Rate Support Grant (Scotland)

HC Deb 21 January 1981 vol 997 cc347-71 10.14 pm

The Secretary of State for Scotland (Mr. George Younger)

I beg to move, That the Rate Support Grant (Scotland) Order 1980, a copy of which was laid before this House on 18 December. be approved. As the House knows, it is essential in the national interest that public expenditure should be reduced. Local authority expenditure is a large and important component of this. Indeed, local authority current expenditure in Scotland represents some 40 per cent. of public expenditure for which I am responsible. The upward trend in local authority current expenditure is a matter of acute concern, especially the prospect of substantial increases in some local authority spending plans. Once again I commend the wise counsel offered by the right hon. Member for Glasgow, Craigton (Mr. Millan) in December 1976 to the effect that local authority staff numbers should not have increased and that such increases in expenditure on particular services as local authorities desired should have been offset by expenditure reductions elsewhere. Of course we all want more services in many fields, but to produce these, however desirable they may be, at the expense of ruining national or local finances would be irresponsible folly.

It is quite ridiculous to suggest that the reductions that I am calling for will decimate local services. If only what I have asked for is achieved, it could bring spending under this order only to little above the level actually spent in the year 1977–78. I might be mistaken but I do not recall the right hon. Member for Craigton telling us in that year that the level of spending which he was allowing was in any way inadequate.

Moreover, my proposals allow for improvements, for example in education—the largest single service in this context. My proposals for 1981–82 allow for pupil teacher ratios falling from 23.3:1 to 21.9:1 in primary schools, and from 15.4:1 to 14.7:1 in secondary schools compared with the settlement in 1977–78. What I am asking local authorities to do is to cut back on the growth since 1977–78. That means this year a reduction in aggregate expenditure to a level 2.7 per cent. lower than that on which the 1980–81 settlement was based. The reduction in local authority expenditure for Great Britain as a whole is 3 per cent.

I have been able to ask for a lower reduction in the current expenditure of Scottish local authorities by contributing some savings from my own expenditure within the Scottish block to ease the burden on them. The Convention of Scottish Local Authorities has been comparing this reduction, not with last year's expenditure but with its own initial budgets for 1980–81. As the House knows, these were far higher than could possibly be afforded, and I have asked local authorities to contain their expenditure this year to a level consistent with the settlement. I am glad to say that authorities responsible for the bulk of the expenditure are taking active steps to do so, and I urge all others to do so without delay.

At this point I pay tribute to all authorities which have been doing everything in their power to follow the Government's advice since we assumed office and which have planned for moderate levels of expenditure in the current financial year. I warmly commend their sense of responsibility, their clear perception of the public interest and the difficult task that they are taking on. Some have produced 1980–81 budgets within the indicative guidelines which we produced. Many others exceeded the guidelines only marginally and have conducted themselves with great good sense. I trust that in the outturn their expenditure will demonstrate this.

There is another side to the coin. Some authorities chose, in 1980–81, to ignore the Government's advice and planned for significant growth in services which, however desirable in benign economic circumstances, is unjustifiable at the present time. Thus, total expenditure planned by authorities was initially about 4.9 per cent. above the level proposed in the 1980–81 grant settlement. After consultations with the convention I understand that the prospective excess has been moderated since many authorities appear to have heeded my advice in the course of the year. But any authority which fails to do so will face a commensurately more difficult task in reducing expenditure in 1981–82. It will have only itself to blame for that problem if it meets it.

The Government will not flinch from taking measures to bring the expenditure of such authorities into line with national economic requirements. My proposals to reduce grant progressively to authorities which plan for an excessive and unreasonable level of expenditure are currently subject to debate in proceedings on the Local Government (Miscellaneous Provisions) (Scotland) Bill. I would add only this: subject to parliamentary approval, will, if it should prove necessary, use those powers to reduce grant selectively with resolution and with vigour. Besides, I already have powers to act on outturn expenditure if it is excessive and unreasonable.

The Government's main concern is with the aggregate level of expenditure planned and incurred by authorities. But I must also pay close attention to staff costs, which account for nearly 70 per cent. of total current expenditure. Recent trends must give everyone considerable cause for concern. In September 1980, authorities as a whole were employing some 2,000 staff more than in September 1979, 4,000 more than when this Government assumed office and no fewer than 15,000 more than in December 1977. These are overall totals. I am glad to say that some authorities are acting more reasonably. For instance, Strathclyde regional council has effected manpower reductions since last year, although there is still a net increase since the Government first sought staff economies.

On the other hand, it is noteworthy that nearly half the total increase between September 1979 and 1980 is attributable, by its own public statements—if nothing else—to the eccentric policies followed by one particular authority. At a time when the private sector as a whole, and virtually every individual, is having to exercise restraint and good sense in expenditure matters, a continuing increase in the local authority payroll, the costs of which are met entirely by the taxpayer and the ratepayer, cannot be justified, and cannot fail to cause severe damage to businesses and loss of jobs, not to mention the unacceptable burden that it will place on individual ratepayers.

Mr. Dennis Canavan (West Stirlingshire)

On the matter of loss of jobs, does the Secretary of State realise that there are already more than ¼ million people unemployed in Scotland? What effect will the rate support grant have upon unemployment arising from local government redundancies? Has he any estimate of that? Does he not realise that this niggardly rate support grant order will lead to further unemployment in Scotland?

Mr. Younger

Further increases in staff on the lines of what has taken place, let alone any decreases, will result in literally thousands more redundancies in the private sector, which is the only thing that pays the cost of all these expenditures. The hon. Gentleman must face the fact that every job in the public sector is paid for by someone in the private sector. That is what is putting jobs in his and other Members' constituencies out of being at the present time.

Mr. John Maxton (Glasgow, Cathcart)

Does the right hon. Gentleman accept that it is not only in the public sector and local authorities that redundancies will take place as a result of this rate support grant? If local authorities have to cut back their expenditure, many small private companies, which this Government were elected to support, will go to the wall, with further redundancies, because they rely almost entirely upon local authority business to continue?

Mr. Younger

With respect, the hon. Gentleman ought to speak to some small companies. What is worrying them more than anything else at the moment is the rising level of rates being forced upon them by irresponsible authorities. If the hon. Gentleman has not discovered that, he had better discover it quickly, because many businesses of that kind will be put out of business unless rate increases are kept at a reasonable level.

I turn to the main provisions of the order. The rate support grant for 1981–82 will be derived from a total of relevant expenditure 2.7 per cent. less than the corresponding figure in 1980–81—£2,458.5 million at November 1980 prices. Before determining that figure I undertook a painstaking review, after consultation with the Convention of Scottish Local Authorities, of the scope for reductions in individual services. My conclusions on individual services are not binding on authorities which may incur current expenditure in accordance with local priorities. My overriding concern is that the aggregate of expenditure should not exceed the overall provision on which the settlement is based. Nevertheless, I hope that the proposals in paragraphs 7–17 and in appendix C to the report on the order will help authorities to determine expenditure levels for individual services and to contain the aggregate level.

The Government propose that a substantial part of the overall reduction should be found in provision for education. But it would be wrong to infer from that that I envisage a reduction in standards. As noted in paragraph 8, the expenditure reduction is less than the reduction indicated by falling rolls, to which it is mainly attributable. Thus we will be making considerable savings in total expenditure but actually spending more per pupil and still further improving the pupil-teacher ratio, as I described a few minutes ago.

Otherwise, substantial reductions are concentrated in less essential services, such as leisure and recreation, and in provision for miscellaneous services. A substantial reduction in planning expenditure is attributable mainly to the introduction of charges. Provision for law, order and protective services is maintained at the 1980–81 level, reflecting the high priority that this Government accord to this important factor. Provision for social work is increased by 1 per cent.

The underlying theme may be summarised in this way. The overall reduction is vital in the national interest at a time when our national resources are declining, and both private individuals and the private sector are all having to face up to saving money wherever they can. It would be absurd and most unfair for local authorities to be exempted from making savings similar to those which everyone else is having to make. But within this it is perfectly possible—and this is what we have done—to concentrate savings on the less essential and preserve spending on the essential services to a very great extent. I have no doubt that this general order of priorities will have widespread public support.

The percentage by which grant is calculated for relevant expenditure reflects an actual reduction compared with 1980–81 of 1 per cent. A further adjustment of 0.8 per cent replaces an ad hoc abatement made since 1978 in respect of rates on local authority properties. This is COSLA's preferred solution. It will have no effect on the grant received by local authorities. That gives a grant percentage of 66.7 per cent. and aggregate grants for 1981–82, based on expenditure at November 1980 prices, will be £1,639.8 million. Of this total, rate support grant will account for £1,503.1 million and specific grants for £136.7 million.

As in previous years, there will be a cash limit on additional grant for 1981–82 towards pay and price increases beyond November 1980 prices. The cash limit figure of £94 million includes provision for increases of no more than 6 per cent. on average in pay settlements in this round and provisionally for the next round, and for price increases of no more than an average of 11 per cent. between 1980–81 and 1981–82. Total grant payable through increase orders may be above or below the figure of £94 million to take account of variations in expenditure due to changes in interest rates, which are not subject to cash limits. Provision is also made for the payment of additional grant towards cost increases for 1979–80, amounting to £24.5 million, and for 1980–81, amounting to £203.1 million.

Mr. John Home Robertson (Berwick and East Lothian)

The Secretary of State referred to the wage increases being allowed in the public sector under the present policy, increases of 6 per cent. Would he care to comment on the fact that one of the local authorities that he would term reasonable, though I would disagree—the Borders regional council—has already announced that a rate increase of 18 per cent. is likely, which is three times the percentage of the pay policy that he is applying in the public sector?

Mr. Younger

The hon. Gentleman is magnificently confused on all matters contained in his question. First, the 6 per cent. is the amount that the Government can contribute towards local authorities' pay bills. It is the amount that the public can afford to spend in assisting local authorities towards that expenditure. Local authorities have the discretion to decide what they pay and what they provide from their own resources if they wish to do so. Secondly, I am extremely surprised that the hon. Gentleman, of all people, is complaining that the Borders region has announced a tentative rate increase of about 18 per cent. when the other local authority within his constituency is talking today about positively staggering rate increases of 40 per cent. or more. If the hon. Gentleman wants to exercise his undoubted debating skills on anyone, he might try them on his local friends before he tries them on anyone else.

My arrangements for distributing grant in 1981–82 are generally similar to those adopted in 1980–81. Domestic relief will remain at 3p in the pound, and the scheme for special assistance to authorities affected by oil-related development will continue with a first payment in 1981–82 of £10.8 million. I have decided again, as for 1980–81, to reduce the resources element entitlement, which is affected by individual decisions on rating levels, to reduce any possible disincentive to economy within the grant arrangements.

The formula for distribution of the needs element—that is the general portion—will be as endorsed by the convention during my consultations with it, subject to minor adjustments consistent with the agreed objective of stability.

The estimated effect of my proposals on the relative position of individual authorities and of whole regions is, with a few exceptions, not substantial provided that the present pattern of relative rate levels is maintained. Thus an authority which budgets for substantial increases in expenditure and which rates accordingly will receive less resources than it would have received under an unchanged ratio, so that a lower percentage of its total expenditure will be met by grant.

As previously, I do not propose to offer a firm prediction of the average level of rate increases in 1981–82, a custom followed by my predecessor as well. The level will depend entirely on decisions reached by individual authorities when they complete their budgets in the course of the next few weeks.

Dame Judith Hart (Lanark)

How does the right hon. Gentleman reconcile philosophically the Government's monetarist policies and commitments with their commitment to individual democracy and the freedom of local government? The two approaches are totally in conflict.

Mr. Younger

If I may say to the right hon. Lady—

Mr. John Home Robertson

Answer the question.

Mr. Younger

Indeed, I propose to do so. I am grateful to the hon. Gentleman for his advice. I am not quite sure what the right hon. Lady means when she refers to monetarist policies. However, it is clear that it is the role—it will remain the role under all Administrations—of the central Government to decide how much the central Government and the taxpayer can afford to spend in assisting local authorities to do their job. That is what I am doing. That is our job. That is our responsibility. It is the local authorities' responsibility to decide beyond that what they think their ratepayers can afford to provide. Although I do not agree with the decisions that many authorities take, they must stand by their decisions and they must take the consequences if they rate so excessively that their ratepayers reject them, as I am sure that many of them will.

Mr. Robert Hughes (Aberdeen, North)

I have listened to the right hon. Gentleman with great care. No one would disagree that the central Government have a responsibility to make available whatever they can afford and to leave the rest to local authorities' judgment. However, I understand that he is changing the formula of the needs element so that if authorities go beyond the guidelines and cash limits he will be able to penalise them for exercising their judgment. How does he square that settlement?

Mr. Younger

First, it is nothing to do with the needs element. I am changing the formula because I cannot see why the public purse should subsidise directly those authorities that spend the greatest amounts at the expense of prudent authorities that take care not to over-spend and not to put excessive strain on their ratepayers. It would, indeed, be a Gilbert and Sullivan operation if we were to give extra help to those which were the most extravagant, and I do not think that anyone would want that.

Mr. Ernie Ross (Dundee, West)

The Secretary of State says that he wants to help those local and regional councils which have carried out his policies. I quote from the Dundee Courier and Advertiser of last Monday: Mr. Ian Mackie, the Tory council's leader of the administration, was in an angry mood last night about what he termed the 'completely inadequate' allocation of £103.5 million from the Government. That is a Tory-controlled region, having carried out the right hon. Gentleman's policies, saying that his allocation is totally—

Mr. Deputy Speaker (Mr. Bryant Godman Irvine)

Order. Interventions should be brief.

Mr. Younger

I am not quite sure what the hon. Gentleman is saying, but if he has overnight suddenly become a great supporter of the policies of Tayside regional council I shall be extremely pleased, because it is one of the best and most responsible local authorities in its expenditure. That is not just my view. I am pretty certain that it is the view of the right hon. Member for Craigton, because that authority gave him more help than did half the Labour-controlled authorities in Scotland when he was in my position.

As for what the hon. Gentleman's reference to what was said in the newspapers this week, as I understand it Tayside regional council has not yet finalised its budgets, and the remarks reported in the newspaper referred to guidelines. Tayside's guidelines are in the same position as everyone else's: they are merely guidelines, and they are not anything that anyone has to achieve or stick by. They are guidelines intended to help. As I say, if the hon. Gentleman is now paying tribute to Tayside for its responsible attitude to local spending, I am glad that he is at last doing so. It is about time.

Expenditure is the main key to the rate levels that we expect to see in the coming year. I have given authorities a positive lead in this matter in the terms of the grant settlement embodied in the order. Provided that authorities budget reasonably in line with the volume of expenditure assumed in the settlement and pursue a moderate policy towards wage settlements, there will be no need for undue rate increases, and the average level of increase should be considerably below that imposed by authorities in 1980–81. But if authorities plan for a substantially higher volume of expenditure and contemplate average increases in the earnings of local authority employees substantially beyond 6 per cent., higher rate increases will be inevitable. It is accordingly for authorities as employers to reach their own decisions on the level of individual settlements with a clear understanding of the Government's position, and how much the Government can afford to give them in the way of help. If they adopt the easy option of higher overall settlements, they will have to accept full responsibility for the consequences which will fall upon their ratepayers.

The general theme of what I have said has been that the settlement embodied in the order is fair and realistic, striking a good balance between the interests of the recipients of local authority services on the one side, and the national economic interest, on the other. It envisages a generous, although reduced, level of expenditure by authorities. It proposes a judicious disposition of reductions between services. It offers a realistic level of support by the taxpayer. It features a carefully balanced system of distributing grant, taking due account of the views advanced by the Convention of Scottish Local Authorities. It enjoins authorities to accept a due measure of responsibility for controlling costs—

Mr. Robin F. Cook (Edinburgh, Central)

Will the right hon. Gentlemen give way?

Mr. Younger

Yes, of course.

Mr. Cook

I am much obliged. The right hon. Gentleman will recall that in his answer to my hon. Friend the Member for Berwick and East Lothian (Mr. Home Robertson) he said that it was for the local authorities to decide how much they could pay in wage settlements with their employees, and he added that that was a matter for them to resolve, taking into account their rate settlement.

The right hon. Gentleman cannot have it both ways, saying that it is a matter for the local authorities themselves, and them insisting, as he was obviously doing in the most recent passage of his speech, on a 6 per cent. settlement. Will he come clean and give the House—we are entitled to it—his own view on whether the local authorities should have settled on an 18 per cent. increase for the firemen or whether they should have settled, as appears to have been the drift of his last paragraph, for 6 per cent? The House must—

Mr. Deputy Speaker

Order.

Mr. Younger

I shall try once more to explain the precise position to the hon. Gentleman and to others who are obviously confused. It is my duty and my task to make clear what the public purse can afford to pay to help local authorities with their wage settlements. That is my responsibility, and I have laid down that the public purse can afford to pay for wage increases of 6 per cent. It is for local authorities to decide whether they wish to choose that figure, a figure below that or a figure above it. It is for them to provide the resources that are necessary, taking into account how much the Government can afford to pay to help them.

Whatever else one may say, and whether or not one agrees with it, that is a perfectly clear statement. I do not think that anyone could be in any doubt that it is the Government's contribution about which I am talking, and it is my responsibility—and only mine—to say what the Government can afford to do to help local authorities.

Mr. Dick Douglas (Dunfermline)

rose—

Dr. M. S. Miller (East Kilbride)

rose—

Mr. Younger

I have to choose between Scylla and Charybdis I shall choose Scylla.

Mr. Douglas

I am not sure whether I should be flattered by the Secretary of State's remark.

Is he saying that in the light of the expertise that is available to him, he is entitled to take a view of the national economic resources that inhibits a growth of wages and salaries to 6 per cent., and that the local authorities are entitled to take an entirely different view on the basis of their resources? Through an accident of this Parliament, he wills the end of the services that can be provided in many cases by the local authorities. Why is he inhibited from willing the means also?

Mr. Younger

I am not certain where that question started and finished. The hon. Gentleman will appreciate more easily than most that two different components make up the total amount of what it will cost local authorities to pay their employees. All I am obliged to do is to give a clear indication in good time of how much the Government can afford to pay to help local authorities. I have done that. They know what it is, and they can make their decisions with that in mind.

Dr. M. S. Miller

rose—

Mr. Younger

I am sorry, I must finish my remarks. [HON. MEMBERS: "Give way."] If I give way, it will prevent other hon. Members from speaking. [Interruption.] I give way.

Dr. Miller

Does not the Secretary of State appreciate that, cutting through all the rhetoric and the fine phrases, whatever happens there will be a cutback in the essential services that local authorities provide? Does not the right hon. Gentleman appreciate that that is despicable on a matter to which the Government should be contributing in this International Year of Disabled People?

Mr. Younger

As I have explained, there is no reason why any essential services should be abolished or removed because of this settlement. If local authorities decide in their priorities that essential services should suffer it is their decision. I have made it perfectly clear, and it is clear from the fact that the amount of money is the same or rather more in real terms than the Secretary of State provided in 1977–78. No one can say that local authorities must cut essential services. A properly organised local authority will be able to make the necessary economies by cutting the less essential services.

Of course this settlement involves a saving of money. Of course it involves cuts on some of the activities of local authorities. They are in no different a position from that of everyone else in the country—individuals, businesses, everyone who is going through a period of economic difficulty. I see no reason whatever why local authorities should be exempted. The good and efficient local authorities are having no difficulty in making cuts.

I hope that the House will now approve the order.

10.45 pm

Mr. Bruce Millan (Glasgow, Craigton)

This is a short debate and, therefore, I shall not take time by complaining at length about the timing of it. It is, however, highly unsatisfactory that we should be having first the rate support grant debate and then, following that, the housing support grant debate at this time of night. We have complained about that, we consider it to be highly unsatisfactory and, speaking for the Opposition, I am absolutely determined that we shall not have another year in which we shall debate these extremely important matters at this ridiculous time of night.

As it is a short debate, I shall try to confine my remarks as much as I can, but I want to deal with the question in which every ratepayer, whether he is a householder or an industrial or commercial ratepayer, is most interested—namely, what is to be the increase of rates in 1981–82.

When we debated last year's rate support grant order, about a year ago, the Secretary of State, as he has done tonight, tried to convince the House that increases in rates would be at comparatively modest levels, but he refused to give a specific forecast. I gave forecasts a year ago. I said that I could not see how rates in Scotland as a whole could come out with an average increase of anything less than between 25 and 30 per cent. and that I believed that in many authorities it would be considerably more. In the current year, the average rate increases in Scotland have been no less than 32 per cent.

I put on record now that it is my view that the ratepayers of Scotland, because of this rate support grant settlement, and directly on the responsibility of the Government, are facing in 1981–82 rate increases which will again certainly approach the 32 per cent. that they have already borne in the current year. The responsibility is absolutely that of the Government. The Secretary of State can try as he will to place the responsibility on profligate local authorities, but the average increase in Scotland as a whole in 1981–82 will be a savage increase, and that will severely affect not only domestic ratepayers but industrial and commercial ratepayers.

Why is there to be this massive increase in the next year? First, there is the cut in the percentage grant of only 1 per cent. That seems modest, but it will mean a 3 per cent. increase at least in rates in Scotland.

Secondly, there is the normal inflation rate—because, whatever the rate of inflation, other things being equal, the rates will go up by something like the same percentage—and my estimate is that that will be at least another 10 per cent. increase, a very modest estimate, in the forthcoming year. It may well be a good deal more than that.

Thirdly, and even more important, the rate increases will be very substantial because the relevant expenditure on which the rate support grant is being paid is completely unrealistic. What is more, the Secretary of State, despite all his blustering tonight, knows that it is completely unrealistic. He talks about a decrease in relevant expenditure of only 2.7 per cent., but that is, of course a decrease on what he was told last year would prove a completely unrealistic figure. It is a reduction of 2.7 per cent. on the artificial figure that was in last year's rate support grant order. We know, however, that if we compare the relevant expenditure on which grant is being paid for 1981–82 with the actual local authority budgets of the current year, the reduction is not 2.7 per cent.; it is 7.2 per cent.

I state now absolutely categorically that there is not the slightest chance of the local authorities in Scotland reducing their relevant expenditure in 1981–82 by 7.2 per cent. or anything like it, compared with the figures for which they have budgeted in the current year. In so far as they are not able to make that reduction—there is not the slightest chance that they will come anywhere near that, as the Secretary of State knows perfectly well—the burden will fall exclusively on the ratepayers and will mean very considerable increases in rates.

The Secretary of State would like to pretend that the problem has been caused by a lot of profligate authorities. He would like to pretend that if they made a little effort they could reduce their expenditure to the figures that he has provided for in the order. I do not believe that for one minute. What is more, the Convention of Scottish Local Authorities, which includes Conservative-controlled local authorities, does not believe that.

Local authorities have a much better record than the Government—including this Government—of keeping public expenditure under control. There is a lot of humbug and hypocrisy when the Secretary of State talks about the manpower figures. He is fond of boasting in a self-righteous way that the Scottish Office has kept down its manpower figures. However, the right hon. Gentleman always excludes the prison service and State hospital, which are the only departments within the Scottish Office that are directly involved in providing services to Scottish ratepayers

It would be very nice if local authorities could, for example, exclude from their manpower figures teachers, firemen, social workers and those who repair council houses. Local authority manpower figures would be very different if such direct services were excluded from the calculations. Since 1 April 1979, manpower for direct services in the Scottish Office has increased. There has been a minimal reduction in overall manpower in the Scottish Office. If the bureaucrats, administrators and those who sit in offices are excluded, manpower in the direct services for which the right hon. Gentleman is responsible—the prison service and State hospital—has increased since May 1979. The Secretary of State does not seem to know that. He is asking for figures to be supplied from the Box.

I am complaining not about that increase but about the self-righteous way in which the Secretary of State criticises local authorities. They also provide direct services to ratepayers. They supply teachers, policemen, firemen, social workers and so on. In principle, I do not disagree with keeping public expenditure under control, but the record of Scottish local authorities is much better than that of the Government.

These major rate increases have been imposed not only—as the right hon. Gentleman knows—because the expenditure on which the grant is based is unrealistic but because the inflation factors for 1981–82 are as dishonest as they were for 1980–81. Indeed, the situation in 1980–81 was a major item in the debate on last year's rate support grant order. Local authorities tend to overbudget and to underspend, but those authorities that took the right hon. Gentleman's inflation factors for the current year into account when fixing the rates will face massive deficits at the end of the year. Those deficits will have to be carried forward into 1981–82. That is a disaster for Scottish ratepayers.

In 1980–81, the cash limit amounted to £194 million. If COSLA's figures are in dispute or are inaccurate, the Secretary of State can let us know at the end of the debate; but he will not say that they are inaccurate, because they are beyond dispute. According to COSLA's figures, the underlyig increases for inflation represented by the cash limits fixed for 1980–81 amounted to about £307 million. In 1980–81, actual inreased costs which are completely outside the control of local authorities were £390 million, even if increased loan charges are not taken into account. Every penny of that additional expenditure has fallen directly on the ratepayers. The Government have swindled local authorities out of their share of that increased expenditure.

One does not have to rely on the COSLA figures. One can look at the Secretary of State's own figures in the rate support grant order. I invite Conservative Members, if they are sceptical, to look at page 11 of the report on the order. They will see that the figures for 1981–82, when compared at November 1979 and November 1980 prices, show inflation that local authorities have had to pay over the current year of rather more than 25 per cent. The factor for which allowance was made in the rate support grant settlement last year was only 13 per cent. plus an undisclosed figure for comparability settlements in pay.

This massively increased inflation is the responsibility of the Government. It is not the responsibility of the local authorities. Yet it has been paid by the local authorities and, therefore, by the ratepayers of Scotland in 1980–81. What has happened in 1980–81 will happen again in 1981–82 because of the unrealistic cash limit figures written into the order for 1981–82. The Secretary of State gave the figures. For wages and salaries, the figure is 6 per cent. For other expenditure, the figure is about 11 per cent.

I should like to examine the figure for wages and salaries to see what it means in reality. The commitments that the local authorities already have to take on board following the fire service settlement, the manual workers's settlement and other settlements—

Mr. Canavan

And the police.

Mr. Millan

No, not the police. I am coming to the police. My hon. Friend should be patient. The commitments already taken on by the local authorities for 1981–82 for the fire service and for manual workers mean that the money left available in this rate support grant for additional wages and salaries for 1981–82 amounts, on average, to only 4½ per cent. That takes account only of the settlements already made. Does the Secretary of State honestly believe that on 1 April 1981 the teachers will settle for 4½ per cent.?

Mr. Canavan

No chance.

Mr. Millan

Does the right hon. Gentleman believe that the policemen, in the autumn of 1981, will settle for 4½ per cent.? Will he answer the question? Will his Under-Secretary of State answer the question? There is not the slightest chance of either the teachers or the policemen settling later this year in their annual settlements for salary increases of anything like 4½ per cent.

Mr. Younger

Will the right hon. Gentleman remind the House what was the cash limit for pay in his last settlement? How nearly accurate did it turn out to be?

Mr. Millan

There were no cash limits under the Labour Government that ever left local authorities with a massive burden placed on the ratepayers. Will the Secretary of State answer the question I have put? Does he expect the teachers and the policemen to settle in 1981 for a 4½ per cent. salary increase? I will give way again. I have given way once. Will he give the answer?

Mr. Younger

The right hon. Gentleman knows that I do not take part in these negotiations. I have tried to explain several times that the local authorities negotiate in these matters. I have let them know, as the right hon. Gentleman did before me, how much the Government can afford to pay to help them with this.

Mr. Millan

That is an absolutely appallingly dishonest answer. [HON. MEMBERS: "Oh."] First, the Secretary of State takes part in the teachers' negotiations. He is part of the management side in them. Does he expect the teachers or the police to settle for 4½ per cent? Of course not. The result of whatever these settlements are beyond 4½ per cent. will be a further burden on the ratepayers. That is his direct responsibility. That is the reality of the situation. The Secretary of State may wriggle as much as he wishes, but the responsibility is his.

Mr. Barry Henderson (Fife, East)

rose—

Mr. Millan

It is not the responsibility of the hon. Member for Fife, East (Mr. Henderson). The Secretary of State will not answer these questions, but he knows that, as the result of the cash limits in this RSG settlement, these additional salary settlements which will be reached in 1980–81 will mean that vast sums will fall directly on the ratepayers and will be an important contributory factor in the very large increases in rates that we shall see in 1981–82.

Mr. Henderson

Will the right hon. Gentleman give way?

Mr. Millan

No. I have great regard for the hon. Member for Fife, East.

Mr. Henderson

Well, give way then.

Mr. Millan

No. The hon. Member is not yet the Secretary of State—not that he would not be an improvement.

We are having artificial figure piled on artificial figure. The figures in this order for 1981–82 bear no relation whatsoever to the reality of the situation facing local authorities and ratepayers in Scotland, and they bear no relation to the burdens that will be placed on the ratepayers of Scotland in 1981–82.

I shall not deal in detail with the commentary on particular services outlined in the report on this settlement. I dare say that some of my hon. Friends will want to deal with education and a number of other services. However, looking at the commentary and at what the Secretary of State asks us to believe he expects will happen with regard to these services in 1981–82, the unreality and artificiality are evident.

The result for 1981–82 will be as it has been for 1980–81. I repeat: the responsibility is the Government's. It is that we shall have massive rate increases in the forthcoming year. They will vary between areas and between regions. I believe that the biggest increases in the current year will be at regional rather than district level. I dare say that the Secretary of State and his cohorts will take what little comfort they can from the particular authorities at regional or district level which manage to keep rate increases next year down to a reasonable level. But the fact is that the overall Scottish position in the forthcoming year, taken as a whole, will be a very considerable increase in rates, to something approaching the massive and savage increases of more than 30 per cent. that we have had in the current year.

That will be accompanied by poorer services in education, for the elderly, for the disabled and so on. [Interruption.] We can have it both ways. That is the problem. We are having higher rates and poorer services.

To add insult to injury, we have the provisions in the Local Government (Miscellaneous Provisions) (Scotland) Bill, which will put penalties on local authorities which try to preserve services at a reasonable level. Local authorities will be acting perfectly legitimaately, because there is no economic or other reason for the kind of reductions in public expenditure for which the Secretary of State is asking. The local authorities will be faced with penalties under that Bill.

I am glad to see that the Convention of Scottish Local Authorities, including Conservative-controlled authorities, is unanimously against the Bill's provisions. They rightly see it as an attack on local democracy and local decision-making. If the Secretary of State thinks that the penalty powers will be a boon to ratepayers or if the ratepayers think that the powers will produce anything good for them, they could not be more wrong. If the penalties are applied—I sincerely hope that they will not be—they will increase rates by even greater amounts than they will go up in any case as a result of the order. The penalty will fall directly on the unfortunate ratepayers.

Mr. David Myles (Banff)

Will the right hon. Gentleman give way?

Mr. Millan

I am about to finish.

Mr. Myles

On a point of order, Mr. Deputy Speaker—

Mr. Deputy Speaker

The right hon. Gentleman is refusing to give way, and I fail to see how there can be a point of order in that.

Mr. Myles

On a point of order, Mr. Deputy Speaker. I accept your ruling, but the right hon. Member for Glasgow, Craigton (Mr. Millan) is misleading the House.

Mr. Deputy Speaker

That is not a point of order.

Mr. Millan

If misleading the House were out of order, the Secretary of State would not have been allowed to speak at all.

For domestic ratepayers the order is another burden placed on their shoulders. The ordinary householder has seen the tax concessions of the first Budget of 1979—if he was fortunate enough to receive any of them—disappear, as the Government now admit. If he is a council tenant, he has seen his rents forced up by unprecedented amounts. If he is an owner-occupier, he has seen his mortgage increased to unprecedented levels. He has seen the inflation rate maintained at 15 per cent. and gas and electricity prices pushed up and he faces, for the second year running, massive increases in rates.

If he is a commercial or industrial ratepayer, he is already suffering from high interest rates, overvalued sterling and the deflationary policies of the Government. Indeed, he is lucky if he has escaped bankruptcy and unemployment. Now, he will be faced with massive increases in his rates. I am not surprised that he is worried about the prospects for 1981–82. The order will add to the havoc of bankruptcies and unemployment that we are already suffering in Scotland.

I say to every domestic ratepayer and to the House that the disaster has been created by the Government, and, typically, the order has been brought forward, as was last year's order, with the duplicity and dishonesty which is characteristic of the Secretary of State. That is why we shall vote against it.

11.8 pm

Mr. Allan Stewart (Renfrewshire, East)

The right hon. Member for Glasgow, Craigton (Mr. Millan) complained about the timing of the debate. His memory seems to be rather short and I remind him that the 1977–78 order was considered on 22 December 1976 at 11.40 pm and the rate support grant orders for England, Scotland and Wales for 1979–80 were put together after a four-hour debate on a Thursday night—14 December 1978. The first speech on the Scottish rate support grant order was by the hon. Member for Glasgow, Maryhill (Mr. Craigen), who began at eight minutes past midnight on the Friday morning. So let us knock that piece of hypocrisy on the head.

We have heard a predictable speech by the right hon. Member for Craigton. He said that cuts were impossible without cutting services, and so on.

Mr. Harry Ewing (Stirling, Falkirk and Grangemouth)

What about the new clause to the Local Government Bill?

Mr. Stewart

I will tell the hon. Gentleman about the new clause to the Bill whenever he wants a discussion on it, but it is not relevant to this debate.

The right hon. Member for Craigton and I have one thing in common—we live in the same area of Glasgow, in Dumbreck. A few streets away from my modest semidetached and the right hon. Gentleman's luxury flat lives the Lord Provost of Glasgow. I am sure that the right hon. Gentleman will agree that Dumbreck and Pollokshields are an attractive area in which to live. It is quiet, it is desirable, it is near the city centre, with many nice respectable people, most of whom vote Tory. It has one disadvantage—it is very difficult to get one's Sunday newspapers delivered. The House will hope that that is not too much of a nuisance for the right hon. Gentleman. It is certainly not too much of a nuisance for me. And it is no nuisance at all for the Lord Provost of Glasgow, because he has his newspaper delivered by the council chauffeur. I will start believing all this stuff and nonsense about a financial crisis in Scottish local government when the Lord Provost of Glasgow has to get his own Sunday paper.—[Interruption.]

Mr. Deputy Speaker

Order. The hon. Gentleman must realise that sedentary observations are not permitted. This debate must finish at 11.44 and the more time that is taken up by noise, the less we shall have for debate.

Mr. Stewart

Thank you, Sir.

I turn now to the comrades of Renfrew district council. It seems that they have trouble with their Sunday newspapers as well, but they are adopting a different solution. They propose a scheme under which they personally get cheap loans at the expense of the ratepayers to buy motor cars. That is outrageous, and I ask my right hon. Friend whether it is legal.

On more general points, my right hon. Friend has already mentioned manpower. Scottish local authorities have increased their manpower by 2,000 in one year, whereas English local authorities have cut theirs by 35,000 or 40,000. This is not due to an increase in police manpower, as is sometimes said. The increases have been, for example, in social services. In the past year, Scottish local authorities have added 400 people in recreation and leisure. I have nothing against recreation and leisure: I like it myself. But one must ask what these people are doing. Why has employment in technical services increased by 20 per cent. over the past year? Why have direct works departments increased their employees by 200 in the last year?

The local authorities complain that the base for calculation is wrong. They say that the Government should not have continued with their original base, their estimates for 1981, but should have taken the local authorities' budgets instead. If local authorities had listened to Ministers when we came to power and responded properly and responsibly, they would not have the problems that they now claim they have.

The 6 per cent. figure that has been much criticised by the hon. Member for West Stirlingshire (Mr. Canavan) from a sedentary position—I do not wish to tempt him to rise—is entirely reasonable. Given the difficulties faced by the private sector, many people working in it will settle for less than 4 ½to 6 per cent. in the forthcoming year. In the light of national economic circumstances—

Mr. Norman Hogg (Dunbartonshire, East)

rose—

Mr. Stewart

I have to listen to the hon. Member for Dunbartonshire, East (Mr. Hogg) every Tuesday and Thursday morning. I shall forgo the pleasure of allowing him to intervene now. The settlement is reasonable and fair. The sacrifices, such as they are, are not the maximum possible, but the minimum necessary, if local government in Scotland is to make a reasonable contribution to the national recovery that we all wish to see.

11.16 pm

Mr. Donald Stewart (Western Isles)

I am glad of the opportunity to make a short contribution. I do not think that the Secretary of State will regard any Opposition Member who is not called as consenting through his silence. The first part of the speech of the hon. Member for Renfrewshire, East (Mr. Stewart)—it later became a serious contribution—made me worry whether I should stand up in case Hansard attributed the speech to the wrong Stewart when reporting the debate.

The net result of the order is that Scottish local authorities will be faced with incredible difficulties in trying to maintain services—including housing—and far more so in being able to improve them. It is all very well for the Secretary of State to talk about not cutting essential services. There is no way round that. Authorities will be obliged to do so, and in many cases the services will fall back severely.

Mr. Alex Pollock (Moray and Nairn)

I know that the right hon. Gentleman wishes to put the whole picture before the House. Is he aware that Grampian region's social committee last week voted to increase the home help service and certain other aspects of social care by £231,600?

Mr. Stewart

I am prepared to accept that. Grampian region is in a more fortunate position than many other parts of the country. If the hon. Gentleman wishes, I can give the other side—criticism of the Scottish office and the Government—but that would be unfair to other hon. Members who are waiting to speak. I am keeping my speech as brief as possible.

However, the Government may try to disguise it, the net effect of tonight's orders, in conjunction with the Local Government (Miscellaneous Provisions) (Scotland) Bill, is seriously to weaken the concept of local autonomy. the Government are imposing their ideas and their determination of rents on local authorities. It is traditional for the Conservative Party to have scant regard for the idea of local determination. Not only did it set its face against any devolution of power to Scotland; it forced on Scotland the so-called reform of local government that removed its very definition. By the imposition of local government reform, the Government foisted on Scotland one of the most disliked and resented constitutional changes ever. It does not become the Secretary of State to complain about increases in staff and workers. That was inevitable. No doubt, at the time the old myth about economies of scale was trotted out, but it was inevitable in that sort of reform.

Behind the orders lies the Tory resentment of the big-spending authorities such as Strathclyde and Lothian, which, the Government say, are determined to wreck the Tory economic strategy to reduce public spending. Leaving aside the fact that the present Administration have no mandate whatsoever from Scotland, it is despicable that their party political disputes should be used in such a way that the innocent Scottish public suffer even more. Scotland has suffered enough from the shortsightedness of all Westminster Adminstrations—and this Administration is no different from the rest. Unemployment has risen steadily both under this Government and under the Labour Government. The manufacturing base of the country is being destroyed. Society is being torn apart. These petty squabbles between Labour-controlled local authorities and the Conservative Scottish Office merely add injury to the injustice.

The orders, no matter what buckets of whitewash the Secretary of State may bring along to cover them, represent mean aggression against the Scottish people and they will be seen in that light.

11.20 pm

Mr. Jim Craigen (Glasgow, Maryhill)

I am glad to have been called a little earlier in this debate than I was on that last occasion. I was going to begin by congratulating the Government's business managers on their skill in introducing the order at this hour of the night, because it is immensely important. Indeed, the Secretary of State pointed out that it constituted 40 per cent. of the Scottish Office expenditure.

The awakening is coming, because people are beginning to realise the deterioration that is taking place in the quality and range of services provided by local authorities. It is all very well for Members of Parliament to snipe at local government, but Parliament passes laws which impose more and more responsibilities on local authorities.

Many local authorities now find increasing difficulty in undertaking their statutory duties. One example is the Government supported Concessionary Travel for Handicapped Persons (Scotland) Act 1980, introduced by my hon. Friend the Member for Dunbartonshire, West (Mr. Campbell) last Session. Strathclyde region found that it did not have enough money in its budget to implement that discretionary legislation. Such problems will increase.

If the Government are looking for quangos to axe, I suggest the Stodart Committee which is supposedly looking into the inter-relationships of local government. I foresee experienced councillors getting fed up with the kind of role that is being assigned to local government. Whereas it has traditionally been accepted that local authorities act as the agents of the Government, the Secretary of State now expects them to act as the instruments of the Government.

Local authorities cannot be held responsible for the mismanagement of the Government's economic policies. A considerable conflict will develop between local and central Government democracy. We cannot expect elected local authorities to pursue the kind of economic policies that the Government are seeking to force on them.

The message is clear. The Secretary of State, in his press release announcing the rate support grant order, indicated that he expected local authorities to sack staff. Is he going to introduce a new element into the rate support grant whereby local authorities will be reimbursed for part of the cost of sacking staff? Redundancy involves heafty initial costs.

Conservative Members often complain about staffing levels in local authorities. I wish that they would show more concern about the unemployment level in Scotland. We are debating a rate support grant order involving £1.5 billion. Does the Secretary of State realise that the cost of keeping a quarter of a million Scots out of work for a year equals £1.5 billion? This loss in taxation, rent and rates and the need to pay out unemployment and supplementary benefits is equivalent to the Government funding of Scottish local authorities. The busiest offices will be those which deal with rent and rate rebates. I wonder how many extra staff local authorities will have to take on to meet savage increases in rents and rates in Scotland. Rent and rate arrears will increase considerably.

About 70 per cent. of local authority expenditure is on wages and salaries. The Government lay down guidelines about the numbers of teachers, firemen and policemen that should be employed. Central Government might as well employ such people themselves. Then the Secretary of State would be directly responsible for his actions. He could not blame the local authorities.

Conservatives talk about freedom, especially when in Opposition. In government they centralise the powers available to the the Government over the local authorities. One could almost say that they seek to nationalise local authorities. The Gaullists in France could learn from this Government about centralisation. The Secretary of State might as well appoint his own prefects to the local authorities. He believes that the men from St. Andrew's House know best. For a decade in the 1960s we examined the need for reform in local government. For a decade in the 1970s we implemented the reform of local government structure and sought to translate it into action. Now we face a decade in the 1980s when the local authorities will go into decline, if not into eclipse, The message of the order is that the local authorities will be the scapegoats for the Government's economic mismanagement.

11.28 pm

Mr. Bill Walker (Perth and East Perthshire)

The right hon. Member for Glasgow, Craigton (Mr. Millan) mentioned a bogus Government figure. We have listened to suggestions about the wages and salaries of local government employees. It would be wise to remember that the bill must be paid by taxpayers and ratepayers and that the Government have no magic pot of gold. We ask local authorities to act sensibly.

I was delighted by the comments of my right hon. Friend the Secretary of State about Tayside. I am sure that when the guidelines materialise and action is taken Tayside can look forward to obtaining its proper reward for having behaved responsibly for many years. I look forward to its gaining benefit from the needs element.

I turn to the question of manning levels. That local authorities behave differently from industry in these difficult times causes anxiety. Between March 1979 and September 1980, there was an increase in the number of full-time equivalent architects and people employed in management and computer services which is dfficult to justify. What I find most interesting is that the cost of internal transport increased cubstantially. I imagine that this is because they now all require to have their papers delivered.

I also look to the fact that the cost of central services has risen substantially. Contrary to some comments—particularly those of the fisherman below the Gangway, the hon. Member for West Stirlingshire (Mr. Canavan), who spoke from a sedentary position about the effect on teaching of Government policies—between March 1979 and September 1980 there was an increase of 454 teachers. That hardly bears out the comments about savagely destroying services and the removal of services.

One of my own district authorities assures me that its rate increase will be just into double figures, possibly, whilst another of my district authorities is talking about a three-figure increase. That shows the difference between authorities that behave prudently, sensibly and wisely in the interests of all those who live in their areas and the authorities with spendthrift policies.

Mr. George Foulkes (South Ayrshire)

rose—

Mr. William McKelvey (Kilmarnock)

rose—

Mr. Walker

I shall not give way. I am following the example of the right hon. Member for Craigton, who was not prepared to give way to Conservative Members. The people of Scotland are not interested in bogus figures or rhetoric. [Interruption.]

Mr. Deputy Speaker

Order. I again remind the House that the debate ends at 11.44 pm. If time is taken up with noise, we shall not get one more speaker in.

Mr. Walker

The people of Perth and Kinross are delighted to live there. My constituents who live in Longforgan and Invergowrie are not at all happy, because they know that Dundee district council does not behave responsibly. Consequently, they will largely foot the bill of that spendthrift authority.

In conclusion, I remind the House that much of the cost borne by the local authorities was to pick up the Clegg post-dated cheques left by the outgoing Administration.

11.33 pm

Mr. George Foulkes (South Ayrshire)

It is appropriate that I follow the hon. Member for Perth and East Perthshire (Mr. Walker), because earlier this week I had the opportunity to read the Daily Record, which reported that the Tayside regional council—not a Labour-controlled authority, but an authority controlled by the Conservative Party—had said that the Conservative Government were mean and despicable. When that comes from a Tory-controlled authority, the Labour-controlled authorities can find no better words with which to express their feelings. That council finds that the rate support grant that the Government are giving to all the regional councils is such that it will presently find it difficult to carry out its statutory responsibilities.

I said on a previous occasion, and I say again with great seriousness, that all the regional councils, given the money that they will receive from the central Government, given the amount that they can raise through the rates, will find it difficult to carry out their statutory responsibilities. Some regional councils will be unable to provide the number of home helps that they consider necessary to deal with the elderly, and expectant mothers, and to carry out all the range of responsibilities imposed on them by legislation introduced by the Conservative Government.

Mr. Michael Ancram (Edinburgh, South)

Under what statute is there a requirement for a number of Labour councillors from Lothian region to go to Denmark on a beanfeast?

Mr. Foulkes

There are a number of statutes under which Governments of all complexions have placed responsibilies upon local authorities, involving expenditure upon such things as visits to other countries. Such sums are minuscule in comparison with the amount of money needed to provide vital services.

Mr. John Home Robertson

Since this is the International Year of Disabled People would my hon. Friend care to reflect upon whether it will be possible for local authorities to carry out their obligations under the Chronically Sick and Disabled Persons Act on the basis of this rate support grant allocation?

Mr. Foulkes

I am glad my hon. Friend raised that point because the disabled persons I have spoken to, including those in wheelchairs, find it sickening that the Secretary of State for Scotland is able to launch the International Year of Disabled People in Scotland. It is hypocrisy on his part, when the Government are making things more difficult for disabled people and making it harder for local authorities to provide services for them by way of capital building programmes. It is despicable of the right hon. Gentleman to behave in this way, so that he is able to receive approval and approbation for his alleged sympathy with the disabled while refusing to allow programmes aimed at helping the disabled put forward in good faith by, for example, Lothian regional council.

The disabled are beginning to realise how hypocritical the right hon Gentleman is. I had the unfortunate experience of attending the last annual general meeting of the Disablement Income Group when the Secretary of State spoke. The meeting was held in Ayr and the right hon. Gentleman was received in respectful silence. The people there knew that what he was saying was absolutely untrue. He was saying that the Government were sympathetic and understanding towards the disabled. Those at that meeting who were disabled knew that that was untrue. But they did not boo or hiss or shout, because they are understanding people. They did not boo and hiss—

The Under-Secretary of State for Scotland (Mr. Alexander Fletcher)

Unlike the hon. Gentleman.

Mr. Foulkes

The hon. Gentleman is right. The Secretary of State was condemned much more by the silence of these people than anything I could have said. It is clear, in the International Year of Disabled People, that the Government are unsympathetic towards the disabled. It is clear that the rate support grant will make it increasingly impossible for local authorities to provide for them. That is one more reason why we should vote against the order.

11.34 pm

Mr. Younger

By leave of the House, I shall reply to some of the points that have been made during the debate. The hon. Member for South Ayshire (Mr. Foulkes) may not have had time to read the report properly. He will notice, if he reads it later, that there is a 1 per cent. increase allowed for in guidelines on the social work side. No doubt that is something that can be used to help disabled people and I hope that it will be. I look forward to meeting the hon. Gentleman as often as I can at these functions because, like him, I have a great interest in the disabled, and always have had. There has been a galaxy of speeches. The right hon. Member for Glasgow, Craigton (Mr. Millan) did his best to make a speech and the hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) has made a speech from a sedentary position throughout the debate, as has the hon. Member for West Stirlingshire (Mr. Canavan). I do not know what it is about Stirling that causes that to happen, but we greatly enjoyed all their contributions.

The right hon. Gentleman's contribution did not hold water on any of his main arguments. He was shot down in flames by my hon. Friend the Member for Renfrewshire, East (Mr. Stewart). The right hon. Gentleman's complaint that the debate began at the wrong time of day was absurd. On every occasion that the debate took place during his tenure of office it began at a similar time, and on one occasion the starting time was considerably worse.

Secondly, we were supposed to believe from the right hon. Gentleman and other Opposition Members that it is awful that the Government should be telling local authorities not to spend so much. They suggested that it was a dreadful Tory plot and something which should never be done by any Government and which could be done only by a wicked Tory Government. I remember the right hon. Gentleman's speech in December 1976 during the debate on the Rate Support Grant Order (Scotland) for that year. He said: For example, the February 1976 White Paper on public expenditure stated that the substantial rate of expansion in recent years in local authority manpower and in local spending could not continue and that any increases in individual services had to be offset by reduced levels of provision in other services."—[Official Report, 22 December 1976; Vol. 923, c. 850.] The right hon. Gentleman is now telling us that it is a scandal and a disgrace that the Government are telling authorities to reduce their spending. That is humbug and the right hon. Gentleman knows it.

The right hon. Gentleman produced a great farrago of indignation about the theory that local authority manpower is being unfairly treated because central Government manpower in Scotland has increased, which it has not. He is totally incorrect. Central Government manpower in Scotland has decreased irrespective of whether the State hospital and the prisons are included. It has decreased considerably and the right hon. Gentleman should know that.

Finally, the right hon. Gentleman gave us a great spiel about cash limits. He described their dreadful effect and the squeeze that authorities suffer. He said that authorities had to reduce spending because of cash limits. Who invented cash limits? Who was the first Minister to produce cash limits on local authorities in Scotland? It was the right hon. Gentleman.

There was never during his time as Secretary of State any occasion when cash limits turned out to be sufficient for the expenditure that actually took place. On every occasion that the right hon. Gentleman produced a cash limit it did not produce enough cash to recompense local authorities for their actual expenditure. He knows that and I know that. He also knows that he introduced cash limits in the first place. It is nonsense to suggest that cash limits are new or that they should not be produced. He knows that they were introduced by his Government and that they are an indispensible part of keeping local authority expenditure within some limits.

Mr. Millan

What the right hon. Gentleman has said about the previous Labour Government is completely untrue. Will he tell the House what the rate increases next year will be?

Mr. Younger

I was about to turn to rate increase. The right hon. Gentleman spent a long time talking about rate increases. He said specifically and categorically, as did some others, that such increases are solely the responsibility of the Government. He did not address himself on this occasion, although he did at length in December 1976, to the effect of expenditure. If there are excessive rate increases—I am glad that many of the good authorities are not going to introduce them—they are due to one factor and one only, namely, irresponsible and excessive expenditure by local authorities that are not prepared to keep their spending under control. The right hon. Gentleman knows that. He said it himself on many occasions. Indeed, he preached that message to local authorities time and time again during his tenure of office.

If we are to have discussions on the rate support grant, let us at least agree that the system that we are operating—

It being one and a half hours after the commencement of proceedings on the motion, MR. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 3 (Exempted business):—

The House divided: Ayes 282, Noes 231.

Division No. 49]	[11.45 pm
AYES
Adley, Robert	Bendall, Vivian
Aitken, Jonathan	Bennett, Sir Frederic (T'bay)
Alexander, Richard	Benyon, Thomas (A'don)
Ancram, Michael	Benyon, W. (Buckingham)
Arnold, Tom	Bevan, David Gilroy
Atkins, Rt Hon H. (S'thorne)	Biggs-Davidson, John
Atkins, Robert (Preston N)	Blackburn, John
Atkinson, David (B'm'th, E)	Blaker, Peter
Baker, Kenneth (St. M'bone)	Body, Richard
Baker, Nicholas (N Dorset)	Bonsor, Sir Nicholas
Banks, Robert	Boscawen, Hon Robert
Beaumont-Dark, Anthony	Bottomley, Peter (W'wich W)
Bell, Sir Ronald	Bowden, Andrew
	Boyson, Dr Rhodes
	Braine, sir Bernard

Bright, Graham	Havers, Rt Hon Sir Michael
Brinton, Tim	Hawkins, Paul
Brittan, Leon	Hawksley, Warren
Brooke, Hon Peter	Hayhoe, Barney
Brotherton, Michael	Heddle, John
Brown, M. (BriggandScun)	Henderson, Barry
Browne, John (Winchester)	Heseltine, Rt Hon Michael
Bruce-Gardyne, John	Hicks, Robert
Bryan, Sir Paul	Hill, James
Buchanan-Smith, Hon Alick	Hogg, Hon Douglas (Gr'th'm)
Buck, Antony	Holland, Philip (Carlton)
Bulmer, Esmond	Hooson, Tom
Burden, Sir Frederick	Hordern, Peter
Butcher, John	Howell, Ralph (N Norfolk)
Carlisle, John (Luton West)	Hunt, David (Wirral)
Carlisle, Kenneth (Lincoln)	Hunt, John (Ravensbourne)
Carlisle, Rt Hon M. (R'c'n)	Hurd, Hon Douglas
Chalker, Mrs. Lynda	Jenkin, Rt Hon Patrick
Channon, Rt. Hon. Paul	Jessel, Toby
Chapman, Sydney	Johnson Smith, Geoffrey
Churchill, W. S.	Jopling, Rt Hon Michael
Clark, Hon A. (Plym'th, S'n)	Kaberry, Sir Donald
Clark, Sir W. (Croydon S)	Kellett-Bowman, Mrs Elaine
Clarke, Kenneth (Rushcliffe)	Kershaw, Anthony
Clegg, Sir Walter	King, Rt Hon Tom
Cockeram, Eric	Kitson, Sir Timothy
Colvin, Michael	Knight, Mrs Jill
Cope, John	Knox, David
Corrie, John	Lamont, Norman
Costain, Sir Albert	Lang, Ian
Cranborne, Viscount	Langford-Holt, Sir John
Critchley, Julian	Latham, Michael
Crouch, David	Lawson, Nigel
Dean, Paul (North Somerset)	Lee, John
Dickens, Geoffrey	Lennox-Boyd, Hon Mark
Dorrell, Stephen	Lester Jim (Beeston)
Dover, Denshore	Lewis, Kenneth (Rutland)
Dunn, Robert (Dartford)	Lloyd, Ian (Havant & W'loo)
Durant, Tony	Lloyd, Peter (Fareham)
Dykes, Hugh	Luce, Richard
Edwards, Rt Hon N. (P'broke)	Lyell, Nicholas
Eggar, Tim	McCrindle, Robert
Elliott, Sir William	Macfarlane, Neil
Emery, Peter	MacGregor, John
Eyre, Reginald	Mackay, John (Argyll)
Fairgrieve, Russell	Macmillan, Rt Hon M.
Faith, Mrs Sheila	McNair-Wilson, M. (N'bury)
Farr, John	McNair-Wilson, P. (New F'st)
Fell, Anthony	McQuarrie, Albert
Fenner, Mrs Peggy	Madel, David
Finsberg, Geoffrey	Major, John
Fisher, Sir Nigel	Marland, Paul
Fletcher, A. (Ed'nb'gh N)	Marlow, Tony
Fletcher-Cooke, Charles	Mates, Michael
Fowler, Rt Hon Norman	Mather, Carol
Fox, Marcus	Maude, Rt Hon Angus
Fraser, Peter (South Angus)	Mawby, Ray
Fry, Peter	Mawhinney, Dr Brian
Galbraith, Hon T. G. D.	Maxwell-Hyslop, Robin
Gardiner, George (Reigate)	Meyer, Sir Anthony
Gardner, Edward (S Fylde)	Miller, Hal (B'grove)
Garel-Jones, Tristan	Mills, Iain (Meriden)
Gilmour, Rt Hon Sir Ian	Mills, Peter (West Devon)
Glyn, Dr Alan	Miscampbell, Norman
Goodhart, Philip	Mitchell, David (Basingstoke)
Goodlad, Alastair	Moate, Roger
Gow, Ian	Monro, Hector
Gray, Hamish	Montgomery, Fergus
Greenway, Harry	Moore, John
Grieve, Percy	Morris, M. (N'hampton S)
Griffiths, E. (B'y St. Edm'ds)	Morrison, Hon C. (Devizes)
Griffiths, Peter Portsm'th N)	Mudd, David
Grist, Ian	Murphy, Christopher
Grylls, Michael	Myles, David
Gummer, John Selwyn	Needham, Richard
Hamilton, Hon A.	Needham, Richard
Hamilton, Michael (Salisbury)	Nelson, Anthony
Hampson, Dr Keith	Neubert, Michael
Hannam, John	Newton, Tony
Haselhurst, Alan	Nott, Rt Hon John

Onslow, Cranley	Squire, Robin
Oppenheim, Rt Hon Mrs S.	Stanbrook, Ivor
Osborn, John	Stanley, John
Page, John (Harrow, West)	Steen, Anthony
Page, Rt Hon Sir G. (Crosby)	Stevens, Martin
Page, Richard (SW Herts)	Stewart, Ian (Hitchin)
Parris, Matthew	Stewart, A. (E Renfrewshire)
Patten, Christopher (Bath)	Stokes, John
Patten, John (Oxford)	Stradling Thomas, J.
Pattie, Geoffrey	Taylor, Teddy (S'end E)
Pawsey, James	Temple-Morris, Peter
Pink, R. Bonner	Thatcher, Rt Hon Mrs M.
Pollock, Alexander	Thomas, Rt Hon Peter
Porter, Barry	Thompson, Donald
Prentice, Rt Hon Reg	Thorne, Neil (Ilford South)
Price, Sir David (Eastleigh)	Thornton, Malcolm
Prior, Rt Hon James	Townend, John (Bridlington)
Proctor, K. Harvey	Townsend, Cyril D, (B'heath)
Pym, Rt Hon Francis	Trippier, David
Raison, Timothy	Trotter, Neville
Rathbone, Tim	van Straubenzee, W. R.
Rees, Peter (Dover and Deal)	Vaughan, Dr Gerard
Rees-Davies, W. R.	Viggers, Peter
Renton, Tim	Waddington, David
Rhodes James, Robert	Wakeham, John
Rhys Williams, Sir Brandon	Waldegrave, Hon William
Ridsdale, Julian	Walker, Rt Hon P. (W'cester)
Rifkind, Malcolm	Walker, B. (Perth)
Roberts, M. (Cardiff NW)	Waller, Gary
Roberts, Wyn (Conway)	Ward, John
Rossi, Hugh	Warren, Kenneth
Rost, Peter	Watson, John
Royle, Sir Anthony	Wells, John (Maidstone)
Sainsbury, Hon Timothy	Wells, Bowen
Scott, Nicholas	Wheeler, John
Shaw, Giles (Pudsey)	Whitney, Raymond
Shaw, Michael (Scarborough)	Wickenden, Keith
Shelton, William (Streatham)	Wiggin, Jerry
Shepherd, Colin (Hereford)	Wilkinson, John
Shersby, Michael	Williams, D. (Montgomery)
Silvester, Fred	Winterton, Nicholas
Sims, Roger	Wolfson, Mark
Skeet, T. H. H.	Young, Sir George (Acton)
Smith, Dudley	Younger, Rt Hon George
Spence, John	Tellers for the Ayes:
Spicer, Jim (West Dorset)	Mr. Spencer Le Marchant
Spicer, Michael (S Worcs)	and Mr. Anthony Berry.
Sproat, Ian

NOES
Abse, Leo	Cohen, Stanley
Adams, Allen	Coleman, Donald
Allaun, Frank	Conlan, Bernard
Alton, David	Cook, Robin F.
Anderson, Donald	Cowans, Harry
Archer, Rt Hon Peter	Craigen, J. M.
Armstrong, Rt Hon Ernest	Crowther, J. S.
Atkinson, N. (H'gey,)	Cryer, Bob
Barnett, Guy (Greenwich)	Cunliffe, Lawrence
Barnett, Rt Hon Joel (H'wd)	Cunningham, G. (Islington S)
Beith, A. J.	Cunningham, Dr J. (W'h'n)
Bennett, Andrew (St'kp'tN)	Dalyell, Tam
Bidwell, Sydney	Davies, Rt Hon Denzil (L'Ili)
Booth, Rt Hon Albert	Davies, Ifor (Gower)
Boothroyd, Miss Betty	Davis, Clinton (Hackney C)
Bradley, Tom	Davis, T. (B'ham, Stechf'd)
Bray, Dr Jeremy	Deakins, Eric
Brown, Hugh D. (Provan)	Dewar, Donald
Brown, Ron (E'burgh, Leith)	Dixon, Donald
Brown, Ronald W. (H'ckn'y S)	Dobson, Frank
Buchan, Norman	Dormand, Jack
Callaghan, Jim (Midd't'n & P)	Douglas, Dick
Campbell, Ian	Douglas-Mann, Bruce
Canavan, Dennis	Dubs, Alfred
Cant, R. B.	Dunnett, Jack
Carmichael, Neil	Dunwoody, Hon Mrs G.
Carter-Jones, Lewis	Eadie, Alex
Cartwright, John	Eastham, Ken
Clark, Dr David (S Shields)	Ellis, R. (NE D'bysh're)
Cocks, Rt Hon M. (B'stol S)	Ellis, Tom (Wrexham)

English, Michael	Mason, Rt Hon Roy
Ennals, Rt Hon David	Maxton, John
Evans, Ioan (Aberdare)	Meacher, Michael
Evans, John (Newton)	Mikardo, Ian
Ewing, Harry	Millan, At Hon Bruce
Faulds, Andrew	Miller, Dr M. S. (E Kilbride)
Field, Frank	Mitchell, Austin (Grimsby)
Flannery, Martin	Morris, Rt Hon A. (W'shawe)
Fletcher, Ted (Darlington)	Morris, Rt Hon C. (O'shaw)
Ford, Ben	Morris, Rt Hon J. (Aberavon)
Forrester, John	Morton, George
Foster, Derek	Moyle, Rt Hon Roland
Foulkes, George	Mulley, Rt Hon Frederick
Fraser, J. (Lamb'th, N'w'd)	Newens, Stanley
Freeson, Rt Hon Reginald	Oakes, Rt Hon Gordon
Garrett, John (Norwich S)	Ogden, Eric
Garrett, W. E. (Wallsend)	O'Halloran, Michael
George, Bruce	O'Neill, Martin
Gilbert, Rt Hon Dr John	Orme, Rt Hon Stanley
Gourlay, Harry	Palmer, Arthur
Graham, Ted	Park, George
Grant, George (Morpeth)	Parker, John
Grant, John (Islington C)	Parry, Robert
Hamilton, James (Bothwell)	Pavitt, Laurie
Hamilton, W. W. (C'tral Fife)	Penhaligon, David
Hardy, Peter	Powell, Raymond (Ogmore)
Harrison, Rt Hon Walter	Prescott, John
Hart, Rt Hon Dame Judith	Price, C. (Lewisham W)
Hattersley, Rt Hon Roy	Race, Reg
Haynes, Frank	Radice, Giles
Healey, Rt Hon Denis	Rees, Rt Hon M (Leeds S)
Heffer, Eric S.	Richardson, Jo
Hogg, N. (E Dunb't'nshire)	Roberts, Allan (Bootle)
Holland, S. (L'b'th, Vauxh'll)	Roberts, Ernest (Hackney N)
Home Robertson, John	Roberts, Gwilym (Cannock)
Homewood, William	Robertson, George
Hooley, Frank	Robinson, G. (Coventry NW)
Horam, John	Rooker, J. W.
Howell, Rt Hon D.	Roper, John
Howells, Geraint	Ross, Ernest (Dundee West)
Huckfield, Les	Ross, Stephen (Isle of Wight)
Hudson Davies, Gwilym E.	Rowlands, Ted
Hughes, Mark (Durham)	Sandelson, Neville
Hughes, Robert (Aberdeen N)	Sever, John
Hughes, Roy (Newport)	Sheerman, Barry
Jay, Rt Hon Douglas	Sheldon, Rt Hon R.
John, Brynmor	Shore, Rt Hon Peter
Johnson, James (Hull West)	Silkin, Rt Hon J. (Deptford)
Johnston, Russell (Inverness)	Silkin, Rt Hon S. C. (Dulwich)
Jones, Rt Hon Alec (Rh'dda)	Silverman, Julius
Jones, Barry (East Flint)	Skinner, Dennis
Jones, Dan (Burnley)	Smith, Rt Hon J. (N Lanark)
Kaufman, Rt Hon Gerald	Snape, Peter
Kerr, Russell	Soley, Clive
Kilroy-Silk, Robert	Spearing, Nigel
Lambie, David	Spriggs, Leslie
Lamborn, Harry	Stallard, A. W.
Lamond, James	Steel, Rt Hon David
Leadbitter, Ted	Stewart, Rt Hon D. (W Isles)
Leighton, Ronald	Stoddart, David
Lewis, Arthur (N'ham NW)	Stott, Roger
Lewis, Ron (Carlisle)	Strang, Gavin
Litherland, Robert	Straw, Jack
Lofthouse, Geoffrey	Summerskill, Hon Dr Shirley
Mabon, Rt Hon Dr J. Dickson	Taylor, Mrs Ann (Bolton W)
McDonald, Dr Oonagh	Thomas, Jeffrey (Abertillery)
McElhone, Frank	Thomas, Mike (Newcastle E)
McGuire, Michael (Ince)	Thomas, Dr R. (Carmarthen)
McKay, Allen (Penistone)	Thorne, Stan (Preston South)
McKelvey, William	Tilley, John
Maclennan, Robert	Torney, Tom
McNally, Thomas	Urwin, Rt Hon Tom
McNamara, Kevin	Varley, Rt Hon Eric G.
McTaggart, Robert	Wainwright, E. (Dearne V)
McWilliam, John	Walker, Rt Hon H. (D'caster)
Magee, Bryan	Watkins, David
Marks, Kenneth	Welsh, Michael
Marshall, Dr Edmund (Goole)	White, Frank R.
Marshall, Jim (Leicester S)	White, J. (G'gow Pollok)
Martin, M (G'gow S'burn)	Whitehead, Phillip

Whitlock, William	Woodall, Alec
Willey, Rt Hon Frederick	Woolmer, Kenneth
Williams. Rt Hon A. (S'sea W)	Wrigglesworth, Ian
Wilson, Gordon (Dundee E)	Young, David (Bolton E)
Wilson, Rt Hon Sir H. (H'ton)	Tellers for the Noes:
Wilson, William (C'try SE)	Mr. Hugh McCartney and
Winnick, David	Mr. James Tinn.

Question accordingly agreed to.

Resolved, That the Rate Support Grant (Scotland) Order 1980, a copy of which was laid before this House on 18 December, be approved.