HC Deb 03 December 1986 vol 106 cc931-4 3.31 pm
Dr. John Cunningham (Copeland)

(by private notice) asked the Secretary of State for the Environment if he will make a statement on his latest proposals for the rate support grant settlement for 1987–88.

The Secretary of State for the Environment (Mr. Nicholas Ridley)

In response to the representations that I have received on the proposals that I made on 3 October, and in the light of new information affecting the data upon which grant is distributed, I have today announced revised proposals on which I am consulting local authorities afresh.

Dr. Cunningham

Is not this situation quite unprecedented? No previous Secretary of State has needed three consultation documents between July and December in order to make up his mind. Is that not an indictment of the Secretary of State's incompetence? Was not his attempt to try to sneak the information out by way of a written answer an act of political cowardice and a disgrace? Is not his reply an indictment of the appalling mess to which this Government have reduced local government finance?

As the right hon. Gentleman only put forward his second proposals in October, and gave local authorities barely three weeks in which to reply, why has he now changed his mind yet again? What is the purpose of the proposed changes? Which authorities will benefit? Is not the reality that the majority of authorities will lose under his new proposals? Are not the reasons really a combination of his own ineptitude and a political pay-off to his Tory friends in marginal seats?

Will the Secretary of State tell the House when we shall now learn of his final decisions? Does he still intend, for example, to abolish grant recycling which, according to the treasurer of Somerset county council, will reduce the extra grant that he is purporting to give local authorities by at least £400 million next year, and will result in higher rates for many millions of families? Does not this whole sorry story make nonsense of all the bluster and bravado that we had from the right hon. Gentleman in July?

Mr. Ridley

It is rich of the hon. Gentleman to quote precedent when sitting one away from him is the right hon. Member for Bethnal Green and Stepney (Mr. Shore) who, whenever he had proposals on a rate support grant settlement, came once to the House, in December, to answer a written parliamentary question stating what the Government's decision was. By contrast, this Government have consulted and we put forward a consultative paper on 3 October. We have listened to the results of that consultation and I now come forward with further proposals which, by precedent, have always been outlined by way of written parliamentary question. I shall listen to the results of further representations on these consultations. What an extraordinary example the hon. Member for Copeland (Dr. Cunningham) wishes me to follow—of the right hon. Member for Bethnal Green and Stepney's practice to slap it down on the table in December—take it or leave it and no consultation. I cannot accept that.

I shall make up my mind as to the final settlement when I have listened to consultations that may be received on the proposals that I am announcing this afternoon. If the hon. Gentleman wishes to study the document, copies are now in the Vote Office as well as in the Library, and I have written to him giving him details. The Government are proceeding with their plans to end the recycling of grant, as I announced on 22 July. I think that he will find that this is fairer, for this reason. The latest data on populations, capital allocations and expenditure in 1986–87 and on rateable values of authorities make it clear that the basis of the 3 October settlement which I proposed has been altered by the fact that the data have changed, making those authorities that did badly in October do even worse. It seemed necessary to me to correct that imbalance.

Mr. John Heddle (Mid-Staffordshire)

Does my right hon. Friend accept that the consultation that he has had with hon. Members over the past months have been appreciated? Will he confirm that the outcome of his consultations will be that those underspending, prudent authorities will be able to spend more money, which is their due reward?

Mr. Ridley

I am grateful to my hon. Friend, as I am to all hon. Gentlemen who came to see me to discuss the last proposals. I hope that the House will acknowledge that I have tried, as far as possible, to listen to what hon. Members have said, and to make the necessary changes. Again, we shall be ready to hear any hon. Member who wishes to make representations on behalf of his authority in the light of the new proposals.

Mr. Simon Hughes (Southwark and Bermondsey)

Was the announcement that the Secretary of State made in July not one of relative principle compared with that of today, as he said then that it would not be possible to change the system in favour of the home counties without depriving the inner cities of moneys to which, under the Act, they were entitled? Are we not about to see, next month, a new form of gerrymander, the "Ridleymander", which is buying votes in the places where the right hon. Gentleman knows that his friends would otherwise lose seats because of the system set up under statute in 1980? Is not the real reason that the Secretary of State wants to know the outcome of the teachers' dispute settlement before he knows what local authorities will require to have in their budgets to spend in the forthcoming year?

Mr. Ridley

I had not intended to refer to the effects of the new proposals on the individual authorities. The hon. Gentleman accuses me of gerrymandering, but I can think of no reason, on that argument, why I should have provided extra money for the borough of Southwark, which is represented by the hon. Gentleman, and run by the Labour party. I do not see how one can gerrymander in favour of one's political opponents. The effect of the data is what the hon. Gentleman should study, and he will find that there are good reasons for the changes that I have suggested.

Mr. Jerry Hayes (Harlow)

First, may I welcome the sensitive and flexible approach which my right hon. Friend has adopted in this matter? I hope that the further consultations that he and his Department will be having will produce a result whereby inner-city areas will be aided and prudent shire authorities will be rewarded for their prudence. Secondly, may I disabuse him of the notion, if any of his officials care to press it upon him, that any delay will take the heat out of the argument, because I assure him that it will not?

Mr. Ridley

I am grateful to my hon. Friend. It has not been a matter of seeking to reward certain authorities and penalise others. I have to operate within the 1980 Act and ensure that I distribute the grant in accordance with the formula on a basis which is best defensible. What makes the difference between October and now is the different information on the grant likely to be received, due to changes in rateable values and other such matters which have to be taken into account, and the result is different from that which I thought was fair.

Several Hon. Members


Mr. Speaker

Order. I must take account of the fact that this is an Opposition day. There is an important debate to follow and I shall take two more questions from either side of the Chamber.

Mr. Allan Roberts (Bootle)

May I offer the Secretary of State some sympathy for having inherited an entirely unworkable rate support grant system from the right hon. Member for Wanstead and Woodford (Mr. Jenkin) and having to make a statement which he hoped would give extra money to the local authorities in some of his hon. Friend's marginal constituencies? He has had to face a rebellion that has been led by his right hon. Friend the Member for Wanstead and Woodford, who is campaigning against the difficulties which the Secretary of State faced in a system which he inherited. Is it not true that the system that was honed by previous Tory Secretaries of State cannot be made to give Tory authorities extra moneys and to take moneys away from Labour authorities in the way that was hoped? There has been a Back-Bench rebellion—

Mr. Speaker


Mr. Roberts

—by his hon. Friends which has resulted in the Secretary of State rethinking how he can fiddle the system to enable him to take moneys away from Labour authorities to give them to authorities in Tory marginal seats.

Mr. Ridley

If the hon. Gentleman feels as he says he does, I look forward to his presence in the Government Lobby after we have introduced legislation to abolish the rating system and replace it with a fairer system.

Mr. David Madel (Bedfordshire, South-West)

In considering alterations to the original proposals, may I express the hope to my right hon. Friend that what is now proposed will help alleviate some of the problems that Bedfordshire has had over rates for some time?

Mr. Ridley

I think it best that my hon. Friend studies the document that is now in the Vote Office. It is too difficult to memorise the details of every authority, but I think that he will find that there is some help for Bedfordshire. Some counties that are run impeccably well by the finest Conservative councillors do not benefit from the proposals that I am putting forward.

Mr. William O'Brien (Normanton)

As this is the season of consultation, will the Secretary of State have consultations with the Secretary of State for Transport to sort out the problem which they have caused for the West Yorkshire transport authority? The Department of Transport is saying that its expenditure should be £58 million and the Department of the Environment is saying that it should be £37 million, thereby making the authority an overspender. There is a grant from the Department of less than £8 million, which is unfair to the ratepayers and travellers of west Yorkshire. Will the right hon. Gentleman have consultaions with the transport authority to sort out the mess in which west Yorkshire has been placed, because of this misunderstanding?

Mr. Ridley

My right hon. Friend the Secretary of State for Transport and I are in total accord about all matters. We think exactly the same. There is no need to consult each other because we always agree about everything. The hon. Gentleman has mentioned sums for transport in west Yorkshire which seem enormous in relation to need in that area.

Sir David Price (Eastleigh)

Is my right hon. Friend aware that because of the bizarre, complicated and almost byzantine nature of the calculations involved in the rate support grant system, he is to be congratulated on introducing a consultative phase, which we have never had before? That is entirely to his credit. As a result of consultation, how has Hampshire done?

Mr. Ridley

I must agree entirely with my hon. Friend about the bizarre and complex nature of the system that we seek to operate.

Hon. Members

It's your system.

Mr. Speaker


Mr. Ridley

The House seems to agree about the bizarreness and complexity of the system. I am sure that all hon. Members would wish to change to a new system that takes away rateable value as one of the bases from which the rate support grant settlement is derived. I ask my hon. Friend to examine the paper in relation to Hampshire. He will find that there is some benefit for Hampshire ratepayers in what is proposed.

Several Hon. Members

On a point of order, Mr. Speaker.

Mr. Speaker

Order. I shall take one at a time.