Orders of the Day — National Insurance Surcharge Bill

Part of the debate – in the House of Commons at 10:51 pm on 30th November 1982.

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Photo of Mr Robert Cant Mr Robert Cant , Stoke-on-Trent Central 10:51 pm, 30th November 1982

I shall make a brief and perhaps superficial contribution. In doing so, I wear my other hat as a member of a local authority.

I seek some assurance that local authorities will not be the losers as a result of this measure. Following the contribution of my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), the Minister received a prompt note from Treasury officials, and I hope that it contains that reassurance.

There are few more battered corporate bodies in financial terms than local authorities. They do not know what is happening from one day to the next, and the rules of the game change constantly. The announcement that the NIS was to be reduced was welcomed by local authorities, but immediately the Treasury said "It will not make any difference", just as when the interest rate fell it said "Ah, well, local authorities will derive no benefit from that."

I have been a local authority member for only 30 years, and in my view, ordinary central budgeting is like simple double entry bookkeeping compared with the rate support grant. Palmerston once said of the Schleswig-Holstein question that only three people had ever understood it—one was dead, the second was in a mental home and he himself had forgotten the answers. I sometimes think that the rate support grant mechanism is similar.

In the light of my right hon. Friend's comments, I hope that local authorities will not be the losers as a consequence of the way in which the Treasury is handling this item. It is far too complex a matter for me to follow, but, in the light of everything that has happened in local government finance, I am still profoundly suspicious. Week after week the ball game changes.

The Secretary of State for the Environment has a mad rush of blood to his head and gets up one day and says "Spend all of your capital receipts." The Prime Minister, bless her, supports him. "Yes" she says, "let us have a flurry of spending." But then the Treasury intervenes and local authorities are in desperate straits because the Treasury says "If you spend all of your capital receipts you will have serious problems, because we will take half of them from you." That is a diversion merely to emphasise the financial problems, especially those concerned with rate support grant, that local authorities face.

If the Minister can give me and the House an assurance that we will not be the losers once again in the financial crisis through which we are going, I and others in local government will welcome it.