Local Government Finance (Scotland)

HC Deb 28 February 1994 vol 238 cc693-756

6.9 pm

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

I beg to move, That the Local Government Finance (Scotland) Order 1994, a copy of which was laid before this House on 17th February, be approved.

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse)

I understand that with this it will be convenient to discuss the following motion: That the Revenue Support Grant (Scotland) Order 1994, a copy of which was laid before this House on 17th February, be approved. This is the annual opportunity for the House to debate the Scottish local government finance settlement for the year ahead. It is common ground across the Chamber that it is an important debate for several reasons. Local authority services are clearly crucial to all those who receive them, be they the youngest or the oldest in our community.

The debate is also important because of the huge amount of money that is distributed under the orders that we are considering. The total sum involved is £5.3 billion. That represents about 40 per cent. of the total Scottish Office budget or, to put it another way, £1,034 for every man, woman and child in Scotland from the United Kingdom and business taxpayers. The figure of £1,034 compares to the English figure of £709 and the Welsh figure of £835. So the figure in Scotland is 46 per cent. higher than that in England and 24 per cent. higher than that in Wales.

The background to the two orders is provided in the reports on them, but I hope that it will be helpful to the House if I briefly summarise the position. I shall deal first with the main order, the Local Government Finance (Scotland) Order 1994. It represents the final stage of the 1994–95 settlement, details of which my right hon. Friend the Secretary of State first announced to the House on 30 November. He said that Government-supported expenditure—the total of grant-aided expenditure and the provision for loan and leasing charges—had been set at just less than £6,014 million and that aggregate external finance had been set at £5,272 million for next year. Those figures represent increases of 3.52 per cent. and 2.41 per cent. respectively on the 1993–94 figures, inclusive in both cases of the amounts being transferred to local authorities for the second year of their community care responsibilities.

The Local Government Finance (Scotland) Order 1994 deals with the distribution of aggregate external finance—AEF—for next year. As the report to the order explains, AEF has three components. The first is the provision for specific grants. For 1994–95, that provision is estimated at £421.5 million, and a breakdown of that estimate among the various specific grants is given in appendix B to the report.

The second component of AEF is the distributable amount of non-domestic rate income, which for next year has been set at £1,109 million. That estimate takes account of the 1994–95 rate poundages which my right hon. Friend also announced on 30 November. Those poundages, in turn, took into account a further reduction of £60 million as part of the Government's policy of harmonising business rate poundages north and south of the border.

Mr. Tam Dalyell (Linlithgow)

Do the figures take into account the costs already incurred of setting local government reform in motion?

Mr. Stewart

Yes. The order provides an additional £5 million for local government reorganisation. As the hon. Gentleman will appreciate, the major costs and savings will come in years subsequent to the order.

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

It would be helpful if the Minister could elaborate on the exact basis on which the £5 million was calculated. It is important to know how much of the expenditure he envisages would take place in the next financial year. It would be helpful if he could set out briefly—I think that we have plenty of time—the types of expenditure that he expects to be incurred in the coming financial year.

Mr. Stewart

Certainly. As the hon. Gentleman will know, we sent out a circular to Scottish local authorities asking for an estimate of the costs of local government reorganisation in the forthcoming year. The costs mainly relate to information technology. As I said in answer to the hon. Member for Linlithgow (Mr. Dalyell), the main costs and savings will come in future years. We thought it right to allow a small increase in expenditure for costs in 1994–95. As the hon. Gentleman will appreciate, most costs will come in years thereafter.

Mr. Foulkes

We are talking about 1994–95, which goes on, as I understand it, right until the end of March 1995. It seems to me that £5 million is a small amount. From the discussions in which the Minister has been involved in the Standing Committee considering the Local Government etc. (Scotland) Bill, it seems likely that by the beginning of 1995, local authorities—whatever structure we ultimately decide—will be involved in fairly substantial expenditure around February and March 1995. I wonder whether information has been made available to the local authorities on which they can make reasonable judgments about what the expenditure is likely to be.

Mr. Stewart

Of course there will be substantial extra expenditure in the financial year 1995–96. The expenditure in 1994–95—the financial year that we are dealing with this evening—is likely to be very limited. No local authority suggests that it will incur other than preparatory expenditure. The hon. Gentleman is correct that, in 1995–96 and 1996–97, the picture will be different.

I informed the House last year that, with the agreement of the Convention of Scottish Local Authorities, it was proposed to distribute non-domestic rate income to regional and islands authorities only. That meant that district councils would receive their AEF support solely in the form of revenue support grant and specific grants. I am happy to say that those arrangements have been accepted by all involved and it is proposed to continue them for next year.

The third component of AEF is revenue support grant, which for 1994–95 totals £3,741.5 million. A detailed explanation of how AEF for next year has been distributed to individual local authorities is contained in the report to the order. It may be helpful to the House if I briefly summarise the procedure, the object of which is to equalise both for variations in authorities' assessed need to incur expenditure and for their tax base. There are broadly two stages in the process.

Mr. George Robertson (Hamilton)

Broadly?

Mr. Stewart

There are exactly two stages in the process. The first stage is to equalise differences in authorities' grant-aided expenditure assessments—GAEs—as determined by the client group methodology. That methodology, which is reviewed regularly, is agreed with COSLA in the distribution committee of the working party on local government finance. A little more than £1,303 million of the AEF total is used to equalise differences in GAE assessments.

The second stage of the procedure is to equalise for differences in each authority's tax base—in other words, their ability to raise revenue locally. The balance of AEF remaining after equalising for differences in the GAE assessments is allocated to authorities in proportion to the number of council tax band D equivalent properties in each authority area. The sum of £3,927 million is distributed in that way.

The principle underlying the distribution procedure is that if all authorities spent at the level of GAE assessment, they should all be able to set the same level of council tax. In practice, there is often a significant variation in the levels of tax because some authorities decide to spend above GAE and others below. Variations in tax levels, however, are not the result of the aggregate external finance distribution system being used to reward or to penalise certain authorities. Any claims of that sort made in previous debates—I am sure that they will not be made today—betray a lack of understanding of the system and the extent to which COSLA is fully consulted about the mechanisms that I have summarised.

Mr. Gordon McMaster (Paisley, South)

Is not taking the council band alone into account a rather crude way to assess the tax base of an area and the impact on local authority expenditure? That crude formula alone will not take into account the fact that an area with many houses in the council band might also have been affected by unemployment or have a high level of poverty.

Mr. Stewart

The hon. Gentleman's argument is incorrect because of the two-stage process. Unemployment is an indicator in relation to the provision of a number of services and that is set out in detail in the distribution formula. If there were only one stage, the hon. Gentleman would be correct, but, because of the needs part of the procedure, indicators such as unemployment and deprivation are fully taken into account in the distribution of the grant.

Mr. Phil Gallie (Ayr)

Can my hon. Friend advise me whether COSLA has offered any constructive arguments on a change to the formula which would improve it, if that were possible?

Mr. Stewart

The formula is constantly reviewed with COSLA. It is perhaps inevitable that authorities do not always wholly agree with the consequences of the formula because they are affected in different ways.

I certainly pay tribute to the very professional expertise commanded by the distribution committee of COSLA and the Scottish Office, as hon. Members who have studied the client group methodology in detail will be the first to attest. I see that the hon. Member for Glasgow, Garscadden (Mr. Dewar) is agreeing with me and I am sure that he studied it year in and year out when he was the shadow Secretary of State for Scotland. The methodology is extremely technical and sophisticated and I pay tribute to those who work very hard to improve it in the light of continuing representations.

Mr. Dalyell

Before we leave the subject of the professional expertise of COSLA, to which the Minister rightly pays tribute, if it has so much professional expertise, why does the Scottish Office challenge its estimates for costs of up to £720 million for local government reform? Does he accept that that COSLA figure was put together not by a group of Opposition politicians, but by precisely the type of experts to whom he is paying tribute; for example, David Chynoweth, who was president of the Chartered Institute of Public Finance and Administration last year? Is it not dangerous to give such fulsome praise to COSLA's expertise—praise which is justified, in my opinion—but to say that it has its sums all wrong on another aspect of local government reform? The Government cannot have it both ways.

Mr. Stewart

I do not accept that figure. When I paid tribute to the convention's technical expertise in one area, I do not think that anyone would imply that I necessarily meant that we accepted every figure that it produced on every subject under the sun. I merely said that the distribution formula is extremely complex and sophisticated and I paid due and proper tribute to those who worked very hard to ensure that the formula reflects changing circumstances; it changes from year to year.

Mr. Gallie

I apologise to my hon. Friend for intervening again. If I heard him aright, he not only complimented those who were technically involved from COSLA, but also people from the Scottish Office. That office has come up with different figures for local government reform to COSLA, so the argument is balanced. Perhaps my hon. Friend should acknowledge that and advise Opposition Members of that fact.

Mr. Stewart

My hon. Friend is right, as always.

We are considering the distribution of the grant, which is done according to a formula agreed by the distribution committee. Both Scottish Office and COSLA officials do much extremely technical work. That does not mean that COSLA, by agreeing the distribution, necessarily agrees with the total, which is a different matter. COSLA is entitled to its view on that.

I do not think for a moment that the second order is controversial. The Revenue Support Grant (Scotland) Order 1994 redetermines the amount of revenue support grant payable to each Scottish authority for each of the years 1990–91, 1991–92 and 1992–93. Those are the three years covered by an agreement with COSLA to adjust, either up or down, the level of RSG payable to each authority in the light of any variations between the estimate of non-domestic rate income and the amount collected.

Hon. Members will appreciate, I am sure, that the amount can vary from the estimate because of changes in buildings, empty buildings and so forth. The introduction of pooling of non-domestic rate income—NDRI—from 1 April 1993 removed the need for the agreement to continue beyond 1992–93. With pooling, adjustments to the level of NDRI are made administratively.

The order provides for the level of RSG for 1990–91 to be increased by £26.6 million; for the level of grant for 1991–92 to be increased by £39.7 million; and for the level of grant for 1992–93 to be reduced by £34.5 million. All those adjustments are necessary in the light of the latest returns of non-domestic rate income collected by authorities for the three years in question. Overall, as hon. Members will doubtless be delighted to hear, the order provides for a net additional payment of £31.8 million to authorities. Clearly, there are swings and roundabouts as far as individual authorities are concerned.

Mr. John McFall (Dumbarton)

And if the hon. Member has anything to do with it, Eastwood will always be on the roundabout.

Mr. Stewart

I do not think that it is.

I do not believe that the second order is controversial in any way. It has been fully discussed with COSLA. The settlement to Scottish local authorities provided for in the main order is entirely realistic, given the present low level of inflation, the Government's approach to public sector pay and the public expenditure situation and I commend both orders to the House.

6.29 pm

Mr. George Robertson (Hamilton)

This will be an interesting evening, because we have started the debate earlier than anticipated. Hon. Members will therefore have a good opportunity to discuss the orders.

We can also reflect on the fact that, although the Secretary of State has come to join us, he still manages to duck out of dealing with local government issues, as he did during Scottish Question Time last week. At the weekend, it was noticeable, however, that when he was debating with, or should I say when he was being attacked by, Conservative councillors, at a conference he managed a few remarks about the conduct of the Standing Committee considering the Local Government etc. (Scotland) Bill, although he has not even popped his head around the door of the Committee. He is, presumably, receiving detailed reports from the Parliamentary Under-Secretary, the hon. Member for Eastwood (Mr. Stewart). Great debate and dissent are undoubtedly caused by them.

Mr. Gallie

rose—

Mr. Robertson

Perhaps the hon. Member for Ayr (Mr. Gallie) has occasionally bumped into the Secretary of State in the Corridor and has put down a few amendments as a result.

Mr. Gallie

Given the hon. Member's words of welcome to the Secretary of State, it would be churlish if Conservative Members did not mention the presence of the hon. Member for Glasgow, Garscadden (Mr. Dewar) on the Opposition Front Bench. I am sure that the hon. Member for Hamilton (Mr. Robertson) will benefit greatly from his hon. Friend's advice on, and sound knowledge of, local government.

Mr. Robertson

I have no doubt that if the hon. Member for Ayr turned his mind to it, he could turn that intervention into an amendment for the Committee tomorrow, because his ingenuity seems to have absolutely no limit.

My hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) is, of course, welcome to join us. A trip down memory lane is never bad for people. I am sure that he will enjoy the debate, just as he always enjoyed the previous ones. In fact, he is probably one of the few people who enjoy such debates.

Mr. Archy Kirkwood (Roxburgh and Berwickshire)

He is the only person.

Mr. Robertson

Yes, that may well be true.

My hon. Friend the Member for Garscadden is certainly welcome, because he never shirked or dodged the column in dealing with important issues, especially those concerned with local government.

I must admit that many a heart dropped when a study of the Order Paper revealed that the House intended to discuss the Local Government Finance (Scotland) Order 1994 and the Revenue Support Grant (Scotland) Order 1994. Frankly, the Minister with responsibility for local government has just revealed the deathlessness of the prose and the complexity of the concepts as he explained different components of the aggregate external finance levels compared with the Government's supported expenditure levels.

That explanation left the House of Commons more than cold in its appreciation. It also has the unfortunate effect of leaving the Government in the advantageous position of putting their figures forward as the truth—something which anyone with half a mind on the past would automatically dismiss.

The Minister told us that this is a good settlement, but he has said that every single year, just as his predecessors have in the past 15 years. It is no more true this year than it was in the previous ones. Why should the Minister change the script; after all it is recycled year on year? A few different civil servants may be involved and Ministers may go round in circles, but, each year, we are given the same speech about more cash being available for local councils and that, as a result, council tax, poll tax bills and rate levels should fall across Scotland. As the Opposition know only too well, Ministers are not telling the whole truth.

The truth, buried deep in the figures, is not just a matter of interpreting dry, obscure statistical complexities, but means money, which comes from the pockets of the people of Scotland. They are expected to shell out more money and more taxes. All those taxes are new ones, which are a direct result of this incompetent Government. Whatever Ministers say tonight—they have sold us this stale, unconvincing justification year on year—the minimum estimated effect of the orders will be an extra 10 per cent. on council tax bills across Scotland. The Convention of Scottish Local Authorities has authoritatively estimated that that is equivalent to £1.20 a week on average council tax bills.

Mr. Stewart

Can the hon. Member therefore explain why the biggest Labour district council in Scotland, Glasgow, has just announced that it will reduce its council tax by 3.8 per cent?

Mr. Robertson

As the Minister has said, there will obviously be swings and roundabouts. Because of the differentials involved and a number of other factors that apply, there will be differences of view about the figures. But the estimate, published this morning by the same professional officials whom the Minister has praised up to now, means an extra £1.20 a week on every council tax bills. That is equivalent to an additional 10 per cent. on top of all the other added expenditure which results from the Government's policies.

Mr. George Kynoch (Kincardine and Deeside)

Would the hon. Member care to ponder on the fact that another Labour-controlled regional council, Grampian, has said that it intends to freeze its council tax levels? I wonder whether he attaches a lot of credibility to COSLA' s figures.

Mr. Robertson

There are not many Conservative Members present, but I hope that they will come up with examples of the good housekeeping of individual Labour local authorities, which have been able to act in that manner in the face of the settlement and the circumstances dictated by Ministers. Those Labour local authorities have been able to do that because of the sheer professionalism of their approach. I shall explain, however, that the figures mean that it will be difficult for those authorities to uphold that behaviour.

Mr. Alex Salmond (Banff and Buchan)

May I take the hon. Member's remarks as something of a compliment to the Scottish National party's financial convenor of Grampian region?

Mr. Robertson

The hon. Gentleman can take it any way he wants.

The Government say that the aggregate external finance level will be up 2 per cent. this year, but when one takes away transferred moneys from the other purses of Government—from the careers service, which has been transferred, and the care in the community cash, which has been transferred to local authorities from the Department of Social Security—that level is down to 0.97 per cent., on the Government's own estimates. That is an increase of less than 1 per cent. in the aggregate external finance, the totality of Government support to local authorities.

That is the estimate before one takes into account inflation. If one takes away the Government's own estimate for inflation, which is published each year in the Red Book, as it was in the unified Budget, Scottish local councils budgets will be down this year by 2.91 per cent. That is almost 3 per cent. down not just on their current budgets but on those for last year. That means that, based on the figures for last year and not even on those on which the budgets that they reasonably proposed for the following year were based, a total of £148.8 million will be taken out of local authority budgets. In other words, almost £150 million will be taken out of local government budgets which are already stretched to breaking point. The consequence will be simple, brutal and unavoidable.

Mr. Kynoch

rose—

Mr. Robertson

I should like to make more progress, as Ministers would say, before I give way again.

The consequences of that reduction will be job losses, service reductions and an increase in council tax. All that is due to a direct, dictated, ordered, forced and even desired consequence of the Government's direction from the centre. At least £1.20, on average, will be added to council tax bills.

That will be on top of an extra £10 a week which, from April, every family will have to pay for the broken promises on national taxation for which the Government are responsible, and on top of the cost of VAT on fuel, which will come into effect on 1 April. More taxes will be set on more taxes. All of them are the price to be paid by taxpayers as a penalty for the incompetence and the deceit of the Conservative party, which told the people two years ago at the election that it would reduce taxes year on year.

The simple message behind those complicated figures is, "The Tories pick your pockets and then waste the money that they have taken". I wondered whether I could draw an analogy with Robin Hood, who stole from the rich to give to the poor, or with the sheriff of Nottingham, who stole from the poor to give to the rich. But the Government are acting like "East End Hood", who steals money from everybody and then loses it. That is the reality of the additional taxes which the Government are now imposing. They are picking the pockets of the Scottish people with extra taxes all the time. In return, we get less: fewer services and jobs, and longer dole queues.

The bulk of the 300,000 people employed in local government in Scotland face a year in which the Government estimate that inflation will run at 3 per cent. The Chancellor has published that estimate in the Red Book. Where is the justice in saying that people face 3 per cent. inflation plus all the tax increases that will be heaped on them, but no increase in pay? It is yet another gift from this high-promising Government.

The Government say that all that is fiction and exaggeration. They say that they have provided local councils with a pot of gold and that tax increases, service cuts and job losses are down to individual local council decisions. I say that that is hogwash.

There are few Tory local authorities, but Stirling and Kyle and Carrick district councils are flagship Tory authorities which perform the role of shop windows for the Tory councils of tomorrow. Two weeks ago, Stirling district council fixed its council tax level, reducing it by between £34 and £100. In its headline making that announcement, the local newspaper, the Stirling Observer, made it clear what the price was. It said: Jobs are lost to pay for tax cuts". The loss of at least 18 jobs and huge increases in charges will be the price paid by those in Stirling district who will enjoy a reduction in council tax.

The hon. Member for Stirling (Mr. Forsyth) does not participate in many Scottish debates. He does not enjoy a walk down memory lane and, as a begetter of the poll tax, there are few highways and byways in Scottish debates which he would like to visit. But the same edition of the Stirling Observer quoted him as saying: The councillors and officials of Stirling district must be the toast of my constituents tonight". Some celebration for the 18 people who were to lose their jobs as a consequence of that decision, those who would pay up to 200 per cent. more to let a hall in Stirling district, or those who would have to pay more to bury their dead in the area because of the rise in burial charges.

The Stirling Observer has not taken a partisan view. Indeed, the hon. Member for Stirling has received much favourable publicity from it over the years. But in its editorial opinion that week, Mr. Alan Rennie said: Perhaps the district council should line up the 18 people whose jobs are to be axed and explain to us and them why they are surplus to requirements. Then line up the people who are expected to assume many of their functions overnight. I'm fed up with those who treat ordinary people as pawns in a political game or as mere figures in an accountancy exercise. There may be champagne corks popping in Conservative party HQ but elsewhere this budget is like a glass of flat beer. Interestingly, the story did not end there. The following week, the saga continued in the editorial opinion. Mr. Rennie told his readers: One of the first calls to my office on Wednesday morning came from MP Michael Forsyth, who felt that I had been unclear in my criticism. How touchy of the Minister of State, Department of Employment. Anyway, Mr. Rennie analysed the comments and other points put to him and concluded: So I am going to stick to my guns. It's not the Observer that is playing politics. That charge lies at the door of the ruling Conservative group on Stirling District Council. And it is my readers who will suffer the consequences. Just wait and see. Mr. Rennie adequately makes the point about a council that has contracted out its legal services and handed them over to Professor Ross Harper in Glasgow, with a loss of jobs in the district and a legal challenge for unfair dismissal; contracted out its grass-cutting service with disastrous consequences; and spent £60,000 on designing a new logo and corporate identity for the district council. I heard it described as: a Lego man for a loco council". The council has made itself a national laughing stock as a consequence.

Given that grimy, unattractive shop window for Tory councils, it is small wonder that there are so few Tory councils around to talk about. But there is one more—the district council based on Ayr: Kyle and Carrick. It is still strong and is run on the Stirling model of champagne-popping, job-slashing, charge-increasing and standard-dropping councils. But Kyle and Carrick council is slightly more sinister at the edge because it now flouts the law as it seeks to break agreements that were freely entered into and contracts that were legally adopted. It seeks to dump existing contracts and the people who were party to them, and to sack loyal local workers and bring in contractors from Spain to handle the cleansing contract for the area. Loyal, decent, hard-working human beings will be dumped by those Tory fanatics—the loony right of Scottish politics—as they try to squeeze through some European loophole and illegally break signed contracts.

That example, not the statistics of the aggregate external finance, is the true face of the Tory party in dealing with local government.

Mr. Gallie

Will the hon. Gentleman advise the House how Kyle and Carrick district council has flouted any law, contractual or other? Is he aware that an announcement has only just been placed in the Journal of the European Communities and that no contracts have been placed? Certainly, no contract has been placed with a Spanish company, yet the hon. Gentleman seems to have the inside story. Can he put up the evidence? If not, he should come off that track.

Mr. Robertson

The hon. Gentleman has been involved in all those shenanigans and probably knows more than anyone else. Instead of posing questions, he would be well advised to provide answers. The House and the electors of Kyle and Carrick need to know whether those contracts, which were freely entered into, will be broken.

Mr. Foulkes

Is my hon. Friend aware that Kyle and Carrick district council announced that it would cancel a contract that had one to two years to run with the in-house tenderer for cleansing and refuse? Once that was announced, it was revealed that, prior to the announcement, five separate meetings had taken place between Provost Gibson Macdonald and its officials and the Spanish company, FOCSA. Does that not smell of a rat and some kind of collusion or corruption?

Mr. Robertson

The words "rat" and "smell" certainly come to mind. There is little doubt that something funny is going on in Kyle and Carrick district council. There is certainly an intention to break a contract freely entered into with local workers. No doubt the law courts will ultimately adjudicate on whether the law has been broken or whether the council has found a loophole that will allow it to break the law. What is clear, however, is that there has been a breach of faith with local people who are adequately providing a service but are going to be mercilessly dumped because of blind ideology.

Mr. Gallie

It is courteous of the hon. Gentleman to allow me to intervene again. He has suggested that something funny is going on in Kyle and Carrick district council. I read a newspaper article at the weekend which, under the headline "Spend, Spend, Spend", said that the council tax was being frozen. There is certainly something going on—it is very good news for the people of Kyle and Carrick.

Mr. Robertson

It is difficult to know what to make of that. If the hon. Gentleman is adopting "Spend, Spend, Spend" as his slogan—

Mr. Gallie

It is not my slogan.

Mr. Robertson

All I can tell the hon. Gentleman is what we know about the council's attitude to agreements and contracts, and to its local people, who will draw their own conclusions. There is little doubt that the Conservative party is setting out its stall in the area, and it is a wholly unattractive one.

The Tory principles—higher taxes, broken promises, fewer jobs and bargain basement services—adopted by the Stalinists of the Scottish Conservative party—

Mr. Stewart

Ha, ha!

Mr. Robertson

The Tory Stalinists are not going to stop there. Those who dissent from the one nation, one party idea get the chop. The hon. Member for Eastwood may roar with laughter, but I should like to draw his attention once again to the case of Colonel Frank Saunders. That should wipe the smile off even his face.

Mr. Stewart

I have heard the story before. I have great respect for Colonel Saunders, whom I have known for a long time. The hon. Gentleman talks of the Stalinist tendency. Who does he have in mind as Stalin?

Mr. Robertson

That is an open question—which could be answered by anyone who cares to fill in a postcard and send it to St. Andrew's house. [HON. MEMBERS: "The Minister is Stalin."] Well, it is certainly not the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton). I cannot imagine him leading that tendency, although he might be playing the part of a quiet Beria. If so, he has not yet disclosed the fact.

As we all know, Colonel Frank Saunders has nothing to do with chickens of either the fried or the cowardly variety. He serves as leader of the Tories on Central regional council. He is therefore a man of no small distinction. He lives in Stirling district and is a constituent of the hon. Member for Stirling. He has been an active Tory for more than 52 years, and a councillor in Stirling for more than 30 years. Yet the colonel said, when the tap on the shoulder came in the night, in words evocative of eastern Europe: After being told of the decision I asked if I was being dismissed because I had failed as a councillor. But I was told that it was because I didn't support the local authority reform proposal. So he bit the dust, because he did not agree with the new architecture.

I took a self-denying ordinance to the effect that I would not quote Councillor Brian Meek again. In a recent article he said that he wanted to be paid lineage if he was to continue to be quoted endlessly in the House. I fear that I must quote him again, however. Councillor Meek of Edinburgh district council had this to say about Colonel Saunders: He was deselected. Because, it seems, Frank Saunders disagrees with the Government's plan to reform local councils, particularly as they affect Central region, he has been booted out. I support the move to one-tier authorities. Nevertheless I am concerned that the price of speaking one's mind"—

Madam Deputy Speaker (Dame Janet Fookes)

Order. According to my information, we are discussing financial matters tonight, not the reform of local government.

Mr. Robertson

Of course you are right, Madam Deputy Speaker. Colonel Saunders would agree with you: he agrees with most of what the Conservative party is doing. He would probably agree with the orders that we are debating. We are talking about the financial base for local government in Scotland—a huge figure which the Minister outlined in his speech. It is extremely pertinent to this debate to know the policies of the councillors who will spend the money that Parliament, presumably, will vote through at the end of this debate. I assure you, Madam Deputy Speaker, that Colonel Saunders' fate is of immediate relevance to these orders.

Councillor Brian Meek went on to say—

Mr. Stewart

Will the hon. Gentleman give way?

Mr. Robertson

First, it is worth quoting Councillor Meek, a close friend and buddy of the Minister. [Interruption.] I use the word "buddy" in its broadest possible sense. He said: Are we not big enough, not magnanimous enough to recognise the sincerity and integrity of Frank Saunders, an active member for 52 years? Are we supposed to be speaking puppets? Perhaps the Minister would like to answer that question.

Mr. Stewart

I am sure that the hon. Gentleman is just about to go on to the case of the four Labour councillors who have been suspended from the party in Monklands.

Mr. Robertson

They have not been deselected as candidates. The party is entitled to its own disciplinary procedures, but we are talking about a man with 52 years' service to the Tory party, 30 of them as a councillor. He is a man of enormous distinction in Scottish local government and he has been deselected. I am quoting here the views of another Conservative, not my own views.

Madam Deputy Speaker

Order. The hon. Gentleman is now well off the point. He has made his point, and we must move on.

Mr. Robertson

I bow to your guidance, Madam Deputy Speaker. I should add that Colonel Saunders, from whom I am about to depart, is not alone in his disenchantment with this butchery.

Mr. Raymond S. Robertson (Aberdeen, South)

Will the hon. Gentleman give way?

Mr. Robertson

I trust that the hon. Gentleman does not intend to trespass against what Madam Deputy Speaker has just said.

Mr. Raymond S. Robertson

Far from it. The hon. Gentleman has championed the cause of deselected councillors. Will he come to my constituency and champion the cause of Labour councillor David Falconer, who has just been deselected for not toeing the party policy line?

Mr. Robertson

The hon. Gentleman will have to tell us what party policy was involved—

Madam Deputy Speaker

Order. I do not wish to know. Please continue.

Mr. Robertson

I think that you, Madam Deputy Speaker, have saved the hon. Gentleman from the embarrassment of the irrelevance of his comparison. I notice that even he did not try to defend the decision to boot out Colonel Saunders.

The disenchantment with the butchery of Scottish local government all across Scotland is not confined to the leader of the Tory group on Central regional council. Many people are now realising that this gerrymandered upheaval, done without the consensus of, or demand by, the people, without a review and on a crazy and impractical timetable, will cost them a packet. The new gerrymander tax is going to be substantial—yet another tax on the people of Scotland for Tory convenience. We do not have to take my word for that; it might be thought slightly partisan, despite the fact that it is accurate and dispassionate. Let us look at the report in yesterday's Scotland on Sunday about the Association of Scottish Conservative Councillors. Kenny Farquharson's article begins: Scotland's Tory councillors yesterday sent a warning to Scottish Secretary Ian Lang that he has badly underestimated the price to be paid for the reorganisation of local government. It is not the Labour party, or even the suspect professionals of COSLA, who are telling the Government that they have underestimated the costs, but Tory councillors themselves. That is extremely relevant and pertinent. The Secretary of State for Scotland is quoted as saying: The Labour leadership has lost the argument on the costs of reform". He went on to describe our claims as "extraordinary and wild". The Secretary of State was told by the Tory councillors—

Mr. Gallie

On a point of order, Madam Deputy Speaker. We seem now to be discussing the cost of the reform of local government in Scotland rather than the revenue support grant. Could you give me guidance on that?

Madam Deputy Speaker

I am making the presumption that the hon. Member for Hamilton (Mr. Robertson) is connecting the two.

Mr. Robertson

Absolutely. If the hon. Member for Ayr had bothered to listen to the speech of the Minister, he would realise that there is specific inclusion in the orders for the transition costs to move into the new local authority structure. What I am saying is not only relevant but highly inconvenient for the hon. Gentleman if he chooses to believe the sort of nonsense that is peddled by his Front Bench.

It is interesting that the councillors are being quite specific. They said in Scotland on Sunday: Yesterday's meeting of Tory councillors said Lang was deceiving himself over the true cost. The article then quotes Jim Evans, the chairman of Berwickshire district council and the association's new chairman, as saying: We are a little bit more cynical than the Government about these things. The Government's centrepiece—their plan for reorganising local government based on saving public money—was torn into tatters by a Conservative councillor speaking at the weekend, but speaking the truth. All he is telling Ministers is what everybody else in Scotland knows and what we have been telling the Minister for weeks since the White Paper was published; it will cost more than the Government says, and substantially more at that.

I can remember the words of Mr. Arthur Bell—another bosom buddy of the Minister—

Mr. Stewart

A party colleague.

Mr. Robertson

A party colleague of the Minister. He is a senior Conservative and has carried the blue flag of the Conservative party in Lanarkshire—no mean feat—for many years. Last November, addressing a seminar at Strathclyde university's business school and speaking in relation to the claims made by Ministers on savings at that time, which they put in the range of £120 million to £196 million, Mr. Bell said: If anyone came to me with a gap as wide as this I would be amazed. I would not wish to make major changes in my business without being more accurate. Mr. Bell and the Association of Scottish Conservative Councillors are all saying it, and are saying it loud and clear.

I look around me for Conservatives who are willing to speak the inconvenient truth, who are willing to run the same risks as Colonel Frank Saunders and spell out to the country precisely the consequences of what the Government are doing. I have yet another example. I think that it would be exhibit C in this case. It is an article by the right hon. Member for Shropshire, North (Mr. Biffen), published in The Guardian—of all newspapers—on Saturday, and entitled Colonel Blimp and the rural revolt". I do not know who that could be describing, but the article is about local government reorganisation south of the border, which is different from that north of the border, because the south was at least given a review and people there are arguing publicly about it. The timetable has gone completely haywire and very little is happening as a consequence. The right hon. Member for Shropshire, North, who, after all, was a Cabinet Minister—Chief Secretary to the Treasury and, later, Leader of the House—before departing office, said: In the first instance there is no popular demand for such changes, and much cynicism about the supposed benefits and certain increase in costs. There we have it, authoritatively from the words of the Tory's themselves, the real insiders, a former Chief Secretary to the Treasury; a prominent Lanarkshire Conservative supporter; and from the Association of Scottish Conservative Councillors. All said that the Government have got it wrong and that the savings that they are projecting are implausible, contrived, hopelessly optimistic and, indeed, plain fantasy. So, too, are the figures that are supposedly included in the orders for the transition costs of reorganisation. This year, £5 million is allowed, with £25 million next year and a final £15 million in 1996–97.

Those figures are unrealistic and wholly inadequate for what is being asked of councils today. After a month in Committee—I know that we are not allowed to debate in the Chamber what is happening in Committee—we still do not know what the boundaries will be for the new councils that the Government intend to set up, because a deliberate Government decision has been taken to leave as many of those issues as possible wide open for the future. We are only 13 months away from the first elections to these authorities, yet nobody in Scotland definitely knows what all the boundaries will be or even how many councils will actually—

Madam Deputy Speaker

Order. There is a boundary in here of what is relevant, and the hon. Gentleman is trespassing over it.

Mr. Robertson

I fear that the figures for the transition costs of local government reorganisation are pretty fundamental to the orders, because if they are as seriously underestimated as we believe that they are—as all the documentary evidence shows that they are—the settlement that has been made to Scottish local authorities this year will seriously embarrass them, cause a loss of jobs, increase council tax levels and mean a reduction in services.

It is extremely important that we try to establish here and now precisely what the Government are playing at and how they can pretend to have finalised the details of local government reorganisation to the extent that councils are told that they must live within £5 million this year for transition costs in a reorganisation that is now hopelessly ambitious—although ambitious is the wrong word to use—in its timetable and construction. There is only one way in which the Government can be right: if they are to start dismissing large numbers of people in local authorities. The Secretary of State was quoted as saying at the weekend, again in Scotland on Sunday: Of course, there will be transitional costs. But by far the larger part of those costs will result from the rationalisation of staff. So the greater the short term transitional costs, the greater the long-term savings from single-tier councils. What he is saying is that the more employees that councils sack, the greater will be the longer-term benefits. That is the only way in which the circle can be squared. But to do so, he will have deliberately to challenge the assurance that was given by the Prime Minister last October to Councillor Charles Gray, when he said: We do not anticipate that local government reform will result in widespread job losses and redundancies. The Government now have a serious obligation to people in Scotland to explain how these fantastic savings will be made in the existing structure without the kind of job losses that the Secretary of State appeared to be signalling at a conference at the weekend. The COSLA figures that were produced quite clearly demonstrate—

Mr. Kynoch

Will the hon. Gentleman give way?

Mr. Robertson

No, I wish to end my speech so that other hon. Members may contribute. It would be unfair if I went on for too much longer.

The COSLA study on costs, as my hon. Friend the Member for Linlithgow (Mr. Dalyell) said, is compiled by the same experts, who, it would appear, are the only ones apart from the Minister's advisers who understand the detail of what he was talking about this evening. Those people, who received his plaudits and congratulations, are the same people who have put together this authoritative study on the cost of local government reorganisation. It cannot be applauded on the one hand and dismissed whole-heartedly on the other. Their estimates are based on experience. They are based on hard-headed experience of what has happened in previous reorganisations. Their analysis is based on reality, not on what is convenient for the present Government. People will listen to them before they will listen to any Minister saying anything. Even the mid-point of their analysis reveals half a billion pounds of transition costs, and precious little in the way of long-term savings.

This whole exercise in butchering local government means a bad bargain for the Scottish taxpayer, which, moreover, is completely unnecessary—all for a local government structure that no one believes will last. It has neither the durability nor the stability to survive the test of time.

Mr. Dalyell

Did my hon. Friend observe that, when he made assertions that many of us consider to be correct, the Minister just shook his head? Will my hon. Friend invite the Minister to explain the methodology of the Scottish Office, and why he thinks that my hon. Friend is wrong about this important matter?

Mr. Robertson

The Minister's silence is due to the irrefutability of the arguments that have been advanced. If Ministers were expected actually to tell the truth about the methodology involved in transition costs—thinking of a figure and halving it—and in savings—thinking of an even more implausible figure and doubling it—I do not think that their credibility would be very great. I rest my case, as I know that my hon. Friend does, on the words of the new chairman of the Association of Scottish Conservative Councillors: he said that even he, one of the faithful, felt cynical about what the Government were doing.

Mr. Kynoch

Will the hon. Gentleman give way?

Mr. Robertson

I am bringing my remarks to a conclusion. The hon. Gentleman should wait his turn.

The orders are hopelessly inadequate for Scottish local councils. They will lead to cuts in services, the destruction of jobs, the lowering of standards and increases in council tax bills across the country. At the end of the debate, what Councillor Brian Meek so prosaically called the "speaking puppets" may well deliver a majority: that is a reasonable assumption and forecast—much more accurate than some of the Government's forecasts. I suggest, however, that in the Scottish regional elections on 5 May, when the people have a chance to make their voices heard in ballot boxes across the country, the Government will receive a profoundly different message.

7.12 pm

Mr. Bill Walker (Tayside, North)

We have just heard the hon. Member for Hamilton (Mr. Robertson) allegedly addressing the order. In truth, he did everything but that. First, he tried to deal with the situation on the basis of personalities in Scottish politics. That was all right, as long as he was dealing with personalities who, in his eyes, wore Conservative colours; but, as soon as he began to discuss personalities who sailed under the Labour flag, he did not want to know anything about it.

For instance, the hon. Gentleman did not believe that people could be expelled, or simply taken off the list of candidates, because they did not conform to policy. He says that that has happened to one Conservative candidate. As he and I know—as everyone in political life knows—it is possible to fall foul of the establishment from time to time; hon. Members sitting behind him have experienced that problem, and it has been experienced by at least one Conservative Member, whom I know very well. There is nothing new about that.

Why did the hon. Gentleman use that point in evidence this evening, of all evenings? We are discussing a revenue support grant figure that is far in excess of inflation, but the hon. Gentleman failed to mention that; all he did was talk about people and personalities. Rather than dealing with the issue before the House, he spent his time trying to become the darling of the Scottish media by naming names, among other things. It is called tactical and strategic thinking.

The man is an amateur. We very much miss the real contribution made by the hon. Member for Glasgow, Garscadden (Mr. Dewar), who would have done tonight what he has always done—analyse the content of the order, and explain why he did not agree with it. His speeches down the years have always been worth listening to, because we could always be sure that he had done his homework thoroughly, and he would always unearth aspects that required consideration. That was not the case tonight; the hon. Member for Hamilton has done a sad disservice to both his party and the people of Scotland.

It is about time we began to think about this impostor—for that is what the hon. Gentleman is. He is no longer wearing the mantle of the Labour party, and carrying on its crusade; he is now conducting a personal campaign that he hopes will give him publicity and media attention. He hopes that we will call him the great saviour of the Labour party in Scotland.

I have news for him: I think that exactly the opposite will happen. I think that both those sitting behind him and the Scottish media will realise that there is nothing there. The hon. Gentleman has not done his homework on the revenue support grant order; if he had, he would recognise—as I have—the massive increase for three authorities in my constituency—Perth and Kinross, Angus district and Tayside region.

I accept that authorities are never given enough money, but we have a very low real inflation rate at present. Moreover, Tayside region has received a substantial increase, from £171,379,938 in 1990–91 to £245,157,226 in 1992–93.

Mr. Kynoch

Unfortunately, the hon. Member for Hamilton (Mr. Robertson) would not let me intervene earlier; I suspect that he would not have liked my intervention, because it was not very convenient. I believe that 60 per cent. of local government expenditure is on labour. If the Government's guidelines on self-financing wage increases are adhered to, significantly more will be available in the revenue support grant than the hon. Gentleman has suggested.

Mr. Walker

I thank my hon. Friend for that telling intervention.

I am always interested and amused by Labour's claim to be the party that will somehow give the people of Scotland better value for money. Labour does not address the key issue: can services be provided more cost-effectively so that people receive a better service having paid less?

As has been clearly demonstrated in many other contexts—especially as a result of privatisation—when attitudes are changed, it is possible to achieve substantial reductions in manpower, for example. I hope that the objective of all employers is to secure the best possible value for customers—in this instance, for electors and council tax payers.

I do not apologise for hoping that employers will do that, and will achieve better results. Unquestionably, when there is a move from labour-intensive to more capital-intensive activities, we expect a reduction in revenue costs. That is the real objective of heavy investment in new, modern capital equipment, which is taking place throughout the western world so that it can be competitive. I have never understood why people should think that local government is any different in that regard.

As for the benefits received by Angus district and by Perth and Kinross, the 1990–91 figure for Angus was £3,995,821; it has risen to £8,282,606. The figure for Perth and Kinross has risen from £5,301,063 to £10,459,773. Of course I acknowledge that that contains an element of inflation, along with additional duties and responsibilities.

Having taken all that into account, I believe that central taxation, which is paid for anyway by the taxpayer, contributes in real terms more than the rate of inflation towards the running of the three authorities in which I am interested. Consequently, I have no problem in supporting the order, and I hope that the Labour Members who will speak will address it.

7.19 pm

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

I am grateful for the opportunity to speak in the debate, although fellow members of the Committee that is considering the Local Government etc. (Scotland) Bill might think that it is taking masochism a little too far. We sit all day until late at night on Tuesday and Thursday, and I see some familiar faces in the Chamber today, including that of the hon. Member for Tayside, North (Mr. Walker). We are taking masochism to a new form of supermasochism. Those of us who have been involved in local government, who are concerned about it and committed to it, and are anxious to ensure that services continue, believe that it is important to participate in today's important debate.

I want to advance a serious and, I hope, non-partisan argument before I make some of my more partisan comments. I am sure that the Minister, having received representations from local government, will appreciate that there is a feeling that dealing with local government expenditure on a year-to-year basis does not allow for proper planning. I know that it may be understood that the sum that a local authority receives for the following year will be similar to that of the previous year, plus allowances for inflation. There is a growing feeling, which I hope has got through to the Minister and the Department of the Environment, that a rolling programme for capital and revenue expenditure would be sensible. A rolling programme exists, to some extent, for capital expenditure. It would be helpful and useful if such a programme were considered for revenue expenditure, although I understand that that would always be provisional and subject to all sorts of qualifications. I hope that the Minister will consider that and ensure that there is more long-term planning in local government. That was my non-partisan argument, to which I hope that the Minister will respond.

Some services will be under tremendous pressure as a result of the revenue support grant settlement and the other related order. I am glad to see my hon. Friend the Member for Edinburgh, Leith (Mr. Chisholm) here today. He knows that I used to be the chairman of the Lothian regional education committee. He was one of our excellent teachers before he came to Parliament to waste his time.—[HON. MEMBERS: "Oh!"]—like the rest of us.

Mr. Robert Hughes (Aberdeen, North)

My hon. Friend has inadvertently given the impression that my hon. Friend the Member for Edinburgh, Leith (Mr. Chisholm) is wasting his time here. That is not the case. He is doing an excellent job and his constituents should be aware of that.

Mr. Foulkes

I am sorry—I chose my words incorrectly. I am doubly grateful to my hon. Friend the Member for Aberdeen, North (Mr. Hughes). All three of us are experiencing the frustrations of Opposition. My hon. Friend the Member for Leith will find it much more satisfactory after we have won the next general election and we are in power and pressing forward with new developments. I know that he experiences the frustration that I feel.

It worries me that our expectations of the education system and its provisions, not only in Lothian but across Scotland, have been depressed in the past 15 years by the Government. When I was chairman of the education committee, we were expanding education, reducing the staff-pupil ratio and developing community schools. We had just developed Wester Hailes school, the Wester Hailes education centre and Deans community school. We were talking about increasing resources and keeping schools across the region open for 24 hours a day, seven days a week. We wanted the improvements to be spread throughout the region and community and we had a great vision for education.

Mr. Gallie

I assume that the hon. Gentleman is referring to the late 1970s. Was not the rate support grant considerably cut in 1978 and 1979 by the then Government?

Mr. Foulkes

I can recall that period very well: we were in the process of expanding community schools in Lothian region. The resources were made available and, compared with today, those were rosy days. I have noticed that my former right hon. Friend the Member for Leeds, East, now Lord Healey, is appearing on posters. We think back on his days as Chancellor as the golden days. What is happening today, particularly in education, causes great concern.

I do not know whether it is happening in other constituencies, but school buildings in my constituency are being maintained and painted less and less frequently. Their maintenance has been substantially reduced—that is poor long-term planning. The planning is being done on a short-term basis, which creates tremendous problems for school buildings. Regional councils are under pressure to close schools. That pressure comes from the Minister and the Scottish Office Education Department, the name of which has been changed for reasons that I do not understand—I used to call it the Scottish Education Department. I live and work in Strathclyde region. The pressure is on that local authority to close schools, to save money and to cut its revenue.

Let me take a random example from the south side of Ayr. When three or four primary schools in the region were half empty and, under pressure from central Government, Strathclyde regional authority attempted to rationalise its procedures and proposed to close Castlehill primary school, everyone, including the hon. Member for Ayr (Mr. Gallie), was up in arms. When that happened I also complained that the concerns of the parents should be met. Strathclyde region is being put under pressure by the Government to make savings—that subject relates to today's debate. We need to realise the consequences. Sometimes I feel that, when we consider the orders, the documents of the Convention of Scottish Local Authorities and the figures, we do not understand what they mean on the ground. They mean fewer and less well-maintained schools. Pressure is being put on half empty schools to close.

I want to deal with the subject of the staff levels, which will cause my hon. Friend the Member for Leith to think back. The hon. Member for Kincardine and Deeside (Mr. Kynoch), in a well-timed intervention, said that he welcomed the concept of self-financing wage increases. What does that mean? It means that if, for example, teachers claim for and receive a wage increase above the level of inflation, which they richly deserve—I hope that they receive a sensible and reasonable increase—the regional council will have to find the money elsewhere. Inevitably, that means either saving money on school buildings and maintenance, which means cuts and closing more schools, or sacking and cutting the number of teachers. That will result in an increase in the staff-pupil ratio or a reduction in the number of specialist teachers. The Government cannot have it both ways. If we have self-financing wage increases, it will mean that people will be sacked or that buildings will not be properly maintained.

Mr. Kynoch

Has the hon. Gentleman heard of increasing efficiencies in other sectors where there may be scope for savings? Cuts need not be made in productive sectors.

Mr. Foulkes

We considered that matter. I spent some time pressing the staff of Lothian regional council to find efficiencies. If the hon. Gentleman understands the education budget, he will know that more than half of it goes on teacher salaries. A substantial amount goes on other important staff such as janitors, who are responsible for the security of the buildings—I am sure that the hon. Gentleman would not want to do away with them—school cleaners, and a range of jobs. All efficiency savings that could have been made have been made.

In my experience in the education service, no further savings can be made without cutting back the direct provision of services.

Mr. Bill Walker

With the hon. Gentleman's extensive knowledge—it certainly occurred during his period when he was in charge of those matters at Lothian region—he will know that one way to make changes and savings is to close schools in which the numbers of pupils fall below economic levels. The other way, which is often the result of that, is not to replace teachers who retire or who give up for whatever reason, and often that can be linked to the changes in school numbers and so on. The hon. Gentleman must know that there are always ways to do such things.

Mr. Foulkes

Let us take the two examples that hon. Gentleman mentions, because he is helpfully participating in the debate. Let us take closing schools. Of course that is one way to do it, but those who are most vociferous about proposals to close schools are Conservative Members of Parliament. No one could have shouted louder than the hon. Member for Ayr about the closure of Castlehill school, yet it happened as the direct result of the policies of the Conservative Government. That is the hypocrisy that we see—

Mr. John McAllion (Dundee, East)

Two-faced.

Mr. Foulkes

I am not sure whether I am allowed to say that. That is the two-faced attitude that we see from Conservative Members.

Mr. Gallie

Will the hon. Gentleman give way?

Mr. Foulkes

I am already dealing with one intervention.

Let us take the second point, about retirement. If one has a single-stream primary school with seven classes of about 30 pupils and one teacher retires at the age of 60, one has to replace that teacher. One cannot have composite classes all the way up of 35 or 36 pupils. In secondary schools, if one gets rid of specialist teachers one reduces the quality of education. There is a limit, therefore, and that limit on savings has not just been reached, but passed.

Mr. Gallie

The hon. Gentleman must realise that my main objection to the way in which Castlehill school was closed was that it was not half-empty—it had about 70 per cent. occupancy of pupils. Strathclyde region took an overnight decision. One moment it promised new build, the next minute it came up with a closure. That is not sound management. On another point, the hon. Gentleman—

Mr. Foulkes

The hon. Gentleman is wrong. I said in Committee that I find it difficult to deal with the hon. Gentleman because he makes so many misstatements. He says things that just are not true and it is very difficult to deal with people who do that. Strathclyde went through a long consultative process because there are a number of—

Mr. Gallie

On a point of order, Madam Deputy Speaker. I certainly did not make a statement that was not true, in spite of the words of the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes).

Madam Deputy Speaker

That is not a point of order for the Chair because the Chair is not responsible for the accuracy of the content of speeches or remarks made.

Mr. Foulkes

I am grateful, Madam Deputy Speaker.

Mr. McAllion

Perhaps it is just as well.

Mr. Foulkes

It is just as well, as my hon. Friend the Member for Dundee, East (Mr. McAllion) rightly said.

A number of schools were half-empty. Forehill was half-empty, Castlehill was substantially empty and Kincadeston was substantially empty. Kincadeston is a modern school, built only a few years ago. It was suggested that Castlehill, which has old buildings, should be closed down because its facilities are totally inadequate. That was proposed and there was full consultation. I opposed the closure, but there was full consultation. I opposed it because I am in favour of spending more money on education and therefore there was not anything contradictory in opposing it, but the hon. Member for Ayr, who also opposed it, wants to cut the money for education but at the same time to keep all those schools open. As the Member for Tayside, North rightly said, one cannot have it both ways.

Mr. McMaster

The hon. Member for Tayside, North (Mr. Walker) gave us a couple of what my hon. Friend described as "useful examples" of ways in which savings could be made—closing down schools and not replacing teachers who had retired. Is not it the case that if those self-same arguments that there is always room for efficiency and closure were applied to the national health service, he might find that one of the results is the closure of Meigle hospital?

Mr. Foulkes

That is absolutely right. I am grateful to my hon. Friend because his logic is impeccable.

Mr. Bill Walke

rose—

Mr. Foulkes

I give way to the hon. Member for Tayside, North for the last time.

Mr. Walker

If the hon. Gentleman examined carefully my record on school closures in north Tayside, he would find that I have supported schools that had to be closed. Equally, I have not supported the closure of hospitals that should not be closed. Those are entirely different things. My record shows that, equally, I have supported hospitals that had to be closed. I have supported closures. The hon. Gentleman should do his homework more carefully.

Mr. Foulkes

There seems to be a dispute there but, looking at it completely impartially, the logic seems to be on the side of my hon. Friend the Member for Paisley, South (Mr. McMaster).

I shall now move off the subject of education and deal with two other sectors in which the settlement about which we are speaking today is actually reduced. The Minister said that there will be no quarrel about the settlement. I have a quarrel about two sectors, the first of which is roads and transportation, funding for which decreases by 5.8 per cent.

Mr. Stewart

What I said was that I did not think that there would be any quarrel about the second order. I of course accept that hon. Members can take different views on the overall settlement.

Mr. Foulkes

I am grateful.

Roads and transport decrease by 5.8 per cent. The Minister must know that there is a huge pressure on from Strathclyde region, and from Ayrshire especially, with regard—the hon. Member for Ayr actually wants it as well—to the building of the M77, the Ayr road link between the top of the A77 at the moment and the M77, the spur that is missing. Most of that is capital expenditure and must be taken into the capital account, but some of it is revenue expenditure that needs to be provided to get design work done in Strathclyde region, or by outside contractors if the Government press it that way. My fear is that if funding for the roads department of Strathclyde is cut substantially, the much-needed design work on vital projects such as the Ayr link road, the Girvan bypass and the new Cumnock bypass will be delayed and the projects will be delayed.

When we look at the figures we need, time and time again, to translate them into reality on the ground. That is what Conservative Members do not do. They go along with the Government. They vote blindly, like sheep, with the Government, day in, day out, week in, week out, month in, mouth out, year in, year out, without realising the consequences of what they are doing. Then they go to their constituencies and say, "Of course we want those roads to be built, of course we want those schools to stay open" when they are the very people who voted for settlements that inevitably mean that that will not happen.

My next subject is domestic sewage. That does not sound like the most exciting subject to talk about at any time, but it is vital, as you know and as we all know, Madam Deputy Speaker. The domestic sewage settlement is decreasing by 6 per cent. Let us, once again, think of the consequences of our action. Every year, the European Community tells us that many beaches are no longer usable, do not satisfy the standards, are filthy and polluted. In Ayrshire we were told that beaches at Maidens, Turnberry, Girvan in my constituency, Troon, Ayr and Prestwick do not satisfy the required standards. We all jump up and down and say that it is disgraceful—and it is absolutely disgraceful. In some cases, raw sewage is being pumped out into the sea and in others housing and other much-needed developments cannot take place because there are not adequate sewerage facilities.

Yet again, all the Conservative Members who complain—

Mr. Gallie

Will the hon. Gentleman give way?

Mr. Foulkes

The hon. Gentleman has intervened far too often. He can try to make his own speech later.

All the Conservative Members who complain about those dirty, polluted beaches come to the House and are unwilling to vote the money and agree the settlement that is necessary to do something about those beaches. Again, their two-faced attitude becomes apparent.

The Convention of Scottish Local Authorities has made representations about the additional burdens imposed by central Government. Central Government always say that local government is required to do this or that because a new Act has been passed. Central Government willed the ends but would not will the means, and that is especially true now with care in the community.

Care in the community has resulted in a substantial extra burden being placed on local authorities, which are the lead bodies in this respect. A certain amount of money has been transferred but nowhere near enough. I shall not give any details but I shall mention a case that was drawn to my attention at the weekend. Strathclyde region was unable to provide the money necessary for a severely disabled person in my constituency. As a result, the extra money that would have come from the independent living fund, a subject raised by my hon. Friend the Member for Falkirk, East (Mr. Connarty) during Prime Minister's Question Time only week, is not available because Strathclyde region does not have the resources to trigger the money from the ILF. It means that millions of pounds that could be coming from the ILF will not be available because of a lack of resources. Care in the community is just one sphere where an additional burden has been imposed by central Government because the necessary money is not being made available.

I have dealt with regional council matters but now wish to mention two district councils in my area. I know that the Minister believes that Cumnock and Doon Valley district council has done an excellent job with industrial development, a sphere in which few local authorities become greatly involved. However, unemployment in the Cumnock and Sanquhar travel-to-work area is now the highest in mainland Britain—it stands at 19.1 per cent.—so Cumnock and Doon Valley district council has made it its business to become involved in industrial development. I am concerned that no special attention is being given to Cumnock and Doon Valley's efforts.

The Minister visited Cumnock and Doon Valley and, I concede, made some sympathetic noises but, when it comes to the settlement at the end of the year, those sympathetic noises are not translated into money to enable the local authority to do all that it wishes. The authority has a substantial industrial development programme, which it wishes to continue.

My hon. Friend the Member for Hamilton (Mr. Robertson) referred to Kyle and Carrick district council. He mentioned what one of our colleagues in Committee called the competition for the gold medal in the loony olympics between Stirling and Kyle and Carrick to see which authority could come up with the craziest right-wing idea. I have heard a bit about what is happening in Stirling, but I believe that Kyle and Carrick is in the lead.

I shall not spell out in great detail the case to which my hon. Friend the Member for Hamilton referred but it has created tremendous concern locally, and not only among Labour Members and supporters or people who might be natural Labour sympathisers. There is deep concern throughout the community, including the business community, about the fact that a legal contract for cleansing and refuse disposal into which Kyle and Carrick entered, and which still has between one and two years to run—it was an in-house tender—is about to be torn up by the district council.

The authority has advertised in European journals and elsewhere but we then found that there have been secret meetings with representatives of a Spanish cleansing company. That is sinister. Why did the meetings take place? Why was Provost Gibson Macdonald privately meeting representatives of FOCSA if not to start talking about tearing up the in-house contract and putting the job out to tender? I see no other reason why the provost and, on at least one occasion, the chief executive, should meet a Spanish-based company unless it was to put pressure on the district council, or come to an agreement with it, to tear up the contract. There is to be a demonstration in Ayr on 19 March and I shall certainly be there, supporting the unions in their legitimate legal challenge to Kyle and Carrick.

The hon. Member for Ayr referred to the headline "Spend, Spend, Spend", which appeared in one of the local newspapers. It certainly describes what Kyle and Carrick Tories have decided to do. There are legitimate reasons for some of the authority's expenditure but, at a time when people are being asked to accept reductions—or, at the very best, a standstill—in their wages, would not it have been far better for Kyle and Carrick district council to do what the Labour group suggested and reduce the council tax and the burden on ordinary council tax payers rather than proceeding with some of its more extravagant proposals? I hope that the Minister will examine the issue seriously because I do not believe that he would wish Kyle and Carrick to go ahead with some of its more outrageous proposals if the alternative is a reduction in council tax. After all, he has been recommending that other local authorities consider every possible way of reducing the council tax, so why would not he do the same to Kyle and Carrick?

I am deeply worried about the two orders. They would cause a further reduction in services, a further deterioration in local government building stock, more job losses and a deterioration in the services that are so important to many people. I hope that my hon. Friends will vote against them for those reasons.

7.46 pm

Mr. George Kynoch (Kincardine and Deeside)

My contribution will be brief. Listening to Labour Members, one would imagine that the Government were cutting their support to local government rather than providing a significant increase.

We must remember that inflation is very low. As I said in an intervention on my hon. Friend the Member for Tayside, North (Mr. Walker), 60 per cent. of local government expenditure goes on employees' wages; so if we could hold wage costs level by whatever means—through efficiency and improvements or by making savings elsewhere—the whole revenue support grant contribution could be spread over 40 per cent. of the expenditure. If we take the current rate of inflation to be the full 2.5 per cent., we would need an increase of only 1 per cent. to cover the total. In other words, there has been a significant increase in the contribution to local government expenditure.

I agree with my hon. Friend the Member for Tayside, North that in Kincardine and Deeside—

Mr. George Robertson

rose—

Mr. Kynoch

I shall give way in a minute; the hon. Gentleman kept me waiting.

I agree with my hon. Friend the Member for Tayside, North that there had been an increase of almost 6 per cent. in the revenue support grant settlement for Kincardine and Deeside. The same is true for Grampian region, which has also received a significant increase. Both councils have said that they intend to maintain the present council tax level.

Mr. George Robertson

Why does the hon. Gentleman not believe the Chancellor's estimate of inflation, as stated in the Red Book, at 3.5 per cent.?

Mr. Kynoch

I base what I am saying about expenditure on the current rate of inflation. I believe that my right hon. and learned Friend the Chancellor, quite rightly, has been prudent and sensible in his projections. It may well be that inflation is a little higher; hon. Members will appreciate the fact that if it applies to only 40 per cent. of local government expenditure, it accounts for only 40 per cent. of the increase. Mathematically, it does not make a lot of difference.

Local councillors must play a significant part in ensuring that their local taxpayers get value for money. I give the example of Kincardine and Deeside district council which faced a 4.2 per cent. increase in the draft budget for next year. The councillors simply said to the executives of the council, "This will not do. We have to get the budget level. We cannot stand a council tax increase at this time." Surprise, surprise, the second draft budget came in significantly less, to the extent that council tax will be held level. Whether it is to the credit of the Scottish National party.. as the hon. Member for Banff and Buchan (Mr. Salmond) claims, or whether it has rather more to do with the fact that we face regional council elections this year, Grampian regional council, miraculously in election year, has managed to come in with a level council tax.

I now turn to the move towards the unified business rate. Non-domestic rates play a part in the equation about which we are talking tonight. I very much welcome the fact that the variance between Scotland and England, which was 64.6 per cent. in 1990–91, will go down to 14.7 per cent. in 1994–95. Even that percentage does not tell the whole story because it is an average. Kincardine and Deeside, Gordon, Moray, Berwickshire, Tweeddale, Orkney and Shetland are all level with England. Their rates cushion the fact that the rate in Glasgow is still significantly higher than the average, with a rate poundage of 52.9p, which compares with the average in England of 42.3p. The message is loud and clear. The trend continues throughout Strathclyde, where the variances are between 19 per cent. and 20 per cent. from the English average. The clear message is, therefore, that Labour councils are not as good at getting their business rates down.

Mr. Brian Wilson (Cunninghame, North)

Does the hon. Gentleman live in such a fantasy world that he seriously believes that there are comparable social and economic problems in Glasgow and in the other authorities to which he alludes?

Mr. Kynoch

I certainly believe that the affairs of that council can be managed as efficiently as those of other councils. In other cities that have problems similar to those of Glasgow, there is a lower rate poundage. That proves the point.

Mr. McMaster

In an intervention, I asked the Minister about the way in which aggregate finance was calculated. He told me that indicators such as poverty, deprivation and poor housing were taken into account. As the Government are responsible for about 88 per cent. of the money that local authorities receive, why will the hon. Gentleman not allow local authorities to apply the same logic?

Mr. Kynoch

I believe that I correctly heard my hon. Friend the Minister say that the formula for the revenue support grant split was discussed jointly by the Scottish Office and COSLA. COSLA must, therefore, shoulder its responsibility for the way in which the split has come about.

I summarise by saying that I believe that the level of revenue support grant that has been applied in the order is more than adequate if councils use their best initiative to ensure that, on the labour side, they keep settlements this year to a level that can be self-financing. They therefore have plenty left with the remaining 40 per cent. to fund services so that there are no cuts whatever.

7.53 pm

Mr. Archy Kirkwood (Roxburgh and Berwickshire)

The hon. Member for Kincardine and Deeside (Mr. Kynoch), to whom I listened with interest, is totally unrealistic if he expects local authorities in Scotland to be able to cope with the wage demands that they will receive this year and to make the savings that he suggested were possible. The evidence coming from south of the border, where some of the settlements are a little further on than they are in Scotland, suggests that that is hope above expectation. The hon. Gentleman also forgets that the local government settlements are nationally negotiated; they are not in the hands of individual councils because the rates are set nationally, as the hon. Gentleman knows as well as I do. It is, therefore, a bit ridiculous realistically to expect such savings.

I should like to make one or two general observations before turning to some of the detail of the orders. Over many years, I have become convinced of the need to look a bit more closely at the way in which we finance local government. The existing system is not transparent. It is very difficult—I say this neutrally—for ordinary council tax payers to determine for their own purposes exactly where the responsibility for some of the increases that they have to pay lies. If that is true, the system needs to be looked at again. It is now descending into a war of attrition between local government and central Government, in which each side tries to be the first to get in its retaliation and public relations so that it can attribute the blame for the increased cost of local government to the other side.

The system is so complicated that the only person in the world who understands it, outside the Scottish Office, is Mr. Albert Tait, who does wonderful work for COSLA. The Minister was right to pay tribute to him and colleagues, who supply us with the information that we require to inform these debates. We must get a system that is more transparent and with which people can cope. We need a system that people can comprehend and about which they can make sensible judgments. That is not possible with the current system.

It is not sensible to have a system, which we all now accept as a matter of course, that requires central Government to fund 88 per cent. of local authority spending. It is time that we stood back and looked at exactly what that means for the autonomy of local government and how local councillors can best discharge their duties. An important factor in the debate, which has been mentioned earlier, is that 66 per cent. of all local authority spending goes on staff-related costs. For the Government simply to say, as a matter of course, that they are giving increases that take account of inflation does not begin to meet the true increases that local authorities will face. We all know that, year on year, earnings invariably rise faster than prices. In Committee, we are now contemplating our system of reform for local authority organisation in Scotland, yet we are not looking in any detail at the system of finance. That is stupid. It is not possible to reform the system of local government north of the border without looking carefully at a more sensitive, coherent and transparent system of finance.

The relationship between central Government and local government is appallingly bad. We should try to repair that relationship to achieve a greater feeling of partnership and a far lesser sense that there is a constant war of attrition between St. Andrew's house and the local authorities collectively north of the border. I am very concerned that the results appear to be that no one is listening to the other side of the argument and that power is being gradually and inexorably drained away from the local authorities, which is a bad thing in principle.

Sir Nicholas Fairbairn (Perth and Kinross)

Does the hon. Gentleman agree that it would be wise to inquire into the number of people who are employed by local authorities? General extravagance and over-employment are the real cause of the burden on the citizen.

Mr. Kirkwood

The hon. and learned Gentleman, as usual, anticipates my next point. I agree with him to an extent, but there is a factual increase which is difficult to justify unless one considers the additional duties, responsibilities and liabilities that the House is placing on local government. I need to use only one example to demonstrate my point. The community charge legislation, which was succeeded by the council tax legislation, required even local authorities in south-east Scotland and other non-profligate authorities to hire extra hands and computers to deal with the work that we as a legislature perforce required them to undertake. The hon. and learned Gentleman is right. We as legislators should be much more careful before we willy-nilly overlay new layers of duties on local authorities, as we often do. His point is valid to that extent.

My next point in general terms is that I am suspicious of the client group approach, as it is currently implemented and introduced into the method of calculation of the relative amount that each authority receives. It is flawed. In my experience, it is certainly flawed in the way in which it calculates the share-out of local authority revenue in rural areas.

Primary indicators basically count heads. For example, if money is to be paid to local authorities for primary education, one considers the first primary indicator, which is the number of children in schools. That is a common-sense approach. However, secondary indicators do not take nearly enough account of the factors that apply in rural areas which have disparate populations and a series of problems. Their problems might not be as great as those of urban areas but, in their own way, they are just as important to local areas in rural landward parts of Scotland. I do not believe that the client group approach, as currently drafted and implemented, takes those problems properly into account. I hope that the Minister will give the House some comfort by saying that he is prepared to consider developing and refining the way in which the client group method is calculated in practice.

I had a slight difference of opinion with the hon. Member for Kincardine and Deeside about the ability of councils to accommodate wage costs and then redistribute savings. Of course I am in favour, as everybody is, of local councillors achieving efficiency, but that is a bridge too far. It is totally impossible for local authorities to make savings of the kind to which he referred; indeed, the reverse will occur.

There is evidence that there will be job losses if central Government limits and capping rates are implemented in the way we expect. There are some problems. It is stupidity itself that we have a local government settlement that takes no account of the realistic increases that are bound to be in the pipeline in the way of public sector wage settlements which, again, are negotiated nationally, not locally.

I have concluded that there will inevitably be job losses or reductions in services. In my own regional authority, which is not a profligate authority, we have to find savings of about £400,000 in social work and about £200,000 in education. That means that all sorts of sensible, planned, service delivery projects will have to go by the board. Throughout Scotland, there is great need for nursery education—there certainly is in the borders. There is a great need in the border towns that I represent to develop, extensively, better facilities for young people. The social work and community education authorities have worked out plans and are doing their best to develop those services, but they are being hampered by a shortage of finance.

The hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) mentioned the maintenance of school buildings. I agree. One price that we will have to pay for the orders is that maintenance schedules will be delayed and delayed again. As he mentioned, that is a short-sighted, short-term policy. Another consequence of the orders will be further delays in making improvements in the safety of school transportation which, as hon. Members know, is a matter of great concern to community councils and school boards in rural areas after the recent terrible accident in Biggar.

As for social work, in the near future we will be able to determine the consequences of the orders. Already, in my authority, the charges for home helps and meals on wheels and other charges have been increased. People are already in severe financial circumstances, which will be exacerbated by the imposition of VAT on fuel on 1 April. They are being hit twice. It is a double whammy in terms of the effects of some social work cuts, not to mention the closure of the old part IV accommodation and residential homes, many of which are institutions in their localities. That accommodation will have to go by the board.

Another example—it is not an exhaustive list—is that the ability to develop future industrial sites and engage in an industrial strategy at regional authority level will be severely hindered and hampered by the orders. Another point that is directly relevant to the non-domestic rate aspects of the orders is the effect on local authority finance in relation to the uniform business rate. The hon. Member for Kincardine and Deeside mentioned that point. I am also concerned about some of the issues about which he talked.

What worries me more than anything else is that, using the evidence of my own eyes and ears, high streets in market towns throughout Scotland are being decimated by a combination of factors, not just the non-domestic rate imposed on them. Our high streets are under tremendous pressure. The amount of rates that businesses now pay in place such as Kelso and Jedburgh is worrying. The effect is available for all to see. Many of our high streets are suffering and paying the price. The orders take out an extra £12.5 million, according to the COSLA figures, from what local authorities would otherwise have expected had the old non-domestic rating system applied. That money would have helped them to address the problem.

I wonder, too, whether the allowance for loan and leasing charges of £750 million or thereabouts for 1994 is enough. With a bit more leeway, local authorities would be able to develop capital projects. I can list several capital projects in my constituency—for example, the new school that is needed in Jedburgh, the new bridge that is urgently needed as a matter of safety in Kelso, the redevelopment scheme at Gallalaw in Hawick and the Eyemouth harbour development project. They are examples—again, it is not an exhaustive list—of projects that could be brought on stream by local authorities in a way that would put local people back into work and assist the national finances very positively.

Finally, I shall refer to something that was mentioned by the hon. Member for Hamilton (Mr. Robertson). The allowance for transitional costs to the new local government system is severely understated, at £5 million for this year, £25 million for next year and £50 million for the year after that. I ask the Secretary of State—he is the Treasury Bench note-taker while everyone else is out having his tea, and we are not complaining about that—whether, if we bring evidence in the coming weeks and months that shows that the figures are inadequate for 1994–95 and subsequent years, he will give an assurance that he is willing to look at that evidence and bring back more realistic estimates. The whole of the local government establishment north of the border is severely exercised and worried about that question.

A whole series of worries relate to the orders. I do not think that it is anything like good enough for the Government simply to say that there is price protection and a bit more, so why is anyone worrying? That is a superficial and disingenuous approach. When the detail of the orders is studied with care by people north of the border, and if they get to the stage where they can understand the full consequences of the orders, they will be very unhappy that the settlement reached for next year is unfair to local authorities north of the border.

8.10 pm

Mr. Phil Gallie (Ayr)

I did not come here armed to speak today. Having heard the rate support grant settlement, I honestly thought that all hon. Members would be amazed that the Secretary of State has been able once again to increase the levels of rate support grant beyond the level of inflation. That is a remarkable achievement which goes back year by year throughout the 1980s. Bearing in mind the comments by the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) on education, I must repeat that if we go back to 1978 and 1979, there were no rose-coloured spectacles; the fact is that at that time the rate support grant was cut in real terms. It beats me why hon. Members hark back to those times. The reason why they criticise the settlement announced by the Secretary of State is beyond my comprehension.

More than £6 billion has been allocated through Government supported expenditure this year. That is a remarkable sop. If we analyse it further, we find that that accounts for some £20 per week for everyone in Scotland in 1994–95. Scotland receives greater central Government support for local spending than the rest of the United Kingdom. That means that we have higher expenditure of about 34 per cent. per head in Scotland than in England. That tells a story.

The hon. Member for Hamilton (Mr. Robertson) suggested that the people of Scotland will have to pay more because of the generous rate support grant settlement. Of course, they will have to pay more. If the Government spend more, taxpayers must take more out of their pockets, whether through council tax or general taxation.

Mr. Salmond

rose—

Mr. Gallie

If the hon. Gentleman lets me finish my point, I shall give way. The charge today from Opposition Members is that the Government are not putting enough into the kitty through revenue support. If the Government put more in through revenue support, their only option will be to raise taxes, although Opposition Members continually condemn them for taxing at the current levels. What I have not heard in this debate is how on earth Opposition Members would bring in more money through the general taxation system and where they would put that money with regard to local authority expenditure.

Mr. Salmond

In the hon. Gentleman's comparison of Scottish and English local government figures, has he allowed for a different range of responsibilities? Obviously, in the current circumstances English local authorities do not control water and therefore do not spend anything on it, although there were substantial green dowries when English water was privatised. Allowing for that difference in responsibilities north and south of the border, can the hon. Gentleman tell the House the real figure?

Mr. Gallie

The hon. Gentleman refers to water. The rate support grant for water in the Strathclyde region is absolutely infinitesimal. Basically, the charge for water and sewerage services is set by the councils and I see no reason to change the figure of 34 per cent. along the lines suggested by the hon. Gentleman. Perhaps my hon. Friend the Minister will be able to clarify that point further as the debate continues.

As to the charge that the rate support grant is not sufficient for local authorities to sustain services and thrive in the years ahead, I must come back once again to the stated intent of Glasgow district council to cut back on the council tax. At the same time, I do not hear a charge that Glasgow will cut services. Glasgow seems to be able to live with the settlement and has adapted it to meet the needs of the people in its city without passing on the massive increase that we heard so much about from the hon. Member for Hamilton. Indeed, there have been numerous examples of other local authorities announcing standstill and reduced council tax settlements, despite what Opposition Members said.

I have every reason to feel a certain degree of pride with regard to Kyle and Carrick district council. When that council changed administration almost two years ago, it inherited a massive deficit of £2 million on the revenue account, which it has turned round. That is a sign of good Conservative management in local authorities. That must not be condemned but applauded.

When I examine the spending programmes for this year, and had I been a councillor on Kyle and Carrick district council—we have been told that it is a radical right-wing council, yet it seems to be going on a spend, spend, spend programme, as the local paper suggested; and perhaps I am a bit more right than some members of the council—I would certainly have looked at a reduction in council tax charges for next year. That would have been meritorious.

The rate support grant means that expenditure will be directed at improving the infrastructure and aspects of Kyle and Carrick. It means that new jobs will be created as a result of the way in which cash is spent, and Kyle and Carrick will prove that its cash investment will be advantageous to council taxpayers in the future.

Stirling district council was condemned for laying off 18 people and much has been said about job losses. The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) suggested that there are problems for local authorities in this area. He referred to the imposition of the community charge and the fact that that had created many more jobs in local authorities. If that is the case, and given that the hon. Gentleman has got his way and we have returned, somewhat reluctantly as far as I am concerned, to a property-based tax for funding local authorities, perhaps local authorities should now be examining the manpower that they are using in this area. If there had been a massive increase in the requirement for labour at the time that the community charge was introduced, and if Opposition Members are correct now, perhaps there is an opportunity to cut the number of people employed in this area.

Mr. Kirkwood

Will the hon. Gentleman allow me to buy him a cup of tea afterwards and explain to him how a local income tax would mean significant staff reductions? I would like to see that, and we have been arguing for it for many years.

Mr. Gallie

I recognise that the hon. Gentleman is an ardent supporter of a local income tax, but I think that he will recognise the impossibility of introducing such a tax against the background of the numerous local authorities in Scotland. His argument might gain a little value following the changes that we are studying.

Having said that, I have no wish to see a local income tax introduced in Scotland. It would not be rational, and it would be highly bureaucratic. Those involved in the tax would be looking deeply into the affairs of individuals, and I would not support that intrusion.

Mr. Bill Walker

My hon. Friend might care to inform the Liberal Democrats that some of us have examined the working practicalities of a local income tax in great detail. My information—based on research which I have done during a number of years—suggests that such a tax would be even more costly to operate than the community charge, and would cause far more resentment.

Mr. Gallie

rose—

Mr. Deputy Speaker

Order. Before the hon. Gentleman goes down that way, I remind him that we are talking not about the council tax or any other tax but about revenue support grant, and the hon. Gentleman should stick to that.

Mr. Gallie

I was talking about revenue support grant and the adverse effect on jobs that that would have, as has been suggested by Opposition Members. Advantage could be taken of recent changes which would allow additional cash through revenue support to be used in a different manner.

Dr. John Reid (Motherwell, North)

Given that revenue support grant is dependent in its proportion on the manner in which other local finances are raised, and given that the hon. Gentleman has ruled out a local income tax and has, in addition, ruled out a property tax, will he put on record for the people of Ayr that he still supports a poll tax?

Mr. Gallie

rose—

Mr. Deputy Speaker

Order. I do not want the hon. Genteman to go down that way and talk about the poll tax, the council tax or any other tax. We are talking about revenue support grant.

Mr. Gallie

I respect that view, Mr. Deputy Speaker, and it is with great reluctance that I do not respond. I would certainly have liked to respond in a positive manner to the hon. Gentleman's comments. Given your guidance, I will attempt to stick to revenue support grant.

With your indulgence, Mr. Deputy Speaker, I shall concentrate a little further on jobs. A local authority must look at the number of people it employs when considering revenue support grant as an element of its financing. With about 60 per cent. of local authority expenditure going on the wage bill, that is very relevant. It is the responsibility of every local authority to look at its staffing structures and to attempt to get the right structure to meet its needs.

After all, running a local authority is not much different from running any business, if one considers the turnovers for each local authority. In Kyle and Carrick, for example, about £14 million comes in revenue support grant from the Government.

We have heard no whining from Kyle and Carrick. The council is holding its council tax, and it is still managing to spend £2 million on capital projects. That is despite the fact that Kyle and Carrick's revenue support grant has been reduced during the current year. We have heard no one whine—the council has got on with the job, and a dashed good job it is doing.

It is not just local authorities who have been forced into cutting jobs. The Daily Record has cut 200 jobs, and the House has not heard the Opposition complaining about the cut in the newspaper's staffing. Yet Opposition Members think that the loss of 18 jobs in local government is a major disaster. That is a logic which escapes many of us, and certainly escapes the workers at the Daily Record.

I have heard comments about cuts in the education budget as far as it affects school buildings. It is my view that Strathclyde regional council has failed to address the real problems of sound maintenance and management of its school building programmes. I did protest about the closure of Castlehill, a school which had a 70 per cent. occupancy rate and a set place in its community. I protested against the background of Strathclyde having promised a replacement school for Castlehill up till the eleventh hour, when there was a sudden change and the council went for hon. Gentleman was elected."] The closure was wrong. It was bad management, and that was what I criticised. That record in the management programme for the provision, new build and maintenance of school buildings has continued for 10 or 15 years.

Mr. Thomas Graham (Renfrew, West and Inverclyde)

I thought that it was on record that the previous Secretary of State for Scotland had mentioned how prudent and good an authority Strathclyde regional council was. Many of the council's management plans saved a lot of money. I was interested to hear the hon. Gentleman's statement on management or mismanagement. Will the hon. Gentleman put that on record so we can see clearly where he believes the deficiencies were in Strathclyde?

Mr. Gallie

I must say that the hon. Gentleman's reading is not mine. If he cares to present to me the statements made by the various Secretaries of State who have commended Strathclyde regional council on its schools maintenance programmes, I shall take them on board.

Mr. Stewart

Did my hon. Friend hear the sedentary comment from Opposition Members to the effect that Strathclyde proposed the closure of Castlehill because he had been elected to the constituency?

Mr. Gallie

I must think carefully before I respond to my hon. Friend. I must say that it is not the first time that I have heard that remark. Certain remarks were made along similar lines with respect to a sewage works at Greenan. I would like to discount those comments, because I do not believe that any authority with any credibility could consider making judgments in such a way. On that basis, I shall dismiss the comments that my hon. Friend heard from the Opposition.

The hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) referred to the much-needed link between the A77 and the M8, and to the link between the M77 and the A77. The hon. Member for Kilmarnock and Loudon (Mr. McKelvey) and myself have both been chasing my hon. Friend the Member for Edinburgh, South on that matter over recent months.

Strathclyde regional council has had capital consents given over the years which should have allowed it to make progress on that length of road, but year by year that cash has been diverted elsewhere. I am well aware of the delicate state of the negotiations between my hon. Friend the Member for Edinburgh, South and Malcolm Waugh, the convener of the transport committee of Strathclyde regional council. I do not wish to aggravate the position and I shall not comment further. I should like to think that agreement can be reached in the not-too-distant future and that plans for the road link will come to fruition.

The hon. Member for Carrick, Cumnock and Doon Valley made some remarks about sewerage facilities in Ayrshire. Here again, there are instances—

Mr. Nigel Griffiths (Edinburgh, South)

I am not sure whether I misheard the hon. Gentleman or whether he referred to my constituency when he meant to refer to that of someone else.

Mr. Gallie

I have referred to the hon. Member for Edinburgh, South (Mr. Griffiths) when I should have referred to my hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton). Apart from the pleasantries exchanged outside the Chamber, the fact that I used the words "hon. Friend" speaks for itself.

In drawing my remarks to a close, it would be churlish of me not to refer to the generous increase of more than 8 per cent. in housing capital allocations given to my local authority recently. I recognise that that is not revenue support, but it is worth noting and I thank my right hon. and hon. Friends on the Front Bench for it. It is also worth while extending my comments to the housing non-revenue account payments which will also meet with satisfaction in my area. I recognise that I am beginning to stray a little, Mr. Deputy Speaker, so before I incur your wrath, I shall take my seat.

8.30 pm

Mr. Robert Hughes (Aberdeen, North)

The hon. Member for Kincardine and Deeside (Mr. Kynoch) made a commendably brief speech. It was fascinating because it revealed how his mind operated. He sought to give us a lesson in elementary economics of such naivety that I suddenly realised how lucky we were to see the hon. Gentleman in the House at all. If he had applied such simplicity in his business affairs, he would have gone bankrupt long ago and would have been unable to take his seat in the House. I have never heard such misrepresentation of the facts on expenditure, revenue or proportions grossed up or grossed down. I do not think that he understood what the order was all about.

The difficulty that we have in discussing the orders is that we have little to go on when we try to work out how the different figures in the orders have been arrived at. The Minister would have us believe—I apologise for missing the early part of his remarks—that expenditure figures are calculated according to some sophisticated mathematical formula. He would have us believe that everything is worked out to give authorities their proper due. [Interruption.] If my hon. Friends will allow me to speak, I will not barrack them in the middle of their speeches.

The approach of the Minister and of many Conservative Back Benchers is simple. They take the general view that local authority expenditure is bad and Labour local authority expenditure is worse and not to be tolerated. I will give the Minister at least some credit. I think that he was trying to be accurate. All that I can do is be charitable to him by saying that he does not understand the formula.

The Minister's view is that any wage increases must be paid for by efficiency savings. That view is commonly reflected on the Conservative Benches. Many Opposition Members know that that is unrealistic. In many cases, the phrase "efficiency savings" is a euphemism for driving down wages and sacking people. That is what it amounts to.

Everyone knows perfectly well that it is unrealistic to expect efficiency savings to meet all the increases which are in the pipeline. Let us take the example of wage increases. We know for a fact that teachers in England and Wales have already received a 2.8 per cent. pay increase. We do not know what the figure will be in Scotland. I should be surprised if it was less than 2.8 per cent. We know that other wage claims are in the pipeline. The Minister cannot expect ordinary people to put up with large increases in tax from April this year and the imposition of VAT on electricity and gas without seeking recovery for that in their wages.

It is bad enough that the Minister says that there should be no pay increase. He is asking for a severe reduction in people's living standards. People are right to seek at least to maintain their current living standards. Our ethos should be to increase people's living standards. There is no way in which the pay increases that are in the pipeline can be met by the settlement. Indeed, there is no way in which those pay increases can be matched by loss of jobs or anything similar.

Mr. Salmond

I noticed the Minister shaking his head when the hon. Gentleman was making the point about efficiency savings in the public services. The hon. Gentleman is familiar with my constituency and with the Willowbank adult training centre for the mentally disadvantaged. Does he think that efficiency savings in that centre can be used to pay reasonable salary increases to the extremely committed staff who man that centre?

Mr. Hughes

I certainly do not believe that efficiency savings, particularly in places dealing with the mentally handicapped, should be the way in which staff wages are increased. Many of the staff who put in for pay increases are dedicated people who offer a service more often than not above and beyond the call of duty. They do not simply see their way through the day from 9 am until 5 pm, or whatever time, and then go home. People take their work home with them. They have a commitment to the people whom they serve. That is not confined to those who deal with the mentally handicapped.

Mr. Bill Walker

I wish to understand clearly what the hon. Gentleman is saying. As I understand his argument, his view is that it is unrealistic to expect the wage increases that are in the pipeline to be met by efficiency savings. He is not saying that there is no such thing as efficiency savings?

Mr. Hughes

Of course I am not saying that there is no such thing as efficiency savings. However, for at least the past five years, if not longer, we have been told that tale every year. We are told that there must be efficiency savings and efficiency gains. The facts and figures show that local authorities throughout the country have made large efficiency savings and gains. They have squeezed and cut the services down to the bone. When I give some examples of how that has been done, people will understand that we have gone so far that we cannot go any further.

The Minister praised some authorities for holding their council tax down. I wonder how many of them are spending their reserves. Perhaps he can answer that. In my view, to spend the reserves simply on keeping the council tax down is bad. If there are reserves, they ought to be spent on the people directly by providing services.

We have this sterile argument year after year. The Minister and Conservative Members say that so long as an authority holds its rates, poll tax or now council tax steady, with no monetary increase, it is a good authority. I say that that is not necessarily the best test. It is not a bad test, but it is not necessarily the best of tests. We need to look at council tax and service provision together.

Let us consider what is in store for local authorities. I am told that a 3 per cent. pay award across the board cost Aberdeen city district council £5 million on its band D tax. That will take a lot of recovering in council tax.

The trouble is that Ministers do not take into account the many demands being made of local government. The population is increasing in the north-east of Scotland, which implies increasing demand in the city of Aberdeen and the region. We are entitled to an explanation from the Minister of how he arrives at his figures for the area.

Mr. Stewart

The hon. Member will appreciate that not all the council tax figures for the north-east of Scotland are in. However, he will also appreciate that the recommendation to the Grampian region is for a zero increase in council tax, that Banff and Buchan has decided on a 4.8 per cent. increase and Gordon on a 4.7 per cent. increase. Those figures are not compatible with the argument that the settlement is somehow unfair to the north-east of Scotland.

Mr. Hughes

That goes to show that one should never give way to a Minister in the middle of one's speech because one will not get the answer one expected. I did not ask the Minister about the figures. I asked how many authorities in Scotland are using their reserves to keep the council tax down.

I shall now deal with what I regard as the unfairness to the north-east of Scotland. The aggregate external finance has been cut by 3.3 per cent. for the city of Aberdeen, but it has increased in Grampian by 2 per cent., in Banff and Buchan by 1.8 per cent., in Gordon by 1.2 per cent. and—the oddest of all and I cannot understand any reason for it—in Kincardine and Deeside by 5.1 per cent. What are the factors that govern such huge differences in aggregate external finance in a fairly compact and cohesive area?

Why should the aggregate external finance for Aberdeen, which faces the tremendous social problems normally associated with cities, decrease by 3.3 per cent. while Kincardine and Deeside which borders it—the constituency overlaps the local government boundary for the city—gets a 5.1 per cent. increase? I know that there are problems in rural areas, but why should there be such a difference?

I know that the Minister's stock answer will be that the distribution figures are worked out by the distribution committee of the Convention of Scottish Local Authorities. The decision on the figures is not taken by COSLA, but by the Minister. He cannot duck his responsibilities by saying that such matters are discussed or decided elsewhere.

The explanations for expenditure decisions and how they are arrived at are inadequate. What about community care? We have been told that much money has been transferred to local government so that it can deal with community care. Yet we are also constantly told, and given example after example, that the amount of money transferred is inadequate to deal with the social problems involved.

We have all been made aware in our constituencies of examples of the lack of follow-up care and attention—examples of people being put into local authority houses and left on their own without supervision. Who is responsible for supervision? Is it the hospital or the regional authority? Is it the health trust or the social work department? No one seems to know.

As far as one can discern, the distributions seem to mix up community care expenditure and expenditure on aids and adaptations to houses, which is unfair. The Minister must look more closely at the way in which, under the tenants' rights legislation, so-called amenity houses can be sold while sheltered housing cannot. That is resulting in severe problems with the provision of aids in amenity houses. Authorities are beginning to wonder whether they should spend money on anything except temporary adaptations, which can be taken out. That is bad economics. It is much better to make proper, permanent provision for the people who need such aids so that the houses can be transferred to other needy people later.

We mentioned education and I hope that the Minister will listen closely because expenditure on education has been cut so much that Grampian region, which the Minister keeps telling me is a very good authority—I am sure that that remark in Hansard will be used in election manifestos in May—

Mr. Stewart

rose—

Mr. Hughes

I shall not allow the Minister to renege. I had a ringing endorsement for Grampian regional council from him and it will have to stay in the record. He is not going to wriggle out of it now.

Mr. Gallie

Will the hon. Gentleman give way?

Mr. Hughes

No. I shall not allow an ambitious and hopeful surrogate Minister to intervene.

I take it that the Minister agrees that Grampian region has done extremely well on education, but we have problems. Beechwood school in my constituency caters for children with special needs. The school swimming pool has been closed for more than a year because the region does not have enough money to repair the heating system or install a new one. One might ask, "What's a swimming pool? It's just for recreation. The children can go elsewhere." The kids are going elsewhere, but they have to be out of school for two and a half hours to get a half-hour swimming lesson. For children with special needs, swimming is not simply recreation; it has therapeutic value. It is disgraceful that such money should be held back and that there is not enough in the budget. That is one example of how education is being squeezed and the children who are most in need are the ones to suffer.

People are beginning to understand that one will always have to pay the price for neglecting social provision and social problems and for ignoring the rise in drug addiction and other similar problems. There is a price to be paid. Parents in many parts of Aberdeen are becoming desperately concerned because syringes that have been used to inject drugs intravenously are being left lying around. That is dangerous for health. That is the cost which must be paid. If one neglects good housing conditions and good education, the community will pay the price.

It is far better for the community to face up to the costs of providing good education, social services, housing and employment prospects. That is a much better and more positive price to pay. People are beginning to grasp that argument and the fact that holding the council tax down—as the only real test of a council's efficiency or value—is bad news and a bad way to approach the problem The more that they wake up to the fact that good social and local authority provision are good for the community, the better. We are winning that argument and we will win votes as well.

8.48 pm

Mr. Jimmy Wray (Glasgow, Provan)

The hon. Members for Tayside, North (Mr. Walker) and for Kincardine and Deeside (Mr. Kynoch) said that my area has high expenditure, but it is not much higher than other areas of Scotland. The hon. Member for Tayside, North mentioned addressing the issues, and I shall certainly do so tonight—[Interruption.] Conservative Members should be called to order.

I have served on local authorities for a number of years, and I know exactly where all the problems began. Just in case the Minister has never visited a constituency such as mine, let me tell him about the poverty and the misery that has been created over the years by the Government. We have heard all the rubbish about the revenue support grant, but everyone knows that it is a pittance, which will never deal with the problems.

In my area, some houses have been boarded up for two years. People are crammed into houses, and others are homeless. They never will get a house from the Government. My authority is still paying the interest charges on houses that were built 60 years ago. We know all about local authorities and we know how, over the years, the Government have pressed them hard and brought them to their knees. How did they do it? The answer is the Miscellaneous Financial Provisions Act 1983 and the Local Government and Planning (Scotland) Act 1982, which gave the Secretary of State more powers. Is it not a scandal, wrong and shocking that the Secretary of State should have those powers?

I wish that we had a video of all the problems that have been created since the Government came to power. All the problems I have mentioned are related to the rate support grant and to the revenue support grant, which is supposed to clear up the problems of the country.

What have we got? Unemployment is high all over the place. The poor health of my constituents is unsurpassed throughout Britain. Glasgow has the worst infant mortality rate in Britain, and the mortality rate for adults between 45 and 65 years is the highest in the country. Those are the problems created by the Tory Government. The people of Britain and of Scotland must do one thing. They must recognise that the Government are not on their side. If they were, they would not just be giving people a small pittance in the revenue support grant.

How are people supposed to deal with the problem of 12,000 drug addicts in Glasgow, with an evil trade worth £188 million? The police cannot even catch the dealers for a breach of the peace. They cannot deal with the problem, but the morgue is full of youngsters. What are the Government doing about that when they talk about statistics? This is not a game for the faint-hearted or one of comedy. It is a game of seriousness, because people are out there dying on the streets. We want to make sure that something is done. That is why we must increase the revenue support grant when we take power.

The hon. Member for Kincardine and Deeside mentioned the unemployment figures, and how we should deal with them if we cannot deal with the problem through the rate support grant. The only way to deal with the problem is to regenerate the economy. We should not pay £9,000 for people to sit in their houses and lie on the labour exchange. The Government should invest that money to give those people a job and hope. Show them a light at the end of the tunnel. If the Government cannot do that, they should not be in power, and they should never return to power.

Many local authorities in Scotland, especially those in Glasgow, would like to do more to improve housing. Over the years, Glasgow has suffered from Tory landlords who have left and sold their properties off at a pound a time. They put a burden on local authorities, when priority should have been given to people who are living in slums. Their fathers and mothers could not get a job and they were on the labour exchange from the day their children were born to the day they died. This is the kind of world that the Tories want people to live in.

Bad education is hereditary. Why did the Government not take up the recommendations of the Plowden report, which said that areas of deprivation should be made a priority and given nursery education? It also said that the pupil-teacher ratio should be reduced. [Interruption.] It is all right for the hon. Member for Billericay (Mrs. Gorman) to laugh. While you are laughing, people are suffering out there. I hope that the cameras are on you, because you are a certain calibre of Conservative. Why are you laughing when people out there are suffering?

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse)

Order. May I cool things down a little bit by saying that I am responsible for none of this? The hon. Gentleman keeps on referring to "you", but that means the occupant of the Chair. If the hon. Gentleman refers to an hon. Member or hon. Lady, he will be in order.

Mr. Wray

Thank you very much, Mr. Deputy Speaker, for your correction. Unfortunately, we are worried about Conservative Members who come in here—perhaps they have been sitting in the Tea Room, when we have been sitting in the Chamber all day because we are really interested in trying to improve services throughout Scotland.

Mr. Graham

My hon. Friend and I are close friends. He will be aware that I have been inundated with requests from mothers for nursery provision in all areas, including Erskine, Kilbarchan, Lochwinnoch and Gourock. Those mothers are desperate for their kids to get some pre-five education. My hon. Friend is quite right that Strathclyde cannot provide it, because it does not get enough money from the Government to satisfy the needs of our people.

Mr. Wray

My hon. Friend is quite correct. Strathclyde region had policies that were designed to last not for one or two years, but for between five and 10. It had decided to implement policy, but when it had an opportunity to implement the recommendations in the Plowden report, it had to close schools down. Plowden recommended that people living in deprived areas should have a pupil-teacher ratio of 1:10 not 1:20, 1:30 or 1:50, as in the past. That is the kind of education we need for people from humble backgrounds. [Interruption.] I hope that Conservative Members will listen carefully.

Mr Bill Walker

I genuinely respect the hon. Gentleman's passion and concern. I trust, however, that he acknowledges that not all Conservative Members have no experience of poverty, and that we care just as deeply as he does.

Mr. Wray

That applies to very few Tory Members. I have never heard a Tory Member make a passionate speech about his or her constituents living in poverty and bad housing. If you lived in my area—

Mr. Deputy Speaker

Order. I hesitate to intervene on the hon. Gentleman again, but he has not yet got out of the habit of saying "you". I hope that he will try to do so.

Mr. Wray

From now on, I shall address my remarks to you, Mr. Deputy Speaker.

You, Mr. Deputy Speaker, will agree that Labour Members are extremely concerned about the changes that have been made, especially with regard to housing. Under health legislation of 1970, if a house is below tolerable standards and is damaging household effects, a tenant in Scotland has a right, because the local authority is not dealing with the service as it should and is creating a hazard to the tenant, to summon the local authority to court.

Under housing legislation of 1966, local authorities have the discretion to spend money to put those properties right. Glasgow district council has had to spend millions of pounds in compensation, because the Government would not give it enough money to deal with the problems in the area.

Strathclyde regional council was restricted by rate capping, so it could not deal with its transport problems. The Government then introduced deregulation, when good services disappeared and we were left with ghost streets. A greyhound service and a leapfrog service now compete with each other. Many important services have been lost, so we know exactly what the situation is.

The Government wasted millions of pounds when they introduced the Water (Fluoridation) Act 1985, allowing local authorities to buy equipment and waste money. Those millions of pounds could have been spent on solving the problems. If the Government had come to me, I would have told them about the food and drugs legislation, the Water (Scotland) Act 1946 and section 130 of the Medicines Act 1968, which would have saved local and central Government millions of pounds. We took them to court because they did not know the Act, which is why they had to introduce the 1985 Act. All that was a waste of money.

Why do hon. Members think that all the mad schemes which the Government have introduced, such as the poll tax, the council tax and those mad local government schemes, were not respected by COSLA? We had seen what local government reorganisation meant. Men and women who had worked for years in local authorities were dumped on the dole because the Government had bought out their jobs.

Two decades later, the Government are doing the same again. They are looking for money through the introduction of those schemes. Schemes such as child support have nothing to do with helping children: they are simply about helping to clear up the deficit. Of the £530 million coming in, only £50 million will go to the children. That is why local councils cannot provide the rate and revenue support that is needed.

I realise that many hon. Members are waiting to speak, so I shall not take a great deal more time. I could stand here all night, because I have a great deal of experience in the corporation. I live a lot among the people. They act as a sounding board for me every Saturday. Why do not the whole Government take a walk with me around Paddy's market on a Saturday and see exactly what the problems of the people are? A walk around the Oxfam shops will show them just how well people are doing.

I just hope that, next time we deal with rate support revenue or any other assistance which the Government hope to give working-class people, they will give them a wee bit more.

9.3 pm

Mr. Malcolm Chisholm (Edinburgh, Leith)

The consequences of this important debate will have an impact on thousands of council workers and millions of service users. Once again, this debate has shown that there are lies, damn lies and Scottish Office statistics. The Government have particular reasons for distorting the figures this year, because this is the worst settlement for local government since 1979, and Opposition Members can all remember quite a few bad ones.

Tonight we need to compare the figures for 1994–95 with the figures for 1993–94—not that this year's figures were very brilliant. But before we do so, we should bear in mind two points which may have become muddled by certain Conservative Members in this debate. First, what inflation rate are we talking about? We are not talking about the rate that includes mortgage interest relief—at 1.8 per cent. We are talking about the other inflation rate, which, according to the Red Book, will be 3.25 per cent. in the coming year.

Secondly and crucially, we must remember that the money for next year includes community care money that was not included in the settlement for this year. That community care money will amount to about 2 per cent.—a fact consistently forgotten by Conservative Members, enabling them to inflate the actual figures for next year's spending.

I want to look at the figures for Lothian region; it helps to look at one authority instead of bandying about general figures. The aggregate external finance for Lothian region for this year was £572 million. Aggregate external finance for next year will be £583 million. No doubt the Government will tell us that that represents an increase of £11 million. I must tell the Government, however, that transferred money for new expenditure on community care will amount to £11.5 million; so the cash settlements for Lothian region this and next year will be the same.

I could also point out other items of new statutory expenditure, such as money for devolved school management and local government reorganisation. Taken together, these would mean that the cash for next year, in straight terms, is less than for this year. For the sake of this debate, however, let us assume that the figures for the two years are the same. Since 1979, as far as I can remember, Lothian region has never suffered no cash increase from one year to another.

The settlement therefore represents a real cut, given the inflation rate of 3.25 per cent. This 3.25 per cent. cut is part of a general public expenditure cut across local authorities in Scotland and across all the services in the United Kingdom. This has led Andrew Dilnot of the Institute for Fiscal Studies to say that this public expenditure round makes Lady Thatcher and Lord Howe look like socialists, so draconian is it and so much worse than anything they imposed.

It is because of this sort of figure that the Government aim to reduce the share of GDP taken by public expenditure from 45 to 42.5 per cent. in only three years. These draconian figures are getting worse; my hon. Friend the Member for Peckham (Ms Harman) has seen the Grey Book—the updated public expenditure figures—which reveals an additional £750 million cuts in public sector asset creation. No doubt there will be other changes too, but that is the one that she has drawn to our attention.

This is a terrible settlement for local government, and it is part of a terrible public expenditure settlement. Lothian will receive the same cash this year as in the previous year, once the community care money is stripped out of the figures.

The Governnment claim that there can still be a cash increase of 1.75 per cent. It does not take too much imagination to realise that the only way to achieve that is to hike up the council tax. Even a cash increase of 1.75 per cent. will still mean a cut, but to achieve that cut Lothian region will have to increase its council tax by 10 per cent. So the region faces next year a cut in services and a 10 per cent. increase in council tax.

Quite apart from the general budgetary problems faced by the Government, it probably suits their political purposes to do this, because this is regional elections year and a time of local government reorganisation. Doubtless the Government hope that the people of Lothian will feel that theirs is not a good council, because it is putting up the council tax by 10 per cent. and cutting services at the same time.

The Government hope that the people of the region will not regret the passing of that council—but the people of Lothian are not stupid. They are quite used to the cuts imposed on them by this Government, and they will realise, when their council tax rises and the cuts are imposed, that the blame lies at the door of the Government.

To get to that 1.75 per cent. capping point in the next recap, Lothian councillors must decide how to take £12 million out of what is already a strictly disciplined base budget. Those decisions will be made this week, and £12 million of cuts must be made in education, social work and other services. Although the decisions have not finally been made, we will probably find that, when people leave their jobs, their jobs cannot be filled, there will be fewer teachers and people in community education, grants to voluntary organisations will be cut, and school meal charges may even go up.

Lothian region will have to make those cuts because it is not getting enough money from central Government. It has had a massive real-terms cut, which means that the amount it receives this year will be the same as that for next year. The cuts would have to be twice as great if Lothian were to give the normal pay increase. In its budget this week, it will have to allow no money whatever for wage increases for its employees. We may have heard of pay freezes since the second world war under various Governments, but I cannot remember a pay freeze that did not give at least some protection to low-paid workers.

We all know that thousands of council workers are on low pay. Let us consider the effect that the settlement will have on their lives. If the freeze is maintained for the next three years, their pay will be cut by 10 per cent. Many of the tax increases that we know will happen in April will penalise low-paid workers in particular—such as the freezing of allowances, increases in national insurance contributions and VAT on fuel; not one low-paid worker will get a penny of compensation for VAT on fuel.

Mr. Graham

My hon. Friend will realise that there will be a swingeing increase in rents for the thousands of Scottish Homes tenants that the Government control. That will affect very much the low-paid workers in local government. Once again, we are seeing the boot being put in to people who are least able to defend themselves.

Mr. Chisholm

I thank my hon. Friend for adding that point. Housing is not strictly the subject of this order, but it relates to the public sector pay freeze, and allows me to say that there will be a rent increase in Edinburgh for another reason, because Edinburgh does not get a penny of housing support grant. I will not trespass on that subject, but that must also be borne in mind.

The public sector pay freeze is built into Lothian region's budget and all the Government's budgetary calculations. They are assuming that it will hold for the next three years. Public sector workers have an impossible choice. If the freeze does not hold, there will be job losses. From this settlement and the general public expenditure settlement, we are likely to get job losses, a pay freeze and a devastating effect on services—all because of the economic incompetence and mismanagement of the Government.

It is not even as though, at the end of the day, it will achieve the Government's objectives. They would argue that we must take that medicine to solve the problem of the budget deficit, yet many experts are questioning whether the Government can achieve, by taking so much demand out the economy through pay cuts and public expenditure cuts, the growth that is necessary for them to achieve their targets.

Studies have been made in the past week by the National Institute of Economic and Social Research, the London Business School and the CBI, all of which say that the Government will not achieve their growth targets, and therefore will not solve their budget deficit problems. That leads to the obvious conclusion that the only way in which we shall have some restoration of public services, solve the deficit and achieve growth is by electing a Labour Government. That cannot come too soon.

9.13 pm

Mr. Alex Salmond (Banff and Buchan)

If the hon. Member for Glasgow, Provan (Mr. Wray) took the present collection of Ministers round Paddy's market, he might have difficulty in finding a buyer. His speech, however, was very worth while. It brought us back to some of the basics—basic services affected by the orders.

There is a tendency for debates such as this to become ritualistic. The debates are also complicated by the fact that virtually no one understands the distribution formula that is being discussed. This is very much the Schleswig-Holstein question of Scottish politics. Only three hon. Members have ever understood it: one is dead, one is mad and the hon. Member for Glasgow, Garscadden (Mr. Dewar) is no longer in the Chamber.

That ritualistic quality does not convey a message worthy of the subject. In the normal course of events, the Government describe the settlement as generous, and the Opposition call it miserly and inadequate. We quote figures from the Convention of Scottish Local Authorities, such as £1.20 and 10 per cent. increases in council tax. The Minister implies, or even says in some cases, that COSLA has a vested interest in the figures and that its estimates are, therefore, not to be trusted.

When the overall settlement for Scottish local government was made, I took the precaution of asking the House of Commons Library to give its opinion of what the settlement would mean for the revenue position of Scottish local government. I did that at least to demonstrate that the hon. Member for Fife, Central (Mr. McLeish) was not the only person to use the services of the statisticians in the Library.

I think that the House of Commons Library provides a reasonably authoritative and independent estimate. It is not a hotbed of anything, apart from librarians. This is what the Library said about the settlements: We estimate that after adjustment for changes in responsibilities this implies falls in real Government Support Expenditure (GSE) of 1.7 per cent. in 1994–95, 1.9 per cent. in 1995–96 and 0.7 per cent. in 1996–97. On an equivalent basis Aggregate Exchequer Finance … will fall in real terms by 2.9 per cent. in 1994–95, 2.7 per cent. in 1995–96 and 1 per cent. in 1996–97. Even if the Minister is not prepared to accept figures from local government itself, is he prepared to accept argument and analysis from the House of Commons Library? Is he prepared to accept that that is the real position that faces local government in Scotland over the next few years of his stewardship? It is not good enough for him to point to individual councils that have succeeded in controlling their finances and to say that that proves that the overall settlement is adequate. That proves nothing except that some councils have managed their finances very well.

I was interested to hear hon. Members on both sides of the House compliment Grampian region on the running of its finances—although the hon. Member for Kincardine and Deeside (Mr. Kynoch) seemed to have forgotten the complexion of the council, and I am not entirely convinced that the hon. Member for Hamilton (Mr. Robertson) knew it in the first place. In any event, Councillor Pearl Paul, Scottish National party finance convener of Grampian region, will no doubt take the tributes made to her—by implication, at least—in good faith and in good heart. Grampian region indeed deserves to be complimented, not only on freezing the council tax but, for example, on the excellent 10p bus scheme that it introduced this year, which has been lauded by old-age pensioners throughout the region.

Let me offer a quick catchline to the hon. Member for Kincardine and Deeside, which he will doubtless hear rather more often during the coming weeks. What is the difference between the current administration of Grampian region and the Conservative party? The current administration helps pensioners and freezes the council tax; the Conservative party freezes the pensioners and helps itself to the tax.

Individual councillors and councils can do very well by prudent financial management and by looking after their own resources. That, however, does not alter the fact that, on the whole, the settlement and the orders are extremely bad news for the financial position of Scottish local government. We deserve an answer to the point about the overall settlement and the overall squeeze on local authority finance.

Mr. Bill Walker

The hon. Gentleman kindly read out some of the observations of the House of Commons Library. I doubt that any hon. Member would suggest that our Library gives us anything other than splendid service. Would the hon. Gentleman care to read out the qualifications listed along with the figures that he gave?

Mr. Salmond

I am happy to tell the hon. Gentleman that the only part that I did not read out was the following sentence: As you will be aware, there was an announcement yesterday on local authority finance in Scotland. Apart from that, I read out the whole of the Library's summary. I am happy to hand the full correspondence across the Chamber. I hope that, now that I have given the hon. Gentleman that information, he will join us in the Lobby tonight. Who knows? Wonders will never cease.

There is a real and important point in regard to what the settlements mean for Scottish local government. The Minister should tell us a bit more about the overall settlement and not about individual success stories of councils in Grampian or elsewhere.

Scottish local councils and councillors are underpaid, under-appreciated and under the thumb of central Government. That position is deleterious to good local government administration. By and large, local councils and councillors in Scotland discharge their responsibilities very well. There are individual exceptions. Some councils are blots on the landscape of Scottish local government. When Ministers and the Labour Front-Bench team fling at each other the extreme examples of Kyle and Carrick and Monklands, it does not add to the debate and both parties are on a loser.

I have another question on finance. What evidence can the Minister produce to show that withdrawing powers from Scottish local government—powers that are covered by the revenue support grants—will lead to the better administration of public services in Scotland? What evidence can he produce that control by quango is more economically efficient than control by democratic local government? What evidence has emerged from the recent experiences of the Greater Glasgow health board and various local enterprise companies that control by quango, adding to the 5,000 quango members appointed by the Secretary of State for Scotland and the £5.5 billion—40 per cent.—of the Scottish Office budget already controlled by quango, will be in the best interests of the economic administration of services?

In the administration of finance, local government and local democracy have a better track record than quango government. Every local democratic council, even Monklands, has one essential saving grace. If Monklands district council does not discharge its responsibilities properly, its electorate can get rid of it at the next electoral opportunity. That check on efficiency is not available to anyone who wants to get rid of quango members who are clearly not allocating and carrying out their responsibilities properly. I can see that you, Mr. Deputy Speaker, are becoming somewhat restless about the comparisons that I am drawing, but they are relevant to the economics of the revenue support grant in Scottish local government. Local government provides both the best economic and democratic means of allocating finance for important services.

My next argument relates to the cost implications of the changes, including the £5 million that is mentioned in the orders. There is a good argument that single-tier local government will be more efficient. There is academic evidence based on the fact that smaller councils have a good track record on efficiency. I grant that to the Minister, but he should also face the fact that severe questions surround the estimates on the changes to Scottish local government that he has provided to the House. The estimates of other bodies seem to be a good deal more competent and soundly based than the Minister's. Apart from the Convention of Scottish Local Authorities and other participants in the debate, independent organisations such as the Chartered Institute of Public Finance and Accountancy are severely critical of his estimates. The range of estimates also tend to show that the Minister is not confident about the figures that he has put forward.

As the Minister knows, before I fell among thieves in this place, I used to turn a penny as a professional economist. It was well known in the economics profession that, to safeguard one's back against future inquiry, one could conduct a scenario analysis. One would present not a single figure for projections and forecasts but a wide range of figures so that one might blunder into the right estimate. That appears to be exactly what the Government have done.

The hon. Member for Linlithgow (Mr. Dalyell) asked the Minister a question last Wednesday. Incidentally, the hon. Gentleman should be running a seminar on how to ask questions during Scottish questions, from which many hon. Members might benefit. When he asked the Minister to give to the nearest £10 million his latest estimate of the changes in Scottish local government, the Minister's eyes glazed over. At the very least, that should not make us confident that there had been a proper and adequate financial examination of the figures.

Mr. Dalyell

I do not know whether I fall into the category of thieves among which the hon. Gentleman has fallen in this place, but I do agree with him that we have not had from the Scottish Office any suggestion of the way in which it has arrived at its figures. At the least, it owes the Chartered Institute of Public Finance and Accountancy and the rest of us some explanation of how it has arrived at its figures because, bluntly, Miss Anna Capaldi and her Touche Ross figures have just been exposed as being totally flawed—in fact, I do not know how Touche Ross got taxpayers' money.

Mr. Salmond

I happily exclude the hon. Gentleman and myself from the category of thieves into which we have both fallen. I am not so sure that I would be excluding Touche Ross, if we consider the benefits that have been gained for itself from its expensive report into the financing of Scottish local government. I think that the argument has been well made once again by the hon. Gentleman.

I want to make two final arguments, in summary. I hope that the Minister will not continue to make the argument that I hear sometimes from his lips, that somehow, when the Convention of Scottish Local Authorities, which is the representative organisation for local government, says something it is necessarily in the pockets of the Opposition parties and necessarily its viewpoints and arguments must be disregarded. I merely draw to his attention the fact that the president of COSLA, Charles Gray, is one of the more independent-minded members of the Labour party in Scotland and has a known track record of saying things in an extremely independent way. When someone such as Charles Gray makes comments on those matters, his arguments deserve to be taken on their merits. I should like some indication, at least, that the Minister is prepared to do that and not allow Charles Gray to fall victim to the "Stalinist tendency" that has been identified in the ranks of certain political parties in Scotland.

Secondly, and lastly, I should like the Minister to show some appreciation of the fact that the debate is not just another ritual debate about the revenue support grant orders. As the hon. Member for Provan reminded us, the debate affects finance, and real services which affect real people. I hope that if the House gives leave to the Minister to sum up the proceedings this evening, there will be some sign in his closing speech—which I do not think was there in much of his opening speech—that he realises the importance to people of the services that we are debating this evening.

9.26 pm

Mr. John McAllion (Dundee, East)

The debate has been characterised by some excellent contributions by Opposition Members and by total ignorance about local government displayed by Conservative Members.

I begin by paying tribute to my hon. Friend the Member for Glasgow, Provan (Mr. Wray), who made a tremendously passionate and clear speech about the implications of the orders for ordinary people outside the House. The hon. Member for Banff and Buchan (Mr. Salmond) was equally right when he drew attention to the ritualistic nature of the way in which we debate rate support grant orders and housing support grant orders. They become just another item on the agenda of the business of the House and we sometimes forget how much they matter to people and how measures that we can joke about and make cheap debating points about across the Chamber affect people's lives and mean more suffering and more deprivation for everyone. It is important that we try to remember that and keep our remarks to the point of the debate.

This is a very disappointing settlement for local authorities in Scotland, and it is not only hon. Members who have long experience of local government who are saying that but local government itself. Of course the Minister would argue back that local government "would say that, wouldn't it", saying that it has an interest to argue that it is a poor settlement. As the hon. Member for Banff and Buchan said, the objective analysis of the settlement that is provided by the House of Commons Library suggests that the settlement is worse than does the analysis by COSLA. We should keep that in mind when we consider the figures.

The hon. Member for Kincardine and Deeside (Mr. Kynoch) drew attention to the fact that most local government expenditure is tied up with employing people; the wages bill accounts for most of it. Ingeniously, he argued that we can cut that out of the rate support grant settlement—freeze employment, not think about employing any more people and so on. He said that the settlement is generous if one considers only the 40 per cent. expenditure that remains after one thinks about employment.

I draw to the attention of the hon. Member for Kincardine and Deeside the fact that the local government services that are provided across Scotland are people-intensive. They have to be people-intensive. They are about employing people. Government statistics show that there are more pensioners in Scotland, and more people aged over 85, than there ever have been before. That fact in itself means that local government needs to employ more people to look after the elderly. There will have to be more home helps and social workers—residential and domiciliary—and more warden support and meals on wheels. The provision of such services means people being employed to deliver them—there is no way around that. One cannot exclude people costs.

Mr. Kynoch

Does the hon. Gentleman accept that the figure that I cited for the revenue support grant increase excluded community care and that the increase in revenue support grant could be applied to the non-wages element if the wages element were frozen?

Mr. McAllion

The hon. Gentleman says that the figure that he cited excluded care in the community; but it is not only care in the community that is people intensive; all the services provided by local government are people intensive. For example, everyone admits that crime is a massive problem in Scotland, especially in the urban areas. There are more offenders than ever before. Local councils provide offender services and need social workers to look after offenders. Victim Support is in its infancy in Scotland and if it is to grow and if victims are to get the proper care and attention that they require, that will have to be provided by local authorities and regional councils and the social workers employed by them.

It is disingenuous of the hon. Member for Kincardine and Deeside to argue that we can discuss local government services without talking about local government employees. Local government services are all about local government employees. If one reduces the number of local government employees, one reduces local government services to people who need them. If Conservative Members do not understand that simple fact, they do not deserve to be representing their constituencies.

Mr. Bill Walker

I happen to agree with the hon. Gentleman that local government services are largely about people doing jobs on behalf of the community. I also agree with what he said about issues such as law and order—we all think that more money should probably be spent. However, a large percentage of the cost involved in the provision of services is taken up by human factors such as wages. There is nothing odd about that. Retail distributors know that it is not uncommon for 60 per cent. of their costs to be accounted for by wages, but one can increase efficiency and make savings by changing the way in which services are delivered. The hon. Gentleman must accept that that is as true in local government as it is in distribution.

Dr. Norman A. Godman (Greenock and Port Glasgow)

In other words, reduce employment.

Mr. McAllion

My hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) has answered the hon. Gentleman's point. The retail industry is all about low wages, reducing the number of employees and cutting corners. One cannot cut corners when providing services for vulnerable people. Cutting corners in the provision of such services means that the vulnerable suffer and end up being sacrificed for the sake of levying a council tax lower than might otherwise have been the case had proper services been provided by the local authority. That is what Conservative Members favour.

Mr. Ian Davidson (Glasgow, Govan)

Does my hon. Friend agree that, when the hon. Member for Tayside, North (Mr. Walker) refers to the need for efficiency and compares public services to retail, he is making a fundamental mistake? One cannot compare a home help with someone working in retail, in a shop. If efficiency is to be improved, presumably a home help will have to look after more old people. A better service would result in home helps looking after fewer people more intensively, which is the very opposite of private sector efficiency.

Mr. McAllion

My hon. Friend speaks from direct and recent experience of working on a major regional council. He knows what it means to deliver services to people in a large part of Scotland. If some Conservative Members had come from a local government background, we might not be debating such orders.

Mr. Bill Walker

rose—

Mr. McAllion

I cannot give way again. I must make progress. The hon. Gentleman has been here since 1979 and it is many years since he worked in local government, if he ever did.

I believe that a copy of the brief from the Convention of Scottish Local Authorities has been given to every hon. Member. The first sentence states: The Convention re-affirms its earlier view that on average Council Tax bills are likely to increase by about 10 per cent. or £1.20 per week next year as a result of the settlement proposals". COSLA is not saying that the council tax will increase because inflation is going up, because local authority wage settlements are going up or because local authority services are being increased; it is talking about council taxes going up by £1.20 as a direct result of the revenue support grant that the Government have made available to local authorities in Scotland.

That example is not an isolated one. As many hon. Members have pointed out again and again, it is only two weeks since we debated an order on the housing support grant which will inevitably increase rents across Scotland. We have also recently heard about the increase in NHS prescription charges. We have heard about the massive increases in income tax that the Government are to introduce in April. We all know about VAT on fuel. If we consider all those things together, a pattern begins to emerge. The Chancellor of the Exchequer has set himself the target of eliminating the public sector borrowing requirement, which currently stands at £45 billion, by 1997–98. He will do that by cutting public services in every way that he can think of. One way is to cut back on the funding for local government, as the order shows.

COSLA makes that point very clearly. It says that the level of grant-related expenditure for next year is well below the figures that it has identified as being necessary to maintain the level of services available in local authorities at the moment. If COSLA says that the amount is not enough even to maintain services, against a background of increasing unemployment in Scotland—that is the official level of unemployment and not the unofficial level, which is much higher—and against a background of massively increasing poverty in Scotland, what does that imply for ordinary people whom we are meant to represent here?

Tayside regional council social work department recently sent me a report. It considered the figures from the 1991 census. It went through a number of the changes in my part of Scotland over the past 10 years. I suspect that they are fairly typical of what is happening in the rest of Scotland. The department pointed out that there has been a massive increase in the percentage of single-parent households. As there are more single-parent households, there is a need for greater child care facilities to be provided through local authorities.

There is also a need for more nursery provision through local authorities and there is a need for more bridging schemes to allow single parents to make the jump from relying on benefit to going back into employment. There is a need for employment schemes to be run by local authorities. There is a massive need for local authorities to increase their expenditure at a time when the Government are cutting the RSG that is available to local authorities in Scotland.

The department points out that, over the past 10 years, there has been a large increase in the percentage of people living in the area who are recorded as being permanently sick and who are on invalidity benefit. The Secretary of State for Social Security has already told us that he intends to eliminate about 700,000 people who are currently in receipt of invalidity benefit. When they come off invalidity benefit, they will go back on income support. They will then need social work services which are provided through the local authority. When they look to the local authority to provide those services, they will find that the Government have cut the grant and that the local authorities are, therefore, unable to help them. The situation will be even worse than it is at the moment. So it goes on.

The percentage of low-income families across the city of Dundee has not changed since 1981. On many occasions, I have heard the hon. Member for Dumfries (Sir H. Monro), the Under-Secretary, shout about the British economic miracle that took place in the 1980s. Where was the British economic miracle in Dundee, in Glasgow, in Edinburgh or in Aberdeen? The percentage of people living on low incomes is the same as it was 10 years ago. The economic miracle bypassed them; they have never had access to it. Those people need strong local authorities which are able to provide them with the services that they need.

One point that has not been brought out concerns the aggregate external finance figures which are provided in the order. They show, for example, that Tayside region will get a percentage increase next year of 2.2 per cent. As has been pointed out time and time again, that does not make an allowance for care in the community. Once we make an allowance for that, we are talking about a very small increase of less than 1 per cent. or even about a cut, yet councils will face increased demands for their services. There will be a cut in the aggregate external finance available to Dundee district council.

The grant-aided expenditure figures within the aggregate external finance figures show that Tayside regional council will have an increase of 2.56 per cent. The Secretary of State will use that figure for capping purposes. The right hon. Gentleman is actually encouraging Tayside regional council to increase its expenditure above the funding that he is making available to it. That argument applies even more to Dundee district council; its grant-aided figure allows for an increase of up to 5 per cent. but funding is not provided to cover it.

In effect, the Minister is saying that he is withdrawing central Government support for local government services. At the same time, he is allowing local councils to increase their expenditure, in the hope that he will make local council tax payers pay for that before the Secretary of State steps in to cap the councils. The Secretary of State is desperate to cut public expenditure and he is doing so by back-door methods. He hopes that, at the end of the day, local authorities will be forced to increase their council tax and that they will be blamed for that, and that he and the Government will not be blamed for cutting support for local authorities. That is completely despicable.

It is assumed that any pay awards will be met from efficiency savings. We have heard much nonsense about what that means. Teachers and local government workers have made pay demands which are in excess of 10 per cent. If even 50 per cent. of their demands are met, there will be tremendous cuts in local government services.

We have heard much about efficiency savings. The hon. Member for Tayside, North (Mr. Walker) said that one of the greatest efficiency savings that could be made arises from school closures. Do Conservative Members think that they should advocate school closures when people in Scotland are calling out for child care facilities and increased nursery provision? The only matter that we are discussing is how to shut schools and pay off teachers to make savings for local authorities. It does not make sense.

The hon. Member for Tayside, North referred to schools falling below what he called the economic level. I remember that argument being used in respect of the mines back in 1984. Uneconomic pits had to be shut down. Why do not Conservative Members, in particular the hon. Member for Dumfries and the right hon. Member for Galloway and Upper Nithsdale (Mr. Lang), use that argument about farmers? Why do they not say that uneconomic farms have to close down? Why do they pay surpluses to farmers? Why do they subsidise them to set aside fields that they do not even farm? They actually give them public money to do that. We never hear Conservative arguments about economic farms because farmers generally vote Tory. That is why the Government are prepared to pay massive subsidies to farmers.

When it comes to schools and children's futures, we hear Conservative Members talk nonsense about uneconomic schools and having to close them down and leaving kids on the scrap heap. It is no wonder people turn to drugs or to crime, bearing in mind the way that they are treated by the Government. If the debate proves anything, it proves what the Scottish people have always said—that is, that the Conservative party is not fit to be in government. The sooner the people in the south of England realise that, the better it will be for the whole United Kingdom.

9.42 pm

Mr. Eric Clarke (Midlothian)

I shall be very brief because some of my hon. Friends also want to speak.

I should like to add to what my hon. Friend the Member for Edinburgh, Leith (Mr. Chisholm) said about the Lothian region. The people whom I represent in Midlothian district council pay regional and district council rates. Midlothian district council has told me that its grant-aided expenditure for 1994 means a reduction of 0.46 per cent. When we boil that down to money, we see that the district council will lose £439,000 out of a budget of £10.287 million.

The gearing effect means that the council tax will rise by 20 per cent. We will have that against a backcloth of unemployment, a wage freeze, lower-paid workers, and even VAT on fuel. The Secretary of State has told us the expenditure that it is appropriate for authorities to spend. Where will economies be made? They will be made among people who can least afford them.

The hon. Member for Eastwood (Mr. Stewart) is listening not to me but to one of his colleagues who would say that what I am saying is a load of nonsense anyway. It is not nonsense. I am making a plea on behalf of not only my constituents but many others in a similar plight who pay rates to district councils.

I was a county councillor and a regional councillor for 16 years and I know what it means when the Government make cuts. I fought against both Labour and Tory Government cuts in the past. I became the ex-chairman of the Labour group because I fought against the Callaghan Government on cuts. I was not elected to local government for cuts; I was elected to give services to the people whom I represented. That is what we are trying to do here. We are trying to tell the Government that public expenditure cuts are bad. Tory Members, the Minister and the Government seem to think that cuts in public expenditure are great. That is the way with rates and everything; the stock exchange will hit the ceiling.

Many companies are waiting for the day when the Government start to spend money in local government. I see that as a way of getting out of the recession and giving people what they deserve. There are many other things that the Government are delaying for which we will have to pay a high price in the future. I am talking about the renewal of sewers, housing, hospitals and many other things that come under the so-called umbrella of capital expenditure.

The people of Midlothian are no different from anyone else. They have had cuts. All their industries have been decimated—the coal industry, the carpet industry and the paper industry before that. Many industries, especially electronics, were brought in supposedly to save the locality that I represent. However, we find that they are moving out.

All I can see is an area that needs help and a council that cares. By the way, we may be hoist by our own petard because the council spends money on making the place more beneficial to investors and others in the area. There is hidden poverty behind the facade of so-called prosperity. When we look at the unemployment figures and so on, we see that there is poverty in the community. I have made many appeals to the Secretary of State on behalf of our young people. They cannot get jobs in the collieries or elsewhere. This direct cut in district council expenditure is one of many cuts that these people cannot afford.

I am making a plea to the Secretary of State and I want an answer: how can the Government justify this cut? What have the people of Midlothian or Scotland done to deserve it? Is it the result of the Government's incompetence? As I see it, it goes back to black Wednesday. We are all paying the price for the incompetence of the Chancellor of the Exchequer and the Government.

9.47 pm

Mr. Thomas Graham (Renfrew, West and Inverclyde)

Once again, the Secretary of State and the Minister have got the situation wrong with regard to Scotland. They have come forward with proposals that will mean further cuts in the quality of life for the people whom I represent.

Undoubtedly, some of the profound statements made by my hon. Friend the Member for Midlothian (Mr. Clarke) went into the deaf ears of the Minister who will blunder on tonight and make the usual decision—cuts, cuts and cuts. He will not listen to my hon. Friend's plea for social services, home help and services for the mentally handicapped. We have already heard pleas about dealing with crime in Scotland. Once again, the Minister will do nothing to help to reduce crime in Scotland, which will continue to rise. We will continue to have the problem of drug barons having more money than the police to furnish their evil trade in drugs.

Earlier, I made an intervention on my hon. Friend the Member for Glasgow, Provan (Mr. Wray) about nursery provision, for which there is a tremendous demand in my area. Unfortunately, local government does not have the wherewithal because of the Government's continued savage denial of local finance. Local government cannot get young folk into pre-five education quick enough because there is not enough money.

I hope that the Minister is listening to the point that I am going to raise. Scotland has one of the longest coastlines in Europe; we have literally thousands of miles of coastline. Scotland is one of the most important countries for tourism in Europe, and certainly 'we contribute a considerable amount to the coffers of Great Britain. Tourists come not just to visit the City of London, Manchester or Birmingham, but to visit Scotland. The revenue that that provides to this country is enormous. If we spent some time, consideration and money in that area, that revenue could increase.

I remember not long ago the town of Salou in Spain was castigated in the papers, and rightly so, for sewage problems which created an unhealthy situation for tourists. Did that fall on deaf ears? No. The people of Spain and Salou realised the consequences of that and proceeded not to bury the sewage or hide it out of sight, but to do something about it. They spent £250 million to solve the problem and to make sure that Salou became an admirable, decent and healthy place to go and have a holiday.

The Government do not recognise the role that local government has to play to ensure that the environment in Scotland is brought up to a decent standard. That would ensure that the American, Canadian, Australian and Japanese tourists all come and spend their money. But what do the Government do?

I often fly to London, and the situation has got that bad that one can see the devastation from up in an airplane. One can see quarries unfilled, and dirty and dank places. When one drives through Britain, what does one see? Rubbish is dumped by the side of the road. There is household and domestic rubbish and, worse, there is business rubbish from businesses which cannot afford to pay the going rate. They are tipping on the fly at night all around the country, and especially in Scotland.

Renfrewshire is becoming one huge tip, because the Government are not providing enough money to allow local companies to develop and dump their rubbish legally. I also use the train, and when I go through Britain and look out of the window it is an appalling sight. There is rubbish strewn about everywhere, and falling buildings and devastation. The Government do nothing.

At one time, folk used to sing songs about the River Clyde. "What a wonderful place, the name of it fills me with pride". If you were going up the Clyde in your wee boat tonight, Madam Speaker, you would need a big brush to clean away the stuff at the side of it after you docked it. I can assure you that our beautiful beaches have been turned into rubbish dumps.

The Minister does not need to believe me. I am sure that he will believe one of the great newspapers of Scotland., the Evening Times, which mentioned that about 40,000 pieces of rubbish had been dug up from a stretch of about one mile on the Ayrshire coast. That is not very far from where the Minister and I live. We do not just fly over rubbish or drive through it—we also sail thorough it.

The Government have not taken on board the serious point that if we wish tourists to come and spend money in Scotland, we must ensure that local government gets sufficient money to clean up our beaches. We must ensure that the water supply meets the standards of the European directive, and we must ensure that our sewerage system is the best in the world, and not the worst.

I say to the Minister that, once again, the people of Scotland are getting a shabby deal from the Government. Once again, the Government are savagely reducing the quality of life. Once again, they are denying our people the ability to make a decent living, by failing to ensure that there is a solid and decent tourist industry. I shall finish on this note: why does the Minister not do the right thing and resign?

9.54 pm

Mr. Tam Dalyell (Linlithgow)

Madam Speaker, time-wise we need to press on, but I should like to say that I am appalled by the consequences of the unpicking of the Lothian social work department. My hon. Friends the Members for Edinburgh, Leith (Mr. Chisholm), for Carrick, Cumnock and Doon Valley (Mr. Foulkes), who was a councillor in Edinburgh, and other colleagues have outlined general worries. In view of the time, I shall simply ask six precise questions following long and detailed conversations with John Chant, who is the longest serving director of social work in Britain. He has rightly been awarded a CBE for his work.

First, in removing the statutory requirement to establish a social work committee and appoint a director of social work, how does the Minister envisage that the new councils will carry out their statutory and other responsibilities to provide for the social welfare of their community and ensure accountability for the development of policy and the delivery of service? That question has not yet been answered.

Secondly, is the Minister confident that all of the new councils will be of a size that will enable them to provide the full range of services currently offered by mainland regional social work departments? I pay tribute to what has been done in Strathclyde, Lothian, Tayside and elsewhere in the advancement of social work in recent years. It is a crying shame—I shall not use stronger language—that all the work should be unpicked when Members of Parliament know at first hand from our day-to-day work how it benefits our constituents.

Thirdly, what requirements does the Minister intend to place on the new councils to ensure the preparation of community care plans and plans for the development of criminal justice and child care services? What steps does he intend to take to ensure that such plans are drawn up by people with the relevant qualifications and experience? It is far from clear that the smaller new councils will have such people, particularly specialists.

Fourthly, how does the Minister intend to ensure that the new councils put in place proper systems of professional accountability, develop social care policies, provide appropriate services and deliver those services in an accountable manner? How is that to be done? We have not been told.

Fifthly, in the absence of a social work committee or a director of social work, what arrangements does the Minister propose to make to ensure that sufficient staff are trained and deployed to meet the statutory requirements of the mental health and child care legislation? There has been no indication of how that will be done. My hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) knows a great deal about such matters. Unfortunately, he serves on the Standing Committee which is considering the Criminal Justice Bill, not the Committee considering the Local Government etc. (Scotland) Bill.

Dr. Godman

Does my hon. Friend accept that the burdens that are placed on our social work departments will be exacerbated by many of the clauses in the Criminal Justice Bill? Those additional burdens have been ignored by the odd-job lot on the Conservative Benches.

Mr. Dalyell

As the member of the Scottish Labour group on the Criminal Justice Bill, my hon. Friend is in a position to know. It is a serious matter.

Sixthly, local authorities are now substantial purchasers of social care services. How do the Government intend to ensure that local authorities give first consideration to the needs of the person to be served and the quality of care provided? What steps have been proposed to avoid service provision being led solely on the basis of cost? Do the Government intend to require local authorities to consider and evaluate any proposed contract for the provision of social care services by a suitably qualified or experienced person?

All my colleagues on the Opposition Benches could go on and on about the subject. Those questions have to be answered very soon and not at the fag end of the Committee stage of any Bill.

10 pm

Mr. Henry McLeish (Fife, Central)

The debate has once again highlighted the divide in the House on local government issues. One the one hand, the Government and their supporters are unwilling, on any occasion, to praise the tremendous work done in Scotland by the employees who provide some of the best services that one can find anywhere in Europe. We have heard the usual snide comments about inefficiency and lack of value for money. That is not the local government scene that Opposition Members know. We know that local government provides excellent services in Scotland and it would at least show a little humility if the Government sometimes allowed their consciences to get the better of them and if they praised the excellent work that is done.

On the other hand, Opposition Members praise the work going on. We have to sit through debates on local government in Committee and in the House, but we hear precious little appreciation of the efficiency, effectiveness and economy demonstrated by Scottish local authorities, in the face of the tremendous difficulties that have been heaped on them year after year by the Conservative Administration.

The contribution by my hon. Friend the Member for Glasgow, Provan (Mr. Wray) was one of the highlights of the debate. He made a passionate speech and spoke at first hand about the real issues facing Scotland and the real context within which the revenue support grant settlement should be viewed. He mentioned poverty, unemployment and many of the other problems that local authorities are trying to tackle. Sadly, they are doing so in very difficult circumstances because of the Government's policies, attitudes and prejudices.

Such debates are always characterised by technicalities. The Government like to hide behind a smokescreen of revenue support grant orders. We hear from Government Ministers that every order is better than those of the previous year. We hear that the order will allow councils to cut council taxes and to expand services. If any of that were true, there might be something in Government policies for Opposition Members to praise, but the local government settlement does none of those things. It is another smokescreen to hide continuing cuts at the very heart of local government in Scotland.

As if the local authority settlement were not bad enough, the existing problems of cash-starved services endure. We can see that from the problems with crime, care in the community, housing and—at a time of rising unemployment—economic development.

One other consideration will loom large for the Government and for Ministers during the next two or three years—reorganisation. How eloquently my hon. Friend the Member for Linlithgow (Mr. Dalyell) posed his questions about this crazy reorganisation and the bill, which will have to be measured in higher council taxes for the Scots or in massive cuts in services and dramatic job losses.

That is the price that we are paying and will continue to pay for the Government's incompetence and mismanagement of the Scottish economy and—what is more important—for a Government who, after 15 years, have refused to face up to the fact that we have genuine and endemic structural problems in Scotland, which are not being tackled.

This evening, it is important for us to move beyond the reckless and irresponsible behaviour of the motley crew on the Government Benches and to talk about the settlement. We have heard that, in cash terms, it is supposed to be yet another that captures the plaudits, as far as the Government are concerned, but nothing could be further from the truth.

Over the next three years, we will witness a cut of a third of £1 billion in real terms from local authority budgets. How can that be squared with an excellent settlement on revenue support? It simply cannot, because significant real terms cuts will be made. How do the Government measure up to that? Is the Minister willing to explain away that cut or is he willing to carry on with the smokescreen in an attempt to deceive Scottish public opinion into thinking that we are making significant progress?

Another issue that we must consider is the naive simplicity demonstrated, once again, by Conservative Back Benchers. We have heard, of course, of the links between the local authority settlement and the possible cuts in or freezing of council tax levels. The Government do not understand that those levels are based on a number of factors, not just the revenue support grant settlement. Those factors include expenditure levels, the possibility of capping and non-statutory expenditure in which many local authorities are involved. My own regional council, for example, provides one of the best concessionary transport systems anywhere in Britain. For its trouble, however, it does not get a penny from this mean Government.

The Prime Minister is always talking about expanding nursery provision, but "Where's the beef, Prime Minister?" In Scotland, some of the excellent provision does not get any help from the Government. We have heard enough from the Government about how they help out local authority services, but in key services non-statutory spending is going ahead because Labour councils care about and appreciate real need, unlike the Government.

The Government's settlement falls well short of what would be needed, in real terms, to keep ahead of inflation. At a time of massive problems, it also falls well short of the expectations of Scots. It falls well below the expectations of local authority leaders. Senior officials in local government, of course, know at first hand the problems that they face.

We must also consider services. The settlement will do nothing to deal with the 1 million crimes that are committed in Scotland every year. We have a crime epidemic under the so-called law and order party. The settlement will not provide for an extra policeman or provide an extra opportunity for a young person involved in crime to be caught. Once again, we see the nonsense of a settlement that does not match expectations in an area where the Government are trying to take credit.

As my hon. Friend the Member for Provan said, the settlement will not help to tackle the endemic problems of poverty. Some 900,000 Scots, or one in six, live in families where income support is the only source of income. How do the orders square with the reality of misery for hundreds of thousands of people in Scotland and nearly 250,000 children under the age of 16? They simply do not. The Government are trying to deceive all who listen to their hollow promises about real improvements in revenue support grant.

Unemployment has been mentioned by my hon. Friends. The Government have seen unemployment rise in Scotland by nearly 4,000 a week in the past month. Again, they are constraining our local authorities from tackling economic development in the way that they want. We could put the unemployed back to work. Our local authorities could help. We could give the young people the skills that they need, but we need the tools to do that. That means hard cash, not vacuous comments from a Government who simply do not care, but who try to deceive people into thinking that they do.

According to the revenue support grant settlement, £5 million will go towards local government costs of reorganisation. Even by the Government's estimates, however, those costs will be £200 million. According to COSLA's expectations, they will be nearly £720 million. Once again, however, we find that the Government will not provide any substantial help towards the massive costs involved.

The settlement is a bad one by any stretch of the imagination. It is a settlment that will steal a third of £1 billion from local authorities and will not go even towards providing the costs, of up to £720 million, of the crazy reorganisation. The message to Government is clear and simple: you can fool some of the people all of the time, but Scots believe that it is time for a rethink about the need for serious money to tackle the serious problem that Scotland is enduring.

10.9 pm

Mr. Stewart

May I make three points in winding up the debate? First, the hon. Member for Fife, Central (Mr. McLeish) criticised a speech that I did not make rather than the one that I made. None of my hon. Friends has criticised the hard work done by many people in local government. whatever their political party, and officials throughout Scotland.

Secondly, I understand that the Opposition intend to vote against the orders. The hon. Member for Hamilton (Mr. Robertson) confirmed that. As we know from the press, he is a man of great parliamentary guile and, as he constantly boasts, lots of Conservative Members will doubtless vote with him in the Lobby. I point out for the record that, if he succeeds in the vote on the first order, he will deprive local authorities in Scotland of £31.8 million to which they are entitled. If he succeeds in the vote on the second order, he will deprive local authorities in Scotland of £100 million a week from the beginning of April. But if that is the Labour party's policy, so be it.

Thirdly, I have wound up these debates when the right hon. Bruce Millan and the hon. Members for Glasgow, Garscadden (Mr. Dewar) and for Monklands, West (Mr. Clarke) have led for the Opposition. All three right hon. and hon. Gentlemen had one thing in common: they gave every impression that they had read the orders and were aware of the details and figures concerned. The hon. Member for Hamilton hardly referred to the order.

Mr. Salmond

Will the Minister give way?

Mr. Stewart

No, I must get on for a moment.

My hon. Friends the Members for Tayside, North (Mr. Walker), for Kincardine and Deeside (Mr. Kynoch), and for Ayr (Mr. Gallie) rightly supported the orders.

Before I deal with some of the general points that have been raised, may I respond to some of the detailed points? The hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) made a fair point about the usefulness of planning for current local authority expenditure. I accept that point in principle, which is why last year, for the first time, my right hon. Friend the Secretary of State announced not only Government support expenditure and aggregate Exchequer finance figures for 1994–95, but his plans for the forward two years of the 1993 public expenditure survey—1995–96 and 1996–97. The hon. Gentleman will accept the constraints, but in principle he made a fair and proper point.

The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) argued that the client group methodology was biased against rural authorities. I have heard urban authorities argue that the methodology is biased in favour of rural authorities, but representations from his authority and others will no doubt continue.

The hon. Member for Aberdeen, North (Mr. Hughes) asked me a specific question about the differences in the distribution between the city of Aberdeen and Kincardine and Deeside. Those relate to the two authorities' different loan and leasing charges this year. As it is fairly late in the evening, may I write to the hon. Gentleman explaining that point in detail?

Throughout the debate, Opposition Members have argued that local government in Scotland was badly treated by this Conservative Government compared to the last Labour Government. I remind them that, on the 1977–78 settlement, the president of COSLA said: To have been told by the Secretary of State that the percentage grant was being savagely cut by 4 per cent. was something none of us expected. I refer Opposition Members, including the hon. Member for Edinburgh, Leith (Mr. Chisholm), to an excellent recent article by David Begg, chairman of the finance committee of Lothian regional council.

Dr. Godman

Will the Minister give way?

Mr. Stewart

Mr. Begg is much respected by Opposition Members, and he has said that, according to his estimates, local government employment has increased in Scotland by 3.9 per cent., in full-time equivalent jobs. He went on, in the Local Government Chronicle of 9 February, to say that his figures destroy the myth that 14 years of Conservative Government have decimated services and destroyed jobs. I commend the article to Opposition Members.

Mr. Salmond

On a point of order, Madam Speaker. Am I right in thinking that the debate on the orders can continue until 11.30 pm? The Minister seems painfully unaware of that, given his refusal to give way to hon. Members who have sat through the entire debate. Is there some agreement to which neither you nor I is a party about when we must proceed to vote on these orders?

Madam Speaker

The hon. Gentleman is correct: I am party to no agreement. The debate can go on until 11.30 pm

Mr. Stewart

Thank you, Madam Speaker. I was about to give way to the hon. Member for Greenock and Port Glasgow (Dr. Godman)—I just wanted to get my point on the record.

Dr. Godman

Does the Minister intend to write to my hon. Friend the Member for Linlithgow (Mr. Dalyell) dealing with each of his six important questions about the operation of our social work departments? If so, will the hon. Gentleman be good enough to put a copy of his letter in the Library? They were criticial questions dealing with the need to continue the efficient operation of our social work departments.

Mr. Stewart

Of course, the hon. Gentleman's questions were in order, but he will recognise that they were not specifically related to the 1994–95 settlement. They were, however, related to the broader issues covered by the Local Government etc. (Scotland) Bill, and if the hon. Member for Linlithgow (Mr. Dalyell) raises those questions in Committee, I shall be happy to deal with them. If not, I shall of course respond to him in writing and put a copy of the letter in the Library.

Mr. Salmond

The Minister heard me refer to a Library analysis which seems to demonstrate a continuing squeeze on Scottish local government over the next three years. I know that the figures have been supplied to the hon. Gentleman by his new parliamentary private secretary—the hon. Member for Tayside, North (Mr. Walker). Does he broadly accept the Library's analysis?

Mr. Stewart

I believe that this is a realistic but tight settlement. Neither I nor my right hon. Friend the Secretary of State has ever said anything different. I would point out, though, that per capita expenditure in Scotland is 34 per cent. higher than it is in England and 26 per cent. higher than it is in Wales. I hope, therefore, that the hon. Gentleman will not maintain that Scotland is being hard done by in this settlement. The total level of support for Scottish local authorities, compared with support for English and Welsh authorities, is very high.

Mr. Salmond

On a point of order, Madam Speaker. There is a great deal of noise in the Chamber, and I am sure that the Minister missed my question about the Library figures—at any rate, he avoided answering it.

Madam Speaker

A number of conversations are going on. I do not want to stop them, but I should be obliged if they were not quite so noisy.

Mr. Stewart

I believe that, although the settlement is tight—nobody denies that—it is realistic in terms of the increases in local authority expenditure that have been made in Scotland in recent years against a background of the need for public expenditure constraint. I am grateful to my hon. Friends for warmly welcoming the settlement as realistic and reasonable. I commend the orders to the House.

Question put:—

The House divided: Ayes 305, Noes 266.

Division No. 148]	[10.19 pm
AYES
Ainsworth, Peter (East Surrey)	Cope, Rt Hon Sir John
Aitken, Jonathan	Couchman, James
Alexander, Richard	Cran, James
Alison, Rt Hon Michael (Selby)	Currie, Mrs Edwina (S D'by'ire)
Amess, David	Curry, David (Skipton & Ripon)
Arbuthnot, James	Davies, Quentin (Stamford)
Arnold, Jacques (Gravesham)	Davis, David (Boothferry)
Ashby, David	Day, Stephen
Aspinwall, Jack	Deva, Nirj Joseph
Atkins, Robert	Devlin, Tim
Atkinson, David (Bour'mouth E)	Dickens, Geoffrey
Atkinson, Peter (Hexham)	Dicks, Terry
Baker, Nicholas (Dorset North)	Dorrell, Stephen
Baldry, Tony	Douglas-Hamilton, Lord James
Banks, Matthew (Southport)	Dover, Den
Banks, Robert (Harrogate)	Duncan, Alan
Bates, Michael	Duncan-Smith, Iain
Batiste, Spencer	Dunn, Bob
Bendall, Vivian	Durant, Sir Anthony
Beresford, Sir Paul	Dykes, Hugh
Biffen, Rt Hon John	Eggar, Tim
Blackburn, Dr John G.	Elletson, Harold
Body, Sir Richard	Emery, Rt Hon Sir Peter
Bonsor, Sir Nicholas	Evans, David (Welwyn Hatfield)
Booth, Hartley	Evans, Jonathan (Brecon)
Boswell, Tim	Evans, Nigel (Ribble Valley)
Bottomley, Peter (Eltham)	Evans, Roger (Monmouth)
Bottomley, Rt Hon Virginia	Evennett, David
Bowden, Andrew	Faber, David
Bowis, John	Fabricant, Michael
Boyson, Rt Hon Sir Rhodes	Fairbairn, Sir Nicholas
Brandreth, Gyles	Fenner, Dame Peggy
Brazier, Julian	Field, Barry (Isle of Wight)
Bright, Graham	Fishburn, Dudley
Brooke, Rt Hon Peter	Forman, Nigel
Brown, M. (Brigg & Cl'thorpes)	Forth, Eric
Browning, Mrs. Angela	Fowler, Rt Hon Sir Norman
Bruce, Ian (S Dorset)	Fox, Dr Liam (Woodspring)
Budgen, Nicholas	Fox, Sir Marcus (Shipley)
Burns, Simon	Freeman, Rt Hon Roger
Burt, Alistair	French, Douglas
Butcher, John	Fry, Sir Peter
Butler, Peter	Gale, Roger
Butterfill, John	Gallie, Phil
Carlisle, John (Luton North)	Gardiner, Sir George
Carlisle, Kenneth (Lincoln)	Garel-Jones, Rt Hon Tristan
Carrington, Matthew	Garnier, Edward
Carttiss, Michael	Gill, Christopher
Cash, William	Gillan, Cheryl
Channon, Rt Hon Paul	Goodlad, Rt Hon Alastair
Clappison, James	Goodson-Wickes, Dr Charles
Clark, Dr Michael (Rochford)	Gorman, Mrs Teresa
Clarke, Rt Hon Kenneth (Ruclif)	Gorst, John
Clifton-Brown, Geoffrey	Grant, Sir A. (Cambs SW)
Coe, Sebastian	Greenway, Harry (Ealing N)
Colvin, Michael	Greenway, John (Ryedale)
Congdon, David	Griffiths, Peter (Portsmouth, N)
Conway, Derek	Grylls, Sir Michael
Coombs, Anthony (Wyre For'st)	Hague, William
Coombs, Simon (Swindon)	Hamilton, Rt Hon Sir Archie

Hamilton, Neil (Tatton)	Monro, Sir Hector
Hampson, Dr Keith	Montgomery, Sir Fergus
Hanley, Jeremy	Moss, Malcolm
Hannam, Sir John	Needham, Richard
Hargreaves, Andrew	Nelson, Anthony
Harris, David	Neubert, Sir Michael
Haselhurst, Alan	Newton, Rt Hon Tony
Hawkins, Nick	Nicholls, Patrick
Hawksley, Warren	Nicholson, David (Taunton)
Hayes, Jerry	Nicholson, Emma (Devon West)
Heald, Oliver	Norris, Steve
Hendry, Charles	Onslow, Rt Hon Sir Cranley
Heseltine, Rt Hon Michael	Oppenheim, Phillip
Hicks, Robert	Ottaway, Richard
Higgins, Rt Hon Sir Terence L.	Page, Richard
Hill, James (Southampton Test)	Paice, James
Hogg, Rt Hon Douglas (G'tham)	Patnick, Irvine
Horam, John	Patten, Rt Hon John
Hordern, Rt Hon Sir Peter	Pattie, Rt Hon Sir Geoffrey
Howard, Rt Hon Michael	Pawsey, James
Howarth, Alan (Strat'rd-on-A)	Peacock, Mrs Elizabeth
Howell, Rt Hon David (G'dford)	Pickles, Eric
Howell, Sir Ralph (N Norfolk)	Porter, Barry (Wirral S)
Hughes Robert G. (Harrow W)	Porter, David (Waveney)
Hunt, Rt Hon David (Wirral W)	Rathbone, Tim
Hunt, Sir John (Ravensbourne)	Redwood, Rt Hon John
Hunter, Andrew	Renton, Rt Hon Tim
Hurd, Rt Hon Douglas	Richards, Rod
Jackson, Robert (Wantage)	Riddick, Graham
Jenkin, Bernard	Rifkind, Rt Hon. Malcolm
Jessel, Toby	Robathan, Andrew
Johnson Smith, Sir Geoffrey	Roberts, Rt Hon Sir Wyn
Jones, Gwilym (Cardiff N)	Robertson, Raymond (Ab'd'n S)
Jones, Robert B. (W Hertfdshr)	Robinson, Mark (Somerton)
Jopling, Rt Hon Michael	Roe, Mrs Marion (Broxbourne)
Kellett-Bowman, Dame Elaine	Rowe, Andrew (Mid Kent)
Key, Robert	Rumbold, Rt Hon Dame Angela
Kilfedder, Sir James	Ryder, Rt Hon Richard
King, Rt Hon Tom	Sackville, Tom
Knapman, Roger	Scott, Rt Hon Nicholas
Knight, Mrs Angela (Erewash)	Shaw, David (Dover)
Knight, Greg (Derby N)	Shaw, Sir Giles (Pudsey)
Knight, Dame Jill (Bir'm E'st'n)	Shephard, Rt Hon Gillian
Knox, Sir David	Shepherd, Colin (Hereford)
Kynoch, George (Kincardine)	Shepherd, Richard (Aldridge)
Lait, Mrs Jacqui	Shersby, Michael
Lang, Rt Hon Ian	Sims, Roger
Lawrence, Sir Ivan	Skeet, Sir Trevor
Legg, Barry	Smith, Sir Dudley (Warwick)
Leigh, Edward	Speed, Sir Keith
Lennox-Boyd, Mark	Spencer, Sir Derek
Lester, Jim (Broxtowe)	Spicer, Sir James (W Dorset)
Lidington, David	Spicer, Michael (S Worcs)
Lightbown, David	Spink, Dr Robert
Lilley, Rt Hon Peter	Spring, Richard
Lloyd, Rt Hon Peter (Fareham)	Sproat, Iain
Lord, Michael	Squire, Robin (Hornchurch)
Luff, Peter	Stanley, Rt Hon Sir John
Lyell, Rt Hon Sir Nicholas	Steen, Anthony
MacGregor, Rt Hon John	Stephen, Michael
MacKay, Andrew	Stern, Michael
Maclean, David	Stewart, Allan
McLoughlin, Patrick	Streeter, Gary
McNair-Wilson, Sir Patrick	Sumberg, David
Madel, Sir David	Sweeney, Walter
Maitland, Lady Olga	Sykes, John
Malone, Gerald	Tapsell, Sir Peter
Mans, Keith	Taylor, Ian (Esher)
Marland, Paul	Taylor, John M. (Solihull)
Marlow, Tony	Taylor, Sir Teddy (Southend, E)
Marshall, John (Hendon S)	Temple-Morris, Peter
Marshall, Sir Michael (Arundel)	Thomason, Roy
Martin, David (Portsmouth S)	Thompson, Sir Donald (C'er V)
Mates, Michael	Thompson, Patrick (Norwich N)
Mawhinney, Rt Hon Dr Brian	Thornton, Sir Malcolm
Merchant, Piers	Thurnham, Peter
Mills, Iain	Townend, John (Bridlington)
Mitchell, Andrew (Gedling)	Townsend, Cyril D. (Bexl'yh'th)
Mitchell, Sir David (Hants NW)	Tracey, Richard
Moate, Sir Roger	Tredinnick, David

Trend, Michael	Whittingdale, John
Trotter, Neville	Widdecombe, Ann
Twinn, Dr Ian	Wiggin, Sir Jerry
Vaughan, Sir Gerard	Wilkinson, John
Viggers, Peter	Willetts, David
Waldegrave, Rt Hon William	Wilshire, David
Walden, George	Wolfson, Mark
Walker, Bill (N Tayside)	Wood, Timothy
Waller, Gary	Yeo, Tim
Ward, John	Young, Rt Hon Sir George
Wardle, Charles (Bexhill)
Waterson, Nigel	Tellers for the Ayes:
Watts, John	Mr. Sydney Chapman and Mr. Timothy Kirkhope.
Wells, Bowen
Whitney, Ray

NOES
Abbott, Ms Diane	Dafis, Cynog
Adams, Mrs Irene	Dalyell, Tam
Ainger, Nick	Darling, Alistair
Ainsworth, Robert (Cov'try NE)	Davidson, Ian
Allen, Graham	Davies, Bryan (Oldham C'tral)
Anderson, Donald (Swansea E)	Davies, Rt Hon Denzil (Llanelli)
Armstrong, Hilary	Davies, Ron (Caerphilly)
Ashton, Joe	Davis, Terry (B'ham, H'dge H'l)
Austin-Walker, John	Denham, John
Banks, Tony (Newham NW)	Dewar, Donald
Barnes, Harry	Dixon, Don
Barren, Kevin	Dobson, Frank
Battle, John	Donohoe, Brian H.
Bayley, Hugh	Dowd, Jim
Beckett, Rt Hon Margaret	Dunnachie, Jimmy
Bell, Stuart	Dunwoody, Mrs Gwyneth
Benn, Rt Hon Tony	Eagle, Ms Angela
Benton, Joe	Eastham, Ken
Bermingham, Gerald	Enright, Derek
Berry, Dr. Roger	Etherington, Bill
Betts, Clive	Evans, John (St Helens N)
Blair, Tony	Ewing, Mrs Margaret
Blunkett, David	Fatchett, Derek
Boateng, Paul	Field, Frank (Birkenhead)
Boyes, Roland	Fisher, Mark
Bradley, Keith	Flynn, Paul
Bray, Dr Jeremy	Foster, Rt Hon Derek
Brown, Gordon (Dunfermline E)	Foster, Don (Bath)
Brown, N. (N'c'tle upon Tyne E)	Foulkes, George
Bruce, Malcolm (Gordon)	Fraser, John
Burden, Richard	Fyfe, Maria
Byers, Stephen	Galloway, George
Caborn, Richard	Garrett, John
Callaghan, Jim	George, Bruce
Campbell, Mrs Anne (C'bridge)	Gerrard, Neil
Campbell, Menzies (Fife NE)	Gilbert, Rt Hon Dr John
Campbell, Ronnie (Blyth V)	Godman, Dr Norman A.
Campbell-Savours, D. N.	Godsiff, Roger
Canavan, Dennis	Golding, Mrs Llin
Cann, Jamie	Gordon, Mildred
Carlile, Alexander (Montgomry)	Gould, Bryan
Chisholm, Malcolm	Graham, Thomas
Clapham, Michael	Grant, Bernie (Tottenham)
Clark, Dr David (South Shields)	Griffiths, Nigel (Edinburgh S)
Clarke, Eric (Midlothian)	Griffiths, Win (Bridgend)
Clarke, Tom (Monklands W)	Grocott, Bruce
Clelland, David	Gunnell, John
Clwyd, Mrs Ann	Hain, Peter
Coffey, Ann	Hall, Mike
Cohen, Harry	Hanson, David
Connarty, Michael	Hardy, Peter
Cook, Frank (Stockton N)	Harvey, Nick
Cook, Robin (Livingston)	Hattersley, Rt Hon Roy
Corbett, Robin	Henderson, Doug
Corbyn, Jeremy	Heppell, John
Corston, Ms Jean	Hill, Keith (Streatham)
Cousins, Jim	Hinchliffe, David
Cox, Tom	Hoey, Kate
Cryer, Bob	Hogg, Norman (Cumbernauld)
Cummings, John	Home Robertson, John
Cunliffe, Lawrence	Hood, Jimmy
Cunningham, Jim (Covy SE)	Hoon, Geoffrey
Cunningham, Rt Hon Dr John	Howarth, George (Knowsley N)

Howells, Dr. Kim (Pontypridd)	O'Hara, Edward
Hoyle, Doug	Olner, William
Hughes, Kevin (Doncaster N)	O'Neill, Martin
Hughes, Robert (Aberdeen N)	Orme, Rt Hon Stanley
Hughes, Roy (Newport E)	Parry, Robert
Hughes, Simon (Southwark)	Patchett, Terry
Hutton, John	Pendry, Tom
Illsley, Eric	Pickthall, Colin
Ingram, Adam	Pike, Peter L.
Jackson, Glenda (H'stead)	Pope, Greg
Jackson, Helen (Shef'ld, H)	Powell, Ray (Ogmore)
Jamieson, David	Prentice, Ms Bridget (Lew'm E)
Janner, Greville	Prentice, Gordon (Pendle)
Jones, Jon Owen (Cardiff C)	Purchase, Ken
Jones, Lynne (B'ham S O)	Radice, Giles
Jones, Martyn (Clwyd, SW)	Randall, Stuart
Jones, Nigel (Cheltenham)	Raynsford, Nick
Jowell, Tessa	Reid, Dr John
Kaufman, Rt Hon Gerald	Robertson, George (Hamilton)
Keen, Alan	Robinson, Geoffrey (Co'try NW)
Kennedy, Charles (Ross, C&S)	Roche, Mrs. Barbara
Kennedy, Jane (Lpool Brdgn)	Rogers, Allan
Khabra, Piara S.	Rooker, Jeff
Kilfoyle, Peter	Rooney, Terry
Kinnock, Rt Hon Neil (Islwyn)	Ross, Ernie (Dundee W)
Kirkwood, Archy	Rowlands, Ted
Lestor, Joan (Eccles)	Ruddock, Joan
Lewis, Terry	Salmond, Alex
Litherland, Robert	Sedgemore, Brian
Livingstone, Ken	Sheerman, Barry
Lloyd, Tony (Stretford)	Sheldon, Rt Hon Robert
Llwyd, Elfyn	Shore, Rt Hon Peter
Loyden, Eddie	Short, Clare
Lynne, Ms Liz	Simpson, Alan
McAllion, John	Skinner, Dennis
McAvoy, Thomas	Smith, Andrew (Oxford E)
McCartney, Ian	Smith, C. (Isl'ton S & F'sbury)
Macdonald, Calum	Smith, Rt Hon John (M'kl'ds E)
McFall, John	Smith, Llew (Blaenau Gwent)
McKelvey, William	Snape, Peter
Mackinlay, Andrew	Soley, Clive
McLeish, Henry	Spearing, Nigel
McMaster, Gordon	Squire, Rachel (Dunfermline W)
McNamara, Kevin	Steel, Rt Hon Sir David
McWilliam, John	Steinberg, Gerry
Madden, Max	Stevenson, George
Mahon, Alice	Stott, Roger
Mandelson, Peter	Strang, Dr. Gavin
Marek, Dr John	Straw, Jack
Marshall, David (Shettleston)	Taylor, Mrs Ann (Dewsbury)
Marshall, Jim (Leicester, S)	Thompson, Jack (Wansbeck)
Martin, Michael J. (Springburn)	Turner, Dennis
Maxton, John	Vaz, Keith
Meacher, Michael	Walker, Rt Hon Sir Harold
Michael, Alun	Wallace, James
Michie, Bill (Sheffield Heeley)	Walley, Joan
Michie, Mrs Ray (Argyll Bute)	Wardell, Gareth (Gower)
Milburn, Alan	Wareing, Robert N
Miller, Andrew	Watson, Mike
Mitchell, Austin (Gt Grimsby)	Wicks, Malcolm
Moonie, Dr Lewis	Williams, Rt Hon Alan (Sw'n W)
Morgan, Rhodri	Williams, Alan W (Carmarthen)
Morris, Rt Hon A. (Wy'nshawe)	Wilson, Brian
Morris, Estelle (B'ham Yardley)	Winnick, David
Morris, Rt Hon J. (Aberavon)	Worthington, Tony
Mowlam, Marjorie	Wray, Jimmy
Mudie, George	Wright, Dr Tony
Mullin, Chris	Young, David (Bolton SE)
Murphy, Paul
Oakes, Rt Hon Gordon	Tellers for the Noes:
O'Brien, Michael (N W'kshire)	Mr. Alan Meale and Mr. John Spellar.
O'Brien, William (Normanton)

Question accordingly agreed to.

Resolved, That the Local Government Finance (Scotland) Order 1994, a copy of which was laid before this House on 17th February, be approved.

Resolved, That the Revenue Support Grant (Scotland) Order 1994, a copy of which was laid before this House on 17th February, be approved.—[Mr. Andrew Mitchell.]