HC Deb 18 January 1988 vol 125 cc769-92 10.26 pm
The Minister of State, Scottish Office (Mr. Ian Lang)

I beg to move, That the Rate Support Grant (Scotland) (No. 3) Order 1987, a copy of which was laid before this House on 11th December, be approved.

Mr. Speaker

Perhaps it would be for the convenience of the House if we were to debate at the same time the second motion on the Order Paper: That the Revaluation Rate Rebates (Scotland) Order 1987, a copy of which was laid before this House on 11th December, be approved.

Mr. Lang

The main purpose of the rate support grant order is to fix the amount of rate support grants for Scottish local authorities in 1988–89, and to prescribe the allocation of the needs element to individual authorities. The order also makes adjustments, in the normal way, to rate support grants for earlier years to take account of more up-to-date information on matters such as interest rates, rateable values and provisional outturns of expenditure.

The Revaluation Rate Rebates (Scotland) Order 1987 continues revaluation rate rebates to give a fourth and final year of relief to those most affected by the 1985 revaluation.

At this time last year my predecessor was welcoming the fact that in the financial year then ending Scottish local authorities had, for the first time, planned for a lower volume of expenditure than they had incurred in 1979. It was a welcome sign of realism and the Government responded with a rate support grant settlement for the present year based on local authorities' own budgets for 1986–87, uprated for inflation, and with rate support grant sufficient to maintain the previous grant percentage. I think it is fair to say that the House generally, on that occasion, regarded the settlement as reasonable. Unfortunately, the Government's reasonableness found no ready response from local authorities that budgeted to overspend in 1987–88 by no less than £122 million—among the worst budgeted overspends that we have ever experienced. The result was large rate rises, heavy grant penalties and selective action to reduce the rates of two authorities, following approval of the House given last July.

This is not the occasion to go over that ground again, but it has posed an obvious dilemma for the Government in deciding what to do for 1988–89. The crude, if obvious, conclusion is that local authorities respond better to force majeure than to reasonableness. We have, however, decided—1988–89 being in Scotland the last year before the introduction of the community charge and correspondingly revised grant arrangements—that we shall try a further year of reasonableness, and the rate support grant settlement for 1988–89 that my right hon. and learned Friend announced to the House on 23 July last year is once again based on local authorities' actual budgets for 1987–88, with additional provision of 4 per cent. for inflation, an allowance for pay increases for teachers and other categories, and a further £12 million related to the costs of introduction of the community charge.

Aggregate Exchequer grant has been set so as once again to maintain the grant percentage. As hon. Members will be aware, decisions on those matters arc taken only following exhaustive consultation with the Convention of Scottish Local Authorities, and I think that it is Fair to record that the general terms of this settlement met almost entirely COSLA's wishes. There was a difference of view about the appropriate allowance for inflation, but the total level of provision was very close to the level that COSLA itself was seeking. I make that point now because I want to return to it in what I shall say later about local authority budgeting for 1988–89.

The order's main provisions, as I have said, concern 1988–89. Aggregate Exchequer grant has been set at £2,370.53 million. That differs slightly from the figure of £2,372 million announced by my right hon. and learned Friend on 23 July. The change arises, first, from a reduction of £3.5 million as a result of our decision to transfer some provision for urban programme spending from current to capital, to achieve a better balance on that programme, and, secondly, by the addition of £1.03 million in respect of the transfer of responsibility to local authorities for children committed to residential care by the courts. That transfer of responsibility, and the amount of provision, have been agreed with COSLA. Overall, those figures represent an increase of £178 million or 8 per cent. over the equivalent figure of aggregate Exchequer grant for 1987–88.

On grant distribution, our proposals follow the usual) detailed consultation with COSLA, and indeed implement in very large measure what COSLA itself wanted. Overall, it was concerned that for this last year of the present grant arrangements, the main consideration should be stability in grant entitlements. The Government agree with that.

We estimate that £332.6 million of aggregate Exchequer grant will be paid as grants for specific services, leaving £2,037.93 million for payment as rate support grants. We propose to maintain the domestic rate relief at 7p. That is expected to cost £91.9 million in domestic element of rate support grant. Resources element compensates authorities with low rating resources. The ratio of resources element to needs element has, for the past two years, been 1:8, and we propose to maintain that ratio for 1988–89. That calls for a resources element of £215.8 million.

The remainder of the grant forms the needs element. An innovation this year is that, as a first call on the needs element, a sum has been earmarked to finance rating relief to sports clubs. That follows my right hon. and learned Friend's commitment during our consideration of the Abolition of Domestic Rates Etc. (Scotland) Act to remove any disincentives for local authorities to give rating relief to sports clubs. The order provides that, on the basis of estimates received from authorities, £3.2 million will be available for that purpose in 1988–89. That is, incidentally, four times the amount of relief being given to sports clubs in the present financial year and will, I hope, be regarded as a welcome follow-up to the commitment that my right hon. and learned Friend gave.

Mr. John Maxton (Glasgow, Cathcart)

Will the Minister explain whether that is new money over and above what would have been allocated to local authorities anyway, or is it coming out of the general needs budgets that local authorities would have had anyway, so that they could spend the money on something else?

Mr. Lang

It is a transfer of the arrangements. Instead of being taken out of the resources element, which would not have applied evenly throughout all local authorities, the provision is being earmarked out of the needs element before the needs element is attributed. It will come out of the £178 million increase in needs element. Whether the hon. Member for Glasgow, Cathcart (Mr. Maxton) chooses to call it new or old money, it was not there in the past. It has met its purpose, because it will give four times as much relief as is being given to sports clubs in the present year, and I hope that it will be regarded as a successful solution to this problem.

Mr. Tam Dalyell (Linlithgow)

This subject has been raised before in relation to the Linlithgow cricket ground. How will the allocations be made between various sports and who will make them? It is not a hostile question; I am asking only for clarification.

Mr. Lang

It is not for me to allocate it between different sports, if that is the hon. Gentleman's point. If he refers to the report on the rate support grant order, he will find a table in one of the annexes that gives the allocations to all local authorities. The allocation is based on local authorities' estimates of what they need to resolve this problem.

Mr. Harry Ewing (Falkirk, East)

If local authorities decide to give rate relief to sports clubs, who will make up the shortfall—the Government or the ratepayer?

Mr. Lang

The shortfall — if that is the correct expression—comes out of the increase of £178 million, which is 8 per cent. extra over the equivalent figure of aggregate Exchequer grant for last year. That is a figure of more than twice the rate of inflation, and it allows for a substantial freedom of manoeuvre within that overall figure.

The rest of the needs element has been distributed using the client group method of needs assessment. However, implementing the client group method in full would have led to grant losses, or very small grant increases for some authorities and very large gains for others. In line with the generally expressed desire for stability in grant distribution, and in response to a specific suggestion from COSLA, we have therefore decided that every authority should receive an increase in needs element of at least 4 per cent. This gives rise for a need to limit gains, and at the top end it would be 10 per cent. Details of the calculation for individual authorities are given in annex E to the report on page 19.

The order also contains adjustments to grant for back years to take account of the latest information on interest rates, rating resources and outturn expenditure. Many of these figures stand to be varied further when final audited returns are received from the local authorities. All of these adjustments are on a basis that is well understood by authorities, and I do not want to detain the House with any more detailed comments on them.

The Revaluation Rate Rebates (Scotland) Order 1987 provides for rebates in 1988–89. Up to and including the current financial year, there have been three such orders. The first, for 1985–86, provided for rebate of all rates payable on rateable value in excess of three times the 1984–85 rateable value, subject to a maximum rebate of £10,000. The orders for 1986–87 and for the current year respectively provided for 75 per cent. and 50 per cent. rebates and for maxima of £7,500 and £5,000. The Act and orders together have ensured that the 1985 revaluation has been gradually brought into effect for those ratepayers with the greatest valuation increases. The order marks the completion of these transitional arrangements, providing in 1988–89 for rebates of 25 per cent. of the rates payable on rateable values increased by more than three times in 1985, subject to a maximum rebate of £2,500.

I estimate that about 130,000 domestic and about 60,000 non-domestic ratepayers have received rebates, and that the total rates rebated over the four years of the scheme will amount to about £57 million. About £51 million of this relief will have been given up to and including the current financial year, and I expect that, under the order, about £6 million will be rebated in 1988–89.

I should like to address one or two general points. The first is why we should experience such persistent overspending by local authorities. Labour Members will have their usual pat answers, but it is a point that deserves serious consideration. It cannot be simply that the Government make inadequate provision in their public expenditure plans, or at least that cannot explain the high budgeted overspend this year when provision was based on local authorities' own plans for the previous year plus an inflation allowance. Nor does it appear to be inadequate grant distribution arrangements. COSLA is fully consulted about these arrangements and, while they can admittedly be rough and ready at the margins, I know of no serious suggestion that they are fundamentally flawed.

The answer must be that there is an endemic capacity in local government to increase its expenditure constantly, regardless of the consequences for its ratepayers. In some cases that is a result of simple ideology, and I do not suppose I can offer any rational argument that will make any difference to that. But I have also become conscious, since I took on this responsibility in June 1987, that there are many authorities which consider themselves prudent and moderate and which still overspend substantially on guidelines despite what they regard as their best efforts at economy.

1 invite these authorities to look again carefully at their budgeting process, and particularly at the extent to which existing expenditure simply becomes uncritically the baseline for the next planning exercise, without any serious review of whether all existing spending needs to continue, or of whether policy objectives are being met in the most efficient and cost-effective way. Proposals are now being considered in another place to give the Commission for Local Authority Accounts in Scotland a formal statutory duty to undertake value-for-money studies in local government. The first of such studies, undertaken without the benefit of the statutory duty, has now been published and points to possible economies among Scottish local authorities of up to £10 million a year through more effective energy management. Such studies will help cost-conscious local authorities in future.

There is one other aspect to this. It is frequently pointed out that the actual level of inflation experienced by local authorities can be higher than that experienced in the economy as a whole, and I recognise that there may be something in this. But it is too ready an excuse, as for many of their purchases local authorities are in a buyers' market. They can, if they have the will, influence the level of inflation in their own costs. They have direct control, for example, over their own wage negotiations. Having heard last July that the inflation assumption in the settlement for 1988–89 was 4 per cent., they have no one to blame but themselves if in September they conclude an agreement to increase their manual workers' pay by over 10 per cent. Every other employer in the country, including in other parts of the public sector, has to conduct pay negotiations against a predetermined background of what resources are available. There is no reason why local authorities should behave differently.

It is suggested — it is a point of view that I have heard several times in recent months—that, in line with our new national economic success, the restraints should be taken off public expenditure. But that is part of the kind of thinking that got the economy into trouble in the first place. The public sector, and public sector trade unions, have no natural right to a prescribed share of the national wealth. As a Government, we are committed to containing public expenditure, but we are committed also to ensuring that the resources are available to maintain adequate standards of public services. I believe that our record on local authority expenditure provision is a good one. But we have also to ensure that the circumstances are created and maintained in which business and commerce can operate profitably and create and maintain jobs. It is the private sector that generates the resources from which the public sector is funded. We must ensure that local government does not take a disproportionate share of public expenditure at the expense of other public services. In effect, this is what has happened in Scotland for 1988–89. I hope that it will not have to happen again.

Finally, I want to say something about reports that are now beginning to appear of local authorities' budget plans for 1988–89. Disappointingly, but no doubt unsurprisingly, we hear stories yet again of substantial expected overspends by some of the larger authorities. I would only say that there is no excuse or justification for this and that authorities which seek to justify their overspending next year by reference to their low guideline increases delude themselves and mislead the public, who will recognise that these low guideline increases arise only for authorities whose spending is historically already very high, and well in excess of their assessed needs. I warn these authorities tonight that my right hon. and learned Friend will be prepared to impose severe grant penalties again next year in response to high budgeted overspending, and will once again consider the use of his power to secure rate reductions where planned expenditure is in his view "excessive and unreasonable". But there is still time for authorities to consider their budget plans carefully, and I hope that as many as possible of them will do so and budget within guidelines, in the national interest and in the interests of their own ratepayers.

10.44 pm
Mr. John Maxton (Glasgow, Cathcart)

The Minister's speech livened up a little towards the end, even though it was incredibly funny to hear his analysis of Scotland's economy and local government expenditure and his normal tirade against overspending local authorities. This time last year we were listening to Michael Ancram make such speeches, supported by nine other Conservative Members who are no longer in the House. It is not local authorities that have learnt nothing from last June's general election. It is the Minister who appears to have learnt nothing.

The people of Scotland elect the local authorities in Scotland to take decisions on expenditure and services. The only people who elected the Minister are the electors in his constituency — [Interruption.] Yes, just. The people of Scotland rejected the Conservative party and the Government and wanted nothing to do with them. It is time that the Government stopped coming to the House with the arrogant prating that we heard from the Minister.

The Minister said several times that this was the last time that we would debate rate support grant orders. I suppose that most of us would breathe a great sigh of relief if that were true, but I make a guess — perhaps a reasoned guess—that this time next year we will be back debating a similar order. An administrative nightmare has been created in Scotland by the poll tax legislation. The Government are delaying the orders which are needed to implement the poll tax if the local authorities are to have it in place by 1 April 1989. The Secretary of State for Scotland will be forced to use English legislation. The fact that the rebate scheme is to be a United Kingdom scheme is an excuse to delay implementation until 1 April 1990 at the earliest. Therefore, we will need a rate support grant order next year.

I expect that there will also be orders on penalties and variation orders. I look forward to hearing the Minister yet again putting forward a rate support grant order. [HON. MEMBERS: "No."] I look forward to it because at least it will mean that the poll tax will be one year further away. I should be grateful if the allocation of local government finance were handed over from this House to a democratically elected Scottish assembly in Edinburgh, but if our having to debate one more rate support grant order means one more year without the poll tax, I am prepared to put up with it. If we ever have the poll tax, the Minister will still be complaining, weeping crocodile tears about the poor taxpayers in Scotland and bringing orders to reduce the level of poll tax in what he claims are high-spending local authorities.

The Minister has tried to pretend that this settlement is generous. I confess that it is. There has at least been a standstill compared with previous settlements. It would be perverse not to admit that. But it is another of the Government's con tricks to pretend that they are generous and that the local authorities and the people of Scotland should go down on their knees and thank the Government. The idea that the Convention of Scottish Local Authorities agreed to this sort of settlement beggars belief. Of course, there is consultation. Of course, COSLA says, "If you can do nothing more, at least keep us at the same point we were at last year." But that is not what the local authorities or COSLA want. They want a much more generous settlement.

Let us look at what has happened since 1979.

Mr. Tristan Garel-Jones (Vice-Chamberlain of Her Majesty's Household)

Labour has lost three elections.

Mr. Maxton

The hon. Gentleman from an English constituency says that the Government won three elections. They have lost three elections in succession in Scotland and every local government election in Scotland since 1979. They are now hanging on by no more than their fingernails to what little support they have. The Government have Englishmen sitting in the Whips' positions—the hon. Members for Watford (Mr. Garel-Jones) and for Penrith and The Border (Mr. Maclean)— because they cannot find a Scottish Whip from among their remnant of 10 hon. Members representing Scottish seats. The hon. Member for Tayside, North (Mr. Walker) is the only Scottish Member on the Government Benches who has been neither a Minister nor a Whip. I know that he takes great pleasure in that.

In 1979, the level of rate support grant was 68.5 per cent. This year, even at a standstill, it will be 55.4 per cent. of expenditure. That does not take account of any clawbacks that may reduce it to an even lower figure. If the Government, with the generosity that they claim for themselves, were giving Scotland a 68.5 per cent. rate support grant this year, local authorities would receive another £557 million. What could local authorities provide in services for the unemployed, the single parents, the old and the children in our schools if they had that money to spend?

It is not good enough for Ministers to say that this is a generous settlement. Even in the Government's own terms, it is not as generous as the Minister would have us believe. He has claimed that the relevant current expenditure is an increase of 8.6 per cent. on the provision for this year, which is true. But it is only 4 per cent. above the level of current local authority budgets, plus the cost that he has identified to take into account the implementation of the poll tax and the new rebate scheme for housing benefit that is coming into force in April this year. Merely to stand still and maintain services as they now are, therefore, local authorities—

Mr. Bill Walker (Tayside, North)


Mr. Maxton

I shall finish the point. Local authorities will have to keep current levels of expenditure on services within that 4 per cent. increase. So if the RPI increases by more than 4 per cent., authorities will find that they have to cut back on services, or increase their rates. If, as is even more likely, local government services' costs rise by more than 4 per cent.—that has been normal in the past few years—local authorities will have to cut back on what they are doing.

Mr. Bill Walker

The hon. Gentleman mentioned that an allowance had been made for the administration of changes in housing benefit. Nothing in what he has said thus far—or, indeed, ever before—draws attention to the fact that, with the increased rents of the past few years, the huge increase in housing benefit has all gone directly into the housing coffers, which is really public money going into local government. So how have there been cuts?

Mr. Maxton

The reason why a massive increase in housing benefit has gone to local authorities is that more people are in need — more unemployed and elderly people need the help that the state should provide. On 1 April this year, thousands of people in Scotland will lose the housing benefit of which the hon. Member for Tayside, North is so proud.

Included in the 4 per cent. increase is £12 million which is allocated to implement the poll tax. No one in Scottish local authorities believes that that money will be adequate; much more will be required. Strathclyde alone is talking about having to take on 700 extra people just to draw up the register and collect the money. So the £12 million will be wholly inadequate. Because the Government will do nothing about that, services for Scottish people will have to be cut, or their rates increased, to pay for the imposition of a tax which the vast majority do not want and which they clearly rejected last year in June. So that this poll tax can be imposed on them, the people of Scotland will have to have cuts in local authority services. That is an obscenity.

I find it interesting that the budgets that attracted the wrath of the Secretary of State in July and led to the withholding of £202 million of grant by the Treasury are now acceptable to the Government. If it is now seen by the Government that £202 million is the amount that local authorities ought to spend over and above what they spent last year, surely it would be logical in this year's budget to restore that £202 million to local authorities.

I do not intend to go much further along this line, but even under this settlement some local authorities will lose as a result of the rate support grant. Local authorities representing over half the people of Scotland will receive only a 3 per cent. increase in real terms in their budgets. That has to take account of inflation and pay increases and meet the last stage of the teachers' pay increase. Nobody in Scotland believes that local authorities can maintain their services without increasing their rates.

Conservative Members complain about local authorities increasing their rates. Those are the authorities that are faced with an increase of only 3 per cent. in grant. That means that they will have to increase their rates by more than the Minister wants simply to maintain services at their present level. Of course, if they increase rates, the Minister will claw back some of the money. Those authorities include Lothian, Strathclyde, Glasgow, Edinburgh, Cumbernauld, Kilsyth and Cumnock and Doon Valley among others. I am sure that many of my hon. Friends who represent at least some of those authorities would wish to speak in the debate to give details of the effects on services.

I have already made the point about relief for sports clubs. It became quite clear to my hon. Friends that there is no new money for that. It is a con trick from beginning to end and we warned local authorities about that. There is no new money and local authorities will have to find from other proposed expenditure the money that will go to sports clubs.

I shall now deal with the second order. When the rate revaluation took place there was an outcry in Scotland about it, especially from the supporters of the hon. Member for Tayside, North. The then Secretary of State for Scotland, the right hon. Member for Ayr (Mr. Younger), here at the whim of only 182 people in Ayr, boasted about how he was being enormously generous in giving rebates. He allocated £50 million in 1985–86. We accept that that was new money for people whose rate increase was more than threefold. The amount the following year was £37.5 million and this year it is £25 million. After doing my sums, I find that it will be £16.75 million next year.

The total to be spent is £57 million over four years out of a total budget of well over £100 million. That is the generosity of the Secretary of State. He was never as generous as he tried to make out. He should have worked out a more generous scheme so that more people who were hit got the money or he should have given to local authorities the extra money to spend as they wished.

The Government have been rejected by the people of Scotland time and again. In every election, both local and national, since 1979 the Tory vote has gone down, the number of Tory Members of Parliament has gone down and the number of Tory councillors has gone down. Yet the Government continue arrogantly to claim that they have a right to say what is right for the people of Scotland.

The people of Scotland will have many more chances to reject the Government, and their next chance will be in May this year in the district council elections. All the evidence points to the fact that the Tory party will be kicked in the teeth yet again by the people of Scotland. Perhaps on that occasion, at long last, the Secretary of State and his "Hobson's Choice" Ministers will listen to the people of Scotland. Perhaps the Secretary of State will go to the Prime Minister and say, "I am a democrat; I believe in the will of the people of Scotland and I can no longer therefore govern Scotland and I urge you to establish a Scottish assembly that rules Scotland for the people of Scotland." That is what the Opposition want and that is what the people of Scotland want.

11 pm

Mr. Allan Stewart (Eastwood)

The House has heard before most of the speech of the hon. Member for Glasgow, Cathcart (Mr. Maxton) and we shall no doubt hear it again and again, but it will be interesting to compare precisely what he said at the end of his speech with the apparant sudden U-turn by the Scottish Labour party in the Scottish Affairs Committee debate last Thursday. It sounded to me as if the Scottish Labour party still believes in the mandate argument, and that the hon. Member for Cathcart was rejecting the concept of a unitary Parliament.

Mr. Maxton

In return, Mr. Deputy Speaker, may I ask the hon. Member for Eastwood (Mr. Stewart)—or the ex-Minister—whether he believes that there ought to be a Scottish Office? While he believes that there should be separate legislation and separate administration for Scotland, he has no right to say that the Scottish people have no right to say what happens in such a Scottish Office.

Mr. Stewart

The hon. Gentleman is in the wrong party if he pursues that line of argument, and the sooner he joins the Scottish National party the better, because that is precisely the logic of his position. Whether the hon. Member for Moray (Mrs. Ewing) and her colleagues would wish to accept a subscription from the hon. Member for Cathcart is another matter.

I welcome both orders, although I should like to speak solely about the rate support grant order because of limitation of time. My hon. Friend the Minister of State described the settlement as reasonable, and he was able to say that despite the valiant efforts of the hon. Member for Cathcart to find something to criticise. The settlement is fairly generous by any reasonable standards. There is an increase of provision of just under 9 per cent. which is paralleled by an increase in the aggregate Exchequer grant of 8 per cent.

Within the individual figures, my understanding is that there is a real increase in the guideline figures for every authority in Scotland and an increase of at least 3 per cent. in cash terms for all authorities' guidelines, compared with their 1987–88 budget. That settlement is very generous indeed.

I welcome what the Government are doing for sports clubs and the increase of 9 per cent. for education. However, my right hon. and hon. Friends will have to keep a watchful eye on local government expenditure. The question that the House must always ask is whether all of this money will be spent wisely and sensibly. I do not think that the current behaviour of the Convention of Scottish Local Authorities is very encouraging in that regard. To take just one example, I believe that this week members of the Socialist COSLA are coming down in droves to roll into Westminster to a mass lobby at the ratepayers' expense.

There is some doubt, I understand, about the legality of their expenditure. It is not my purpose to pursue that issue tonight, but I put it to the House that expenditure of £40,000 or more of ratepayers' money on what is frankly a jolly is outrageous. Although it is a small sum in relation to the total of local authority expenditure, it is an unfortunate indication of COSLA's priorities.

Mr. Dick Douglas (Dunfermline, West)

Is the hon. Member speaking for himself or, as a former Minister, is he reflecting the weight of Conservative opinion in Scotland? Is it the intention of Scottish Conservative Members not to meet any of the COSLA delegation on Wednesday?

Mr. Stewart

I am speaking for myself, and I will answer that in two ways. First, the members of the Convention of Scottish Local Authorities have made it absolutely clear that they regard this as an outrageous waste of ratepayers' and taxpayers' money. They will be meeting in Edinburgh, but, as a ratepayer in Glasgow, I believe that this is a outrageous waste of ratepayers' money. It is certainly not my intention to meet the members of the convention. If they wish to come to the House to lobby Members of Parliament, they should bring a small and expert delegation, not everybody they can find in Scotland to come down at the ratepayers' expense.

I hope that my right hon. and learned Friend the Secretary of State and my hon. Friend the Minister of State will keep a watchful eye on local authority expenditure as a result of the settlement. This year there is concern that authorities may increase their rates more than is necessary in order to raise the base for non-domestic rates when the provisions of the Abolition of Domestic Rates Etc. (Scotland) Act come into force.

Mr. John Home Robertson (East Lothian)

They never will.

Mr. Stewart

They will, fear not. It is clear that there is the potential for local authorities to do that. I appreciate that my hon. Friend the Minister may not be able to comment on that possibility tonight, but I hope that he will keep it under constant review.

11.6 pm

Mr. Archy Kirkwood (Roxburgh and Berwickshire)

I would like to make a brief contribution to the debate. [Interruption.] Some rather extravagant claims are being made about the length of the future of our great alliance in British politics. They are vastly exaggerated and unduly pessimistic; every new day brings a new dawn.

Dealing with the revaluation rebate order, I remember moving a ten-minute Bill on the need for some relief in rating revaluation in 1985 and being roundly abused by everybody because I was doing a fag-packet calculation, as is my wont, based on my constituency and I was rash enough to suggest that £15 million might make a big difference if it were applied properly. I was ridiculed by Conservative Members who said that that amount of money could not be found from the Treasury. Then, before the Tory party conference in 1985, when the then Secretary of State for Scotland realised that he was on a loser, he came back with £50 million a year from the Treasury over four years. Even with my O-level arithmetic, I know that that comes to £200 million. This is the last of the four years, and we have managed to spend and allocate £57 million of that money.

I say to the Secretary of State that there is disappointment that the Government, having won the battle—I applauded the Secretary of State for having waged and won the battle for £50 million a year—did not apply that money over a wider range of subjects in order to give the relief that was then necessary and is still necessary. The Secretary of State has missed an opportunity. If he had been more generous, he would have been given credit for that.

Looking ahead, there is another revaluation waiting in the wings over five years. If we are not careful, the commercial subjects left in rating will be subject to all sorts of horrors and may well require that the precedent established in 1985, which I welcomed and continue to welcome, will have to be wheeled out again in 1990. I hope that the Secretary of State will be more generous then and learn some of the lessons which he should have learned over the four years of operation of this rebate relief scheme. He should have brought more commercial subjects into relief, and I hope that he will give that some thought between now and 1990.

I am not an expert on the rate support grant order, but I cannot understand what the Government complaint is. From the figures which the Library and COSLA have given me and the pattern of expenditure in volume terms over the past nine years, am I not right in thinking that there has been not a significant increase but a marginal one, if there has been an increase at all? If so, what is the point of rubbing the collective and individual noses of COSLA and individual authorities in this propaganda battle between central and local government in terms of the extravagant degrees of overspend and other emotive phrases such as those we have become accustomed to hearing? It does the whole political process no good when the breach in confidence and the breakdown in communications between central and local government comes to such a sorry pass.

My experience in this place is not great and I have no direct experience of local government, but it seems to me that over that period the Government have paid a high price, whatever success they may have had and however necessary the steps to constrain individual local authorities. I accept that the Government must do that, and certainly when we are the Government in the near future we shall have to face up to these problems responsibly. The Secretary of State must recognise that over the past nine years and against a background of no great increase in volume terms that I can identify, the price he has paid is generally too high. That is a political fact of life which over the past nine years we have experienced in Scotland.

It is a salutary fact that the grant percentage has been reduced from 68.5 per cent. in 1979 to 55.4 per cent. now, which is a difference of some £557 million. Therefore, if there is an argument about where the rate increases have come from, it is impossible for the Government to say that they have not, at least in large part, been responsible for some of these rate increases.

The Minister said, and I should like to press him on this, that he thought that the incidence of retail price index increases as they affected local government was higher than the average RPI figures. Have the Government undertaken any detailed analysis of what that means? If it is true, and I believe that it is, more information should be provided so that we can make more objective decisions about what cost increases local authorities are facing, and they are facing increases.

There has been an element included in the needs element of the rate support grant to meet the teachers' pay award and to deal with the rebate legislation. I do not know whether they have been adequately covered and I suspect that they have not. However, I am absolutely certain, as one does not need to look far beyond that, that the House has been showering a plethora of other duties and obligations on local authorities in recent months and years, for example, data protection legislation, for which I am partially responsible with my private Member's Bill last year, and disabled persons legislation. There is a whole series of individual incremental increases which, taken together, produce real new burdens on local authorities.

I know something about social security because I spent many a long hour in the 1986 Social Security Bill Committee. The housing benefit regulations that the Secretary of State is introducing in April will cause tremendous difficulties and inexorably increase the costs of local authority administration. I cite the experience of 1983 with the administrative shift from DHSS to local authority payment of housing payment. That was regarded as a minor tidying-up operation which everyone supported, but it caused great difficulty. In my view, the extra demands on housing departments and the increased information and expertise required to administer the system efficiently have not been properly taken into account in the orders before us.

In all honesty, I also do not think that sensible provision has been made for the on-costs and additional expenditure required for implementation of the community charge. I do not believe that £12 million next year is enough. COSLA believes that the Government have underestimated the cost by about 50 per cent. If that proves to be true, will adjustments be made in the course of the financial year? I believe that there is a real danger that the Government are rushing this fence. It is a very complicated piece of legislation. Much work remains to be done and many regulations have not yet been put out for consultation. I fear that there will be a good deal of administrative chaos anyway, but my question today is simply this. If, as the Government monitor the situation, it becomes clear that the £12 million is a substantial underestimate, is there any machinery for taking account of that in the course of the year and, if so, will the Minister use it?

Considering the orders against the background of the financial situation of local government, I believe that the Government could have done better. I agree with the hon. Member for Glasgow, Cathcart (Mr. Maxton) that the figures are a marginal improvement on what has gone before. My local authority in south-east Scotland has no great complaint other than those that I have mentioned in passing today. Nevertheless, I believe that the Government have paid a very high price and I am pleased that these are to be the last orders. I hope that in the future the Government will organise the system better, although I suspect that that is a vain hope, and at least improve the relationship between central and local government when the community charge system is introduced.

11.17 pm
Mr. Bill Walker (Tayside, North)

I am — [HoN. MEMBERS: "Hear, hear."] I am delighted that I still have my fans on the Opposition Benches.

The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), who spoke on behalf of the Liberals, must be one of the world's supreme optimists as his chances of ever occupying the Treasury Bench must be as slender as those of the hon. Member for Glasgow, Cathcart (Mr. Maxton). I was surprised that he should make such comments today when the nice people of politics have been seen for what they are. Like the rest of us, they fall out and have disagreements. It must also have been discouraging for the hon. Gentleman to discover that his friends the Social Democrats have not even come along to hear what he has to say, although there were two Liberals here to support him.

The hon. Member for Cathcart made a fascinating comment towards the end of his speech. He will no doubt correct me if I am wrong, but he seemed to be saying in effect that, so long as there is a Scottish Office and the votes of the Scottish people do not support the party in power in the unitary Parliament of the time, there is a requirement for a Scottish assembly. What does the hon. Member for Cathcart think would happen if a Labour Government came to power? Does he mean that there is no need for a Department of the Environment substantially for England and Wales?

Mr. Maxton

Substantially, not entirely.

Mr. Walker

I said "substantially". The hon. Gentleman is going down the road that I had hoped that he would follow.

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


Mr. Walker

This relates to the rate support grant order. I did not raise the matter; it was raised by the hon. Member for Cathcart. This is a debate and I am trying to deal with the points raised by the hon. Member for Cathcart.

I trust that the hon. Member for Cathcart will realise that the Scottish Office looks after forestry, which covers substantial areas in England. If I looked at these matters in more detail, I could find other examples. As always, the hon. Member for Cathcart has not done his homework carefully or thoroughly enough.

I now want to consider the comments made by my hon. Friend the Minister. I agree that we must achieve value for money when we consider what happens in local government. In the examinations into value for money, has any attempt been made to consider the method of organising and collecting the community charge? As I understand it, at least two computer firms are offering suitable packages to local government. Has any attempt been made to evaluate those packages? A British company, ICL, is offering a package that has been accepted by a number of Scottish local authorities. I also understand that Tayside region has opted for a package from National Cash Register. Which of those packages provides the best value for money and has any attempt been made to study them? If so—

Mr. Maxton


Mr. Walker

I will give way to the hon. Gentleman in a minute.

If we are to have a cost-effective system of collection, the most cost-effective package should be implemented.

Mr. Maxton

Do the packages offered by the two companies include, as they obviously must if they are total packages for computerisation, any information on the rebate schemes and if so on what basis do they work? The Government have failed to offer us any rebate scheme.

Mr. Walker

I am sure that the hon. Gentleman is an expert at writing software for computer companies and he will know that if the software structure is organised correctly in the first place, the level of rebate can be easily fed in at a different level. I am not an expert in those matters, but I know a little about running computer systems. Department store groups led this country in the use of computer systems and stock control was the first thing to be computerised. If the hon. Member for Cathcart was suggesting that the packages on offer are in some way defective, I cannot reply to that. I do not know, as I have not tried to study them. I am asking the questions, not giving the answers. However, I would like to know whether they will be cost-effective.

I welcome the provisions covering the sports clubs. By any standards, anyone considering the orders tonight would agree with my hon. Friend the Minister that they are reasonable settlements in the circumstances, and, with my hon. Friend the Minister, I hope that this is the last time that we will ever debate such orders.

11.23 pm
Mr. Nigel Griffiths (Edinburgh, South)

The Minister's speech shows that the Government are turning their back on local services, cleaner streets, and better libraries. They are restricting improvements in leisure services and heralding more council cuts and soaring rates.

The Minister's comments mean that the new poll tax will be even higher than the figures already given by the Government. The settlement goes nowhere near meeting the recent pay increases of local government workers and the Government are thwarting all attempts to improve the cleaning services on our streets which involve staff and equipment.

We know that the money is available. The Government have just spent £130,000-plus. Was it on cleaning up the streets? No. It was spent on making litter for the streets. It was spent on a leaflet on the poll tax which contained so many mistakes that it should have been pulped. That money should have been spent on local government services rather than Conservative party propaganda.

The Government are also turning their backs on improvements in our library services. This settlement will not fund even current services. The Government have brought chaos to local government services. They have hit home owners with savage cuts in repairs grants. Last month, they cut Edinburgh's 90 per cent. grant budget from £26 million to £14.5 million. They cut Glasgow's from £32 million to under £15 million. The cut inflicted on home owners in Scotland in the grant queue was more than £29 million, and it was made when local councillors wanted to help to reverse the disrepair experienced by private tenants.

The settlement continues the Government's attack on local government. In 1984, the Conservatives lost control of Edinburgh — and Edinburgh lost £5 million in rate support grant as part of the Government's retribution on the ratepayers and voters of the city for voting in a Labour administration after years of Tory complacency and neglect, which had reduced many of the services in the city to a shambles.

New councillors such as me and other colleagues on these Benches who were elected in Edinburgh and Lothian region were (deluged with letters. They were not all from constituents and other ratepayers. They came from Ministers and the Secretary of State himself. He had occasion to write more than once to the committee that I chaired, complaining about the low level of services after he had inflicted cuts.

The same is true of the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton), who wrote to me and my hon. Friend the Member for Edinburgh, Central (Mr. Darling) complaining about the effect of deregulation of the buses—a measure for which he had voted and which inflicted considerable suffering and hardship on his constituents. That, I am afraid, is hypocrisy of the worst order.

Lothian region suffered Government cuts of £80 million between 1980 and 1987, but it was ruled by so-called prudent Tories for four of those seven years. For every year of Conservative rule between 1982 and 1986, the administration of Councillor Brian Meeks could not meet the Government guidelines because they were so draconian.

The Minister invited moderate authorities to look at their budgets again. When Councillor Meeks' Conservative administration looked at its budget again when it was over the guidelines in 1983, 1984, 1985 and 1986, it cut services again and again. It robbed senior citizens of their concessionary bus passes. It slashed meals on wheels services to the elderly and disabled. It removed teaching posts, depriving schools of specialist teachers. When Conservative Members represented Edinburgh, they wrote to Councillor Meeks complaining of the cuts of which they were the authors. Those were the effects of rate grant settlements such as this.

We firmly believe that spending on local government is spending wisely. The biggest money-wasters that we have seen in the time of the present Government, and of Governments after 1979, have been Government Departments. Their excesses have been criticised, year in year out, by the Public Accounts Committee; and the officers whom they have appointed to quangos—there are many within the patronage of the Secretary of State and his Ministers—have, in many cases, discharged their duties appallingly.

Why does not the Secretary of State turn his attention to those Departments? [Interruption.] I am asked to name them. I shall name one of many: Lothian health board, which has reduced the Health Service in Edinburgh to a state of chaos and a shambles. For the first time in Scotland, we have seen strikes not just by ancillary workers, but by nurses—who are members of royal colleges, brought out on the streets by the mishandling of the situation by the current Minister of Health, who should resign forthwith, and by appointees of the Secretary of State, who in many instances have replaced good members of the health board. [Interruption.] The hon. Member for Eastwood (Mr. Stewart) complains, but he challenged me to name some of the authorities concerned. The hon. Gentleman has had his say, and wasted the time of the House when he did so. He challenged me to name some of the abuses of the present Government and some of the waste for which they are responsible, and I have given one example.

I want to draw my remarks to a conclusion, because many of my colleagues want to give examples from their authorities. I have revealed the hypocrisy of the Government, whose Ministers have first inflicted on local government cuts of the worst order, and then written to the councillors complaining about the effect of those cuts. I hope that the Secretary of State will give some explanation.

Mr. Brian Wilson (Cunninghame, North)

While my hon. Friend is going through the litany of the dirty little deals in which the Government are involved on quangos, does he recognise that the former leader of Lothian regional council—the man who boasted after the general election of having brought the Secretary of State for Scotland into politics as his protege—was rewarded with quite a few pieces of silver when he was made vice-chairman of Livingston development corporation?

Mr. Griffiths

My hon. Friend is right. I understand that it is a part-time post which carries a multi-thousand pound salary, and that he had been neither chairman nor vice-chairman before.

Mr. Allan Stewart

On a point of order, Mr. Deputy Speaker. May I seek your guidance? Is it in order for Opposition Members to make specific allegations about individuals which have nothing to do with rate support grant?

Mr. Deputy Speaker (Sir Paul Dean)

The orders allow a fairly wide debate, but we must stick to local government expenditure.

Mr. Griffiths

Thank you, Mr. Deputy Speaker.

The problem with Conservative Members is that they like to dish it out to the weak in society, but cannot take it. The reason that I am not still in the council that I had the privilege to represent for seven years is that the local government Minister made such a shambles of running local government that the constituents whom I now have the honour to represent threw him out. Conservative Members like to pick on the weak. We saw what they did in Lothian region and in Edinburgh, which was under Tory rule for decades. They picked on the poorest tenants and on pensioners who rely on sheltered housing, public transport and meals on wheels. When we remind Conservative Members of that they do not like it one bit.

The rate support grant order will penalise local government, which will have to take the blame for many of the decisions for which the Secretary of State and his hon. Friends are responsible. Local councils in Scotland have had enough. I predict that more Labour councillors than ever before will be returned for Edinburgh district and that that result will be reflected throughout Scotland. It will be due to the caring policies of Labour councillors in Edinburgh and elsewhere. They have defended services against the onslaught of the Secretary of State, who knows that this settlement is not enough to fund adequate local spending. He is not prepared to allow local councillors to decide for themselves, in consultation with the ratepayers.

The artificial limits that have been imposed on the rate support grant settlement will rebound on the Secretary of State in May when the Conservatives will lose even more seats than they lost at the general election.

11.36 pm
Sir Hector Monro (Dumfries)

The hon. Member for Edinburgh, South (Mr. Griffiths) must be a very worried man if he has to start his election campaign so soon in an effort to try to win a few seats in Edinburgh. The trouble is that he has the misfortune to belong to a party that has no idea about local government finance.

The hon. Gentleman has shouted the odds tonight about cuts in local government expenditure and cuts in the National Health Service. That shows how far he is removed from reality. Everybody knows that far more money is being spent on local government and the National Health Service than ever before. The cuts to which the hon. Gentleman referred are fanciful cuts in mythical budgets put forward by authorities that are prepared to spend unlimited amounts of other people's money on satisfying their own egos.

The hon. Gentleman knows that an immense amount of money is being spent on the National Health Service in Scotland and that there are far more nurses, doctors, dentists and specialists than ever before, but he has had the cheek to say that the National Health Service is in a state of chaos. That is not so. When he replies to the debate, I know that my hon. Friend the Minister of State will take the opportunity to support what I have said. Not for the first time, the hon. Member for Edinburgh, South is completely out of his depth.

I welcome the orders. They mean an increase of £338 million in rate support grant, or 9 per cent. That figure includes £170 million of additional money over and above what was provided for in the public expenditure White Paper. That is good news for Scotland. Opposition Members should be welcoming it rather than girning away in their usual fashion whenever we debate Scottish affairs. That substantial increase in the amount of money that is being provided for local government will allow current expenditure to increase. It will also allow resources to be made available for pay increases to the police, the firemen and the teachers. There is no question of cuts being made. After a long haul, there has been success in regard to support for sports clubs. In a Labour Government Finance Bill in 1968 I first proposed that rate relief should he mandatory rather than discretionary for sports clubs. That was opposed by the Labour Government. I am glad that my right hon. and learned Friend the Secretary of State has now introduced the measure and has allowed for new money in this rate support grant to help sports clubs, as I am sure is the unanimous view of everybody in the House tonight.

When we considered the Rating and Valuation (Amendment) (Scotland) Bill, we looked in depth at the amazing anomalies between major stadia and more humble sports facilities. The anomaly on valuation between Scotland and England is still quite excessive. I hope that this is not the end of the matter. The procedures laid down under that Act have worked to an extent for some of our major football grounds, such as Ibrox and Tynecastle, and so on, but are not as successful as I suspect those who drafted that Bill hoped in the original stages of the legislation.

I am pleased, too, that in the Dumfries and Galloway region, with the two district councils within it that I represent—Annandale and Eskdale, and Nithsdale—the guidelines now meet assessed needs. That has been a request by those local authorities for many years, and I am glad that my right hon. and learned Friend has now been able to meet it. The region has had an increase of 11 per cent., or £9.5 million, and a needs element increase of 4.4 per cent., or £2 million, yet having achieved that satisfactory result, it wishes to put up the rates by about 20 per cent. That is incomprehensible. There is no reason to blame the Government or for the region to say, having achieved what it wants, that it must now raise expenditure because of the increased availability of resources from the Government.

The districts have been well looked after by my right hon. and learned Friend the Secretary of State. If we take into account not only the rate support grant but the housing support through the housing revenue account and non-HRA orders, they have been favourably treated this year, as they were last year. Their criticisms of lack of resources have been removed. As Opposition Members would say, all local authorities are keen to have more resources, but there are limits in the world of prudent housekeeping because of the priority of keeping clown inflation. If we were to let local authorities have carte blanche to spend what they liked, we should be in a spiral of rising inflation and unemployment, two important things that we do not want.

Opposition Members tend to forget some of their statements about local government finance last summer at the time of the general election. They said that they were keen to return to the old discredited system of rates. In their manifesto, they said that a property tax had "real advantages" and that they wanted a "wide expansion of resources". So Opposition Members want more unemployment, more inflation and more taxation. They do not begin to understand the repercussions of some of their policies—

Dr. John Reid (Motherwell, North)

Will the hon. Gentleman give way?

Sir Hector Monro

I shall give way if I wish to do so. The hon. Gentleman must sit down and wait.

The Opposition also said that they wished to rate agricultural land and buildings, which would be hard on farmers who are going through a difficult transition period under the common agricultural policy.

Dr. Reid

As the hon. Gentleman is so opposed to increases in taxation, does he agree with the figures that have been produced by the Library that show that at 1986 figures, far from being £250 per head, the poll tax will, if the Government continue the cuts of the past few years in funding local authorities and hold the business rate steady, as they have said they will, be £450 for every man, woman and adult over 18 years of age? Is an average family having to pay a poll tax of £2,000 per annum the hon. Gentleman's idea of a cut in taxation?

Sir Hector Monro

I do not accept the hon. Gentleman's figures. I have looked carefully at the figures and at answers to parliamentary questions, and the combined community charge and water rate will be £190. For the average couple, and particularly for the widow or single person, living in reasonable accommodation, it will be a great advantage. I do not want to start an argument on the community charge at this time of night, but the hon. Member for Motherwell, North (Dr. Reid) will find that it is a much fairer tax than any of the proposals that I have quoted from the Labour party manifesto, which were a rating disaster in terms of political advancement.

Labour Members should be grateful to my right hon. and learned Friend the Secretary of State for the rate support grant that he has put forward. It should be warmly welcomed by all local authorities.

11. 46 pm

Mrs. Maria Fyfe (Glasgow, Maryhill)

It has been claimed this year, and many a year before, that COSLA and Scottish local authorities are grateful for and pleased with the year's rate support grant. That has always sounded like a battered wife being pleased because her husband is battering her no more this year than he did last year.

The accusation about overspending is particularly unjust, and it carries no evidence with regard to Scottish local authorities. It is particularly amusing because it has been made at a time when we have been reading about Westminster city council, which has sold three cemeteries—one for a mere £1 to a developer, who promptly sold it to another developer for millions of pounds. Relatives who have been visiting the graves of their families for more than 50 years have complained that those well-kept cemeteries have now become wastelands. There is not one Scottish local authority that would dream of conducting itself in such a manner. With such activities going on, it is amazing that Conservative Members dare to talk about the wastefulness of Scottish local authorities.

The Government show no sign of answering the points that have been made during the debate by Labour Members. The hon. Member for Dumfries (Sir H. Monro) claimed that new money was being made available for sports clubs. The COSLA document has pointed out—I am sure that Ministers must have read it—that the overall grant percentage has been maintained in line with this year's figure, so the compensation to authorities for grant relief is not new money. It has been earmarked and transferred from sums that would otherwise have been available for general needs grant.

The hon. Member for Dumfries claims to understand local government finance. He had a go at Labour Members and said that they know nothing about it. I imagine that the hon. Gentleman realies on the forelock-tugging peasantry in his locality putting faith in his understanding of local government finance. The reality is that very few people do understand it. The Government hope that, because of the widespread lack of understanding of it, they will get away with their schemes.

It has been said that for about half the population of Scotland the increase will be only 3 per cent. on this year's budgeted level. As my hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) observed, pay and price increases have been about twice as much as that. The Minister's response was to argue that wages are within the direct control of local authorities. That makes me wonder whether the Minister knows anything about wage bargaining in the local authority section at all levels, including manual workers, those in the craft trades and professionals. Surely the Minister knows that bargaining takes place at an all-Britain level with representatives from all the local authorities in the management team. Following the bargaining there is all-Britain acceptance of that which has been negotiated. There are no individual decisions on what pay levels will be. Is the Minister suggesting that there should be a move away from the national negotiating machinery? If he or his colleagues take that view, they should say so plainly, to make it clear to the people that that is what they are about. A couple of Ministers came out with the suggestion last year, and I am sure that Scottish local authorities will want to know whether the same suggestion is being made by the Scottish Office.

In addition to the pay and price increases, there is the final stage of the teachers' pay award and the new housing benefit arrangements that will come into force in April. There are many pressures on local government and I hope that just for once my colleagues and I will receive answers to our questions.

The majority do not have a grasp of the complexities of local government finance. That being so, the bunch on the Government Benches hope to get away with their chicanery. However, the public know when services are being cut. They know when streets are swept less often, when bins are being emptied less often and when they cannot have home helps. They know who are responsible and they know who they will be voting for come the next general election.

11.52 pm
Mr. Andrew Welsh (Angus, East)

I shall be brief, not because there is a shortage of things to say, but because I realise that the debate will shortly be brought to an end.

There has been a clear difference between the speeches of Opposition Members, such as the hon. Members for Glasgow, Maryhill (Mrs. Fyfe) and for Edinburgh, South (Mr. Griffiths), and those of Conservative Members. The speeches of Conservative Members have been based on unreality and we have heard reality from Opposition Members who have served in local government. I faced the reality of several rate support grant orders when I was in local government. I know that local government is basically underfunded for the tasks that central Government place upon it. Central Government constantly place more tasks on local government without providing it with adequate finance. They go further than that by hedging in local government by means of arbitrary guidelines.

Needs allowances are unrelated to the needs of the people of Scotland, and that is allied to the fall in rate support grant settlements. There is a deliberate policy of shifting the funding of local government, including the rate support grant, from central Government and placing it on the shoulders of ratepayers. All local authorities throughout Scotland, even Conservative-controlled ones that are supposedly prudent, have been loud in their complaints to the Government about the treatment that they have received while attempting to provide services for those who elected them.

I wish to dispel the myth of high-spending local authorities. I should be interested to see evidence to contradict the COSLA critique, which demonstrates that local government tries to give value for money and tries in a professional way throughout Scotland to provide high-quality services at reasonable costs. If the Government want local authorities to provide services, they must realise that that cannot be done on the cheap. Angus district council, for example, had its needs allowance halved in one year. Such violent swings in the supply of central Government finance are obviously harmful and make it difficult for local authorities to operate. It is only central Government's estimates of local needs that change, not the needs themselves.

Paragraph 4 of appendix F of the order shows that the so-called overspend of £122 million resulted in a clawback of £202 million. That cannot be regarded as anything but a punishment, and that is unfair to those who use local government services.

I ask the Government to explain the £12 million allocation for the collection of poll tax payments. Angus district council estimates that there will be £300,000 in capital costs and £360,000 in revenue costs. That is one district — what about the other 52? Tayside region estimates that £4 million will be required for accommodation for people working on the poll tax. How can that equate with the £12 million offered? If the sum is inadequate, will the Government give extra cash to meet these needs and consult COSLA?

11.55 pm
Mr. Lang

It would be overstating it to say that this has been a productive debate. It has at least been interesting and somewhat predictable. There was a good deal of indignation, most of it plainly synthetic in view of the generous settlement.

The hon. Member for Glasgow, Cathcart (Mr. Maxton) referred to cuts in the rate support grant percentage. If he really wants to look at cuts in the RSG percentage, he should look back to the period of the last Labour Government, who reduced the RSG percentage from 75 per cent. to 68.5 per cent., which in one fell swoop reduced it by 4 per cent. more than this Government have ever reduced it by. As for the argument that by keeping the RSG percentage constant it might somehow lead to more stable local government expenditure, over the four-year period when we left it at 68.5 per cent. local government expenditure rose by no less than 60 per cent.

The hon. Member for Cathcart suggested that consultation with COSLA was a sham and that it wants a much more generous settlement. COSLA wanted £3,679 million and got £3,637.53 million. Indeed, the only difference between ourselves and COSLA was over the estimate of the local government inflation rate. All the details of the grant distribution—the domestic element, the ratio of needs to resources, the use of the client group method, the minimum grant increase, the grant percentage—were precisely what COSLA asked for.

The hon. Member for Cathcart said that some authorities would get only a 3 per cent. increase in their guideline, and COSLA pointed out that that was about half the population. As the total increase is 5.2 per cent. over budget, it is therefore demonstrable that the other half of the population would get a considerably larger increase. Authorities such as Strathclyde and Lothian have a 3 per cent. increase in their guideline. Spending levels were some £15 million over assessed need in Strathclyde and £16 million over assessed need in Lothian. As for the 4 per cent. increase in provision for 1988–89 including some £12 million for the community charge introduction, the hon. Member for Cathcart is plain wrong. If he had listened to me, he would have been aware that the £12 million is in addition to the 4 per cent. increase in grant.

It being one and a half hours after the commencement of proceedings on the motion, MR. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 14 (Exempted business):—

The House divided: Ayes 204, Noes 159.

Division No. 143] [11.57 pm
Alexander, Richard Franks, Cecil
Alison, Rt Hon Michael Freeman, Roger
Allason, Rupert French, Douglas
Amess, David Gale, Roger
Amos, Alan Garel-Jones, Tristan
Arbuthnot, James Gill, Christopher
Arnold, Tom (Hazel Grove) Goodhart, Sir Philip
Ashby, David Goodlad, Alastair
Aspinwall, Jack Goodson-Wickes, Dr Charles
Atkins, Robert Gorman, Mrs Teresa
Atkinson, David Gow, Ian
Baker, Rt Hon K. (Mole Valley) Greenway, John (Rydale)
Baker, Nicholas (Dorset N) Gregory, Conal
Baldry, Tony Griffiths, Sir Eldon (Bury St E')
Batiste, Spencer Griffiths, Peter (Portsmouth N)
Bennett, Nicholas (Pembroke) Grist, Ian
Bevan, David Gilroy Ground, Patrick
Blackburn, Dr John G. Hamilton, Hon A. (Epsom)
Blaker, Rt Hon Sir Peter Hamilton, Neil (Tatton)
Body, Sir Richard Hampson, Dr Keith
Bonsor, Sir Nicholas Hannam, John
Boscawen, Hon Robert Hargreaves, Ken (Hyndburn)
Boswell, Tim Harris, David
Bottomley, Peter Haselhurst, Alan
Bowden, Gerald (Dulwich) Hawkins, Christopher
Bowis, John Hayes, Jerry
Brandon-Bravo, Martin Hayhoe, Rt Hon Sir Barney
Brazier, Julian Hayward, Robert
Brittan, Rt Hon Leon Heathcoat-Amory, David
Brooke, Rt Hon Peter Heddle, John
Brown, Michael (Brigg & Cl't's) Hicks, Mrs Maureen (Wolv' NE)
Bruce, Ian (Dorset South) Hind, Kenneth
Buchanan-Smith, Rt Hon Alick Hogg, Hon Douglas (Gr'th'm)
Buck, Sir Antony Holt, Richard
Budgen, Nicholas Howard, Michael
Burns, Simon Howarth, Alan (Strat'd-on-A)
Butler, Chris Howarth, G. (Cannock & B'wd)
Butterfill, John Howell, Ralph (North Norfolk)
Carlisle, John, (Luton N) Hughes, Robert G. (Harrow W)
Carrington, Matthew Hunt, David (Wirral W)
Cash, William Hunt, John (Ravensbourne)
Channon, Rt Hon Paul Irvine, Michael
Chapman, Sydney Jack, Michael
Chope, Christopher Jackson, Robert
Conway, Derek Janman, Timothy
Coombs, Anthony (Wyre F'rest) Jessel, Toby
Coombs, Simon (Swindon) Johnson Smith, Sir Geoffrey
Cope, John Jones, Gwilym (Cardiff N)
Couchman, James King, Roger (B'ham N'thfield)
Cran, James Kirkhope, Timothy
Currie, Mrs Edwina Knapman, Roger
Curry, David Knight, Greg (Derby North)
Davies, Q. (Stamf'd & Spald'g) Knight, Dame Jill (Edgbaston)
Davis, David (Boothferry) Knowles, Michael
Day, Stephen Knox, David
Devlin, Tim Lang, Ian
Dorrell, Stephen Latham, Michael
Douglas-Hamilton, Lord James Lawrence, Ivan
Dover, Den Leigh, Edward (Gainsborgh)
Durant, Tony Lennox-Boyd, Hon Mark
Evennett, David Lightbown, David
Fallon, Michael Lilley, Peter
Favell, Tony Lloyd, Peter (Fareham)
Fenner, Dame Peggy Lord, Michael
Field, Barry (Isle of Wight) Lyell, Sir Nicholas
Forman, Nigel Macfarlane, Sir Neil
Forth, Eric MacKay, Andrew (E Berkshire)
McLoughlin, Patrick Taylor, John M (Solihull)
McNair-Wilson, P. (New Forest) Taylor, Teddy (S'end E)
Malins, Humfrey Temple-Morris, Peter
Mans, Keith Thompson, D. (Calder Valley)
Maples, John Thompson, Patrick (Norwich N,
Marshall, John (Hendon S) Thorne, Neil
Martin, David (Portsmouth S) Thornton, Malcolm
Maude, Hon Francis Thurnham, Peter
Mayhew, Rt Hon Sir Patrick Townend, John (Bridlington)
Mellor, David Tracey, Richard
Miller, Hal Tredinnick, David
Mills, Iain Trippier, David
Mitchell, Andrew (Gedling) Twinn, Dr Ian
Monro, Sir Hector Waddington, Rt Hon David
Morris, M (N'hampton S) Walden, George
Morrison, Sir Charles (Devizes) Walker, Bill (T'side North)
Morrison, Hon P (Chester) Waller, Gary
Moss, Malcolm Ward, John
Moynihan, Hon C. Wardle, C. (Bexhill)
Neubert, Michael Warren, Kenneth
Nicholls, Patrick Watts, John
Paice, James Wells, Bowen
Patnick, Irvine Wheeler, John
Rathbone, Tim Whitney, Ray
Rifkind, Rt Hon Malcolm Widdecombe, Miss Ann
Ryder, Richard Wilkinson, John
Shaw, Sir Giles (Pudsey) Wilshire, David
Squire, Robin Winterton, Mrs Ann
Stanbrook, Ivor Winterton, Nicholas
Stern, Michael Wood, Timothy
Stevens, Lewis Woodcock, Mike
Stewart, Allan (Eastwood) Yeo, Tim
Stewart, Andrew (Sherwood) Young, Sir George (Acton)
Stradling Thomas, Sir John
Sumberg, David Tellers for the Ayes:
Summerson, Hugo Mr. David Maclean and
Taylor, Ian (Esher) Mr. Kenneth Calisle.
Abbott, Ms Diane Clarke, Tom (Monklands W)
Allen, Graham Clay, Bob
Archer, Rt Hon Peter Clelland, David
Armstrong, Ms Hilary Clwyd, Mrs Ann
Ashdown, Paddy Cohen, Harry
Barnes, Harry (Derbyshire NE) Cook, Frank (Stockton N)
Barron, Kevin Cook, Robin (Livingston)
Battle, John Cousins, Jim
Beckett, Margaret Crowther, Stan
Beith, A. J. Cryer, Bob
Benn, Rt Hon Tony Cummings, J.
Bermingham, Gerald Cunliffe, Lawrence
Blair, Tony Dalyell, Tam
Boyes, Roland Darling, Alastair
Bradley, Keith Davies, Ron (Caerphilly)
Bray, Dr Jeremy Davis, Terry (B'ham Hodge H'l)
Brown, Gordon (D'mline E) Dixon, Don
Brown, Nicholas (Newcastle E) Dobson, Frank
Brown, Ron (Edinburgh Leith) Doran, Frank
Bruce, Malcolm (Gordon) Douglas, Dick
Buchan, Norman Dunnachie, James
Buckley, George Dunwoody, Hon Mrs Gwyneth
Caborn, Richard Eadie, Alexander
Callaghan, Jim Eastham, Ken
Campbell, Ron (Blyth Valley) Evans, John (St Helens N)
Campbell-Savours, D. N. Ewing, Harry (Falkirk E)
Canavan, Dennis Ewing, Mrs Margaret (Moray)
Carlile, Alex (Mont'g) Field, Frank (Birkenhead)
Clark, Dr David (S Shields) Fields, Terry (L'pool B G'n)
Fisher, Mark Millan, Rt Hon Bruce
Foster, Derek Mitchell, Austin (G't Grimsby)
Foulkes, George Moonie, Dr Lewis
Fyfe, Mrs Maria Morgan, Rhodri
Galbraith, Samuel Morley, Elliott
George, Bruce Morris, Rt Hon A (W'shawe)
Godman, Dr Norman A. Mowlam, Marjorie
Golding, Mrs Llin Mullin, Chris
Griffiths, Nigel (Edinburgh S) O'Brien, William
Griffiths, Win (Bridgend) O'Neill, Martin
Hardy, Peter Patchett, Terry
Harman, Ms Harriet Pendry, Tom
Haynes, Frank Pike, Peter
Hinchliffe, David Powell, Ray (Ogmore)
Hogg, N. (C'nauld & Kilsyth) Prescott, John
Home Robertson, John Primarolo, Ms Dawn
Hood, James Quin, Ms Joyce
Howarth, George (Knowsley N) Redmond, Martin
Hughes, John (Coventry NE) Reid, John
Hughes, Robert (Aberdeen N) Robertson, George
Hughes, Sean (Knowsley S) Rogers, Allan
Illsley, Eric Ross, Ernie (Dundee W)
Ingram, Adam Rowlands, Ted
Johnston, Sir Russell Ruddock, Ms Joan
Jones, Barry (Alyn & Deeside) Skinner, Dennis
Jones, Martyn (Clwyd S W) Smith, Andrew (Oxford E)
Kirkwood, Archy Soley, Clive
Lambie, David Spearing, Nigel
Lamond, James Steel, Rt Hon David
Leadbitter, Ted Steinberg, Gerald
Lestor, Miss Joan (Eccles) Strang, Gavin
Lewis, Terry Taylor, Mrs Ann (Dewsbury)
Litherland, Robert Taylor, Matthew (Truro)
Livsey, Richard Thompson, Jack (Wansbeck)
Lloyd, Tony (Stretford) Turner, Dennis
Lofthouse, Geoffrey Vaz, Keith
McAllion, John Wall, Pat
McAvoy, Tom Wallace, James
McCartney, Ian Walley, Ms Joan
Macdonald, Calum Warden, Gareth (Gower)
McKay, Allen (Penistone) Wareing, Robert N.
McKelvey, William Welsh, Andrew (Angus E)
McLeish, Henry Welsh, Michael (Doncaster N)
McTaggart, Bob Williams, Alan W. (Carm'then)
McWilliam, John Wilson, Brian
Mahon, Mrs Alice Wise, Mrs Audrey
Marshall, Jim (Leicester S) Worthington, Anthony
Martin, Michael (Springburn) Young, David (Bolton SE)
Martlew, Eric
Maxton, John Tellers for the Noes:
Meale, Alan Mr. Allen Adams and
Michael, Alun Mr. David Marshall.
Michie, Bill (Sheffield Heeley)

Question accordingly agreed to.

Resolved, That the Rate Support Grant (Scotland) (No. 3) Order 1987, a copy of which was laid before this House on 11th December, be approved.