LOCAL GOVERNMENT, SCOTLAND (GRANTS)

HC Deb 09 December 1958 vol 597 cc211-64

3.33 p.m.

The Secretary of State for Scotland (Mr. John Maclay)

I beg to move, That the General Grant (Scotland) Order, 1958, dated 20th November, 1958, a copy of which was laid before this House on 25th November, be approved. The General Grant (Scotland) Order, 1958, and the accompanying Report, are the latest stage in a process which started with the announcement which was made in Parliament, on 12th February, 1957, indicating the outcome of our review of local government finance. This statement was later embodied in the White Paper, Cmnd. 208, published in July, 1957. The proposals in the White Paper were given effect in the Local Government Act, passed in the summer of this year, and the Act, in turn, required the Secretary of State to make the General Grant Order and lay it, along with a Report, before the House.

The Order itself is a straightforward document. It sets out the result of our calculations arrived at in consultation with the local authority associations. The Report explains how we have done the sums. Before developing this in more detail, I think it is worth while attempting to set the Order and the Report in their proper perspective.

In the original statement, Ministers said that the Government had three proposals: to enable local authorities to raise more of their revenue from their own resources by rerating industry to 50 per cent.; to review the relationship between the central Departments and the local authorities; and to reform the system of Exchequer grants by introducing the general grant.

As the House is aware, the 1958 Act rerated industry; and allowance is made for this in the General Grant Order. The Act also contained relaxations of the controls to which local authorities had previously been subject, and further relaxations are included in the Town and Country Planning Bill now before the House, which removes most of the restrictions on local authorities' land transactions. With the laying of the General Grant Order, we can fairly claim that we are fulfilling our promise to give local authorities increased financial independence and more freedom to manage their own affairs.

To come now to the Order itself, Section 2 (1) of the 1958 Act sets out in explicit terms the various factors which the Secretary of State has to take into account when fixing the totals of the general grant. These factors are also reproduced in paragraph 3 of the Report. I should like to explain now the procedure which has been followed and how this procedure fully complied with the statutory requirements.

A few months ago, we asked local authorities to let us have figures showing the latest available information about the current rate of expenditure on the relevant services, together with estimates of that expenditure for the two years covered by the Order. These figures were scrutinised by my Departments, and some adjustments were made in the estimates for the years 1959–60 and 1960–61. These adjustments took account of future variations in the level of prices, costs and remuneration, so far as my departments can forsee them, of any probable fluctuation in the demand for the services, and of the need for developing these services, having regard to the extent to which the country can afford such development. In other words, the exact procedure laid down in Section 2 of the Act has been carried out.

The results of our calculations were circulated to the local authority associations, whom we are required to consult under Section 1 (5) of the Act. My hon. Friend the Joint Parliamentary Secretary of State met the associations' representatives on 14th November and discussed the calculations with them in considerable detail. I should emphasise that the differences between the local authorities' own estimates of relevant expenditure and the figures proposed by the Departments were very slight and were, in fact, marginal when compared with the total figure. We made clear in detail what adjustments we had suggested and the reasons for them, and these suggestions and any other points raised by the local authorities were the subject of detailed discussion round the table item by item.

In the outcome, as explained in paragraph 5 of the report, certain of the figures were modified to take account of the further points made by the associations. The final result is set out in the table in paragraph 5. These figures, I should inform the House, are accepted by the local authority associations as the best estimates which can be made at present of their likely relevant expenditure in the two years in question.

Perhaps I should say, at this stage, that I know that the local authority associations were originally of the view that they had not been given enough time to consider the Government's proposals, and they thought that further meetings would have been desirable. It is, of course, true that we never have as much time as we want to do complicated sums of this kind. But the House will want to know that, at the end of our meeting with the local authority associations, there was only one figure in dispute, and this has since been appreciably modified to take account of their views.

I can give the details of that figure if hon. Gentlemen want it. The figure in question related to the amount included in relevant expenditure for loan charges on educational building. If I may amplify it, since it was the only one in dispute, the local authorities' estimates had not been accepted by the Department at the outset. Further discussion, however, did reveal that the authorities' estimates for 1959–60 were based on firm commitments for loans in respect of work which had already been started, and the local authorities' estimates were, therefore, accepted. For 1960–61 a revised figure was proposed by the Department after detailed discussion which has since been accepted by the local authority associations. I hope that that gives the information.

I must make clear once again that the general grant is not merely the sum of the estimated specific grants that it replaces. If it were there would be no purpose in introducing the general grant. Since this is the first general grant, however, we thought it only right to take full account of the detailed expenditure which local authorities expected to incur on the relevant services. This was our starting point. We then had to decide what assistance we should give towards the cost of these services. This obviously must be a matter of judgment, and in our view the right course was to accept the local authorities' estimates, adjusted and agreed after discussion, and to provide Government assistance towards this expenditure on broadly the same scale as obtains at present. The adjusted estimates make a fair provision for such future increases in costs as can be foreseen at present, and also make allowance for reasonable, foreseeable development.

It will be observed, for example, that the total estimated relevant expenditure for 1959–60, which is over £80 million compares with an actual net expenditure of just over £69 million in 1957–58 and estimated expenditure of £75 million in 1958–59.

Adjustments have also been made on this occasion to take account of certain other effects of the 1958 Act, namely, the discontinuance of certain minor grants, the effect of the additional income which local authorities will receive from rerating and the effect on the Exchequer equalisation grant. These are described in paragraphs 9 to 11 of the Report and their net effect is to increase the general grant for the first year by £465,000. The final figure is, therefore, £50.125 million for 1959–60 and £52.075 million for 1960–61.

From 16th May, 1959, the local authorities themselves will decide how to spend this money. The Government have every confidence that they will use wisely the grant they will receive when the total figure is apportioned by means of the formula set out in the Second Schedule to the Act. The actual amount which each individual authority will receive will be notified as early as possible in the New Year. I need not remind the House, however, that under the transitional arrangements provided for under Section 18 of the Act, no authority will lose anything in the first year of the grant's operation, and only 10 per cent. of any loss in the second year. The gains and losses will be calculated in accordance with the General Grant (Transitional Adjustments) Regulations, which have also been laid before the House. There will, however, be a net gain of approximately £750,000 to Scottish local authorities as a whole from the first year onwards.

While it will be for the local authorities to decide how to spend the grant, the House will expect to have some indication of the kind of development which we hope to see during the next two years and of the provision which we have made for it in our calculations. Taking the main services covered by the grant in order, the details are as follows.

In education, the main developments in the period will be the provision of new schools; an increase in the number of teachers; the development of secondary education; improved facilities for higher education; further provision for full-time and day-release courses in further education; and for the development of the youth service.

Educational building will be maintained at a high-level and the value of work to be started during the first general grant period, 1959–61, is expected to be about £30 million. On the basis of the forecasts of the Committee on the Supply of Teachers, modified by later information, we expect that the number of certificated teachers will increase by more than 1,000 during the period. Allowance has been made in the authorities' estimates for the salaries of these additional teachers and for the recent increase in teachers' salaries.

Provision has also been made for the increase in the number of pupils in the secondary schools in consequence of the effect of the "bulge" on the secondary school population and of the increasing number of pupils expected to remain at school after the age of 15. The main task in this direction during the period will be to maintain and improve standards for these pupils.

The need for increasing the facilities to enable students to receive education at the higher levels in the training colleges and central institutions has also been allowed for. I am giving a lot of details because it may be helpful to the House to know how the figures have been arrived at. The new Bursaries Regulations made in 1957 and 1958 will enable more students to receive bursary assistance; they prescribe higher rates of allowances and lower parental income scales. Allowance has been made for this.

The education authorities also expect that the number of students attending full-time and day-release courses at further education centres will rise during the period as a result of the general encouragement being given to these forms of education; and account has been taken of this in their estimates. Their estimates also make provision for an increase in contributions to the Youth Service and other bodies in respect of prospective developments in this field.

I turn now to health—

Miss Margaret Herbison (Lanarkshire, North)

Before the right hon. Gentleman leaves the question of education, I should like to ask whether he can tell us by how much the Department cut the estimates which local authorities gave for building and capital investment during 1960–61. He has told us that where there was a difference the Government allowed the estimates for 1959–60 to stand, but not the estimates for 1960–61.

Mr. Maclay

The hon. Lady will realise how the problem arose. I will not attempt to give a categorical answer now, but I do not think that there was a cut. I should, however, like to check that, and no doubt my hon. Friend the Joint Under-Secretary will deal with the point when he winds up the debate.

Mr. J. Grimond (Orkney and Shetland)

The Order says that the amount to be received by each authority will be notified as soon as possible. Is there to be further discussion with local authorities about the amount, or has discussion finished? Also, will there be an opportunity in the House to discuss the amounts?

Mr. Maclay

The position is that there will be no further discussion because the method of distribution is laid down by the formula which appears in the Act.

Mr. Grimond

It cannot be altered?

Mr. Maclay

No, it cannot be altered. That is laid down and has been decided by the House. The formula will be applied to the sum and local authorities will be notified as soon as practicable. There are reasons, into which I do not propose to go at this stage unless hon. Members wish it, why it is not possible to give at this moment the precise distribution, but there is a great difference in the English position. The formula is not in the English Act, and one point of difficulty which we are up against is that we have to find out the standard rateable value before we can get the final result. If the hon. Gentleman wants me to go into that point in great detail, I can, but I think it would be better to leave it to my hon. Friend the Joint Under-Secretary of State. I can assure the hon. Gentleman that there are very convincing reasons why it would not be practicable or wise to give the final distribution figure in advance.

Allowance has been made for increased expenditure on occupational and day care centres for the mentally handicapped, for the provision of additional psychiatric social workers. and for the boarding out of increased numbers of mental defectives, equivalent to expansion at about one and a half times the rate in previous years.

The Domestic Health Service is playing an important part in the care of the aged and in reducing the demand for hospital beds and for accommodation in local authority welfare homes. There has already been considerable expansion in this service, the number of helper hours during 1958–59 being just about half as much again as the number of hours in 1953–54 and an allowance has been made for continued growth of this service.

Account has also been taken of the need for new clinics and day nurseries, for increases in nursing staffs, and for increased dental services for mothers and young children, for increased chiropody services for old people and for the expansion of the anti-poliomyelitis programme announced in the House of Commons on 21st July, 1958. I hope that the House is not bored by these data. It is important for a full understanding of what we have done in arriving at the final figure.

Allowance has been made for some increase in establishment of firemen to take account of likely developments in the service. The proposals by fire authorities for obtaining appliances and other equipment and for continuing their programme for the replacement of out of date hydrants have, in general, been accepted.

Provision has been made for an agreed increase in the number of children in care as foreseen by the local authorities, and allowance has been made for the further development of the boarding out of children received into care. Allowance has also been made for improvements in existing children's homes and for replacement of some large and less suitable homes by some small family-group homes.

I come next to town and country planning. Grants are at present paid under the Town and Country Planning (Scotland) Acts, towards the cost of the acquisition, clearing and preliminary development of land in readiness for other forms of development such as industry, shops and houses. The local planning authorities have estimated that in 1958–59 they will acquire for planning purposes about 60 per cent. more land than they did during the previous year. Allowance has been made for the continuance of this increase in planning work, at an equally high rate during the two years covered by the first Grant Order.

Next, road safety. The estimates of expenditure on road safety and training submitted by road safety committees have been increased to make provision for the Child Cyclists' Training Scheme, which we hope will receive general support. All these details show the great care with which future possibilities have been examined by the Department in conjunction with the local authorities. They represent the fulfilment of everything that we have said in the debates at the various stages leading up to the General Grant Order.

The welfare services for the handicapped are an extremely important item. The Report of the Piercy Committee, Cmd. 9983, indicated that, with the exception of the services for the blind, there was room for considerable expansion in the services provided for handicapped persons. These services are not at present grant-aided, but an allowance has been made in the general grant towards the cost of their development.

Mr. Thomas Fraser (Hamilton)

The Secretary of State has mentioned a whole list of services and in each case has ended by saying that an allowance has been made for it in the general grant. Would it not have been helpful if he had told us how much the allowance was in each case?

Mr. Maclay

The precise details are extremely complicated and entail a mass of figures. I am informed that in every case the figures were fully agreed with the local authority associations as being appropriate and relevant. To go into the precise details of all these figures would be going a good deal beyond what is normal in this kind of debate.

Mr. William Hamilton (Fife, West)

Would we not be able to get them by Question and Answer in the House on Tuesday?

Mr. Maclay

That is a question of which I should like notice, but I will try.

The welfare services for the handicapped are not at present grant-aided, but an allowance has been made in the general grant towards the cost of their development. The allowance provides for the expenditure to increase by 15 per cent. in each of the two years of the first grant period.

The last category to be described is the residential and temporary accommodation under the National Assistance Act, 1948. Grants are at present paid under that Act towards the cost of accommodation of the elderly and the infirm. Allowance has been made in the General Grant Order for the provision of about 250 additional places during each of the two years of the first grant period. This represents an increase of 50 per cent. above the progress likely to be achieved during the current year 1958–59.

I have given these figures in some detail and I hope that they have been of interest to the House. It will be evident from them that we have budgeted for a steady programme of expansion and the amount of the general grant shows that we have provided for a balanced and orderly development of local authority services. After these years of discussion about this new system of general grant, I feel that what I have just said shows very clearly that we have meant every word we have said throughout all the debates, in spite of the doubts which have been cast in certain quarters, sometimes from the Opposition.

In spite of the genuine anxiety felt by people outside the House that the general grant system represented something new and dangerous, I am convinced that as time goes on, when these people realise fully what we have done for this first general grant period and the new life that this will undoubtedly give to local authority discussions and the new interest in local authority work, they will appreciate that we have built and founded well. I commend the Order to the House.

3.55 p.m.

Mr. James McInnes (Glasgow, Central)

I am glad that the Secretary of State took the opportunity of indicating at the outset of his speech the protestations of the local authority associations at not being given adequate time to consider all that was involved in the fixing of the aggregate grants. I am, however, exceedingly sorry that the right hon. Gentleman did not include in his Report all the information which he has imparted to us today. I am also sorry that he did not come to the House prepared to give the figures concerning each of the services that he has specifically mentioned.

As the right hon. Gentleman said, Section 1 of the Local Government and Miscellaneous Financial Provisions (Scotland) Act, 1958, requires the Secretary of State, with the consent of the Treasury, to make general grant Orders fixing the aggregate amount of the general grant payable, to make such Orders after consultation with the local authority associations and to lay the Orders before the House with a report explaining the considerations leading to their provision. I propose to confine my remarks largely to dealing with the failure of the Secretary of State to explain in his Report all the considerations that led him in fixing the aggregate amount of the general grant.

The right hon. Gentleman's Report is a concise document. So concise is it, in fact, that it fails lamentably to explain the considerations that the right hon. Gentleman took into account when fixing the amount of these grants. Indeed, it is so concise that the Secretary of State has been able to condense into three pages of print all the factors which he took into account in fixing these grants, whereas his right hon. Friend the Minister of Housing and Local Government took 21 pages and an Appendix to explain precisely the same thing. Does the Secretary of State seriously regard this contemptible little document as a Report which in any way fulfils the requirements laid down in Section 1 of the 1958 Act?

Mr. Maclay

The hon. Member has always made the case for what he calls this "contemptible" document. Has he read right through the English Report? It deals with matters additional to those with which I am dealing in my Report. Furthermore, if we feel that we can give the facts with reasonable brevity, there is no particular merit in using a large number of words. That, however, is no reflection on the English White Paper.

Some of the details that I have filled in today are details of factors—they are not necessarily factors themselves—and it seemed to me that the most courteous thing to the House was to give in my Report the basic factors as laid down in the Act and to amplify them in my speech explaining them to the House.

Mr. McInnes

I cannot follow the right hon. Gentleman's remarks. This afternoon he utilized all his time to explain to us the relevant factors that enabled him to fix the aggregate amount of grants, whereas the Minister of Housing and Local Government explained in his Report the reasons, the factors and considerations which enable him to fix the grants for England and Wales.

Mr. Maclay

If I follow the English model I am accused of slavish imitation. If I do what I consider better, I am reproved. I stand unrepentant. I think that this is the best and most courteous way of dealing with the matter.

Mr. McInnes

It is because of the circumstances in which we find ourselves today that the Glasgow Herald, for example, thought it necessary to make this comment on the right hon. Gentleman's White Paper: Of the two White Papers issued, that from the Ministry of Housing and Local Government is the more explicit. Why has there been this failure to include all the information? Why has there been this timidity on the right hon. Gentleman's part in providing all the data that he has used as a basis for determining the aggregate of the grants?

Was it because in the White Paper to which he referred, Cmd. 208, which he issued in July, 1957, and which outlined the Government's reasons for introducing a system of general grants he gave away too much information? That was the occasion when the right hon. Gentleman expressed a view entirely different from that of the Minister of Housing and Local Government about the real reason for introducing the system of general grants.

I quote from paragraph 17 of Cmd. 208, which is headed "Reduction in Grants". There is nothing ambiguous about the heading at least. The paragraph says: The Government's view is that this opportunity should be taken to make some reduction in the level of Exchequer grants. The reasons for this proposal … are briefly that local authorities now receive more from Government grants than from rates—an undesirable development if local government is to retain its financial independence …

Mr. Maclay

We must get this straight. I have some sympathy with the hon. Member in making his speech, because I know that he is finding it much more difficult than he expected to attack the grant. The quotation which he makes takes no account of the fact, which he would have discovered if he had read on, that the whole intent of the words was that we were to have an increase of local income through rerating. It was simply a question of getting a better balance. Every hon. Member has said, at some time or another, that it is very desirable that local government should not be so dependent upon the central Government for its finances. Everybody realises that.

Mr. McInnes

I should appreciate it if the right hon. Gentleman appreciated his own difficulties rather than mine. The right hon. Gentleman is bobbing up and down there like a yo-yo in trying to justify his own decision. There is absolutely no misunderstanding on my part.

This paragraph is quite clear. There is no ambiguity about it. It is a reduction in grants. I suspect that, because of his honesty, the right hon. Gentleman was rapped over the knuckles for explaining the reason why it was necessary to introduce the block grant system, but having been rapped over the knuckles is no justification for pretending this afternoon to be uninformed. I should have preferred it if the right hon. Gentleman had been honest.

In any case, the right hon. Gentleman is in duty bound, under the Act, to submit a report explaining the considerations which led him to provide for the amount of grants shown in the report. I submit that we have not had this explanation. Indeed, the absence of explanation compelled me on 2nd December to put Questions to the right hon. Gentleman. The Answers which he gave revealed that grants payable to Scottish local authorities in respect of relevant expenditure for general grant purposes had in 1956–57 exceeded the 1955–56 total by £4½ million.

The 1957–58 figures were £4½ million more than the 1956–57 figures, and the figures for 1958–59 were £4½ million more than those of 1957–58. But I find from the Secretary of State's Report that instead of this annual average increase of £4½ million, in 1959–60 there is an increase in grant of only £2¾ million, and in 1960–61 the figure is only £2 million more than that for 1959–60 Quite obviously, therefore, we in Scotland have failed to sustain what in the past has been an average increase of approximately £4½ million each year.

I regard this as an extremely serious matter. This is one of the reasons why the right hon. Gentleman has not disclosed the facts in his Report. I often wonder why we in Scotland are compelled on so many occasions to elicit by way of Question and Answer in the House information which ought to be contained in documents. One needs only to look at the Ministry of Housing and Local Government Report to have revealed an excellent table showing the comparative figures of grants for the past seven years and for the two years that lie ahead. Obviously, the Minister of Housing and Local Government has provided the maximum amount of information to hon. Members who represent English and Welsh constituencies.

It seems to me that the Secretary of State took a degree of comfort this afternoon from the very qualified approval which he obtained from the local authority associations in respect of his general grant proposals. This, of course, has resulted in a good deal of window-dressing. The Government proclaim that these proposals and these grants are the highest ever but, on the other hand, I could claim with equal emphasis that local government expenditure has also reached the highest total ever.

The acid test is: what percentage the proposed grants represent of the total estimated expenditure of local authorities? We do not know, nor does the Secretary of State. I am willing to give way if the right hon. Gentleman will tell the House exactly what percentage the grants for 1959, 1960 and 1961 represent of the total estimated expenditure of local authorities.

Mr. James Stuart (Moray and Nairn)

May I ask the hon. Gentleman whether he is insinuating that the degree of efficiency of a local authority is to be judged by its extravagance, by the amount of money it is capable of spending?

Mr. McInnes

I do not know that I made any such imputation. It is typical of the right hon. Gentleman the Member for Moray and Nairn (Mr. J. Stuart) to put up his own dollies and start knocking them down again.

Mr. Stuart

All the hon. Gentleman is asking is how much a local authority spends, not whether it is spending efficiently.

Mr. McInnes

I would counsel the right hon. Gentleman to keep quiet in case he lets the cat out of the bag. The difficulty is that he obviously is not following my remarks—

Mr. Stuart

I am.

Mr. McInnes

I am putting to the Secretary of State what I regard as the acid test of the correct amount of grants.

Mr. Maclay

I have the figures on the comparative basis for which the hon. Member asks giving the grant as a percentage of relevant expenditure. In 1957–58, the percentage was 61.4; in 1958–59, it is estimated to be 61.7; in 1959–60, it is estimated to be 61.9 per cent.; in 1960–61, it is estimated to be 62 per cent. A rise in grant is a percentage of relevant expenditure.

Mr. McInnes

It is for us to analyse the figures which the right hon. Gentleman has given us. I do not know why he did not incorporate them in his Report, as did the Minister of Housing and Local Government.

Mr. Stuart

If I may make one last interruption, would the hon. Gentleman have been satisfied with 21 pages of verbiage, because that would have relieved us of this criticism?

Mr. McInnes

I would never under any circumstances have been satisfied with 21 pages of verbiage from the right hon. Gentleman the Member for Moray and Nairn. He must recognise that the ever-increasing rate burden in Scotland, and the figures I will give now will, to a degree, answer his intervention.

In 1945, the total rates collected in Scotland amounted to £25 million. In 1951, six years later, these had increased to £32 million, which was an increase of £7 million in six years. Between 1951 and 1957 the total rates collected increased from £32 million to £63 million, an increase in six years of £31 million. When we consider Government grants in relation to the total relevant expenditure of local authorities we must also have to consider the ever-increasing rate burden that is being imposed on the ratepayers in Scotland.

There are many other points to which I should have liked to refer, but I will only ask the right hon. Gentleman the following question. When he discussed these grants with the local authorities, were the estimates submitted put forward in the climate of the restrictions and curtailments announced to the local authorities on 17th February, 1956? Or were they submitted in the climate of expansion which the Government have so recently announced in this House? That is one thing we ought to know.

In his speech the right hon. Gentleman dealt with some of the services and gave us an approximate indication of those that have been taken into consideration and those that have not. I want to deal with the question of the provisions mentioned in his White Paper. He mentions expenditure on the welfare services for the disabled, the Town and Country Planning Bill, now before Parliament, expenditure on accommodation under the National Assistance Acts, and also states that the estimates will have regard to variations in the level of prices, costs and remuneration. He also refers to the adjustment in respect of the contribution made by Scottish education authorities to the Scottish universities, which I think is about £60,000.

There are other factors about which the right hon. Gentleman made no observations. For example, there is mental health. Having regard to the recommendations in the Report of the Royal Commission on Mental Illness and Mental Deficiency, the acceptance of that Report by the Government, and the recognition that it will place far greater responsibility an local authorities, will the Joint Under-Secretary of State tell us what provision has been made in respect of that service? I observe from the OFFICIAL REPORT of yesterday's debate that the Minister of Housing and Local Government stated that his estimates as a whole allowed for an annual rate of development in this respect, in each of the years 1959–60 and 1960–61, at roughly two-and-a-half times the rate which has obtained in recent years.

Another service of particular social significance is that of domestic help. Did the Secretary of State make any provision for that service in his discussions with the local authorities or in the adjustments he made of their estimates? Does he visualise any appreciable increase in this service? Has the right hon. Gentleman made any provision for improved or additional welfare centres for mothers and young children? I also think that he mentioned in his speech provision in respect of midwives, health visitors and home nurses, but he did not say whether or not provision had been made for the expanded anti-poliomyelitis vaccination programme which was mentioned in the House.

The right hon. Gentleman also mentioned that provision had been made for an increase in manpower in the fire service and for the progress that will be made in that service during the next year or two. I cannot recollect whether he referred to the development of school crossing patrols, police traffic patrols, and road safety, but if no provision has been made in respect of those services, perhaps the Joint Under-Secretary will tell us what the position is.

Finally, did the right hon. Gentleman disclose all those relevant factors during his discussions with the local authority associations? For example, I direct his attention to paragraph 6 of his own Report, where he says: These totals … take account of such future variations in the level of prices, costs and remuneration as can be foreseen, and also any probable fluctuation in the demand for the relevant services. In paragraph 9 of his Report, the Minister of Housing and Local Government says: Nothing is included for possible further increases in the price level of goods and services. Whether or not stability is wholly achieved during the period of grant, it is natural that public authorities will seek, as they normally do, to meet increases by economies and they will constantly improve efficiency by the use of new techniques. Can the right hon. Gentleman explain the different approach in the two countries? Since the legislation for Scotland and for England and Wales is precisely the same, I find it difficult to appreciate why we have different lines of approach towards these matters of price levels for goods and services. I hope that when he replies the Joint Under-Secretary will take the opportunity of answering the questions I have put.

I conclude by saying that while I recognise that the general grants were, admittedly, based on estimates submitted by the local authorities themselves, subject, of course, to adjustments by the Scottish Departments, I beg hon. Members opposite to realise that the highly desirable development and expansion of local government services rest not with the local authorities, but with the Government. In that knowledge I genuinely believe that when the implications of the general grants are fully appreciated by individual authorities, then and only then will they recognise the great betrayal.

4.23 p.m.

Mr. W. S. Duthie (Banff)

I must admit that I am still gravely concerned about the Order. It puts into effect the provisions of the Local Government and Miscellaneous Financial Provisions (Scotland) Act, which caused many of us much heart-burning in the earlier part of the year. The round figures put forward by my right hon. Friend appear to be fair enough, but the uncertainty and grave disquiet are caused by the difficulty of knowing exactly how individual areas will fare in the distribution.

Yesterday, when the Order for England and Wales came before the House, Members from English and Welsh constituencies were furnished with a complete apportionment of the grants for their areas. The list was complete, exhaustive and comprehensive. There is no such list for Scotland. I am amazed that we should be asked to legislate without being aware of the local implications of the Order.

As my right hon. Friend knows, I voiced my grave concern for my constituency at various stages of the Act and voted against its Third Reading because of the inequitable treatment which my county was arbitrarily receiving in the apportionment of the money. I was told that this was because of the application of a formula. That is still a complete enigma to me. I have never had the formula explained, nor whence its source, nor how it was applied, nor the reason for it, nor its logic.

Scottish Members are now being asked to buy a pig in a poke. That is how the matter appears to me. It may be argued that if we do not pass the Order now we shall halt the machinery of distribution. That may be, but I must register my strong protest that the Government should come to the House with an Order of this importance without bringing forward, also, the precise information which is vital to making a correct decision.

I am merely applying normal business principles. There is no board of directors worthy of the name which would engage upon a decision of this nature without having the fullest information. During the early stages of the Bill, which is now an Act, I criticised the somewhat grandiose and over-confident expectation about local taxation. The prognostications about local industry which we then made have been realised all too unfortunately. There has been a falling off of orders in the shipyards and there is every likelihood that their contribution will be even less than we surmised.

I do not want to hold up financial provision for Scottish local authorities, but I protest at having to come to the House to consider this Order without knowing exactly how my constituents will fare, and on behalf of my constituency I register that protest most emphatically.

4.28 p.m.

Mr. J. Grimond (Orkney and Shetland)

I shall be extremely brief. I am very happy to follow the hon. Member for Banff (Mr. Duthie), because, like him, I represent a county which will fare badly under the new formula. As I said in previous debates, it may be that for certain counties in Scotland a case can be made for reducing grants. I do not know, but it is possible that that might be so. What I have to complain about is that no one has argued that Banff, Shetland, or any other county which will lose under the new arrangements, deserves to have its grants reduced. It is agreed that it has happened by ill-luck, but ill-luck is not a good basis for Government legislation.

I understand that on this Order we cannot again consider the whole principle of the new arrangements for the general grant. I shall, therefore, confine myself to joining with the hon. Member for Banff in protesting about the reduction of grant to counties which are to be badly hit. I share the misgiving expressed from the Opposition Front Bench about what will happen if prices rise. I understand from the Secretary of State that we are to have no chance to alter these figures. They are to last for two years, within which time there may be a substantial movement in prices.

I very much regret that, unlike the English Members, we shall not have an opportunity of judging how our particular counties and local authorities will fare. Even if we cannot alter the figures we should at least like to feel that we are in a position to comment upon them, criticise them and have them explained by the Government. That is the least the House of Commons should expect to be able to do to fulfil its duty.

Over the next two years we hope for some developments in certain areas in Scotland, including the North, which will throw an additional burden upon local authorities. We hope that some assistance will be given to encourage new industries to come in. and we hope for some assistance in the extension of certain services, including education, at any rate in my county. Some allowance is made for education on page 3 of the Order, but it is not a very large amount, especially if there is an increase in prices, and other factors do not seem to have been allowed for at all.

I end by reiterating what I have said before namely, that it is not possible to have a much larger burden placed upon the rates in the North. I am opposed to the whole rating system, which has become anomalous, and is a very bad system. I realise that that is a different point but, good, bad or indifferent, we cannot go on piling burdens on the rates, and if the Government are to go forward and tell local authorities that they are being offered a wonderful vista of the time when they can run their own affairs, they must provide local authorities with new means of finance.

I maintain my original objections to the whole principle and I wish that we had been given, or could be given in the future, more details of the way in which individual authorities will be affected by these proposals, because we are bound to be concerned with individual cases.

4.32 p.m.

Mr. E. G. Willis (Edinburgh, East)

I hope that the Secretary of State will now pay more serious attention to the complaint made by my hon. Friend the Member for Glasgow, Central (Mr. McInnes) about the lack of information, because that complaint has been reinforced by one of his hon. Friends and also by the Liberal Party, so that representations in this respect are unanimous. so far.

My hon. Friend was being generous when he said that three pages of the White Paper explained how the Secretary of State had arrived at the figures. In fact, the White Paper gives us about two paragraphs. It is all contained on page 3, in the notes under the table and in paragraph 6. All that the right hon. Gentleman says in the White Paper is: These totals … take account of such future variations in the level of prices, costs and remuneration as can be foreseen, and also of any probable fluctuation in the demand for the relevant services. They also appear, having regard to the fact that the revised estimates of relevant expenditure for 1959–60 and 1960–61 are larger than the actual net expenditure … incurred in 1957–58, to make reasonable provision for the need of developing these services and for the extent that, having regard to economic conditions, it is reasonable to develop them. All that he has done is to take the words from the Act and say, "This is what we have done. This is the answer" These are the exact words of the Act. That is not good enough. It is not the way in which Scottish Members should be treated when asked to consider the expenditure of about £50 million of public money. The Joint Under-Secretary should give us a better answer than we have had from the Secretary of State.

It is difficult for hon. Members who have been given a mere paragraph of information, such as I have read, and have then listened to a speech from the Secretary of State, to follow exactly what sort of considerations have led to these conclusions. All the information given us by the right hon. Gentleman could have been put into the White Paper. He had all that information when the White Paper was published. It would not have been irrelevant; it would have helped us to understand what had been done, and would have enabled us to discuss this grant more intelligently than we can at present.

The right hon. Gentleman seemed to derive great comfort from the fact that the percentage of local government expenditure to be met by the general grant is being increased. The present policy of the Government is to try to encourage public bodies to undertake public expenditure so as to do something about unemployment. In those circumstances, one would expect this expenditure to be increased. The great question which arises is: what happens when the Government decide to decrease expenditure, as they have been doing in the past two or three years? That is when the real test of this system will emerge. Local authorities will not be able to cut down their expenditure so readily as the Government will expect of them.

My hon. Friend the Member for Glasgow, Central asked about the level of prices, costs and remuneration. We have been told nothing about that, and the White Paper says nothing about it. What did the Government have in mind when they made allowances for those things? We do not know, and we should be told whether the Government expect any increase.

The Secretary of State told us that the value of the work to be begun in the next year or two in respect of education was £30 million. It would be much more relevant if we were told the amount to be spent in each of these years. What do the Government expect to spend in those years, over and above what is at present being spent on school buildings? Last week, a White Paper was issued dealing with this question, and the figure for Scotland was put at about £60 million. How much of that is to be spent next year, or the year after? If we know that, we shall be able to see whether the general grant makes sense, but we cannot intelligently discuss the question whether it should be increased unless we know to what extent the Government expect to embark upon this programme, and how much they intend to spend in the next two years.

Is the programme to extend over twenty, ten or five years? The right hon. Gentleman told us that he expects to start £30 million worth of work on new school buildings during this period, but the important question is: how much does the right hon. Gentleman expect to be spent in that period? We can judge this only in terms of the amounts that local authorities will spend, and we should be given some information about them. There are many other items about which we should have more information if we are expected to arrive at a decision with any feeling of knowing what the facts are.

One of the few things that is explained in the White Paper is the figure for town and country planning. The Town and Country Planning Bill, now before Parliament, proposes to amend the basis for compulsory acquisition of land. It is not expected that the annual increased relevant expenditure incurred by local authorities, if the Bill is enacted, will be a figure of any magnitude.

The amount has been estimated at £20,000 next year. When we were discussing the Bill on Second Reading we were told that the local government expenditure involved in this was £1¼ million and that the largest part of the expenditure was for housing, which is, of course, not part of the relevant expenditure, and that that large part accounted for £500,000. We were told also that the total increased expenditure was about 25 per cent., which was £300,000. On housing, for instance, we were told that, taking an average of 25 per cent., increased expenditure expected under that heading would account for an increase of £125,000.

What about all the other expenditure with which local authorities will now be concerned? If the figures given by the right hon. Gentleman during the Second Reading debate were correct, I would have thought that the figure, instead of being £20,000, would be £150,000 to £175,000. That is my calculation. Whether it is correct, or £50,000 out, there is still a very big difference between £20,000 and £175,000.

What are we to assume from this? Are we to assume that when the right hon. Gentleman gave the figures previously he was not giving us figures based upon any knowledge of the facts? Now that he has discovered the facts, he finds that the amounts are £20,000 in 1950–60 and £40,000 in 1960–61. That seems to me to be the reason why that particular figure was given. But I do not want to say anything more about this matter, because my hon. Friend the Member for Glasgow, Central has dealt with it very fully.

I want, in conclusion, to emphasise the need for the Secretary of State to treat the House much more courteously than he has done over this White Paper. I do not know what he has been accustomed to, but he ought by this time to know that we like to know the reasons why certain conclusions or recommendations are placed before hon. Members for approval. It is not good enough to serve us up with something of this kind. I am quite prepared to accept that there may be certain technical difficulties in connection with the publication of actual figures for local authorities, but in giving the reasons why the general grant is on a certain level there is no reason at all why we should not be treated better than this. I hope that the next time that a general grant Order comes before the House we shall be given something which explains the reason which has led the Government to put forward their proposals.

4.45 p.m.

Mr. William Hamilton (Fife, West)

We have now had four speeches on this Order, apart from that of the Secretary of State, and not one of them has supported the principles upon which it is based or the manner in which it was presented. It is too bad that the Secretary of State should come here to present a complicated Order and talk for just a quarter of an hour on it. He had all the time in the world. There was, quite clearly, no great desire on the part of hon. Members on his side of the House to speak on it. He could have taken one-and-a-half hours or even two hours. We would have endured it. At any rate, we should then have had some facts on which to base our arguments.

The right hon. Gentleman's statement reminded me of the kind of statistics which we get from the Soviet Union—designed to conceal more than they publicise. We had, of course, the usual bromides, which we have been sick and tired of hearing in the course of the legislation concerned with this Order—more freedom for local authorities; the ability to raise more money for themselves in the form of rerating. It is rather curious that the right hon. Gentleman used the argument—more freedom for local authorities—while, at the same time, pointing out that the percentage of grant on relevant expenditure would steadily increase over the next few years.

If the argument is to be sustained that local authorities are to get increased freedom from rerating, why not—and we repeat the argument which we used in Committee—go the whole hog and rerate completely? The Institute of Public Administration, two years ago, recommended precisely that and, moreover, recommended the complete rerating of agriculture. If we want to give freedom to local authorities we can very soon give them freedom to raise more money than they have at present by measures of that kind.

The right hon. Gentleman also said, in a carefully considered peroration, that we were budgeting for a steady programme of expansion. It is rather strange, in view of the context when the idea was originally introduced, that the Minister of Housing and Local Government, the Chancellor of the Exchequer, and Treasury Ministers at Tory conferences and in this House gave as the reason for introducing this that it was one of the measures of economy which the Government were then introducing.

Of course, the difficulty that the Government are now in is that the context has completely changed. The Government are now afraid of a slump of their own creation and, in fact, are going out of their way to tell local authorities in England and Scotland to spend as much as they can on any kind of service they can to stop unemployment. Precisely because the context has changed the Government are now trying by this block grant system to get local authorities to spend more. The difficulty of course, as the hon. Member for Orkney and Shetland (Mr. Grimond) said, is that they will do that only by increasing their rates. The rate burden now is an intolerable one for many local authorities.

The Secretary of State made great play with the educational advance that this Order will allow. I am not sure that local authorities will be convinced by that, or that we shall get the kind of expansion that we want, that the country demands, and that the Government White Papers have laid down as essential.

In all the fine talk about expenditure on education which we have heard today from the Secretary of State, and in the contents of the recently issued White Paper, there is no mention whatever of the fundamental question, which does not relate to buildings at all but to the quality of the teachers. A good teacher teaching in a barn is better than an inferior teacher teaching in a first-class building. To get good teachers we must pay them adequately, but there is no mention in the White Paper, or in the references to the general grant, of any provision for a substantial increase in teachers salaries.

It is that in which teachers are interested. They are not so much interested in the buildings, but in what they will get. To me, that is a reasonable attitude. The record of the Secretary of State in this respect is regarded with suspicion. The recent 5 per cent. increase in teachers salary was delayed by the right hon. Gentleman as long as possible, so the teachers are suspicious about his attitude towards them.

The Secretary of State said that there would be some expansion in the Youth Employment Service. He did not give us any figures or tell us what that expansion would be. It is certain that the service has long been recognised as the Cinderella of the social services. Recently the Select Committee on Estimates made some scathing comments on the attitude of Ministers towards the service. The problem of juvenile unemployment is increasing. Boys and girls leaving school find it difficult to get jobs, and the service must be expanded. I should like to have some specific information from the Government about the future of this service.

I hope that the Secretary of State will take note of what has been said today about his extremely discourteous attitude to the House. He should have provided us with something that we could get our teeth into by giving us more details.

4.52 p.m.

Mr. J. C. George (Glasgow, Pollok)

This debate has taken an amazing line. It is not so much an indication of a defeat of the Opposition as of a complete and absolute rout. Only once this afternoon have we heard a word on education. For the rest of the time hon. Gentlemen opposite have been wandering about unhappily amid a lot of trivialities.

Mr. Willis

I asked how much was to be spent on school buildings each year. Does the hon. Member consider that a triviality?

Mr. George

If the hon. Member had read the White Paper he would have seen that £65 million is to be authorised.

Mr. Willis

But how much each year?

Mr. George

I admit that the hon. Member thought up one question, and I readily give him credit for that, but it is the only point which has emerged.

I thought that the hon. Member for Glasgow, Central (Mr. McInnes) did himself far less than justice today. We generally look upon him and the hon. Member for Edinburgh, East (Mr. Willis) as virile, well-informed opponents who can advance a strong case whenever there is the slightest opportunity to do so. But not today.

Mr. Willis

We had no information.

Mr. McInnes

Surely the hon. Member for recognises that not a single full-stop or comma in the speech of the Secretary of State or the Order he presented had anything to do with education. How, then, can we deal with the subject?

Mr. George

The hon. Member reminds me that this afternoon we have heard demands for details, and the reason why it was possible to reach agreement with the local authorities. But it is all amicably agreed, so why should everything be repeated over and over again? The whole thing has been agreed.

Mr. T. Fraser

It is not agreed.

Mr. George

I am being charitable to the hon. Member for Glasgow, Central when I say that he made the worst of a very bad case.

The violent opposition which extended from one end of Scotland to the other, and which was stirred up and fanned by hon. Members opposite was not related to details, important as they are, but to the question of education. That was what the fires blazed over during the Committee stage discussions and during the Second Reading debate on the Bill—but not today. There has not been one word about that today except from the hon. Member for Fife, West (Mr. Hamilton).

This White Paper has taken the course which I expected, the inevitable course, because we on this side of the House have clear plans for education—

Mr. Hamilton

We know that.

Mr. George

—and if hon. Members opposite were in doubt about our intentions for education, it would have been more to the point had they expressed their doubts today. But we have not heard a word.

I had no doubt that the general grant would show that we on this side of the House fully realise the tempo at which we have to live today. We know that in this age of scientific advance we can prosper only by producing more and more educated people. That is our intention. Year by year we propose to increase the number of educated people coming from our schools and universities. The old story that education should be cheap and efficient is obsolete. We must look forward to an expansive expensive educational system and the general grant shows that we are prepared to face that fact. We have to meet the challenge in the days that lie ahead. If we do not do so, this country will drop into mediocrity and that is something which hon. Members on this side of the House do not intend shall happen. We shall face the cost of the education system and match the days in which we live. That is shown in the White Paper.

Mr. T. Fraser

Will the hon. Member tell us in which paragraph of the White Paper there is an indication of the intention of the Government to pursue this expansionist policy for education?

Mr. George

I spoke of the White Paper. I should have been more explicit and referred to "Education in Scotland". If the hon. Member had read it—

Mr. Fraser

I have read it. I have seen that the programme of expenditure of £65 million is to begin in the year 1960–61. Despite what was said in the White Paper, we do not know how this expenditure will be incurred.

Mr. George

The hon. Gentleman is too wise in the ways of the House to think that the Government would produce a White Paper of such importance without having based it on very sound calculations. He knows better than that. It is all clearly stated.

Mr. Fraser

It is not.

Mr. George

During the discussions on the Bill the impression was created that we on this side had laid plans to sabotage education. No other conclusion could be arrived at. Had hon. Gentlemen opposite taken the trouble to examine our performance in this Parliament they would have found sufficient confirmation of our real intention.

Hysterical criticism by teachers has extended from one end of Scotland to the other. The impression was given that the Government intended to sabotage education. On page 30 of a publication entitled, "The Threat to Education" it is stated:

Never before has there been such universal recognition of the extent to which our survival as an industrial and commercial power depends on the improvement of our educational system. This survival must not he placed in jeopardy by the folly of our Government.

Mr. Hamilton

Surely the hon. Gentleman will not let it go out from the House that he is charging the teachers with mass hysteria? He should withdraw that offensive expression.

Mr. George

I am not going to withdraw it. It was hysterical propaganda, based on fear.

Mr. John Rankin (Glasgow, Govan)

Shame.

Mr. George

Had they examined our performance they would have seen that we had laid a sound basis for proper expansion of the education system. The picture painted was that the Secretary of State would indulge in slashing the grants and smashing education prospects. The folly in that is now revealed. We see steadily rising expenditure to be incurred on the education system in the years ahead.

Mr. Fraser

Where?

Mr. George

The hon. Member for Hamilton (Mr. T. Fraser) approaches this very serious matter with too much levity. So far, the subject has been neglected by the Opposition, and I am now trying to deal with it.

Mr. Fraser

Will the hon. Gentleman tell us where in the White Paper, the General Grant Order or the other publication to which he has referred there is any evidence of the Government assisting in the financing of this expansive expensive education plan which the hon. Member says the Government support? I am not treating the matter with any levity. It is a very serious matter.

Mr. George

All that one needs to see is the expanding total of expenditure on education. Each year it is rising.

Mr. McInnes

That is because of wages and salaries.

Mr. George

The hon. Member says that it is caused by wages and salaries. If wages and salaries did not rise he would still object. The expenditure on education has increased in real terms. The Parliamentary Secretary to the Ministry of Education yesterday took up that very point, saying that … between January, 1956, and June, 1958, there was an increase in the retail price index of 10 per cent. During this period, expenditure on education was rising by approximately 14 per cent. Therefore, the real development in education during those years in real terms was somewhere in the region of the difference between 14 and 10 per cent. …"—[OFFICIAL REPORT, 8th December, 1958; Vol. 597, c. 97.] That is the answer to the hon. Gentleman's interjection.

We have seen the general grant, and it must be a great disappointment to hon. Gentlemen opposite.

Mr. McInnes

And to the hon. Member.

Mr. George

Not to me. It is what I expected. The level of the debate from the other side of the House shows the intense disappointment of the Opposition.

I want to look at the education system in the light of our past performance and future prospects and see what the leading authorities on education say about the performance of the Government. On the technical education side here is what is said by the magazine "Technology", published by The Times: Millions of pounds are being spent on technological and technical training. Nothing like as great a jump forward has been tried before. It is a revolutionary period. That is what was said on the question of our technical education, which the Opposition try to deride.

I bring to my assistance John Vaizey, than whom there is no greater authority on education costs in Britain today. He is the author of an important book, "The Costs of Education". He pointed out in a letter to The Times, on 25th November, that during this Parliament a real, indeed dramatic, advance in education has been achieved, and said that one more surge forward would see our education system placed on a permanent, sound and happy foundation within ten years.

That is the stage which we have reached. Hon. Members on this side of the House are too well aware of their responsibilities to the young and to industry ever to fail in their obligations towards the education system. We know that education must expand, not only in quantity and quality but in complexity, and, therefore, the expense must grow as the years go by. It will grow, and my hon. Friends will see that education is properly catered for and that a sufficient amount of money is allocated to enable local authorities to carry out their duty to the young.

There is a glittering future for Britain in the age that lies ahead if we educate our people to the proper standard. There is a growing realisation among parents that the future of our children lies more and more within the education system. We want to marry the desires of the people, the needs of industry and the challenge of the future, and provide all the finance which is necessary to ensure that our country has the future which it can have if wisely governed in the years immediately ahead.

Ridicule has been poured on the idea that the change to the general grant would make local authority work more attractive and interesting. Throughout the years we have seen it slipping back in quality and interest. The Order ushers in a new era when the authorities will have round sums of money to which they themselves will have to direct close attention to ensure that the money is properly spent. No longer can they simply say, "Spend £x on education, and 60 per cent. will flow from the Government".

The authorities now have to look at the round sum and distribute it carefully in the two years that lie ahead. Without doubt, it will mean great debate in the finance committees of the future. It will mean a decision on priorities and a fight for priorities, and that can have only a good effect upon local government. We all know that local government needs the injection of some new life if it is to continue to play an important part in government. We want it to survive and be effective.

The Member for Fife, West said that no hon. Member on this side had spoken in favour of the general grant today, but I speak fully and completely in favour of it. My confidence in the Government has been well founded, and I am completely content.

5.57 p.m.

Mr. Hector Hughes (Aberdeen, North)

I did not intend to speak in this debate until I heard the speech of the hon. Member for Glasgow, Pollok (Mr. George). I cannot let it pass without comment. It was full of sobs, as though the Government are the only people in favour of the education of the children of Scotland. It was full of emotion, but it was like the Order—vague, full of hypotheses and lacking any concreteness.

Apparently the hon. Member does not appreciate the basis of the Opposition criticism, though it was put very clearly by my hon. Friend the Member for Glasgow, Central (Mr. McInnes), who put categorical questions to the Minister and indicated with great clarity the defects in the Minister's speech. Yet to the hon. Member for Pollok all that has been like water off a duck's back.

The basis of our criticism is the lack of detail. The House is being asked to deal with very large sums of money. The Opposition are very glad to spend large sums of money on the education of the children, and the Labour Government of 1945–50 showed that by the way it legislated for the better education of the children of Scotland and the better remuneration of their teachers. The basis of our criticism has nothing to do with that, but is that sufficient facts are not being put before the House to show why we are being asked to vote these large sums. Parliament is being asked to deal with £50,125,000 for the year beginning 16th May, 1959, and £52,075,000 for the year beginning 16th May, 1960. By all means let us spend money on the education of the children—we all want that to happen—but we want a clear exposition from the Secretary of State about it.

All this is based on Section 1 of the Local Government and Miscellaneous Financial Provisions (Scotland) Act, 1958, which is as clear as anything could be. Section 2 (1) lays down specific requirements. I quote: In fixing the aggregate amount of the general grants for any year the Secretary of State shall take into consideration"— three things. One is (a) the latest information available to him of the rate of relevant expenditure"— It is a long subsection, and I will not trouble the House with it, but that is clear and concrete, and the Secretary of State has not put that clearly before the House. The second is (b) any probable fluctuation in the demand for the services … mentioned. Neither has the right hon. Gentleman done that, and the House is entitled, when dealing with such large sums, to have it clearly put before it. The third requirement is (c) the need for developing those services and the extent to which, having regard to general economic conditions, it is reasonable to develop those services. These have not been put specifically and clearly before the House.

Instead of that, we have been offered hypotheses, speculations, estimates and expectations, but where are the concrete facts? I submit that it is the duty of the Government, in asking the House to vote such large sums of money, welcome as they may be, as I have said, for the benefit of the children of Scotland, to put them clearly and precisely before the House.

If we look at the small print on the second page of the Report of the Secretary of State for Scotland under Section 1 of the Local Government and Miscellaneous Financial Provisions (Scotland) Act, 1958, we find in that print the justification for what I have said about expectations and speculations. Let us look at that small print. In paragraph (a) we find: The expenditure on welfare services for the disabled does not at present attract grant, and for purposes of general grant account is taken only of development above the 1958–59 level. Further, it states: It is not expected … the amount has been estimated … estimates of expenditure"— The whole of this submission to the House by the Government is full of hypotheses, estimates, expectations and things of that sort. That is not the way to present a request to the House to vote large sums of money.

Let me end as I began by making clear that we on this side of the House are strongly in favour of the best educational service for the children of Scotland and the best remuneration for the teachers, but I say that, when such an Order as this is presented to the House, welcome as it may be, it is showing disrespect to the House not to adduce in its support concrete facts and figures.

5.14 p.m.

Mr. John Rankin (Glasgow, Govan)

I am sorry the hon. Member for Glasgow, Pollok (Mr. George) has had to leave his place. We enjoyed his speech. He always speaks with vigour, and at least he does give an impression of conviction, although there was a tendency today to overwhelm that conviction by a somewhat hysterical delivery, which was perhaps imposed upon him by the fact that he had so few supporters on his side.

I note that the figures of estimated expenditure by the local authorities for 1959–60 and 1960–61 have been compiled after consultation with the local authorities, and I assume that when the appropriate departments and the Minister were consulting them about this expenditure they explained to the local authorities that the expenditure comprehended the amount of money which had to be expended in the White Paper called "The Next Step in Education."

I take it that the contents of that White Paper, although they have only now become available to us, were carefully explained to the local authorities and that it was made clear to them that the rise of less than £3 million in expenditure represented the amount which would be spent under the new White Paper which has just been issued. If that is the case, then the explanation which is given on page 3 in paragraph 6 is not complete, because the document before us now—the only one which we have to guide us—tells us that the totals of expenditure were adjusted to take into account— variations in prices, costs and remuneration … and also of any probable fluctuation in the demand for the relevant services. That is all. There is no reference there to any future policy such as that outlined by the hon. Member for Pollok.

It is worthy of note that, out of a total amount of £83 million, which is anticipated will be spent by the local authorities in 1960–61, when the new White Paper proposals will be in operation, roughly £72 million will be spent on education. Yet, despite an expenditure of £72 million, the Secretary of State gave us no hint in his Report how that money will be spent—not one word. Surely, when we are dealing with a sum so large as £72 million it is the business and, indeed, the duty of the Secretary of State to tell us what was planned in the expenditure of that money.

I know that it is not our province today to explore "The Next Step in Education," which outlines Tory plans, but that White Paper has been criticised in the newspapers. It has been examined and, as far as its purpose is concerned, most educationists have concluded that under the White Paper policy very little money at all will be spent by the year 1960. Perhaps the Joint Under-Secretary, if he is to reply, may have a word to say on that subject and tell us exactly what is comprehended within this increase of £3 million, with its consequent increase in grant.

I would refer to the fact that the Secretary of State did say in his speech that some £30 million would be consumed in the building of new schools throughout Scotland. Of course, the hon. Member for Pollok will agree with me that in Glasgow we particularly welcome that.

As I have said in speeches in this House on the subject of new schools in Glasgow, not very far from where I live there is a school called Pollok Academy. It is still being used; yet it was condemned in 1925 as not being a place in which children should be taught. It used to be a polling booth in local elections, but the local authority had to stop that use because when parents went into the school to vote they could not find their way out and people had to be employed to rescue them and get them out of the school properly. This school is still packed to capacity.

Is that school now to go out of service and to be replaced by a school built under the new £30 million programme? If that is the case, almost the whole £30 million will be consumed in Glasgow, as we have many schools much worse than the one I have described. I took a former Joint Under-Secretary of State who was in charge of education to these schools to let him see with his own eyes the problem that faced him in Glasgow. We shall want a great deal of that £30 million to deal merely with the type of school in which our pupils are being taught. When the Joint Under-Secretary of State replies, I should like him to say how much of the £30 million will come to Glasgow.

When the Secretary of State was talking about the next step in education, I did not know whether he referred to the £30 million or the Order which is before us. After the intervention of the hon. Member for Pollok, he will now have to tell us with which part of Tory policy he is dealing when he replies. The right hon. Gentleman said that we needed more than 1,000 teachers right away. I do not know in which pocket the right hon. Gentleman is carrying them, but Glasgow has been seeking for years to get more teachers. We have discussed the matter in this House, and, as the hon. Member for Pollok knows there has been far more animation on this side of the House than on the Government benches about the problems of education. He needs to look hack only to the Estimates debate on education in July, when his was one of the few voices raised from the Government benches.

Mr. T. Fraser

His was one of the few voices on Government benches which were educated in local authority schools.

Mr. Rankin

The Secretary of State is to provide a thousand teachers. That is a tall order, but once again Glasgow could take all those teachers now. The local authority was recently asking for 500 teachers immediately for its secondary schools. Is this part of the next step in the Tory plans for Scottish education, as the hon. Member for Pollok suggested? It involves salaries. We shall not get a thousand teachers easily at the present salaries.

I am sorry to mention again some points which I put before the Secretary of State during the debate in July, when I pointed out that we should not get the 500 or 1,000 teachers that we need now until we paid salaries competitive with those paid in other parts of our economy. A graduate with first-class or second-class honours can command an initial salary at the level of £2,000 per year, or at least £1,500. Can we get him into the education service at the level of education salaries now being offered? The Observer and the Sunday Times have pages of advertisements every week offering jobs not only in this country but in the Commonwealth to graduates with first-class or second-class honours at salaries that put completely in the shade those offered to teachers. The Secretary of State says he will provide 1,000 teachers; is he bringing the salary level of the teaching profession nearer to the competing demands of industry and other professions? Perhaps the Joint Under-Secretary of State will tell us about these things when he replies.

I gathered from the Secretary of State that the education programme will deal with the county colleges. That is a very welcome step indeed. We have been hoping for something like that for a long while. It should be done and done quickly. There is a gap in our educational system between the ages of 15 and 18 that has been left open for far too long. I take it that the right hon. Gentleman proposes to fill that gap. If so, I welcome this next step in education which the Government propose to take. Where will the right hon. Gentleman find the teaching staff? That brings us back again to the point that if he is to get the staff he must be prepared to pay salaries which will attract men with the proper qualifications into this completely necessary work.

Of course, I support all the hon. Member for Pollok said about the need to develop the technological side of education. He and I have spoken freely on that subject and agree on it. I wonder whether his hon. and right hon. Friends on the Government Front Bench, who may say that they agree with the hon. Member about the need for technological education and providing more money for it, will agree with the hon. Member and me when we demand that the technological university shall be given the same status as the existing university and allowed to award degrees? Unless it has that status it will not produce students of recognised equivalent status in the world outside.

In view of the fact that so many countries are giving to technological universities the right to confer degrees and not have to be brought under the umbrella of general universities, could we hear that in this endeavour to further education the Government are prepared to recognise the status of our technological universities and to give them the right to award their own degrees? It will be interesting to know whether the answer of the Secretary of State to that is in the affirmative or in the negative. If it is in the negative, the next step the Government propose to take and all the money they say they are to spend will not help technological education along the lines it should be going if we are to keep our place in the world.

If it were only to satisfy the hon. Member for Pollok that we on this side of the House are interested in education, I could go on speaking for a long time. If duration of speech were proof of intention, I should be perfectly prepared to overwhelm him with proof, but I believe other business is to follow and, as that other business is to follow at seven o'clock—or is it eight o'clock?—[An HON. MEMBER: "Six o'clock"] Oh, six o'clock? Good heavens! I must apologise to my hon. Friends and to the Government Front Bench. I thought I had until six o'clock in which to finish what I had to say, but in view of the fact—

Mr. Willis

Who said it was six o'clock?

Mr. Rankin

I do not know. Maybe it was a general conspiracy to get me to sit down. I think I have said enough, however, to convince the hon. Member for Pollok that he ought to withdraw many of the things he said and to give the Joint Under-Secretary something to which to reply. I hope he will reply in a very favourable way. On this side of the House we are still dreadfully doubtful of Tory intentions towards education. It may be that we shall be proved wrong tonight. I am a firm enough believer in education to hope that I shall be shown the error of my ways.

5.34 p.m.

Mr. Thomas Fraser (Hamilton)

If there is one thing which has come out of this debate, it is that we ought not to have had a debate with the hopelessly small amount of information we have before us. We have had a White Paper from the Secretary of State which has not said anything at all about the detailed considerations he took into account in arriving at the global figure set out in the General Grant Order.

We have heard criticism from all parts of the House by hon. Members who have said that before they can possibly discuss the Order they need to know what their individual local authorities are to get out of it. There is no doubt in my mind that the right hon. Gentleman had a plain duty in terms of the Act to provide us with much more information than he provided, either in the White Paper or in his speech, or in both put together. We should have had some indication, albeit an estimate, of haw this will affect different local authorities so that that would enable hon. Members to consult local authorities.

It is all right for hon. Members glibly to say that these things were discussed with the local authorities. These things were not discussed with the local authorities. The local authorities did not individually know what they are to get, and the local authorities individually have not even had time up to now to get copies of the General Grant Order to see what the global sum is and how the figure is to move over the years.

The Secretary of State said a bit about education. It is interesting to note that, although education accounts for seven-eighths of all money accounted for in the relevant expenditure of local authorities, the Secretary of State did not find it convenient to say anything at all about education, about the development of our education services, or how these figures were arrived at in the White Paper, which is a report of the considerations which led him to determine certain figures.

Mr. Willis

He is supposed to explain the considerations.

Mr. Fraser

Yes, he does not even mention the considerations, let alone explain them in the Report which is now before us. The hon. Member for Glasgow, Pollok (Mr. George) was surprised that hon. Members had not now set about discussing education as they did when the Bill was going through the House. I believe it is precisely because the Secretary of State did not wish the House to be in a position to discuss what was happening in education that he failed so lamentably, as my hon. Friend the Member for Glasgow, Central (Mr. McInnes) said, in not saying a word about this in his Report and explaining the considerations he took into account.

The Secretary of State talked about the increase in the number of teachers, the increase in salaries, extensions and expansions of further education services and he talked about the improvements in bursaries provisions. Each time he told us that these were taken into account in arriving at the global figure, but never at any point did he tell us what expenditure was to be incurred in giving effect to these expansions. The Minister of Housing and Local Government in his White Paper dealt with the services one by one. He gave estimates, not in money terms but generally speaking, of the number of people to be employed or assisted in the Heath Service and so on. He gave figures to show how the Service was going over the years. One could easily calculate from that what would be the increase with the rise in current prices. The Secretary of State did not endeavour to do that in his White Paper, nor in his speech.

The hon. Member for Pollok, the only hon. Member who found anything to quarrel with in the speech of my hon. Friend the Member for Glasgow, Central, underlined more effectively than any other hon. Member the aptness of the speech of my hon. Friend. The hon. Member for Pollok, in his flight of fancy this afternoon, described the Tory approach to education. He said, "Our approach is the approach to an expanding education to meet the needs of our people in the future, to develop technical education and to improve secondary education" He foresaw a reduction in the size of classes and the recruitment of new highly skilled teachers ad infinitum.

Mr. Rankin

It is the pantomime season.

Mr. Fraser

My hon. Friend is correct it is the pantomime season.

The hon. Member for Pollok said that all these points were taken care of in the White Paper which reports the increase in local government expenditure in respect of the relevant services. But what do we find? The estimated cost of the education service for 1959–60 is £69,672,000. For 1960–61, when the White Paper is to become effective, the estimated expenditure is £72,574,000. That is an increase in respect of this service of a little less than 5 per cent. When he takes into account the increasing cost of services, does the hon. Member for Pollok think that we shall even be holding our own if we increase our expenditure by only 5 per cent.? He said that he wanted an expensive education service. Does he think that he will get this great, new, expanding and expensive service out of an increase of less than 5 per cent. in the estimated expenditure on it?

He knows we shall get nothing of the kind. When we are discussing a serious matter of this kind—and the future educational service of Scotland is a serious matter—it is not good enough for an hon. Member as well informed as he is to allow his imagination to run away with him in the way he did this afternoon and to say, "The White Paper shows how much we care about education." He could have remembered that the Convenor of the Education Committee in Glasgow, part of which city he has the honour to represent, made a speech the other day in which he forecast that even in secondary schools there is a possibility of their being driven to part-time education in Glasgow through want of teachers.

The hon. Member drew a picture of an expanding, expensive service which would secure the well-being of our country in the future. It is a great pity that we have not the data in front of us this afternoon to allow us to make a proper examination of the extent to which our education services could possibly be extended in terms of the total figures written into the General Grant Order.

It is for the same reason that we cannot, with profit to ourselves and the people we represent, go into the many other services in detail. We have not been given the details by the Minister either in his White Paper or in his speech. We have therefore not been able to discuss with the local authorities in our constituencies what is their estimate of what they will spend on the different services in the next few years, and we have not been able to relate one with the other in order to see whether adequate provision is being made for the extension of the services which are so essential in our community.

The right hon. Member for Moray and Nairn (Mr. J. Stuart) said that we were encouraging extravagance when we talked about our expanding services, but I did not think the right hon. Gentleman had understood my hon. Friend the Member for Glasgow, Central at all. In any case, he was surely given the answer by the hon. Member for Pollok. It is no extravagance, it is not wasteful expenditure, to extend some of these services, such as education, public health and a great many other services covered by this document. Unfortunately, we have not all the necessary information available to us.

Dealing with the general point—and I believe that the general point is the only one with which we can profitably deal in the debate—I would point out that the local authorities of Scotland were asked to make their estimates of expenditure at a time when we were still fighting inflation and against the background of a whole series of circulars sent out by the Secretary of State. May I refer to the circulars?

On 17th February, 1956, a circular was issued—I have a copy here—placing a virtual embargo on all capital projects other than those relating to public health and to public safety. That was a virtual embargo.

Mr. Willis

It included education.

Mr. Fraser

As my hon. Friend says, it included education. On 10th October, 1956—after the Election of 1955—a further circular was issued continuing this restriction on capital expenditure until further notice.

May I move forward to January of this year, when we were getting ready for the general grant? A circular was issued inviting all local authorities to ensure that all possible economies were achieved both in current expenditure and in the budget for 1958–59. That is this budget. All possible economies had to be effected in building up their expenditure to be met out of the current budget. On 12th June, in case local authorities had forgotten, a circular was sent out mentioning the changes in the administrative procedure and repeating the Government policy that the utmost economy in public expenditure, both on capital and on revenue account, was to be maintained.

It was in that atmosphere and against that background this summer that local authorities made their estimate of expenditure in the year 1959–60 and the year 1960–61. They could do it only at the then ruling prices and against the background of Government policy. I have consulted as many local authority people as I could possibly consult over the weekend, since we received this General Grant Order, and I am bound to tell the right hon. Gentleman and the House that the information which I have been given is that if they could have made their estimate of expenditure now, since recent relaxations and against the background of recent pronouncements, they would have made very different estimates from those which they made last summer.

I think it worth mentioning at this point that on 17th November, after the local authority consultations had been completed about the General Grant Order, Circular No. 9329 was issued. I have a copy of it here. It invited local authorities to carry out in the next twelve months capital expenditure which would otherwise have been incurred later. Is it not a little dishonest for the Government, a bit of sharp practice, to have taken figures of estimated expenditure from the local authorities when they were under this injunction to curtail, restrict and restrain and then, when the estimates have been made in that atmosphere and against that background, to publish the General Grant Order for 1958–59 and for 1960–61; and then to say to the local authorities, "There are things which you wanted to do in 1960–61, but you can do them now in 1959 because you will pay for it yourselves"? That is exactly the position.

The official, who obviously must be nameless, who sent me some of the documents which I have before me, has concluded his report to me in these words: It may only be coincidence but perhaps there is significance in the fact that this change of direction by the Government comes at a time when the whole financial relationship between the Government and local authorities has altered. If the local authorities are to give effect to this relaxation, to this expansion in local government services that is now being encouraged, they will have to meet the whole cost from local rates. They will not get any assistance from the central Government.

This Government—this Tory Government, not some other Government—have been doing their utmost in the last three years to keep down public expenditure—I have mentioned the relevant circulars—and, in particular, to keep down the expenditure incurred by local authorities. Notwithstanding that attempt, we find that local authority expenditure has increased more year by year than it is now estimated to increase when we have embarked on a policy of expansion. That is a statement of fact, and if any right hon. or hon. Member opposite wishes to contradict that, I hope he will.

I repeat: the increase in local government expenditure has been greater during the restrictionist period than it is anticipated to be in these next years when local authorities are to be encouraged to incur new capital expenditure. The annual charges on the loans for the provision of new schools and other buildings are a small item compared with the increase in current expenditure on the running of the service, but apparently in his General Grant Order the Secretary of State has not been able to allow for any of this expansion at all.

This brings us back to the debates we had on the Bill. This General Grant Order demonstrates how right we were when this change in the law was being made to point out that when we got a General Grant Order the Secretary of State would succeed in limiting the share of he cost to be borne by the Exchequer, and then in encouraging local authorities to go ahead expanding their services as they would—knowing that they would not be able to do so because of the burden on local taxation.

From time to time, right hon. and hon. Members opposite, including the Secretary of State, boast in public speeches of the way in which this Government have succeeded in reducing central taxation. The real fact is that far more money is raised in central taxation by this Government than was raised by their predecessors in 1951. However, if we take into account the change in the value of money—and it has changed considerably under this Government—they may now be taking a slightly lower proportion of people's earnings than was taken in 1951, but what they cannot deny is that the local authorities, in local rates, take a bigger share of people's earnings today than was taken in 1951.

That is true of the most Tory authority; Edinburgh, with a Tory Government at Westminster, has doubled its rates in the last seven years. The reason is that in recent years the Government have gradually transferred burdens from the taxpayer to the ratepayer. That is a retrograde step. With the hon. Gentleman the Member for Orkney and Shetland (Mr. Grimond), I believe that our rating system is the most regressive form of taxation we have; and that it is wrong that we should be easing the burden on the taxpayer and putting an additional burden on the ratepayer.

That is undoubtedly what is happening under this General Grant Order. If the local authorities take the advice given to them in the most recent of the Secretary of State's circulars, that issued on 17th November, there is not a shadow of doubt that they will increase expenditure on relevant services, and the Secretary of State, who under the specific grants legislation some years ago—and, indeed, until now—would have been required to find 25 per cent., 50 per cent., 60 per cent., of the increased cost, will not meet any part of the increase at all. This expansion above that which the local authorities could reasonably estimate when they were acting against the background of restriction and restraint, will have to be met 100 per cent. out of the rates, which is the most regressive form of taxation.

For those reasons, this General Grant Order is very wrong. It is also very wrong that we should be forced into having this debate at all when we have not sufficient information before us. I had thought of quoting from two or three of the several documents that we have before us in order to show how inept they were. I have not done so, but I think that the case is made. We have not sufficient information—the local authorities are still in the dark—and the Secretary of State is getting away with it by not making the Report that the Act says that he ought to make, and by not explaining in detail today the considerations that led him to produce the overall figures set out in the White Paper and in this Order.

The Joint Under-Secretary may fill in some of the gaps left by the right hon. Gentleman's speech, but even if he does so, I hope that the House and the country will note that it is too late to give the information immediately before the House is asked to approve the Order. The information ought not only to have been made available in time to enable hon. Members to make up their minds, but should have been made available to Scottish local authorities so that hon. Members could have discussed it with them and, in the light of those discussions, have decided whether or not the General Grant Order was adequate to the needs of the day.

5.58 p.m.

The Joint Under-Secretary of State for Scotland (Mr. J. Nixon-Browne)

The hon. Member for Hamilton (Mr. T. Fraser), like his hon. Friend the Member for Glasgow, Central (Mr. McInnes) and others, has complained about the form of the White Paper. As my right hon. Friend told the hon. Member for Glasgow, Central, we have done this in our own way in Scotland; in a way that we thought would be best and most convenient for the House. I am sorry that hon. Members opposite do not agree with this. My own view is that this should have been a debate on the general grant, not on particular grants, and that is how we thought hon. Members opposite would wish to conduct this debate.

I must take up one thing that the hon. Member for Glasgow, Central said. I was rather disappointed in him. So weak was his case that he had to fall back on misreading paragraph 17 of the original White Paper—and he knew that he was misreading it. He knows quite well that that paragraph, headed "Reduction in Grant," refers to reduction in grant consequent on rerating. In the event, what has happened is that the grants have not been reduced but increased.

He then complained, as did his hon. Friend the Member for Hamilton, that the increase was less than in previous years. Surely he realises that prices have stabilised—

Mr. T. Fraser

Have they?

Mr. Browne

Certainly—[Hors. MEMBERS: "Oh"]—and those cries of alarm make it quite clear to me that right hon. and hon. Members opposite—and here I include the hon. Member for Orkney and Shetland (Mr. Grimond) and the hon. Member for Fife, West (Mr. Hamilton)—have not got the position perfectly clear.

The Act provides, in Section 2 (2): If it appears to the Secretary of State that during any grant period any unforeseen increase has taken place in the level of prices, costs or remuneration"— and so forth, he may issue a new order.

Mr. Hamilton

He may.

Mr. Browne

Yes; but my right hon. Friend has so far scrupulously carried out the provisions of the Act, as I imagine any Secretary of State in any Government would be expected to carry out what he was instructed to do by Statute.

The hon. Member for Hamilton made a case for the expansion of the education estimates, saying that they were too low. He said that it was just a meagre pittance of 5 per cent., and this really was not in keeping with what my hon. Friend the Member for Glasgow, Pollok (Mr. George) had said about Tory policy. The hon. Gentleman may have his own opinion, but he missed one point. This expansion in the estimates is in the loan charges, and, of course, loan charges which are small can hide a very great amount of capital expenditure.

The hon. Member for Hamilton and the hon. Member for Glasgow, Central, regretted that we had given no detailed figures for this increase. It might be as well to make clear now that these figures cannot be published. The new grant is a general grant, not a bundle of specific grants.

Mr. Willis

Before the hon. Gentleman leaves education, will he answer the specific question I asked—

Mr. Browne

The hon. Gentleman knows that before I finish I shall try to answer every point which was raised. I am doing my best.

It would be contrary to the whole intention of the grant if it were possible to say that £X had been provided for, let us say, health services, £Y for fire services, and so on.

Mr. Willis

Why?

Mr. Browne

The essence of the scheme—this is why—is that local authorities are free to spend the general grant as they wish, and it would be very wrong for the Government to tie strings to it by relating specific parts of the general grant to specific services. The nearest we have thought it right to go in the way of information is set out at the top of page 3 of the White Paper.

The hon. Member for Glasgow, Central Thought he had a very good point when he said, quite rightly, that the acid test was the percentage of grant in relevant expenditure. My right hon. Friend told him that, from 1959 to 1961, the percentage of grant in relevant expenditure had not suffered but had risen, the percentage being 61.4, 61.7, 61.9—

Mr. T. Fraser

Estimated expenditure.

Mr. Browne

All right estimated expenditure—up to 62 per cent. That is not gradually transferring the burden from the taxpayer to the ratepayer, as the hon. Member for Hamilton suggested. It is relieving the ratepayer of a burden.

Mr. Fraser

Ask Edinburgh.

Mr. Browne

The same two hon. Gentlemen asked if the figures were submitted in a climate of reduction or expansion. First of all, the local authorities submitted the figures. They were then revised by my right hon. Friend in a climate of reasonable expansion.

Mr. Fraser

When?

Mr. Browne

After he received the figures of the estimates from local authorities. I cannot give the exact dates.

Mr. Fraser

I am sorry to interrupt again, but I have taken the trouble to inform myself by consulting people in local authorities. They tell me that their estimates were made in the climate of restriction, and I want to know, if it is said that they were told that they could do it in a climate of moderate expansion, when they were so told.

Mr. Browne

I am doing my best to answer the hon. Gentleman, if he will allow me to continue. I understand now that they were advised in October, in a climate of reasonable expansion.

The revisions were sent back to the local authorities, in the fullest detail, chapter and verse being given for every item where any of their figures were varied. Here, I may say that many of them were varied more up than down. The fullest details were given. I then had the pleasure of meeting the local authorities myself, and we discussed every variation in their estimates, item by item.

The hon. Member for Hamilton drew attention to the circular of 17th November, which invited local authorities to bring expenditure planned for later years forward into 1958–59 and 1959–60. There has been no general relaxation of capital investment by the local authorities. What the circular did was to ask them to plan to bring expenditure forward. If account had been taken of this in the general grant, it might have increased the grant for 1959–60 by a very little at the expense of the grant for 1960–61. Further, I would point out that the relaxation circular, of course, covers a far wider field than the relevant services.

The hon. Member for Glasgow, Central, who always reads the papers very carefully, asked why paragraph 9 of the English Paper says that nothing is included for increases in prices, and our own Paper says that it is included. The real point is this. If the hon. Gentleman will look at the Paper, he will see that the two go hand in hand, and that no provision was made for increases in prices that were not foreseen. In both countries, the increases in prices which were foreseen were allowed for.

Mr. McInnes

I am obliged to the hon. Gentleman for giving way. Do I understand from that that it is the intention of the Secretary of State to instruct local authorities to effect economies in order to meet the rise in wages, prices, and things of that kind?

Mr. Browne

Really, if the hon. Gentleman will read Section 2 (2) of the Act—I have read it once already, and I shall not read it again—he will see that that is allowed for.

The hon. Member for Glasgow, Central asked about provision for mental health. We are awaiting the report of the Scottish Health Services Council, and we shall consider that and have discussions on it. It is unlikely that there will be a considerable increase of expenditure under that head. He asked about domestic help. The figures have been agreed and accepted by the local authorities. He asked about additional welfare centres for mothers and young children. Provision has been made for increases here compared with what is likely to be provided during the year 1958–59; allowance has been made for an increase.

As regards traffic controls and road crossing patrols, the figures in the table in the White Paper were accepted by the local authorities as providing for reasonable development of these services.

The hon. Member for Glasgow, Govan (Mr. Rankin), in a fighting speech, complained that 1,000 teachers were not enough, though he seemed to have some doubt about where we should find 1,000 teachers anyway.

Mr. Rankin

The thousand was not my figure. It was the figure given by the right hon. Gentleman the Secretary of State.

Mr. Browne

All right. The Secretary of State gave round figures. The real estimate taken from the local authorities was 1,050 teachers. It rises from a figure in 1958–59 of 36,210, to 37,260 in 1960–61. Of this increase 680 will be employed in secondary schools. That figure, I can assure the hon. Gentleman, is based on what we believe can be achieved. Nothing will prevent the recruitment of more teachers if we can get them. That assurance I can give. The hon. Gentleman will realise that the figures I have given take account of the decision to grant indefinite deferment from National Service to virtually all trained teachers.

I cannot say much to the hon. Gentleman the Member for Fife, West, because youth employment is not a relevant service. The hon. Member for Edinburgh, East (Mr. Willis) and the hon. Member for Govan asked how much would be spent by local authorities on educational building. The value of the work to be done during the period 1959–61 is expected to be £29 million, but only a small part of it is included in the £65 million programme under the White Paper, "Education in Scotland: The Next Step", which covers the period 1960–61 to 1964–65. Work on that programme will, of course, not commence until 1960–61.

My hon. Friend the Member for Banff (Mr. Duthie) and the hon. Member for Hamilton complained that we had not complete figures, such as those available in England. My hon. Friend the Member for Banff asked, why buy a pig in a poke? Some pig, at £50 million!

The Scottish distribution formula is contained in the 1958 Act and has not been varied except for the very minor addition of sea miles, since the Scottish White Paper Cmd. 208 showed how a hypothetical general grant of £37 million would be distributed. All local authorities have to do, including my hon. Friend's local authority, is to estimate their share by adjusting the sum in the Appendix to the White Paper to take account of the fact that the revised total of general grant is not £37 million but £50 million.

Mr. Fraser

Cannot the hon. Gentleman tell us that the estimates he made originally ought not to be taken seriously and did not mean anything at all? Why give figures which are so hopelessly irrelevant?

Mr. Browne

This shows how right we were. It was £50 million, not £37 million.

Mr. Duthie

My hon. Friend will admit that this is based on a formula which had never been explained to me or to the House.

Mr. Browne

I will endeavour once more, as I think I have done at least six times before, to explain the position about the formula. There will be no losses in 1959–60, but there will be a gain for all local authorities of £750,000, for which we have had no words of congratulation from right hon. and hon. Members opposite.

That money will be shared according to the formula. In the first year there will be no gains or losses at all. In the second year, 1960–61, when there are gains and losses of 10 per cent., we will know the effects of revaluation and the effects, which worry my hon. Friend the Member for Banff so much, of any weakness in the distribution formula. The hon. Member for Orkney and Shetland was also worried about that point. There will then be an opportunity between 1961 and 1962 to revise the distribution formula if this is thought to be necessary. Up to then, local authorities will have, first, one year with no gains or losses and, secondly, a year with gains and losses of 10 per cent. Then the formula can be looked at again.

Under the wise steering of my right hon. Friend, we have then to enact new arrangements about equalisation grant and revise the method of calculation. There will be a Measure before the House which will be appropriate for the revision of the formula. The hon. Member for Orkney and Shetland was worried about those with ill luck. We can have another look at it before too much damage is done.

The hon. Member for Edinburgh, East wondered whether the amount allowed in the general grant in respect of compulsory acquisition was sufficient. Some of the figures which the hon. Member quoted were in respect of housing and roads, which are not relevant expenditure.

Mr. Willis

I agree at once that some of the figures I quoted were not relevant expenditure. The figure given by the Secretary of State was an increase of over £300,000. I deducted from that an expected increase of £125,000 or £150,000 for housing, which still leaves £150,000 as compared with £20,000 in the White Paper.

Mr. Browne

I can well understand the hon. Gentleman thinking that there is confusion. The answer is the same as the one I gave to the hon. Member for Hamilton.

Mr. Willis

What is the answer?

Mr. Browne

I shall give the answer. The grant is on loan charges on expenditure, and, if the hon. Member cares to work it out in detail, he will find that the grant is very generous indeed.

Mr. Willis

It does not matter whether the additional expenditure is incurred on loan charges or not. The figure of cost given by the Secretary of State was £300,000. Now it has been reduced to £20,000 in the White Paper. We ought to have an explanation. The matter cannot be brushed off like this.

Mr. Browne

I thought that the hon. Member understood the position better than that. If one buys something, one borrows money to pay for it. If one borrows money to pay for it, one has to pay interest and repay the money, and if one does this, the taxpayer makes a contribution to the ratepayer. That contribution from the taxpayer will be £20,000 in the first year and £40,000 in the second year. That allows for a great deal of capital expenditure.

The main point of the debate, which was raised by the hon. Member for Hamilton concerns the broad principle of the extent of Government assistance from the taxpayer to the ratepayer. Both sides of the House agree that the object of the exercise is to provide the best possible growth in services and to provide the most efficient service possible. It is a matter of nice judgment. It does not matter whether we pay as taxpayers or ratepayers, because they are really one and the same person. If the taxpayer paid too little, rates would go sky high and there would be too little central control. We cannot afford to allow that to happen. If, on the other hand, the taxpayer pays too much, the local authorities become mere cyphers under the dictatorship of bureaucracy. I believe that we have struck the right balance. The degree of financial help which we are giving by the Order is about right, although I shall have a word or two to say about the present degree of central direction.

With regard to financial help, Section 2 (2) deals with any unforeseen increase. For the first time we are giving local authorities a bag of gold. What were the Opposition's prognostications on this point? The Opposition said that this was a Treasury device, that we were letting local authorities down and that we would give local authorities less subsidy. This has not been proved by events. We are giving local authorities greater financial independence.

Let us consider the benefits of this greater financial independence. We must agree that room for manoeuvre is not unlimited. A combination of good sense and of a degree of statutory obligation is required. My right hon. Friend has power to make regulations and in the last resort he has power to reduce the grant. We do not want to make too much of that. Similar powers over the equalisation grant have been available for many years, but they have never been used. What is the position now? If a local authority has a guinea to spend, it says, "If we spend it on health we shall get two guineas' worth of work; if we spend it on the fire services we shall get 28s. worth of work; and if we spend it on non-grant aided services, we shall get only one guinea's worth of work." Under the general grant, what will be the tendency? It will be to spend money in the best interests of the ratepayers and to put first things first and not feel that by not spending money on a heavily grant-aided service they are missing the grant bus, so to speak.

I now come to the point about which little has been said by hon. Members opposite—and quite rightly, because they do not agree with it. Central dictation by central Departments has gone too far. The general grant is a major loosening of control. I was astonished that all local authorities opposed it. I wonder why? Perhaps it is that the local authorities like somebody else to do their thinking for them and then to put the blame on someone else when things go wrong. Perhaps these prisoners of Socialist freedom have come to love their chains.

I was worried during the course of the Bill about the possibility of a breakdown in relations between central and local government. We are used to opposition from some local authorities to our Bills, but this was a united opposition, except for Edinburgh.

Mr. McInnes

The Joint Under-Secretary said that local authorities do not think for themselves, but yet they can unite in opposition. How does he reconcile that statement?

Mr. Browne

I gave the reason. In any case, I am very pleased indeed that after our last meeting the good relationship with, and the faith that the local authorities have in, central Government has been restored. Nothing that I have heard today has altered that opinion.

We have done more than that in the general grant. By administrative and legislative means, we have swept away a host of minor controls and irritations. We have done a great deal to free the local authorities from the shackles of central Government. Each item is small in itself, but the cumulative effect is very large.

We cannot hope in one operation to take the local authorities out of the deep waters of Socialist theory in which since the war they have been swept ever further from the shore. By this Measure, we have for the first time turned the tide and the local authorities can feel the ground under their feet. I firmly believe—[Interruption.]—I know that hon. Members opposite do not like it—that this Measure will do more than any single thing the Government have done to instil fresh vigour into local public life and into the understanding and practice of democracy without which the nation cannot long survive. By this Order, and by the Act under which it was laid, we have been fair, even generous, to the local authorities and have made possible those desirable ends that we set out to achieve in the original White Paper.

Question put and agreed to.

Resolved, That the General Grant (Scotland) Order, 1958, dated 20th November, 1958, a copy of which was laid before this House on 25th November, be approved.