CAB128-94_A1b — Page 84

CONFIDENTIAL

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1. The Cabinet were informed of the business to be taken in the House of Commons in the following week.

THE PRIME MINISTER said that the Lord Chancellor was to be congratulated on the very successful launch on the previous day

the White Paper on Legal Services.

FIDENTI

egal Serv hite Paper

ocal Government inance

THE SECRETARY OF STATE FOR THE ENVIRONMENT said that, in his statement on the previous day about the local authority grant settlement for 1990-91 for England, he had announced revised transitional safety net arrangements for phasing in the impact of the new stem of local government finance. Under those arrangements, Un areas in which community charge payers could expect to sheir bills falling, nearly half of this reduction would come tifoul in 1990-91. To finance this, losses of grant support equivale to up to £25 per adult would be allowed to feed through if year. He had also announced additional support of some illion for authorities with low ratable values; and the Secret of State for Education and Science had announced that a tronal grant of £100 million in 1990-91 would be paid to Inne don boroughs and to the City, which would be taking over

on responsibilities from the Inner London Education Author EA) on 1 April 1990. Compared with his original prop for the safety net, the new proposals would ensure that uch larger percentage of the

Such gains would come through immediately to gaining areas. Under his proposals as a whole, the average community charge would be around £275, provided that 10thorities spending was in line with the Government's standarding assessment.

The new grants to low-rated authorities and to London boroughs and the City had been well received. However, a number of Conservative backbenchers had criticised the fact that, under the safety net arrangements, those living reas with prudent local authorities would effectively be sub (dising high-spending authorities, and had argued that any such subsidisation should be met by the Exchequer. In fact, however those living in areas with prudent local authorities were already subsidising high-spending authorities through the resource/ealisation mechanism: the level of cross-subsidisation would be feduced by around one-half under the new safety net arrangements because any subsidies would be denoted separate community charge bill, they would attract increased attention

but,

the

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