The central Government grant to local authorities for the next. financial year was generous and was up by 5.75 per cent, Mr Nicholas Ridley, Secretary of State for the Environment, said in the Commons.

He was moving approval of the Rate Support Grant Report (England) Order, which provides for Exchequer support to local councils and ratecaps the high-spending ones

He said that the aggregate Exchequer grant of £13,775 million was an increase of £750 million over this year. Provision for local authority current expenditure at £27,538 million, was 7 per cent more than this year.

The Opposition went on about the £18,000 million the Government was supposed to have stolen from local authorities. That had to be nailed once and for all.

In 1979-80, the last settlement under the Labour Administration, grant had totalled £8,101 million, at today's prices the equivalent of £14,691 million. So the present settlement was only £916 million less, not £18,000 million.

The settlement would allow non-rate-capped authorities to hold their spending broadly steady in real terms. Education authorities were enabled to increase their spending by rather more because of the additional allowance made for teachers' pay.

The expenditure plans made realistic provision for local authority spending. There was plenty of scope for authorities to make savings through competition and efficiency savings.

They continued to spend more than he believed they should.

How much rates would rise would depend upon how much councils decided to spend. But ratepayers in areas where councils chose to budget sensibly should on average receive rate bills which increased by about the rate of inflation.

The arrangements for paying for October's storm damage did not mean that authorities would be left with no burden to shoulder, but it was not Government policy, as had been suggested, that the Treasury should make a profit.

The deadline by which authorities must undertake work eligible for grant would be extended to March 1.

On the general issue of local government spending, he said that a few authorities had increased their spending and would lose grant.

Those authorities that had reduced expenditure by proportionately more than average would gain grant. But those authorities that had reduced their spending by less than the average would lose grant. That was an unsatisfactory feature of grant recycling and it was one of the reasons why it was being scrapped.

Overall, his proposals for rate-capping were good news for domestic and business ratepayers in areas of high local authority spending.

In addition to the 17 authorities subject to rate limitation, the Ilea and the 19 joint authorities in London and metropolitan areas were also subject to precept limitation in 1988-89.

Dr John Cunningham, chief Opposition spokesman on the environment, said that no attempt had been made to ease the burden on ratepayers. That burden had been increased consistently, often dramatically and always deliberately every year since 1979.

Mr Ridley was masquerading as the friend of ratepayers, but the average domestic rates bill in England had increased from £155 in 1979-80 to £428 in 198788.

No attempt was made to tackle the problems of the inner cities.

Authoritarian powers were being used to enforce political judgements on local authorities in direct conflict with the decisions of local people.

The block grant within the £9,482 million worked out at as little as £201 a head of population in England.

The Government was planning a 5 per cent cut in expenditure. That made nonsense of its claims that it wanted to increase resources to help people in the inner cities.

Mr Simon Hughes, Liberal spokesman on the on the environment, said that the Government should allocate money to help to remedy disadvantage. It had been taking money out of inner cities and capping their rates.

The motion was carried by 281 votes to 220 Government majority, 61.