HC Deb 26 July 1976 vol 916 cc3-5
2. Mr. Gwynfor Evans

asked the Secretary of State for Wales whether he is satisfied with the formula which governs the rate support grant for local authorities as it affects Wales.

The Secretary of State for Wales (Mr. John Morris)

The basis of this formula is provided by the Local Government Act 1974. In 1976–77 it resulted in a grant to Welsh local authorities of about 7½ per cent. of the total to be distributed in England and Wales. The Welsh proportion of the England and Wales population is 5.6 per cent.

Mr. Evans

Is the right hon. and learned Gentleman aware how much some local authorities in Wales, including Dyfed, suffered last year from the reform of the formula in favour of big conurbations? Has not the time come for the Government to consider settling a Welsh grant separately from that for England, in consultation with Welsh local authorities, which increasingly want to reorganise in a separate body?

Mr. Morris

I am not sure that Welsh local authorities would all like the hon. Gentleman's proposition. Welsh local government has done rather well in the course of my negotiations. Powys gets 80 per cent. of its expenditure through the rate support grant and Dyfed, Clwyd and Gwyned each get about 70 per cent., which is higher than the national average.

The per capita rate support grant is £165 in Wales compared with £122.3 in the rest of the country—35 per cent. higher. I am considering all these matters, but before we set up an Assembly it would be premature to change the system from which Wales, without boasting unduly, has not done too badly.

Mr. Roderick

Is my right hon. and learned Friend aware that those of us who support the idea of a local income tax believe that some form of central Government support will still be needed because there will be poorer areas under any system?

Mr. Morris

My hon. Friend has raised the issue of local income tax which was canvassed in the Layfield Report. He will have to wait until the Government have carried out their consultations with local authorities and then reached a decision.

Mr. Wyn Roberts

Is the right hon. and learned Gentleman satisfied that the formula is working satisfactorily in the case of retirement areas such as mine, where there is a high proportion of retired people for whom additional services have to be provided?

Mr. Morris

As I am sure the hon. Gentleman knows, the formula is very complicated. It is always capable of improvement, but when improvements were suggested last year as regards the sparsity and super-sparsity factor it was discovered by those canvassing it, particularly from the hon. Member's area, that in the end it did not necessarily work to their advantage. Therefore, I would be the first to welcome any ideas that the hon. Gentleman has for improvements if they prove in the end to be of advantage to these areas.