HC Deb 07 July 1953 vol 517 cc1053-6
The Secretary of State for Scotland (Mr. James Stuart)

With your permission, Mr. Speaker, and that of the House, I should like to make a statement about the investigation into the working of the Exchequer Equalisation Grant in Scotland which has recently been going on.

A Committee consisting of representatives of the three associations of local authorities and of my own Department have been examining the whole matter. They submitted an interim report in January which demonstrated that the addition of 25 per cent. which is at present made to the English standard rateable value for the purpose of calculating the grant to Scottish local authorities, is unfair to Scotland. The Committee concluded that as for the time being no precise arithmetical measure can be found of the difference between the levels of the rateable value in the two countries, the total grant to Scottish local authorities should, as an interim measure, amount to the Goschen equivalent of 11/ 80ths of the grant payable in any particular year to local authorities in England and Wales. On the basis of the 1951–52 figures, this would increase the total grant payable to Scottish local authorities by about £1.7 million a year.

The Government intend to propose early legislation providing as an interim measure for an alteration in the basis of the grant on these lines. I understand that the investigating committee will submit a final report on other aspects of their inquiry almost immediately.

Mr. Woodburn

Is the right hon. Gentleman aware that local authorities in Scotland will welcome this step as an interim settlement of this difficulty? Is he also aware, however, that very considerable anomalies are outstanding as between town and town, not only in Scotland but in Scotland and England together? Will the Committee in their further report be dealing with this problem? Is the Secretary of State aware that much of this difficulty has arisen because of the non-completion of the revaluation in England, but that this step will go some way to repair the disadvantages suffered by Scotland in that regard?

Mr. Stuart

I am very glad the right hon. Gentleman agrees that it will go some way to repair the disadvantages. As to the distribution of the sum, I am at present only in possession of an interim report of the Committee. Their further report will reach me, I believe, shortly, and the method of distribution is a matter which will have to be settled thereafter.

Mr. Woodburn

Is the right hon. Gentleman aware, however, that apart altogether from the distribution of this amount, considerable unjustifiable anomalies have appeared both in England and Scotland and are relevant to each other? Will the right hon. Gentleman be looking into these anomalies?

Mr. Stuart

I agree that this is an interim settlement pending a final one. I must just say how grateful I am to my right hon. Friend the Chancellor of the Exchequer for his assistance in this matter.

Lieut.-Colonel Elliot

Is my right hon. Friend aware that the result of this successful expedition into the land of Goschen and the remedying of a manifest injustice will give lively satisfaction throughout Scotland? Furthermore, when my right hon. Friend is considering the allocation of this sum, would it be possible to use it, not simply in small packets, but towards some important objective, such as the remedying of the housing of Scotland, which is certainly one of the greatest defects in our whole economy?

Mr. Stuart

It will probably be agreed, Mr. Speaker, that I should not at this stage go into a debate on these important and complicated matters. I merely assure my right hon. Friend that I will bear these points in mind. I am grateful to him that he agrees that this action is a help to us.

Mr. McNeil

Would the Secretary of State not agree that as according to his statement and the Report of the Committee the sum of £1.7 million—I think it should be nearer £1.8 million—is to be applied to reduce the anomalies, it would be improper and contrary to the recommendations if any further strings were tied to it as the right hon. and gallant Member for Kelvingrove (Lieut.-Colonel Elliot) suggests?

Mr. Stuart

As I said, this is an interim arrangement and it will go some way to help us at the present time.

Lady Tweedsmuir

Can my right hon. Friend say how much this increase amounts to per head of the population?

Mr. Stuart

I am credibly informed that it amounts to approximately 6s. 7d. per head.

Mr. Pryde

Is the right hon. Gentleman aware that the situation in Scotland is deteriorating rapidly and that there is considerable dissatisfaction that the consideration of derating was not taken into account long ago?

Mr. Stuart

I am not responsible in every respect for the past, but I maintain that the £1.7 million is something to help us in the future.

Mr. Emrys Hughes

Is the Minister aware that the £1.7 million is really not enough, because the local authorities have had to pay an increased rate of interest and their interest burdens since the Government took office are far more than the £1.7 million?

Mr. Stuart

I think that the Goschen formula is the best that we can work on at present. It has stood the test of time for some years and I base myself on that.

Sir W. Darling

Will my right hon. Friend make it clear that this is not a piece of legislation which has been initiated by this Government but is a piece of legislation to remedy a serious blunder by the previous Government?

Mr. Rankin

Is the Secretary of State aware that the loss to Glasgow due to derating represents exactly the total amount of money which he proposes to distribute over all the rating areas?

Mr. Stuart

I was dealing not with derating, but with the question of the equalisation grant and this arrangement to better the position.

Mr. Paget

Is the right hon. Gentleman aware that this plundering across the border will cause grave indignation amongst English people who do not get any equalisation grant at all?

Mr. Stuart

I do not say that I object to plundering, but this is not plundering. It has been proved by the Committee that for once Scotland is being treated unfairly.