HL Deb 22 January 1974 vol 348 cc1284-5

2.49 p.m.

EARL ST. ALDWYN

My Lords, may I inform your Lordships that, with the leave of the House, my noble friend Lord Carrington will be making a Statement at a convenient moment after 3.30 p.m. on the Prime Minister's discussions with the T.U.C.

My Lords, my right honourable friend the Secretary of State for the Environment is making a Statement in another place on the Rate Support Grant Scheme. It has been agreed through the usual channels that this Statement need not be repeated here, but with the leave of the House I will arrange for the Statement to be circulated in the OFFICIAL REPORT.

Following is the Statement referred to: Mr. Speaker, I will, with permission, make a Statement about the rate support grants to local authorities in England and Wales for 1974–75. Details are set out in the White Paper, Cmnd 5532, copies of which are available at the Vote Office. I discussed the settlement with local authorities last week. It assumes that they will make the reductions in expenditure announced by the Chancellor of the Exchequer in May and in December. Details will be given in a circular. I should emphasise that local authority relevant expenditure in 1974–75 will still grow in real terms by 2½ per cent. The present formula for distributing the needs element no longer reflects the true variations in local authorities' spending needs particularly bearing in mind reorganisation. The effect of our new proposals is broadly to give a greater share of the total of the needs and resources elements of grant to the declining city centres. I also consider there is a real need to correct the balance between the burdens on the domestic and non-domestic ratepayer which was distorted by the last revaluation. So I propose to increase the total amount to be devoted to domestic relief to £446 million in all—more than double last year's amount. Much of this will go to help those domestic ratepayers who would otherwise suffer as a result of changes in the grant system, reorganisation and the effect of the new water and sewerage charges. In the light of further consultations and subseqeuent changes in the settlement I have decided on a fixed minimum domestic element of 7p rather than the 10p I previously announced but the majority of ratepayers will be getting more than 7p and many will be getting more than 10p. Indeed the 7p will only apply in areas gaining under the new grant distribution. I have decided to propose, subject to the approval of the House, a grant percentage of 60.5 per cent. This compares with 60 per cent. in 1973–74. It would mean a total grant of £3,431 million. As a result of this redistribution of the domestic element and of the high rate of grant I believe that the percentage rise in domestic rate burdens can be kept to a maximum of about 9 per cent. subject to any exceptional local circumstances. In a number of cases, particularly in the cities, there should actually be a decrease in the domestic rate burden. The average national increase should accordingly be about 3 per cent. But this is on the understanding that local authorities play their part in keeping down expenditure. Even with these provisions rates can bear hardly on some domestic ratepayers. I have done two further things. I have altered the statutory deductions to lessen the burden on domestic ratepayers in dwellings with a lower rateable value. And in addition over 2 million domestic ratepayers should be helped for the first time through the new rate rebate scheme at a cost approaching some £100 million, the cost of which will be borne as to 90 per cent. by the Exchequer.