House of Commons Hansard Debates for 18 Jan 1990

Sir Anthony Grant (Cambridgeshire, South-West) : For more than 25 years I have advocated reform of the ludicrous old rating system. I have done so because I have always thought it outrageous that the whole cost of local government expenditure was borne by only one third of the electorate. It was not borne by the richest by any manner of means. Therefore, I have no difficulty in supporting the reform brought in, at last, by this Government, after it had been sunk by previous Governments, both Labour and Conservative. Those who are dissatisfied and complain about the proposed system should have an alternative system to propose. The reform that I advocated for 25 years was that the cost of teachers' salaries should be borne by the Exchequer. When they opened their rate demands, people always found that the largest item of expenditure was education. The largest item of education expenditure was always teachers' salaries--which now cost about £7 billion a year. Even under the Education Act 1944, the Secretary of State has a statutory obligation to maintain the supply of teachers. It is absurd to propose that teachers' salaries are negotiated anything but nationally. The idea that they can be negotiated by Hogsnorton borough council is ludicrous. I hope that the Government will not lose sight of that in future as a possible solution to some of the problems. If they did so, inevitably some irresponsible councils would simply take advantage and spend money like water in place of education expenditure. That is why I am wholly in agreement with my colleagues who say that we should not reject the idea of community charge capping. I was glad that, in the Secretary of State's remarkable speech, he seemed to respond to that sympathetically. Cambridgeshire has been unfairly treated for many years. I remember that, when I first represented my area,

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Cambridgeshire Members of Parliament had to rebel against the Government. I do not refer to my hon. Friend the Member for Cambridgeshire, South-East (Mr. Paice) but to Lord Pym and my hon. Friend the Member for Cambridge (Mr. Rhodes James). We had to do something that we did not like doing. Unusually for us, we rebelled simply because the Government persistently refused to recognise the problems of Cambridgeshire, which is the fastest growing county in Britain. Many problems arise from that fact. They may be problems of success, but population is the problem in Cambridgeshire. When Ministers considered the SSAs--as they are now--for last year, I found that they still had not taken Cambridgeshire's population problems into account. We had to tackle the Minister and we had a good argument about it along with local authority officials and councillors. I am grateful for the way in which he responded, and I am happy to say that a change has taken place. The SSA for Cambridgeshire county council is now 8.5 per cent. higher than the grant- related expenditure for 1989-90. It is £2.3 million more than the figure originally proposed in November last year.

The SSAs for the Cambridgeshire districts range from 11.6 per cent. for the city of Cambridge, to 52.3 per cent. for east Cambridgeshire district council. It is right that I should publicly thank the Government and my hon. Friend the Minister of State for that. It is up to the district councils in Cambridgeshire to respond by conducting their affairs prudently and wisely. I am satisfied that they will do so, although I have grave doubts about Cambridge city council where I am a ratepayer, and Peterborough city council, both of which are in alien hands. We hope that all councils will respond properly. In addition, the Government treated our credit approvals favourably.

Only the area cost adjustment is outstanding. Like many south-eastern areas, Cambridgeshire has high labour and high industrial costs. However, we were suprised to find that we did not get an area cost adjustment. We were even more surprised and appalled when we noted that Oxfordshire did. Why on earth should Oxfordshire of all places have an area cost adjustment and Cambridgeshire not? I defy my hon. Friend the Minister for Local Government and Inner Cities to give a reason for that. He has said that the matter has only been dealt with in a rough and ready arbitrary way. In a letter to me he said that the case is somewhat technical and that the results of the new earnings survey were not robust enough to apply county by county. I ask him only to give me an assurance that perhaps next year the matter will be looked at in much greater detail and Cambridgeshire put on the same basis as Oxfordshire.

We in Cambridgeshire have had our rows and we have had to rebel. But in all my time in Parliament, no Minister has responded so carefully and sympathetically and taken so much trouble in dealing with all our complaints as my hon. Friend. He may not have pleased everybody, but he has seen them. On this occasion I shall support the Government because of the concessions that have been made for Cambridgeshire, but I hope that those who are doubtful will show a little gratitude to my hon. Friend for what he has done.

Several Hon. Members rose --

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Madam Deputy Speaker : Order. The 10-minute limit on speeches has now ended, but it would be helpful if all hon. Members speaking from now on would impose a voluntary time limit on their speeches. 7.51 pm

Ms. Hilary Armstrong (Durham, North-West) : I shall endeavour so to do, Madam Deputy Speaker.

Many hon. Members, including the hon. Member for Cambridgeshire, South-West (Sir A. Grant), have highlighted the fact that the Government have simply not met the objectives that they set when they began on this sorry course, the introduction of the poll tax. The poll tax, as Conservative Members have demonstrated today, is far from achieving the Government's initial main aim of accountability. As the tax has been adjusted to try to match one anomaly here and another there, it has achieved less and less accountability rather than more.

Many Conservative Members do not seem to be content with the idea that accountability begins with the ballot box. Many Conservative Members wanted to use the tax to attack those who voted through the ballot box for councils that Conservative Members did not approve of.

The poll tax is no simpler than the system that preceded it. No hon. Member or anyone trying to administer the poll tax believes that there is any sense in the nature of the administration or that administratively it will be more simple or more fair. In addition, it is costing infinitely more than the system that it replaces. More and more problems are arising each week. The Government talk about wanting to encourage young people to stay on at school, but a 19-year-old at a sixth form college rather than at a polytechnic or a university is not classed as a student and so is not entitled to a rebate. Therefore, a 19-year-old in full-time education in a school will not be entitled to the same rebate as a brother or sister of 20 who happens to be in higher education.

That is the sort of anomaly that the Government keep tripping over which highlights the sort of problems that accompany the poll tax. That is because the tax has never sought to be a fair tax for services received.

Mr. Pawsey : Will the hon. Lady give way?

Ms. Armstrong : I will not give way because I have given a commitment to you, Madam Deputy Speaker.

From the beginning, the Government have had specific aims in mind, and their main aim has been to attack local government. In doing so, they have brought upon themselves enormous problems. They cannot even meet their own objectives. The further down the road they go, the more problems appear and the more difficulties they get into. They are discovering that the poll tax does not simply attack Labour-controlled local government ; it undermines any commitment that the Government might have had toward local democracy. That is one of the major problems that the tax is now bringing. It never set out to be fair, and that is why no Conservative Members can find an element of fairness when they look at their position. Having set out to be so unfair, it is not surprising that Cambridgeshire, Brent, or wherever, ends up with problems. The problem is the tax and the way in which it has been implemented.

Let me illustrate my point with Durham. Durham is a

Labour-controlled authority. It is solidly Labour, but even

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so we won a further seven seats in the county council elections in 1989 and we won a seat in my constituency which the Labour party has never held in the history of that county council. Durham is not known as a high spender. It has never been castigated by the Government for high spending. Yet if Durham were to spend within the SSA as most recently presented--an exact account of which the Government cannot give me--there would, in real terms, be an increase of less than 3.2 per cent. over this year's figure. That would mean a cut in services.

If Durham stuck to the SSA, the cut would be equivalent to closing down the social services department or the police and fire services. We are talking not about cutting a little spending here and there, but about substantial amounts, and that is if the council manages to collect all the poll tax that is due to it. There has always been a reasonably good collection under the rating system, but now we shall be collecting for more than twice that number, so the default rate is likely to be higher and the implications will be greater than ever before.

We are left with enormous problems. There are problems of collection, but most of all there are problems with delivering the service. When the original SSAs came out at the end of November or the beginning of December, I calculated that overall in the northern authorities we would lose about 15 per cent. for education spending. I was corrected by the Minister of State, Department of Education and Science. She said that it would be about 12.9 per cent. But even if I am wrong and she is right, a cut of 12.9 per cent. in education spending at a time of teacher shortages--

Mr. Richard Holt (Langbaurgh) : Not in Durham.

Ms. Armstrong : Even Durham has problems in recruiting science and language teachers in order to deliver the national curriculum. I was there last week talking about that. [Interruption.] Hon. Members seem to think that I am making these things up, but I am not. There are teacher supply problems in every authority throughout the country. Even in Durham we have to implement the national curriculum. In Durham we have been asked to take specific action by Her Majesty's inspectors following their latest report.

If authorities are to stick to what the Government say, there will be the equivalent of a 12 per cent. cut in education. The Minister knows that that is nonsense and will leave an authority totally unable to meet its statutory responsibilities. He has the opportunity this evening to demonstrate that he cares more about the lives and opportunities of people in this country than he does about sticking by something which he knew from the beginning was wrong. I hope that he is big enough and magnanimous enough to take that opportunity. 8 pm

Mr. Robin Maxwell-Hyslop (Tiverton) : I shall certainly abide by your injunction, Madam Deputy Speaker, as if the 10-minute rule were in force.

This is the first of these debates in which I have had a sporting chance of understanding what is happening, because the revenue support grant distribution report is quite the clearest that I have ever seen. That has to be an

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improvement for people inside, as well as outside, the House who wish to understand what the new system is and how it works. What happens to county councils is much more important than what happens to district councils, because of the effect on the ratepayer. A besetting sin of the Government has been to increase more and more the duties of local authorities, particularly of county councils, without transferring proportionate resources to them. For example, the changes in the national education curriculum have resulted in a massively increased need for new books and computers. Some of the need for new computers arises because often we can no longer get spare parts for the first generation of computers purchased. That is not reflected in changes in the cost of living index. These massive changes in expenditure were knowingly brought about by the Government when they changed the curriculum.

The golden rule should always be, "If you can't afford it, don't do it." That should apply as much to Government as it does to private individuals. We have seen expensive changes made in the respective responsibilities of district health authorities and county councils. Those health authorities started with joint funding and are ending up with unique funding by the county councils. Those changes are not embraced by a figure of 6 per cent. or by looking at the cost of living index. They represent a quantum change.

The counties which were traditionally low spenders were caught by rate capping, so that they had to run down their capital assets because they had no alternative. If a road surface is allowed to remain broken up for more than a certain time, the road's understructure suffers damage which will be much more expensive to repair than it would be to maintain the road surface in the first place. But councils such as Devon had knowingly to permit this to happen to many of the lanes because it was not allowed to spend the necessary money to keep them in good repair.

In Devon there are still a large number of schools with outside lavatories which can freeze over in winter. I am not talking just about discomfort but about the fact that, when frozen, the lavatories will not work. There is a backlog of capital expenditure which has never been spent.

There was an era when architects believed that, owing to a change of Government, water no longer flowed downhill. We had an era of flat, rather than pitched, roofs. They saved money originally, but the rooks have now come home to roost in the form of maintenance costs which were never incurred when we had pitched roofs, when the worst that happened was for a slate or two to come adrift after a storm. We can get away with this for a certain number of years, but then we have to raid our reserves. If the formula is applied not to expenditure, but to the previous year's revenue, such realities are totally ignored. My right hon. Friend the Member for Norfolk, South (Mr. MacGregor) is the present Secretary of State for Education and Science ; a series of Secretaries of State for Education and Science have imposed frightening new costs on education authorities. Although it has been said that teachers' pay is negotiated nationally, that is not so for supply teachers. The more teachers who have to go to committee meetings or training courses, the greater the need for supply teachers. In some counties, such as--I regret--Devon, financial constraints on the local education authority have resulted not only in teachers being paid a miserable rate per hour but in their not being paid at all for those hours

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in between classes when they were not teaching as supply teachers. They often have to travel long distances, uncompensated.

Is it not utterly incongruous that we are moving to individual taxation in terms of national tax, so that husbands and wives will have their own allowances and be taxed separately, yet for the community charge, a couple have only half the capital exemptions? They each have half of the £8,000--a total of £8,000 between the two of them--compared with the £8,000 for an individual. It is utterly incomprehensible that the Government are quite rightly moving in one direction in terms of central Government taxation, but defy the logic of that when they bring in a new taxation system for local government. If £8,000 was the right capital limit for income support when that was introduced, it cannot still be the right limit, without valorisation, for the tapering of community charge.

When I wrote to my hon. Friend the Minister about this matter, I was more than surprised to receive an interim reply saying that my letter had been passed from him to the Department of Social Security because his Department did not accept responsibility for the £8,000 limit.

Mr. David Hunt : I was unaware of that letter. The £8,000 limit, which I thought was increased from £6,000 for income support, is consistent with social security policy. If we were to make any move it would be a matter for my right hon. Friend the Secretary of State for Social Security. That is probably why my hon. Friend received the interim reply and I shall ensure that he receives a much fuller reply as soon as possible.

Mr. Maxwell-Hyslop : I have received a full reply, but it is utterly unconvincing. There is no essential reason why community charge--based on a poll tax system abated by rebates--should have the same limit as income support. There is no logical reason for that. Income support is related to the many different circumstances of a person, as are family credits, but the community charge is not. Therefore, there is no essential, self-evident reason why the figure at which the taper starts should be the same for both.

When the community charge was voted by the then Government, it was understood that grants to enable students to pay it would be increased by 20 per cent. of the national average community charge. Students would then have the same incentive as others to encourage economical local government and to punish extravagant local government. However, that got lost in the wash.

I wrote to my right hon. Friend the Secretary of State for Education and Science asking what has happened to the proposal to add that 20 per cent. to student grants, but I am still waiting for a reply--which I thought someone would take the trouble to see that I received before this debate. The question of where the money is to come from that will allow students to pay the charge has, at this moment in time, received no answer.

The points that I have raised are not trivial but are very serious. Taken together, they constitute the basic reason why I shall not be able to vote with the Government tonight.

8.10 pm

Mr. Harry Barnes (Derbyshire, North-East) : For some time, I have wanted to make a long speech on the constitutional and democratic implications of the poll tax.

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I shall not do so tonight, because although the poll tax is of relevance to the revenue support grant, it is technically secondary to the main subject of tonight's debate.

The revenue support grant is an injustice inside an injustice. If one could imagine that the initial injustice did not exist and that the poll tax was fair--which it cannot be--there would still be something very peculiar about the operation of the revenue support grant. I would only add that the poll tax is the unfairest general form of taxation that has ever been introduced into any western democracy, which is why it has serious implications for our democratic and constitutional system. However, that is for another occasion.

On 19 December, I wrote to the Minister for Local Government and Inner Cities asking him to meet a deputation from North-East Derbyshire district council. I wrote to him again on 12 January. We do not wish to discuss the poll tax or the national business rate ; we specifically want to discuss the 1990-91 revenue support grant. On the basis of information published on 6 November, it appears that the poll tax in north-east Derbyshire will, in accordance with the Government figures, be £297--or £366 when the safety net is removed. However, because the revenue support grant will be so low, it will be impossible for north-east Derbyshire district council, which is not a profligate authority, to observe those figures--no matter how carefully it behaves. As the revenue support grant will be woefully inadequate, the poll tax will be nowhere near the figure suggested by the Government but closer to the figure of £400--unless the deputation that I hope the Minister will meet can persuade him to alter north-east Derbyshire's poll tax figure and the revenue support grant formula.

When the Local Government Finance Bill was in Committee, the Conservative party made a party political broadcast about the benefits of poll tax and produced a rough and ready formula. It was never meant to be exact, but was intended to give a general idea of how the new arrangements would work. It was estimated that about 50 per cent. of an authority's income would come from revenue support grant--25 per cent. from the national business rate, and 25 per cent. from poll tax. The Government's standard spending assessments show a revenue support grant for north-east Derbyshire of £9 million, which is less than 20 per cent. of the amount required. Poll tax will contribute £21 million, as will the uniform business rate. Together, they will account for more than 80 per cent. of total income, which represents a dramatic change for that authority, brought about by the nonsensical rate support grant formula.

One aspect of the formula relates to population, including inflow and outflow. During the working day, the area covered by north-east Derbyshire district council loses many people to their places of work in Chesterfield ; to Markham pit, near Staveley ; and to Sheffield. East Staffordshire authority, which is of comparable size to north-east Derbyshire district council, gains from that because its area experiences a net inflow of the working population. Nevertheless, east Staffordshire can raise money because of the car parking and other facilities that it must provide for people working in its area. No such revenue is available to north-east Derbyshire, whose residents will have to contribute to the costs incurred by other local authorities in the provision of certain services. What district council services are so dramatically changed

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by either a net inflow or outflow of its working population? Dustbins must still be emptied, houses repaired, and other general services provided.

The revenue support grant formula also incorporates a density and sparsity factor. A highly populated area naturally requires additional money to provide adequate services. Likewise, a sparsely populated area such as the Derbyshire dales in west Derbyshire will incur higher costs in the provision of refuse collection services, for example. North-east Derbyshire is an intricate mix of areas that are either densely or sparsely populated, so it will lose out. It still has to cope with problems of communications and congestion in respect of its sparsely populated and densely populated areas respectively. That aspect of the formula makes no sense to north-east Derbyshire or, I suspect, to many other areas.

The revenue support grant formula also takes into account an all-age social index. Its parameters include the numbers of persons sharing a property, the number of baths and lavatories available, the number of lone-parent families, whether more than one person occupies a room, and the number of Commonwealth residents. North-east Derbyshire is divided into east and west. The "EastEnders" comprise the working population, while the west of the district is more rural and middle class. The working class areas could benefit considerably from the all-age social index, as neighbouring Bolsover does, but the social mix of the district means that they will lose entirely. That makes a nonsense of the revenue support grant formula.

The formula's social deprivation factor is more appropriate to county councils than to district councils in terms of education and social services, yet compared with other authorities in Derbyshire, north-east Derbyshire will lose out considerably. On 12 January we were given a fresh set of figures for the special grant. Bolsover will get a low-rateable- value-area grant of £1,216,000. North-east Derbyshire and the other authorities in the area will get nothing, but the heartland of north-east Derbyshire is identical in its social characteristics to Bolsover. I am happy that Bolsover will get the money, as it obviously needs it, but at least 50 per cent. of north-east Derbyshire needs that money as well. That shows that the whole arrangement is nonsense.

Some of the new arrangements are supposed to overcome the problem of high poll taxes for people who are relatively socially deprived. Socially deprived people who live in a rich area will suffer, but rich people who live in a socially deprived area will gain from a slight alleviation in the charge.

I hope that the Minister will agree to meet the deputation from north-east Derbyshire, and that he will discuss seriously with it the technical problems, which will cause financial difficulties for authorities in my constituency. I am sure that similar problems exist in many other areas.

8.21 pm

Dame Elaine Kellett-Bowman (Lancaster) : Since 1981,

Labour-controlled Lancashire county council has been taking those citizens who are unfortunate enough to pay rates, manufacturing and service industries, hospitals,

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education colleges and the university to the cleaners. The only way to get a lower community charge is to kick out the Labour county council.

Labour's first act on taking office in 1981 was to slap an extra 18p on the rates above the already budgeted spending. It has continued to increase that burden every year until, oddly enough, last year when there was a county election, and the council raided the reserves to keep the rates increase down. Now there is only three hours' county spending left in the kitty because the Socialists have been spending merrily since then.

The massive rates increases that the council has imposed have placed a huge burden on our industries, which had no vote and could do nothing to protect themselves. The rates increases have also been a terrible burden on the local hospitals, which had to pay millions more--money that should have been spent on patient care. Similarly, the university had to divert funds that should have been devoted to education to feed the insatiable county council appetite. As long as there was no connection between demanding services and paying for them, the county council could get away with it. It was essential to change the system so that everyone paid for the services that they demanded. I am happy to say that the new system will achieve that.

However, those on low incomes must be protected from sudden steep rises--

Mr. Ronnie Campbell (Blyth Valley) : Will the hon. Lady give way?

Dame Elaine Kellett-Bowman : No.

People who live in small terraced houses must be protected. Many of them will be among the 9.5 million who are eligible for rebates, and others may be eligible for the transitional relief to cushion rates that was announced in the autumn.

Although rebates apply to the whole charge, transitional relief applies only up to the amount that local councils are supposed to need to provide proper local services. Any excess is not covered. People will still have an incentive to vote for a council which will not spend charge payers' money as though there were no tomorrow, which is what is happening now in Lancashire.

Businesses, especially manufacturing industry, in our part of the world will benefit substantially, but the new revaluation is designed to give equal treatment to everybody. It has put the fear of death into many business men, who have not yet understood transitional protection or the lower poundage. They do not all appreciate that in future the unified business rate will rise only by the rate of inflation, and we ought to stress that. That will prevent the robber barons at county hall from holding them to ransom, as they have done for the past nine years.

Businesses in the northern and north-western areas will gain £900 million in transfers from southern England. This is the best general regional policy for the north-west since the war, and it is better than anything that Labour has ever brought in. Even so, I think it is wrong that companies in my constituency, which have had too high a rate burden for too long, will not get the whole relief at once. I have raised that matter with the Minister on several occasions, and I shall continue to do so.

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Transitional relief for those in the south who are hard hit by the rises should be paid for by the Exchequer and not by stallholders in Lancaster market or small firms on Caton road.

The Labour-controlled Lancashire county council is having a field day. It has increased its estimates three times since September, and it proposes to increase expenditure by 31.5 per cent., which is equivalent to an 82p rate under the old system, which it will gaily blame on the new community charge --fibbing as usual. The council has to refill the county coffers, which it emptied to cushion rate rises before last year's election. It also has to pay for the above-average wage settlement that it persuaded the local authorities to concede.

Mr. David Hunt : Lancashire was in the chair.

Dame Elaine Kellett-Bowman : As the Minister observes, Lancashire was in the chair at the time. On top of the 8.8 per cent., which was well above the going rate when it was conceded, the council is handing out an extra 20 to 30 per cent. on the salaries of higher paid officers. It cannot be justifiable to ask lower-income charge payers for some £15,000 extra for a pay increase for the chief executive.

The administration at county hall has become increasingly top-heavy. The number of teachers employed in our schools has gone down, while the number of staff in the county education department has steadily increased. That was before the Education Reform Act 1988, which it might have used as an excuse for more staff. In future, the Labour group will not be able to rob industry in Lancashire to pay for its extravagant spending, and everyone will have an interest in keeping spending down since everyone will pay, and those who pay the piper call the tune.

For those reasons, I support this long overdue measure of justice. 8.27 pm

Mr. Harry Cohen (Leyton) : What is the standard spending assessment- -the SSA that has been referred to today--which is so essential to the whole tax figures for individual boroughs? It is the amount that the Government say that local councils should be spending.

My council, Waltham Forest, is spending £30 per head less than the Government's SSA for it. Judging by that criterion, Waltham Forest must be a low or a reasonable spender, according to the Government. However, the poll tax will go through the roof--the latest estimate is £488 per head and that is with a standstill budget. That is a long way from the £297 that the Government have mentioned. Why is that? One reason is that Waltham Forest will have to put £42 for everyone who pays the tax into a safety net. That is grossly unjust. The neighbouring borough of Redbridge will pay nothing ; nor will other boroughs in the surrounding area which are in a better position than Waltham Forest. The money will go to Conservative-controlled Wandsworth council to help with the Conservative election effort, and that is grossly unfair.

There are many other reasons, and they are all factors that are outside the control of Waltham Forest council. For example, high interest rates will add £1.1 million. Inflation is 7 per cent. this year and is forecast at 8 per cent. for next year, but the Government have only allowed for 4 per cent. That adds another £5.5 million. The police

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precept is £2.5 million, the cost of setting up and running the poll tax is £1.7 million and budgeting for non-payment will mean another £3.5 million. As my hon. Friend the Member for Dagenham (Mr. Gould) pointed out, the Government have said that every penny will be collected. That is ludicrous--every local authority accountant knows, as many other people do, that there will be bad debts.

Thus we have a total of £14.3 million to cover factors outside the council's control--and, for every £1 million, £6 can be added to the individual's poll tax bill. On top of that, there is the cost of the Government's new legislation--the Children Act 1989, the Education Reform Act 1988 and the National Health Service and Community Care Bill. Presumably the Government want local authorities to implement their laws, but that will add another £1 million. To arrive at the Government's figure of £297, the authority would have to cut services by £32 million. Even its Conservative members are discussing cuts of only £11 million, and that would require major education and social service closures. If they had their way, the poll tax bill would still be £420 per person, far above the Government's assessment. The poll tax is a redistribution of money from the poor to the rich. Let us compare the results of the rating system in Leyton with the poll tax figure of £450--and, as I have said, the latest estimate is £488. Two adults will pay 79 per cent. more, and three will face an increase of 169 per cent. In Chingford, in the same borough, the increases--although large- -are much smaller than those in poor areas such as Leyton. Few of my constituents will qualify for transitional relief, which is granted to those paying £3 more than they paid in rates--according to the Government's unreal poll tax figure of £297. The Secretary of State could not even justify SSAs in his speech ; he said that they were not cast in stone and could be changed next year. That is not surprising, when we consider some of the facts. Tory Gloucester, for instance, receives £5.3 million for under-fives, but provides no services for them. It receives its grant on the same basis as councils that do provide such services. Similarly, seaside resorts contain many old-age pensioners but provide no direct services for them, as such services are provided privately. They are treated in the same way as boroughs that provide old people's homes, home helps, day centres and so on.

SSAs are ludicrous. I have just put out a press release in which I have observed that the SSAs are making an ASS of the Government--and that is the truth.

8.33 pm

Mr. Timothy Wood (Stevenage) : I shall be supporting the Government tonight. In debates such as this, it is all too easy to lose sight of the problems and inequities that have existed for years in the domestic rating system. Over the years, I have attended a multitude of conferences and meetings at which pleas have been made for an end to that system. In Hertfordshire and the other home counties, huge levels of rates have been paid, suggesting a level of disposable income far beyond the reality.

I must confess that the huge differences between payments per adult in Stevenage and those in other parts of the country staggered me. The treatment of different areas has involved massive injustices, and there have also been great injustices on an individual basis. It has been

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said many times before--but there is nothing wrong with repeating it--that single elderly people have, typically, been severely disadvantaged. In contrast, many young adults--who are the main users of subsidised local authority sport and leisure facilities--have not been required to pay anything.

Mr. Pawsey : May I draw my hon. Friend's attention to the fact that there is not a single Liberal Member in the Chamber? I find that staggering, and I am sure that he will as well. Is it not disgraceful that there is not a single Liberal Member present to comment on a debate that touches every constituency?

Mr. Wood : I agree with my hon. Friend. Not only have we seen hardly any Liberal Member apart from the one Liberal contributor to the debate, but we have seen large expanses of green Bench owing to the sparse attendance of Opposition Members in general.

I am convinced that sweeping away the domestic rating system, together with the paraphernalia of penalties and so forth, will dramatically improve both accountability and equity. Having said that, however, I do not wish to give the impression that some great Utopia has arrived in local government finance. Further improvements can and should be made in the standard spending assessments, and I welcome my right hon. Friend's willingness to consider further the methodology by which such assessments are set.

First, the formulae used to define SSAs run to excessive and spurious numbers of significant figures. I remember complaining about exactly the same features of grant-related expenditure assessment. For example, page 7 of the relevant report informs us that the number of students aged over 16 is multiplied by £2,315.54. To that figure is added £33.42 multiplied by an "additional needs" factor, and to that is added £347.33 multiplied by a "scarcity" factor. The result is taken with another table for 11 to 15-year-olds and multiplied by "area cost adjustment for education" ; that result is then scaled to a control total given in annex B of the report.

As a science graduate in mathematics, I see no satisfactory justification for the pseudo-accuracy implied in some of those figures. Furthermore, I am convinced that such spurious accuracy confuses both local councils and hon. Members. I had hoped that the introduction of the SSA would lead to a simplification and clarification of the figures in comparison with GREA. Some of the frustration and discontent that such assessments sometimes reveal is a result of the opacity of the calculations.

Secondly, greater clarity in the tabulations presented to Parliament would be helpful. I suggest, for example, that to give the SSA per capita in each local authority area would aid ready comparison. I have observed during the debate that some people have obviously made the appropriate calculations and presented them, but it would surely be easier to assess the expenditure that was relevant to a particular area if the figures were readily to hand. Thirdly, and perhaps most important, I believe that the SSA figures contain anomalies. I shall tolerate that this year, but I feel that rectification will be necessary in due course. My constituency contains three local authorities : Stevenage, North Hertfordshire and East Hertfordshire. For some reason, North Hertfordshire is given the highest

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per capita SSA. I live in that district, and I know it well. I do not believe that its per capita needs are greater than those of Stevenage or much greater than those of East Hertfordshire. I also know both the borough of Stevenage and Bracknell district very well. They are both new town areas ; I have been leader of one, and I now represent the other. Bracknell has the higher per capita SSA, but I am convinced that Stevenage's per capita needs are greater than those of Bracknell.

Perhaps most extreme is the amazingly high standard spending assessment per capita for the borough of Slough. I can see no justification for the Slough borough spending needs to be set at double the per capita figure for such areas as Bracknell and Stevenage. It appears that Slough borough shares my view, as council spending is significantly less than the standard spending assessment.

Mr. Wilshire : Slough is next to the borough which I represent. Does my hon. Friend share my view that when a borough such as Slough, controlled by the Labour party, is able to suggest that it will be setting such low charges, it is extraordinary that a thrifty and sensibly run neighbouring authority, Spelthorne, should be faced with a charge of £400? Does he agree that that proves his point that something is sadly amiss?

Mr. Wood : I said that there was great need for a further detailed examination of some of the anomalies that emerge from the figures. Clearly- -one does this in any scientific assessment of anything--if one finds exceptions, one looks for the causes of them and assesses whether there is a factor that is playing an excessive part. That must be happening in view of some of the effects that we are seeing. I hope that during the next year some of those factors will be sorted out and that a better position will be presented.

I press those points because Stevenage borough council spends excessively and I do not wish to defend that extravagance. But equally, I hope that a reconsideration of the SSA methodology will remove the anomalies and thus more readily enable me to criticise the council for not doing what it should in giving value for money. In relation to safety nets, I welcome the response of the Government to the representations that were made in the autumn. A great political error would have been made if safety net contributions had been made by local authorities for a period of four years. One of the principal objectives of the community charge is to improve local accountability. Just one year of safety net contribution will enable local residents to make easy comparisons of local government spending more quickly.

I confess that there seems to be some curious safety net anomalies in the first year, even though they have been reduced since the first proposals were published. I have drawn the attention of the Minister of State to some of those. Regrettably, those anomalies seem to favour the high, rather than the low, spending authority. For example, in Copeland the average rate bill per adult is £191. In Kerrier, Cornwall, the figure is £194. Copeland overspends by £28 per adult, while Kerrier spends at £50 below the SSA. But Kerrier will receive a £9 safety net payment per adult and Copeland a massive £91 and a special grant of £25.

As a result, the residents in the prudent Kerrier district will have to pay at least £216, while in high-spending Copeland the figure will be £191--no change, assuming

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that spending is not increased excessively. It seems that the safety net arrangements are often over-generous to the high spenders. While this matter will automatically reduce in significance, I hope that a further look will be taken at the methodology before the figures are set for next year.

I have raised those concerns because I want to see the new system of local government finance work with even greater effectiveness in future years. I am convinced that there will be much improved accountability. I am also convinced that the uniform business rate should boost the position of manufacturing industry in the north of England, which we wish to see. Councils will no longer be able to indulge in rash spending without regard to the local consequences. The measures may not bring perfection, but a giant stride forward is being made to give us better value for money in local government spending, and they deserve our support tonight.

8.43 pm

Mr. Tony Banks (Newham, North-West) : It is interesting to speak after any Conservative Member who has suddenly realised that he has been sold a pup by the Government. I recall that in the early days of this matter there were a few Conservative Members who were consistent in their opposition to the poll tax, but in the main they were those who just saw it as unfair and inequitable. The great majority of them were swept along by the Government's propaganda. Here was another way to get at the spending patterns of Labour local authorities, they thought, and they went into the Division Lobby with great glee. As those Conservative Members saw the proposals unwind, they realised with a degree of horror and shock--which we have taken great pleasure in witnessing today and which we witnessed in subsequent days after the original decision--that it would be a bad deal for them. Then the whingeing started. I await with interest what happens tonight. One often hears of a Tory rebellion, though often it is more mooted in the press than turning into reality in the Division Lobby. I suspect that the Government have a serious situation on their hands tonight. The way in which the whole of the Cabinet was reeled in to sit on the Front Bench, stoically listening, gave one food for thought. I watched the Prime Minister look at her watch--she does not often stumble into local government debates ; I am sure that the way in which the new system will work is as clear to her as it is to the rest of us--as she sat there in a sort of demonstration of support for her beleagured Secretary of State, hoping to quell with one of her icy glances the rebellion on her Back Benches. I hope that she has not succeeded because, as my hon. Friends have pointed out, this is the last chance Conservative Members have to do something about the iniquitous poll tax and bring the Government up short.

Sir Nicholas Bonsor (Upminster) rose --

Mr. Banks : I give way to a man who is obviously suffering badly.

Sir Nicholas Bonsor : That is extremely kind of the hon. Gentleman. Opposition Members should appreciate why some of us will be in the same Lobby as him tonight. The reason is not because we do not like the community charge but because the SSA has been geared in such a way that it is having precisely the opposite effect to that which we

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