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Rate Support Grant

Volume 980: debated on Wednesday 5 March 1980

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asked the Secretary of State for Scotland what representations he has received from Lothian regional council about the effect of the rate support grant settlement on the level of rates.

I have received no written representation from the council, but members of the council whom I met recently expressed opinions on the subject.

Why does not the Secretary of State come clean? Why does he not admit that those members have expressed the opinion that over half of the rate increase in Lothian results from his cash limits? Those cash limits pretend that the rate of inflation is 13 per cent. Another one-third of that rate increase results from his cut in the rate support grant. Does he not agree that less than 10 per cent. relates to new growth? Is it not therefore sheer brass neck on the part of the Secretary of State to threaten to withhold capital borrowing consent from the Lothian region for a rate increase which is almost entirely the result of his own policies?

Those figures do not bear any relation to the facts. I have not yet received official figures from the council, but according to press reports it intends to spend no less than £34 million more than the guidelines suggest. Almost every other authority in Scotland has carefully adhered to those guidelines. If we are discussing opinions, I am sure that the hon. Gentleman will have taken careful note—as the rest of us have—of the strongly expressed opinions of ratepayers in Lothian. They will be placed in extremely difficult circumstances as a result of that authority's profligacy.

In answering the local authorities which have made representations about the large increase in rates in Scotland, has the Secretary of State suggested any alteration to the grants system? It does nothing to reward local authorities which have been economical. Does not the Secretary of State agree that it encourages authorities to spend large amounts of money on capital developments of doubtful utility, because the Government pay for most of them?

I agree that there is a problem. We have altered the ratio of the resources to the needs element in the rate support grant this year in order to meet at least part of that problem. That is one of the subjects that I am discussing with COSLA to see whether any improvements can be agreed.

Will my right hon. Friend invite the Lothian regional council to take a crash course in budgeting from the Grampian regional council? Does my right hon. Friend realise that that council has managed not only to achieve significant cuts in public expenditure but to increase the provision of social services in that area?

I appreciate the remarks of my hon. Friend. However, we might extend his suggestion a little wider. Perhaps Lothian regional council should attend a course run by all the Conservative-controlled authorities in Scotland. It is clear that, on average, those authorities are much better at keeping rates down than are Labour-controlled authorities.

Will the Secretary of State confirm that the punitive action that he has taken against Lothian regional council will make no difference to the level of rates during the coming year? Will he admit that if he stops any capital project in the forthcoming year, the immediate effect will be to harm the local construction industry and add to the large numbers of people who are already unemployed in that industry in the Lothian region?

If I take no action a large number of ratepayers in Edinburgh will have no redress against crippling rate increases. Although I do not have power to alter rate levels that are set by profligate authorities, the action that I propose to take may reduce some of those authorities' expenditure in future years, as a result of limits on their capital expenditure budgets.

During his inquiries, has my right hon. Friend found evidence of any genuine attempt by the Lothian regional council to make economies or cuts in its staff and administration, or in last year's excessive spending and duplication?

Despite diligent searches I have found no evidence other than the courageous stand made by the former Labour leader of Lothian regional council, Mr. Peter Wilson.

When will the Secretary of State stop dodging his responsibilities? When will he admit that the major reason for these massive and unprecedented rate increases is the Government's rate support grant settlement? The increases apply equally to Tory and Labour-controlled authorities. They affect the Lothian region as well as the Strathclyde and Border regions, where an increase of nearly 40 per cent. has occurred. An increase of 27 per cent. was announced today for the Tayside region. Does the Secretary of State accept that he is directly responsible for those massive increases? When will he admit that?

I was given to understand that the right hon. Gentleman had had problems because the Lothian region failed to reduce its expenditure. I am sure that he will tell me if I am wrong. He cannot get away from the fact that many local authorities—most of them Conservative-controlled—manage to keep their expenditure down, as requested by the Government. Those same authorities were more helpful to the right hon. Gentleman than Labour-controlled authorities were when he was trying to keep expenditure down. I should have thought that he would recognise that.

I had no trouble with the Lothian region. However, even if we leave the Lothian region out of account, the average rate increase in Scotland next year will be more than 30 per cent. That is the right hon. Gentleman's responsibility.

The responsibility for excessive expenditure by local authorities falls clearly upon Labour-controlled authorities. From the right hon. Gentleman's experience he should know that the Lothian region consistently exceeded the guidelines set by the previous Labour Administration. I understood from the Lothian regional council that it had had difficulties with the right hon. Gentleman on this issue.