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Part of the debate – in the House of Commons at 3:32 pm on 22nd July 1986.

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Photo of Hon. Nicholas Ridley Hon. Nicholas Ridley , Cirencester and Tewkesbury 3:32 pm, 22nd July 1986

I must check with my office to see whether the hon. Member for Copeland (Dr. Cunningham) was sent a copy of the wrong statement. I cannot make any correlation between his remarks and the welcome and important announcement which I have just made.

The local authority associations asked for the provision to be increased by £3 billion and it has been increased by nearly that amount. I simply cannot see how the hon. Member for Copeland can say that, in some way, this is not what local government asked for.

The hon. Gentleman alleged that the GREs had been reduced. As a result of the statement I have just made, the GREs will be increased by 3·75 per cent. or possibly more, subject to consulting the authorities. The hon. Member said that the slopes had been steepened for grant penalties. That is simply not true. I never mentioned anything of the sort, nor is it our intention to do so. So far, the hon. Gentleman has been wrong on three out of three and regret to tell him that he is wrong on the fourth point, regarding grant recycling.

I have never heard a poorer response to a statement — generally welcomed by the House — and a more incompetent piece of analysis than that which came from the hon. Member for Copeland this afternoon. With regard to grant recycling, we have made realistic provision both for spending and for aggregate Exchequer grant. No authority need incur any penalty or forfeit grant provided that it does not spend more than this year's budget plus the GDP deflator. We have allowed for inflation and we have allowed for the present high level of spending, but if, on top of that, an authority makes a further increase in spending, it surely deserves to forfeit grant. If every authority behaves in the reasonable way that I have suggested, no grant will be forfeited. The hon. Gentleman's suggestion that £1 billion of grant would be forfeited is ridiculous. The hon. Gentleman is aware that at this year's level of provision, which was well under the level of spend, only £628 million was forfeited, under totally different conditions.

The hon. Member, in seeking to consider next year's rate support grant, made reference to the Social Security Bill, but I think that that is something which should be discussed tomorrow.

With regard to rate capping, the hon. Member asked why a number of Labour authorities appear in the list. The hon. Gentleman is aware—I read out the criteria—that the criteria are clearly designed on levels of spending and levels of increases in spending. The fact that a number of Labour authorities appear in those lists is surely an indictment, if ever an indictment was needed, of the Labour authorities which go in for profligate waste.