Rate Rebates

Order of the Day – in the House of Commons at 12:00 am on 30th January 1973.

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9.58 p.m.

Photo of Mr Graham Page Mr Graham Page , Crosby

I beg to move, That the Rate Rebates (Limits of Income) Order 1973, a draft of which was laid before this House on 19th December, be approved.

Photo of Mr Selwyn Lloyd Mr Selwyn Lloyd , Wirral

Perhaps it would be for the convenience of the House to take the similar motion relating to Scotland at the same time— That the Rate Rebates (Limits of Income) (Scotland) Order 1973, a draft of which was laid before this House on 21st December, be approved.

Photo of Mr Graham Page Mr Graham Page , Crosby

I am obliged, Mr. Speaker.

Rates are of course a topical subject but these orders deal with only one aspect of the liability for the payment of rates, namely, the amount by which the rate demand upon an individual ratepayer should be reduced by reason of his lack of means. In short, what we are dealing with in these orders is the rate rebate.

These orders are based on the existing statutory system of rebates—in many respects, I readily admit, an unsatisfactory system and one which, as I have foreshadowed occasionally from this Box, will receive consideration under the local government finance legislation which was forecast in the Gracious Speech last October. But any revision of the basis of the system needs legislation, and we must proceed at present on the basis of existing statutes.

Ratepayers below a certain level of income are entitled to what I would call a common rebate. Apart from a fairly rapid tapering when the income is marginal, the rebate is on the same basis for all who qualify. Everyone pays the first £3·75 of the half-year's rate demand and one-third of the difference between that £3·75 and the amount of the half-year's demand. What these orders seek to do is to raise the level of income below which the ratepayer qualifies for rebate. The orders do not alter the amount of the rebate. They do not seek to relate directly the amount of rates payable to the income of the ratepayer. Those are steps which can be taken only by some legislative vehicle other than orders of this sort.

It is just one year, I recollect, since the House last debated a Rate Rebates (Limits of Income) Order. The need for these orders stems directly from the decision of my right hon. Friend the Secretary of State for Social Services to uprate national insurance retirement pensions and other social security benefits—an improvement in the social security system which is of immense importance to many people.

I have tried to explain the method of rebate. In doing so I perhaps blurred the object, which is to help those with low incomes whose rates are not already paid in full by the Supplementary Benefits Commission to pay the rates on their homes. When I said "those with low incomes" perhaps I should have said "those with low gross incomes", because I am conscious of the annoyance and, indeed, anger of many people that such items of income as war disability pensions, attendance allowances, and so on, are taken as part of the gross income in judging the limit below which the ratepayer qualifies for rebate. That again is something which deserves consideration in preparing the legislation on local government finance, but again I fear it is not something that we can meet without legislation, and certainly not under these orders.

At present the prescribed income limits are £12 a week for a single person and £14·75 for a married couple. Those income limits are increased by £2·50 a week for each dependent child. If the House approves these orders tonight the limits will be increased to £13·50 a week for a single person and £16·50 for a married couple. The addition for each dependent child will be £2·75 a week.

As I have said, the orders are needed because of the annual uprating of social security benefits which have now been introduced. The last uprating was in October 1972, when the retirement pension went up by 12½ per cent. About 85 per cent. of the 800,000 recipients of rate rebates in England and Wales and 78 per cent. of the 100,000 recipients in Scotland are retirement pensioners. In addition, about two and a half million receive supplementary benefit which clears their rates for them.

If the present rate rebate income limits were left unchanged some of those 800,000 people in England and 100,000 in Scotland—including so many of them as are retirement pensioners with incomes near the present qualifying limits—would lose their entitlement to rebate, or part of their entitlement, as a result of the higher pensions which have been payable since October. That has not yet happened because in England and Wales the entitlement to rebate in the half-yearly periods beginning in April and October is based on the gross income for the previous periods of July to December and January to June respectively. That means, for example, that the rebates payable from April 1973 will be based on gross incomes in the period July to December 1972. In Scotland the rating year begins somewhat later, and the six-monthly income assessment periods begin in April and October. Thus, the increase in social security benefits from October will be matched by an increase in income limits bearing on rate rebate for the period commencing on or shortly after 16th May next.

I emphasise that there is no entitlement to relief if the ratepayer is receiving supplementary benefit which takes into account his rate liability. Clearly, no rebate can be claimed if a householder's rates are being paid in full by the Supplementary Benefits Commission, and about two-and-a-half million people are helped in that way.

In 1971–72 the average domestic rate bill in England and Wales was £53, and the average individual rebate granted to those entitled to rebate was £22·79—a quite substantial proportion. In Scotland the corresponding figures for 1971–72 are £58·33 and £26·05. For 1972–73 I can only estimate the figures. For England and Wales the average rate bill is £60 and for Scotland £61. It is estimated that the rebates granted in the year will cost about £24 million of which 75 per cent. is paid by the central Government—that is about £18 million.

Hon. and right hon. Members will be Justified in asking whether that contribution from the central Government is sufficient to cope with the hardship which rate rebates are intended to meet. I think that it is enough by this method as the rebate system stands at present. It is the same rebate for all who qualify. It is an indiscriminate form of relief, but it may be said that, having regard to the forecast of the level of rates for 1973–74, one-third of the difference between £3·75 and the rate demand may still be crippling to those who qualify for rebate. I am putting a possible argument that we ought to do something more than the order is designed to do.

The Government have already done much to prevent rates rising too greatly in the next year. We shall contribute 60p in every £ of estimated local government expenditure. I appreciate that the worry at the moment is whether, with revaluation, even if the rate poundage is properly reduced by the local authority—as it will be—if the rateable value of any house has increased above the average, that one-third may still come as a severe blow to those who are receiving rebates. But to increase the limit of qualification under this order would not solve that problem. It needs to be solved in other ways. Merely to increase the qualification limit would be too indiscriminate. I do not think we could extend it any further than giving it the same coverage over the next year as it has always had since its innovation in 1966.

The purpose of the order is to keep matters on an even keel, the Government having increased the pension last October. As for any other assistance which may be necessary, we must look to other forms of relief, but we cannot do anything further under this order.

10.14 p.m.

Photo of Mr Michael Cocks Mr Michael Cocks , Bristol South

We are grateful for this limited opportunity to discuss the rate situation since a great crisis faces our large cities in terms of the present rate burdens.

I wish the Minister could have explained in a little more detail the basis upon which the Government have arrived at these figures. He concedes that it would have been possible to increase them over and above these figures, but he said that it would have been indiscriminate aid. I regard the whole approach as indiscriminate, because the Minister said that 60p in the £ will be given to help to relieve the rate burden of local authorities. In the past few years Bristol has received only 43p in the £ to help alleviate its rate burden.

I concede the Minister's point that when we talk about rent rebates we talk about an existing system and that tonight we cannot restructure the whole of local government finance. In fact we look forward to receiving the Minister's proposals on that in due course. We have to deal with the existing situation. But on the right hon. Gentleman's own admission it is unsatisfactory and the rebate is the same for all who qualify.

The Minister has been trying as far as possible to deal with matters which are constants in this equation. But he has glossed over quickly and perhaps a little smoothly the fact that there is now a variable which has not been present in previous years. It is the question of revaluation. I think that we ought to consider the effect of it on rate rebate orders of this kind.

There is a very different impact on different people. It means that a system which operated evenly and fairly over the population as a whole in the past will now become discriminating in terms of the amount of relief which it gives to individuals.

Perhaps I might be allowed to quote some figures from my local authority. It is the one that I know best. What is more the Minister is familiar with Bristol. He has been referred to frequently as "the undertaker of Bristol" since he has reduced our once proud city to the status of a jazzed-up parish council.

The general effect of revaluation is to increase rateable values by a factor of 2·2. In Bristol the domestic factor will be increased by 2·5, in older estates by a factor of 2·6 and in some newer estates by a factor of 2·9. Within the Bristol ratepaying community as a whole differences are now appearing which were not there before we considered these latest orders. The rate increases which are envisaged in Bristol in order to maintain and improve existing services and to take account of inflation and the new responsibilities placed upon local authorities will fall more heavily on some people than on others. Therefore of those in receipt of rate rebate some will be discriminated against through the lack of sensitivity in this order.

I wish that there was more possibility for flexibility in orders of this kind. We tend to look upon the rating crisis in much too glib and easy a manner. We cannot allow the Minister's comments to pass unchallenged. We ought to put it on record that to deal with the problem arising from revaluation whereby some people who in the past have been receiving the same rebate as others will have to pay proportionately far more, there should be some effort to give them relief. If that is not possible through the order, it should be acknowledged that greater hardship will result.

10.18 p.m.

Photo of Mr Kenneth Marks Mr Kenneth Marks , Manchester, Gorton

The Minister has readily criticised the system under which these orders are made by drawing attention to the tapering-off effect when a certain income is reached and the fact that everyone gets the same rebate who comes into the system. It was a system brought in by the Labour Government. But it is a much better system than the niggardly rate relief given by their predecessors. It has developed faults as it has gone on, and it has the faults of all means-tested benefits.

The news does not always get through to those who ought to have means-tested benefits, and some people will not apply for them. But old people regard rate rebates as respectable, whereas applications for supplementary benefit are not. This is partly due to the campaigns mounted in some newspapers against supplementary benefit and social security which in my opinion have been quite wrong.

I should like to think that the authorities, whether the Department of Health and Social Security or town councils, will let people know the most favourable applications for them to make whether for supplementary benefit, rate and rent rebate or other relief. I have found that many people have not been getting the benefits to which they are entitled because they did not know the system.

Where there are substantial rebates—there are in places with high proportions of poor people, pensioners and large families—the Government make a grant towards them. But here we have the big city problem again. The big cities do not get help with rate rebates, or very few of them, because they do not qualify for the resources element of the grant. When they have paid out these rate rebates, or not collected them, they have lost that income. This is yet another problem that the big cities will face this year.

Some people in Manchester and probably Bristol and other cities who will pay for these rate rebates are just above the margin. Some of them with families, perhaps on £23 or £24 a week, are not only paying their own rates—and they need bigger houses—but are paying towards the rebates for people who are just below the margin. I hope that when the Prime Minister meets representatives of the big cities—I understand that it is to be on Friday, 9th February—this matter will be taken into consideration. We accept that tonight nothing can be done. We welcome the fact that people who got rate rebates last year will not be priced out of them this year. This is yet another problem facing the big cities which I hope will be taken into account at that meeting.

10.22 p.m.

Photo of Mr Edward Leadbitter Mr Edward Leadbitter , Hartlepools, The

I wish to raise only one or two small but nevertheless important matters to people who are concerned whether they qualify for the rate rebate.

I hesitate to complain very much about the order. The amount of assistance which comes from the rebate, which stems from Section 49 of the 1967 Act, is a welcome form of relief to many people. But time has passed and a number of new economic stringencies have impinged upon the generality of people.

The revaluation has come as a sharp shock to many people, basically because there is not much understanding about the mechanism of the rating process. I am sure the Minister will agree that as politicians we are sometimes confounded in trying to get over to people what is meant by rateable value, how it is reflected in terms of payment from their pockets, that they have to wait until another period has passed before the rate poundage is declared, that although it is a second apparent increase to them, the psychology concerns us, and that, even after that, the working out of the pounds and pence part in terms of payment relating to the rateable value arising from the declaration of the rate poundage produces great difficulties for us all.

With the passing of five years since the Act came into force, the changing economic conditions, and the new rating valuation there is a need, as my hon. Friends have already pointed out, to review the objectives of the Act. It seems that serious discriminations are now becoming evident. There are people in the low income groups, to whom my hon. Friend the Member for Manchester, Gorton (Mr. Marks) referred, who have found themselves just beyond the point of qualification and are subsidising people who are just marginally worse off than they are.

That raises the major question how in practice a person meets his need to be considered for a rebate. How does he make the first steps? When he has found out about that, to what extent is the form of application so complicated that it is practically a deterrent? Some of us are very worried about the way local authorities go about this part of the business. We must bear in mind that many low-paid workers, not because of a lack of intelligence but because of the pressures and the nature of the circumstances in which they live, are already well weakened in their approach to complicated form-filling.

Photo of Mr Michael Cocks Mr Michael Cocks , Bristol South

In that connection, I am sure that my hon. Friend will be interested to know that when I went to the Bristol City Council offices and asked for an application form for rebate—because I was interested in the form of the application—it was not until I told the people there that I was mindful that I might he qualified for a rebate that I was allowed to have a form to take away to study.

Photo of Mr Edward Leadbitter Mr Edward Leadbitter , Hartlepools, The

My hon. Friend will agree that those of us who have had to go to our local council office or had to respond to pleas made by our constituents have had very much that sort of experience. Certainly this is a matter which the Department should look at because ultimately, if it is the Government's concern—as I am sure it is, because there is no argument about the principle—as to the number of people who are not yet applying, there are serious underlying reasons for that which are not totally reasons of ignorance. They arise sometimes from the simple fact that once confronted with a form or faced with some of the awesome conditions in municipal offices, people are frightened of taking the next step which might lead them to qualify.

The Minister will, perhaps, correct me on this matter, but it might be as well if we looked at the question whether it is right to look at the gross income rather than at another form of income which might be called a net income after certain matters are taken into account. It seems that there may be a point here. I merely mention it as a contribution to my concern about approaches to the simplification of this matter from the outset. It may be helpful.

Finally, I should like to feel that the Government might be disposed to give more information to the House. My hon. Friend the Member for Bristol, South (Mr. Michael Cocks) has already talked about how the figures are arrived at. No matter how generous the figures look, we are faced with a terrifying situation when, with limited income, we have to meet the costs of living in any event. For instance, we are dealing with a very special section of the community in a country in which the average wage in manufacturing industry is now £36 per week. When I was a young man, £10 or £12 sounded like a considerable sum. That sum is now extremely small in comparison with the financial requirements necessary for the needs of present day society.

One fact related to this theme is the differential between the qualifying income for married couples and that for a single person. While there is a differential here to meet the point I have in mind, nevertheless, it is clearly understood nowadays that the domestic demands upon a single parent are sometimes very much greater than those on a married couple. The case of the single-parent family has already been made out in the past few months by a number of organisations. It is a factor which might be taken into account in future by the Government. I fully support the orders because their objectives follow the principle of an Act passed by the Labour Government which provided greater help than any other Act.

I hope that the Government will aim for simplicity, remove the discrimination, tell us more about how they arrive at their figures and say whether they think that the differentials between married and single people are appropriate.

10.31 p.m.

Photo of Mr Frank McElhone Mr Frank McElhone , Glasgow Gorbals

While we always welcome any increase in rate or rent rebates or any Government assistance, the only point of agreement between the Minister and myself concerns his comments on the rethink of local Government finance. There is a tremendous burden on local authorities and a strain on the treasurers, as I am sure will be clear from the meeting which I understand will be held between the Prime Minister and the city treasurers. There is an urgent and grave need for a rethink on local Government finance and it is a pre-requisite in any change in the local Government structure.

Photo of Mr Edward Leadbitter Mr Edward Leadbitter , Hartlepools, The

My hon. Friend should realise that the increase in the amount contained in the order is not matched by an increase in real terms. That is why I have asked for the figures.

Photo of Mr Frank McElhone Mr Frank McElhone , Glasgow Gorbals

I hasten to agree with my hon. Friend in certain respects. It is strange to see the twinge of conscience on the Tory benches. That is a strange phenomenon because the first action of the Tory Government when they came to power was to publish a White Paper promising rebates by the Chancellor. The rebates he gave amounted to £350 million but they went to the surtax and corporation tax payers—the people who paid the Government into power by their financial support in the 1970 campaign. I have paid tribute in the past to the loyalty of the Government's supporters, but nevertheless it is good to see this twinge of conscience——

Photo of Mr William Ross Mr William Ross , Kilmarnock

I can see only empty benches.

Photo of Mr Frank McElhone Mr Frank McElhone , Glasgow Gorbals

Perhaps we are witnessing the first conversion on the road to Damascus, but the Government would have to travel far along that road before we were satisfied, especially in view of the paltry increase contained in the order. The Government should be ashamed of themselves because it is subsequent legislation stemming from the gifts to surtax and corporation tax payers during that period that has created the poverty which now exists in this country. Part of that rebate created a 25 per cent. increase in food prices. To pay for the £350 million, we lost £140 million in food subsidies that the Labour Government had given to the people.

We have the benefit of a Scottish Minister on the Government Front Bench tonight. Perhaps his recent legislation is another reason for this paltry increase. The Housing Finance Act has already caused a great deal of hardship in Scotland. Private property owners are going to the rent tribunals for rent increases of up to 500 per cent. I claim no knowledge of rents and rates in England, but I know that when rents in Scotland are increased there are increased valuations, with substantial rate increases later. A representative of the Property Owners and Factors Association has said that he is looking for an average 500 per cent. increase in private property rents. Those living in the properties, many for a long time, will find the supposed assistance totally inadequate.

I see about 2,800 people at my weekly surgeries. The vast majority are pensioners who have worked most of their lives and do not receive supplementary benefit, perhaps because they have a small superannuation payment, for which they have made sacrifices. Therefore, they just meet, or do not meet, the requirement for the increased Government assistance.

The big problem is the lack of take-up of Government benefits. Perhaps we shall have to resort to Marjorie Proops again to tell people of the benefits of FIS and the increased rebates.

A study of my constituency shows that there is a feeling of indignity, the stigma of being a pauper, about some benefits. Because of inflation, the increased cost of living brought about by the present Government, people are more and more forced on to the means test. The Government seem to have a means test mania, with their FIS and other schemes. They should be looking at the situation from a completely different angle.

Glasgow has a very serious problem, and not only in housing. It is spending about £180 million on highways alone. To tackle urban renewal and follow the programme the Minister has advocated for the city, the ratepayers will have to pay a great deal more. We all want to see a better standard in our cities, but more support from the Government is needed. The special sum of £5 million was given to Glasgow, but the Minister realises that that is inadequate to meet its needs.

Because of the increased cost of living brought about by the Government, and because of their vicious Housing Finance Act, which will increase the rents of all houses in Scotland—the Minister shakes his head, but he knows that as a result of his forcing a general rent rebate scheme on local authorities Glasgow in particular has suffered very badly. It was forced to give up its own generous and much better scheme. The Minister shakes his head, but he apparently fails to recollect the many discussions we had in Committee on the Scottish Local Government Finance Bill.

Photo of Mr William Ross Mr William Ross , Kilmarnock

He does not want to remember them.

Photo of Mr Frank McElhone Mr Frank McElhone , Glasgow Gorbals

He does not want to remember them because his conscience is being disturbed. I hope that I am not digressing from discussion of this order, but the Minister has not been completely honest with Scottish hon. Members. I hope that he will have the audacity to try to reply to the allegations which my hon. Friend the Member for Glasgow, Provan (Mr. Hugh D. Brown) and I make tonight.

Any increase is welcome, but the city treasurer of Glasgow will realise that with the change in the administration and the work thrown on the staff—which is already in difficulty by virtue of coming changes in local government—he will find this an imposition which is not welcome. If in some way the Minister can guarantee that this money will be an uplift for many people, particularly pensioners, and that it will be taken up much better than FIS, I shall feel more mollified than I have been in the past.

The Minister knows that the £2·60 does not really touch on the rate increase which will face Glasgow citizens and many in other Scottish cities in the next two or three years. I should like him, with his colleagues, to have a rethink on an urgent reappraisal of local government finance and a discussion with Scottish local government treasurers on their projected increases. When he sees the very necessary plans they have in mind he will realise that this supposedly adequate assistance will be totally inadequate.

10.43 p.m.

Photo of Mr Hugh Brown Mr Hugh Brown , Glasgow Provan

I am reluctant to follow my hon. Friend the Member for Glasgow, Gorbals (Mr. McElhone) in a vicious attack on the Government. [HON. MEMBERS: "Why?"] He has done it so well that there is no need for me to do so.

All this order does is once again to admit that the Government have completely failed to do anything about inflation. This is merely a holding operation to keep in line with pension increases which did not increase in real value but merely caught up with the cost of living. I do not think the Government can take much credit for this order, which is certainly overdue.

I make one small point which I am sorry to have to make. The explanatory note in the English order is slightly better laid out than that in the Scottish order. I prefer the nicely set out table in the English order.

I detect a distinct lack of enthusiasm for this scheme as a whole. This was evident in the rather tepid introduction by the Minister. I should have thought that each time there is such an order there is an opportunity for the Government to give us a little more information. Are some authorities better than others? Is the uplift better in some areas than in others, bearing in mind that with an ageing population examination of statistics is required? The House needs this information from time to time. I do not detect any drive on the part of the Government to pursue this. It is an uncharitable thought, but perhaps it is because the Government have to find 75 per cent. of the cost. It may help to explain why there is no great drive and it is left to local authorities. We are entitled to more information about whether the statistics can be obtained, whether Government Departments do gather them.

We are finding difficulty with people who are above the limits for supplementary benefit. I am not criticising, but merely suggesting that this needs to be examined. There is always a reluctance on the part of Government Departments to advise people to claim from the local authority. It might be done now, but I am reasonably certain that there is no clear instruction to the social security or supplementary benefit offices that if they get a claim from someone above the limits they should advise him to go to the local authority for rent and rate rebates. The last thing a civil servant wants to be seen to be doing is telling people to go to local authorities.

Most of us in our surgeries are coming across people who should have been claiming such rebates or allowances but have not been advised to make an application. How many people drawing family income supplement are entitled to rent and rate rebates. There are different groups of officials making separate calculations within departments of authorities dealing with each subject. I know that the Government have promised to streamline things but the way the orders are presented is typical of the narrow-minded approach whereby a Department says, as they say in Glasgow, "It is nothing to do with me; that is someone else's problem." We need a little more information to help bring these matters together and assist the maximum number of people.

10.47 p.m.

Photo of Mr Denis Howell Mr Denis Howell , Birmingham Small Heath

This has been an interesting little debate in cameo on an important subject. The Minister began by telling us that rates are a topical subject. I looked round the House. There was not a single Conservative or Liberal backbencher who felt it worth while to attend—with the exception of the hon. Member for Hendon, North (Mr. Gorst), who is here because he has the Adjournment and wishes to address us an another topic of Government iniquity—VAT.

I agree that rates are a topical subject. In my years in the House I cannot think of a time when there has been more general concern throughout the country about the effect of the rate burden. The Government are in a state of chaos and do not know what to do. We have the remarkable situation in which almost every local authority is deciding what the rate burden ought to be while at the same time there is great difficulty over revaluation and universal agreement that no local authority can keep the rates within the limits which the Government intend to impose. Yet so far we have had no indication from the Government about what they are going to do to help the local authorities in these circumstances. Not only that but the right hon. Gentleman very charitably acknowledged the chaos which exists.

Photo of Mr Denis Howell Mr Denis Howell , Birmingham Small Heath

Yes, indeed. Not only did the right hon. Gentleman acknowledge the chaos but admitted that these orders cannot deal with it. He said that it had to be dealt with in some forthcoming legislation. He said that it would receive consideration as forecast in the Gracious Speech. That means that at some time in the future we shall be getting a Bill for the reform of local government finance as well as of the rating system as a principal means of raising that finance. That was forecast in October. Perhaps the right hon. Gentleman will tell us when we are to see this legislation.

I cannot believe that there is anyone in the country who does not want to see a reform of local government finance, and surely there is no one left who has a good word to say about the rating system, which has proved to be totally unable to meet the needs of society.

Photo of Mr Graham Page Mr Graham Page , Crosby

Will the hon. Gentleman suggest now what he would put in place of rates?

Photo of Mr Denis Howell Mr Denis Howell , Birmingham Small Heath

I will respond to that invitation. When I was on the back benches, I put forward a scheme for a local income tax and spelt it out in some detail. The thing which offends so many ratepayers is that they all have to pay the same amount of rates. For example, a number of people with families use local government services more than a lot of other people do. We thus have the classic case of the pensioner paying as much money in rates as the family next door with four incomes coming into the house. What offends so many people is that the rates burden has no relation to the ability to bear it.

I say that off the cuff, as it were, in answer to the generous intervention by the right hon. Gentleman. I am not sure how far I carry my hon. Friends with me in the idea of a local income tax, but I do carry them with me a long way when I say that almost any alternative is prefer- able to the present system, which is creaking and breaking down under the strain.

The intervention by the right hon. Gentleman can only mean that the Government would like to produce a Bill for the reform of local government finance if only they knew what to produce. The right hon. Gentleman has now given us a Freudian insight into the Government's thinking. The Government forecast in the Gracious Speech the reform of local government finance and the rating system, yet three months later, when I ask whether we are to get what we were promised, the right hon. Gentleman asks what we think the Government should do. It is an insight into the way the Government produce their legislation.

Photo of Mr Graham Page Mr Graham Page , Crosby

This is good to and fro debate, but I recollect that when I was sitting where the hon. Gentleman is sitting now his right hon. Friend the Member for Coventry, East (Mr. Crossman), speaking as a Minister at the Dispatch Box six years ago, said "Of course we shall do away with rates." The right hon. Gentleman never suggested how he would do away with them, and I was inquiring whether the hon. Gentleman knew what was in his right hon. Friend's mind six years ago.

Photo of Wing Commander Sir Robert Grant-Ferris Wing Commander Sir Robert Grant-Ferris , Nantwich

Before we get too involved in this discussion I think we ought to remember that we are discussing two orders, and I have my mind on the Under-Secretary of State for Development at the Scottish Office who has to reply. We should not get too diverted, because we do not have very much longer for this debate.

Photo of Mr Denis Howell Mr Denis Howell , Birmingham Small Heath

I assure you, Mr. Deputy Speaker, that I shall bear in mind what you have said. If I can be told of any good reason for agreeing with my right hon. Friend the Member for Coventry, East (Mr. Crossman), even at this time of night, I shall be delighted to hear it. I was not aware of his wise words six years ago, but I support them now.

The Minister admitted all the limitations in these orders. He did so with the candour and frankness that we have come to expect of him. He said that their purpose was to keep things on an even keel. The Opposition's case today is that rates this year have been on anything but an even keel. Local authorities are sinking rapidly—if we are to use these nautical metaphors—in trying to deal with the rating system.

The Minister said that the need for these orders arose principally from the increase in social security benefits, which, he said, amounted to 12½ per cent. I have made a mathematical calculation of the increase in the rebate allowance for which these orders allow, and I make the figure 10¼ per cent. If social security benefits have increased by 12½ per cent., and if allowance is being increased by only 10¼ per cent., it must follow that this is a worsening of the position of old-age pensioners and people in receipt of social security benefits.

I assume that the Minister's figure is correct. If it is, and if my figure is also correct—which I am sure it is—it means that many old-age pensioners and people on social security benefits who are now able to qualify for rate rebates might be worse off when they get the increase proposed in the orders. Perhaps the Under-Secretary of State would clear that up.

The new allowance is to be £16·50 for a married couple, plus £2·75 for each child. If one considers—as we normally do in the House—a married man with a wife and two children, under these orders he will qualify for the new rebates if his income is £22, which I think is the limit. Unless it is contradicted by what I have said about old-age pensioners and people on social security, it is relevant to point out that there are many working people with an income of less than £22 a week coming into the family. My union, APECCS, has clerical and computer staff who come into that category, and only today I have been looking at what they earn. There is no doubt that many of them will come under the £22 limit. This is a serious matter. No doubt the Government will say that if that is so they are the very people for whom the allowance is being increased.

That takes us directly to the point my hon. Friend the Member for Manchester, Gorton (Mr. Marks) was making, that local authorities will have to pay if there is a big increase in take-up because of these allowances. If the TUC and other organisations advertise the opportunities for very low paid workers, there will be a tremendous take-up of rate rebates which most of us would want to see, but that burden will be shouldered by the rest of the ratepaying community because of the system under which the Government pay only 75 per cent. of the money for this purpose. We face a serious situation.

I referred to this as a chaotic situation. My hon. Friends have referred to it in more eloquent language, but all confirm that theory. My hon. Friend the Member for Bristol, South (Mr. Michael Cocks) described it as a crisis. My hon. Friend the Member for the Hartlepools (Mr. Leadbitter) said that ratepayers were in for a short, sharp shock. My hon. Friend the Member for Glasgow, Provan (Mr. Hugh D. Brown) said quite rightly that the introduction of these orders was one more indication of the Government's failure to deal with inflationary problems——

Photo of Mr Denis Howell Mr Denis Howell , Birmingham Small Heath

—total failure to deal with the inflationary problem facing the country. All these statements have been borne out.

I think that it was my hon. Friend the Member for Glasgow, Provan who touched on a point which I want to raise. We are dealing with some of the poorest members of our society. They have to be in that category to qualify for these rate rebates. They are the same people who would nowadays be expected to qualify for rent rebate, for family income supplement, for free school meals for children, for freedom from health charges, if, unfortunately, they are sick, and by one means or another, for social security benefit.

If one adds up all the benefit entitlements, the forms which have to be filled in, and the applications which have to be made by these people, a frightening situation emerges of gross indignities and inequities with which we face the poorest members of society so that they may get the benefits which Parliament wishes them to have.

Photo of Mr Denis Howell Mr Denis Howell , Birmingham Small Heath

A means test society, as my hon. Friend says.

We have tonight two of the more civilised members of the Government with us. It is a high compliment—because it is difficult to find two civilised members of the Government—to have two of them on the same night dealing with one subject. May I ask them, therefore, to use their good offices and take this up with the Government. These are people who are finding difficulty in making ends meet, and yet I have dealt with six separate items available to them, each of which they have to apply for separately, and which are dealt with by different Government or local government departments. It would be helpful if these could be put together so that welfare and security benefits were available to everybody on one application and it was somebody's duty to say to people in difficult circumstances "Let us go through all the possibilities of help which national and local government try to make available, avoiding the difficulty of a multiplicity of applications." We shall support the orders, limited though they are, because they are a move in the right direction, but we do not kid ourselves that in supporting the orders we shall relieve poverty. We shall not do anything of the sort. We are marginally worsening the position for people on social security benefits and we are acknowledging the dangers of inflation and the great difficulties which local authorities face. The Government are producing an extra 6 per cent. of financial help for local authorities at a time when there is hardly one local authority that can limit its rate increase to that.

Ours is a disgraceful rating system. The Prime Minister and other Ministers tell the House and the country that the Government are producing 60 per cent. of help for local authorities in this year's general rate support grant order, yet those of us who represent big cities such as Manchester, Sheffield, Birmingham and Glasgow know that that is a total misconception. In Birmingham alone the amount of Government financial help through the general grant order will be not 60 per cent. but 42 per cent., a matter which will be borne in upon the Prime Minister when the representatives of the big cities and of the Association of Municipal Corporations meet him.

We support the orders as far as they go, but in doing so we acknowledge their shortcomings and, in particular, the shortcomings of the rating system.

11.7 p.m.

Photo of Mr George Younger Mr George Younger , Ayr

My right hon. Friend and I are basking in the glory of being described as two of the most civilised members of the Government.

Photo of Mr George Younger Mr George Younger , Ayr

I do not think that the hon. Member for Birmingham, Small Heath (Mr. Denis Howell) described us as the two most civilised members of the Government, but perhaps he will come to that on a future order if we carry on as well as we can.

I thank the Opposition for the way in which they have welcomed this reasonably restricted order which does a reasonably restricted thing. It tries to restore the rebate scheme to the position it was in before the recent increases in social security benefits, for, unless this were done, the increases, when promulgated, would take some people out of rebate, which is not by any means the Government's intention.

The order updates the arrangements for rate rebates to recognise the increase in social security benefits which have been made in recent months. This is happening more frequently than in the past because we have introduced for the first time an annual uprating of the benefits which has been widely welcomed. A concomitant of that is the need to update rate rebate schemes to ensure that they are in tune with the new benefits.

At the end of his speech the hon. Member for Small Hearth made some interesting comments about the number of different sources to which people must go to get assistance. I entirely agree with him that it is highly desirable to reduce the number, and there are various ways of doing this. The hon. Gentleman knows that the implementation of the idea set out in the Green Paper on the tax credit scheme is one way in which many people in need will be helped by a great reduction of the number of sources to which they must apply for assistance. I hope that that statement will go a considerable way towards meeting some of the hon. Gentleman's points.

I will not follow the hon. Member for Glasgow, Gorbals (Mr. McElhone) in his wide-ranging review of the social security system in general, because to do so would be out of order——

Photo of Mr Frank McElhone Mr Frank McElhone , Glasgow Gorbals

I will now merely refer to the tax credit system, because the Minister is anticipating legislation to be introduced by the Chancellor of the Exchequer, but I feel that he will agree that the credits or allowances, however they are paid, will not increase the amounts going to the very needy, while under the tax changes envisaged those with incomes of over £6,000 a year will get a substantial increase.

Photo of Mr George Younger Mr George Younger , Ayr

I would not go all the way with the hon. Gentleman, but if he refers to my right hon. Friend's statement when he announced the Green Paper on the tax credit system he will see that that point was covered. But it would not be in order for me to go into more detail now.

Photo of Mr William Ross Mr William Ross , Kilmarnock

Perhaps on the very narrow point of rent rebates, rate rebates and social security I might take the hon. Gentleman back to our discussions on the Housing (Financial Provisions) (Scotland) Bill, when this matter, with its complexity and duplication in the social security area, was regarded as important. The Minister, in his usual charming way, said that the Government intended to look at it and see what could be done about it. Has anything been done?

Photo of Mr George Younger Mr George Younger , Ayr

Yes, indeed; and we shall be discussing this sort of arrangement elsewhere in the Local Government (Scotland) Bill. As the right hon. Gentleman knows, that is where the matter comes in, but, as he also knows, we have been taking very great pains to marry the application systems for the two forms of rebate. We are making progress, and when the appropriate time comes I shall be happy to explain it in detail to him. We have not forgotten it as a desirable aim, and we are, therefore, trying to design any changes in the scheme which my right hon. Friend announced in such a way that there will be a minimum of difference between the methods of applying each scheme. As I say, at the appropriate time we can discuss the details.

I will not be drawn by the references of the hon. Member for Gorbals to the Housing Finance Act because I would be ruled out of order were I to do so. I am itching to reply to some of the hon. Gentleman's points but must deny myself that pleasure.

The hon. Member for Glasgow, Provan (Mr. Hugh D. Brown) said that it was not enough merely to reflect the increases in social security benefits in the uprating of the rent rebate scheme because those increases had merely kept pace with the cost of living. That is a wider subject, but I would deny what he says on any interpretation or mathematics he likes to apply. It is perfectly clear that, for instance, the increases in old-age pensions have exceeded any rise in the cost of living. I hope that the hon. Gentleman will do his sums again.

The hon. Member for Bristol, South (Mr. Michael Cocks) said, among other things, that the jump in rateable values had caused great difficulties and anxieties. I entirely agree that a revaluation causes much anxiety. We in Scotland had a revaluation last year which in England and Wales has not taken place for 10 years. The effect is that much worse because the previous Government postponed the revaluation. That is nice at the time but has its consequences later, and I am sorry that these may be felt at the moment.

It is important to emphasise to people that the jump in valuations does not necessarily mean that the amount they will have to pay will jump by anything like the same amount. That has not been our experience in Scotland. People have to pay more only when the local authority requires to raise more revenue. That is not directly connected with revaluation. I know that it is extremely difficult to put this across, but it is important to put it across, otherwise when people see their new valuations they get far more worried than they need. When people get worried about it we should do all we can to help them.

Several hon. Members said that the cities are very concerned about the effect of revaluation. My right hon. Friend the Prime Minister has agreed to meet representatives of the major cities, when I am sure these points will be well aired.

As my right hon. Friend the Minister for Local Government and Development has said, we are considering the possibility of a new formula for the resources element because of the anomalies which crop up from time to time. My right hon. Friend will certainly keep that under active consideration.

Photo of Mr Kenneth Marks Mr Kenneth Marks , Manchester, Gorton

It is clear, I hope, that the cities that do not receive a resources grant will not get help in finding the money that they lose through rate rebates?

Photo of Mr George Younger Mr George Younger , Ayr

That is a matter which the cities can raise in the normal way. That may be so in some cases.

The hon. Member for Bristol, South, also spoke of the reluctance of Bristol to distribute rate rebate forms. My right hon. Friend has been personally concerned about this. It was originally brought to his notice by the Child Poverty Action Group with which his Department was working in the campaign in Islington for publicising rent rebates. My right hon. Friend took up with Bristol its refusal to distribute forms to voluntary societies which wish to get those who are entitled to rate rebates to make claims for them. My right hon. Friend intends to pursue this matter in a circular to local authorities urging them to help voluntary societies in that way, and I agree with him that that is desirable.

The hon. Member for Bristol, South, asked whether the application form was too complicated. We do not directly control the layout of forms put out by local authorities, but the information that has to be provided is not complicated. All that is needed is the income figure and the family circumstances—whether the applicant is married and the number of children. It is unnecessary to have too complicated a form to obtain that information, and I hope that local authorities will try to simplify the form whenever they can.

The hon. Member for Glasgow, Gorbals asked what could be done to increase the take-up of benefits. I agree that we should do all we can by publicity to encourage people to take up these benefits as of right. We advertise the rate rebate scheme in the national newspapers, as do many local authorities. I have heard and seen one or two references to the scheme on radio and television, and leaflets and posters are distributed. These do not always achieve the effect we want, but we try hard to get across the idea that rate rebates are there to be used and that we want more people to get them.

Photo of Mr Frank McElhone Mr Frank McElhone , Glasgow Gorbals

Will the hon. Gentleman do his utmost to ensure that the availability of rate rebates is made known? Will he assure us that a request will be sent to local authorities to explain the increased allowance, and can some financial assistance be given, perhaps through the rate support grant, to enable the local authorities to publicise these schemes?

Photo of Mr George Younger Mr George Younger , Ayr

I am not sure about the latter point, but I undertake to do all that I can, as I am sure my right hon. Friend will, to bring home to local authorities the need to reinforce any efforts they may make to get people to take them up.

Photo of Mr William Ross Mr William Ross , Kilmarnock

We now have many schemes for rate and rent relief, and so on. Many people who apply for rent rebates are ruled out and many who apply for social security help are ruled out. However, people do not realise that the tables are so designed to try to bring in those who are on the borderline and do not get this other assistance. Could the Government direct a little more publicity towards that aspect? Many people do not apply because they feel that, having been turned down for social security assistance, there is no point in applying elsewhere. The purpose of publicity was to emphasise that point and to get more people to apply. The Labour Government made special efforts to try to find out the people who were applying. In the first few years just over 90,000 people were getting help. We were not satisfied then, bearing in mind the increasing numbers of old-age pensioners, and there is no ground for satisfaction now that the figure has reached 100,000.

Photo of Mr George Younger Mr George Younger , Ayr

The right hon. Gentleman has made an interesting suggestion, which I will follow up, why it may be difficult to bring home to people that they may be entitled to this relief.

Social security officers are instructed to give people advice on which of the options is most favourable to them—that is, whether it is better to go for social security or to take the rate rebate. They are instructed to give this advice to applicants whenever they can, and I think it is valuable advice.

Photo of Mr Hugh Brown Mr Hugh Brown , Glasgow Provan

That is slightly different from the point that I made. I appreciate that if an application is made and it is more beneficial to the applicant to apply for a rent or rate rebate, that is done. But where someone has applied for social security and is perhaps £2 or £3 above the limit, I am not sure that that applicant is advised to go for the rent and rate rebates.

Photo of Mr George Younger Mr George Younger , Ayr

I hope that he is. I know that social security officers are instructed to be as helpful as possible in giving advice to people. I think that in general most of them try very hard to give such advice.

I was asked whether family income supplement was included. I confirm that it is taken into account when assessing entitlement to rent and rate rebate.

I was asked about the take-up. I cannot give a breakdown as to which authorities are better or worse on take-up of rate rebates partly because I do not have the figures here and it is not by any means easy, looking at the figures produced by an individual local authority, to deduce whether it has a lesser take-up because of ordinary and explicable reasons or due to some laxness or remissness on its part. It would require a lot of study and, indeed, survey work to establish which local authorities were doing better or worse than others. However, the numbers have not changed substantially over the years.

There are two periods in each year, a first and a second period. For instance, in 1969–70 in the respective periods there were 90,886 and 91,614 in Scotland. In 1970–71 there were 94,120 and 98,889. In 1971–72, the latest year for which we have figures, there were 97,737 and 100,355. So there is a slow and steady, not dramatic, increase. Of course, we would all like the take-up to be more. However, it is moving in the right direction.

The hon. Member for Small Heath—I think that I am right and he is wrong—said that our arithmetic was wrong. I have carried out as quick a check as I can in these circumstances and I believe that broadly our arithmetic is right. The only point on which I could agree is that the children's addition is not as much as 12½ per cent. It is actually nearer 10 per cent., because, being a small amount anyway, it is rounded to the nearest 5p. I think that this is probably reasonable.

I am glad that the House has welcomed the orders. They are necessary in order to keep the rate rebate scheme doing what it was intended to do in the light of the changes in social security. I am glad to commend them to the House.

Question put and agreed to.

Resolved,That the Rate Rebates (Limits of Income) Order 1973, a draft of which was laid before this House on 19th December, be approved.

Resolved,That the Rate Rebates (Limits of Income) (Scotland) Order 1973, a draft of which was laid before this House on 21st December, be approved.—[Mr. Younger.]