Weather Damage (Scotland) (Hansard, 4 February 1982)

§ Mr. Norman Hogg (Dunbartonshire, East)
I am very disturbed by the absence of the hon. Member for Edinburgh, Pentlands (Mr. Rifkind), who has ministerial responsibility for the subject of the debate. His absence is, I understand, due to the fact that he has chosen, in preference to attending this House, to appear in a television chat show. It is known that he is substituting for another Minister who had duties in the House earlier today. Frankly, I must tell the House that I prefer his colleague's priorities and sense of duty. The hon. Member for Pentlands has acted in a thoroughly discourteous manner towards many thousands of people in Scotland whose homes were damaged by the severe weather. Above all, he has acted with gross discourtesy towards the House.

§ Mr. Hugh D. Brown (Glasgow Provan)
It is a most unusual occurrence for a Minister to treat the House with such disrespect. Has the hon. Gentleman given my hon. Friend a personal apology in respect of his constituents? As was shown in proceedings in Committee this week, there is great interest in this subject outside the House.

§ Mr. Hogg
I regret to inform the House that I have had no such apology. I am, however, grateful for the opportunity to initiate a brief debate on compensation to Scottish local authorities for weather damage.
The debate arises from answers given to questions by myself and my hon. Friend the Member for Glasgow, Shettleston (Mr. Marshall). The Secretary of State for Scotland was asked whether he would adjust the rate support grant settlement for the next financial year to take account of the cost to local authorities of frost damage to local authority properties. The reply of the Under- Secretary of State was, to say the least, inadequate. He said: As my right hon. Friend announced on 12 January, a special grant will be available to Scottish local authorities which have incurred exceptional expenses in dealing with the effects of severe weather—mainly the additional cost of snow clearing operations and the repair of damaged roads."—[Official Report 27 January 1982; Vol. 16, c. 876] He went on to say that a circular would be issued giving details.
First, the circumstances are very different from those which obtained during the days of the previous Government. The Government have squeezed local authority finance to such a degree that there is no fall-back position or reserve cash to deal with the problems of the winter. They have cut the rate support grant and the housing support grant. They have presided over double- figure inflation. They have caused high interest rates. It is not good enough for Ministers to refer to the attitude of the Labour Government. The situation has changed. In addition, this winter is without precedent this century. Even in my constituency temperatures of 20 degrees below freezing were not uncommon. The extremely cold weather lasted for weeks.
The resulting damage was terrible. Of the 10,000 houses in Strathkelvin district, 5,000 were severely damaged. Of 40,000 in the Renfrew district, 16,344 sustained damage. The estimated cost of repairs in that authority is &£2.3 million. The estimated cost of damage in 636 Glasgow is £30 million, Cumbernauld £200,000, Dundee £300,000, Clydebank £500,000, Edinburgh £1.6 million and Monklands district council £750,000. Aberdeen tells me that it is still preparing its estimate.
If those costs are put on to local authorities' capital accounts, they cannot cope. If the money has to come from other funds, rates and rents will have to be increased. My hon. Friend the Member for Shettleston, who was a councillor in the city of Glasgow, calculates that it would mean a rate increase of about 6p.
When whichever Minister who is found as a substitute replies, I am sure that he will mention insurance cover and the Labour Government's circulars. To save time, let me read from some of them. A Scottish Home and Health Department circular of 4 August 1976 states: The question of insurance for local authority property is one for local authorities to decide. Where for whatever reason a local authority refrains from insuring, they should do so in the knowledge that they will have to bear any financial losses and that no special financial assistance will be forthcoming. A Scottish Development Department circular of 28 March 1978 gives the details of a parliamentary reply. The then Minister said: I shall pay local authorities involved a special grant of 75 per cent. of their excess over a reasonable threshold."—[Official Report, 23 February 1978; Vol. 944, c. 757.] The most recent SDD circular deals with storm damage in the context of the conditions which then prevailed in Scottish local government. I have pointed out that they are very different today. I have mentioned the cuts in the rate support grant and the housing support grant and the other disastrous consequences of the Government's economic policy.
Many local authorities are insured. Two authorities in my constituency are insured—Bearsden and Milngavie and Strathkelvin district councils. The former does not have a large housing stock, but authorities with a large housing stock are in a different position. It is not practicable for such authorities to insure. I refer to Clydebank, Renfrew, Monklands, Dundee, Aberdeen and Glasgow. None is insured. They have explained why:the cost would be considerable. I have established that the Scottish Special Housing Association is not insured and neither are the Government where they have houses. I thought that the hon. Member for Pentlands was to reply, but it appears that the reply will come from the hon. Member for Edinburgh, North (Mr. Fletcher). However, my next point is still apposite, and that is that the Edinburgh district council is not insured.
The bad weather caused damage beyond any precedent and beyond anything which might be reasonably allowed for in district council budgets. Secondly, insurance cover is not practical for the larger housing authorities and does not make economic sense. Thirdly, the Government's present proposals are inadequate to prevent the serious distortion of estimated expenditure in the current financial year. The costs, even if they attract a 75 per cent. grant over a 0.6p rate increase, will still lead to a large rate increase. Finally, I ask the Government urgently to reconsider their position. I hope that they will agree to pay the costs of the local authorities, non-insured charges.

§ Mr. Donald Dewar (Glasgow, Garscadden)
I congratulate my hon. Friend the Member for Dunbartonshire, East (Mr. Hogg) on raising this important issue on the Adjounment debate. There has been great 637 doubt about the situation and a great deal of genuine anxiety. My hon. Friend was justified in every way in applying for an Adjournment debate to discuss the matter.
I am sorry that the Under-Secretary of State for Scotland, the hon. Member for Edinburgh, Pentlands (Mr. Rifkind), is not present. It seems that he has preferred the BBC's hospitality to his place at the Dispatch Box when a matter directly within his responsibility is being discussed. I offer my congratulations to the hon. Member for Fife, East (Mr. Henderson), who is the only Tory Back Bencher apart from the PPS, the hon. Member for Argyll (Mr. MacKay), who has seen fit to grace the Government Benches while this matter is before the House.
My hon. Friend the Member for Dunbartonshire, East is right to raise this issue because local authorities in Scotland are facing an unprecedented disaster. Glasgow alone may be facing a repair bill of £25 million to £30 million in a year when the city's total capital budget may be as little as £50 million because of the Secretary of State's financial policies. Renfrew has more than 16,000 damaged houses and Edinburgh estimates its loss at over £1.6 million. It is clear that there has been a catastrophe. What is anything but clear is the help that the Government are prepared to give.
I have no doubt that the Under-Secretary of State for Scotland, the hon. Member for Edinburgh, North (Mr. Fletcher), will talk about precedent, but precedent can be broken when the situation demands it, and the scale of the disaster is without precedent. It is suggested that local authorities should be insured and that if they are not they must take the consequences. I am assured that insurance for large authorities such as Glasgow, Edinburgh or Renfrew is not a practical option. Ministers must know that it is essential that there should be a sympathetic and flexible approach.

§ Mr. Jim Craigen (Glasgow, Maryhill)
Insurance has not been a practical option because of the considerable cost to public funds had the local authorities paid large insurance premiums in the past.

§ Mr. Dewar
I accept that in any normal run of bad luck with the weather, or with the fabric of housing, it would be impossible to justify an insurance scheme.
What is the position of a large authority with a large housing stock? Edinburgh, which is run by the Secretary of State's political friends, is certainly in that category, and so is Glasgow. When such authorities are faced with an unprecedented disaster they cannot be expected to deal with it. If they did undertake the task, they would be edged towards a dire financial crisis. The result would be the virtual obliteration of modernisation and new-build schemes in the areas of many of the larger authorities. If the massive burden were to be a charge totally on revenue, there would have to be crippling rate increases.
The Secretary of State has claimed consistently to be the ratepayers' champion. We are somewhat cynical about that, because we have seen the savage cuts in local authority finance that have hit ratepayers hard year after year. He can do something to redeem his rather tarnished reputation by acting generously to protect local government from the effects of a national disaster that could not have been foreseen.
My constituency is typical of that of many of my hon. Friends. Thousands of houses have been devastated. Many 638 families have suffered enormous losses because of ruined carpets and furnishings. They are the same people who faced the disruption and expense of redecoration and the trauma of being decanted to temporary premises in difficult circumstances. It has been a desperate time. Those people want and deserve an assurance that their local authorities will be put in a position where they can, with the shortest possible delay, put right the damage and get them back into homes restored to a state in which they can reasonably be expected to live.
The Government must accept that the exceptional circumstances demand a generous and immediate response. The hon. Member for Pentlands has made it clear that he is still collating the information and considering the facts. I hope that that means that the door has not been slammed. However, we must be told soon that there is no question that the 75 per cent. grant aid is available only for road repairs and for the clearance of snow, as seemed to be suggested in Scottish Question Time last week. It must be available to local authorities that are facing this massive bill so that they can restore the housing stock to a reasonable state. We are talking, not about an abstract book-keeping concept, but about the homes of people who Opposition Members certainly represent.

§ The Under-Secretary of State for Scotland (Mr. Alexander Fletcher)
The hon. Member for Dunbartonshire, East (Mr. Hogg) suggested that the present proposals are inadequate. I must refute that, because there is no justification for that charge to be brought against the Government. Of course the damage has been severe. That was recognised by my right hon. Friend the Secretary of State in his statement during the recess. The Government are taking a reasonable and sensible approach to the problem in the offers that we have made to the local authorities. We are following precedent, as the hon. Member for Glasgow, Garscadden (Mr. Dewar) suggests, because we are happy to follow the example of the Labour Party in dealing with such problems.
There is also a precedent on the question of insurance. The Opposition have pressed, not just once but on at least two occasions, local authorities to insure their properties. We believe that it is only sensible that local authorities should try to provide, through insurance, for such a disaster. It is in the best interests of their tenants. This lesson should drive the point home to those local authorities that find themselves embarrassed by the fact that they do not have as much money as they might have expected.
It might be helpful if I remind hon. Members of the statement made by my right hon. Friend the Secretary of State for Scotland on 12 January while the House was in recess. He said then that a special grant would be made to local authorities that have incurred exceptional expenses due to dealing with the effects of the severe winter weather. The special grant assistance will be made available to Scottish local authorities on a basis similar to that adopted by them, and previous Governments, when dealing with earlier emergencies caused by exceptional weather conditions. As before, we believe that local authorities should meet part of this exceptional expenditure themselves. For that purpose we have set a threshold for each authority of the product of a 0.67p rate.
639 Expenditure beyond that level will be assisted by a grant of 75 per cent. of the cost. The Scottish Development Department will, very shortly, issue a circular giving guidance on the criteria to be adopted when determining what is exceptional expenditure for grant purposes.
We recognise that the winter has been nothing short of disastrous for many thousands of householders and for local authorities throughout Scotland. I wish to take the opportunity to express our appreciation, and that of the Opposition Members, of the gallant work carried out by local authority staff, especially during the holiday period, in unselfishly coming to the rescue of thousands of families. With a great sense of duty, they carried out a difficult operation in the midst of severe winter weather.
I understand that, as a consequence of water damage, more than 4,000 households in all parts of Scotland have had to move into temporary accommodation arranged by local authorities, and that most of them are still there. Many others have made their own arrangements with relatives or friends. That is profoundly distressing for all those involved. I extend on behalf of the Government and the House our genuine sympathy towards all the people who have suffered damage and discomfort.
However, with the immediate crisis over, councils are turning to systematic assessment of the damage and of the measures required to repair it. It is a daunting task. We still do not know the full extent of the damage, but it appears certain to run into many millions of pounds.

§ Mr. Frank McElhone (Glasgow, Queen's Park)
The Minister is adopting a rather complacent attitude with regard to the city of Glasgow, which has 50,000 burst pipes. Will he not emulate the priority given by the Labour Government of 1968, who gave £6 million immediately to the city of Glasgow? The then Secretary of State for Scotland immediately visited Glasgow. Will the Minister or the Secretary of State come to Glasgow to see the disaster in that city?

§ Mr. Fletcher
My right hon. Friend and I visit Glasgow regularly. It is not a far-off city of which we know nothing.
I accept that authorities will wish to treat the restoration of severely damaged property as capital expenditure. Some authorities may be able to accommodate a portion of that work within their capital budgets for 1981–82, but some may ship over into the next financial year.
Authorities have recently been given guidelines for housing capital expenditure in 1982–83. With regard to expenditure on council houses, the final allocations given to local authorities will depend on their decisions about rate fund contributions to the housing revenue account.

§ Mr. Dewar
I ask the Minister to be specific. We understand from the Under-Secretary of State that certain categories such as damage to roads and clearing of snow would qualify for grant aid. We also gathered that it was highly unlikely that there would be any help in the form of grant aid for the direct repairs to the fabric of housing damaged by burst pipes, burst water tanks and such disasters. Is our understanding correct? Can the Minister offer us help? If not, the situation is as serious as my hon. Friend the Member for Dunbartonshire, East (Mr. Hogg) has suggested.

§ Mr. Fletcher
It will be necessary to distinguish between damage covered by insurance and damage that is not—

§ Mr. Dewar
In Glasgow and Edinburgh?

§ Mr. Fletcher
Yes. It would be absurd for the Government to give extra help to local authorities that have not taken the precaution of insuring their property. Following the direction of the advice of the hon. Member for Garscadden, there would be little incentive for local authorities to insure their property if the Government backed them up and made it unnecessary for them to do SO.

§ Mr. Dewar
The Minister is not clarifying the point.

§ Mr. Fletcher
I am clarifying the point. The Government—

§ Mr. David Lambie (Central Ayrshire)
The Government are giving nothing.

§ Mr. Fletcher
The Government will distinguish between the damage that can be covered by insurance and the damage that cannot be covered by insurance. If the authority finds it impossible to accommodate the capital work alongside other essential commitments, we would be prepared to consider representations for an increased allocation in 1982–83.

§ Mr. Dewar
rose—

§ Mr. Fletcher
I have answered the hon. Gentleman's point. He may not like the answer, but I have answered it.
I return to the question of housing capital expenditure. For 1982–83 we would be prepared to consider representations for an increased allocation. The scope for such allocations is limited. I shall turn to further issues.

§ Mr. Dewar
The Minister is dodging the question.

§ Mr. Lambie
We need the money now.

§ Mr. Fletcher
I am not dodging the question. I am coming specifically to the question of insurance. In the limited time for an Adjournment debate, Opposition Members give the impression that they do not wish to know any of the answers put forward by the Government.
I shall come back to the question of insurance, which is agitating the hon. Member for Garscadden. I remind him that the previous Administration—

§ Mr. Hugh D. Brown
On a point of order, Mr. Deputy Speaker. You are the custodian of the House. I personally resent the Minister's insinuation that we do not wish to hear the reply. In view of the grave discourtesy to the House that has occurred in that the Minister who actually knows something about this is not here, I resent that accusation.

§ Mr. Deputy Speaker
(Mr. Bernard Weatherill): Order. I think that I may fairly say to the hon. Gentleman that if there is great deal of background noise from a sedentary positions none of us will be able to hear the reply.

§ Mr. Lambie
The Minister is not replying. He is saying nothing.

§ Mr. Fletcher
On the question of insurance—

§ Mr. Hugh D. Brown
On a point of order, Mr. Deputy Speaker. With great respect, I know that it is part of your job to protect the Minister, but it was clearly within the hearing of everyone else in the House that the Minister was 641 making an accusation that we did not want to hear his reply. I beg you to use your right to defend our interests as well as the Minister's.

§ Mr. Deputy Speaker
That is not a point of order. It is a point of argument. The Minister is responsible for his own speech. I must tell the hon. Gentleman and other hon. Members that points of order take up the time left for the reply. Let us hear it.

§ Mr. Fletcher
I understand that about half of the housing authorities in Scotland have insured their property against frost damage. As I think the hon. Member for Dunbartonshire, East said, two out of the three district authorities in his constituency have done that. They happen to be the two Conservative districts, but I should be the last to make a party point about that.
As the hon. Gentleman also said, the remaining authorities, which include the four major cities, decided not to insure, or at least they decided to carry their own insurance, and they are perfectly entitled to make that decision. I was trying to make it clear to the hon. Member for Garscadden and others that if a local authority decides to carry its own insurance it cannot expect the Government to be the fall-guy in the event of that decision proving too expensive at any time. Otherwise, the authorities which had been prudent would have no recognition by the Government or the ratepayer, who is also important in these matters, for having taken the prudent decision to insure their properties. It is therefore important as a matter of principle to make a distinction between local authorities which have insured their properties and those which have not done so.

§ Mr. Lambie
The Government are giving nothing.

§ Mr. Dewar
Let us have this absolutely clear. Is the Minister saying that Edinburgh and Glasgow, which we both know do not carry insurance, in these utterly exceptional circumstances, will not be helped by any Government aid at all and that the massive bills will ultimately fall upon the ratepayer whom the Government are usually so keen to protect?

§ Mr. Lambie
It will fall on the rentpayers.

§ Mr. Fletcher
I can only return to the point that I was making earlier. The Labour Government gave local authorities the same advice—that they should insure their property. In the assistance that we give, we shall distinguish between damage which is exceptional and not normally covered by insurance and damage which is covered by insurance. It should be perfectly possible to make that distinction. Local authorities are certainly able to do so. Where the damage to property could normally be expected to be covered by insurance and is insured in one 642 district but not in another, the district which does not have the benefit of insurance cover cannot expect to be assisted by the Government. Otherwise the Government would, in effect, be carrying the insurance liability for those authorities which decided not to take the step of insuring their property in the interests of their ratepayers and the general body of taxpayers.

§ Mr. Dennis Canavan
(West Stirlingshire): The Government do not give them enough money for the premiums.

§ Mr. Fletcher
The authorities presumably decided to take the risk of carrying their own insurance in full knowledge of the advice given to them by the Labour Government in 1976. This is not something that they have had no opportunity to consider or to prepare for. The hon. Member for West Stirlingshire (Mr. Canavan) cannot point the finger at us and blame the Government's cuts. The authorities were advised by a Labour Minister in 1976 to insure their property. They have had six years of rate support grant. They had rate support grant for as many years under the Labour Government as they have had under the Conservative Government and they have had the opportunity to take that step and pay their premiums. It is totally irresponsible of the hon. Member for West Stirlingshire to suggest from a sedentary position that it is this Government's control of public expenditure that prevents local authorities from taking the prudent step of insuring their properties.
We believe that we have taken steps that will enable local authorities to tackle the serious problem that they face. We have taken steps to ensure that the amount of damage will be assessed as quickly as possible by them, in conjunction with the Scottish Development Department, so that we can give the authorities financial assistance as soon as possible. The cut-off date is about June, which we think keeps the urgency of the matter in hand. I am sure that no local authority would wish to fail to give proper help to its tenants in local authority houses on a longer time scale than that.
I refute the charge that the Government have the role of a "hard-hearted Hannah" in these matters. My right hon. Friend and my hon. Friend have acted properly and promptly in giving this advice and in providing this assistance to local authorities in Scotland. As I said at the beginning, we have followed the precedent set by the Labour Party. If Labour Members are dissatisfied with that precedent, they should address their remarks to the right hon. Member for Glasgow, Craigton (Mr. Milian). We believe that the people involved in this serious situation —