HC Deb 25 July 1990 vol 177 cc487-98

5.2 pm

The Secretary of State for Scotland (Mr. Malcolm Rifkind)

With permission, Mr. Speaker, I should like to make a statement about my proposed financial settlement for Scottish local authorities for 1991–92.

This is the first year in which the Scottish announcement is in respect of the total level of local authority resources that are determined by the Government—that is, revenue support grant, specific grants and business rates. Collectively, those are known as aggregate external finance. In determining the settlement I have taken into account the views of the Convention of Scottish Local Authorities expressed when I met it on 6 July regarding the spending levels that it thought were required for next year. I have also had full regard to the additional burdens facing local authorities and to the scope that undoubtedly exists in local government for improved efficiency.

I propose that aggregate external finance for 1991–92 should be set at £4,338 million. That is £410 million higher than the corresponding figure for the current year. The House will realise that that is substantially more than the application of the normal formula rules to the comparable English settlement would produce. In addition, a further sum of £15 million will be provided for safety netting next year. This also will be the second year in which the safety net has been funded entirely by the Exchequer. So, overall, the settlement amounts to a total of £425 million. Proposals for the distribution of that amount to individual authorities will he announced in the usual way in the autumn.

In reaching this settlement, I have assumed that local authorities will contribute the sum of £10 million in the second year of the Government's policy of moving to a common rate poundage with England and thereby reduce the excess rate burden on Scottish business. I shall announce the total reduction that will be made in business rates next year at a later date, but the fact that the local authorities' contribution has already been taken into account in this settlement means that the reduction in non-domestic rate income will not require a reduction in aggregate Exchequer finance below the figure that I have just announced.

Overall, the settlement that I have announced today is a very fair one. Even if, as COSLA has forecast, authorities were to budget to increase their expenditure next year by as much as 9 per cent.,—that is, close to the current rate of retail prices index inflation—there should be no need for community charges to increase, on average, by more than that amount. And if, particularly with the expected fall in the rate of inflation, authorities increase spending by rather less than 9 per cent.—as I would hope they would—there should be scope for next year's charge levels to be lower in real terms. I hope that Scottish local authorities will also take into account their very high expenditure compared to local authorities in England and Wales. If local authorities in Scotland were to reduce their spending to levels closer to those elsewhere in Britain, there would be scope for large reductions in the community charge.

As hon. Members will know, I announced last Thursday a number of changes to the community charge. Those included major revisions to the transitional relief scheme, the prescription of a boundary for the rating of bed-and-breakfast establishments and additional classes with restricted maximum multipliers for the standard community charge. The changes to the transitional relief scheme, which will take effect in Scotland from 1 April 1990, will increase significantly the value of relief received by individuals and the numbers entitled to receive relief. Our decision to set a boundary for the rating of bed-and-breakfast establishments has been widely welcomed, while the additional standard charge classes have been identified as a result of experience gained in operating the new powers, which took effect at the beginning of this year.

Those changes and the settlement that I have announced today represent good news for community charge payers in Scotland.

Mr. Donald Dewar (Glasgow, Garscadden)

Does the Secretary of State accept that the adjustment to the transitional relief scheme to which he has just referred and which was announced earlier in the week is no substitute for the fundamental reform that the injustices of the poll tax demand? Can he confirm that the first year of transitional relief has been worth only £11 million to poll tax payers and not the £30 million that he promised when it was announced? Why is the scheme still to be fraudulently based on notional poll tax figures dreamt up by the Scottish Office rather than on what people actually pay? Will he confirm that barely one in six will qualify for help under the new scheme, even with the so-called improvements? Can he give an undertaking that this small cosmetic change will not be funded from money already allocated but not used in earlier years of the transitional relief scheme and that the Treasury will be providing additional help? Will he say what the transitional relief changes will be worth to the poll tax payer in a full year and will he give the cost of the total package that he has announced, on which there has been a remarkable silence so far?

On the aggregate external finance figure, the Secretary of State sounded remarkably smug. Does he accept that there are some question marks about the figures? Is it not the case that the Government's contribution to the cost of rebates has been cut by 2 per cent. and that the resultant shortfall of £14 million has, for the first time, been included in the aggregate external finance figure? If he takes the aggregate external finance total with the safety net contribution included, for the current and coming year, is not the picture rather different? The Government's contribution to the safety net is being halved from £30 million to £15 million. When that is taken into account, the increase in grant falls to a true figure of £395 million or 10 per cent. The Secretary of State might remember that the comparable figure announced by the Secretary of State in England a few days ago was 12.8 per cent.

The Secretary of State proclaims that this statement is good news for the poll tax payer. Does he accept that, on a standstill budget with no expansion of service, the average payment is likely to rise by about £30 a year? This package will not do.

Does the Secretary of State accept that the most bitter disappointment will be felt not in local government circles but in the community at large, where no one will see this minor tinkering with transitional relief as an answer to the desperate need for radical changes in the poll tax system? It will be condemned as inadequate to the point of insult. Does the Secretary of State realise that, to restore his damaged reputation, he must tackle the unjust principles of the poll tax? He cannot get away with doling out a little conscience money in the vain hope of buying peace.

Mr. Rifkind

The hon. Gentleman's protestations about the community charge would sound more convincing if he was not wallowing in a sea of controversy as a result of his ill-judged proposals for a roof tax in Scotland. Scotland is still waiting to hear what the hon. Gentleman proposes to do with his misguided, ill-judged and ill-thought-out proposals.

Today, the hon. Gentleman started by asking about transitional relief. It is indeed the case that the cost of transitional relief in the first year is likely to be less than originally anticipated. The precise amount is not yet known because there are a still several applications to come forward. There is likely to be less cost because it has become clear that the cost of the transition to community charge from rates has imposed less of a burden in Scotland than south of the border, about which the hon. Gentleman should be pleased, not sad. The criteria are exactly the same throughout Britain—fewer people meet those criteria in Scotland precisely because the change to the new system has produced less individual hardship.

The hon. Gentleman also asked why it was a notional community charge payment that was taken into account. The reason is simple—the purpose of the taxpayer paying transitional relief is to help those whose bills have gone up purely because of the change from a rating system to a community charge system. It is not intended to compensate for decisions taken by individual local authorities to increase their real spending and impose additional burdens on their charge payers, which is a matter for them to answer for to their charge payers.

The hon. Gentleman also referred to the percentage increase that he said that today's aggregate external finance statement represents, and suggested that it was 10 per cent. He is wrong—the figure is actually 10.4 per cent. The hon. Gentleman said that the figure was nevertheless less than the percentage increase announced to the House last week by the Secretary of State for the Environment, which was 12.8 per cent. Of course it is less—does the hon. Gentleman realise that, because of the huge level of Scottish local authority spending compared with that in England, to achieve an equal percentage to that announced by the Secretary of State for the Environment, I should have to provide for Scottish local authorities no less than £70 million more than COSLA even requested? I would have to give Scotland £165 million more than its normal formula share of United Kingdom expenditure—a formula that is already generous to Scottish requirements.

The hon. Gentleman and Scottish local authorities cannot avoid the fact that their expenditure is no less than 32 per cent. higher for every adult in Scotland than comparable expenditure in England and 29 per cent. higher than comparable expenditure in Wales. As long as they insist on such excessively high expenditure, comparisons in terms of percentages are, frankly, meaningless. The settlement that I announced today represents not only the full formula consequentials of the announcement made by the Secretary of State for the Environment, but £70 million more than the formula would have provided for. I take no great comfort in that, because, if I were not providing that £70 million to help support local authority current expenditure, those resources could be made available for health, and capital expenditure on housing, education or elsewhere. The hon. Gentleman should take that into account.

Mr. Alick Buchanan-Smith (Kincardine and Deeside)

Am I correct in thinking that the sum announced by my right hon. and learned Friend is close to the sum bid for by local authorities in Scotland? If that is so, does it not put particular responsibility on local authorities in Scotland to act properly and fairly towards the community charge and rate payers in their districts in the coming year?

Mr. Rifkind

My right hon. Friend is absolutely correct—the Convention of Scottish Local Authorities asked for a settlement of £433 million, and the figure that I announced today is £410 million, which is so close to the figure that it was seeking that it can hardly make a great song and dance about the settlement that I announced.

Mrs. Ray Michie (Argyll and Bute)

I welcome the changes to the poll tax, particularly those relating to bed-and-breakfast accommodation, which will be helpful in my constituency. Does the Secretary of State agree that all those changes to the poll tax have increased administrators' problems and shown that the system is in a terrible mess? The changes have also increased problems for the elderly, particularly those who applied for transitional relief and found that they were ineligible, and others who did not apply. Is the Secretary of State aware that the elderly are suffering stress and distress as a result of the number of forms with which they have to cope, because the administrators cannot cope with all the changes?

In his statement, the Secretary of State referred to the high expenditure of local authorities in Scotland compared with those in England and Wales. Is it not time that he started to compare like with like, in population terms, and gave us a breakdown of the subsidies and public expenditure that go to regions of England, particularly the south-east, where there is such benefit from mortgage tax relief? Will the Secretary of State do some work during the summer, return for the new Session and tell us exactly what Scotland contributes to the Exchequer from its industries and the amount spent by the Departments, not the Scottish Office, on Scotland, compared with England? If he did that work, we might prevent much of the argument.

Mr. Rifkind

I thank the hon. Lady for her welcome for the changes in relation to bed-and-breakfast accommodation, which will be important, particularly for the tourist industry in the rural regions of Scotland.

The hon. Lady is correct to say that pensioners—and indeed others—can be disturbed and upset by complicated and difficult forms, whether in this or any other sector of public administration. With regard to the community charge, I am entitled to add that single pensioners are among those who have benefited most from the change from the old rating system to the community charge. The hon. Lady should consider that.

The hon. Lady is right to say that the south-east of England may have considerable prosperity that is not enjoyed by some other districts. That is why I concentrated on a comparison between Scotland and Wales, which is a part of the United Kingdom with a similar economy and social profile. Expenditure per adult by local authorities in Wales is £776; in Scotland it is £978—I am curious to know the explanation for that. When I asked COSLA whether it had an explanation, I was met with blank incomprehension. It admitted that it had no explanation and said that it would try to find one. I hope that it does, because I am genuinely curious to know whether there is a good basis for a higher level of local authority spending. If there is a good reason, we all wish to know it, and if there is not, there may be scope for reduced spending and reduced tax bills.

Sir Hector Monro (Dumfries)

May I, too, thank my right hon. and learned Friend for the changes that he has made in the community charge this week, particularly with reference to the anomaly over bed-and-breakfast accommodation in the tourist industry? Does he agree that his announcement today of 10.4 per cent. is above the likely level of inflation next year and should give local authorities an opportunity at least to hold, if not reduce, the community charge?

Mr. Rifkind

My hon. Friend is quite correct. The percentage increase is likely to be considerably above the inflation rate for the financial year in which the settlement will apply.

Mr. Norman Hogg (Cumbernauld and Kilsyth)

Does the Secretary of State accept that the poll tax is, of itself, a local authority cost that need not exist if we had a proper system for funding local government, which he has refused to introduce? Instead of making fundamental changes to the poll tax, he continues to tinker with the system, with the attendant costs to local authorities in the administration of the tax. Could not he be more flexible in his approach, give local authorities the power to reintroduce the rating system if they consider that appropriate for their district and get rid of a poll tax that is thoroughly unpopular?

Mr. Rifkind

I am increasingly interested by various comments by Opposition Members. The hon. Member for Cumbernauld and Kilsyth (Mr. Hogg) has just called for the reintroduction of the rating system. His hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) is still thirled to a roof tax—

Mr. Dewar

What is the difference?

Mr. Rifkind

The hon. Gentleman says that there is no difference, which is an interesting statement. If it is the Labour party's view that there is no difference between roof tax and rates, perhaps there is more agreement between both sides of the House than I realise.

Mr. Allan Stewart (Eastwood)

I congratulate my right hon. and learned Friend on this fair and generous settlement. Can he give the House a broad idea of the probable implications for community charge payers in Renfrew and Eastwood district councils? Looking ahead, will he agree to study with care over the recess the strong representations that he has received from the hon. Member for Renfrew, West and Inverclyde (Mr. Graham) and myself against the absurd proposal to transfer large parts of Hillington industrial estate from Renfrew to Glasgow district, which would result in an unfair burden on community charge payers in Renfrew?

Mr. Rifkind

I shall certainly consider my hon. Friend's latter point, which is presumably in the first instance a matter for the Boundary Commission for Scotland.

Although at the end of the day it will be the local authority that determines the level of the local community charge on the basis of its proposed expenditure, in the light of the settlement announced today there is every prospect that authorities—particularly good authorities such as Eastwood district council—will be able to reduce their community charge in real terms.

Mr. John McAllion (Dundee, East)

Is the Secretary of State aware that his previous so-called concessions on transitional relief amounted to nothing less than a fraud perpetrated on Scottish poll tax payers? When he announced that the upper savings limit for rebate purposes had been increased to £18,000, there were 500 inquiries in Dundee alone, yet only 17 of the cases qualified for rebate.

Will the right hon. and learned Gentleman take this opportunity to make a genuine concession by announcing the restoration of 100 per cent. rebates for those on income support and rebates for those who are entitled to rebates but who have not received them for whatever reason?

Mr. Rifkind

The hon. Gentleman appears to leave out of the equation the fact that those who pay the minimum 20 per cent. community charge and who paid the minimum 20 per cent. rates in the last year of the rating system received—if they were on income support—an increase in income support equivalent to the average community charge. As the community charge in Scotland is below that in England, the hon. Gentleman cannot call for a 100 per cent. rebate unless he simultaneously accepts that that would lead to a reduction in income support—and I cannot believe that he would want that.

Mr. Bill Walker (Tayside, North)

Is my right hon. and learned Friend aware that this generous settlement, which is almost exactly what local authorities requested, is certainly not in keeping with all the girning and greetin' from hon. Members?

How can the constituents of Tayside, North protect themselves from councillors who refuse to pay the community charge but who also collect their expenses and set the charge levels for their expenditure? What do my right hon. and learned Friend and the Government propose to do if councillors continue to follow that unsatisfactory and unsavoury practice?

Mr. Rifkind

My hon. Friend is certainly right that Labour or nationalist councillors who collect their allowances but who refuse to pay their taxes put themselves in a position that is neither ethical nor moral. It would be a matter either for the Commission for Local Authority Accounts in Scotland or for the local authority itself to ensure that councillors do not put themselves above the law in terms of their community charge obligations, which are the same as those of the rest of the public, who I believe hold such people in contempt.

Mr. Alexander Eadie (Midlothian)

As the right hon. and learned Gentleman mentioned ill-judged schemes of raising local government revenue, does he not realise that he is the number one expert when it comes to ill-judged schemes in Scotland, to the extent that the poll tax is one of the most hated taxes ever inflicted on the Scottish people? The fact that the Conservative party's rating in Scotland is now equivalent to the vote received by the communists in the elections in East Germany is a political indictment of the right hon. and learned Gentleman.

As the settlement is based on the assumption that inflation will remain in the region of 9 per cent.—it is actually higher than that now—does the Secretary of State realise that, even in his own area, there is talk about free travel for the elderly, home helps and education services being cut? Does he realise that this announcement is accompanied by appeals to local authorities to cut services for the people?

Mr. Rifkind

I am delighted that the hon. Gentleman shares my pleasure at the Conservative victory in the East German elections; I have no doubt that that will give East German Conservatives great pleasure, too.

The hon. Gentleman is aware that, even in the Scottish context, Lothian community charge payers, of whom I am one, have the dubious privilege of paying the highest community charge in Scotland. The suggestion that Lothian cannot modify its expenditure to a level that seems sufficient for many other local authorities, including Labour-controlled local authorities in other parts of Scotland and Britain, does not carry credibility.

Mr. Alex Salmond (Banff and Buchan)

If the Secretary of State is to continue with the con trick of basing transitional relief on notional poll tax payments, why are they not also based on notional rate levels? Why has he announced further changes, modest though they are, to the poll tax today instead of a year ago, after three months' experience of it? If three months' experience of the poll tax was enough for a review in England, why was not three months enough for a review in Scotland? Is it not true that every change in the poll tax has been dictated by circumstances south of the border? What level of resistance and antagonism in Scotland will be necessary to convince the Secretary of State that this unjust tax will never be accepted by the Scottish people?

Mr. Rifkind

The hon. Gentleman is, not uncharacteristically, wrong. About half the changes that the Secretary of State for the Environment announced last week about the standard charge we announced last year and they have been in force in Scotland for some time. The hon. Gentleman should check his facts before he makes such allegations.

Mr. Harry Ewing (Falkirk, East)

Will the Secretary of State confirm that, as a Lothian poll tax payer, he is £40 a week better off as a result of the legislation that he himself introduced, whereas many of the constituents whom he represents are a great deal of money out of pocket as a result of that legislation? When will he stop being more anti-Scottish than the Prime Minister? Today he has given a good impression of being the most anti-Scottish Secretary of State that Scotland has ever had.

Mr. Rifkind

The hon. Gentleman's original remark could not have been more wrong. If he consults the old valuation rolls he will discover that he owes me a substantial apology. [HON. MEMBERS: "How much?"] These are public matters that can easily be scrutinised in the valuation rolls.

The hon. Gentleman must realise that there is nothing anti-Scottish in pointing out that Scottish local authorities levy taxes which must be paid by people in Scotland and which result in local authority expenditure being dramatically higher than that in any other part of Britain. Why the hon. Gentleman should believe that drawing that to the attention of the Scottish public is against Scotland's interests I fail to understand. If the local authorities have a convincing explanation for it, they will no doubt provide it; so far, they have failed to do so.

Mr. Salmond

On a point of order, Mr. Speaker. I could not hear the Secretary of State telling us how much he saved from the poll tax. Will he please repeat it?

Mr. Speaker

I heard clearly enough.

Mr. Robert Hughes (Aberdeen, North)

Why is it that, when the Secretary of State believes that he has given a generous settlement, he preens himself at the Dispatch Box, whereas today he has come here blustering and foaming at the mouth? Does not that disguise the fact that the settlement that he has announced—[Interruption.] I could do without heckling from my own side. Is not the right hon. and learned Gentleman trying to disguise the fact that the settlement that he has announced is below that considered necessary merely to keep pace with a standstill budget? As he has always said that the main purpose of the poll tax is to bring about accountability in local government, will he take into account the fact that we recently had regional council elections; and will he pledge that the verdict of the Scottish people will not be set aside by capping authorities which believe that they have to deliver services?

Mr. Rifkind

If the hon. Gentleman had listened to what I said, he would realise that the settlement is more than even the current rate of inflation, never mind next year's likely rate. I have powers granted by Parliament to take selective action on capping. I did not use them in the current year because I did not think that it would be appropriate to do so, given the decisions of some local authorities. I should certainly use them if I thought that that was justified. We shall have to await the expenditure decisions of Scottish local authorities to see whether the criteria laid down in the Act would persuade me to use those powers. I do not rule that out. I have not used the powers since the introduction of the community charge, and would use them only if I felt it right and proper in the circumstances.

Several Hon. Members

rose—

Mr. Speaker

Order. I must protect the legitimate interests of hon. Members waiting to take part in the debate on the Courts and Legal Services Bill, on which there are 45 amendment groupings as well as Third Reading. If hon. Members ask brief questions, I may be able to get them all in.

Mr. Jimmy Hood (Clydesdale)

Is the Secretary of State aware that many thousands of those who are in arrears with the community charge are in that position because of the administration of the rebate system? Will he confirm what was said early this morning by the Under-Secretary of State for Scotland, the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) in Committee on the Law Reform (Miscellaneous Provisions) (Scotland) Bill—that local authorities have been administering the rebate system unfairly, and perhaps unlawfully, by imposing a three-month limit on the backdating of rebate? Will he also confirm what the Under-Secretary of State told that Committee, that those who are in trouble with community charge arrears because of administration difficulties, which are outside their control, can get rebate not only back to the beginning of this year but back to April 1989?

Mr. Rifkind

My hon. Friend the Under-Secretary of State did not say what has been attributed to him by the hon. Gentleman. My hon. Friend said that the legislation has always permitted those who can show good cause for not having applied for a rebate within the prescribed time to be entitled to a rebate if they can satisfy the criteria to which I have referred.

Sir David Steel (Tweeddale, Ettrick and Lauderdale)

May I caution the Secretary of State against the extravagant use of the phrase "excessive public expenditure by local authorities"? I have looked carefully at the expenditure by district and regional authorities in my area and found that the biggest single increase in the past two years has been in the cost of collecting the poll tax. That is his fault, not theirs. I invite him to come to the Borders and look at the unmet needs for housing, nursery education and other items and to tell those councils where their spending is excessive.

Mr. Rifkind

If the right hon. Gentleman wishes to be fair, he will acknowledge that local authorities were fully reimbursed for the additional cost of collecting the community charge.

Sir David Steel

indicated assent.

Mr. Rifkind

I am glad that the right hon. Gentleman acknowledges that. We are now talking about other areas of expenditure. I have no doubt that any local authority could find new ways to spend taxpayers' money, because that would not require too much imagination. We are entitled to know from local authorities whether they have good reasons for much higher public expenditure than that of comparable authorities in other parts of the kingdom.

Mr. Mike Watson (Glasgow, Central)

The Secretary of State should withdraw the profoundly insulting remark that Scotland, the country that he is supposed to represent, is over-provided for in terms of local authority finance and services. I invite him to come with me during the recess to parts of my constituency, such as Royston and the Gorbals, where schools and houses are crumbling and potholes in roads left unfilled because the local authority does not have adequate finance to do the things that people who come to my surgeries ask to be done.

The right hon. and learned Gentleman continually asks why local authority spending in Scotland is higher than in England and Wales. Why does he not take up the offer made to him by the Convention of Scottish Local Authorities, which remains on the table, to fund a proper inquiry to look into the reasons, not least of which is geography? That would give him the answers and he might be prepared to fight Scotland's corner for the level of services we need and not give us a reduced figure that is below the 12.8 per cent. that the Secretary of State for the Environment announced for England last week.

Mr. Rifkind

I am perfectly prepared to have the matter examined. It is significant that the local authorities that are responsible for this expenditure cannot provide any explanation and say that they need to study the matter before they can come up with a preliminary response to the question. Geography might be relevant if we were talking simply about Highland region, but why Glasgow, Dundee, Hamilton or Motherwell should require so much additional expenditure compared with similar industrial towns in Wales or England is a legitimate matter for public debate, given that it is the same United Kingdom taxpayer and Parliament who are funding that expenditure.

Mr. David Lambie (Cunninghame, South)

Recently the Secretary of State or his hon. Friend the Under-Secretary of State, the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) met representatives of the Scottish Federation of Small Businesses, who complained that many members of the federation were suffering because of increasing rates and facing bankruptcy. They compared business rates in Scotland with those paid by comparable businesses in England and Wales. When the representatives emerged from the meeting they confidently said that the Secretary of State or the Under-Secretary had given them a sympathetic hearing. What help is available in the settlement for small businesses in Scotland that was not available in last year's settlement?

Mr. Rifkind

The hon. Gentleman will be aware that the Government are committed to eliminating the discriminatory high level of business rates in Scotland, which is damaging to employment and the economy. We have already reduced the gap by about £80 million, and later this year I shall make an announcement about next year's proposals. Protests about that from the Labour party are crocodile tears, because the Labour party is committed, not to completing that process, but to reversing it. It has made it quite explicit that, when it has the power to do so, it will return to local authorities total freedom to determine the level of business rates. As such local discretion has led to Scottish business, industry and commerce paying higher business rates then those in other parts of the kingdom, it would be disastrous to the prospects for employment and inward investment in Scotland if the Labour party were to carry out the policy to which it is publicly committed.

Mr. John Home Robertson (East Lothian)

Of all the things on which to choose to spend more public money, why on earth did the Government insist on imposing this absurdly inefficient and unfair new tax system on Scotland? The Secretary of State spoke about inflation. As a fellow Lothian Member of Parliament, will he tell me what he proposes to do about the discrepancy between 52 per cent. accumulated inflation since 1983 and less than 15 per cent. extra Government funding for Lothian regional council over the same period?

Mr. Rifkind

If the hon. Gentleman wishes to criticise the community charge, it would at least be helpful if he told us to which wing of the Labour party he belongs and whether he wants to see a roof tax or rates, or whether he is part of the tendency that believes that the two are identical. That would be a helpful clarification of his aspirations. Like other local authorities, Lothian has been provided with increased resources to take account of inflation over the years. The fact that local authorities, and Lothian in particular, seem to feel committed to such high levels of spending is, in the first instance, a matter between them and their electorate.

Mr. Tam Dalyell (Linlithgow)

Leaving out the yah-boo for a moment, may I ask, if Lothian regional council quietly and politely asked to come to see the Secretary of State, would he be prepared and able at least to steer it in those directions where he thinks that there are so-called areas of excess spending?

Mr. Rifkind

I shall come to the hon. Gentleman's question in a moment, but first I shall deal with the distribution of resources between Lothian regional council and other local authorities. We discuss that matter with the convention as a whole. Clearly, the debate within Lothian about the level of its resources has identified various options put forward by the different political parties. It is not my business to suggest to a local authority a specific item of policy, but if it seeks taxpayers' money to help finance its spending, it is my business to point to the fact that the level of spending in Lothian is greater than that in other parts of Scotland as well as in other parts of the United Kingdom.

Mr. Ron Brown (Edinburgh, Leith)

As a lawyer, the governor-general will know that the poll tax, the so-called community charge, has doubtful legal status in Scotland. Why should anyone, irrespective of party, accept his edict, his Tory law? Plainly, many people do not and I support them. The mass non-payment campaign makes sense, and has forced his Government and his leader, the Prime Minister, to rethink the poll tax. They have not thought about it enough. The people should reject it and put it on the scrap heap of history, along with the Government. If there is any message, it is this. People power is important in Europe, important in Britain and most of all important in Scotland.

Mr. Rifkind

The legal status of the poll tax is being determined by the Scottish courts rather than by the hon. Gentleman. He is saying that, irrespective of the judgment of the Scottish courts, he intends to put his view of the matter before the law of the land and before a decision of Parliament. That approach is indicative of the hon. Gentleman's attitude.

Sir Nicholas Fairbairn (Perth and Kinross)

I congratulate my right hon. and learned Friend on this enormous grant. I suggest that it is a light so grand that he should find a big bushel before the Courts and Legal Services Bill is debated on Report, and the English appreciate his generosity. Given that the Welsh have said that their community charge could be reduced to £9 or £10 if they had the generosity that has been meted out to us—they are a similar nation—should not my right hon. and learned Friend say that, until COSLA can justify anything else, he will reduce our poll tax to £10?

Mr. Rifkind

My hon. and learned Friend—[HON. MEMBERS: "Answer."] My hon. and learned Friend has identified a strong argument in favour of COSLA recognising the need to identify the reasons for high expenditure in Scotland, and, if it is unable to justify that different level of expenditure, encouraging local authorities not only to reduce their spending but to pass on the benefits to their community charge payers, whom I am sure would be delighted to see such an initiative.

Mr. Tony Worthington (Clydebank and Milngavie)

Last week, the Secretary of State for Health postponed implementation of the community care proposals on the grounds that local authorities were not ready, and that there was confusion over the poll tax in England and Wales. In Scotland, local authorities claim that they are ready and have put a great deal of effort into the work, and the Secretary of State claims that the poll tax is working well in Scotland. If the poll tax can come first to Scotland, why cannot community care come first to Scotland? By how much would the poll tax have had to go up in Scotland so as to implement community care? What calculations has he made?

The Secretary of State claims that the Scottish people were receiving an excessively high level of services—not that there were excessively high levels of expenditure. In education, Scotland is better served than England and Wales—the pupil-teacher ratio is better and there are better staying-on rates. Over 50 per cent. of local authority spending is on education. Would the Secretary of State like a cut in that sector?

Mr. Rifkind

We have said that we wish to see a phased introduction of community care. The hon. Gentleman may have noticed from today's reports in the Scottish newspapers that that decision has been welcomed by the Mental Welfare Commission for Scotland, which feels that delay in implementing the Government's community care programme provides much-needed time to co-ordinate mental health services. [Interruption.]. On this matter, not unreasonably, I prefer the views of the commission to those of the Scotsman editorial.

Education expenditure is one of the issues that Scottish local authorities will wish to consider. They will also wish to consider whether higher expenditure on education compared with other parts of the kingdom gives a proportionate benefit to the youngsters who attended Scottish schools. We need to identify whether Scottish education is so demonstrably superior to that in England and Wales as to justify the higher expenditure. That is a legitimate matter of public debate, which the local authorities and no doubt others will wish to address.