Local Government (Rate Support Grant)

Part of the debate – in the House of Commons at 12:00 am on 9th December 1968.

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Photo of Mr James Allason Mr James Allason , Hemel Hempstead 12:00 am, 9th December 1968

I congratulate the Minister on his skill in introducing the Order so quickly, there being just three working days between his Report being issued and our debate. That makes it very difficult for hon. Members to find out just how the Order will affect their constituencies.

Apart from that, I can find little on which to congratulate the Minister. We are granting no less than 5 per cent. of the gross national product, yet few hon. Members are in a position to take part in the debate. We are discussing very nearly 10 per cent. of the expenditure of the gross national product in a background of great anxiety that there may be substantial rate rises. They have been forecast by some of my hon. Friends.

Some people cannot afford substantial rate increases, even remembering the domestic element in the rate support grant, which cushions them to some extent. Equally, there is desperate anxiety that services should be preserved. This is where we need a firm line from the Government. I recognise their dilemma. They need to restrict their spending. This is because we have an expanding population but not an expanding national income. What should the Government do? Should they increase taxation and rates in order to maintain services or should they order cuts? I accuse the Government of failing to face the situation.

I do not believe that the Government were honest in the White Paper. They would have been honest if there had been a "backs to the wall" feeling about it. They should have said, "We are in a financial jam and everyone must make sacrifies. Ten per cent. of the national income is being taken this way and it must be reduced". Had the Government said that, I believe that there would have been tremendous response from the country.

Instead, the White Paper suggests that everything is splendid, that there will be no substantial cuts anywhere and that no one need worry. What do the Government mean? If there are not to be cuts, it means that the rates have to go up. The Government have said this. Paragraph 15 of the White Paper, dealing with education, says: The expenditure envisaged in education allows in full for the expected increases in the numbers of pupils in primary and secondary schools … It takes account of … the expected increase in the number of teachers in primary and secondary schools, which should make possible some improvement in staffing standards. It sounds splendid and suggests that everything will go well.

Perhaps the right hon. Lady will tell us the national position, but in Herefordshire the number of children entering primary and secondary schools next year will increase by 3 per cent. That does not automatically mean an increase of 3 per cent. in expenditure. The increase in expenditure will be substantially more because it is much more expensive to provide a new place than to maintain an old one. The standards are higher and debt charges are much higher. I suggest that a 3 per cent. increase in the number of children probably means a 6 per cent. increase in expenditure in order simply to stand still.

Then there are teachers' salaries. An increase is due there which, I am told, will represent about 1 per cent. of the total education bill in Herefordshire. In addition, there is the improvement of staffing standards, mentioned in the White Paper. I imagine that this means full employment of all teachers available, including part-time teachers. If it does not mean that, I hope that the right hon. Lady will tell us what it does mean. This again means an increase on the education bill of about half of 1 per cent.

All this means that an increase of about 7½ per cent. is required for Herefordshire's education bill in merely to cope with the growing number of children and with modest improvements in staffing ratios. However, instead of 7½ per cent., it is to get only 3·4 per cent. I do not understand what is intended in education. Do the Government intend that there shall be cuts elsewhere in order to keep up the standards of education, or do they really believe that the average national increase of 3¾ per cent. will be enough to meet the difficulties?

Herefordshire is generally saved by the bell over rates and next year we shall have a windfall through the increase in the needs element which has been effected by the Minister at the expense of the resources element. This will benefit Herefordshire so that, for that one year, we are hoping that we will not have to have substantial rate increases. But that is only for one year. For the following year, there must be a considerable rate increase.

I turn now to roads. One point not yet brought out is that, while it is intended to cut road maintenance for a further two years, this will add up to a total of four years. Is it feasible? Is it not perhaps a false economy, particularly in urban areas, where roads receive a heavy pounding and where, if there is failure to maintain over a period of four years, they will probably have to be remade at much greater expense?

The hon. Member for Orpington (Mr. Lubbock) mentioned the Caravan Sites Act and said that he had been told that Section 2 will not be introduced as hoped because the Government are worried about the expenditure involved. Is that expenditure included in the forecast for 1969–70? If it has not been included, do the Government intend to introduce a supplementary order in to meet a proportion of the considerable expenditure which will fall on the local authorities when the Act comes into operation? I do not believe that the Government intend to put off the operation of the Act indefinitely.

The right hon. Gentleman said that it was possible to revise the distribution formula for the needs element but said that he had not yet done so and did not wish to do so because, if he did, it would not be possible to do it for another four years. Nevertheless, as he pointed out, he has made changes in the education formula. When he considers the distribution formula, I urge him to consider the element of expanding population. I have raised this matter time and again, and I wish the Government would realise that an area with an expanding population needs extra help from the Government, because expenditure has to be put into the infrastructure whereas the rateable value increase which will ultimately come from that expanding population does not accrue in time. There is thus considerable expenditure in the early years with an expanding population. The Government have never accepted this. Indeed, the Conservative Government were equally remiss about it. But, in the light of the experience of expanding populations that we now have, it is time the Government took account of this factor.

The demand for local government services, without cuts, is rising by about 6 per cent. per year. There is a clear need for a statement of Government policy. In the light of the economic crisis, what do they want? Do they want to maintain services, which involves an expansion of expenditure, in which case, as they have not increased the rate support grant by the necessary 6 per cent., rates must rise? Do they wish the total volume of local authority expenditure provided by both rates and rate support grant to rise by 6 per cent. a year, or to be contained by 3 per cent. a year? I cannot discover this from the White Paper and we are entitled to this information.

It is for the Government, not the Opposition, to say which services should continue to expand and in which there should be cuts. If there are to be cuts, the Government must provide a White Paper which says what the cuts are to be, and the country will face them. At present the White Paper is utterly flabby and worthless.