Orders of the Day — Rates

Part of the debate – in the House of Commons at 12:00 am on 20th November 1974.

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Photo of Mr Anthony Crosland Mr Anthony Crosland , Grimsby 12:00 am, 20th November 1974

I congratulate the hon. Member for Southend, West (Mr. Channon) on his return to the House after what I understand has been a particularly painful and unpleasant bout of illness. I am glad to see him fully recovered.

I also congratulate the hon. Gentleman on what I take, and hope, to be promotion to a new Front Bench position. Certainly he has sloughed off both the memories and the responsibilities of Government quickly enough, because a large part of his speech had nothing to do with the coming rate support grant negotiations. I hope that the hon. Gentleman stays there for a little time, if only because we have become irredeemably confused by the restless instability of Opposition Front Bench spokesmen.

In recent weeks the hon. Members for Hornsey (Mr. Rossi), Chelsea (Mr. Scott), Shipley (Mr. Fox), Honiton (Mr. Emery) and Bury St. Edmunds (Mr. Griffiths) have popped up and down, now on the Front Bench, now on the back bench. They move from back to Front and Front to back and Front to Front. There must be some system of weekly promotion and demotion in the new democratic Conservative Party. We used to hear a great deal about the Tory magic circle. It seems that we now have the Tory magic roundabout. Please may we have some stability of deployment in the interests of national sanity before we all become totally giddy and cross-eyed?

Today, much as we like to see the hon. Member for Southend, West, we had looked forward expectantly to hearing from the right hon. Member for Finchley (Mrs. Thatcher). After all, it was she who, just before the election, made the ex cathedra announcement on the aboli- tion of the rating system. It was the right hon. Lady, not the hon. Gentleman, who was in the Tory Cabinet which bequeathed to us the present frightful rating crisis. Indeed, as Secretary of State for Education and Science, the right hon. Lady was exceptionally closely involved in rate suport grant matters, and her views would have commanded instant and respectful attention in the Cabinet. Therefore, we would have liked to ask her one or two gentle, courteous questions this afternoon.

For example, does the right hon. Lady suffer from chronic amnesia about what happened in the Cabinet of which she was so elegant an adornment? Was she in fact pressing, day in, day out, with persistent doggedness for the abolition of rates, only to be overruled by our old friends, those two stolid opponents of change, the right hon. Member for Worcester (Mr. Walker) and the right hon. and learned Member for Hexham (Mr. Rippon)? If the latter was the case, she has turned the tables on them now because she appears to be in the leadership race and they are not.

The trouble is that we shall never know the truth. The right hon. Lady has flown away and upwards, leaving as a souvenir to her meteoric passage only a characteristically charming photograph on the front page of the Local Government Chronicle which the ungallant editor chose to caption, The Unacceptable Face of the Conservative Party. That is very unchivalrous.

This debate could hardly be more topical. It takes place right in the middle of the crucial final stages of the negotiations with the local authority associations over the size and distribution of next year's rate support grant. Discussions have already continued for some months. The Government's formal proposals have now been put to the associations, and there was a first discussion of them at official level only yesterday. I shall have my final meeting with the association members—the so-called statutory meeting —next Tuesday, 26th November.

The right hon. Gentleman the Member for Crosby (Mr. Page) has sometimes referred to the day of the statutory meeting as the local authority Budget Day. That is an apt description. Thousands of millions of pounds of public money are at stake. The outcome, like the outcome of a Budget proper, will affect the lives of almost all our citizens. For different reasons, preparations for the local government budget have also to be carried out in conditions of strict confidentiality. This is not because great fortunes will be made, or national security threatened, if details of the settlement leak out in advance. The reasons are less spectacular than that.

There is, first, the obvious and general point that no party to any negotiation—be he employer, trade unionist or anyone else—can ever announce his final position in advance. The progress of negotiation could be seriously hampered if one side or the other were to take up a position in public at the outset. The parties would soon become entrenched in their positions, and it would then require a huge amount of time and effort for them to extricate themselves.

Secondly, apart from this general point, the rate support grant negotiations present particular difficulties. All local authorities are affected by their outcome. But each authority has its own special problems and needs and is not slow to suggest that they deserve priority over all other authorities' special problems and needs. Authorities are represented in the negotiations by their national associations. The association have to strike a balance between the often conflicting interests of their individual members. That requires some immensely difficult judgments which are bound to leave some proportion of their membership dissatisfied. The pressures operating on the associations are enormous. They would become intolerable if the final stages of the negotiations were to be carried out in a blaze of publicity.

If Conservative hon. Members press the case of the peculiarly deserving local authorities that all of us have in our own constituencies I shall not be able to satisfy them today even if the proposals which I have put to the associations happen to be beneficial to the authorities in question. Likewise—and I am sure the hon. Member for Southend, West will not be surprised to hear this—I shall not be able to tell the House today how much grant I am proposing to give for next year or what increase I am ready to make in this year's grant total.

Ex-Environment Ministers like the hon. Member for Southend, West will not be surprised to hear that never before—at least, not since rate support grant was introduced—have we had a major rates debate in the middle of the statutory negotiations. I do not complain of this in the slightest. Nor would I dream of impugning, as some cynical observers have done, the motives of the Opposition in initiating this debate. As honourable men and women, are they not bound by the pledge of the right hon. Lady the Member for Finchley to abolish the rating system? That was a pledge which shone out, in the otherwise murky light of a hard-fought election campaign, as a shining example of non-party-political moral purity along with the even purer 9½ per cent.

Of course, I accept that it is solely the Opposition's genuine concern with the plight of ratepayers which has prompted them to initiate this debate now. Nothing, I am absolutely certain, could be further from their minds than any desire to make political capital out of the rating situation. After all, the next election is some time away. I am only astonished that they should not have tabled a specific motion. Given the previous record of the Conservative Party in these matters, I suppose that the Shadow Cabinet found it impossible to draft a form of words that would not have been torn to shreds by my right hon. and hon. Friends.

Let me make it clear beyond any shadow of doubt that I and my right hon and hon. Friends are as deeply concerned as anyone on the Opposition benches at the magnitude of the crisis—crisis is not too strong a word—affecting local authorities' finances and the appalling consequences it would have for next year's rates if nothing were done to help. Both as a Minister and as an MP whose constituents faced a 40 per cent rate increase this year—less, I know, than in many other areas—I have been profoundly conscious of the problems arising from the situation which I inherited in March.

Lest we forget, I must remind the House of the factors which contributed to this situation. First, whatever the hon. Member for Southend, West may say, local authorities were subjected to a form of local government reorganisation which we in Opposition predicted would be expensive and extravagant, and which has proved so. It is no good saying that the kind of reorganisation we wanted on a unitary basis would have been as expensive. Secondly, they were required to include in their rate an element over which they had no control whatsoever—namely, the water charges set by that equally extravagant creation, the new regional water organisation.

Next, the new local authorities were told by the right hon. and learned Gentleman the Member for Hexham to keep their eyes tightly shut against the realities of the oil crisis and world-wide inflation, and to rate for only a 9 per cent. increase in pay and prices over the year. The last straw was the promise which the right hon. and learned Gentleman made to the House on their behalf that … the national average increase …"— that is the increase in domestic rates— should accordingly be about 3 per cent."—[OFFICIAL REPORT, 22nd January 1974; Vol. 867, c. 1469.] Even taken singly, none of these demands was realistic. In combination, they added up to a nightmarish fantasy.

Something had to give. Domestic rates did not go up by 3 per cent.; they went up by an average of 30 per cent.—or they would have done had it not been for the special relief scheme which we introduced in July.