Equalisation Payments to Be Made to Certain Water Authorities

Part of Orders of the Day — Water Charges Equalisation Bill – in the House of Commons at 12:00 am on 16th March 1977.

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Photo of Mr Arthur Jones Mr Arthur Jones , Daventry 12:00 am, 16th March 1977

I beg to move Amendment No. 7, in page 2, line 41 at end insert— '(2) Subject to section 3(3) below, in giving a direction under this section for any year the Secretary of State shall have regard to any allowance made under the domestic element of the Rate Support Grant calculations in respect of the level of water charges.' This amendment deals with the question of the domestic element of the rate support grant calculations. It is something that we have talked about a great deal in Committee. We talked about it during the Second Reading, but, unfortunately, we failed to find it possible to come to any agreement on the subject. In spite of the substantial evidence that was enjoined in our advocacy, Ministers were adamant. One suspects that their attitude was directed not to the question but rather to trying to avoid it.

The purpose of the amendment is to ensure that it cannot and should not be avoided. It would be tedious to go over all the evidence now. But we must deal with one or two of the pieces of evidence concerning that fact that in the domestic element of the rate support grant there is a considerable factor which has regard to the costs of local government reorganisation and the level of water charges in Wales. The Government have been unable to accept this, but it appears in the House, in Government publications and in local authority material time and time again. It is necessary to go through some of the evidence and see whether the Government maintain their position.

12.30 a.m.

On 22nd January 1974 the Conservative Government published a White Paper, "The Rate Support Grant 1974–75", Cmnd. 5532, setting out their intentions to use this power to protect domestic ratepayers against exceptional increases in rates arising from changes in grants and from exceptional increases in charges for water and sewerage services arising from the reorganisation of those services. In February there was a change of Government, but the Rate Support Grant Order 1974 was laid before the House on 14th March and was debated on 25th March. A number of references to this factor in the domestic element were made in that debate.

In reply to a Written Question, the late Mr. Anthony Crosland said on 15th March 1974: I propose therefore to maintain the total amount of grant previously proposed and the division of grant as between needs, resources and domestic elements."—[Official Report, 15th March 1974; Vol. 870, c. 12.] That was in confirmation of the policies followed by the previous Government.

On 8th May, in an oral answer, Mr. Crosland said: We took the view that much of Wales had been affected far more seriously than other areas by the application of changes in local government and by reorganisation of finance and water and sewerage services. Lest there is a misunderstanding, I should point out that, even with the uniform domestic relief for Wales, some districts in Wales will lose out as a result of our decision."—[Official Report, 8th May 1974; Vol. 873, c. 372.] There again we have confirmation that in the domestic element of the rate support grant calculations the special position of Wales with regard to local government reorganisation and the level of water charges in the Principality were taken into account when the grant calculations were made. I am talking about 1974, but there have been no changes since. The Government have never said that they are no longer having regard to the domestic element and the differing figures that were allowed.

In the Rate Support Grant (No. 2) Order 1974, which came before the House later that year, the domestic element again refers to the reorganisation of local government and water services. It is difficult to think that no regard is now paid in the domestic element of the rate support grant to those earlier allowances. In fact, the calculations have not changed. They are still relevant for next year. Here I call in aid the Daniel Report, which refers in paragraph 5.8 to the reorganisation of local government and water services.

The domestic element for 1974–75 allowed 33·5p for Wales and 13p for England. Again there was discrimination in favour of Wales. In the current year, and I understand for next year, the figures have been altered to benefit Wales-36p for Wales, which is a narrowing of the margin, and 18·5p for England. There is a mass of evidence to support the contention that in dealing with the rate support grant for Welsh local authorities regard is being paid to the increase in water charges.

The purpose of the amendment is to ask the Government to consider whether it would be fairer to have regard in any equalisation programme to that factor in the domestic element of the rate support grant. We might be told that the amendment is not drawn correctly or not correctly worded. I take responsibility for that. The purpose is to clear up the unsatisfactory debate that we have had on the rate support grant and to narrow the gulf between the Government and the Opposition and that between the Government and all the well-informed sources that have been consulted. It will be interesting to hear what the Government have to say and to what extent they are prepared to accept my argument.