What is wrong with that is that it has been done at the expense of ratepayers in other areas. Therefore, the claim that the Act benefits ratepayers is bogus. I shall have a little more to say about Ealing in a moment, but let me examine further the Government's claims to protect ratepayers.

Authorities with budgets below £12·2 million can raise rates and expenditure with impunity because they are not covered by the Act, and many of them do. There is no protection for their ratepayers in the Act. This year the Secretary of State chose the criteria of a budget below £12·2 million and an increase of 12·5 per cent. or more in grant-related expenditure for existing rate-capped authorities. For newly selected authorities, he used those two criteria plus increased spending on 1986–87 of more than 6 per cent.

But for the fourth successive year, authorities were selected on the basis of spending above grant-related expenditure assessments. They were never intended to be a normative spending target, but rather a means of distributing grant. That was made clear at the time that the Government constructed the system and that was the promise given to local authorities and Parliament at the time. It is simply not a suitable bench mark by which to make this kind of judgment.

London has perhaps been worst affected by the Government's policy under the Rates Act. London has been the focus for much of the attack on local authority services and jobs, as several of my hon. Friends have already pointed out. In each of the four years of ratecapping, over half the authorities selected have been London authorities. In 1985 it was 11 out of 18; in 1986, eight out of 12; in 1987, 12 out of 20 and in the coming financial year it will be 10 out of 17.

Seven London authorities — Camden, Greenwich, Hackney, Haringey, Lambeth, Lewisham and Southwark—have been selected every year since the Act came into force. Again, I emphasise that those are some of the hardest hit authorities in the country, with some of the worst problems of homelessness, deprivation, bad housing and the like. Yet the Government go on and on imposing restrictions on those authorities' ability, freedom and flexibility to tackle those very problems.

It is hypocrisy for the Prime Minister to say that it is her Government's aim and objective to help inner-city boroughs to solve their problems when the Secretary of State for the Environment is introducing orders such as this. The rate limit set out in the order, and the expenditure levels on which they are based, imply serious shortfalls between the resources available to those councils and the money required to maintain local services.

In addition, many London councils also confront sharply rising levels of demand on those services. That is particularly the case with homelessness, as my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) has pointed out. London authorities face a crisis of homelessness. At the close of 1987, some 19,000 families were in temporary accommodation in the capital. That is costing the ratepayer a colossal amount of money, and it is money inefficiently spent. It would be cheaper and better value for the taxpayer and the ratepayer to build houses to house those families rather than to keep them in temporary accommodation.