HC Deb 17 July 1985 vol 83 cc410-20 9.39 pm
The Secretary of State for Scotland (Mr. George Younger)

I beg to move, That the Rate Reduction (City of Edinburgh District) 1985–86 Report, which was laid before this House on 3rd July, be approved. I should like to start by setting the action that we have taken against Edinburgh in the context of our policies on local authority expenditure as a whole and then set out the reasons why we have taken action against Edinburgh this year.

On any measure, local authority expenditure is a significant feature of the economy. What Scottish local authorities spend accounts for half the programme of public expenditure in Scotland for which I am responsible. In the United Kingdom as a whole, local authority expenditure accounts for a quarter of public expenditure. Given the range of services provided by local authorities, this is not surprising, but it does emphasise the fact that no Government can leave local authority expenditure out of their economic calculations. I do not think that Labour Members would disagree with that. Certainly their policies when last in office confirm that they agree with us that local authority expenditure cannot be ignored and has to be controlled in the pursuit of national economic aims.

Local authority expenditure in total is still too high. It is still above the level it was when we came to office, although I am glad that increasing numbers of authorities are now reducing their expenditure and budgeting to spend within guidelines. In 1984–85, 15 authorities budgeted to spend within guidelines. This year, the number is 30, and I hope to see continued improvements.

The problem of local authority expenditure is increasingly becoming a problem of a small group of authorities. If we look at this year's overspenders, of which there were 35, 12 were within 3 per cent. of guideline and 16 were within 6 per cent. Of the remaining seven all except one were within 8.1 per cent. of guideline All these 34 authorities have of course suffered grant penalties but, under the new improved arrangements that we have introduced, if they bring their spending down to guideline at outturn, they will have their penalty returned. There is no reason why this money should be lost to ratepayers if authorities take action now and reduce their expenditure.

The exception to this pattern of overspending is Edinburgh district council with its massive overspend against guideline of 48 per cent. On any test this planned expenditure is excessive and unreasonable and action simply has to be taken in the interests of the city's ratepayers. However, before I turn to the details of the case against Edinburgh, I should like to trace briefly the history of the term "excessive and unreasonable" as applied to local authority expenditure and linked to the power to take selective action.

Although the origins of the power are in the local government legislation of 1929, the power to take action against an individual local authority on the grounds of excessive and unreasonable expenditure, and on which, in amended form, we are taking action against Edinburgh, is set out in the Local Government (Scotland) Act 1966. It is therefore a measure put on the statute book by Labour Members when they were in power. We have, of course, amended and improved it so that we can operate on planned expenditure and return the savings to the ratepayers. However, the basic concept of selective action is contained within legislation for which the Labour party was responsible and for which the ratepayers are. I am sure, grateful.

Mr. Tom Clarke (Monklands, West)

Is the right hon. Gentleman really telling the House that the guidelines had statutory backing in 1966?

Mr. Younger

No, I did not refer to guidelines. I merely pointed out that the ability to take selective action for excessive and unreasonable expenditure was proudly introduced by a Labour Government. It may be significant that the Minister who introduced that measure has since joined the Social Democratic party. I leave it to the Opposition to judge whether that has any significance.

We have initiated selective action on 14 occasions. The total of savings achieved over the years is over £80 million and there have been significant benefits to ratepayers. For instance, the rate of Lothian regional council went down by 25 per cent. over two years. It is, of course, a power to be used only when an authority is clearly planning excessive and unreasonable expenditure. Last year, no authority fell into that category. This year, one authority has stood out and I should now like to turn in detail to the reasons why I initiated action against Edinburgh and why, having considered the representations it made in response to my action, I have decided to lay this report before the House.

It is necessary only to set out the basic statistics for Edinburgh's expenditure plans for 1985–86 to make an overwhelming case for selective action. The figures speak for themselves and I shall remind the House of them. Edinburgh is planning to exceed its guideline by no less than 48 per cent. This is a massive excess and it is six times greater than the next highest excess. If all authorities had overspent by 48 per cent. local authority expenditure in Scotland would have been no less than £1,289 million higher than it is.

If I heard the hon. Member for Glasgow, Garscadden (Mr. Dewar) correctly when he was speaking on the radio this morning, he made it clear that he would have nothing to do with supporting any defiance of court rulings or any contempt of court by a local authority. I hope that he will confirm that sensible and statesmanlike statement when he speaks this evening. However, he must go rather further if he is to satisfy the House of his and his party's bona fides in this matter. We require a clear statement from the hon. Gentleman whether he fully supports all the actions of the Labour administration of Edinburgh district council, including its rating plans, expenditure plans and the increase in rates which these plans involve. He owes it to the House to make it clear whether these plans have his full support in every detail.

Edinburgh's excess expenditure of 48 per cent. represents £17.2 million in cash, which is almost 20 per cent. of the total overspend of all Scottish local authorities, although at guideline level Edinburgh's expenditure accounts for only 1.2 per cent. of guideline provision. Without Edinburgh's contribution, the spending performance of Scottish local authorities would look much better.

The level of spending against guideline is not the only test, and on every other way of considering the figures Edinburgh stands out from all other authorities. Its planned level of spending per head is, at £114, the highest of any district council, and almost double the district average of £62. It is well above the average of comparator authorities and above each comparator individually.

Mr. Tam Dalyell (Linlithgow)

Is the right hon. Gentleman aware that there are other ways of judging an overspend of £17.2 million? That sum is a quarter of that which was ladled out to Johnson Matthey Bankers and the cost of five days on the Falklands.

Mr. Younger

Yes. It is probably a much smaller sum and a much smaller percentage if it is compared with all that we spend on the Health Service or the education service in Scotland. It can be compared with anything one chooses. Surely it is fair to compare Edinburgh with its nearest comparator authorities and other local authorities generally. I have no doubt that it is difficult to run a local authority but it is the easiest matter in the world to run one if no attention is paid to the amount of money required to do it. The skill is in matching resources to requirements and it is that which we are criticising this evening.

The level of growth planned at a time when we are asking authorities to reduce their spending is staggering. Edinburgh is planning to spend in real terms—that is, making full allowance for inflation—33 per cent. more than it spent last year. The comparable figure for districts as a whole is 1.8 per cent. Compared with what the council was spending in 1978–79, it is now planning to spend 68 per cent. more in real terms after fully allowing for inflation. The comparable figure for districts as a whole is 8.3 per cent.

Thus, on any test, Edinburgh is planning expenditure which is excessive and unreasonable. The cost of that to the ratepayes is heavy, and it is their interests which selective action is designed to protect. When I initiated selective action, I therefore proposed a reduction in the rate of 5.2p to reduce Edinburgh's excessive expenditure and return the savings to the ratepayers in the form of reduced rates. A 5.2p rate reduction, if translated into expenditure savings, would reduce Edinburgh's expenditure by £16.145 million. That would still leave it £1 million above its guideline. That is a 3 per cent. excess compared with the average for all other districts of 2.7 per cent. Thus, in my proposals I am not even expecting Edinburgh to come down to its guideline or even the average excess over that guideline of other authorities. After making such a reduction, its expenditure per head would, at £79, still be above the district average of £62 and the average for its comparators. It would still be above all the comparators individually except one, and above all the cities except Glasgow, which has special expenditure needs. The level of spending after selective action would still be 16 per cent. in real terms above what the council was spending in 1978–79, and that is double the district average. Thus, I do not believe that, in proposing a rate reduction of 5.2p, I am asking Edinburgh to do the impossible when one sees what authorities as a whole, and comparable authorities, are doing.

Mr. Malcolm Bruce (Gordon)

Does the Secretary of State accept that, while what he says is true in respect of a complete financial year, by imposing this cut halfway through the financial year he is requiring a cut of about 50 per cent.? That will have a chaotic effect on the city's administration.

Mr. Younger

The hon. Gentleman is correct. I shall be covering that point in a few moments. I hope that I am not to take it from his intervention that he supports what Edinburgh is doing. I should have expected him and his party to support this measure.

Mr. Bruce

indicated dissent.

Mr. Younger

I hope that we shall be told whether the Liberal and the Social Democratic parties support Edinburgh. We are entitled to know.

I invited Edinburgh to submit representations on my proposal and I have studied the full comments which it sent me. I, together with my hon. Friend the Minister responsible for home affairs and the environment, met representatives of the council when they expanded on those representations. The council's representations and a note of our meeting are included in the report which I have laid before the House. However, I am bound to say that nothing said in the representations or at our meeting leads me to change my view that the council is planning excessive and unreasonable expenditure, or that it is unreasonable for it to be asked to cut its expenditure by the equivalent of a 5.2p rate.

The representations of the district council contain a vast amount of detail about services. The implication seems to be that any reduction in the level of services that it has in mind is unacceptable. For the reasons I have given, however. I believe that the expenditure consequences of what Edinburgh proposes are quite unreasonable, and must be reduced. I note that Edinburgh is not arguing that any lesser reduction in its plans would be preferable.

I shall comment on some of the general points which Edinburgh makes. First, it is much concerned that the overall effect of the two statutory steps that I have taken against—it the order which is before us today and my order requiring a reduction in its rate fund contribution to the housing revenue account—is to point to a level of expenditure implied in the budget proposed by the local Conservative group. It suggests that my proposals therefore flout the views of the local electorate. But I stress to the House that that line of thought is not relevant to the order before us, which, as I shall explain, is very generous to Edinburgh. The coincidence, to which the district council's line of criticism relates, does not occur unless one also takes into account my housing order. The reasonableness of that order by itself has, of course, been upheld in the courts.

The whole argument about the coincidence is in fact wrong-headed. My decision to look for a reduction of 5.2p was based on the considerations I have mentioned, including consideration of the average excess over guideline of all districts, a figure which would not be known to the Edinburgh Conservative group. Of course, my action on the rate fund contribution, including the precise amount in rate poundage terms of the reduction I required, was initiated before the local Conservative group was even involved in budget-setting at all.

Secondly, the council is critical of the guidelines against which its expenditure has been judged. Those guidelines are based on client group assessments built up service by service on the basis of discussions with the Convention of Scottish Local Authorities. The assessments are, of course, not perfect and are being refined in consultation with the convention. However, Edinburgh is not being expected to budget at its client group assessment. Many hon. Members might wish that their local authorities were similarly treated. Its guideline is fixed at 7.7 per cent. above it in recognition of its 1984–85 expenditure level and to give it a realistic target. Its 1985–86 guideline was described recently by an independent academic commentator as "generous", and is 11 per cent. more in cash than last year—an increase well above the rate of inflation, which again many other authorities in Scotland would be glad to have.

Thirdly, Edinburgh complained of the other authorities with which it had been compared. Those were chosen on the same basic method as we used to choose comparators in 1982–83 and 1983–84 as authorities whose expenditure need was most like that of Edinburgh, taking account of factors that have been found to affect expenditure. In its representations, Edinburgh compares itself with the other three cities. However, even on that basis, Edinburgh,s still well out of line. It is planning to spend £114 per head That is 34 per cent. more than the average of the three cities., which is £85 per head. It is also planning to spend more than each of the other cities individually.

We are now asking Edinburgh to bring its spending down not to guideline but to about 3 per cent. above it. In terms of last year's budget, that is about 3.5 per cent. less in real terms than the planned level of spending for 1984–85. Thus, it cannot be said that we are proposing huge reductions in basic services. If such massive reductions happen, it will be because of the course followed by the council of ignoring all the signs arid pressing on with spending plans well above that level until it has no choice but to look for major economies in existing services.

However, behind all those figures are the ratepayers. Edinburgh's rate for 1985–86 is 22.7p. If it had budgeted to spend at guideline and in line with its rate fund contribution limit, that figure would have been cut by a third. That is a measure of the cost of Edinburgh's plans to its own ratepayers. What is more serious, perhaps, is the effect that Edinburgh council's activities have on the businesses is the city and those considering expanding or coming into the city to create jobs. Rates push up business costs and force businesses to look at ways of cutting down on staff. High rates discourage firms considering setting up in Edinburgh when they know that one of their main costs is in the hands of an unpredictable high-spending council.

At present, on the information available to us, Edinburgh is spending regardless of the action which has been taken against it and building up its expenditure to ever higher levels. I should like to take this opportunity to give Edinburgh a serious warning about the dangers of the course it is following. The longer Edinburgh takes to recognise the consequences of the action being taken against it and start reducing its expenditure, the harder it will be for that city.

Every month's delay, indeed every week's delay, means progressively sharper cuts when cuts eventually are made, as they will have to be. The longer the decision to cut is put off and the longer the build-up of unnecessary expenditure, the smaller will be the number of months available over which the required savings will have to be made. It is clear that, even if Edinburgh takes action at the end of July, it will still have to spend at a level of 4 per cent. below its guideline for the remainder of the year if it is to keep within the expenditure level implied by the rate reduction I propose.

If Edinburgh delays that decision for another month until the end of August, it will have to spend 10 per cent. below guideline for the rest of the year. Another month's delay would make the situation even worse, as it spends inthe first half of the year the money that is meant to last the whole year. That raises the prospect of Edinburgh being unable to provide proper services and inflicting damage on the city and on its own employees. Defiance and delay will only damage the citizens of Edinburgh and the employees of the council in a way which could do lasting harm to Scotland's capital city.

The figures I have quoted make it abundantly clear that Edinburgh is planning excessive and unreasonable expenditure. The consequences of that for ratepayers are serious, and what I propose in this report by way of a rate reduction of 5.2 p will provide welcome relief to them. I am not asking the council to make unreasonable reductions, only to come down to a reasonable and still above-average level of spending.

This debate is not about a complaint by me or my hon. Friends that Edinburgh is spending more than last year or that it is spending more than we think it ought to. Edinburgh is entitled to do that if it wishes to do so. The debate is about a level of spending which is so extreme, unreasonable and excessive that by any level of calculation something must be done about it. I hope we shall get a clear statement from the hon. Member for Garscadden not only that he deplores any attempt to defy the law, but that he does not support this extreme level of overspending. I hope that we shall have a clear statement from the Liberal party and, if possible from the Social Democratic party about their position; and whether or not they support the interests of the ratepayers of Edinburgh. If ever an argument was put before the House for excessive and unreasonable expenditure requiring action to be taken, it is before us this evening, and I ask the House to support the order.

10.4 pm

Mr. Donald Dewar (Glasgow, Garscadden)

I regret that we are having this debate at a rather late hour, crushed into a slot at the fag end of the day. However, it has its consolations. I particularly welcome the Minister of State, Foreign and Commonwealth Office, the hon. Member for Edinburgh, Pentlands (Mr. Rifkind), who has made an unexpected appearance in Scottish affairs. I suspect that he is practising. We shall watch developments with interest. We are facing a confusing situation, and that applies in particular to Edinburgh district council. This order is the result of a quite extraordinary exercise in misplaced ingenuity. It is part of what may be described as an obsessive campaign. Sometimes one tends to forget that because of the milk and water and rather limp style of the Secretary of State and the matter of fact way in which he performs at the Dispatch Box. But there is a ferocity of purpose, and we have seen what can fairly be described as a vendetta not just against Edinburgh but against local government in Scotland.

A battery of assault weapons has been deployed. They came creaking forward and were laboriously manoeuvred into position over a number of parliamentary Sessions. Now they are in place and the Government intend to use them to try to bombard and destroy the budget of Edinburgh district council.

First, the rate fund contribution limitation order asks that £5.8 million be taken out of the rate fund contribution. It sounds a formidable excess, but, of course, it is an excess over a limit which was chosen arbitrarily by the Secretary of State. It is simply an effort to ensure that, in a city where rents are already considerably above the Scottish average, they are forced even higher. It is extraordinary brass neck for the Secretary of State to say, "It is all right, because the courts have said that my order is reasonable." What the courts said was that Parliament for good or ill has pronounced and they could do nothing about it. His statement that that is an argument in favour of what he is doing shows the complete poverty of his case. It is monstrous that, as a friendly interim gesture, the Secretary of State has clawed that £5.8 million out of the capital fund for housing. I hope that that will be repaid if and when the rate fund contribution target is met.

Secondly, the general abatement represents a penalty of £9,455,000, which neatly excises Edinburgh's entire rate support grant for 1985–86. One problem is that about £2 million has already been paid. During Scottish Question Time recently, the Secretary of State said that he is pondering how to get the money back. I do not know whether he has reached a conclusion, but I hope that he has more constructive and important matters about which to worry than that.

If the Government force through this order tonight, the £16.3 million that will be clawed back will, in any event, largely eliminate the general abatement. It will be reduced from £9.5 million to about £1 million.

That underlines the fact that this is a nasty and remarkable case of overkill, because, in addition to the two matters to which I referred, we have the section 5 clawback, which is embodied in this order, of £16.3 million or the equivalent of 5.2p on the rates. The position is remarkably confusing, and it has not been helped by the Secretary of State's speech. He seems to work on the assumption that, since he is right and everyone else is wrong, he need not produce an argument or an intelligent case in support of the order.

The product of the Government's proposal is clear. If we combine the rate fund contribution order and the order that we are discussing tonight, Edinburgh is being asked to make cuts of about £23 million well into the financial year. Whatever else we may disagree about, it is clear that that will be a painful and damaging process. I hope that Ministers recognise that.

The Secretary of State tried to justify his position with a flurry of figures. He paraded his disapproval in his usual prim fashion, as though he was discussing some unacceptable conduct with a member of his family. But the position is much more serious than that, and the case that he has made, even on his figures, is nothing like as conclusive as he wishes us to believe. The tragedy is that, in the eyes of the Under-Secretary of State—the hon. Member for Edinburgh, South (Mr. Ancram)—and his colleagues, we have almost reached the point at which every job that is created in local government is a sin, every facility that is opened is an offence and every additional collection or service is an indiscretion. That is not a sensible conclusion.

The comparisons that have been used in Edinburgh's case are bizarre. Kyle and Carrick and Edinburgh have something in common—they are in Scotland—but beyond that it is difficult to understand why they have been linked. Many of the figures quoted by the Secretary of State sound massive in percentage terms, but we should remember that Edinburgh started from the low base inherited from the previous authority. If we consider the figures for 1983–84 for expenditure per head and employees per 1,000 of the population, we see that Edinburgh started from a low base compared with other Scottish cities.

Of course, Edinburgh has set out to try to improve services. It had a mandate to do so. There was no dishonesty or deceit. In the election campaign, the Conservative group consistently campaigned on what it described as the irresponsibility of the Labour programme, but the people of Edinburgh voted for it. There is no doubt that the district council has a mandate to which it is entitled.

Mr. Younger

Can the hon. Gentleman refer to any pre-election programme put out by the Labour party which said that rates would be going up by 79 per cent.?

Mr. Dewar

The Labour group fought an honest campaign in which it stated its plans for services. Indeed, if the right hon. Gentleman is saying to me that people in Edinburgh were not aware of the consequences of voting Labour, then he is passing an enourmous vote of no confidence in the political efforts of his own party.

Mr. Michael Hirst (Strathkelvin and Bearsden)

Is the hon. Gentleman prepared to do what the leader of his party is not prepared to do—support the gross overspending of Edinburgh district council? Will he stop equivocating and give the House a straight answer yes or no?

Mr. Dewar

The hon. Gentleman will have to wait until I have completed my speech. If I may say so, every month he sounds increasingly more pompous. He will have to watch that.

This should be taken as a serious debate. One matter that Conservative Members should consider is the criteria that ought to apply. We are certainly not being invited to set ourselves up as a surrogate district council. We should not be asked to vote on the basis of whether we would have introduced such a budget. That is not the test that should be applied on this occasion.

If we consider the figures per head for cleansing services, environmental health, leisure and recreation or libraries and museums—we can give the figures if hon. Members want them—and compare them with those of other cities, in some areas Edinburgh is spending more and in others less, but ultimately it is not a gap which any reasonable man, in my view, would say justifies the extraordinary action that we are being invited to take in terms of the excessive and unreasonable expenditure contained in the order.

I do not believe there is anything inherently wicked in decent, humane services. It may be that the electorate of Edinburgh would want to vote to cut services and to have lower rates. On this occasion, the electorate voted to increase services. I do not believe that it is the job of Parliament to prevent the Edinburgh district council from carrying out that mandate and answering ultimately for what it does at the ballot box. That is the nature of local government. Except in the most extraordinary circumstances, we should not interfere. I do not believe that we have reached that point.

The recreation budget, for example, is £21.2 million. If the Secretary of State has his way, that will be cut to £13.2 million. It is not just a matter of forgoing over £3 million of growth—perhaps the Tories would say that there should be no growth in difficult times—it is finding where to make cuts of over £3 million, which will hurt. I do not believe that it is the business of the House to interfere in that way.

We could have endless arguments about the figures, but this goes beyond one budget. I believe that the machinery being used is fundamentally wrong. We are discussing a matter of principle. As we have said, the essence of local democracy is that directly elected councillors exercise their judgment, try to meet the needs of their areas and make a count at the end of the day. We are being invited to contemplate a system whereby periodically the Secretary of State imposes a form of direct rule because he disapproves of the policy of the council. I believe that there is sometimes merit in a pluralist society in having centres of power which compete. I do not believe in this kind of bully boy tactic and riding roughshod over local democracy in Scotland.

This is not a necessary exercise. It is said that it must be done to control public expenditure. In a strange way, Edinburgh has been rejected by the public purse. It has been hived off. In 1980, Edinburgh had a housng support grant of £12 million. It is now nothing, and this year there will be no rate support grant. It will be a city supported by rents, rates and charges. It will be a vision—the ultimate privatisation, in a sense, for the Adam Smith Society—if the Government have their way.

It is a crazy form of economics to say to the city of Edinburgh, "Forgo £23 million of services to get £9 million of rate support grant." That is a thieves' bargain. It is a land of make believe into which the Secretary of State has stumbled.

As I have said before—I repeat it so that the Secretary of State may understand it—my hon. Friends and I did not seek this confrontation. It has been a potential confrontation; but it is now an immediate crisis. It is a travesty for the Secretary of State to give the impression that the district council has been inflexible, unreasonable and absolutist.

Mr. Michael Forsyth (Stirling)

rose—

Mr. Dewar

I shall give way to the hon. Gentleman, if he wishes to challenge me, when I have developed the point.

Even those who disagree with Edinburgh district council have been aware from the beginning, and have said repeatedly in public statements, that the council's budget is not sacrosanct and that they are prepared to discuss the matter and to negotiate. The last-ditcher, the person who has not been prepared to give an inch and who has seen settlement in terms of capitulation, has been the Secretary of State, and he knows it. He has been saying, in effect, that the only basis on which to achieve a settlement is to ask this directly elected council to accept the budget of the discredited and defeated Tory group. That is inflexibility taken to the point of obstinacy in a way that we should not tolerate.

Mr. Bruce

Is the hon. Gentleman suggesting that the members of the Labour administration in Edinburgh have not proceeded with their budget, knowing that the amount was likely to be cut and that they would suffer penalties? In those circumstances, can he justify why yesterday they voted to add another £400,000 to the budget, knowing that this measure would be presented today?

Mr. Dewar

I am sure that during the debate the hon. Gentleman will perform the splits in the way that he usually does on issues such as this. The district council said that it would compromise and go to the negotiating table. The Secretary of State said that the only form of settlement was unconditional surrender. None of us can accept that.

For the Secretary of State to say that he is doing it in the names of the ratepayers, when the principal cause of discontent on the part of ratepayers has been the persistent cuts in rate support grant by the right hon. Gentleman, represents confounded brassneck on his part. He is doing it not for the ratepayers but for the Treasury. He knows that, and so does everybody else.

In the polls the right hon. Gentleman has the support of 15 per cent. of the people of Scotland. In May 1984 he led his party to unprecedented defeat in the district council elections and lost control of Edinburgh. He now purports to act as though that defeat never took place. The local authorities in Scotland have every right to fight by every legitimate means available to them. They have the backing of public opinion and it is clear what would happen if there were by-elections in Edinburgh—[Interruption.] Would the hon. Member for Edinburgh, South welcome a by-election in his constituency? He would get the result that his record deserves—summary execution—and the same would apply to the rest of the Tories.

There is a total lack of credibility about the Government's position, and they know it. I imagine that most Conservative Back Benchers—this is the achievement of the Secretary of State from the point of view of his party—have ringed April 1988 as the date that they want for the next general election, on the principle that they should put off the evil day for as long as possible.

The real problem is how to find a solution to the difficulty, and we should at least turn our minds to that. I regret that this matter has ended up in the courts. There is now an order for specific performance from the Court of Session. I understand the temptation to defy that, but it is a temptation that should be resisted. The court order should be observed. I have no doubt about that, speaking for myself. We are the parliamentary Labour party, and we believe in the democratic process. We have a right to argue and to continue to argue, but the order is there and it would not be sensible to make the central issue—apart from the point of principle—the authority of the courts. The central issue, which the Secretary of State should not escape, is what he has been doing to the services and to the local democratic processes in Scotland.

Mr. Younger

It may have been a slip of the tongue, but when the hon. Gentleman said that he was repudiating what had been done, he said that he was speaking for himself. Will he make it clear that he is speaking for his colleagues in deploring what has happened?

Mr. Dewar

I am speaking from the Dispatch Box. I make it clear that while I regret that the Secretary of State has forced us into this position, the court order should be observed. There is no dubiety about that. That is no victory for the right hon. Gentleman. There is no credit to a bully for his actions.

It is not for me to try to save the Secretary of State from his prejudices and folly. I hope that he remembers what happened in 1980–81, when Lothian was in hot water with the Scottish Office. A similar order was introduced under section 5 of the Local Government (Scotland) Act 1966 to drop £47 million from Lothian region. It was bulldozed through the House, as this one will be. However, having worked out his aggression and gone through his ritual war dance, the Secretary of State then had to face his responsibilities. He realised that he could not expect Lothian region to make such big cuts, so he settled for £30 million. He forwent £17 million of that penalty.

In the cold light of day, when he comes to look at what he is doing and the realities of the situation, the Secretary of State will realise that he has set an unreasonable target and he will have to forgo some of the penalty that he is trying to exact. He should forgo all of it. That is why we shall vote againt the measure. It is wrong in principle.

Even allowing for the fact that the Secretary of State takes a different view, he will have to go back to the negotiating table and make the concessions that, if he had made them several months ago, would have prevented this crisis. That is a fair summary of the position. The right hon. Gentleman should think long and hard, because he is doing a great deal of damage to the structure of government. His course of action is counterproductive and he should desist from it.

Behind the Secretary of State there is a great deal of private dismay and in the country there is a good deal of public dissension among Tory local government representatives. That is reflected in the polls and in recent local government by-election results in Scotland. I have no doubt that the right hon. Gentleman will win the vote tonight. I am a realist about that. However, it will be a pyrrhic victory, and the real victims will be not only many of his hon. Friends when they have to face the electorate but, more seriously, local government in Scotland and its services, which are as important in Edinburgh as in every other part of Scotland.

I know that the Secretary of State will not retreat now. However, he is committed to a harsh vendetta of which he will repent, unless he is prepared to rethink his position and take account of the realities of Edinburgh district council's position and the interests of public opinion in Edinburgh and throughout Scotland.