Rates (Hansard, 22 October 1975)

§ 14. Mr. Campbell
asked the Secretary of State for Scotland what representations he has had about the percentage increase in rates, particularly as it affects those areas which were small burghs before local government reorganisation; and if he will make a statement.

§ Mr. William Ross
Representations have been received from the Scottish Federation of Ratepayers and others, particularly about relief of increases which are large in percentage terms. Massive assistance to the relief of rates is given through rate support grant, and the residual burden does not appear to be unfairly distributed among ratepayers.

§ Mr. Campbell
In the first instance, will my right hon. Friend be prepared to publish in Hansard the actual and percentage increases in the rates of the small burghs in this financial year? Will he look at the possibility of introducing transitional rating in the next financial year in the district councils?

§ Mr. Ross
I will reply to my hon. Friend's last point first. A reversion to the old special district rating is just not on within the new set-up. It cannot be done.
My hon. Friend suggested publication of actual and percentage increases in the small burghs. On 4th July I placed in the Library of the House a table showing the actual rates for 1974–75 and 1975–76 and the poundage increases involved for each of the old ratings of the small burghs. I will publish the figures in respect of the percentages, but I remind my hon. Friend that percentages do not always give the right impression of the actual weight of rates in any particular area.

§ Mr. Fairbairn
Does the right hon. Gentleman appreciate that small burghs had lower rates because they were more economically run and had fewer services? They still have fewer services. Will he do something to ensure that those that had fewer services in the past and that were economically run do not have to pay for the services of extravagant regional authorities that they do not have?

§ Mr. Ross
What surprises me is that so many hon. Members opposite have so 470 suddenly come across something which was so basic to local government reorganisation. The whole basis of that reorganisation was to do away with the differences between town and country and to bring together a natural and extended community. Where there has been a reduction from over 240 to 65 rating authorities, it is inevitable that, in the process of creating uniformity of the rating system, there will be increases for some people, some of them quite high.

§ Mr. MacCormick
Does not the right hon. Gentleman agree that, due to the action of the Conservative Government, all classes of people are now suffering from the changes in local government and that, particularly in the type of area mentioned by the hon. Member for Dunbartonshire, West (Mr. Campbell), people in council houses are suffering very much?

§ Mr. Ross
Let us be fair. There are certain factors. I was Secretary of State for some six years and took office again in March 1974, and I have a good memory of what has happened in local government reorganisation, with positions taken up and people learning about needs they would never have known about had they not been implicit in the reorganisation.
This last year has been very difficult for the local authorities. Local authority services are very labour-intensive. I can remember the Opposition urging the needs in relation to teachers' and police salaries. But the buck must stop somewhere. When it comes to paying for these increases in local services, the ratepayer must bear the burden. One cannot have it every way. Added to that is that some local authorities prior to regionalisation ran down their reserves and handed nothing over to the new authorities.
Inevitably, therefore, we get this grave artificial percentage increase, whereby someone who had an artificially low rate last year is meeting a higher rate this year. This, of course, is why we do not give assistance on the basis of supporting those with the highest percentaged increase. If we had done so, ratepayers such as those in Glasgow, who are the heaviest hit financially would not have got a penny. We fed a massive amount into the rate support grant giving the highest percentage ever—75 per cent., a total of 471 over £200 million, with the result that everyone got some advantage.

§ Mr. Lambie
I congratulate the Government on the rate support grant of 75 per cent. The ever-increasing rate burden facing Scotland is due to two factors. The first is the increasing cost of local government reorganisation, for which the Labour Party had no responsibility. The second is the general inflation rate of 26 per cent. in spite of the tremendous efforts of the Government. Will my right hon. Friend make a supplementary estimate to increase the rate support grant to local authorities which are suffering from these factors, which were caused by Government and not by local councillors?

§ Mr. Ross
I think that my hon. Friend should appreciate what I have already said on this subject. When we determined the rate support grant for the local authorities we struck upon a figure of likely expenditure. In fact, the local authorities have budgeted for £60 million more than that. Of course, the year has not ended and it does not end until the spring of next year. Although they have budgeted for £60 million, I have urged them not to spend that sum and to build up a reserve for rates for the future. I cannot accept everything that my hon. Friend says and I could not do what he asks of me.

§ Mr. Teddy Taylor
Is the right hon. Gentleman aware that the deputation that came to see him was shocked and appalled by his totally complacent and insensitive attitude to severe rate rises which could not have been anticipated? Is the right hon. Gentleman aware that his job is to fight for Scotland, and that he is failing in that job at every turn? Is it the case that the right hon. Gentleman told the deputation not only that he had failed to get an interim relief scheme, but that he had failed to ask the Chancellor of the Exchequer whether such a scheme might be available for Scotland?

§ Mr. Ross
We considered an interim relief scheme but we thought that it would be unfair to Scottish local authorities. For example, it might well have been the case that the hon. Gentleman's constituents would have received nothing from such a scheme. Indeed, they would probably have had to have paid higher rates to support the scheme to benefit 472 those with a rate poundage last year of about 50p. If the hon. Gentleman had been in my position, I think that he would have come to the same conclusion with a view to being fair to everyone concerned.