House of Commons Hansard Debates for 19 Jan 1989

Mr. Soley : What is wrong with that?

Mr. McLoughlin : The hon. Gentleman asks whether that is all.

Mr. Soley : No. I asked what was wrong with that.

Mr. McLoughlin : Derbyshire county council approved the spending of £50,000 in July 1988 for a civil rights campaign organised by that famous organisation, the National Council for Civil Liberties. It spends money on political opinion polls and incurred expenses of £3, 000 on a readership survey for Insight, the county council's magazine. Last year, the council staged its own May day celebrations at a cost of £5,000 and also gave £500 to help the Trades Union Congress to organise a May day event. It set aside £15,000 for a May day event in the American adventure theme park. The chairman of the county council's public protection committee attended a week-long conference in Athens entitled the "Acropolis Appeal for Peace and Life and Civilisation" and described as "A conference of mayors and delegates from nuclear-free cities and zones."

The councillor's travelling expenses, costs and attendance allowance were all paid.

Then there is the competitive tendering panel. Derbyshire county council set up a special panel to combat the effects of competitive tendering, which in June 1988 voted itself an initial budget of £300, 000 to be spent in recruiting staff who specialise in tendering. I can tell the House about the effects of competitive tendering--they are awful. Amber Valley district council has done a wicked thing in Derbyshire--it has saved ratepayers £2 million by competitive tendering. No wonder the county council wants to spend money on the panel.

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Derbyshire county council proposes to expand its equal opportunities and race relations department. Prior to that expansion, the department had a staff of 32 and cost £500,000 per year to run. Hon. Members may ask, "What is wrong with equal opportunities?" I do not mind people talking about equal opportunities, but I wish that they would act on what they say. Why is there not one woman committee chairman on Derbyshire county council? It seems that Derbyshire is happy to tell people how to behave but not to follow its own advice. What about the race relations department? I have not been monitoring closely the Labour candidates for the forthcoming county council elections, but I have not heard that any Labour candidate from the ethnic minorities is standing in Chesterfield, Bolsover, High Peak or West Derbyshire. The county council asks everybody else in the county to do a good job while setting a pathetic example itself. Hon. Members may yawn, but I can tell them that my constituents yawn when they get their rate bills. Under the present system, ratepayers cannot see what council spending means to them. The sooner they can see that more easily, the better. I congratulate my right hon. Friend the Minister for Local Government on his enviable position as the last Minister to introduce a settlement under the present rate support system. Next year we shall have a far better system which will allow representation throughout the county and under which people will pay for the services that they desire. I hope that we in Derbyshire do not have to tolerate the present level of rates for much longer and I hope that we soon have a change in the county council. We shall then show that it is quite possible to reduce the rates while still providing the services that people in the county want.

7.43 pm

Mr. Derek Fatchett (Leeds, Central) : Last year I spent many long hours in the Standing Committee on the Education Reform Bill with the hon. Member for Derbyshire, West (Mr. McLoughlin). Thankfully he was then playing what I suspect many would regard as his proper role. He was Parliamentary Private Secretary to the Minister of State and therefore kept silent for the 200 hours. His speech tonight was predictable. I suspect that it is the speech that he has trailed up and down the valleys of Derbyshire in search of a reference in some local newspaper. Sadly, he gave the game away and told us a lot about himself and about the values of the Conservative party. One of the items of expenditure that he criticised was the translation of textbooks into mother tongues. In criticising that, he showed that he had no concern to extend opportunities in education or to improve standards and give passports to life to all our children. His comment told us the truth about the Conservative party.

There is a fundamental characteristic of all our debates on these matters. The hon. Member for Derbyshire, West told us that the system works in the same way for every local authority. It simply does not. That is why the hon. Members for Great Yarmouth (Mr. Carttiss) and for Eastleigh (Sir D. Price) have spoken on behalf of their constituents, saying that the system does not work and that they face an injustice. If the system worked in the same way for every authority, the hon. Friends of the hon. Member for Derbyshire, West would not have made those speeches.

Mr. McLoughlin : Will the hon. Gentleman give way?

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Mr. Fatchett : No. The hon. Gentleman made a long speech. That inconsistency is characteristic of the system and the way in which it is worked and I hope that those Conservative Members who have raised their voices against the injustices of the system will join Labour Members in the Lobby.

Another characteristic that is typical of all our debates is the performance of the SLD. That party's spokesman is not with us at present and I do not criticise him for that, but his speech disappointed me and worried me greatly. His behaviour was typical. He said, "Yes, we are in favour of some things, no, we are against others." The essential political word from the SLD is "maybe". They say, "Maybe we believe it, and maybe we do not". I am amazed that the centre parties could ever find it possible to fall out over a principle, as it is impossible to detect a principle in anything that their members say in this place or elsewhere.

I have a soft spot for the hon. Member for Truro (Mr. Taylor). On the day when the hon. Gentleman was elected to the House I was in Truro for the "Newsnight" election special and I remember proudly announcing that it was the best by-election result for the Labour party in the 1983-1987 Parliament although admittedly we started from a very low base. During the election special the BBC allowed a phone-in--with all its usual sense of objectivity. The first call was from a Mrs. Rosie Barnes, housewife, of Greenwich. Even I did not believe that the BBC could be quite that inefficient. Then we had the moment of triumph when the newly elected hon. Member for Greenwich (Mrs. Barnes) came on screen to talk sweet words to the hon. Member for Truro in front of millions of viewers. I am sure that the House will understand how sad I felt when I discovered some 18 months later that they no longer speak to each other--perhaps not over a principle but over a personality.

The rate support grant settlement is bad news for the ratepayers and residents of Leeds, just as it is bad news for ratepayers everywhere. I base that assertion on one simple criterion. The rate support grant settlement is based on an inflation figure that takes no account of the Chancellor's foolishness and irresponsibility. The Chancellor is pushing up inflation, and as he does so, he pushes up rate bills and cuts services. Ratepayers everywhere will want to know the answer to the question posed by my hon. Friend the Member for Hammersmith (Mr. Soley). Will ratepayers have to meet the cost of the foolishness and stupidity of the Chancellor? Will they have to pay more simply because the Department of the Environment has not been able to budget to take account of that? Ratepayers will suffer also, especially in Leeds, because of the nature of the settlement. Leeds is an authority which could never be criticised for inefficiency or its failure to deliver services. However, that authority--which occasionally has even been praised at the Dispatch Box by Government Ministers--is about to lose in this settlement £7.3 million. What justice is there in that? The Minister will say that part of that loss is due to the nationalisation of Leeds polytechnic. A Tory Government has introduced a measure of nationalisation which will take that institution out of local control. The Minister will know, however, that the loss of Leeds polytechnic does not account for the £7.3 million cut in Leeds' grant. Leeds' record over the years will stand comparison with that of any other authority ; yet it is now to be penalised. Leeds' spending has never exceeded Government targets or GRE levels. Leeds' rates are the fifth lowest in the country for a metropolitan district.

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Leeds' grant percentage, however, has been reduced every year since 1980-81. Leeds has delivered in Government terms, but the Government have reneged on their commitment and promise to the ratepayers and those who want to use the services provided by Leeds city council. Crucial questions need to be answered by the Minister. For instance, why does Leeds lose nearly £8 million, yet on the same settlement Bradford gains £5 million? I am not criticising that, because I believe money should be spent on the people in Bradford. My hon. Friend the Member for Bradford, North (Mr. Wall) is in the House. I saw recently the results of some of the cruel decisions which have been taken by Bradford Conservative council. It decided to close a unit with a national reputation for special education. That is Conservatism in Bradford. It decided to increase the price of school meals, which means that 9,000 youngsters are missing out on a crucial meal. The Minister may nod and grimace at that thought, but she should talk to those children and to their parents and discover what Conservatism in Bradford is doing to those children.

I do not criticise money going to Bradford, but the Minister must tell me why that money should go to Bradford and Leeds should lose out. In a reply to my hon. Friend the Member for Leeds, West (Mr. Battle), the Minister gave predictions for Leeds' rates. Leeds city council has not been extravagant, inefficient or profligate, but, as a result of this Minister's settlement, the Government are taking money from the ratepayer of Leeds.

My hon. Friend the Member for Leeds, West asked what would happen if the city's council's expenditure for 1989-90 was in line with the GRE predictions. The hon. Lady replied that on that basis the rate increase for Leeds would be 12 per cent. The Government have built into their model a prediction of a 12 per cent. rate increase for Leeds. That increase has nothing to do with Leeds' expenditure, because Leeds has expended at the level calculated by the Government. Why, therefore, a rate increase of 12 per cent.? The simple fact is that the Government are punishing the ratepayers of Leeds. The Minister may reply that Leeds city council could cut its expenditure and therefore stop the rates going up. [ Hon. Members :-- "Why have GRE?"] If hon. Gentlemen would be quiet for a moment, they might find out something about local government. Leeds has never spent above its GRE levels. Why, therefore, should Leeds cut its services in education, housing and social services? I want services in Leeds for my constituents.

I have heard during the debate that this is the last year of the rate support grant settlement. Over the hill, however, will come a new dawn, a new tomorrow and a new utopia called poll tax. That new utopia will not be heralded in with great enthusiasm in Leeds, because people have studied the figures. The city council has produced its figures. In Leeds, 33 wards make up the metropolitan district. On the Chartered Institute of Public Finance and Accountancy figures, in 29 of those wards there will be more losers than gainers. In only four wards will there be gainers, and, not surprisingly, those wards are in the richest and most affluent areas of the city. If I break those figures down to individuals in Leeds, the fact is that 75 per cent. will lose out because of the introduction of the poll tax. There will be no new dawn and no new tomorrow. Leeds has been asked to pay this year and will be asked to pay again and again in subsequent years. There will be no

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justice, no equity and no fairness. I ask the Minister for some justice, some fairness and some hope for the Leeds' ratepayers. I understand that the Minister has agreed to meet an all-party delegation from Leeds. I wish that some of those Conservative Members who represent the city could have joined in this debate and made their voices heard. They are conspicuous by their absence. When that all-party delegation meets the Minister, we want to be in a position to negotiate. We do not want a closed door. We want to be able to put the case for the city and we want some movement from the Government. Local government is important. It is important to the balance and the control over power in our society. Too much power has gone to the centre. Much more needs to go back to local people so that local people can make their decisions. We cannot do that until we have a change of Government. We cannot do that until we have a system of local government finance that is efficient and fair. We will get no such system from this Government, because they believe in making the burdens on local government and the tax and rate payers much more difficult and onerous. That is why I shall be voting against this settlement.

7.57 pm

Mr. Iain Mills (Meriden) : I am in some difficulties tonight and, before making a brief contribution, I should like to ask my hon. Friend the Under-Secretary to advise the Minister of State that Solihull council and I are most grateful for his reasoned, sympathetic and extremely kind attention to our affairs. He not only saw us separately on 26 October, but also saw a delegation which was present in the House earlier. We understand the difficulties facing him.

In thanking him, however, for his reasonableness and for listening to us, we are still adamant--and absolutely adamantine--in our dissatisfaction with the effect of the rate support grant on Solihull council. This is not a matter of personal criticism of Ministers. I have heard tonight much cheap politicking and the blaming of the Conservative Government. Hon. Members should look carefully at the origins of the redistributive effects within this legislation that allows for the rate support grant.-- [Interruption.] If hon. Members care to listen--of course they may not--it goes back to the days of Sir Winston Churchill. They therefore must not make cheap points.

Mr. Battle : Will the hon. Gentleman give way?

Mr. Mills : No, I shall not give way. I have been asked to be brief, and, quite honestly, other hon. Members have been lengthy. I cannot give way if I am to keep my contribution to 10 minutes.

The redistributive effects go back to the early post-war years. I am here not to argue with hon. Members but to put the point of view of Solihull council and of my constituents who live in its area. The system has been extremely unfair to those residents. In saying that, I am joined by my hon. Friend the Member for Solihull (Mr. Taylor), my constituency neighbour with whom I work closely. I know that he has worked hard behind the scenes in the same direction as I have to try to persuade the Government to alter the system to benefit our constituents. I have received letters from many people in my constituency--from Conservative branches, from my Conservative political

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centre, from individuals, from councillors and from the council itself. Some of those councillors travelled today at short notice to be here for the debate, and no doubt the exciting arguments heard in the course of it will sustain them in their journey home by InterCity.

It is unlikely that I can support this measure, and not in the sense that I am a disloyal Conservative--I sometimes think that the Prime Minister should be grateful that she shares my views on so many subjects--but on this matter I must show my loyalty to my constituents and to one of the most successful councils in the country. It is not a bad council ; nor is it inefficient or lacking in

cost-effectiveness. It is the most efficient and the most supportive of the Conservative Government. It was the first to introduce a city technology college, of which we are proud. The council is innovative, successful, and by its very effectiveness has been caught on the sharp point of the redistributive effect of the rate support grant. The council has kept rate increases down for a couple of years, and houses, factories and commercial developments have been attracted to the area. Partly as a result of that success, the rate base has increased. The system works in such a way that if a council attracts these good developments, it receives less from the Government. So its very success is bitter aloes to the council. Its efficiency has generated less money and could result in a rate increase for my constituents and for those of my hon. Friend the Member for Solihull of 17 per cent., 18 per cent. or 20 per cent.--not because of the council, but because it is one of the few--it is perhaps the only one--metropolitan boroughs to receive less from Government, and in real terms, allowing for inflation, the council has lost more millions.

The council has been the leader in implementing a number of education policies. Where houses are built, schools must be built too. A new school costs £330,000, not an inconsiderable sum, and it is not allowed for under the rate support grant. The council has been a leader in implementing social service policies to look after disadvantaged people. It was said earlier that Solihull seemed to be a rich borough. I ask hon. Members who may believe that to remember, when travelling up the M6 between Coventry and Birmingham and passing dozens of high-rise flats, that they are part of Chelmsley Wood council housing estate, which is operated by Solihull council. It comprises 18,000 dwellings in which live many socially deprived people, many elderly people and many single parents--nice people who need expenditure to meet their needs. It is a cause of sadness to me and the council that such expenditure is not reflected in the rate support grant.

More bitter aloes are discovered in the fact that, because people are attracted to leave the cities and move out to villages where they build houses, thereby eroding the green belt--I am afraid that the target is about 2,000 more houses in the Solihull green belt--that in turn creates yet more demands on the council. It is extraordinary that Birmingham should have done so well out of the rate support grant, considering that the outflow from Birmingham and from Coventry, which has also done well, has created part of the problem that we must cope with.

Birmingham has gained magnificently--it is rate-capped. I am sure it will thrill Oppposition Members to know that the only council in the west midlands to lose is

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also the only Conservative-controlled council. To judge from their silence, Opposition Members can apparently understand the passion of my feelings.

In my 10 years in this House I have never voted against a Government measure, but I shall consider doing so this evening. That is sad, but I would not be doing justice to my constituents or to the council that runs their affairs if I did not make a demonstration of the strength of their views.

I have slightly exceeded my time and I conclude by reminding the House that this is not a transient matter. I alone, or with my hon. Friend the Member for Solihull, have led delegations to see three Secretaries of State, three Ministers of State and three Under-Secretaries of State. We have always been promised that the system would be changed. It operates to the disadvantage of Solihull.

I see that my right hon. Friend the Minister for Local Government has returned to the Chamber. I thank him again for his kindness in meeting the council. Our hon. Friend the Under-Secretary will tell him that I have been extremely critical of the system, but my right hon. Friend the Minister's interest in our affairs has never been lacking.

Will the community charge benefit Solihull? Because of the transitional period, which I opposed, it will add £75 to what will eventually be a much more successful system and a fairer charge for the residents of my constituency and of Solihull. It has long been needed.

Had the present system continued, Solihull would have continued to receive less and less benefit and to suffer higher and higher rates for the worst possible reasons. Let us change the system. If, at the last minute, my right hon. Friend the Minister of State could find it in his budget-- because of falling school rolls, or the RSG or anything else--to make the system fairer, my constituents and the residents of Solihull would be grateful.

8.8 pm

Mr. Dennis Turner (Wolverhampton, South-East) : We should congratulate the hon. Member for Meriden (Mr. Mills) on his robust defence of his local authority, which faces difficulties because of this measure. Even though he considers that other authorities in the west midlands get a fairer distribution of rate support grant, he may be assured that other local authorities, including my

own--Wolverhampton--will at this very moment be making painful cuts in their budgets to reach levels of expenditure and of rate increases that will be acceptable to the people of Wolverhampton. We must not under- estimate the difficult decisions that Birmingham, Walsall and Sandwell will have to make.

There is no point in the Minister coming at this eleventh hour to tell us about the end of the rate support grant formula and that, as an hon. Member said, we are moving into the unknown. The move to the poll tax or community charge--whichever we call it--is the wrong way to go from this iniquitous form of rate support grant that we are debating.

It is the Government's fault that we are in these difficulties. They do not date from 1988 or even from 1983-84. They go back to the advent of this Government. We all remember the changes made in 1979, and we remember successive Secretaries of State tampering with the system of rate support grant. They always reduced the level of rate support and at the same time introduced

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targets and grant-related expenditure assessments, holdbacks and clawbacks. All of us in local government in the early 1980s remember all the legislation passing through the House. Some Conservative Members know that I am speaking the truth when I say that the kind of legislation that we got year after year has brought us to our present position.

The problems that have been brought upon local

government--uncertainties and difficulties in planning--are due to the failure of the Government from the outset to tackle local government and to deal with its finances and the planning that is necessary. Such a process would have achieved better services for the people that local government represents.

Three months ago, in a debate on the rate support grant settlement, we said that three crucial matters needed the Government's attention. One was the provision for current expenditure in 1988-89. We said that the expenditure level set by the Government was substantially lower than that which was likely. At that time, the Association of Metropolitan Authorities estimated that the amount required was about £1 billion. We also said that estimates of inflation were far too optimistic, and that has proved to be correct. We said that, even at that stage, pay awards were running at 3 per cent. above the Government's forecast. We asked for interest rates to be reconsidered because of the impact that they would have on local government expenditure in 1988-89 and 1989-90.

The Government's bold and exciting claim of a £1.1 billion, or 9 per cent., increase for 1989-90 was misleading. We told the Minister that £500 million would be returned to the Treasury because final grant entitlement for 1988-89 and for earlier years was based on estimates rather than on final audited figures. Those matters were raised in the debate three months ago and have not been adequately reflected in this final settlement.

For months the Minister has been trying in a subtle way to send out from the House the message that this rate support grant formula is inadequate, imperfect and complicated. We have known for years that it is totally unacceptable, but now the Government are introducing the poll tax and they try to give the people the feeling that they readily recognise all the imperfections, the rate increases and the problems that authorities such as Solihull have to place on their ratepayers. The Government give the impression that these problems are the result of some mysterious formula with which the Government cannot cope. The Government say, "Let us accept that, put it away and ride into the new dawn with the poll tax."

The people know that the poll tax will be worse and less fair. It is an iniquitous tax, and when the people get the opportunity in the coming council elections they will show the Conservative party and the Government what they think of the poll tax and of the way that the Government have treated local government.

8.16 pm

Mr. Jacques Arnold (Gravesham) : I have been in the House since the debate started and I have listened with some fascination to the speeches by Front Bench Members who seem to have achieved an inversion of political mythology. The hon. Member for Hammersmith (Mr. Soley) made a great virtue of the last Labour

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Government's attempt to restrain local government spending. They had to, because they had got our economy into such a mess. The Minister explained how our Government had significantly increased the spending by local government, not least through the rate support grant. It is significant to note an increase in the rate support grant of 8.6 per cent. which is above inflation. That is another £1,100 million to be spent by local government. So much for the hysterical weeping by the Opposition.

I have spent much of the debate puzzling over this extraordinary document which seems to use algebra to explain how the rate support grant is calculated. That was well caricatured by my hon. Friend the Member for Eastleigh (Sir D. Price). One of the virtues of the community charge is that it will simplify this agonising mess that passes for local government finance. With minor exceptions, all adults will pay an equal amount and because of the social conscience of Parliament and people there will be generous rebates for 9 million community charge payers, those who are least able to pay. I noted what Ministers said about subsidies and the effect of transfer of resources from one local government area to another. Those of us in Gravesham and in Kent generally know full well about this transfer of resources from our areas to badly run Labour cities. In my borough of Gravesham the average rate bill is £404. It is interesting to compare what would have been the community charge this year with that average rate bill.

The estimated community charge in Gravesham would have been £180. A little mathematics shows that those families with only two adults stand to gain. Households would lose out only when there was an average of well over two adults. A two-parent family will make a marginal gain in their bill and one-adult families, such as single-parent families and the widowed elderly, will gain substantially from the community charge. That £180 community charge that would have been levied in Gravesham compares favourably, thanks to the effective and efficient working of Kent county council and Gravesham borough council, even with Conservative authorities that would this year have levied an average charge of £196.40. Earlier, the hon. Member for Workington (Mr. Campbell-Savours) called for a debate on Kent. He claimed that it was sad that no Kent constituency returned a Labour Member and that people in Kent were crying out for Labour Members. They would not cry out for them if they realised that, this year, the average Labour authority would have levied a community charge of £294.40. That is almost £100 extra per adult man and woman in Labour authorities compared with Conservative authorities. There is no doubt on which side the bread is buttered for the average community charge payer of the future. Nevertheless, problems remain for this year, which is the last year of the rate support grant system, because the system places undue reliance on the numbers estimated by the registrar general. The dangers can be exemplified by the position in Gravesham where the registrar general tells us that, in the present financial year, he estimates the population to be 92,988 and that next year it will decrease to 91,692. That calculation appears to fly in the face of all other available statistics. For instance, the Audit Commission reports in its profile for 1988-89 that the birth rate in Gravesham is 13.7 per thousand of the population when the national average for a cluster family is 12.9. That would indicate an increase in the population, not a

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decrease. The report goes on to state that the standard fertility ratio in Gravesham is 107 compared with a national average of 96. Again, that indicates that the population is rising.

The death rate in Gravesham is 9.6 per cent. per thousand, below the national average of 9.7. Fortunately, fewer of our elderly people are departing, thus keeping the population higher. The standard mortality rate is 92 compared with a national average of 96. All of those figures show that the population of Gravesham is not decreasing and, therefore, the rate support grant should not be restricted as it is being this year.

Our electorates are steady. We should also consider the new dwelling figures in various boroughs in Kent. In Gravesham, there were 350 new dwellings but the commission suggests a population reduction of 1,300. There are fewer new dwellings in the borough of Ashford, only 300, but, nevertheless, the registrar general suggests a rise in the population of 1,500. There are 240 new dwellings in the borough of Tunbridge Wells, yet the registrar general reports a rise in the population of 608. How can it be that Gravesham, with the highest growth in new dwellings, should record a decrease in the population?

The result is significant. The financial effect on the borough of Gravesham's rate support grant is significant, particularly the effect on its rate precept. If the borough's spending were to stand still, the borough council would have to ask the ratepayers for a 15 per cent. increase in their precept. That calculation appears to accentuate the likelihood of the registrar general's figures being wrong and, consequently, that the rate support grant for the borough of Gravesham is wrong.

All the hon. Members who have spoken this evening have shown that the current system does not work. We must welcome the Government's decision to throw out the rate support grant system. When my right hon. Friend the Minister goes out to bury the system, I shall happily wield the shovel.

8.26 pm

Mr. Geoffrey Lofthouse (Pontefract and Castleford) : The hon. Member for Derbyshire, West (Mr. McLoughlin) suggested that there should be uniformity and that a fair formula should be fixed across the board for all authorities. I could not disagree more. When I first learned that the hon. Gentleman was an ex-miner, I had a natural affection for him. Over the years, I have looked for any signs of his being an ex-miner. I have chatted with him from time to time and looked for blue marks, but I have not found any. Tonight, however--with the greatest respect--he has proved that he is no miner or, at least, that he has not been in the mining industry long enough. If he had been in the industry for a long time, he would have been taught by the old miners, especially if he had worked in the Yorkshire mines. They would have said to him, "Ee lad, tha only spakes when tha's summat t' say." Some of his remarks tonight were not called for and had nothing to do with the debate.

Mr. McLoughlin : My blue marks are quite substantial. I have 10,500 ; that is my majority in Derbyshire. A number of people tried to change my mind in the Staffordshire coalfields, perhaps not as effectively as they might have done in the Yorkshire coalfields.

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Mr. Lofthouse : When the hon. Gentleman has as many blue marks as I have, he will have a majority of 22,500.

I have heard a great deal tonight about efficiency and competence. I wish to direct my remarks to the subject of Wakefield metropolitan district council. The Minister will agree that Wakefield has always been acknowledged as a competent and efficient council. It must have been because, two years ago, the Government knighted the leader of the time. They had previously knighted the deputy leader, so I should have thought that the Government would concede that the council was a responsible and well-run authority.

It is rather strange, therefore, that last year the Government grant was 41.8 per cent., but, for the coming year, it will be cut to 38.6 per cent. That is a 7.6 per cent. reduction. If we take inflation at 6.7 per cent., the rates for the authority should increase by 14 per cent. The Minister has said that the rate increase should be about 2 per cent. but how can the authority approach that mark without a slashing cut in services? If an authority is efficient and there is a cut in grant, something will have to suffer. As Wakefield is a responsible authority it has decided to increase its rate by 9.48 per cent. when the figure should be 14 per cent.

Mr. Gummer : I do not quite understand what the hon. Gentleman is saying. The increase in grant to Wakefield is £2,233,000 and the estimated increase in general rate necessary for Wakefield if it spent at assessment should be 2 per cent. I wonder why the figure must be 14 per cent. With such an increase in grant, it should not be 14 per cent.

Mr. Lofthouse : I itemised the figures and explained earlier why it was 14 per cent. If the Minister cannot follow me, I will try again. The reduction in grant is equivalent to 7.6 per cent. If we take inflation at 6.4 per cent. into consideration, and if my mathematics have not deserted me, that makes 14 per cent. That was the increase that Wakefield required to stand still. I hope that the Minister has followed me.-- [Interruption.]

Madam Deputy Speaker (Miss Betty Boothroyd) : Please carry on.

Mr. Lofthouse : If Wakefield's rate support grant was the same as last year, there should have been a further £5 million.

Perhaps we should compare Wakefield's grant with the grant received by Bradford. Bradford has received an increase of around £23 million if we consider the three years prior to this year's allocation. I hope that the Minister will advise me if I am wrong. When Bradford was Labour- controlled for three consecutive years, it requested the Government to release the council from rate capping. It is rather ironic and interesting to note that, immediately the Conservatives gained control of the council, the grant was increased to the figure to which I have referred. Many people will not need to gaze too long into a crystal ball before they realise what has happened. Wakefield has lost £5 million.

Mr. Gummer : I am genuinely surprised. I believe that the hon. Gentleman's figures do not face the fact that we have taken the payment for the polytechnics out of the equation. If he considers the figures with that balance in mind, he will see that 14 per cent. is wrong and 2 per cent. is right. It is a question of how the hon. Gentleman looks at the figures.

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I have just checked the figures. The hon. Gentleman will recall that the effect of removing the benefit cap from Bradford has also been felt by authorities such as Derbyshire and Birmingham. Neither of those authorities is in the same category as Bradford. The hon. Gentleman is the first person to suggest that there is any connection between a council's political views and the change in funding. We were pressed very hard, particularly by Birmingham, to make changes and I believe that it has been widely welcomed. I hope that the hon. Gentleman would not suggest that the change was made after a change in control on the council. I do not want to play party politics with that, although I am quite prepared to have a good party political row if I want one.

Mr. Lofthouse : Some people may believe the Minister, but we will let people outside this place decide for themselves.

Mr. Soley : Perhaps I can help my hon. Friend. Perhaps my hon. Friend's local authority is taking account of a more realistic rate of inflation, closer to 7 or 8 per cent., than the Minister's figure of 4 per cent. Perhaps the authority is taking into account the additional cost of the poll tax, over and above the Government's assessment of it. With regard to the polytechnics, the block grant will still fall between 1988 and 1989 even when the polytechnics have been removed from the equation. The Minister is trying to dress that up today. He is wrong, and not for the first time.

Mr. Lofthouse : I am grateful to my hon. Friend. I can assure the Minister that my figures have been provided by Wakefield metropolitan district council's chief finance officer. If he is wrong, I will have to concede that, but where there is everyday local knowledge of what is happening in Wakefield, I accept the figures from the chief financial officer of that authority.

Mr. Gummer : I reiterate that the hon. Member for Hammersmith (Mr. Soley) is wrong. The grant is not cut. It is increased by £2,233,000. The figures are quite clear. That means that the general rate should not increase by more than 2 per cent. for the authority to spend at assessment. That is reasonable, and we cannot accept the figures from the hon. Member for Pontefract and Castleford (Mr. Lofthouse). No doubt we can argue about how best that money should be spent, but I hope that the hon. Member for Pontefract and Castleford will not ask his local authority to introduce a higher rise.

Mr. Lofthouse : The local authority has decided to increase its rate by 9.8 per cent.

Mr. Soley : My hon. Friend is being very generous in allowing himself to be a telephone line between myself and the Minister. My point applies across the board and probably affects the Minister's local authority as much as any other. The block grant total--the amount actually paid after holdback--will fall between 1988-89 and 1989-90 from £8,959 million to £8,812 million. That is the overall fall, and it will apply to most local authorities.

Mr. Lofthouse : That is the last time that I will give way, because other hon. Members wish to speak.

There cannot be a uniform formula for all authorities ; that will not work. The House is aware that the Wakefield metropolitan district council area is suffering depression arising from the rundown of the staple industry. The area

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has lost 11,000 miners' jobs in four years. The authority must find money to attract other industries into the area. It is trying to sell the area to replace the jobs. When rates increase to the kind of level to which I have referred, we appreciate that there will be great hardship for many people in an already depressed area. Of the total unemployed in the area, which in black spots reaches between 25 and 30 per cent., some 42 per cent. are under the age of 24. At that age people want to get married, set up homes and have children. However, with the increases in mortgage interest rates, some of those young people have been forced to leave the homes that they have bought and dreamed about and apply to the local authority to be housed. However, the local authorities cannot help them. I still maintain that a figure of 14 per cent. is necessary, although it will be stuck at 9.8 per cent. There is evidence in the area that the responsible local authority is having many problems. For example, there are problems with road repairs and decorating schools. I received a letter from a blind person the other day in which I was told that the local authority could not fill the posts for three welfare officers for the blind. The dog warden service has been discontinued, although that service is essential in Wakefield and elsewhere.

There are also cuts in sports provisions. The House will be aware that, in the communities to which I have referred, a lot of the sports facilities were provided by British Coal and the Coal Industry Social Welfare Organisation. Those facilities now depend on the local authorities, but the authorities have no grants or assistance to offer to maintain those facilities.

I hope that the Minister will consider the mining communities to which I have referred. My area is not blessed by the Government, who have not considered it for intermediate area status grants. It receives no assistance. The added problems for local government in areas like mine are severe. Instead of being cut, the rate support grant should have been increased.

8.39 pm

Mr. Robert G. Hughes (Harrow, West) : Tonight we say goodbye to a system that has been with us too long. Opposition Members have spoken eloquently about the changes that have been made to local authorities' grants since the Government took office, but they seem to have a blind spot. They seem to have forgotten the Labour Government's record. They seem to have forgotten that it was the right hon. Member for Bethnal Green and Stepney (Mr. Shore) who, as Secretary of State for the Environment, started reducing the amount of rate support grant to local authorities. To listen to Labour Members, anyone would think that the only changes have been made since 1979.

In this, the last rate support grant settlement, we have had a generous 8.6 per cent. increase. I wonder what sort of debate we would have been having and what contributions we would have had from Opposition Members had a Labour Government run the economy so well that they could increase local authority spending by that much. When was the last time that a Labour Government increased local authority expenditure by 8.6 per cent.? The fact that Opposition Members are stuck firmly to the Benches shows that they do not know.

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Mr. Soley : There has been a £27.7 billion cut since 1979. If the Conservatives had kept up the Labour Government's policies, local authorities would have had £27.7 billion more. Under Labour the figure was 61 per cent. It is now down to about 40 per cent.

Mr. Hughes : I am grateful to the hon. Gentleman for answering a different question. He clearly cannot answer the one that I asked. I wish to make a comparison between certain London boroughs. The hon. Member for Brent, East (Mr. Livingstone) likes to refer to Brent's Labour administration as being like Pol Pot. That is unfair to Pol Pot. The London borough of Brent could be much more accurately compared with the script of "Who Framed Roger Rabbit?". Anyone who has seen that film knows that in it, as in the London borough of Brent, nothing is quite what it seems--the truth is never the truth for more than a couple of minutes and anybody in the film is never responsible for anything that might have happened.

It was pointed out to me by a Labour councillor from the London borough of Brent only a couple of days ago that the borough has failed over a number of years to face up to its problems. It has failed to face up to the reality of the amount of money available to it. It is one thing to have marvellous spending plans and to say how much one would like to spend on individual areas to solve problems, but when that money is simply not available it is irresponsible to make such decisions and many people are hurt.

Mr. Ken Livingstone (Brent, East) : I thank the hon. Gentleman for agreeing with my criticisms of the present administration in Brent. Will he also share my criticisms of the previous administration which left the incoming Labour administration with a budget in which income was 27 per cent. below expenditure?

Mr. Hughes : The fact is, as is well known, that that Conservative administration was in power for only a short time. Compared with the previous Labour administration, it turned round that budget, although not so fast as one might have wished. It is a bit rich to blame all the problems of the London borough of Brent on a brief Conservative administration. The problems had existed for a number of years, as is now admitted in private by Labour councillors in the borough. For a number of years, several councils have failed to make the proper spending decisions.

One is left with people being hurt by that lack of attention to detail-- that lack of proper decision-making. Nothing so characterises that appalling council more than the fact that it prefers to spend money on a women's committee, on maintaining its so-called nuclear-free zone and on having political staff for its councillors rather than having staff in the social services department. When a family finds itself in the unfortunate position that one of its members has to be taken into a mental hospital under mental health legislation, a member of the family now has to take that decision rather than, as in every other council, someone from the social services department. What a heartless way to treat people, and what a heartless decision for a family to have to make simply because the London borough of Brent could not be bothered to live within its means.

I regret that I missed the speech made by the hon. Member for Hammersmith (Mr. Soley) because of my other duties in the House, but I shall read it with great

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interest. I understand that he made a comparison between rate levels in Harrow and in Ealing. He told the House, quite properly, that the rate level in Harrow was higher than that in Ealing. That crystallises what is wrong with the rating system and why we have decided to get rid of it and move to a system that is more accountable, allowing people to see how money is spent and what is being done in their name. Although the hon. Gentleman is right, he did not tell the House that Ealing plans to increase its rates by 35 per cent. this year. He does not want to acknowledge that. Last year there was a standstill in the rates because of the Government's generosity in giving the council a large rate support grant. The year before, the London borough of Ealing put its rates up by 65 per cent. Expenditure in Ealing has gone up and up. The council has not bothered to contain it. That is what is so damaging to people and industry in that borough.

Like my right hon. Friend the Minister, I too live in Ealing. We have to live with its services and pay its rate increases.

Mr. Soley : If next year's increase goes through in Ealing--it may not--the rate will be lower in real terms than it was two years ago. Why does the hon. Gentleman think that Ealing has been rate capped while his council has not? Is it because it is Conservative controlled or because the Government have already taken £10 million off Ealing in rate support grant in the past couple of years, even though its rates in real terms are less than they were two years ago?

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