HC Deb 21 July 1983 vol 46 cc664-75 10.39 pm
The Under-Secretary of State for Scotland (Mr. Michael Ancram)

I beg to move, That the Rate Reduction (Kirkcaldy District) 1983–84 Report, which was laid before this House on 7th July, be approved. The budget return submitted by Kirkcaldy district council and certified as correct by its authority showed that the authority was budgeting to spend 28.9 per cent. above its guideline, significantly more than the district average of 21.8 per cent. Its expenditure per head was above the average of comparator authorities. In addition, it had the highest cumulative rate increase of any authority since 1978–79—220 per cent.—in effect, more than trebling the rate.

Having taken all aspects of Kirkcaldy's expenditure plans into account, the Secretary of State decided to initiate selective action. The district council only then notified the Scottish Office that it wished to change its budget return and transfer funds from its repairs and renewal fund to offset the net expenditure total. Even when that had been done, the excess over guidelines was 25 per cent.—still noticeably above the average.

There was further confusion about the figures submitted by the council as the return included certain housing expenditure, contrary to the advice of the Scottish Development Department. I should make it clear that this had no substantive effect on the reasons for deciding to take selective action, but it led to the clarification that I shall explain.

I met representatives of the council on 23 June, and it proved possible to clear up a number of these matters. In particular, the council representatives agreed that, as a result of returning that expenditure to the housing revenue account and making compensating savings, it would be possible to return £200,000 to the ratepayers. They further agreed that the provision made for inflation when the council's budget was set had proved to be too high. A provision of 8 per cent. had been built into the budget for pay awards, whereas recent awards had been around 5 per cent. and below. The overall inflation provision was 11.8 per cent. The council representatives did not dispute that that had turned out to be far too high. Indeed, they accepted that significant savings could be made in that area and that about £375,000 was available for return to the ratepayers.

The two sums that the council representatives agreed could be returned to the ratepayers amounted together to the equivalent of 1.5p on the rates. On our calculations, the council could comfortably return 2p in the pound to the ratepayers on those two grounds alone. The Secretary of State gave the council the opportunity to return to the ratepayers the savings that its representatives accepted could be made, but I am sorry to say that, following what I felt was a very constructive meeting with the council, the council failed to take that opportunity. Had it taken the reasonable course, instead of choosing the political gesture, there would have been no need for this debate, but the council's inexplicable action left the Secretary of State with no alternative but to lay a report before the House to obtain its approval so that the ratepayers of Kirkcaldy could have the rate reduction to which I believe that they are entitled. I ask for the support of the House.

10.43 pm
Mr. Donald Dewar (Glasgow, Garscadden)

I regret that the debate on the fourth report comes so late at night. We have had a long day of Scottish business. We come to this report last not because it is in any sense the least important but merely because one of the reports had to be last just as one had to be first.

In a sense, Kirkcaldy is the most curious case of all. There has undoubtedly been tension for a long time between central Government and the authorities of Lothian, Stirling and Glasgow. Moreover, the finances of Glasgow tend to be examined in great detail merely because it is such a large authority. Until a month or two ago I should certainly not have nominated Kirkcaldy as an authority likely to attract the Secretary of State's displeasure.

When one considers the statistics on how the Kirkcaldy authority has performed in the past year or two, the situation becomes curiouser and curiouser. I take a simple example. The current rate poundage in Kirkcaldy is 29p—substantially below the average of 35p for district councils in Scotland.

Neither the Secretary of State nor on this occasion the Under-Secretary can claim that this is an area in which the ratepayer has been systematically pillaged or victimised. As anybody who has listened to these debates will know, even in the areas where such a plea has been made by the Government, the facts have been very different from those represented. The principal villain has been the right hon. Gentleman, as we have been able to prove to our satisfaction in the past few hours.

There is no case on the ground of rate poundage for moving against the Kirkcaldy district council, but there are the guidelines. Although I wish to give full weight to the arguments on Kirkcaldy's behalf, I do not want to weary the House by going through the arguments about the validity of the guideline exercise. Even if we take the present excess guideline as being a fair test—and that is being charitable in the extreme, or to the point of folly, to the Government's position—a substantial number of our district councils have a larger excess over guidelines, and they have not been victimised or put on the hit list, such as Ettrick and Lauderdale, Dunfermline, Aberdeen, Comnock and Doon Valley, to mention a few.

Kirkcaldy has not been peculiarly victimised, but we can make out a case for it. In 1982–83, its guidelines were £8.36 million, which were the same as the guidelines for the year before. There has been no adjustment for inflation, or any arising from rising costs. That is why that gap has opened. The system has been manipulated to produce that gap, which has allowed the Secretary of State to pick and choose his victims as he feels it to be appropriate.

Nobody should be hit, as I have pointed out before. No Labour Member believes that such buck shot, random, punitive action is justified or necessary. However, let us assume that such an operation has to be put in hand. It is extraordinary to see the way in which Kirkcaldy has been picked. Let us compare it with Kyle and Carrick district council. I do so for a number of reasons. First, it is Labour controlled, so I cannot be accused of picking a Tory council to make a point against the Tories and suggest that it is straight political favouritism.

This is an interesting example because it includes the Secretary of State for Scotland's constituency and should also be a useful example. It might be argued that the two areas are not comparable because Kirkcaldy is on the east coast and Kyle and Carrick is on the west coast, and the former is more of an industrial area than the latter. However, I do not think that the Under-Secretary will object to this example because it is one of the comparable local authorities that he has picked, as he is bound to do to support his arguments for this punitive measure.

Let us start with expenditure per head. One of the district councils spends £74.75 per head, and the other £66.55. Kyle and Carrick is not on the hit list, so it must be the one spending less per head—but not a bit of it. Kyle and Carrick spends considerably more than Kirkcaldy, but it is not on the hit list. It may be argued that there are some peculiar distorting factors in the individual budgets that make up the total. However, the rating review shows that Kyle and Carrick's planned expenditure on libraries, leisure and recreation, burials and cremations, all of which are central to the functions covered by the motion, is more per head of the population than that of Kirkcaldy. For reasons that are difficult to fathom, the council which, in terms of the Secretary of State's test, should have a more acceptable record is on the hit list and the other is not. We could pile anomaly upon anomaly, complication upon complication but I shall not do that.

In cash terms, the rate levy in Kirkcaldy amounts to about £244 per head of the population. If one takes the nine comparable authorities—comparable in population terms—they include the four that the Under-Secretary himself took for his comparability exercise and only two have a lower figure per head than Kirkcaldy. That is another test that could be applied and there are many others. The whole situation has become a farce, and rather an undignified one.

I hope that no one in Kirkcaldy will resent it if I say that they find themselves surprised as well as offended to be in the firing line in such a way. I do not want to labour the protest, but I find it extraordinary that we should be in such a situation. On 22 June the Prime Minister said; In recent years the expenditure of local authorities has increased enormously."—[Official Report, 22 June 1983; Vol. 44, c. 56.] I am not an expert on the English figures, but we have heard a good deal about the Scottish figures this evening and there is no substance whatever in that claim. It is just not so.

The whole intellectual basis on which the persecution has been mounted is cut away. When the Secretary of State opened an earlier debate we heard a superb example of what I call the "nevertheless" principle. He started off by saying that the Government did not wish to interfere in local democracy, nevertheless. He actually said "but", but it is still the "nevertheless" principle. It is always based on a non sequitur. It is a statement not of faith but of prejudice. That is what is happening in the measures before us.

The Secretary of State talks about the poor ratepayers, yet he is the person who has brought their troubles upon them. He says that the measure is necessary because local authority spending is out of control, but their record is infinitely better than that of his Government and Department. He claims that the Government do not wish to interfere in local democracy, yet that is what he is doing, and doing in the most objectionable, offensive and radical way that we have seen in the history of negotiations and relationships between local government and central Government in Scotland.

I am convinced that there is no justification in what is being done to Kirkcaldy district council and the House should treat the measure with the contempt and derision that it deserves.

10.52 pm
Mr. Barry Henderson (Fife, North-East)

After about seven hours of debate many major issues have been thoroughly debated and I shall not rehearse them. They include the constitutional position, and the need for Government to accept their responsibility towards the ratepayers has been well explained by my right hon. Friend the Secretary of State in introducing the first debate.

If we do not control the excessive and unreasonable expenditure of a few local authorities, all the others will suffer a reduction in what is available for them, even though they may have been extremely prudent. That is a major reason why I rise to support the measures this evening.

During the period when Kirkcaldy district council had a number of people from that area within my constituency I always enjoyed a good and fair relationship with its councillors and officials. I have no complaint about the relations between the Member of Parliament and the council during that period. But Kirkcaldy district council is not on such good ground as it has argued when lobbying Members of Parliament in talking about democratic rights. When the Labour party took over complete control at the last district council elections it was that council that ruthlessly expelled all its opponents from the council's committees and gave no opportunity for any but the Socialist view to be heard.

Many hon. Members will remember a debate in Committee when we considered whether Parliament should lay down the constitution of the membership of committees of councils to deal with such abuse. Hon. Member after hon. Member rose to condemn what Kirkcaldy had done. No one thought that what it had done was right, although we did not go to the extreme of legislating. We felt that good sense should prevail.

There is absolutely no doubt that Kirkcaldy district could have easily returned 2p to the ratepayers, and it knows that. It is clearly on the record that in the meeting between my hon. Friend the Minister and the council, the provision made for inflation proved to be too high—a sum of £375,000. The council's representatives said that they were prepared to return that sum, together with the £200,000 saved on housing expenditure, to the ratepayers. The only difference between my hon. Friend and the council was not that that sum was available to return to the ratepayers, but that the council wanted to return it next year rather than this year. A suspicious person might wonder if there was any relationship between that and the coming district council elections next May.

There are also other areas in which the council could reasonably have been asked to look after, expenditure. The increase in expenditure on recreation and leisure alone was more than the total reductions for which the Secretary of State was looking in the whole of the council's budget. It has allowed every staff increase requested at any time, except staff increases required for processing the sale of council houses that tenants have the right to buy. Its rates have increased by 222 per cent. in six years—twice as much as all the other districts in Scotland, including Socialist high spenders.

Before there was full Socialist control, Kirkcaldy district council had one of the lowest rates in Scotland. It certainly had the lowest rate in Fife.

Mr. Dewar

Does not the hon. Gentleman accept that Kirkcaldy is still well below the district council average for Scotland? The rate poundage increase for Kirkcaldy and the average for all district councils is almost exactly the same — to be specific, 19p and 20p. The hon. Gentleman's highly coloured, penny-dreadful argument does not stand up to examination.

Mr. Henderson

The hon. Gentleman will appreciate that I cut large chunks from my speech in the interests of all hon. Members. I cut the part that dealt with the special advantages enjoyed by Kirkcaldy district council. One is the considerable rating valuation increase that occurred in Glenrothes. The regional council has substantial additional expenditure because of the growth of Glenrothes, but the district council gains largely from the valuation increases there without having the same increase in expenditure that other local authorities might have had. That is among the reasons why Kirkcaldy had a low rate until the Socialist administration took control. From that point in 1980–81, the rate has risen from 13.5p to 29p—an increase of 115 per cent. Its neighbour, north-east Fife district council, increased its rate by only 15 per cent. during the same period.

The scale of the increase is dramatic. There is no reason why the rates should have increased on that scale. For those reasons I shall support the motion in the interests of the ratepayers of Kirkcaldy.

11 pm

Mr. Willie W. Hamilton (Fife, Central)

The hon. Member for Fife, North-East (Mr. Henderson) made a similar point with reference to north-east Fife district council at Question Time on 13 July when he said, much as he said tonight, that there was a substantial increase in the rates subsequent to the Tories losing power a few years ago, with the incoming Labour authority, in my view quite properly, seeking to undo the enormous damage that had been done to services under the Tory administration.

For the hon. Gentleman to compare north-east Fife with Kirkcaldy is quite wrong. Not even the Government choose to regard north-east Fife as a comparable authority. Completely different factors operate in the two areas. The complete withdrawal of the housing support grant from Kirkcaldy has meant the loss of about £7 million, whereas a rural authority like north-east Fife suffers no such adverse effect. It was absurd and dishonest of the hon. Gentleman to attempt to compare the record of north-east Fife with that of Kirkcaldy.

I was glad to hear my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) say that he found this measure the most curious of those we have been debating tonight, and he gave some of his reasons for that view. Before dealing with those, I must mention the question of inflation, a subject raised when the district council met the Minister. It is true that the inflation provision in the budget prepared by Kirkcaldy district for 1983–84 provided for an 8 per cent. inflation rate for pay and about 8 per cent. per annum for other costs.

It is no good denying that pay awards are currently coming in at rates somewhat lower than that. However, awards are yet to be negotiated in the latter part of the year, and then inflation will be substantially higher than it is now. The estimates of inflation are running at about 8 per cent. 12 months from now, so it may not be far out. There is no certainty about the level of pay awards to come or about the eventual level of inflation increase. On their own admission the Government agree that in the coming months inflation will go steadily up.

In any case, it has always been the council's policy that inflation is a provision in the budget to be spent only as required because of rising costs. My hon. Friend the Member for Garscadden pointed out that when assessing the guidelines, the Government for the past two years have arbitrarily fixed them at the same figures, regardless of any possibility of increased costs.

The district council submitted to the Secretary of State a revised budget form, POBE, for 1983–84 reducing the relevant expenditure by £330,000, the equivalent of a penny rate, and up to a few moments ago the council had had no indication from the Scottish Office that the Department was not prepared to accept that. Scottish Office officials are listening to me saying that only now does the council realising that the Government want their full pound of flesh, 2p in the pound. The council has conceded 1p, but that is not enough, and it would have saved a great deal of time if the Government had said "We realise that Kirkcaldy district council has come some way towards us"—Government spokesmen have said that the guidelines are only a rough and ready measure, not a hard and fast rule—"and has shown, while not agreeing with us, that it realises that the Government have some rights in these matters".

My hon. Friend the Member for Garscadden gave some figures. When one studies the figures placed in the Library by the Government one sees, taking a succession of yardsticks by which to measure the profligacy or otherwise of Kirkcaldy, that there are no grounds—or, at least, hardly any grounds—for treating Kirkcaldy in this way. For instance, there are at least seven district councils that have a worse record, to use the jargon of the Government, of expenditure over the Government's guidelines, yet Kirkcaldy is singled out for exceptional and draconian treatment.

The second point is that in the past five years, at least 10 other district councils have spent more per head of the population than Kirkcaldy. The third fact is that Kirkcaldy is 30th in the league of comparisons of increased expenditure this year compared to that of 1982–83. I am quoting these figures from the official statistics in the Library.

The fourth fact is that the global changes in expenditure over a five-year period, despite what the Minister has said, showed that at least 12 other district councils have a worse record than Kirkcaldy.

The fifth fact is that at least 19 district councils have a higher rate poundage then Kirkcaldy. That is the picture shown by the Government's figures.

The story is even stranger than that. The Kirkcaldy district council is spending, not £10.78 million, but £10.45 million—a figure accepted by the Government—so its position should become much more acceptable to the Government than that of at least a score of other district councils in Scotland. I shall deal with that at greater length later.

The point has been made, and I think that it is worth repeating, that when the Government first took office in 1979, they pledged that they would devolve more power to local authorities from the centre, but since then the opposite has happened in a variety of ways. Local authorities, of all political persuasions, are extremely disturbed at the increased centralisation of decision-making and the increased feeling that local authorities must be subservient agents of central Government.

I shall give examples of how that has developed. As has been said many times before, the rate support grant has been reduced substantially as a proportion of the money available to local authorities—from 75 per cent. in 1975–76 to 61.7 per cent. in 1983–84. In addition there is the continued deflation of the expenditure base for calculating RSG. So local authorities have been enormously disadvantaged by the Government's manipulation of the rate support grant.

A further example is the alteration in the methods of computing and distributing rate support grant. Kirkcaldy district has made another point, that the Government have provided for the derating of outdoor industrial plant and machinery which means a loss of rateable resources without any compensatory payment to the local authority, which means inevitably higher rates for the rest of the community.

Another factor is the phasing out of the housing support grant—housing subsidy as it was known. In 1980–81 Kirkcaldy district council received housing support grant of nearly £7 million. In 1983–84, it is nil. So the council had to find that money by one means or another as a direct consequence, not of its own profligacy, but of a deliberate policy of this Government.

Another factor is the limitation of rate contributions to the housing revenue account. For Kirkcaldy district, that meant £1.75 million, the equivalent of a 4½p rate. Those are a few examples of how local authorities have been whiplashed by the Government in a succession of deliberate policy decisions. Now the Government have imposed rate levels that are based on arbitrary judgments and opinions as to what constitutes excessive and unreasonable expenditure. The little man in New St. Andrew's House is sitting there deciding what is unreasonable and unfair expenditure in places such as Kirkcaldy, Stirling, and elsewhere. That is an impossible, dictatorial imposition and it has no rational basis.

The Secretary of State, in his letter of 5 May, decreed that Kirkcaldy district council had indulged in, and was continuing to indulge in, excessive and unreasonable expenditure. He has taken powers to exercise that judgment made by the little guy in New St. Andrew's House and to penalise councils which dare to question it. He, the Secretary of State for Scotland, decreed that Kirkcaldy district must reduce its rates by 3p in the pound. That means cutting its proposed expenditure for 1983–84 by about £1 million.

I have been through the figures with the Kirkcaldy district time and again. Its members say to me, "Please, Willie, ask the Secretary of State to tell us what to cut." We have challenged the district Tory councillors to tell us what services they will cut. The Under-Secretary's hit man in Kirkcaldy district is Councillor Mason, the hon. Gentleman's paid hack. He is the guy who is carrying the coat tails. That is one of the reasons why Kirkcaldy district is singled out for this unfair treatment. That man Mason is telling the Government that Kirkcaldy council should be clobbered because of the allegedly undemocratic way in which the newly elected Labour-controlled council a few years ago got rid of the Tories and others on the committees. I made my view known on that, but that is no reason why the vendetta should now be carried to the extent of threatening Kirkcaldy district with penal measures if it does not reduce the rates in accordance with the edict from New St. Andrew's House.

The Minister said earlier that he does not intend to tell local authorities how to save the money, but presumably he has made a judgment about where or how they are wasting it. He has come to a global figure of 3p in the pound. Why was it not 4p, or 2p, or 2½p? Someone must have looked at the expenditure item by item, and decided that certain items could be cut out, and arrived at the global figure of 3p. No one will ever know how that 3p was arrived at. Moreover, in his letter of 23 June he said, suddenly, that it could be 2p. How was that figure reached? Was it just an arbitrary decision made in New St. Andrew's House, following representations by Kirkcaldy district?

At the meeting of 23 June the Minister said that in taking his action he had regard to three factors. The first was the council's excess over guidelines, compared with other district councils. The second was the level of expenditure per head planned for 1983–84, compared with comparable authorities. The third was the substantial increase in the council's rate poundage, both since 1982 and over the longer period from 1978–79.

My hon. Friend the Member for Garscadden referred to the rate poundage, as did the hon. Member for Fife, North-East. In the last three years, under the Labour-controlled council, the rate poundage in Kirkcaldy increased from 13.5p in 1980–81 to 29p in 1983–84. That decision was deliberately taken by a democratically elected Labour-controlled council to repair the ravages of the previous Tory administration. That is what democratic local government is about.

Between 1980–81 and 1983–84, Kirkcaldy's rate poundage was less in each year than the average for all Scottish district councils. Kirkcaldy is not out of line with the general run of rate poundages in Scotland. The Kirkcaldy district council's average rate poundage per year over the last six years is 18.1p, whereas the average for all district councils is 25.2p. On that count Kirkcaldy comes out well.

The average rate poundage over the same six years in what the Government call "closely comparable" district councils — Cunninghame, West Lothian, Kyle and Carrick, Kilmarnock and Dunfermline—is 22.8p. There is little evidence, whatever yardstick one uses, to allege that Kirkcaldy district is a profligate, irresponsible local council.

The Minister's second charge against Kirkcaldy is that the level of expenditure per head planned for 1983–84 compares unfavourably with similar authorities. The average over the last six years in Kirkcaldy is £59.42 per head, against £59.01 in other comparable authorities.

At the meeting in June the Minister referred specifically to the expenditure per head planned for 1983–84. The Minister's assertion is not borne out by the facts. The figure for Kirkcaldy was £62.56, for Cunninghame £64.76, for Kilmarnock £63.90 and for Kyle and Carrick £74.76. The average for all closely comparable district councils was £61.95. The most closely comparable authority to Kirkcaldy is Cunninghame because it also has a new town.

The Minister's third charge against Kirkcaldy is that its proposed expenditure far exceeds the guidelines. Enough has been said to condemn guidelines as having no statutory authority. Guidelines are merely suggested limits for local authority expenditure. They are not the basis on which to build global expenditure for rate support grant purposes.

The guideline for Kirkcaldy for 1982–83 was £9 million. Arbitrarily, the Government reduced that to £8.36 million. No reason was given for that figure. Similarly, for the next year — 1983–84 — the guideline of £9.605 million was arbritrarily reduced to the same figure as for the previous year, £8.36 million. No provision whatever was made for inflation. The local authority just had to meet that out of what it could get from the rates. In 1982–83, Kirkcaldy's cash expenditure was £9.26 million, and in 1983–84, it was £10.78 million. That figure has now been revised to £10.45 million, so that the increase over the guidelines is 25 per cent., which compares favourably with the district council average for Scotland of 21.8 per cent.

However, there are no figures for the so-called five comparable local authorities. If they are comparable with Kirkcaldy, they should have comparable guidelines. Perhaps the Minister will say whether they do have comparable guidelines. Appendix A in the Minister's original communication does not say that. But in any case, as a Scottish Office witness said at the Joint Committee on Statutory Instruments: the guidelines are indicative, not definitive, and in no way mandatory. Therefore, I doubt whether the Minister has any legal status in this. Kirkcaldy district council might challenge the Government about whether they can deal with Kirkcaldy or any other authority in a matter for which there is no statutory basis. In 1983–84, 62 out of the 65 local authorities in Scotland exceeded those guidelines. Only three out of the 65 managed—and then only just—to keep within them. That shows that there is something undeniably wrong with the guidelines.

Other hon. Members will probably get a document from the Society of Local Authority Chief Executives. It has no political axe to grind, and is concerned only to maintain and foster a healthy democratic system of local government throughout the United Kingdom. The society represents all authorities in the United Kingdom. It put forward a list of 11 principles and objectives as essential foundations to effective and healthy local government. Hon. Members will be gratified to know that I do not intend to quote all 11, but I shall cite four of them. The third principle states: Individual local authorities should have the freedom, and should be encouraged, to innovate and undertake new initiatives in responding to the needs of their inhabitants within their democratic mandate. In furtherance of this objective, local authorities should continue to have a general power to incur expenditure in the interests of their inhabitants. That is precisely the sort of power that is being denied those authorities tonight. The fifth principle states: The total financial resources available to local authorities should be sufficient to enable them to perform their functions adequately. Again, that principle will he denied to local authorities both tonight and, in future, by the Government.

The sixth principle states: Local authorities' financial resources should include independent sources of revenue whose level can be fixed at the discretion of the individual authority. The principle says that the fixing of the level should be at the discretion not of the central Government or of the Scottish Office, but of the individual democratically elected local authority.

The eighth principle is that the system of local government should ensure that individual local authorities are fully accountable to their electorates and local taxpayers for their expenditure decisions. They are clear and sound principles that are being undermined by the Government.

Local government at all levels throughout the United Kingdom has seldom been so demoralised as it is now. It has seldom felt so threatened by the ever-increasing and malevolent interference by central Government. Local councillors and their officials feel increasingly that local government is becoming a mere rubber-stamping agent of a central Government who are hell-bent on regarding almost every service that is provided by local government or central Government as a profit-making opportunity for greedy and often unscrupulous speculators. The story is the same in housing, health, education and in almost every other sector.

Local authority services are being increasingly regarded as fair game for the gravy-train camp followers of the Tory party. The local authorities that dare to resist these pernicious pressures from central Government will be either whipped into line, as is happening tonight, or abolished, as in the case of London, and as will happen to the metropolitan boroughs if the Government have their way. All local authorities are under threat if they do not toe the line of this increasingly dictatorial Government, who have no mandate in Scotland.

11.27 pm
Mr. Ancram

If there were any truth in the closing sentences of the hon. Member for Fife, Central (Mr. Hamilton), and if he regards the motion as an entirely politically motivated action, is it not surprising that so many councils which fit his description have not had selective action taken against them? Only four councils of the many councils in Scotland have had selective action taken against them, which shows the care with which my right hon. Friend the Secretary of State made his assessment of what council spending was excessive and unreasonable.

Mr. Tom Clarke (Monklands, West)

The hon. Member for Fife, North-East (Mr. Henderson) answered the Minister's question. He said that if action was not taken against the authorities named in the motions, other authorities might feel brave and emulate the decisions that the named authorities have taken. In other words, the Government have set out deliberately to use these authorities, including Kirkcaldy, to frighten off other authorities.

Mr. Ancram

If the hon. Gentleman is saying that in taking selective action against authorities whose spending is obviously unreasonable we are setting an example to other authorities not to spend in the same way, that is a purpose that I hope will be achieved by this action.

Mr. Henderson

I am sure that my hon. Friend did not mean to mis-paraphrase me. I said that it was important that other authorities that are more careful in their spending should not be hit because of the wild overspending of a relatively few authorities.

Mr. Ancram

That also is a valid point.

The hon. Member for Glasgow, Garscadden (Mr. Dewar) asked why Kyle and Carrick had not been treated in the same way.

Mr. Dewar

I do not want it to be.

Mr. Ancram

In that case, I am sure that the hon. Gentleman is relieved that it is not. However, he asked why it had not been treated in the same way. I had hoped that at the end of this lengthy day the one message that I had put across was that there is not one single criterion for taking action. Balanced criteria have to be taken into account. The hon. Gentleman's argument about expenditure per head in Kyle and Carrick may be valid. Kyle and Carrick's budget excess was below the district average. On the various balances of criteria, if he thinks about it, Kyle and Carrick would not have been a sufficient candidate for such action. He must realise that in the case of Kirkcaldy, just as in the other cases that we have discussed, a balance of criteria was carefully examined before any decision to take selective action was taken by my right hon. Friend.

My hon. Friend the Member for Fife, North-East (Mr. Henderson) gave a good and reasoned breakdown of the spending pattern in a council such as Kirkcaldy that can lead to excessive and unreasonalbe expenditure. The hon. Member for Fife, Central (Mr. Hamilton) raised many questions. I am sure that the House will not wish me to deal with all of them. If there are any that I have missed, perhaps he will write to me about them. He referred to the inflation provision. I said that it was at a rate of 8 per cent. for pay awards, which he agreed with, but the overall inflation provision was 11.8 per cent. I am sure that he will agree that that is a high figure in comparison not only with the present rate of inflation—after all, we are one third of the way through the financial year—but with the projected rate of inflation. In terms of the budget expenditure, which my right hon. Friend looks at, if provision for inflation at that high rate is not needed, it should be returned to the ratepayers and if it is used in any other way, it becomes expenditure and should be assessed as part of the relevant expenditure for the purpose of assessing excess over guidelines. Therefore, the Government have rightly taken that into account.

The hon. Gentleman said, to my surprise, that tonight Kirkcaldy district council learnt for the first time that we were asking for 2p from it. When the representatives came to see me, they knew full well that they were entitled, if they wished, to come back to me. That was made clear before they left. Four days later when my right hon. Friend announced that he was reducing the demand on the council from 3p to 2p and that it had until 6 July to say whether it would accept that, it could have been in no doubt as to what the position was. The suggestion that it was not told until tonight is remarkable. In the hon. Gentleman's analyses, he seemed to miss the point that in Kirkcaldy's case, as in the case of all the other districts against which we have taken selective action, a balance of criteria, not one single criterion, must be taken into account when making comparisons with comparative authorities.

My right hon. Friend and I considered the representations that were made to us about Kirkcaldy. In the light of those representations, a reduction was made from 3p to 2p. For the reasons that I gave, and as there is still an excess on the guidelines over the above the district average, expenditure per head is still also above the average of comparative authorities, and there has been the highest cumulative rate increase since 1978–79, excessive and unreasonable expenditure is being incurred by the council. I ask the House to support the report.

Question put:

The House proceeded to a Division

Mr. Lang and Mr. Garel-Jones were appointed Tellers for the Ayes, but no Member being willing to act as Teller for the Noes, Mr. Deputy Speaker declared that the Ayes had it.

Resolved, That the Rate Reduction (Kirkcaldy District) 1983–84 Report, which was laid before this House on 7th July, be approved.