—the mess we are in was caused largely by the Conservative Party.
I can offer no hope of an easy early solution to this situation. Many of us who have considered the matter have not found an alternative to rating which is not just as divisive. I wish the Government good luck in this terrific job. Meanwhile let us place responsibility where is clearly belongs—on the Conservative Party.
8.5 p.m.
Mr. Churchill: Perhaps even the hon. Member for South Shields (Mr. Blenkinsop) will recognise that many areas, including inner city areas like that which falls within my constituency, will face a substantial increase in their rates burden as a direct result of the Secretary of State's decision and actions. The level of increase is utterly disastrous and comes on top of the injustice of the present rating system which has already been mentioned. Perhaps one good thing will come out of this debate; it must make inevitable an early review and, more than that, a radical reform of local government finance.
Despite a reduction of £1·4 million in expenditure this year compared to last by the constituent authorities of the Trafford district in my constituency, the ratepayers are to be faced with a colossal increase. In 1973–74 those authorities received £16·8 million in rate support grant. This year they are due to receive less than £8 million—a drop of £8·9 million. So where is all the help that the inner city areas are to supposedly get? It certainly is not going to our area of Manchester.
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In the short time that the Secretary of State has been sitting in those ghastly buildings over the way he has had little chance to consider the matter but he has nevertheless made some swift decisions which have added enormously to the burden. The freezing of rent increases for council tenants will add to that burden. His abolition of the variable domestic element will also add to it in my constituency and many others.
This move does not benefit all those inner city areas for which the Secretary of State professes so much concern. Under the order the domestic rate is due to rise from 34p and 35·75p in the pound to 60·25p—an increase of between 68 per cent and 77 per cent. To keep the increases even within 17½ per cent. will mean massive cuts in local authority services.
Mr. Huckfield: Will the hon. Gentleman tell the truth to both sides of the House? Will he admit that all he will lose in terms of domestic rate relief is 1½p?
Mr. Churchill: That is the case in regard to the variable element, 1½p, which will mean over £½ million. That involves some 10 per cent. of increase.
The choice facing the Chief Executive and the Council of Trafford District is whether to face ratepayers with an increase of from 68 per cent. to 77 per cent., or to cut £5½7 million—nearly 25 per cent.—from their expenditure. This would still involve an increase cost of 17½ per cent. The Secretary of State for the Environment, who is a fair man, will agree that in present circumstances, when the Labour Government are seeking to contain inflation, the imposition of 17½ per cent. is a crippling burden.
I am sure the right hon. Gentleman would wish to know the effect of that burden on this part of Greater Manchester. I quote from the Chief Executive of Trafford:
"The general implications of these reductions would be to reduce the services of the council below an acceptable level: there would be immediate default in complying with certain areas of statute."
I am sorry that the Secretary of State for the Environment is leaving the Chamber at this point for I particularly wanted his advice on whether my authority will be allowed to default on its requirement

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to keep within certain areas of statute. The Chief Executive says:
"There would be redundancies of staff, including professional staff; replacement and maintenance provision would have to be reduced to levels which would result in forced deterioration of property and impose a crippling burden on the authority in future years; it would not be reasonably practicable to maintain essential minimum standards to comply with statutory requirements particularly in the fields of education and social services."
Mr. Marks: Will the hon. Gentleman give way?
Mr. Churchill: I have already given way to the hon. Member for Nuneaton (Mr. Huckfield) and I know that there are many other hon. Members who wish to take part in this debate. I am only reading a brief extract outlining some of the cuts that may have to be made in my area:
"The maintenance of buildings and grounds would have to be reduced to absurd levels, with various long-term effects. The school library service would have to be withdrawn. St. Bride's School would be closed. It would be impossible to admit handicapped children to schools outside the area of the authority and the vast majority of handicapped children are placed in schools outside the area at the present time."
Mr. Marks rose—
Mr. Churchill: The hon. Member for Manchester, Gorton (Mr. Marks) did not give way during his speech, so I am sure he will understand if I continue.
"Furthermore, there would have to be a reduction in the quantity and quality of school meals."
We all know from experience how lamentable the quality can be, and to suffer any further reduction would be damaging.
"All discretionary awards in further education would-have to be abolished; there would be no grants to voluntary bodies. One of the two teaching centres would have to be closed. The teaching staff would have to be reduced by 370 teachers, representing a 15 per cent. reduction in the teaching establishment.
"On the question of housing"—
Mr. Tomlinson rose—
Mr. Churchill: I appreciate that the hon. Member for Meriden (Mr. Tomlinson) does not like to hear this. However, he must bear with me.
"In housing there would have to be a £175,000 reduction in the repairs fund, representing a one-third reduction. Furthermore, the planning department would become effec-
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tively non-operational, apart from providing an advisory service.
In the public health service, reductions would involve significant staff vacancies, including five public health inspectors, which must have a serious impact on the level of service now being provided. Public conveniences would be cleaned less often; economies in the refuse collection service would have a serious effect, resulting in an erratic service, a cumulative deterioration in the collection of refuse and possibly failure to comply with the requirements of Section 72 of the Public Health Act 1936 relating to collection of household refuse.
Mr. Crosland rose—
Mr. Churchill: Perhaps the right hon. Gentleman will tell me how my local authority can be expected to comply with the statutory requirements when it has not the money to do so.
Mr. Crosland: Is the hon. Gentleman seriously blaming this on the 1½p? Is not 98 per cent. of the cost of all he is describing due to the rate support grant order introduced by the Conservative Government and nothing to do with the 1½p which we are discussing today?
Mr. Churchill: The right hon. Gentleman's figures are not correct. The right hon. Gentleman seeks to laugh off an additional increase of £557,000. This is a substantial increase—and this is apart from the additional burden imposed by the freezing of council house rents. That burden is being directly imposed because the right hon. Gentleman has abolished the variable domestic element.
Mr. Tomlinson: Will the hon. Gentleman give way?
Mr. Churchill: No. I have given way enough.
"With regard to the social services"—
and I know that many Labour Members are most concerned about this aspect—
"the Order would mean drastic reductions in staff, equipment, maintenance costs, vehicles and research expenditure. The opening of the children's home at Davyhulme would be delayed; the opening of a family group home would also be delayed. Furthermore, the number of children accommodated in remand homes would be reduced, the number of physically and mentally handicapped children admitted to homes would be reduced, and the rehabilitative unit for mentally handicapped persons at Ashwood would be deleted from the programme. A home for mentally ill persons at Altrincham would be closed. Three day nurseries would be closed; a new day centre for physically handicapped persons at Sale would not be opened; there would be a

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reduction in the number of places for employees in sheltered workshops, and a home for the elderly would be closed."
This report has been given to me by the chief executive of my local authority.
I should like to know what is the Secretary of State's advice to my local authority. Does he suggest the authorities contain the level of increase within 17½ per cent. and make the cuts which I have itemised, or that they impose a 68 per cent. to 77 per cent. increase on the domestic ratepayers? Why is it that no additional help is being accorded to my constituents? Indeed, it is clear that help is being removed by the Secretary of State for the Environment. In 1968 the previous Labour Government introduced their Fair Rents Act, and, even though they did not provide the generous rebates which the Conservative Government provided when they, in turn, introduced their Fair Rents Act in the public sector, it can be said that at least the Labour Government introduced some form of staging in raising the rents. Is it unreasonable for the right hon. Gentleman and the Labour Government to consider introducing, even at this late stage, special provision to help those ratepayers who are faced with increases of 20 per cent. or 30 per cent.—or, as in the case of my constituents, increases of 65 per cent. or 75 per cent.—so that this burden may be eased?
What has been the Government's motivation in changing the variable domestic element? We have heard much about the benefit to inner city areas. I am arguing that this is not the case in Manchester. There is great suspicion in parts of the country that this is not just a question of taking more from the prosperous rural areas and giving it to the cities. The hon. Member for South Shields mentioned wealthy people living in the stockbroker belt of East Sussex—one or two, I must say, spring to mind, such as the right hon. Gentleman the Foreign Secretary and his right hon. Friend the Chancellor of the Exchequer, who will open his Budget tomorrow. Those people are finding that their rates are being reduced. Those of us who have a home within the vicinity of Westminster are finding that our rates are being reduced. Yet in many other parts of the country, particularly in the great cities outside the London area, the rate burden is being enormously
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increased. I repeat that there is a great deal of suspicion about the situation. It is known that there are many Labour seats in the Greater London area and it is bound to be seen as a partisan sop to the London area to keep those constituencies sweet for the Greater London Council elections. This measure strikes directly at the interests of the Manchester area and of many other parts of the country.
On the more general question of rate reform it is noteworthy that out of the £26 million budget of the Trafford district of Manchester, £16½6 million is for education. Therefore, the rate support grant does not even cover 50 per cent. of the cost of education in the area, let alone anything else.
Surely there can be nothing more conclusive in support of radical reform of local government finance? An urgent and thoroughgoing reform is required. Even more urgent is the need for an assurance from the Government that some provision will be made for domestic ratepayers faced with increases of over 20 per cent., and especially over 50 per cent.
8.20 p.m.
Mr. John Tomlinson: I do not want to take up the heart-rending tales about the effects of a reduction of 1½p on the constituency of Stechford. Some of us have real problems arising from the effects of the rate support order. I want to deal with the effect on the local authorities within my constituency.
Mr. Churchill: On a point of order, Mr. Deputy Speaker. The hon. Member for Meriden (Mr. Tomlinson) inadvertently referred to my constituency as Stechford, which is in fact represented by the Home Secretary. My constituency is Stretford.
Mr. Tomlinson: I am sorry. I take the point—
Mr. Deputy Speaker (Mr. George Thomas): That was not a point of order; it was an interruption.
Mr. Tomlinson: The interruption was about as relevant to my constituents as the hon. Member's 15-minute speech. The effect of the rate support grant order on my constituents who live in the Solihull district council area is that they will lose 11½p. That is a problem which makes the problems of the hon. Member for

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Stretford (Mr. Churchill) look like solutions.
We are faced with an increase of no less than 92 per cent. Of that 92 per cent. a substantial proportion—well over half—is due to the actions of the previous administration. However, that does not lessen the anxiety about the 11½p which is being lost under the order. We are losing £1,445,000, which is placing a heavy burden on the shoulders of the ratepayers, coming as it does after such a short period. In the North Warwickshire district area my constituents face increases of the order of 86 per cent., resulting from the loss of 11p in the rate support grant. The rate in North Warwickshire, as a result of the rate support order, will be 24 per cent. higher than in any other part of Warwickshire, and Warwickshire is one of the worst affected areas in the country.
Therefore, while I support my right hon. Friend's long-term aim, to get a more egalitarian basis for the finance of local government, he must realise that it cannot be done by playing about with the present rating system. It is wrong to play about with the system in the name of egalitarianism while at the same time creating a crisis of local government which will have calamitous consequences for my constituents. That is no way to deal with the long-term problem.
In order to overcome the short-term effects of the order, my right hon. Friend must do something to mitigate difficulties in the transitional period. Increases of the scale of 92 per cent. are completely unacceptable. I ask my right hon. Friend to put himself in the position of my constituents who went to the polls at the election on the basis of the need to curtail inflation. One of the first things they received from my right hon. Friend is a rate support order which will create governmentally-induced inflationary pressures of the order of £1 per week for some of my constituents. Only a couple of days ago my constituents were expressing their pleasure that the Labour Government had managed to freeze rent increases this year. However, within a few days of that announcement they find the money is being taken away from them at compound interest by increased rates. These same council house tenants
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will have to bear the burden like anyone else in the community, and that situation is totally unacceptable.
I hope that before the vote tonight we may receive certain assurances from my right hon. Friend, assurances which are eagerly awaited by other hon. Members. My first point was covered to some extent by my right hon. Friend. May we have an assurance that a fundamental review of the rating system will produce something more than a White Paper or a Green Paper? For once can it not be followed by action to deal with the inequalities created and perpetuated by the present system? Will the order which we would expect to see later in the year take special account of the problems of the authorities which are suffering most from the effects of the rate support order? Or will the later order merely continue the pattern created by tonight's order?
Will such action as is possible after tomorrow's Budget be taken to mitigate the effects of the application of what my right hon. Friend has already called "rough justice"? I ask my right hon. Friend to ensure that with such funds as his Department will have available after the Budget he mitigates the worst effects of this poor application of rough justice. Will my right hon. Friend assure the House that the special problems of areas like Warwickshire will be taken into account when a review of the rate support grant domestic element takes place?
Without the assurances which I seek, as well as a further gesture in the direction of those in our community who are suffering the most, some hon. Members on the Government side will find it difficult to support my right hon. Friend tonight. We support the general trend towards an egalitarian system of finance in local government. We accept that inner areas have special problems, but we do not support the idea that the best way to solve the problems of inner areas is to transfer them to some of the rural areas, which have their own problems as well as people with low incomes. I ask my right hon. Friend to take into account the special problems of areas such as I have mentioned, and I look forward to hearing the Government's views before the vote this evening.
8.31 p.m.
Mr. Michael Morris: I am grateful for the opportunity to make my maiden speech as the first hon. Member for Northampton, South. I do so in the knowledge that this Parliament and previous Parliaments have listened to many interesting contributions by hon. Members from Northampton. Not least among those contributions were those over the past 28½ years from a person who, on many occasions, had feelings towards the Conservatives, although he voted reasonably consistently with the Labour Party. He served the people of Northampton loyally and honestly, and the thanks of the people go to him.
The name of my constituency confuses the electorate. Although called Northampton, South it stretches from west to east. On its western boundary is the village of Duston, a prosperous and growing community, with a long history and tradition. The community is centred on the fortunes of the ball bearing industry, through the firm British Timken. The town also had a castle, but because of Northampton's support of the parliamentary cause it was demolished by Charles II. The town also has a number of great shoe companies, known across the world—firms like Church, Hawkins, Allinson and others, which are household names.
To the east is the grammar school, founded in 1541, at which thousands of Northamptonians were educated, including one senior hon. Member on the other side of the House. Today there is a cloud over that school because certain misguided local officials and elected persons wish to destroy it. They may try, but they shall not succeed.
Far to the east, beyond the residential areas of Weston Faye11, is the development area. In 1968 Northampton was designated for expansion and it is this expansion of the town that brings me to the matter under debate. Our expansion is the fastest in England. Northamptonshire is the fastest growing county in England and we hope that Northampton will live up to Defoe's description as the handsomest and best built town in England.
When the decision was taken to expand the town it was on the basis of a partnership agreement between the old county borough and the development cor-
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poration. It was taken on the understanding that there should be no financial burden on the town. It was felt that the town was doing its duty in accepting people from London and Birmingham. The town made these people feel happy and at home, but it was always understood that there would be no financial burden arising from this.
However, I already see signs of the Treasury this year beginning to wriggle out of this understanding a little, and the financial burden is starting to arise. I also see signs from the Government that no extra provision has been made to help Northampton over this burden.
In standing here, I have the unique advantage of being at one and the same time an alderman of one of the poorest of the London boroughs—Islington—and representative of one of the growing towns in the centre of England. I hope that this depth of experience gives me a unique understanding of the dual problems.
We all know and well understand the philosophy of the rate support grant, which is to give particular help to the inner urban areas that need so much help. But there seems to be no allowance in any element of the grant for those towns, such as Northampton, that are playing their part in alleviating that burden. I plead with the Government to ensure that in these days of largesse, of which there seems to be an abundance, the people of Northampton are not financially exploited. I believe that the Treasury could and would, if instructed, look more sympathetically on us and other new towns. I hope that the rate burden on the new towns will be borne in mind in the promised review which was mentioned earlier this afternoon.
I turn to the computing of the rate support grant. For reasons best known to successive Governments, it has always been based on past population—in the case under consideration, on the population at mid-1972. But do hon. Members realise that in expanding areas—to take only the example of education—5,000 extra children go to school each year, at an average cost of £200 a head? That means that in just the two years since that base was formed the people of Northampton have lost the best part of £2 million.

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In the past there were adjustments, which helped the end-year balances, but this year there is to be nothing. However, we believe that there is to be an interim award. If so, is it to be made across the board or where the shoe pinches?
In theory, the needs element reflects the needs of an area, yet the criteria are based on such things as children in care. It would pay my local authority and others to put more children in care, so as to receive more rate support. There is no consideration of the dynamic element or the preventive situation.
Next, I turn to the announcement of the flat rate 13p for domestic ratepayers, which has caused such controversy today—an announcement made, so it is said, after full and frank consultation with the local authority representatives. I am told, however, that the Press release was issued within seconds afterwards. I believe that the time it took to get out that Press release has set a record for any administration in post-war history.
It is a question not just of the cavalier approach to the consultation, or lack of it, but of the total failure of the incoming Government to understand how local authorities are run. Local government has been reorganised throughout the country. New members and officers have spent hours and days going through their estimates, cutting them back when requested and replanning and rephasing them. They had them all tailored to await the rate support grant. They were prepared to wait until the election for the grant, and then they prepared the rate demands all ready to be sent out.
Did the Labour Party say anything about this matter in the election campaign? It did not say a word. No warning was given, so the demands were prepared. Then, like a bolt from the blue—or perhaps one should say "a flash of inspiration"—came the Government's extraordinary announcement.
Why was that announcement necessary? Was it that the cities or the London boroughs faced insurmountable problems? By any objective assessment, they did not. Indeed, when we compare the level of assistance that the previous Government gave to inner urban areas with the paltry sum that we were offered in 1968–70, we know that the inner urban
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areas were treated very well and were well looked after. No, it must be something else, something so important that the whole of local government had to be turned upside down at this delicate time in its history. I hope that we shall learn from the Minister who is to conclude the debate what it was that was so important.
The Government will have to make clear why these changes had to take place so late in the day. Do they know of the number of hours of work which have been thrown out of the window? Do they appreciate the enormous problems which they have created throughout the country? Do they realise just how much the rates will now rise? In my town, which will not suffer the highest rise, the increase will be 54 per cent. Little wonder that people in towns like mine are saying, "Forget about the bread subsidy and look to the rates, because that is the burden that will hit us." Damage will be done unless hon. Members on both sides of the Chamber think about the problem enough to reject what has been put before us, or the Government are prepared to table an amendment. It is not too late to move such an amendment.
I make a series of pleas for the future. I make them for all expanding towns in general and for Northampton in particular. Incidentally, I understand that it has been graciously accepted to receive a deputation from Northampton on Wednesday. My plea is, first, to ensure that any interim award goes to those who make a case rather than an across-the-board award. My second plea is that the Treasury is instructed to look generously towards towns which are doing their part in helping the inner urban areas. My third plea—and this is the crux—is to ask that we move to a more dynamic model, with an allowance for known increases, such as those of schoolchildren, so that the proper level of rate support goes where needed. It should not be beyond the bounds of possibility to produce a system that works simply.
My fourth plea is that if there is a shortage of resources we should consider the regional water authorities. Let us look at their budgeting. I have it on good authority that they asked every district to decide what it would like to do, to add 15 per cent. for inflation, then to add

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another amount for contingencies and then to add whatever else an authority thinks it might have to do. The net result, taking the Anglian Water Authority as an example, is an increased precept of 62 per cent. Here is a tree that needs pruning.
British local government is justly thought throughout the world to be one of the very best. It can be if Ministers will let it and if central Government will understand it. I make no apologies for frequently mentioning the town of Northampton, South and Northamptonshire in general.
Mr. Eldon Griffiths: On a point of order, Mr. Deputy Speaker. Will you kindly ask the Government Chief Whip to cease browbeating his hon. Friends so that those who are following the debate may be able to hear what my hon. Friend the Member for Northampton, South (Mr. Morris) is saying?
Mr. Deputy Speaker: There are many things that I should like to do. Evidently order is restored. Mr. Morris.
Mr. Morris: I make no apologies for frequently referring to Northampton, South and Northamptonshire in general. We are at the heart of England. We hope that we are doing our part to help the poorer inner areas of the cities of London and Birmingham. We can do that only with hard cash and not just with good will and nice words.
My town supported the Parliamentary cause in the Civil War. It supplied 1,500 pairs of shoes for that war. The town was short-changed on that occasion, in that nobody paid for the shoes. I believe that we now have a fine opportunity for at least those memories to be wiped out by a little more cash.
8.44 p.m.
Mr. Dick Taverne: I congratulate the hon. Member for Northampton, South (Mr. Morris) on his maiden speech, which was as eloquently phrased as it was confidently delivered. His predecessor, Mr. Reginald Paget, was also a great master of phrases. I am sure that the hon. Gentleman is a worthy successor. I also hope that he shows the same independence of mind as his predecessor showed, to which the hon. Gentleman referred. I believe that the hon. Gentleman's predecessor often carried his inde-
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pendence into the Lobby, or, rather, kept himself out of the Lobby. I hope that the hon. Gentleman will do the same when he feels that the occasion so requires. I congratulate him warmly, and I shall listen again, if I can, on every occasion when he speaks.
I shall be very brief. A great many points have already been made and I do not wish to repeat them unnecessarily. I do not disagree with the overall aim of the Secretary of State of seeking to redress the balance very much in favour of the urban areas. I also agree with him when he agrees with his predecessor that in many ways the new rate support grant contains features which are an improvement on the last system.
But the Secretary of State is wrong on two counts. He has failed to see that this very rapid change is working major injustices in a number of cases and that it was reasonable to provide for a more gradual transition, and he has failed by his concept of rough justice to realise or to give sufficient attention to the fact that he is causing considerable injustice to urban areas with problems very similar to those of large conurbations.
Lincoln, too, has the problem of urban decline and decay. It has areas of slum housing. It has problems of homelessness, with people in the centre of the city being displaced by office developments and having nowhere to go. Lincoln has the further burden of being an historic city, in that it is in the national interest that we should preserve our heritage. But, while it is in the national interest, there is no subsidy from public funds. There are, then, a number of reasons why such situations, which can be repeated in our cities, should not be worsened by the Secretary of State's announcement.
A city like Lincoln also suffers from being part of an overwhelmingly rural county which has been adversely affected by a series of factors, the most serious of which is the way in which the needs element is now calculated. The low density element now consists of a payment of 1·22p per acre if the acreage is between 1·5 and 3 per head of population, and then jumps right up to 3·12p per acre where the acreage exceeds 3 per head. There is no tapering off for marginal cases, and the most marginal case is Lincolnshire.

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In Cumbria, Northumberland and North Yorkshire the higher rate of grant applies, but in Lincolnshire, which is the closest non-qualifier, the acreage per head is 2·84. Thus, there is the curious position that if we had had in the county 29,000 fewer inhabitants or an acreage 85,000 larger the county would be entitled to additional needs element grant exceeding £2,750,000. This is absurd, and I hope that it is one of the elements which the Secretary of State will bear in mind when he comes to his long-term review.
There are further elements which are perhaps of less significance. Again, the distribution formula does not allow any flexibility in the burden of local government reorganisation, which has been far more fundamental in Lincolnshire than in a number of other counties. But the result is that in Lincoln itself we are having to face an extra rate of 7p, which means that on average each householder will have to pay close on an extra £10 a year.
I recognise that the Secretary of State was in a dilemma. He had no time to consult because of the need to produce the order in a hurry. He wants a more rational system. He is proposing a review, which eminently sensible. However, it is not good enough for him to come and tell the House that all the same he will act now even if his action produces an element of rough justice. There is not just an element of rough justice; there is a large quantity of it. The cursory examination, which is all that he was able to carry out, is not good enough. The anomalies and injustices are too glaring. I believe he is mistaken.
The hon. Member for Gloucestershire, West (Mr. Loughlin) said earlier that though he was opposed to the action taken by the Secretary of State he would, nevertheless, vote for the Government because he did not wish to see the Government brought down. If a vote on this order adverse to the Government could bring them down, that would give many people cause for thought. It would give me cause for thought since it would be a great mistake to achieve such a result at present. The life of the Government is not at stake, and I shall therefore have no hesitation in voting against this order.
8.51 p.m.
Sir John Eden: At the outset I would say how glad I am that I was present in the Chamber to hear the speech of my hon. Friend the Member for Northampton, South (Mr. Morris). I had the privilege of speaking in support of him at his adoption meeting at the beginning of the election campaign. I know the area about which he was speaking quite well, and I thought he made abundantly clear to all hon. Members the nature and dimension of the problems facing his constituency. An expanding town has a special call on our sympathy and understanding at present.
I was also interested in the speech of the hon. and learned Member for Lincoln (Mr. Taverne), who referred to the special need of a city such as Lincoln which has an historic national contribution to make. There are special burdens associated with that. It has been apparent to everyone during the debate that all hon. Members can refer to special problems justifying special attention, thereby making a claim against the arbitrary setting of a flat-rate level for relief as is here proposed.
I was dismayed by the Secretary of State's speech. It was not that he did not understand what he was doing that worried me. I felt that he did not really care. I thought that was untypical of him. The right hon. Gentleman certainly knew something of the nature of the additional burdens which his action will inflict upon domestic ratepayers in many parts of the country. If his speech was a case for anything at all, it was for saying that at this time he had decided to make no change in the variable order planned by the previous Government. He made out a strong case for saying that this is not the time to overthrow what had already been planned.
Hon. Members have mentioned local government reorganisation and the difficulties it is bringing. I do not need to enumerate the problems that this reorganisation brings. In my area what was an inclusive county borough rate has now been broken into three separate constituent parts: a county council precept, a district council rate and a water authority sewerage charge. These three things together add up to a substantial increase for all ratepayers in the district council area.

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In Bournemouth special hardship affects the domestic ratepayer because of the shortage of industry. There has been a large loss in connection with the needs element of the grant running into many million pounds, when one compares the new Dorset with the old Dorset and the county borough of Bournemouth. That accounts for a large proportion of the increase.
My right hon. Friend the Member for Crosby (Mr. Page) said that it was generally accepted that the inner city centres should be specially helped because of their special problems and needs. There was widespread understanding of that, but perhaps what is not so well recognised is that even in the generally sparse areas there are blocks of dense urban development where similar problems exist. For example, the Bournemouth, Poole and Christchurch area is a continuous urban area of nearly 300,000 population. Taken together, the three districts have, admittedly, only 7 per cent. of the new county area, but they comprise 52 per cent. of its population. The area therefore carries a considerable burden of the problems and expenditure associated with it.
The new district council rate is high partly because a holiday area like Bournemouth has to spend, rightly, so much each year on amenity expenditure. For Bournemouth that amounts to £1 million, the equivalent of a 5p rate. Bournemouth has to cater for a large annual inflow of staying visitors as well as one-day visitors, and it is right that it should spend the money. But that is an additional and special burden that the ratepayers of Bournemouth have to bear. It is in the national interest that holidays at home should be encouraged. Many people come from Birmingham, Manchester, London and the other great cities to spend their holiday in Bournemouth, and they are welcome there, but in equity the whole of this burden should not fall on the ratepayers of Bournemouth. There is something wrong with the present system.
Previously, the resources element in the grant system went only to the below-average rateable value authorities. Now, virtually all the districts get the grant. It is set at a level of about £154 rateable value per head of the population. Since Bournemouth has a level of £152, it gets
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little. The additional rateable value does not mean any increase in the actual resources; it simply means a lower level of Government grant. All around Bournemouth, the rural neighbours have their rateable resources brought up by this grant of £154 per head. They spend, by comparison, obviously, a minimum amount on services, and their inhabitants, equally obviously, enjoy the benefits of Bournemouth's facilities, without having to pay for them in rates.
In the past, the additional shopping and hotel facilities created more rateable value to help pay their rates in places such as Bournemouth and other holiday areas. This is not so now. The rateable value no longer counts; only expenditure counts in determining the district rate. I ask that special attention be given to that fact.
I should prefer, as my right hon. Friend the Member for Crosby said, to see the rating system changed fundamentally, or abolished altogether. I thought that the review, to which so much reference has been made, was to be a review of the grant distribution system. If that be so, I hope that the right hon. Gentleman will give special attention to the point that I have been making. There is no doubt that there needs to be a change in the rate support grant basis, or else a supplementary grant provision should be made for towns providing services for more than the enjoyment of their residents. This could be done by amending the £154 rateable value per head of population to include at least a proportionate part in respect of annual visitors as well as just the residents.
Then there is the water authority sewerage charge. This shows an increase of 64 per cent. on the 1973–74 estimates for Bournemouth. It is a very steep increase. I know that, here again, Bournemouth expected to pay considerably more. We have been carrying through a major sewerage diversion scheme. But the new charge is about 14 per cent. more than Bournemouth's own expected costs, and I suspect that that may be due to the fact that we are having to carry a disproportionate share of the new administrative superstructure which has been created.
For domestic ratepayers, the Conservative Government's proposed relief was

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designed to cushion the impact of the changes in the grant structure which have been made. It may have been crude—I think that that has been widely accepted—and it certainly was not perfect but its intent was valid enough. In Bournemouth, it would have served to reduce the massive rate increase to 33 per cent., which is steep enough in all conscience.
The present Government's proposed flat-rate relief does nothing to cushion the changes in the grant system, and may even be giving additional relief to those areas whose needs have already been taken care of through other elements in the rate support grant. This will now mean that the domestic ratepayers in my constituency will have to face an increase of up to 40 per cent. That, quite honestly, is too much.
Here is one example. A typical three-bedroom semi-detached house in Bournemouth has a rateable value of £250. The ratepayer paid £88 in rates last year. In 1974–75 it will be £123·50, an increase of £35·50 per year, or 68p a week. These, as my hon. Friends have already said, are steep increases in budgets which, very often, have to be met by retired people and those on limited incomes.
If the Government want to help inner city areas, it could be done by increasing the overall Government assistance, without placing the additional burden on domestic ratepayers elsewhere, but better by far would it have been had they left things as they had been planned by their predecessors in Government.
Several Hon. Members rose—
Mr. Deputy Speaker: Order. If hon. Members would do their best to contain themselves within 10 minutes, all those who wish to speak would be likely to have an opportunity to be called. It is in hon. Members' own hands.
9.3 p.m.
Mr. Gwynoro Jones: Being a Welshman like your good self, Mr. Deputy Speaker, I will endeavour to speak within the time limit mentioned.
The former Minister of Posts and Telecommunications displayed a rather schizophrenic attitude towards the Rate Support Grant Order of the Government. We all recall the days when the Conservatives
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were telling the people of the country that Labour's programme was going to cost a very great sum. Yet this evening the right hon. Gentleman was pleading for more money to be handed out, and blaming this Government for rates having to go up although the pressures had been building up before. The former Minister in the Department of the Environment shook his head, as he used to do a great deal when he was a Minister, and said "Leave things as they were".
I speak as a Member whose constituents are suffering under this new order. Let me make one thing quite clear from the Welsh point of view. If we left things as they were under the Conservatives, Wales would lose £16 million. As a result of the order laid by my right hon. Friend, Wales is gaining £16 million. Thus, the argument does not fall consistently on both sides of the House. As one who is losing £70,000 in the Carmarthen district authority and some £5,000 or £6,000 in Dynefwr, I find the argument rather difficult.
Mr. Ioan Evans: Will my hon. Friend also add that in Wales there will be great benefit to 31 of the 37 districts as a result of the Secretary of State's action?
Mr. Jones: Yes, my hon. Friend is absolutely right in his assertion that the majority of the local authorities in Wales will be receiving significant increases, but five of them will lose £250,000. So the actual deal is £16 million more, but five authorities will lose £250,000. It so happens, as my hon. Friend knows, that two of the district authorities fall within my constituency.
Many hon. Members opposite will benefit from the new order. But what will they do at 11.30? This is the sort of bogus political situation in which we find ourselves in the Chamber tonight. Liberal Members, I understand, intend to vote against the order. I am sure that the hon. and learned Member for Montgomery (Mr. Hooson) cannot afford for one moment to oppose the order. He will benefit to the tune of 5p in the pound. The people of Montgomeryshire will be eager to know at 11.30 tonight whether it is party politics or the hon. and learned Gentleman's constituency interest which determines what he does.

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Many hon. Members have raised the question of what is wrong with the present rating system. Many hon. Members on the Opposition benches, including the former Minister—the person who was in charge for the last three and a half years—told us what was wrong with the system. The former Minister chided my right hon. Friend for not having made some major pronouncement within three weeks. We politicians are subjected to a great deal of cynicism, and that sort of argument coming from the right hon. Gentleman only adds to the cynicism that is creeping into our communities. The right hon. Member for Crosby (Mr. Page) stands to gain from the new order, yet he told the House how bad the order was. Is he talking as a party politician or as a constituency Member?
In that context, I should like to deal with the problem in Wales and within my constituency. The total impact must be assessed in comparison with what total assistance is being given. Under the Rate Support Grant Order Wales will receive about £229 million. The five authorities which are losing out on the deal are losing £250,000. That is the comparison, if one is to have any fair basis, that has to be made.
I come now to my own constituency. The Secretary of State for Wales, who was kind enough to meet me last week, listened while I expressed the anxiety of my district authority. I met the Carmarthen district authority last Wednesday. My right hon. Friend knows what I think of the fact that we are losing on the deal. When one is making a comparison and mentioning a figure of loss of support under the new order, it must be considered in relation to what is the total assistance given. In my new Carmarthen district authority, if things were left as they were then it was to have £776,000. Now it will have £1,076,000 assistance. Conceding, as I do, that it would have been £70,000 extra if the order had stayed as it was, it is still a significant increase in the grant and assistance given the year previously.
Clearly, we have to look at the way that local services are financed, and I hope that my right hon. Friend, given the necessary time, will ensure that we move away from the present rating system.
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I, for one, am not exactly happy that some rural areas are losing out to urban areas. In Wales, for instance, while my rural county is losing out somewhat on the deal, other rural counties in Wales are gaining significantly. One must not present it as just a question of town versus rural areas. We must look at the whole system afresh. We must get away from analysing, basing and meeting the costs of local services on the question of property values. It is high time we moved to a system based on ability to pay, on the income of the household, rather than on the property itself. Those on fixed incomes, young people, young married people with small children, have to meet an unfair burden quite frequently.
I hope that the Secretary of State for Wales, when he winds up the debate will give to those of us from Wales who are concerned at the loss of assistance from the Government an assurance that our case will be borne in mind when he reviews the system for the forthcoming financial year. We want him to realise that rural communities have burdens and stresses placed upon them just as much as the inner cities and metropolitan areas have. They are problems of a different kind. They are problems of lack of services. Indeed, when people in my constituency compare the services that they have—or have not—at their disposal and then compare their rates with other areas, they sometimes think it high time that services were provided for them commensurate with the rates which they are paying.
Therefore, rural communities expect in the new review a realisation by the Government that the problems are just as great, just as intense—albeit different—as the problems which urban areas and towns experience. I shall listen with great interest to what my right hon. and learned Friend says when he winds up the debate.
If hon. Members are to express their feelings in the Division Lobby tonight on a constituency interest, well and good. But if we are to witness "a grand old Duke of Sidcup" performance, with the Leader of the Opposition leading his troops—many of them benefiting under this order, but for some abtruse reason, deciding to vote against it to a man—

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I will not play that sort of game. If it is to be party politics, let the right hon. Gentleman say so. If it is to be constituency interest, that is a totally different matter.
9.13 p.m.
Mr. John MacGregor: I thank you, Mr. Deputy Speaker, for enabling me to catch your eye and to make my maiden speech in this important debate. I represent now the constituency of South Norfolk. It is with some surprise but great delight that I find myself following in John Hill's footsteps. I know with what warm affection and regard he was held both in the House and in the constituency. He is a most kind and sympathetic man who always did his utmost to help his constituents with their problems. Nationally, he had a wide range of interests over the 19 years that he spent in the House—agriculture, inevitably, but many others ranging from nursery education to long and sterling work in the cause of European unity. It is not only the people of South Norfolk who owe him a great deal.
I am a comparative newcomer to South Norfolk. There is a saying in the villages there that one is not accepted as a local until everyone who remembered one's coming has died. In addition to this slow acceptance of strangers, Norfolk has in the past been noted for its independence of mind, its gentle pace of life and its rural appeal. I stress "has been in the past", because all is now changing fast, and perhaps I, with a fresh eye, can see it most clearly.
The independence of mind is still there. The rural appeal is still there. Indeed it is a delightful county with long landscapes and fascinating sky views. Agriculture is still important, and Norfolk is well placed to make a large contribution to the expanding agriculture which our nation now so badly requires.
But agriculture no longer dominates. It is an interesting fact that, however widely the agricultural community is defined, it contributes only 20 per cent. of the South Norfolk work force. The remainder is to be found to a large extent in small to medium-sized industry, with Thetford playing a major part as a large overspill town from inner London. It is an overspill that has been done most
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attractively. The remainder is divided between small and medium industry and the large proportion who go to Norwich each day as part of the commuted work force for this expanding commercial centre.
If in this debate I dwell a little more on my constituency than is customary, it is because it is relevant to the debate itself. There are two other factors about South Norfolk which I should like to bring out. The first is that, in common with many other counties, it has a fast expanding population, with the expansion concentrated among the young, the young married couples, who are making such heavy demands on the schools in Norfolk, largely as a result of the overspill, and on the old, for Norfolk has been found to be a place very attractive to the retired: indeed, the proportion of over-65s in Norfolk is some 20 per cent. above the national average. They have come there because, until recently, and certainly now, Norfolk was a cheaper place in which to live and to eke out one's savings in retirement. So the fast expansion of the population is a relevant factor to Norfolk's local government services.
But the second factor, which in my view is equally important, is that, unlike many other counties, this population is evenly spread throughout the large expanse of South Norfolk. It is concentrated in small villages, sometimes tiny hamlets, and small towns, rather than in two or three major expansion areas. This inevitably creates immense problems for local government services. I might add that this combination makes it, as I discovered during the election campaign, one of the largest constituencies not only in terms of size but in terms of population.
I turn to the question of the rate support grant. I know that it is the custom to be non-controversial in one's maiden speech—though I am comforted by the remarks of the hon. Member for Gloucestershire, West (Mr. Loughlin) and certainly by many of the preceding speeches. I should like to take this opportunity to make clear to the House the serious situation facing many of my constituents. If not non-controversial, certainly I shall be non-partisan, for if I were to scatter shot, I should be spreading it evenly to many targets.

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I recognise well the merits of the original objectives of the reform of local government finance and of the rate support grant, but I think that the new system has clearly created anomalies, as it was bound to, and we must hope that they will quickly be put right. My aim in the remainder of my remarks on the rate support grant is to be constructive and to draw attention to some of the lessons which I think have occurred in its application to Norfolk.
I speak here not only of my own constituency, but of Norfolk as a whole, because I know that my concern is shared by all other Members for that area, and in one district council I share the problem with my hon. Friend for Norfolk, South-West (Mr. Hawkins).
The facts for the domestic ratepayer—it is he on whom I am concentrating—are that on average he faces an increase of 55 per cent. this year, though this may not be as bad as the worst constituencies, for in some districts in south Norfolk the increase is as high as 80 per cent., or just over. That 55 per cent. average is composed of three elements.
About 15 per cent. of it is due to the inevitable consequences of inflation and the need to provide for the growing population; that is to say, it would have been an increase of 15 per cent. were not the rate support grant system altered. A further 18 per cent. is due to the reforms carried out under the previous Government. But the catastrophic change has been produced by the remaining 22 per cent. as a result of the action of the present administration.
I know that the total rates payable in areas like Norfolk are lower than many parts of the inner urban areas. But increases of this order play havoc with the budgets of the people in the areas concerned and for many who are just above the minimum level for the rate rebate relief. They have equally serious problems. It especially applies to many young married couples who have come in and inevitably paid the high house prices and increased mortgage rates. It applies also to the retired who are trying to make their retirement pleasant on small savings. Bearing in mind that the area has one of the lowest average incomes in the country, it is clear that rate increases of this order represent serious consequences for the people.
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This rate increase of 55 per cent. compares with what the grants working group last autumn originally thought for Norfolk would be an increase of 2·1 per cent. The main factor, indeed, has been the loss of £12 million in the Government grant.
What, then, has gone wrong to produce this unexpected result? There are four factors to which I should like to draw attention and which I hope the Government will take into account in their review of the system next year.
The first factor is that the switch from the so-called rural to urban areas has been too sudden and too drastic. Almost half the loss to Norfolk has been caused by this switch. I speak with an interest as I am an inner urban ratepayer. But I well understand the local reaction of many of my constituents, who realise that, while they have the benefit of country living, they have at the same time the disadvantage of having only few of the facilities provided by local government services that their urban counterparts have.
I have had shoals of letters on this theme, and I should like to quote from just one. It says:
"We live in a small village with no street lights, no road sweepers, no paths for our children to walk on. We are very lucky, we do have a bus which runs about three days a week, at one a day. So why have we got to pay more rates to subsidise the city when we do not benefit from the facilities?"
That lady may well have added that they have no sewerage, no other facilities for children, such as swimming pools, no libraries, and so on. They pay heavy transport costs which have to be provided by their own car.
When one remembers also that these same so-called rural areas are, as I have said, areas with, on average, low incomes, and that they are also areas which are helping to ease the inner urban problem by taking a lot of the population from inner urban areas, at great expense to themselves, one sees the justice of the case that this switch from the rural to the urban areas has been too sudden and too drastic.
My second factor relates to population density. It seems, though we still have to see further evidence, that the old system of working out the population density on road mileage per head of population, rather than acreage per head

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of population, might have been more accurate and fairer. It more accurately depicts the picture of an area like South Norfolk, which has a large population but it is spread evenly throughout several hamlets, compared with one where the population may be concentrated in two or three centres in an otherwise large area with mountains, moorland, and so on in between. I believe that the formula for dealing with population density should be looked at again.
My third factor is the effect of a fast expansion in population. In South Norfolk it is now six times the national average and growing proportionately all the time. I do not believe that the significance of this on local authority services is yet properly reflected in the formula. It is not just the fact that there is a loss of two years' revenue, because the formula relates to population two years previously. In South Norfolk's case it means that an extra 21,000 population have not been catered for.
I think the point is much more that in areas such as this the expansion of population means that old small villages are doubling in a short space of time. Their facilities, which were adequate to cope with the problems they faced, say, five years ago, such as local schools, are now no longer adequate. Therefore, areas such as those face an inevitably heavy local government programme that must be reflected in their costs.
The fourth factor is the change back from the variable relief system to the fixed rate system, of which we have heard so much today. I shall not add to what has already been said, because the point has been extremely well made, most of all perhaps by my right hon. Friend the Member for Finchley (Mrs. Thatcher). But I believe that it is fair to say that at least the variable rate relief element took account of the situation for ratepayers, such as those in my constituency, who are facing this sudden and dramatic increase. Measures taken in haste such as this are rarely good measures. They always have their rebound, and today we have seen the effects of that rebound.
Three of the four factors I have talked about have one thing in common, namely, to show that some recognition should be given to the extra needs of so-
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called rural areas that are seeking to help the inner urban areas by taking their population, just as much as recognition needs to be given to the inner urban areas themselves. I hope that that will be reflected by returning to the proposition put forward by the previous Government in respect of the rate support grant this year. If not, I ask the Government to ensure that it should be reflected in the increase order this year, if there is one, and in the new formula to be arranged for next year.
9.26 p.m.
Mr. Phillip Whitehead: It is a special pleasure for me to be able to congratulate the hon. Member for Norfolk, South (Mr. MacGregor) on his fluent and moderate maiden speech. As one of the other maiden speakers was reminded by my hon. Friend the Member for Gloucestershire, West (Mr. Loughlin) tonight, we are allowed hon. Friends on our own side of the House—and not all of them at that. However, we have friends throughout the House and across the whole spectrum of political life. After long acquaintance with the hon. Member, I want only to say that his auspicious debut in our proceedings today augurs well and bears out everything that all his friends in the House would have wished.
I congratulate, too, all the other maiden speakers on both sides who have spoken. I see only the hon. Member for Leominster (Mr. Temple-Morris) in the Chamber at the moment. I assure him that if there have been occasions in recent years when we have forgotten how to pronounce the name of his constituency, or of the former sitting hon. Member, I believe that those days are now over and that we shall hear often from the hon. Member.
I appreciate my right hon. Friend's dilemma. I applaud the spirit of egalitarianism in which he has attempted to bring back the fixed rate of domestic support. When the hon. Member for Stretford (Mr. Churchill) said earlier that there was a degree of gerrymandering involved and that this was a shift over to help those who were in Labour seats, I think that he knew not what he said. If my right hon. Friend's considerations have been marked by anything, it is by a certain lofty disregard for those who

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enjoy majorities which are not on the sunny side of safety.
As my right hon. Friend said, the variable element in domestic rate support grant has clawed back from the conurbations what they should have had under a proper breakdown of needs and resources in the domestic element. So the sum of £446 million has been redistributed. The overall level has not been increased, as many of us had hoped, and it is an open matter whether the redistribution that has occurred is more than the rough justice which my right hon. Friend described.
It is indeed rough justice. Following the last revaluation, many of our constituents faced a heavy burden. I quote part of a letter I have received which is typical of many. The writer, a shop steward and a man of limited means, writing about the last Government's rate increases, says:
"During a year of rocketing interest rates, in 1973 we were presented with a revaluation, which transformed our rateable value from £68 to £254,…an increase of 44·5 per cent. Now we are told the rate levy is to be 45p in the pound which is a 31·5 per cent. Increase.…Surely some consideration is overdue to people in our position…who are prey to Government whims…and moves which have put vast profits into the pockets of certain sectors of our society, certainly not the working classes."
Now I must tell the writer that in Derby it is not 45p but 48p in the pound. In Derby, which is represented by my hon. Friend the Member for Derby, South (Mr. Johnson) and myself, we are losing 3p in the pound. The hon. Member for Stretford said that 1½p in the pound was a colossal disaster, and went on to define the disaster as being every cut-back that has occurred over the last two years, all ascribed to that 1½p on the rates. I do not take that line, but I contend that 3p is a lot and will be seen as such.
Other Members are in a worse situation. My hon. Friend the Member for Belper (Mr. MacFarquhar) represents two local authorities which will lose 4p and 4½p respectively. My right hon. Friend says that the problems of the cities are severe and acute and must be met by redistribution in an egalitarian sense. I must in fairness say to him that the problems of many of the towns that now find themselves in the new county areas are also acute and severe.
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For many years we have been reminded of the nature of the problems. That well-known Labour voter, the former right hon. Member for Wolverhampton, South-West, Mr. Enoch Powell, was always reminding us of the problems which had been brought to the cities and towns by immigration. We have problems in Leicester, Wolverhampton, Derby and many other places which directly derive from acute problems of urban renewal and the burdens on our schools, roads and hospitals, and so on.
Many authorities in such situations now find themselves with marginally aggravated problems as a result of what has happened. They are facing, anyway, large increases in costs. The right hon. Member for Bournemouth, West (Sir J. Eden) mentioned the heavy superstructure of local government, which is now an additional cost facing many local authorities. Who brought that about? Certainly it did not result from the shift in the domestic rate support grant. In addition, many of the new local authorities are coping with the effects of the December budget and the savage effects of the past year's inflation on their costing, and, as hon. Members have mentioned, with the increased sewerage and water authority charges.
It is not only the local authorities and the owner-occupiers—who have probably preoccupied us with their protests over the last week—who have been affected. Everybody is affected. The right hon. Lady the Member for Finchley (Mrs. Thatcher) made light of the problems of council tenants. Council tenants are also ratepayers, and they now find themselves in a situation—particularly if, as in my constituency, they pay rent and rates simultaneously—where, as they see it, they face not one but two rate increases. This has tended to vitiate many of the good things that have been done including the freezing of council house rents, which I particularly applaud, in what has been a good and auspicious start for the Government.
Many of us on this side are awaiting more assurances than we have had regarding the Government's proposals, not just until 1st April but during the next year or two. If I vote for this order tonight, it will be mainly because I feel that most fair-minded people would probably give

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the Government nine out of ten on their performance so far, making this the tenth point.
There have been a lot of interruptions from the hon. Member for Louth (Mr. Archer) and others, asking us why we did not choose to abstain or vote against the order so as to provoke some kind of Government crisis. I remind the hon. Gentleman of the definition given by a former Leader of the Conservative Party, Mr. Disraeli, of the difference between a disaster and a catastrophe. He said that if Mr. Gladstone were to fall into the lake that would be a disaster. If anyone pulled him out, it would be a catastrophe. I do not pursue that analogy to say we have a disaster before us, but in this situation many of us feel that to have the Government defeated tonight and asking for a vote of confidence on Budget Day would be an absurd situation, little short of catastrophe. It would be directly opposed to the many good things which have been done by this administration so far.
What we are looking for are reasonable proposals for long-term reform. When the Secretary of State for Wales winds up, we want rather more than the one or two general statements which we had from the Secretary of State for the Environment when he opened the debate.
On 12th February of last year I introduced a Private Member's Bill on the subject of rating reform. I am somewhat amused at the conversion today to widespread rating reform of the right hon. Member for Crosby (Mr. Page) who then replied to that debate. The Damascus road is crowded with converts at the moment. The right hon. Gentleman at that time spoke of the Department of the Environment being papered with White Papers and Green Papers. He hid behind those papers at the time. He had no wide-ranging proposals for reform then.
I repeat what I said in that debate. I recommend to my right hon. Friend that we want to hear at the conclusion of the debate proposals for the overall reform of the rating system. We should like to see the alleviation of the imbalance in the last rating revaluation which shifted the balance to the domestic ratepayers, partly because of the fantastic inflation
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in house prices and house values which had occurred.
We should like to see the elimination of rating relief on second houses. We should like to see a shift in the burden of valuation from property to the income of householders, which is a less regressive system. We should like to see consideration given to various services being taken from local authority responsibility. Education is one that comes to mind in this area.
Finally, although it can be no more than a palliative on the margin, we should like to see supplementary methods of raising revenue. Local sales taxes, for example, have often been discussed in the House, but they have never been taken seriously by successive Ministers, nor have proposals for examining them been brought before the House.
In the book which he commended to the House in his opening remarks, which is a snip at something less than £4, my right hon. Friend says that rates are certainly unpopular and in many ways unsatisfactory. We all know that. They will always be unpopular, but there are ways of making them less unsatisfactory. Tonight is the night when we want to hear how that should be done.
9.38 p.m.
Mr. Fred Silvester: I am proud that my reincarnation in this House should be as Member of Parliament for Manchester, Withington.
Manchester, of course, does not require any singing of praises by me. Its history as the cradle of industrial power in this country is well known. It is perhaps appropriate that I came to the House today from the opening of the extension to the international airport at Manchester, which will serve to remind us of the continuing power which that great city will wield in this country.
My constituency has within it a number of important medical centres which I shall probably mention again from time to time. We not only have the great Withington hospital itself, but there is the Christie Hospital and the Holt Radium Institute, of international repute for their work in the cure of cancer. There is also the pioneer work of Duchess of York Hospital for Babies.

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I am proud to succeed Sir Robert Cary, who represented Withington for 23 years. He had been a Member since 1935. He fought every election since 1924 and had the distinction, which must be rare, of piloting no fewer than two Private Members' Bills through the House—something I should like to emulate, given the opportunity. His experience was much appreciated in the House, and I know that his voice, which has spoken for Manchester and the North-West, is well remembered in the constituency which he represented.
I want to make a few simple points about the order, and I begin by referring to a misrepresentation which has come up time and again, in speeches not only from the Government side of the House but in councils up and down the country, namely, that the amendment to the rate support grant which the Secretary of State has introduced is responsible for the redistribution of support from the counties to the big cities. In fact, the most important part of that redistribution was carried forward by the order laid before the House by the previous administration.
If one takes the general rate for a city such as Manchester, it will be found that most of the benefit that will accrue to that city derives from the previous order. In Manchester, the increase in grant was £11·6 million—that is, a 43 per cent. increase—all deriving prior to the election. It accounts for 14 per cent. of the total budget of that city. It is most important, therefore, that we should understand that, despite protestations from politicians, the advantage to the city of Manchester and to the inner cities is one that has been available to us both before and since the election.
I have been speaking of the general rate because I wish to remind the House that it is with this rate that most people who are in business or who are shopkeepers are concerned. Some have amelioration when they have a mixed rate. But for many shopkeepers it is the general rate that matters, and the general rate will not be affected by the change which this new order makes.
I hope that the House will forgive me for pressing the case of shopkeepers in this respect, but they are increasingly overlooked in the discussion about the domestic rate. My hon. Friend the Mem-
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ber for Reading, North (Mr. Durant) referred to it in his maiden speech. In my constituency, there is a large number of small shops that form an important part of the pattern of life for the community, which has an above-average number of elderly people. They have become used to that form of shopping, and it is very important to them.
It is worth remembering, too, that under the present order of the Price Commission on retail margins, although small shops are excluded, they will be under increasing competitive pressure. To add to that an additional rate burden is to ask too much when there are already so many pressures to keep them on their toes.
So much for the general rate. If one adds to that the 7p already available on domestic rate relief under the old order, it will be seen that for cities such as Manchester so much money had already been given that it was possible for a prudent authority to reduce the domestic rate. That was before the present change was made. Manchester is one such authority benefiting from the change being made between the two orders. The Secretary of State is beleaguered both behind and before by people getting at him because their rates have been increased.
We are now offered another 6p in the pound. I must make two points about that. First, I reiterate that the amount which that gives to Manchester is small beside the amount already available to it under the old order. Second, I am always glad that my constituents should be relieved of any obligation to pay more rates, and I shall not look a gift horse in the mouth. But I can understand the anger of my right hon. and hon. Friends when they see that the other end of that horse has a vicious kick. Those people will be badly affected. My area, Manchester, will certainly gain, but very little compared with what it was already gaining under the old system, and at the cost of a great deal of unhappiness in other parts of the country.
One of the most unpleasant aspects of the order is that it is frequently debated in terms of setting the town against the country. That will mean conducting this debate in no good manner, and it will reach no sensible conclusion.

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There are two important aspects of the rating system which the order does not cover but which we shall have to meet. The first is the efficiency of local government expenditure. It may have been asking a lot to require local authorities to keep their growth in expenditure this year to 13 per cent., but it cannot be wrong to ask local authorities, which are now responsible for a third of total public expenditure, to make a contribution to increased financial discipline in times like the present. Manchester, for example, will have a rise of 25 per cent. in its expenditure, which to say the least is unhelpful and badly timed.
The second thing that we must do is find a way of making the system fairer. Hon. Members have discussed the differences between authorities. It is also worth pointing out that within one city there may be great unfairness. There are people in my constituency who are forced to contribute to the services required for big city administration but get little benefit from them. We are well used to this in national taxation—we do not expect to get back exactly what we pay in, but in the case of rates this is not a fair system. Why should a single householder be required to pay more rates than someone with several adult incomes coming into the same house? That is an unfair system which we shall clearly have to rectify.
I was interested in the proposals of my right hon. Friend the Member for Crosby (Mr. Page), who I am sure the House heard with great attention. One thing which I hope we shall all concentrate on as a result of the order is the fact that the problems of the inner cities arise from the pursuit of national policies. They will have to be paid for nationally, and services like education will have to be taken out of the local rate. By this simple stroke we should make it possible to debate the rate support grant order of the future with this unfortunate division between town and country greatly ameliorated.
9.59 p.m.
Mr. Leslie Huckfield: I am not sure whether it is within the traditions of the House to accord the same congratulations to a reincarnation as to a maiden, but I offer my congratulations
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to the hon. Member for Manchester, Withington (Mr. Silvester), not least for disappearing from Walthamstow and reappearing in Withington. I am sure that the House has benefited from his experience both tonight and when he was last here.
I should also like to pay my tribute to the hon. Members for Leominster (Mr. Temple-Morris) and Reading, North (Mr. Durant) and to my hon. Friends the Members for Thornaby (Mr. Wrigglesworth) and West Bromwich, East (Mr. Snape), as well as to the other hon. Members who have spoken tonight.
While the maiden speeches were flowing thick and fast, I took a look at the league table of relief published in the Municipal Journal on 1st March 1974. In that table, on page 221, was listed the relief that every district was due to receive under the old order. It showed those Conservative Members whose constituents were due to receive 5p and all those who were due to receive 13p. It is amazing the number of "15p shouts" we have had from hon. Members whose constituents would be affected to the extent of only 2p. However, the cries of protest from Conservative Members have been quite incredible. On the other hand, many of my Labour colleagues have far more ground for protest because of the situation in which their constituents have been placed, and their cases should have been heard far more than the cases put by Conservative Members.
I make no apology for the fact that I represent a district council—as it will become on 1st April—which, under the order, will lose domestic rate relief of 12½p. Many of my constituents have already protested to me about the effect of the order—[An HON. MEMBER: "Then vote against it!"] I am quite prepared to make my own speech without any assistance, and I intend to do so. Many of us have had difficulty in accepting the formula on which the old system of rate relief was based. A system which traditionally benefited only rural areas and did not offer some succour and comfort to urban areas was not particularly palatable to Labour Members.
Many of my constituents understand the pressing problems of areas such as central London, central Manchester and many of the areas that will benefit from this new order. However, they wonder

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whether my right hon. Friend the Secretary of State for the Environment fully understands the pressing problems in many of the smaller towns which now find themselves in non-metropolitan counties.
I represent a constituency that is not in the West Midlands metropolitan county but is in the new county of Warwickshire. When we consider the kind of rate relief which my constituency was accorded in the old system and see the way in which the situation has now changed, we note that the new rate support grant order appears to impinge on those towns which are outside the metropolitan counties but still have a tremendous number of services to provide. Some rural areas have suffered smaller cuts than has my constituency, but constituencies such as mine must continue to provide services. This underlines the problem that we now face.
It is difficult for the authorities in my constituency to sustain a reduction in rate-borne expenditure, particularly when it is appreciated that in Nuneaton 48p out of 60·7p is beyond its control anyway. I understand from the treasurer of my authority that even if a reduction from 60·7p to 60p could be achieved—although that would have the effect of cutting the potential expenditure available to the council by £116,400—it would save ratepayers only some £79,100. In other words, a cut of that magnitude to try to save expenditure would have serious effects on the spending programme of the district council but would be of little help to domestic ratepayers. Because of the level of services it has to provide, an authority like mine does not have available to it the opportunity to make cuts in expenditure, as do, for example, some of the authorities that do not have to provide so many services.
Let us consider the kind of rate expenditure which will impinge on an authority like mine. Of the 60·7p rate, 41p comes from a Tory-controlled county council which increased its rate and proposed the new rate even before the General Election. When we consider the kind of services which the new counties have to provide, especially their extended remit in health and social services, we are forced to ask why, if the Conservatives were so keen to reform local
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government and to have the new county councils carrying out far more functions, they did not give the county councils more money to do the job. I cannot help feeling in view of some of the rate calls mentioned by hon. Members that the bulk of them arise from the levy which comes from the county councils who declared their rates before the election. To blame all that on a Government who have been in power for a few weeks is just not on.
As a result of the orders the average domestic ratepayer in Bedworth will have to pay an extra £32 per year, or 62p per week. In Nuneaton, the average domestic ratepayer will have to pay an additional £33 per year, or 63p per week. A person now paying £100 for the general and water rate in Bedworth will find himself paying 85p more per week. A person now paying £100 for the general and water rate in Nuneaton will have to pay an extra 90p per week. These are not trifling amounts, or amounts which my constituents can take lightly. Many of the council tenants thought their rent had been frozen by the Government's proposals, but the freeze on rents is more than cancelled out by the increase in rates. That raises the question, what is the average benefit of those two proposed pieces of legislation?—a point that my constituents have been raising with me over the weekend.
We cannot escape from the fact that whichever way we reform the rating system someone is bound to get hurt. There have been speeches from both sides of the House calling for a reform of the rating system, but any reform will mean that someone will gain and someone else will lose. I believe that that is a consequence of reforming local government without reforming local government finance. When in Government, the Conservatives were keen to reform local government and to create these larger areas. I wish to goodness that they had dealt in much more detail with the bigger problems that they were creating.
My right hon. Friend has already had a telegram from my two local authorities. He or my hon. Friend the Under-Secretary will see a deputation tomorrow morning. I know that the deputation will be told that increased rate rebates are available from 1st April—rebates

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that were instigated not by the Conservatives but, I believe, by the previous Labour Government. For the Conservatives to claim the credit for the bigger rate rebates is rather like the hon. Member for Stretford (Mr. Churchill) trying to say that everything that happened in his constituency in the last two and a half years was because the Labour Government proposed to lop l½p off his domestic rate.
My constituents will face a serious prospect unless there are measures in the Budget about mortgages. They are in a serious position because of the loss of domestic rate relief which they will suffer under the order. I know that my right hon. Friend may believe that he understands the full compass of the problems which have been presented to the House, but I do not think that he has so far taken sufficiently into account the problems of urban areas outside the metroplitan counties.
There have been protests from hon. Members on both sides who represent rural areas. Incidentally, most of the areas which appear to be hardest hit are represented by the Liberal Party, but it has not been much in evidence in the debate.
I am not sufficiently satisfied that my right hon. Friend has understood the problems of areas like mine and I hope that in the concluding speech for the Government there will be greater succour and comfort than there has been so far. I hope that greater understanding will be shown, whether it be in an increase order which, I am told, is still available, or through some other interim measure, which I understand is possible. Unless greater succour and comfort is forthcoming, or greater understanding is shown, I shall have great difficulty in supporting the order.
Mr. Teddy Taylor: On a point of order, Mr. Deputy Speaker. It is now clear that the debate on this very important order will continue until at least 11.30 p.m., which means that the Scottish order, which is equally important and which will affect the rates paid by people all over Scotland, will be debated from 11.30 p.m. onwards. This is outrageous when one considers the importance of the business. Will you ask
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the Leader of the House to make a statement saying that he agrees that in view of this important debate continuing until 11.30 p.m. the Scottish order will be discussed tomorrow? It would be an insult to ratepayers in Scotland if the important order relating to Scotland were not discussed until the small hours.
Mr. Deputy Speaker (Mr. Oscar Murton): I understand the hon. Gentleman's concern, but the Chair is governed by procedure laid down in Standing Order No. 3(1)(b) which refers to
"proceedings in pursuance of any Act of Parliament …"
and states that:
"… Mr. Speaker shall put any questions necessary to dispose of such proceedings not later than half-past eleven o'clock or one and a half hours after the commencement of those proceedings, whichever is the later".
It is in this case 11.30 p.m.
Mr. Taylor: I appreciate that, Mr. Deputy Speaker, but surely it does not prevent the Leader of the House, or the Chief Whip, from agreeing that the Scottish order be discussed tomorrow. I realise that we have the Budget tomorrow, so perhaps the Scottish order should be discussed on Wednesday. There is ample time this week for a proper debate on this vital order.
English Members have rightly shown that the order affecting England is important and needs a lot of time to be debated. The Scottish order is just as important. It would be scandalous to discuss it after 11.30 p.m.
Mr. Deputy Speaker: The Chair is bound by Standing Orders and, as such, in this case it should be 11.30 p.m. before this debate is concluded.
Mr. Ian MacArthur: Further to that point of order Mr. Deputy Speaker. With great respect to you, I recognise that you are bound by the Standing Orders of the House, but is there no procedure, in circumstances of this kind, whereby the presence of the Leader of the House can be expected at ten o'clock, when it was widely expected by hon. Members on both sides that we would start the debate on the Scottish order. This is not only a matter of concern for Scottish hon. Members. There are 149,000 tenants in Scotland who are

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paying no rent because of the Conservative housing policy, and they are waiting anxiously to hear the result of the debate tonight—
Mr. Deputy Speaker: Order. The hon. Gentleman is getting a little wide of the mark. The question of a decision by the Leader of the House is no concern of the Chair.
Mr. J. Bruce-Gardyne: Further to that point of order, Mr. Deputy Speaker. We all appreciate that you are placed in a difficult position in these circumstances, but the English order has
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now been discussed for six hours, and it is apparently proposed that the Scottish order, of at least equal importance to all the ratepayers of Scotland, is to be confined to the watches of the night. May we submit, through you, that there is an urgent case for the Leader of the House now to make arrangements to take the Scottish business at a more suitable time on another occasion?
Mr. Deputy Speaker: The hon. Gentleman is quite wrong in this matter. It is no concern of the Chair, and he is taking up the time of the House when many hon. Members are still waiting to speak.
10.6 p.m.
Mr. Michael Alison (Barkston Ash): The Secretary of State for the Environment started his speech today with a reference to the rather disagreeable environment in which he found himself in that vast building where he now lives. I warn him of one occupational hazard he will find as he gazes out of the ninth floor of that great building across the panorama of London, taking a bird's eye view of things. Many of the mountains that confront people close to the ground will appear to him from a great height to be much flatter than they really are.
In dealing with the order we must adjust all our thinking. I beg the right hon. Gentleman in particular to adjust his thinking to a worm's eye view of what is implied for individual families or householders in specific houses in specific localities. Not enough attention has been paid to what is now crowding in on individual householders as a result of the various hazards that have cropped up in their lives, partly as a result of events during the life of the last Government and partly as a result of what the right lion. Gentleman is doing tonight.
The right hon. Gentleman will know, as an economist, that there are many elements in the costs that householders now have to bear for which there is no substitute in alternative forms of expenditure. There is virtually no dodging the burden that a mortgage now places upon the householder. He cannot switch to an alternative form of consumption in that sector. There is nothing he can do about the impending enormous increase in the cost of electric lighting and heating.
On top of all that, we now come to the hazards to be presented to some households by the change from the old variable formula which my right hon. and learned Friend the former Secretary of State had proposed. I want to remind the Secretary of State of what those hazards mean to a typical family. I take a house in the town of Selby in North Yorkshire, one of the areas disadvantaged by the order. I hope that the right hon. Gentleman can enter sympathetically in his imagination into the
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family life of those in a three-bedroom semi-detached house with a rateable value of, say, £250 under the last revaluation, where the householder was paying a rate of £78 in 1973–74.
As a result of what the right hon. Gentleman is doing in the order, that rate will go up to £120. I have here a specific example provided for me by the county treasurer of North Yorkshire. It gives the original notification, before the present order, after taking account of subsidy in 1974–75. I shall pass it to the Secretary of State. If the original notification under the variable formula had applied, the householder paying £78 in 1973–74 would have found that his rate had gone up to £103. As a result of what the right hon. Gentleman is doing tonight, he will be paying a rate of £120. Compared with 1973–74, that is an increase—and it is by no means the most astronomic—of £42 a year. That is nearly an extra £1 a week and is a rise of 54 per cent. The Selby District Council sent me a telegram which indicated that some householders would be paying more—up to 75 per cent.
I hope the right hon. Gentleman appreciates that for a family with perhaps no great income, having had to face increases in mortgage repayments and facing impending increases in electric heating and lighting charges, the sort of rate increases which are now implied by the order are little short of catastrophic in personal terms. They turn the phenonomen of inflation literally into a spectre. If the right hon. Gentleman is unable to perceive, with his casual throwaway use of the phrase "rough justice", what such increases will mean, he must accept that the order implies something in which justice plays little part. "Roughly" is an under-statement of the impact upon the individual. The right hon. Gentleman must take away the order and rethink it.
Mr. Crosland: The hon. Gentleman is a person of great integrity. Does he agree that the increase in mortgage rates to 11 per cent. was nothing to do with the present Government? Does he agree, on the basis of the figures which he has quoted, that the greater part of the increase in rates which people in Selby will suffer is due to the previous

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Government's rate support grant and not to the change which I have made?
Mr. Alison: I cannot accept that. I told the right hon. Gentleman that the increase implied by the order represents another £17. I have already given him the figures. I have told him what the original rate would have been in 1973–74. Under the original notification the rate would have gone up to £103. That is serious enough. Under the new notification it has gone up another £17 to £120. I hope that the right hon. Gentleman takes the point which I am making. It is no good harking back to whose responsibility it is. If right hon. Gentlemen want to try to comfort honest citizens in the community, they should think about the future. It is the future which is implied in the order. By harking back to whose responsibility it was that mortgage rates increased, or who is responsible for impending increases in coal, fuel or lighting charges, the Government are betraying the trust that people put in them.
The people put trust in Parliament, and it is the future about which we should be concerned. The right hon. Gentleman has brought forward an order which he has not properly thought through. The order has not been considered from the worm's eye point of view. It has not been considered in relation to all the other matters like extra coal costs, which will be disastrous for many people. The right hon. Gentleman must bear in mind that in some cases folk are facing another £1 a week in extra rates as a result of what is implied in the order.
The right hon. Gentleman talked in a casual way about rough justice. He put it forward with something of an old-fashioned smile as if everyone in politics is accustomed to this sort of thing. He then threw in, to make matters worse, the concept of egalitarianism as the basis for justifying his rough justice as the guiding principle of this measure. However, he has not even got his egalitarianism anything like approaching right because he bases his argument for the new order upon the need to do something special for the inner city areas.
It is ludicrous to pretend that those areas are as seriously disadvantaged as
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he chooses to pretend when we bear in mind that many such areas contain a lot of relatively well-to-do people. Even if they contain a lot of poor folk, the rate rebates apply to them and there is a genuine cushioning effect to that extent. Further, the total formula upon which rate support grant is distributed contains the needs and resources element, specially tailored to inner city areas. Thus overwhelmingly the largest part of the rate support grant specifically takes into account in a deliberate way the special needs of inner city areas.
The situation is ludicrous in that places in London like the city of London, the Royal borough of Kensington and Chelsea, the city of Westminster, Barnet, Bexley, Royal Kingston-upon-Thames and Richmond - upon - Thames—these poor, neglected inner city areas—are to get special help from the Secretary of State. But what is he doing for Yorkshire? The premier and largest county, as the Comptroller of Her Majesty's Household, now silent, unfortunately, because of his trappist vows, knows, is split into north, south and west. It contains 17 separate districts. No fewer than 15 of them are disadvantaged by what the Secretary of State is doing. Only two get any sort of advantage.
Where is the egalitarianism there? Where is the right hon. Gentleman's desire to help the poorer parts of Yorkshire? There is nothing egalitarian about his formula. It is haphazard. Such is the inaccuracy of the right hon. Gentleman's aim that nine-tenths of the largest county will be outside the range of help he wants to give. Most of Yorkshire will be outside that help because the right hon. Gentleman wants to do things for places like the city of London, the city of Westminster and other places in the capital. It is a ludicrously rough form of justice.
It is no use simply saying that we must look at long-term ways in which to inform the system. As my right hon. Friend the Member for Finchley (Mrs. Thatcher) pointed out with great insight, there is ready to hand something which the right hon. Gentleman could do, not next year but in the Budget tomorrow or very shortly afterwards. He could turn again to the method which my right hon. and learned Friend the Member for Hexham

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(Mr. Rippon) introduced when revaluation imposed extra burdens on householders. My right hon. and learned Friend introduced special ad hoc relief.
My right hon. Friend the Member for Finchley reminded the right hon. Gentleman that on 6th March last year the then Government announced their intention to give some relief to those domestic ratepayers whose rate bills would increase substantially in 1973–74 as a result of revaluation. The details of the relief available were given in Circular 34/73. The relief payable was half the amount of increase over 10 per cent. in domestic rate bills arising purely as a result of revaluation.
Why should not this precedent be followed now? In financial terms, it is clearly available. The Government have found it possible to produce £20 million for bread subsidy and to make extra finance available following the freezing of rents. Why not, therefore, adopt this simple method of ad hoc relief? The method for revaluation relief was first to calculate a factor representing the increase in rates which would have arisen in 1973–74 because of changes in rate-borne expenditure, discounting revaluation, and then to add 10 per cent. on to it; and any ratepayer whose bill for 1973–74 exceeded his 1972–73 assessment, multiplied by the factor I have described, was entitled to relief as to half the increase.
Why should not this formula be applied to the extra element of reorganisation costs now in place of the revaluation factor? It would not cost a large sum of money. It would be a practical step, and one which we would expect of the right hon. Gentleman.
If the right hon. Gentleman is unable to offer help generally to Yorkshire, where so few areas are to get advantage from what he is doing—and even the rates of towns like Wetherby, helped under the order, will still go up over 50 per cent.—then hardship will result. It is vitally necessary in the exceptional circumstances of reorganisation for him to do something practical.
Many hon. Members have expressed grave disquiet. We have to focus upon the deeply worrying circumstances now beginning to press in upon householders.
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If the Government mean anything at all in terms of egalitarianism and justice, let alone rough justice, they will bring forward a special measure of relief to take account of the special circumstances of this year. If the right hon. Gentleman or his colleagues cannot give an assurance on this point, then I, representing a Yorkshire constituency, will have no hesitation in voting against the order.
Mr. Deputy Speaker: Order. Before I called the next hon. Member I would point out that there is not much time remaining and that quite a number of hon. Members still wish to speak. Short speeches would be most acceptable.
10.21 p.m.
Mr. Paul Tyler: I have a special interest in this debate in that I am a ratepayer in the district which is hardest hit by the revised rate support grant. I heard an hon. Member saying that he was to be affected to the tune of 1·5p. I was surprised that he dared to rise to his feet at all. My district is, we understand, to suffer a cut in grant of 27p in the pound. Despite that I have some sympathy with the right hon. Gentleman's intentions. I accept that there is a need to assist the lower income areas of the country, that they must be given the opportunity of greater income and that they must have the burden of increased expenditure taken off them.
Similarly I see that the central areas of our great conurbations have special problems and needs and require special encouragement. It is equally important that we recognise that the figures worked out by the previous administration were not compatible with those aims and intentions. My point is that two wrongs do not make a right. Two half-baked schemes put together do not provide a proper solution to the problem. I cannot understand how any hon. Member opposite can justify a scheme which will help Leeds at the expense of Huddersfield and will penalise towns with such major problems as Leicester, Stoke, Hull, Derby and Wolverhampton.
I cannot understand anyone who seeks to justify a scheme which enables the people of Wales to get nearly three times as much as the people of Cornwall, who have almost identical problems. Here I come to the crunch point. The Minister was kind enough to give me a Written

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Answer at the end of last week giving comparisons between the water and sewerage rates for districts in Cornwall compared with districts in Wales. What comes out of those figures is that while the highest combined figure for Wales is 32·5p in the pound—and in my district of Caradon in Cornwall it is 27·7p—there are, nevertheless, figures in Wales which are much lower, down to 11·2p, which is far below anything in Cornwall.
In certain parts of the country there is an accumulation of factors which deserve special treatment, where the water and sewerage rate falls disproportionately hard upon the domestic ratepayer and where the domestic ratepayer is part of a low income group. This accumulation of factors arises especially in Wales and Cornwall. To a lesser extent it is present in some other development and intermediate areas The Secretary of State has given special treatment to Wales. He should extend that special treatment to these other areas.
The right hon. Gentleman must give three undertakings to meet the misgivings of hon. and right hon. Members. First, he should say—and I hope he will—that he is prepared to offset the burden of large water and sewerage rates. His right hon. and learned Friend the Secretary of State for Wales created the precedent, and the Secretary of State for the Environment should extend it.
Secondly, there must be an immediate extension of rate rebates to cover sewerage and water charges. Those who are eligible for maximum rebate in my constituency face massive increases of about 70 per cent. or 80 per cent., and they are the people whom the Government say they particularly want to help. Cornwall is an area of incredibly low incomes. The average wage in Cornwall is about £10 less than the average wage in Wales.
Thirdly, the right hon. Gentleman, in consultation with his colleagues in other Departments, should give special assistance, through the machinery and the geography of the development and intermediate areas, to those areas of the country where there is an accumulation of special factors. If the right hon. Gentleman gives those explicit assurances we shall feel that the intentions he announced are being met. I do not believe that they are being met by the order.
10.26 p.m.
Mr. James Wellbeloved: The subject of the debate is of vital importance and affects every one of our constituents. It concerns the impact of rates upon domestic households. I am in favour of the action which my right hon. Friend has so swiftly taken to try to redress the nonsense imposed upon local authorities by the previous administration.
I was delighted that the hon. Member for Barkston Ash (Mr. Alison) referred to the London borough of Bexley. I have the honour to represent one of the constituencies in that borough, an honour which I share with the right hon. Gentleman the Leader of the Opposition, who is the right hon. Member for Sidcup (Mr. Heath) and the hon. Member for Bexley-heath (Mr. Townsend). I wonder whether the Leader of the Opposition and his hon. Friend the Member for Bexleyheath will have the gall to go into the Lobby against the Government on this issue.
One might think that this was the first occasion on which a Government have had an opportunity to do something about the heavy burden of rates. I served on the Standing Committee on the Local Government Bill, with the hon. Member for Bury St. Edmunds (Mr. Griffiths), who will recall that Labour Members put down numerous amendments to the Bill to deal with the resources, needs and domestic elements of the rate support grant, and asked the then administration to give local authorities the opportunity to raise revenue from other sources. I tabled an amendment to provide that local authorities should have the opportunity of imposing a tourist tax on hotel beds. In many areas that would have gone a long way towards meeting the unfair burden that some ratepayers have to bear because of their geographical situation.
London has had a bit of a kick-around today, and the fair and just case for London has not been put. London has two basic disadvantages—apart from the Leader of the Opposition and the hon. Member for Bexleyheath. The first is that it has the highest rateable values in the United Kingdom, and that is accepted beyond dispute. London ratepayers also have thrust upon them the

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burden of £104 million unavoidable expenditure which no other local authority or combination of local authorities has to face. That heavy expenditure is borne by London just because it is the capital city. For instance, visitors from overseas clog our roads with traffic, causing immense frustration and cost to London ratepayers.
If I may say so to my hon. Friends who normally have great compassion and care for the less-well-off sections of our society, they ought to listen to my case because London unfortunately acts as a magnet to down-and-outs and drug addicts from all parts of Britain. Many of the down-and-outs whom I see on the Embankment, for whom I and the rest of London ratepayers bear the burden of providing facilities, come from constituencies represented by some of my hon. Friends They should bear in mind that when the Yorkshire hippy camps on the Embankment in London it is not the Yorkshire ratepayer who bears that burden. It is the London ratepayer who does so.
There is also the disadvantage that many hon. Members opposite live in London. They live in what they regard as their weekday cottages while they are here for the odd day during the week attending Parliament. One of our complaints was mentioned by the hon. Member for Bodmin (Mr. Tyler), who referred to an accumulation of factors. It is because London has an accumulation of factors which do not apply to any other local authority area that I believe it was right for London—and I could give figures for many other areas with large populations—[Interruption.] My hon. Friend the Member for Huddersfield, West (Mr. Lomas) is eager to catch your eye, Mr. Deputy Speaker, and I have no doubt that with his normal persistence he will do so. As my right hon. Friend the Member for Battersea, North (Mr. Jay) says from a seated position, there will be plenty of time for my hon. Friend.
As a result of the action of my right hon. Friend the Secretary of State for the Environment, a large number of major authorities will now be able to tackle some of the problems which face large cities. The Association of Metro-
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politan Authorities, the new body formed to look after the interests of the new large authorities, supports my right hon. Friend's action.
Mr. Kenneth Lomas: Nonsense.
Mr. Wellbeloved: My hon. Friend calls it nonsense. If he wishes me to read the brief which that body has sent to me, I shall be more than pleased to do so, but I am sure that in the interests of time he will accept what I say. Most ratepayers in London suffer from the effect of other things which the Conservative Government forced through—[Interruption.] We always get this sort of attitude —I will not call it a drunken attitude because you would call me to order, Mr. Deputy Speaker—from hon. Members opposite after a good dinner. Hon. Members opposite seem to congregate on the back benches and at least give the appearance of being slightly inebriated and careless of the real interests of the people of this country. [HON. MEMBERS: "Withdraw."] I will not withdraw. If hon. Members give the appearance of being drunk, that is their fault.
Mr. Deputy Speaker: While the hon. Gentleman is not being strictly unparliamentary, he is speaking with slightly less dignity than we expect.
Mr. Wellbeloved: If I had said they were drunk, I would have been out of order, Mr. Deputy Speaker. I am not suggesting that they are drunk. I am merely suggesting that they are giving a very good imitation of it.
Mr. Deputy Speaker: I was dealing with the question of dignity.
Mr. Wellbeloved: The dignity of the House would be better served if hon. Members tried to maintain a dignified silence when others were speaking on such important and vital matters affecting the ratepayers.
As I was saying, some of the actions of the Conservative Government, ranging back to 1962, have had a disastrous effect upon ratepayers. I recall the reorganisation of London government. That measure was forced through the House on a timetable motion without a proper opportunity to discuss it. It had

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the result of forcing up the cost of local government administration in the metropolis to a phenomenal extent and of increasing tremendously the rates paid by London ratepayers.
I regret that the Conservative administration, far from taking the lesson of London reorganisation, pressed ahead with the reorganisation of local government throughout England and Wales, because this has contributed to the high rate demands that are about to flood out upon ratepayers all over the country. It is a bit much for hon. Members on both sides of the House to attack my right hon. Friend, because he has done something that is sensible and correct in the light of the situation that he found when he took over the Department.
When the rate support grant was introduced it had three elements—the domestic relief element, the resources element and the needs element. It is the needs and resources elements which ought to be the vehicles for bringing the necessary relief to hard-pressed ratepayers, whether they live in urban or in rural areas, and, if my right hon. Friend has not already done so, I am sure that when he winds up the debate he will make it clear that it is the Government's intention to do just that in the time that they have available.
The domestic element in the rate support grant was never designed to deal with the resources and needs of local government. The domestic element, when it was introduced, was a flat-rate payment over the whole country. The system was altered by the previous administration, basically to try to give preference to those areas which it thought were more important electorally, though I understand and sympathise with those of my hon. Friends who were caught in that little bit of political jiggery-pokery.
I hope that as a result of this debate and the Division tonight we shall be back to a flat-rate domestic element over the whole of England, and an equivalent rate for the whole of Wales. This is a fair way of dealing with the matter, but sooner or later this Parliament will have to get down to the total reorganisation of the method by which local authorities are financed. I hope that when that is done we shall have the support of some of those right hon. and hon. Gentlemen opposite who have been so loud in their
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condemnation of the Government on this order.
I wait with bated breath to see whether the right hon. Member for Sidcup and the hon. Member for Bexleyheath join me in the Lobby in support of the order and of their ratepayers in the London borough of Bexley.
10.39 p.m.
Mr. Eldon Griffiths: I am grateful to my hon. Friend the Member for St. Ives (Mr. Nott), who is to reply for the Opposition, for allowing me two minutes of his time, and I hope that the Secretary of State will match that, because I feel that I must intervene following the absurd intervention of the hon. Member for Erith and Crayford (Mr. Wellbeloved).
The debate today concerns the sum of £3,076 million. As the Secretary of State recognised, nearly the whole of the debate has centred on the domestic element of rate support grant, which is a small proportion of that sum. I make no complaint about that, but, as a former Minister responsible for rates, I wish to make two general points.
First, we are talking about an enormous and increasing proportion of our gross national income. If our local government is the best in the world, it is exceedingly expensive. I hope that there will be general agreement that it is high time that the increasing costs of local government were brought under some control. I hope that the additional help which is given will not be an invitation to local authorities to spend more. The national economy requires that, if anything, they should moderate their expenditure in the national interest.
The rating system is defective and needs to be improved. We sought in the last administration to make it more effective by taking account of such factors as changes in local government, water administration and other things. In the variable element we found a more sensitive system of fine tuning. I regret that the right hon. Gentleman, arbitrarily and hastily, has thrown that overboard, and I believe that he will live to regret it. The system he has brought in is not only arbitrary and capricious: it simply does not achieve the very purpose of egalitarianism that he has himself set forward.

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I should like to read some of the results, in the form of a league table of what Labour Members will tonight be voting for. As a result of the order, Government help to domestic ratepayers will go up or down as follows: the city of London, 2p up, the city of Durham 2½p down; Sevenoaks 3½p up, Darlington 3½p down; Mid-Sussex 3p up, Leicester 3½p down; Brighton 5p up, Redditch 11½p down; Bath 5½p up, Stoke-on-Trent 5½p down; Kingston-upon-Thames 6½p up, Kingston upon Hull 4½p down.
This is social justice? It is nothing more than absurd. It began as a piece of political payola, and the Government are not even competent to carry out that.
10.43 p.m.
Mr. John Nott: As is customary, I should like to start by congratulating the six maiden speakers in this debate. All made exceptional contributions to our discussion of this important order.
My hon. Friend the Member for Leominster (Mr. Temple-Morris) made an excellent speech. He follows a much-loved Member, Sir Clive Bossom, whom we shall all miss very much. His speech was fully up to the standard that I remember well when we used to debate together at Cambridge 15 years ago. He described feelingly the resentment of those who look across the border to the flat-rate relief of 33½p in Wales, when there is, of course, a variable rate with the English towns and counties. He and the House will be interested to hear from the Secretary of State for Wales how this can be justified, and what are the "special problems" to which the right hon. Gentleman referred. We look forward to many further contributions from my hon. Friend.
My hon. Friend the Member for Reading, North (Mr. Durrant) made an interesting speech, whose brevity will have commended it to the House. His strong feeling that all local government finance, including rating, is in need of reform is widely held in the House, as was clear from several speeches. We all look forward to hearing more from my hon. Friend in future.
I greatly regret having missed the maiden speech of my hon. Friend the Member for Northampton, South (Mr.
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Morris), because I understand it was a fine speech. That does not surprise me, since I served for a time with him on the Islington Borough Council under his leadership. If anyone knows the problems of the inner conurbations it is my hon. Friend. With his profound knowledge of local government, we hope to hear a great deal from him in these debates. There is nothing the House respects more than an hon. Member who speaks with experience and knowledge of a subject.
My hon. Friend the Member for Norfolk, South (Mr. MacGregor), representing a rural county, made an able and fluent speech. He succeeded one of the most respected Members of this House, Mr. John Hill, who will be greatly missed, particularly in debates on agriculture and education. My hon. Friend the Member for Norfolk, South spoke most interestingly about his constituency and its problems. He said that in Norfolk—and this sounded a little like my own county of Cornwall—a man is ultimately accepted when everybody who remembers him arriving has died. I know from what he said and the manner in which he presented his case that he will prove to be an exception to that rule in Norfolk, and that he will become accepted there very soon indeed.
The hon. Member for Thornaby (Mr. Wrigglesworth) was greatly encouraged in his maiden speech by the fact that Middlesbrough has returned to the First Division. He made a good constituency speech, and I know that the enthusiasm for his team will carry over into representation of his constituents' interests in this House. Everybody who listened to him thought that he made an excellent contribution to the debate.
I regret that I missed the maiden speech of the hon. Member for West Bromwich, East (Mr. Snape), but I am told that it was a robust and articulate contribution. He did not speak with any great admiration for the Conservative Government, but in view of the hammering given to the Labour Government in this debate, it must be said that the hon. Gentleman added some measure of balance to it. I congratulate him, too.
I wish to say how delighted we all are to welcome back to the House my hon. Friend the Member for Manchester,

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Withington (Mr. Silvester). The only regret we all have is that we no longer have in the House that much-loved Member Sir Robert Cary. His experience, modesty and good humour will be greatly missed by every Member of the House of Commons.
I wish to commence my short wind-up of this debate by saying that I am somewhat unaccustomed, but none the less relieved, to be speaking in this House without the aid of a Treasury brief. Therefore, I must ask the House to accord me its customary generosity as I embark on a speech on a subject which, until last Friday, found me not wholly devoid of knowledge because, much to my astonishment, I was at one time an alderman. On the other hand, as an ex-alderman I am not wholly lacking in ignorance of this subject. Having heard the contribution of my right hon. Friend the Member for Crosby (Mr. Page), who knows so much about this subject, I confess that I came to this debate clothed in modesty rather than in my old aldermanic robes.
I certainly came to this debate with greater humility than did the right hon. Gentleman the Secretary of State for the Environment. When the right hon. Gentleman spoke of "that elegant adornment of London's environment," I thought for one moment that he was referring to himself rather than to No. 2 Marsham Street. It is a lofty building and matches what the hon. Member for Derby, North (Mr. Whitehead) described as his right hon. Friend's lofty disregard —a disregard which I think has come across in this debate today. It was a mark either of the Secretary of State's remarkable powers of comprehension or of his impatience—even, perhaps, of the intellectual arrogance suggested by my hon. Friend the Member for Grantham (Mr. Godber)—that within a few days of assuming office the right hon. Gentleman saw fit to overthrow, in the thirteenth hour, an earlier decision made by my right hon. and learned Friend the Member for Hexham (Mr. Rippon). We must remember that the decision taken by the Conservative Government was made in good faith, after full consultation with all the local authority associations. It was made after a study of all the options. It cannot be suggested that the new Minister had time seriously
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to consider the matter. I echo the words of the hon. Member for Gloucestershire, West (Mr. Loughlin).
I realise that any formula that attempts to balance out the discrepancy between different parts of the country cannot avoid some anomalies. My right hon. and learned Friend admitted this. But in his choice of the variable domestic element he sought to impose a limitation on the increased burden ratepayers might face, provided that local authorities kept to the agreed rate of spending and exercised economies in saving and other matters. It is evident that the Secretary of State takes the same view, that a variable element makes some sense, because in his proposals he has chosen to use a variable basis as between England and Wales. Yet he rejected it as between one English county and another and between one part of the United Kingdom and another. It is that among many other factors on which the House will require an answer. I hope, again to use the words of the hon. Member for Derby, North, that we shall get more than the one or two general statements made by the right hon. Gentleman in opening the debate.
As the debate has made clear, by adopting an arbitrary flat rate the Secretary of State has pleased some hon. Members but he has greatly angered others on both sides, including the hon. Members for Gloucestershire, West, Dewsbury (Mr. Ginsburg), Nuneaton (Mr. Huckfield) and Derby, North. In a divided House and a House that is divided across the parties, it is normally simple for the Government to get their way, but I think that tonight things look a little different.
However, regardless of constituency interests, what has been so evident in the debate is that in his first public action the right hon. Gentleman has undermined the belief that these matters will at least attempt to be handled with equity and justice. The Secretary of State described his own action as "rough justice", and surely only an over-confident Minister can speak of his own action in this way, especially when that rough justice affects the elderly, the over-committed and those who seriously need assistance. What is there in his egalitarian purposes to please him in what he has done in this matter?
I realise that the right hon. Gentleman's horizons might be clouded and his

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political time scale may be rather short, but prudence should have led him to act cautiously in this controversial area. Even the hon. Member for Gloucestershire, West accused him of "instant government", and that is indeed how it appears to the whole House.
As my right hon. Friend said in opening the debate, we fully acknowledge the plight of many of our city centres and the obvious needs of our big towns. My right hon. and learned Friend the Member for Hexham said in his statement on 22nd January that there was a very real need to give a greater degree of rate support to the metropolitan areas. We sought to do this by an increase in the needs element and changes in the formula. My right hon. and learned Friend emphasised his determination to change the grant arrangements so as to increase the grant to such areas as Greater Manchester, Merseyside, West Yorkshire and the GLC. But in endeavouring to correct an undoubted discrepancy of treatment each time it occurred, my right hon. and learned Friend was also careful to impose a limitation on the burdens on other areas. He said
"we have tried to bring about a generous settlement, which, while recognising the particular problems of the cities, at the same time imposes a limitation on the burdens in the counties and elsewhere."—[OFFICIAL REPORT, 22nd January 1974; Vol. 867, c. 1474.]
What is so precipitate about this decision is, as the hon. Member for Gloucestershire, West said, that the Government are in any event intending to carry out a thorough review of the grant distribution system during the course of this year. If that is so, why was it necessary to change the original proposals for 1974–75? In doing so after a few weeks—hardly enough time for Ministers to have studied the facts in full detail—the Government have overthrown the well-established tradition of attempting to phase in from year to year changes in domestic rate burdens. Surely it would have been wiser to maintain for the time being a variable domestic rate element as a transitional measure, thereby avoiding bigger increases in particular years so that the grant distribution system may be reviewed in depth over the course of 1974.
My right hon. Friend, the Member for Finchley (Mrs. Thatcher), in her opening
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speech, challenged the Secretary of State to say whether the Chancellor of the Exchequer would take action tomorrow to mitigate the rise in rates, as did my right lion. Friend the Member for Altrincham and Sale (Mr. Barber) in his Budget last year.
There is still much confusion about what the Government intend to do, and so far the debate has done nothing to clear up this confusion. I particularly again draw attention to the remarks of my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop). All of us in the West Country read in the Western Morning News—a most reputable newspaper, which does not misreport these matters—this morning that the hon. Member for Oldham, West (Mr. Meacher), an Under-Secretary of State for Industry, had said at Exeter Labour Party's annual dinner-dance at the weekend:
"While the redistribution formula in the rate support grant has given enormous aid to the large cities of this country, I am conscious that it has brought disadvantages to cities like Exeter.
"I am authorised to tell you that this Government will at an early stage be introducing a rate relief measure precisely to aid areas like Exeter which have been disadvantaged by that altered rate support grant formula."
The Express and Echo for Saturday, 23rd March has a headline stating that Exeter had got a pledge on rate aid. If the Under-Secretary of State for Industry is giving pledges on rate aid which will help Exeter, can we please know now more about it from the Secretary of State for Wales? We all appreciate that the hon. Member for Oldham, West is an expert at inaccurate statistics, but we do not expect him to make a statement on behalf of another Department which proves inaccurate.
How can the Secretary of State say that his actions were without consequence for the rate-fixing process when Under-Secretaries from other Departments are going around the country spreading confusion?
The Secretary of State's action appears all the more strange when one reads the circular from the Association of District Councils. The circular points out that out of 296 new district councils in the non-metropolitan counties of England no fewer than 234 will lose part of the domestic rate relief previously notified in mid-February.

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It is not only rural areas which are adversely affected. Hon. Members on both sides have spoken about towns and cities such as Stoke-on-Trent, Kingston upon Hull, Portsmouth, Leicester, Derby and Plymouth, all of which will have increases in their rate burdens. These towns and cities, no less than the inner areas of the conurbations, face social and housing programmes. They also have heavy programmes for urban renewal, clearance, redevelopment, and environmental improvement.
I should like to know from the Secretary of State what has happened in the last four weeks which makes the people in these cities and towns less worthy to receive help than the inhabitants of other towns—
Mr. Marks: Why were the former Government's proposals notified to district and other councils before Parliament approved them?
Mr. Nott: It was part of the perfectly normal process of consultation. My right hon. and learned Friend the then Secretary of State spoke at the three statutory meetings which took place.
The effect of the change is not to provide more money for improving services in cities and urban areas, but to provide additional relief to those householders who happen to live in these areas at the expense of those living in other parts of the country. If the aim of the domestic element is to cushion people against steep rate increases it should be provided wherever people live. If cities have been extravagant, domestic ratepayers are to be safeguarded. If rural areas and some other cities have acted responsibly and prudently, their ratepayers will be clobbered just the same.
At this point I hope that the House will forgive me if I briefly illustrate the effect of the Government's action by referring to Cornwall, not just because it is my own county but because by taking one example we can see the consequences of what has happened. Under the original proposals, which had already been widely publicised, householders in the second-tier authority of Penwith were to suffer an increase of from 0 per cent. to 8 per cent. in 1974–75, and in Caradon an increase of from 0 per cent. to 26 per
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cent. Suddenly, without warning, following the Secretary of State's announcement, these increases in Cornwall range from a minimum of 50 per cent. to a maximum of 95 per cent. in Caradon.
As the hon. Member for Gloucestershire, West said, it is no use listing the comparative size of the rates people in these areas pay. The fact is that rates bear a relation to the services provided.
Is the Secretary of State saying that he accepts it as fair and reasonable to have a near doubling of the rate in Caradon? The matter was referred to by the hon. Member for Bodmin (Mr. Tyler). It is a Liberal constituency. I hope that this first lesson in Socialist Government will teach those who voted Liberal in Bodmin the folly of their ways.
Why, if the Government impose a flat rate throughout this country, have they chosen what is in effect a variable rate for Wales? I hope that the Secretary of State for Wales will answer that. He will perhaps say that is a question of water and sewerage. But 40 per cent. of the total rate in Caradon, for example, is represented by water and sewerage. Therefore, how can that possibly be used as an excuse for what has been done?
As the Secretary of State for Wales is to wind up the debate, and as I speak as a Cornish Member, I must warn the Government that no good will come to them if they seek to divide the Celts in the House. The Celts are practically a majority party in the House—and may the good Lord preserve the House for that! We will not be put upon by the English. I read in the Sunday Telegraph yesterday that the Celts were the original streakers of the ancient world, and my constituents are in a streaking awful rage about the rates.
I do not have time to refer to rate rebates. A year ago, when in opposition, the Under-Secretary for the Environment talked about rate rebates, which were substantially increased by the previous Government. That substantial increase will do something to mitigate the rate rises proposed by the flat-rate basis. The hon. Gentleman said that the rebates would be of piddling help. I hope that Conservative Ministers do not use that kind of inelegant phrase.

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In the debate on land and housing on 14th March last year the Deputy Leader of the Labour Party said:
"The increased rates are the last straw for the householder under this Government."—OFFICIAL REPORT, 14th March 1973; Vol. 852, c. 1317.]
Now the householder sees what has happened under the present Government, when 234 out of 296 non-metropolitan district councils have been adversely affected by the action of the Secretary of State.
I come to the Government's recent freeze on rents, which was mentioned by the hon. Members for Derby, North and Nuneaton. Almost the same day as that freeze was announced there came a wholly unexpected rise in rates for hundreds of thousands of tenants throughout the country. For many, the rise in rates will exceed the increased rent of 50p under the Housing Finance Act, which has been overturned.
What kind of political cynicism motivates a Government which trumpet a rent freeze one moment and then at the next moment snatch out of the pockets of those same people a greater sum in increased rates? What kind of political philosophy dictates that the rates of tenants in private accommodation should rise to subsidise the rents of council tenants who may earn more than themselves? What help is it even to those same council tenants to be told one day that their rent increase of 50p is stopped and the next day to be told that their rates will rise by 53p? That is precisely what has happened in my constituency. What justice is there in a change to a flat-rate domestic element which at one jump, with no transitional arrangements, requires householders who happen to live in one part of the country to subsidise the rates of householders in another? That is not the way in which the nation's business should be conducted.
When the Secretary of State referred to the good Socialists and the loyal Labour Party members in his constituency who complained to him at the weekend—indeed, his hon. Friend the Member for Thornaby in his maiden speech said that 10,000 names had come to him since the last election complaining about what the right hon. Gentleman had done—did it occur to him that they might have been
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right? Did he consider in his egalitarian zeal that he had made a real muddle? Did he consider the lofty disdain which was referred to by his hon. Friend the Member for Dewsbury.
I have always rather admired the right hon. Gentleman at a distance. After all, he has written many books full of stuff about Socialist philosophy. Anyone who has the application to employ his time so uselessly has surely to be admired, but his change in the domestic rate arrangements will not rebound to his advantage. Many ratepayers in the conurbations will face a somewhat lower increase, but that will not compensate for the resentment of those in several towns and many district councils throughout the land who will find themselves faced with an unprecedented rise next year.
When the right hon. Gentleman opened his speech and talked of the rate-fixing process, the complicated girations to fix the formula, he said that it was so complicated that someone had suggested that they might sacrifice a goat. The right hon. Gentleman will be the sacrificial goat in this instance. He has started the process of misjudgment and muddle which will surely characterise many of the Government's actions from henceforth.
11.9 p.m.
The Secretary of State for Wales (Mr. John Morris): The hon. Member for St. Ives (Mr. Nott), whatever else he has done, has eaten a little into my time. I was due to rise at five minutes past 11 o'clock. [Interruption.] Will right hon. and hon. Members pipe down.
This has been a long and interesting debate. Hon. Members on both sides have expressed their satisfaction and dissatisfaction with my right hon. Friend's proposals, as might have been expected. We have had an unusually large number of maiden speakers. It is my privilege to congratulate all of them on their contributions. I am sure, in view of the lateness of the hour, that they will forgive me if I do not go into detail about their speeches. My hon. Friend the Member for Thornaby (Mr. Wrigglesworth), in a fluent and able speech, told us of the anger about rate increases. Of course, from my right hon. Friend's proposals, Middlesborough is a gainer of 4p. The hon. Member for Leominster (Mr. Temple-Morris) combined the talents of

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the skilled advocate and Celtic passion and began to bring the debate back to a proper perspective. He said that any system which doubles the rates must be wrong and that his own party was partly to blame.
My hon. Friend the Member for West Bromwich, East (Mr. Snape), in a very able speech, said that the seeds of this increase were sown by the last Government in their reorganisation proposals. The hon. Member for Reading, North (Mr. Durant), in his able speech, told us of the anxieties of a shopkeeper in his constituency about the increase in rates. I have good news for his constituent. Under my right hon. Friend's proposals he will be the beneficiary of 5p. I am sorry that I did not hear the speeches of the hon. Member for Norfolk, South (Mr. MacGregor) and Northampton, South (Mr. Morris) but I am told that they, too, were very able.
My right hon. Friend has been most unfairly under attack. It has been suggested that he is some kind of novice who came suddenly to office and upturned the tables the moment he got there. It is within the recollection of the House that he was Secretary of State for Local Government and Regional Planning and before that successively Secretary of State for Education and Science and President of the Board of Trade in the last Labour Government, and that in opposition he was shadow Secretary of State for the Environment, considering then the very problems which he took over the moment he was appointed by my right hon. Friend the Prime Minister.
As my hon. Friend for South Shields (Mr. Blenkinsop) said, clearly there is a great deal of hypocrisy about the statements we have heard from right hon. and hon. Members opposite today because, as he pointed out, even after the modest benefits which South Shields will get from my right hon. Friend's proposals, there is to be a rate increase of between 50 and 60 per cent.—and none of that can be laid at the door of the present Government.
The truth is that there is a substantial increase in rates throughout the country, and it is no good the right hon. Member for Finchley (Mrs. Thatcher) waxing furious about it and suggesting that most of it is our responsibility. We are deal-
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ing here with only a part of the totality of Government support for the rates—£446 million—and only part of that sum has been shifted by my right hon. Friend to those parts of the country which, in our judgment, should carry the greater burden. We are dealing with only £200 million out of a total rate support of £3,076 million. Indeed, the rate support grant is 60·5 per cent. of the total relevant expenditure of the local authorities for this purpose. Therefore, the Opposition's case against my right hon. Friend is hypocritical.
The right hon. Lady talked of "callous indifference" by my right hon. Friend, but she spoiled her advocacy by over-egging the pudding. She glosses over the fact that her constituency in Barnet is a minor gainer from his proposals. Indeed, hon. Members opposite representing London have been conspicuous by their absence today. Most of the London areas are substantial gainers from my right hon. Friend's proposals the only parts which do not gain are, fractionally, Bromley, Croydon, Harrow and Havering. If any hon. Member opposite who represents London votes against the order, he will have a lot of explaining to do to his constituents.
To talk of "callous indifference" is a gross over-exaggeration by the right hon. Lady. She talks of extravagance by local authorities in paying high staff salaries resulting from reorganisation. Anyone coming from outside might believe that all this could be laid at the door of the Government. But local government reorganisation has been the child of the Tory Party. The previous Government introduced it. They allowed this whole edifice to be built up. When the right hon. Lady talks of local government extravagance, is she suggesting that there should be greater Government interference? Has there been some major new manifestation on the local government front since 1st March?
In what was said to be an important vote in this House the other day, but which turned out to be a non-event, we saw the Grand Old Duke of York leading his troops up the hill and down again. I warn the right hon. Lady that she must not imitate the Grand Old Duke of York and become known as the Grand Old Duchess of York.

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It is odd, when the former Government were suggesting as recently as 17th December that public expenditure should be kept down, that there should now be the suggestion that we should indulge in greater public expenditure by way of greater assistance.
Mr. Loughlin: I am enjoying my right hon. and learned Friend's speech, but will he now deal with the issues that have been raised, from this side as well as the Opposition side of the House?
Mr. Morris: I am obliged to my hon. Friend. I will deal with his comments in a moment. I am dealing with the right hon. Lady just now.
We had a thoughtful and telling speech from my hon. Friend the Member for Wolverhampton, North-East (Mrs. Short). She made the pertinent point that much of the present situation is due to the actions of the last Government following from local government reorganisation, water reorganisation charges and the enormous rate of inflation. These are crucial factors behind the present rates, regarded as a burden by so many hon. Members.
Mr. Graham Page rose—
Mr. Morris: I cannot give way. The House knows that I am usually most generous in giving way. I have been allowed only 22 minutes in which to reply.
Under this Government, as under the last one, the total rate burden remains the same. The total of Government support remains the same. I hear accusations of gerrymandering. What has happened? There has been a shift of a minor part of the whole of Government assistance.
Mr. Timothy Raison rose—
Mr. Morris: It was the Conservative Party which began this. It did not go far enough in giving the Government aid that was so much needed by many parts of the country. It is a matter of judgment, and in our judgment we have to do more. [Interruption.] Every part of the country could have done with much more. Obviously in the present economic situation—[Interruption.]—we have to shift a part of the burden within the totality of aid.
Mr. Raison rose—
Mr. Speaker: Order. On the whole, it has been an orderly debate so far. I am afraid that behaviour does not seem to change very much whichever side is in Opposition or in Government.
Mr. Morris: The House will, I am sure, want to hear the reply to the many able and thoughtful speeches that have been made, and I will do my best in the limited time, if I am allowed to do so by hon. Gentlemen opposite, to make my reply.
The hon. Member for Tiverton (Mr. Maxwell-Hyslop) enjoyed himself hugely and was supported from the Front Bench when he referred to a speech made by my colleague the Under-Secretary of State for Industry. I understand that my hon. Friend was referring to the relief which would be given by the proposed rate rebate scheme which will help up to 3 million people who are less well off. The first scheme was introduced by the Labour Government, and the Conservative Government proposed to improve it.
Mr. Graham Page: Will the right hon. and learned Gentleman give way?
Mr. Morris: No. The order had not come into effect, it having been laid after the election was announced. We have taken over lock, stock and barrel, the proposals of the previous Government.
Mrs. Thatcher: That is absolute nonsense. The Under-Secretary of State's words were:
"I am authorised to tell you that this Government will at an early stage be introducing a rate relief measure precisely to aid areas like Exeter which have been disadvantaged by that altered rate support grant formula."
That cannot refer to the rate rebates which were provided for in the last measure of the previous Government.
Mr. Morris: I have told the House that my hon. Friend was referring to the rate rebate scheme which had not yet come into effect. The order has been laid and we have taken over the previous administration's proposals.
Mr. James Prior: Will the right hon. and learned Gentleman give way?
Mr. Morris: I will not give way.
Mr. Prior: On a point of order. Would it not be in order on an occasion such as this, Mr. Speaker, for a personal statement to be made to the House at the earliest opportunity, as what the right hon. and learned Gentleman is saying now is totally different?
Mr. Speaker: That is not a matter for the Chair.
Mr. Morris: I have made the position clear. My hon. Friend was referring to the rate rebate order which was to be made and is being made.
The interruptions have made it exceedingly difficult for me to deal with the other points.
There have been attacks on the rating system. My right hon. Friend said that there was an element of rough justice in his proposals. I am sure that the House will accept that his aim is right and that a large number of people who are hard-pressed will welcome my right hon. Friend's proposals. My hon. Friend the Member for Gloucestershire, West (Mr. Loughlin) and other hon. Members wanted a review.
The right hon. Member for Crosby (Mr. Page) dealt with the need to abolish all rates. The right hon. Gentleman's was a fascinating speech. Indeed, three and a half weeks out of office undoubtedly sharpen the mind enormously. I thought that he was a strong candidate for being a one-man Royal Commission upon the rates.
Mr. Graham Page: The right hon. and learned Gentleman, having referred to me, will perhaps now tell the House what provision is being brought in by the present Government to aid Exeter as promised by the junior Minister.
Mr. Morris: The right hon. Gentleman knows that that is not an intervention which I would have given way to at this juncture had I suspected that that would be its nature—though earlier, yes.
The right hon. Gentleman was less caustic than the right hon. Lady the Member for Finchley, because the right hon. Gentleman's comment upon my right hon. Friend's proposals were that they were rough guesswork and flat-footed. The implication from that was that his
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Government's proposals were less flatfooted and that there was less guesswork about them. I am sure that on reflection the right hon. Gentleman would not want that implication to go abroad, because there was a great deal of roughness in those proposals as well.
One other matter which is of very great importance is the need for a review of the whole system. My hon. Friend the Member for Dewsbury (Mr. Ginsburg) brought a delegation to see my right hon. Friend, and my hon. Friend the Member for Meriden (Mr. Tomlinson) forcibly argued the case for a review, as did my hon. Friend the Member for Gloucestershire, West.
In the next 12 months there will be a review of the distribution of the rate support grant. We shall be going into the whole matter more thoroughly in time for next year and shall be paying particular attention to those aspects of the system which appear to give rise to anomalies. My right hon. Friend does not rule out a more fundamental review of the whole rating system, but this obviously will be longer term than in the next 12 months. The solution to this problem has escaped Government after Government, and I would certainly agree that there is a need to look at the problem as a whole.
What happens if the order is rejected tonight? Local authorities would have to borrow at the rate of £60 million a week at a current rate of interest approaching 15 per cent. How long this would continue I cannot say, but if hon. Members think that it would be easy or quick to renegotiate a whole grant settlement they are wrong. If there were to be any question of altering the needs and resources elements, there would have to be complicated discussions between the Department and the local authority associations, followed by discussions at ministerial level, culminating in a statutory meeting, and then the laying of a new order. This is a process which would be bound to take many weeks. This is a fact and not a threat.
The shortage of time is not our fault. The last Government created the problem. Normally this kind of order would have been laid before December. Therefore, the onus and the whole responsibility for this matter being dealt with so late in

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the day lies with the last Government. The rejection of this order would cause undue and grave hardship. I therefore commend the order to the House.
Question put:—
The House divided: Ayes 292, Noes 217.

Division No. 3.]

Ayes

[11.29 p.m.

Abse, Leo

English, Michael

Lewis, Arthur (Newham, N.)

Allaun, Frank

Ennals, David

Lewis, Ron (Carlisle)

Archer, Peter

Evans, Fred (Caerphilly)

Lipton, Marcus

Armstrong, Ernest

Evans, loan (Aberdare)

Lomas, Kenneth

Ashley, Jack

Evans, J. (Newton)

Loughlin, Charles

Ashton, Joe

Ewing, H. (St'ling, F'kirk&G'm'th)

Loyden, Eddie

Atkins, Ronald

Faulds, Andrew

Lyon, Alexander W. (York)

Atkinson, Norman

Fernyhough, Rt. Hn. E.

Lyons, Edward (Bradford, W.)

Bagier, Gordon A. T.

Fitch, Alan (Wigan)

Mabon, Dr. J. Dickson

Barnett, Guy (Greenwich)

Flannery, N.

McCartney, Hugh

Barnett, Joel (Heywood & Royton)

Fletcher, Raymond (Ilkeston)

McElhone, Frank

Bates, Alt

Fletcher, Ted (Darlington)

MccFarquhar, Roderick

Benn, Rt. Hn. Anthony Wedgwood

Foot, Michael, Rt. Hn.

McGuire, Michael

Bennett, A. F. (Stockport, N.)

Ford, Ben

Mackenzie, Gregor

Bidwell, Sydney

Forrester, John

MacLennan, Robert

Blenkinsop, Arthur

Fowler, Gerry (The Wrekin)

McMillan, Tom (Glasgow, C.)

Boardman, H. (Leigh)

Fraser, John (Lambeth, Norwood)

McNamara, J. Kevin

Booth, Albert

Freeson, Reginald

Madden, M. 0. F.

Boothroyd, Miss Betty

Galpern, Sir Myer

Magee, Bryan

Bottomley, Rt. Hn. Arthur

Garrett, John (Norwich, S.)

Mahon, Simon

Boyden, James (Bishop Auckland)

Garrett, W. E. (Wallsend)

Mallalieu, J. P. W.

Bradley, Tom

George, B. T.

Marks, Kenneth

Broughton, Sir Alfred

Gilbert, Dr. John

Marquand, David

Brown, Bob(Newcastle upon Tyne,W.)

Ginsburg, David

Marshall, Dr. Edmund (Goole)

Brown, Hugh D. (Glasgow, Provan)

Golding, John

Mason, Rt. Hn. Roy

Brown, Ronald (H'kney,S. & Sh'ditch)

Gourlay, Harry

Mayhew, Christopher(G'wh,W'wch,E.)

Buchan, Norman

Graham, Ted

Meacher, Michael

Buchanan, Richard (G'gow, Springbrn)

Grant, George (Morpeth)

Mellish, Rt. Hn. Robert

Butler,Mrs.Joyce(H'gey, WoodGreen)

Grant, John (Islington, C.)

Mendelson, John

Callaghan, Rt.Hn. James (Cardiff, S.E.)

Griffiths, Eddie (Sheffield, Brightside)

Mikardo, Ian

Callaghan, Jim (M'dd'ton & Pr'wich)

Hamilton, William (Fife, C.)

Millan, Bruce

Carmichael, Neil

Hamling, William

Miller, Dr. M. S. (E. Kilbride)

Carter, Ray

Hardy, Peter

Milne, Edward

Carter-Jones, Lewis

Harrison, Walter (Wakefield)

Mitchell, R. C. (S'hampton, Itchen)

Castle, Rt. Hn. Barbara

Hart, Rt. Hn. Judith

Molloy, William

Clemitson, Ivor

Hattersley, Roy

Moonman, Eric

Cocks, Michael

Hatton, Frank

Morris, Alfred (Wythenshawe)

Cohen, Stanley

Healey, Rt. Hn. Denis

Morris, Charles R. (Openshaw)

Coleman, Donald

Heffer, Eric S.

Morris, Rt. Hn. John (Aberavon)

Colquhoun, Mrs. M. N.

Hooley, Frank

Moyle, Roland

Concannon, J. D.

Horam, John

Mulley, Rt. Hn. Frederick

Conlan, Bernard

Howell, Denis (B'ham, Small Heath)

Murray, Ronald King

Cook, Robert F. (Edinburgh, C.)

Hughes, Rt. Hn. Cledwyn (Angles'y)

Newens, Stanley (Harlow)

Cox, Thomas

Hughes, Mark (Durham)

Oakes, Gordon

Craigen, J. M. (G'gow, Maryhill)

Hughes, Robert (Aberdeen, North)

Ogden, Eric

Crawshaw, Richard

Hughes, Roy (Newport)

O'Halloran, Michael

Cronin, John

Hunter, Adam

O'Malley, Brian

Crosland, Rt. Hn. Anthony

Irvine, Rt. Hn. Sir A. (L'p'I, EdgeHI)

Orbach, Maurice

Cryer, G. R.

Irving, Rt. Hn. Sydney (Dartford)

Orme, Stanley

Cunningham, G.(lsl'lgt'n, S. & F'sb'ry)

Jackson, Colin

Ovenden, John

Cunningham, Dr. John A.(Whiteh 'v'n)

Janner, Greville

Owen, Dr. David

Dalyell, Tam

Jay, Rt. Hn. Douglas

Padley, Walter

Davidson, Arthur

Jeger, Mrs. Lena

Palmer, Arthur

Davies, Bryan (Enfield, N.)

Jenkins, Hugh (W'worth, Putney)

Park, George (Coventry, N.E.)

Davies, Denzil (Llanelli)

Jenkins, Rt. Hn. Roy (B'ham, St'fd)

Parker. John (Dagenham)

Davies, Ifor (Gower)

John, Brynmor

Pavitt, Laurie

Davis, Clinton (Hackney, C.)

Johnson, James (K'stonuponHull, W)

Peart, Rt. Hn. Fred

Deakins, Eric

Johnson, Walter (Derby, S.)

Pendry, Tom

Dean, Joseph (Leeds, W.)

Jones, Barry (Flint, E.)

Perry, Ernest G.

de Freitas, Rt. Hn. Sir Geoffrey

Jones, Dan (Burnley)

Phipps, Dr. Colin

Jones, Gwynoro (Carmarthen)

Delargy, Hugh

Jones, Alec (Rhondda)

Prentice, Rt. Hn. Reg

Dell, Rt. Hn. Edmund

Judd, Frank

Prescott, John

Dempsey, James

Kaufman, Gerald

Price, Christopher (Lewisham, W.)

Doig, Peter

Kelley, Richard

Price, William (Rugby)

Dormand, J. D.

Kerr, Russell

Radice, Giles

Douglas-Mann, Bruce

Kilroy-Silk, Robert

Rees, Merlyn (Leeds, S.)

Duffy, A. E. P.

Kinnock, Nell

Rhodes, Geoffrey

Dunnett, Jack

Lambie, David

Richardson, Miss J.

Dunwoody, Mrs. Gwyneth

Lamborn, Harry

Roberts, Albert (Normanton)

Eadie, Alex

Lamond, James

Roberts, G. E. (Cannock)

Edelman, Maurice

Latham, Arthur (City of W'minsterP'ton)

Robertson, John (Paisley)

Edge, Geoff

Leadbitter, Ted

Roderick, Caerwyn E.

Edwards, Robert (W'hampton, S.E.)

Lee, John

Rodgers, G. (Chorley)

Ellis, J. (Brigg & Scunthorpe)

Lestor, Miss Joan (Eton & Slough)

Rodgers, William (Teesside, St'ckton)

Ellis, Tom (Wrexham)

Lever, Rt. Hn. Harold

Rooker, J. W.

Roper, John

Stonehouse, Rt. Hn. John

Weitzman, David

Rose, Paul B.

Stott, R.

Wellbeloved, James

Ross, Rt. Hn. William (Kilmarnock)

Strang, Gavin

White, James

Rowlands, E.

Strauss, Rt. Hn. G. R.

Whitehead, Phillip

Sandelson, Neville

Summerskill, Hn. Dr. Shirley

Whitlock, William

Sedgemore, B. C. J.

Swain, Thomas

Wigley, Dafydd (Caernarvon)

Selby, Harry

Thomas, D. E. (Merioneth)

Willey, Rt. Hn. Frederick

Shaw, Arnold (Redbridge, Illord. S.)

Thomas, Jeffrey (Abertillery)

Williams, Alan (Swansea, W.)

Sheldon, Robert (Ashton-under-Lyne)

Thorn, S. G. (Preston, S.)

Williams, Alan Lee (Hvrng, Hchurch)

Shore, Rt. Hn. Peter (S'pney&P'plar)

Tierney, S.

Williams, Rt.Hn. Shirley(H'f'd & St'ge)

Short, Rt. Hn. E. (N'ctle-u-Tyne)

Tinn, James

Williams, W. T. (Warrington)

Short, Mrs. Renee (W'hamp'n, N.E.)

Tomlinson, J. E.

Wilson, Alexander (Hamilton)

Silkin, Rt. Hn. John (Lsham, D'tord)

Tomney, Fank

Wilson, Rt. Hn. Harold (Huyton)

Silkin, Hn. S. C. (S'hwark, Dulwich)

Torney, Tom

Wilson, William (Coventry, S.E.)

Sillars, James

Townsend, C. D.

Wise, Mrs. Audrey

Silverman, Julius

Tuck, Raphael

Woodall, Alec

Skinner, Dennis

Urwin, T W.

Woof, Robert

Small, William

Varley, Eric G.

Wrigglesworth, Ian

Smith, John (Lanarkshire, N.)

Wainwright, Edwin (Dearne Valley)

Young, David (Bolton, E.)

Snape, P. C.

Walden, Brian (B'm'ham, Ladywood)

Spriggs, Leslie

Walker, Harold (Doncaster)

TELLERS FOR THE AYES:

Stallard. A. W.

Walker, T. W. (Kingswood)

Mr. James Hamilton and

Stewart, Rt. Hn. M. (H'sth.Fulh'm)

Watkins, David

Mr. Joseph Harper.

Stoddart, David (Swindon)

NOES

Adley, Robert

Fidler, Michael

Kirk, Peter

Alison, Michael

Fisher, Sir Nigel

Kitson, Timothy

Allason, James

Fletcher, Alexander (Edinburgh, N.)

Knight, Mrs. Jill

Ancram, M.

Fletcher-Cooke, Charles

Knox, David

Archer, Jeffrey

Fookes, Miss Janet

Lamont, Norman

Atkins,Rt.Hn. Humphrey

Fraser, Rt.Hn.Hugh (St'fford&Stone)

Lane, David

Awdry, Daniel

Freud, Clement

Langtord-Holt, Sir John

Balniel, Rt. Hn. Lord

Fry, Peter

Latham, Michael (Melton)

Banks, Robert

Gardiner, George (Reigate&Banstead)

Lawrence, Ivan

Beith. A. J.

Gardner, Edward (S. Fylde)

Lawson, Nigel (Blaby)

Bell, Ronald

Gibson-Watt, David

Le Marchant, Spencer

Bennett, Sir Frederic (Torbay)

Gilmour,Rt.Hn.lan(Ch'sh'&Amsh'm)

Lester, John (Beeston)

Benyon, W.

Godber, Rt. Hn. Joseph

Lloyd, Ian (Havant & Waterloo)

Biffen, John

Goodhart, Philip

Loveridge, John

Biggs-Davison, John

Goodhew, Victor

Luce, Richard

Blaker, Peter

Goodlad, A.

MacArthur, Ian

Boardman, Tom (Leicester, S.)

Gorst, John

McCrindle, R. A.

Boscawen, Hon. Robert

Grant, Anthony (Harrow, C.)

Macfarlane, Neil

Braine, Sir Bernard

Gray, Hamish

MacGregor, J. R. R.

Bray, Ronald

Grieve, Percy

Macmillan, Rt. Hn. M. (Farnham)

Brocklebank-Fowler, Christopher

Griffiths, Eldon (Bury St. Edmunds)

McNair-Wilson, Patrick (New Forest)

Bruce-Gardyne, J.

Grimond, Rt. Hn. J.

Marshall, R. M. (Arundel)

Bryan, Sir Paul

Grylls, Michael

Marten, Neil

Buchanan-Smith, Alick

Hall, Sir John

Mather, Carol

Buck, Antony

Hall-Davis, A. G. F.

Maude, Angus

Budgen, Nick

Hamilton, Michael (Salisbury)

Mawby, Ray

Bulmer, Esmond

Hampson, Dr. Keith

Maxwell-Hyslop, R. J.

Burden, F. A.

Hannam, John

Mayhew, P. (Royal T'bridge Wells)

Butler, Adam (Bosworth)

Harrison, Col. Sir Harwood (Eye)

Miller, Hal (B'grove & R'ditch)

Carlisle, Mark

Hastings, Stephen

Mills, Peter

Carr, Rt. Hn. Robert

Havers, Sir Michael

Mitchell, David (Basingstoke)

Chalker, Mrs. Lynda

Hawkins, Paul

Moate, Roger

Chataway, Rt. Hn. Christopher

Heath, Rt. Hn. Edward

Money, Ernie

Churchill, W. S.

Henderson, J.S.B.(Dunbartonshire, E.)

Monro, Hector

Clark, A. K. M. (Plymouth, Sutton)

Heseltine, Michael

Moore, J. E. M. (Croydon, C.)

Clark, William (Croydon, S.)

Higgins, Terence

More, Jasper (Ludlow)

Clarke, Kenneth (Rushcliffe)

Hill, James A.

Morgan-Giles, Rear-Adm.

Clegg, Walter

Holland, Philip

Morris, Michael (Northampton, S.)

Cockcroft, John

Hooson, Emlyn

Morrison, Charles (Devizes)

Cooke, Robert (Bristol, W.)

Hordern, Peter

Morrison, Peter (City of Chester)

Cormack, Patrick

Howe, Rt. Hn. Sir Geoffrey (Reigate)

Mudd, David

Corrie, John

Howell, David (Guildford)

Neave, Airey

Crowder, F. P.

Howell, Ralph (Norfolk, North)

Neubert, Michael

Davies, Rt. Hn. John (Knutsford)

Hunt, John

Nott, John

d'Avigdor-Goldsmid,Maj.-Gen. James

Hurd. Douglas

Onslow, Cranley

Dixon, Piers

Hutchison, Michael Clark

Oppenheim, Mrs. Sally

Dodds-Parker, Sir Douglas

Iremonger, T. L.

Osborn, John

Dodsworth, Geoffrey

James, David

Page, Rt. Hn. Graham (Crosby)

Drayson, Burnaby

Jenkin, Rt.Hn.P.(R'dgeW'std&W'fd)

Page, John (Harrow, W.)

du Cann, Rt. Hn. Edward

Johnson Smith, G. (E. Grinstead)

Pardoe, John

Dykes, Hugh

Jones, Arthur (Daventry)

Parkinson. Cecil (Enfield, W.)

Eden, Rt. Hn. Sir John

Kaberry, Sir Donald

Pattie, Geoffrey

Emery, Peter

Kellett-Bowman, Mrs. Elaine

Peyton, Rt. Hn. John

Fairgrieve, R.

Kershaw, Anthony

Pink, R. Bonner

Farr, John

Kimball, Marcus

Prior, Rt. Hn. James

Fell, Anthony

King, Evelyn (Dorset, S.)

Pym, Rt. Hn. Francis

Fenner, Mrs. Peggy

King, Tom (Bridgwater)

Quennel. Miss J. M.

198

199

Raison, Timothy

Spicer, M. H. (Worcestershire, S.)

Tyler, P.

Rawlinson, Rt. Hn. Sir Peter

Sproat, Iain

Viggers, P. J.

Redmond, Robert

Stainton, Keith

Wainwright, R. (Colne Valley)

Ridley, Hn. Nicholas

Stanbrook, Ivor

Wakeham, J.

Ridsdale, Julian

Stanley, J. P.

Walder, David (Clitheroe)

Rifkind, M.

Steel, David

Walker-Smith, Rt. Hn. Sir Derek

Rippon, Rt. Hn. Geoffrey

Stewart, I. (Hitchin)

Wall, Patrick

Rodgers, Sir John (Sevenoaks)

Stodart, Rt. Hn. A. (Edinburgh, W.)

Walters, Dennis

Ross, S. (Isle of Wight)

Tapsell, Peter

Weatherill, Bernard

Rossi, Hugh (Hornsey)

Taverne, Dick

Wells, John

Scott-Hopkins, James

Taylor, Edward M. (Glgow.C'cart)

Wlnstanley, Dr. Michael

Sims, Roger

Taylor, Robert (Croydon, N.W.)

Wood, Rt. Hn. Richard

Sinclair, Sir George

Temple-Morris, P.

Smith, Cyril (Rochdale)

Thatcher, Rt. Hn. Mrs. Margaret

TELLERS FOR THE NOES:

Smith, Dudley (W' wick&L'm'ngton)

Thomas, Rt. Hn. P. (B'net.H'dn S.)

Mr, Marcus Fox and

Spence, John

Thorpe, Rt. Hn. Jeremy

Mr. Michael Jopling.

Spicer, J. W. (Dorset, W.)

Trotter, N. G.

Question accordingly agreed to.
Resolved,
That the Rate Support Grant Order 1974, a copy of which was laid before this House on 14th March, be approved.
Mr. Speaker: We now come to the three Scottish orders—
Mr. Eldon Griffiths: On a point of order, Mr. Speaker. You will recall that during the course of the winding-up speech, a matter of some importance was raised pertaining to the veracity of a Minister of the Crown. I must tell the House now that the explanation which the right hon. and learned Gentleman the Secretary of State for Wales sought to make—
Mr. Speaker: Order. There was nothing out of order in what the right hon. and learned Gentleman said.
Mr. Griffiths: Further to that point of order, Mr. Speaker. My right hon. Friend the Member for Lowestoft (Mr. Prior) raised with you, and, through you, with the Secretary of State, the question whether a personal statement ought to be made to this House, and that is the matter which I wish to raise on a point of order.
Mr. Speaker: The hon. Member cannot raise that as a point of order.

RATE SUPPORT GRANT (SCOTLAND)
11.46 p.m.
The Secretary of State for Scotland (Mr. William Ross): I beg to move,
That the Rate Support Grant (Scotland) Order 1974, a copy of which was laid before this House on 19th March, be approved.
Mr. Speaker: I take it that it is the wish of the House that with this order
200
we should discuss the Rate Support Grant (Increase) (Scotland) Order 1974 and the Rate Support Grant (Increase) (Scotland) (No. 2) Order 1974.
Mr. Ross: Thank you, Mr. Speaker. [Interruption.]
Mr. Speaker: Order. Will hon. Members please withdraw as quietly and as quickly as possible.
Mr. Ross: In moving the order—[Interruption.]
Mr. Speaker: Order. Will hon. Members not carry on discussions in the Chamber. I must ask hon. Members who intend to leave the Chamber to do so at once.
Mr. Ross: Copies of the two increase orders were also laid before the House on 19th March. The provisions of the three orders are explained in House of Commons Papers Nos. 11, 12 and 38.
We are moving from rather troubled English waters to more placid Scottish waters.
Mr. Hector Monro: Not at all.
Mr. Ross: The hon. Gentleman had better face the fact that the orders are virtually those prepared by the previous administration. Little change has been made to them, and what change there is will be beneficial to some local authorities.
The Rate Support Grant (Increase) Order and the report on it—House of Commons Paper, No. 11—relate to a final increase of £4·75 million in the grant for the financial year 1972–73 which was determined early in 1971. I recall the occasion very well. I was then in opposition, and the debate started at

201
fifteen minutes past midnight. Since then, the grant has twice been increased because of cost increase, and the No. 2 order relates to an increase of £34·27 million in the grant for the current financial year 1973–74 which was originally determined a year ago.
Perhaps I should draw attention to an error that has probably not escaped the attention of mathematically minded hon. Members. Although the main order was correct, further copies that were placed in the Vote Office today contain a printer's error at the foot of the first page. The figure for the resources element of £96,600 million has been printed as £96,609 million. I offer that clarification in case anyone is confused about the addition on that order.
The Rate Support Grant Order and House of Commons Paper No. 38 relate to the determination of grant for 1974–75. This will be the last main order providing grant to the present local authorities. As it happens, it fell to me in 1967 to introduce the first rate support grant order of the whole series. That gives an indication of how time has slipped by until the presentation of these orders today. I am presenting the last in the series and look forward to signing the first order for the new authorities in about a year.
Since some hon. Members will recall that the House approved a year ago the order which determined the rate support grant for Scotland for 1974–75, I should draw attention to paragraph 1 of House of Commons Paper No. 38. The order made last year dealt with two years, as did earlier orders, but Section 120 of the Local Government (Scotland) Act 1973 changed the period for future orders to one year and provided that the existing year ceased to have effect as regards 1974–75. This means that we have been given an opportunity to redetermine reckonable expenditure for 1974–75 and in doing so to take into account some of the costs of reorganisation which fall in the year. So this is a main order plus a built-in increase order.
One unusual feature of the background to the orders is that a General Election intervened between what is normally the last stage in the negotiations and the tabling of the orders. When we took office, the details of the proposed settle-
202
ment had been announced to local authorities by the previous administration and we had passed the time when orders are normally made. Given the present economic outlook that we have inherited, we did not think it would be reasonable to attempt a full reappraisal, which would have been necessary before we could modify the reckonable expenditure forecast or the amount of the grant.
My proposals in the order are, therefore, substantially those explained to the local authority associations in January by the previous Secretary of State. But I have made one change. Because of the shortening by about two weeks of the financial year in Glasgow, Edinburgh and Aberdeen, it had been proposed to deduct £2·6 million from the forecast of reckon-able expenditure. This would have reduced the aggregate grant by about £1·8 million, giving Glasgow about £1·1 million less, Edinburgh about £500,000 less and Aberdeen about £200,000 less. I have looked at this again and concluded that these deductions should not be made. That is the one substantial change in the orders compared with what would have been introduced by the previous Secretary of State.
Details of the forecasts leading to the orders are given in House of Commons Paper No. 38, with summaries on pages 10 and 11. The forecast of total expenditure is in round terms £661 million, of which the aggregate of Exchequer grant is £449 million. Two changes affecting reckonable expenditure should be noted, because they affect the expenditure of the grant. The first is the transfer to the National Health Service of responsibility for the local authority health services and school health. That has come out of the rate support grant and has, of course, gone into other Estimates. This has reduced the reckonable expenditure by about £18 million.
Second, rate rebate grants will in future be treated separately from the rate support grant, and not as one of the specific revenue grants which are deducted from the aggregate Exchequer assistance to arrive at the total of Exchequer assistance. This last change, which is to the benefit of local authorities, is as a result of the provision by Parliament in the Local Government (Scotland) Act 1973 for a new system of rate rebates assisted by grant at the rate of 90 per cent.

203
The percentage rate of grant is 68 per cent. of reckonable expenditure. This may not seem an improvement, since it was fixed at 68 per cent. for 1973–74 as well, but the effect of the two changes to which I have referred in expenditure on health services and rate rebate grants is to make the 68 per cent. on the new arrangements the equivalent of slightly more than 69 per cent. under the old ones. It is a rather abstruse calculation, but if the £18 million is added to the reckon-able expenditure of £660 million and to the grant of £449 million, it will be found that the percentage changes and the figures I have given are correct.
Of the total grant £37 million will be paid as specific grants and £412 as rate support grants. The rate support grants will consist of a needs element of £290 million, a resources element of £97 million—in the usual proportion to needs element of 1:3—and a domestic element of £25 million.
The domestic element gives direct rate relief to householders, and the only change in the distribution arrangements which I am proposing this year is to increase that relief from 15p to 17p in the pound. This maintains the arrangement which has been adopted in recent years of giving about half of the benefit from the increased rate of grant to domestic ratepayers only, and the rest to all ratepayers generally. There is no controversy about this; it has been done before and it is accepted.
The needs element—a sum of £290 million—is the main component of the grant and is distributed, at the "education" authority level, on a formula which makes allowance for the different spending needs of each authority as measured by various indicators which have been used before. There has been no change in the distribution formula now for two years, since it would be pointless to review the working of the system as regards the present authorities when they have so little time to run. But I shall soon be asking the local authority associations to agree to meet my officials to discuss the distribution arrangements for the first year of the new authorities. This will be a considerable task and is fraught with more than usual difficulty. It may well take some time.
Mr. Ian MacArthur: While the right hon. Gentleman discusses the point about distribution according to need, will he look again at his proposal to freeze rents and to repeal the Housing (Financial Provisions) Scotland Act? Will he say whether any allowance is made in the order to protect ratepayers from the cost of this proposal and whether he will direct Government funds not only in that direction but to rent payers who need help the most, as was the policy pursued by the Conservative Government, and in this way help to protect the 149,000 tenants in Scotland who are already paying no rent at all?
Mr. Ross: Questions of rent freeze and provision in respect of rate burden that might fall upon people are not covered by rate support grant, and indeed could not be covered by it. That will have to come in legislation.
Mr. MacArthur: When?
Mr. Ross: Fairly soon, I hope. I hope that, before legislation, there will be announcements in respect of the extent of help.
Mr. J. Bruce-Gardyne: Wholly inadequate.
Mr. Ross: It is not inadequate. We are discussing rate support grant in Scotland, and that cannot be made a vehicle for other matters.
Mr. Bruce-Gardyne: We need to know what the figure is going to be.
Mr. Ross: Not tonight.
Mr. Bruce-Gardyne: Come clean.
Mr. Ross: It is not a case of "coming clean". The hon. Member for South Angus (Mr. Bruce-Gardyne) should get to his feet if he wants to say something.
Mr. Bruce-Gardyne: I shall.
Mr. Ross: Anything of that nature would be out of order on this order. I was responding to the hon. Member for Perth and East Perthshire (Mr. MacArthur) and seeking to give him information. There has been no change in the distribution formula now for two years, but we shall get down to discussing changes required to be made in the light of reorganisation.

205
While the needs element compensates for differences in local needs, the resources element of grant compensates for differences in local rateable values. There is a tremendous variation in rateable values—ranging from about £175 per head in Grangemouth to £9 per head in Shetland. The rates income of the poorer authorities is not capable of supporting equivalent standards of services which people rightly demand. Greater support is therefore required for these overheads. Through the resources element the Secretary of State, in effect, steps in as a local ratepayer, making the greatest proportionate contribution where rateable values are lowest.
There is one further point I should mention about the resources element. All the expenditure of the local authority is taken into account in the calculation of the element, but, in accordance with the 1966 Act, expenditure by way of contribution to housing revenue accounts is calculated on the basis that rents do not fall below a certain level, and that level is prescribed in the order as the notional rent income. That is the only part of the formula basis in respect of rent income accounts. Since we have decided to freeze rents this year, I have prescribed that the formula for calculating the notional rent income of 1974–75 is to be the same as for 1973–74.
Mr. MacArthur: The right hon. Gentleman has today repeated an undertaking that he gave during the election. He must say how in future local authorities and, in particular, ratepayers are to be compensated for this whim of Socialist fancy. It is wrong that the ratepayer should be made to pay a large part of the cost of the right hon. Gentleman's policy of buying thoughtless votes.
Mr. Ross: We are dealing with the rate support grant. It would be out of order for me to embark on a long explanation of something that is not in the rate support grant order.
Mr. MacArthur: You must know.
Mr. Bruce-Gardyne: On a point of order, Mr. Deputy Speaker. It seems that we are getting into some difficulty with the right hon. Gentleman. He has given an indication of the effect of the Government's rent freeze on the calculation of the notional rent income. He then said
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that there could be no further discussion on the matter. That cannot be correct. If the right hon. Gentleman's original remarks were out of order it would have been for you, Mr. Deputy Speaker, to say so. It is not for the right hon. Gentleman to tell us which parts of our discussion are in order and which are not. Surely that is a matter for the Chair.
Mr. Deputy Speaker (Mr. George Thomas): I am much obliged. Whoever occupies the Chair always receives plenty of advice. I have received it from the right hon. Gentleman the Secretary of State and from the hon. Member for South Angus (Mr. Bruce-Gardyne). This is a timed debate, and there may be room for a little latitude, but let us see how we get along.
Mr. Ross: The simple fact is that I have already said that what we are doing in respect of compensating local authorities requires legislation. Since it requires legislation it cannot possibly be in this order. Before that legislation comes along the way in which the matter will be handled will be announced to the House.
The starting point for the determination of grant is the consideration by the Secretary of State, in consultation with the local authority associations, of the current rate of reckonable expenditure—
Mr. MacArthur: On a point of order, Mr. Deputy Speaker. Is there any point in continuing the debate, because without the information the discussion is a waste of time?
Mr. Deputy Speaker: Order. That is not a point of order and the hon. Member knows it.
Mr. Ross: —and the current level of prices which are customarily taken into account.
I am sure that the House would wish me to express our thanks to those who have laboured to make the forecasts as fair and accurate as possible. I should like particularly to acknowledge the contribution of the local authority representatives this year, having regard to the fact that when cuts are under discussion their position is necessarily a delicate one.
After adjustment for savings proposed by the last administration, which I have

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left unchanged, the forecast of next year's reckonable expenditure is £660 million. That implies that current expenditure of local authorities, excluding loan charges, will rise next year by no more than 1 per cent. in real terms, or about 3½ per cent. when loan charges are allowed for. These are across-the-board figures and are affected by the quite severe reduction in highways expenditure which is proposed for this year, highways being a sphere in which local authorities have more scope for varying expenditure than in most other services. It can work both ways, because they can inject as well as deduct if the situation changes.
Overall restraint does not mean that we should disregard areas of greater social need. In the estimates set out on page 10 of the report allowance is made for the improvement in standards, though at a considerably lower rate than in recent years, where that is required. In particular provision is made for the continued recruitment of teachers and other key categories of staff.
My hon. Friend the Minister of State, Scottish Office will deal in reply with points which may be raised about the provision in the order for particular services. However, I ask the House to remember that the share of the rate support grants which any local authority receives is a grant in aid of its revenues generally. How these revenues are allocated is a matter for the local authority itself.
I need not refer to the increase orders in detail. The reports relating to the orders state the considerations, and I do not think that issues of principle arise. My hon. Friend will be happy to deal with any questions that may be raised.
The orders should enable the Scottish local authorities to carry out their responsibilities during the coming financial year, and, provided they exercise restraint, to do so without imposing unreckonable burdens on the ratepayers. I commend the order to the House.
12.6 a.m.
Mr. Teddy Taylor: Time is short, and, while I appreciate that there was a long debate on the English order, I regret that this important order should be discussed at this time of night.
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The Secretary of State has been a little unfair in the way he has dealt with the order. He has spoken about the negotiations having been in an advanced stage when he took office; yet, at the same time, he has claimed total credit for the concessions—to Glasgow and Edinburgh —and the 15 per cent. to 17 per cent. on domestic rating.
Had he wished to be absolutely fair the right hon. Gentleman would have pointed out that at a meeting on 18th January it was made clear by the previous Government that both these points would receive careful and sympathetic consideration. He unfortunately omitted to mention this, which shows that these points were well on the way to being agreed during earlier negotiations.
The order is important in determining the rate poundage which Scottish local authorities will announce in the autumn and many local authorities and ratepayers are more worried this year than previously about the outcome.
All the signs are that the rate rise this year could be catastrophic and alarming, and that it will affect the living standards of every Scottish family, directly through rates and indirectly through prices which will be charged in the heavily rated shops.
Why is there such great concern? The first worry, on which I hope the Secretary of State can give detailed guidance, concerns the fear expressed to the Government and, in particular, to Lord Hughes at a meeting last week, about the percentage of local government spending which the Government will underwrite.
The Secretary of State has now said that all the calculations and decisions have been made. It was a little unfair of Lord Hughes to have a meeting with the local authorities on the important point of principle. In all the years up to 1972 Scottish local authorities enjoyed a differential of 8½ per cent. over English authorities. In 1972–73 this differential was reduced to 8 per cent., with Scottish authorities getting grant for 68 per cent. of reckonable expenditure and English authorities getting 60 per cent., but the reason advanced for this was that the English authorities had special extra expenditure in coping with problems of local government reorganisation.

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In those circumstances, Scottish authorities were understanding about a reduction in differential. However, it was anticipated that the differential would at least be restored in 1974–75 when Scotland faces the problems of its own reorganisation of local government, which will, no doubt, give rise to a heavy burden. But this year, when Scottish local authorities said that they must have the differential restored, and increased to 9 per cent., they have been presented with an order which makes clear that the differential is being reduced to 7½ per cent. Scotland is to receive 68 per cent. again this year, and the English authorities 60½ per cent. The 1½ per cent. difference comes to about £9 million.
I think that the Secretary of State is fully aware that Scottish authorities are very concerned about this further reduction in the differential between the Scottish and English authorities. He should give us a full explanation why Lord Hughes apparently turned a deaf ear to the pleas of the Scottish authorities. There may be a clear explanation, and if there is we are entitled to hear it.
The second big problem worrying Scottish ratepayers is that in paragraph 5 of the Secretary of State's report on the order it is indicated that local authorities have been asked to hold their expenditure for 1974–75
"at a level which in real terms is close to that of the current year."
The Secretary of State explained tonight that by "close" he was thinking in terms of 1 per cent. Bearing in mind the demand for additional services in local authorities, he has a duty to tell the ratepayers of Scotland precisely what will happen if an individual authority or several authorities cannot contain their expenditure as requested by the Government. Will it simply mean that the rates will soar? How will that help to contain inflation?
The third problem, one which the Secretary of State cannot dodge, is the one so ably raised by my hon. Friend the Member for Perth and East Perthshire (Mr. MacArthur). In view of the order, what will be the implications for the rates of the Government's decision to put a freeze on council rents until the end of 1974? How will that affect the rates?
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It will mean that local authorities will lose a significant income which they would otherwise have been expecting to receive in the current financial year.
At the time of the announcement of the freeze reports were published that local authorities would be compensated for that loss of income, but in a courteous letter to me of 18th March the right hon. Gentleman indicated that his aim now was to compensate them for the major part of the lost revenue, and that he hoped to give the local authorities as much notice as possible of the new arrangements so that they could prepare their estimates. When shall we have the details? If the Government will not compensate the local authorities fully, who will pay the rest? When will the Government reveal their new rents policy to local authorities?
In Glasgow the freeze is of less urgency because another rents rise was not due until 28th January next year, but other authorities had planned increases in October. But, whether it is October or January, the county and city treasurers will have to be planning very shortly what will be their rates poundage for the year 1974–75. How precisely is that to be done unless we have an indication of the Government's plans?
It seemed to me that the right hon. Gentleman was saying "I have made provision by saying that we have not the same notional rent for 1974–75 as we had for the previous year." The indication is that the major part comes to about 68½ per cent. Is that the figure? Is the right hon. Gentleman proposing that we should pay the major part, just over two-thirds, and the ratepayers pay one-third?
The detailed plans will perhaps have to await legislation, but I find it difficult to see why the matter could not have been dealt with by increasing the amount of grant. But if there has to be legislation—and the right hon. Gentleman has detailed advice on this—can he give us an indication of what percentage he has in mind? What does he mean by "the major part"—60 per cent., 70 per cent., 80 per cent., 90 per cent.? It is a crucial factor. We appreciate that the Secretary of State will want later to give the details of the legislation or of his plans, but he can surely at least give an indication of what percentage he has in mind.

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The Secretary of State must remember that in every Scottish family someone, whether a council tenant or owner occupier, has to pay rates. Can ratepayers look forward to a massive rates rise in August instead of a rents rise at the end of the year? We are talking about big money. I understand that the loss of revenue from 28th January 1975 until the end of the financial year in Glasgow alone will amount to about £1,300,000. Other authorities which are represented here by my hon. Friends are facing an anticipated rents rise in October. This is big money. It is essential that before the local treasurers make up their budgets the Secretary of State should tell them whether he intends to make good the full amount of lost revenue and what his rents policy will be after 1974. I hope that we shall not return to the unjust system of the previous Labour Government when tenants of SSHA houses and new town development corporation houses were more directly controlled by the Secretary of State. They were subject to annual rent rises while local council rents varied enormously depending on which authority was concerned.
Mr. Harry Ewing: Is the hon. Gentleman aware that he, along with his right hon. and hon. Friends, was party to a Housing Finance Act that preserved a constant system whereby SSHA and new town development corporation houses always had a higher level of rents than local authority houses? Is it not hypocritical of the hon. Gentleman to express such concern for local authority and SSHA tenants when he and his hon. Friends, and particularly the hon. Member for Perth and East Perthshire (Mr. MacArthur), were responsible for bulldozing through the Housing Finance Act about which he is not complaining?
Mr. Taylor: The hon. Gentleman will find that he is wrong. The final result, once the Housing Finance Bill had been taken through all its stages, was not the grave variation which the hon. Gentleman is talking about. I shall be glad to go through the matter with him afterwards. He should appreciate that when we last had a Labour Government there were Questions from myself to the Sec-
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retary of State for Scotland about the position in a strange-named place in Glasgow called Toryglen. Whether that is an appropriate name only the secrecy of the ballot box can tell. The hon. Member for Glasgow, Queen's Park (Mr. McElhone) will know Toryglen well as he has the honour of representing it. He will know that at Toryglen there were SSHA and Glasgow Corporation houses side by side. The Secretary of State for Scotland was then telling the SSHA to put up its rates, and the council rates did not go up at the same time. That was an unjust situation which I hope will not be repeated. That is why it is important that we have clarification on future policy very soon. The right hon. Gentleman must state his views on what will happen to rates in Scotland.
It is the Government's decision to abandon statutory wage control. We do not know when that will be done. I know that the hon. Member for South Ayrshire (Mr. Sillars) may have different views from some of his hon. Friends on that point. The fact is that the Secretary of State for Employment said that it was his aim that at some stage, and at an unspecified time, wage control should disappear.
If local councils decide to increase the wages of their employees outside the national wage structure negotiations, we must know whether the extra cash will come from increased orders or whether the entire burden will fall again on the ratepayers. I hope that the right hon. Gentleman can give us a clear answer to that matter. I am sure that he is fully aware that my right hon. and hon. Friends regard this order with grave suspicion. Scottish ratepayers were clobbered the last time we had a Labour Government, and the signs are that that will happen again.
12.19 a.m.
Mr. James Sillars: I was not sure, when the hon. Member for Glasgow, Cathcart (Mr. Taylor) came to the end of his speech, whether he was going to tell us that the Opposition were to divide the House at the end of these orders as they did at the end of the last order? Or will he just bark but never bite the Labour Party?
Mr. Taylor: The hon. Gentleman must be aware that we never prejudge an issue.

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What we do in the Lobby depends entirely on whether the answers which we receive are satisfactory.
Mr. Sillars: Up to now it appears that the Opposition are dissatisfied with what the Labour Party has said. I have in my five minutes the opportunity to make them even more dissatisfied. Perhaps they will then divide the House. We shall then be able to explain to the people of Scotland that hon. Members representing constituencies throughout the United Kingdom stayed up late so as to take a decision relating to Scottish matters as we did on an order relating to England and Wales not so long ago.
The first point which struck me when I examined House of Commons Paper No. 38 was that this was like the Local Government (Scotland) Act, in that this was very like a Conservative measure and that the momentum had moved forward to such an extent that my right hon. Friend, even given his hostility to the Act, had found that it had gone too far to stop or for him to take the necessary Socialist corrective measures, so that he was bound to put this order forward with one or two necessary adjustments tonight.
Mr. John Robertson: My hon. Friend will notice that it is not night but morning.
Mr. Sillars: I am grateful for the correction. However, having been a railwayman I am used to the night shift and look at it in that way.
However, returning to my point about matters having gone too far for the necessary corrective measures to be taken, I have been brought up to believe that, when one has political power, provided that one has the will to make the necessary changes one can do so. I am disappointed that we are having to take most of a Conservative measure. I see the hon. Member for Cathcart nodding. He is no doubt nodding himself into a position where he will not have to divide the House in about an hour's time.
My right hon. Friend tells us in House of Commons Paper No. 38 that he consulted the local authority associations, but, as he said in introducing the order, he did not have a great deal of time in which to consult local authorities. It is also said that an increase order can be
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introduced. I hope that my right hon. Friend will do so, for a number of reasons.
I am rather concerned with paragraph 5 on page 4 of HC No. 38, which covers briefly but succinctly the economic background against which the order was framed. It talks about local authorities marking time with some of their plans for expansion of their various activities. I fully recognise the difficulty facing the present Government. We have inherited a dreadful mess from the Conservatives. In some areas local authorities cannot afford to mark time. They must go forward at a very rapid pace of development.
I refer specifically to activities connected with housing, leaving aside the need to build more houses, which is a clamant need in Scotland at present. In the Cumnock area of my constituency we have ambitious plans for housing development. Although the last Government said that they would not stand in the way of developing housing, they stood in the way of developing the sewers and drainage systems which are essential if housing schemes are to proceed. I have been told by local councillors that the Underwood sewerage scheme was held up and that this has had a marked effect on the housing plans in the whole Cumnock area.
Can I have an assurance that any marking time by the local authorities will not simply not apply to housing but will definitely not apply to associated developments which are essential if housing is to to proceed?
The second point concerns the urban programme mentioned in paragraph 14 of HC No. 38, which states:
"Provision has been made for a moderate increase in current expenditure under the urban programme, although savings will be required in capital expenditure."
What does this mean? If savings are required in capital expenditure, that is bound to have a great impact on the urban programme, because to a great extent it is capital expenditure that takes an urban programme forward, taking the areas earmarked from dereliction into a reasonably modern situation. I believe that the urban programme is not sufficiently imaginative.
I will not mention to too great an extent areas in other constituencies, but I

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saw "Current Account" on BBC television in Scotland last Thursday. Part of that programme covered the situation in Ferguslie Park in Paisley and part of the city of Glasgow. That was a shattering programme for anyone to see. We have Ferguslie Park and Blackhill, and there are small housing areas in towns and villages all over Scotland which are in a shocking state because of the poor quality of housing construction. It was so poor when they were built that they were bound to degenerate into modern slums. We have flatted dwellings in which no one wants to live, and certainly no hon. Member of this House would take up an allocation to one. The urban programme should be extended to the point where we should consider, adopt and prosecute a policy of bulldozing down these poor quality buildings and rebuilding much better ones.
I come to paragraph 13 of House of Commons Paper No. 38 dealing with the Rate Support Grant Order. The view expressed there must be the Civil Service view rather than that of a Labour Secretary of State for Scotland. It tells us that the estimated growth rate of about 14 per cent. in 1973–74 is higher than expected. Surely we would not expect this to be any different, given the effects of three and a half years of Conservative rule in Scotland, especially in housing and social service—when they dumped people into the poverty trap.
What happened in three and a half years of Conservative rule was that the social condition of Scotland deteriorated to such a point that a great deal of pressure was placed on the social work departments. Before I left Ayr this morning I spoke on the telephone to the director of social work in Ayrshire, well known to my right hon. Friend as well as to me. We were discussing some of the problems arising out of the housing crisis, caused by a collapse of the house building programme under the Conservatives.
More and more of us are finding that families are desperately seeking a house, but cannot get one, either from the council or from the private sector. The director told me that in the past year we have taken more children into care than ever before, because families cannot find
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homes. The accommodation of the social work department is bursting at the seams, while the work load of the social workers is building up.
I do not expect my right hon. Friend to build these houses in 24 hours. It will take time to repair the damage, but it seems to be extremely optimistic for the order to talk about growth in terms of 5 per cent. That underestimates the sort of welfare condition we have inherited.
The final sentence of paragraph 13 in the House of Commons Paper says:
"As in other services, economies in the procurement field will be necessary."
Am I right in thinking that this means that economies in procurement will take place at the time of the changeover from the present system to the new system of local government when people will be building empires all over Strathclyde? It seems we are unlikely to get any economies at all. I give a qualified welcome to the Paper, and look forward to the increase order that I hope we shall get from my right hon. Friend.
12.28 a.m.
Mr. Hector Monro: I listened with interest to the Secretary of State. In a major debate on Scotland covering the whole ambit of local government services for the year it is astonishing that no member of the Scottish National Party has bothered to attend and take part.
Mr. Robertson: And no English Tory, either.
Mr. Monro: The hon. Member should remember he is not at his Ayr conference now.
Mr. Robertson: I was only trying to indicate that, although I have sat here all day, during the debate on the English order no English Members are willing to listen to the debate on the Scottish order.
Mr. Monro: That is an astonishing argument to put forward at 12.30 a.m. It is much more important for the one-and-a-half hours to be used entirely by hon. Members representing Scottish constituencies when we are discussing a subject that concerns Scotland.
According to paragraph 12 of the White Paper, the aim is to achieve improved pupil-teacher ratios in both

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primary and secondary schools, and I welcome that. I am also glad to see that there is no intention to seek economies in teaching costs. I hope that the right hon. Gentleman will follow the December circular in which the previous Government said that there should be no cuts in school building starting this spring, which is contrary to what many Labour candidates said during the election campaign.
I should like to have some figures and assurances on teacher recruitment. There are about 3,000 students at colleges of education training to be secondary teachers. That should give a pupil-teacher ratio next session of 15.8 to one, or slightly less—a figure second only to that achieved in 1972–73.
How will the Government improve the distribution of secondary teachers, which is a major difficulty in Scotland? Will they continue the policy announced by the previous Government of voluntarily restricting recruitment in those areas that are better staffed and encouraging teachers to go to areas that are short-staffed, by which I mean the West of Scotland? Do the Government also hope to improve the pupil-teacher ratio for remedial teachers?
How does the Secretary of State hope to improve the designation scheme for commencement in August? The present scheme runs out at the end of July, and it is important to know this soon so that students in colleges of education can plan ahead which authority to apply to for jobs for next session.
Perhaps we might have a comment on primary education. Does the right hon. Gentleman see the continuing improvement in staffing which I believe is likely? In September 1973 there were 25,774 qualified primary teachers, against 20,610 in 1969. In that period there was an increase of about 25 per cent. That trend enabled the Conservative Government to recommend a class size of 30 by 1975–76. Many authorities have made substantial progress towards this objective and should reach it, bearing in mind that the primary school population has begun to fall. Are sufficient resources available to make a start in nursery education later this year, as was forecast in the White Paper of December 1972?
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The hon. Member for South Ayrshire (Mr. Sillars) was his usual unfair self in his reference to the Conservative Party and social work. Bearing in mind that the local authorities were unable to make a major start in developing social work until 1969, over the years substantial progress has been made in view of the available resources. Many of the resources come from local authorities. It has taken a while for local authority social work committees to establish themselves as being among the most important committees within local authorities. They are receiving equal priority with education and housing, and I am glad of it. But the hon. Gentleman has been asking for too much to happen too quickly. I hope, however, as I am sure the Secretary of State does, that the local authorities will spend the maximum they can afford on social work in the coming year.
In Appendix B there is mention of approved schools. Should not these be List D schools? I would like that point clarified for future reference. I hope that the right hon. Gentleman will continue to encourage, as his predecessor did, the local authorities to be involved in the construction of List D schools, because we all accept that such school places are in short supply and are essential if the children's hearings are to carry out their work effectively.
On 18th March, the right hon. Gentleman told my hon. Friend the Member for Bute and North Ayrshire (Mr. Corrie) that he was considering urgently the future of improvement grants where there had been delay because of shortage of building materials. On 22nd March the Minister of State, Department of Industry, in an English context, told the hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) that delays in construction caused by shortage of materials would not prevent the payment of grants where applications had been lodged in time. This is also an important matter to Scotland, and perhaps the Secretary of State will make an announcement as soon as possible.
What developments does the right hon. Gentleman see under Appendix B in relation to rural bus services? They have become more and more important in recent years, particularly to old folk with concessionary fares. Is there sufficient money in the order to cover the

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developments we want to see in these services?
I shall not follow the argument of the hon. Member for South Ayrshire although I would like a reply from the Minister of State on the point we have pressed in the debate about rents and rates, because, without a satisfactory answer, it is tempting to give the Government Chief Whip heart failure and call a Division.
12.39 a.m.
Mr. John Robertson: The hon. Member for Dumfries (Mr. Monro) has made a most astonishing speech. We have seen him shedding crocodile tears over a situation which he more than anyone else helped to create. During the election campaign I went out of my way to tell the people of Paisley that even if Labour was returned with a very large majority things could not be other than tough in clearing up the dreadful mess left by the Conservative Government.
Mr. MacArthur: Oh!
Mr. Robertson: That goes, too, for the hon. Member for Perth and East Perthshire (Mr. MacArthur), who has so much to say. He should feel ashamed of some of the attitudes he has taken in the past year.
Of course, restraint has to be exercised, but I do not agree that it has to be applied indiscriminately across the board. There has to be a determination of priorities, and nothing is said in the orders about priorities. However, I accept that they are Tory documents.
Nor is this just a matter of looking at the various items of expenditure only in the Scottish context. There must be a scrutiny of expenditure at a United Kingdom level. Indeed, more than scrutiny of of this order and that on which we spent the whole day is required to see the significance of what is happening in Scotland. On the face of it, it seems that intention is to maintain the status quo. I recognise that my right hon. Friends have not had much time to make their own appreciation of the situation, and, as my hon. Friend the Member for South Ayrshire (Mr. Sillars) said, no doubt we may look forward to a further order later.
However, there are two areas of public expenditure that, if possible, must be increased rather than diminished. The first is education. The situation in educa-
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tion, as my right hon. Friend knows, has reached crisis proportions. Not only is there a shortage of school buildings, but we have part-time education, and in Paisley there are even children receiving no education at all. Of course, the former administration was responsible for that.
I know that it is asking too much to hope that all these matters will be rectified tonight, but I hope that my right hon. Friend will quickly consider what may be done to make education not only a Scottish but a United Kingdom priority. For instance, we could do without Maplin and we could have another look at the Chunnel and at Concorde in order to rescue Scottish education.
The same can be said of housing. There can be no cut-back in housing expenditure. No doubt there are items—defence and some of the grandiose schemes of the former administration in South-East England and the Midlands—that could be cut. On the basis of need, those areas have been sucking in far too much of the country's resources for far too long. If any attempt is to be made to rectify the country's imbalance overall, drastic decisions affecting the whole country, not only Scotland, will have to be made.
In Paisley, the local authority has already had officially to demolish 250 council houses, while 600 houses lie empty. But another and unknown number of houses have been partly or even totally demolished by unofficial demolishers—so badly vandalised that they, too, will have to be demolished. Replacing them will cost at least £6,000 or £7.000 per house and there is a tremendous housing waiting list in Paisley. If sufficient money is injected into the rehabilitation of Ferguslie Park, however, in the long term there will be a considerable saving of public money.
I cannot think that it is only in Scotland that these conditions exist. A special effort is needed to save public property from vandalism and complete waste. This is an instance of when being penny wise is pound foolish.
Priorities, it is said, are the language of Socialism. I believe that my right hon. Friend wants to apply Socialist priorities. We need a review of all local authority and other public expenditure and the application of Socialist priorities

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over the whole community. Only in that way shall we get some of these problems rectified.
12.45 a.m.
Mr. J. Bruce-Gardyne: I must confess that I never saw myself coming to the support of the right hon. Member the Secretary of State—least of all under your guidance, Mr. Deputy Speaker. I take this opportunity of joining in the congratulations that have been expressed to you.
Having listened to the hon. Members for South Ayrshire (Mr. Sillars) and Paisley (Mr. Robertson), it seems to me that the right hon. Gentleman is in need of friends tonight. At least on one count I am quite prepared to come to his support—namely, in terms of his reference to the need for restraint in local authority expenditure in the year ahead. I was delighted to hear that from the right hon. Gentleman. We did not hear very much about the need for restraint in local authority expenditure from the right hon. Gentleman and his hon. Friends before the election, and we are all grateful for sinners that repent, even if it be at a late hour.
I subscribe to the demand for restraint at present. I am sure that restraint in all forms of public expenditure is essential. It will be particularly essential in the year ahead, when we are facing the reorganisation of local government. I hope that the Secretary of State takes very good care to see that we do not have in Scotland a repetition of what appears to have happened in some areas in England, where the reorganisation of local government has led to a horrifying escalation of what I can only call sumptuous expenditure. This needs watching, and we shall be watching the Secretary of State to see that he watches it properly.
The Secretary of State has a bit of a brass nerve. He talks about the need for restraint. His presentation tonight slightly recalled the comment of my right hon. Friend the Member for Barnet (Mr. Maudling) on a famous occasion in 1964, when he said that the then Labour Government had inherited our problems and our solutions. That is what the right hon. Gentleman was telling the House tonight—that this, in broad essentials, was the Conservative Government's Rate
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Support Grant Order which he had inherited. He was criticised by the hon. Member for South Ayrshire for having taken it on board, and the knives were flying into his back.
This is like a recitation of Hamlet without the Prince of Denmark, because the right hon. Gentleman left out completely a major change that has occurred—my hon. Friend the Member for Perth and East Perthshire (Mr. MacArthur) drew his attention to it in an intervention, and my hon Friend the Member for Glasgow, Cathcart (Mr. Taylor) rightly criticised the right hon. Gentleman in his remarks—the impact of the rent freeze. I draw your attention, Mr. Deputy Speaker, to paragraph 5 of the White Paper. It says that
"Local authorities are aware of the need for restraint, and have been asked to hold their expenditure for 1974–75 at a level which in real terms is close to that of the current year. By achieving the necessary reductions in the growth of their expenditure, and in the consequent increase in their rate demands …"
How are they to do that when the Secretary of State, in his very first action on taking office, imposes a brand-new diminution in the revenues that they could otherwise have been expecting during the rent freeze?
My hon. Friend the Member for Dumfries (Mr. Monro) referred to the absence of the SNP from our deliberations. I am not in the least surprised. The SNP supported the right hon. Gentleman in his rent freeze; now its members avert their faces and their presence from the consequence that we have to discuss when considering this order. The Liberals supported the right hon. Gentleman. The rapid departure of the Liberal Whip was only to be expected. I wish that only occasionally we could expect the minority parties from Scotland to pay some attention to the effect of the policies they support.
Before we leave this order tonight, we ought to have some clearer evidence of how the Government expect to apportion the burden of their economically ludicrous rent freeze between the ratepayers and the taxpayers. All we have had to date is an absolutely flat contradiction in terms from the right hon. Gentleman and his hon. Friend the Minister of State.

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On 20th March the Minister of State announced:
"I have said that we are not putting the burden"—
of the rent freeze—
"on ratepayers."—[OFFICIAL REPORT, 20th March 1974; Vol. 870, c. 1009].
I wish the Minister of State would read HANSARD or occasionally have a word with his right hon. Friend the Secretary of State. His right hon. Friend, the day before in reply to his hon. Friend the Member for South Ayrshire, said in a Written Answer:
"There are likely to be some increases in rates due to higher deficits in housing revenue accounts."—[OFFICIAL REPORT, 19th March 1974; Vol. 870, c. 89.]
Has the Minister of State met his right hon. Friend in the last 10 days? Do they ever converse? Do they ever compare notes about what should appear in HANSARD? This House needs to know before we approve this order.
I should warn the Minister having listened to the speeches of his hon. Friends tonight, that if there is a Division it does not sound as though he could necessarily count on their support. Before we complete our deliberations on this order we need to know exactly how this burden which the Government have wilfully and wantonly imposed upon the ratepayers of Scotland is to be shared between the ratepayers and the taxpayers. It is not good enough to read in The Scotsman, after the right hon. Gentleman's meeting with local authorities last week:
"Mr. Ross has meanwhile asked local authorities to hold the coming year's expenditure at this year's levels."
How are they to do that if their revenue is depressed by the actions of the Government and if they are not given any indication of how that additional burden is to be shared out? All they can do is read HANSARD, and when they do, all they know is that the right hon. Gentleman and the Minister of State speak with two totally different minds.
I am delighted that some economies in public expenditure have been achieved by the Government with a restricted Scottish Office team, but if this is the sort of information that the nation is to get from the Scottish Office—one thing from the Secretary of State on one day
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and the absolute reverse from the Minister of State the next day—all I can say is: take them both away and find somebody who can tell us what is really going on. We need this answer before we approve this order tonight.
12.53 a.m.
Mr. Alick Buchanan-Smith: I apologise to any hon. Member on the Government side who has not had an opportunity to speak. I intend to speak for only a few minutes because many points have been raised in the debate and we want to give the Minister of State plenty of time in which to reply to the detailed questions.
From some of the things which have been said from the benches opposite, one would think that the Government on coming into power had inherited a difficult situation in Scotland. All I would say—and I say this particularly to the hon. Member for Paisley (Mr. Robertson)—is that I do not think any Government have taken over with the economy in Scotland in a stronger position than it is at the present time. Any balderdash that is talked about a weak economy in Scotland is an absolute travesty of the facts, and I do not intend to allow any hon. Member opposite to get away with that sort of statement.
Mr. Robertson: Does the hon. Gentleman deny that his administration were cutting local government expenditure last summer, long before the December budget was brought in?
Mr. Buchanan-Smith: There are problems—there always will be—and no Scot will ever accept that things are as right as he would like to see, but it is a travesty of the truth to say that the Scottish economy was not strong.
Until March of this year we had a Government who were prepared to cut their own and public expenditure in an effort to control inflation so that the ordinary person did not suffer. The burden rested on the Government and public authorities rather than on the ordinary person.
My hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) referred to the call in the report submitted by the Secretary of State for restraint by local authorities in an effort to control inflation. We support this and believe that

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it is right. We shall watch the Government to ensure that they set a proper example in trying to control inflation. I say that because many of the things they have done so far will not encourage others to try to control inflation.
We hope that if economies are necessary the Government will accept their proper share of any cuts that have to be made and not seek to make the individual bear the burden of them. Unless inflation is controlled, much of what we have gained in Scotland in recent years will be squandered and lost.
There has been a lot of talk about priorities, and questions have been asked about where the money goes and what services are provided. I hope that the Minister of State will answer the questions that have been asked.
I share the concern expressed by the hon. Member for South Ayrshire (Mr. Sillars) about social work. There should be an efficient social work service. Paragraph 13 of the report submitted by the Secretary of State says that the social work service has developed considerably since 1970 and that the growth rate of about 14 per cent. in 1973–74 is higher than expected. It may be that improvements could be made in certain arms of the service, but a great deal has been done and the hon. Gentleman's condemnation of the service is not borne out by the facts or by what is in the report.
Mr. Sillars: My condemnation of the previous Government is that the social and economic conditions created by them meant greater pressure on the social work service than it should have been called upon to handle.
Mr. Buchanan-Smith: That is a roundabout kind of argument. Perhaps the hon. Gentleman would care to cast his mind back to 1970 and recall the large number of unemployed in Scotland then. There are now fewer unemployed and more vacancies, thanks to the policies of the Conservative Government.
The other priority is housing, to which reference has already been made, in particular by my hon. Friend the Member for Perth and East Perthshire (Mr. MacArthur). This shows the weakness of the reasoning of some Labour Members. If we are to pay attention to particular areas, like housing, what the hon. Member
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for Paisley is asking for is not reflected in any sense of priority over the rent freeze, which benefits all tenants regardless of need. If we want to make the best use of scarce resources, surely they should be concentrated where they are most needed. Far better than the rent freeze would have been a concentration on the needs allowance or some other aspect of housing expenditure.
Mr. Robertson: The last Government three times drew attention to 500 empty houses in Paisley, which they said were bringing in no rent, but they did nothing to solve that problem.
Mr. Buchanan-Smith: It will be interesting to see how the Secretary of State solves that local problem, which is perhaps deeper than the hon. Gentleman suggested.
There is anxiety about the effects of the order, particularly the rent freeze, and I hope it will not be long before the right hon. Gentleman tells us how he intends to finance it. If it goes on the rates, this will affect the cost of living in Scotland. It could also affect the competitiveness of industry in Scotland, which has a bearing on the welfare and prosperity of Scotland's economy.
1.3 a.m.
The Minister of State, Scottish Office (Mr. Bruce Milan): I found it difficult to recognise the description that the hon. Member for North Angus and Meatus (Mr. Buchanan-Smith) has just given of the situation we inherited in Scotland and elsewhere in the United Kingdom. Some details have already been given by my right hon. Friend the Chancellor and other Ministers, and no doubt we shall hear more tomorrow in the Budget. To pretend that we inherited a healthy and vigorous Scottish economy flies in the face of facts accepted even by Conservative Members. It is with that situation as a background that the order is introduced.
My hon. Friend the Member for South Ayrshire (Mr. Sillars) said that the order could be given only a qualified welcome. I agree, because apart from the improvements that my right hon. Friend mentioned it is basically one we inherited and which, because of the shortness of time, the seriousness of the economic position and the inevitable constraints on public expenditure, we felt we could

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improve only slightly. In happier circumstances I would have hoped that we could do much better than the last Government, but the seriousness of the economic situation that we face has prevented us from doing so.
I agree with my hon. Friend the Member for Paisley (Mr. Robertson) that it is important to get our priorities right. We have very much in mind some of the matters mentioned by my hon. Friends. On the subject of housing, we know that in local authority terms the number of houses completed in the public sector in Scotland in 1973 compared with 1970 was reduced by half. That is part of the inheritance left by the Tories to the Labour Government. I pledge to my hon. Friends that the Labour Government will give considerable priority to housing. I have very much in mind the problems mentioned by my hon. Friend the Member for Paisley—for example, Ferguslie Park—which are partly housing problems and, in other areas, partly social problems.
I agree with my hon. Friend the Member for South Ayrshire that on the subject of social work we have also inherited a serious situation. I thought it was a little strange that the hon. Member for Dumfries (Mr. Monro) asked the Labour Government to give priority to the improvement of provision for List D schools and other accommodation when he and his Conservative administration were responsible for a situation which has deteriorated to crisis point. In the few weeks we have been in charge, we have had pleas from different parts of the country about the urgency of dealing with the problem. The Government in-tend to give early attention to this matter.
Mr. Monro: I hope that the Minister will not put words into my mouth. If he reads HANSARD tomorrow, he will see that I asked that he should continue to encourage local authorities.
Mr. Milian: The hon. Member for Dumfries as a Minister had a very poor record—I am sure he will not dispute what I say about his record—in social work provision.
Mr. MacArthur: This is disgraceful.
Mr. Milian: Obviously the Labour Government will want to do very much
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better than their Conservative predecessors. The same is true of nursery education. I was asked by the hon. Member for Dumfries whether there would be provision for nursery education this year, whereas the hon. Gentleman's own circular last December announced deferment of the nursery education programme by six months from March to September this year. That again is a situation which we have inherited from our predecessors. We are now reappraising the priorities and as we do so we shall hope to be able to tell the House and local authorities the kind of priorities that we wish them to follow in the coming year.
I turn from the particular to the more general questions that were put to me mainly by the hon. Member for Glasgow, Cathcart (Mr. Taylor). As for any reduction in differential between Scotland and England, this again was exactly what the Conservative Government intended to do. The percentages contained in the order are exactly those put by the Conservative Government to the local authority associations. I do not agree with the interpretation put upon the percentages by the local authority associations. Apart from anything else, on a strictly comparable basis the 68 per cent. provided for in the order is equivalent to 69 per cent., which is a real increase of 1 per cent. if we take into account adjustments for the National Health Service transfer to area health boards.
My noble Friend the Minister of State in the other place has told the local authority associations that he is willing that this point—which at the end of the day will be more than a matter of arithmetic—should be looked at jointly by officials of the Department and of the local authority associations. That exercise is now going ahead. But I do not accept the comparisons which the hon. Member was attempting to draw. There are particular circumstances in England such as water reorganisation and an earlier local government reorganisation which make his comparisons invalid.
The Opposition have made a good deal of the rents issue. I confirm what my right hon. Friend said about the position generally. It would not be possible within the Rate Support Grant Order to make compensating payments to the local authorities because there is no authority within

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the legislation on the Rate Support Grant Order to make that kind of payment. Payments on housing are not part of the reckonable expenditure for rate support grant purposes. The adjustment which was made in the resources element in calculating the estimated revenues from rents in the following year compared with 1973–74 is concerned exclusively with the distribution of the grant between local authorities and is not concerned with the total amount of grant.
My right hon. Friend has already explained that we intend to see that the major part of the effect of the rent freeze will be compensated to the local authorities, a point which was confirmed during Question Time last week. That will require legislation and there will be ample opportunity for it to be debated when it comes forward. We all look forward to hearing an explanation of the ambivalent position adopted by the Opposition on this point. They seem to be saying that they are not in favour of any rent freeze, but they are not willing to say so in those precise terms.
Mr. Barry Henderson: Does the hon. Gentleman accept that a big burden has been placed upon ratepayers by the rent freeze which I am sure must have been expected by the Government when they imposed the freeze? When will the legislation be introduced? Ratepayers will be most anxious unless they are told.
Mr. Milan: The hon. Member has not added anything to what has been said by his hon. Friends. The local authorities have not complained to the Government about the delay. I am not aware of a single local authority complaining on that score. Tory Members are indulging in a good deal of humbug in pretending to be defenders of local authorities when the local authorities are prepared to wait until the Government have produced their proposals. That we shall do as soon as we can.
The hon. Member for Cathcart adopts a somewhat ambivalent position. He mentioned the SSHA houses as well as the local authority houses. He did not mention Western Heritable houses He has a large number of them in King's Park and I have many in my constituency. Before the rent freeze there was to have been an 800 per cent. rise in rents on Western
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Heritable houses, largely negotiated by the hon. Member.
Mr. Teddy Taylor: Will the Minister give way?
Mr. Milian: That increase was to have come into force on Thursday but it has been frozen. Will the hon. Member say whether he believes that increase should have gone ahead?
Mr. Taylor: The rent on the homes the hon. Member was referring to were increased from £32 per annum to £240 per annum. In fact the rent was fixed at £340 per annum not by the Tories but by the rent assessment panel under an Act introduced by the Secretary of State in previous times.
It being one and a half hours after the commencement of Proceedings on the motion, Mr. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 3 (Exempted Business).
Question agreed to.
Resolved,
That the Rate Support Grant (Scotland) Order 1974, a copy of which was laid before this House on 19th March, be approved.
Resolved,
That the Rate Support Grant (Increase) (Scotland) Order 1974, a copy of which was laid before this House on 19th March, be approved.—[Mr. William Ross.]
Resolved,
That the Rate Support Grant (Increase) (Scotland) (No. 2) Order 1974, a copy of which was laid before this House on 19th March, be approved.—[Mr. William Ross.]

ELECTIONS OF COUNCILLORS (SCOTLAND)
1.15 a.m.
The Minister of State, Scottish Office (Mr. Bruce Milian): I beg to move,
That the Representation of the People (Scotland) Regulations 1974, a copy of which was laid before this House on 19th March, be approved.
These are simply technical regulations which arise because of changes in basic legislation. Regulations 2 and 4 make changes in the references in the 1969 regulations about election rules. They refer to the Scottish Election Rules of 1974 instead of to the old local election rules in the Representation of the People (Scotland) Act 1949. Regulation 3 is a

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similar technical kind of amendment to existing regulations.
Question put and agreed to.

RATING AND VALUATION (STRUCTURAL ALTERATIONS)
1.17 a.m.
The Under-Secretary of State for the Environment (Mr. Gordon Oakes): I beg to move,
That the Rating of Minor Structural Alterations to Dwellings (Specified Amount) Order 1974, a copy of which was laid before this House on 13th March, be approved.
The House has sat a long time, you have been in the Chair for a long period, Mr. Deputy Speaker, and I hope that I shall be brief in moving the order. It is made under Section 21 of the Local Government Act 1974, which was one of the last Acts passed by the previous Government.
That section has the effect of excluding proposals being made to change the valuation list between revaluations if structural alterations have been made to a property to install central heating or if the alterations would give rise to an increase in gross value not exceeding the prescribed amount. The purpose of the order is to prescribe the amount, and I believe that £30 is the right figure. It would mean that if a householder built a normal size garage the rateable value of his property would not be increased between revaluations. The same would apply to the building of porches, bay windows and so on.
I hope that if the order is approved we shall have got rid of one of the irritations of the rating system. We have heard this evening that there are many irritations in the rating system as a whole.
Many householders have complained that they have been penalised for improving their properties. The order will ensure that they at least get a respite. I cannot make the respite permanent—that would not be fair to other ratepayers—but at least we can remove the immediate source of complaint.
I therefore commend the order to the House.
1.20 a.m.
Mr. Hugh Rossi: I am grateful to the Minister for introducing
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the order. As he has told the House, it flows naturally from the Local Government Act 1974, for which my Government were responsible. Our gratitude will be equalled only by that of many ratepayers who will now have removed from them the irritation of having a proposal for increases in rates made to them consequential upon any improvements to their property that they may wish to carry out within certain limits, the limit laid down by the order being that of £30 value in the valuation list.
I should like to ask the hon. Gentleman one or two questions about that figure because of the confusion in the House when we debated Section 21 of the Act on Report. Certain hon. Members confused the distinction between the value of the work carried out and the effect of that work on the valuation list. The £30 refers only to the changes in the valuation list, not to the value of the work carried out which might otherwise bring about a change in the valuation list.
Can the Minister give further guidance on that point? He has said that a £30 change in valuation is equivalent to the building of a garage. It is conceivable that ratepayers would hesitate to carry out alterations, not being, sure of the effect on the valuation list. Can the hon. Gentleman say whether, for example, £1,000 worth of work would bring about a £30 change in the valuation list, or would it need to be a £1,500 or £2,000 value of work? There must be some relationship between the value of work carried out and the effect on the valuation list.
No doubt the valuers have a rule-of-thumb method by which they operate. Can the Minister give the public the benefit of that method? If he cannot answer the question, can he help the public by offering them a service whereby they can have inquiries answered before they carry out their work? Nothing could be worse than for a man to carry out alterations and then find that they bring about a £31 change in valuation, with the result that he has to pay rates on the whole sum, having missed the benefit of the order by only £1. I am sure that the hon. Gentleman would not like to see people suffer that sort of irritation. Therefore, can he suggest a method by which the public could make inquiries to the town hall, the valuation officer or his Department?
1.24 a.m.
Mr. Oakes: I am grateful to the hon. Gentleman, particularly for pointing out that the £30 is not £30 worth of work but £30 added to the valuation of the house. The cost of the work will be considerably in excess of £30.
The hon. Gentleman asked me what would be the value of the work and how it is assessed. It is difficult to reply, because valuation officers in different parts of the country value a structure in different ways. Indeed, in the negotiations that I have been having with many of my hon. Friends and delegations from throughout the country on another matter which the House debated much more excitedly earlier this evening, it is almost impossible to give a specific value of work, whether it be £1,000, £1,500 or whatever it might be, as giving rise to a specific increase in the value of a property. Value depends on the area, the situation of the house and many other factors.
The hon. Gentleman asked me about the position of a householder who is to build a garage, a bay window or make an improvement or alteration to his property. We struck the figure of £30 as it would accommodate a normal-sized garage in most areas. It would not apply to a super-luxury garage for many cars. We have in mind the normal garage that an ordinary householder may want to build. The same applies to normal alterations such as a porch or bay windows. If there were a number of such improvements, they might give rise to a proposal by the valuation officers. I hope that local authorities, valuation officers and my Department would endeavour to be helpful to any individual who made an inquiry in advance, when seeing his builder about building a property, as to whether he was exceeding the limits.
I can assure the hon. Gentleman that the figure of £30 which we have in mind will take in the normal type of development. That is why that figure has been chosen. I hope that the hon. Gentleman is satisfied with the replies which I have given. I commend the order to the House.
Question put and agreed to.
Resolved,
That the Rating of Minor Structural Alterations to Dwellings (Specified Amount) Order 1974, a copy of which was laid before this House on 13th March, be approved.

CEMETERIES
1.28 a.m.
The Under-Secretary of State for the Environment (Mr. Gordon Oakes): I beg to move,
That the Local Authorities' Cemeteries Order 1974, dated 12th March 1974, a copy of which was laid before this House on 18th March, be approved.
It is appropriate for me to bring before the House an order such as this in the dead of night. The order, although unsensational in its content and undertaken in the context of local government reorganisation, constitutes an important chapter in the history of burial law.
The law of burial developed rather messily and haphazardly in the middle of the nineteenth century. It has for many years been recognised as one of the most out-of-date and chaotic branches of the law. The most obscure and complicated aspects of it were those relating to the provision and management of burial grounds and cemeteries by local authorities, many of which, but not all, could work either under the Burial Acts 1852 to 1906 or under the even older, but at least more concise, Cemeteries Clauses Act 1847, which was applied by the Public Health (Interments) Act 1879. Some authorities operated grounds under both codes and there was no provision for switching from one code to the other.
The London Government Act 1963 undertook some rationalisation of the law as it related to London. For example, it applied the Clauses Act of 1847 to the cemeteries of London local authorities, to the exclusion of the Burial Acts. The opportunity for a more thorough overhaul was taken in the Bill which became the Local Government Act 1972.
The Act repeals, as from 1st April of this year, the Public Health (Interments) Act 1879 and the provisions in the Burial Acts 1852 to 1906, conferring powers to provide burial grounds. Instead, the 1972 Act starts again by conferring the power to provide cemeteries upon burial authorities, which are defined so as to include all local authorities other than county councils. This means that such power is conferred upon parish and community councils and parish meetings of parishes which have no parish council.

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The Act empowers the Secretary of State to make provision by order, subject to affirmative resolution of both Houses, with respect to the management, regulation and control of the cemeteries of local authorities. This is the first such order.
As a precautionary measure, the Act applies the code of operation contained in the Cemeteries Clauses Act 1847 to all burial authorities until such time as the first order made by the Secretary of State takes effect. The object was solely to ensure that, if for any reason it proved impossible to bring an order into force by 1st April 1974, burial authorities would still have a set of detailed powers for the operation of their cemeteries in spite of the repeals in the 1972 Act. But no one could really want to complicate the administration of the new burial authorities or of the many parish burial authorities which continue in existence by requiring them to operate temporarily under an Act of 1847 which most of them have never seen and which it would be very difficult indeed to obtain at the Vote Office or anywhere else. Hence the importance of ensuring that this order takes effect on 1st April 1974.
The order includes such material on the management of cemeteries as it seemed necessary to preserve from the vast mass of nineteenth-century legislation which is being repealed, but a number of additions and improvements have been made in consultation with the interested organisations.
It is intended to deal in further orders with special subjects like the registration of burials and the conversion of cemeteries to lawn cemeteries—these are important and contentious issues—and, indeed, to consolidate them with this one so that from now on burial authorities will have a concise and up-to-date code for the operation of their cemeteries.
What cannot be done in these orders is to deal with matters other than the management, regulation and control of local authority cemeteries, or to deal at all with matters related to cemeteries provided otherwise than by local authorities. I know that in various parts of the country there are problems with regard to cemeteries provided by bodies other than local authorities. I am seeing a delegation tomorrow night dealing with
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a private cemetery not far from the precincts of the House which is now overcrowded and where various difficulties arise.
This leaves a number of aspects of the law of burial which could be dealt with only by a Bill, for which, regrettably, previous Governments, both Conservative and Labour, have been unable to find parliamentary time. These aspects of the law are now being considered separately by my Department with a view to a Bill being brought forward in the future.
Meanwhile, however, the 1972 Act and this order will have remedied the worst defects of the existing law of burial. I therefore commend this very useful order to the House.
1.33 a.m.
Mr. Hugh Rossi: Once again, I am grateful to the hon. Gentleman for introducing the order, which I understand was drafted as to the greater part by my right hon. Friend the Member for Crosby (Mr. Page) but was overtaken by the events of the General Election and is, therefore, presented by the hon. Gentleman instead of by my right hon. Friend.
There are two matters on which I seek a brief explanation. First, I believe, that in Article 5(5) a new element has been introduced. It provides:
"Notwithstanding the consecration or the setting apart for the use of a particular Christian denomination of the part of a cemetery in which any body is to be buried the burial may take place without any religious service …"
Knowing how sensitive an area this is, I should like to have the assurance of the Minister that—if I may use a phrase used in this connection by a Welsh provincial newspaper—he has consulted all interested bodies.
My other question relates to Article 10, in which the right is given to a bishop of the Church of England, as regards the consecrated part of a cemetery, to object to any inscription on a tombstone or memorial. Why is this right given? If it is necessary for it to be enjoyed, why should it not also be enjoyed by the heads of other denominations? If it could be offensive for a particular inscription to be on a tombstone in a consecrated part of a cemetery within the

237
jurisdiction of a bishop of the Church of England and he may object, why cannot an objection be made by the head of some other denomination over part of a cemetery allocated to his denomination?
1.37 a.m.
Mr. Michael Jopling: I notice that in Schedule 3 to the order there is a suggestion that Section 1(1)(a) of the Parish Councils and Burial Authorities (Miscellaneous Provisions) Act 1970 should be repealed. That was a Private Member's Bill which I introduced and was the only Act which has ever reached the statute book through my offices. I think that I have some authority to ask this question. It is an Act which is fairly dear to my heart.
I should be grateful to have an explanation of this. If the Minister is a little short of an answer, I am prepared to talk for a moment or two longer. If it is to hand, I am ready to sit down.
1.39 a.m.
Mr. Oakes: I will deal first with the point about the bodies that we consulted. I feel tempted to say that local authorities are statutory undertakers. I am sure that you, Mr. Deputy Speaker, will be interested to know that we consulted religious denominations, including the Representative Body of the Church of Wales. We also consulted local authorities and such bodies as the National Association of Funeral Directors, the National Association of Local Councils, the National Association of Master Monumental Masons and the National Union of Funeral and Cemetery Workers. Indeed, the Department has cast its net far and wide to make sure of agreement to the order.
Article 5(5) was agreed by the General Synod and the Churches' Main Committee. It is not new. The provision was in the Burial Act 1880 which provided for a burial with no religious service, notice of the burial being given. The article is almost consolidation of the Act of 1880.
Article 10 provides for the right of a bishop of the Church of England to object to the wording on a tombstone. Although it is little used, that is a valuable right
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because of the nature of a cemetery. The hon. Member for Hornsey (Mr. Rossi) asked why this right was confined to a bishop of the Church of England and did not extend to clergymen of other denominations. We would not now have invented such a right, but in an order which is intended to be non-controversial it would have been more controversial to repeal the right than to incorporate it. The right existed under previous legislation and we have incorporated it because it would be more contentious not to do so.
I am delighted to tell the hon. Member for Westmorland (Mr. Jopling) that because he courteously gave me a little time I now have a note on the Parish Councils and Burial Authorities (Miscellaneous Provisions) Act 1970. I understand the hon. Gentleman's concern because I was successful in getting through the House a Private Member's Bill on dogs which the Government—which gave me facilities in getting the Bill through—amended substantially in a subsequent order. I understand that the subject matter of the Act so far as it relates to burials is covered by the order, which limits the period for which the rights may be granted. All the legislation on burials is now in one place, and the hon. Gentleman's Act is not harmed. Again, this is consolidation which does not detract from the Act. We are not removing any right.
I have answered the questions put by the two hon. Gentlemen and I commend the order to the House.
Question put and agreed to.
Resolved,
That the Local Authorities' Cemeteries Order 1974, dated 12th March 1974, a copy of which was laid before this House on 18th March, be approved.

CEMETERIES
  ADJOURNMENT
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Coleman.]

RETIRED PERSONS (SAVINGS)
1.43 a.m.
Mr. Evelyn King: This is a late hour at which to initiate any debate but the subject is such as to justify it. I want to talk briefly about the plight of the elderly. One may think first of the pensioner who has no savings and who may even be on supplementary benefit, but his plight has been debated many times and tonight it is not that subject that I have primarily in mind.
I want to speak of the retired person, pensioner or elderly person who has savings. His plight should have an especial claim upon our attention because every Government in turn have urged saving and therefore every Government must have some responsibility for what has happened to his savings. This is not primarily a party attack. I accept that all Governments have responsibility. I make a slight difference between the two parties. In so far as the Conservatives have hurt savings we have done so accidentally and apologetically, whereas I detect on the Labour side an attack upon the existence of a shareholder mainly because of misunderstanding.
I want to talk about the poor, the proud and the provident. I make no apology for saying that I have a particular interest in them. I represent Swanage, Weymouth and the Isle of Purbeck, which are full of such people. They are all along the coast. Let me describe the sort of couple I have in mind. They retired at about 60 after a lifetime's work in a big city and moved to the South Coast, buying a little semi-detached bungalow, and they have savings—let us say £12,000. Then years ago that sum would have brought in £600 a year. They had reason to believe, being provident, that theirs was the sort of style of life they could sustain for the rest of their days. They could run their little car, visit their children in it, have their round of golf and live happily ever after. That was what they were entitled to think.
Now let us see what has happened. The car was the first thing to go. To buy a new one now would probably cost one-fourth of what remains of their fortune. Even if they could buy a new one,
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with petrol at 50p a gallon they would have chance to use it.
The second item is the house. Even before last week their rates had doubled. In the last week in the Isle of Purbeck there is an increase in rates of 60 per cent. I resent that. I have reason to do so. I resent it not because I would not like to see all possible aid given to the centres of towns or cities, but because I cannot see why that aid should be paid for by retired people like those I have described. I cannot see why money should be taken out of that kind of area in order to be put into an area where men are often earning £30 to £40 a week. I see no logic in that.
Then there are people's savings. I postulated a couple who, after a lifetime of labour, might be rather proud of having saved perhaps £12,000. What would the Government have wished them, in the national interest, to do with it? To put it perhaps into Government stock? Which Government stock? If they had put it into War Loan—which is going back a long way—each £100 they put in would now be worth only £26. More probably the couple would have put their money into medium-dated Treasury stock—but every £100 put into that would be worth now only £60.
More likely still, they would have invested in some kind of equity shares—for example, the National Westminster Bank. If a year ago they had invested £12,000 in National Westminster Bank shares, their shareholding would now be worth £5,700. They would have lost more than half. I mention this because we get so much publicity about the huge bank profits. They may have made huge profits, but those profits have not reached their shareholders. Why? The reason is not far to seek.
We have heard all too often about statutory wage limitation but little has been said about statutory dividend limitation. I ask the House to understand that the statutory dividend limitation has limited dividends to an increase of just over 5 per cent. That means that the value of shares has been hugely reduced. That humble retired couple who had £12,000 now find themselves with £5,700, largely due to Government action.
One compares the plight of such people with that of the wage earner, who sometimes suffers hardship because of

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statutory wage restraint. But the wage earner is earning probably £30 or £40 a week and the hardship for him is minimal compared with what happens to a retired person living on savings that have gone down more than £5,000 in the example I have cited. This is appalling discrimination against the retired, against the elderly and against those who have no power to protect themselves when compared with the young and the fit. That is the major theme of what I have to say.
The Labour Party now has responsibility and authority. What are the Labour Government to do? We are told that statutory wage limitation is soon to cease. May we hope that the limitation on dividends of the kind I have described will also cease? If the Minister says that he does not want to help the rich, I shall understand that, but it may be that he does want to discriminate in favour of the sort of person whom I have been describing. Will he do so?
I understand the Treasury's difficulty having regard to the economy as a whole, but I understood both major parties to say that, whatever sacrifices they made of the British people, they would at least try to be fair. It is impossible to describe what has happened as fair. Many years ago the psalmist said:
"Put not your trust in princes."
Any elderly person who has taken the advice of the Government—any Government—and placed the trust of his old age in savings recommended by the Government might well cry "Put not your trust in Governments".
There is much that the Government can do to help in this matter. They could help practically. They could probably help later today—Budget Day —although this debate is too late to influence that. More than that, however, they could help by being a little more careful with their words. There is a great tendency, not confined to the Labour Party, to talk about shareholders as though they were disreputable. For example, I was appalled to read of a child at Aberfan—more than £1 million was collected to aid the victims of that tragedy—who had been told with other victims what sort of amount would be placed to her credit. She now found that, owing to the limitation on dividends, she had been robbed of about one-third of
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the amount to which she was entitled. People who talk lightly of dividend limitation and who laugh at shareholders often do not understand the sort of person whom they hit.
Naturally my mind turns to personal reminiscences, and especially to widows. Only a week ago I was speaking to a widow in Swanage. She had a large house, far larger than she could afford to maintain. Ten or 12 years ago she and her husband had come to settle in the area. She explained how horrified her husband would have been, had he lived, to see to what she had been reduced. He had died happy in the belief that he had left a widow without worry or anxiety, he having had, in his context, a successful life.
Owing to the operation of events, the £13,000 or £14,000 that he had saved was worth half, and that only nominally, because, with the fall in the value of the pound it was worth much less. We are getting near 'to the point at which the people I have been describing will be in want unless they get national assistance. As I have said, they are the poor, the proud, the provident, and they will not easily ask for national assistance, because that is not their style of living.
These people—I can be safe in saying this without causing controversy—are the backbone of the country. They are the people who have had that degree of common sense and prudence which enabled them to look after themselves, or so they had reason to think. They deserve encouragement. I know that this Government—I am sure that this applies to all others—wish to encourage savings, but I find it hard, within my conscience, to make any speech asking people to save if this is the way the Government will treat them.
I ask the Minister to bear in mind the sort of couple, living often along the South Coast but no doubt everywhere, of whom, I hope, I have drawn a picture. I am sure that the hon. Gentleman will wish to treat them with that degree of sympathy which I suggest they deserve.
1.56 a.m.
The Financial Secretary to the Treasury (Dr. John Gilbert): It is only right that I should congratulate the hon. Member for Direst, South (Mr. King) on his very moving speech and also on his

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good fortune in being successful in the ballot for Adjournment debates so early in the Parliament. I also congratulate him on his wisdom in raising so important a matter for the subject of his debate.
Having immediately congratulated the hon. Member on his good fortune, however, it is my unfortunate duty to commiserate with him on his ill fortune. It is not often that Treasury Ministers have the pleasure of replying to Adjournment debates, but, even given that, I should point out that there could hardly be a worse time to have a Treasury Minister at the Dispatch Box than about 12 hours before the Chancellor of the Exchequer is about to introduce his Budget Statement. I am sure that the hon. Member, who is well versed in these matters, appreciates that there is little that I can say by way of reply to him, except in generalities, which, while sympathetic, will, I am afraid, not give him very much of substance into which to get his teeth.
Having said that, I should say that I was in communication with the hon. Member before this evening's debate and he was good enough to outline to me some of the general lines along which he wanted to discuss this problem. I have had a little research done into some of the matters he raised.
The hon. Member talked at some length about the problems of the modest savers in retirement who had invested savings in equity shares and who found after a few years that unfortunately, quite apart from the question of inflation, their savings, far from rising to compensate for increases in prices, were falling because of fluctuations in share prices. I am deeply sympathetic to anybody who finds a fate of that sort overtaking him but, as the hon. Member recognises, it has never been part of the responsibility of any Government—I do not think that the hon. Member would wish it to be part of the responsibility of any Government—to guarantee anybody against fluctuations in the prices of ordinary shares of stocks in any company, let alone in a particular type of company.
I shall come to the question of bank shares in a moment, because the hon. Member spent some time talking about them. He will recognise that the essence of putting money into empty shares is
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that one is in a risk-taking position. The risk can go both ways. It is unfortunate that some of the hon. Member's constituents have had their fingers burnt by investing when the market was high and currently find themselves in a difficult position when the market is somewhat depressed.
Mr. Evelyn King: I am not for one moment complaining about anyone who makes an investment and the value of the security falls, if he is guilty of bad judgment. My complaint is when the value falls—I have bank shares particularly in mind—and no question of bad judgment arises. The banks were making huge profits, and the value of the investments fell because the Government said "You must not and will not pay more than a certain amount." It was the Government's responsibility.
Dr. Gilbert: I shall come to the question of dividend restraint presently. If I may take a closer scrutiny of the fluctuations of prices of some of these shares, I think I can demonstrate that the fluctuations have been in more than one direction.
When one looks at the fluctuations in the prices of ordinary shares, of bank stock over the last six years, one sees that some quite interesting and startling fluctuations show themselves. Taking the current price of the shares of each of the four major banks—the figures which I have are up to date to 21st March, at the close of business on Friday last—the National Westminster closed at 230, the Midland at 260, Barclays 250 and Lloyds 220. Those figures, with the exception of Lloyds, are above the low prices over the last six years and in two of those cases by considerable amounts.
In the case of the National Westminster, if one were fortunate enough to buy at a very low point in the market in the last six years, one would be holding a profit of nearly 50 per cent. In 1971 they stood at 160. With Barclays one would show a profit of nearly 50 per cent. They stood at 161 and are now 250. With the Midland, which were 235 in 1970, one would show a modest profit—
Mr. King: Of course shares have fluctuated. The point is that the National Westminster shares have fallen from 470 to 228 since the Government interfered by dividend limitation. What happened

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five years ago is irrelevant. There was no dividend limitation then.
Dr. Gilbert: I promise that I shall not evade the question of dividend limitation but I want to look at the question of movements in bank share prices. Banks have been liable, like all companies, to general Government intervention in economic affairs, and the Government manipulation in the general level of interest rates has affected bank profits.
I should say that if one bought one's bank shares at the top of the market, in the case of the four major banks, one would show a considerable loss. Probably the most serious loss would he if one bought Lloyds shares at 847 two years ago. They are now standing at 220. If one bought Lloyds shares in 1969 one could pick them up for 220 and sell them out at 847. I recognise that the sort of people of whom the hon. Gentleman was talking are not people who would trade in and out of the market. They would hold their investments for some time. Therefore, to that extent I should emphasise that fluctuations in the share prices are not relevant. It is the difference in yield which is important. Whether that is the most sophisticated analysis by which to approach the purchase of shares is another question, but I realise that that is the consideration by which many people whom the hon. Gentleman has in mind will be influenced.
Having said that, I want to come on to the question of dividend restraint and the effect that it may have had on share prices. It is arguable whether dividend restraint as such does not help to sustain share prices by forcing companies to reinvest the earnings instead of distributing them. Therefore, in generality—I emphasise, in generality—the effect will be to force prices higher, and shareholders can very often get their return out by selling off a small tranche of their shareholding, getting preferential treatment under the capital gains roof. I suspect that the reasons for the fluctuations in the price of bank shares have a great deal more to do with other circumstances than the question of dividend control.
The hon. Gentleman is right in saying that dividend restraint is a Government matter. The present policy was introduced by the previous Government. My
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colleagues and I will always be happy to listen to any representations on the subject, but here again I come up against the problem to which I referred at the beginning. We are already in Budget Day, and there is nothing more I can say about that general proposition. However, I should like to point out to the hon. Gentleman that the tax position of individuals holding shares which have been subject to dividend restraint, when one takes into consideration also the tax changes that have affected them, is not as bad as he suggested.
Let us consider an individual holding a certain portfolio in shares bearing dividends of £100 gross in 1972 and holding the same shares in 1973. If his unearned income was less than £2,000 a year—which is probably the sort of individual to whom the hon. Gentleman is referring —with savings of about £12,000, the following pattern would have emerged. In 1972 he would have had gross dividends of £100. Income tax of £38·75 would have been taken off, and he would have been left with £61·25. In 1973, in addition to the original £100, he would have had the £5 increase permitted under dividend restraint, which means that he would have had £105 gross. His income tax at 30 per cent. under the new unified tax system on £105 would have been £31·50. If that had been deducted from £105, he would have been left with £73·50. The comparison with what he had net in his pocket after tax would have been £61·25 in 1972 and £73·50 in 1973.
Mr. Evelyn King: Less inflation.
Dr. Gilbert: By all means, but that leaves a gain of about £12·25 on the 1972 figure, from £61 to £73. That is a net increase after tax of about 20 per cent.
Mr. Evelyn King: Less inflation.
Dr. Gilbert: I agree, but it covers the increase in the retail price index in the last 12 months. Generally speaking, even the small saver in retirement in that position would have been better off in real terms over the last 12 months and would not have suffered to the extent that certain other members of the community might have dole as a result of inflation. He would, of course, have been better off still if there had not been inflation—

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who would not?—but if the hon. Gentleman studies the effect of those two considerations he will see that the problem is not quite as serious as he might have thought.
The hon. Gentleman referred briefly to the pensioner with no savings and was good enough to recognise that he was even worse off. The Government's plans already announced, and shortly to be put into effect, for increasing the basic rate of pension will benefit the people whom the hon. Gentleman has in mind, whether or not they have savings. But even more so the plans which the Government have announced—I concede that at present they are only in outline—and to which they have committed themselves for future increases in pensions will take care of the general proposition which worries the hon. Gentleman.
The hon. Gentleman referred to the position of pensioners who had much smaller earnings than some industrial workers in his constituency or nearby. It is the Government's intention for the first time to introduce into pension law the proposition not simply that pensions shall be protected against increases in the cost of living, but also that they shall share automatically—not as a result of Government benevolence—in increases in the average national wage. Many of the hon. Gentleman's constituents, in time, will benefit from this.
No Government have been able to commit themselves to repay War Loan. The amounts involved are enormous. This is one of the risks that, regrettably, somewhat less sophisticated investors took when interest rates were much lower. One wishes that one could announce a redemp-
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tion date, but that is not likely to be my lot or anyone else's for the foreseeable future. It has been suggested that War Loan held for more than a certain period should be redeemed, but this would lead to injustice among those who bought at different prices, those who would make uncovenanted profits, those who had taken their losses and those who were still carrying them. It is virtually impossible to achieve equity between present and past holders of the stock.
This is a sad matter, as the hon. Gentleman movingly pointed out. My party does not attack savings. We take a jaundiced view of inherited wealth, but we draw a distinction between those who have earned a quiet and modest retirement and those who spend their days clipping coupons on the backs of the rest of the community. No doubt the hon. Member appreciates the distinction.
The hon. Gentleman could not have raised this subject more appositely to catch the Chancellor's ear. Whether echoes of our debate will reach him before he rises tomorrow is not for me to say. I gather that the hon. Gentleman has already appeared on television on the subject, when he had a larger audience than tonight, but not a more attentive one. I wish him success in his campaign, which I am sure—
The Question having been proposed after Ten o'clock on Monday evening and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned accordingly at thirteen minutes past Two o'clock.

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