HC Deb 17 June 1981 vol 6 cc1017-9
16. Mr. Douglas

asked the Secretary of State for Scotland if he will make a statement on the Government's position regarding the reform of Scottish local authority finance.

Mr. Younger

I have nothing to add to the statement I made to the House on Thursday 4 June.

Mr. Douglas

Will not the Secretary of State concede that the present course that he is adopting brings him into direct conflict with local democracy as expressed through the local government organisations in Scotland? He is penalising organisations in which there are people who are elected to do a particular job. Will not he sincerely look at the whole system of local government finance so that we can all get out of the morass into which he has put us?

Mr. Younger

I have no desire for confrontation with any part of local government. As the hon. Gentleman knows, I have taken steps over the last two years to try to reduce the amount of central Government interference in what local government does. The cause of the difficulty at the moment is simply the excessive overspending by a small number of local authorities. If no one else will stand up for the ratepayers who are having to pay the price, I shall.

Mr. Myles

Will my right hon. Friend consider the direct labour costings of Buchan district council, where it is estimated that it will cost that cost-conscious authority a considerable amount to comply with his requirements?

Mr. Younger

I shall consider the case raised by my hon. Friend. The question of overspending must be seen in the context of what I am asking local authorities to do, which is in no sense unreasonable. The sums that I am trying to get them down to are still higher than what they were spending in real terms as recently as 1978. No one in all conscience can regard that as unreasonable.

Mr. Grimond

Does not the Secretary of State agree that, apart from the question of overspending, the method of local government finance cries out for change? Will he give an undertaking that the Government intend to legislate on that, at least in the present Parliament?

Mr. Younger

My right hon. Friends and I agree that the system needs to be reconsidered. As he will remember, I said in my statement on 4 June that we propose to publish a consultative document this autumn about alternatives to the rating system. In the meantime, we are considering whether other shorter-term measures can be taken to ease some of the burdens which are pressing excessively on ratepayers.

Mr. Strang

Will the Secretary of State admit that the £53 million reduction which he is trying to enforce in the Lothian region's budget can be achieved only if thousands of public service workers are made redundant in Lothian in the current year? Is he aware that that is utterly unacceptable? Will he think again before provoking a confrontation of intensity and bitterness much worse than anything we have seen before, the eventual outcome of which cannot be predicted?

Mr. Younger

As the hon. Gentleman should know, the figures for that region are to be seen in comparison with similiar efforts at controlling spending in other regions by other authorities in similar conditions, who are managing well with lower levels. If he believes that Lothian region is so over-staffed, I should think that he would have exercised his influence on the authority before now to get it moving on reducing staff by wastage before it is necessary to have redundancies.

Mr. Allan Stewart

Does not my right hon. Friend agree that a key feature of future reforms must be strict control of the burden of local taxation on industry and commerce, in view of the disastrous effects on jobs of rate increases by particular authorities in Scotland over the last year?

Mr. Younger

I agree with my hon. Friend. I do not know which to be more distressed about —the effect of those high rate increases on people, particularly old people and single people, living in houses in cities, or the effect on those who are trying to run small businesses in difficult times and who are finding that rate demands have piled up, which means that they must lay off their employees. The fault lies with the overspenders. They must bring down their spending to a reasonable level.

Mr. Gordon Wilson

With regard to the Secretary of State's statement on 4 June, is it his intention to restore some local autonomy to our local authorities or to erode their powers even more?

Mr. Younger

If the hon. Gentleman is referring to the powers to which I referred on 4 June, I am asking local authorities to revise their budgets, which they have often been asked to do before, in order to avoid penalties. I have asked those authorities to bring down their spending to the level of the vast number of authorities which have managed to make economies in the same conditions and with the same problems. That is not an unreasonable request. It is high time that that small number of authorities did what they should do, with the interests of their ratepayers in mind.

Mr. Dewar

Will the Minister accept that, whatever case there may be for the reform of structure, the real problem at the moment is resources? If he insists on a clawback under the miscellaneous provisions legislation and on further cuts next year, the situation will be intolerable and we shall have reached the point of no return for local government. Will he accept that it is disingenuous rubbish for him to suggest that he is not looking for trouble, when anyone with one eye can see that he is determinedly following a policy of confrontation, which will do incalculable damage to the fabric of local democracy in Scotland?

Mr. Younger

The hon. Gentleman has a selective memory. He should recall clearly, as I do, that this is not the first time that the Government have had to do this with regard to local authorities. He will remember that his right hon. Friend also had to invite local authorities to save on their budgets. The only difference is that in his case the local authorities were mostly Conservative —controlled and co-operative, and in my case a small number of local authorities are determined to ruin their ratepayers and to try to alter the Government's economic policy at the same time.