HC Deb 27 January 1982 vol 16 cc875-6
6. Mr. Ancram

asked the Secretary of State for Scotland what representations he has received about the reform of the local government finance system in Scotland.

Mr. Rifkind

From May 1979 to date my right hon. Friend has received about 170 representations mainly concerned with the rating system. He has also had between 30, 000 and 40, 000 representations about the need to protect ratepayers against excessive rate rises, and some of them have also expressed objections to the rating system.

Mr. Ancram

Does my hon. Friend accept that the present rating system is becoming increasingly unfair as it reflects less and less the ability of the ratepayer to pay? Does he agree that the system is causing severe financial hardship in regions such as Lothian and that there is an urgent need for reform? Will he urge local authorities to recognise the hardships? Further, will he urge the Lothian region to reduce its rates this year to give ratepayers a break?

Mr. Rifkind

On the general issue, my hon. Friend will be aware of the Green Paper, on which all interested parties have been asked to comment by 31 March. The Government will consider the representations urgently. Lothian region could reduce its rates without any reduction in spending. If it reduced its spending in line with other local authorities, the ratepayers would benefit enormously.

Mr. Home Robertson

Has the Minister seen the report today in The Scotsman, which reveals that the Government have increased the burden on Scotland's ratepayers by £72 million by manipulation of the rate support grant? As the Government are handling the present system of local government so deviously, how can we trust them to introduce a new fair system of local government?

Mr. Rifkind

Any additional burden on ratepayers is the result of certain local authorities refusing to moderate expenditure. The hon. Gentleman will recall that his right hon. Friend the Member for Glasgow, Craigton (Mr. Milian) said that the best way to persuade local authorities to reduce their spending was to reduce the rate support grant percentage.

Mr. Pollock

Pending the reform of local government finance, has my hon. Friend had drawn to his attention the Moray district finance committee's recommendation for the forthcoming year of a reduction of 2p in the rates?

Mr. Rifkind

I congratulate Moray district council if that is its intention. I have not the slightest doubt that many local authorities, if they have the will, can either reduce rates or impose only moderate increases.

Mr. Maclennan

Is the Minister aware that the Government's decision in their Green Paper to examine domestic rating in isolation has caused widespread disappointment in Scotland, particularly in the commercial community? Is he further aware that it would be more appropriate to review local government finance generally? Does the hon. Gentleman accept that the Green Paper is inadequate, because it deals only with local authorities' existing functions? Does he agree that not to consider structure at the same time as finance is to consider only half the problem?

Mr. Rifkind

I am sure that hon. Members on both sides of the House will accept that this is not the time to embark upon another major reorganisation of local government. The business and industrial community should appreciate that the Government have already suggested in the Green Paper that if domestic rates are abolished it might be desirable to examine the possibility of further protection for the non-domestic ratepayer against the consequences that might flow from that.

Mr. David Steel

Does the Minister agree that the Government must consider whether a two-tier system of local government is any longer viable in the sparsely populated areas of Scotland?

Mr. Rifkind

The Stodart committee examined a whole series of questions affecting the structure of local government. The main representations from all political persuasions, particularly from the main political groupings, reveal that Scotland does not want another major reorganisation of local government. The right hon. Gentleman should recognise that.