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 James MacColl Mr James MacColl , Widnes 12:00 am, 13th March 1967

It does indeed show that. It also shows the number of people who were not getting the kind of help they needed. My only regret is that more people are not applying for the rebates. That is a problem that does arise, in persuading people to use the opportunities open to them.

The hon. Member asked me about the long-term picture, about what was going to happen. We can say quite reasonably that we have produced an effective scheme in conditions of very great difficulty and in conditions of great economic crisis. Everybody is demanding reductions in public expenditure. One cannot open a newspaper without seeing calls for the slow-down of increases in public expenditure. When we take steps to slow down the increase in local expenditure, and to shift more of it over to the central Government, it does not lie in the mouth of the Con- servative Party to blame us that we have not been able to do more. Of course, we would like to do more, but we are satisfied with what we have done. We have done sufficient to show the seriousness of our intention to do a great deal more as we get the opportunity.

The position about the long-term future of local government finance is that it must depend very much upon the future of local government organisation. The hon. Gentleman mentioned the question of education. That is a very good example of it. A lot depends on the size of the education authority in the future, and that is something which the Royal Commission is looking at. Upon that will depend the kind of local government financial scheme that we need. It has often been said in the House that the final answer to the reorganisation of local government finance must depend upon the position of local government reorganisation. These are some of the things that we have been able to do.

The hon. Gentleman mentioned the question of high interest rates. Under the Housing Subsidies Bill, which has now passed through the House, the major item of capital expenditure is shielded by the new subsidy, which is based on paying the difference between the market rate and 4 per cent. That is the major part of local government capital investment. The adjustments which we made—they are complicated and technical, and I will not detain the House by describing them now—to the mortgage loans pools and the Consolidated Loans Funds by altering the rate to 5 per cent. from 3½ per cent. credited to local authorities, are of considerable help to local authorities, particularly in the field of housing, who use those two different methods.

The quota arrangement for borrowing from the P.W.L.B. means that over half the local authority capital expenditure is financed at a rate of 6 per cent. or less. That particularly helps the small authorities, to whom the P.W.L.B. quota is of more importance and significance than it is to the large authorities.

These show that against the background of great difficulties, all the evidence is that our policy is doing a tremendous lot to keep down the burden of rates, and this year we have had the smallest increase in rates for years.

It is quite true that in past years the argument has been advanced, and questions have been asked whether the rate is increasing in terms of compound interest. To get a picture of the sort of uncontrolled building up of the rate burden, 10 years ago the increase in rates per head was something like 19½ per cent. The first year of the Labour Government, when we were in difficulties, in getting our policy in order to cope with the economic and financial difficulties, the increase was 12 per cent. In the current year it is 10·8 per cent. I have no doubt that next year it will be very much less than that.

Although I am very glad to have had this opportunity to put before the House the facts of the situation, the hon. Gentleman was singularly ill-judged in moving his Motion at this time, at the very moment when every day we see in the newspapers headlines snowing rate increases of nil or reductions.