Welsh Rate Support Grant

Part of Points of Order – in the House of Commons at 11:19 pm on 20th December 1988.

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Photo of Mr Richard Livsey Mr Richard Livsey , Brecon and Radnor 11:19 pm, 20th December 1988

I wish to add my tribute to the late hon. Member for Pontypridd, Brynmor John. He was a compassionate man and a champion of Wales and his constituents. I got to know him when we were both agricultural spokesmen. He was well-informed and was always pleased to discuss matters with me at any time of day or late in the evening. He was a kind man and was friendly to me as a newer Member. I appreciated that. We feel his loss deeply.

There is no doubt that the rate support grant settlement is well behind inflation, although last July it was level pegging. Inflation next year is predicted at about 8 per cent. and the settlement will not match that. That must be a worry for local authorities affected by rate support grant. Inevitably, it will affect the level at which the rates are set, particularly when one takes account of the current high level of interest rates. What seemed reasonable in July seems doubtful now and will be untenable in 1989. A shortfall can be identified. About half the cost of setting up the poll tax collection system is allowed for in the settlement. Therefore, the settlement is not high enough. Why is it not higher?

The Secretary of State mentioned the national non-domestic rate. Many small businesses in Wales, particularly in rural Wales—shops, filling stations and so on—will be badly affected by the national non-domestic rate. People will be complaining about having to pay poll tax as individuals and the national non-domestic rate as a business. That will hit them hard because many of the businesses are finely balanced in terms of viability. They do not have the same volume of business as that found in some urban areas. However, some of the more rundown urban areas are also struggling. There is no doubt that it will prove to be an unpopular measure, particularly when one realises that the non-domestic rates will be aggregated —collected in Cardiff and inadequately redistributed to areas where rates are low and where the economic activity is not sufficient to sustain the loss of the current business rates.

I was glad to hear that the capital side of the rate support grant will be at 8 per cent. In the past it has tended to lag behind. There are worries in relation to sparsity factors in rural Wales. I suspect that some of the calculations done by the Audit Commission relate to what is known as spare school places. As I have argued before, many small schools in sparsely populated areas may have some spare places in theory. However, it is too much to ask small children to move from one community to another because alternative schools are 12 or 15 miles away.

The school buildings maintenance programme faces a crisis. Last week I visited the Oxford road school in Llandrindod Wells. It is a primary school; 222 children attend the school. I found that the roof was leaking and that the school canteen was on the point of falling down; it had just been propped up the week before. Too many of our schools are in a similar state. Rain is pouring on to the lunches. That is not good enough. Powys hopes to sort out that problem, but a more generous rate support grant would have been of great assistance.

Less and less support is being provided for housing. It is almost negligible now. Are Ministers able to say what grant Tai Cymru will receive on 1 April? That new body will require substantial support if it is to tackle the major housing crisis in Wales.