HC Deb 01 February 1967 vol 740 cc691-715

12.34 a.m.

Mr. Gordon Campbell (Moray and Nairn)

I want to change to a different subject and to refer to page 22 of the Supplementary Estimates, containing items concerning the Scottish Supplementary Estimate and the increase required in general grants to local authorities in Scotland. The total of these items is £6,968,000. It is stated that this provision is subject to the General Grants (Increase) (Scotland) Order, to be laid before Parliament, and to the Local Government (Scotland) Bill. These Supplementary Estimates are dated 30th November last and we considered the General Grant Order on 20th December last. The Local Government Bill which was referred to must have been the one which is now enacted.

Then, later on in page 22, it is stated, in explaining the expenditure, that the Secretary of State for Scotland proposed to increase the aggregate amount of the general grant for the years 1965–6 and 1966–7 was £8.4 millions. This was on 30th November, but the Scottish General Grant (Increase) Order, which subsequently appeared about two weeks later, provided for an increase of less than that—to be precise, for £8,045,000 for the two years in question, or about £400,000 less in the event than had been stated on page 22 of the Supplementary Estimates.

Of course, one recognises that the question of dates arises here, but we would appreciate an explanation from the Minister. The grant begins in the middle of May and ends in the middle of May, but the Estimates are for the period up to 31st March; so there is a difference of about six weeks. This may explain why the figure of nearly £7 million is now required and not £8 million, or nearly £9 million if one counts in the £700,000 in rating relief. What it does not explain, is why it was stated on 30th November that there would be an increase of £8.4 million, while when the General Grant (Increase) Order appeared only two weeks later, the figure had become £8.04 million. I quote the figures in that way, because the explanation may be that there has been a misprint; it could be that 8.4 has been printed for 8.04.

The Minister of State, Scottish Office (Dr. J. Dickson Mabon)

indicated dissent.

Mr. Campbell

The Minister shakes his head, but if it is not a misprint, then he must explain how the Secretary of State decided in only two weeks to lop off no less than £400,000.

A further point needing clarification is on the question of the increased costs and prices and remuneration which are the reasons for this extra money being required. In the report of the Secretary of State accompanying the General Grant (Increase) Order, it was stated that the increase in remuneration was for increases in wages and salaries for teachers, firemen, and miscellaneous minor awards. We knew of the increases for teachers and firemen, but what about the "miscellaneous minor awards"? There is one in particular which is affected, and on which we should like more information.

That is the local government officers whom it was expected would receive an increase in their pay as from 16th March—that is, this coming month. There would be two weeks of this 7 per cent. increase of pay included in this Supplementary Estimate because two weeks of March are involved. But have these been included? On 30th November last was an increase included under the extra remuneration and under "miscellaneous minor awards" in this explanatory report by the Secretary of State? These increases had been negotiated and then postponed for six months, so the facts were not new to the Government. They were negotiated on 16th September last and then, under the arrangements for freezing wages, the award was accepted but would not come into effect until 16th March.

It was following the English equivalent of the negotiation. For the local government officers in England and Wales the negotiation had led to a 7 per cent. increase being agreed, and this also was postponed for six months; but the difference between the two negotiations appears to be that whereas in the case of England and Wales the pay award is coming into effect—I was going to say today, but I now see that the date was yesterday, 1st February—we understand that in the case of Scotland at the end of the six months the award is not to be made and has not been accepted.

This seems extraordinary and inexplicable because the time lag between the two negotiations, which was a matter of only a few weeks, was made necessary by the Department of Economic Affairs which, I understand, insisted that the Scottish negotiation must follow precisely the pattern of the English negotiation. It was understood that because the local government officers were in similar grades, doing similar work with similar qualifications, the Scottish negotiation should have the same award as the English, and that therefore the English negotiation should take place first and the Scottish negotiation afterwards.

By mischance, it seems, the English negotiation was completed just before an arbitrary day, 20th July, and the Scottish negotiation afterwards. If that is the only reason that the local government officers in England and Wales are to get their award after the postponement for six months, while the Scottish local government officers are not to do so but are to have theirs further postponed, this is inexplicable. It is a deplorable distinction which has happened entirely by chance, and I hope the Minister of State can tell us that he or his right hon. Friend the Secretary of State will make sure that this glaring anomaly is put right.

We should like to know, first, whether the part of this award that was expected to fall within this financial year—that is, the part which was expected to fall before 31st March—was included in these Supplementary Estimates when they were made up in November; and, secondly; referring to page 20 of the Estimates where there is exactly the same wording concerning the increase in remuneration for employees of local authorities in England, which increase is apparently to start on 1st February—whether allowance has been made in the English Estimates for such an increase to take place.

This is a matter which is causing great concern not only amongst the local government officers and their employers in Scotland but in Scotland as a whole. I hope the Minister can tell us what the position is and that he can give us an answer which is fair to Scotland.

12.43 a.m.

Mr. J. Bruce-Gardyne South Angus)

I should like to endorse the points which were made by my hon. Friend the Member for Moray and Nairn (Mr. G. Campbell). We need a great deal of explanation of the apparent discrepancies between the figures in the general grant that we are discussing tonight and the figures in the General Grant (Increase) (Scotland) Order that we discussed before Christmas.

I should like also to take up one or two other points which arise from the details of the General Grant (Increase) (Scotland) Order for which the money is being voted, as I understand it, under the general grant which we are discussing tonight. My hon. Friend has already referred to the affair of the N.A.L.G.O. award. I should have thought that we needed a pretty comprehensive explanation from the Minister of State about this. On the face of it, it appears to be a fairly disgraceful case of discrimination against Scotland, and a case which is not, so far as I can see, allowed for in the Grant Order. We shall need a clear explanation why the discrimination should have occurred.

When the General Grant (Increase) Order was being discussed in the House before Christmas, the Parliamentary Secretary, as he then was, pointed out, correctly, that the bulk of the money arose because of the teachers' salary award. He made a statement which I have read with considerable interest. He said that the grant was in respect of all kinds of workers in local government who deserved to have their wage and salary increases endorsed. He went on: I hope that no one, in criticising the size of this Order, suggests that they ought not to be honoured."—[OFFICIAL REPORT, 20th December, 1966; Vol. 738, c. 1352.] It is a great relief to find the present Government honouring any of their promises to anybody. It sticks out like a good deed in a naughty world. I would not criticise them for honouring their obligations in the matter of an increase in teachers' salaries notwithstanding the circumstances whereby the award was agreed after the Secretary of State had "taken the mickey" out of the Prices and Incomes Board, a matter one would hardly be in order in discussing again tonight.

Another point arises from the Order. Among the figures that come within the scope of the grant, there is an increase in respect of cost of registration of electors. The Minister of State must give us an explanation. Why should the cost of registering electors increase when the number of electors declines? We had a net emigration of 47,000 Scots last year; the number of electors declined proportionately. Of those, 25,000 went abroad and 22,000 came south. The Secretary of State seeks to console himself with the fact that the number coming south remained constant, although there was an all-time record in the number going abroad—in the immortal words of the Prime Minister, voting with their feet, and voting against Socialism.

Why is it that, despite the decline in the number of electors—of which the Government should be mortally ashamed—the cost of registration of electors should increase? We are entitled to an explanation. If in passing the Minister of State can tell us what the prospects are of a genuine increase in the number of electors in Scotland in future we shall be delighted but thoroughly surprised, and thoroughly sceptical so long as the present Government are in power.

Another increase is on account of increased transport costs. This was discussed in the debate before Christmas, and the then Parliamentary Secretary gave a very unsatisfactory explanation, and a very inadequate one, of the reasons for the increase. In particular, he attempted to gloss over the impact of increased taxation and the taxation element in fuel costs and vehicle licences. I hope that we will be given a more comprehensive explanation tonight.

There is also an increase in the grant in respect of National Insurance employers' contributions. Is there, in this part, provision being made for an anticipated increase in unemployment contributions in view of the growing condition of unemployment in Scotland? In other words, does the Minister anticipate that this is liable to affect employees in local government? [Interruption.] The Minister of State may consider this a laughing matter, but many people in Scotland do not regard it as such. But what can one expect from the present Government?

Mr. John Brewis (Galloway)

I thought that the number of employees in local government was increasing.

Mr. Bruce-Gardyne

My hon. Friend may be right. Perhaps that is the way in which the Government are hoping that their redeployment policies will work; the way in which people are being driven from one employment to another.

At a time when the burden of rates has been increasing so fast, I would be the last person to complain about any assistance being given by way of general grant to help the ratepayers of Scotland. However, I cannot see that either this grant or anything else we have been discussing in the Scottish Committee can he regarded as in any way fulfilling the Government's frequent promises to alleviate the burden on ratepayers and shift it to the taxpayers. The Government have been issuing a great many empty promises and what is proposed will in no way adequately alleviate the burden on ratepayers.

12.53 a.m.

Mr. John Brewis (Galloway)

I wish to comment on only one point mentioned by my hon. Friend the Member for South Angus (Mr. Bruce-Gardyne)—the local government aspect of this matter. I do so because it is lamentable that we cannot keep the salaries of those employed in local government in Scotland in line with their counterparts in England in such a way as to prevent them from seeking alternative employment South of the Border, particularly since we in Scotland cannot afford to lose these people to the South.

This Supplementary Estimate seems to reveal some bad housekeeping. When the last General Grant Order was made the Minister stated, on 20th December last, that the figure involved was £86…2 million. That seems to have become £86…37 million. It also appears that, while he was referring to the year ending in May, he is now referring to the year ending in March. What is the true position? Further, we now have the figure of £93…8 million mentioned, although then it was £93…13 million. All the figures seem to be wrong. One must add to this the fact that the Ministerial Circular, signed by the Financial Secretary to the Treasury, contained a date in November, 1966, which indicated that it was issued—and, therefore, these figures got out—before the debate in December took place. It is all the stranger when one asks oneself whether he knew or did not know that the local government claim was not to be honoured. Did he or did he not know that the teachers' salary increase was to be cut by 2 per cent. and that teachers in further education would not get their salary increase at all? Why are there always increases in the Estimates? There should be decreases occasionally.

Interest rates for local authority borrowing have been at the highest rate for the longest period ever, but just recently there has been a reduction. What will the ½ per cent. reduction mean for the rest of the year? There is no reference to that anywhere. Will the Minister of State tell us what alleviation the hard-pressed local authorities will have from the reduction in interest rates?

12.55 a.m.

Mr. Edward M. Taylor (Glasgow, Cathcart)

There is so much one would like to say about local government spending in Scotland, but the Supplementary Estimates limit the scope of the discussion to only a few points. But they are important points, and one cannot but deplore that, on a matter of such significance for Scotland, there is only one Labour back bencher present to discuss it. This is a shocking state of affairs.

Mr. William Hannan (Glasgow, Maryhill)

What the hon. Gentleman says is not founded in fact. If he cares to challenge the Vote, he will find out how many Labour Members will be on the back benches. There is no point in saying that they are not in the Chamber at this precise moment.

Mr. Taylor

I am sorry to have annoyed the hon. Member for Glasgow, Maryhill (Mr. Hannan) because I know that there is no more conscientious Member than he.

Mr. Hannan


Mr. Speaker

Order. After that exchange of amenities, I hope that we can come to the Supplementary Estimates.

Mr. Taylor

These Supplementary Estimates remind us of the extent to which costs and prices are rising and of the Government's failure to control the increase in local government spending. But if we do not approve these Estimates, the local authorities will have to make good the difference, and this could only bring further distress to the hard-pressed ratepayers of Scotland. Having this week had the opportunity to speak with some Glasgow traders about their rate problems, I know that this is one reason why we could not turn down the Estimates. It would only make things much more difficult and confirm the impression that some people have that the local authorities, with the connivance of the Government, are almost intent on committing economic suicide.

I am concerned about the sharing of the increased costs referred to in the Supplementary Estimates. It is difficult to follow grants from one year to another and compare like with like, but it seems that the amount which has been allowed for under the General Grant (Increase) Order is to rise to over £93 million in 1966–67, compared with a final figure of about £83 million in the previous year. Government grants, therefore, are rising at about 12 per cent. a year, or a little less. But the Minister of State told us a few days ago that rates in Scotland, that is, the share borne by the ratepayers, were rising by more than 16 per cent. It appears, therefore, that the Government are passing an increased burden on to the shoulders of the ratepayers and accepting less on their own.

Our fears have been confirmed by a Government paper published today by the Scottish Office which shows that the Government are not even prepared to accept the normal local authority estimates for reckonable expenditure, and the authorities will themselves have a much higher share of the burden to carry in the forthcoming year. I believe that that is the first time it has been done, and it will cause real alarm in local authorities.

My second question is that which was touched upon by my hon. Friend the Member for South Angus (Mr. BruceGardyne) in his very penetrating speech. I would make a further quote from the OFFICIAL REPORT in that connection. The Minister said of the wage increases: They have been negotiated through the proper machinery…and must be honoured."—(OFFICIAL REPORT, 20th December, 1966; Vol. 738, c. 1352.] It appears that the local authority officers are to be cheated out of their meagre entitlement because someone, somewhere is not fighting for the interests of local government in Scotland.

The Government have the responsibility for giving an answer. Are these figures included in this Supplementary Estimate, and if not, does that mean that the Government have known, or the Scottish Office Ministers have known, for a considerable time that that wage agreement would not be honoured? If that is the case, and I hope that it is not, it would be a disgraceful condemnation of the Government's interest in the people of Scotland and Scottish local government.

The question of teachers' salaries is referred to at the foot of page 22 of the Supplementary Estimates, where it says that most of the increase results from the increase in teachers' pay. What would be the increase in the Supplementary Estimate if our schools were fully staffed? We must bear that point in mind, because the Government plan to raise the school leaving age, which would mean a dramatic increase in that provision. Are the Government taking into account the present situation in the schools or making provision for an increase?

Have the Government allowed themselves scope to allow for things other than increases in "prices, costs and remuneration"? The Minister knows that this is an old hobby-horse of mine. It is wrong that the Government should only make provision for prices, costs and remuneration in such an Order. How strictly have the Government interpreted this?

One point of difficulty arose as a result of a penetrating question by the hon. Member for West Stirlingshire (Mr. W. Baxter) on 20th December, when he asked whether provision for S.E.T. was included in the Order. The Minister was not very clear then. He said: As far as we are concerned now the answer is, 'No.'"—[OFFICIAL REPORT, 20th December, 1966; Vol. 738, c. 1353.] A few weeks have elapsed since then. Has the Minister had an opportunity to investigate the matter, and is provision being made in the Supplementary Estimate for S.E.T.?

If it is not, could the Minister explain why it is not included under the general definition of unexpected increases in prices, costs and remuneration? Surely it is one of the basic costs of local gov- ernment which it cannot avoid, and one for which proper provision should be made? It will not be adequate for the Government to suggest that provision can be made in future years, for it is then so difficult to trace these things back. Can the Minister also give a general indication of the extent to which he interprets prices, costs and remuneration?

How much provision has been made for the success of the Government's exhortations to local authorities to restrain their spending? We see in a paper published today that a further exhortation has been made by the Government, and that beneficial and useful schemes will be cut because of the Government's financial policies. To what extent has this Supplementary Estimate been adjusted as a result of the Government's endeavours and exhortations to local authorities? I want a straight figure. Can the hon. Gentleman say what the figure would have been if the Government had not made this exhortation to local authorities? Would not the rates increase of 16 per cent. in the country have been far more? This Supplementary Estimate is yet one further indication of the inadequacy of the rating system and I hope that the Government some day soon will have a general indication to make on the point.

1.5 a.m.

Mr. Hector Monro (Dumfries)

As my hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor) said, this Supplementary Estimate is largely to deal with teachers' salaries. I am not in the least critical of the increase, for which the teachers are certainly due. If we are to have sufficient teachers by 1970, the salaries will have to go up a great deal faster than they are at the moment. I hope that the Remuneration of Teachers (Scotland) Bill will be the first stage in that direction.

It is stated in the Supplementary Estimate that other local authority employees are included—for example, firemen and school crossing patrolmen and so on. Does this include national and local government officers who work for local authorities? I do not want to read again the penetrating extract from the debate of 20th December which my hon. Friend the Member for North Angus and Mearns (Mr. Buchanan-Smith) read out. It indicated that the Minister of State accepted that the negotiated wage increase would be paid. That is why we want to know whether that is included in this Supplementary Estimate.

The statement made by the Minister of State on 20th December was hedged around with various escape clauses but the intention to honour the agreement is there and when a Minister makes a statement like that he should carry it out. He knows that the increase is being paid to officers in England and Wales as from today but that the Scottish increase due on 16th March has been postponed. That is a shameful method of carrying on government in this important area of local authority salaries.

I am concerned about the many services which the Government are increasingly estimating for and for which the local authorities will have to provide a percentage grant increase from their own resources. They are already extremely hard pressed and are trying to keep down to the suggested norm, which all think is impossible. It is extremely worrying to local authority finance committees, which have to bear the wrath of the ratepayers when the notices go out.

Over many of these increases, particularly those in education, the local authorities have little control. The Government have their policy and legislation and the local authorities must carry out their instructions. Yet they have to increase their rates very substantially without having any come-back to the Government. The sooner we can change this method of education expenditure the better.

I want to deal particularly with the item of £58,000 for planning. On 20th December, the Minister of State gave the figure of £38,000. That may be a mistake in printing. But I want to quote the remarks he made then: There are planning advances which have to be made in many parts of the country which, frankly, have not been touched. I will not go into all the areas—the Borders, the South-West and the North-East—but all these require major efforts in planning, which can he expensive in professional terms, which we have to countenance. Therefore, the £38,000 estimated here is well justified."—[OFFICIAL REPORT, 20th December, 1966; Vol. 738. c. 1351.] Whether it is £38,000 or £58,000, it is still a lot of money.

I am particularly interested in the Borders and the South-West and I want to question the Minister of State closely about just how this money is to be spent in those areas. The economic consultative planning groups have been set up in most regions of Scotland, certainly those for the Borders and the South-West, although the south-west group has only just been formed and is at a very early stage, but I wonder how this money is to be spent between now and May.

Do the Government have in mind some big new initiative for the South-West which will need all this money? Yesterday, in reply to a Question of mine the Secretary of State indicated that the Government were not going forward with an investigation of the Solway Barrage, which was one of the things in planning which we thought might well have been dealt with at an early stage. I welcome the expenditure of money on economic surveys if constructive action follows, but so often we set up committees and get no decisive action to follow. I hone that the Minister will see that constructive action follows the spending of this money on planning.

The general impression which the people of Scotland will get will be that this is money being voted by the Government for valuable services, but at the same time they will well appreciate that a large amount of it has to be paid by the ratepayers in equal percentage amounts. The Minister should give as much information as he can in reply to the questions which have been put to him.

1.12 a.m.

Mr. Ian MacArthur (Perth and East Perthshire)

As the months go by, we receive evidence, which is now mounting to an alarming extent, of the quite astonishing mismanagement of our financial affairs by the Government. The sum of money which we are discussing tonight represents yet another example of that managerial bungling. I recognise, of course and at once, that a major part of the increase of nearly £7 million is represented by an increase in teachers' salaries in particular, which we have discussed at length and in detail on other occasions. I will not develop that now.

I hope that one other salary heading will be covered by the Minister of State, however, and it is that to which several of my hon. Friends have referred, particularly my hon. Friend the Member for Moray and Nairn (Mr. G. Campbell)—the quite extraordinary abuse of local government officers in Scotland by the present Government, who have exercised a discrimination, through oversight and incompetence, against these officers which almost passes belief.

I ask the hon. Gentleman one other new and related question, and I ask him to treat this seriously and not laugh at it as he has been doing. The point to which I draw his attention is one on which I require further information. If I do not receive it tonight—and I appreciate that I have not given the hon. Gentleman notice and that he might not be able to answer it tonight—I will press him about it on another occasion. Can he state the position of manual workers employed by local government in Scotland? Are they in any way covered by the missing £400,000 to which my hon. Friend the Member for Moray and Nairn referred? I ask that question because it appears from some information in the recently published Ministry of Labour Gazette that there may have been a similar mishandling of manual workers in local government in Scotland as there has been over the non-manual worker.

I will not press that point any further now, but I hope that the hon. Gentleman will be able to give us some indication of the position tonight. If the Government, through their incompetence have doubled the discrimination, then they will be doubly to blame. My hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor) referred to the Selective Employment Tax, which I raised in the debate on the General Grant Order in December.

What was said then illustrates the reason for my comment about incompetence in terms of the amount of this grant which is not represented by salary increases. When I asked the hon. Gentleman I received an incomplete answer and I appreciated the reasons for it. I asked how much of this substantial increase is represented by increases in taxation and duties and so on, arising from the Government's decisions. When the Government increase duties and taxes they always urge everyone to absorb those increases, but they are very ready to pass them on.

Can the hon. Gentleman now give me more information? He has had over a month to ponder this question. Less than a year ago hon. Gentlemen opposite were telling electors and ratepayers that interest rates would come down. Interest rates have risen a good deal. Can the hon. Gentleman say how much of this increase is represented by increases in interest rates? Similarly, we were told that there would be no increase in taxation, but petrol tax has risen considerably. In our previous debate, the hon. Gentleman, in reply to a question by me, indicated that the cost of the additional fuel duty—simply the extra duty—was £23,000. He dismissed that as of little consequence.

Looking through the debate again I was not able to decipher whether he means that the increase was £23,000. Perhaps he will confirm this. I hope that he will not brush aside £23,000 as being of little consequence. It represents 100,000 gallons of petrol or 3 million miles in a local authority car, and that is not to be sneezed at, particularly when we consider the state of some of the roads, improvement of which is now cut by the Government's programme. The S.E.T. question is one which the Minister needs to explain further.

There is a substantial increase in National Insurance contributions and it occurred to me that some part of this might be the cost of the S.E.T. As my hon. Friend the Member for Cathcart reminded the House a moment ago, the hon. Gentleman said in December that there was no S.E.T. burden on ratepayers, in what he described as "these financial years". This may have been a misprint for "this financial year". How can that be so, because S.E.T. is already being paid? Perhaps he would explain this a little more? There must surely be some S.E.T. element. In passing will he tell us how this tax helps Scotland's economy? Perhaps he will tell us what postage increases are costing local authorities, and to what extent these increases of at least one-third are represented in the figures before us. There are other heads of expenditure which are going up as a direct result of the Government's actions, and I hope that the hon. Gentleman will give us a fuller and clearer answer than he gave us on the previous occasion.

1.19 p.m.

Mr. Michael Noble (Argyll)

One point has been raised tonight which to my mind affects the morale and efficiency of a most important service in Scotland. I am surprised, although not totally ignorant of the reason, that not one word has been spoken from the Socialist benches in defence of the position of N.A.L.G.O. I would like the Minister to concentrate on answers to two or three straightforward questions on this problem. The first is that we were told that it was a decision of the Department of Economic Affairs that the agreement with the Scots must precisely follow the English award. To what extent were those the instructions which the Secretary of State had; and if they were his instructions, did he agree with them? He has been on record in this House as saying that he would protect Scotland from the special effects of the freeze. If he agreed to it, he broke his promise to Scotland.

Secondly, these negotiations were carried out on 13th September, two months after the 20th July measures. Were the officers with whom these arrangements were negotiated told then that their pay increase would or would not come into effect on any particular date, or were they told that it was purely in the air? We should be told this.

Thirdly, I know that the Minister was not present in the debate immediately preceding this one, but does he realise that not only is the House exceedingly worried about the problems of immigration—in the preceding case it was of doctors going overseas—but that Scottish Members are particularly worried not only by the high unemployment figures but by the problems of immigration? The hon. Gentleman knows as well as anybody in the House that there has been a steady immigration of people like firemen, policemen and all sort of others who work for local authorities coming down across the Border because of the better conditions offered here. Has that been taken into consideration in the Government's decision on this point?

1.23 a.m.

The Minister of State, Scottish Office (Dr. J. Dickson Mahon)

I will come presently to the major point raised by the right hon. Member for Argyll (Mr. Noble) when I have disposed of some of the other matters which are strictly in accordance with the Supplementary Estimate. The hon. Member for Moray and Nairn (Mr. G. Campbell) was perfectly right in asking us to give the reason for the discrepancy between the Supplementary Estimate and what the figures were—he was quite right in his figures—when we discussed the General Grant (Increase) Order on 20th December. As he will, perhaps, by now have guessed, something happened between 30th November and 20th December which significantly altered the position. What happened was that we had the final meeting with the local authority associations.

I—and I am sure that previous Ministers would agree that this is right—put great store by those meetings with the local authority associations. They are real meetings and they get business done effectively. As the occupants of the Opposition Front Bench know, the local authority associations at the meetings with Ministers are serviced by a working party which does a great deal of hard work behind the scenes. A lot of figures given to elected members, and also to the Minister, at these meetings at that level are agreed by the working party.

What happened is that after this Estimate was presented and we then had the discussions, the assumed increase for 1965/66 of £1.2 million was refined to a figure of £1.115 million and for 1966/67 the £7.2 million which we mention in this Supplementary Estimate was refined to £6.93 million, which was allowed for in the General Grant (Increase) Order. The difference in grant is £ .292 million, but with some minor adjustments that we make in the outturn calculation for the current fiscal year, 1966/67, we expect that there will prove to be a £400,000 difference from what the Supplementary Estimate allows for.

We all recognise that that is not the final outturn figure, because those who have experience—the hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) and I discussed this some time ago—of doing these figures and trying to make true comparisons one year with another recognise that it may take as much as three years—two years is pretty good, but three years is not bad—to get the exact outturn figures correct.

This is because there is a calculation under the present system we are discussing which was created by the 1958 Act and the 1963 Act, and the present system demands these calculations after a time.

Under the new system we will certainly have to go on taking calculations year by year, but it is fair to say that one does not really know the final outturn until three years after the financial year concerned. This is inevitable when one looks at the very complicated calculations when dealing with the general grant.

As for the other complaint about the nature of the increases here, far be it from me to defend a Statute passed by hon. Gentlemen opposite when they were in office. It was they who laid down that the Increase Order had to apply to the three elements, and irrespective of what the new system does bring, I can hardly be asked to justify the present situation as it stands, which is their Act of Parliament. This General Grant (Increase) Order is their statutory shape, and I cannot alter that.

What is a fair point is the interpretation of this, and that is what the meeting with local authorities associations is for—so that there is agreement between the Government and the local authorities on the interpretation of what is meant by the rise in prices, remuneration and the general point which is mentioned in the actual Statute.

This is very important, and this is something we have to achieve as best we can at these meetings. They are not always smooth meetings at all—they are quite bumpy at times—but with good will we can try to secure this. Of course I cannot debate the Order we are going to discuss later on under the Local Government (Scotland) Act, 1966, which received the Royal Assent on 21st December.

I cannot comment on the points made by the hon. Member for Cathcart on the position as it will be in the next financial year, though I do not agree that the proportion is going to be higher as against the ratepayer. But we can leave that to a later debate.

On the question of the discrepancy between the 16 per cent. and the 12 per cent. I think the hon. Gentleman will realise, if he thinks about it, that he is not comparing like with like. He has to take into account not only the money accruing from the rise in rates, that is the actual rise in local revenue in the form of rates. That is what the 16.7 per cent. represents but he has also got to recognise that there are other incomes to local authorities from various activities, transport and others, that one must add in as well as Government grants. So one cannot compare the rise in rate poundage and valuation on the one hand as against the rise in Government grants, as represented by this Supplementary Estimate being added to the original one.

I hope that it will become very clear to the hon. Gentleman, perhaps on the next Order when I shall have more scope to debate this than this Estimate provides, that there is not this direct connection in figures. One cannot compare 16.7 per cent. with 12 per cent., or 13 per cent. The hon. Gentleman says 12 per cent., actually it is 13 per cent. I do not want to justify this, although I have a long explanation as to why he is slightly out, but there is no comparison between the 13 per cent. and the 16.7 per cent.

I take the hon. Gentleman's point, nevertheless, that 16.7 is a high increase. As I said to the local authorities on 20th January, there seems to be no reasonable explanation for the imponderable 4 to 5 per cent. which is added to the rate burden in a revaluation year. Our predecessors in office had this experience in their revaluation year in 1961, when the increase was 19 per cent. In our revaluation year, just past, it was 16.7 per cent. I suspect that, if we had not started our campaign in February, in which we were helped by one or two hon. Gentlemen opposite as well as by some of my hon. Friends, we should have had a far higher figure than we have at present. It would no doubt have been higher than 19 per cent.

It is fair to say that perhaps 9 per cent. of that 16.7 per cent. is justified by existing services. None of us can run away from that, though, naturally, hon. Gentlemen opposite have tried to ride two horses: namely, when money goes down, services are bad, and when it goes up, it is downright extravagance. However, 9 per cent. is a genuine expansion in services, and I do not quarrel with the local authorities about that. Another 3 per cent. is for teachers' salaries, and none of us quarrels with that.

Those come to 12 per cent. If we allow for the 1 per cent. argument, that means a difference between 13 and 16 per cent. I do not understand, and Ministers in previous Administrations did not understand, why there should be this incredible rise in the revaluation year, and I have still to get a satisfactory explanation from the local authority side.

I have, e said why I think local authorities take, unfair advantage of the revaluation year, and I hope that, as Parliamentarians looking at the national interest, we shall nit make this a party point but recognise that the local authorities have to face up to the problems of a revaluation year as long as the present rating system persists.

The local authorities have not disputed this in a difficult or irritable way, as I sometimes do in this House. They have taken the point. We have agreed, as far as we can, to go through the last and, if necessary, the previous revaluation year, 1961–62, and we shall try to isolate specific instances of what we mean. I regard that as a more effective way of pursuing the matter than, in debate in this House, clobbering each other over the head on these two years when neither party seems to have had control over this margin of 5 per cent. in a revaluation year.

Mr. Bruce-Gardyne

Could the Minister tell us whether, in his discussions with the local authorities on this matter, they have suggested to him that the high level of interest rates prevailing has been a substantial factor in the high increase in rates during the past year?

Dr. Mahon

There is no doubt that, in servicing the loans in which they have been involved for many years, the local authorities are bound to have to face up to the prospect of paying a lot of money in loan charges. I will not go into how much responsibility hon. Gentlemen opposite must bear for the high interest rates in those years, or how they denied access to the Public Works Loan Board for so long to the local authorities.

These loans are still being paid off at these interest rates. There is not just the legacy of two years of high Bank Rate under this Government. There are also the past obligations incurred by very high rates in previous years.

What we are asking them to do is to service even bigger loans, and that is why we have the Housing Subsidies Bill, which will effectively peg the borrowing rate to 4 per cent., while adding other subsidies. We want to look closely at the development of services and capital expenditure in this regard.

The interest on loans is not in the Supplementary Estimate for the first year, and amounts to about £534,000 in the second financial year that we are discussing. I do not deny that even £34,000 is a large sum, but, taken over the stretch of what we are talking about, the extent of the whole Government subvention for the local government year is not a large item. That does not mean that we are not concerned about it. The hon. Gentleman is quite right, but it means that it must not be made the major concern of local authorities at this time. There are other things about which they are concerned, and I share their concern. Indeed, perhaps we will debate this at length on the Rate Support Grant Order when we come to it.

I cannot comment on all the points which have been raised in this debate. Some were taken up in the last debate on spending. I do not withdraw anything that I said about spending. I think that the money is well spent.

I shall not follow the Solway Firth argument, because that is being dealt with, as the hon. Gentleman may learn from an Answer which has been given to him, I hope. There are certain other matters to which I am precluded from replying because there are Questions on the Order Paper and I would rather that the proprieties were observed and that the answers were given in the proper way.

I am sorry if I was misunderstood when I was making some sotto voce comments to my hon. Friend, but I was trying to get some of the figures for which the hon. Member for South Angus (Mr. Bruce-Gardyne) was asking. I did not mean to be rude and turn my back on the hon. Gentleman.

During an intervention in the speech of the hon. Member for South Angus, who was talking about the figures of local government employees and asking whether unemployment benefits would be higher in Scotland because of the increased unemployment, the hon. Member for Galloway (Mr. Brewis)—and I congratulate him—pointed out that stamps for insurance would have to go up because there were more local government employees. It was an excellent example of two men on the same horse going in different directions.

If both hon. Gentlemen will be kind enough to look at the Written Answer to a Question by the hon. Member for Cathcart on Tuesday, they will see there a breakdown of the figures, and I draw their attention to the second column which separates local government employees from educational, transport construction and certain other employees who are classified under these headings in the Digest. It shows that there has been a fall in the number of other employees, but I do not believe that one can take these figures as satisfactory, because we are all concerned about the shortage of teachers, for example.

Mr. Edward M. Taylor

The figures in the Answer to my Question were a bit out of date.

Dr. Mabon

That is true, but that is not my fault. These statistics were drawn up under rules laid down by hon. Gentlemen opposite. [An HON. MEMBER: "Alibis."] They are not alibis. They are facts taken from the Ministry of Labour Gazette and the Scottish Digest of Statistics, and one can get no further than that. The figures which do not really tell the whole story are those in respect of the missing people in local government services, and here I come to a point mentioned by the right hon. Gentleman.

It is not true that we are short of as many as 3,000 places. We are short of about 500 teachers, whom we would like to recruit at once. I admit that this would alter the position, even for this year, although only marginally, and we have £400,000 in the Estimate as a margin. We would like to see a replacement criteria for the non-certificated teachers so that we can take up the estimated shortage. The estimated shortage of certificated teachers in Scotland in December, 1966, was 3,662, but, on the other hand, one has to take account of the fact that at the present time about 3,000 non-certificated teachers occupy these posts. I just want to put that in its true perspective. I could not estimate how much more it would cost in the current financial year, but I am sure that we could cover it if we were lucky enough to have recruitment to that extent in such a short time.

This is true of others in local government service. When I spoke in the debate on 20th December—I do not know whether I misheard hon. Members opposite when they quoted me—I said: They have been negotiated"— that is, the wage awards for workers in local government— through the proper machinery before the standstill took effect, and they must be honoured."—[OFFICIAL REPORT, 20th December; Vol. 738, c. 1352.] That is the essential point. The right hon. Member for Argyll tried to suggest, as I thought, that somewhere my right hon. Friend the Secretary of State for Scotland had said that Scotland would not suffer from the squeeze in the way she had done before. I thought that the right hon. Gentleman was insisting that the prices and incomes policy should not apply north of the Border. Those of us who are interested in the development of electricity know that one of the casualties of the standstill was the tariff of the South of Scotland Board. There are other examples, not only in the local government service but in industry, where Scottish workers did not get the benefit of negotiations being pursued when we were caught by the guillotine of 20th July.

I am not arguing the merits of the case, and it has never been that case that we have argued. I am surprised that there was a suggestion from hon. Members opposite that Scotland should be exempted from the prices and incomes policy. Perhaps it is that they suggest she should be exempt from the credit squeeze effect, but on the prices and incomes part of the policy, surely not. I thought that that part of the policy was agreed between hon. Members on both sides—but I could be mistaken. Suffice it to say that my hon. Friends have been quiet on this matter tonight, because they have been making representations along these lines both to my right hon. Friend the Secretary of State for Scotland and my right hon. Friend the Chancellor of the Duchy of Lancaster, who is concerned in this matter by virtue of his connection with the Department of Economic Affairs.

The hon. Member for Dumfries (Mr. Monro) obviously does not read the first page of HANSARD at the commencement of the Session. Both Ministers have met deputations to discuss this matter, and I understand that they are continuing these discussions and intend to write to those hon. Members who have been anxious to speak to them and see them. There is also a Parliamentary Question on this matter, for answer tomorrow, I believe, and I would prefer not to pursue the discussion any more for the present, except to refer to the time taken. This point concerns the Government's so-called incompetence in this matter. We have looked up the history of the matter, and find that the period of time between the English and Welsh negotiations being settled—agreement was reached on 13th July. 1966—and the Scottish negotiations is substantially less than comparable periods in earlier years, the figures for which I have here.

There has always been a time lag, for historical reasons, for which we are not responsible. The time lag in 1960 was three months and in 1959 it was rather longer. All I am saying is that the English and Welsh negotiations were settled on 13th July and the fact that the Scottish negotiations were unfortunately not settled seven days thereafter is hardly something for which to blame the Government.

Mr. Noble


Dr. Mabon

All right; it was not a point made by the Opposition Front Bench, but it was a point made by the hon. Member for Perth and East Perth-shire (Mr. MacArthur), and he deserves a reply. The date was arbitrarily chosen and was hound to create some anomalies, but it is hardly reasonable to say that after the settlement of 13th July, because the statement was not made in time to beat the standstill it is an example of Government incompetence, or of selective discrimination. That is a quite unjustified charge.

Mr. Noble

I do not want the Minister to pursue this for hours on end, but I would like the Minister to answer two perfectly simple questions which I asked and neither of which he seems to want to answer. They are, first, was the Secretary of State told that he had to stick precisely to the English pattern and, secondly, what were these people told on 13th September? I am not arguing whether they ought to have been dealt with in July.

Dr. Mabon

So far as this year is concerned, there is no involvement, but the matter is being discussed. The right hon. Member knows the terms of Command Paper 3073 and Command Paper 3150, and they are the two which cover the respective periods. This was all known at the time, and the right hon. Gentleman must either say that he does not agree with the prices and incomes policy being applied to Scotland, or that he does. If he does, then there must be some observance of it. The whole point that I have been trying to make is that there cannot be distinction between England and Scotland, and it is at that juncture that the argument has to cease.

So long as this matter is under discussion by Ministers, and hon. Members have made representations before this debate and questions have been tabled for answer, then it is unreasonable for me to be asked what the outcome will be. Until something has been conceded by Ministers I cannot say more. We must observe the White Paper policy.

Mr. G. Campbell

The Minister of State may have misunderstood what I said in opening the debate. He may recall that I did not criticise the fact that the Scottish negotiations had to follow the English pattern. The point is that, because one followed the other, the second negotiations meant that these people were not going to receive the award. I did mention the interval of a few weeks in my opening remarks, but the fact that there was an interval did not mean that the second lot should not get the award.

Dr. Mabon

I accepted what the hon. Member said at the beginning, but I must point out that what he said was not precisely followed by what some of his colleagues have said tonight.

I think that this matter could best be ventilated by its being raised with the Minister primarily responsible once it has had a fair chance of being discussed between the Minister and the organisations concerned. I can tell the hon. Gentleman that the Secretary of State has discussed this with the Minister concerned. He has received a deputation on the matter and is just as alive to the situation as the hon. Member and his right hon. Friend. In fact, I understand that correspondence has gone out to the organisations concerned, and this correspondence has by no means ended; but there must be some kind of indication from the Government about how the awards shall become operative. As hon. Members know, the third stage of the Government's prices and incomes policy is still a matter for decision and public announcement, and what is decided then may well affect the position of these people.

Hon. Members may say that one group of workers has a justifiable claim, but simply to deal with that is one thing; another is to accept that we must recognise that this is a matter which has to be ventilated properly—and that is what is being done at present. There is no reason at all why they should not take the first opportunity to raise this at some later time.

Mr. Bruce-Gardyne

Before the hon. Gentleman sits down—

Mr. Deputy Speaker (Mr. Sydney Irving)

Order. The hon. Gentleman has sat down. Mr. Martin Maddan.