HC Deb 17 December 1984 vol 70 cc68-9W
Mr. Chapman

asked the Secretary of State for Transport when he will announce his proposals for the levy on London's ratepayers in support of his grants to London Regional Transport for 1985–86; and if he will make a statement.

Mr. Ridley

Under section 13 of the London Regional Transport Act 1984, I am empowered to make a levy on London ratepayers to cover up to two-thirds of the cost of my total grants to London Regional Transport for 1985–86. Accordingly I have today laid before Parliament a draft levy order, which is subject to affirmative resolution. This provides for a levy of 10.80 pence in the pound, estimated to raise £212 million. This is equivalent to 65.6 per cent. of my estimated expenditure on grants to LRT in 1985–86 of £323 million; the balance of £111 million comes from the Exchequer.

The Government have set LRT the primary task of securing better value for money through improved efficiency. LRT's specific financial objective is to reduce the revenue support requirement to half the 1984–85 level of £190 million by 1987–88. This will enable the Government to continue to reduce the burden upon taxpayers and ratepayers, while providing for continuing substantial levels of capital investment.

Substantial progress is already being made towards these goals. The element of grant for revenue support—about £125 million—is £65 million below the GLC's 1984–85 provision. At the same time, the capital element of the grant—about £200 million—is £50 million more than the GLC's budgeted capital grant for this year. Yet in 1985–86, the ratepayer will have to find only £212 million towards this programme—some £50 million less than in 1984–85 on a comparable basis.

My right hon. Friend the Secretary of State for the Environment has made an adjustment to the grant-related poundage schedule for London authorities in the rate support grant settlement to ensure that London ratepayers, and those elsewhere, are treated fairly following the transfer of LRT financing from local to central Government.

Improving efficiency has enabled LRT to contain their proposed fares increase in January to an average of 9 per cent., which will still leave fares about 10 per cent. lower, in real terms, than they were in May 1981 when the present GLC administration took office. LRT plan to maintain underground services at their present level for 1985–86 and to reduce bus services slightly, in line with falling demand.

The increase in resources for investment will enable LRT further to improve efficiency and to make public transport facilities more attractive to passengers including, for example, a substantial programme of station modernisation on the underground.