Local Government Finance (Hansard, 17 April 1991)

§ 1. Sir Russell Johnston
To ask the Secretary of State for Scotland if he will make a further statement on the reform of local government finance.

§ The Secretary of State for Scotland (Mr. Ian Lang)
I announced our outline proposals on the reform of local government finance to the House on 21 March. We shall be issuing a consultation paper shortly.

§ Sir Russell Johnston
Will the Secretary of State tell us his thoughts on who is to meet the cost of care in the community? That is something that the Secretary of State for the Environment did not mention in his statement on 21 March. Is the right hon. Gentleman aware that there is a good deal of concern among local authorities about how the mentally handicapped and mentally ill patients coming out of institutions are to be cared for and paid for? I should like to know the position.

§ Mr. Lang
The hon. Gentleman has identified a subject of great importance, to which the Government have given a great deal of attention. He will be aware of our developing plans in that area. The consultation paper that is to be published and the statement that has been made are primarily concerned with the way in which local government finance is collected and the contributions made to it by local residents.

§ Mr. Tom Clarke
Will the Secretary of State deal with the specific question asked by the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston)? Is the right hon. Gentleman aware that the matter is of supreme importance, especially to regional and island authorities that have to deal with the problems of mentally ill and mentally handicapped people and their carers? Those authorities' budgets are being cut and they want to hear more from the Secretary of State today than they have heard to date.

§ Mr. Lang
I urge the hon. Gentleman to table a question on that subject. The question that I am answering is about the Government's consultation paper and the statement on the reform of local government finance. Our record on the funding of community care is second to none and substantial improvements in the handling of that matter are under way.

§ Sir Hector Monro
Does my right hon. Friend agree that finance and the structure of local government must go hand in hand? Does he accept that in the review of the structure of local government, the issues relevant to Strathclyde will be very different from those relevant to Dumfries and Galloway? I hope that he will be flexible in his arrangements so that we can find the best method for each region in Scotland.

§ Mr. Lang
I am grateful to my hon. Friend, with whom I agree that the funding and the structure of local government should be considered together. The Government propose to consult widely on possible developments for the structure of local government. When we bring forward proposals in due course, we shall take careful account of the varied and diverse nature of Scotland, and that will be reflected in the structure on which we decide.

§ Mr. Dewar
On the specific subject of local government finance, will the Secretary of State confirm that he now believes that a local government tax, essentially based on property and the rate poundage and paid by householders, is preferable to the poll tax? Can he explain why he greeted that very same proposal, when it was made by the Labour party, with scorn and contempt? He now appears to be prepared to endorse it.

§ Mr. Lang
The hon. Gentleman is asking me to anticipate the publication of our consultation paper. He is not going to draw me on that, other than for me to repeat that in our statement we made it clear that we are proposing a new local tax. It will be a single tax with a property and personal element. I think that he will find that it is rather different from the Labour party's proposals. At the next election, the electorate will have a choice—our new, fair, local tax or a return to rates under Labour.