Neil Macfarlane – 1986 Speech on the Rate Support Grant

Below is the text of the speech made by Neil Macfarlane, the former Conservative MP for Sutton and Cheam, in the House of Commons on 31 January 1986.

I am grateful for the opportunity to raise a subject which is of great importance to my constituents—the rate support grant settlement and the London borough of Sutton. It is interesting—I hope it will be an illuminating experience—to be on this end of an Adjournment debate, having sat for many hours on the Front Bench over the past six years.

I am encouraged and honoured by the excessive presence of the worthies from the Department of the Environment who have just joined us in the Box. I have great admiration and a lot of affection for them after my years with them, so I am glad that they are here today and I am sure that they will be able to assist us in many ways.

The rate support grant settlement was debated fully on 20 January, but, with hindsight, it seemed to many of us, not only in the House but outside in the wider world through the media, that there was a tendency for my right hon. Friend the Secretary of State, and indeed others, to concentrate on the problems facing the shire counties. I do not make that for one moment as an accusation against my right hon. and hon. Friends at the Department of the Environment. That is the way that it was largely presented. It absorbed much of the media’s attention throughout those few days, as it tended to in December when my right hon. Friend the Secretary of State made his announcement on 18 December about the settlement for 1986–87.

That is why many of us who represent outer London boroughs feel that the problem is just as acute there as it is in the shire counties and it is to that to which I wish to turn my attention. I have every confidence that my hon. Friend the Member for Mitcham and Morden (Mrs. Rumbold), the Under-Secretary of State who is to reply, is well in tune with outer London politics and equally well in tune with outer London Government finance. I am sure that my hon. Friend the Member for Carshalton and Wallington (Mr. Forman), who is anxious to have a few moments in which to speak in this debate and hopes to catch your eye Mr. Deputy Speaker, when I have sat down — with the full recognition of my hon. Friend the Minister — has just the same problems. We both represent the London borough of Sutton. I want to express my warm thanks to my hon. Friend the Minister for the way in which she received a large delegation from both of us a fortnight ago, including various officials of the London borough of Sutton. That provided an opportunity for a detailed survey on Sutton’s finances.

Sutton’s financial control has been well in accordance with prudence and has reflected the Government’s demands since 1979. Sutton has for many years complied with Government guidelines and target requirements. It has also given the fullest support to Government policies in connection with the abolition of the GLC and has cooperated more than fully in setting up the consortium arrangements to handle waste disposal in south London in spite of receiving a transfer station far larger than required. That is an important dimension for us in the overall assessment.

No charges of profligacy can be laid at Sutton’s door, as opposed to the other inner London authorities which ​ have for many years been locked in battle. I need not enumerate those except to say that we all know where they are and we all know what they have done to the ratepayers of Greater London. Indeed, many of the inner London boroughs and the outer London boroughs that make up the metropolis are in an identical position.

I did not support the Government’s proposal on Monday 20 January, because the whole settlement is inequitable. I ask my hon. Friend to give urgent consideration to our problem with my right hon. Friend so that we may achieve a more equitable distribution. I am heartened by the comments made by my right hon. Friend the Secretary of State who received a delegation of outer London Members of Parliament in the same week, and for that we are grateful. But I hope that there will be more to come from some of the comments and observations that he made.

A feature of the 1986–87 settlement is that it is supposed technically to benefit metropolitan areas, but the increased benefit for London is concentrated almost exclusively on the inner London boroughs. Having worked for some years in the Department of the Environment I am well aware of the problems in the inner cities, but we must ensure that our programme is not to the detriment and exclusion of the outer London boroughs which, in many respects, are facing problems similar to any other capital city.
It must be said that most of the metropolitan areas receive, justifiably, all forms of other additional Government support through the inner city partnership, urban development grants and derelict land grants. There is a whole series of additional sources of funding which we tend not to see in the outer London borough of Sutton.

I want first to look at grant-related expenditure assessments. That has assumed a far greater importance in 1986–87 because previously rate support grant penalties commenced for expenditure in excess of target. Now, withdrawal commences in relation to GRE level. Thus the more GRE received, the higher is the grant. Indeed, an analysis of the total percentage GRE change in London, excluding GRE related to services transferred from the Greater London Council shows that inner London receives an increase of about 15·4 per cent. Outer London, on average, receives an increase of 8·2 per cent., but in Sutton the increase is only 6·4 per cent. The figures including transferred services are: for inner London an increase of 51·7 per cent., outer London 21·8 per cent., on average, and for Sutton merely 20·5 per cent.

Officials in Sutton are concerned that details of individual GREA components for existing services were not made available to Sutton until after the debate on the settlement in the House of Commons. I know the reasons for that policy over the years, but the timing is difficult. Without access to data, any conclusions drawn from the information available so far can be based only on assumption. That places us in all sorts of difficulties at this critical time with just a few months to go before the end of the financial year.

Pre and post-abolition GREs have been provided for former GLC services and one area where Sutton seems to have suffered is in the post-abolition highways maintenance GRE. I hope that my hon. Friend the Parliamentary Under-Secretary will say something about that when she winds up because that is just one of several features that concern my hon. Friend the Member for Carshalton and Wallington and myself.

I must make it clear to my hon. Friend the Parliamentary Under-Secretary that we understand that we cannot expect detailed and specific answers to all the points we might hope to make during the debate, but I hope that in the immediate future it may be possible to have some follow-up guidance so that we can relate it to our colleagues in the London borough of Sutton.

I also want to make it clear that the electorate wholeheartedly approves the Government programme to reduce expenditure. We also applaud the containment of inflation, which is a key factor in all of this. It is also worth pointing out to hon. Friend that, on all services, Sutton had the lowest net cost per capita in 1984–85. Sutton is an efficient local authority. It had the third lowest rate rises in outer London and between 1981 and 1985 rate rises were contained at just over 10 per cent. when the RPI increase was 28 per cent. for the corresponding period. That speaks volumes for Sutton’s financial management. Indeed, I venture to suggest that many other local authorities should follow that. So far, we have had some recognition from my right hon. Friend the Secretary of State towards our problem, but I should like some answer. Can my hon. Friend say whether the reduced budget for the London Residuary Body helps Sutton and by how much can it help?

From the correspondence I have received in recent months it seems surprising to ratepayers that the benefits derived from abolition do not seem to be followed by a good grant distribution. Accordingly, we need specific details. I expected, as a firm supporter and believer of the abolition of the top tiers of Government in this country —the seven metropolitan authorities—that there would be such a distribution.

During his speech on 20 January my right hon. Friend used the phrase “grant recycling”. I do not think that I would have chosen that phrase myself, but I know what he means and it is a graphic description. He spoke about grant recycling for low-spending authorities, meaning that those that have been in penalty will be required to help low-spending authorities. My hon. Friend the Member for Carshalton and Wallington and I are curious to know, as will other outer London borough Members who are in similar positions, how that will help the boroughs and, more specifically, how it will help Sutton. Can my hon. Friend be specific on that?

Third, is the all-important question of GLC balances — which my hon. Friend the Member for Carshalton and Wallington and I discussed before, when we went to see my hon. Friend the Parliamentary Under-Secretary and her officials at the Department — and their future distribution, based on the population of each borough? It is important for us to know precisely what that means. It is an important concession that the distribution of GLC balances might be on a fairly equal basis throughout the population of each borough. Have any studies been pursued by my hon. Friend’s officials? If not, can they get in touch with officials in the London borough of Sutton? We need to know what the help will be. Again, the timing is crucial, bearing in mind the fact that it is only a couple of months until the year end.

Those are critical points for my constituents in Sutton and Cheam, Belmont and Worcester Park. Sutton’s problems are not unique, but we are talking about specifics in this debate. I fully understand that my hon. Friend might not be able to reply to all the points that I have raised, but ​ I should be grateful if, in the fullness of time—within a couple of weeks, I hope—she will provide answers to the more detailed points that I have raised.