Rate Support Grant Order

Part of the debate – in the House of Commons at 12:00 am on 15 December 1977.

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Photo of Mr Peter Shore Mr Peter Shore , Tower Hamlets Stepney and Poplar 12:00, 15 December 1977

No. I will not give way for another moment because I believe that the House will get very testy with me if I do not move on.

The second feature of the 1978–79—[Interruption.] The House is obviously enjoying the rate support grant debate! The second feature of the 1978–79 rate support grant distribution arrangements is our attempt to ensure a greater measure of stability in authorities' finances. A number of deputations from local authorities made very effective representations about their problems in the light of last year's 1977–78 settlement. I pay tribute, incidentally, to the many hon. Members, on both sides of the House, who reinforced their local authorities in putting forward a very cogent case on their behalf.

I well recognise that the 1977–78 settlement was a tough one. With both a reduction and a redistribution of grant, it bore heavily on certain authorities These authorities were faced with a sharp dilemma betwen large rate increases or cuts in services. I shall not labour the point, but even large rate increases would not have brought rate bills in some areas up to the national average. However, I recognise that the pace of increase in rate bills can be almost as important as absolute levels. But I have decided to moderate the increases that otherwise would flow this year. I do not want cuts in services in 1978–79.

Stability is not just a matter of overall grant totals, as I have already said. It is also a matter of changes in the amount of grant paid to individual local authorities. I am, therefore, taking two important steps to limit changes in the distribution of RSG to authorities in 1978–79. First, year-on-year changes in the pattern of grant distribution will be flattened out, or "damped". This will be achieved by combining the 1978–79 needs assessment with those for 1975–76, 1976–77 and 1977–78, and using the average for all four as the basis for needs element distribution. That is "four-year damping", and, obviously, it is a very welcome feature for those who would be otherwise adversely affected.

Secondly, the authorities which would otherwise lose most will be protected by a safety net.