§ 7. Mr. Harry Ewing
To ask the Secretary of State for Scotland what plans he has to meet with COSLA to discuss the financial position of Scottish local authorities.
§ Mr. Ewing
In a constructive vein, may I suggest to the Secretary of State a way in which he could help some Scottish local authorities to develop their spending programmes? He could ensure that funds from the European regional development fund for coal mining communities, which have suffered as a result of the demise of the coal industry, are released to areas such as Central region. Will he use his powers under the Local Government Acts to set aside the spending limits imposed on such authorities so that they may accept money from the ERDF and get on with their planned programmes?
§ Mr. Lang
The hon. Gentleman was a member of a Government—a comparatively rare event nowadays for members of the Labour party—and therefore knows the importance of managing public expenditure in a way that ensures that there is no overspend giving rise to the danger of increasing inflation. The Government have been extremely successful in securing grants for Scotland from the various European funds. About £1.25 billion has been secured for Scotland over the years, and we shall continue to be as effective and successful as we can in taking advantage of all the funds that are available for Scotland.
§ Sir David Steel
Has the Secretary of State yet made a total assessment of the cost to Scottish local authorities and, therefore, to the Scottish people of the poll tax fiasco—the introduction of the tax, the score or so of amendments and its abolition and replacement? If he has 343 made that assessment, will he produce the figure so that everybody will know the total cost of the Government's incompetence?
§ Mr. Lang
As the right hon. Gentleman knows, the poll tax exists to raise resources for spending by local authorities. The fact that those authorities now have to raise more than they did a few years ago shows that local authorities have continued substantially to increase their spending, despite substantially increased grants from the Government. Let us hope that the council tax is more effective in controlling high spending.
§ Mr. Bill Walker
Does my right hon. Friend find it astonishing that Scottish local authorities should claim that they are strapped for cash and are having to cut programmes while at the same time they are able to invest large sums? Does he agree that highly paid officials are responsible for investments, especially when they are bad investments?
§ Mr. Macdonald
I understand that Scottish Office officials will be meeting the Western Isles council later this week to discuss the financial crisis in which that council finds itself. Notwithstanding the Government's general policy on the collapse of BCCI, will the Secretary of State instruct his officials to take as constructive and as positive approach as possible in discussions with the Western Isles council so that we can find some way of resolving the crisis without the full burden falling on ordinary people in the Western Isles who had no part in the decision which led to the crisis—the schoolchildren, the old folk and others who still have to rely on council services?
§ Mr. Lang
Of course I understand the hon. Gentleman's great concern about the circumstances of the Western Isles council. My officials have been in touch with the council and they have also had meetings with the three other district councils affected by the closure of BCCI. We shall examine carefully any proposition put to us by the Western Isles council, but I must emphasise that the responsibility for what has happened lies with the council, not with the Government, and there can be no question of the Government stepping in to bail it out.
§ Mr. Wilson
In spite of the rather unsubtle blandishments that the Secretary of State will receive from his hon. Friends, such as those from the hon. Member for Chelmsford (Mr. Burns), will he act in this matter with some social compassion and concern for the people who will ultimately be the victims of what has happened? Does 344 he accept that it is unreasonable to expect that if highly paid officials—as the hon. Member for Tayside, North (Mr. Walker) referred to them—of the Bank of England and the Department of the Environment cannot spot any rottenness in a financial institution when they are sitting in the heart of London, it is just a little more difficult for local authority officials in far-flung parts of Scotland to do so? Will he particularly bear in mind that single-tier authorities, by their nature, although covering small populations, have heavy financial burdens because they are responsible for social work, education and so on which would usually be the preserve of regions? In other contexts, that may be a good thing, but in this case it has exposed the council, and, more importantly the people of the Western Isles, to a disproportionate budget. In short, will the Minister not close any doors and deal with the matter as humanely, sympathetically and understandingly as is possible?
§ Mr. Lang
The hon. Gentleman will be aware that the Bank of England's powers are based on statute. It acted at the appropriate time and at the earliest possible time that it could have acted. With regard to the Western Isles council, I have nothing to add to what I have already said in answer to the hon. Member for Western Isles (Mr. Macdonald).