HC Deb 24 April 1963 vol 676 cc369-76
Mr. Leburn

I beg to move, in page 13, line 37, to elave out subsection (2) and to insert: (2) Section 200 of the Act of /947 (which also relates to the inspection of accounts) shall have effect as if in subsection (1) thereof the word "any" were inserted immediately before the word "Saturday", in the second place where that word occurs; and as if after subsection (1) thereof there were inserted the following subsection:— (1A) Any such ratepayer may make written application to the local authority for an opportunity to inspect the said abstract of accounts at such reasonable time as may be specified in the application, being a time not between the hours specified in the foregoing subsection in relation to Saturdays and other weekdays respectively but within the period of seven days referred to in that subsection; and where such application has been made, the local authority shall make the abstract of accounts available for inspection by the ratepayer at that time in such manner as the local authority may determine". This is another Amendment which is designed to meet points raised in Committee. The hon. Member for Dunbartonshire, West (Mr. Steele), who kindly explained to me that he could not be present tonight, asked whether arrange- ments could be made for the inspection of local authority accounts by individual ratepayers at hours other than the restricted hours set out in Section 200 of the 1947 Act. The Amendment will allow ratepayers, on written application, to arrange to see the accounts at any reasonable time outside the specified hours.

Amendment agreed to.

11.10 p.m.

The Under-Secretary of State for Scotland (Mr. Gilmour Leburn)

I beg to move, That the Bill be now read the Third time.

First, I should like to express my thanks to all hon. Members who have played a considerable part in improving the Bill. When I express these thanks I express them very sincerely and very warmly, and particularly—I hope the hon. Member for Hamilton (Mr. T. Fraser) will not mind—to those hon. Members who served on the Standing Committee.

It now seems to me a very long time ago since we dealt with the earlier Clauses of the Bill. I think that it is perhaps right to remind ourselves that the origin of the Bill arose from the need to provide a continuation of Exchequer equalisation grant for Scotland after 15th May this year. In making this provision, we have tried in various ways to improve the system, and, at the same time, we have taken the opportunity to introduce a number of improvements not only in regard to Government grants, but also in regard to a number of other matters affecting valuation and rating and one or two other minor points.

Exchequer equalisation grant has been a valuable feature of local authority finance since it was introduced and is an outstanding example of grant given by the Exchequer to local authorities to use as they judge best in the light of local circumstances. Time after time when the grant has been reviewed it has received the approbation of local authorities who, I believe, recognise it as an equitable means of providing assistance to those authorities whose rating resources per head of population are below the average for Great Britain as a whole.

I recognise very well that there is an inherent difficulty in deciding how best to calculate the amount of grant which should come to Scotland as compared to the amount which goes to England and Wales. This is largely due to the fact that there is no unified valuation system covering both countries, but I believe that as the years have rolled on we have been able progressively to improve these arrangements.

I do not at this late hour wish to make a long speech, but I must specifically mention Clause 3. I understand very well that it has proved to be controversial. The revision of E.E.G. means looking, among other things, at the circumstances in which grant is paid, perhaps on occasion without justification. The assumption which lies behind the grant is that it should be applied to the assistance of expenditure which would otherwise go on the rates. The Public Accounts Committee has emphatically drawn attention to one of the difficulties in the present system. Since local authorities in receipt of grant get a guaranteed percentage of their relevant expenditure paid to them by the Exchequer, housing deficits transferred to rates receive grant, and if this results in charging unreasonably low rents, the taxpayer is paying an additional contribution through grant.

I do not wish to say very much more, but there are one or two other important Clauses, particularly perhaps Clause 10. It has had its critics from time to time, but I believe what we have done is right.

This will not, in my opinion, be the last Bill which we shall have to deal with for Scottish local government. I realise that improvements will continue to be necessary from time to time both in regard to the relationship between local authorities and the Exchequer and in regard to the valuation and rating system. I am well aware of that. I hope that, as the days go on, we shall be able to get better and better uniformity in rating and valuation matters. I realise that this is important when we are here dealing with the question of equalisation grants, and, in fact, in dealing with other matters as well. This will not be the last Measure dealing with Scottish local government finance, but I commend this one to the House. In doing so, I would like to thank again the local authority associations and the working party for what they have done. Most of all, I would thank hon. Members who have done a great deal to improve the Bill.

11.15 p.m.

Mr. Manuel

First, I tender, on behalf of my hon. Friend the Member for Kilmarnock (Mr. Ross), his apologies to the Under-Secretary of State and to the House. He has an appointment in Scotland and has had to catch a train. Secondly, I associate myself with the remarks of the Under-Secretary of State about the good work accomplished in Committee upstairs. While it appeared to me that most of the work was done on one side of the Committee, I was on one occasion very grateful for the support we got from certain active Members opposite, although, at the end of the day, nothing much came of it.

We used a great deal of brain power and exercised our thoughts to try to improve the position of local authorities regarding unemployment, but were unsuccessful. If things do not get better, something will have to be done eventually about unemployment weighting in local government finance.

I want to thank the hon. Gentleman the Under-Secretary for his great patience and, at times, forbearance. The Committee got a bit heated at times and those of us who were active felt very keenly about some of the issues but the hon. Gentleman steered his way successfully through and surmounted all the hurdles.

This Bill is financial, but is different from previous Measures of this character, because the Government have introduced new powers for the allocation of the Exchequer equalisation grants, tied to a formula laid down in Clause 3, which is designed to force up municipal rents. It is a new feature and I regret it. I hope that no Government I support would ever introduce a Bill of this character with this ulterior motive in connection with the allocation of grants to Scottish local authorities.

We must remember that this exercise, as we see it, and as the hon. Gentleman has agreed, will lose Scotland £1 million in Exchequer equalisation grants which will be filched from the local authorities and returned to the maw of the Treasury. I do not think that this is something Which any hon. Member associated in driving the Bill through the House should be proud of. We should think carefully before we have a recurrence of this sort of exercise.

I believe that Clause 3 is unnecessary. The Secretary of State has already all the powers he needs to deal with local authority rents if he wishes under the 1962 Housing Act. But the Government has been loth to use those powers because of the resentment that would arise among a great many electors if the Government were seen to be putting up rents. The Government are now forcing local authorities themselves to inflate their rents and take the blame or lose certain proportions of the Exchequer equalisation grant. In Committee, the Under-Secretary agreed with me that that was the case.

In the context of rent rebates, the Bill also brings into being a principle which is obnoxious, unfair and un-Christian. The Under-Secretary has heard my views on this and I will not dwell on them tonight. To qualify for the full equalisation grant, local authorities are to have to increase rents if they are not above the figures laid down in Clause 3. When I say "figures" I refer to the proportion of the gross annual value. Many of the lower income groups do not have the incomes to pay these rents and rent rebate schemes are now already operated on their behalf. The cost of rent rebate schemes is now to fall wholly on the tenants of council houses. This is a substantial change.

I could quote Section 73 (4) of the 1950 Act which gives local authorities complete freedom to set up their own rent rebate schemes and to operate them as they think fit. The Government are taking away quite substantial powers from the local authorities while further powers are being placed in the hands of the Secretary of State. That cannot be denied. Local authorities are now to have no power to operate rent rebate schemes which they may wish to operate.

I deplore, as do all my hon. Friends and, I am sure, some hon. Members opposite, these further dictatorial powers which are being taken by the Secretary of State. This is weakening the fabric of Scottish local government and the status of local councillors who are now to be told what they must do about local authority finances in practically every field. This is a bad thing and I hope that when there is a change of Government, as I sincerely hope that there will be when we have a general election, we will be committed to removing the obnoxious financial provision which is introduced by Clause 3.

11.23 p.m.

Mr. McInnes

I want to express, on behalf of those of us on this side of the House, our appreciation of the Under-Secretary. He has said that he had the co-operation of all those who took part in all the stages of the Bill and I must confess that I found his attitude very flexible. He demonstrated that in Committee and we have had evidence of it again today. I express my personal gratitude to him for his co-operative spirit, but in saying that I want him clearly to understand that, while I appreciate his efforts, I detest the Bill.

11.24 p.m.

Mr. T. Fraser

My hon. Friends and I are mindful of the great strain which has been imposed on the Under-Secretary of State in the course of today's debate. He has been here since the beginning of the discussion on public business this afternoon without once being relieved. The hon. Gentleman is one of a team of four Scottish Ministers who are free to play their part in the House. It may be that the two other Under-Secretaries of State were not sufficiently briefed on the Bill to enable them to relieve the hon. Gentleman, but it is scandalous that the Secretary of State has not once put in an appearance in the course of today's proceedings.

In view of what I have said, I do not want to delay the hon. Gentleman, but perhaps I might put on record a few comments on Clause 8. As the Under-Secretary of State knows, I was not a member of the Standing Committee which considered the Bill, but I read with considerable interest a good deal of what was said both by my hon. Friends and by the hon. Gentleman as to the reason why he wanted this order-making power to adjust the weighting provisions for the calculation of general grant. He explained that Lanarkshire was to have a considerable reduction in its general grant because of the development of the new town of East Kilbride.

On Friday, 1st March, together with my hon. Friend the Member for Lanarkshire, North (Miss Herbison) and a depu- tation from Lanarkshire County Council, I waited on the Secretary of State for Scotland, at St. Andrew's House, to discuss with him the problems affecting Lanarkshire in the sphere of education arising from the development of the new town to which I have referred. On a number of occasions we have made representations to the Secretary of State, to his predecessor, to the Under-Secretaries of State for Scotland, and to the Minister of State for Scotland, to the effect that the Lanarkshire education authority is seriously penalised by the operation of the general grant for the simple reason that we have East Kilbride in Lanarkshire.

The general grant is determined by the counting of heads, with certain weighting for sparcity of population, and that kind of thing. The county has to meet its educational expenditure out of general grant, and a substantial part of this expenditure has to be applied to the building of schools in East Kilbride to cater for people from other parts of the country. We cannot find the money to build schools in other parts of Lanarkshire because so much of the money available to the county has to be spent on building schools in East Kilbride for the population that is moving into the county.

On 1st March the Secretary of State said that he appreciated that there was a serious problem. He expressed his awareness of the financial burden falling on Lanarkshire County Council. We pointed out that a similar burden would fall on other counties with new towns, particularly Fife with Glenrothes, Dunbartonshire with Cumbernauld and West Lothian with Livingstone. He said that he would be able to adjust the weighting under the Clause and that he would do what he could to see whether Lanark could get some advantage out of the order to be made under the Clause.

I do not know whether he then knew what the Under-Secretary had explained to the Committee would be the effect of the order, but I quoted it back to the Secretary of State, who said, however, that he believed that he could use the new freedom given him under the Clause to increase the general grant to Lanarkshire and not to decrease it, as the Under-Secretary had explained was the purpose of this order-making power.

I thought it important to get this on the record. I wondered whether the under-Secretary had been informed of what the Secretary of State had promised on Friday, 1st March, to the deputation from Lanarkshire, and whether he would now say that there was a reasonable prospect of the Secretary of State's promise being kept.

Mr. Leburn

I confess that I had not been so advised. I would like to consult my right hon. Friend on this point. In passing, although there has been criticism of my right hon. Friend's absence today, I ought to point out that he is on very important business, and I happily volunteered to take the whole of the Bill. I think that I am just managing.

I would remind the hon. Member—this is rather a long intervention—that we accepted an Amendment on the Clause, bringing in the year 1964 as the effective year, and that I then made the point that this would give an opportunity to these specific local authorities to make further representations and to have the matter further considered.

Question put and agreed to.

Bill accordingly read the Third time and passed.