Revenue Support Grant (Scotland)

HC Deb 17 February 1993 vol 219 cc379-424 7.22 pm

The Parliamentary Under-Secretary of State for Scotland (Mr. Allan Stewart)

I beg to move, That the Revenue Support Grant (Scotland) Order 1993, dated 2nd February 1993, which was laid before this House on 4th February, be approved. I understand that with this it will be convenient to discuss at the same time the following motion: That the Local Government Finance (Scotland) Order 1993, dated 2nd February 1993, which was laid before this House on 4th February, be approved.

Mr. Michael Connarty (Falkirk, East)

On a point of order, Madam Deputy Speaker. The order is tabled in the name of the Secretary of State. I wonder why he is not here to move it and whether he is briefing the press, as he normally does, rather than bringing matters to our notice on the Floor of the House.

Madam Deputy Speaker (Dame Janet Fookes)

The question of which Minister moves a motion is not a matter for the Chair and is therefore not a point of order.

Mr. Stewart

May I be allowed to continue the debate, which is normally introduced by the Minister responsible for local government finance? I appreciate that the hon. Member for Falkirk, East (Mr. Connarty) has not been long in the House.

Mr. Tony Worthington (Clydebank and Milngavie)

On a point of order, Madam Deputy Speaker. It is not true that such orders would normally be taken by the Minister responsible for local government finance. This is part of a pattern of disrespect for the House shown by the Secretary of State for Scotland, who ducks out of every confrontation with the Opposition, and we are sick of it.

Madam Deputy Speaker

Order. As I have had cause to tell the House before, the accuracy and traditions of who speak and what they say are not matters for the Chair.

Mr. Bill Walker (Tayside, North)

On a point of order, Madam Deputy Speaker. Can you confirm that, under successive Governments, it has been in order for the appropriate Minister to reply to a debate in the House? The practice being followed today and on other days is no different from that of a previous Labour Government.

Madam Deputy Speaker

Yes.

Mr. Stewart

I am grateful, Madam Deputy Speaker. Perhaps we may continue with the debate. My right hon. Friend the Secretary of State is here, so may we ask Opposition Members to stop making idiots of themselves?

This is the annual opportunity for the House to debate the settlement for Scottish local authorities for the year ahead. I begin by making it clear that both orders have been the subject of full consultation with the Convention of Scottish Local Authorities, which raised no detailed issues on either of them.

I shall deal first with the main order under debate, the Local Government Finance Order, which represents the final stage of the 1993–94 settlement, details of which my right hon. Friend announced to the House on 12 November.

My right hon. Friend said that aggregate external finance for next year had been set at £5,165.1 million, which represents an increase of 3.5 per cent. in total on the 1992–93 figure. Because of the announcement of an extra £15 million on 2 December, the COSLA briefing uses the original 3.2 per cent. figure, but the corrected figure is 3.5 per cent., after the adjustments for the transfer of responsibility for further education colleges from local to central Government from 1 April 1993, and excluding the £63.4 million that was included in the settlement to meet the cost of care in the community and independent living fund responsibilities, which Scottish local authorities will assume from 1 April.

The settlement is accordingly fair and reasonable, especially in the light of the continuing fall in the rate of inflation. As hon. Members will no doubt have read in the COSLA brief, the figure cannot be regarded as "unrealistic".

As the report to the order explains, aggregate external finance has three components.

Mr. John Maxton (Glasgow, Cathcart)

The Minister may intend to comment on this, but can he say how much the Government are allowing for non-collection of outstanding poll tax, and the result for local government finance; and also how much is included for the implementation of the council tax?

Mr. Stewart

We have certainly allowed for the implementation costs of the council tax, and have allowed more than the councils' estimates. I shall come to that later. To answer the hon. Gentleman's first question, aggregate external finance is related to local authority expenditure and not to non-collection.

I must explain to the hon. Gentleman and to the House how AEF is broken down. It has three components. The first is the provision for specific grants. For 1993–94, that provision is estimated at £397 million, and a breakdown of that estimate among the various specific grants is given in appendix B of the report.

The second component of AEF is what is described in the Local Government Finance Act 1992 as the distributable amount of non-domestic rate income", which, for 1993–94, has been set at £1,186 million. That represents my right hon. Friend's estimate of the total business rates payable to local authorities next year. That estimate is based on the 1993–94 rate poundages that my right hon. Friend announced on 14 January. Those poundages take account of the reduction of £68 million in the total amount of rates payable by Scottish business next year, as the next stage of the Government's policy of harmonising rate poundages north and south of the border as quickly as resources allow.

Mr. Maxton

How long will it take?

Mr. Stewart

The hon. Gentleman knows that our objective is to bring rates into line in 1995 or shortly thereafter. I can reassure him by saying that, so fair, Scottish businesses have saved the equivalent of £350 million a year as a result of the Government's policy. That is a substantial sum, which has been warmly welcomed throughout Scotland by businesses large and small.

Mr. Jimmy Hood (Clydesdale)

Am I right in assuming that the figure of £350 million that the Minister has just given includes the £68 million for the coming year? A letter from the Scottish Office gives a figure of £280 million up to the end of 1993. If the figure given by the Minister includes next year's amount, it may be misleading. I am sure that the Minister did not intend to mislead the House.

I have received a complaint from Clydesdale district council about the arbitrary way in which the Secretary of State has decided that local authorities in Scotland will have to make a £12 million contribution to the Government's uniform business rate policy. Regardless of what the Minister says about consultation with the Convention of Scottish Local Authorities, I am assured that there has been no consultation on the UBR policy. The Government have taken arbitrary action and have told local authorities that, without being consulted on it, they will have to contribute £12 million to the Government's policy.

Mr. Stewart

The consultation to which I was referring was the formal consultation on the orders. Obviously, COSLA is frequently consulted. The hon. Gentleman is correct to say that we have consistently asked local authorities for a small contribution from efficiency gains to the policy of bringing rate burdens north and south of the border into line. The main reason, historically, for the rate burdens being different has been the high level of expenditure, and therefore local taxation, in Scotland compared to England.

Mr. Hood

The Minister referred to a "small contribution". Is he saying that 15 per cent. of the total cost of Government policy is a small contribution? I suggest that 15 per cent. is a high contribution.

Mr. Stewart

If one considers £12 million in relation to the total expenditure of Scottish local authorities, it becomes apparent that it is a small contribution.

The hon. Gentleman asked me for a detailed breakdown of the figures. The reduction in 1990–91 was £80 million, with, on top of that, £100 million in 1991–92, £100 million in 1992–93 and, as the hon. Gentleman rightly said, £68 million in 1993–94.

Next year, there will be a change in the way that non-domestic rate income is treated. Under the 1992 Act, non-domestic rate income is to be pooled in Scotland with effect from 1 April, following the pooling in England and Wales in 1990. Under the pooling arrangements, Scottish local authorities will continue to be responsible for levying business rates, but the rates income collected will be paid into a central pool and distributed to authorities as a per capita amount based on the resident population of each authority.

With the agreement of COSLA, non-domestic rate income will be distributed to regional and islands authorities only. That will simplify the administration of the pooling arrangements for both local authorities and the Scottish Office. District councils will no longer have to maintain non-domestic rate income accounts.

The effect of distributing NDRI to regions and islands only is that districts will receive their AEF support solely in the form of rate support grant and specific grants. Districts will obviously receive proportionately more RSG and regions proportionately less RSG than would otherwise be the case. But I must emphasise that no authority will lose in terms of its overall level of AEF as a result of the new method of distributing NDRI.

Mr. Malcolm Chisholm (Edinburgh, Leith)

I understand the complications of comparing this year's aggregate external finance with last year's, because of changes such as community care and the funding of further education, but those factors should be common throughout different regions. Therefore, why is aggregate external finance down by 0.8 per cent. in the Lothian region and up by 2.8 per cent. in the Borders region? Is that to do with band D equivalent properties, or is there another explanation for the variations?

Mr. Stewart

The overall figure for AEF, after taking account of the factors to which the hon. Gentleman referred, is up by 3.5 per cent. If he looks at the table, he will find that, in relation to grant-aided expenditure, Lothian is the equalising authority because it has a lower GAE figure per head than other regions. That factor in turn affects the total. As it happens, Eastwood is the equalising authority among district authorities. That is why Eastwood has a zero figure.

Mr. Chisholm

Is the Minister saying that Lothian region is receiving less money because there are more properties in higher council tax bands? If he is, does that not cause a problem, given that we know that, although property is more expensive in Edinburgh, the people who live in those properties are not always better off?

Mr. Stewart

It is a two-stage process, which I shall explain for the benefit of the hon. Gentleman and, indeed, the House. The revenue support grant totals £3,582.1 million for 1993–94. There is a full explanation in the report, but I shall summarise it for the hon. Gentleman.

The first stage is to equalise differences in authorities' spending needs as determined by the client group methodology—which is where Midlothian is the equalising authority. That methodology is reviewed regularly and agreed with the convention in the district committee of the working party on local government finance. Each authority's relative spending need is reflected in its grant-aided expenditure assessment figure.

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

The Minister is a much wiser man than the junior Agriculture Minister, and I am grateful to him for giving way. In the context of the calculation of the needs element, does he agree that districts such as Cumnock and Doon Valley are disadvantaged by it? Such districts contain a large number of rural communities, each with its own cemetery, sports centre and so on, so revenue costs are much greater than they are for city areas. Not enough account is taken of that.

Secondly, Cumnock and Doon Valley has very high unemployment—almost 20 per cent., and I would not be surprised if tomorrow's figures show that it exceeds 20 per cent. That is appalling, and because of the requirement to keep within Government guidelines, Cumnock and Doon Valley has had to keep its budget down and cannot appoint an economic development officer to help to bring new industry to the area.

Are not such areas seriously disadvantaged by the criteria that the Minister has just described?

Mr. Stewart

From time to time, we do receive complaints from authorities about the criteria, but those criteria are carefully assessed, not by the Scottish Office acting alone but with the expertise of COSLA's technical experts on the distribution committee. A range of primary and secondary indicators are used, and the sparsity of population in an area is certainly taken into account.

As for Cumnock and Doon Valley's budget, the council will, on my calculations, be able to increase its estimated budget by just under 2 per cent. this year without hitting the capping level.

Mr. Foulkes

That is precisely my point. Cumnock and Doon Valley desperately needs jobs. The Minister and the Secretary of State have visited it, and they know the priorities—of which an economic development officer was one. But because of the Secretary of State's guidelines, the council cannot appoint such a person. Does the hon. Gentleman agree that that disadvantages the authority; and cannot something be done about it?

Mr. Stewart

It is open to Cumnock and Doon Valley, through COSLA, to go directly to the distribution committee and say that it does not believe that the factors in what is a highly technical calculation are entirely fair. That is how the authority should seek redress.

That is the first stage in the process. The second stage is straightforward, although it involves a change from the procedure adopted in the past few years. That is the point to which the hon. Member for Edinburgh, Leith (Mr. Chisholm) referred. Before, the amount of AEF remaining after the equalisation of spending needs was distributed to authorities on a straight per capita basis related to the number of community charge payers in each authority. That meant that there was an equalisation of spending need and an equalisation of resources among authorities. If they all spent, therefore, at GAE level, they could all set the same level of community charge.

This principle of equalisation of resources continues to apply, but with the replacement of the community charge by the council tax with effect from 1 April, the second stage procedure has had to be changed. Instead of distributing the remainder of AEF on a per community charge payer basis, the amount involved is allocated to authorities in proportion to the number of council tax band D equivalent properties in each authority. That answers the question asked by the hon. Member for Leith.

The effect of this change is to swing AEF support away from high-value property areas to lower-value property areas, but the principle underlying the distribution remains the same as under the community charge. It is that, if all authorities spend at their GAE level, they should all be able to set the same level of council tax.

Mr. James Wallace (Orkney and Shetland)

Can the Minister confirm that COSLA's briefing figure that Shetland's maximum budget increase for the forthcoming year is minus 37.4 per cent. is correct? How does he expect the local authority to start to deal with that?

When the Minister deals with the islands, will he explain the following? How will the new pooling arrangements for the business rate operate, given that these are circumstances in which our per capita distribution will not be high but large sums of business rates have been paid in the past because of the presence of our oil terminals?

Mr. Stewart

As the hon. Gentleman says, the rate for the islands council is the same as the English rate. The objective is to bring other business rates that are above the English level down to the English level. The hon. Gentleman's council is in a rather unusual situation.

The hon. Gentleman may also be interested to learn that we have introduced changes to the special islands needs allowance, following representations from the Western Isles council. I can confirm that we asked independent consultants to examine the way in which the special islands needs allowance was calculated, and we accepted their recommendations.

The provisional capping principles to which the hon. Gentleman referred are not dealt with in these orders, although the provisional principles announced by my right hon. Friend the Secretary of State showed the need for substantial reductions in expenditure for Shetland. But my right hon. Friend has already said that he would be prepared to accept a standstill budget. The hon. Member for Clydebank and Milngavie (Mr. Worthington) will be aware that the same applies to Clydebank.

Mr. Thomas Graham (Renfrew, West and Inverclyde)

How much assessment has the Scottish Office done of the loss of revenue from which many councils have suffered because of the huge number of company bankruptcies? We are extremely worried about that.

Mr. Stewart

The hon. Gentleman is right to say that non-domestic rate income can vary considerably from original estimates: it can go up or down. That is covered in the Revenue Support Grant (Scotland) Order 1993. The purpose of that order is to redetermine the amount of RSG payable to each Scottish local authority for each of the years 1990–91 and 1991–92.

These redeterminations are necessary in the light of the so-called AEF guarantee—an agreement with COSLA to guarantee the combined non-domestic rate income arid RSG figure notified to each authority at the time of the issue of the distribution proposals for the year in question. Such a guarantee is necessary because it is extremely difficult to calculate exact business rate income until such matters as valuations, appeals, empty properties and so on are dealt with. RSG can be increased or reduced in the light of experience. Adjustments have been made, and 45 authorities will receive more RSG and 20 will receive less as a consequence.

Next year's settlement is very fair and reasonable, and substantially above the rate of inflation. COSLA's original bid was made when inflation was considerably higher than it is today. The settlement is made against the background of the Government's policy on public sector increases, in the range of 0.5 per cent. to 1.5 per cent.

COSLA has said that the figures are not unrealistic, and with the scope that always exists for efficiency savings, there will be no need for cuts in services and jobs of the kind that are the subject of the scare stories that we hear every year. I commend this realistic settlement to the House.

7.50 pm

Mr. Tom Clarke (Monklands, West)

I mean no disrespect to the Minister—to coin a phrase, I regard him as being a nice guy—but as an ex-president of the Convention of Scottish Local Authorities, and as an ex-vice president under George Sharp, I may say that if the Government had sent a less senior Minister than the Secretary of State for Scotland to meet COSLA, it would have asked for the Secretary of State. The House has the same right. I am greatly surprised that the Secretary of State is unable to be present for this important debate, although he was courteous enough to write a note to me. I hope that the Secretary of State will be present for future debates.

This debate is about the Government's attack on Scotland—on our services and on our people. The measure unveiled by the Secretary of State is a betrayal of our children and their teachers, our elderly folk and their carers, and our public services—which have the support of the majority of the population of Scotland, no matter their means or how they vote. To suggest, as the Secretary of State did, that the settlement is either fair or adequate is not believed even by Tory councillors in Scotland, never mind anyone else.

In the 1980s, the Government cut the number of home helps, meals on wheels, teachers, libraries, and many other services that we Scots cherish, and the Secretary of State's announcement today means that cuts will continue into the 1990s. Doubtless that is welcome news to some of the right hon. Gentleman's hard-line colleagues, whose hatred of public services is on record—but almost every Scot will greet today's news with sadness and anger.

Mr. Bill Walker

I imagine that some of the hon. Gentleman's barbs are directed at people like myself. It is difficult to follow the hon. Gentleman's logic. At what point in the past 14 years has there been a reduction below the rate of inflation in public support for local government? Unless the hon. Gentleman can demonstrate one, he is misusing the word "cut".

Mr. Clarke

I hope to demonstrate that inflation is not itself a sufficient guide. Other elements, such as the obligations that the Government place on local councils, must be considered. We heard tonight, for example, that from April greater community care demands will be imposed on councils. The spectre of unemployment also makes demands on local councils, as do unpredictable problems such as flood damage. That ought to be recognised.

Mr. Hood

Got him!

Mr. Clarke

Even in education, we are making considerable progress.

The settlement is less than generous. COSLA's document indicates that it regards the settlement as penal—that is a strong word to use—and continues the Government attack on local democracy that we have seen for more than a decade, on crucial services, and on jobs—particularly on the eve of tomorrow's announcement, when we expect to hear that unemployment is a great deal worse.

Today's short debate is inadequate in terms of conducting Scottish affairs. This three-hour debate will end with a Division that will influence every individual, family and household in Scotland. That makes the case, if ever one needed to be made, for a Scottish Parliament, supported by the overwhelming majority of the Scottish people, that will have the right to consider such matters in detail and at length, with the representatives of each community involving themselves in the subsidiarity which the Scottish people endorse but which the Secretary of State has not yet recognised.

Mr. Phil Gallie (Ayr)

If there were a Scottish assembly, would not that place a massive charge on the people of Scotland—and take cash away from the useful services that could and do need to be provided for the people of Scotland?

Mr. Clarke

The best people to decide that are the people of Scotland. They have made it plain that important, essential matters such as the settlement we are debating tonight, law and order, education, the fire service, roads, planning, infrastructure, employment, and promoting Scotland in Europe ought to be given far more consideration than a three-hour debate allows.

Mr. Gallie

rose—

Mr. Clarke

No, I will not give way to the hon. Gentleman again. As time is so limited, it would be impertinent of me to keep other hon. Members from catching Mr. Deputy Speaker's eye, having made the point that we have been given too little time.

The order represents power for one man—a man who is unable to be with us this evening. I refer to the Secretary of State for Scotland. It would not be so bad if the right hon. Gentleman represented Scotland in the Cabinet, but he appears to represent the Cabinet in Scotland. That is as unacceptable as the figures in the settlement, which adds to the numerous problems heaped on local councils, without the Government paying any regard to the difficulties that local authorities must confront.

The poll tax was rejected by the people of Scotland but was still imposed upon them, and it cannot be properly collected. That is no way to run any local government service. Any consultations with local authority representatives should lead the Government to taking the same view.

At the end of December 1992, non-payment of the poll tax totalled £478 million—more than 17 per cent. of the sum billed in the first three years of the tax. How can one run a local government system when central Government have devised an approach to finance that leaves such huge amounts uncollected? That total is heading for £498 million–50 per cent. Uncollected—in the coming year. How can local authorities fund the services that they want to provide, including the industrial development to which my hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) referred when, because of the Government's absurd system, the revenue to do that is not there?

The fact is that the Government have spent millions upon millions on trying to bail themselves out of the results of the poll tax. What could the local authorities have done with that money? They could have spent it on libraries, education and the police, for instance. The Government's handling of local government finance has been a disaster—an administrative nightmare—not just for finance departments, but for every department in every council in Scotland. The Government, of course, will go on promising lower bills; even tonight we have heard a promise about the council tax which is yet to materialise. At the same time, the Government will continue to blame local authorities for the inevitably reduced delivery of services—at a huge cost to the people of Scotland.

This order is being presented against a backdrop of rising unemployment, and a Scottish economy that is much weaker than the Scottish people want it to be. It is a backdrop of more poverty in many parts of Scotland; a background of hopelessness and homelessness. All that the Government offer far too many of our people is the prospect of cardboard homes and cardboard hopes.

Inevitably, social work departments face greater demands, even before the community care changes mentioned by the Minister land on their laps in April. According to today's Scottish Daily Record, every hour of every day someone is given a P45. If that is true, it will inevitably lead to greater demands on the housing, education and social work departments of local councils. It is clear that those demands cannot be met within the constraints imposed by the Government.

Why is the Secretary of State setting such devastatingly harsh capping levels? It is plain that he did not secure the agreement of the Convention of Scottish Local Authorities. In 1992, he allowed the resultant budget above grant-aided expenditure to reach 6.5 per cent.; this year, he proposes a mere 2.25 per cent. He has been told that that represents only half the sum identified by councillors of every party everywhere in Scotland as the amount required even to maintain existing services, let alone deal with the numerous burdens newly imposed on them by the Government. Fairness seems to be absent from the Government's proposals, as the Scottish people are increasingly recognising.

Councils now have to address enormous problems in their planning departments as they seek to provide local people with the best possible education opportunities, and to deal with housing problems such as damp and condensation. They desperately want to deal with such problems, but they are being denied the necessary resources.

No one believes that the Secretary of State has preserved the Barnett formula. For every £100 that is being spent, we have lost £1.10. The cost for Scottish local authorities is becoming horrendous. Imagine what local authorities could have done to improve schools, housing, roads, lighting, libraries and so forth if we had maintained the principle of that formula. Those vital matters are not being addressed.

The Secretary of State and the Minister have boasted about consultation. We want concrete evidence that the Government are prepared to listen to what is said to them during those consultations.

Mr. Stewart

I am astonished that the hon. Gentleman should refer to the Goschen-Barnett formula in this context. Aggregate external finance per head of the Scottish population is no less than 47 per cent. higher than it is in England. If the Barnett formula were applied, Government support for local authorities in Scotland would be a great deal less than it is now, not more.

Mr. Clarke

The Minister, and the Government. will have to work hard to persuade COSLA of that. COSLA itself made the point that the Government are providing £16 million less than it asked for road projects, £14 million less than it asked for law and order and protective services, £5 million less than it asked for libraries and museums and £21 million less than it asked for leisure and recreation. Above all, the Government are providing £8 million less than it asked for the urban programme that is so vital now, when unemployment is growing. The Minister has a great deal of missionary work to do if he is to persuade local authorities that the change in the Barnett formula will not apply to them.

What options face local authorities in Scotland? They are some of the most difficult that councils have ever had to face. They are confronted by the possibility of eliminating some services altogether, cutting existing services and even making employees redundant. Lothian council's capping limit for 1993–94 was set at £588.386 million, against which expenditure now stands at £608.034 million: there is a gap of £19.648 million. That is the amount by which budgetary expenditure will have to be reduced if Lothian is to avoid capping.

Strathclyde is having to reduce its budgetary expenditure by over £20 million; Central region is having to find reductions of over £8 million; Fife region is £11.53 million short of the amount needed to maintain the provision of services, even at the current level, without anticipating the demands that will be made next year. Even in Edinburgh, the Secretary of State's case is so weak that the Tory councils have rejected his budget, because they were unable to find the £5 million that he ordered them to find without devastating services to a capital city.

Opposition Members speak with considerable support from all political quarters. Strathclyde's education department faces a proposed cut of some £10.74 million, which is bound to have a devastating effect on provision for schools in the form of teachers, books and materials. The Government will then criticise education establishments for the fact that children are under-achieving, but the blame lies with an Administration who have constantly underfunded education. In that and other respects, the past is catching up with them.

Mr. Graham

May I mention something that really upsets me? A young man in my constituency has an autistic kid, and cannot secure a school place for him because Strathclyde has not enough money to provide places for such children. The Government keep telling us that they are treating local authorities fairly, but they are treating young handicapped folk in a despicable fashion.

Mr. Clarke

As always, my hon. Friend has made his point extremely well.

It was this Government who, in the early 1980s, increased local government funding below the rate of inflation. I was involved in the negotiations that took place then. Let me say, with great respect to the Secretary of State that the Secretaries of State with whom we dealt then may have been a bit more heavyweight, and may have given a little more thought to the subject that he has managed.

The Government's past approach has forced councils to cut their funding. Now, the current Government are faced with the reality of what earlier Ministers have done. Those who were only five or six in the early 1980s but who are now 15 or 16 are paying the heavy cost of the Government's considered but unacceptable policies of that time.

Mr. Stewart

The hon. Gentleman referred to his time with COSLA. He will recall the 1977–78 settlement of the previous Labour Government, when he was vice president of COSLA. The president of COSLA said: To have been told by the Secretary of State the percentage grant was being savagely cut by 4 per cent. was something none of us expected.

Mr. Clarke

I look forward to arranging a meeting between the Minister and Sir George Sharp, whom he has just quoted. The first thing that Sir George would tell the Minister is that if we received the same settlement for Fife tonight as we secured that night there would be joy indeed and, to coin a phrase, we would be asking the people of Scotland to rejoice. The Government's settlement falls far short of anything that Bruce Milian or Willie Ross achieved.

Mr. Jimmy Wray (Glasgow, Provan)

Is my hon. Friend aware that Strathclyde must cut £20 million from its budget? Is not the amount that has been allocated to Scottish local authorities a scandal given that the Government spent £16 million in a weekend on the European summit in Edinburgh?

Mr. Clarke

I do not know whether the Secretary of State will be here later to reply to my hon. Friend's point, but if he is it will be interesting indeed.

The order has been proposed, unlike the period when George Sharp was president of COSLA and I was vice president, at a time of deep recession. Public expenditure should be part of the infrastructure to deal with that serious problem. Proper investment should be made in education and training, in building homes and improving schools and in providing better roads and lighting. There should be a response to the problems within our community, and I am extremely concerned that after April councils will be expected to take up those problems—part of the social security budget, indeed, is being transferred to them—and to exercise the role of enabler rather than provider. But so great are the demands on social work and other departments, especially given the problems of the elderly and of demography, that local councils will not be able to provide the package for community care—home helps and contact with health boards to provide occupational therapy and physiotherapy, which are vital to a strategy for community care. It should be made quite clear that the problems facing councils at the moment, considerable though they are, will intensify because the order simply does not recognise those problems. The work of and demands on local authorities will increase, but their resources simply will not match.

How do the Government respond to people's concern about law and order, which is hardly reflected in the order? Their 1992 manifesto contained a commitment to legislate on offensive weapons but made no mention of water. Today, they are concentrating on privatisation but doing nothing to reassure the community about safety in the streets.

As we consider the order, albeit in a debate that is unacceptably limited, let us be clear that it is a direct attack on disabled people by forcing cuts in home helps and services and on our schools and education by underfunding our teachers. It fails all the people who are afraid to go out or stay in because the Secretary of State has not given the chief constables the resources that they need to tackle crime in virtually every region of Scotland. Today's announcement offers no hope for Scotland's homeless, for our children, for senior citizens or for those without jobs. Today, the Secretary of State had the opportunity to invest in Scotland's local services, in local people and in local communities. He had the chance to invest in Scotland, but his party has no vision, no policies and no support in Scotland. Scotland has no faith in his party or its discredited policies either.

8.15 pm

Mr. George Kynoch (Kincardine and Deeside)

I listened to the hon. Member for Monklands, West (Mr. Clarke) and began to wonder whether we were discussing the same figures as I have before me. He stated that he was once vice president of COSLA. [HON. MEMBERS: "President."] I beg his pardon: president of COSLA.

The hon. Gentleman should therefore have read COSLA's briefing paper, which it has circulated to all hon. Members. The first paragraph says: Having regard to the present rate of inflation, an overall increase in AEF of 3.2 per cent. (4.8 per cent. when Care in the Community funds are added), cannot be regarded as unrealistic", Yet the hon. Gentleman said that the order is an attack on services in Scotland and, as usual, talked down good news for Scotland—a 3.2 per cent. increase when inflation is 1.7 per cent.

Mr. Chisholm

The crucial issue is not the level of aggregate external finance but the reductions that will have to be made in services because of the penal capping limits. Reductions in services have been proposed for more than half the local authorities in Scotland. Lothian is a classic example, where £20 million is being taken out of the budget. Last year, it was the second lowest spending council per head, not because it wanted to be but because of the inadequate level of support that it was receiving. That is the reality.

Mr. Kynoch

The hon. Gentleman talks about capping. Some councils are obviously overspending. Had they spent more carefully in previous years, they would not be suffering from these problems.

Mr. Worthington

Will the hon. Gentleman give way?

Mr. Kynoch

No, I am going to make progress and talk about expenditure.

Aggregate external finance is 3£2 per cent. COSLA states that expenditure of 2.25 per cent. is permitted within these figures. The Government talk about 2.6 per cent. By my simple arithmetic, if the Government's public expenditure constraints on wage increases of 0 to 1.5 per cent. are observed, overall costs can increase by 2.6 per cent. Wages in local government account for about 60 per cent. of expenditure. If that is true, the other 40 per cent. can incur rises of almost 4 per cent., at a time when inflation is 1.7 per cent., yet the Opposition talk about cuts. That may be simplistic, but simplistic ideas are often the best. If councils were to look simplistically at giving taxpayers value for money, they would give better services.

Mr. Hood

If everything is as rosy as the hon. Gentleman seems to believe, will he tell the House of any local authority in Scotland that is employing extra workers, rather than laying them off?

Mr. Kynoch

The hon. Gentleman should consider my local authority of Kincardine and Deeside which, I believe, intends to increase its staff in the coming year. One could also consider Kincardine and Deeside in relation to another issue, although I do not wish to detain the House because I know that many hon. Members wish to speak. I refer to non-domestic rates.

I very much welcome the fact that we have made a further move towards the rate applicable south of the border. The figures in COSLA's briefing document show that in 1990–91, the percentage variation between Scotland and south of the border was about 64.6 per cent., but the projection for 1993–94 is only 26.4 per cent. That is clearly a move in the right direction.

Having been lobbied by numerous businesses in Scotland, and only yesterday by the chemical industry there, about concern over the introduction of the uniform business rate throughout the United Kingdom, I believe that the quicker we can make the move to get things level, the better it will be for business.

Let us consider the figures more closely and examine the variances, which average 26.4 per cent. It is interesting to note that Kincardine and Deeside is level with the average applicable south of the border. I believe that the same applies to Shetland and Orkney. Glasgow, however, is about 43.6 per cent. at variance with the rest of the United Kingdom. In fact, the central belt of Labour-dominated councils are all at the higher levels of variance. I suggest that there is a message in that.

Central belt councils, which are largely Labour dominated, must get their house in order and use the funds and opportunities that are being given to them this year wisely and sensibly in the best interests of the ratepayer and the local taxpayer.

8.21 pm

Mr. Michael Connarty (Falkirk, East)

It is a strange irony that I am standing on the Floor of the House tonight. I recall sitting in the Gallery 13 years ago when I was leader of Stirling district council. The Government were using the draconian powers of the "excessive and unreasonable" clause to bring down Stirling district council's rate of expenditure nearer to the level that the Government found acceptable.

The Minister might reflect on the fact that after that exercise had been carried out, at the next election the electorate increased the Labour majority on Stirling district council. People in Scotland know what has been happening for the past 13 or 14 years. They know that the Government are intervening to give themselves a majority on every council in Scotland, regardless of the voting patterns and choices of the people. They are doing so in spite of the rhetoric about the people being given a choice and being allowed to assess their councils—

Mr. Gallie

Will the hon. Gentleman give way?

Mr. Connarty

No, I shall not give way. The hon. Gentleman's previous interventions have been appalling and I do not intend to accept one from him.

The Government then were underfunding local authorities, and that is what this order is about—the continued underfunding of local authorities. Throughout the 1980s, local authorities had problems because the Government were placing on them many additional duties, such as those to which my hon. Friend the Member for Monklands, West (Mr. Clarke) referred.

Benefits adminstration was shifted solely on to local authorities without proper recompense. Increased environmental health duties were placed on them without adequate funding. With the passing of the Civic Government (Scotland) Act 1982, the Secretary of State shifted the paraphernalia of unnecessary and unwanted bureaucracy on to local authorities. The conclusions of the Stodart report also placed extra burdens on local authorities for, among other things, tourism.

Every time the Government came up with their rate support grant settlement, as they are doing tonight, they said that they had provided adequate funds. They fiddled the figures and talked about their level of inflation and other levels of inflation, but they did not give adequate funding to local authorities.

In the coming year, local authorities, especially their social work departments, will face the massive burden imposed by community care. It is grossly underfunded. As yet, it is unclear what will happen in one important aspect of the transfer of responsibilities: what payments will have to be made to keep people in residential care? The cost will fall either on the local authorities, which tell me that they do not have the funding and that the revenue support grant does not provide adequate funding, or on the families.

Families might have to pick up the tab for the extra costs of keeping their loved ones in residential care where they are currently being well looked after. At the moment, some of the responsibility for the cost involved falls on the Government, but that will not be the case after the transfer of responsibilities.

Occupational therapy services, even in the region which takes in Kincardine and Deeside, cannot afford enough people to carry out a proper survey of a person's need, sometimes even within six months. For example, they cannot give people a shower because they do not have the physical resources. It has already been said that they cannot supply adequate home help care.

Such problems will continue because the revenue support grant settlement does not take into account the aging of the population. That portion of the population requires more care, but the Government are throwing those people out of the health service's care. I have been told by health board representatives that the welfare of elderly people is no longer regarded as being a health matter but is a social concern. If that is so, the Government should be transferring resources in the revenue support grant settlement to allow local authorities to look after those people properly and give them the social care that they deserve.

Education departments are straining to maintain their morale, and I commend them on remaining motivated. I do not know how they manage it, because they have been burdened with one idea after another. Some ideas have been good, such as the five to 14 proposals. The Minister will know of the burden that has been placed on local authorities by that initiative, but local authorities do not have the resources to make the changes required of them. Many other tasks that local education authorities are being asked to perform, such as testing, are diversions. They need funding to carry out the initiatives at the regional level, to continue to develop standard grades and to continue a commitment to nursery education.

It might be notable that, under the Clinton Administration, there is a proper commitment to the Head-Start programme. The lessons from the previous programme proved that giving a child a proper education as early as possible will bear fruit in the teenage years. Youngsters stay on in education, provide the skills that we need and go on to become the technicians who will develop our future. One hopes that they will be able to pay for the retirement of those who cannot salt away money in a decent private pension fund, as many hon. Members probably can, but rely on state benefits that come from the taxation borne by the new productive industries.

In my region, the cracks are beginning to show. I know of two advisers in the education department who have recently returned to being head teachers in primary schools. They wanted to get out of the advisory service, making it clear that what they were being asked to do was necessary but impossible because of the resourcing and funding from the Government for the very initiatives in which the Government encouraged them to participate and to develop.

In district councils, where I spent 10 years, the staff used to have a vision of leisure and recreation providing an alternative for people who hung around the streets, selling drugs, getting into trouble and doing all the things about which the Government complain. That vision is now very dulled by the mud that has been thrown at it by the Government in many ways, one being a level of revenue support grant settlement which means that local authorities cannot provide the leisure development officers who are required to get young people into leisure centres and make them realise that there is an alternative to hanging about on the streets.

I began by saying that 13 years ago I was in the Gallery when the Government had to use the "excessive and unreasonable" clause to bring down local authorities' budgets. At that time, people could see what an authority stood for when it had a decent level of budget. They could also see what the Government stood for when they reduced each authority's spending with a single order.

Now, it is all done by sleight of hand. Capping is up the Minister's sleeve—he wears a soft glove but there is an iron hand underneath. Local authorities are not allowed to do what the Government said that they would allow them to do, which was to set their budgets, and say to the people, "Elect us if you want to elect us, and put us out if you don't like our budget." The Government have walked away from that promise despite their warm words about the poll tax: they said that everyone would pay and would be individually responsible for choosing the membership of the local authority that they wanted. However, the Government did not want people to choose, which is why they introduced rate capping before the rate support grant order.

The world is now a different place from what it was when Labour were in power. Page 49 of the latest "Scottish Economic Bulletin" shows that in 1980 unemployment in Scotland was 6 per cent. It has gone up and down since then, but has never been below 8 per cent., and the latest figure is 10 per cent. Everyone knows what massive problems that causes for people on social welfare. The lack of jobs causes demotivation among fathers and young people.

There are problems out there, but the Government are not willing to provide an adequate revenue support grant settlement. Let the people choose the level of local authority service and expenditure. The Government are guilty, in the eyes of the Scottish people, for not doing so, as are those, like the hon. Member for Kincardine and Deeside (Mr. Kynoch), who supported them. The expenditure of the hon. Gentleman's local authority is 35 per cent. below the guideline set by the Government. The hon. Gentleman should apologise for that, and the Government ought to apologise for this impoverishing revenue support grant settlement.

8.30 pm

Mr. Bill Walker (Tayside, North)

The hon. Member for Falkirk, East (Mr. Connarty) typifies the difference between the Opposition and the Government.

Mr. Connarty

The hon. Gentleman will recall that when I was the leader of a local authority we had occasion to engage in a debate in Perth. My recollection is that he told young people that they should be grateful for the scab YTS jobs that they were given in Gleneagles. So far as I know, the hon. Gentleman has not served in local government and does not know what it is like to work on the ground to provide people with services, rather than sit here and pontificate.

Mr. Walker

The hon. Gentleman seems to think that the only thing qualifying people to take part in a House of Commons debate on any subject—local government or otherwise—is to have done the job himself. I shall not forget that, as the hon. Gentleman is inclined to speak on many topics of which he has no experience at all.

Mr. Kynoch

Does my hon. Friend agree that one of the qualifications entitling Members of Parliament to speak about local government is that Parliament provides its funds?

Mr. Walker

Yes, indeed. The hon. Gentleman and his friends believe that there is virtue in simply spending money. As has been demonstrated very clearly in Kincardine and Deeside, virtue lies in providing a service at the lowest possible cost to the taxpayer and those who make their 14 per cent. Contribution—or whatever tiny proportion it will turn out to be.

I am rather sorry that the hon. Member for Monklands, West (Mr. Clarke) is not now in the Chamber. I do not say so critically, as we all require sustenance in a long day here. I simply want to say that I am delighted that the hon. Gentleman is back on the Opposition Front Bench, in combative form. I should have liked to be able to say so to his face, rather than in his absence. The hon. Gentleman, like many of his colleagues, has a very selective memory. Opposition Members forget the traumas of the last Labour Government—for example, the problems created by the IMF.

In addressing the problems that face Tayside, Perth and Kinross and Angus district, I remind the Minister of matters that I have put to him and to his ministerial colleagues. I refer to the storm and flood damage sustained in my constituency and in the neighbouring constituency of Perth and Kinross. This matter was referred to also by the hon. Member for Monklands, West. The Bellwin formula, while it is useful in most circumstances, is not the answer in every case. I believe that the River Tay is unique in that the volume of water and the speed at which it moves are greater than in any other river in Europe. The unique problems of the Tay require unique answers.

Mr. Foulkes

I am grateful to the hon. Gentleman for giving way. No doubt, he is keen to be helpful to me, as I arranged for him to reply for the Government in a debate last night.

The hon. Gentleman is making an eloquent plea—I heard him do likewise on the radio—for public funds for people suffering from a natural disaster in his own area. As the hon. Gentleman would expect, I support that stand, since it accords with my philosophy. But the argument that he is putting forward on behalf of his constituents is out of tune with his own philosophy. In his introduction he said that money does not solve these problems. He wants to cut expenditure. He wants people to stand on their own feet. Why does he think that his constituents who suffered in this way should not have been properly insured, that they should not take care of their own liabilities, that they should not stand on their own feet? Why are they special?

Mr. Walker

As always, the hon. Gentleman is being very selective. I defy him to suggest that I have ever said that public money ought not to be used to meet particular needs. This has been the basis of my whole political career, such as it is—and I was very grateful for the opportunity to make a winding-up speech. The plain fact is that the taxpayer is constantly called upon to contribute towards satisfying specific needs once they have been clearly identified. That does not mean some kind of blanket arrangement, which is why I deliberately used the word "unique" in reference to the Tay. If the Tay were in the hon. Gentleman's constituency, I should still think that the problems were unique.

Mr. Foulkes

In my constituency are the Rivers Doon, Stinchat and Girvan, all of which create problems. The Spey, too, is a very fast river, which creates difficulties. I believe that the hon. Gentleman is stretching a point. My hon. Friend the Member for Monklands, West (Mr. Clarke) put forward a very good argument in respect of a whole range of services, including education and social work, and he referred to the new responsibilities that have been assumed by local authorities. I support the hon. Gentleman in putting forward arguments on behalf of his constituents. Surely he, in turn, ought to support the arguments put forward by my hon. Friend the Member for Monklands, West.

Mr. Walker

Again, the hon. Gentleman has got it all wrong. We are already spending much more than he or his colleagues will acknowledge, but we are not getting the best possible value. Expenditure could be more constructive and more useful and could produce better results. As time is limited, I do not intend to go into detail on that matter.

The Tay requires a special detailed survey—something for which I have already made a plea. Such a project will cost money, but we hope that it will demonstrate how the river could be managed more effectively during periods of spate and flood. The hon. Gentleman seemed to imply that I expect the largesse to extend to everybody who is affected. That is certainly not the case.

However, the Perth and Kinross local authority has special problems. There has been difficulty in my constituency, and there has been substantial difficulty in the neighbouring constituency of Perth and Kinross. The question of the Bellwin formula must be looked at carefully. It is rather nonsensical that one bank of the River Tay qualifies for less-favoured area status, whereas the other bank, which is owned by the same person, does not. That makes a difference to the amount of public money that goes towards repairing the flood banks. The flood banks are there to protect people and property, not for the benefit of any individual.

Mr. Eric Clarke (Midlothian)

We are talking about the expenditure of money. The hon. Gentleman wants one-off expenditure on a barrier to ensure that flooding will not occur again. That is common sense, and in that respect, 1 am with him 100 per cent. However, money spent on patching a road or a roof, rather than repairing it, is wasted. Local authorities are asking for resources to do a multitude of such things. The way that you look at it, public expenditure cuts are sacrosanct. Those are things that you—

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse)

Order.

Mr. Clarke

I am sorry, Mr. Deputy Speaker; I should have said, "the hon. Gentleman". The point is that we are on your side. We are with you on this one.

Mr. Deputy Speaker

Order.

Mr. Clarke

I am sorry, Mr. Deputy Speaker. I meant that we are with the hon. Member on this one.

Mr. Walker

I thank the hon. Gentleman, but I do not want there to be any confusion about the narrow case that I am making. The situation is unique and calls for a unique answer. I do not want my argument to be seen as a rubber stamp or a blanket authority for across-the-board expenditure.

I drew attention to the fact that the case required a single in-depth inquiry. I agree with the hon. Member for Midlothian (Mr. Clarke) about patching. One of the results of patching on the banks of the Tay and elsewhere, as we know from the experiences of 1990 and 1993, was that the river had its way. Anyone who understands the situation will realise that the water has to go somewhere. The problem has to be properly tackled. There is a great need for an in-depth inquiry if we are to find answers.

I can tell the Minister that if I lived in California instead of North Tayside my neighbours would be delighted to store all that water. They would find a use for it, because there is a dearth of water in California. Some areas of the United Kingdom have recently been declared drought free and, as I said in the Scottish Grand Committee in Edinburgh, when we were talking about what might happen to water authorities, there is plenty of water in North Tayside. If anyone wanted to go there with a bucket or a bowser he could take it away, and it would be free.

Mr. Gordon McMaster (Paisley, South)

The hon. Gentleman has made a lucid and rational case for investment in the suggested study of the banks of the Tay. The Opposition support his efforts, but I must tell him that a far smaller number of houses in Park avenue, Paisley have experienced flooding over a number of years. The residents of those houses—I believe that there are about a dozen houses—have often had to move out, at substantial cost. I convened a meeting with all the authorities—the district council, the regional council and there was even someone from the Scottish Office—a year ago. Yet those residents are expecting their houses to be flooded again this winter. I shall support the fight of the hon. Member for Tayside, North (Mr. Walker) for the people of Tayside if he will support me in my fight for the far smaller number of people in Paisley.

Mr. Walker

Let me make it clear that I am not talking about simple flooding, which occurs throughout the whole country when rivers rise above their normal level and flood properties, and when there is a backflow from the outflows, or whatever. Such problems must be addressed; I am not ducking the issue. I am talking about what happens when a river is flowing faster than any other river and with a greater volume of water. The damage done by water moving at that speed is horrendous. Whole farms are wiped away; the topsoil is removed and when the river finally subsides, there is nothing left. That is quite different from the kind of flooding that occurs in many other areas.

Several hon. Members

rose—

Mr. Walker

Other hon. Members wish to speak. I have tried to let in as many hon. Members as I could, because I believe that that is often the only time that Opposition Members get the opportunity to raise their constituency problems. That is why I give way as often as I do.

I want a single body to have the authority to deal with the problems of the Tay sensibly and logically. I know that that will require specific funding and allocations. I hope that the Minister will tell me tonight that the Scottish Office is considering sympathetically my suggestion as a special one-off, unique case, which should be dealt with accordingly.

8.44 pm

Mr. James Wallace (Orkney and Shetland)

As in the past, the hon. Member for Tayside, North (Mr. Walker) has expressed eloquently his case for special funding. I endorse his plea, but when he responded to interventions the hon. Gentleman failed to grasp the point of principle at issue. The facts of nature make the banks of the Tay and its banks the way they are, and that leads to damage to people's livelihoods, farms and well-being. In the same way, the ravages of age and disability, for example, mean that some people need home helps or sheltered workshops. Yet the hon. Member for Tayside, North seems to have a mental block about that kind of local government expenditure. He shakes his head, as if to say no, but he usually seems to approve of such expenditure cuts, which often mean that home helps are not being provided and sheltered workshops are not being built. Those issues inevitably arise in debates such as this.

The hon. Member for Kincardine and Deeside (Mr. Kynoch) said that the Convention of Scottish Local Authorities said that 3–2 per cent. could not be regarded as unrealistic. I believe that the Minister said that the sum was somewhat larger. It was said that, with inflation at 1–7 per cent., that was reasonable. But we are talking about a level of grant that has to last throughout the forthcoming financial year. I do not think that the hon. Member for Kincardine and Deeside could put his hand on his heart and tell us that inflation will still be at 1–7 per cent. next February. According to the Bank of England report today, that would be an optimistic assumption; 3–5 per cent. might not look so rosy in 12 months' time.

Mr. Kynoch

The hon. Gentleman obviously did not hear the rest of what I said. I said that, as wage increases represent 60 per cent. of local government costs, if they were restrained and ranged from nothing to 1–5 per cent., that would leave up to 4 per cent. or even more for other expenditure. That would take account of varying inflation over the coming year.

Mr. Wallace

It may even be optimistic to imagine that inflation will be 4 per cent. in 12 months' time. The hon. Gentleman leaned so heavily on COSLA's comments he should have regard to the fact that COSLA said that reductions in services were still likely as a result of the settlement. That is because we are talking not about a one-off arrangement but about a background of 14 years during which local government has been asked to cut expenditure.

The Minister said that he expected more efficiency savings, but there comes a time when one cannot save any more. There may be some items in the budget that can still be investigated; perhaps some functions can be performed more efficiently. But the Government have failed to recognise that there comes a time when there is no more fat left; they are eating into muscle. At that point services are threatened. Repairs and maintenance in schools are not carried out, and children have to learn in circumstances and surroundings that are not conducive to learning. In the past, I have tabled questions whose answers revealed the diminishing amounts spent in real terms on school books. When I was at school pupils had a book each. Now it is common practice for books to be shared, which makes homework difficult.

An increasing number of responsibilities have been placed on local authorities. The Minister responsible for industry and local government in Scotland is present, so perhaps he can tell us how many more responsibilities were placed on local government as a result of the Environmental Protection Act 1990. I do not dispute the fact that many of those responsibilities were appropriate, but so often the resources to implement the new responsibilities do not match the task.

There are particular concerns in my constituency. In Shetland the reduction in aggregate external finance this year will be 10.3 per cent., and that follows a reduction last year. Inevitably, that must mean that there will be either a significant hike in council tax, or other local government taxation, or a cut in services. The original brief for the special islands needs allowance contemplated the possibility that it might not continue, so the fact that it is to continue is welcome. We wish to acknowledge that fact, and put it on the record.

One issue involved the resources that the two local authorities in the isles had built up not only as a result of prudent management over the years but from oil-related income. I understand now that while local authorities cannot dip into special funds to meet expenditure, they can do so to defray council tax. People will ask why local authorities which have been prudent in the past, and which have managed to build up special funds, should be expected to use those funds because Government have not provided sufficient to them otherwise to meet their responsibilities.

The hon. Member for Monklands, West referred to non-payment of the community charge. I share the views of Conservative Members that those who went about encouraging people not to pay their community charge did considerable damage to local government in Scotland. Those who have to bear the cost of that through the subsequent increase in community charge are the honest, law-abiding citizens who pay their tax and those who suffer because of services not being provided.

Mr. Maxton

I agree with the hon. Gentleman. I never argued in favour of non-payment campaigns. But if the whole responsibility for non-payment of poll tax was placed on those who propagated that idea, it would be misleading. The tax was uncollectable from the start. The problems were built into the tax and it should never have been introduced.

Mr. Wallace

That was partly recognised because 100 per cent. collection was never expected. Various factors were involved. The mobility of people was much greater than anyone had imagined. Also, in some cases it was not a matter of "can pay, won't pay" but that people could not afford to pay the tax.

The Minister knows that I am a fair person and will take the rap if I am wrong, but I understand that if a person does not pay, for whatever reason, and if that person would have been entitled to a rebate, the Government do not pay the amount of the rebate to the local authority.

Mr. Foulkes

It is a double whammy.

Mr. Wallace

It is a double whammy, perhaps. The local authority is not getting the money from the individual; in addition, it is not getting the money which it would have got from central Government if the person had paid the tax. In the first nine months of this financial year almost £0.5 billion of community charge is unpaid. The Government contribution relevant to that could be a sizeable amount. Perhaps the Minister could indicate how much he estimates the Government have saved because people have not paid their poll tax. Local authorities would be interested in knowing the amount by which their resources would have been increased if the Government had paid their share. The Government could pay, but I think that they, too, are adopting the line of "can pay, won't pay".

The problem in local government finance is that, because of the gearing effect, almost 90 per cent. of council spending is determined by central Government. If a local authority wants to incur expenditure, the impact is proportionately very high on the council tax and, because of the capping powers of the Secretary of State, the amount of discretion afforded to local authorities has become less and less.

We believe in the system of local government finance based on a person's ability to pay. In that case there would be scope to increase the local base for raising revenue. If Ministers are sceptical about that, it comes ill from a party which at the last three general elections gave tax bribes to ensure that it would win. We believe in a simple proposition that may be too radical for the Government. Local government finance should be arranged in such a way that local authorities, elected by local people to make decisions in respect of the local community, should be accountable to the electorate for those decisions, including decisions on spending. That proposition is perhaps too radical for the Government, but it would enhance the quality of local authorities throughout Scotland.

8.54 pm

Mr. Phil Gallie (Ayr)

I wish to comment first on the remarks of the hon. Member for Monklands, West (Mr. Clarke), who refused my second intervention. I do not criticise him for that; he was good enough to allow me to intervene once.

The hon. Gentleman listed matters for which he thought a Scottish assembly should be responsible. Some Opposition Members have suggested that a Parliament would be more in line with their views, but I will comment on that later. The hon. Member for Monklands, West suggested that education, roads, social services and planning should fall within the remit of a Scottish assembly. Those services are all looked after by local authorities. The hon. Gentleman seemed to be offering devolution in reverse by passing to the centre responsibility for issues already catered for locally.

Mr. Foulkes

The hon. Gentleman shows a lamentable ignorance of the proposals. The proposals are for devolution of legislative powers for education, housing, local government and so on. The proposals are for devolution of the legal framework for those services, not their administration. Administration would remain, as at present, with local government. The hon. Gentleman shows a fundamental lack of understanding. He displays an ignorance which shows us why he does not understand anything about Scottish devolution.

Mr. Gallie

I am not sure what I am not supposed not to understand. Is it the policy for a Scottish convention? Is it the policy for a Scottish assembly? Is it the policy of the Labour party that I am supposed to know about? Is it the policy of the Liberals, or that of the Scottish National party? Each of those groups has different ideas. They are a hotch-potch; they are crazy ideas. The hon. Gentleman is trying to kid us if he makes out that there is some structure that we should all be aware of.

Mr. Foulkes

rose—

Mr. Gallie

No, I am not giving way. The hon. Gentleman had his opportunity.

As the hon. Member for Monklands, West said, the vote at the last election suggested support for Scotland's place within the Union and support for an assembly. There are two interpretations of the consequences of that vote. The hon. Member suggested that 75 per cent. of the population voted for a Scottish assembly. My interpretation is that 78 per cent. of the population voted for Scotland's place within the United Kingdom. I strongly believe that the parties of the Union must take on board the fact that an assembly would be nothing more than a stepping stone to the break-up—

Mr. Deputy Speaker

Order. I have listened patiently, but I have not heard much about local government. Will the hon. Gentleman please get back to that subject?

Mr. Gallie

I accept your ruling, Mr. Deputy Speaker, and I shall come back to the topic. I was simply trying to pick up points raised by the hon. Member for Monklands, West.

The hon. Member for Falkirk, East (Mr. Connarty) criticised Kincardine and Deeside for spending at below Government limits. Voters in Kincardine and Deeside elect local councils to do just that. They fully recognise that the community charge that they have to pay relates to council expenditure. Obviously they do not favour paying high community charges, so they elect councils that are financially responsible. Instead of criticising that council, hon. Members should commend it.

The hon. Member for Falkirk, East also suggested that Labour party policies served people especially well in Stirling district. My recollection—I stand to be corrected—is that Stirling district is now a Conservative-run council.

Mr. Maxton

It was decided on the toss of a coin.

Mr. Gallie

As it was when Labour ran the district.

The revenue support grant has three elements. The first is aggregate external financial support—RSG and business rates combined—which totals £5.165 billion. As the Minister suggested, the figure for Scotland is 47 per cent. higher than the equivalent figure for England. The total allowable expenditure for local authorities in the coming year is £5.8 billion. That means that the council tax has to make up the difference of £6.35 million, which is 11 per cent. of the total expenditure of local authorities. The Government have thus been very generous to the new council tax payers. I suggest that that is far fairer than the demand when the community charge was introduced. Payments then were based on a 14 per cent. contribution.

If some of the new ideas for the introduction of the council tax, which is about to descend on us, had been introduced with the community charge, we might not have had to make the change. [HON. MEMBERS: "Like what?"] Like what? We do not now demand 20 per cent. payments for those on benefit as we did for the community charge. The 20 per cent. banding payment has been removed for the new council tax. It was almost certainly a mistake to look for payments on a per head basis without tying payments to the point of abode and without looking for a collective payment from that door. Such lessons have been learnt only in retrospect, and I regret that.

In the coming months, many who will be asked to pay the council tax may regret the passing of the community charge. They have been the silent members of the community until now.

I have said that council tax payments will be 11 per cent. of total expenditure. I also see figures between £200 million and £250 million, which will almost certainly come from the rebate system, especially as the 20 per cent. banding will be removed. That means that only 7 per cent. of local authority funding will be paid directly by council tax payers.

Mr. Maxton

I accept what the hon. Gentleman is saying about council tax rebates. The real problem with the discounts for council tax payers is that that cost will not be borne by central Government: it will be borne by the other council tax payers in the area. There may be a fair number of second homes, which have a 50 per cent. discount, in the hon. Gentleman's constituency. That 50 per cent. discount will be paid for by the hon. Gentleman and his constituents, and not by central Government.

Mr. Gallie

I do not believe that there are many second homes in my constituency, so the problem does not really arise. I recognise, however, that, in many areas—especially in the constituency of the hon. Member for Cunninghame, North (Mr. Wilson)—second homes were a problem when the community charge was introduced. Therein lay another problem with the implementation of that charge for local authority services.

Another problem arose because the Government were not prepared to cap local authority spending on the introduction of the charge. In effect, that meant that local authorities spent beyond reasonable levels and blamed the Government and the community charge for the high cost to the community charge payer. I am pleased to note that the Government have learnt that lesson in time for the introduction of the council tax.

Mr. Hood

It is a roof tax.

Mr. Gallie

A roof tax was something that was in the Opposition's minds. I hold no brief for property taxes, but I believe that the council tax is the best of such options, and I support it on that basis.

Let us look once again at the rate of revenue support grant in the current year. I must draw attention in particular to the added injection of the community care allowance—some £63.5 million. I welcome the community care ideal, as do most people in the community, but I ask my hon. Friend the Minister to take careful note of what I have to say. I understand that there may well be problems of ring fencing in Scotland, but it is important that the new cash injected finds its way into the community care programme. I seek my hon. Friend's words of comfort on that.

Mr. Chisholm

The hon. Gentleman speaks highly of the community care settlement. Does he realise that a study by Lothian region shows that, throughout Scotland this year, there will be a £9.5 million care gap between the amount of money given and the amount that will have to be paid for services? Does he further realise that, when all clients are covered by local councils, that care gap will widen to £63 million? A £9 million care gap would add £5 and a £63 million gap £40 to a band D council tax payer's bill. Surely the settlement is somewhat inadequate.

Mr. Gallie

The hon. Gentleman's comments do not surprise me, especially as they are based on the findings of Lothian regional council. In my experience, whatever aspect that body is considering, it always envisages a need for more money.

The allowances give a 3.2 per cent. increase across the board—above the rate of inflationߞto local authorities. If one adds in the community care component, as my hon. Friend the hon. Member for Kincardine and Deeside (Mr. Kynoch) suggested, that raises the level to 4.1 per cent.

One important issue seems to have been ignored in the documents, and that is the effect of falling interest rates. Will my hon. Friend the Minister address that point and advise me what benefits local authorities will achieve as a result of the fall in interest rates that we have experienced, especially in the past six months? I do not think that the papers take account of that fall, which I think will place extra money in the councils' coffers.

The Convention of Scottish Local Authorities document refers to the non-collection of the community charge. In that respect, I am pleased to identify myself with the words of the hon. Member for Orkney and Shetland (Mr. Wallace), who referred to difficulties that were initially encouraged by Opposition Members when the community charge was imposed. People were encouraged not to pay, and inevitably the collection rate fell. The situation got worse. In the first year, there was a 12 per cent. non-collection rate, which fell to 18 per cent. in the second year and 20 per cent. in the current year. That is changing, because people are being pursued. I should like the Under-Secretary of State to give me some assurance that those who have deliberately avoided paying the community charge will be pursued until every last penny is paid into the coffers of the local authorities which are entitled to that cash.

I pay tribute to the council of the Western Isles. Last week, I was privileged to visit the Western Isles with the Select Committee. I was most impressed by the attitudes of the councillors. I expected to hear complaints and whining about the problems of the Bank of Credit and Commerce International, but I heard nothing but positive views. I understand the problems which the councillors face. I would ask the hon. Member for Western Isles (Mr. Macdonald) to return my good wishes to the councillors. I trust that they will do well in the coming year with the rate support grant.

I should like to refer to the new administration of the Kyle and Carrick district council. That council inherited an horrendous budget. The previous council had overspent, and the budget was totally out of control. The new council did not wait until the rate support grant announcements were made to take action; it tackled the issue from the day it was elected in May 1992. It has made good progress.

I believe that the Under-Secretary of State will have no worries at all in having to cap Kyle and Carrick district council. That would not have been the case if another party had been in control of the council.

Mr. McMaster

I remind the hon. Gentleman that two councils look after the people of Kyle and Carrick—Kyle and Carrick district council and Strathclyde district council. The hon. Gentleman is trying to convince us that the revenue support grant settlement is generous. Can he tell us what he will say after 1 April to the people in his constituency who will lose home helps as a result cif the settlement?

Mr. Gallie

I would need to examine closely the budget of Strathclyde regional council. When I find that the regional council can spend £500,000 on a campaign against changes in the water structure, and when it publishes glossy magazines and information on 29 January —the date that the consultation period closes—I must examine the budget. There must be a lot of money in the coffers which the regional council can use to the better advantage of those who pay the community charge and will pay the council tax. At present, that includes people in Kyle and Carrick district but, hopefully, they will not be included in the not too distant future because they will have a single tier authority.

It does not matter what level of rate support grant the Secretary of State announces—Opposition Members will never be satisfied. They always look for increased expenditure. Tonight, it is local government; tomorrow, it will be health, social security, third-world aid or the arts. They will want to spend more. I am delighted with the settlement, and I compliment my hon. Friend for producing it.

9.14 pm

Mr. Eric Clarke (Midlothian)

I had 16 years as a councillor on Midlothian county and regional councils. I fought against the then Secretary of State for Education, Baroness Thatcher, when she stole the half-pint of milk from children. That is going back a bit. More than that, I stood out against the Callaghan cuts, so I am consistent.

I am not standing here simply to talk about policy. IL am interested because the decision which is taken today will affect the quality of life of thousands of people in Scotland. I am sure that everyone is interested in that. The sacrosanct idea of Conservative Members that public expenditure cuts are marvellous is irresponsible. The cuts do not save money: they cost money. The hon. Member for Tayside, North (Mr. Walker) wants to spend money to save the inconvenience of his constituents. I would support you in that. But there are many other ways throughout Scotland of doing exactly the same. The spin-off of that would be the creation of jobs. I am saying to you that civil engineering jobs—

Mr. Deputy Speaker

Order. The hon. Gentleman must address the Chair.

Mr. Clarke

I apologise, Mr. Deputy Speaker. I cannot get out of the habit of being reasonable and speaking proper English, but I shall try my best: bear with me.

The Government's short-sighted policy costs us all money eventually. There is a backlog of work needing to be done. Let the Minister just visit some of the schools that I used to visit years ago. He will see paint peeling off the walls and windows that need to be replaced, which could have been painted. It is the old saying about the tar on the ship—penn'orth of tar. Now roofs will have to be repaired rather than patched.

Mr. Gallie

The hon. Gentleman suggested that Conservative Members were responsible for the maintenance of schools. I suggest to him that the responsibility is with the local authorities. They had the cash to manage properly. The problem lies in the fact that they have not managed their affairs in a reasonable manner.

Mr. Clarke

When I was a councillor, we stood by an increase in the rates and people had the opportunity of voting us in or out. We had the autonomy. Now there is direct Government interference. There was no capping then. We stood every three years and were either elected or not elected. What was wrong with that? The expenditure was either frivolous or otherwise. I assure the hon. Gentleman that it was not normally frivolous. We prided ourselves on running our authority well. So do local councillors now.

The hon. Member for Ayr (Mr. Gallie) said that local authorities had the cash and could do this and that. That is not so. There is direct interference from St. Andrew's house. That is why we want a Scottish Parliament. We want to take power away from the individuals in St. Andrew's house and give it to a democratic body.

One of the cruellest ironies is that, although buildings can be repaired and things put back, we cannot give back to children the proper education that has been taken from them.

Mr. Gallie

indicated dissent

Mr. Clarke

The hon. Member for Ayr shakes his head. All I can say is that it might rattle now and again.

The position is a fact of life. It is serious because youngsters are being deprived of a proper education. The remedial aspect of education which my hon. Friends mentioned earlier is being damaged, and opportunities are being removed, from young handicapped individuals. Such things cannot be replaced later. Young people cannot be repaired as buildings, roads and so on can be repaired. I ask the Government to reconsider. I know that I am talking to the deaf. The people of Scotland are getting to the stage where they want and are willing to pay for a quality of life. "Public expenditure" seems to be a dirty phrase, but it could be used to give people back some employment.

Expenditure will be required for sewers, maintenance, barriers on the Tay or an injection of cash into my constituency of Midlothian. That work must be carried out, and this is the time to do it. The Government pride themselves on being business men, but if they were they would get the best tenders now while there is a dearth of work. That is common sense.

I hope that people are watching and listening to our arguments. I am not here to score points against anyone, because the situation is far too serious to be funny. My constituents' quality of life will be affected if we deprive local authorities of money, and I have repeated that fact because it is so important.

How many of us have seen homeless people turn up at our surgeries? What can we do for them? I am not a super-councillor but a Member of Parliament, and I refer them to the local authority, which has a list of homeless people, many of whom are unemployed builders who could build homes.

The problems that we all face every day are too numerous to mention. Are not our people entitled to the quality of life that they deserve? They are unemployed through no fault of their own. The Minister cannot say that we are a poor country—we are a very wealthy country, but the wealth happens to be in the hands of too few people. Opposition Members want that wealth to be in the hands of many people.

Mr. Chisholm

Since my hon. Friend and I represent constituencies in the Lothian region, does he agree that, although there is a general problem with finance, the region has a particular problem, as it receives less per head than any other region of Scotland—last year it was £708 per head, and it will be less this year? Does he also agree that the result of inadequate central Government funding is that Lothian services are not what they were when he was a councillor, when they were the best in Scotland? Expenditure per head is now the second worst, because the region is not getting enough from the Government.

Mr. Clarke

I agree. We seem to be being penalised for having had the audacity to vote Labour. One aspect of the problem is the way in which the formula is worked out by the Secretary of State for Scotland and others. The Government have never got over the shock that Edinburgh is Labour-controlled, and they have never forgiven us for it. The people of Edinburgh and the Lothians are suffering for that. That is my view, and the Government can respond to it, or not, but it is a fact of life and the only logical reason. Why is the formula different from anywhere else?

Mr. Wallace

Does not the hon. Gentleman accept that, in last year's district elections, far more people voted Conservative than Labour in Edinburgh? How does he square that circle?

Mr. Clarke

Edinburgh is still Labour-controlled. Sometimes people vote in a daft way when Governments penalise them and hit their pockets. That is what the Government tried to do on that occasion. They may be succeeding, but I am sure that they will not pull the wool over everyone's eyes, and that people will realise what is going on.

I am making a plea for all those people who are employed by local authorities and who are doing their best. Because of the balance of budgets, they do not know whether they will keep their jobs and the threat of redundancy hangs over every one of them. Many have worked for the authority for years and are very dedicated, working outwith the ordinary nine-to-five job. We depend on them.

Many other people wonder about their future quality of life and ask themselves whether it is worth staying in local government or whether they should move on. That is true of teachers, who are asking themselves whether it is worth it. We depend on a well-educated new generation, who have been looked after in properly maintained schools and other institutions, and we must give them confidence. Those cuts and clawbacks do not help local authorities or those who are unemployed.

Mr. Gallie

indicated dissent.

Mr. Clarke

The hon. Member for Ayr can keep shaking his head, but I know that what I am saying is right.

Mr. Gallie

rose—

Mr. Clarke

No, I shall not give way as I shall be finishing my speech in a minute.

I hope that common sense prevails regardless of the fact that the Government believe that their policy of cutting public expenditure is sacrosanct.

Mr. Gallie

rose—

Mr. Clarke

No, I shall not give way. I am going to sit down as I have finished my speech.

9.26 pm

Mr. Andrew Welsh (Angus, East)

We have just heard the genuine voice from the heart of Scottish local government. Among Opposition Members there is a tremendous depth of experience of and expertise on local government. I hope that the Minister is listening to what is being said. I can definitely identify with many of the issues raised. Having served in a local authority, I know of the expertise and dedication of the highly trained councillors and officials who work in local authorities. Those people supply a massive range of services daily throughout the length and breadth of Scotland.

It is an absolute shame, and almost criminal neglect by the Government, to fail to understand either what local authorities are doing or the true worth and position of those authorities in Scotland. I would rather see those local authorities given greater autonomy and the resources to carry out the services to the best of their ability. I have never seen a Government who have understood that and allowed local authorities to make their contribution to Scotland.

The revenue support grant order confirms the general trend in the Government's handling of local authorities over the past decade. Successive Governments have consistently hogtied local government with more statutory obligations, while refusing to provide adequate resources, powers and skills for genuine local authority action.

The Government's view is that local authorities are simply enabling organisations, with little or no ability to act independently. That is the sum total of Government policy, and shows the direction in which they have been heading over the past decade. Now, the Secretary of State wants to determine 89 per cent. of all the income that is available to local authorities for annual expenditure. If we ally that to the Government's capping proposals, we are left with democratically elected Scottish local authorities with virtually no discretion over service provision and absolutely no discretion to expand local services to meet local need.

One major problem is that local authorities know the need but are frustrated, as they do not have the ability to meet it. They have the expertise to do so, and central Government's job is to give local authorities the tools to allow them to provide services at the levels that they know are required locally.

During the past seven years, central Government financial domination has risen from 32 per cent. to 75 per cent. in my local authority. That pattern is repeated throughout the length and breadth of the country. That means that there is little or no scope for truly local action or discretion. Under the Government's clear centralisation policy, local authorities are gradually being reduced in status to the level of non-elected health boards. They are organisations that are given fixed budgets determined solely by central Government, who simply cut spending to suit their budget levels, irrespective of local need.

Mr. Gallie

The hon. Gentleman suggests that central Government have taken more and more control over the affairs of local authorities. I acknowledge that, if central Government cap local authorities, the hon. Gentleman's argument has some merit. However, the way that local authorities administer their affairs does not allow for central involvement. I asked my right hon. Friend the Secretary of State to ensure that local authorities provided nursery education to reasonable levels; he said that it was a local authority matter, and that he could not intervene.

Mr. Welsh

Compulsory competitive tendering, capping and these orders all show that the hon. Gentleman's remarks are nonsense. We oppose the quangofication of Scottish local government tooth and nail. Local authorities which know local conditions should be allowed maximum autonomy to meet local need—because they understand it. Then it is up to the local electorate to decide whether they like or dislike the way in which these democratically elected local councillors have run the affairs of the local authority.

There can be no denying that the imposition of central Government legislation—a flood of it—has badly affected local authorities over the past decade. I want that trend reversed, to allow more decision-making power to be devolved to local authorities, allowing them to make decisions on behalf of their electorates and in the light of their needs.

Local authorities are an essential part of the democratic structure of society. They can and should offer people the right to participate democratically in local decisions affecting local communities. I do not want any more quangofication—I dislike the system that ensures that health boards, for instance, are packed with Tory placemen carrying out Government policy with no mandate to do so. We should encourage democracy in Scotland—precisely what the Government are not doing—

Mr. Calum Macdonald (Western Isles)

What on earth is "quangofication" in Gaelic?

Mr. Welsh

I could not say, but perhaps the hon. Gentleman can help us.

Under the Government's system, spending is unrelated to actual need and there is limited scope for local discretion. If it is to be meaningful, democratically elected local government must be able truly to reflect local wishes, priorities and needs. That requires an ability to raise and target funds according to the wishes of an electorate. Everything in these orders runs directly counter to local democracy. Central Government now fund and cap local authorities, and they are turning Scotland's local authorities into nothing more than local administrative units.

I do not want local authorities to become just enabling administrators. I want them to be service providers, understanding local needs and meeting them. If the Government complete their local administration ideas, the democratic system will be the loser. The SNP opposes Tory centralism and believes in maximum local authority autonomy and decision making.

I should like to ask Labour party Front-Bench spokesmen to make their views clear. The right hon. and learned Member for Monklands, East (Mr. Smith) seemed, in his Bournemouth speech, to set Labour on a course to chase south-east English voters—expressing the very Tory philosophy which sees local authorities as enablers, not as service-providing organisations. Does the Labour party see local authorities merely as enablers or as positive service providers?

Mr. Adam Ingram (East Kilbride)

The hon. Gentleman talked about local authorities being able to raise funds to spend on local communities. How does he square that with the SNP campaign in favour of non-payment of the poll tax? There was still a need to ensure that funds were collected to meet the essential needs of the community.

Mr. Welsh

Had it not been for that campaign, we would still be stuck with the poll tax.

I repeat my question to Labour Front-Bench spokesmen. If they are to begin chasing south-east English votes, some of their fundamental policies may have to be ditched. If the Labour party will not clarify its position, all Labour Members' words in support of local authorities tonight—I agree with them—will be meaningless.

The SNP is absolutely sure of the importance of a democratic role and of independence for local authorities. I am sure that the electorate will want to know whether Labour has changed its views.

In conclusion, I should like to highlight the unfairness of the non-domestic rating system in Scotland. Scottish businesses and industries are still I 1p in the pound adrift of their English counterparts in this respect. So much for extra taxation under a Scottish Parliament. We already have extra taxation, because of the situation that the Government have allowed to exist for decades.

Mr. Kynoch

The hon. Gentleman said that Scotland was I 1 p worse off than England. Obviously he did not listen to my earlier remark that Kincardine and Deeside is exactly on the average that exists south of the border. It comes down to good management by good councils.

Mr. Welsh

The exception proves the rule, but the solution is in the Government's hands. They could create a level playing field for Scottish commerce and business now, but they are talking of some future date. May we have an assurance from the Government that Scottish business will enjoy a level playing field next year? Scotland will pay £312 million in extra costs in 1992–93. That means job losses and higher prices to Scottish consumers, which should not be allowed.

The hon. Member for Kincardine and Deeside (Mr. Kynoch) is the first to say that Scotland would suffer extra taxation, but I do not hear him say very much about the extra taxation that it has suffered for decades and is suffering now.

Mr. Kynoch

Does the hon. Gentleman realise that the order gives extra funds in respect of non-domestic rates, so that the differential will be reduced? The Government are already moving very fast in that respect. The differential is now only 26 per cent.—and earlier, I asked the Government to speed up that process.

Mr. Welsh

The Minister spoke about the order producing savings, but not about actual costs—which are far greater as a result of the unfair rating burden, which exceed by far his so-called savings. I ask the Minister to achieve a level playing field. Business must be hindered and jobs lost by Strathclyde's 43.5 per cent. rates disadvantage. It is all very well speaking about Kincardine and Deeside, but I want that unfair burden to be removed from the whole of Scotland.

Mr. Connarty

Does the hon. Gentleman realise that Kincardine and Deeside expenditure is 35 per cent. below the guideline? That local authority spends 35 per cent. less than the Government think it should to provide a standard level of service. Is the hon. Gentleman suggesting that Scotland should take a 35 per cent. cut to achieve the level cited by the hon. Member for Kincardine and Deeside (Mr. Kynoch)?

Mr. Welsh

I am not advocating any cut. If the hon. Gentleman will listen to the rest of my speech, he will learn that I am advocating that expenditure in Scotland should match the needs in Scotland. However, I take his point that Conservative-controlled Scottish local authorities, few though they may be in number, keep rates low by destroying services.

The answer is to improve services and to keep rates low. I commend to the House the actions of Angus district council, which always has the lowest rates in the whole Tayside region while massively increasing services—something that the Tories could never manage when they ran Angus. I believe in value for money, and I take the hon. Gentleman's point in that regard.

The increased tax burden on businesses in Scotland is the price paid for Scotland's outdated union with England.

Mr. Bill Walker

Will the hon. Gentleman confirm the value of the local authority's reserves when it changed from Conservative to Scottish National party control, and how they were used to keep rates low?

Mr. Welsh

The reserves were wiped out by the Tories trying to get themselves re-elected. The SNP in Angus district inherited zero reserves—that was the state of play. The Tories were absolutely disastrous at running local authorities. The Minister has a cheek pretending that value for money is always achieved by Conservative authorities. That was certainly not the case in Angus.

When the SNP took over, Angus had the fifth highest average rents in Scotland. Under SNP control, as the documents that we shall examine later show, it now has the second lowest average rents, with a massive increase in services and good value for rent payers.

The sooner that unfair business rates are wiped out the better.

Mr. Maxton

Will the hon. Gentleman allow me to intervene?

Mr. Welsh

No, I want to finish, because other hon. Members hope to catch your eye, Madam Speaker.

Mr. Maxton

rose—

Madam Speaker

Order. The hon. Member for Angus, East (Mr. Welsh) said no.

Mr. Welsh

The hon. Gentleman can make his own speech.

This year, a £312 million bill will be imposed on Scottish business and employment—and that is too high a price to pay for an outdated Union. The sooner that Union is abolished, the better.

9.39 pm

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

Having sat through every minute of this interesting debate, I am glad to have the opportunity of saying a few words. I spent nine happy years in Scottish local government, along with my hon. Friend the Member for Midlothian (Mr. Clarke): we both served on Lothian regional council. I congratulate my hon. Friend the Member for Monklands, West (Mr. Clarke) on his excellent speech; I remember when he was a distinguished president of COSLA.

My hon. Friend the Member for Midlothian said that, when he and I worked in local government—Labour was then in office at Westminster—we did not get all that we wanted. Of course, under any Administration, local government does not receive everything that it requires. I can assure the House, however—from my COSLA experience, and, in particular, my experience as chairman of Lothian's education committee—that those were halcyon days compared with what we are now experiencing.

In those days, we were expanding community schools in Lothian, with the encouragement of the Labour Government. We were expanding nursery education. We saw the prospect of doing even more: I looked forward to taking over some of Edinburgh's private schools, for we were certainly working in that direction. We shall do so again, once we regain power at Westminster.

Mr. Stewart

Will the hon. Gentleman give way?

Mr. Foulkes

The Minister will be allowed to reply to the debate, if he behaves himself.

Over the past 14 years; local authorities have been squeezed, cut and capped. That has meant a major reduction in services to the most vulnerable members of society. The sons and daughters of Edinburgh's judges do not attend local authority schools; they attend private schools, so they are not worried. Our children, however, attend local authority schools, and experience the cuts. They know that books are not available as they used to be.

We also see the effect on employment. The Government really are astonishing: they stand back in amazement, saying, "My goodness, the level of unemployment is rising", as though that were nothing to do with them. In fact, the increase in joblessness—in industry as much as local government—is a direct result of the squeeze on expenditure that the Government have imposed. They say that they are as concerned about unemployment as Opposition Members, but theirs are crocodile tears. It is the Government who ensure that that employment comes about.

We have heard a good deal of special pleading today. I agreed with the special pleading of the hon. Member for Tayside, North (Mr. Walker); I hope that he will agree with mine, but I am not sure that he will. Earlier, I asked a question about Cumnock and Doon Valley, which I make no apology for repeating. The area needs special consideration, because of the high level of unemployment. Cumnock and Sanquhar travel-to-work area, for instance, has a higher unemployment level than any other travel-to-work area in Great Britain. As my hon. Friend the Member for Monklands, West pointed out, the area has a special need for employment creation and regeneration, but the work that it wants to do has been held back by the threat of capping. Moreover, it has now been forced to increase charges to private industry for dealing with such matters as trade waste. That extra burden is creating problems for the few industries that remain in Cumnock and Doon Valley.

The hon. Member for Ayr (Mr. Gallie), in a remarkable, indeed unbelievable, speech—actually, having got to know the hon. Gentleman, I did not find it so very unbelievable—spoke of all the needs of local government; or, rather, he said that local government had no needs. He said that local government had enough money, and even implied that it had too much.

Mr. Gallie

Will the hon. Gentleman give way?

Mr. Foulkes

I have not even said anything yet. I know that he is very sensitive, but he should wait until he is attacked before he tries to intervene.

The hon. Member for Ayr goes to Castlehill primary school in his constituency—

Mr. Ingram

He is too old for that.

Mr. Foulkes

He might go along from an educational point of view, but he goes from a constituency point of view and says that he supports its fight, but he does not support the regional council's demands for money for repairs. He says that Strathclyde council is profligate and that it spends money on other things. Of course it does. It spends money on police, fire prevention, water, sewerage and all the social services. Conservative Members demand those services, but they will not will the resources.

Mr. Gallie

The hon. Gentleman refers to Castlehill school in my constituency. My complaint about Strathclyde is that it has not planned a reasonable closure programme over a number of years. Originally, Strathclyde planned to rebuild Castlehill, but in January it suddenly decided to close it. That is atrocious management. That is the problem.

Mr. Foulkes

The hon. Gentleman fails to understand that Strathclyde does not have control of its revenue or capital budget. It is inhibited by Ministers failing to provide the capital and revenue. The hon. Gentleman stands up in his constituency and says that he does not agree with the Government and that he will protect the interests of his constituents, but comes here and goes through the Lobby—

Mr. Gallie

On a point of order, Madam Speaker. It is wrong to say that I say all these things in my constituency. I should like evidence of it—

Madam Speaker

Order. That is a point of argument, not a point of order.

Mr. Foulkes

Sometimes we wonder whether the hon. Gentleman represents Ayr or Scottish Power.

There are many more arguments that I could deploy about community care, the aging population and so on, but I shall not do so because I know that my hon. Friend the Member for Fife, Central (Mr. McLeish) will deal with them. What sickens me is the hypocritical attitude of Conservative Members who always want services but are not prepared to ensure that they are paid for. That brings discredit to politics. The people of Scotland have realised that and it will not be long before the people of the rest of the United Kingdom also do so.

9.47 pm

Mr. Calum Macdonald (Western Isles)

I congratulate the hon. Member for Ayr (Mr. Gallie) on one aspect of his speech, in which he acknowledged the special difficulties and problems of the Western Isles and the council's struggle to meet those difficulties. I acknowledge that the Government have taken those problems on board to some extent by reinforcing their commitment to the special islands needs allowance. Like the hon. Member for Orkney and Shetland (Mr. Wallace), I welcome that repeated commitment and hope that it continues.

The special needs of the Western Isles are based on its special geographic character and its rural nature. The population is sparsely spread over a large area. Thal presents the council with particular problems in trying to meet the usual responsibilities and leads to additional costs. Although the Government have acknowledged that through the special islands allowance, there is still some way to go. The revenue support payments need to be reconsidered to ensure that all the islands' special characteristics are taken properly into account.

I mentioned the geographic distribution and sparsity of the islands' population. The Minister will be aware that those factors lead to special communication problems which in turn lead to additional costs with which the council must grapple. Since the Braer disaster, no one can be under any illusions about the desperate nature of the climatic conditions that the island communities have to face, especially during the winter. Once again, they lead to special difficulties with which the island authorities in the Western Isles and in Orkney and Shetland have to deal. Dealing with those problems also involves additional costs.

When the Western Isles council was formed, it inherited a particularly low service base but it has done remarkably well in building council houses and in developing the roads programme and the transport network in general, in building links with the smaller islands in the island chain and in generally developing the provision of services throughout the islands. Inevitably, that has led to high capital costs, and because much of the provision has been made recently, it has led to the need to service the resulting debt. That is another special factor affecting the Western Isles council which the Government must take into account.

I am grateful that the Government have accepted the recommendations of Touche Ross to maintain the special islands needs allowance. It is absolutely essential for the Western Isles and for the communities of Orkney and Shetland. I should be grateful if the Minister could say that he has a long-standing commitment to that allowance and that he recognises the recommendation of an independent report that it is a much needed supplement to the revenue that central Government otherwise provide to the islands authority. I am sure that such a commitment would also be welcomed by the hon. Member for Orkney and Shetland.

Finally, I shall deal with water and sewerage costs. For the Western Isles, such costs represent a great financial burden. As the Minister will know, the problem is that the costs are supposed to be self-financing. In addition, the money raised from individuals within the communities is not subject to any rebate. Therefore, in an area such as the Western Isles, which has high water rates and is expected to have even higher rates in the future, the poorest members of the community face the most crippling bills. Will the Minister seriously consider that issue? He may not be willing to countenance the prospect of providing additional resources for the islands' authorities to deal with their particular water and sewage costs, but will he accept the case for introducing into the water rate a rebate similar to that available under the council tax to the poorest members of the community? I look forward to his reply.

9.54 pm

Mr. Henry McLeish (Fife, Central)

As is usual when we are dealing with such matters, this has been an interesting debate, and it has served to point up the differences between Opposition Members and Conservative Members. The Conservative Government believe in spending on local services; we believe in investing in the people for whom the services are provided. That is the essential difference.

The Government will not accept that these services are legitimately provided by local authorities and that they are an investment in the community, an investment in people. I am reminded of remarks that were made a few weeks ago by the hon. Member for Eastwood (Mr. Stewart), the Parliamentary Under-Secretary of State for Scotland, who, in a blinding flash of characteristic honesty, indicated that he wanted to sell everything. If that served to entertain the members of the Scottish Grand Committee, it also showed ultimate contempt for services that reach out to every family and every community the length and breadth of Scotland. Many hon. Members have indicated a similar attitude today by speaking grudgingly about the quality of local government services. Conservative Members find it difficult to manifest empathy with or sympathy for quality service.

One characteristic of the debate has not yet been mentioned. Even if the Government wanted to spend more money on local government—and I do not believe that they do—the real issue would continue to be the public sector borrowing requirement of £50 billion towards which the Government are heading. Let us forget for a moment whether they care about local government. The real issue is the financial mess in which we find ourselves as a consequence of 14 years of economic failure and incompetence. The Chief Secretary to the Treasury said recently: Over the course of the Parliament we shall be looking at the direction spending on every programme is taking and whether its purpose remains right for the 1990s. We shall be seeking to identify areas where better targeting can be achieved, or from which the public sector can withdraw completely. Does not that show that we have a problem with the Conservatives? This settlement reflects the poverty of Conservative thinking, but it reflects also the deep anguish of Opposition Members, who believe that much deeper cuts will be foisted upon the people of Scotland in the next two to three years.

Another feature of the debate has been the central hypocrisy of the Government's argument. Let us remember that, despite record levels of unemployment and record manufacturing bankruptcies, the Government will not intervene. But what happens when they are let loose on a local authority that spends slightly more than its budget figure? We have rate capping, interference in education, and so on. The Government are determined to shape the social agenda, regardless of their commitment to the freedom of local authorities. It is indeed a central hypocrisy. How does the Minister square that attitude with the Government's total idleness in respect of the key issues of the economy—jobs, and so on?

As many of my hon. Friends have said, one of the reasons for the level of local authority expenditure is related to the economic collapse that we face. Tomorrow we shall see a rise in unemployment. I can tell the Minister that the figure in Scotland may rise by 9,000–2,500 people thrown on the scrap heap every week under this regime. That fact must be taken on board. It is not possible to continue to create such levels of unemployment without expecting the regional and district services to pick up the bill for the community initiatives that are necessary to help the unemployed. Does the Minister think that that is a reasonable proposition? Or does he want us to return to the attitude adopted in the early days of this century, when a distinction was drawn between the deserving poor and the undeserving poor? I believe firmly that the Scottish local authorities have done a magnificent job by picking up the pieces left by the Government in applying their disastrous policies.

The Government always miss the importance to Scotland of local authorities. We have heard that those authorities provide excellent services—flagship services, I would argue. They need not be compared with any private sector organisation. They are efficient, value-for-money bodies and, more important, they are accountable. Is not that the essence of democracy? Is not that another of the Government's central contradictions?

Even apart from services, one in six of the Scottish work force is employed by the regions and the districts–300,000 people. Let us imagine what would happen if this evening the Strangers Gallery were packed with people who worked in those services, and they heard the grudging Conservative concessions on the caring services—the police, the fire service, the community care services and investment in jobs and training, whereby young people are given training and an education. Those people would be appalled by the indifference which the Government continue to show and which, of course, is reflected in the settlement.

We have heard the Government say many times that the settlement is adequate, with pay rises below 1.5 per cent. and inflation—temporarily—at 1.7 per cent. We are all supposed to rejoice and hope that local authorities will be able to survive. But the reality is different from the Government's window dressing.

The council tax, which will be imposed in April, is likely to be £100 higher for every household in the country because of the Government's meanness and sleight of hand over the estimates that they first discussed publicly in the press. Will the Minister explain why the council tax bills will be so much higher, adding another burden for households at a time when we are hoping for a consumer-led recovery? What hypocrisy. The Minister must answer that question.

There was much about community care in the statement. Community care is more than an emotive issue. We all support it—health boards, local authorities and everyone in the House. The tragedy is that, in April, people who leave care or psychiatric hospitals will not have the resources to lead the independent lives and have the dignity that community care was set up to create. What about the lack of funding for community care? Sixty million pounds or so will not even start to measure up to the problems.

In England we see hospitals being emptied far too quickly and local authorities being underfunded to deal with the problem. We shall not tolerate any attempt by Scottish Office Ministers to replicate those problems in Scotland. I hope that when the Minister replies to the debate he will respond to that statement.

Capping has already been mentioned. We have exposed the central hypocrisy and the contradiction in the Government's philosophy—their selective interventions. Why can we not have genuine democracy that allows local authorities to be reasonable and responsible and to provide for the needs in their areas? The Government will have none of that. The settlement is about the sum to be given in revenue support, but it is also about the reason why the Government have taken draconian steps to impose punitive capping on local authorities. Why have they done that? The answer is simple. They abhor what local authorities do and they will not countenance increases in the levels of council tax that they are trying to impose. Of course, they care little for the quality of services and jobs that may be sacrificed.

I said earlier that we shall see tomorrow that unemployment has risen steeply. Is the Minister at all concerned about the crisis in jobs and services that will ensue? One of his close friends in local government—Councillor Charles Gray—is quoted in an article under the heading: Councils warn jobs may be casualty of spending cuts". I am glad to see that the Minister is awake—although his response to my jibe was slow.

I ask the Minister how many jobs will be sacrificed as a result of the settlement. Will it be 10,000, 20,000 or 30,000? More importantly for the people who receive the services, what services will be cut? Will the Minister answer? Will he intervene now and tell us what the poverty of the settlement will mean for jobs and services? Those are crucial issues, which we take seriously. The Minister is an understanding fellow, but he must take those issues seriously. For many, services and jobs mean life and death and they depend on what the Minister does.

We have talked about Government philosophy in the settlement and about the wider aspects of community care. There is another appalling prospect behind the figures that have been announced. What will the Government do about crime? Why are three crimes committed every minute in Scotland? Local government provides excellent services. The police force in Scotland does an excellent job, but it is under-resourced. The Government have given up on crime. They have created record levels, so what do they do? They walk away. They blame the police. It is the scapegoat philosophy which permeates everything they do.

Crime is a cancer in Scottish society. More than 1 million crimes were committed in the last year for which we have figures. There has been a 20 per cent. increase in four years. What will the settlement do to put another policeman on the beat to ensure that people are safe in their houses and on the streets?

The local government settlement is also about the quality of life in our communities. Why were 100,000 Scots homeless last year? We have record homelessness and record crime. Yet the Government pretend that Opposition parties should be satisfied with the settlement. We are not satisfied, either with the amount or with the complacency of some of the comments that we have heard in the debate.

After 14 years of the selfishness and greed of the Government, masquerading as a caring Government, Britain must return to a position where individuals see their future through the community. That is the sensible way forward. If we needed a potent symbol of how the community works, it is the quality, efficiency and value for money provided by Scottish local authorities. That is community in action. It means children being allowed to have the education opportunities that they would never have under the regime which the Government would impose on them. It means people knowing that they can rely on decent services, including the fire service and consumer protection measures which the Tories would like to dismantle.

Can the Minister defend the settlement and promise Scots that they will continue to have the best local government in Europe? Can he guarantee that employment levels will be maintained? More importantly, will he give a commitment to defend the notion of community which has served us well and which is under serious threat?

The Labour party does not want any more contracting out, resulting in shabby services, second-rate facilities and mass unemployment. The challenge to the Minister is to put all that nonsense behind him and to give us a settlement of which we can be proud and which will defend jobs and protect services.

10.7 pm

Mr. Stewart

I do not want to make a personal criticism of the hon. Member for Monklands, West (Mr. Clarke); one can safely leave that to his hon. Friends who do so at daily intervals in the Scottish press. However, he was somewhat ungracious about my right hon. Friend the Secretary of State. My right hon. Friend explained to him in a note that he was occupied with forestry interests in his capacity as the United Kindom's forestry Minister.

Mr. Tom Clarke

I had not expected to intervene so soon. I said in my speech that I had received the note, but since the Minister raises the point, I must say that when I am Secretary of State for Scotland, if I am asked to be in the House for two important debates or to attend a dinner with the Forestry Commission, I will be here.

Mr. Stewart

I understand that the betting is that the hon. Gentleman will not be shadow Secretary of State for Scotland for long, never mind Secretary of State for Scotland in the future. It was interesting that the hon. Member for Fife, Central (Mr. McLeish) did not refer once in his winding-up speech to the speech by his hon. Friend the Member for Monklands, West. Perhaps that was a bid for the Scottish leadership.

The speech by the hon. Member for Angus, East (Mr. Welsh) had the great merit of stirring up Labour Members. He got them very worried when he referred to the most interesting speech in Bournemouth by the Leader of the Opposition. Unfortunately, that speech was obviously not communicated to Scottish Labour Members in good time. A number of points made by the hon. Member for Fife, Central were not in line with the new philosophy as spelt out by the right hon. and learned Member for Monklands, East (Mr. Smith).

As always, there were a number of constructive constituency points from Opposition Members, especially from the hon. Member for Western Isles (Mr. Macdonald). I hope that I shall have time to respond to those points. If I cannot do so, I shall be happy to have a discussion with him afterwards.

The hon. Member for Fife, Central praised the excellent services of Scottish local authorities.

Mr. McLeish

indicated assent.

Mr. Stewart

I see that the hon. Gentleman nods. He then said that those authorities had been massively underfunded over the past 14 years. He can hardly have it both ways. If the authorities are providing excellent services, they can hardly have been massively underfunded over a long period.

The hon. Member for Fife, Central asked about the reality. I shall tell Opposition Members what the reality is. The reality is that local authority expenditure per head of population in Scotland is 30 per cent. higher than it is in England and 30 per cent. higher than it is in Wales. Aggregate external finance—specific grants, business rates and revenue support grant—is 47 per cent. higher per head in Scotland than it is in England and 25 per cent. higher than it is in Wales, which is a similar country.

Let us hear no more nonsense from Opposition Members about the Government not giving adequate support to Scottish local government. The facts simply do not show that. In the past five years, there has been a real increase in central Government support to local authorities, after allowing for inflation.

Mr. Hood

Two weeks ago, the Minister received a letter from the Auchlochan Trust, a Christian charitable trust in my constituency. The trust pleaded for the Scottish Office to guarantee the money for providing.community care for hundreds of geriatrics. The trust told the Minister that if it was not given that guarantee, it would have to throw elderly people out into the street and pay off some of its many workers. Has the Minister given that guarantee to the trust?

Mr. Stewart

The community care figures have been mentioned by a number of hon. Members. The hon. Gentleman knows perfectly well that individual decisions are for councils. I shall give him the overall figures for Government support for care in the community. The total figure for care in the community from 1 April is £63.4 million. Some £40–6 million will be transferred from the Department of Social Security, there will be £20 million in respect of additional costs incurred by local authorities next year, and there will be £2.8 million in recognition of the independent living fund successor arrangements.

I emphasise that the amount transferred exceeds the present level of relevant Department of Social Security spending in Scotland by £4 million. In addition, we have allocated more than £20 million to authorities in recognition of community care preparation costs. I entirely refute any claim that local authorities are being underfunded for community care esponsibilities. The Government have taken the additional step of disregarding local authority expenditure on community care for capping purposes. That relates to the point made by my hon. Friend the Member for Ayr (Mr. Gallie).

Mr. Hood

Will the Minister give way?

Mr. Stewart

I have already given way to the hon. Gentleman.

I can assure my hon. Friend the Member for Ayr that the resources will not be ring—fenced but will be spent in full by local authorities without their being required to consider the impact of capping. My hon. Friend the Member for Ayr rightly paid tribute to the achievements of Kyle and Carrick since the change in administration there. In emphasising the excellent record of his authority, my hon. Friend the Member for Kincardine and Deeside (Mr. Kynoch) rightly said that, if the authorities in central Scotland held by the Labour party over the years had followed the policies of Kincardine and Deeside, we should not have the burden of extra business taxation to which the hon. Member for Angus, East referred.

I emphasise that the reason why we have that extra burden is that, fundamentally, local authority spending in Scotland has for a long time been higher than that in England and Wales.

Mr. Brian Wilson (Cunninghame, North)

Will the Minister give way?

Mr. Stewart

Hon. Members have also suggested that there have been great cuts in manpower in Scottish local authorities in recent years.

Mr. Wilson

Will the Minister give way?

Mr. Stewart

I should point out that, in each of the past five years, the number of people employed by local authorities in Scotland has increased. So much for all this talk of savage cuts and threats to jobs and services. The number of people employed—

Mr. Wilson

Will the Minister give way?

Mr. Stewart

The number of people employed—

Mr. Wilson

Will the Minister give way?

Madam Speaker

Order. The Minister is not giving way. The hon. Member for Cunninghame, North (Mr. Wilson) should not persist.

Mr. Stewart

rose—

Mr. Nigel Griffiths (Edinburgh, South)

Will the Minister give way to me, then?

Mr. Stewart

No, but I finally give way to the hon. Member for Cunninghame, North.

Mr. Wilson

I am grateful to the Minister, who can be very helpful on occasion. He spoke in praise of small low-spending authorities. I draw his attention to the concern felt in parts of my constituency at reports of an attempt to incorporate Largs into a greater Eastwood. The Minister should be aware of the damage that such territorial ambitions do elsewhere in the world. Will he kindly take the opportunity to say that he has no such ambitions towards the people of my constituency?

Mr. Stewart

I do not think that, on this occasion, I should spell out the whole range of ambitions that the people of Eastwood have. I assure the hon. Gentleman that that particular suggestion did not come from anyone who lives in the Eastwood constituency—although my right hon. Friend and I will consider most carefully all the representations that we receive in relation to the reform of Scottish local government.

Hon. Members refer to cuts in manpower. There have not been cuts but increases in manpower. Hon. Members referred to cuts in Strathclyde: in fact, Strathclyde will have the scope to increase its budget next year by some £55 million—an increase of 2.9 per cent. By no means can that be described as a cut. The alleged cuts of which we hear from Opposition Members are cuts in unrealistic spending aspirations. They are not real cuts.

A number of hon. Members have made specific points. My hon. Friend the Member for Tayside, North (Mr. Walker) rightly referred to the problems of flooding that have been faced by his constituency and its local authorities. He asked for sympathetic consideration to be given to the representations, in particular with regard to capital allocations. My hon. Friend will not expect a commitment from me tonight but I can confirm that we will consider such representations most sympathetically.

The hon. Members for Orkney and Shetland (Mr. Wallace) and for Western isles raised the issue of the special islands needs allowance and asked me for an assurance that it will continue. I can confirm to both hon. Members that we have no plans to end the allowance, having just received a consultants' report. Inevitably, we will have to examine it once single-tier authorities are introduced on the mainland. I can give an assurance that the Government recognise the problems of the islands' authorities.

I can confirm that we have decided that the special funds to which the hon. Member for Orkney and Shetland referred should not be taken into account in determining the distribution of the special islands needs allowance. That was recommended by the consultants, and we have accepted it.

Opposition Members allege that Lothian is unfairly treated. I remind them yet again that the special funds are distributed formally or by a distribution committee which consists of members from the Convention of Scottish Local Authorities as well as the Scottish Office. Lothian has a lower number of assessed needs for several obvious reasons—the low proportion of people in education authority schools and it is relatively prosperous and small.

Mr. Nigel Griffiths

Will the Minister give way?

Mr. Stewart

I do not have the time: I apologise to the hon. Gentleman.

In the past five years, the level of Government support in real terms has increased for Scottish local authorities. The settlement is realistic and fair.

All that we have heard from Opposition Members are the usual allegations about cuts which are not real cuts and demands for much more money to be spent on everything in sight without any attempt to allocate costs or to indicate how the money will be provided. The Government are increasing the funds available to Scottish local authorities by 3.5 per cent. at a time when inflation is 1.7 per cent. and 60 per cent. of the costs are wages. As my hon. Friend the Member for Kincardine and Deeside said, the settlement is fair and reasonable.

It being three hours after the commencement of proceedings on the motion, MADAM SPEAKER proceeded to put forthwith the Question necessary to dispose of them, pursuant to order [12 February].

The House divided: Ayes 303, Noes 251.

Division No. 157]	[10.22 pm
AYES
Adley, Robert	Clappison, James
Ainsworth, Peter (East Surrey)	Clark, Dr Michael (Rochford)
Alexander, Richard	Clifton-Brown, Geoffrey
Alison, Rt Hon Michael (Selby)	Coe, Sebastian
Allason, Rupert (Torbay)	Congdon, David
Amess, David	Conway, Derek
Ancram, Michael	Coombs, Anthony (Wyre For'st)
Arbuthnot, James	Coombs, Simon (Swindon)
Arnold, Jacques (Gravesham)	Cope, Rt Hon Sir John
Arnold, Sir Thomas (Hazel Grv)	Couchman, James
Ashby, David	Cran, James
Aspinwall, Jack	Currie, Mrs Edwina (S D'by'ire)
Atkins, Robert	Curry, David (Skipton & Ripon)
Atkinson, David (Bour'mouth E)	Davies, Quentin (Stamford)
Atkinson, Peter (Hexham)	Day, Stephen
Baker, Nicholas (Dorset North)	Deva, Nirj Joseph
Baldry, Tony	Devlin, Tim
Banks, Matthew (Southport)	Dickens, Geoffrey
Banks, Robert (Harrogate)	Dicks, Terry
Bates, Michael	Dorrell, Stephen
Batiste, Spencer	Douglas-Hamilton, Lord James
Bellingham, Henry	Dover, Den
Bendall, Vivian	Duncan, Alan
Beresford, Sir Paul	Duncan-Smith, Iain
Biffen, Rt Hon John	Durant, Sir Anthony
Blackburn, Dr John G.	Dykes, Hugh
Body, Sir Richard	Elletson, Harold
Booth, Hartley	'Emery, Rt Hon Sir Peter
Boswell, Tim	Evans, David (Welwyn Hatfield)
Bottomley, Peter (Eltham)	Evans, Jonathan (Brecon)
Bottomley, Rt Hon Virginia	Evans, Nigel (Ribble Valley)
Bowden, Andrew	Evans, Roger (Monmouth)
Bowis, John	Evennett, David
Boyson, Rt Hon Sir Rhodes	Faber, David
Brandreth, Gyles	Fabricant, Michael
Brazier, Julian	Fenner, Dame Peggy
Bright, Graham	Field, Barry (Isle of Wight)
Brooke, Rt Hon Peter	Fishburn, Dudley
Brown, M. (Brigg & Cl'thorpes)	Forman, Nigel
Browning, Mrs. Angela	Forsyth, Michael (Stirling)
Bruce, Ian (S Dorset)	Forth, Eric
Budgen, Nicholas	Fowler, Rt Hon Sir Norman
Burns, Simon	Fox, Dr Liam (Woodspring)
Butcher, John	Fox, Sir Marcus (Shipley)
Butler, Peter	Freeman, Roger
Butterfill, John	French, Douglas
Carlisle, John (Luton North)	Fry, Peter
Carlisle, Kenneth (Lincoln)	Gale, Roger
Carrington, Matthew	Gallie, Phil
Carttiss, Michael	Gardiner, Sir George
Cash, William	Garel-Jones, Rt Hon Tristan
Channon, Rt Hon Paul	Garnier, Edward

Gill, Christopher	Maitland, Lady Olga
Gillan, Cheryl	Malone, Gerald
Goodlad, Rt Hon Alastair	Mans, Keith
Goodson-Wickes, Dr Charles	Marland, Paul
Gorman, Mrs Teresa	Marlow, Tony
Gorst, John	Marshall, John (Hendon S)
Grant, Sir Anthony (Cambs SW)	Marshall, Sir Michael (Arundel)
Greenway, Harry (Ealing N)	Martin, David (Portsmouth S)
Greenway, John (Ryedale)	Mates, Michael
Griffiths, Peter (Portsmouth, N)	Mawhinney, Dr Brian
Grylls, Sir Michael	Mayhew, Rt Hon Sir Patrick
Gummer, Rt Hon John Selwyn	Mellor, Rt Hon David
Hague, William	Merchant, Piers
Hamilton, Rt Hon Archie (Epsom)	Milligan, Stephen
Hamilton, Neil (Tatton)	Mills, Iain
Hampson, Dr Keith	Mitchell, Andrew (Gedling)
Hannam, Sir John	Moate, Sir Roger
Hargreaves, Andrew	Monro, Sir Hector
Harris, David	Montgomery, Sir Fergus
Haselhurst, Alan	Moss, Malcolm
Hawkins, Nick	Needham, Richard
Hawksley, Warren	Nelson, Anthony
Hayes, Jerry	Neubert, Sir Michael
Heald, Oliver	Newton, Rt Hon Tony
Heathcoat-Amory, David	Nicholls, Patrick
Hendry, Charles	Nicholson, David (Taunton)
Heseltine, Rt Hon Michael	Nicholson, Emma (Devon West)
Hicks, Robert	Norris, Steve
Higgins, Rt Hon Sir Terence L.	Onslow, Rt Hon Sir Cranley
Hill, James (Southampton Test)	Oppenheim, Phillip
Hogg, Rt Hon Douglas (G'tham)	Ottaway, Richard
Horam, John	Page, Richard
Hordern, Rt Hon Sir Peter	Paice, James
Howard, Rt Hon Michael	Pattie, Rt Hon Sir Geoffrey
Howarth, Alan (Strat'rd-on-A)	Pawsey, James
Howell, Rt Hon David (G'dford)	Peacock, Mrs Elizabeth
Hughes Robert G. (Harrow W)	Pickles, Eric
Hunt, Rt Hon David (Wirral W)	Porter, David (Waveney)
Hunt, Sir John (Ravensbourne)	Portillo, Rt Hon Michael
Hunter, Andrew	Powell, William (Corby)
Hurd, Rt Hon Douglas	Rathbone, Tim
Jack, Michael	Redwood, John
Jackson, Robert (Wantage)	Renton, Rt Hon Tim
Jenkin, Bernard	Richards, Rod
Jessel, Toby	Riddick, Graham
Johnson Smith, Sir Geoffrey	Robathan, Andrew
Jones, Gwilym (Cardiff N)	Roberts, Rt Hon Sir Wyn
Jones, Robert B. (W Hertfdshr)	Robertson, Raymond (Ab'd'n S)
Jopling, Rt Hon Michael	Robinson, Mark (Somerton)
Kellett-Bowman, Dame Elaine	Roe, Mrs Marion (Broxbourne)
Key, Robert	Rowe, Andrew (Mid Kent)
Kilfedder, Sir James	Rumbold, Rt Hon Dame Angela
King, Rt Hon Tom	Ryder, Rt Hon Richard
Kirkhope, Timothy	Sackville, Tom
Knapman, Roger	Sainsbury, Rt Hon Tim
Knight, Mrs Angela (Erewash)	Scott, Rt Hon Nicholas
Knight, Greg (Derby N)	Shaw, David (Dover)
Knight, Dame Jill (Bir'm E'st'n)	Shaw, Sir Giles (Pudsey)
Kynoch, George (Kincardine)	Shephard, Rt Hon Gillian
Lait, Mrs Jacqui	Shepherd, Colin (Hereford)
Lamont, Rt Hon Norman	Shepherd, Richard (Aldridge)
Lang, Rt Hon Ian	Sims, Roger
Lawrence, Sir Ivan	Skeet, Sir Trevor
Legg, Barry	Smith, Sir Dudley (Warwick)
Leigh, Edward	Smith, Tim (Beaconsfield)
Lennox-Boyd, Mark	Soames, Nicholas
Lester, Jim (Broxtowe)	Spencer, Sir Derek
Lidington, David	Spicer, Sir James (W Dorset)
Lightbown, David	Spicer, Michael (S Worcs)
Lilley, Rt Hon Peter	Spink, Dr Robert
Lloyd, Peter (Fareham)	Spring, Richard
Lord, Michael	Sproat, Iain
Luff, Peter	Squire, Robin (Hornchurch)
Lyell, Rt Hon Sir Nicholas	Stanley, Rt Hon Sir John
MacGregor, Rt Hon John	Steen, Anthony
MacKay, Andrew	Stephen, Michael
Maclean, David	Stern, Michael
McLoughlin, Patrick	Stewart, Allan
McNair-Wilson, Sir Patrick	Streeter, Gary
Madel, David	Sumberg, David

Sweeney, Walter	Waller, Gary
Sykes, John	Ward, John
Tapsell, Sir Peter	Wardle, Charles (Bexhill)
Taylor, Ian (Esher)	Waterson, Nigel
Taylor, John M. (Solihull)	Watts, John
Taylor, Sir Teddy (Southend, E)	Wells, Bowen
Temple-Morris, Peter	Wheeler, Rt Hon Sir John
Thomason, Roy	Whitney, Ray
Thompson, Sir Donald (C'er V)	Whittingdale, John
Thompson, Patrick (Norwich N)	Wiggin, Sir Jerry
Thornton, Sir Malcolm	Willetts, David
Thurnham, Peter	Wilshire, David
Townend, John (Bridlington)	Winterton, Mrs Ann (Congleton)
Townsend, Cyril D. (Bexl'yh'th)	Wolfson, Mark
Tracey, Richard	Wood, Timothy
Tredinnick, David	Yeo, Tim
Trend, Michael	Young, Sir George (Acton)
Twinn, Dr Ian
Vaughan, Sir Gerard	Tellers for the Ayes:
Waldegrave, Rt Hon William	Mr. Sydney Chapman and
Walden, George	Mr. Irvine Patrick.
Walker, Bill (N Tayside)
NOES
Abbott, Ms Diane	Cousins, Jim
Adams, Mrs Irene	Cox, Tom
Ainger, Nick	Cryer, Bob
Ainsworth, Robert (Cov'try NE)	Cummings, John
Allen, Graham	Cunliffe, Lawrence
Alton, David	Cunningham, Jim (Covy SE)
Anderson, Donald (Swansea E)	Dalyell, Tarn
Anderson, Ms Janet (Ros'dale)	Darling, Alistair
Armstrong, Hilary	Davies, Ron (Caerphilly)
Ashton, Joe	Davis, Terry (B'ham, H'dge H'I)
Austin-Walker, John	Denham, John
Banks, Tony (Newham NW)	Dixon, Don
Barnes, Harry	Dobson, Frank
Barron, Kevin	Donohoe, Brian H.
Battle, John	Dowd, Jim
Bayley, Hugh	Dunnachie, Jimmy
Beckett, Rt Hon Margaret	Dunwoody, Mrs Gwyneth
Beith, Rt Hon A. J.	Eagle, Ms Angela
Bell, Stuart	Eastham, Ken
Benn, Rt Hon Tony	Enright, Derek
Bennett, Andrew F.	Etherington, Bill
Benton, Joe	Evans, John (St Helens N)
Bermingham, Gerald	Ewing, Mrs Margaret
Berry, Dr. Roger	Fatchett, Derek
Betts, Clive	Field, Frank (Birkenhead)
Blair, Tony	Fisher, Mark
Blunkett, David	Flynn, Paul
Boateng, Paul	Foster, Rt Hon Derek
Boyce, Jimmy	Foulkes, George
Boyes, Roland	Fraser, John
Bradley, Keith	Fyfe, Maria
Bray, Dr Jeremy	Galbraith, Sam
Brown, Gordon (Dunfermline E)	Galloway, George
Brown, N. (N'c'tle upon Tyne E)	Gapes, Mike
Burden, Richard	Garrett, John
Byers, Stephen	Gerrard, Neil
Caborn, Richard	Gilbert, Rt Hon Dr John
Callaghan, Jim	Godman, Dr Norman A.
Campbell, Mrs Anne (C'bridge)	Godsiff, Roger
Campbell, Ronnie (Blyth V)	Golding, Mrs Llin
Campbell-Savours, D. N.	Gordon, Mildred
Canavan, Dennis	Gould, Bryan
Cann, Jamie	Graham, Thomas
Carlile, Alexander (Montgomry)	Griffiths, Nigel (Edinburgh S)
Chisholm, Malcolm	Griffiths, Win (Bridgend)
Clapham, Michael	Grocott, Bruce
Clark, Dr David (South Shields)	Gunnell, John
Clarke, Eric (Midlothian)	Hain, Peter
Clarke, Tom (Monklands W)	Hall, Mike
Clelland, David	Hanson, David
Clwyd, Mrs Ann	Hardy, Peter
Coffey, Ann	Harvey, Nick
Connarty, Michael	Henderson, Doug
Cook, Robin (Livingston)	Heppell, John
Corbyn, Jeremy	Hill, Keith (Streatham)
Corston, Ms Jean	Hinchliffe, David

Hoey, Kate	McNamara, Kevin
Hood, Jimmy	Madden, Max
Hoon, Geoffrey	Mahon, Alice
Howells, Dr. Kim (Pontypridd)	Mandelson, Peter
Hoyle, Doug	Marek, Dr John
Hughes, Kevin (Doncaster N)	Marshall, David (Shettleston)
Hughes, Simon (Southwark)	Marshall, Jim (Leicester, S)
Hutton, John	Martin, Michael J. (Springburn)
Ingram, Adam	Martlew, Eric
Jackson, Glenda (H'stead)	Maxton, John
Jackson, Helen (Shef'ld, H)	Meacher, Michael
Jamieson, David	Meale, Alan
Johnston, Sir Russell	Michael, Alun
Jones, Barry (Alyn and D'side)	Michie, Mrs Ray (Argyll Bute)
Jones, Jon Owen (Cardiff C)	Milburn, Alan
Jones, Lynne (B'ham S O)	Miller, Andrew
Jones, Martyn (Clwyd, SW)	Mitchell, Austin (Gt Grimsby)
Jowell, Tessa	Moonie, Dr Lewis
Kaufman, Rt Hon Gerald	Morgan, Rhodri
Keen, Alan	Morley, Elliot
Kennedy, Charles (Ross,C&S)	Morris, Rt Hon A. (Wy'nshawe)
Kennedy, Jane (Lpool Brdgn)	Morris, Estelle (B'ham Yardley)
Khabra, Piara S.	Morris, Rt Hon J. (Aberavon)
Kilfoyle, Peter	Mowlam, Marjorie
Kinnock, Rt Hon Neil (Islwyn)	Mudie, George
Kirkwood, Archy	Mullin, Chris
Leighton, Ron	Murphy, Paul
Lewis, Terry	Oakes, Rt Hon Gordon
Litherland, Robert	O'Brien, Michael (N W'kshire)
Livingstone, Ken	O'Brien, William (Normanton)
Lloyd, Tony (Stretford)	O'Hara, Edward
Loyden, Eddie	Olner, William
Lynne, Ms Liz	O'Neill, Martin
McAvoy, Thomas	Orme, Rt Hon Stanley
McCartney, Ian	Parry, Robert
Macdonald, Calum	Pickthall, Colin
McFall, John	Pike, Peter L.
McKelvey, William	Pope, Greg
Mackinlay, Andrew	Powell, Ray (Ogmore)
McLeish, Henry	Prentice, Ms Bridget (Lew'm E)
Maclennan, Robert	Prentice, Gordon (Pendle)
McMaster, Gordon	Prescott, John

Primarolo, Dawn	Stevenson, George
Purchase, Ken	Stott, Roger
Quin, Ms Joyce	Strang, Dr. Gavin
Radice, Giles	Straw, Jack
Randall, Stuart	Taylor, Mrs Ann (Dewsbury)
Raynsford, Nick	Taylor, Matthew (Truro)
Redmond, Martin	Tipping, Paddy
Reid, Dr John	Turner, Dennis
Robinson, Geoffrey (Co'try NW)	Tyler, Paul
Roche, Mrs. Barbara	Vaz, Keith
Rogers, Allan	Walker, Rt Hon Sir Harold
Rooney, Terry	Wallace, James
Ross, Ernie (Dundee W)	Wardell, Gareth (Gower)
Rowlands, Ted	Wareing, Robert N
Ruddock, Joan	Watson, Mike
Salmond, Alex	Welsh, Andrew
Sedgemore, Brian	Wicks, Malcolm
Sheerman, Barry	Williams, Rt Hon Alan (Sw'n W)
Sheldon, Rt Hon Robert	Williams, Alan W (Carmarthen)
Shore, Rt Hon Peter	Wilson, Brian
Short, Clare	Winnick, David
Simpson, Alan	Wise, Audrey
Skinner, Dennis	Worthington, Tony
Smith, Andrew (Oxford E)	Wray, Jimmy
Smith, C. (Isl'ton S & F'sbury)	Wright, Dr Tony
Smith, Llew (Blaenau Gwent)
Snape, Peter	Tellers for the Noes:
Soley, Clive	Mr. Jack Thompson and
Squire, Rachel (Dunfermline W)	Mr. John Spellar
Steinberg, Gerry

Question accordingly agreed to.

Resolved, That the Revenue Support Grant (Scotland) Order 1993, dated 2nd February 1993, which was laid before this House on 4th February, be approved.

Resolved, That the Local Government Finance (Scotland) Order 1993, dated 2nd February 1993, which was laid before this House on 4th February, be approved.—[Mr.Stewart.]