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Column 460I reinforce what my hon. Friend the Member for Dagenham (Mr. Gould) said about this being the Government's last chance to think again. I ask Conservative Members to do the sensible thing tonight --to vote against the reports and to get a more sensible arrangement for the immediate future.
Mr. Devlin : On a point of order, Mr. Speaker. Was it in order for the hon. Member for Birmingham, Perry Barr (Mr. Rooker) to criticise my hon. Friend the Member for Birmingham, Northfield (Mr. King) for being absent from a meeting when all but eight Labour Members have absented themselves from this important debate?
Mr. Norman Tebbit (Chingford) : I agree with the hon. Member for Birmingham, Perry Barr (Mr. Rooker) on at least one point. If there is to be accountability in local government, we should again closely reconsider annual elections for quarters or thirds of local authorities. That may be a good path to take. If we are to have such accountability, those who authorise spending should be called upon to pay the bills. If they can pass the bills on to someone else, such as the taxpayer or that lovely creature the Government, who distribute largesse at no cost to anyone, there will be no pressure on voters to consider the cost of the proposals for which they are voting. The hon. Member for Perry Barr will probably agree that voters should know what proposals will cost when they vote. On that basis, he should support the community charge, although I shall return to some of the problems that may arise from that in a moment.
I declare an interest as a director of several public companies, which are listed in the Register of Members' Interests--
Some of those companies are favourably affected by the introduction of the new business rate and others are unfavourably affected. That has given me an especially good overview of how the national business rate will operate. As I think the House knows, in general it will increase the burden on businesses in the south and decrease the burden on businesses in the north. It will increase the burden on service industries such as retailing, and decrease it on manufacturing. In effect, it will do precisely some of those things that my right hon. Friend the Member for Chesham and Amersham (Sir I. Gilmour) has always asked the Government to do. It will help to close the north-south divide. I am surprised that he is so critical of the measure. Many of us are in favour of proposals in theory, but when we realise how they will work out we often quibble about them. Perhaps my right hon. Friend is suffering from that.
In the domestic area, it is a little more difficult to consider the question of gainers and losers. In some respects, we have moved away from what some of us thoght to be the purity of the concept of the community charge. Why have we done so? Every step taken has been
Column 461an endeavour to make it easier for those who will be adversely affected. To some extent, that has blunted the effect of the principle upon which we are all agreed--that those who vote for expenditure should pay for that expenditure.
Many of my right hon. and hon. Friends who represent constituents who consistently voted for low expenditure over the years complain that they are now being called upon again to help pay for the high expenditure of other local authorities. My right hon. and hon. Friends have made proper and laudable efforts to ease the impact of the community charge, and especially to do something for those many people who live in low-rated areas and who, until now, have paid a relatively small part of the cost of local government services. I hope that all my right hon. and hon. Friends will take into account the fact that, if the community charge were not introduced, there would have to be a rating revaluation. I venture to suggest that, had that happened, different hon. Members would be complaining, but that there would no fewer of them. We should make up our minds that this is the system of local government for the future. At the very least, it is no more unfair than the old rating system, which was absolutely absurd and should have been swept away years ago. We should put some of the blame for the excessively high community charge figures where it belongs.
I received a letter today from a constituent who, as a local employer, attended a meeting in the London borough of Waltham Forest to discuss the proposed community charge for that area. I remind those hon. Members who are not familiar with my borough that it has the distinction of being second only to the borough in which the Leader of the Opposition lives for the highest ever rate rise in one year. It chose the year of the general election to increase its rates by more than 60 per cent. Politically speaking, the local Conservatives probably felt that that was a monstrous own goal for the Labour party.
After a 60 per cent. increase in one year, what can the local electors expect other than a high community charge bill? The authority has been a consistent overspender, yet its services are far worse than they were under the previous administration. My right hon. Friend the Member for Brent, North (Sir R. Boyson) is familiar with that local authority because he once served there as a Conservative councillor. At that time the rates were well under control--not because there was a rating system rather than a community charge system, but because it was a well-managed authority that maintained a good level of services and a low level of expenditure.
My constituent said that at the meeting one of those present questioned council expenditure and specifically asked what steps, if any, were being taken to reduce the financial burden on both non-domestic and domestic ratepayers. The answer was none. When there are complaints about the level of the community charge in my borough, the blame should fall upon those who flatly refuse to take any measure to cut expenditure in what has been a grossly extravagant council. Only recently, I was told by a senior member of the town hall staff that, in his opinion as a long-serving local government officer, the community charge in my borough could be reduced by
Column 462£100 if a sensible administration were in force. That would make the proposed community charge figure very different.
I have no hesitation in supporting the Government tonight in carrying through the final stage of the implementation of the community charge. Of course it will be uncomfortable in places, but I beg my right hon. and hon. Friends to remember that we would also have faced an uncomfortable time with revaluation, which would have shifted the burden in what would have seemed to those who had received arbitrary benefit over the years to be an arbitrary increase in their share of the expenditure.
I hope that tonight my right hon. and hon. Friends, whatever their misgivings about some of the detail, will accept what was said by the hon. Member for Perry Barr--that we want accountability in local government. It is my view that that accountability comes only when those who call for expenditure are called upon to pay for it. 6.57 pm
Mr. Tom Pendry (Stalybridge and Hyde) : By now the Secretary of State must be in no doubt that the Government's attempts to simplify the standard spending assessments for local authorities, and their selective was of calculating the safety net grant, will be disastrous for many local authorities. What my hon. Friend the Member for Leyton (Mr. Cohen) said earlier in a whisper needs repeating in a louder voice--that the SSA has made an ASS of the Government.
The provision of the safety net grant is supposed to protect local authorities such as Tameside from changes in grant between this year and next. Instead, the reverse is likely as a result of direct actions by the Government and Ministers. Although local authorities are facing inflation that is currently running at 8.5 per cent. and rising, the Government have decided that Tameside's spending will increase by only 4.8 per cent. That decision alone will affect the safety net grant by £4.7 million, or £29 per adult.
As a result of Government legislation, local authorities face many new responsibilities such as implementing local management of schools, the national curriculum and others that have been spelt out by hon. Members. Nevertheless, the Government have chosen to ignore that when calculating council's spending figures for next year. In Tameside, that will result in an underpayment in grant of £10 per adult. As the Secretary of State has decided that the first £25 per adult loss in grant is not to be protected, that will cost Tameside poll tax payers £25 per adult, or £4 million, in lost grant.
I wish to illustrate another glaring injustice in my local authority. Tameside recently made a one-off contribution of £2.5 million to the housing revenue account to pay off debt. Hon. Members must agree that it is outrageous that that exceptional payment has been included in the Government's calculations, and so deducted from the safety net grant, not only for next year, but for the next three years. That will amount to £7 million over that period.
All these factors mean that the residents in my local authority area face a poll tax bill of £358 instead of £278. Each adult will have to pay £70 more. Next year new legislative requirements will force the council to spend an additional £1.5 million on debt repayment. On top of that, the poll tax is expected to cost £1.3 million to collect-- more than the cost under the previous rating system.
Column 463Those two factors will add £17 per adult to the poll tax, without any benefit to the residents. What will happen in 1992, when the safety net grant is no longer available, is clear : the poll tax payers will have to bear the full burden. If the Government believe that the ratepayers will blame all this on local councils, I assure them that that is wishful thinking. We will ensure that the focus of attention is those Members who join the Government tonight in the Division Lobby. That is a promise.
Changes in the formulae used to assess spending needs will cost my local borough about £5 million of its rate support grant. As I am sure the Minister of State knows--when Ministers go to my area, they recognise this fact--my borough is already greatly underfunded and this is a direct result of the policies of this uncaring Government, although Ministers may not agree with that. It is a deprived borough, which needs assistance and better treatment than it gets from the Government. Last year, for example, the Government thought that Tameside should spend £19 million on social services. Under the new rules, this has been slashed by 13 per cent., to £16.6 million. Furthermore, Tameside is suddenly expected to make large cuts of £2.1 million in the so-called minor services-- community protection, recreation and the like--and £1 million in education. Once again, the Government are completely out of touch with reality.
Our population is aging rapidly. We need more spending on social services to care for our elderly--not less--yet the Government expect authorities such as Tameside to make cuts of £2.4 million. Such cuts will affect the most vulnerable in our society. Tameside will be forced to restrict the free use by voluntary groups of minibuses which have been specially adapted for the disabled and the handicapped. Meals-on-wheels charges will have to be increased above the inflation rate. The standards of provision of home help services, of which Tameside is proud, will deteriorate.
These are the inescapable effects of the Government's proposals. Councils throughout the country are forced against their will and the collective will of the people whom they represent to take central Government decisions, not local government decisions. So much for setting the people free. The issues which I have highlighted may be considered by many hon. Members to be parochial, but they are real and worrying to the people whom I represent, and I make no apology to the House for raising them.
On a different note, I wish to draw attention to the concern which is widely felt in the sporting world about the Government's decision to include sports clubs in the uniform business rate. The outcome for many clubs could be catastrophic, with many forced into bankruptcy and others forced to raise membership subscriptions to a level that it will be impossible for the less-well-off to afford. Clubs are faced with one more example of the Government's disregard for the future of sport.
It was hoped that, in view of the increasing worry which was expressed across the board about the decline of sport in our schools and the poor standard of fitness among our nation's children, the Government might have thought twice before further jeopardising the 150,000 voluntary clubs that provide sporting opportunities for thousands of people. Such voluntary clubs are non-profit-making and make no demand on the public purse, yet, following the Local Government Finance Act 1988, they are facing higher bills and increased rate charges.
Column 464Although local authorities have been urged to give discretionary rate relief to such clubs, senior finance officers throughout the land say that there is little hope of it being granted. The general secretary of the Central Council of Physical Recreation told me today that his initial optimism on receiving the news from the Minister for Sport that sports clubs would get a better deal, following the announcement on 12 September by the Minister of State, has completely evaporated. The Minister failed to tell the CCPR that local authorities would not have the cash to release the kind of money that was necessary and that was expected by sports clubs.
Unfortunately, sport does not come high on local authorities' lists of priorities, as it is clearly in direct competition with many other demands, such as housing and social service provision. I can fully understand the dilemmas faced in choosing priorities, but those choices are made much more difficult by Government legislation that continually burdens them with extra duties while reducing their resources.
If hon. Members want clear evidence of the effect of the uniform business rate on sport, I suggest that they look at this evening's Evening Standard , where they will get plenty of evidence. When I was a Northern Ireland Minister, I introduced a rates order which gave mandatory rate relief of 65 per cent. to sporting clubs in the Province. I hoped that that would merely be a start which would be followed by the rest of the United Kingdom and, 10 years on, be improved upon. Alas, under these proposals, local sporting clubs and associations cannot expect anything like that kind of relief. Charities rightly receive mandatory 80 per cent. rate relief, and I believe that sports clubs should have the same.
If no relief is forthcoming, many clubs will be forced to close. Some increases in rateable values will exceed a staggering 1,600 per cent. Faced with the detrimental effects of compulsory competitive tendering, the selling off of playing fields and the implications of local management of schools for dual-purpose facilities, it is vital that we preserve these voluntary facilities before this country's once world-renowned sporting prowess passes into mythology. The Government have clearly got their rating policy wrong. They should scrap it and think again.
Sir Rhodes Boyson : I was carried away with the impression, Madam Deputy Speaker. In fact, I was speechless, which is rare for me. I pay tribute to my hon. Friend the Minister of State, who is in the Chamber, and my right hon. Friend the Secretary of State for my meetings with them and their help. I am not saying that more help will not come--we await with great interest the wind-up speech and any extra help that it will give. As always, I am an optimist, and I feel that our views could influence that speech greatly.
I supported the Government on the introduction of the community charge and I still support the principle. Past revolutions were based on the words, "No taxation
Column 465without representation." The rates position is "representation without taxation" ; only one in two, one in three or, as in Brent, one in four of those who vote pay rates. Some people vote to spend other people's money. That is political immorality. I support the community charge principle on the basis of accountability. The slant of emphasis that I gave to the community charge changed following a conversation that I had with some colleagues, and this shows the importance of not just being in the Chamber but of speaking to one's colleagues. One evening in the Smoking Room, I was approached by a fellow Back Bencher who represents a northern seat. He asked whether three or four people could see me one evening and eat together so that he could show me what the community charge on low-rated properties would mean. I said, "Certainly. Why not tonight?" I am always a man who likes to move quickly, so we met that evening. They showed me figures, which I checked on a computer the following day. The figures were horrific. I had not seen such figures before, including during the eight months when I have been a local government Minister in the Department of the Environment, where I inherited the system and passed it on.
In certain northern seats, instead of what we said as a party--which was that those in households of fewer than 2.1 people would be better off--we now know that approximately 1 million people in single occupancy will be worse off. In low-rated properties in the north which were built before 1939, 60 or 70 per cent. will be worse off and in some cases, 80 per cent. will be worse off.
That was the beginning of my road to Damascus and the realisation of that fact was the blinding light. It seemed to me wrong and politically disastrous that people who looked forward to a system under which they would be better off would be worse off. I know that I have changed my mind on the issue, but if the leader of the Gadarene swine had changed his mind before jumping over the cliff, many of his followers would have lived. All of us make a reassessment of the situation from time to time, and I make no apology for that. People can say that at least I am open-minded, even if my brains may have fallen out on the way. The hon. Member for Newham, North- West (Mr. Banks) should listen to me, because it is good for him. Like my right hon. Friend the Secretary of State, I have respect for him. I shall give an example, as a northerner. Let us suppose that there is one big house and that the owner pays rates of £1,400. Let us also suppose that there are four small houses with rates of £150. Let us suppose that it is then decided to raise that £2,000 by dividing it among the five houses, so each house will pay £400. The man from the big house who gains so much may feel guilty about it and may vote Liberal. The other four will be worse off and will be horrified that £400 is being taken from each house rather than £150. I respect what has been done. I paid tribute earlier to my right hon. Friend the Secretary of State and to the way in which he dealt with the issue in a brilliant speech this afternoon. As I listened to it, I had to hold on to my seat so that I was not carried away. His speech was fair and generous to right hon. and hon. Members of all parties, and ideal for the House of Commons.
The problem is the £3 maximum loss, and Opposition Members and some of my hon. Friends have referred to
Column 466that. I am pleased that the most that people will lose is £3, but that presumes that their authorities are spending only at the norm. What came out yesterday from the Chartered Institute of Public Finance and Accountancy is that the figure will be £1.25 a week in community charge more than that. If that is right, people will lose £4.25, which is a lot of money to an old-age pensioner. Some people live in a Labour authority which is spending more than normal--an example of that is Brent, which is a wasteful, spendthrift authority, where people could be £7.75 worse off.
It is no good telling people in my constituency to vote Conservative. Already 19 out of 21 councillors in my constituency are Conservative because the voters have such pride in their Member of Parliament. How can I get 23 out of 21 Conservative councillors? We have done all that we can. We are regularly evangelists in the rest of Brent and I am sorry that the hon. Members for Brent, South (Mr. Boateng) and for Brent, East (Mr. Livingstone) are not with us this evening. Perhaps we shall win a landslide.
I am worried that we shall create a new poor. Twice as many people will require help, yet we came in as a Government who wanted to end or lessen dependency. We are recycling money, which is politically disastrous and morally wrong. When the two are linked, I can speak with confidence that comes from both lungs.
The safety net arrangements were not proposed in the 1986 Green Paper. I was a Northern Ireland Minister at the time and listened to the proposals, which came to me like golden pennies and I thought that my right hon. Friend the Member for Mole Valley (Mr. Baker), who is now Chancellor of the Duchy of Lancaster, was right at that time. It was said that the community charge would come in over 10 to 12 years, that inflation would ease it, that one tenth or one twelfth of rates would be taken up by the community charge each year, and that it would be eased in generally. The safety net proposals came up during my eight months at the Northern Ireland Office, and I thought then that it would help people.
It was only later, after discussions last June when I became involved, that it came to me that the safety net arrangements went against the basis of accountability. For four years we have been giving warnings about accountability and yet we now propose to move money from careful authorities to spendthrift authorities, such as Brent, and to destroy that principle. When the bills go out in April and people see that £70 or £75 is to be transferred to other authorities, we shall find it difficult to sell that change because people will say that they thought that we stood for accountability. I welcome the fact that my right hon. Friend announced in October that he would take away the safety net in the second, third and fourth years. However, I hope, even at this late hour, that he will end it this year. In the London boroughs, voters will not go to the polls for four years after the poll this year. It is of no help for those of us who represent London constituencies that the safety net will be taken away in the second, third and fourth years. Other hon. Members have mentioned capping. We must have capping to protect our people in spendthrift Labour areas, or people will leave and the inner city will come out and destroy other areas. If my right hon. Friend proposes to cap at 25 per cent. above the norm--that is £347.50--or at 50 per cent. above the norm--that is £417--he should say so now, so that people can live content
Column 467and will at least know that help is coming. They will know that those riding off into the sunset will be there to help to some extent. Something should be done immediately after the community charge is introduced to assess the political effect of the charge and its effect on local authority finance.
I have learnt much from this. The Government started out with good intentions. Ministers have passed through and civil servants have passed through, so no one guides the legislation through from beginning to end. Eventually, as the old saying goes, a camel is a horse invented by a committee.
Madam Deputy Speaker : Order. I must call the right hon. Gentleman to order. It hurts me more than it hurts him, but I must point out that he has spoken for 10 minutes and that I am governed by Standing Orders.
Mr. John Cartwright (Woolwich) : Some of us might have preferred the right hon. Member for Brent, North (Sir R. Boyson) to grasp the basic injustice of the poll tax a little earlier, but it is right that I should pay tribute to his courage in accepting that he was wrong. There is more joy in heaven over one sinner who repents. Traditionally, this is the time of year for many gloomy predictions about next year's rate levies. It has been normal for borough treasurers--or directors of finance, as we now have to call them--to make our flesh creep as part of the exercise in getting budgets through. However, Ministers will make a serious mistake if they believe that what is happening now throughout the country is another example of that trend.
Ministers may discount what local authorities say because they are interested parties, and they may discount what local authority associations say for the same reason, but they cannot ignore the cool, analytical judgment of a body such as the Chartered Institute of Public Finance and Accountancy, which has been known for years for its careful analysis of problems. It is hard to argue with its judgment, to which other hon. Members have referred, that the Government appear to expect the local authorities to struggle with the additional burdens placed on them by central Government and with the problem of inflation with an increase over last year's spending levels of about 3 per cent. In the real world, we know that retail prices are about 8 per cent. higher and that pay awards are nudging double figures.
I find it hard to dispute CIPFA's suggestion that a sensible estimate of what the impact of inflation will be, a reasonable assessment of the extra burden of new Government policies and a prudent judgment about what will be lost through evasion and avoidance suggests an average poll tax figure not of £278 but of £344 for the country as a whole.
The institute's final assessment is that local authorities could deliver an average community charge of £278 only by making substantial cuts--cuts of 8 per cent. to 10 per cent. CIPFA says--this is important--
"Even if local authorities wanted to cut spending on such a scale it is doubtful that they could do so, so the most probable outcome is higher community charges than those indicated by the DOE." My own local authority, Greenwich, appears to have done just as badly out of the much vaunted standard spending assessment as it did out of the late and unlamented grant -related expenditure assessment system. The Government have given Greenwich a standard
Column 468spending assessment of £153 million, an increase of 16.4 per cent. over its grant-related expenditure assessment. At first glance, that looks generous, but if one excludes education responsibilities, which will be taken over for the first time on 1 April, one finds that for the remaining services the increase is 7.7 per cent, as compared with a national increase of 11 per cent., so Greenwich seems to have missed out compared with some local authorities.
Some inner-London boroughs have education SSAs representing as much as 98 per cent. of their Government-assumed spending, but in the case of Greenwich it is 81.8 per cent. and the discrepancy will have to be made good by the poll tax payers.
The worst impact of the SSA on Greenwich will be in social services, for which Greenwich has a lower SSA per head of population than any other London borough. The figure for Greenwich is £118.66 and the gap between that figure and the next lowest--£153.02 in Lewisham--is substantial. Yet neither the Department of the Environment nor the Department of Social Security has made any suggestion that Greenwich is massively overspending on social services. I would argue that the reverse is true : there are obvious and worrying deficiencies in the council's social service provision.
Let us look at the "other services" block of SSA. For inner-London boroughs generally, the SSA is up 19.5 per cent. on the GREA, but for Greenwich the figure is down by 2.6 per cent. The reasons would appear to be artificially low population figures, a low estimate of social deprivation based on the 1981 census, which is now very out of date, and a low assessment of numbers in private rented housing, again based on out-of-date information. All those errors will have an impact on the likely poll tax in Greenwich.
In the exemplifications before us, the Government have assumed that, allowing for the safety netting, Greenwich poll tax payers will face a charge next year of £252, compared with an average rate bill of £290 per head. That looks like a very good deal, but the longer-term trend is far from encouraging. After the safety net has gone, the Government estimate a poll tax for Greenwich of £537, the second highest in the country. Figures based on the council's current budget show a poll tax not of £252 but of £495, rising to £768 when the safety net is phased out. That is simply not acceptable, even to those who run Greenwich council. The council is now engaged in a programme of last- minute and hasty cuts to try to reduce spending by about 10 per cent, but that will still leave us with a poll tax of about £350--£100 above the Government's prediction and £60 per head above the present rate bills.
The need to cut spending is forcing the council's political leadership to reveal its priorities--and they are very strange priorities. The council seems to be protecting the new, trendy, fashionable services introduced after 1982 and targeting for cuts the basic bread-and-butter services on which many ordinary people depend. For example, there is no proposal to reduce the grant of £105,000 to subsidise entertainment at the Albany, even though that institution is not in the borough, but essential staff in the parks department are to be cut by 18 per cent., library hours are to be reduced and spending on children's playgrounds cut.
The council proposes to close long-established community centres with a long history of service to the community, but donations amounting to almost £80,000 a year are being continued in respect of groups such as the
Column 469Greenwich mural workshop, Emergency Exit Arts, and a group called--equally unbelievably--"Fooled Again Puppets". Those organisations are to continue to have council help when basic services are being cut. The total sum of those contributions--£80, 000 --is the cost of running one of the community centres now threatened with closure.
The council is also considering cuts in road sweeping services and increased meals-on-wheels charges, while it continues to publish its own newspaper at a cost of about £300,000 a year.
The Government may succeed in forcing cuts on what they regard as profligate local authorities through the poll tax system--particularly if they use capping--but they may not be the right sort of cuts. The crudity of the system does not allow that to be prevented. The Government's main claim for the poll tax has never been that it is fair and just. There is no way in which they could make a case along those lines. Their case for the poll tax has always been based on the argument that it introduces a better level of accountability and makes it easier for local electors to judge the financial performance of their councils. The botched settlement before us tonight leaves even that claim in ruins. The mysteries of the standard spending assessment and the safety net and the Government's totally unrealistic estimate of councils' need to spend make it quite impossible for high poll tax charges to be placed at the door of those responsible. Councillors will blame Ministers and Ministers will blame councillors. Tonight's debate underlines the fact that the poll tax is not only inherently unjust in principle but a bureaucratic nightmare in practice.
As we get nearer to the moment at which the bills start dropping through the letterbox, I believe that more and more people will come to accept that the fairest way of paying for local services is the way recommended by Layfield 14 years ago--a local income tax. The sooner that that is accepted, the sooner we shall have a sensible system of local government accountability.
Mr. Derek Conway (Shrewsbury and Atcham) : We are regularly told that the electors are very unhappy with the community charge. That is good. I hope that my hon. Friend the Minister for Local Government and Inner Cities will reflect on that fact in his reply. I do not see why any of my electors should be particularly happy about paying the community charge, or their national taxes for that matter. When I entered the Tory party at the age of 15, one of my motivations was to get taxation--both national and local--reduced. I am glad if my constituents are unhappy about the community charge.
The question must be whether the community charge is fair, and I believe that it is, although I suggest that the levels are unacceptable. My county council is controlled by an alliance of the Labour and Liberal parties, and I do not believe for one moment that the charge that it levies will be good or acceptable. People write saying, "I shall never vote Conservative again." They are entitled to have a good moan and get if off their chest, but the price of vengeance will be high because they will find that in the county of Shropshire the re-election of a bungling alliance of Labour
Column 470and Liberal councillors will only serve to increase the charge that they will have to pay. Their vengeance will not taste sweet. I know that this is not a Second Reading debate and that we must therefore be cautious and not be tempted into discussing the principle of the community charge. Undoubtedly, the mechanics are not only unpopular but extremely confusing. I do not know how many of my hon. Friends have ploughed through the reports. I got as far as the second one and could not make head or tail of it. From now on, I shall leave my hon. Friends on the Front Bench to explain these matters to me.
I appreciate the fact that, under the standard spending assessments system, there is one bit of good news for counties such as Shropshire. Extra weighting has been given to the population sparsity factor. I see that my hon. Friend the Member for Ludlow (Mr. Gill) is in his place. He has one of the largest constituencies in the country and that extra weighting will no doubt be as welcome in his constituency, which lies to the south of mine, as it will be to the 117 villages that lie around the county town that I have the pleasure to represent.
The Department of the Environment's computer is positively lethal, although hon. Members who have served on local councils will know that there is nothing new in that. About 16 years ago, when I first became a councillor, we were suffering under a Government made up--like Shropshire county council--of Labour and Liberal politicians. That Lib-Lab Government used to issue their rate support grants, but then we had a series of clawbacks. First, we had the primary clawback and then, just as the council's budget was settling down, they suddenly realised that the figures were wrong and we had a secondary clawback. The complexities of the system of local government finance cannot therefore be laid at the door of the present Secretary of State for the Environment and those who preceded him, in bringing about the community charge. Complex local government settlements are nothing new to those of us who have experience of local councils. The one encouraging thing is that councils are now getting £2.3 billion in advance. When I was a councillor, we used to complain about the lateness of the settlement, yet now, when councils are getting that huge sum of nearly £2.5 billion in advance, there has been not an ounce of gratitude from any side about it. Perhaps that shows my hon. Friend the Minister for Local Government and Inner Cities that there is, indeed, little gratitude in politics. The safety net is undoubtedly unpopular. It is unpopular in my constituency. My right hon. Friend the Member for Brent, North (Sir R. Boyson) expressed the feelings of many who did not realise the unfairness and the imbalance of it, but at least it will be for only a short period. The concession that the Government made in the autumn of last year, to phase out half the safety net this year, is welcome but costly to the taxpayer.
In my constituency, in addition to the £251 assumption that the Government published, which included £4 for the safety net, there will be an extra £30 for the increased spending by Shropshire county council and another £12 for the parish precepts. Many of my right hon. and hon. Friends who represent city areas forget that those of us who have large rural constituencies have an additional charge that is levied by the parish councils.
Column 471represent urban constituencies might be interested to know that many parishes pay only a matter of pence in precepts at the moment but, as my hon. Friend has just pointed out, in The Wrekin district council of Shropshire it is possible that community charge payers will pay £12 instead of a matter of pence.
Mr Conway : My hon. Friend is quite right. I hope that parish councillors around the country will remember that we in Parliament will be watching the levels of increase to ensure that they do not try to confuse electors with the new system. In addition, my borough council is allowing for a 5 per cent. collection deficit, which amounts to £16 per head. Therefore, straight away the local electors will be paying £62 per head more than the Government assumption. As my right hon. Friend the Secretary of State said, it is for the councils to decide, so the Government should not be defensive about this. In fact, my county spends about 90 per cent. of the money raised on local government services. Its budget, as planned, could be £28 million up on last year, which is a 14 per cent. increase, considerably above the rate of inflation and, I would argue, quite unnecessary.
I agree absolutely with the point made by the hon. Member for Birmingham, Perry Barr (Mr. Rooker), who is clearly not of my party, but who is right to say that we need to look at the frequency of elections. I advised my hon. Friend the Minister that I shall support the Government enthusiastically about the community charge tonight, with no apologies at all, but that we need to look at the frequency of elections for county councils in shire areas because they are not accountable enough on the basis of being elected every four years. That interval does not give the electorate enough of a chance to get at them, which is the whole point of the community charge. Of course, my constituents can always say, "That's it, Conway, you're out," and they can vote for somebody else. They can turn away from the £250 that my right hon. Friend's Department has calculated that they should be paying in community charge and can turn instead to the one alternative that was published by the Labour party, which would cost my constituents £623 per head, nearly three times as much. That is the alternative.
Mr. Rooker rose --
We are talking about a fairer system that will undoubtedly bring back voter power because, as my right hon. Friend the Member for Chingford (Mr. Tebbit) rightly told the House, those who vote for expenditure will pay for expenditure.
I have a great deal of sympathy with the plight of my constituents over the level of the community charge because, as I live in the constituency and am married to one of my constituents, I shall hear regularly about the cost of the community charge.
People in the county of Shropshire have a simple option. They can kick out the Labour-Liberal Democrat coalition at the next opportunity because it is forcing up the community charge. I shall make absolutely certain in my area that the blame for the level of the community
Column 472charge will rest fairly and squarely with the bungling opposition parties that control the local councils. But they will not be there for long.
Mr. Peter L. Pike (Burnley) : This debate is the last occasion on which the Government can take action to try at least to salvage something from the disastrous poll tax and to prevent some of the difficulties that will be encountered by so many people who are ratepayers at present and who will be poll tax payers from 1 April this year.
One thing is quite clear. Because of the basic unfairness of the Bill that went through Parliament and despite our repeated protestations and attempts at the time to amend the Government's failure to take ability to pay into account, unfortunately whatever the Government do at this stage, they will not be able to overcome the main difficulties of implementing the poll tax.
I hope that the Conservative Members who trooped through the Lobbies last year to support the legislation but who now recognise its implications will at least recognise that if the Government are to do anything to ease the burdens and to assist some of the people who will be penalised, it is no good those hon. Members abstaining tonight. They must vote with Labour and the other Opposition parties against the proposals.
I recognise clearly that the only way in which we shall be able to end the poll tax and the unfairness of the system is by electing a Government who are committed to replacing it with a system that is based on fairness. I am sure that that will be a major factor at the next election, when it comes.
The right hon. Member for Chingford (Mr. Tebbit) referred to accountability and to annual elections. I have always believed that borough councils should be elected annually and I would support any move to make councils more accountable by making them frequently elected and thus more answerable to the electorate. The borough council that I represent already elects one third of its council three years out of four, and in the fourth year the county council elections are held. Therefore, it is accountable.
I should like to say a few words about my local authority because I had experience both as finance chairman of the council and as leader of the council before being elected to the House. Our budgets were never a case of spending for the sake of spending because we used to spend a lot of time trying to achieve a budget that was both fair and reasonable. We tried to achieve a budget that would provide the services that we needed while being fair to the people who had to meet the bills. The expenditure could be roughly divided into three--one third for interest and debt payments ; another third for salaries and wages ; and the final third for the items that could be adjusted. However, there was not much room for adjustment once one began to analyse those items.
The Minister should recognise that at present two thirds of the expenditure of many councils is for debt and interest payments, and salaries and wages. He should also recognise that the Government are responsible for the level of pay increases that the local authorities have had to make. The Government are also responsible for the level of
Column 473interest rates, yet they have used the figure of 4 per cent. for inflation in the figures that we are debating. What nonsense. The Government have moved to a system of standard spending assessments. Of course the old system of grant-related expenditure assessments was unfair and even the Department of the Environment could not explain it. The Secretary of State has repeatedly said that the new system was "simpler". Indeed, he used that word time after time, but the one thing that he did not say--that he could not say--was that the new system is fairer ; he could not say that, because it is unfair. Although I welcome any moves towards something that is simpler, if the system is changed, it is much more important that it is changed to something that is fairer. That has not happened, and the Government should think again on that important matter. I turn now to another important issue that affects Burnley. The Association of District Councils has assessed the total spending of authorities at £32.8 billion. That figure has been used several times. The Association of District Councils, which is not Labour-controlled, says that that is an understatement of about £1.6 billion. The Secretary of State says that it may be £2 billion. Whichever figure is right, we all know that many local authorities supplement their spending from balances. Lancashire county council and Burnley borough council have both done so. Some £800,000 has been spent from balances this year by Burnley council.
The Secretary of State challenged my hon. Friend the Member for Dagenham (Mr. Gould) to say whether spending commitments will have to be met in future if there are no balances to meet them. It was implicit in his comment that the expenditure of local authorities is not necessary. From whatever source it comes, local authorities deem their expenditure necessary. If the Secretary of State is saying that this year's expenditure from balances cannot be repeated next year and must be met by poll tax demands higher than the Government's figures, what services would he cut? Would he close nursery schools or old people's homes? Would he stop grants to citizens' advice bureaux? Would he cut grants for running sports facilities, arts centres and leisure centres? Those are all important services. If he is saying that the level of expenditure of local authorities as a whole or individually is wrong, he must say what should be cut or where additional income should come from. Of course, he cannot do that.
I represent a deprived area. The Government recognise that it is deprived because they have designated it under the inner-area programme. Additional resources have been announced during the past few days. If anything, we are not spending enough money on the problems of dereliction and poverty in my area. Under the present system we cannot spend more because we must take into account what we can ask ratepayers, whether domestic, commercial or industrial, to pay. The Government have got it wrong.
In Burnley, the population figure that the Government have used to calculate the grant, taking into account the non-domestic rate, is the Office of Population Censuses and Surveys figure of 61,000. The population is now 67,000 because we have the highest electoral roll for many years. In some ways the poll tax has encouraged people to
Column 474register, rather than the reverse. The Government have not taken into account the higher population figure in calculating the standard spending figures. They should have done so, because that figure will continue.
We shall receive relief as a low rateable value property area but the transitional payments, low-rate relief and other help will be phased out. We must tell people what their poll tax bills will be without the safeguards, safety nets and transitional payments which are given to con people that the poll tax is not as bad as it is. The population figures used should be re-examined carefully.
I shall conclude by making a few remarks about low rateable value areas. The hon. Member for Brent, North (Sir R. Boyson) knows north-east Lancashire well. He comes from a Labour background. He is aware of the low rateable values in the area. He knows that the ratepayers of Burnley, Nelson, Colne, Accrington and Rawtenstall will suffer considerably because they will face a massive increase because of the poll tax. Even with safety net protection and relief for low rateable value properties, people will pay heavily from year one and in year two it will be worse. Year three will be even worse and year four will be worse still. The Government must think again. I hope that Conservative Members who have any doubts and any fairness at all will vote with us against the proposals. This is the last chance that we have to say to the Government, "You have got it wrong."