Rates (Hansard, 2 December 1974)

§ 10. Mr. Grist
asked the Secretary of State for Wales what was the total amount raised in Wales by commercial rates in each of the last two years; and what is the estimated rise for 1975–76.

§ Mr. John Morris
Information in this form is not collected centrally but it is estimated that the total amount raised in Wales by non-domestic rates in 1973–74 was about £59 million and in 1974–75 about £83 million. Any increase in 1975–76 will depend on the decisions to be taken by local authorities.

§ Mr. Grist
Does the right hon. and learned Gentleman realise that these quite dreadful figures—I am surprised that there is not an Estimate for the next financial year—hide the fact that many small shopkeepers will be subject to the severe increase in national insurance contributions next year as self-employed people? In my own area, water rates rose by more than 80 per cent. this year, and they will rise by possibly 100 per cent. next year. Would it not have been fairer on ratepayers if the cost of education had been removed from local government to the Government, instead of having the scheme that has been announced?

§ Mr. Morris
I am surprised at the hon. Gentleman's being surprised that there are no figures for next year's Civil Estimates. He must understand that it is for local authorities to decide what the rate will be. On the question of taking education and other charges off the rates, perhaps I may ask why, if hon. Gentlemen opposite have supported the idea over the years, the Conservative Government did nothing about it. We have set up a committee, under Mr. Layfield, with wide terms of reference to look into the whole rating system. That is what we are doing. The 1099 failure of the Conservative Party lies in not taking action on the important issue of rates.

§ Sir Raymond Gower
Without wishing to make partisan comparisons, may I ask the right hon. and learned Gentleman to recognise that, owing to inflation and other conditions, the impact of rates on businesses, shopkeepers and industry is extremely savage and it would be unwise to underestimate the difficulties with which these people have to contend? Will the Minister consider what can be done to ameliorate their situation?

§ Mr. Morris
I sympathise with anyone who has to cope with a rate increase. That is why the Government have taken the step of increasing the rate support grant from an average of 60.5 per cent. this year to 66.5 per cent. next year. That will be a major factor in bringing help to industry.
As regards industry itself, we have made the part of the world represented by the hon. Gentleman a development area, and therefore it benefits from the regional employment premium. That is of major assistance.
I sympathise with small shopkeepers and similar people who do not receive that kind of benefit. I very much hope that they will make their representations to the Layfield Committee so that in the end we can have a much better system.

§ 13. Mr. Nicholas Edwards
asked the Secretary of State for Wales what representations he has received from the Welsh counties on the subject of rate support in the coming financial year; and what estimates they have given him of anticipated rate levels in Wales.

§ Mr. John Morris
The Welsh Counties Committee has written asking that the rate support grant formula should help counties with sparse populations and low income per head. It also asked that next year Wales should receive at least the same level of domestic relief as this year. On 19th November I subsequently saw a deputation from the committee to discuss these and other points. The committee has given us no estimates of anticipated rate levels in Wales.

§ Mr. Edwards
Is it not a fact that Dyfed, Powys and Gwynedd will receive a much smaller share of the larger cake 1100 to which the right hon. and learned Gentleman referred earlier—in the case of Powys about 8 per cent.—and that there is a substantial loss on sparsity accounting of between £2 million and £3 million for Dyfed, and about £2 million for Gwynedd, and that the local authorities believe that ratepayers in the poorer and more sparsely populated counties will suffer severely as a result of the new formula?

§ Mr. Morris
The hon. Gentleman is failing all the time to understand the whole picture. The history of the super sparsity factor is that the working party of local government and central Government officials—it is no good the hon. Genleman shaking his head—came to the view that there should be no super sparsity factor. When that recommendation came to Ministers it was decided that there should be a super sparsity factor, although not, perhaps, as generous as last year's. That is how the original recommendation was overturned, and that was applied to all the counties the hon. Gentleman has mentioned.
The hon. Gentleman must look at the whole picture. When he considers all the other elements, and increases generally to local government, he will see that there have been increases for every county in Wales, amounting to a total of about £90 million extra for next year.

§ Mr. Gwynfor Evans
Is the right hon. and learned Gentleman aware that I am informed that the Dyfed precept will be about the fifth highest in England and Wales, and that of the five highest-rated counties in England and Wales, four are in Wales? Is he further aware that I am told that that sparsity formula alone, despite the super sparsity element produced by the right hon. Gentleman, will add for Dyfed alone a loss of £3 million, and that because of this there will be an addition of 6.2 per cent. in the pound on the rate?

§ Mr. Morris
With respect to the hon. Gentleman, he is making the same mistake on this matter as has another hon. Gentleman. We have sought to recover some of the ground from the recommendation of the official committee by introducing the super sparsity factor. When we look at the picture we see that in addition to that there has been 1101 a substantial general increase in the rate support grant from the Government's recommendations, whereas last year the grant percentage for England and Wales was 60.5 per cent. and the rate support grant for the whole of Wales was about 70 per cent. This year Wales will get more than England was getting.
I come back to the additional part— the increase in the domestic rate element which has been increased in Wales and is now running at twice the rate of that of England.