HC Deb 17 December 1980 vol 996 cc280-2
12. Mr. John Evans

asked the Secretary of State for the Environment what discussions he has had with local authority associations about next year's rate support grant order.

Mr. Heseltine

I have had frequent discussions on this subject in the consultative council on local government finance, the latest of which was on 4 December, prior to my final announcement of the settlement on 16 December.

Mr. Evans

During the discussions, did the Secretary of State tell the local authorities what the cut in real terms in this year's RSG is compared with last year's settlement? Will he now tell us what those figures are? Did some of the local authorities tell him that next year many local authorities will be faced with reducing their staff, reducing their services and considerably increasing their rates?

Mr. Heseltine

I think that the hon. Gentleman will remember that yesterday I gave the House all these figures, and, of course, I also gave them to the local government consultative council, so I think that they are well established in the public mind.

Mr. Christopher Price

As the right hon. Gentleman travels back to his modest Oxfordshire homestead for Christmas, will he have a look at the front page of today's edition of the Financial Times and see the list of those areas of the country that will benefit from his announcement yesterday and the list of the areas that will suffer? Will he reflect on the fact that among the areas that will suffer are some of the most impoverished areas of Britain? How many people does he expect to be sacked by the ILEA and the London boroughs, and how much unemployment does he intend to create in London, in order to comply with his announced target that ILEA must spend 14 per cent. less next year?

Mr. Heseltine

The economies that are made by any authority must be a matter for the authority. It is my responsibility to allocate on a national basis and according to general rules. But what the hon. Member will, perhaps, want to remember is that if authorities do not make the economies that we request, they will have to raise the rates, and raising the rates destroys far more jobs than authorities create in local government by maintaining their existing pay rises.

Mr. Colin Shepherd

Is my right hon. Friend aware that his RSG settlement will be welcomed in my part of the world because it will go to reverse the ever-increasing rural deprivation that was experienced as a result of the steady removal of RSG over the last five years of Labour Government?

Mr. Heseltine

I am most grateful to my hon. Friend. I realise that by introducing for the first time factors which all right hon. and hon. Members can understand, I am making a readjustment. [Interruption.] If I thought that the right hon. Member for Birmingham, Small Heath (Mr. Howell) understood the RSG that his Government produced, it would be one of the more surprising things that I have heard in the House. The fact is that I am providing facts to indicate how the sums are distributed on a basis that can be understood for the first time.

I make one point in addition to what my hon. Friend said. It is not just a question of deprivation that we are dealing with in the distribution of the RSG. There are many expanding areas to which people who are leaving some of our cities are moving. It is just as important to recognise the need for the provision of new services, such as social services and education, in those areas as it is to deal with the problems of poverty that remain in the areas from which people are moving. Therefore, one has to have a fair balance in the distribution of the RSG. As I have said before, what the House can now do is to examine the factors in detail. If hon. Members see the arguments for changing those factors, we shall have begun a debate about local government that I want to encourage.

Mr. Alton

Was the right hon. Gentleman thinking about his relationship with local government when he recently spoke to the CBI saying that he felt like Wellington before the battle of Waterloo?

Instead of fighting these imaginary battles and living out his childhood fantasies, the right hon. Gentleman ought to be doing something about the battles being fought in many of our urban communities as a result of his rate support grant settlement. Will the Secretary of State say—

Mr. Speaker

Order. The hon. Gentleman is making a very long preamble and I am a historian—or at least I used to be.

Mr. Alton

Will the Secretary of State say whether he is now satisfied that he has complied with section 56(10) of the Local Government, Planning and Land Act in holding a statutory meeting with the local government associations before agreeing to this year's rate support grant settlement?

Mr. Heseltine

Yes, Sir.