Local Government

Part of the debate – in the House of Commons at 10:12 pm on 23 January 1984.

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Photo of Mr Winston Churchill Mr Winston Churchill , Davyhulme 10:12, 23 January 1984

It is nice to be assured that the ratepayers of Islington will not have to pick up that bill —although we are still not clear who will have to do that.

Last year's rate support grant settlement was so catastrophic for the Manchester borough of Trafford—I have the privilege to represent part of it—that I and my hon. Friend the Member for Altrincham and Sale (Mr. Montgomery) had no choice but to vote against the Government. Following our representations, the Government acknowledged that Trafford had been unfairly treated and £1.2 million was restored to our grant —£750,000 in respect of falling school rolls. We now find that the limited ground—and more— made good since last year's rate support grant has been lost. The 1984–85 grant is based not on last year's adjusted grant. but on the original grant that the Government conceded was wrongly calculated.

In consequence, we find ourselves facing a reduction of nearly £2·5 million in rate support grant, which has been reduced from £22·5 million to barely £20 million. In terms of block grant as a percentage of target, Trafford fares worse than any other metropolitan district at 27·9 per cent., the next lowest being Newcastle at 33 per cent. Our notified grant for 1984–85 represents the loss of 11 per cent. in cash compared with last year, and 15 per cent. in real terms — again, the largest reduction of any metropolitan district.

Our target is well under GRE. Were we to spend at the prescribed standard level, we would be penalised to the tune of more than £500,000. The safety net that previously existed, and from which Trafford benefited in respect of falling school rolls, has now been removed. Trafford believes that it is suffering from delays in revaluation. That is based on a statement contained in the White Paper, which declares that older industrial properties in the north and the midlands are now over-valued. That means that industry in the established industrial areas is paying too much in rates. Trafford, by the same token, is losing too much of its grant.

We in Manchester feel strongly that the discount of 30 per cent. on rateable values given to the London boroughs, including Islington, should either be extended to other high resource areas or be abolished completely. There is no justification for treating the London boroughs in a privileged way compared with areas such as the Trafford district of Manchester.

Although many of my right hon. and hon. Friends have had cause to make complaint to the Minister on behalf of the local authorities in our constituencies, which have been careful with their expenditure and have kept within the Government's guidelines—they have been kicked in the teeth and penalised for their pains—several of the high-spending local authorities have had their grants increased for 1984–85 in spite of all the Government's rhetoric. I do not understand what the hon. Member for Islington, North was belly-aching about. Islington has gained 2·3p in the pound in grant. Doncaster has gained 4·2p, Cleveland has gained 4·9p but Trafford has lost 2·7p. Where is the justice in that? Where is the sense in that?

In 1981–82, the first year in which the present system of block grant was in operation, Trafford received £25·1 million. Its grant is now down to £20·1 million, a loss of £5 million, or 20 per cent., in cash terms over four years. In real terms the grant should have been £29·5 million this year to maintain its 1981–82 value. This year's settlement represents a reduction of 32 per cent. in grant since 1981–82. Were we to go back to the previous grant system, allowing for the transfer of grant to the Greater Manchester council, I estimate that our present grant would be found to be well under half the 1975–76 level. All the cuts are well in excess of any reduction that has been imposed nationally.

It cannot be right that a council such as Trafford, which has so loyally implemented the Government's policy of restraining expenditure and seeking efficiency wherever it may, should so repeatedly be done down by the formula that Ministers use. Last year I warned Ministers that if they continued to give prizes to those who so openly flout their injunctions and guidelines while penalising those who do the Government's bidding, they would be undermining their own policies. Last year I begged Ministers to reconsider the formula upon which the rate support grant settlement is based. They have done nothing. They have ignored all the warnings. When will my right hon. and hon. Friends get a grip of the situation? When will they insist, with their civil servants, that the flawed formula be changed?

It gives me no pleasure to find myself unable to support the Government this evening. Unfortunately, I have been left with no other means of making clear on behalf of my constituents that Trafford is not prepared to accept a fundamental injustice.