Rates (Lothian Region)

HC Deb 21 July 1983 vol 46 cc615-48

7 pm

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

I beg to move, That the Rate Reduction (Lothian Region) 1983–84 Report, which was laid before this House on 7th July, be approved. The arguments that were advanced in the previous debate are relevant to this issue and I shall not weary the House by repeating any of them.

I shall spell out as briefly as I can the case behind the report on the Lothian regional council. The House will know that the council has been the subject of selective action for the financial years 1981-82 and 1982–83. In those two years, as well as this year, Lothian's excess over guidelines was and is the highest of any regional council, and its planned expenditure per head is above that of any comparable authority and above the regional average.

My action in 1981–82 and 1982–83 reduced Lothian's expenditure significantly. Last year that was accompanied by a welcome rate reduction of 16p in the pound. When agreeing not to proceed with action to reduce Lothian's rate support grant in 1982–83, in the light of its voluntary rate reduction, I said that I hoped that the council would continue to consider urgently the scope for further reductions in its expenditure in future years. Unfortunately the council has failed to live up to that hope.

Far from continuing to reduce its expenditure this year, the Lothian regional council has planned for a slight increase. Once again its expenditure, measured against the guidelines, showed the highest increase of any region. Its planned expenditure per head was significantly higher than that of comparable authorities and above the regional average. Had Lothian chosen to co-operate and continue the downward trend in its expenditure, which was brought about by previous selective action, further selective action would have been unnecessary.

Two issues have been raised in particular about Lothian's budget for 1983–84 and used to suggest that the selective action is not justified. First, it has been claimed that Lothian reduced its rates this year by 8p and that its rates are now closely in line with those of other regions. There is no doubt that Lothian has reduced its rate from 100p in 1982–83 to 92p in 1983–84. That is clearly welcome to ratepayers, but that has been achieved only by the use of a credit balance of almost £10 million. It is clear from the fact that the authority does not plan a reduction in its expenditure that the rate reduction, not being linked to real expenditure savings, is not a lasting one.

Secondly, it has been alleged that Lothian continues to have the highest guidelines excess of the regions because its guidelines are constantly being changed. Until 1981–82, existing expenditure patterns played a large part in determining an authority's guidelines. An authority with high expenditure would have high guidelines. In 1982–83 the client group method of assessing relative expenditure need was used for the first time to calculate guidelines. That was based on a systematic examination of relative expenditure need related to work carried out for the distribution committee.

There was some damping effect in both 1982–83 and 1983–84 on the client group figures to take account of previous expenditure, and it is not surprising that authorities with a history of high spending should find themselves with lower guidelines as a result of the change.

The objective of the guidelines is not to reflect actual spending but to try to establish relative expenditure need on a basis that treats all authorities, whether high or low spenders, in the same way. It would not be fair if high-spending authorities continued to be set high guidelines.

It is clear that Lothian has failed to continue the necessary process of reducing its expenditure which was started in 1981–82. I do not think that it is unreasonable to bring down an authority's expenditure, as I propose, to the average per head of regional councils as a whole, especially when that average includes authorities with special geographical and social needs, such as the Strathclyde and Highlands regions.

Mr. Gavin Strang (Edinburgh, East)

Does not the right hon. Gentleman recognise that, because the Lothian regional council has a history of high spending, it has made some important capital investments, such as new sewerage works, which involve continuing revenue expenditure? His policy will involve drastic cuts in expenditure on schools, for example, if revenue spending on the sewerage works is to be maintained. Common sense dictates that the Government should recognise that Lothian has had a higher level of capital investment than other authorities, and that should be taken into account when it comes to cutting expenditure.

Mr. Younger

The hon. Gentleman makes a genuine point which flows from decisions taken in previous years. It is one of the factors that I have carefully taken into account in the representations made to me by the Lothian regional council and in the consideration that has been given to the exercise of the discretion. It is one of the reasons why we have modified what was originally proposed for the council. I appreciate that all these factors have to be taken into account.

Mr. Robin Cook (Livingston)

The Secretary of State said that it could not be claimed to be unreasonable to bring Lothian's expenditure down to the average of other regional authorities. With respect, that is not the case that the right hon. Gentleman has to prove. He has to prove that Lothian's expenditure is excessive and unreasonable. Is he asking the House to accept that any increase in expenditure over and above the average of other regions is excessive and unreasonable?

Mr. Younger

No, I am not. That has never been the purpose of any of the reports.

Mr. Cook

The right hon. Gentleman has just said that it was.

Mr. Younger

No, that is not so. The hon. Gentleman will recall that on every occasion when this issue has been debated I have made it clear that it is not a matter of taking any one criterion and saying, "Because the authority is above this criterion, action is to be taken against it on account of its excessive and unreasonable expenditure." It would not be possible or correct to do that. I have to demonstrate that the expenditure proposed by a particular authority is excessive and unreasonable, and to do that it is necessary to demonstrate that it is considerably out of line with several criteria. I have on many occasions listed the criteria and said how many of them we take into account. The case that I am making against Lothian rests on the general principles that I have been applying generally. There is no difference between this case and any others.

Even after Lothian made the reduction that was required to bring down its expenditure by the equivalent of 6p, its expenditure per head was still above that of all other comparable authorities, including the Central region, Fife, Grampian and Tayside, all of which run satisfactory and efficient services. We know from the budget proposals of the Conservative group that the reduction proposed for Lothian is achievable and that there need be no compulsory redundancies. The wise move by the council of agreeing that none of the recruitment necessitated by its budget should take place until the matter is resolved should ensure that there are no compulsory redundancies.

The Lothian case is clear. Its planned expenditure is excessive and unreasonable on all measures. Only action such as I propose will bring its expenditure — and consequently its rates—to a level that is not excessively above that of other authorities.

7.8 pm

Mr. Donald Dewar (Glasgow, Garscadden)

Anyone who has taken an interest in the debate on local government over the past three years in the House and in Scotland generally will be aware that every time the Conservative party gets into a tight corner its first and immediate instinct is to attack the Lothian region. It holds a special and prominent place in Tory demonology.

I do not think that the House should conduct its business in that way. If the Lothian region is on trial, and if the charge is excessive and unreasonable expenditure, at least we owe the authority the courtesy of considering the evidence and the arguments. It is not good enough for the Secretary of State to start his case with the significant comment that he has had to move against the Lothian regional council in the past. The Opposition say that that action should not have been taken, but even if we were to accept the premise that in the past it was necessary to do so and that the authority has previous convictions, that does not mean that it is guilty in this case and on this occasion.

My right hon. Friend the Member for Glasgow, Govan (Mr. Millan) talked about the general background and I shall not deal with it again. I shall direct myself to the evidence, which has largely been provided by the Secretary of State. I want to try to keep things simple because I think that that will be especially helpful to the Under-Secretary of State who is to reply.

The first criterion that has been used by Conservatives is reference to the guidelines and the extent to which he planned expenditure of the Lothian region is in excess of the guidelines. We have tried to argue consistently and with justification that the guidelines are discredited. It was said in the previous debate that councils up and down the land, however they are politically controlled and however true blue they are, have failed to live within the guidelines because they are unrealistic. Only three out of 65 have met the impractical targets set for them.

At the end of the day the whole black farce was exposed by the interesting exercise that the Government conducted with the Shetland Islands council. I make it clear, so that there is no ambiguity, that I am delighted that that council has been let off the hook and has escaped from the trap, but it is obvious that there is something wrong with the guidelines because Shetland was almost 47 per cent. over them. The Secretary of State, having talked to the council, discovered, apparently to his amazement, that there were certain consequences of oil development that he had not thought of when he set the guidelines. He now says that the expenditure is not excessive and unreasonable but is at a level to which he is prepared to give his blessing.

Therefore, the Secretary of State will penalise Lothian, Stirling, Kirkcaldy and Glasgow for being in excess of the guidelines, yet he is saying that the guidelines for Shetland can be abused by 47 per cent., which is all right, and not excessive or unreasonable. Anyone with half an eye can make the deduction that the guidelines should have taken account of the situation in the Shetlands when they were formulated. Whatever may be the casualty of this exercise — it is largely the credibility of the right hon. Gentleman—the principal one is the guidelines system itself. If one starts to erect an oppressive edifice on the basis of the guidelines, one is building upon unsure and unsatisfactory foundations.

Let us consider what has happened to Lothian's guidelines since 1978–79. They have increased by the smallest percentage of any of the regional authorities in Scotland—94.5 per cent. — while the average for the regions as a whole is 100.86 per cent. The guidelines of the comparable group of authorities, picked by the Secretary of State himself, increased in that period by 111 per cent. Therefore, a large percentage of the gap that has apparently appeared between the expenditure of Lothian region and the allegedly objective guidelines is accounted for by the fact that Lothian has been extremely badly treated by the mysterious formula through which the figures emerge. The region has made cuts and scrambled for safety to try to avoid the wrath of the Secretary of State, but it can never reach the target because every time it makes concessions, the guidelines retreat before it again and it is left stranded.

I shall consider some of the other criteria, for example appendix A, which deals with expenditure. The expenditure in Lothian in 1979–80 was £334 million. In 1981–82 it went up to £348 million, and in 1983–84 it fell to £345 million. Therefore, over four years, in a budget that literally runs to hundreds of millions of pounds, the increase in real terms was £11 million. Within the Lothian region there could be a perfectly legitimate debate on whether expenditure should have increased by £11 million or decreased by £11 million. It could argue about that, considering what it would say to its electorate and how they would react when they cast their votes in the regional election.

To maintain that that marginal variation allows the Secretary of State to ride roughshod over the whole fabric of local democracy in that part of Scotland is nonsense. Even that rise of £11 million is highly suspect. If one looks at the expenditure figure that the Secretary of State gives in his appendix, one sees that he changes the basis of calculation. The first few years are calculated on November 1982 figures. For 1982–83 and 1983–84 we go into cash figures. If one recalculated those cash figures back to November 1982 prices, I suspect that one would find that the alleged rise of £11 million, which is a small figure against the size of the budget, practically or perhaps totally disappears. Therefore, there is no case on the global figures of expenditure for saying that the Secretary of State is justified.

The right hon. Gentleman might say that it is not a matter of how much is spent but of the excess over the guidelines. Lothian region is 13 per cent. over the guidelines, it is said. In parenthesis, it is not 13 per cent. over the guidelines at all. The right hon. Gentleman has not included in the guidelines the £120 million of unallocated expenditure that was included in 1983–84, which the Secretary of State knew and admitted would be spent by the local authorities. If we take that and a number of other minor adjustments into account, the figure is just over 7.5 per cent. in excess of the guidelines, but it is still considerably more in excess of the guidelines than other regional authorities. In 1978–79 Lothian region was only 4.5 per cent. over the guidelines. How can that be so? How is that possible when its expenditure hardly rose at all? The answer is that the guidelines themselves have been fiddled and fixed and amount almost to a fraud. The Lothian region has no real case to answer or that first criterion.

I do not want to go through endless figures in great detail. However, I shall look at expenditure per head. In 1979–80 it was £444. In 1983–84 it had dropped to £439. Is it excessive and unreasonable when there is a fall in expenditure per head? Is that a reasonable definition of "excessive" or "unreasonable"? The Secretary of State said that all other regional councils had a better record, and although he tried to retreat when he replied to my hon. Friend the Member for Livingston (Mr. Cook), he said explicitly that he thought that it was not wrong for him to try to force a reduction to the regional average.

Had the right hon. Gentleman looked at expenditure per head in Strathclyde, he would have seen that it is much higher than in Lothian, and perhaps rightly so, because of all the problems there. However, there are also problems in Lothian. The numbers game that the Secretary of State has been playing on a most shaky basis destroys all credibility and confidence in the system. The increase in expenditure per head for 1978–79 to 1983–84 for all regional councils in Scotland was 5.2 per cent. For Lothian it was 5.6 per cent. Who could call that excessive and unreasonable? Is it such an offence to national economic policy? Are people in the Treasury saying that, because over four years Lothian put up expenditure by 0.4 per cent. per head of the population above the regional average, we must change the entire course of this country's economic policy? That is nonsense.

In 1982–83 to 1983–84, the figure went up in all regions by 2.7 per cent., but in Lothian it went up by only 0–2 per cent. If there is any charge—it is a feeble and weak charge—against Lothian region, it is a charge rooted in the past. If one looks at the last two figures one sees that is performing "better" than other authorities. I put "better" in inverted commas because some people might think that it was arguable that the performance was better. But in terms of the Secretary of State's demands it is performing much better than local authorities in its regional category.

We could go through category after category. The Secretary of State is constantly talking about the rates. There was some rather depressing support for him from new Members of Parliament during the debate. I make it clear that the Secretary of State is the author of domestic, commercial and industrial ratepayers' misfortunes. He has not been faced with escalating expenditure by local authorities in Scotland. By and large they have been level pegging over the years, but the rates have been forced up by the catastrophic and, by any terms, extremely significant reductions in his contribution.

If, during the past four or five years the Secretary of State had simply maintained his contribution to the Glasgow budget in real terms it would have been the equivalent of a rate poundage of 17p. For him then to say that he is the man who is going to the barricades to help the ratepayer is the height of hypocrisy. I do him the credit of thinking that he knows it.

I was intrigued when, in his brief and cursory speech, the Secretary of State said that it is claimed that, in the past three years, Lothian has reduced its rate poundage. I do not know what the English language means but it appears that the Secretary of State is suggesting in a rather unpleasant way that such a reduction has not in fact occurred. It has. In the past three years the Lothian rate has come down from 112p to 100p to 92p. If that is the mark of an excessive spending, irresponsible and spendthrift authority I am amazed.

We are also told that Lothian's rates are above the average. They are. Lothian's 92p is above the average for regional councils in Scotland— 1p above the average. Yet we have all this machinery creaking into action. Moreover, the relationship between Government and local government will be soured and scarred because local government has been told that 1p above the regional average for rate poundage amounts to an offence to the good government of Scotland. That is a joke and one that is in extraordinarily bad taste.

The politics of the case make a curious and disturbing story. When the budget discussions in Lothian opened, several competing bids were advanced. One was from the Labour group. If its proposals had been accepted the rate poundage would have been increased to 102p. The Tories suggested a budget that would have produced a rate poundage of 86.5p. In the delicate circumstances in Lothian it was clear that there would be much hard bargaining. I understand that the final outcome was not reached arbitrarily or by a global compromise but that the council went through its budget in great detail and examined almost every item.

The budget which produced a rate poundage of 92p was arrived at after 146 budget items had been discussed. In 108 of those 146 items—well over two thirds —the Tories supported the winning line. They approved, promoted or voted for the final decision. Therefore, they had a substantial say and, in the majority of items, Conservative policy ruled. I do not suppose that the Secretary of State maintains that they are incapable of simple arithmetic and did not know what they were doing. Of course they knew what they were doing and voted on the merits of the case as did all of the other parties in the council. The result was a rate poundage of 92p, which the Secretary of State is now trying to repudiate.

The Secretary of State probably read a leader in The Scotsman on that issue on 23 February. That newspaper said that the budget was arrived at in the most democratic fashion possible". The budget was supported by four of the five political parties represented on the Lothian regional council and to attack it, according to The Scotsman, would be "naked aggression". We now have the unpalatable and extraordinary spectacle of the Tory leader of Lothian council coming out of that meeting and, having failed to get his way, crying "foul" and running screaming for help to his political seniors at St. Andrew's House. The decision was democratic and was reached only after detailed consideration. It is a negation of democracy for the Secretary of State now to turn round and say that he will reinstate what, by a strange but not surprising coincidence, is more or less the Tory budget as originally proposed although it had been repudiated as I have described.

We are engaged not simply in an argument about this year's budget in Lothian. On the figures that the Secretary of State has provided, the best of the argument is overwhelmingly on the council's side—not the Labour group but the majority of that council which is a cross-party amalgamation of interests. We know that expenditure per head in Lothian has decreased in the past couple of years and we know that expenditure in real terms has been more or less static. Moreover, we know that, since 1981, Lothian's spending in real terms has been £53 million a year less on services than it was. We also know that rates have been reduced as I have described. In those circumstances, to take the enormously serious step of arrogating the rights of democratically elected councillors, the Secretary of State is striking at the heart of the democratic system as we know it. That is why we are protesting. We are not protesting because this is an argument about this year's figures, the nuts and bolts and balance sheet of the budget. We are protesting because what the Secretary of State is doing is wrong in principle. It would be just as wrong for these powers to be used in this way by a Labour Secretary of State. They are fundamentally flawed and offensive.

I hope that the right hon. Gentleman will reconsider his position. I hope that if false pride will not let him do that he will not take this route in future. The total sum of money that is being raised by this squalid operation across the four authorities is £18.8 million. We are therefore discussing a small sum of money as compared with the total of the right hon. Gentleman's expenditure and national budgets. However, the price that we are paying is enormous. I understand that the repayment to ratepayers of Lothian will be about 19p a week. It is a handful of coppers and not even a handful of silver. For that, we are disrupting the relationship that has been built up over the years. That relationship must depend to some extent on trust between the Government and local government. By insisting on these measures, the right hon. Gentleman is giving a ring of truth to charges of dictatorship. He is asking us to pay far too high a price. His decision, if he is thrawn and insists upon it, will be greatly regretted.

7.27 pm

Lord James Douglas-Hamilton (Edinburgh, West)

The hon. Member for Glasgow, Garscadden (Mr. Dewar) speaks persuasively, but when he uses such words as "dictatorship" he grossly exaggerates his case and does an injustice to it. The House has every right to act as the arbiter on grievances of citizens and one of the grievances of citizens is excessively high rates.

This is not the only report of its type that has been debated here. In 1981–82 the Secretary of State was forced to act against Lothian council which was following a policy of sustained expenditure growth. Expenditure was then estimated to be 29 per cent. in excess of needs and rates followed a steep upward spiral. At that time, the Secretary of State proposed, first, a reduction of £53 million. He reduced that to £47 million after receiving representations. That was approved by the House in 1981. After that, the council made economies but some £30 million which could have been returned to the ratepayers was not returned as the council insisted on its being returned to the Treasury instead. That decision was one of the fundamental reasons for the marked shift at the local elections when the administration there was changed.

Mr. George Foulkes (Carrick, Cumnock and Doon Valley)

What was the reason in Edinburgh, West?

Lord James Douglas-Hamilton

The reason in Edinburgh, West is that I am here today and not a Labour Member. The hon. Gentleman's party has done remarkably badly in Edinburgh recently. He should not draw attention to that fact.

That refusal to return the £30 million was seen as a harshly vindictive attitude towards Lothian ratepayers. The Conservative administration then made it clear that there would be no compulsory redundancies when it cut the rate poundage. As the hon. Member for Garscadden said, the Conservative budget, which proposed a rate of 86.5p in the pound, was defeated. The Labour group proposed a budget that would have required 102p in the pound, and the alliance group proposed a budget for 93p in the pound. At first my right hon. Friend asked for a reduction of 8p in the pound. Many people and groups, including me, made representations to him. I am glad that he listened to them and reduced his request to 6p in the pound. The reason for taking action against Lothian regional council is that its budget is 13 per cent. above the guidelines, the highest of any region, and is well above the regional average of 7.7 per cent. More significantly, the excess has grown, compared with an excess figure for 1982–83 of 11.7 per cent., and Lothian has been consistently above its guidelines since 1980–81.

I am not sure whether I heard the hon. Member for Garscadden correctly on this matter, but Lothian has a significantly higher per capita expenditure than any other regional council in Scotland. The growth in expenditure during the past five years, at constant prices, has been more than in other regions.

Mr. Robin Cook

I regret that the hon. Gentleman has made that proposition, because he was with me last Friday when we met senior officials and councillors of Lothian region. They explained to him patiently the reason for many of the figures that he has quoted and pointed out to him then that what he has just said is not true. Lothian is not the highest spender per capita. The biggest spending region in Scotland is Strathclyde, although I do not criticise it for that. If this motion is passed, Highland region will spend more per capita than does Lothian region. There is no justification for singling out Lothian for special treatment.

Lord James Douglas-Hamilton

That is not my information, but I should be glad if my hon. Friend the Minister would confirm in reply that the expenditure per head for this year is £439.14, the average for all regional councils is £424.03, and that the average for closely comparable authorities is £403.24.

Mr. Dewar

Section 3 of the June 1983 edition of "Rating Review", which the hon. Gentleman will agree is an authoritative publication, shows that there is a substantial differential in regional services and that Strathclyde spends more per capita than Lothian. Will he also address himself to the fact that central Government grant, as a percentage of regional council expenditure, has decreased from 57 per cent. in 1978–79 to 40 per cent. in 1982–83. Should he not address himself to that fact when making representations to his right hon. Friend?

Lord James Douglas-Hamilton

It is more significant that Lothian is well above the regional average, and I look forward to my hon. Friend the Minister confirming the figures for per capita expenditure. I shall not pursue the matter until he confirms the facts, but I can tell the House that my information is different.

Mr. Foulkes

Where did the hon. Gentleman get it from?

Lord James Douglas-Hamilton

My hon. Friend will confirm the facts later this evening.

One fact that has not been mentioned during the debate is that the rateable value of houses in Edinburgh is often much higher than that of their counterparts in the rest of Scotland. A Wimpey villa in Dalgety bay will have a net rateable value of £300 a year, but for an identical villa in my constituency one must pay £600, which is twice as much. The rates escalation in Lothian region often bears more heavily on Edinburgh ratepayers, because in many cases the rateable value of houses in Edinburgh is much higher than it is in the rest of the region. The average domestic rates bill in Lothian of £336.43 compares with the Scottish average of £311.75, and a reduction to 86p in the pound would take Lothian well into the pack of regional councils.

My right hon. Friend is justified in taking action to protect the ratepayer. Apart from anything else, his action will help job creation. I received a letter yesterday from the chief executive of Edinburgh chamber of commerce and manufactures, who said: Last year's rate reduction gave a significant boost to confidence following the disastrous years of dramatic increases … By the spring of this year our invest gations indicated that we could identify 1,896 jobs which we believe to have been saved or created by the reduction … Many small or medium-sized businesses have hung on throughout the last years in a desperate battle for survival and the rate s bill, as the largest payment which many firms make, is identified as the final straw and unfortunately staff have to be released to pay this levy. Later in that letter the chief executive explains that the chamber of commerce is co-operating in the youth training scheme as a managing agency for 250 places. If businesses are squeezed by excessively high rates, it is difficult for them to offer places to assist the necessary growth in jobs.

Jobs in the wealth-creating sector of the economy should not be destroyed by excessive rates. An example of such a company was mentioned in The Scotsman a few days ago. The managing director of Inveresk Research International Limited said that his organisation had the disadvantage of being the most highly rated research laboratory per unit of floor space in the United Kingdom. He went on to say—this point is similar to that made by my hon. Friend the Member for Strathkelvin and Bearsden (Mr. Hirst)—that he had to pay £17,000 more net rates than did a similar laboratory in Yorkshire. I have no difficulty in coming to the view that such heavy rating has an adverse effect on job recruitment.

Mr. Strang

I apologise for making this point, because my hon. Friend the Member for East Lothian (Mr. Home Robertson) had wished to make it. Inveresk research International Limited was in east Edinburgh before it moved to east Lothian. The reason for the disparity has nothing to do with Lothian's rates but is to do with the different legislation in Scotland as opposed to England.

Lord James Douglas-Hamilton

I should be glad if the hon. Gentleman would take up that point when suitable local government legislation comes forward. I am certain that if Lothian's regional rates are reduced it will substantially help that company and many businesses like it, and have a favourable effect on jobs. The evidence submitted by the chamber of commerce proves that beyond doubt. The Conservative party is safeguarding jobs, which is another reason why my right hon. Friend must act.

The background to the present position is that between 1978 and 1982 there was a massive explosion in expenditure on social work and, to a lesser extent, on education. In 1982, expenditure on social work in Lothian region was 25 per cent. more per capita than it was in Strathclyde. Expenditure per head is £68.16, which is more than £10 higher than the next highest spending region, Strathclyde, and considerably higher than the Scottish average of £55.18. This year there are about 4,000 fewer school children, so the council's desire to have 100 more teachers makes no sense. With a large contraction in school rolls this is not the time to hire extra teachers. The pupil-teacher ratio in Lothian secondary schools is the best in mainland Scotland.

Mr. Foulkes

Conservative Members send their children to Winchester and other private English schools.

Lord James Douglas-Hamilton

The region must work out the detailed economies, but I hope—

Mr. Foulkes

That is not where I send my children.

Lord James Douglas-Hamilton

We all know that the hon. Gentleman went to a private school, but he need not draw attention to the fact.

Detailed economies are the responsibility of Lothian regional council, but I hope that teachers on short-term contracts will have their contracts renewed. I understand that they have already been renewed until December. I also very much hope that, wherever possible, economies will not bite into remedial education. I have received representations from specialist teachers in my constituency. I hope that that will be taken into account.

Finally, the Secretary of State and Lothian regional council are walking a tightrope in terms of the time scale. The longer the economies are delayed, the more difficult it will be to achieve them. As each day goes by, it becomes harder to implement the economies. The more restrictive the time scale, the more difficult they will become. It is time that the uncertainty was resolved in the interests of all concerned.

7.41 pm

Mr. Robin Cook (Livingston)

I think that I can assist the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton). The figures that he quoted were exactly the same as ours, so there is no difference of information between us. If he looks more closely, however, he will see that he was quoting the average figures for the regions and comparative regions. It is in the nature of averages—this is the way in which they are calculated—that some figures one above the average and others are below. Thus, one cannot conclude that Lothian region's per capita expenditure is greater or less than any other by looking at the average.

Looking at all the figures, one sees that Strathclyde has the highest. I make no criticism of Strathclyde. No doubt that figure is justified by the demand in its area. Next comes the Highlands region. Again, I make no criticism as that region has additional problems in meeting expenditure and providing services over a vast tract of land. Only then does one come to Lothian, and again there are special factors which justify the Lothian figure. I shall go into the detailed case later, but I put firmly and clearly on record at the outset that Lothian does not have the highest expenditure per head of population—it has only the third highest.

There is a sense of déja vu about this debate. This is the third year running in which the Secretary of State has sought to cut our budget by order. The most charitable explanation for his behaviour is that it must be force of habit. One is tempted to conclude that this has become an annual ritual in which the Secretary of State seeks to exorcise the evil spirits of high spending through the token sacrifice of Lothian region and Stirling district. No doubt the day will come when we shall dispense with prayers on the day of this annual summer debate and begin instead by burning straw effigies of councillors Connarty and Milligan. There is certainly no rational justification for what we are now being invited to do.

Logically, with every passing year the Secretary of State's case must become weaker. In 1981, he sucured the permission of the House to lop £30 million from Lothian region's budget on the grounds that that sum was excessive and unreasonable. The following year he returned with a similar case and, through negotiation with the council, lopped off a further £30.7 million as being excessive and unreasonable. Even allowing for the small reinstatement in the current budget, in those two years well over £50 million was removed from the budget as being excessive and unreasonable. The Secretary of State now says that there is still £15 million which is excessive and unreasonable. If that is so, the definition of what is excessive and unreasonable must have been shifted progressively the more the local authority cut into its expenditure.

The most frustrating aspect for Lothian Members rebutting the report is that we have never been offered a sensible, objective definition of what "excessive and reasonable" means. Indeed, the Under-Secretary of State, the hon. Member for Edinburgh, South (Mr. Ancram), added a new note of confusion into our attempts to understand what the Government regard as excessive and unreasonable when he said that he welcomed the expenditure on the Burrell gallery in Glasgow, but that he could not lay that expenditure aside when calculating what was excessive and unreasonable. If he welcomes it, how can he include it in his calculation of what he regards as an excessive and unreasonable total?

As my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) argued with such fluency and skill, when one considers all the objective figures for the relevant local authorities, there is no case for saying that Lothian's budget is excessive or unreasonable. We have already shown that there is no case in terms of the accounts or of expenditure. There is also no case in terms of the trend in expenditure. Lothian is out of line with other regions in Scotland in the trend of expenditure, but it is out of line in a way that undermines rather than strengthens the Secretary of State's case. Since 1981, Lothian region's expenditure has fallen by 5.5 per cent., whereas the average for all the regions has increased by 0.5 per cent.

The only definition of "excessive and unreasonable" on which the Secretary of State can possibly be relying is that of excess expenditure over the guidelines.

There are two problems in relying on the guidelines for Lothian. First, there is the general problem that the guidelines have been subject to shrinkage in the past two years because the Secretary of State has failed to index them fully by reference to inflation. The authorities' estimates of the rate of inflation have proved more prudent and realistic than those of the Secretary of State on both occasions. The result is a grotesque situation. If the guidelines were genuinely indicative, one would expect to find as many authorities above them as below them. In fact, only three local authorities in the whole of Scotland managed to get below the guidelines, while 62 are above them.

Secondly, one cannot rely on the guidelines because they are constantly being fiddled. In the past five years, there have been four changes in the method of calculation. The most recent change—to the client group method—is the least satisfactory of all. I shall not weary the House with the full quotation from Dr. Arthur Midwinter that I gave when I intervened in the Minister's speech. I merely repeat that Dr. Midwinter concludes that the client group does not provide a scientific basis, that it is in a primitive state of development and that it is pernicious to use this method as a means of calculating the guidelines.

When I put that to the Under-Secretary of State—perhaps the Secretary of State will spare his junior for a moment—he responded with a cheap jibe about Dr. Midwinter being politically biased. I do not know Dr. Midwinter's political affiliations. I have never actually met him, although I have corresponded with him, but he is a distinguished university academic and the leading authority on public expenditure in Scotland. The Under-Secretary of State, who is in a privileged position, knows that if he repeated his allegation outside the cloak of parliamentary privilege it would be actionable. We shall see whether he has the courage to do so.

If the Under-Secretary of State argues that the report should be disregarded on the ground that Dr. Midwinter is a friend of the Opposition, I should inform him that the report from which I quoted was prepared for the Highlands regional council. I am not aware that that council is run by the Labour party, Militant Tendency or even the SDP. In that report Dr. Midwinter gives his conclusions about the pathetic inadequacy of the client group method of calculating the guidelines, which is the only basis on which Lothian's expenditure shows up as execessive compared with that of other authorities.

As my hon. Friend the Member for Glasgow, Garscadden pointed out, the guidelines for Lothian have declined, but those for the comparative regions have increased. That inevitably contrasts unfavourably with Lothian. If it is the case—there may be grounds for it—that guidelines should be shifted differently for the comparative regions than for Lothian, that blows apart the idea that these regions are comparable. The Secretary of State cannot have it both ways. The comparative regions should have the same guidelines as Lothian, or they are not comparable with Lothian. If they are not comparable, the right hon. Gentleman cannot use them to justify the criticism of Lothian's expenditure.

The Secretary of State's case is so statistically and transparently bare and so much the result of fixing those atatistics and he is so intellectually mediocre in his reasoning, that it is tempting to spend one's time concentrating on demolishing his statistics. However, that would be wrong, for it would obscure the real consequences of what we are debatig tonight.

The first of these consequences is the dire effect on services already cut. This is the third year in which the Lothian region faces cuts, and we have already had experience of what those cuts mean. Livingston has the highest proportion of toddlers of any constituency in Scotland and I have more pre-school children than anybody else in the Chamber. [Laughter.] I am happy to withdraw that. My constituents have more pre-school children than any other set of constituents represented here.

The number of nursery school places in Lothian region has fallen in the past two years as a result of the cuts. Hundreds of toddlers in my constituency are now on waiting lists for nursery places, yet they will not reach the top of those lists before they are old enough to go to primary school. When they get to primary school, perhaps because of the level of poor pre-school education, they will in many cases need remedial education.

I could describe the reference to remedial teaching made by the hon. Member for Edinburgh, West as hypocritical, but I shall not do so. Instead, I shall call it his maivety in expressing his pious hope that remedial teaching will not be affected. Remedial teaching has already been affected in Lothian. In west Lothian the school roll has fallen by 2 per cent., and remedial teaching has fallen by 17 per cent. Those kids who need the help most are being made to suffer most under the Conservatives.

What is more, when those children leave school, half of them will be unemployed. There is 50 per cent. unemployment among school leavers. They will find the youth and leisure centres, formerly available to them, being closed. In the past month, the largest youth centre in my constituency has closed because of cuts in the community education budget. I cannot understand how Conservative Members can prate about law and order and a civilised society when their Government are making cuts that mean that kids are idle all day, without recreation facilities on which to spend their time, and then be surprised that those kids turn to petty crime.

In the light of what has already happened in Lothian region, we must ask what will happen if we approve this report? We know from the figures calculated by heads of departments that in education the cuts will mean the loss of 1,000 teaching posts, although that does not necessarily mean 1,000 compulsory redundancies. That will mean a sharp reduction in services. It will mean the loss of 272 home-help posts in a region with one of the highest proportions of elderly persons in Scotland. We already know what the Conservative administration in the Lothian region wants to do because it obligingly told The Scotsman. It will utilise fares to recoup some of this loss. Specifically, it will withdraw the bus concession to pensioners. In other words, the poor will pay more for the services upon which they depend.

Mention of the Conservatives brings me to the other real consequence of the report. It will mean a further major blow to local democracy. There is a fresh factor in Lothian's case tonight. In the past two years the budgets that were put forward and then amended by order by the Secretary of State were proposed by the ruling Labour group in Lothian region, because we have to admit that we failed to carry the minor parties with us. Lothian region's budget has now been so cut that all the minor parties agree with the Labour group on the importance of resisting this motion. The budget that the Secretary of State is seeking to amend by order is approved by four of the five parties in Lothian region—the Labour group, the SNP, the SDP and the Liberals. Between them, those parties not only have a majority on Lothian regional council, but a two thirds majority of the votes cast as recently as May last year. What is most repugnant is that the Secretary of State is using his majority in this Chamber to impose on Lothian region a budget that the Conservative party in Lothian could not get a majority for in its own council.

The effect of these cuts on services will be damaging enough, but we shall also lose something more precious — the ability of local authorities to be creative and innovative in the policies and services that they provide to local people. We shall damage their capacity to respond to the local demand for improvements in those services and take away the right of local communities to settle for themselves the policies to be followed by their local authorities. It is for that reason that we shall vote against the motion. If Conservative Members' rhetoric about freedom and democracy with which they deluge us during elections means anything, they should also vote with us in the Lobby tonight.

7.55 pm

Mr. Gerald Malone (Aberdeen, South)

The hon. Member for Livingston (Mr. Cook) ended his speech by talking about democracy. I am not a member of the Scottish family affected by this report as I come from a constituency that is outwith the three areas directly affected, and therefore I should like to deal with that point. What has been said raises matters of principle, and the hon. Member for Livingston referred to them as well.

It is wrong to suggest that local authorities have any democracy other than that that flows from this House. They are creatures of statute and we must not forget that. They exercise functions that are delegated to them by the House. It is constitutionally correct to say that they must exercise these functions within the guidelines laid down by the House, both statutory and, in terms of the powers that the House has given itself, financial as well.

Tonight, we are dealing with the relationship between the House and local authorities, and a misconception that is held about their role by Labour Members. That relationship has been recognised by most of those on the Labour Benches. It was recognised in 1966, albeit in a slightly blunter form, when Labour Members adopted the same type of legislation in principle as we are trying to adopt tonight. Nothing has changed. Local authorities are still the creature of the legislature and that cannot be changed. We are entitled — I wish to get this point clearly on record—to supervise them in what they do in the general levels of their expenditure.

Mr. Michael Meadowcroft (Leeds, West)

Does the hon. Member accept that, whereas the constitutional facts are as he states, the electoral process is also crucial to the democratic health of the country, and members of the public have the chance to cast their votes, just as they cast their votes for Members of the House? The people of Lothian cast their votes overwhelmingly against the policies that the Government are now trying to enforce, through the House, on Lothian regional council.

Mr. Malone

I cannot accept that, because it is founded on a basic misconception. People are elected to regional and district councils in Scotland to carry out the functions given to them by statute created in 1973. It is as simple as that and that point cannot be ignored.

We must take the shades from our eyes and realise that this is not just a one-off issue. It is the end of a long struggle by not only this Government since 1979 to try to control unreasonable expenditure but by the Labour Government to impose strictures on local government when it was thought that spending was getting out of hand. It is clear that Lothian spending has got out of hand. A rise of 154 per cent. in rates since 1978–79 is too much in the Lothian region or any other region. On that scale it is right that the House should intervene to protect the ratepayers.

I was interested to hear various points that were made about electors and the local authority dictating the overall level of expenditure. The point is that many electors do not pay those rates. When it comes to defending those who pay them and when electors start to suggest policies that get out of hand, it is up to the House to exercise its correct and clear function to protect them. That is what the Government are doing tonight.

Mr. Dewar

I accept that a local authority must obey the laws passed by the House and operate within them. No one would argue with that. But that is no excuse for the House passing bad laws and treating local democracy insensitively, which is what these measures do. The hon. Gentleman should address himself to the question which has not yet been answered. In view of the high rates about which he is complaining, why does he approve of a Government policy which has seen central Government grant as a percentage of Lothian council's expenditure fall since 1978 from 57 per cent. to 45 per cent.? Assuming that services have remained almost static, that means that the unfortunate ratepayer has had to find about another £50 million in rates as a result of the Secretary of State's actions.

Mr. Malone

The hon. Gentleman is always at his most persuasive when he puts forward half an argument. My reply is simply that Governments have tried over the past few years to encourage local authorities to reduce their spending. In fact, local authorities pass the buck to the ratepayers and that is what the Government are now trying to stop. It comes ill from the hon. Gentleman and the Opposition Front Bench to argue as they do. I suspect that they are suffering from a case of envy, because the blunt instrument that they created in their legislation of 1966 did not work. The instrument that we are legislating tonight is more refined and will tackle the problem. At the end of the day the Labour Government found that their legislation did not achieve what they wanted. They found that rates could go up regardless and that they had to penalise authorities which exceeded expenditure as well as those that did not. This legislation is effectively designed to put the blame back where it belongs — on those councils that are overspending. That is why we do not want to continue implementing the type of legislation that was passed by the Labour Government.

This is not a matter of central Government attacking local authorities. It cannot be ignored that in many cases in Scotland a reasonable compromise has been reached. Local authorities have recognised that the Government have national objectives and public spending guidelines to which they must accommodate themselves. I must suggest a slightly uncharitable construction on the attitude of those authorities that we are debating tonight. It is that they are determined to break the Government's national economic policy. They are determined to do it step by step. The reduction in expenditure that we are discussing might not be very much on its own, but nobody can deny that it is part of a pattern. If the Government ever gave way there would be a flood of increased expenditure, which the country could not afford.

Mr. Foulkes

The hon. Gentleman is clearly an economic expert. How will the expenditure of an extra £18.5 million break the British economy when, in the current year's Estimates, the Government will spend £624 million on fortress Falklands?

Mr. Malone

If the hon. Gentleman would do me the courtesy of listening to what I say, he would realise that that is a foot in the door. There have been feet in the door from these regional and local authorities time and again. If ever the Government's resolve gave way, we should find an ever-increasing escalation of expenditure from those authorities.

If the relationship between central Government and local authorities is breaking down, it is because of the persistence of those local authorities in refusing to compromise with the Government. It is the Government's duty to protect not only public spending but those local authorities which have fairly agreed to work with them. That is why we have to pass these measures tonight. It would be grossly unfair to regions such as Grampian, in which my constituency lies, if we were not to take this action. Therefore, the measures should be supported.

8.5 pm

Mr. Malcolm Bruce (Gordon)

I am amazed at the speech of the hon. Member for Aberdeen, South (Mr. Malone) but I suspect that he has revealed some of what the Secretary of State would prefer not to reveal and that is the real objective behind the measures before us tonight. The Opposition will be voting against them because they cross a threshold inasmuch as they are quite different from anything that has been presented before. It is legitimate for a Government to say that they must control what they are prepared to give to a local authority. It is legitimate for the Government to say that they must control their borrowing. That affects the national economy. But it is not true that what local government chooses to raise itself to spend on its own services affects the national economy. Local government is self-contained and self-financing. The money is raised and spent.

Mr. Bill Walker (Tayside, North)

If the hon. Gentleman cares to look at the services provided by other Government agencies, Departments, and quasi-Government bodies in the Lothian region which are funded by the Government, he will recognise that any increase in the rates of the Lothian region could mean an increase of over £1 million for the health board. He will realise how the problem is compounded and why the Government have to take action.

Mr. Bruce

Rates that are raised by local authorities to supplement their spending are self-balancing. The Government control borrowing and that is legitimate and right. The measures before us now take a step across a threshold that should not be crossed.

What makes the Scottish Office think that it knows Lothian's needs better than its people, officials and councillors? It is only 18 months since we have had local elections, at which those needs were presented. The road down which we are moving started, perhaps understandably, when colleagues of Labour Members in the Lothian region pursued a reckless budget, which presented the Government with a problem that had to be dealt with. The Lothian electorate has resolved that problem by turfing out that administration and electing a new council, which has responded positively by cutting the rates by 20p over the past 2 years. To say that that is not a reasonable and moderate reaction is not to be interested in the views of the local people of Lothian as expressed by the council.

The hon. Member for Glasgow, Garscadden (Mr. Dewar) pointed out that every item of Lothian's budget was voted through in 146 votes, and it represents a bigger percentage of voters' support than any element of the Government's manifesto that will be implemented in the House in the next four years. The main problem of pursuing this line of thought is that the Government have made moderation an unacceptable course of action.

What incentive has there been for Lothian to reconsider its budget and put forward a new and reasonable budget that represents the views of most parties and the majority of voters if it is to be kicked in the teeth for doing so? The consequence will be to suggest to parties other than the minority Conservative party that there is not much point in participating in Lothian region politics because they will be overruled. That suggests that we are moving into an era of comtempt not only for local democracy but for democracy as a whole.

The Government attitude is that democracy is fine provided they and their mates finish up top of the heap. If they do not, they will change the rules, say "To hell with democracy" and do it their way. That attitude discredits local elections and local participation in local government.

Taking power to the centre creates a dangerous precedent. It is opening the door for a regime without democratic beliefs. Centralising power gives such regimes much easier means of control. Already one of the great weaknesses of our constitution is that we do not have a system of checks and balances. Undermining local government takes away one of the existing checks. It makes more and more people say, "What is the point of participating in the democratic process?".

The hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) is on dangerous ground when he talks about jobs.

Mr. Dennis Canavan (Falkirk, West)

The hon. Gentleman is always on dangerous ground.

Mr. Bruce

He said that the chamber of commerce had identified 1,800 jobs that had been saved because of rate reductions. Yet the report before us shows that Lothian regional council lost 2,088 jobs because of cuts. That is hardly an overall net gain.

Local authorities actually spend money on local businesses. Because they have had to cut that expenditure, many firms have lost council business and some have even ceased trading. It misleads the House to suggest that there is no relationship between council spending and private enterprise. Conservative Members say that they want business put out to private tender, which is an acknowledgement that councils have worthwhile business to put out. The Government cannot have it both ways, although they try to do so.

The report reveals the Secretary of State's true ambition. He really wants to be the convenor of Lothian regional council.

Mr. Canavan

The Marquess of Lothian.

Mr. Bruce

The Secretary of State could resign his seat in Ayr, stand for election to the Lothian regional council and pursue his policies. The advantage of that would be that when he inherits his title and moves to another place he can keep that job. If he intends to put further orders of this sort before the House, I wish that he would make that move sooner rather than later.

8.13 pm

Mr. Ron Brown (Edinburgh, Leith)

We all know that Parliament represents class interests, and that is even more true since the general election. The Government have a substantial majority, but that does not mean substantial support throughout the country. The case put forward by the Secretary of State was predictable — bad but consistent. We have recognised for some time that he has thrown moderation, caution and reason out of the Tory window. Tories do not consider such virtues any longer. They want to solve the economic crisis at the expense of the working class.

Let us consider the Government's tactics. First, they attack real wages and living standards and then move to social services, local services and local government. They speak of local services as though they were charity. They are not charity, but something that we have fought for over the years. All of us, especially working people, have earned those services and have the right to see them in operation.

Tories claim that Tory freedom works and that their system of society means something. It certainly means something to big business, which backs the Tory party and benefits from Tory policies. The Tories sometimes condemn luxuries and frills in local government yet the one luxury left untouched is interest payments paid as tribute to the City of London. The Government can destroy everything, send people to the breadline and the soup kitchens, but interest payments must be maintained and improved. That is the nature of the society in which they believe.

When individuals say "Whoa" and claim that Government policies are unfair, the Government say that they believe in democracy. But democracy for the Tory party is like a piece of chewing gum — it can be stretched one way or the other.

Mr. Deputy Speaker (Mr. Ernest Armstrong)

Order. A number of hon. Members wish to catch my eye. The hon. Gentleman must relate his remarks to the order.

Mr. Brown

We are talking about democracy, which affects local government. If it does not, there is something wrong with this Chamber. I say that with all respect to you, Mr. Deputy Speaker. Let us not be kidded—democracy affects local government. The Government thinks that it is a piece of chewing gum that can be stretched. They stretch workers' rights.

The Government have no mandate in Scotland. They may have a mandate elsewhere, but not in Scotland. They sell their ideas through Saatchi and Saatchi and do all sorts of clever things, such as using slogans. I think that the latest was "Cheer up, the Tories are coming". No one is cheering in my area, and certainly not the unemployed, the disadvantaged, the disabled, the young and the old age pensioners. The only people cheering are the skinheads of big business, the CBI and, perhaps, the chamber of commerce in Edinburgh, which has been much quoted tonight. Those are the only people who count for the Tories. It is all to do with the class nature of politics savoured by the Tory party.

The Tories and the CBI represent the capitalist system. That system is unfair, inefficient, corrupt and dangerous. It is unfair because wealth is concentrated in fewer and fewer hands. It is inefficient because of the waste of resources, especially human resources. It is corrupt because of the behaviour of those with vested interests, such as the Vestey family. It is dangerous, as proved by recent events in the South Atlantic and the so-called defence policy.

Lothian Labour councillors have been vilified by the media because they have stood up for the principle that human need is important. They have been challenged by the Secretary of State. They have had to suffer much but principles are important to our movement. We in the Labour movement do not worry when we are attacked by the Tory press. If we are praised by the Tory press we cannot be doing our job.

We hear a great deal about Lothian region overspending, but Labour councillors invest in people. Is that not important? The Government spend a great deal of money on nuclear weapons—that is another argument but it is not an argument of the Labour party. Today in Lothian region Labour councillors are not in charge. The Tory-SDP alliance are in charge and it is trying to work out a compromise. It is agreeing to introduce policies that the Secretary of State wants. That means effectivelyy that it is doing the Tories' dirty work. Those councillors give all sorts of explanations for their actions but they are cutting back. The cutbacks are not as severe as the Secretary of State would like to see but ordinary working people in my area are affected.

We know that the Secretary of State has a hit list and that the number one target on the hit list is Lothian.

Mr. Canavan

The Marquess of Lothian.

Mr. Brown

Some people will say that a rate refund is fine but a rate refund does not mean anything for the average person. The rate refund is a "con" job because it means that services and jobs that are so important in Lothian will be affected. The Government talk about cutting away the fat but we know full well that the fat is not there. They are cutting away the limbs of local government. That story could be repeated throughout Scotland. Many things have been said but essentially the story remains the same. Our constituents can better explain the issues. I have received a letter from a Mrs. Anne-Marie West. I shall not quote all the letter but it contains an important passage which says: I ask you, please, to think of the children whom we teach and who cannot stand up for themselves. Surely, they must be protected. Mr. Younger must see that his demands are unreasonable. Lothian Region has made a great many cuts during the past two years, and has reached a stage where it can cut no longer without drastically hurting those who rely on the services provided by the region. How can the Government possibly justify such an increase in the defence budget, while our children cannot receive a proper education and old and sick people cannot receive the care and treatment they deserve? I ask you to vote against Mr. Younger on this subject and to make known the feelings against such stringent cuts in the Region. There speaks the voice of reason; there speaks the voice of Lothian; there speaks the voice of the working class. That voice must be heeded. We talk a great deal about democracy but that is the voice of democracy. Whatever the politicians may say in this Chamber, that is the voice of the ordinary people of this country. It can be heard in England, Wales and Ireland as well. That is the statement that matters. If it does not, what do we have? We have the alternative of Big Brother Younger, the Secretary of State, taking over-1984 is just next year. Is that what we are offering the electorate of this country? Is that what is on the menu? Unless we fight for democracy we are not entitled to have it.

We can speak of many things in this Chamber but democracy was carved outside. It was carved from the struggles of ordinary working folk. It came from the struggles of the last century of the Chartists, the early trade unionists, the Labour party and the suffragettes. We will have the ritual dance where people will jump up and down this year and next year moaning and groaning and saying that things are going from bad to worse. That is the problem with British politics. We are conned into thinking that this is a marvellous place, that this is the centre of the political universe. It is not, but the lessons must be learnt and the Labour party must learn them or it will not get back into power. If it wants to struggle in local government and fight back against the Tories, it must be active on the street corners and at the factory gates. The Labour party must get its act together. It can do so only on a matter of principle and by building up real leadership at all levels, particularly at the basic level, on an understanding of politics and on understanding what socialism is about.

Mr. Bill Walker

On a point of order, Mr. Deputy Speaker. I believe that it is correct to draw your attention to the fact that we are not here this evening to debate the problems of the Labour party. I understand that we are debating a report as it affects Lothian region.

Mr. Deputy Speaker

The debate has gone a little wide but it is related to the Government's proposals about rate reductions in Lothian. I hope that the hon. Member for Edinburgh, Leith (Mr. Brown) will relate his remarks directly to the report.

Mr. Brown

That is correct, Mr. Deputy Speaker. I again emphasise that democracy in this Chamber is related to democracy outside.

Mr. Deputy Speaker

Order. The report before the House relates to the Secretary of State's decision to reduce the rate. We must discuss the merits or demerits of that proposal.

Mr. Brown

With respect to you, Mr. Deputy Speaker, it is important to appreciate the sense of feeling among Scottish Labour Members who have been elected to the House and have been outvoted, despite the tremendous support and mandate that we have in Scotland. We feel angry, frustrated and bitter. You can understand why, Mr. Deputy Speaker. When we are arguing these points about outside activity, it is not a gesture, but a facing of reality. That reality will, of course, affect other areas. It will affect the north of England, Merseyside and elsewhere. I am not a nationalist—I am a Socialist but the front line at the moment is local government. Local councillors are defending what we have fought for consistently over the years. We are fighting for the welfare state. We are making pertinent points to the Secretary of State, which must be listened to. If they are not listened to in this Chamber, they will certainly be listened to elsewhere. That is the role of Socialists. We Jo not mourn. We organise. That thought is not original to me; it was said by Joe Hill and it still prevails. Socialism does not belong to me or to individual hon. Members here. Socialism belongs to the whole country. In particular, it belongs to those who are fighting against injustice.

8.29 pm

Mr. Alexander Eadie (Midlothian)

Although I have been present since the beginning of the debate I shall, in the interests of my hon. Friends, curtail my remarks.

This has turned out to be a strange debate, because we have a new definition of the democratic role of local councillors. They will not take kindly to being told that they are creatures of this legislature. Ministers have always adopted the attitude that electors, if they did not like a local administration, would exercise their democratic right to elect a new one. Now, apparently, we have a change in Conservative thinking about the role of local government.

It is ironic, when discussing a measure affecting the Lothian region, to lump the other local authorities together and suggest that there is some clandestine plot to defeat the economic strategy of the Government. It is stretching imagination rather far—I thought that Mick McGahey had been relegated — to suggest that those who are trying to overthrow the democratic rights of the Government are involved in local government—those affected by the proposals. That is ridiculous.

It has been said that the report would not make any difference to the existing local government services. I was interested in the remarks of the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) and the figures that he gave. I should like to debate them with him —perhaps on another occasion—but I shall not delay the House now. It is ridiculous to suggest that the education and social services will be able to continue much as before. I hope that the Government will not adduce that argument. It is clear that the proposals will have an impact, and I shall give an example of what will happen should hon. Members be so foolish as to agree to what the Government are proposing.

I have here a letter from an elderly constituent. I will not name her—I will call her Mrs. X. This is a good example to bear in mind. Think of the elderly who want to live in their own homes but who depend on the back-up services especially the home help service as, in the twilight of their lives, they wish to have the dignity of living in the house in which they have lived for many years. Sometimes that demands great effort on their part, and often they need help.

My constituent had a home help. On becoming ill, my constituent went into hospital. After treatment and with courage and willpower, she felt able to return to her own home. "I want to sit at my own fireside," she said, having battled for six months to prove to the doctors that she could look after herself. She did not want to be hospitalised in the twilight of her life. She returned home to discover that the home help service had been withdrawn. I took the case up with the social services department, and the reply I received from Lothian regional council was that she is receiving less service than before her admission to hospital. We are not happy about the reductions in services to clients but unfortunately to keep within budgets we have no other option but to reduce services while trying to offer enough service to maintain the clients at home. That is the position before we introduce financial cuts for the Lothian home help service. It has been suggested that 250 home helps will go if the report is implemented. The situation would become worse. It is dispicable that this lady is receiving only one hour of home help each day. I wonder whether it will be withdrawn.

The provision of social services in Midlothian is bad enough, but if the House is foolish enough to agree to the Secretary of State's motion, the position will worsen and a great disservice will be done to the sick and the elderly.

8.36 pm

Mr. Gavin Strang (Edinburgh, East)

I am happy to follow my hon. Friend the Member for Midlothian (Mr. Eadie), because his example effectively reveals the result of the Government's expenditure policy in the Lothian region. Later, I shall amplify some of his points about the home help service.

At the heart of the debate is the Government's policy of cutting public expenditure and social services and destroying public sector employment. It is fitting that we should debate this matter when we know, from leaks in the newspapers, that the Cabinet is contemplating additional expenditure cuts of hundreds of million of pounds. The Times—I heard it on radio as well—reported that the head of the CBI, Sir Terence Beckett, said: The state is swallowing us up; something has got to be done. What sort of gobbledegook are we hearing from these people? We have a massive amount of under-used resources and million of people, many of them highly skilled, who want to work. It is nonsense and an insult to their intelligence for the heads of big business to lecture and say that the public sector should be cut back so that they can expand. This policy is misguided.

This country will not return to work nor will our economic problems be solved if we cut expenditure and public investment. These cuts are having a disastrous effect on the British people. That is the first issue of principle in this debate. It will be a sad day not just for the people of Lothian but for those in other parts of the country if we have another four years of such policies.

The second great issue of principle in this debate is democracy, as you, Mr. Deputy Speaker, well know. We are talking about a direct assault on local democracy. One of the great economic and social developments during this century has been the growth of local government with the provision of council housing for people who lived in homes without basic amenities, such as indoor toilets and bathrooms, advances in the education service — for example, nursery education — the provision of home helps and services for the mentally handicapped. It has meant an enormous growth in the budgets and the importance of local government. Fundamental to that is the principle of local democracy. Elected councillors, who have played a crucial role in recent decades in looking after the economic and social well-being of our country, can decide what is best for the people in their areas. It is fundamental to our way of life that these services should be provided and democratically controlled locally and not dictated and provided from the centre.

We are seeing the principle of local democracy undermined. As my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) said, the Government are turning local government into the agents of central Government. It is utterly irresponsible of the Government to enforce Tory party policy on the elected Lothian regional council for the sake of a small amount of money when only 22 of the 49 councillors are Conservative. They were elected just over a year ago.

It is nonsense for Conservative Members to say how committed they are to local democracy. It does not mean anything when one realises the lengths to which they are prepared to go in Lothian to cast aside the principle of local democratic control.

Conservative Members must learn—my hon. Friend the Member for Midlothian made the point effectively this evening — what these cuts mean to the people of Lothian. The hon. Member for Edinburgh, West (Lord James Douglas-Hamilton), in particular, must learn, because he had the effrontery to say on 4 July in a debate in which we both took part: services will be adequately maintained, I believe that ratepayers are entitled to be fully protected against unreasonable increases, especially as the employment prospects of many are tied up with keeping the rates under reasonable control."—[Official Report. 4 July 1983; Vol. 45, c. 123.] The hon. Gentleman was talking about a grandiose social works department. He was saying that cuts would be made without any real reduction in services. We know what the cuts mean to services. My hon. Friend the Member for Midlothian described the experience of one pensioner as a result of the cut in the home help service. In reply to a question only this week from councillor Nolan, Labour spokesman on social work of the regional council said that as a result of the cuts the number of home helps have been reduced from June 1981 to May 1983 by 288 full-time equivalents which, in fact, means around 600 home helps. Those 600 home helps serve about 1,500 people. As a result of these cuts, 1,500 people will suffer in the way described by my hon. Friend the Member for Midlothian. If time allowed, I could give examples of the types of peole who are suffering from cuts in the home help service. They are people suffering from cancer, leukaemia and other disabilities.

I do not know what sort of a world some hon. Gentlemen live in. The Opposition have been inundated with letters about the effects of the cuts from organisations and I assume that they are writing to Conservative Members as well. They include the Lothian association of youth clubs; the campaign against reducing expenditure in Lothian, which is worried about all services, and the campaign with specific reference to primary school remedial teachers, which my hon. Friend the Member for Livingston (Mr. Cook) mentioned. If time allowed I could cite many more.

There are cuts in music provision. We are reaching the point, at which there will be no music teaching in primary schools and not much in secondary schools. One of my constituents asked in a letter a week ago whether there would only be opportunities for music for kids in Edinburgh who go to fee-paying schools. Is that what the Government are trying to achieve? I could giving examples of the cuts imposed on and hardships suffered by the people of Lothian. The idea that we should have more cuts as well is utterly unacceptable.

I want to touch briefly on some of the narrow reasons why it is unfair for the Government to single out the Lothian region in the way that they have done. First, there is the matter of the guidelines. They are based on what are supposed to be objective criteria, involving the concept of client groups but they are rough and ready guidelines. When the main reason for a local authority being over the guidelines is not that expenditure is going up but that the guidelines are going down, we should surely give it the benefit of the doubt, particularly when the expenditure involved is not very much. The fact that the guidelines are going down is the most important reason why the Lothian regional council is in excess of the guidelines.

Secondly, there is the question of the high investment that has been made. Whether we like it or not, we have built the new sewage works. Whether we like it or not, we have made a certain amount of provision, and we have to man that provision. We have to accommodate the revenue costs. To ignore that, or virtually to ignore it, is nonsense. The idea that our children should not have the opportunity to learn music at school because they have a sewage works which incidentally, other authorities should have provided is outrageous.

Cuts on top of cuts make the situation worse. The fact that the budget has already been cut by £53 million, and the fact that thousands of public sector jobs in Lothian have already been destroyed—over 3,000 jobs have gone—makes the additional cuts even harder.

Then there is the argument about the rate burden. It does not stand up, when one compares the rate poundage in Lothian with Strathclyde and other authorities. When one takes an average house in Lothian—not the very selective example that was given by the hon. Member for Edinburgh, West of a bungalow at Dalgety bay—and compares it with an average house in Strathclyde or other areas, one finds that the rate burden per household is not excessive.

Finally—and perhaps the most fundamental point of comparison—there is the level of public expenditure per head of the population. Once the cut is made, the Lothian region will be fifth out of nine. The Highland region, Strathclyde region, Tayside region and the Borders region will be spending more per head of population than this so-called high-spending regional council if the motion is accepted.

There is no case for what the Government are doing, even on the narrow criteria on which they seek to justify their actions this evening, and it is an affront to the House of Commons that we should have to deal with these motions.

8.47 pm

Mr. John Home Robertson (East Lothian)

Like my hon. Friends the Members for Midlothian (Mr. Eadie) and for Edinburgh, East (Mr. Strang), I am desperately worried about the impact of the cuts on people throughout the region and in my constituency. Old persons, children and people living in remote communities suffer enough already, without having further cuts in services imposed on them.

Again like my hon. Friends, I am also concerned about the attack on the principle of local democracy. I was astonished that the hon. Member for Aberdeen, South (Mr. Malone) should suggest that local authorities were creatures of central Government. He said that they were like quangos—like the Scottish Tourist Board or the Highlands and Islands Development Board. There is a difference between quangos and local authorities. Local authorities are elected, and they exercise responsibilities according to the mandates that are given to them by their electorates.

I speak with some minor experience, having been a local authority councillor in the district of Berwickshire before being elected to this House. I remember taking part in the budget-fixing exercises every year and the striking of the rate. When I resigned from that local authority and came here, I never imagined that I would be involved in the striking of a local authority rate in this place. That is what we are doing this evening. We are fixing the budget, the rates, for Lothian regional council, and for three other local authorities. That is extraordinary. It would be laughable if it were not so tragic.

It is particularly laughable since the Government are constantly talking about over-centralisation and excess government. The Government have, in effect, created a third tier of Scottish local government. The Secretary of State has taken powers to intervene directly to fix the rates in Lothian and elsewhere. For the Lothian region this is the third year in which we have been through this process, and no doubt the same will happen again.

The House has the power to impose on local authorities the responsibility for providing local services. The House is now exercising another perverse power to restrict the money that can be made available for the provision of services. While taking the powers, the Government refuse to take any responsibility for local authority functions. The responsibility still lies with the local authorities and councillors. Kipling said about that: Power without responsibility — the prerogative of the harlot throughout the ages. We constantly remind ourselves of the sovereignty of Parliament. Tonight, the Government are asking the House to exercise the sovereignty of the harlot in respect of a number of local authorities in Scotland. They are using the power to cut the budget without accepting responsibility for the consequences.

I understand that a number of local authorities asked the Secretary of State which services he thought were excessive and unreasonable. In response the Secretary of State had the gall to say that it was up to the local authorities to decide. In spite of him seeking to fix the rates, he is not prepared to say what services should be cut. He wants local councillors to take that responsibility and to accept the odium that goes with the cuts. They must choose whether to inflict the cuts on children, old people, commuters or someone else. Who on earth does the Secretary of State think he is?

I have been criticised recently for saying that the Secretary of State has no mandate to govern Scotland. I stand by that. The Secretary of State is attacking local authorities when he should be working in the Cabinet to protect Scotland's interests in the face of public expenditure cuts. What is happening today shows up the Secretary of State for the Quisling that we all know he is. Even those who are unhappy about the national mandate argument must accept that the Secretary of State has no mandate to tinker with local authorities' budgets in Scotland.

Lothian regional councillors have taken their decision. They have taken into account the severely restricted rate support grant. They have assessed the needs of the people whom they represent and reached their own conclusions about the necessary budget and levied a rate accordingly —92p in the pound. That is 1p in the pound less than it is for the Strathclyde region and not far from the national average. Someone in Dover House or Whitehall has come to the conclusion that that is excessive and unreasonable, without saying why or going into detail.

I have had my say about the vagaries of the rating system. There is no doubt that rates are a considerable burden, but that has been aggravated by regular cuts in rate support grant and by continuous manipulation of the guidelines by the Secretary of State for Scotland. Despite that, four of the five parties on the Lothian regional council have come together to reach a compromise package that they believe appropriate to fund a tolerable level of services in the region. I suggest that that package was modest. It is demonstrable nonsense for the Secretary of State to describe it as excessive.

I should like to describe briefly some of the levels of service in East Lothian district, in the constituency that I represent. I am not the first person to have to assess the needs of East Lothian district. Between February and October 1974 the hon. Member for Edinburgh, South (Mr. Ancram), now the Under-Secretary of State, was the Member of Parliament for Berwick and East Lothian, which included most of East Lothian district. He circulated an election address in October 1974, which listed several of the things for which he was fighting for additional expenditure in East Lothian. On the subject of private housing improvement grants we saw the headline: MP joins grants fight. Another headline ran: Central Government should subsidise festivals, says Ancram. That would go down well with the Musselburgh Honest Toun's Association. He was actually suggesting that such festivals should be subsidised by central Government.

Another headline stated: Public transport needs immediate help, says MP". I can tell the hon. Gentleman that things have not changed. Public transport in East Lothian is still pretty ropey. It needs to be improved, not cut. The hon. Gentleman said that it needed to be improved then, so why on earth does he tell the House that he wants to cut it now? Another headline said: MP stresses urgent need for more houses. I could go on and on.

The point is that East Lothian still has pressing needs, and the recent cuts in services that have been imposed with indecent enthusiasm by the hon. Gentleman and by the new minority administration of Lothian region have made matters even worse than they were then. I could speak about cuts in the bus services and the threat that they pose, in particular, to the remote communities in my constituency. I could also talk about the further erosion of the concessionary travel schemes which are being threatened in Lothian region. I could mention the great stress under which our home help service is operating, but my hon. Friend the Member for Midlothian has already mentioned that. Instead, I shall concentrate on the subject of education.

The greatest protests in my constituency concern the fact that Lothian region has already imposed sever cuts in teaching staff, in both secondary and primary schools. One of the small village schools in my constituency, at Humbie, is under threat of closure. Seven village schools with rolls of under 50 may be under threat of closure in East Lothian. Other communities, such os Ormiston, Wallyford, Prestonpans, and East Linton, have experienced cuts in the number of teachers that are more severe than are justified by the fall in pupil numbers. If the Minister wants me to quote figures, I shall be happy to do so, because I have plenty with me. However, I think that the House wants to make haste.

Campie school in Musselburgh already has the minimum pupil-teacher ratio. If there is any increase in the number of children in that catchment area during the course of the year, those children will have to be bussed to another area. The school has reached saturation point because of the cuts in the number of teachers. Meanwhile, inordinate numbers of teachers are on the dole. The situation is obscene.

The Government seek to set the seal on that miserable package of cuts and to make it worse. They want to impose £11 million of cuts on Lothian region, which represents 6p on the rates. About £6 million of that £11 million will presumably come out of the education budget. There is no justification for any of those cuts. I have received dozens of representations from all over my constituency. They have been made, in particular, because of the threat to schools, and also because of concern about other services. The message is clear. People are more interested in protecting the standard of education and other services than in having a rate refund equivalent to about 19p per week per household. It is just not worth it, as those in my constituency and elsewhere in Lothian recognise.

When the Division bells ring, droves of Conservative Members for English constituencies, who have probably never heard of Lothian region and do not even know where it is, will pour into the Lobby to inflict unwarranted and unwanted cuts in the standards of services to my constituents. About 200 of them did that when the previous Division took place, and presumably they will do so again when we divide on this issue. They have certainly not been in the Chamber listening to the arguments as the debate has proceeded. If the 200 or more English Conservative Members support the Government in their Lobby, they will cause considerable distress in my constituency and add to the discredit that the Secretary of State has already brought upon the House. I hope that they will not do so. However, I am confident that the overwhelming majority of Scottish Members will vote against the Government.

Mr. Bill Walker

On a point of order, Mr. Speaker. Is it in order for an hon. Member to describe my right hon. Friend the Secretary of State as a Quisling?

Mr. Speaker

That is not a parliamentary term. I was not in the Chamber when it was used.

Mr. Walker

I only wanted to know whether it was in order.

Mr. Canavan

It was not strong enough.

Mr. Speaker

I know that Scottish debates are good humoured—

Mr. Home Robertson

Not this one.

Mr. Speaker

I hope that it will be good humoured from now on. I think that enough has been said on that point of order.

9.1 pm

Mr. Charles Kennedy (Ross, Cromarty and Skye)

I know that Scottish debates are good-humoured, but I shall be brief in making my contribution to the debate and I shall not push my luck. I am anxious to participate in the debate on behalf of the SDP—

Mr. Canavan

The hon. Gentleman is the first SDP Member to do so.

Mr. Kennedy

My hon. Friend the Member for Gordon (Mr. Bruce) has addressed the House on behalf of the Liberal party. Given the delicate balance of power in the Lothian region, of which I am sure the Secretary of State is only too well aware, it is appropriate that the other half of the Alliance should make its contribution.

Mr. Canavan

Where is Jenkins? Where is he?

Mr. Kennedy

When the hon. Member for Falkirk, West (Mr. Canavan) was not in the Chamber my right hon. Friend the Member for Glasgow, Hillhead (Mr. Jenkins) made an excellent contribution to the debate. I am sure that the hon. Member for Falkirk, West will do so later.

When we received a briefing this morning from the Lothian delegation, it was clear that it was looking beyond this debate to the future. There is a great deal of doubt and confusion about "excessive and unreasonable expenditure". The Lothian representatives are disappointed that the Secretary of State has not been more specific and has not clarified the matter more fully. They said that they felt that they were up against a brick wall in trying to get more specific information from the Scottish Office and in seeking further clarification.

We know that the Government will secure a majority when we divide at the end of the debate and that the measure will pass through the House. However, I hope that in future they will make every attempt to ensure that confusion and anxiety do not arise again should this sort of issue emerge once more in respect of the Lothian region or other authorities. I put that to the right hon. Gentleman in a constructive manner.

The hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) spoke about the need for compromise. I was interested by the measure of application that he gave to that term. On 4 July the hon. Gentleman said in reply to the hon. Member for Glasgow, Garscadden (Mr. Dewar) that compromise is the essence of politics."—[Official Report, 4 July 1983: Vol. 45, c. 122.] I could not agree wih him more. Indeed, the hon. Gentleman was echoing the words of one of the most distinguished members of his party in bygone years, the late Mr. R. A. Butler, who described politics as being largely the art of the possible.

The Government are facing a contradiction in the report on Lothian regional council. We have a shining example there of political compromise and an excellent example of adaptability and agreement being reached on a budget by locally elected representatives. Instead of accepting that expression of local opinion and that compromise budget, the Government will reject it and try to penalise the regional council when they use their majority in the Lobby. That is a disturbing trend, particularly when one thinks, as the hon. Member for Glasgow, Garscadden (Mr. Dewar) said, that it took 145 votes to pass the previous motion. Heaven knows, after the number of votes cast this week over our wage claims, that is a large number. Despite the tortuous process, the Secretary of State is now introducing this measure to penalise the regional authority. It is sad.

I repeat my plea that in future there will be as much cooperation and flow of information between the Scottish Office and the regional councils as possible. Furthermore, I hope that the Government will realise the contradiction with which they are faced. On the one hand they are supporting nationally a philosophy of rolling back the parameters of the state, yet on this occasion, when local democracy has made a compromise decision, which has been accepted, they are extending the powers of the state to penalise the authority. That is disturbing. The alliance regrets it and hopes that it will not need to be repeated in future.

9.6 pm

The Under-Secretary of State far Scotland (Mr. Michael Ancram)

I listened with a great deal of attention to the speeches in this full debate. I shall try to sum up and deal with some of the points that were made reasonably briefly.

The hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) accused both my right hon. Friend the Secretary of State and myself of putting up a brick wall against the council's request for clarification. The people in the council who had made the compromise, as the hon. Gentleman called it, visited us. We listened to their submissions and made an adjustment to the rate reduction demand that my right hon. Friend originally proposed. I would have thought that that was a sign of the way in which their submissions were listened to and their arguments given due weight. If anything, the consultation with them and the flexibility shown by my right hon. Friend give the lie to the accusation that we have been inflexible or that we have not been prepared to listen.

I hope that hon. Members will forgive me if I do not go into the particular services that they mentioned. It is not for the Government to go into them—

Mr. Canavan

Why not?

Mr. Ancram

If I were to go into the services and say where I thought economies should be made, I would be accused of undermining local democracy. It is for local authorities to make up their minds on that.

I listened with great interest to the speech of the hon. Member for Edinburgh, Leith (Mr. Brown). I learnt a lot about the internal workings of the Labour party in what I took to be an ideologically pure speech. He referred to the needs of his constituents. I was given a letter this morning written to the convenor of Lothian region from a company in the hon. Gentleman's constituency called Unitank Storage company. As he is interested in his constituents, he might be interested to hear what was said in the letter. That company operates a bulk liquid storage installation at the Imperial dock, Leith. I am sure that the hon. Gentleman knows about it. The divisional managing director wrote: I am writing to tell you how pleased we are to see the change in policy of the Lothian Regional Council and how much we appreciate your efforts in reducing the rate burden. The rates have had a quite disproportionate impact on our profitability since 1977 and, although the rate burden is still higher than elsewhere in the United Kingdom, he can at least consider further investment in Leith. The hon. Gentleman talks often about the problems of unemployment in his area. I am sure that they are great. I am also sure that he would welcome any move that is likely to produce more jobs in his constituency. In this case, such a move is a reduction in the rates.

Mr. Ron Brown

Is the Minister aware that rates have increased and services have been cut because the Government have cut rate support grant? They have done that repeatedly. The press does not mention it because it is the Government's press, but that is the truth.

Mr. Ancram

The hon. Gentleman is making the same point that the right hon. Member for Glasgow, Govan (Mr. Millan) made earlier—if the Government maintained rate support grant at a given level rates would nave been reduced. It does not follow naturally that that would happen. However, if, after reductions in rate support grant, councils had reduced expenditure as they were asked to do by the Government and as the Government had a right to ask them to do, there would have been no rate increases. The hon. Gentleman's argument is invalid to that extent.

The hon. Members for Glasgow, Garscadden (Mr. Dewar) and for Livingston (Mr. Cook) made several important points. Both mentioned the guidelines. As I said at the end of the previous debate, we had a system of guidelines that was based largely on historic expenditure. It tended to favour councils with a higher level of expenditure, to the detriment of councils that handled their expenditure more carefully. The guidelines were rough and ready in the sense that the hon. Member for Livingston understands. At the moment, the guidelines are being based on an assessment of the needs in each area. The Scottish Office is not alone in making that assessment—local authorities are co-operating. I hope that the hon. Member for Livingston will bear that in mind when he criticises the guidelines. After all, they were introduced by the Labour Government. They were rough and ready then and remained so in the early years of the previous Government. They are now improving and we are continuing to improve them. I am grateful for the cooperation that we have received from COSLA.

Mr. Robin Cook

Will the Minister now reply to the point that I made in my speech? If the guidelines for the supposedly comparable authorities are diverging so markedly from the guideline for Lothian—by a factor of 17 per cent. in the past two years—would he care to explain how those authorities are comparable with Lothian although they require different guideline treatment?

Mr. Ancram

The hon. Gentleman knows that the comparisons are based on several criteria, only one of which is spending in excess of the guidelines. If he is prepared to accept that the guidelines are becoming more accurate assessments of the needs and expenditure requirements of the various authorities—no one claims that they are perfect—what has happened in the past few years might reflect what many of us have suspected for a long time, that expenditure in Lothian has been far too high. What is now happening in Lothian is a reflection of high spending policies in the past.

Mr. William McKelvey (Kilmarnock and Loudoun)

When the guidelines are drawn up, how much thought is given to what happens when there is a cut in services such as has been mentioned? How much thought goes into the human misery that cuts in services create? Is that misery conveniently forgotten just as the Minister has forgotten about it today?

Mr. Ancram

An important feature of the way in which the guidelines are worked out is that there is a possibility of examining changes. One has to build in a factor to ensure that the change in the guidelises in not excessive, as that would cause disruption in a local authority's spending plans. The various client groups are examined and it is possible to make an assessment when circumstances have changed. To that extent it is a fairer system and it should be welcomed. I appreciate, however, that some hon. Members believe that they are being especially hard done by and prefer the old rough and ready method which was less general.

The hon. Member for Garscadden mentioned several criteria, but he has not understood that the assessment made by my right hon. Friend in deciding whether to take selective action is based not on one criterion but on a combination of criteria. It is a balance between several criteria, which gives him the ability to decide whether a local authority's expenditure is excessive and unreasonable. It is not for him or for me to take one criterion and to say that the case has been proved on the basis of that alone. That was the basis of the hon. Gentleman's argument, which does not hold water.

Several hon. Members have mentioned expenditure per head of the population. In an interesting and useful speech—

Mr. Tam Dalyell (Linlithgow)

I accept that there is a problem in referring to individual services, but my hon. Friend the Member for Livingston (Mr. Cook) mentioned the urgent problem of remedial teachers, which is a policy matter for the Scottish Education Department. Does the Minister have any comment on that central Government responsibility?

Mr. Ancram

The hon. Gentleman must realise that I do not have responsibility for such matters. He can write to my hon. Friend the Under-Secretary of State who is responsible for education, who will answer his question about Government policy. My hon. Friend is sitting here, and I am sure that he heard what the hon. Gentleman said.

My hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton), in an interesting and useful speech, gave the House the facts about per capita expenditure. However, the hon. Member for Livingston was correct to say that expenditure per head in Lothian region is not the highest in Scotland. Two other regions spend more, but the hon. Gentleman will accept that they do so for special reasons, several of which he underlined during his speech. Per capita expenditure in Lothian region at £439.14 is above the average for all regions—

Mr. Robin Cook

By 3 per cent.

Mr. Ancram

—which is £424.03, and it is above the average for comparable authorities, which is £403.24.

The case that we are putting before the House is based on the three criteria stated by my right hon. Friend, which I shall repeat now. The guideline excess of 13 per cent. is the highest of any region and is well above the average for other Scottish regions, which stands at roughly half that level. Expenditure per head is higher than in any other region, except the two that have special circumstances, and despite the fact that last year my right hon. Friend, in giving Lothian time to make the adjustments needed, made it clear that further savings in expenditure should be made this year, there has been no expenditure reduction since 1982–83. On that basis, Lothian's expenditure in the current year is unreasonable and excessive. I ask the House to approve the order.

Question put:—

The House divided: Ayes 208, Noes 144.

Division No. 39]	[9.19 pm
AYES
Amess, David	Hayward, Robert
Ancram, Michael	Heathcoat-Amory, David
Atkins, Rt Hon H. (S'thorne)	Heddle, John
Boscawen, Hon Robert	Henderson, Barry
Brandon-Bravo, Martin	Hickmet, Richard
Bright, Graham	Hicks, Robert
Brooke, Hon Peter	Higgins, Rt Hon Terence L.
Bruinvels, Peter	Hirst, Michael
Bulmer, Esmond	Holland, Sir Philip (Gedling)
Chapman, Sydney	Holt, Richard
Clegg, Sir Walter	Hordern, Peter
Colvin, Michael	Howard, Michael
Cope, John	Howarth, Gerald (Cannock)
Corrie, John	Hubbard-Miles, Peter
Crouch, David	Hunt, John (Ravensbourne)
Currie, Mrs Edwina	Hunter, Andrew
Dorrell, Stephen	Jackson, Robert
Douglas-Hamilton, Lord J.	Jessel, Toby
Dover, Denshore	Jones, Gwilym (Cardiff N)
Dunn, Robert	Jones, Robert (W Herts)
Eggar, Tim	Kellett-Bowman, Mrs Elaine
Evennett, David	Key, Robert
Eyre, Reginald	King, Roger (B'ham N'field)
Fallon, Michael	King, Rt Hon Tom
Farr, John	Knight, Gregory (Derby N)
Favell, Anthony	Knowles, Michael
Fenner, Mrs Peggy	Lang, Ian
Fletcher, Alexander	Lawler, Geoffrey
Fookes, Miss Janet	Lawson, Rt Hon Nigel
Forsyth, Michael (Stirling)	Lee, John (Pendle)
Forth, Eric	Lester, Jim
Freeman, Roger	Lewis, Sir Kenneth (Stamf'd)
Gale, Roger	Lightbown, David
Galley, Roy	Lilley, Peter
Gardiner, George (Reigate)	Lloyd, Peter, (Fareham)
Gardner, Sir Edward (Fylde)	Lord, Michael
Garel-Jones, Tristan	Lyell, Nicholas
Goodlad, Alastair	McCrindle, Robert
Gorst, John	McCurley, Mrs Anna
Gower, Sir Raymond	MacKay, Andrew (Berkshire)
Grant, Sir Anthony	MacKay, John (Argyll & Bute)
Gregory, Conal	Macmillan, Rt Hon M.
Griffiths, Peter (Portsm'th N)	McNair-Wilson, M. (N'bury)
Ground, Patrick	McNair-Wilson, P. (New F'st)
Gummer, John Selwyn	McQuarrie, Albert
Hamilton, Hon A. (Epsom)	Malins, Humfrey
Hamilton, Neil (Tatton)	Malone, Gerald
Hampson, Dr Keith	Maples, John
Hanley, Jeremy	Marland, Paul
Hargreaves, Kenneth	Marshall, Michael (Arundel)
Harvey, Robert	Maude, Francis
Haselhurst, Alan	Maxwell-Hyslop, Robin
Hawkins, C. (High Peak)	Mayhew, Sir Patrick
Hawkins, Sir Paul (SW N'folk)	Mellor, David
Hawksley, Warren	Merchant, Piers

Meyer, Sir Anthony	Spence, John
Miller, Hal (B'grove)	Spencer, D.
Mills, Iain (Meriden)	Spicer, Jim (W Dorset)
Mills, Sir Peter (West Devon)	Spicer, Michael (S Worcs)
Miscampbell, Norman	Squire, Robin
Mitchell, David (NW Hants)	Stanbrook, Ivor
Moate, Roger	Stanley, John
Monro, Sir Hector	Stern, Michael
Montgomery, Fergus	Stevens, Lewis (Nuneaton)
Morris, M. (N'hampton, S)	Stevens, Martin (Fulham)
Morrison, Hon P. (Chester)	Stewart, Allan (Eastwood)
Moynihan, Hon C.	Stewart, Andrew (Sherwood)
Murphy, Christopher	Stradling Thomas, J.
Neale, Gerrard	Sumberg, David
Needham, Richard	Taylor, John (Solihull)
Nelson, Anthony	Tebbit, Rt Hon Norman
Neubert, Michael	Temple-Morris, Peter
Newton, Tony	Terlezki, Stefan
Norris, Steven	Thomas, Rt Hon Peter
Ottaway, Richard	Thompson, Donald (Calder V)
Page, Richard (Herts SW)	Thompson, Patrick (N'ich N)
Parris, Matthew	Thorne, Neil (Ilford S)
Patten, Christopher (Bath)	Thornton, Malcolm
Patten, John (Oxford)	Tracey, Richard
Pawsey, James	Trippier, David
Peacock, Mrs Elizabeth	Trotter, Neville
Pink, R. Bonner	Twinn, Dr Ian
Pollock, Alexander	van Straubenzee, Sir W.
Powell, William (Corby)	Vaughan, Dr Gerard
Prentice, Rt Hon Reg	Viggers, Peter
Price, Sir David	Wakeham, Rt Hon John
Raffan, Keith	Waldegrave, Hon William
Rathbone, Tim	Walden, George
Rees, Rt Hon Peter (Dover)	Walker, Bill (T'side N)
Renton, Tim	Waller, Gary
Rhys Williams, Sir Brandon	Wardle, C. (Bexhill)
Robinson, Mark (N'port W)	Warren, Kenneth
Roe, Mrs Marion	Watts, John
Rumbold, Mrs Angela	Wells, Bowen (Hertford)
Ryder, Richard	Wells, John (Maidstone)
Sainsbury, Hon Timothy	Wheeler, John
Sayeed, Jonathan	Whitfield, John
Shaw, Sir Michael (Scarb')	Wilkinson, John
Shelton, William (Streatham)	Wolfson, Mark
Shepherd, Colin (Hereford)	Wood, Timothy
Shepherd, Richard (Aldridge)	Yeo, Tim
Shersby, Michael	Younger, Rt Hon George
Sims, Roger
Smith, Sir Dudley (Warwick)	Tellers for the Ayes:
Smith, Tim (Beaconsfield)	Mr. John Major and
Soames, Hon Nicholas	Mr. Douglas Hogg.

NOES
Adams, Allen (Paisley N)	Boyes, Roland
Archer, Rt Hon Peter	Bray, Dr Jeremy
Ashley, Rt Hon Jack	Brown, Gordon (D'f'mline E)
Ashton, Joe	Brown, Hugh D. (Provan)
Atkinson, N. (Tottenham)	Brown, N. (N'c'tle-u-Tyne E)
Bagier, Gordon A. T.	Brown, R. (N'c'tle-u-Tyne N)
Barnett, Guy	Brown, Ron (E'burgh, Leith)
Barron, Kevin	Bruce, Malcolm
Beckett, Mrs Margaret	Caborn, Richard
Bell, Stuart	Campbell, Ian
Bermingham, Gerald	Canavan, Dennis
Bidwell, Sydney	Clarke, Thomas
Blair, Anthony	Cohen, Harry
Boothroyd, Miss Betty	Coleman, Donald

Cook, Frank (Stockton North)	McTaggart, Robert
Cook, Robin F. (Livingston)	McWilliam, John
Corbett, Robin	Madden, Max
Cowans, Harry	Marek, Dr John
Craigen, J. M.	Marshall, David (Shettleston)
Crowther, Stan	Martin, Michael
Cunliffe, Lawrence	Maxton, John
Dalyell, Tam	Meacher, Michael
Davies, Ronald (Caerphilly)	Meadowcroft, Michael
Davis, Terry (B'ham, H'ge H'l)	Michie, William
Deakins, Eric	Mikardo, Ian
Dewar, Donald	Millan, Rt Hon Bruce
Dixon, Donald	Miller, Dr M. S. (E Kilbride)
Dormand, Jack	Morris, Rt Hon A. (W'shawe)
Dubs, Alfred	Morris, Rt Hon J. (Aberavon)
Duffy, A. E. P.	Nellist, David
Dunwoody, Hon Mrs G.	Oakes, Rt Hon Gordon
Eadie, Alex	O'Neill, Martin
Edwards, R. (W'hampt'n SE)	Park, George
Evans, Ioan (Cynon Valley)	Patchett, Terry
Evans, John (St. Helens N)	Pavitt, Laurie
Ewing, Harry	Pendry, Tom
Fatchett, Derek	Pike, Peter
Field, Frank (Birkenhead)	Powell, Raymond (Ogmore)
Fisher, Mark	Radice, Giles
Flannery, Martin	Randall, Stuart
Forrester, John	Redmond, M.
Foster, Derek	Rees, Rt Hon M. (Leeds S)
Foulkes, George	Richardson, Ms Jo
Freeson, Rt Hon Reginald	Roberts, Allan (Bootle)
Garrett, W. E.	Roberts, Ernest (Hackney N)
Gilbert, Rt Hon Dr John	Robertson, George
Godman, Dr Norman	Ross, Ernest (Dundee W)
Golding, John	Sedgemore, Brian
Hamilton, James (M'well N)	Sheerman, Barry
Hamilton, W. W. (Central Fife)	Sheldon, Rt Hon R
Hardy, Peter	Short, Ms Clare (Ladywood)
Harman, Ms Harriet	Silkin, Rt Hon J.
Harrison, Rt Hon Walter	Skinner, Dennis
Heffer, Eric S.	Smith, C.(Isl'ton S & F'bury)
Holland, Stuart (Vauxhall)	Smith, Rt Hon J. (M'kl'ds E)
Home Robertson, John	Soley, Clive
Hoyle, Douglas	Stott, Roger
Hughes, Robert (Aberdeen N)	Strang, Gavin
Hughes, Sean (Knowsley S)	Straw, Jack
John, Brynmor	Thompson, J. (Wansbeck)
Kaufman, Rt Hon Gerald	Tinn, James
Kennedy, Charles	Varley, Rt Hon Eric G.
Kirkwood, Archibald	Wardell, Gareth (Gower)
Lambie, David	Wareing, Robert
Lamond, James	Welsh, Michael
Leadbitter, Ted	Williams, Rt Hon A.
Lewis, Terence (Worsley)	Wilson, Gordon
Litherland, Robert	Winnick, David
Lloyd, Tony (Stratford)	Woodall, Alec
McCartney, Hugh	Young, David (Bolton SE)
McDonald, Dr Oonagh
McGuire, Michael	Tellers for the Noes:
McKelvey, William	Mr. Frank Haynes and
Mackenzie, Rt Hon Gregor	Mr. Norman Hogg.

Question accordingly agreed to.

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