§ 4. Sir Raymond Gower
asked the Secretary of State for Wales what average level of rate increases he expects in Wales for the year 1987–88.
§ The Secretary of State for Wales (Mr. Nicholas Edwards)
The rate support grant settlement that I intend to make for 1987–88 is a generous one for Wales. As I have told the House, I intend to increase all the main components by more than the forecast rate of inflation. Consequently, if councils spend in line with the settlement, and after allowing for the settlement of the teachers' pay dispute, the average rate increase in Wales should be in low single figures. As I warned the Welsh Grand Committee, some counties seem to be planning expenditure which would produce higher increases than that. I hope that those councils will think again.
§ Sir Raymond Gower
In view of the forecasts of higher rate increased in some counties, will my right hon. Friend name any factors that he thinks would justify such higher increases?
§ Mr. Edwards
I do not think there are any such factors. It is within the power of local authorities, spending at about the same level as the general increase in costs this year, or even a little more, to keep rate bills down to low single figures, and in some instances to make reductions. Some of the proposals being considered by some counties bear no relationship to the increase in costs in the economy as a whole or to the requirements and needs of their ratepayers.
§ Mr. Roy Hughes
Does the Secretary of State realise that for our 37 district councils the year-on-year increase in block grant is only 0.7 per cent. and that with his imposed settlement there is such volatility that it is likely to bring about rate variations of between minus 20 per cent. and plus 30 per cent? Would the right hon. Gentleman expect private enterprise to function successfully with such crazy arithmetic?
§ Mr. Edwards
It is perfectly true that in this year's settlement we have put the emphasis on the priority areas of education and law and order which, broadly, come under the responsibility of the counties, and that some of the precepts by districts will be relatively high. As the hon. Gentleman knows perfectly well, however, the effect of the district increases on the rates bill paid by the ratepayer is relatively small because the county share is by far the largest proportion.
§ Mr. Raffan
Will my right hon. Friend impress upon Clwyd county council that the ratepayers of Clwyd, especially those who are also employers, cannot afford such absurdities as, first, a castle and a proposed concert hall on the lines of Sydney opera house, both of which have serious revenue, let alone capital, implications, and secondly, 22,300 surplus primary and secondary school places which cost £3 million per year to keep empty?
§ Mr. Edwards
My hon. Friend is right to draw attention to the problem of surplus school places. As my hon. Friend the Under-Secretary of State for Wales, the hon. Member for Conwy (Mr. Roberts), told the House when we last answered Welsh questions, there are 150,000 surplus school places in Wales, costing about £18 million a year, which could be used to improve the education service. There is no doubt that if Clwyd pursued sensible policies there could be a low rate increase.