HC Deb 23 February 1983 vol 37 cc918-9
7. Mr. Alton

asked the Secretary of State for the Environment what estimates for the rate of inflation were used in calculating the recent rate support grant levels.

Mr. King

Like all other public expenditure programmes, the local authority expenditure provisions for 1983–84 were planned in cash. They reflect the Government's view of what the country can afford.

Mr. Alton

As the water workers' award may well have a spin-off effect for other public sector employees, and as the rate of inflation could well increase, how will the Secretary of State help local authorities which find that they do not have sufficient resources at the end of this year to maintain existing services?

Mr. King

It is becoming clear that local authorities have been considerably advantaged in the present year by the fall in inflation and interest rates. Despite an admittedly tough rate support grant settlement that reduced the rate support grant by 3 per cent., the overwhelming majority of responsible authorities are now making very low rate increases and I expect that to be maintained. I do not want to follow the hon. Gentleman in looking at every possible problem that can be dredged up.

Mr. Kenneth Carlisle

Will my right hon. Friend confirm that the rapid fall in the rate of inflation has enabled many councils to impose low rate increases in the coming year, which is a further proof of the success that can be achieved if we continue our fight against inflation?

Mr. King

I certainly endorse that. However, there will be some unfortunate exceptions to the low rate increases. One notices the sorts of projects that the Greater London Council has for its expenditure. It is no wonder that it is threatening Londoners with yet another substantial rate increase.

Mr. Marks

Is it the Government's view that, compared with industry, domestic ratepayers do not pay a high enough proportion of local government expenditure?

Mr. King

We have no proposals to change the balance between the domestic and industrial ratepayer, as I made clear in the original discussions and in the Green Paper.

Mr. Oakes

Will the Secretary of State comment on the reports of his speech to the Conservative party's local government conference last weekend, when he said that he was about to scrap targets and penalties?

Mr. King

I told the local authorities and delegates at that conference that I would very much prefer to see a system in which targets were not necessary. The challenge is with local authorities. Targets were introduced to try to obtain a better achievement on Government expenditure targets overall and if we were able to secure that I would be delighted to see whether it was possible to get rid of targets.