HC Deb 11 January 1989 vol 144 cc941-66 10.27 pm
The Minister of State, Scottish Office (Mr. Ian Lang)

I beg to move, That the Rate Support Grant (Scotland) (No. 2) Order 1988, dated 28th November 1988, a copy of which was laid before this House on 30th November, be approved.

I understand that 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 Revenue Support Grant (Scotland) Order 1988, dated 28th November 1988, a copy of which was laid before this House on 30th November, be approved.

Mr. Speaker

If the House agrees, so be it.

Mr. Lang

The revenue support grant order, the first of its kind, marks the final stage of the revenue support grant settlement for 1989–90, first details of which were announced by my right hon. Friend to the House on 27 July. As my right hon. Friend stated at that time, public expenditure provision for the coming financial year has been fixed at 8 per cent. more than provision in the current year, and 4.6 per cent. above authorities' adjusted budgets for this year. It includes full provision for the extra administrative costs of operating the community charge. The increase in aggregate Exchequer grant for next year is 5.5 per cent., but after making provision for specific grant payments, the increase in revenue support grant, over the level of rate support grant for the current year, is 9.8 per cent. That is the relevant point for tonight's debate and I shall return to it later.

The grant settlement is, of course, in respect of the first year in which domestic rates will be replaced, in Scotland, by the community charge. This leads us in turn to a simplification in the system of grant support to local authorities, and the ending of the old rate support grant with its three separate apportionments into needs and resources elements and domestic rate relief each of which then required regular adjustments in subsequent years. We shall, of course, have the legacy of the old system in the continuing need for rate support grant orders for some time, in respect of years up to 1988–89, but I am glad to say that the new revenue support grant arrangements will be simpler.

In the first place, I propose to have only one revenue support grant order a year, and that will be a fairly short document, like the one we are considering this evening, dealing only with the year ahead. The order sets out how much grant each local authority will be paid in the following year, and the report on the order describes how these figures are arrived at. Once approved, each authority's grant will be fixed and the authority can be certain of precisely how much it will receive. There will, in general, be no subsequent adjustments, either for the various technical reasons that have required adjustment in the past or in respect of grant penalties. The effect of the community charge will be to make councils much more responsive and accountable to their electorates for their spending levels and for that reason the Government feel able to abandon the system of grant penalties.

It is worth mentioning at this point the other Significant change which will begin to make its impact on local government next year and that is the introduction of the competition provisions in the Local Government Act 1988. The effect of competition will be to make the local authority operations to which it applies more efficient and to reduce their costs. This will be so irrespective of whether the successful bidders for business are outside contractors or the authorities' own direct labour organisations. The introduction of the community charge and the new competition provisions should between them bring considerable benefits to local charge payers, both in respect of the payments required of them and of the services with which they are provided.

When my right hon. and learned Friend announced in July the terms of the revenue support grant settlement for next year, he said that, if councils were to keep their expenditure increases within the present level of inflation, there would be no reason for community charge levels next year to be higher than they would have been if councils had been required to raise the same amounts as domestic rates this year. We published figures at the time showing that that would mean, for most community charge payers, payments in the range £200 to £300. Last month, we published our detailed estimates of what, on this basis, each community charge ought to be next year.

The matter has been one of lively discussion since then and my right hon and learned Friend and I have been accused by local authorities of almost every crime in the book. May I say this evening that I do not withdraw a word of what we have said on this matter. Underlying our prognostications are a few simple facts. Local authorities have three main sources of income with which they finance their expenditure. These are non-domestic rates, grant and, from next April, the community charge.

Mr. Dennis Canavan (Falkirk, West)

In calculating the amount of revenue support grant, what estimate did the Government make of the number of people who will refuse to pay the poll tax?

Mr. Lang

The provision for non-payment is broadly similar to the provision that exists under domestic rates, although in that instance it is more a question of reliefs than of non-payment. Under the community charge, the reliefs and exemptions are likely to amount to about 2.3 per cent. compared with 6 per cent. of reliefs.

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

Is it not the case that the Government have said to the Convention of Scottish Local Authorities that the non-collection rate will be 5 per cent? Is it not also the case that everyone in local authorities and all others who make any reasonable judgment of the matter think that that is a gross under-estimate, and that the figure will be well in excess of 5 per cent? Local authorities will not, therefore, raise a substantial sum of money through the poll tax this year, as the Government expect.

Mr. Lang

The record of those who have estimated the success or failure of the various processes in preparation for the community charge is such that I think that our own figures are rather closer to reality than those of the others. The figure is broadly the same for shortfall, which is a total of around 7 per cent., as under the domestic rating system, and that includes reliefs and non-payment.

Under the provisions of the 1987 legislation—

Mr. Harry Ewing (Falkirk, East)

I want to ask the Minister a simple question. What on earth has the level of the poll tax got to do with the Scottish Office? Was it not the case that, when the legislation was introduced, the Government argued that they introduced it to create a situation in which the matter was between the local authorities and their electorate? What has it to do with the Scottish Office?

Mr. Lang

It will be such a matter. Accountability is one of the central underlying themes. But throughout last year we heard various Labour councillors and directors of finance estimating outlandish figures such as £529, which was the figure that the finance director of Glasgow estimated. Curiously enough, that estimate emerged in the middle of the local government elections. We have waited until the facts were available to us and then, on the basis of the facts that I am describing now, we have said what the level of community charge would need to be if there was no volume increase in spending by local authorities.

Under the 1987 legislation, authorities now know the inflation-related increase in their non-domestic rate income next year. They also know, subject to the agreement of the House this evening, their increase in grant income. The increase in revenue support grant for local authorities as a whole is 9.8 per cent. over the rate support grant first payable in respect of the present year. Many authorities will gain a much higher increase than that, and for the high-spending authorities that have incurred grant penalties this year, the actual increase in grant next year, by comparison with what they are receiving this year, will in some cases be very substantial.

Mr. John Maxton (Glasgow, Cathcart)

In view of what he has said about grant penalties, why does the Minister not, even now, write off all the penalties for last year? The Secretary of State for the Environment has said that he will not impose any penalties in the coming financial year simply to allow a better run into the poll tax.

Mr. Lang

As the hon. Gentleman knows, the systems are not the same. It is important to maintain downward pressure on local authority spending. That is why we made it clear at the outset that penalties would remain this year. The English have decided to close down their grant system. The effect of that is that there can be no adjustment, so they will not benefit, as we will, if authorities bring their spending into line, from grant adjustments of some £89 million.

All that is left for authorities to fix for themselves is the income that they can expect from community charges. It is absolutely clear, therefore, that if authorities propose to maintain the same volume of spending next year as they are planning this year, they ought to charge the level of community charge that my right hon. and learned Friend announced last month. If their charges are higher, the answer is simple—they are increasing the volume of their spending. Their electors are entitled to know that, and that is why we published our estimated figures when we did. As the House will see, the revenue support grant order is a very simple and straightforward document which simply sets out the amount of grant that we propose to pay to each authority. The basis on which these sums have been arrived at is set out in the report. This is in accordance with the provisions of schedule 4 of the 1987 Act.

First, an amount has been distributed among authorities on the basis of their assessed needs. This is a process akin to the distribution of the needs element of the present rate support grant, and the basis of distribution is to equalise for different per capita needs. The rest of the available grant is then distributed on a straightforward per capita basis. The result of this process is to increase substantially the share of grant going to some authorities by comparison with the present rate support grant arrangements, and correspondingly to reduce the share going to other authorities. There are various reasons for this, but the most notable is that under the old system an authority could actually gain grant by setting a high rate poundage. This encouraged overspending, so in our new grant arrangements it is of no benefit to a local authority to have a high non-domestic rate poundage.

Mr. Foulkes

The Minister wil know that Cumnock and Doon Valley has been a responsible authority. At a meeting in Lugar, when the Secretary of State visited the area recently, he said that he would bend over backwards to assist Cumnock and Doon Valley because of the high level of unemployment, the poverty and the deprivation in the area. Why has assistance to the authority been reduced by £500,000? That is surely not bending over backwards to help.

Mr. Lang

I shall gladly look into the matter if the hon. Gentleman would like to give me details of his anxieties. The authority benefits from the safety net, both in terms of the district and as a district in Strathclyde region, to the extent of some £19 a head.

Mr. Dick Douglas (Dunfermline, West)

How does the Minister respond to COSLA's assertion that safety-netting goes against accountability and that, if we really want to tackle accountability, we should try to direct the tapering device towards the individual?

Mr. Lang

Not since Saul set out for Tarsus has such a blinding flash of light led to such dramatic conversions to the principle of accountability such as we now hear from the Opposition. I shall answer the hon. Gentleman's question by saying exactly what I was about to say on safety-netting. The legislation provides that, having carried out the allocation process, the Secretary of State may then alter the resulting figures. That is the so-called safety-netting power. Its declared intention is to allow damping of swings in grant entitlement.

I understand the concern, but there is nothing new in this arrangement except that we are now starting to do away with it. I am glad to hear that there is a welcome for that from the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes). For years past there have been arrangements to modify grant entitlement to moderate fluctuations in any one local authority from one year to the next. Last year, for example, in distributing the needs element of rate support grant, each authority was guaranteed a minimum increase of 4 per cent. over the present year, and that was financed by imposing a 10 per cent. limit on gains. Last year, the precise detail of the arrangement was suggested to us by COSLA in the course of a meeting that it had with my right hon. and learned Friend and myself.

So there is nothing new or unusual about that sort of arrangement. Indeed, it was a feature of the old grant system that, through the operation of the resources element, some high-spending authorities attracted more grant by virtue of their high rate poundages. The new arrangements for the distribution of revenue support grant will give no such advantage to high spenders. It is only now, under the greater transparency and accountability of the new arrangements, that we can see more easily the unacceptable degree of cross-subsidy of the high spenders by the low spenders that has existed in the past.

The Green Paper on local government reform assumed that the cross-subsidy would be carried over 100 per cent. into the first year of the new system. Legislation was enacted against the background of that assumption and all illustrations of community charge levels that the Government have published until recently have been based on it. I take the view—I am glad that some Opposition Members agree with me—that it is unacceptable—

Mr. Douglas

Will the Minister give way?

Mr. Lang

I would rather that the hon. Gentleman hear me out. When he has done so, I shall give way to him.

Mr. Douglas


Mr. Lang

If the hon. Gentleman will hear me out, I shall give way to him. [Interruption.]

Madam Deputy Speaker (Miss Betty Boothroyd)


Mr. Douglas

On a point of order, Madam Deputy Speaker. I am willing to read Hansard and analyse what I said earlier, but I ask the Minister to respond to that which COSLA has said. I am willing to use my own phraseology. The Minister is prepared—

Madam Deputy Speaker

Order. The hon. Gentleman knows that he is raising a matter for debate and not a matter on which the Chair can rule.

Mr. Douglas

It is all right—

Madam Deputy Speaker

Order. Mr. Lang.

Mr. Lang

I am in the process of responding to the question of the hon. Member for Dunfermline, West (Mr. Douglas) about COSLA. If he will bear with me, I shall give him the rest of the answer. The Green Paper on local government reform assumed that the cross-subsidy would be carried over 100 per cent. in the first year of the new system. The legislation was enacted against the background of that assumption. We take the view that it is unacceptable to continue with this situation for other than the short term. That is why my right hon. and learned Friend the Secretary of State and I have taken steps to remove 38 per cent. of the cross-subsidy or safety net at once. We plan to withdraw the rest within the next three years or so.

We must recognise, however, that for community charge payers in some authorities, especially in Glasgow and Strathclyde, too sudden a change in the grant arrangements would have had dramatic consequences as we move to a completely new and fairer system. The safety net merely reflects temporarily, and on a declining basis, the advantage that some authorities had under the old grant system to enable such authorities to adapt.

The authorities that are most vociferous in their complaints about the temporary continuance of a cross-subsidy should reflect that they are the direct beneficiaries of the change to the new system of grant distribution that gets away from the resource element contribution. They are benefiting further from the already substantial phasing out of safety nets, and they are the recipients of the largest increase in grant under the new system. For example, the Borders region stands to gain 13.5 per cent. more next year than this, and the Grampian region 14.6 per cent. more—more than double the rise in the cost of living—and many districts are receiving still larger increases.

The Revenue Support Grant (Scotland) Order before us tonight, represents an extremely good deal for both local authorities and domestic taxpayers. Every regional and islands council is receiving a grant increase well in excess of the rate of inflation. Taken together with the sums of grant being returned to authorities in respect of earlier years, there is every reason to expect community charges to be set at moderate levels. I commend the orders to the House.

10.45 pm
Mr. John Maxton (Glasgow, Cathcart)

I can understand why the Minister kept his head down and read every word of his dreary speech. If he had lifted his head and had happened to catch the eye of anyone on either side of the House, I doubt whether he could have kept a straight face. He would have broken into fits of laughter because, as my hon. Friend the Member for Dunfermline, West (Mr. Douglas) has said, he was talking nonsense.

Tonight we are debating for the first time the new grant arrangements under the poll tax legislation that the Government are imposing upon the Scottish people, despite almost total opposition to it. The levels of poll tax to be imposed will depend upon the Revenue Support Grant (Scotland) Order and I intend to limit my remarks to that.

The Minister tried to imply that this is a simple matter. Of course the order is simple, because it is simply a list of figures representing what each local authority will receive. The idea that the process by which those figures have been arrived at is more simple than past methods is absolute nonsense. Consider the document put to COSLA by the Scottish Office about how the safety netting is arrived at, which stated: Column 28 is calculated as follows: For an area with no safety net community charge (column 27) over £275, and with a no safety net charge (column 27) greater than the fully safety-netted charge (column 26), column 28 is the greater of £275 and column 26, its fully safety-netted charge, etc., etc.

Mr. Henry McLeish (Fife, Central)

That is simple enough!

Mr. Maxton

Oh yes. If anyone believes that the method is simple and is anything other than gobbledegook, he is a con man. Perhaps that is exactly what the Secretary of State and the Minister are.

The Secretary of State and the Minister have tried to claim that the settlement is generous and that the levels of poll tax are much lower than we had estimated. The Minister made much play of that in his speech. He forgets that our objection to the poll tax is not the level imposed on any individual, but the fact that it is grossly unfair that the tax can be imposed on someone who is just above the low rebate scheme and that the same level of tax is imposed on the wealthiest in the land. That is our moral objection to the poll tax:no matter the level, the tax is grossly unfair.

I accept that the settlement under the poll tax is more generous than past settlements, but that is not saying a great deal for it. Equally, that generosity does not stem from the Government's munificence to the Scottish people, but is part of cheap political opportunism and sheer accident.

The accident which increases the settlement to 9.8 per cent. is the £70 million that the Government, somehow or other, managed to con the Treasury into allowing them to keep. Normally they would have lost that money to the Treasury. The Secretary of State may smile, but I hope that he will be able to guarantee that that £70 million will not be clawed back by the Treasury next year, thus putting an extra burden on the Scottish poll tax payers.

The percentage of grant to relevant expenditure remains at 55.4 per cent., exactly the same as it was last year. It is worth saying again and again that, in 1979, the percentage of grant was 68.4 per cent. If that same figure of grant was being given by the Secretary of State today, the average poll tax in Scotland—based on the Secretary of State's formula—would be not £275 but £180.

Mr. Lang

Perhaps the hon. Gentleman will extend his arithmetic and say what it would be if the level had not been reduced from 75 per cent. to 68.5 per cent. by the last Labour Administration.

Mr. Maxton

Nobody has denied that it was reduced by the last Labour Government, but the massive major reduction in grant has occurred under the Tories. The hon. Gentleman should admit that. It is his problem. The Conservatives have been in power for 10 years and he must accept responsibility for what they have done.

Mr. Harry Ewing

Perhaps my hon. Friend should remind the Minister that the rate support grant level was at 75 per cent. to compensate local authorities in Scotland for the reorganisation of local government imposed on them by the outgoing Conservative Government, who left the Labour Administration to pick up the tab. It was always understood that it would be reduced to 68.5 per cent.

Mr Maxton

My hon. Friend has explained the position as fully as I would have expected him to do. This is not a particularly generous settlement, so let us not get carried away into believing that the Minister is a late phoney Father Christmas.

Grant is given against the relevant expenditure figure that the Secretary of State claims each Scottish local authority should spend next year. If that figure is wrong, then so is the grant less generous than would appear to be the case. On the surface, as the Minister has tried to claim, there appears to be an increase of 8 per cent. in the level of relevant expenditure. But against this year's adjusted budgets it is only 4.3 per cent., and that is well below the level of inflation as estimated by the Government. It includes—but the Minister did not mention this—an extra £13 million for the implementation and administration of the poll tax, an admission that the Government got it wrong in terms of the cost of the poll tax all along.

If local authorities cannot live within that 4.3 per cent. increase—which, as I say, is well below the estimated rate of inflation and almost certainly well below the local government rate of inflation—the poll tax figures will be well above the guesses put out by the Secretary of State. It is difficult to see how local authorities will be able to maintain existing services within that figure, let alone meet the new burdens that have been placed on them—the revised staffing standards in schools, the introduction of school boards, the development of compulsory tendering and the pay awards for police and fire services that, as we know, will be well above 4.3 per cent.

When loan and interest charges are added, the total level of expenditure supported by grant is £4,505 million. But the sum for loan charges is based on an interest rate of 10.2 per cent. and no hon. Member believes that that is remotely realistic in the present economic climate. The Minister must give a guarantee to the House now that he will bring forward variation orders to take account of the changes in interest rates that have been imposed by the Government in recent months. If he fails to do that, the poll tax payer will again have to carry that burden.

The Government are arriving at their estimated poll tax figures assuming that exemptions and non-collections will be the same as for rates. Nobody, apart from the occupants of the Government Front Bench, believes that to be true. Everybody believes that the level of poll tax non-payment and the problems of collection will be so much greater that the poll tax figures for those who can and will pay will be that much higher.

I accept that if the Government had continued the trend since 1979 and reduced the support grant yet again., and if the safety net system based on the unrealistic £275 Scottish average had not been introduced, the poll tax in many authorities, particularly in the west of Scotland, would have been much higher. For instance, but for the safety net, the combined Glasgow and Strathclyde rate would have been £55 more than it will be. The deliberate depressing of the poll tax figures is not an attempt by the Government to be generous to the poll tax payers of Glasgow and Strathclyde; it is a desperate attempt to reduce the political outcry on 1 April when the poll lax bills go out.

Mr. Douglas

This is governmental corruption.

Mr. Maxton

That is why my hon. Friend speaks in such terms, although I perhaps would not; but he is right. This is an attempt to hide the great hatred for the poll tax in Scotland. At long last the Government seem to have realised that the poll tax is deeply unpopular among the vast majority of Scottish people. Knowing that they will have to take full responsibility for the tax and the level at which it is set this year, they have attempted to reduce its impact by these devious means.

I assume that over the next few years the Government will resume their reductions in grant to local authorities. The Minister has already said that they intend to run down the safety net procedures. By doing that they hope that the resultant increase in the poll tax will be blamed on what they call spendthrift Labour-controlled authorities, not on the Government.

Let us examine the safety net procedures. Non-domestic rates are now paid into a common pool and redistributed on a per capita basis to local authorities. That means that authorities such as Strathclyde and Glasgow, with high levels of non-domestic subjects and high domestic rate poundages, contribute more, and authorities with low levels gain.

So the Government decided in their wisdom, against the advice of COSLA, to ensure that the enormous disparities that this would create should be compensated for by a safety net. But this safety net does not help the poorer, as opposed to the richer, poll tax payer—as it should. It helps all local authorities and all poll tax payers in individual poll tax areas. Moreover, the safety net makes a complete mockery of the whole Government case for the poll tax. That case is all about accountability. We have heard time and again—and again from the Minister tonight—that the poll tax is about accountability. We heard that on Second Reading, in Committee and on Report and Third Reading of the Abolition of Domestic Rates Etc. (Scotland) Bill. Local authorities were to be made accountable for what they did. Now, under the sham that the Government have introduced, Strathclyde and Glasgow will not be accountable this year for the sums that they will raise in poll tax. [Laughter.] The Government have destroyed their own case, and all they can do is laugh.

There will be no accountability in Strathclyde and Glasgow because the local authorities there have not decided the level of the poll tax: the Government have. Accountability goes out the window as a result of this order. The fact that the Government have felt it necessary to introduce it illustrates the sorry mess of the new system. Something had to be done; otherwise the Strathclyde ratepayers, particularly the poorer ones, would have had to pay much more.

Under the crazy scheme that the Government came up with, Sutherland district council would have received £30 for every poll tax payer in its area. There would have been no district poll tax payment by the council. It would have been able to reduce the regional poll tax by £30, too. How absurd! As the poll tax is phased out, so accountability disappears. Glasgow, Strathclyde and other local authorities will have to increase their poll taxes merely to stand still. Even if they reduce their expenditure or maintain it at the same level, their poll taxes will inevitably rise. [Laughter.] The Under-Secretary of State, the hon. Member for Stirling (Mr. Forsyth), who is the architect, the evil mind, behind this whole ridiculous affair, is laughing. He knows that is what he has wanted all along.

Strathclyde has reduced expenditure but the poll tax will go up in every one of the local authority areas that benefited this time. However, those who have lost this year will find that they can both increase expenditure and reduce their poll tax at the same time. Where then is the accountability? I thought that this was supposed to stop local authorities from overspending, from increasing their expenditure. Authorities that keep expenditure at the same level will be penalised and those that increase it may well find that they will be all right.

This is an unfair system and makes nonsense of the case for local accountability. The settlement has little to do with the real needs of the people of Scotland or with the services that local government provides. It has all to do with the desperate political plight of the Secretary of State and his party. They know that they are in deep trouble over the poll tax and that the people of Scotland do not want it. Luckily, the people of Scotland are not stupid. Since 1979 they have shown that they know where to put the blame in local government matters. In election after election they have rejected the Conservatives and will continue to do so despite transparent misuses of political power such as this.

Several Hon. Members


Madam Deputy Speaker

Order. Many hon. Members want to participate in the debate. Therefore, I appeal for brevity. I hope that the House will respond to my appeal so that I can call all those concerned.

11.1 pm

Mr. Allan Stewart (Eastwood)

Much of what the hon. Member for Glasgow, Cathcart (Mr. Maxton) said was clearly predictable. It seemed that he had some difficulty in complaining about the details of the settlement and the orders that are before the House. I listened with particular interest to what he said about safety nets in Glasgow because I shall be a community charge payer in Glasgow. He delivered his speech with a great deal of verve and enthusiasm, but at the end of it I was wholly unclear about whether he and his party were in favour of the safety net provisions. As he represents Cathcart, he should have made it unequivocally clear that in the context of the new system the safety net provisions are sensible. I shall come back to that.

I emphasise that this is clearly a generous settlement with an increase of 9.8 per cent. in total grant. The grudging comments from the hon. Member for Cathcart were just about as near to a recognition of that as the Opposition will dare to go. The hon. Gentleman gave the impression that safety nets were a new concept and that somehow they had been introduced because of particular problems that had arisen at the last minute over the introduction of the community charge system. Nothing could be further from the truth.

If one goes back not to the Bill or the White Paper but to the original consultation document, the Green Paper, one sees that on page 64 it says: to move directly to the new grant arrangements would entail unacceptable disruption". That is why there will be safey net provisions. There is nothing at all new about the introduction of safety net provisions for the first few years of the community charge system.

Mr. Douglas

Will the hon. Gentleman give way?

Mr. Stewart

No. I apologise to the hon. Gentleman but I am conscious of what you, Madam Deputy Speaker, have said about the amount of time available.

The settlement has evoked different reactions from different authorities. Perhaps unusually, I should like to congratulate Strathclyde regional council on its provisional budget because it has come out to within one pound of the Scottish Office estimates which are constantly derided and abused by the Labour party as being wholly unrealistic, fatuous and wrong. They were certainly not so in the case of Scotland's largest and overwhelmingly Labour-controlled local authority.

Of course, there have been different reactions elsewhere. The Lothian reaction has been to take the figures out of thin air and constantly revise them. We have heard the complaints from Borders and Grampian about safety nets, but it is worth emphasising that, after the safety net provisions, the grant increase for Grampian is 14.6 per cent. and for Borders 13.5 per cent. I do not know what is happening about the Grampian budget. No one appears to know what is happening about the administration of the Grampian region these days. Perhaps the hon. Member for Angus, East (Mr. Welsh) or the hon. Member for Argyll and Bute (Mrs. Michie) can tell us whether there is still an administration. However, we know that Borders appears to be intending to increase its expenditure by over 11 per cent. in the forthcoming year. That is a quite unreasonable increase and puts into context the complaints about the grant system that have emanated from that area.

You have asked hon. Members to be brief, Madam Deputy Speaker. I therefore conclude by saying that the grant settlement is a fair and reasonable settlement. It was important that the Government obtain a just settlement for the introduction of the new community charge system. All the evidence is that the system is going ahead and will be implemented. The campaigns of non-payment and registration about which we have heard so much from Labour Members will clearly be a complete and utter failure.

11.6 pm

Mr. Torn Clarke (Monklands, West)

If it were not for the fact that I sought to catch your eye, Madam Deputy Speaker, on a specific point involving my constituency and that of my hon. Friend the Member for Strathkelvin and Bearsden (Mr. Galbraith)—it is an immediate problem concerning Strathkelvin district council—it would be tempting to enter into the mainstream debate.

The Secretary of State might recall that I was present at several meetings in another capacity when rate support grant settlements were debated. Hon. Members see a colossal amount of Government interference in local government matters which are not for the Government at all. There is more than a degree of unreality when we see clearly—COSLA has not been mentioned very often, although the Government have a statutory duty to consult it—that the inflation rate, for example, is well above the 4.3 per cent. that the order recognises.

We also see that, although the Government are forced to recognise the reality of increasing public expenditure, for example, in the Department of Social Security, they are pouring money into private residential homes which have arisen as a result of the strain on the health services. The Government do not recognise that those same strains apply to the social work departments of Scottish local government.

May I turn briefly to the specific problems of Strathkelvin district to which I referred. My concern is shared by my hon. Friend the Member for Strathkelvin and Bearsden and is known to the Minister. I thank the Minister and his staff for the attention that they have given to the matter. There has been a error in the calculation of the Strathkelvin rate support grant settlement. That is rather serious, because Strathkelvin district council will be underpaid by between £300,000 and £350,000 in 1989–90. The situation has arisen as a result of an incorrect figure supplied to the Department by the regional council in connection with non-domestic rating in the next financial year. As a result, the grant was calculated based on Strathkelvin receiving £2.731 million from non-domestic rates in 1989–90. The actual figure available is £2.273 million. I understand that the Scottish Office has told Strathkelvin that, although a recalculation cannot be made immediately, it has agreed that the amount underpaid will be recalculated during December 1989 and will be repaid then.

I invite the Minister to confirm the figures for the record, if only because Strathkelvin is concerned about its budget. When does the Minister think that any payment might be made? I hope that I will not sound churlish when I state that I recall on a previous occasion, when something similar happened to Monklands district council, my distinguished predecessor, the late Jimmy Dempsey, advocated the need for adjustments. The Government did meet his request in due course, but only after several years, and they did not meet the full amount. I hope that Strathkelvin will not endure the same experience.

11.10 pm
Mr. Bill Walker (Tayside, North)

I have noted your comments, Madam Deputy Speaker, and I promise to be brief.

The hon. Member for Glasgow, Cathcart (Mr. Maxton) clearly finds it difficult to suggest that there should not have been a safety net when there is a 9.8 per cent. increase. He suggests that there is something odd in having a safety net, but he knows full well that cushioning is essential in any transition period. I can only speak for myself in these matters, but I believe that my view reflects Government policy. I have stood at all elections on a platform of prudent Government expenditure and the control of Government expenditure and the reduction of taxes. I do not apologise for that.

The present position, with the community charge pending, is very interesting. Tayside regional council has been sending out a delightful blue form. I wonder about the legality of a form from a body that has been set up by statute and which operates under statute. That body is sending out forms carrying references to a tax that does not exist. The forms have been about the poll tax. There is no poll tax, and I believe that the forms are probably therefore illegal. It will be intesting to see what the local authority auditors say about that.

It was also interesting to note that the Scottish National party in Angus is not adopting the policies—as we understand them—of non-co-operation and non-payment of the community charge because it is actively collecting it. More importantly, the SNP provost of Perth and Kinross, Alex Murray, has stated publicly on more than one occasion that the SNP policy is not to break the law. It seems that again we have the humbug and hypocrisy to which we have grown accustomed from that quarter.

It seems that those who are in office and have responsibility behave properly and responsibly. Those who have little hope of ever gaining office behave irresponsibly—[Interruption.] Opposition Members should not laugh. They aspire to office but have little hope of achieving it. They should think very carefully about their attitudes in this matter. My advice to them is that this is a unitary Parliament. They should not be associated with the funny lot who represent the Scottish National party. Their views are quite clear. They are out to destroy the link that Scotland has with this place. Labour Members have a different view and I hope that they will adopt the view that one day they might be in government.

Mr. John McAllion (Dundee, East)

I hope that the hon. Gentleman will accept that I will not associate myself with the Scottish National party in Tayside, which recommended that those who pay the poll tax promptly should be given a discount by Tayside regional council.

Mr. Walker

The hon. Gentleman and I find the antics of the Scottish National party on Tayside amusing. We have witnessed the activities of the SNP and its so-called leaders and the actions of the tiny minority of its representation in this Parliament. We have also seen the activities of those in the Angus and Tayside regions. The hon. Gentleman and I look at those people, and we both realise what a bunch of hypocrites they are and what humbug comes from that quarter.

11.14 pm
Mrs. Ray Michie (Argyll and Bute)

The Minister indicated that the rate support grant measure makes provision for increases of grant to Scottish local authorities, which total £19.8 million and refer to the five financial years 1984 to 1987–88. The Government will probably take it as evidence of the success of their policy of forcing reductions in local government spending that they are able to return that sum to Scotland's hard-pressed rate and poll tax payers. However, any impression of success is bogus, because the Government's own information shows that between 1975 and 1980, the average domestic rates bill in Scotland fell by 17 per cent. Since 1979–80, when the Tories dashed in on their white charger to rescue the domestic ratepayer, Scotland's average domestic rates bill increased by 81 per cent.

As to the Revenue Support Grant (Scotland) Order 1988, some may have hoped that one small benefit of poll tax would be that the system for calculating central Government support to local authorities would be made easier to understand. The Minister says that it is simpler, but he is wrong, because that is far from the case. The revenue support grant system is just as complicated, arcane and fundamentally irrational as the rate support grant that it replaces.

The first point to be made about calculating expenditure needs, which underlines the order, is that the new system perpetuates the false and unrealistic assumptions the Government have made over the past nine years about the money required to maintain local government services in Scotland at a tolerable level. Some like to pretend that the Government's estimate of expenditure needs is lower than local authority budgets because local authorities are profligate. Let us look at areas when the Government consider that local authority expenditure is excessive.

In the financial year now drawing to a close, the Government consider that Scottish local authorities, regional and island councils, should have spent about £100 million less than they did on education. The Government wanted £28 million less spent on social work—on providing for the elderly, dealing with the needs of children at risk, and of the physically and mentally handicapped, coping with the menace of AIDS, and combating the drugs problem. Those are all social work responsibilities, on which the Government want less money to be spent.

The Government also wanted £5 million less spent on the fire service, a reduced amount for school crossing patrols, and £7 million less on roads and road lighting. They wanted £1.3 million less spent on sheltered workshops for the mentally and physically handicapped and the disabled, and £1 million less on registering electors. And so it goes on and on.

Over the past nine years, the Government's policy has been to transfer burdens from the Treasury to local authorities. It is a particularly pernicious policy with the move from rating, with all its drawbacks and disadvantages, to poll tax—with its central disadvantage that everybody who is not entitled to rebate pays exactly the same, regardless of their means. It is thus a transfer of tax burdens from a graduated system of taxation to a flat-rate system, and—as we have said often enough in the House—a deliberate exercise of unfairness.

I am disappointed that the Government have still done nothing about business rates. There are huge discrepancies in different parts of Scotland, to say nothing of the United Kingdom. As I think the Minister knows, in my own constituency, Argyll and Bute district council has expressed deep concern about the possible non-implementation of the uniform business rate. The council considers that any failure to arrange a single rate and harmonised valuations would have a devastating effect on its fragile economy, which depends considerably on tourism. I understand that the Minister is to make a keynote speech on 27 January. If he is going to say anything significant about business rates, I would have preferred him to do so on the Floor of the House rather than at a conference later in the month.

By continuing to fiddle with the level of revenue support grant and thereby with that of the poll tax, the Government have demonstrated that, in the new system as much as in the old, the most important determinant will be not the spending needs of local authorities but the whims of central Government in manipulating the grant. I believe that these proposals are fundamentally flawed.

11.21 pm
Mr. Adam Ingram (East Kilbride)

I endorse the criticisms by my hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton). It is important that the debate should not be about individual council settlements. However, I want to refer particularly to my own council, which has suffered significantly.

The Secretary of State has so manipulated revenue support grant as to deny much-needed support to one authority in order to give it to another. That has been done against the best advice of the Convention of Scottish Local Authorities, which has rightly criticised it. I should like the Minister to comment on COSLA's advice and to say why he felt it necessary to reject it.

East Kilbride district council, having been, as I say, particularly badly affected, has, I know, expressed its extreme concern in a letter to the Minister. Over the years, the council has had a reputation as a responsible local authority: it has never been criticised by Ministers for being irresponsible or a high spender, or for acting "out of synch" with the interests of ratepayers and the community that it represents. Traditionally it has been among the three lowest-rating councils in Strathclyde region. But, owing to reasons largely outwith its control and over which it has no influence, it is heading for a personal poll tax of about £99 per head. That will be among the highest poll tax charges—possibly the highest—in Scotland's district councils.

As the Minister will know, as part of the Government's proposals for the distribution of revenue support grant among local authorities, East Kilbride was classified as a benchmark district authority. Accordingly, the district council is to receive no proportion of grant for expenditure needs. Consequently, poll tax payers will lose to the extent of £8 per head of support grant. The unwanted safety-netting procedures that the Government have imposed will result in a further loss of support amounting to £12 per head of population. That represents an overall loss of grant to East Kilbride district council of 91£3 per cent. In both money and real terms, the district council will receive only £107,000 in revenue support grant compared with £1.3 million for the current year. That is the effect of these orders on East Kilbride district council.

I understand that Cumbernauld and Kilsyth district council is to suffer a loss of grant amounting to 27 per cent. —a significant loss, but it has to be set against East Kilbride's loss of 91.3 per cent. There can be no justification whatsoever for such a punitive measure being taken against East Kilbride. It has always acted responsibly over the years.

The district council's main concern relates to the basic figures, which generate a likely base community charge of about £85.1 per head, before any contingency and growth items are taken into account. That has to be compared with the Government's suggested figure of £76 or £77 per head.

I remind the Minister of the letter he received from the East Kilbride district council requesting a meeting. I ask the Minister to agree to that meeting and to listen to the council's detailed arguments. I seek a further assurance from the Minister that the revenue support grant assessment, which has worked so punitively against East Kilbride in all aspects, will be reviewed in the light of outturn information on rate products, community charge yields—and other relevant data.

11.26 pm
Mr. Dick Douglas (Dunfermline, West)

The order forms part of a political fraud. I use those words carefully. The hon. Member for Tayside, North (Mr. Walker) referred to the differences over terminology. He prefers to call the poll tax the community charge.

Mr. Bill Walker

That is the legal definition.

Mr. Douglas

All right, but if it is a charge it should be used to provide local authority services.

Is any hon. Member prepared to say that the services provided by local authorities in Fife are in any way inferior to those provided in Strathclyde—or that they are superior'? Having thought of a figure—about £275—the Government asked themselves how they could cook the books so that that figure could be applied throughout Scotland.

The hon. Member for Stirling (Mr. Forsyth) sits there smirking. He should re-read his speech of 9 December 1986 when he spoke about accountability. This proposal flies in the face of accountability. His speech in that Second Reading debate bears re-reading. It was made by a Member who never thought that he would be the Minister running the Scottish Office. Many hon. Members know that he is the man running the Scottish Office. The Secretary of State is not here, but we know that the hon. Member for Stirling is the real guy running the Scottish Office.

The orders fly in the face of accountability. This is a transitional arrangement in advance of the regional council elections which it is hoped will placate public opinion. If we really want to talk about the imposition of a tax, we should consider how we got into this mess in the first place and the measures that the Tory Government took to provide transitional arrangements for the domestic ratepayer. They did not say that there should be safety netting for the regions but for the individual ratepayer. Why do we not have the same provision now? The answer is that it does not suit them.

The Minister has tried to put words into my mouth in relation to the Confederation of Scottish Local Authorities. COSLA is opposed to safety netting per se. However, if there is to be safety netting, it should be for individual ratepayers and it should be related to ability to pay. Despite all the obfuscation over the minimum level of rebate, the tax will be a heavy burden on those least able to pay.

I have received letters from the chief executive of Fife district council about what might be expected from the revenue obtained from the poll tax. We know that the downturn in rates is less than 1 per cent. A prudent authority in Fife will calculate the downturn in revenue expected from the poll tax as between 5 per cent. and 10 per cent. If we find ourselves in that position, we have made a farce of accountability and local government finance.

It was hurtful for the hon. Member for Tayside, North (Mr. Walker), with his knowledge of the aircraft industry, to talk about prudent local government services. The hon. Member for Dumfries (Sir H. Monro) is sitting in a somnolent position. A tragedy occurred in his constituency and the people performing vital public services never asked about ability to pay. No one made the repulsive statement that the Prime Minister made in relation to the good samaritan-that he only provided his services because the person he helped had the ability to pay.

Vital public services must continue to exist and should not relate to ability to pay. Those services are important and are what the Labour party stands for. When we cease to stand for good public services, we cease to be a Socialist party and should not receive the support of the Scottish people. The Scottish people know what the Tories represent. They rejected them in 1987 and will continue to reject them.

11.33 pm
Mr. Andrew Welsh (Angus, East)

We are saying goodbye to the rate support grant system and hello to the revenue support grant system. The old and vastly complicated rate support grant was driven beyond the limits of toleration by Governments determined to use it for purposes for which it was never intended and as part of their battle to do down local authorities. I have the feeling that the revenue support grant will be just as complicated and misused. Already, before its implementation, we are seeing complications, adjustments and anomalies. I predict—it is easy to do so—that the new system will quickly adopt the flaws and inadequacies of the old.

When I was a local government councillor I could see at first hand the treatment meted out by the Government to local authorities. Now I am operating at the other end of the spectrum and the view is just the same. Local authorities are crucial to the economic well-being of Scotland in the daily provision of basic services. However, local authorities have never been properly financed or allowed the autonomy necessary to enable them to get on with the job of providing services without hindrance. The orders simply confirm that.

Central Government have never considered local government as a complete entity. When finance was reformed, the structure and status of local authorities were simply ignored. Now the Conservatives are apparently planning to take yet another short at structural changes which, no doubt, certainly on past form, will totally ignore the necessary finance and status required to produce a better local government system.

It is easy to pick out individual anomalies in the orders which, financially, will disadvantage some local authorities to favour others. I do not intend to pick out particular examples. It would be all too easy to bemoan the transfer of resources from other regions to Strathclyde region, but to do so would play the Government's no doubt intended divide and rule game. It would miss the fundamental point that it should be a question not of robbing one regional council to pay another, but of ensuring that the extra resources required to fund every region and district are supplied.

Is it true that, as COSLA states, an estimated £100 million of essential expenditure has been ignored by the Secretary of State in these orders? If extra cash is required to finance essential services, surely it is up to central Government to play their part in ensuring that the services and duties they place on local authorities are properly and adequately financed.

In introducing the new system of revenue support grant, will the Secretary of State address the points raised by COSLA? Why has an increase of only 4.3 per cent. been allowed for when the RPI has risen by 6 per cent.? At the very time when, as a consequence of school boards, competitive tendering, higher police and fire pay awards and new staffing standards in schools, new burdens have to be met by local authorities, what allowance have the Government made for the RPI increases? The 10.2 per cent. allowed for loan repayment interest looks vastly optimistic as the Government's economic policy is committed to higher interest rates. We seek an assurance that extra cash will be made available to meet further increases in interest rates over and above the 10.2 per cent. allowed for; otherwise services will suffer and the people of Scotland will lose by that system.

The Chancellor of the Exchequer is committed to ever higher interest rates which are hammering Scots industry, small businesses, agriculture and fishing. Now it appears that, because of these orders, local government taxpayers will also suffer.

Mr. Brian Wilson (Cunninghame, North)

Hurry up; enthuse us.

Mr. Welsh

I would find it difficult to enthuse the hon. Gentleman, given his record on the subject.

The Secretary of State continually made the claim of high spending by local authorities. We heard it again tonight from the Minister. In terms of volume, local government expenditure has not changed since 1979, yet local authorities are being forced to take on additional responsibilities. Government propaganda is saying one thing, but the reality is quite different. It is reasonable for us to ask why there is no grant penalty in England and Wales in the year preceding the introduction of the poll tax and why Scotland is not receiving similar treatment.

COSLA is rightly concerned about finance and the whole future of Scottish local government. I share its concern. I ask the Minister to understand why councils and local authorities feel that way. I ask the Minister to answer the specific questions posed by COSLA on behalf of its member councils. COSLA is worried because ultimately local authorities have to supply services to their customers which we take for granted, yet they are not being adequately financed to do so. Councils should be helped financially and not hindered, which is precisely what the Government are doing.

11.38 pm
Mr. Alexander Eadie (Midlothian)

I shall be very brief as I should have liked to say some of the things that have already been mentioned. As the debate has progressed, the smiles have disappeared from the faces of Ministers on the Government Front Bench. In all the debates in the House in which I have taken part for the past quarter century, I have never seen a Government get such a thrashing as they have on the whole principle of the revenue support grant that they are presenting tonight.

Listening to the debate I was reminded of the story of the little boy who was leaving a village. As he was leaving he said, "Cheerio God, I'm going away to live in another village." The presentation that the Government are making is, "Cheerio rates, we have now gone over to the poll tax." I have never heard a more unconvincing explanation of why we should do it.

My hon. Friend the Member for Dunfermline, West (Mr. Douglas) was on to a good point when he talked about the safety net. There was no possibility of the Government being able to respond to the question of the safety net, as was shown in one of the most disgraceful episodes in Parliament—I am referring to the Mates amendment. That was based on the ability to pay, but what happened? The whole House was incensed by the fact that ability to pay would not be considered for the poll tax and we had the disgraceful situation in the other place in which Members were wheeled in—although they did not even know that the House of Lords existed£to defeat the equivalent of the Mates amendment. So there was no question of a safety net for the individual.

The financial burdens with which people are being confronted today are nothing to smile about. Already this month, the financial burden of the average family has increased by about £50 a month. As time goes on, as a consequence of the increase in mortgage payments and the terrific strain on social services, problems will fall on the backs of local government. Where in the Government's proposals can one find any contingency plan to take care of that?

The Minister made two specific points about the statement from the Convention of Scottish Local Authorities. I do not want to repeat them, because he spelt them out in detail, but one noted that the figure of 4.3 per cent. was mentioned when we know that the retail price index is running at 6 per cent. at the moment. No hon. Member would be boastful enough to say that interest rates will remain stable. Increased interest rates are a burden that will fall eventually on local government. The Minister also dealt with the question of 10.2 per cent. for next year.

In his opening speech, the Minister dealt with the COSLA document in a hilarious manner and treated this thoughtful document, which we should be debating in detail tonight, as something that was not worth considering. I wish that we had more time to debate the points put by COSLA. The Government are obliged to answer in their defence the points made by COSLA about their proposals. It is a sham debate when we do not have sufficient time to deal with all the points in the COSLA critique of the Government's proposals.

Dame Elaine Kellett-Bowman (Lancaster)

The hon. Gentleman could have had twice as long if he had wanted it.

Mr. Eadie

The hon. Member for Lancaster (Dame E. Kellett-Bowman) does not know what she is talking about.

Yesterday, a resolution was passed by Lothian regional council which said: That the Council expresses its concern to the Scottish Office that documents and statements from the Scottish Office indicate a disturbing lack of understanding of many aspects of the present and proposed systems of local government finance; in particular, Council:

  1. (1) reaffirms that it fulfilled its commitment to reduce its budget by £23 million and calls on the Secretary of State to withdraw his unjustified statement that Lothian had promised to reduce its expenditure (not its budget) by £23 million;
  2. (2) calls on the Scottish Office to withdraw its list of estimated poll tax figures because of errors in the calculations, such as ignoring the effect of Councils' deficits or credit balances and giving the wrong figures for legal non-payers;
  3. (3) calls on the Scottish Office to revise its method of apportioning Expenditure Need for items such as concessionary travel and nursery education; and
  4. (4) calls on the Scottish Office to abandon the Safety Net provisions, for which there are no logical justifications and which destroy the elements of fairness and accountability claimed for the Government's tax system."
Some of these points have already been made, but I felt it right that the resolution passed by Lothian regional council should be put on the record. I hope that the Minister will answer our questions.

Dame Elaine Kellett-Bowman

On a point of order, Madam Deputy Speaker. Am I not right in thinking that, if Scottish Ministers had wanted three hours of debate, they could have had it, but some of them were here at the beginning of the debate and decided not to have three hours?

Madam Deputy Speaker

I think that all hon. Members who are now in the Chamber have been here throughout the debate.

11.45 pm
Mr. John McAllion (Dundee, East)

If the hon. Member for Lancaster (Dame E. Kellett-Bowman) had been here throughout the debate—

Dame Elaine Kellett-Bowman

I have.

Mr. McAllion

If the hon. Lady had been here from the beginning of the debate, she would have realised how unable Conservative Members have been to sustain their argument. Indeed, only two Conservative Back Benchers have been prepared to speak.

Mr. Bill Walker

Will the hon. Gentleman bear in mind the fact that Conservative Members made short speeches because we were asked to be brief and because we thought that it would be helpful to the Opposition to enable as many hon. Members as possible to speak?

Mr. McAllion

I am not complaining about the brevity of Conservative speeches, but about their scarcity. The fact that the Government can muster only two Back Benchers to speak shows the weakness of their case.

The hon. Member for Eastwood (Mr. Stewart). who is gesticulating, made the rash statement that this is a generous settlement. Such an inaccurate statement can only be the result of his ignorance and the complexity of the way in which the settlement was arrived at. I have spoken to the convenor of finance for Tayside regional council and the director of finance for Dundee district council, and both confirm that the councils are receiving less grant than they expected. I suppose, as has already been said, that, the hon. Member for Eastwood can be excused on grounds of diminished responsibility, if nothing else.

We are dealing with the first order made under a new system of local government finance for Scotland. The new system is being tested on the people of Scotland. I say that advisedly. We are dealing with something that can only be described as an experiment. Unfortunately, we have a mad scientist who masquerades as the Prime Minister of Scotland and who has a habit of carrying out experiments. Rashly, she at one time promised to abolish the rating system. She considers herself a conviction politician and is determined to see the thing through, but she needs to see how she can deliver what she promised.

The Prime Minister realised that the trouble with experiments is that they sometimes go wrong, so she had to find a part of the United Kingdom where it would not matter to the Tories if things went wrong. Scotland is such an area. The Tories are already doing so badly there that it is difficult to see how they could do much worse. That is the conclusion that the Prime Minister reached. It might not suit 10 Conservative Members, but that does not matter—the Prime Minister does not care what they think. She knows that she can stay in office without their votes, and she is quite prepared to sacrifice them on the altar of the poll tax which she thinks will deliver votes in the south of England.

If we look for evidence which suggests that the poll tax system will work, we look in vain. The Minister promised us that a register of poll tax payers would be available for public inspection on 1 October, but there is still none. In the meantime, authorities have been burdened with extra expenditure on the buildings and staff needed to administer the poll tax in Scotland. The arguments about increased accountability which the Minister advanced have now been contradicted by the safety net measures which have been introduced to lessen the impact on poll tax payers in Scotland. Huge resentment at this hated tax has been stirred up among the Scottish people. There is complete disagreement between the local authorities, regional councils and district councils on the one hand, and the Government on the other, about the likely impact of the poll tax. The published figure for Dundee is £274. Apart from a few Tory yes-men who still survive in Dundee, the Secretary of State is unable to find anyone prepared to agree with that figure. The administration in the Tayside region expects the Dundee figure to be £330. If the poll tax had been introduced last year, it is estimated that the charge would be £291 in Dundee for the current year. The conclusion of the finance convenors of Tayside region and Dundee district was that the figures produced by the Secretary of State were nothing less than a stunt to promote party political propaganda. They have been presented to confuse Dundee's poll taxpayers when they come to decide who is to blame for the charge that they will have to pay in the coming year. It is clear that the Government wish the blame to lie with local councils.

I can understand why the Tories believe that the poll tax is a great wheeze. First, Scottish Ministers will make a great deal out of its introduction. If the Secretary of State's figures are accurate for Edinburgh, he will benefit by nearly £800 a year when a comparison is made with the sum that he pays in rates. That is probably one of the main reasons why the right hon. and learned Gentleman was able to support such a hated measure in defiance of the wishes of those whom he claims to represent. Conservative supporters in Scotland will benefit from the poll tax. That is another reason why the Government think that it is a good idea to introduce it. Their supporters are in the better-off and more highly rated areas and more likely to benefit from the poll tax when it is introduced.

More importantly for the Tories, local authorities will be inhibited from providing services when the mechanism of the poll tax takes effect. In the main, the burden of the tax will fall on the poor and those who are average working class. Those are the people who cannot afford to pay the tax. That is the main reason why the Government have introduced it.

The position in Scotland is "Heads the rich win, tails the poor lose." That is why the Tories are introducing the poll tax, and that is why they will lose the next general election.

11.53 pm
Mr. Nigel Griffiths (Edinburgh, South)

Today's announcement means that Edinburgh's residents will be paying £200 more in poll tax than the sum that should be required of them. The Government have prised money from Edinburgh to give to other parts of the country. The Secretary of State for Scotland, an Edinburgh Member, has done nothing to help the city. Indeed, the opposite is the truth. The right hon. and learned Gentleman has calculated that each poll tax payer in Glasgow should receive £336-worth of local services, but he expects every Edinburgh payer to get by on £214-worth. Why is Edinburgh to have £122 less per payer than Glasgow to have its streets cleaned, its housing estates kept in order, its libraries stocked, its bins collected, its roads repaired and its schools equipped and staffed? The answer is that the Secretary of State has sold out the people of Edinburgh to ingratiate himself with the Prime Minister.

I am not saying that Glasgow should receive less than Edinburgh. I am merely saying that Edinburgh should receive its fair share, not the unfair share that the Secretary of State has given it. He is a Secretary of State who is more concerned about the furtherance of his own career than in standing up for the capital city of Scotland. Of the eight Secretaries of State for Scotland who have held office in my lifetime, the present incumbent has done the most damage to Edinburgh. It is little wonder that he is ashamed to stay in his place throughout the debate and to speak for himself. He should be ashamed of his record. The greatest service that he could perform now for Edinburgh and Scotland generally would be to resign.

11.54 pm
Mr. Lang

With permission, I shall reply to the debate.

Given the speech of the hon. Member for Edinburgh, South (Mr. Griffiths), one would not think that the increase in revenue support grant to Edinburgh next year, as compared to rate support grant this year, is no less than 17.1 per cent. The increase over the figure, after the imposition of penalties on Edinburgh as a result of its budgeted programme last year, is no less than 44 per cent. If the hon. Gentleman thinks that that is unfair to his constituency, he must have a curious idea of fairness.

Before I attempt to answer some of the detailed points that have been made tonight, it is worth repeating the main features of the settlement—[HON. MEMBERS: "Oh no."] Opposition Members have tried hard to lose sight of the fact that public expenditure provision is 8 per cent. more than provision in the current year when measured on a comparable basis.

For the revenue support grant, the specific grant payments translate the increase in aggregate Exchequer grant to a 9.8 per cent. increase in revenue support grant. Even the president of COSLA described that as reasonable and realistic. The hon. Member for Glasgow, Cathcart (Mr. Maxton) although he choked on the words, almost said that the settlement was generous.

I must reply to the serious point raised by the hon. Member for Monklands, West (Mr. Clarke) on his own behalf and that of his hon. Friend the Member for Strathkelvin and Bearsden (Mr. Galbraith). I have already said that, in general, the Government propose to make no subsequent adjustments to the revenue support grant. There are, of course, some exceptional cases. This year, the grant apportionment to Strathkelvin and Bearsden was £306,000 less than it should have been. That was the result of faulty figures submitted by Strathkelvin and Bearsden regional council, which under-estimated the empty property relief element. It is our intention that the council's mistake should not be allowed to penalise the district, and we shall put that right next year. We have given a written assurance to the district council about that.

Mr. Sam Galbraith (Strathkelvin and Bearsden)

When the Minister says next year, does he mean the next calendar year or the next financial year?

Mr. Lang

When we introduce the next Revenue Grant Support (Scotland) Order we shall make the necessary adjustment. There will be time within the financial year for the payments to be made to the district council. The hon. Gentleman will be aware that those payments do not all come at the beginning of the year, but are phased over the year and will be adjusted so that the council receives the full £306,000.

There is limited time left, but it is important to try to reply to some of the points raised in the debate. My hon. Friend the Member for Eastwood (Mr. Stewart) was absolutely right to congratulate Strathclyde region on showing considerably more realism in its approach to the community charge than some Opposition Members. That council's figures are within £1 of our anticipated figure for the community charge. My hon. Friend was also right to point out that Borders regional council's plan to increase its spending by 11.1 per cent. has more to do with the likely community charge level in that area than anything to do with safety-netting or revenue support grant. Its revenue support grant is to be increased by 13.5 per cent. —more than double the rate of inflation—and for districts within that region the increase will be between 8.5 per cent. and 41.5 per cent.

Most comment this evening was about safety nets and that represents no more than the phasing in of grant changes. The large gains in some areas are being phased in gradually to protect other areas, but it is important that, as soon as possible, we should get away from the safety net figure so that there is complete accountability and that is our intention.

The major contributors to the safety net have been the recipients of the largest grant increases, even after safety-netting. Those grants range up to 14.6 per cent. for regional councils and up to 81 per cent. for district councils. Strathclyde regional council is the major beneficiary of the safety net. In some of its districts£

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

The House divided: Ayes 203, Noes 146.

Division No. 31] [11.58 pm
Alexander, Richard Clarke, Rt Hon K. (Rushcliffe)
Alison, Rt Hon Michael Conway, Derek
Amess, David Coombs, Anthony (Wyre F'rest)
Amos, Alan Coombs, Simon (Swindon)
Arbuthnot, James Cope, Rt Hon John
Arnold, Jacques (Gravesham) Cran, James
Arnold, Tom (Hazel Grove) Currie, Mrs Edwina
Ashby, David Curry, David
Baker, Rt Hon K. (Mole Valley) Davies, Q. (Stamf'd & Spald'g)
Baker, Nicholas (Dorset N) Davis, David (Boothferry)
Batiste, Spencer Day, Stephen
Beaumont-Dark, Anthony Dicks, Terry
Bendall, Vivian Dorrell, Stephen
Bennett, Nicholas (Pembroke) Douglas-Hamilton, Lord James
Bevan, David Gilroy Dover, Den
Blaker, Rt Hon Sir Peter Dunn, Bob
Bonsor, Sir Nicholas Durant, Tony
Boscawen, Hon Robert Evans, David (Welwyn Hatf'd)
Boswell, Tim Evennett, David
Bottomley, Mrs Virginia Fairbairn, Sir Nicholas
Bowis, John Fallon, Michael
Brazier, Julian Favell, Tony
Bright, Graham Fenner, Dame Peggy
Brooke, Rt Hon Peter Fishburn, John Dudley
Brown, Michael (Brigg & Cl't's) Forsyth, Michael (Stirling)
Bruce, Ian (Dorset South) Forth, Eric
Buck, Sir Antony Fox, Sir Marcus
Burns, Simon Franks, Cecil
Burt, Alistair Freeman, Roger
Butler, Chris French, Douglas
Butterfill, John Gale, Roger
Carlisle, John, (Luton N) Garel-Jones, Tristan
Carrington, Matthew Gill, Christopher
Carttiss, Michael Goodlad, Alastair
Cash, William Goodson-Wickes, Dr Charles
Chalker, Rt Hon Mrs Lynda Gorman, Mrs Teresa
Chapman, Sydney Gow, Ian
Chope, Christopher Greenway, John (Ryedale)
Clark, Dr Michael (Rochford) Gregory, Conal
Griffiths, Peter (Portsmouth N) Moss, Malcolm
Grist, Ian Moynihan, Hon Colin
Gummer, Rt Hon John Selwyn Needham, Richard
Hamilton, Hon Archie (Epsom) Neubert, Michael
Hanley, Jeremy Nicholls, Patrick
Hannam, John Nicholson, Emma (Devon West)
Hargreaves, A. (B'ham H'll Gr') Norris, Steve
Hargreaves, Ken (Hyndburn) Onslow, Rt Hon Cranley
Harris, David Oppenheim, Phillip
Hayes, Jerry Page, Richard
Hayhoe, Rt Hon Sir Barney Paice, James
Heathcoat-Amory, David Patnick, Irvine
Heddle, John Patten, John (Oxford W)
Hicks, Mrs Maureen (Wolv' NE) Pawsey, James
Hind, Kenneth Peacock, Mrs Elizabeth
Holt, Richard Porter, David (Waveney)
Hordern, Sir Peter Portillo, Michael
Howard, Michael Powell, William (Corby)
Howarth, Alan (Strat'd-on-A) Price, Sir David
Hunt, David (Wirral W) Raison, Rt Hon Timothy
Hunter, Andrew Redwood, John
Irvine, Michael Renton, Tim
Jack, Michael Rhodes James, Robert
Jackson, Robert Riddick, Graham
Janman, Tim Ridley, Rt Hon Nicholas
Johnson Smith, Sir Geoffrey Rifkind, Rt Hon Malcolm
Jones, Robert B (Herts W) Roberts, Wyn (Conwy)
Kellett-Bowman, Dame Elaine Roe, Mrs Marion
Key, Robert Rost, Peter
King, Roger (B'ham N'thfield) Rumbold, Mrs Angela
King, Rt Hon Tom (Bridgwater) Ryder, Richard
Kirkhope, Timothy Sackville, Hon Tom
Knapman, Roger Sayeed, Jonathan
Knight, Greg (Derby North) Shaw, Sir Giles (Pudsey)
Knowles, Michael Shaw, Sir Michael (Scarb')
Knox, David Shephard, Mrs G. (Norfolk SW)
Lang, Ian Shepherd, Colin (Hereford)
Latham, Michael Sims, Roger
Lawrence, Ivan Skeet, Sir Trevor
Lee, John (Pendle) Smith, Tim (Beaconsfield)
Lennox-Boyd, Hon Mark Soames, Hon Nicholas
Lester, Jim (Broxtowe) Speller, Tony
Lightbown, David Spicer, Sir Jim (Dorset W)
Lilley, Peter Stanbrook, Ivor
Lloyd, Peter (Fareham) Stern, Michael
Lord, Michael Stevens, Lewis
Luce, Rt Hon Richard Stewart, Allan (Eastwood)
Lyell, Sir Nicholas Stewart, Andy (Sherwood)
Macfarlane, Sir Neil Stradling Thomas, Sir John
MacGregor, Rt Hon John Summerson, Hugo
MacKay, Andrew (E Berkshire) Taylor, Ian (Esher)
McLoughlin, Patrick Taylor, John M (Solihull)
McNair-Wilson, Sir Michael Temple-Morris, Peter
McNair-Wilson, P. (New Forest) Thurnham, Peter
Malins, Humfrey Trippier, David
Mans, Keith Waddington, Rt Hon David
Marland, Paul Walker, Bill (T'side North)
Martin, David (Portsmouth S) Whitney, Ray
Maude, Hon Francis Widdecombe, Ann
Mawhinney, Dr Brian Wood, Timothy
Miller, Sir Hal
Mills, Iain Tellers for the Ayes:
Mitchell, Andrew (Gedling) Mr. Kenneth Carlisle and
Monro, Sir Hector Mr. David Maclean.
Montgomery, Sir Fergus
Adams, Allen (Paisley N) Bermingham, Gerald
Allen, Graham Blair, Tony
Archer, Rt Hon Peter Blunkett, David
Armstrong, Hilary Boyes, Roland
Ashdown, Rt Hon Paddy Bradley, Keith
Ashton, Joe Bray, Dr Jeremy
Barnes, Harry (Derbyshire NE) Brown, Gordon (D'mline E)
Barron, Kevin Brown, Nicholas (Newcastle E)
Battle, John Buchan, Norman
Beckett, Margaret Buckley, George J.
Beith, A. J. Caborn, Richard
Bell, Stuart Callaghan, Jim
Benn, Rt Hon Tony Campbell, Menzies (Fife NE)
Campbell, Ron (Blyth Valley) Hogg, N. (C'nauld & Kilsyth)
Campbell-Savours, D. N. Home Robertson, John
Canavan, Dennis Hood, Jimmy
Clarke, Tom (Monklands W) Howells, Geraint
Clay, Bob Hoyle, Doug
Clelland, David Hughes, John (Coventry NE)
Clwyd, Mrs Ann Hughes, Robert (Aberdeen N)
Cook, Robin (Livingston) Illsley, Eric
Cousins, Jim Ingram, Adam
Cryer, Bob Jones, Barry (Alyn & Deeside)
Cummings, John Kirkwood, Archy
Cunningham, Dr John Lambie, David
Dalyell, Tam Lamond, James
Darling, Alistair Leadbitter, Ted
Davies, Rt Hon Denzil (Llanelli) Lewis, Terry
Davies, Ron (Caerphilly) Lloyd, Tony (Stretford)
Davis, Terry (B'ham Hodge H'l) Lofthouse, Geoffrey
Dewar, Donald McAllion, John
Dixon, Don McAvoy, Thomas
Dobson, Frank McCartney, Ian
Doran, Frank Macdonald, Calum A.
Douglas, Dick McKay, Allen (Barnsley West)
Dunwoody, Hon Mrs Gwyneth McKelvey, William
Eadie, Alexander McLeish, Henry
Eastham, Ken McTaggart, Bob
Evans, John (St Helens N) McWilliam, John
Ewing, Harry (Falkirk E) Madden, Max
Ewing, Mrs Margaret (Moray) Marek, Dr John
Field, Frank (Birkenhead) Marshall, David (Shettleston)
Fields, Terry (L'pool B G'n) Marshall, Jim (Leicester S)
Flynn, Paul Martin, Michael J. (Springburn)
Foster, Derek Martlew, Eric
Foulkes, George Maxton, John
Fyfe, Maria Meale, Alan
Galbraith, Sam Michael, Alun
Galloway, George Michie, Bill (Sheffield Heeley)
Godman, Dr Norman A. Michie, Mrs Ray (Arg'l & Bute)
Golding, Mrs Llin Moonie, Dr Lewis
Griffiths, Nigel (Edinburgh S) Morgan, Rhodri
Griffiths, Win (Bridgend) Morley, Elliott
Harman, Ms Harriet Mowlam, Marjorie
Henderson, Doug Mullin, Chris
Hinchliffe, David Murphy, Paul
Nellist, Dave Steel, Rt Hon David
Oakes, Rt Hon Gordon Steinberg, Gerry
O'Brien, William Strang, Gavin
Parry, Robert Thompson, Jack (Wansbeck)
Pike, Peter L. Wall, Pat
Powell, Ray (Ogmore) Wallace, James
Quin, Ms Joyce Walley, Joan
Redmond, Martin Wareing, Robert N.
Reid, Dr John Welsh, Andrew (Angus E)
Robertson, George Welsh, Michael (Doncaster N)
Rogers, Allan Williams, Alan W. (Carm'then)
Rowlands, Ted Wilson, Brian
Ruddock, Joan Winnick, David
Salmond, Alex Wise, Mrs Audrey
Sillars, Jim Wray, Jimmy
Skinner, Dennis
Smith, Andrew (Oxford E) Tellers for the Noes:
Soley, Clive Mr. Frank Haynes and
Spearing, Nigel Mr. Jimmy Dunnachie.

Question accordingly agreed to.

Resolved, That the Rate Support Grant (Scotland) (No. 2) Order 1988, dated 28th November 1988, a copy of which was laid before this House on 30th November, be approved.

Resolved, That the Revenue Support Grant (Scotland) Order 1988, dated 28th November 1988, a copy of which was laid before this House on 30th November, be approved.—[Mr. Lang.]