Exclusion of Adjustments of Block Grant by Reference to Total Expenditure or Aggregate Amount Available

Orders of the Day — Rate Support Grants Bill – in the House of Commons at 10:15 pm on 3rd March 1987.

Alert me about debates like this

Photo of Mr John Fraser Mr John Fraser , Norwood 10:15 pm, 3rd March 1987

I beg to move amendment No. 4, in page 1, line 24 at end insert— '(3) If, pursuant to (2) above, the amount of block grant payable out of money provided by Parliament in pursuance of a supplementary report is less than any amount previously calculated as the aggregate amount available for it, the Secretary of State shall publish in a Report to Parliament any information he has received from the local authority associations on the effects of such a reduction in block grant on the services provided by local government.'.

We understand that the Government have decided to limit by statute to two per day the number of amendments to local government law, so we now come to the second one today, which is the Rate Support Grants Bill.

On Second Reading, we drew attention to the overwhelming objection to the Bill, which is the ending of the recycling of rate support grant. In other words, the objection is to the way in which the Treasury will recover money for itself and reduce public expenditure by removing from local authorities sums which they forfeit by means of penalty,—and it is a penalty, no matter how the Government may describe it.

The amendment underlines that objection. Having allocated rate support grant to meet the perceived needs of local authorities, the Government are taking it away through recycling. We do not have any objection to altering the way in which rate support grant is allocated. Indeed, in a discussion paper on the reorganisation of local government finance, we have said that the income levels of those living in a local authority area should be considered as much as the other factors which are at present considered. We have no objection to considering a fresh and more helpful way of allocating central Government assistance for local government functions, but we object to this Bill, which permits the Government to manipulate such factors as slopes, penalties and negative marginal rates in such a way that the coinage of rate support grant is debased and the support given to local government expenditure is diluted and weakened.

The House may want an analogy. Under the Bill, the Minister will be rather like those who visit a patient in hospital with a box of chocolates. They have ostensibly devoted the box of chocolates to the patient, but no sooner do they reach the patient's bed than the box is opened and it is not the patient who gobbles up the goodies but the visitors. The goodies that are gobbled up by the Treasury will be substantial.

If Brent council, the Minister's local authority, spends 5 per cent. above the level of expenditure estimated for it by the Government, it will lose £12 million under the Bill. That is a deprived quasi-inner-city borough. However, it is not just the inner-city deprived boroughs that will lose as a result of the Bill. If local authorities spend more than 5 per cent. above the estimates given to them, even rich, affluent, areas such as Surrey, the home of many Ministers, will lose £14 million. But is that really amazing, when one considers those areas to which resources should he devoted and where the Government ostensibly say that they are trying to help with things such as the inner-city problem? Nevertheless, if Gateshead—an inner-city area —spent more than 5 per cent. above the Government's levels, it would lose £1·6 million in a year. Newcastle would lose £9 million. Liverpool, which is without dispute an area of great deprivation and poverty, would lose £12 million. Birmingham would lose £14 million and Manchester as much as £22 million.

We have made these arguments before. I shall not discuss them at any great length. It is true that we were defeated in Committee, but we seek in this amendment at least to make the Secretary of State own up to the consequences of the cuts that will result from the rate support grant being recycled, not to local authorities but back to the Treasury. We want him to ask local authorities which services should be cut as a result of rate support grant recycling. Let him spell out those authorities—sometimes Tory, shire county education authorities—in which books will not be available for children and those authorities where tire cover will be withdrawn or reduced as a result of the Bill.

Let him spell out the domains, even the Metropolitan police, where less money will be available for fighting crime and for defending people on our streets and those authorities which will find that they have fewer resources to devote to the problem of homelessness and to deal with bed and breakfast and houses in multiple occupation as a result of the Bill.

By this amendment, we would at least compel the Government to translate the loss of grant into the loss of services. Let them own up to the consequences of their act.

Photo of Mr Allen McKay Mr Allen McKay , Barnsley West and Penistone

Amendment No. 4 gives me an opportunity to return to the problem of the South Yorkshire fire service. I thank the Minister for the reply that he sent in a letter to me, but I am afraid that I cannot accept it, because it is wrong. The Minister said: Lord Caithness explained to the Authority that the Home Secretary considers the expenditure for 1987–88 yielded by the formula approach in the Local Government Finance Bill is adequate to enable the Authority properly to maintain its existing level of services. The phrase to maintain its existing level of services is important. However, the budget is not enabling the authority to maintain the level of services that it has at present.

We explained that there was every likelihood that the new training facility that was being provided will remain empty. There is every likelihood that there will be no recruitment of service personnel and that 50 personnel will be made redundant. There is every likelihood that the machine and the appliance time available will have to be extended, which means that appliances that should be off the road will remain on the road and will cost more in the long run.

I am saying that because of the letter from the inspector of fire services in the Home Office. We must bear in mind the fact that we are now talking about the level of services that has already been reduced to what the Home Office said was required. The chief fire officer of the South Yorkshire county council says that it will have to be further reduced under the Home Office figures. There is no way that we can retain the service as it is at the present time.

It is not only Members who represent south Yorkshire constituencies, councillors from that area, the residuary body and the fire service trade union, the Fire Brigades Union, but, more importantly, the chief of the fire services, who are going along with what we think. I shall quote from the letter of the inspector of fire services at the Home Office. He says: My inspection clearly could not examine in detail all areas of responsibility and activity, but this year I have concentrated on matters relating to training, brigade structure, appliance manning, fire prevention and finance. He confirms his satisfaction with the level of efficiency and management under the leadership of your Chief Fire Officer. By those few words, he showed that he accepted that we have an excellent chief fire officer.

The inspector continued: During the inspection a visit was made to the recently acquired school premises which are to be used as the training centre for the brigade". That is likely to be closed. He said: Although the premises were purchased at a very reasonable cost there is still a good deal of work and money to be applied … the full development of the new centre should be carried out as opportunity permits. The operational and financial advantages of a residential facility should not be overlooked and it may be possible to introduce this on a temporary basis". In other words, the inspector says that the facilities are necessary. But those facilities will not be opened. The inspector continued: I am aware that you are considering a reduction in the number of divisions which may enable some managerial resources to be transferred to operational needs. That has already been done. We have tried to maintain the level of services that the Home Office said should be maintained.

The inspector said: Whilst looking at the structure of the brigade … the Authority will need to give full consideration to the outcome of your Chief Fire Officer's review into standards of fire cover. That review has taken place. We are concerned because fire cover will remain inadequate. As the inspector said: fire authorities have been requested to review risk categorisation following the publication in 1985 of the Standards of Fire Cover Report". In the light of the 1985 report, the fire services are already undermanned and there is every indication that they will be further undermanned.

The inspector said: The Inspector did however note that the review of the Fire Precautions Act might require a change in emphasis on inspections and re-inspections and has discussed this with the officers concerned. But if the men who carry out inspections are moved from the managerial side, how will not only fire inspections but re-inspections, which the Home Office requests, be carried out?

The inspector stated: expenditure in the current year will enable the brigade to broadly maintain the level of services provided by the previous authority but it is noted that this has only been achieved by the use of economies having a short term effect. This means that fire services in south Yorkshire, which are already undermanned, will be severely undermanned.

I suggest that all this should be put above board. A meeting has already taken place, but I suggest that there should be a meeting with south Yorkshire Members of Parliament, a person from the Home Office, a person from the office of the Secretary of State, and the chief fire officer. I have already asked the chief fire officer whether he will come. There should be no politicians at local level, although it would be prudent for the council chairman to attend. The chief fire officer, whom the Home Officer has made responsible for the efficiency of the fire service, is worried. May we have a meeting with him over the table to get this matter thrashed out?

Photo of Dr Rhodes Boyson Dr Rhodes Boyson , Brent North

I appreciate, although I do not necessarily agree with, the points made by the hon. Member for Norwood (Mr. Fraser). A number of images were presented during the short Committee deliberations. Tonight we heard of chocolates being taken to a hospital patient. We were told that, when the patient wanted to eat the chocolates, they were whisked away. They were a mirage. Undoubtedly, there will be more imagery on the next amendment because of the hon. Gentleman's versatility.

Let us say that a person was in hospital for a week last year and he enjoyed 100 chocolates. This year he would have 105¾ chocolates—a 5·75 per cent. increase. Under this year's settlement, everyone will get about 5·75 per cent. more. People will lose no money and will have more chocolates. The lucky ones will have nine more chocolates, so it is more chocolates for all. If they are very greedy, when they see the trolley coming past with other people's chocolates, they all dive on them and eat them up, and they are taken away. That is good discipline. We are sorry for anyone who has to go into hospital. The strike of fate is an amazing thing. We know that that sort of thing breaks morale, but if any of those hon. Members are going into hospital they should remember that if this year they had 100 chocolates next year they will have 105¾ chocolates. That is a fine discipline.

10.30 pm

Nobody loses money unless he spends more than the settlement level. I shall consider what the hon. Member for Barnsley, West and Penistone (Mr. McKay) has said about a meeting. As he knows, decisions are made in consultation with the lead department, and we are the sweeper-up department in most respects here. I paid attention to what the hon. Gentleman said and will consider a reply. I have already sent him a reply on a previous query.

I do not want people to get swept away with sweetmeats and chocolates. This is a discipline that the Government are placing on all whereby no one loses anything if he spends at that settlement level; if he spends at less than that level, he gets more. By doing it this way, everybody knows from the beginning of the year how much he will get according to how much he spends. This will help self-discipline to advance on every front.

Photo of Mr John Fraser Mr John Fraser , Norwood

The Minister has again reinforced our thoughts about the idiocy of the rate support grant system, in which the less one spends on services and the less one cares for the needs of the citizens, the more support one gets. I do not propose to call a Division on this amendment. We should reserve the chance to vote on Third Reading to express our disagreement with the Bill.

Amendment negatived.

Photo of Mr John Fraser Mr John Fraser , Norwood

I beg to move amendment No. 6, in page 1, line 26, at end insert— '(4) Before making assumptions in relation to different authorities or different descriptions of authorities in a Rate Support Grant Report or any supplementary report, the Secretary of State shall specify in an Order the basis on which he proposes to differentiate between authorities or descriptions of authorities.(5) An Order made under subsection (4) above shall be subject to annulment in pursuance of a resolution of the House of Commons.'.

The other issue in this Bill is the ability of the Government to subdivide classes of authorities by having a subdivision within a class which will now be known as a description of an authority. By example, the London boroughs can be divided or subdivided by description as between the inner and outer London boroughs. There is some logic in that because the outer London boroughs are education authorities and the inner boroughs are not.

We understand that the Government wish to make such a distinction in classes of authorities for the purpose of making a supplemental or original rate support grant settlement to deal with the increase in teachers' pay. Secondly, we understand that the ability to subdivide might be used to distinguish between rate-capped and non-rate-capped authorities.

What concerns us about the ability to describe or to have descriptions of authorities as well as classes of authorities — the word "class" is used in the Local Government Act 1980—is that the Government may use this power to subdivide and discriminate between one authority and another. Although the Government have given assurances that they will not do this, I ask for those assurances to be repeated on the Floor of the House—that the only authorities that will be described will be those that are rate-capped or those that are education authorities in London, as against those that are not education authorities in London.

I ask for a second confirmation of an assurance given in Committee relating to clause 2 of the Bill. The Government were asked at the end of the Committee proceedings to give an assurance that the sub-division of classes of authorities into descriptions would not be done so as to have any retrospective effect, and that the only purpose of these powers was to deal with the settlement for teachers' pay. May we have that assurance now?

The amendment would at least give some parliamentary control over the assumptions which will be put forward for different descriptions of authorities. We should know that there will be parliamentary scrutiny about assumptions that are made for, say, the outer London education boroughs and the ILEA. We should indeed be annoyed if we found after the passage of the Bill that different assumptions were made for education authorities within the area of the metropolis, with the powers conferred by the measure being exercised in an unexpected way. We are entitled to have the assumptions put before the House, with hon. Members having a chance to negative orders which, put forward those assumptions.

I urge the Government to accept the amendment and so allow a degree of parliamentary scrutiny over assumptions which may be of considerable financial importance to local authorities and to give an assurance that there will be no retrospective use of the powers in the Bill—in other words, that they will not be operated for the current year. May we also be assured that they will be used only to distinguish between inner London non-education authorities and outer London education authorities and that no distinction in assumptions will be made between ILEA and the rest of the London authorities?

Photo of Christopher Chope Christopher Chope Parliamentary Under-Secretary (Department of Environment)

I explained at some length and in some detail in Committee the purpose of subsection (3), when I sought to reassure Opposition Members that this provision was innocuous, that it had been inserted for proper and sensible reasons which local authorities should be able to accept, and that it could not be used to discriminate against individual authorities' grant entitlements, even if we were minded to do anything of that sort.

It would appear that I was only partially successful. Opposition Members have taken some note of that explanation. They appear at least to acknowledge the genuine reasons why it might be desirable to assume that rate-limited authorities were likely to spend at their designated expenditure levels rather than at the common assumption that we have used next year for all other authorities. They seem to acknowledge also the need to be able to differentiate between different classes of authority in some possible circumstances. But there is clearly a residue of suspicion that the provision as drafted might be used in some less desirable way, although Opposition Members have not been able to offer any convincing ideas about what that might be or how it could come about.

I will not repeat in full the detailed explanation which I gave in Committee. I will simply reiterate that the purpose for which these expenditure assumptions are used here is to set the grant-related poundage for spending at GRE, which is a national figure. By using a different spending assumption for one authority, or for a group of authorities, the national GRP for spending at GRE is affected, but this would not have a differential effect on the grant entitlement of that particular authority or group of authorities.

As I pointed out in Committee, if for some reason we were to make a wildly different spending assumption for one authority, that could alter the national GRP, but the effect on that authority would be minimal and would he the same for all authorities. I would not be possible by this method to discriminate against one or more authorities' grant entitlement.

With this in mind, the degree of protection which the amendment is presumably designed to set up is entirely unnecessary for what is in all conscience a highly technical but entirely innocuous provision. If Opposition Members and their friends in local authorities cannot accept our assurances about the purpose and operation of this provision, they can exercise their right to challenge in the courts any assumption which they feel to be unreasonable.

As for consideration of these matters by the House, all rate support grant reports and supplementary reports are subject to the approval of the House, and I do not think hon. Members would wish needlessly to add to that burden in the manner suggested by the amendment.

We cannot give a categorical assurance that we will use the description of authorities to cover only rate limits and education authorities. We might want to use it in the future to cover authorities carrying out functions which were not covered by the description of classes — that is, if an authority wished to secede from a joint authority such as a fire board. ILEA is already covered as a separate authority in the existing legislation. It is worth emphasising again that clause 2 is not intended to have any retrospective effect in the sense of validating any past decisions or actions.

For those reasons, I hope that the House will reject the amendment.

Amendment negatived.

Photo of Dr Rhodes Boyson Dr Rhodes Boyson , Brent North 10:40 pm, 3rd March 1987

I beg to move, That the Bill be now read the Third time.

I hope that the House will support Third Reading of the Bill. It is the second of the three local government Bills that are going through this House and another place. The basis of the Bill is to enable each authority to know at the beginning of the year exactly how much money it will have to spend. Under the previous recycling arrangements, local authorities were given more money, or it was taken back, according not to what the individual authority had done but to what all the 485 local authorities did. The amount of money that was received by a local authority depended on the spending habits of the other 484 authorities. If local authorities overspent, money was taken away from them, put in a pool, and then recycled to all the authorities, including the overspenders. They were punished for overspending and then money was given back to them. I do not think that that system can morally be defended.

I remind the House that there has been an increase of 9 per cent.—£1·3 billion—in rate support grant. That is a very generous settlement. According to the formula, the money has been divided between the 485 local authorities and they have been informed of how much money they are to have. If they spend according to the settlement intention, which is 5·25 per cent., they will keep that amount of money. If, for example, £1 million goes to an individual authority, it will keep that sum. If it spends more than 5·25 per cent., it will lose part of the £1 million, but if it spends below 5·25 per cent., it will gain extra money from the Treasury.

I have a chart that shows what this will mean. If all local authorities spend at 3·75 per cent. — the inflation intention as against the settlement intention— they will receive £150 million more from the Treasury. That is an additional £1·35 billion over last year. If, however, they spend more, they will receive less money. If they spend at 8·25 per cent. instead of 5·25 per cent., they will lose £312 million out of an increased settlement of £1·3 billion. They will, therefore, still be £900 million better off. Every local authority will know exactly where it stands and it will be able to work out its budget for the following year.

Under the previous system, local authorities could not do that. Money was taken from them in some years when they had underspent. It could be called decycling. At other times there was recycling. This is a confusing subject, to say the least, and I am trying to explain it in simple terms. I need a blackboard to explain the system. It is almost like taking a sixth form calculus lesson without a blackboard or textbook and nothing to write on. I shall leave it at that in case we get mixed up even further. However, we are certain that this is a better system. It is a more moral system and it encourages greater self-control.

I shall state my case, as on Third Reading I cannot come back. This time last year, reference was made by the hon. Member for Blackburn (Mr. Straw)—who led for the Opposition on Second Reading—to speeches that I had made in 1974. I quite enjoyed listening to them again. Reference was also made to a recent speech of my hon. Friend the Member for Southampton, Itchen (Mr. Chope). We were pleased to hear that as well. It is always nice to hear speeches recalled from time to time.

One year ago, the hon. Member for Copeland (Dr. Cunningham) made an attack on the recycling system, saying that nobody could budget. I shall read what he said and state my case on that. He said: the local government finance system is now much more difficult to understand and predict than before. That is because of the recycling. The figures issued by the Government on the entitlements on individual authorities are misleading, because they ignore the 'close-ending' factor. The close-ending factor is another form of recycling, as everybody knows, because all hon. Members are nodding in agreement. The Secretary of State cleverly made seductive promises this afternoon to right hon. and hon. Members about what their authorities might get. Does he suppose that responsible councils"— that is the important key here— and treasurers can fix budgets and levy rates and precepts on what they might get after close ending? Of course not. They did not know what they could get. He knows that that is a preposterous suggestion. He knows that no responsible local authority would dream of budgeting on that basis." —[Official Report, 20 January 1986; Vol. 90, c. 57.]

That is what recycling was. We are bringing reality back to local government so that it knows how much it will get. A local authority will know that it will get more or less according to what it spends, and it is not dependent on what the other 484 authorities do. The statement of the hon. Member for Copeland is as clear and convincing a statement as we heard this evening on the difficulties and uncertainties that are caused by close ending, or grant recycling, why the Bill is necessary and why it will bring positive benefits to local authorities.

In previous years, a borough treasurer or chairman of finance, in the run up to the new year, had to budget without knowing how much he would receive because it was dependent on other authorities, and budgets were changing every day. Imagine the sleepless nights and collapse of many treasurers and chairmen of committees as a result. It must have been intolerable. For the sake of the health of borough treasurers and the chairmen of committees, something had to be done. It would have been ignoble — I use that word very carefully — of any Government to ignore it. They will all be in bed now, at 22.47 hours, because they know exactly how much they have to spend; they will already have made their arrangements for next year. They cannot make any excuses to their wives now for late nights because they are working—that may be a disadvantage in certain cases.

Photo of Mr Michael Brown Mr Michael Brown , Brigg and Cleethorpes

The borough treasurer of one of my borough councils, the Glanford borough council, is taking early retirement this year. Presumably, he is retiring in great happiness as a result of the Bill going on to the statute book.

Photo of Dr Rhodes Boyson Dr Rhodes Boyson , Brent North

I did not know about that. Everybody in the House who knows him has a high opinion of that gentleman. Undoubtedly, he would have stayed on had he known that he would have to manage such a complicated system; he would not have wanted to pass it on to somebody else. He can now retire with a degree of personal satisfaction that he would have considered impossible last year. We wish him a happy and long retirement. We wish all the other borough treasurers and chairmen of committees a happy year, knowing that, having made their budgets they have made them firmly. There will he no worry at night, no late nights. The idea is securely before them this year that borough treasurers and chairmen of committees will next year have one long holiday.

Photo of Mike Hancock Mike Hancock , Portsmouth South 10:49 pm, 3rd March 1987

The Minister should be congratulated on having the neck to come here and make that speech in defence of the indefensible. His comments about borough treasurers will not be lost on them, because many of them will have endless sleepless nights trying to interpret his speech and understand the Bill.

At no time during the passage of the Bill have the Government produced a convincing argument that would ensure that the money earmarked for local authorities will end up in their pockets and not those of the Treasury. I am sure that many other hon. Members will agree that the Treasury will be the only beneficiary of the Bill. The Government have said that no authority need lose any grant, but they know that they have set local authority expenditure assumptions unrealistically low, thereby guaranteeing an overshoot in most local authorities, and a subsequent windfall to the Treasury.

I came here hotfoot from Portsmouth, where we set a rate this afternoon. I voted against a rates increase of just under 4 per cent. That was ridiculously low when one takes into account the miserable conditions in which so many of the people are living. The increase took no account of the real priorities in Portsmouth, but the council had no alternative. Already, it had been rate-capped once, and if the rate increase had been set higher, it would have been rate-capped again. To avoid that, many things that needed to be done will be ignored. Once again, the Minister has shown no recognition of that example or of the many that were quoted in Committee.

The Bill, like other local government Bills, will give the Secretary of State more and more powers. The language in the Bill is vague, but it gives the Secretary of State wide powers that have not been properly discussed either here or in Committee. No proper explanation has been given as to why the Secretary of State wanted those powers and how they would be used. The Minister has not clarified why such strong controls are needed. On determining the principles for calculating grant-related poundages, the Secretary of State can make assumptions as he sees fit, once again ignoring many of the real problems with which local authorities have to deal. That is a sinister step in the wrong direction.

The Government in clause 1(3) take powers to distinguish between local authorities, and that is again a dangerous and worrying prospect. Once again, things will happen and different local authorities will be treated differently, and the Government will be able to shift a local authority from one category to another and inflict grievous wounds on its ability to cope with the problems that it has to face. The wide discretion open to the Government could be a good and a bad thing, and that depends on the Government. Local government must know clearly in law what the position is. Despite all the Minister's good intentions. as he attempts to lighten a nightmare of legislation, that position is not properly clarified. Many local authorities will still be in doubt as to exactly what their position is.

The Minister should admit that the Bill is another attempt to tighten the screw on local government by restraining its expenditure. It does not deal with the problems about which the Minister spoke when he introduced the Bill some weeks ago. The inadequate spending provision, coupled with negative marginal grant rates and no grant recycling. amount to a severe and unfair mechanism for restricting local authority spending. The ending of recycling and with it the Government's ignorance and shunning of the need of local authority expenditure leads to yet another extension of centralised control.

Hon. Members do not need me to lecture them on the pressures and difficulties of too much power at the centre. We have had clear examples, because of the difficulties that Ministers have had of explaining to the House the problems associated with the Bill, of the difficulty that local authorities will have in trying to interpret it. That is why the House should reject the Bill.

Photo of Mr Roland Boyes Mr Roland Boyes , Houghton and Washington 10:54 pm, 3rd March 1987

I have listened to the Minister and I can only conclude that he must have got his PhD by studying George Orwell. The Minister has said that there will be an end to uncertainty, but the Government are putting us through a nightmare, week in and week out, when we discuss local government Bills. Those Bills have created absolute uncertainty for local government officers and members. I believe that doublespeak underestimates the powers of the Minister.

This evening we have gone from one Bill on local government to another. This Bill is vital, because it is robbing local government of its money. Parliament will vote for local government to be given a certain pool of cash, but through the Bill the Secretary of State is enabled to distribute to local authorities less money than Parliament has decided that they should receive.

If we study individual local authorities, we can appreciate what that will mean. Let us consider the borough of Sunderland — I make no apology for choosing that borough, as it is the one that I know best. The Minister is correct that the Bill will give local authorities certainty — the certainty of nothing rather than the uncertainty of not being absolutely sure how much they will receive.

Local government will lose approximately £300 million to £400 million, which equates to a 4p or 5p rate increase for all the authorities. No wonder that Jack Layden, chairman of the Association of Metropolitan Authorities, said today: Less than a week after the Courts have found Nicholas Ridley guilty of robbing Greenwich of £4m, he is preparing to push a Bill through Parliament to rob local government of up to £400m".[Laughter.] The hon. Member for Brigg and Cleethorpes (Mr. Brown) may find this amusing, but his council will suffer exactly the same as my council and those of other hon. Members. He will discover that the consequences of this Bill will be that his council will receive less cash than expected from the amount determined by Parliament. That cannot be right.

Photo of Dr Rhodes Boyson Dr Rhodes Boyson , Brent North

I am grateful to the hon. Gentleman. He is always courteous in giving way. I believe that it was rather unfair for the hon. Gentleman to quote the Greenwich case. The basis of the Greenwich case, as I understand it—

Photo of Dr Rhodes Boyson Dr Rhodes Boyson , Brent North

One has to say that, because local government finance is complicated. [Interruption.] At least we have unanimity on that.

I think that it is unfair to say that the Secretary of State robbed Greenwich of £4 million. The allowance of money on the abolition of the Greater London Council was dependent upon who maintained certain roles. A wrong decision was made as to where the money should go, not by the Secretary of State, but by the staff and one authority—[Interruption.] I shall continue. A total of 75 km of road was allocated to the south London borough of Bromley.

Photo of Dr Rhodes Boyson Dr Rhodes Boyson , Brent North

I think that it was kilometers. That is what I read, but I shall check it tomorrow. I wish we had kept our old currency and had kept inches and feet. Is the hon. Gentleman living in the past, or is he living for the present?

Photo of Mr Jeff Rooker Mr Jeff Rooker , Birmingham, Perry Barr

We have not got kilometers.

Photo of Dr Rhodes Boyson Dr Rhodes Boyson , Brent North

That is the only thing we have not got. If I had my way I would be more traditional than the hon. Gentleman.

No money was given to Bromley for that road, but the money was given elsewhere. The decision was made by the Secretary of State that the money should go to those who needed it. I do not consider that to be robbery. I think that it is unfair on the Secretary of State for the hon. Member for Houghton and Washington (Mr. Boyes) to say that.

Photo of Mr Roland Boyes Mr Roland Boyes , Houghton and Washington

The Minister said that he would not have a second opportunity to speak, and that therefore he would say all he wanted to say on his first go. However, he has said more in his intervention than he did in his speech on Third Reading. He has taken the opportunity to try to mislead the House. We are all aware that the Secretary of State for the Environment has been found guilty in the courts on more occasions than any other Secretary of State in modern times.

The effect on Sunderland will be a grant loss of anywhere between £2 million and over £3 million and we have estimated that to be equivalent to a rate overall of 4 or 5p. Sunderland had this year to reduce the rates by 1·5 per cent. It naturally wants to avoid the penalty of being rate-capped and losing control of its own destiny and finances, and it is the objective of this Government to control local government as a whole.

I want the Minister to take note of this. Conservative Members are always saying that high rates lose jobs. I will illustrate the position in Sunderland this year with a few figures.

A large town-centre store will have an annual reduction over 1986–87 of £5,000 and, if we assume a 4 per cent. increase for inflation, that is £19,000. A large factory has an annual reduction of £5,700 for 1986–87, plus 4 per cent., which is £21,000. All companies probably budgeted for a 4 per cent. increase in inflation. I shall be watching very carefully in Sunderland, which is one of the areas of highest unemployment, to see how many new jobs are created as a result of the borough council's keeping the rates low. One could imagine that, given the extra £3 million from grant recycling, even more could have been done by the borough of Sunderland in protecting jobs, services and the environment for the people it represents.

We listened carefully to the Minister's arguments in Committee. We responsibly, as he acknowledged, put forward our arguments on clauses in the Bill and on a series of amendments, and the Minister was unable to accept them. We are concerned about some aspects of the Bill, particularly clause 1(1)(b) and (3), which seem to give a special and unlimited panoply of powers to the Secretary of State. But the hon. Member for Portsmouth, South (Mr. Hancock) has gone through those, and I do not want to detain the House further.

Our major concern is the vital, essential cash that is due to local authorities. It was determined by Parliament that the local authorities should have it, and through this Bill they are going to be robbed of £400 million. As a consequence, we are forced to divide the House on this issue. We are against this Bill.

Question put:—

The House divided: Ayes 171, Noes 116.

Division No. 106][11.02 pm
AYES
Alison, Rt Hon MichaelDykes, Hugh
Amess, DavidEggar, Tim
Ancram, MichaelEvennett, David
Atkins, Robert (South Ribble)Eyre, Sir Reginald
Atkinson, David (B'm'th E)Fallon, Michael
Baker, Nicholas (Dorset N)Fenner, Dame Peggy
Baldry, TonyFinsberg, Sir Geoffrey
Batiste, SpencerForman, Nigel
Bellingham, HenryForsyth, Michael (Stirling)
Benyon, WilliamForth, Eric
Best, KeithFraser, Peter (Angus East)
Bevan, David GilroyFreeman, Roger
Biggs-Davison, Sir JohnGale, Roger
Blackburn, JohnGalley, Roy
Blaker, Rt Hon Sir PeterGarel-Jones, Tristan
Bonsor, Sir NicholasGoodlad, Alastair
Boscawen, Hon RobertGower, Sir Raymond
Bottomley, PeterGregory, Conal
Bowden, A. (Brighton K'to'n)Griffiths, Peter (Portsm'th N)
Bowden, Gerald (Dulwich)Ground, Patrick
Boyson, Dr RhodesHamilton, Hon A. (Epsom)
Brandon-Bravo, MartinHampson, Dr Keith
Bright, GrahamHanley, Jeremy
Brinton, TimHannam, John
Brooke, Hon PeterHargreaves, Kenneth
Brown, M. (Brigg & Cl'thpes)Harvey, Robert
Browne, JohnHaselhurst, Alan
Bruinvels, PeterHayward, Robert
Budgen, NickHeathcoat-Amory, David
Burt, AlistairHeddle, John
Butler, Rt Hon Sir AdamHenderson, Barry
Butterfill, JohnHicks, Robert
Carlisle, Rt Hon M. (W'ton S)Hirst, Michael
Cash, WilliamHogg, Hon Douglas (Gr'th'm)
Chope, ChristopherHolt, Richard
Clark, Hon A. (Plym'th S'n)Hordern, Sir Peter
Clark, Dr Michael (Rochford)Howard, Michael
Clarke, Rt Hon K. (Rushcliffe)Howarth, Alan (Stratf'd-on-A)
Conway, DerekHowarth, Gerald (Cannock)
Coombs, SimonHowell, Ralph (Norfolk, N)
Cope, JohnHubbard-Miles, Peter
Cranborne, ViscountHunt, David (Wirral W)
Crouch, DavidHunt, John (Ravensbourne)
Currie, Mrs EdwinaHurd, Rt Hon Douglas
Dorrell, StephenJackson, Robert
Douglas-Hamilton, Lord J.Jenkin, Rt Hon Patrick
Dover, DenJessel, Toby
Durant, TonyJohnson Smith, Sir Geoffrey
Jones, Gwilym (Cardiff N)Norris, Steven
Jones, Robert (Herts W)Onslow, Cranley
Key, RobertOsborn, Sir John
King, Roger (B'ham N'field)Ottaway, Richard
Knight, Greg (Derby N)Page, Sir John (Harrow W)
Knowles, MichaelPage, Richard (Herts SW)
Lang, IanParkinson, Rt Hon Cecil
Lawler, GeoffreyPatten, J. (Oxf W & Abgdn)
Lee, John (Pendle)Pawsey, James
Leigh, Edward (Gainsbor'gh)Peacock, Mrs Elizabeth
Lennox-Boyd, Hon MarkPercival, Rt Hon Sir Ian
Lester, JimPollock, Alexander
Lewis, Sir Kenneth (Stamf'd)Portillo, Michael
Lilley, PeterPowell, William (Corby)
Lloyd, Peter (Fareham)Powley, John
Lord, MichaelProctor, K. Harvey
Lyell, NicholasRaffan, Keith
McCrindle, RobertRathbone, Tim
MacKay, Andrew (Berkshire)Renton, Tim
MacKay, John (Argyll & Bute)Rhodes James, Robert
Maclean, David JohnRidley, Rt Hon Nicholas
McQuarrie, AlbertRobinson, Mark (N'port W)
Major, JohnRyder, Richard
Maples, JohnSainsbury, Hon Timothy
Marlow, AntonyShepherd, Colin (Hereford)
Marshall, Michael (Arundel)Stern, Michael
Mather, Sir CarolStokes, John
Maude, Hon FrancisThompson, Donald (Calder V)
Merchant, PiersThompson, Patrick (N'ich N)
Meyer, Sir AnthonyWakeham, Rt Hon John
Mills, Iain (Meriden)Walker, Bill (T'side N)
Moate, RogerWaller, Gary
Morris, M. (N'hampton S)Wells, Sir John (Maidstone)
Morrison, Hon P. (Chester)Wilkinson, John
Moynihan, Hon C.Wood, Timothy
Murphy, ChristopherYoung, Sir George (Acton)
Neale, Gerrard
Nelson, AnthonyTellers for the Ayes:
Neubert, MichaelMr. Gerald Malone and
Newton, TonyMr. David Lightbown.
Nicholls, Patrick
NOES
Alton, DavidBoyes, Roland
Archer, Rt Hon PeterBray, Dr Jeremy
Ashdown, PaddyBrown, Gordon (D'f'mline E)
Banks, Tony (Newham NW)Brown, Hugh D. (Provan)
Barron, KevinBrown, N. (N'c'tle-u-Tyne E)
Beckett, Mrs MargaretBuchan, Norman
Beith, A. J.Callaghan, Jim (Heyw'd & M)
Benn, Rt Hon TonyCampbell-Savours, Dale
Bermingham, GeraldCanavan, Dennis
Bidwell, SydneyCarlile, Alexander (Montg'y)
Blair, AnthonyClarke, Thomas
Clay, RobertLloyd, Tony (Stretford)
Clelland, David GordonLofthouse, Geoffrey
Clwyd, Mrs AnnLoyden, Edward
Cocks, Rt Hon M. (Bristol S)McDonald, Dr Oonagh
Cohen, HarryMcGuire, Michael
Cook, Frank (Stockton North)McKay, Allen (Penistone)
Cook, Robin F. (Livingston)McWilliam, John
Corbyn, JeremyMadden, Max
Craigen, J. M.Marek, Dr John
Cunningham, Dr JohnMartin, Michael
Deakins, EricMason, Rt Hon Roy
Dewar, DonaldMaxton, John
Dixon, DonaldMichie, William
Dormand, JackMillan, Rt Hon Bruce
Dubs, AlfredMorris, Rt Hon J. (Aberavon)
Duffy, A. E. P.Nellist, David
Dunwoody, Hon Mrs G.O'Brien, William
Eadie, AlexO'Neill, Martin
Eastham, KenPark, George
Evans, John (St. Helens N)Parry, Robert
Fatchett, DerekPatchett, Terry
Fields, T. (L'pool Broad Gn)Pendry, Tom
Forrester, JohnPike, Peter
Foster, DerekPowell, Raymond (Ogmore)
Foulkes, GeorgePrescott, John
Fraser, J. (Norwood)Redmond, Martin
Freeson, Rt Hon ReginaldRobertson, George
Freud, ClementRooker, J. W.
George, BruceRoss, Ernest (Dundee W)
Godman, Dr NormanRowlands, Ted
Golding, Mrs LlinSheerman, Barry
Gould, BryanShields, Mrs Elizabeth
Hamilton, James (M'well N)Shore, Rt Hon Peter
Hancock, MichaelShort, Ms Clare (Ladywood)
Hardy, PeterSkinner, Dennis
Harrison, Rt Hon WalterSmith, Rt Hon J. (M'ds E)
Hogg, N. (C'nauld & Kilsyth)Spearing, Nigel
Holland, Stuart (Vauxhall)Steel, Rt Hon David
Home Robertson, JohnStraw, Jack
Howell, Rt Hon D. (S'heath)Wallace, James
Howells, GeraintWardell, Gareth (Gower)
Hughes, Simon (Southwark)Welsh, Michael
Kennedy, CharlesWoodall, Alec
Kirkwood, ArchyWrigglesworth, Ian
Lambie, DavidYoung, David (Bolton SE)
Lamond, James
Leadbitter, TedTellers for the Noes:
Leighton, RonaldMr. Frank Haynes and
Lewis, Terence (Worsley)Mr. Chris Smith.

Question accordingly agreed to.

Bill read the Third time, and passed.