RATES (SCOTLAND) (Hansard, 4 December 1975)

§ Mr. Nicholas Fairbairn (Kinross and West Perthshire)
I am very grateful, Mr. Speaker, for the opportunity, on the Adjournment, to raise the question of rates in Scotland. I hope that I am in order, in the absence of a Minister at 2065 present, in raising that matter and have your approval, Mr. Speaker.

§ Mr. Speaker
The hon. and learned Member is in order. Whether he has my approval is quite a different matter.

§ Mr. Fairbairn
I have frequently been out of order in my life, and I have frequently been disapproved of. I am anxious on this occasion to be both orderly and approved.
However, the question of rates in Scotland is probably responsible, more than anything else, for the anger and pain which is reflected in recent voting results. I believe that no political party can ignore the fact that electors will object where they are subject to manifest unfairnesses which a Government are unwilling to correct.
In raising the matter of rates in Scotland, which is a matter of major concern, and having just listened to a debate on the question of urban deprivation, it is important to consider rural deprivation—although people who live in the country are infinitely more willing to have deprivations which people in the towns would not forbear.
Nevertheless, may I first say—I hope that the Minister will agree with it—that we are disappointed, but we are not surprised, that when considering anything as important as the British monarchy, which we were this evening, they who so much resent the fact that that is what they wish to destroy were not here to listen to the debate or to vote at the end of it—none of them—and when we are debating the question of rates in Scotland, which is the penalty that almost every Scottish person in town and country has to pay, and which concerns most members of families, more perhaps than any other issue, not one of them has bothered to be in the Chamber? That is the extent of their political interest.

§ Mr. Harry Gourlay (Kirkcaldy)
Surely the hon. and learned Gentleman is taking a slightly unfair advantage of hon. Members. The subject about which the hon. Gentleman is now speaking was not on the Order Paper for today, and it is quite unfair to challenge hon. Members, either of his side of the House or the Government side, who are not present to hear the debate. It is often deprecated by the 2066 Chair that Adjournment debates of this kind are raised without adequate notice.

§ Mr. Fairbairn
With the greatest respect to the hon. Gentleman, I have so far had no deprecation from the Chair. If the hon. Gentleman and the Minister can have the perspicacity to be here, I do not see why hon. Members of the Scottish National Party should not have the perspicacity to be here. I am delighted, however, to know that there are hon. Members on the Government side of the House who are so concerned with urban deprivation that, in the absence of hon. Members of the Scottish National Party, they are willing to come to their help.
One of the most dangerous aspects of the present political situation is that Parliament places duties upon local authorities which enable them to increase the numbers of their staff and increase staff salaries without increasing or improving the services they supply. That is what people in my constituency and in all parts of Scotland are frustrated about: in return for the enormously increased contribution they make they get nothing more and, in most cases, much less. People in rural constituencies get fewer buses and fewer services of all kinds, yet in many rural parts of my constituency the rates have increased by as much as 167 per cent.

§ Mr. Hector Monro (Dumfries)
That is nothing. It is 300 per cent. in my case.

§ Mr. Fairbairn
It may be nothing. However, it must be remembered that people in rural areas, who often earn low wages compared with others, or who have worked all their lives and who have retired and who are not on inflation-proof pensions, are asked to pay merely because they had sufficient diligence and sophistication to save and to purchase their own house.
It must be remembered that education plays a large part in local authority expenditure. The cost of educating one child at a list D school in Scotland is nearly double the cost of educating a child at the most expensive private school in Britain. The cost of educating children in a day school in the State system is infinitely greater than the cost of educating children in a residential 2067 school in the private system. This is because there is no proper control over public expenditure.
Day after day we see advertisements for local authority staff at inflated salaries. A recent newspaper advertisement invited applications for social workers in one region who should be aged 30 and who would receive a starting salary of £6,900 per annum. Is that reasonable and defensible?
The Government have no proposals for reducing the rate burden on the individual. It is not sufficient for the Governent to ask the Opposition what services we would cut. There is more anger, pain and frustration about this among ordinary people than there is about any other subject. The ordinary citizen cannot pay these desperately high taxes which, together with others, now represent probably 60 per cent. of the income of comparatively poor people. We protest against this situation. Rates, their unfairness and the uncontrolled extravagance of local authorities are as much the cause of public anxiety and disillusionment in Scotland as anything else.

§ Mr. Charles Irving (Cheltenham)
And in England.

§ Mr. Fairbairn
And in England, no doubt, but so far those in England have not manifested an emotional absurdity by way of a dustbin of protest in the form of a party like the Scottish National Party. When they do no doubt that party will have a majority in the House.
We ignore at our peril the fact that we are imposing on individuals and families burdens they cannot bear. It seems unfair to some people that a couple should be able to have a child and put down its cost to their neighbours. It seems unfair that an Asian with 12 children should have a tax-free salary. The hon. Member for Fife, Central (Mr. Hamilton) resents a tax-free salary if it is for royalty, but not if it is for an unemployed Asian immigrant who has never worked in his life and who has 12 children.
It seems unfair to people that they should bear enormous taxes out of their meagre incomes for services which they do not get. That is the major complaint in Scotland. No doubt the Minister will 2068 say that it is all the fault of regionalisation, but it is not. The Government's opportunity is to modify an utterly un-fair increase in all rural areas and in most other areas in Scotland. They have the opportunity to modify it and correct it. They have done nothing, and they are condemned in their failure to relieve everybody in Scotland who is genuinely attempting to provide industry, to work hard and to do his best for his family and his neighbours. It is because those people see this manifest unfairness that there is such resentment in Scotland today. It is not that they are Scottish; it is that they are facing a system which is manifestly unfair and which the Government are utterly unwilling to relieve.
I hope that the Minister will be, able to say tonight that in order to ensure that the absurdity of nationalism gets no further fuel, the Government will bring forward measures which will fairly relieve the families in Scotland of quite a disproportionate burden.

§ Mr. Hector Monro (Dumfries)
I support my hon. and learned Friend the Member for Kinross and West Perthshire (Mr. Fairbairn) in his plea for rate relief. This year the rates have escalated astronomically in all parts of Scotland. I think it is right to put on record that the major reason for this is inflation. Under the present Government it has rip-roared away to the extent of 25 per cent. and more, and this is having a devastating effect on the rate burden of local authorities. This is coupled with the fact that over the past two years local authorities have run down their reserves and have cushioned the natural increase which would have taken place in any event in respect of the services which local authorities have been asked to undertake by all Governments for many years but which are becoming increasingly burdensome.
In an area such as that which I represent, where the rates have increased by anything from 100 per cent. to 300 per cent., I condemn the Government because of the formula of the rate support grant. The Minister knows as well as I do that the formula has been changed so that the rural areas pay disproportionately more than they did before reorganisation, and this is, without doubt, a political ramp so that the urban areas are let off more 2069 lightly than rural areas such as mine which bear all the deprivation to which my hon. and learned Friend referred, because in rural areas the services are much thinner on the ground. I hope that the Minister will consider this aspect very carefully in the formula which he may put forward next year.
I ask the Minister to comment on the ruling given in another place on the question of the sewerage rate. I know that at the moment this affects only England, but all of Scotland has been watching this case, and the people in Scotland feel that if this is so in England it should be similar in Scotland. I know that some authorities are giving cut-price facilities in the way of emptying septic tanks, but this is not a proper alternative to what will now happen in England where those who have not got public sewers will not have to pay the rates on that service. I hope the Government will look at this point very carefully.

§ Mr. Monro
We are very short of time. There are two issues on which I should like the Minister to comment—the sewerage rate and the gerrymandering of the rate support grant formula which meant a disproportionate amount of additional expense for rural communities.

§ Mr. Hamish Gray (Ross and Cromarty)
Would not my hon. Friend agree that it would be better for the Government to await the report of the Layfield Committee before starting to make wild changes in the rate support grant formula? At the present time, rural areas are suffering unreasonably because the Government have not waited for the report.

§ Mr. Monro
That is a very fair point, but I appreciate that local authorities have to announce their rates in the spring and it is very doubtful whether the report could be studied in enough depth to enable the Minister to come to a decision by that time. The Government should be severely criticised for allowing inflation to go on as it has done—it is a root cause of the rise in rates—and for gerrymandering in relation to the rate support grant.

§ The Under-Secretary of State for Scotland (Mr. Harry Ewing)
I thank the hon. and learned Member for Kinross and West Perthshire (Mr. Fairbairn) for having given me notice that he intended to raise the subject of Scottish rates if time was available. I wish to place on record the fact that he gave me adequate notice. We have had a short, interesting and important debate. I wish first to spell out some facts of the past year in relation to rates in Scotland.
The members of the two parties represented here tonight are very much aware of the rate burden placed on Scottish ratepayers, and we are all equally concerned about it. No one has a monopoly of concern. The problem has seriously perplexed me in the past year. It is not long since I was sitting on the Benches opposite, and I remember the industrial dispute which led to teachers in Scotland receiving what was considered to be a relatively substantial increase in salary. I remember the Scottish National Party telling teachers "If only you would vote for us, you could have all you want, and more." Now that party does not have the courage to tell the Scottish ratepayers that such settlements have to be paid for.
The hon. Member for Dumfries (Mr. Monro) is entitled to refer to inflation, though that has not taken place only under this Government; it was accelerating at a rapid rate when we came to power. However, there is something slightly immoral about a party that tells ratepayers that it is right that teachers should have an adequate salary and then turns to those ratepayers and suggests that the settlement does not have to be paid for, and that rates should be lower. These two things do not go together.
There are many other services in Scotland, borne by the rates, in which improvements have been made, quite rightly, over the past year. They have to be paid for, and it is politically dishonest to pretend to people that services can be improved without that having any effect on their pockets. That is simply not true.
I do not wish to take unfair advantage of the absence of the SNP tonight. In the last two days I have come to understand that certain sections of the Scottish Press have grown rather sensitive to the 2071 House taking unfair advantage of the nationalist Members.

§ Mr. Monro
Poor chaps!

§ Mr. Ewing
I want to place on record the fact that I have had countless letters complaining about rates and saying that the SNP are doing this and doing that, yet when we have the opportunity to debate the matter, albeit for only 30 minutes, the SNP decides not to be here—to absent itself from this important debate.
I shall leave the SNP and its dreams for a minute. I had hoped that in discussing public expenditure, of which rates are an element, the hon. and learned Member for Kinross and West Perthshire might at least have referred to the staggering increase in legal aid costs, because I am sure that that is something on which the hon. and learned Member is an expert.

§ Mr. Fairbairn
The increases in legal aid do not apply to my half of the profession. Those who instruct my half of the profession do very badly, as the Minister will appreciate if he knows what Section 13(2) is about.

§ Mr. Ewing
The hon. and learned Member is saying that he does not pull the teeth; he only makes the dentures.
I return to the question of local government and the effect that local government reorganisation has had on rate-borne expenditure in Scotland. It was not this Government that introduced reorganisation of local government. Many of us regretted that when the Wheatley Commission was established it had no remit to deal with local government finance.
This brings me to the point raised by the hon. Member for Ross and Cromarty (Mr. Gray). The Layfield Committee is sitting at the moment. No one knows when it will report, or what it is likely to suggest for the reorganisation of local government finance. In view of that, it would be wise for the House to wait and see what it proposes, and if something constructive and productive should come from it I am sure that that would be given sympathetic and serious consideration by everyone. We are all most anxious to find a solution to the ever-growing problem of the burden on Scottish ratepayers.

§ Mr. Alick Buchanan-Smith (North Angus and Mearns)
The Minister is correct in saying that we are looking forward to the report of the Layfield Committee. He is dealing with this debate in a constructive way, but, pending the publication of the report, will he urge his right hon. Friends, in the context of the rate support grant, to consider how the burden falls on different areas? Many of us feel that the formula under which the rate support grant is settled could be fairer in the interim period pending Layfield.

§ Mr. Ewing
I shall be coming to that point, but before I do I want to deal with the distorted picture presented recently in Scotland over what happened in local government during 1974–75. There have been statements that Scotland did not receive the same degree of additional rate support revenue as England and Wales did. The hon. Member for Glasgow, Cathcart (Mr. Taylor), who is not present—I do not say this facetiously—has been one of the most guilty people in making such a statement when he of all people should have known much better.
The truth is that in 1974–75 the rate support grant included an element for the reorganisation of local government. The assistance given to Scottish local authorities in the past year was 74 per cent. of all rateborne expenditure. I find it difficult to see how a Government can go much beyond 74 per cent. I do not want to be held to be absolutely accurate on this, but, in round figures, of the £1,100 million required to finance local government in Scotland in 1974–75 the Government contributed about £800 million. That is no small amount of the total bill for local authorities in that year.
In the year that special relief was given there was in Scotland the same degree of relief for every local authority which had rate increases of over 20 per cent. I can name local authorities which received it. The old Stirling town council and the old Falkirk town council in my constituency both received additional relief as a result of the Government's action in early 1974 when we came to power. Therefore, it is not correct to say that the same relief was not made available to Scotland as was made available to England.
2073 I come to the present situation. The House will not expect me to deal with the Rate Support Grant Order for 1975–76 which is due to be laid before the House in the very near future and which will itself provide an opportunity for debate. The points raised tonight about how the 1975–76 rate support grant is to be distributed throughout Scotland are the sort of points that hon. Members will be able to raise then.
But I say immediately that although the views expressed by hon. Members present now, who represent rural constituencies, may hold some validity in their own eyes, opposite views are already being expressed in urban constituencies. Hon. Members representing rural constituencies may find it very difficult to convince those on both sides of the House who represent urban constituencies. In each of the four years for which I have been a Member, the same argument about 2074 distribution between rural and urban areas has been advanced when the Rate Support Grant Order has been presented by Governments of both parties. Some change is being made in the year ahead, but that will be a matter for debate on the night when the Order is laid.
We shall examine the ruling in the other place about the sewerage rate and see what it means for Scotland.
I am grateful for the opportunity to reply to this debate, and I am grateful to hon. Members on both sides of the House for the constructive manner in which it has been conducted.