Burden on Ratepayers

Part of Roads – in the House of Commons at 12:00 am on 13th March 1967.

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Photo of Mr Frederic Harris Mr Frederic Harris , Croydon North West 12:00 am, 13th March 1967

I beg to move, That this House deplores the heavy and ever-increasing burden imposed on ratepayers as the result of the policies of the present Government; notes, in particular, that high interest rates, increases in taxation, and inadequate provision by way of general and rate support grant have accentuated the difficulties of local authorities and individual ratepayers; deplores the fact that rebates provided for individual ratepayers are, in part, being provided at the cost of other ratepayers and are, in any event, inadequate; and calls upon Her Majesty's Government to take early action to redeem their election pledge to give early relief to ratepayers. At the outset, I express my sincere appreciation to the hon. Member for Woolwich, West (Mr. Hamling) and to all hon. Members, including the right hon. Lady the Minister of Social Security, who took part in the previous debate for their kindness in letting me have time to move and discuss the second balloted Motion today. It looked rather a tight fit at one stage. This is the first time in 19 years that I have been privileged to win a place in the Ballot, although I have gone in for it consistently on every occasion. Naturally, therefore, I chose one of my pet hobby-horses, the burden on the ratepayers, even if I have only got in, as I say, by a short head.

This is a matter of vital importance, as I think you know, Mr. Speaker, remembering that you were always very interested in it, particularly at this time of year. My Motion deplores the heavy and ever-increasing burden imposed on ratepayers as a result of the policies of the present Government and it draws attention to the reasons for it.

At the last two general elections, the Labour Party promised the country that, if it was elected, people would no longer be subject to further heavy increases in rates. In passing, I must say that it promised the same to the taxpayer, too. We all know what happened in that direction, and I expect it will happen again in the next Budget on 11th April.

In the past two and a half years, ratepayers throughout the country have had, on average, an overall increase of about 25 per cent. in their rates, which certainly justifies my description of "heavy and ever-increasing" applied to the burden shouldered by ratepayers generally. This year, fortunately—I am the first to admit it—there has been an all-out attempt by the Government and local authorities to stabilise the rates. I have no doubt that the Minister will make particular reference to that, but, of course, if the Government had done nothing this year, there would have been a tremendous outcry directed at the Labour Party, especially at a time when people's incomes are virtually all frozen.

As far as I can tell, the domestic ratepayer, helped through the standard rate relief of 5d. in the £, will have to pay, on average, a very slight increase—not much more than 1 per cent., I expect the Minister will tell us—but we still have to remember that, in contrast to the domestic ratepayer, factories, shops and other non-domestic ratepayers will have to meet an increase of about 5 per cent. This is no mean increase, and in one form or another it will, without doubt, eventually be passed back to the public.

In any event, at what cost have the Government done their stabilising act this year? No doubt, they will claim that for householders the relief has come in the main as a result of their scheme by which £23 million of domestic element has been set aside in the new rate support grant for 1967–68 for the benefit of the domestic ratepayer. I imagine that if none of the unusual circumstances of this year had obtained the domestic ratepayer would once again have had to meet an increased demand of about 1s. in the £, but, because of the 5d. support grant, it has been brought down to about 7d.

What else has happened to close the gap? With great regularity last autumn, the Government instructed local authorities to hold down their rate increases by reviewing all claims for expenditure. This has meant that local authorities have cut back drastically on their spending commitments. My own town of Croydon has cut back by about £570,000, which represents about 7d. in the £ in the Croydon rate. Second, some authorities have taken the opportunity to reduce the level of their rate poundage as a result of a change in the interest rates on consolidated loan funds. But this means that such authorities are really mortgaging their future, for, while there will be a reduction in the cost of loan charges in the early years of the loans in question, there will inevitably, and regrettably, be an increase in later years.

First, on the subject of cuts, will the Government give a clear indication on some sort of global basis of what commitments have been cut and how many commitments have merely been rephased so that, in effect, sharper rate increases may be expected by ratepayers in April next year? I have no doubt that a good many authorities have been rephasing their capital schemes on which they had hoped to embark during the next 12 months. If the tempo of capital spending is permanently reduced, annual savings will be effected but if, in yielding to the Government's pressure, local authorities attempt in the year 1968–69 to push ahead again with their retarded schemes, then, as The Timessaid on 7th March, there could be some swingeing rate increases to follow in 1968.

In anticipation of substantially higher demands for rates in the years ahead, I would also like to know from the Government why they have not honoured their pledge to the electorate in their 1964 election manifesto "New Britain ", which at page 14 categorically said that Labour would transfer a larger part of the cost of teachers' salaries from the rates to the Exchequer. The same question came up today at Question Time. This might be just a case of passing the burden from the ratepayer to the taxpayer, but at least it would spread the burden. I would like to know why the Government have not implemented that promise. If it were carried out, it would certainly have a substantial effect on rates in general.

I remember, too, when the Leader of the House indicated that the Government had in mind an altogether new system for rating finance. That was only a short while ago. This could well be the case, because in Labour's 1966 manifesto, "Time for Decision", page 18 stated that there was an area in which tax reform was urgently required in the rating system and that a Labour Government would introduce major reforms in local finance. I would like to know from the Minister whether the Government have something up their sleeve for the near future. Those of us who are closely interested in such rating generally and its unfair effects upon individual ratepayers, with all its various anomalies, would certainly like to know what the Government have in mind. My Motion indicates how Government policies substantially increase the costs of local authorities.

I would like to tell the Minister on a lower plane where some savings in cost could be achieved. I refer to avoidance of duplication that is occurring, particularly in London, in such matters as planning between the Greater London Council and the local authorites, such as Croydon. Croydon has complained strongly. It is a planning authority in itself and yet the G.L.C. gets involved in local details of planning rather than overall principles.

I always said that that would happen when Croydon was pushed into Greater London. If time were available I could give plenty of chapter and verse for what I am saying. Some control might, of course, be necessary for the small local authority which was not able to be properly advised professionally. It is, however, absurd, in respect of land transactions by large towns and cities with long-established, experienced valuation departments.

At a time when valuers are in very great demand, particularly as a result of the considerable work caused by the Land Commission Act, this duplication of effort should immediately be eradicated. If the Government looked into the matter properly they would find that there could be a great saving in manpower and that the efficiency of the country would be increased by much more rapid decisions.

I sometimes wonder whether the public realise what big business local government is today. As we in the House know, local government expenditure is reaching something like 40 per cent. of the national budget. Adoption by the local authorities of more modern, commercial, streamlined administrative methods could bring about vast savings to the ratepayer. That is emphasised by the fact that about 6 per cent. of the working population is employed by local authorities.

Some local authorities have been very farsighted in calling in management con- sultants. I believe that Bromley and Bournemouth, for example, have done this and I gather that large savings have been achieved. It might be a very good idea for the Government to make similar recommendations to other local authorities, particularly the larger ones, and to have an all-out efficiency drive in this direction, which could easily reduce expenditure by about 2½ per cent., which would represent about £100 million a year. Such a target would be well worth striving for and I strongly advocate that the Government should pursue this course.

My Motion also deplores the fact that rebates provided for individual ratepayers are often still far too inadequate and are, in any event, provided at the cost of the other ratepayers. Croydon, for example, has had to appoint 12 additional staff to do this work. Naturally, all this has to be paid for by the other ratepayers. In addition, however, the council has to bear 25 per cent. of the allowances which are given by way of these rebates, and this again has to be provided by the other ratepayers.

All that the Government, in effect, have done in giving that easement to such deserving cases is to place the cost of those reliefs upon the other ratepayers. This is simply a juggling operation at their expense. Obviously, in the main, this relief should have come in total from the Exchequer. Again, therefore, it would have been on a broader basis rather than on the specific shoulders of the local ratepayers, which is very unfair. When this matter was discussed previously in the House, we on this side stressed that aspect of it.

It is important to make the point that the abandonment until 1973 of revaluation for rating purposes, which was to have been carried out next year, was to my mind a retrograde step. If the rating system is to be kept at maximum efficiency, frequent revaluations are surely necessary to keep pace with changing values if we are to have any kind of buoyancy in the system. What has happened is that because of the Land Commission Act and the Capital Gains Tax, valuers in the Inland Revenue have had so much extra work that this postponement has become compulsory. In effect, the rating system is suffering on behalf of national taxation.

Another point is that over the years I campaigned to make nationalised industries pay proper rates, particularly for offices. This, I admit—and I am grateful to the Government—has been achieved, but it should not be the end of the road. It should be followed by all nationalised properties of an ordinary commercial or industrial character being separately rated in the normal way. Only by these means will there be rating justice to individual local authorities.

Crown properties, too, of an ordinary character should be rated in the usual way and not made the subject of Crown distribution in lieu of rates. When the Post Office becomes a public corporation, I trust that all Post Office properties will likewise be rated in the same way as privately-owned properties. At present, Post Office properties are subject to contribution in lieu of rates. Again, I suggest that as in Croydon, the Government should take immediate steps to ensure that all local authorities see that council tenants who can afford to do so pay proper economic rents for council dwellings. If I were asked again what an economic rent would be, I would say that it was one which was not directly subsidised by other ratepayers.

In all my years in the House I have campaigned for the correction of rating anomalies. I was for years the only Conservative Member who advocated the abolition of industrial derating, which we managed to achieve in two main bouts. The points which I have made tonight are at least worthy of the closest consideration. The Government may feel that in the present year they have bought time to avoid yet again a further substantial demand, particularly upon the domestic ratepayer. Unless, very soon, we have sight of the promised major reforms in local finance, we shall find that this is a temporary relief and will be followed, regrettably by dramatic increases in later years. Therefore, I request the Government in the strongest terms to redeem their pledges at the last two elections to give permanent, early relief to ratepayers and to face the issue instead of dodging it.