HC Deb 05 May 1998 vol 311 cc551-3
7. Mr. Tim Boswell (Daventry)

What recent representations he has received about the allocation of revenue support grant between local authorities. [39511]

The Minister for Local Government and Housing (Ms Hilary Armstrong)

My Department receives representations almost continually from Members of Parliament, local authorities and their associations and other sources, including the general public. Such representations arise from the local government finance settlement for 1998–99, which was announced to the House on 5 February. In addition, we receive views on what changes might be made for the next financial year and responses to our current review of local government finance.

Mr. Boswell

Now that the Government have, admittedly under some pressure, made the welcome decision to reinstate the practice of their Conservative predecessors in publishing a rural White Paper, will the Minister undertake to tell the House, either in that document or, even better, now, what their rationale is for taking nearly £100 million a year out of the revenue support grant for shire counties? In addition, why has such a small allocation—only about 1.5 per cent. of the total—been made for shire districts on account of sparsity factors?

Ms Armstrong

The hon. Gentleman will know that the previous Administration considered sparsity factors but found no means of changing the formula fairly. I have invited authorities to submit further ideas this year on how the formula might better reflect sparsity factors. That will be a matter for discussion and deliberation. It is simply untrue to say that there has been a deliberate attempt to take money from the shires. The hon. Gentleman knows that additional money went to shire districts this year after we had looked at the formula for other areas. If he adds up the amounts for shire counties and for shire districts, he will find a different sum.

We are trying to redress the enormous unfairness that existed in the formula during the last few years of the previous Administration. We are moving towards a fairer and more fiddle-free agenda.

Mr. Keith Simpson (Mid-Norfolk)

So it has been changed.

Ms Armstrong

Yes, we have changed it. We are making sure that we end the ludicrous practice of doling out money for visitors as if they were residents. That happened in a place not far from here, and the hon. Gentleman knows that that was a fiddle. We have stopped the fiddle.

Mr. Harry Barnes (North-East Derbyshire)

In determining areas of need, will the Minister consider improving revenue support grant allocations by taking into account Treasury figures that show the number of people in high income tax brackets? In Derbyshire, for example, only 5 per cent. of the population are in those brackets; in Surrey, the figure is 17.2 per cent. Derbyshire is 41st of the 45 counties according to published prosperity figures, which is a clear indication that there is need in particular areas. I hope that that will be reflected in the review that is taking place.

Ms Armstrong

We are seeking to reflect need more accurately, but we also seek to make the formula simpler. We want council tax payers to know exactly what they are paying. At the moment, the system is so complex that that is extremely difficult. I do not promise that we will be able to do it in one year; it took the previous Administration 18 years to make the mess and it will take us some time to undo what they did.

Mr. Andrew Lansley (South Cambridgeshire)

Does the Minister agree that the Government's changes to standard spending assessment methodology this year have cost London nearly £50 million, which is the equivalent of £17 per household, or more than 2 per cent. on council tax? Will the Minister assure Londoners that the Government's plans for further SSA changes will not mean further cuts in SSA for London next year, after the London elections?

Ms Armstrong

I welcome the hon. Gentleman to the Front Bench. I am not sure whether his appearance means that the hon. Member for South Suffolk (Mr. Yeo) has disappeared. I shall miss him greatly; I used to enjoy his over-the-topness and the opportunities that that gave us for scoring yet more goals.

It is interesting that the hon. Gentleman moves back to this issue; at our previous Question Time his Front-Bench colleagues accused us of hitting London hard. [Interruption.] Sorry—they accused us of being overgenerous to London as against the counties. Conservative Members change their minds so often that they confuse even me. The hon. Gentleman demonstrates that the settlement is fairer and fiddle free. If there had not been so many fiddles, some London boroughs would not have had the cushioning that the Conservative Government gave them.

Ms Diane Abbott (Hackney, North and Stoke Newington)

Does the Minister agree that some of us are astonished that the Tories should be so brazen as to come to the Chamber and talk about revenue support grant, because those of us who were in the previous two Parliaments saw how RSG was gerrymandered to pour money into Tory Westminster and Tory Wandsworth? Whether they live in the inner city or in the countryside, where we have unprecedented representation, people are glad to see fairness and common sense return to the allocation of RSG.

Ms Armstrong

I agree with my hon. Friend. The fact that Conservative Members dare complain about any settlement for London demonstrates just how brazen they are. That does not win support, but being straight with people does. We are being straight. This has been a difficult settlement, but it has been fairer. People in London know that the distribution in London is much fairer this year because we have stopped the incredible fiddle over how visitors were treated.