HC Deb 26 November 1992 vol 214 cc804-5W
Mr. Richards

To ask the Secretary of State for Wales at what level he proposes to set the total revenue support grant to Welsh local authorities in 1993–94; and if he will announce his decision on council tax transitional relief.

Mr. David Hunt

As I announced in response to a question from my hon. Friend the Member for Brecon and Radnor (Mr. Evans) on 12 November at columns890–91, I propose a level of aggregate external finance—AEF—for 1993–94 in support of local authority spending in Wales of £2,342.6 million. AEF has three components: the distributable amount of non-domestic rates, the total of relevant specific and supplementary grants and revenue support grant.

I intend to specify that the distributable amount from the non-domestic rating account should be £470.2 million on the basis that the Welsh national non-domestic rating multiplier for 1993–94 will be 44. I propose that relevant specific and supplementary grants towards local authority revenue expenditure should total £204.6 million.

I further propose that the total of revenue support grant should be £1,667–8 million of which £1,666.7 million should be paid to Welsh county and district councils and £1.1 million to certain specified bodies.

My officials are today writing to Welsh local authorities setting out my proposals for the component amounts of AEF and inviting their views. I am placing a copy of that consultation letter, which details the relevant specific and supplementary grants and the amounts to be paid to specified bodies, in the Library of the House.

If local authorities spend in line with the plans that I announced on 12 November they should be able to set council tax for a band C property of £232, which is £34 a year less than the average community charge payable by two adults for the current year, after taking into account relief through the community charge reduction scheme. It is also £95 less than the average domestic rates bill per ratepayer in Wales for 1989–90. The level of council tax local authorities set will depend on their budget decisions for 1993–94 and council tax standard spending can only be indicative, but I will use my capping powers, if necessary, to ensure that authorities set reasonable levels of tax. I will be announcing my proposals on capping shortly.

Around two thirds of properties in Wales fall in valuation bands A to C. Almost half of properties fall in bands A and B and their council tax bills should be proportionately less than £232. Single adult households will be entitled to a 25 per cent. discount and people on low incomes can qualify for council tax benefit. Those in receipt of income support will pay no council tax at all.

I have given careful consideration to the need to provide transitional relief for the introduction of the council tax, but I have come to the view that a transitional scheme cannot be justified.