HC Deb 11 February 1981 vol 998 cc850-2
8. Mr. Grimond

asked the Secretary of State for Scotland whether it is the intention of Her Majesty's Government to introduce any amendments to the rating system in Scotland.

Mr. Rifkind

The Local Government (Miscellaneous Provisions) (Scotland) Bill includes several proposals by the Government for amendments to the Scottish valuation and rating code.

For the longer term, our review of the rating system is in progress, but I cannot say at present what its outcome will be.

Mr. Grimond

Is it not part of Tory policy to abolish the rating system? Is it not extraordinary that after two and a half years of Tory Government no major suggestions have been made about helping local government finance, which is in the most intolerable muddle?

Mr. Rifkind

The Conservative Party indicated that for the longer term it believed that the abolition of the rating system was desirable, but that in this Parliament the emphasis must be on reducing direct taxation. That was made clear in our election manifesto. An internal review of the rating system is at present taking place, and we hope that it will lead to substantial changes and improvements but that is a matter that I must ask the right hon. Gentleman to await.

Mr. Bill Walker

Before considering any changes, will my hon. Friend confirm that one of the greatest deterrents to inward investment in Scotland is the level of rates? Does he agree that the projected level of rates over recent months has been enough to deter anyone from coming to Scotland?

Mr. Rifkind

My hon. Friend is correct. An unjustifiably high level of rates will not only be unpopular with ratepayers but, perhaps even more important in the present climate, will undoubtedly destroy hundreds if not thousands of jobs.

Mr. John Home Robertson

Will the hon. Gentleman explain by what authority he has set himself up as a non-elected third tier of local government in Scotland by reserving unto himself personally the power to fix rates and to engage in crucial local decision-making under the miscellaneous provisions Bill?

Mr. Rifkind

I can assure the hon. Gentleman that I neither have nor will have any such power. Nor will my right hon. Friend have any such power to prevent a local authority from fixing its rate level. However, it is justifiable that the Government should be able to indicate how much financial support they give to a local authority. That is the basis of the provisions in the Bill to which the hon. Gentleman refers, and for that we need make no apology.

Mr. Allan Stewart

Will my hon. Friend confirm that the Government's review covers the whole of the rating system? Is he aware that there is widespread concern that the Government might abolish domestic rates while leaving, or perhaps even increasing, the burden on industry and commerce?

Mr. Rifkind

I can assure my hon. Friend that the review to which I have referred includes the issue of industrial rating.

Mr. Dewar

Will the Minister accept that there is a great deal of anxiety in Scotland about high rates? Will he acknowledge that responsibility for high rates lies with an inadequate rate support grant settlement given by him and his colleagues to local government? Will he bear in mind that if there is to be any fundamental change in the rating review, it will be necessary to make an early announcement, after the enactment of the miscellaneous provisions Bill, about the next quinquennium? When will we hear definitely whether that it is going ahead, whether it is being postponed or whether it is being varied?

Mr. Rifkind

The hon. Gentleman must await an announcement, which will be made as soon as possible. He has come up with a nonsensical suggestion about the rate support grant settlement. The hon. Gentleman must take into account the fact that only yesterday the Grampian regional council was able to indicate that its rates increase next year would be limited to 11.4 per cent., which is substantially below the present level of inflation. If a local authority such as the Grampian regional council can do that, there is no excuse for any other responsible local authority having a rates increase that is substantially greater.