Transport Supplementary Grant Settlement (Hansard, 1 February 1984)

§ Lord Underhill
My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

§ Lord Lucas of Chilworth
My Lords, the principles behind the 1984–85 settlement were, as in previous years, to allocate the available resources and grant between county councils in accordance with the Secretary of State's judgments of their transport policies and needs.

§ Lord Underhill
My Lords, I thank the Minister for that reply, which I do not think has given us the full facts. May I ask whether it is not the case that the transport supplementary grant has been reduced by 11 per cent. overall, and that the rate of grant above the threshold has been reduced from 70 per cent. to 55 per cent.? Has not this led to a substantial switch of grant from the GLC and the metropolitan areas, where the needs of transportation are the greater, and as the Government have accepted a higher rate of 659 expenditure on transport from the various local authorities, does this mean that a higher contribution will be required from the rates in those particular areas?

§ Lord Lucas of Chilworth
My Lords, I am sorry that the noble Lord, Lord Underhill, finds my original Answer inadequate. I did, in fact, answer precisely the Question on the Order Paper. The noble Lord asked me whether the transport supplementary grant has been reduced by 11 per cent. I have to tell him that from last year the grant has been reduced from £456 million to £400 million, and that is a reduction in cash terms of 12.3 per cent. That there was a reduction from 70 per cent. to 55 per cent. in the marginal grant rate above the threshold is quite correct. It was done in order to make good certain imbalances that had occurred in previous years. I might add that there is nothing sacrosanct about the 70 per cent. marginal grant rate, in that the 1973 circular, which led to the introduction of TSG in the Local Government Act 1974, envisaged that the rate of grant would eventually be reduced to 50 per cent.
The switch to which the noble Lord refers is, of course, correct. I have referred to the correction of an in balance. Nevertheless, at the end of the day, the Greater London Council enjoys a grant of £20.95 per head of population; the metropolitan counties £9.37 per head of population; and the shires, £5.30. The GLC and the metropolitan counties enjoy 60 per cent. Of the total grant that has been made available.

§ Lord Mowbray and Stourton
My Lords, can my noble friend confirm that there has not yet been any government which, when looking for ways to cut back, have not taken advantage of the transport side of life? Can my noble friend confirm that he, personally, will be as sad as I am that transport has to suffer these cutbacks? Nevertheless, I should like to receive confirmation that this is part of a cutback which is general to all governments and that, unfortunately, this Government are no exception?

§ Lord Lucas of Chilworth
My Lords, I am just not old enough to remember whether it is "any" government. I suspect that most governments have used the weapons to hand. However, I can tell my noble friend that the transport supplementary grant reduction is very much in line with Her Majesty's Government's general policy of reducing the central Government contribution to local spending. To turn to a piece of detail which my noble friend raised, may I remind the House that an increase of 8 per cent. is being made in the accepted expenditure for the maintenance of roads, while there has been a small fallback in that for rail and bus, which is largely within the control of the local authority itself.

§ Lord Cledwyn of Penrhos
My Lords, is the noble Lord not aware that however he dresses it up a cut of 12.3 per cent. Is substantial? Would he agree that this leaves the authorities with three possibilities: to increase the rates; to increase the fares; or to cut the services? Which does he recommend?

§ Lord Lucas of Chilworth
My Lords, I recognise what the noble Lord, Lord Cledwyn of Penrhos, says: that this reduction is quite a considerable amount. I personally would not accept one of the three solutions which he offers. I believe that there are plenty of grounds for greater efficiency in the cutting of costs which would affect the balance.

§ Lord Underhill
My Lords, that reply does not deal with the point that the Government have themselves accepted a 3.4 per cent. increase in expenditure on transport by the local authorities. The Government have accepted a higher expenditure and yet at the same time, in the Minister's own words, it is——

Noble Lords
Question!

§ Lord Underhill
My Lords, I am asking the question. I am asking the Minister: is it not a fact that at the same time that the Government have done that, in the Minister's own words they have reduced the grant by 12.3 per cent. to meet a higher accepted rate of expenditure?

§ Lord Lucas of Chilworth
My Lords, I have not worked out the percentage to which the noble Lord, Lord Underhill, referred. I accept that his arithmetic is correct. I confirm again that there is a reduction in the grant. Nevertheless, there is no reason for us to suppose that that amount of money which local authorities wish to spend above and beyond the grant. Which is only a supplementary grant to support desirable schemes, cannot be found from much greater efficiency and the cutting of costs within their transport organisations. We discussed this matter over a year ago. I brought before your Lordships a number of instances, and I stand firm on what I said then a year ago.

§ Lord Molloy
My Lords, can the noble Lord give the House an assurance that as a result of the cuts that he has told us must be imposed there will be in no way any form of increased unemployment?

§ Lord Lucas of Chilworth
My Lords, I did not refer to cuts: I referred to a reduction in the level of transport supplementary grant. Noble Lords opposite may find that somewhat humorous. I am not particularly anxious to have the noble Lord, Lord Molloy, put words into my mouth. I cannot give him the assurance from this Box because it is not within my province; it is within the province of the local authorities.