§ 2. Mr. Fisher
asked the Secretary of State for the environment when he proposes announcing the final details of the 1981–87 rate support grant settlement.
§ The Secretary of State for the Environment (Mr. Kenneth Baker)
I hope to make an announcement before Christmas.
§ Mr. Fisher
The House hopes so, too. Is the right hon. Gentleman aware that this rate support grant, when it is announced —and it will surely be cut for the fifth consecutive year —will look even more inadequate in the light of his Department's survey of housing defects, which showed a need for £18.8 billion to be spent? What advice and help will the right hon. Gentleman give to councils which are trying to tackle their housing problems, considering that their rate support grant will inevitably be cut?
§ Mr. Baker
I must ask the hon. Gentleman to await my announcement. The grant percentage for next year will work out at about the same as this year, after allowing for holdback. We have already announced the provisional GREs for the hon. Gentleman's city, and he will know that the GRE for Stoke has gone up by 17.5 per cent.
§ Mr. Charles Morrison
While being fully aware of the needs of inner cities, which are emphasised time and again, may I ask my right hon. Friend, when he makes his announcement, please to take full account of the situation facing low-spending shire counties, and in particular Government commitments to them in the past about rate support grant?
§ Mr. Baker
The rate support settlement was not discussed by Phillips and Drew or by the bankers. They approached my Department only to ascertain whether the deferred purchase agreement was legal. I answered this question yesterday. The Government have not given a penny more to Liverpool to balance the budget.
§ Mr. Shersby
Is my right hon. Friend doing everything possible to ensure that adequate safety nets are being constructed so that prudent local authorities do not suffer excessive grant cuts?
§ Mr. Benn
When the Government draw up their grants for the coming year, will they take account of the report that has just been published by the Church of England? It represents two or three years of serious work and appears to show that there has been a major failure by the Government to meet the pressing needs of some of the inner city areas.
§ Mr. Baker
I refute completely the right hon. Gentleman's allegation of failure by central Government. During the lat six years we have provided substantial additional resources to the inner cities. I shall make this clear in the Government's response to this report and to other reports about the problems that face the inner cities. The rate support grant system and the grant related expenditure assessments recognise the needs of the inner cities. They recognise that they are areas of social deprivation and that grants should flow to them to deal with these problems.
§ Mr. Beaumont-Dark
Does my right hon. Friend accept that many of his right hon. and hon. Friends welcome the appointment of a Secretary of State who has a sense of realism and compassion about the problems that face such cities as Birmingham? Will he use that goodwill to ensure that cities which face great problems in their inner areas get not just a fair crack of the whip but justice?
§ Mr. Baker
When I was in Birmingham about 10 days ago I met Dick Knowles, the Labour leader. The leaders of the councils whom I meet at this time of the year always produce the most horrific stories about the likely rates increase: that it will be 40 per cent., 50 per cent., 70 per cent. or 80 per cent. Dick Knowles said 60 per cent. I do not believe that, after I have made my announcement, it will be necessary for Birmingham to levy a rate increase of that kind. Birmingham is a very good example of what the Government have done by means of inner city aid. I went round the houses in Handsworth and round Lozells road, where I saw the results of enveloping and of bringing back into use as a result of direct subsidy property that was built 50 or 60 years ago in the hon. Gentleman's constituency.
§ Mr. Chris Smith
In view of the Prime Minister's constantly reiterated claim that the Government are spending more money on the inner cities, and in view also of the powerful evidence that has been produced by, among others, the Church of England, does the Secretary of State intend to provide additional money for the inner city areas in the forthcoming financial year through the rate support grant settlement? Does he intend to restore any of the major cuts that have been made in the last five years?
§ Mr. Baker
The hon. Gentleman knows how the rate-capping system operates, because of the rate capping of his own borough of Islington. He knows, therefore, that one of the results of rate capping this year was a flow back of grant to Islington. As Islington will be rate capped next year, there will also be a flow back of grant to Islington next year. The hon. Gentleman's council leader, Mrs. Hodge, said a year ago that 1,000 jobs would be lost in Islington through rate capping. Not one job has been lost 284 in Islington. Since then the press relations officers have resigned from Islington because, they said, they were told to lie during the campaign.
§ Mr. Maples
Is my right hon. Friend satisfied that the rate support grant settlement that he is to announce for London, when coupled with a revised London rate equalisation scheme, will ensure that no London boroughs' ratepayers are financially disadvantaged as a result of the GLC's abolition?
§ Dr. Cunningham
Does the Secretary of State's original answer mean that he is confirming the statement by his predecessor in July of this year that next year the rate support grant will be at the same cash level as this year? If so, is he not announcing a real cut of about £700 million in resources for local authorities?
In the face of the report "Faith in the City", the last in a long line of reports on the problems —the Duke of Edinburgh's inquiry, the Department's own investigation, the CBI's "Change to Succeed", an inquiry into British housing —is it not scandalous that this will be the sixth successive year in which the Government have cut the rate support grant and made the problems of all local authorities much worse?
§ Mr. Baker
The hon. Gentleman will know, because he understands the complexity of the matter, that, as a result of abolishing targets, holdback and penalties, about £300 million to £400 million more in grant will be in the system next year. Local authorities already know that the provisional GREAs which were announced six weeks ago show a shift towards the towns and cities principally because the GREAs now recognise more fully the real demands for concessionary fares for the elderly and disabled and for social work.