HC Deb 14 November 1990 vol 180 cc562-4
3. Mr. Illsley

To ask the Secretary of State for the Environment how the increase in rates support grant for 1991–92 will be identified to cover the cuts in the direct subsidy payable to local authorities to cover community charge and housing benefits; and if he will make a statement.

The Minister for Local Government and Inner Cities (Mr. Michael Portillo)

The estimated cost of the change to local authorities in England is £68 million. The Government propose to increase the moneys that they provide by about £3 billion, or nearly 13 per cent. The change is more than adequately provided for.

Mr. Illsley

Is the Minister aware that in Barnsley the amount of direct subsidy has been reduced by about 3 per cent? Is he further aware that at the same time its revenue support grant has decreased from £28 million to £25 million, at a time when the authority has to deal with the effects of the Environmental Protection Act and other legislation that comes on stream next year as well as with pay rises, some of which have already been agreed, of 9 per cent? How can the Minister identify in that settlement where Barnsley has received adequate resources to fund community charge benefit? How does he expect the authority to set a poll tax in the face of all the reductions in grant?

Mr. Portillo

The hon. Gentleman makes partial use of his statistics and I shall give him some others. The standard spending assessment for Barnsley—that is the amount that we consider it appropriate for Barnsley to spend—has been increased by 19 per cent. The total amount of external finance from the Government has been increased by 8 per cent. I explained to the hon. Gentleman in my main answer that an extra £3 billion will be provided to local authorities next year and that that is nearly 13 per cent. extra. It is clear that the rate of inflation between April next year and the following April will be in single figures. All the matters that the hon. Gentleman mentioned have been well and truly catered for.

Mr. Nicholas Winterton

Will not my hon. Friend be a little more honest with the House?

Hon. Members

Oh!

Mr. Speaker

Order.

Mr. Winterton

I said, "a little more honest", Mr. Speaker, over my hon. Friend's use of the term "external finance". Is not my hon. Friend confusing the uniform business rate contribution with what in the past have been moneys given under rate support grant, and basically supporting the view of the hon. Member for Barnsley, Central (Mr. Illsley)? Is not it true that many areas have suffered a substantial reduction of the sum that they received from central Government under the RSG and that that is being masked by the increase in the business rate contribution, which, instead of coming from local government to local government, is coming from central Government?

Mr. Portillo

I should have thought that the important feature is the total moneys that local authorities will receive from central Government sources, which now include the national non-domestic rate. In Macclesfield, the increase is 19 per cent. That is because the people of Macclesfield will not be expected to put £50 each into the safety net next year. That gives Macclesfield a magnificent opportunity to set a low community charge next year.

Mr. Soley

Did the Minister discuss with his hon. Friend the Minister for Housing and Planning the housing benefit implications of that policy? Given the announcement made by his hon. Friend only the other week, it will have a catastrophic effect on the leaseback scheme of private houses to both housing associations and local authorities. Does not the Minister realise that many more families will be pushed into bed-and-breakfast accommodation and that the bill for that will be passed on to the poll tax payer? We have the absurdity of the Government ending a scheme that they wanted to encourage while at the same time increasing housing benefit and poll tax bills. Is not it time that the Department began to talk to individual Ministers within it and came out with a coherent policy instead of a contradictory one?

Mr. Portillo

I see nothing catastrophic or harmful to local authorities, local authority tenants or community charge benefit claimants in what we propose. The amount of direct subsidy is being reduced from 97 to 95 per cent., and the balance is being made good within the SSAs, which have risen by an enormous amount, as even the Opposition must admit.

Mr. John D. Taylor

Will the Minister take the opportunity of clarifying the confusion in my constituency about the community charge?

Mr. Tony Banks

Poll tax.

Mr. Taylor

The poll tax. The Conservative party in Northern Ireland has said that the poll tax is good for us in Northern Ireland and that it wants to extend it to Northern Ireland. On the other hand the aspirant leader of the Conservative party said today that he wanted to abolish it in Great Britain. What is the future of the poll tax?

Mr. Portillo

The Government's policy is that the community charge applies in Great Britain but not in Northern Ireland.