Restrictions on Rating and Precepting

Part of Orders of the Day — Local Government Finance Bill – in the House of Commons at 11:15 pm on 26th January 1987.

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Photo of Mr John Fraser Mr John Fraser , Norwood 11:15 pm, 26th January 1987

I represent a Lambeth seat, and Lambeth is a rate-capped borough. The one small measure of mercy for us is the ability to have our expenditure limit redetermined, and rightly so. In December 1985, as a result of the borough taking legal proceedings against the Department of the Environment, an approach was made by the Department to Lambeth, and eventually there was an agreed redetermination, to avoid a court case. which came to almost exactly the same figure as the expenditure limits suggested by the borough for that financial year. In the current financial year, the Department threw out some pretty broad hints that if Lambeth applied for a limited redetermination, it would be given a redefined expenditure limit. The consequence of the Bill is that the opportunity for the Department to admit that it was wrong in setting the limit will be thrown away.

Redetermination means an admission that the limit was set too low. I wish that we could find a more simple vocabulary for local government expressions. I used to sit in on the finance consultative council and listen to it talk about things such as regression annalysis, which I translated as repeating in the future the mistakes that had been made in the past. There was exemplification, which was a method of showing how a national disaster was translated into a local disaster. Now there is redetermination, which is a method of admitting that the initial calculation was wrong.

There must be the opportunity to go back, which the Bill denies, and take into account local and special factors. One or two of these factors need to be accounted for. The first is the growth in equalising. A recent survey carried out by an independent body, the Centre for Environmental Studies, shows that between 1979 and 1984, the average income of families in Lambeth decreased by 5 per cent., whereas in the country as a whole incomes rose by 4 per cent. before tax and about 1 per cent. after tax.

However, the survey also shows something that is at the root of social tensions—that the average is not shared by all people. It found that since 1979, the poorest 25 per cent. of households experienced a 10 per cent. decline in their income before tax. The group with the largest drop in income—single parent family households—experienced a drop in income both before and after tax of between 17 and 18 per cent. One cannot make judgments about the extent of need in such communities on the basis of a desiccated calculating machine in Marsham street. I know that Visa used to advertise that it took the waiting out of wanting. The Department of the Environment, with its computer and formulae and algebra in schedule 2, is taking the caring out of calculating. We want the X factor, which puts it back in again.

A second example of what needs to be taken into account is the level of unemployment. Today, Lambeth has provided me with figures that show that on the official statistics there is almost 26 per cent male unemployment, and over 13 per cent. female unemployment. Those are the statistics from the Department of Employment. However, the unofficial, and probably more reliable, statistics provided by Lambeth show male unemployment at 30 per cent. and female unemployment at 17 per cent. In the riot epicentre of Brixton unemployment is 32 per cent. The formulae fail to take into account the social strains that result from that degree of deprivation.

My hon. Friend the Member for Vauxhall (Mr. Holland) and I are lucky enough to be so close to our constituencies that we can visit them during the course of debates. I was able to attend the opening of a social centre by Lord Scarman. That centre was opened partly as a result of Lord Scarman's 1981 inquiry report. The Scarman report was about what happens when a Government ignore the needs of ordinary people. On two occasions in Brixton we have seen the consequences of ignoring the needs and demands of ordinary working people. I hope that the Government will accept factor X, because it can put caring back into calculating.