§ Mr. Kenneth Baker
For all 12 authorities rate capped, rate bills will be lower than if those authorities had been free to spend as they wished. Of the 10 authorities in London and the metropolitan areas, five will have general rates lower than in 1985–86, and two a virtual standstill.
§ Mr. Baker
I have no plans to abolish Cleveland. The answer to the question about rate capping is that it depends on what the budget is in relation to GREA. Neither Cleveland nor my hon. Friend's council, Langbaurgh, qualified for rate capping this year. However, I quite understand that many hon. Members would like their authorities to be rate capped in order to protect their ratepayers from such extravagence.
§ Mr. Chris Smith
What assessment has the Secretary of State made of the impact of ratecapping on rate and service levels in the rate-capped areas? In particular, how does he view the grossly inadequate provision that has been made to make up for the loss of GLC services in rate-capped London boroughs?
§ Mr. Baker
I believe that the hon. Gentleman asked a similar question about 12 months ago, when the leader of Islington council was saying that as a result of rate-capping last year there would be massive unemployment and a collapse of services. Islington was rate-capped last year and it has not proved to be the end of civilised life, as we know it, in Islington. Indeed, as a result of ratecapping this year the hon. Gentleman's ratepayers and electors will benefit from a reduction in rates of 18 per cent.
§ Mr. Nicholls
Is my right hon. Friend aware that one such extravagant council is Devon county council, which has just increased its rate by about 19.8 per cent.? The previous Conservative administration wanted an increase of only about 11 per cent. Will my right hon. Friend remind Devon's ratepayers that that increase was made because the alliance party is now, with Labour support, in control of the council? Should not people bear that moral in mind before they vote for the alliance?
§ Mr. Campbell-Savours
Is the Secretary of State aware that for the majority of Cumbrians the most recent rate increases, which arise directly from cuts in Government grant, are greater than the tax reductions announced in yesterday's Budget? What is the point of robbing Peter to pay Paul?
§ Mr. Fallon
Is my right hon. Friend aware that county and district councils in the north-east are this year approving rate increases of between 10 and 20 per cent., and that as a result businesses are being driven out? When the north-eastern county councils launch their "state of the region" report on Friday, will they not once again attempt to blame the Government, although it is their own hypocrisy and humbug that is putting up the shutters on business in the north-east through excessive expenditure and a failure to bring spending into line with Government targets?
§ Mr. Baker
My hon. Friend is correct. The figure for Darlington is up 20 per cent., and that is the generality for many of Durham's district councils. I urge all local authorities to restrain their expenditure. The amount of cash to be given in grant next year will be greater than the amount given this year. The rise in rate increases this year is due to very excessive expenditure. It is about time that district councils everywhere, particularly those in areas of high unemployment, realised the damage that they are doing to business.
§ Mr. Simon Hughes
Instead of making insupportable assertions about the effect of rate capping, is the Secretary of State prepared to talk to local authority associations before next year and perhaps obtain the support of the Audit Commission in an independent costing of local authority services? In that way, there would be no risk of setting a rate capping limit that was less than the real cost of delivering the services that we ask of authorities.
§ Mr. Baker
Once again, the hon. Gentleman made a similar comment last year, and tried to persuade us that Southwark, which is rate-capped, would suffer considerably. It has not done so. As a result of rate capping, the hon. Gentleman's electors will benefit from a 7 per cent. reduction in rates. Such savings are quite possible if local authorities are prepared to put their minds to it.
§ Dr. Cunningham
As the Government's own figures show that the effect of rate capping has been to bring £116.5 million worth of grant to the rate-capped authorities from all of the authorities, particularly the shire counties, is not the Government's claim to be protecting ratepayers under this Act simply false? If rates are being held down in a few authorities, as the Ministers claim, that is possible only at a cost to ratepayers in all other authorities around the country, and that is why rates in Tory-controlled Buckinghamshire are being increased by 30 per cent. this year. The Government are not protecting ratepayers, and to claim that they are is simply not honest.
§ Mr. Baker
The hon. Gentleman's second-in-command understands the rate system better than he does. Rate capping has been of considerable benefit to many authorities. For example, Lewisham, if it had gone ahead with its expenditure plans, would have suffered a rate 286 increase of 67 per cent., while it will now have an increase of only 7 per cent. Hackney would have had an increase of 25 per cent., and there will now be a cut of 11 per cent. It is little wonder that many hon. Members representing other authorities would welcome the sort of benefit that rate capping gives to their hard-pressed ratepayers.