Rate Support Grant (Hansard, 18 January 1982)

§ 10. Sir Anthony Meyer
asked the Secretary of State for Wales what has been the reduction in the rate support grant for local authorities in Wales for the coming financial year; and if, for comparison, he will give the reduction for local authorities in England.

§ Mr. Nicholas Edwards
The aggregate Exchequer grant for Wales for 1982–83 will be 72.5 per cent., compared with the 1981–82 level of 73.4 per cent. In England aggregate Exchequer grant will be reduced from 59.1 per cent. to 56 per cent.

§ Sir Anthony Meyer
Will my right hon. Friend accept that that is a considerable achievement within the Cabinet in his battling for the ratepayers of Wales? Is he aware, however, that many of us are receiving representations from our constituents against the Government's decision not to put a ceiling on the rates to be paid by industry? If we are serious in our desire to create jobs, even at the expense of the domestic ratepayer, must there not be an attempt to limit rate rises to industry?

§ Mr. Edwards
I have removed the differential between domestic rate relief in England and in Wales and 9 transferred the sum to benefit industry and business in Wales. The £23 million involved will be in the block grant, so some local authority estimates of the consequences are misjudged. As a result, local authorities will be able to keep rate increases to industry very low, and in many cases there will be no grounds for any increase. That is the right priority at this time.

§ Mr. Anderson
Is this not the third year in succession that the rate support grant has been reduced lay the Government, and that now, for the first time, the domestic rate relief is being halved? Will not the current rate increase for all domestic ratepayers in Wales be higher than the rate of inflation?

§ Mr. Edwards
It is an extremely satisfactory settlement for Welsh local authorities, based on their good performance in the past year. It should enable them broadly to keep services at much the same level as before, if they can maintain pressure on costs. Rate increases for the domestic and industrial ratepayer in Wales should be significantly less than in England and a great deal less than in the past year or so. Furthermore, I have able been also to give substantial additional capital allocations to Welsh local authorities—about a 20 per cent. increase—because of their good performance in containing expenditure this year.

§ Mr. Wigley
Does the Secretary of State recall that at one time the 36 per cent. domestic rate relief was justified by the impact of water rates in Wales and the need to keep them down? As the domestic ratepayer is now losing the benefit of that, and as the partial equalisation scheme is being abandoned, what will the right hon. Gentleman do to lower water rates in Wales?

§ Mr. Edwards
Both the rate poundages and the actual rates paid by Welsh ratepayers have been significantly lower than in England, so it is hard to justify higher domestic rate relief in Wales. Furthermore, the Welsh water authority's charges are by no means the highest; they are somewhat in the middle of the table.

§ Mr. Hooson
Will my right hon. Friend clarify his statement about the special emergency provisions over and above a penny rate? Will he confirm or deny the interpretation of the Welsh counties committee that the inclusive rate product relates not to a rate of 1p, but to one of 2½p?

§ Mr. Edwards
The Government have announced that a 75 per cent. grant will be paid on net additional expenditure in excess of the product of a penny, grant-inclusive rate. Some local authorities have expressed surprise that the payment will be calculated on a penny rate including grant. However, that practice has been followed in the past. There can be no reason for surprise, as the position was made clear in a statement to local authorities issued in 1980—

§ Mr. Rowlands
The current position is the worst since 1947.

§ Mr. Edwards
As doubts have been expressed, I must make it clear that there is no question of the special grants to local authorities faced with weather emergencies counting against the rate support grant cash limit.

§ Mr. Abse
On a point of order, Mr. Speaker. Because the Secretary of State wishes to repair his own glaring omission in not making a statement, the whole issue is being dragged in—

§ Mr. Speaker
Order. If we reach question No. 14 before 3.10 pm, which I believe we shall, I shall allow supplementary questions to range widely.

§ Mr. Abse
rose—

§ Mr. Speaker
Order. The hon. Gentleman did not raise a point of order. He passed an observation. It was in no way a point of order on which I could rule. He is now wasting the time of the House.

§ Mr. Abse
On a point of order, Mr. Speaker.

§ Mr. Speaker
Order. If we do not reach question No. 14, the hon. Gentleman can take the credit for that.

§ Mr. Abse
On a point of order, Mr. Speaker. Question No. 14 deals solely with farmers. My people, who are not farmers, although sympathetic to them, also want—

§ Mr. Speaker
Order. The hon. Gentleman did not listen. I said that, in the interests of the House, I would allow questions to range widely.
I now call the hon. Member for Barry (Sir R. Gower) to ask question No. 11.

Hon. Members
Where is he?