HC Deb 08 December 1976 vol 922 cc441-3
14. Mr. Beith

asked the Secretary of State for the Environment whether he is satisfied that under his recently announced rate support grant settlement the burden of cuts is fairly distributed between urban and rural authority and between those who have responded to his earlier calls for economies and those who have not.

Mr. Shore

I look forward to the opportunity that will be presented by our forthcoming debate on the Rate Support Grant Order to explain more fully the basis of my proposals for the distribution of grant. I consider that a fair and just balance has been struck to meet the varying needs of authorities.

Mr. Beith

Does the Secretary of State recognise that in rural counties such as Northumberland it is not possible for people to enjoy the same level of services as in some urban areas, and that it has been found hard to cut them in attempting to comply with his earlier request for economies? Is his Department trying to find a way of making sure that in future it will penalise councils which have been spendthrift, and be more reasonable in its treatment of authorities which have tried to comply with the guidelines?

Mr. Shore

I hope the hon. Gentleman will agree that what we have tried to do in this settlement, as in others, is to assess the situation for needs grant purposes as accurately as we can. Inevitably it is a broad-brush process, but that is what we have tried to do. Needs are greater in many of the large urban areas than elsewhere, although I do not discount the fact that there are also needs to be met in all parts of our land.

On the subject of penalising or dealing with over-spenders, I tried earlier to make clear that we do not have the detailed information to enable us, without virtually taking over local government, to say what is an over-spender any more than to say what is an under-spender. Unless I were convinced that I could operate such a system fairly, I would be afraid of committing more errors and injustices than, in a sense, I admit the present broad-brush system does.

Mr. Kilroy-Silk

Is my right hon. Friend aware that the metropolitan borough of Moseley, in my constituency, has a high level of rates through no fault of its own and that it also faces serious social and economic problems? Does he not agree that what is needed is more resources from the central Government rather than less?

Mr. Shore

My hon. Friend will recognise that in the settlement we have reached we have tried to take account in the needs element of the greater social needs which I genuinely believe are to be found in the major urban centres. Although it is not for me to say what is the experience of each individual authority, I am sure that my hon. Friend will want to wait and see the effects on Moseley.

Mr. Tebbit

Will the right hon. Gentleman accept from me, as a London Member, that he has behaved very unfairly towards rural areas such as East Anglia, which are notoriously low-wage areas, and that in many cases there is a good deal of rural poverty as well as urban poverty, even though certain areas may look mildly more picturesque?

Mr. Shore

The hon. Gentleman's comments point to the difficulty of being fair as between different categories of need. I, too, have some connections with East Anglia and I have sympathy with and knowledge of the problems faced by the people in that part of the country. I believe, however, that within our capital city the accumulation of need is greater still.

Mr. George Cunningham

Will my right hon. Friend accept that the very modest rise from 19 to 19—frac;12 per cent. in the needs element going to London this year is gratefully accepted? Does he not agree, however, that London is still receiving nothing like what it should receive under the normal needs element formula according to the needs that exist at the centre?

Mr. Shore

As a London Member myself, my heart warms to my hon. Friend's comments, but as Secretary of State I have to discipline those feelings and try to achieve a fair situation for the country as a whole. In London it is true that we have an accumulation of needs which has not before been adequately recognised. Against that situation—and we must take account of this consideration—resources are available in London of which account must be taken, and that is why we cannot give the full amount.

Mr. Speed

Will the right hon. Gentleman accept that the rate support grant, which is based on outturn, penalises the thrifty and encourages the spendthrift? Is this not something to which we should set our minds, whatever other differences there may be about the rating system?

Mr. Shore

It is a chicken-and-egg situation. Outturn may reflect actual need, and we cannot dismiss it in that way. I am always prepared to examine new bases of assessing these matters, but the hon. Gentleman will agree that it is a long, tedious and exacting business. I have not yet seen any alternative way of reducing our approach to local authority expenditure and central Government support.