Rates (Hansard, 19 December 1979)

§ 5. Mr. Dempsey
asked the Secretary of State for Scotland whether he proposes to seek powers to negotiate the levels of local rates levied by local authorities; and if he will make a statement.

§ The Under-Secretary of State for Scotland (Mr. Malcolm Rifkind)
My right hon. Friend does not propose to seek new powers of this kind, but I shall be consulting the Convention of Scottish Local Authorities about certain aspects of the present rate support system. My right hon. Friend will then reach a view on the need for change in his powers relating to grants to local authorities.

§ Mr. Dempsey
Is the Minister aware that I hope that when he consults the local authorities he will bear in mind that the Conservative Party issued a manifesto pledging the implementation of certain policies? As the Government are responsible for the prudent handling of finances, is he further aware that I hope that there will be no interference with local authorities in the performance of their traditional function?

§ Mr. Rifkind
The hon. Gentleman is correct in that local authorities have their obligations, but in Scotland the Government provide over 68 per cent. of their expenditure and therefore have a prime obligation to ensure a proper level of support for those authorities.

§ Mr. Bill Walker
Will my right hon. Friend bear in mind that one difficulty is that local authorities that were well behaved under the previous Labour Administration and adhered to the guidelines are now facing the greatest difficulties?

§ Mr. Rifkind
The Government have kept that in mind for the rate support grant for next year in order to assist prudent authorities and to discourage those who might otherwise be profligate. The ratio of needs to resources in the rate support grant has been changed to assist those authorities which are prudent and which intend to continue to be prudent.

Mr. Ron Brown
Will the hon. Gentleman explain why he is trying to govern Scotland by press handouts? Under the powers of local government, could not he have made a statement to the House? Will he confirm that concurrent functions and not the boundaries are under review?

§ Mr. Rifkind
My right hon. Friend the Secretary of State has made clear that the review of local government in Scotland is not a comprehensive one. Any recommendations of the review committee have to be consistent with the viability of existing regional and district councils. After several years of experience of the new system there is widespread agreement among the local authorities that it will be useful to consider the detailed changes that might be appropriate at this time.

§ Mr. Allan Stewart
Does my hon. Friend agree that the previous Government fixed the rate of industrial rating in Scotland at 15 per cent. on the then reasonable assumption that there would be revaluations on both sides of the border? As there has been a revaluation only in Scotland, which has moved the burden of rates towards industry, does he agree that the figure should now be reconsidered?

§ Mr. Rifkind
I am happy to assure my hon. Friend that the provision for industrial derating, which was originally a temporary measure, will, as a result of the provisions of the recently published Local Government Finance Bill, be permanently established. That will be of assistance to industry in Scotland and it will ensure that its rate burden is not significantly different from that south of the border.

Mr. Milian
Is it not clear that, with the present accelerating rate of inflation, and with the Government cheating on the cash limits by refusing to pay their fair share of the costs of that inflation, rents next year in Scotland will go through the roof?

§ Mr. Rifkind
I am astonished that the right hon. Gentleman, of all people, should complain about the cash limits that have been set for next year. He was responsible for suggesting to local authorities that wage increases this year would be a mere 5 per cent. That figure was greeted with derision by the local authorities, and rightly so. The figures set by this Government are far more realistic. If local authorities are prepared to accept the advice of the Government about the level of expenditure, there is no need for rates to soar through the roof, as the right hon. Gentleman suggests.

Mr. Milian
Why does not the hon. Gentleman answer my question? Is it not absolutely clear from what the local authorities have said that the cash limit is quite inadequate and that most local authorities in Scotland will have great difficulty in keeping rate increases next year to below 30 per cent? Is it not the case that many of them will go beyond that figure?

§ Mr. Rifkind
Any local authority that reduces its expenditure on the basis that the Government have indicated will not face the problem referred to by the right hon. Gentleman. He is correct that local authorities would have liked higher cash limits, but I have not heard representations from any local authority that the cash limits are not enormously more realistic than those set by the right hon. Gentleman in the previous Administration.