HC Deb 25 April 1967 vol 745 cc1391-413
Dr. Dickson Mabon

I beg to move Amendment No. 12, in page 7, line 26, after '(2)', to insert: 'Subject to the provisions of subsection (4) of this section,'. The Amendment is consequential on an Amendment which we made to subsection (4) of the Clause in Committee. Subsection (2) requires that a third of the total amount to be requisitioned by a regional water board must be apportioned among the contributing authorities of the Board in the same proportion as the rate product of the relevant part of each of their districts bears to the aggregate of the rate product of the relevant parts of the districts of all the authorities in the region. We debated that in Committee.

Subsection (3) provides that the remainder of the total amount to be requisitioned by the Board is to be apportioned among its contributing authorities in the same proportion as the domestic water rate product of the relevant part of each of their districts bears to the aggregate of the rate products of the relevant parts of the districts of all the authorities in the region.

As originally drafted, subsection (4) qualified subsection (3) by providing that the normal method of apportioning the remaining two-thirds of the total amount to be requisitioned under that subsection was not to be applied in the case of any board where the Secretary of State specified by Order that a modified or different method of calculation was to be adopted for such period as was mentioned in the Order in relation to that board. The Amendment which we agreed in Committee, and now incorporated in subsection (4), enables the Secretary of State to modify the requisitioning arrangements in subsection (2) as well as in subsection (3). Accordingly, we must introduce the qualifying introductory words provided for in the Amendment.

Amendment agreed to.

6.30 p.m.

Dr. Dickson Mabon

I beg to move Amendment No. 13, in page 8, line 11, to leave out from the first 'the' to the end of the line and to insert: 'following provisions of this section'. If the House is agreeable, we might discuss with this Amendment the Government Amendments Nos. 4, 19 and 74 as they all bear on the same point.

Mr. Speaker

If the Opposition has no objection, so be it.

Dr. Mabon

These Amendments remedy a deficiency in Clause 11 as drafted. It contains no provision to estimate the rate products which are to apply in requisitions by regional water boards on their contributing authorities to be calculated on the basis of rate products for the financial year immediately preceding the year in respect of which the requisition is made.

Since the Committee stage the County Councils Association has represented to us that a requisition is respect of a year in which a revaluation takes place should be made on the basis of the current year's valuation instead of on the basis of the preceding year. This is the arrangement for all other requisitions as a consequence of Section 12(2) of the Local Government (Scotland) Act, 1966. It has the effect of enabling the Secretary of State to estimate for any year for any area both the product of the rate for which a third of the requisition is to be calculated and the product of a 1d. in the £ on which the balance is to be calculated.

Amendment No. 14, which applies the provisions of Section 9(1) and (2) of the Local Government (Financial Provisions) (Scotland) Act, 1963, is needed to ensure that there will be no doubt about the interpretation of the expression product of a domestic rate of one penny in the pound used in subsection (3) of the Clause, read with Section 12 of the Act of 1966. Its effect will be that the Secretary of State will make rules, as he already does for the product of a rate of a 1d. in the £ and the standard rate product, by Statutory Instrument after consulting with local authority associations, and will then apply these rules in consultation with the local authorities for the purpose of determining the various rate products to be used by the regional water boards in making their requisitions. These rules, which will be Statutory Instruments, are, of course, subject to annulment by the House of Commons.

Amendments Nos. 13 and 74 are consequential on the principal Amendments Nos. 14 and 19.

Mr. J. Grimond (Orkney and Shetland)

On a point of order, Mr. Speaker. There are two Amendments numbered 74 on the Notice Paper. So that there may be no confusion, may I put on record that we are now discussing Amendment No. 74 in page 7508, and not Amendment No. 74 in page 7516a: in page 22, line 24 [Schedule 1], at end insert:

Orkney and Zetland Water Board. Limits of Supply of:—
Kirkwall Town Council
Orkney County Council
Stromness County Council
Lerwick Town Council
Zetland County Council.

Mr. Speaker

The responsibility for the double numbering is not that of the Government or the Opposition.

Amendment agreed to.

Further Amendments made: No. 14, in line 19, at end insert: (4) In relation to the reference in the foregoing subsection to the product of a domestic water rate of one penny in the pound for the relevant financial year levied for the relevant part of a district, section 9(1) of the Local Government (Financial Provisions) (Scotland) Act 1963 shall apply, as it applies to the references in Part I of that Act to the product of the rate of one penny in the pound, with the substitution for the words 'that area' of the words 'that part'; and for the purposes of the said section 9(1), as so applied subsection (2) of that section shall also apply.

No. 74, in line 24, leave out: 'the two last foregoing subsections' and insert 'subsections (2) and (3) of this section'.—[Dr. Dickson Mabon.]

Mr. Ross

I beg to move Amendment No. 15, in page 8, line 26, at the end to insert: ', in either event, may so specify'. This is a purely drafting Amendment to clarify the scope of the transitional arrangements which can be made by the Secretary of State under Clause 11(4). Of the aggregate amount to be requisitioned by a board, one-third is to be requisitioned in proportion to the actual or standard 1d. rate product, whichever is the higher, of the various local authority districts or parts of districts in the board's area of supply. The remaining two-thirds is to be requisitioned in proportion to the domestic water rate products of those districts.

Subsection (4) qualifies the normal requisitioning arrangements under subsections (2) and (3) and enables the Secretary of State to specify a modified or different method of calculation for such period as is mentioned in the Order. The phrase relating to the financial years has no closely related verb and the Amendment will improve the construction of the Clause, which is somewhat lengthy, and will serve to clarify what can be done by the Secretary of State.

Amendment agreed to.

Mr. Willis

I beg to move Amendment No. 16, in page 8, line 27, after 'years', to insert: 'up to a maximum of twelve years'. This is a humble Amendment. I am not quite sure that it is in the right place, but it raises a point with which my hon. Friend the Member for Midlothian (Mr. Eadie) and I are concerned. That is the period for transition. We were prompted to put down this Amendment because of the great concern of Midlothian about this matter. In spite of very lengthy discussions in Committee and, I believe, in meetings which my hon. Friend the Minister of State has had with the Midlothian local authority, that authority still has great fears about how this provision will be operated.

In Committee, the period for transition was accepted as about five years. This arose out of the Second Report of the Water Advisory Committee, but in its Final Report that Committee discarded all the business about 5 or 10 years and came down definitely in favour of a period up to 12 years. It seems that—inadvertently, of course—my hon. Friend was rather misleading about this in Committee. The Advisory Committee, having considered previous recommendations about a five year period and possibly one up to 10 years and very exceptionally up to 12 years, said, at the end of paragraph 158 of the Report: We therefore recommend that the period should vary in length for eligible authorities according to the circumstances of each case with the maximum of 12 years which should in no case be exceeded. This period should be written into the Bill. I have heard the argument that the maximum period would become the minimum period, but I do not think that would be so in the context of this subsection because it deals with changes made by the Secretary of State.

I am pleased to move this Amendment because I have a nostalgic loyalty to the Water Advisory Committee. It carries me back to my maiden speech in the House. In fact, the Committee exists because of that maiden speech and because, encouraged by my hon. Friends at that time, I ventured to put down an Amendment and the Minister of that time accepted it. He did so because he thought that my industry should be encouraged and also because, he said, the Amend- ment did not mean a thing. Therefore, and as a sort of tribute to the Committee, I should like to see this period written into the Bill.

Apart altogether from that, I think that the fears of Midlothian County Council are justified. It has had some experience of transitional periods in joining with Edinburgh and it has gone through all the recent discussions over the Loch Lomond Order and all the fears which that aroused. As a result, the council is canny and wants to see something put into the Bill to indicate the kind of period over which a transitional order could extend.

Mr. George Younger (Ayr)

I would like to assure the hon. Gentleman the Member for Edinburgh, East (Mr. Willis) that he is not alone in feeling that this would be an admirable Amendment to include in the Bill, and that the concern which he has expressed about the possible repercussions on this point is not confined only to Midlothian. It is felt by many other hon. Members in other parts of Scotland. I have two points in support of this argument. The first is that we must not disregard the fact that the Water Advisory Committee clearly considered this to be of such great importance that it was worth while returning to it in its Fourth Report. It is not stretching a point to say that it almost reconsidered the matter afresh in that Report. If we believe in taking the advice when we can, of the experts whom we establish to advise us, this is a case when we should do so.

The second point has to do with that raised by the hon. Gentleman the Minister of State, in Committee, when replying to a similar Amendment. He said that one of the objections to accepting such an Amendment would be that it was quite possible that 12 years might not be a sufficient length of time in some cases. I can see that this is an argument which could be used, but I ask the hon. Gentleman to consider very carefully whether that is a justifiable view. Do we really feel that matters are sufficiently predictable, that we can see things sufficiently far ahead to say that it will be necessary to go as far as 15 years into the future on this matter, which was the figure quoted in Committee?

The Water Advisory Committee has considered this as a maximum which should not be exceeded in any case. If it thinks that, there is very little likelihood of any local authority or water authority being hardly done by by finding that it could not have the period raised from 12 to 15 years. Twelve years is an entirely reasonable maximum. Is it the case that if we say 12 years in the Bill it will be regarded as the minimum period? I cannot accept that anyone taking a clear view of this matter could regard 12 years as a minimum if it is written into the Bill as a maximum. That is stretching things a long way.

If we do write in the figure of 12 as recommended, it will be regarded as a maximum, quite rightly. All authorities in their negotiations, having a maximum figure of 12 years in mind, might perhaps find it easier to assess their correct place on the scale of number of years that they would be justified in claiming and negotiating. The only arguments against accepting this Amendment is if the hon. Gentleman really believes that 12 years will not be enough for some authorities. I should very much doubt it and I hope that he will be able to accept the Amendment.

Mr. Speaker

Does the hon. Gentleman the Member for Midlothian (Mr. Eadie) wish to address the House?

Mr. Alex Eadie (Midlothian)

No, Mr. Speaker.

Dr. Dickson Mabon

The debate that we had in Committee was of this nature, arguing that there should be a precise number of years and a precise maxima. Some Members insisted that we ought to talk about norms and provide guide lines. I explained in columns 301, 305, and 337 of HANSARD the kind of guide lines that the Government thought ought to be observed in the discussions among the regional water boards. It is a curious argument, this contention about the maximum of 12 years.

In certain cases it would not be enough. Certainly, in the case of Ayrshire, when there was an Order affecting that county, which proved to be abortive, the period of time—I am speaking off the cuff—was 20 years. It was certainly more than 12 in the case of Midlothian, not only on the original Order but on the revision of the original Order. This is a very important point. The initial union with Edinburgh involved a transitional period of 20 years, which would not be allowed by the Amendment. The revised Order was for 15 years, which, again, would be disallowed by the Amendment.

We have the benefit, unfortunately the House does not, of having been to the meetings and obtaining assessments of how the discussions are going with the main groupings of authorities in the 13 regions. Seven of them have been attended by a senior Departmental officer, who has reported directly to the Secretary of State and myself. The existence of this provision, without any definition either of minima or maxima, has helped, not hindered the negotiations, and it is better to leave it to the local authorities to resolve this. We know of no authority which has expressed concern, certainly not Midlothian, at the discussions going on in the South-East. I met some of the representatives of the South-East on Friday.

6.45 p.m.

If there is some feeling on the part of Midlothian that transitional financial provisions for the South-East ought to be less than 12 years, or ought to be more than 12 years, it is fair and proper that Midlothian should say that at the meeting of the South-East, and if it disagrees with the rest of the authorities over this it can raise the matter directly with the Secretary of State.

Mr. Eadie

My hon. Friend cannot make a statement like that. He drew the attention of the House to columns 301 and 305. If he looks at the places quoted he will see that I raised this issue. If he looks at column 306 he will see that I told him: I am already getting them."—[OFFICIAL REPORT, Scottish Grand Committee, 2nd March, 1967; c. 306.] This was a reference to letters from high rated authorities complaining about the time that they would have to wait to get their rates ironed out.

I drew my hon. Friend's attention to the fact that I was being circulated by the Midlothian County Council on the very point that he had made. He cannot tell the House that Midlothian has raised no protestations, when I voiced those very protestations on behalf of Midlothian.

Dr. Mabon

There is a misunderstanding here. I am not talking about the arguments in support of this Amendment. I am talking about the discussions going on involving Edinburgh and Midlothian. The Scottish Office, under both Governments, has had a long dialogue with Edinburgh and Midlothian over their participation in the Loch Lomond Water Order. Because of the argument over that, and the transitional financial arrangements flowing from it, and the uncertainty surrounding the financial arrangements, there has been misunderstanding and ill-feeling.

I do not mean ill-feeling personally, but since then matters have changed. Members on the Committee were the first to witness a change in the climate of opinion, largely as a result of the efforts of the Government and hon. Members. We have had several meetings in the Palace of Westminster to discuss these matters in full. What I am saying to the Committee, on behalf of the Secretary of State, is that these discussions are going well and that we know of no reason why we should import into this Clause any specific minima or maxima.

On the contrary, there is every reason to say that we should leave it alone. If Midlothian feels that there has to be, for Midlothian's sake, a proviso in the transitional financial arrangements affecting Midlothian ensuring a maximum of 12 years, there is no reason why Midlothian cannot put that point of view to the South-East Regional Group. If it failed to convince the group, it can ask the Secretary of State to bear its representations in mind in the specific context of the provisions for the South-East Region. We hope that there will be, and in every normal case there should be, provision for a review to be made of the transitional arrangements at the end of say, three or five years. Therefore, even an Order, once made, can still be reviewed so that if a minority interest feels aggrieved, and even if it has been rebuffed by the Secretary of State, it will still be able to ask for the matter to be raised again.

If I were not sure of how the discussions were going, I should not report so confidently to the House. It would be a mistake to amend the Clause. We should leave it as it is. If there is a case to be made on behalf of Ayrshire or Ayr Burgh and Midlothian, I have no doubt that, with their usual courage and tenacity, they will bring it to the attention of the Secretary of State at the earliest possible moment.

Mr. Willis

I am glad that my hon. Friend is likely to consider the possibility of reviewing the transitional arrangements. However, I am not altogether convinced by his arguments. Whether or not the discussions concerning the South-East are going satisfactorily does not affect the merits of the Amendment. We tabled the Amendment because Midlothian asked us to do so, but that does not alter its merits.

I should have thought that the Amendment was sufficiently good to stand on its own feet. It concerns one of the main recommendations of the Advisory Committee, which examined the matter twice. It changed its mind because of the change in local government financial arrangements. It considered it again as a result of the Acts which were passed and the different local government financial arrangements which had been made.

Dr. Dickson Mabon indicated dissent.

Mr. Willis

My hon. Friend shakes his head. He should read paragraph 158—

Dr. Mabon

I am sorry that my hon. Friend was not a member of the Committee, but if he looks at the Committee proceedings he will see that I dealt at length—some would complain that I took too long about it—with the question of why there was this departure from the major recommendation of the Advisory Committee. I did not think it fair to go over all the argument again.

Mr. Willis

I have read the OFFICIAL REPORT of the proceedings. There was a fairly long debate on this point. I did not get a lot of satisfaction from it.

I understand the reasoning behind what my hon. Friend says. I understand that we should not perhaps tie local authorities to the period of 12 years. I realise that local authorities might require a longer period than 12 years. However, I thought that the fact that the Amendment was based on the Advisory Committee's recommendation would be a sufficient argument for it. However, I can see that my hon. Friend is determined not to give way on the Amendment. I do not know why. I should have thought that it was a reasonable Amendment.

Sir Harmar Nicholls (Peterborough)

Push it.

Mr. Willis

I do not need to be told by the hon. Member for Peterborough (Sir Harmar Nicholls) to push. I have done more pushing in the House than he has. I do not need any encouragement from him.

I am sorry that my hon. Friend does not accept my arguments put forward on behalf of the Midlothian County Council. I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Mr. Willis

I beg to move Amendment No. 17, in page 8, line 32, at the end to add: 'an order made under this subsection shall be subject to approval by both Houses of Parliament'. This is another attempt to ensure that there is a check on what is done under the Bill. Tremendous power is given to the Secretary of State in subsection (4). I have no objection to giving it to my right hon. Friend, but he will not be in office all the time. [HON. MEMBERS: "Hear, hear."] Hon. Members opposite need not bother. My right hon. Friend will be followed by someone on this side of the House.

Subsection (4) provides that (4) Where, in the case of any regional water board, the Secretary of State considers, having regard to all the circumstances, that it would be unreasonable or inequitable that the methods of calculating the sums to be requisitioned, as required by the two last foregoing subsections, should apply, he may by order modify the requirements of either or both of the said subsections or specify a different method of calculation, and the financial years during which the provisions of the said order are to operate, and in relation to that board in respect of those years the provisions of those subsections as so modified, or, where the said order specifies a different method of calculation, the provisions of that order, shall have effect for the purposes of this section. I should have thought it reasonable to suggest that the Secretary of State should place an Order of this kind before the House so that it can be debated. These Orders will affect every household in an area. Sometimes a very large area may be involved, affecting many thousands of homes. Public representatives should be able to express their views in public on the merits of the arguments concerning the transitional arrangements if the local authorities cannot agree. That seems to be a reasonable demand to make.

Mr. Patrick Wolrige-Gordon (Aberdeenshire, East)

I support the hon. Member for Edinburgh, East (Mr. Willis) in the wavering charge which he makes on his Front Bench. The recommendation of the Advisory Committee which was discussed on the last Amendment was not the only recommendation which has not been accepted by the Government. There is concern among many local authorities about what will happen during the transitional arrangements with which the Clause is directly concerned. I support the Amendment, which proposes that the actions of the Secretary of State should be open to scrutiny and that he should give Parliament the chance to consider his proposals.

Mr. Manuel

I am attracted by the Amendment. What must be apparent to everyone is the deplorable lack of opposition by the Conservative Party. This Amendment should have been their Amendment. We were told earlier how scrupulously the Opposition had read the evidence about this, that and the next thing. Here we have a glaring example of how they have missed the opportunity to insert something in the Bill which would control the activities of the Secretary of State. They are always trying to do that, without success.

Mr. MacArthur

If the hon. Gentleman casts his mind back, he will recall that we spent two mornings in Committee debating Opposition Amendments which proposed that we should incorporate in the Bill the recommendation of the Advisory Committee on the rating point. I have always regretted that the Government saw fit to reject them.

7.0 p.m.

Mr. Manuel

I recognise that, but it was not on subsection (4) of this Clause. The hon. Gentleman's explanation is a candid admission that the Opposition missed their opportunity in Committee.

I am attracted to the Amendment. I have always argued for greater freedom for local authorities and joint water boards. Acceptance of it would not mean my right hon. Friend and the Minister of State giving up very much, but it would show that, having said so often that we want as much power as possible to be retained in the hands of local authorities and regional boards, we are now living up to what we said when we were in opposition. I hope that it will be given further consideration.

Mr. Ross

rose—

Mr. Speaker

Order. There is another hon. Member wishing to intervene. Mr. Buchanan.

Mr. Buchanan

If my hon. Friend the Member for Edinburgh, East (Mr. Willis) had been sitting on the opposite benches, I should have been tempted to call this a mischievous Amendment—

Mr. Willis

Surely my hon. Friend does not think that it is mischievous to allow the House of Commons to discuss something which affects hon. Members' constituents?

Mr. Buchanan

That is a double-edged question. I said deliberately that it would be a mischievous Amendment if my hon. Friend had been in opposition. When he was in opposition, his forte was in opposing.

When I first came to the House, I was astonished at the amount of work which we tried to get through. It is difficult to imagine having to debate every Order for an increase in charges promoted by a regional water board. If we did that, we should have to debate every increase in rents proposed by the Scottish Housing Association, and similar subjects. This is a stone which, when thrown into the pool, causes an every-widening ripple. Once we started to debate such Orders, we should not have time to get through the essential legislation which we have to consider. I hope that the House will reject the Amendment.

Mr. Ross

I do not suggest that the Amendment is mischievous. After all my years of co-operation with my hon. Friend the Member for Edinburgh, East (Mr. Willis) on amendments and amending legislation, I should be the last to suggest that any amendment which he put forward could be described as mischievousֵ However, in this case, he is departing from the high standard which we evolved when he suggests that any order made under this Section shall be subject to approval by both Houses of Parliament.

Quite frankly, the Amendment is unnecessary. If Parliament approves the Bill as drafted, the normal requisitioning arrangements will be specified in subsections (2) and (3) of Clause 11. It is only under subsection (4) (now subsection (5)), where the Secretary of State considers having regard to all the circumstances that it would be unreasonable or inequitable", that the specified methods of calculating requisitions should apply; that is, something drawn to his attention by circumstances in an area.

Quite obviously, under Clause 28(4), an Order cannot be made without the Secretary of State first having consulted the authorities concerned, and, following our contacts with authorities, it is our hope and belief that the authorities in each region will be able to agree among themselves the details of any transitional financial arrangements which may be needed. My hon. Friend made it clear in Standing Committee and at meetings with authorities that the framing of such arrangements is, to a large extent, in the authorities' own hands, and the Secretary of State is not likely to dissent from any scheme which commends itself to all the local authorities in a region.

That being so, and because any such Order must by its nature be providing for a purely temporary financial arrangement, it would seem inappropriate to make it subject to Parliamentary approval. After all, ultimately the Secretary of State is responsible to Parliament in relation to the exercise of powers delegated to him, and, in making any Order under this Clause, he will have regard to the interests of all the authorities concerned in a region within the requirements in the subsection as to what is "unreasonable or inequitable". We should be placing a far more stringent requirement on Clause 11 Orders than on any other type of Order provided for in the Bill, including Orders under Clause 5 in respect of changes in regions, which many people will construe as being much more important.

I hope, on reflection, that my hon. Friend will be assured that not only can he trust the present Secretary of State, but those who may follow him, and I think that he should not press this one.

Mr. Eadie

Since I am a signatory to the Amendment, I feel compelled to make a brief contribution to the debate. If my hon. Friend the Member for Edinburgh, East (Mr. Willis) is to be attacked for being frivolous and mischievous, although my right hon. Friend referred to it in a most kind way, it should be pointed out that the Amendment was founded to some extent on the debate which we had in Committee, and I had hoped that my right hon. Friend would take that into consideration.

During the course of that debate, my hon. Friend the Minister of State deemed it necessary to quote from HANSARD. In turn, I would refer my right hon. Friend to column 301, where I suggested difficulties which would arise in getting water committees to come to agreement. I talked about the logic of the situation, and said that it was a strange way for regional boards to get started and then have to sit down and argue about differential rates. My hon. Friend gave us some assurances in Committee, but I do not think that there is anything anti-democratic in an Amendment which suggests that Parliament should have some say on these matters.

Therefore, I wished to be associated with my hon. Friend the Member for Edinburgh, East in an Amendment which I thought was a reasonable one and was in no way mischievous. Even at this late stage, at what might be described as the fag-end of the debate, I hope that my right hon. Friend will consider the reasoning and logic behind it.

Mr. Ross

If I might just take up one point to which my hon. Friend the Member for Midlothian (Mr. Eadie) referred, the question of tyranny or anti-democratic feeling does not arise. The question is whether we think that it is necessary. I have read the debate in Committee. I understand and appreciate that any change in transitional arrangements is important for an area and for the local authorities in it. However, it is there that any discussions must take place and where agreement must be reached. It is because we think that the Amendment is unnecessary that we oppose it. We do not oppose it because we consider it to be mischievous, malicious or undemocratic.

Mr. Willis

My hon. Friend the Member for Glasgow, Springburn (Mr. Buchanan) seems to have missed the point. We are not discussing the activities of local authorities. If we were, I should not want to interfere, having fought for their rights as long as I have. We are discussing the actions of the Secretary of State who considers, having regard to all the circumstances, that an arrangement would be unreasonable or inequitable, and acts upon it. There is only one way that can be checked, and it is not in a town council or joint water authority meeting. It is in the House of Commons. It is for us to check that. If I had been a Member of the Committee which considered the Bill, I would probably have tabled some more Amendments about this procedure. In fact, we might still have been in Committee.

My right hon. Friend chided me for falling below form. I think that he, too, has fallen below form by trotting out the old excuse for every would-be bureaucrat, namely, that they always behave benevolently, that they weigh up the situation and act in the interests of both sides. This is the argument of every bureaucrat. It is an argument used by every official. Everyone in the House knows that we spend half our lives checking the actions of benevolent bureaucrats. We have just appointed an Ombudsman to do this. I do not know whether my right hon. Friend is tired, but he has certainly fallen below standard in trotting out this argument.

It seemed a modest request to make that Members should be allowed to discuss something that the Secretary of State was doing, something which might affect every household in Members' constituencies. I have constituents in Edinburgh and Midlothian. They might all be affected by arrangements made by the Secretary of State. Surely it is not wrong to ask that if he decides to make a different Order—and this is what it says—I should be allowed to say something about it? My electors do not return me to hold my tongue. They return me to express their feelings and their views, and, if I think they are being unfairly treated, to say so. This is why I am returned to this place, and this is what I am endeavouring to do.

However, once again, I can see that my right hon. Friend will not give way on this—

Sir Harmar Nicholls

Push hard.

Mr. Willis

It would be a waste of time—[Interruption.] There would not have been a Scottish Advisory Committee if it had not been for me.

Mr. Speaker

Order. The hon. Gentleman must not allow himself to be tempted out of order by interruptions.

Mr. Willis

I am sorry, Mr. Speaker, but I am so easily led out of order.

I see that my right hon. Friend does not intend to give way on this Amendment, and, therefore, I do not wish to waste the time of the House by voting on it. I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Mr. Grimond

I beg to move Amendment No. 18, in page 8, line 32, at the end to add: 'in particular he shall have special regard:

  1. (a) to the effect of the new groupings into regional water boards upon the Rate Support Grant payable to the local authorities;
  2. (b) to the rate of grant payable under the Rural Water Supply and Sewerage Acts for new schemes'.
The Amendment raises again a point which I raised in Committee. It arose from a memorandum, supported by very detailed calculations, put forward by the Burgh of Inverness with regard to the possible effects of the Bill on the rate support grant and on grants under the Rural Water Supply and Sewerage Acts. When the matter was discussed in Committee, the Minister of State said that he did not think that the Bill would have the effect upon Inverness-shire which was suggested, namely, that it would very much reduce these grants. He said, however, that if it turned out that such effects might result from the Bill, it was the Government's intention to correct that, and as I understood it he gave an undertaking that local authorities would not suffer any diminution either under the rate support grant, or under grants for new schemes under the Rural Water Supply and Sewerage Acts.

7.15 p.m.

The debate was split between two days, and on the second day the hon. Gentleman said that he had thought some more about the matter, and that possibly it merited further consideration. Since then I have supplied him with calculations sent to me by the Chamberlain of Inverness, and I imagine that he has studied these. I have moved the Amendment in the hope that the hon. Gentleman will both reaffirm the undertaking which he gave in Committee, and explain to the House a little more fully what will be the effect of the Bill when it becomes an Act upon the Rate Support Grant and upon the Rural Water Supply and Sewerage Acts.

It may be that the result of the Bill when it becomes an Act will be that to give effect to the undertaking—that local authorities will not be any worse off—it will be necessary for the Government to amend other Acts, or he may be able to say that he is still of the opinion that the Bill will have none of the effects which are suggested on certain local authorities, principally Inverness.

Dr. Dickson Mabon

I am much obliged for the fact that we are able to debate this Amendment again, because in Committee I was pretty certain that the effect would not be what it was suspected it would be on the Rural Water Supply and Sewerage Acts, but I said I was not sure what effect it might have on the rate support grant. The right hon. Gentleman was kind enough to pass on this detailed analysis from the Burgh of Inverness. It is a good illustration, and I am grateful for the work which has been done in preparing it. We have since had time to go through these calculations and get quite clear the effect of the Bill on the rate support grant.

The right hon. Gentleman said that the effect of the Bill would lie in the consideration whether or not to specify transitional financial arrangements in relation to any authority or group of authorities in a regional water board, the Secretary of State would be required not only to consider whether the normal basis of requisition would be, as the Bill has it, unreasonable or inequitable, but also to have regard to the two points he mentions as (a) and (b) in the Amendment.

With regard to the rate support grant, the right hon. Gentleman quoted calculations which purported to show that the Inverness region that is to say the county and burgh, under Schedule 1, as a whole, would lose a substantial amount of rate support grant after regionalisation, and his concern was that this should not represent a transfer of the burden from the Exchequer to the ratepayers.

I can give an assurance on behalf of my right hon. Friend, that, having this evidence before us, and being able to go into it in more detail, and with more time at our disposal than we had between Committee debates, this is not the case, because under the rate support grant formula expenditure on water supply does not affect the total amount of grant paid in Scotland. But in so far as there is a levelling out of water expenditure charged to the general rate, the effect will be that there will be some redistribution of the total rate support grant among the authorities.

I hinted at this in Committee. I said that this might he a consequence, and the right hon. Gentleman was broadminded and fair enough to admit that there is nothing wrong in the principle of redistribution, since this is one of the main ideas of the rate support grant which is geared to resources, as indeed was the Exchequer equalisation grant before it. Where there is some transferance of expenditure on water from counties to burghs, there could be a reduction in the total amount of rate support grant paid within a region because, in general, burghs tend to attract rate support grant at a lower percentage rate than do counties.

The Inverness example was discussed at the regional meeting of authorities on 30th March. This has brought to light the need for an adjustment in the arrangements made under the Water (Scotland) Act, 1949, governing the part of a local water authority's expenditure which it can charge to its general rate. When we reach Amendments Nos. 68 and 69 we shall no doubt be able to pursue this matter further. The Government Amendments to paragraphs 19 and 23 in Schedule 5 have the effect of enabling a local authority to charge more than the present statutory limit of one-third of its water expenditure to the general rate, and this will have the incidental effect of helping to maintain the level of rate support grant. The relative needs of individual local authorities for rate support grant have to find their own level under the grant formula.

To summarise, I can now confirm that following discussions with local authorities it is clear that, regionalisation under the Bill would produce no saving to the Exchequer in relation to rate support grant, although there may have to be adjustments, influenced by later Amendments.

As the right hon. Gentleman knows from our debates on the Local Government (Finance) Act, 1966, we have in session a working party on local government finance capable of influencing and restructuring the rate support grant in as much as it does not affect legislation—in this case the Water (Scotland) Act, 1949. We will keep under review the position vis-à-vis individual authorities. I am glad to say that the Bill does not reduce the Exchequer contribution for Scotland.

It is not the Government's intention, either, to reduce Exchequer assistance under the Rural Water Supply Acts. The rate of grant being paid to a local water authority under the Acts is not the measure of transitional financial assistance that it should get from other authorities in the region under the new structure. The right hon. Gentleman may remember the three categories that I described as affecting the position of local authorities in respect of the work they were undertaking as a local authority—work that had been completed, work that was going on, and work that had been approved.

Many small burghs have low water rates and may justifiably have a case for transitional financial arrangements, although at present they do not qualify for grant under the Rural Water Supply Acts because they do not come within the present definition of rural localities. The hon. Member for Banff (Mr. Baker) raised this point, and I suggested that we would look at the question again, administratively, to see if we could adjust the definition in the light of the new regionalisation proposal.

The aim is to try to reach agreement in each region on a fair and equitable arrangement for every local authority—those with low rates and those with high rates—and it would be restrictive to write into the Bill all the considerations to which the Secretary of State should have regard.

Mr. Bruce-Gardyne

Is the hon. Gentleman saying that it is the Government's intention that the Rural Water Supply Acts will be used to enable grants to be made to small burghs which have not qualified in the past but which are facing substantial increases in water rates as a result of this legislation?

Dr. Mabon

In the two-day debate in Committee I was extremely circumspect in what I said about this. I commend to the hon. Member what I then said. I do not dissent from the view of the hon. Member for Banff; it is the view of many people that a review was necessary, because the definition was too close and unfair to small burghs, especially in rural areas where, by the growth of new communities—usually overspill from the towns—there was no case for rural water supply money going, to those people; it should have gone to others in more scattered areas. I suggested that we were reviewing the situation. We have to try to be fair to all. We are considering whether the definition should be changed in cases of unfairness. The question will be taken effectively into consideration.

I have assured the right hon. Gentleman that in general terms Exchequer assistance by way of rate support grant to Scotland will not fall, and that Exchequer assistance under the Rural Water Supplies Acts to Scotland generally will not fall, but the operation of the rate support grant may have effects which will influence the position. The Secretary of State does not dismiss these elements. He agrees that there are two more elements to be taken into consideration in framing the transitional arrangements to deal with the difference in rates as between low-rated and high-rated areas.

We do not want to spell out all the needs and circumstances to be taken into account, because they do not apply to every region, and we could not work out a standard formula to suit every region. We have therefore left the matter in this comprehensive way, without specifying or adding emphasis to any specific points.

I hope that with those two assurances, which I can now give more emphatically than I could in Committee, the right hon. Gentleman will not press the Amendment. I thank him for putting it down, both in Committee and today.

Mr. Grimond

I have always felt that one danger of the Bill is that we have practically no estimate of its financial effects. Judging by past experience, the cost of water in Scotland will rise considerably.

I appreciate what the Minister has said, but even if the total amount of money supplied by the Exchequer does not fall local authorities are still greatly concerned to know what their individual share of that total will be. In Committee, on 7th March, talking about the rate support grant, the Minister said: The right hon. Gentleman argues that, somehow or other, the position of Rate Support Grant vis-à-vis a local authority has some relation to its water burdens. However, there is no inverse or direct relationship. I say that there is. It does have an effect on the general rate. He went on to say: But there is no intention that it should be so, and, if it were to prove so, the matter could be adjusted."—[OFFICIAL REPORT, Scottish Standing Committee, 7th March, 1967; c. 351.] I am not absolutely certain how we should read this. I understand that the Minister has slightly altered his position today. In Committee he seemed to be saying that the grant coming to an authority—which is presumably a new authority—would not be affected, but that if it were the matter would be adjusted. He seems now to be saying that the total amount will not be affected but the amount payable to different authorities may be. It may be possible to raise the question again on a later Amendment. It is of great importance to individual authorities to know how they will be affected.

7.30 p.m.

I understand that we have had a categorical assurance that the grants payable under the Rural Water Supply and Sewerage Acts for existing schemes in the course of construction, or for new schemes in the course of construction, or for new schemes, will not be affected. I do not feel entirely happy about this. It is very unsatisfactory that we should leave Scottish local authorities in as much doubt as they are at present about their financial liabilities under the Acts. I am afraid that those liabilities may prove to be greater than some people expect.

As there are to be further Amendments, and in the light of the Minister of State's explanation, which contains some more information for local authorities, and his assurance that at any rate the amount of money supplied by the Exchequer will not fall. I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Amendment made: No. 19, in page 8, line 32 at end add: (5) For the purpose of making any calculation required by this section, section 12 of the Local Government (Scotland) Act 1966 (apportionments, allocations etc. relating to local authorities) shall apply as that section applies to section 7(1) of the Local Government (Financial Provisions) (Scotland) Act 1963 with the modification that in subsections (1) and (2) after the words 'rate product' there shall be inserted the words 'and the product of a domestic water rate of one penny in the pound'—[Dr. Dickson Mabon.]