GLC Spending: Comparisons (Hansard, 15 November 1983)

§ Baroness Gardner of Parkes
My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

§ The Minister of State, Department of the Environment (Lord Bellwin)
My Lords, the latest estimates that I have suggest that the GLC's net current expenditure rose by 75 per cent. between 1979–80 and 1149 1982–83. Over the same period, general prices in the economy as measured by the GDP deflator increased by 40 per cent. Net current expenditure of the metropolitan counties rose by 61 per cent. over that period.

§ Baroness Gardner of Parkes
My Lords, I thank my noble friend for that Answer. Regrettably he did not differentiate between 1979–80 and 1982–83. There are I believe significant differences. Does he agree that that is so? Does he not also agree that there is a direct relationship between expenditure and the rate precept, and that in the past two years in particular the rate precept has risen at an alarming rate and has caused difficulty and even hardship to residential ratepayers and actual damage to business and industry in the areas influenced by the authority?

§ Lord Bellwin
My Lords, I am not quite clear about the additional statistics my noble friend requires when she says that I did not give her the Answer she expected or required on the figures between 1979–80 and 1982–83. The figures I gave are the figures which are the facts. As to the second point, the 118 per cent. increase in the rate precept over the last two years by the GLC is quite enormous and compares with a 20 per cent. average across the rest of the country.

§ Lord McIntosh of Haringey
My Lords, will the noble Lord be kind enough to complete the Answer to the noble Baroness's Question by giving the other element in the rates; that is, the amount of Government grant? Will he indicate what part of the rate increase is accounted for by a decrease in Government grant?

§ Lord Bellwin
My Lords, the question of Government grant is really a matter for the GLC themselves. They can be within or without grant according to the levels of expenditure they decide to incur. The reason they are out of grant at the present time is because their expenditure is some £300 million over the target set.

Noble Lords
Answer the question!

§ Lord Graham of Edmonton
My Lords, would not the picture he more complete if the noble Lord advised the House that central Government expenditure over the same period has increased by 55 per cent. while the RPI has gone up by 38 per cent? Bearing in mind that over the same period the GLC and other London boroughs have suffered a net grant loss of more than £1,000 million, and bearing in mind that when they and the other metropolitan authorities were elected in 1981 they were elected on a programme of increased expenditure, and the rates that went with them, why do not the Government trust the people and have elections for the GLC and the other metropolitan boroughs in 1985?

§ Lord Bellwin
My Lords, the noble Lord has put a whole series of questions. First of all, the statistics the noble Lord gives regarding Government expenditure are not correct. If one tries to draw a proper comparison, one should look at things like expenditure on defence, the health service, social security and so on, which are really matters which are 1150 quite apart. To get a really meaningful comparison one ought to look at the manpower statistics. The reduction by local government over the period 1979–83 has been 4 per cent. Incidentally, that figure is now rising again. Over the same period, for the Civil Service it has been 11 per cent. If I may say so, in my own department that figure is now 30 per cent.
As to the other questions, in regard, first of all, to the £1,000 million, or whatever figure the noble Lord mentioned in connection with reduction of grant, I must give the answer I gave earlier that the GLC has suffered a reduction in grant for no other reason than that their own expenditure figures have been so much over the target figures that they have been in penalties. It is no use the noble Lord asking who started anything; the fact is that other local authorities around the country manage their affairs within the targets set, and this authority chooses not to do so. So they must not complain if there is no grant.

§ Lord Boyd-Carpenter
My Lords, is my noble friend aware that the sharp increase in rate levels imposed by the GLC is having a very serious effect on the economic life of the capital city, involving the withdrawal of many offices from London to the provinces? Will he confirm that dealing with this danger is one of the purposes which Her Majesty's Government have in mind in the forthcoming legislation?

§ Lord Bellwin
My Lords, I do indeed confirm what my noble friend says. Those who would try to pretend that this is not a significant factor in what is happening in employment within the areas concerned are really misleading themselves and others.

§ Lord McIntosh of Haringey
My Lords, will the noble Lord the Minister accept—I am sure he will be able to confirm this by reading Hansard—that I did not ask him why the Government grant to the GLC had gone down, nor who started it, but by how much it had gone down? Would the noble Lord be good enough to answer that question?

§ Lord Bellwin
My Lords, I will certainly write in detail to the noble Lord giving him a list of the figures for each year. I hope that will be helpful to him.

Viscount St. Davids
My Lords, I wonder whether the noble Lord has any figures with regard to the values by which the rateable base has gone down as a result of the withdrawal of industry and offices and other people from London; because this is a very serious consideration in regard to this particular question.

§ Lord Bellwin
My Lords, the figures that I think the noble Viscount would like me to give are not those that I would readily bring to answer a Question such as that on the Order Paper, but I shall certainly be glad to write to the noble Viscount.

§ Baroness Gardner of Parkes
My Lords, will my noble friend understand from me that when earlier I was asking about the difference I wanted him to confirm—and, can he now do so?—that between 1979 and 1980 under the Conservative controlled GLC 1151 there was only a small rise in the rate precept but that from 1981 to 1983 there was a rise of over 100 per cent. in the rate precept? This shows a remarkable difference in expenditure. Will my noble friend also confirm whether he is aware of the fact that £120 million was the total lost grant in a recent year and that that £120 million bore no resemblance to the many hundreds of millions of over-spending?

§ Lord Bellwin
My Lords, I certainly confirm the first point made by my noble friend. I mentioned a figure of 118 per cent. as the increase in precept over the past two years. I am aware that the figure under the previous Conservative Administration was much less. But again, when referring to the specific amounts of grant lost each year, one must qualify the word "lost" because it is lost if there is a penalty, and that has happened with the GLC because of its massive over-spending.

§ Lord Glenamara
My Lords, is the noble Lord aware that all of us who know anything about managing the economy agree that there is a problem in controlling public and local authority expenditure, but that the method chosen by this Government is grossly unjust because it penalises the poorest areas in the country, which have the greatest collection of social and physical problems? Is the noble Lord also aware that in the North-East of England—the area with the highest unemployment in Great Britain of sometimes 30 or 40 per cent.—the figure of £30 million has been withheld in grant? Is not this grossly unfair?

§ Lord Bellwin
My Lords, the noble Lord will not expect me to agree with his assessment of the reasons for loss of grant. The fact is that there is a basis of assessment of need which applies throughout the whole country to everyone. It is a method which is clearly there for everyone to question in detail if they so wish. Grants are then given on that basis. The Government believe that it is critical to contain the 25 per cent. of total public expenditure which represents local government expenditure in the context of managing the economy. That is why the Government have set down systems to try, in the first place, to exhort, or otherwise penalise, those authorities who will not do what local authorities have always done in the past—that is, to work within parameters set down by central Government. It is the failure to do that which is causing the problem.