HC Deb 21 May 1986 vol 98 cc341-2
1. Mr. Favell

asked the Secretary of State for the Environment what assessment he has made of the comparative amount of Government support in per capita terms enjoyed by ratepayers (a) in the north of England and (b) in the south of England.

The Secretary of State for the Environment (Mr. Kenneth Baker)

Government support to local authorities, in the form of aggregate Exchequer grant per capita, in 1986–87 amounted to £222 in the south of England and to £307 in the north, about 40 per cent. higher. The corresponding figure for the midlands is £243.

Mr. Favell

With figures like these, why the clamour from the Socialist town halls of the north, such as Liverpool, Manchester and Sheffield, that they are being robbed of their birthright? Is it to cover up for their over-indulgence? Does my right hon. Friend have an addition to make to the Government's "must get the message across" list?

Mr. Baker

Yes. It is clear from the figures that under the rate support grant system the Government continue to give substantially higher sums of money to those in the north. This is one aspect of the north-south divide and a fact that is not generally recognised. For example, looking at RSG alone, in the last years of the Labour Administration the north got 28 per cent. more than the south. Now, under this Government, the north gets 50 per cent. per head more than the south.

Mr. Tony Banks

Now that the Secretary of State is getting out of the frying pan, will he tell the House whether he truly believes that there should be no Government control over rates? If so, does he think that his successor will share his belief?

Mr. Baker

The rates policy that I have pursued and set out in my Green Paper is very clear. I have made it clear that the system of local government finance needs a complete and absolute overhaul. I have put my proposals on the table. We await proposals from other parties.

Mr. Fallon

Does my right hon. Friend agree that those figures make it all the more disgraceful that Darlington borough council has not only increased the rates by 21 per cent. but has increased its spending by 21 per cent.? What does he have to say to a council which puts water slides before jobs?

Mr. Baker

My hon. Friend is absolutely right. The total budgets of local authorities for next year show an increase of over 8 per cent., the inevitable consequence of which must be higher rate increases. The point that I have demonstrated in the grants is that substantial sums of money flow to local authorities, disproportionately in favour of the north.

Mr. Eastham

Is the Minister not being a little dishonest when he tries to draw a simple analysis between the north and the south? I remind him that the north was the home of the industrial revolution. Consequently, it was left with the legacy of all the rubbish and old buildings that had to be replaced. Is that not why the north needs extra money?

Mr. Baker

I have made it clear that I do not begrudge this flow of money, and in fact the rate support grant system achieves that aim. On top of that, we have introduced an urban aid programme, which again is principally directed to the towns and cities of the north.

Mr. Marland

Is my right hon. Friend aware that in some counties in the south, espcially Gloucestershire, with which I am most familiar, funds that have been reallocated this year have not been distributed by the Liberal-Labour pact which is now in power in Gloucestershire? Does he agree that that distorts many of these figures?

Mr. Baker

I have sympathy with my hon. Friend. Wherever a Liberal-Labour pact gets into power, things go wrong.

Mr. Straw

I wish the Secretary of State well, whatever the future holds for him later this afternoon. From our point of view, although we have had a few disagreements with him, we think that whoever replaces him is likely to be worse, especially if it is his right hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley), or even worse his right hon. Friend the Member for Tonbridge and Mailing (Mr. Stanley).

Does the right hon. Gentleman accept that the overall figures that he has given obscure the fact that inner city areas in the north as well as the south have suffered severely, especially Labour areas? For example, Sheffield and Manchester received only 45 per cent. of their total expenditure by way of grant. How can he justify the fact that Newcastle, although it spends less on some services than Wandsworth, has only 20 per cent. of its expenditure covered by grant, while Wandsworth has 85 per cent.?

Mr. Baker

The hon. Gentleman, who knows better than most the complexities of the rate support grant system, will know why grant varies from authority to authority. We are trying to devise a system to reward those authorities which give good value for money to their ratepayers.

I thank the hon. Gentleman for what I took to be good wishes. I may not be the only spokesman on the move.