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Volume 76: debated on Wednesday 3 April 1985

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asked the Secretary of State for the Environment how many and which county and non-metropolitan district councils have fixed their rate for the municipal year 1985–86 at (a) the rate for the year 1984–85 or below, (b) less than 5 per cent. above the rate for the year 1984–85, (c) between 5 per cent. and 10 per cent., (d) between 10 per cent. and 15 per cent. (e) between 15 per cent. and 20 per cent. and (f) over 20 per cent. above the rate for the year 1984–85.

I have today placed in the Library the information currently available. Although it is too early to give a firm estimate of the increase in rates for 1985–86, it seems likely that the average increase in general rates in England will be between 7 and 7·5 per cent., and the average increase in domestic rates between 8 and 8·5 per cent.

Is it not correct that in the shire counties the average rate rise will be more than 9 per cent., which is wildly far from the estimate given by the Secretary of State in December, when he said that he hoped that it would be in low single figures? Are not high rate rises entirely attributable to the Government's policies on rate support grant and rate capping? Does that not imply that authorities in Tory areas must cut substantially the services that they provide to stand any chance of holding the rate rises down, even to about 9 per cent?

The hon. Gentleman has got it wrong, and unwittingly scored an own goal against the Liberal party. The average rate rise in the Conservative shire counties is 6·5 per cent., whereas in the one Liberal-controlled shire county it is 8 per cent. It is the old story that where the Liberals influence events spending and rates are high.

Is my right hon. Friend aware of a document issued in the name of the Haringey joint union committee against rate capping, which has been endorsed by the London boroughs shop stewards on a Londonwide basis, calling for complete disruption of local authority services by phased action, including shutting down street lighting and traffic lights, stopping Thames water maintenance — [HON. MEMBERS: "Order."]—closing schools—[HON. MEMBERS: "Too long."]—taking over the financing of computer services of local authorities, and refusing to accept—

Does my right hon. Friend agree that that is close to criminal conspiracy and incitement to unlawful action? What action will he take?

I have not seen the document to which my hon. Friend refers and, therefore, I do not know its details—whether it is silly bravado or whether it amounts to something with a more sinister intent. I shall look at it, as he has drawn it to my attention today. Clearly, if it has a more sinister intent I shall draw it to the attention of the appropriate authorities.

What advice will the Minister give the authorities which have accepted the lower rating for this year and failed to meet their statutory obligations as a result?

I know of no local authority or any rate-capped authority which is in danger of not meeting its statutory obligations because of the rate support grant settlement this year. Regarding rate-capped authorities, there was a significant move forward this morning in that a High Court judge told Hackney that it must set a legal rate. He ruled that there were no reasonable grounds for the borough to defer making a rate. I hope that this period of illegality will end.

Would any rate increase have been necessary, and would not the average rate demand have been at least 20 per cent. lower, had the Government maintained the same share of local authority expenditure that was provided in 1979–80? Will the Minister give the total burden placed on businesses and industry as a result of the change?

As regards the proportion of the rate support grant since 1979, I remind the hon. Gentleman that the biggest cut was under his Government, when the former Chancellor reduced it from 66 to 61 per cent. in one year. The hon. Gentleman was a member of the Government who did that. The reduction this year from 51·9 to 48·7 per cent. means that there is less grant available, but, even so, if all authorities in England had budgeted to spend at target the average rate increases would have been lower than the ones that I have just announced.

Has my right hon. Friend heard the news this very day of the stunning irresponsibility by which the city of Birmingham, under its Labour masters, is putting up the rates by 43 per cent.? Is it not time for such authorities to stop talking about helping industry when they are going to ruin it and their citizens?

My hon. Friend is correct. There could be no greater distinction between Conservative and Labour control of Birmingham. Last year, under the Conservatives, the rates fell; this year under Labour they have gone up by 43 per cent. That is bad news for the residents of Birmingham.

Does the Minister accept the figures of the Rating and Valuation Association, which show that average rates will increase by more than 9 per cent. in this financial year—twice the rate of inflation? Does he recognise, as everyone outside the House and the Opposition do, that the biggest single reason for that is the consistent reduction in rate support grant? Rather than listen to his right hon. Friend berating Labour councils which are desperately trying to defend jobs and services, why do not the right hon. Gentleman and his right hon. Friend meet representatives of the Association of Metropolitan Authorities and the Association of London Authorities to negotiate a settlement of the outstanding difficulties?

My right hon. Friend and I have made it clear that negotiations with the rate-capped authorities are unacceptable because the House has approved the rate support grant order and has agreed and passed orders for the rate-capped authorities. We have said that they are therefore not negotiable. It is now up to the rate-capped authorities to do what is legal—to set the rate which has been approved by the House.

Will my right hon. Friend confirm that the Liberal-controlled Isle of Wight county council has increased its rates by 38 per cent. since 1981, and that because of the Lib-Lab pact which now controls Cheshire county council, that council has increased its rate by 48 per cent. since 1981? Is that not disgraceful, and does it not show the hypocrisy of the question of the hon. Member for Southwark and Bermondsey (Mr. Hughes)?

The figures speak for themselves, in that those who live in Labour-controlled shire counties will have an average rate of 178p this year, those in coalition-controlled county councils 156p, and those in Conservative-controlled county councils 148p. Those who live under Conservative-controlled county councils will be 30p better off than those who live under Labour and coalition-controlled councils.

Will the Minister put the record straight and confirm that the Isle of Wight county council rate increase was 7·53 per cent.? The 1p rate added by the Liberal-controlled Medina borough council reduces it to 7·1 per cent. The average ratepayer in the Isle of Wight pays £30 per head less than the average ratepayer in Chichester and £600 or £700 less than the average ratepayer in Westminster. We have stuck by targets, but the Secretary of State for the Environment gave us the worst settlement of all counties. We lost 4p, and that is why the rates went up this time by 7·53 per cent.

If with the district included, it is slightly less, I accept that. Even if it is 7·53 per cent., it is still substantially higher than the average for Conservative-controlled county councils.