THE BLOCK GRANT (Hansard, 11 November 1980)

§ Mr. King
I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker
With this we may take Lords amendments Nos. 51, 53, 54 and 55.

§ Mr. King
This is a paving amendment for an amendment which prevents the amount of grant payable to an authority exceeding its total expenditure. It may appear to be an additional complication, but an authority may choose not to receive a grant, and another tier of authority may receive the grant on its behalf.
Amendment No. 55 is what used to be called the "Squire" amendment. I am sorry that my hon. Friend the Member for Hornchurch (Mr. Squire) is not here.

§ Mr. Graham
An absent squire.

§ Mr. King
My hon. Friend tabled an amendment on Report, with which expressed sympathy but which was not technically correct. Under the block grant schedule, the amendment will avoid the problem of a positive incentive to decrease expenditure below the grant-related level. Alternatively, it will prevent a further incentive to increase expenditure above that level. A number of representations have been made by local authorities. The Government were pleased to accept the amendment, tabled on behalf of an association, in their Lordships' House.

§ Mr. Cant
Will the Minister give us a political interpretation of the amendment? It is believed by many—and I hope that the right hon. Gentleman will disabuse me and others—that the amendment is one of the concessions that the Government made in another place to persuade their Lordships not to oppose the block grant and capital expenditure controls.
Am I right in believing that the amendment will make it difficult for any future 302 Government to bring financial pressure to bear on authorities to make them increase their expenditure if they are underspenders? The Squire amendment permits Tory authorities to continue in their rather backward ways of not spending enough on local government services, without any coercion being able to be brought to bear in order to make them do so.

§ Mr. King
This could not have been a concession made in another place, because I announced on Report that we accepted the principle of the amendment. It needed redrafting on technical grounds, and it was retabled in another place.
The concept that the hon. Gentleman has defined is broadly correct. There is a neutral stance below grant-related expenditure. As at present, the line will be constant. I do not want to get into the technicalities of the matter, but the line is constant, regardless of the level of expenditure.
The difference will be that, in future, above grant-related expenditure it will be possible to allow the line to taper upwards. The amendment provides that below grant-related expenditure the line must remain constant and may not be moved either way. There may not be an incentive to reduce expenditure or an incentive to spend up. It works both ways.
I do not think that hon. Members would wish to interfere with the normal determination by authorities of their spending levels—except when they start to move into the area where they could otherwise pre-empt more of the grant when they are, by any criteria on an average assessment, spending substantially more than other authorities need to spend.

§ Mr. Hattersley
We shall not vote against the amendment, because it removes one coercive element in the Bill. We are against the coercion of local authorities to observe spending patterns determined by the Government. Any reduction in that coercion is to be welcomed, and we are delighted that another place improved the Bill on the Government's behalf.
Of course, the Minister let the cat out of the bag and it is worth reiterating in simpler terms what he said. The Government are establishing levels which they, 303 arbitrarily and, in my view, without sufficient information, regard as the appropriate levels of spending of local authorities. They are creating the apparatus by which they can hold down authorities to that level. The Government are removing from their armoury any power to push authorities up to that level. As long as they do not spend above the figure, the Government will be delighted and will not attempt to increase the spending to the level that they have determined. If authorities spend above the determined level the Government will use their power to reduce that expenditure. That is typical of the Government's attitude, but we propose to support the amendment because it removes one coercive element from the Bill.

§ Mr. King
I beg to move, That the House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker
With this we may take Lords amendments Nos. 62, 63 and 177.

§ Mr. King
This is a technical amendment in relation to the Metropolitan Police. It makes the definition of grant-related poundage subject to paragraph 6 of the schedule. Its effect will be that in arriving at the grant-related poundage applicable to a local authority in the Metropolitan Police district, total expenditure will mean expenditure after the deduction of a relevant portion of police expenditure.