HC Deb 20 April 1971 vol 815 cc1092-105

In the application of section 4(1) of the Local Government (Scotland) Act 1966 (variation of rate support grant orders) to a rate support grant order made before the date of the coming into force of this Act for a grant period ending after that date, the Secretary of State shall have power to take into consideration any income accrued or likely to accrue, to education authorities (within the meaning of the Education (Scotland) Act 1962) and any relief obtained, or likely to be obtained, by them—

  1. (a) which is attributable to the coming into force of this Act; and
  2. (b) which was not taken into consideration in making the rate support grant order the variation of which is in question.

The provisions of this section are without prejudice to section 4(4) of the said Act of 1966 (under which an order under that section may vary the matters prescribed by a rate support grant order).—[Mr. Edward Taylor.]

Brought up, and read the First time.

10.37 p.m.

The Under-Secretary of State for Health and Education, Scottish Office (Mr. Edward Taylor)

I beg to move, That the Clause be read a Second time.

This Clause is being introduced in fulfilment of an undertaking I gave in Committee on 2nd February. Its purpose is to allow the Secretary of State to adjust rate support grant within the grant period 1971–73 to take account of any extra income or reduced expenditure arising from this Bill.

Once a rate support grant order has been made, its terms can only be altered under the Local Government (Scotland) Act, 1966, to take account of the effects of unforeseen increases in the level of prices, costs or remuneration. No account can be taken under the 1966 Act of increases or decreases in expenditure which arise for other reasons such as new legislation or inaccurate forecasting. On the income side the Secretary of State is able to take account of the effects of increased charges but not of new sources of income. In these circumstances, there are problems when a new piece of legislation comes along which is likely to have a significant effect on total reckonable expenditure and which is to come into effect in the course of a grant period for which an order has already been made.

The Secretary of State has two courses of action open to him. He can do what the right hon. Member for Kilmarnock (Mr. Ross) did when the Education (Scotland) Bill of 1969 was going through the House—that is, he can try to take account of the effects of the new legislation in the main rate support grant order before the Bill has become law. We considered the possibility of adopting this course of action, but when my right hon. Friend met the local authority associations in January to discuss the rate support grant settlement they made it clear that they did not like the idea of making the estimates in advance of the Bill becoming law. My right hon. Friend readily took their advice and as a result the Rate Support Grant (Scotland) Order, 1971, which this House approved on 16th March, makes no allowance for the effects of the Bill.

Instead, as I explained in Committee on 2nd February, we are adopting the second possible course of action—and, by more or less common consent of all those directly concerned, the better one—which is to introduce a Clause enabling the Secretary of State to take account of the effects of the Bill in an increase order.

It might be helpful if I were now to say a few words about the Clause. Under subsection (1) of Section 4 of the Local Government (Scotland) Act, 1966, the Secretary of State can make an order varying the terms of an existing rate support grant order, but under subsection (3) of the same Section he is able to have regard only to unforeseen increases in the level of price, costs and remuneration. The new Clause empowers him to take into consideration also any extra income or relief from the obligation to spend money which results or is likely to result when the Bill becomes law. This power will in practice apply only to an increase order for the grant period 1971–73 and the Secretary of State will make use of this power only after the usual negotiations with the local authority associations; and before an increase order which is made using this power can become effective it will have to come before this House for approval in the usual way. I commend the new Clause to the House.

Mr. Speaker, you have indicated that we can discuss Amendment No. 6 at the same time and, therefore, it might be helpful if I said a few words about it. I am rather surprised to see the Amendment on the Order Paper. It is identical with Amendment No. 21 moved in Committee, which was discussed very briefly and then withdrawn. As I explained in Committee, the Amendment contains a fundamental flaw. It assumes that there is a system under which grants are made by the Government to individual authority schools. With the exception of grants towards the costs of nursery schools and classes in urban areas of special social need, this is simply not the case. As in the past, any fee-paying authority schools will simply be part of the authorities' provision for education, and expenditure on them will merit no special treatment. In arriving at the forecasts of reckonable expenditure on which rate support grant is based, the Secretary of State must take into account net expenditure by all authorities on the whole of their educational provision, including fee-paying schools—and this is just what the right hon. Member for Kilmarnock did when he was Secretary of State.

These forecasts of reckonable expenditure will be affected by the reintroduction of fee paying, but the right way to deal with that is by the provisions of the new Clause which we have added to the Bill. This will enable the Secretary of State, in varying the main rate support grant order for 1971–73, to take into consideration income attributable to the coming into force of the Act. The Amendment would simply push up fees and remove freedom of choice from the less well-off. For these reasons, the right way to deal with the situation is that outlined in new Clause No. 1, which I hope will be accepted.

Mr. Norman Buchan (Renfrew, West)

I take it, Mr. Speaker, that I must first move Amendment No. 6, in—

Mr. Speaker

It is not necessary for the hon. Gentleman to move the Amendment. He can discuss it with the new Clause.

Mr. Buchan

Two points are involved. First, I shall discuss the new Clause.

The Under-Secretary of State's attitude has not changed much since the Committee stage. What the Government have proposed is one way of dealing with the problem posed to them and I do not disagree with it, but it is shocking that it was only as a result of our discussion in Committee and my discussion with the Secretary of State on, I think, 16th March about the rate support grant that this problem was even seen. Behind this problem is a much murkier problem, namely, what is to happen about the rate support grant in Glasgow for the period during which charges were made in place of fees? The position was described by the right hon. Gentleman as totally unforeseen, but he nevertheless failed to condemn it. Will the new Clause cover the past year in Glasgow? I can see nothing to indicate that it does.

10.45 p.m.

I am willing to accept the new Clause as a means of dealing with the future position. The rate support grant will be affected, since fees will be charged if the Bill gets through, but the Bill does nothing to deal with the murky problem which arose when Glasgow used a method of charging contained in one Section of the Act to circumvent the declared will of Parliament to abolish fees in the fee-paying schools in Glasgow. We should have had an honest explanation of the Government's position and a condemnation of what has happened in Glasgow.

On Amendment 6, it is precisely because the net expenditure in an area can be totalled that it is possible for the Department to do its sums and determine how much of the expenditure of an education authority falls to the fee-paying schools. There is no great difficulty in this. The number of pupils attending the schools is known, and the cost of running the schools can be estimated fairly accurately. There is no reason why the rate support grant cannot be reduced. There is nothing technically wrong with the Amendment from that point of view. The cost can be detected quite easily.

The Minister said that this will have the effect of putting up fees and depriving people of their freedom of choice. But if parents want to buy privilege they must be prepared to pay for it, and not expect the rest of the nation to do so. Not only the local authority which decides to have fee-paying but the rest of Scotland will be affected by the rate support grant position, and penalised because Glasgow, Edinburgh or any other local authority wants to have fee-paying. Above all, let the cost be borne by the local authority which wishes to play ball with the curious reaction which has emerged from this squalid Government, and Amendment No. 6 will achieve this.

Mr. John Brewis (Galloway)

Does this mean that the hon. Gentleman wishes to reduce the rate support to Glasgow?

Mr. Buchan

It is doubtful that Glasgow will ever operate the Bill. There is to be an election on 5th May and the conspiracy and conniving over this Bill in the last six months is because the Tories in Glasgow know that they will lose the election and are attempting to get the Bill through before they do.

Mr. John Smith (Lanarkshire, North)

Mr. Brewis

Would it not also have the effect of increasing the rate burden in the city of Glasgow?

Mr. Smith

The actual amounts are very little. Hon. Members opposite shy away from the economic arguments. The only hon. Member opposite who deploys the economic argument is the hon. Member for Glasgow, Hillhead (Mr. Galbraith), who thinks that it is right to charge fees because it will cut down costs. But this antediluvian approach to education is not shared by other hon. Members opposite.

The answer was given by the Under-Secretary of State for Scotland in a celebrated speech during the 1969 Bill when he said that the matter of fees was irrelevant and that selection was the real issue. The present Government seeks to bring back selectivity by withdrawing the circular on comprehensives and issuing another circular embodying selectivity in order to achieve the objective of the Under-Secretary, but they still must have their fees.

This is the first piece of controversial legislation which the Scottish Conservative Party have sought to introduce into Parliament. It perpetuates the situation of snobbery on the cheap. The reason people send their children to fee-paying schools is that they think it will cut them off from other children and feel that their children will receive a better education if they are fenced round with fees. I do not know what justification there is for it. It is curious when one remembers that the Under-Secretary said in Committee that if we implement the idea proposed in the Amendment, we shall destroy freedom of choice and that, if the fees are too high, there will not be freedom of choice. That means that there must be no freedom of choice over the vast area of Scottish education because there are so few people in the fee-paying system, either direct grant, independent, or local authority fee-paying.

Of course we should have freedom of choice. Parents should be free to decide where they send their children. But we do not need fees for that. It is curious how, whenever freedom is mentioned by hon. Gentlemen opposite, money is always close by in their minds. Freedom is always related to the privilege that money buys. What crimes are committed by hon. Gentlemen opposite in the name of freedom.

Mr. Ian MacArthur (Perth and East Perthshire)

By the hon. Gentleman's argument, he is restricting freedom of choice to the very rich.

Mr. Smith

The hon. Gentleman speaks from a profound misunderstanding of the approach adopted by this side of the House. We say that there will never be proper opportunity in education while we have these gradations of privilege. We say that if they were restricted to the very rich, which might be the effect of our Amendment, that would have such a small impact on the educational system that it would not have a deleterious effect on the rest. In Edinburgh, we have a highly selective and fee-paying system, but the effect on the non-fee-paying state schools is disastrous. When we get to the higher ranges of secondary education, the vast majority of children are in either the direct grant schools or the local authority fee-paying schools. The head of the classes has been taken off and put into these schools.

The vast majority of children in Edinburgh and Glasgow go to local authority non-fee-paying schools, and it is more important to look at their interests. It is their interests which are being harmed. It is not a satisfactory situation where there is creaming off and separation of children into different types of education. We are trying to minimise the caste system of education which exists in Edinburgh, which must have the worst educational set-up in the United Kingdom. It is difficult to think of another city with more gradations. Perhaps it reflects the social outlook of the city itself. If so, it is high time that it was changed.

When the South-East Regional Council is set up, I hope that we shall see an end of local authority fee-paying schools Our only comfort is that such damage as will be done by the Bill will not exist in Glasgow and will be short-lived in Edinburgh.

The general effect of our Amendment is to restrict the operation of local authority fee-paying schools. To the extent that it does that, it will minimise the harm that this squalid Bill seeks to do to the education of the majority of children in Scotland. There are a million children in local authority non-fee-paying schools, and a few thousand in local authority fee-paying schools. In the name of the alleged freedom of a few thousand children, the party opposite is prepared to damage the educational opportunities of the million children in State schools who are the prime concrn of this side of the House.

10.59 p.m.

Mr. Dick Douglas (Clackmannan and East Stirlingshire)

I welcome the opportunity to obtain some information from the Under-Secretary about the new Clause, the direct intention of which is fairly complicated. As the hon. Gentleman knows, the formula for rate support grant comprises a lengthy series of averages amounting in total to a weighted average, resulting at the end of the day in the distribution of a global sum. I hope that the hon. Gentleman will make it clear that the effect of the Clause will not to be reduce the global sum. If the effect is to reduce the global sum, that will fulfil the intention of the Opposition Amendment and strike at those local authorities which provide fee-paying schools by cutting their rate support grants.

11.0 p.m.

I seek advice about this. It seems to me that the effect of the new Clause will be to reduce the global sum without necessarily reducing that proportion going to local authority areas with fee-paying schools. If so, I should like the Under-Secretary to come clean and say so, because that is not an intention which I could support. If I am wrong, I shall accept the hon. Gentleman's explanation, but if I am right, this will be a disgraceful back door method of glossing over the Government's intentions.

Mr. Edward Taylor

By leave of the House, we have had a knowledgeable contribution from the hon. Member for East Stirlingshire (Mr. Douglas), to which I shall reply later, and the usual emotive language and comments from the hon. Member for Renfrew, West (Mr. Buchan) and his colleague, the hon. Member for Lanarkshire, North (Mr. John Smith). They succeeded, as they did several times in Committee, in introducing so many red herrings that I wondered whether the hon. Member for Renfrew, West was trying to set himself up as an expert on Comintern fisheries policy.

He asked whether the new Clause allowed for clawing back from Glasgow fees charged under the 1969 Act for social, cultural and recreational activities. The answer is that it does not and the reason is precisely that the 1969 Act, under which these fees were charged, did not provide for clawing back through the rate support grant. We are correcting that situation for the future, but at the moment we have no power to claw back under the 1969 Act.

Mr. Buchan

The hon. Member is saying, then, that fees were charged by the Glasgow Tories for which they had no legislative power and that no rectification will be made and that the Government are not willing even to condemn that.

Mr. Taylor

I am saying nothing of the sort. These fees were paid for those attending these schools under the 1969 Act, and Glasgow Corporation has expressed the view that it was making legal use of the powers available. Glasgow Corporation has stated the position clearly and said that it believes that it was making legal use of these powers. It is not the case, as the hon. Member is trying to imply, that we are taking any action. The 1969 Act did not provide for any income accruing to local authorities under this part of the Act to be clawed back through the rate support grant.

Mr. Buchan

The hon. Gentleman says that Glasgow claims that it believes that it was acting legally. I am now asking him, in the presence of the Lord Advocate, whether the Government believe that the Corporation was acting legally and, secondly, whether the hon. Gentleman thinks that it was acting morally.

Mr. Taylor

I have no intention of answering hypothetical questions of that kind; nor have I any wish to give legal interpretations.

Mr. MacArthur

Whether the hon. Member for Renfrew, West likes it or not, surely Glasgow, by making these charges, was acting in accordance with Section 1 of the 1969 Act which was passed by the Labour Government. If the hon. Gentleman wishes to make any criticism, it should not be of us or of Glasgow, but of his colleagues who drafted the Act.

Mr. Taylor

My hon. Friend is correct.

Mr. Buchan rose—

Mr. Taylor

I think that I should try to proceed with the reply. I shall not give interpretations on the way that the law is being applied in Glasgow. In fact, Glasgow has indicated that it believes that it is making a perfectly legal use of the provision in the 1969 Act. I emphasise that this is not our Act. This Act was introduced by the hon. Member for Glasgow, Craigton (Mr. Millan) and was approved by the party opposite.

The hon. Member for Renfrew, West asked: why are we not making provision for clawing this back in rate support grant? It is not because of any decision of this Government, but because there is no provision in the 1969 Act for this to be done.

Mr. Buchan

Is it legal?

Mr. Michael Clark Hutchison (Edinburgh, South)

The hon. Member for Renfrew, West accuses Glasgow all the time. If he thought that Glasgow was wrong, why did he not take the matter to the court and find out?

Mr. Taylor

Some disreputable things have been said about Glasgow, and indeed about the educational systems in Glasgow and Edinburgh, of which hon. Gentlemen opposite should be ashamed.

The hon. Member for Renfrew, West made no secret that the effect of the Amendment would be to shove up fees to a substantial figure which would put these schools well outwith the reach of the vast majority of people in Scotland in local authority areas which might consider introducing these schools.

In effect, the hon. Gentleman is proposing, as my hon. Friend the Member for Perth and East Perthshire (Mr. MacArthur) rightly said, that we should have freedom of choice in education for the rich only and for nobody else. This is the effect of the Amendment.

The hon. Member for Lanarkshire, North said that it was all about privilege. The hon. Gentleman, like many hon. Gentlemen opposite, seems to be obsessed with class. I am wondering what he meant by "privilege". He seemed to be arguing this matter in relation to the privilege of selection; that privilege was being in a selective school. The hon. Gentleman said that if parents wanted privilege of this kind then they should pay for it. Is the hon. Gentleman suggesting that in a selective school fees should automatically be charged and that they should be at an astronomical level?

If, on the other hand, it is nothing to do with the selective system but with the hon. Gentleman's obsession with class and that it is the class of children which should be related to the fees, is he not aware of the situation which inevitably arises under a universal territorial comprehensive scheme that there will be wide variations in the class structure of the various territorial schools? The hon. Gentleman's argument is absurd and I do not think the House would accept it.

I turn now to the point raised by the hon. Member for East Stirlingshire. Under the new Clause, any alterations made in the rate support grant will apply to the total sum. This is the basis of any change of this kind which is made. The distribution to which the hon. Gentleman referred is discussed by the local authorities and a decision is arrived at by them. I suggest that, in view of the precedents on alterations of this kind, this is not the place to make any fundamental change on the basis of calculation and the distribution of the rate support grant.

Mr. Lawson

The Under-Secretary has given a most unsatisfactory answer. Indeed, he has not answered the case at all. I am still not satisfied about the way in which this allocation is made in the first place. Without repeating the figures which were quoted on many occasions upstairs, we should be told how this operates. Consider, for example, the problem which faces Edinburgh. Apart from one other authority in Scotland, the item we are discussing costs less per head of the population in Edinburgh than in any other authority, but the Under-Secretary has not bothered to deal with this. It is too fundamental for him.

Is a lump sum available in Scotland for expenditure of this sort? If less goes to Edinburgh, will more go to other authorities. On the other hand, if more goes to Edinburgh, is there less available for other authorities? It is a pity that the hon. Member for Galloway (Mr. Brewis) is not in his place because he holds interesting views about fee paying, rate saving and so on.

It should not be forgotten that the parents of the majority of children—those who leave school at 15—pay taxes in a host of ways, direct and indirect, through P.A.Y.E. and the tax on smoking and drinking. They cannot escape their taxes. Meanwhile, some of the finest mathematical brains are at work to see how people can avoid or evade their taxes. Hon. Gentlemen opposite applaud these activities. As long as one is within the law, even if one is acting against the spirit of the wishes of this House, that is all right by them.

The majority of youngsters leave school at 15. It costs five times more to educate a youngster who goes through senior secondary school and on to university than it does to educate a youngster who leaves at 15. I do not deplore this, but I want it understood. Often it is the very people who complain about paying taxes and carrying the rest of society on their shoulders who are being carried by the population. The great pity is that so many of our youngsters get so little education; that in so many schools it does not matter what the standards are; that two-thirds of our youngsters in this proud Scotland of ours leave school without any kind of qualification whatsoever—not even the lowest qualification.

11.15 p.m.

We are dealing with a serious matter, and I want to know from the hon Gentleman how this scheme will operate. The extra money charged in respect of fees is charged for no other reason than to buy a privilege for the children going to these schools. This is the root of the matter. We have found out that if the parents of children at these schools can continue to keep them there without paying the fee they very quickly want to do just that.

How will this scheme operate? When Edinburgh makes a sizeable income from fees, will that mean that additional money will be available for areas such as my own? If it is not to operate like that, will it operate so as to reduce the total amount coming to Scotland, and so injure areas such as my own?

Mr. Edward Taylor

The hon. Member for Motherwell (Mr. Lawson) has raised an important point. It is because this is a complicated matter that I made rather a long speech in introducing the new Clause. What we are here doing is allowing the Secretary of State to adjust the rate support grant within the grant period 1971–73 to take account of any extra income or reduced expenditure arising from the Bill. We are not introducing any new principle for the distribution of rate support grant, but introducing a new Clause which deals with transitional provision within the rate support grant period 1971–73.

The hon. Gentleman raises a much wider question, but the new Clause is concerned with the assessment of the total reckonable expenditure and total rate support grant for the country as a whole. Until 1970 account has always been taken in the rate support grant of income from school fees in assessing total reckonable expenditure. The new Clause merely provides for the restoration of the normal position which has existed in this regard and in many other regards over previous years. The grant distribution formula is very much a matter for the local authority associations themselves to deal with.

Mr. Lawson

Is the hon. Gentleman saying that the fact that Edinburgh has been charging fees affects the total grant available to Scotland, and does not that mean that my area and all other areas have lost money to divide amongst themselves? Is not that the position?

Mr. Taylor

The position is, to paraphrase what the hon. Gentleman says, that it is net reckonable expenditure that is taken into account. If new income arises, that has an effect on the total grant available for Scotland, and if new expenditure arises, that has an effect on the total grant for Scotland. That is the position that has existed. But the hon. Gentleman is dealing with the wider question of the reform of the whole system, which is something we should not consider in relation to the new Clause. The new Clause deals with transitional arrangements for the grant period 1971–73.

Mr. Lawson

But the hon. Gentleman has answered—

Mr. Deputy Speaker (Sir Robert Grant-Ferris)

Order.

Mr. Lawson

With respect, Mr. Deputy Speaker, as I understand the position, this is the Second Reading of a new Clause. It is not the Report stage, and if that is so—

Mr. Deputy Speaker

It is quite true that it is the Second Reading of a new Clause, but the hon. Gentleman cannot make two speeches: we are not in Committee.

Mr. Lawson

I am not making two speeches, but asking a question.

Mr. Deputy Speaker

If the Under-Secretary of State does not choose to answer that is the end of the matter.

Question put and agreed to.

Clause read a Second time and added to the Bill.

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