§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Knapman.]
10.15 pm§ Mr. Michael J. Martin (Glasgow, Springburn)Through you, Mr. Deputy Speaker, I should like to thank Madam Speaker for giving me the opportunity to have this debate. I should also like to thank the Parliamentary Under-Secretary of State for Scotland who is to reply to the debate, and my hon. Friends the Members for Glasgow, Maryhill (Mrs. Fyfe), for Glasgow, Shettleston (Mr. Marshall), for Strathkelvin and Bearsden (Mr. Galbraith), for Glasgow, Garscadden (Mr. Dewar) and for Greenock and Port Glasgow (Dr. Godman) for their presence and support. I know that the wife of my hon. Friend the Member for Greenock and Port Glasgow, Trish, is a councillor for the city of Glasgow, and that she will be able to watch this debate through the medium of television.
I should also like to thank Mr. John Brown of the public relations department of the new city of Glasgow authority. He is a brother of my hon. Friend the Member for Dunfermline, East (Mr. Brown), and he has been extremely helpful in giving me the information that I require for the debate. [Interruption.] He gave that information in a professional capacity.
I note that the Secretary of State for Scotland is present. Given such large cuts in the finances of the city of Glasgow, it is only right and fitting that he should meet the leader of Glasgow district council, Councillor Bob Gould, at this time of severe crisis. He should also meet Councillor John Young, the Conservative leader on the city council. Opposition Members do not share his politics, but we know that he has always had a deep concern for the city of Glasgow, where he was born and bred.
Given the cuts of £43 million, it is only right and fitting that a meeting between the Secretary of State and those councillors should take place. The Secretary of State is on record as saying that he wants to get out and meet the people. He said that was why he wanted the Scottish Grand Committee to meet all over Scotland. Given the current crisis in Glasgow, he should meet Councillor Gould, along with Councillor Young.
It is worth noting that the Secretary of State for Wales recently got £15.9 million for the Principality. That money was an extra allocation, and was not part of its original funding formula. The Minister may say that the equivalent money for Scotland was accounted for in the formula that the Government negotiated with the Convention of Scottish Local Authorities. That cannot be the case, however, because the Welsh formula did not allow for that extra £15.9 million. If that amount of money can be given to Wales, why not to Scotland?
Those cuts of £43 million will mean the loss of 2,000 jobs in a city where the average unemployment rate is 12 per cent. In parts of my constituency and others, the unemployment rate is absolutely horrendous. At one time, the railway workshops offered employment to my local community, but most people now look to local government for employment. The 2,000 lost jobs are important ones, such as home helps—the very ones that should be increased. We should be looking after our elderly men and women who served us when fascism was 468 at its height. They gave six years of their lives to fight for democracy so that we can be here, yet we are denying them the care that they need in their later years of life.
Schools are being closed that are important to give children in areas of high unemployment and deprivation a chance to get out and make a life for themselves. We are losing sports centres at a time when Conservative Members say that they are worried about the drugs situation. Drugs are a problem in Glasgow, and if we lose sports centres, more and more of our young boys and girls will be put on to the street, and they will be easy prey for the people from whom we are trying to protect them.
We are to lose residential homes. We are also to lose museums. In every service, from social work to education, we are to have closures and loss of services. In education, £12 million will be cut from the budget, which will mean that the price of school meals will go up. Twelve community education centres in the city of Glasgow will close. Three to five secondary schools and 16 primary schools are likely to close.
In Argyllshire, two residential homes that have excellent facilities to get young people out into the countryside to give them the outdoor activities they need will be lost. That will be a loss for the city of Glasgow. It will also mean that employment opportunities will be lost in the rural community of Argyll.
When we had the old slums in our city, it was always said that there was one place that the people could always go free of charge—our parks. We have some of the finest parks anywhere in the world. Kelvingrove park is almost identical to St. James's park across the road from here. It is an excellent place, where people from Maryhill, Anderston—where I was brought up—Woodside and Partick can go. University students enjoy the parks. Boating ponds will also close. They are places where people can take their children and enjoy a day out.
Ruchill, in the constituency of my hon. Friend the Member for Maryhill, is to lose a bowling green. Shettleston will lose its sports centre. On roads, I am sure that the Automobile Association and the Royal Automobile Club will be deeply concerned that maintenance will be cut by £2.4 million in our city.
Social work is of great concern to all of us. I know that it is of concern to Conservative Members, because many of them have dedicated their parliamentary lives to talking about the handicapped and those in need of social work.
Glasgow's social work budget is to be cut by £9.1 million. That will mean that homes for the elderly will close, at a time when our aging population is increasing. Logic tells us that we need more homes for the elderly, yet the Government are telling our local authority, which has excellent social work homes, to cut its budget.
Many visitors to Glasgow have said that the social work homes in the city are something of which our citizens can be proud. Day centres for the handicapped will close. Mothers who have handicapped children use them to get some respite and to give their young children the chance of a decent education. They give children an opportunity to do something meaningful, and help them in their training and to develop their minds. Spending on nursing homes will be vastly reduced, and there will be a delay in filling social work vacancies.
Museums and art galleries are to lose £1.3 million.
§ Mrs. Maria Fyfe (Glasgow, Maryhill)Amid all the other cuts, the social services department is contemplating making cuts of more than £9 million. Where does the Minister expect Glasgow to make alternative savings?
§ Mr. MartinI hope that the Minister will tell us what he thinks Glasgow should do. If he does, when the Secretary of State meets Councillors Gould and Young, at least they will have a chance to rebut the case that the Minister makes tonight.
Museums and art galleries are to lose £1.3 million. Haggs castle, the famous museum, is to close; Pollok house, with its famous Burrell collection, will be able to open for only six months each year. Mr. Burrell, who gave a fantastic legacy to our city, must be turning in his grave.
When I was a councillor on the old Glasgow corporation, along with some of my hon. Friends, we spent days on end ensuring that we stuck to the terms of Mr. Burrell's legacy: he left instructions relating to his famous collection. Finally, we were able to house the collection at Pollok house—but it will not help tourism for Pollok house to be open for only six months of the year. People come to see it from all over the world.
Indeed, there is a possibility that all our famous museums—museums to which many of our parents took us—will close for one day each week. The famous Dixon halls, Govan town hall and the Couper Institute must all close, and I do not know where the voluntary organisations that use them will go. The capital programme is to be cut, and there is to be a £30 million cut in the housing budget.
The Conservative party tells us time and again that we are not the friends of the private sector—that we do not care about small business men and private companies. Glasgow's record in ensuring that building companies, large and small, secure work for their employees is second to none; it is the Government who will put not only council employees but private sector workers on the dole. When I was a member of the council, for every council employee, two private employees—two outside contractors—had jobs on the rates and the city treasury. I do not know what the formula is now, but many people in the private sector, including many builders who used to support the Tory party, will be knocking on the Minister's door.
The council tax could rise by between 36 per cent. and 40 per cent. I have never known such an increase in my city: indeed, I have never known such an increase in any city. The Minister who is to reply to the debate said that there was no need to meet councillors in Glasgow, although the council tax may rise from £676 to £944.
I feel that what I have said tonight is enough to make the Minister consider the possibility that he is wrong. If he continues to pursue the current Scottish Office line, Glasgow will suffer. Glasgow has a first-class history, and its administration has a reputation throughout the country for not being what Conservative Members sometimes describe as the lunatic left. Indeed, it is anything but that: it is the most responsible council in the country, and Strathclyde had an excellent reputation for working with the Government and with Europe.
The Government made their biggest mistake a few years ago when they put a Bill through the House to reorganise local government. That has cost everyone a fortune and caused the sadness of serious redundancies.
470 Strathclyde was abolished along with the other councils because of jealousy. The Government felt that the councils were doing too well in Europe by getting grants and improving the standard of living for the people under their control. They came up with the idea of abolishing local government. The word they used was "reorganisation".
If the figures are true, the Government have not reorganised but abolished local government as we know it. The men and women who were democratically elected are being denied the opportunity to give their electorate a proper service. I hope that the Minister will consider what I have said.
§ The Parliamentary Under-Secretary of State for Scotland (Mr. George Kynoch)I congratulate the hon. Member for Glasgow, Springburn (Mr. Martin) on securing the debate. It has secured a significant turnout of Opposition Members—a rare occurrence—and I should like to mark the attendance of my Scottish Office ministerial colleagues and my right hon. Friend the Member for Dumfries (Sir H. Monro).
The debate is timely because, earlier today, many hon. Members were present when we tried to have a briefing about some of the facts behind the local government finance settlement to allow a more informed debate. The House will shortly have the opportunity to debate the order, which, if approved, will enable my right hon. Friend the Secretary of State to pay revenue support grant and the non-domestic rates distributable amount to the 32 new Scottish councils next year.
As usual, the hon. Member for Springburn has spoken with considerable feeling on behalf of his constituents. His speech clearly merits a serious response, and that is what I intend it should receive. Before I deal with the position of Glasgow city council, I remind the House of next year's overall Scottish local government finance settlement, which has two main elements.
The first is the level of Government supported expenditure, or GSE, which is the Government's view of what authorities need to spend to pay debt charges and deliver services. The second element is the level of Government support for that expenditure, which is known as aggregate external finance, or AEF. For next year, GSE has been set at just over £6.168 billion, an increase of 2.3 per cent. on the current year's figure after adjusting for transfers of responsibility between central and local government, so that a like-for-like comparison can be made.
AEF has been set at just under £5.369 billion, an increase of 2.9 per cent. as compared with the current year. In cash terms, the increase in AEF is just over £148 million. That increase is £26.5 million more than the Barnett formula consequences of the English local government settlement. That may sound technical and complex, but it means that £26.5 million has been diverted from other Scottish expenditure programmes to give local authorities more.
The hon. Member for Springburn referred to a figure of £15.9 million in Wales. My right hon. Friend the Secretary of State for Scotland was well ahead of my right hon. Friend the Secretary of State for Wales by getting the extra £26.5 million included in the settlement given to local authorities.
471 One might find it difficult to believe it from the reaction of the Labour party and the Convention of Scottish Local Authorities, but there is no doubt that Scottish local authorities have been treated favourably. This is at a time when both the Government and, although I sometimes doubt it, the Labour party, accept the need to constrain public expenditure.
§ Mr. Jimmy Wray (Glasgow, Provan)Will the hon. Gentleman give way?
§ Mr. KynochI want to try to get through my speech.
The levels of both GSE and AEF have been increased by significant amounts. That is before any account is taken of the scope for councils to make efficiency savings.
Next year, the level of GSE for Scottish authorities will be 30 per cent. higher per head of population than the comparable amount for English authorities. The level of AEF for Scottish authorities will be no less than 43 per cent. higher than that for English authorities. Yet we continue to hear arguments that the Government are starving the new councils of resources.
The hon. Member for Dundee, East (Mr. McAllion) has claimed that the councils need an extra £395 million to avoid what he calls "spending cuts". There are two main points to be made in relation to that claim. First, it is totally misleading to talk about spending cuts. All the new councils will be able to increase expenditure next year by at least 2 per cent; the majority will be able to increase spending by more than 3 per cent.
Secondly, those who argue that authorities should be able to spend £395 million more are really saying that GSE should be increased, not by 2.3 per cent. but by 8.9 per cent., which is more than three times the current rate of inflation. Those who argue that councils should be permitted to increase expenditure by £395 million more than the level of increase that the settlement already provides for either want council tax levels to be increased by 40 per cent. more than would otherwise be the case, or AEF to be increased by nearly 11 per cent.
The second option of increasing AEF could be achieved only by cutting one or more of the other Scottish Office block programmes, such as the national health service, to which the hon. Member for Dundee, East referred, industry or higher education. We would not be talking merely about a minor redeployment of resources between programmes. To provide anything like an extra £395 million for local government, major surgery would be required in other expenditure programmes. The reality is that the level of the Scottish block resources is finite, and that more for local government means less for other programmes.
The hon. Member for Hamilton (Mr. Robertson) was quoted in The Scotsman newspaper last Saturday as having said:
a Labour Government would not be able to offer a pot of gold to local government or anyone else.It is a pity that the reality of the Scottish block and formula arrangements was not appreciated more widely on the Opposition Benches, and that the hon. Member for Hamilton persisted in failing to recognise the favourable treatment that local authorities had received in this year's block allocations.472 Glasgow city council has received a settlement for next year which, first, gives it a level of AEF of just under £830 million. That is no less than 82 per cent. per head of population higher than the average level for English authorities. Glasgow has by far the highest per capita level of AEF of all the mainland councils. Only the three islands councils have higher levels, as a consequence of their small populations.
Secondly, the settlement enables Glasgow to increase expenditure next year by £40 million, as compared with the level of planned spending in the city in the current year by Strathclyde regional council and Glasgow district council. That is an increase of nearly 5 per cent.
§ Mr. KynochI want to get through the points that I would like to make to the hon. Member for Springburn.
The council has claimed that it will have to "cut" expenditure by £68 million to come within its capping limit. The council is in fact saying that it would like to increase spending next year by nearly £110 million, or more than 13 per cent., but it has been prevented from doing so by the Government's decision to retain capping. I find the figures astonishing, but I must ask the hon. Member for Springburn whether he can explain why the council thinks that it is necessary to increase spending by between four and five times the rate of inflation.
As we are genuinely interested in devolving greater power to local authorities, we decided with some reluctance to retain capping, but it is now clear that it is just as well for council tax payers in Glasgow that we did, because an extra £68 million of expenditure by the council would have added around 55 per cent. to what the council tax level would otherwise have been.
Local government reorganisation has highlighted the fact that Glasgow has been cross-subsidised by most of the rest of Strathclyde, in terms of both spending levels and council tax levels. Many argue that higher spending levels in Glasgow reflect higher need—however, the formula for distributing resources among authorities, which is agreed with COSLA, already takes account of its greater spending needs.
That is precisely why the council receives by far the highest per capita level of AEF of all the mainland councils. I have already referred to the fact that it is 82 per cent. higher than the average level for English authorities. Both the Scottish Office and COSLA are committed to a review of the distribution formula, but there is no evidence that the existing formula is flawed.
The hon. Member for Springburn referred to libraries, museums and art galleries. I point out to him that the formula for distribution and support for libraries, museums and art galleries is adjusted not only for the population of Glasgow but includes commuters and tourists. The same applies to street clearing, to refuse disposal and to leisure and recreation. There is a weighting in the formula to take account of the points that the hon. Gentleman raised.
The Government recognise that Glasgow and the other councils that have inherited relatively high levels of expenditure as a result of the skewing of resources by the outgoing regional councils require time to bring their spending levels more into line with their grant-aided expenditure assessments. That is why my right hon. Friend 473 and I were prepared to accept the COSLA proposals for a three-year transitional scheme to deal with the mismatch problem. Glasgow will receive extra funding of just under £31 million next year directly as a result of that scheme, and a further £15.5 million in 1997–98.
The new Glasgow council must also seek to improve council tax payment levels within the city—at present, these are the lowest in Scotland. [Interruption.] The hon. Member for Dundee, East is laughing. Until now, non-payment within Glasgow has been subsidised by council tax payers and the rest of Strathclyde.
§ Mr. Michael J. MartinWould it not be best if the Minister and the Secretary of State met Councillor Gould and Councillor Young to talk these matters over?
§ Mr. KynochIf the hon. Gentleman wishes to put together a delegation to see my right hon. Friend and me, we will be only too happy to meet them. Now that Glasgow is on its own, it is clearly in the interests of those in the city who pay their bills and of the council that every effort is made to bring payment levels more into line with the position in the rest of the country.
For example, I understand that Glasgow council is assuming a 90 per cent. level of payment, which compares with a payment assumption of 94 per cent. for the whole of Strathclyde, and 88 per cent. for Glasgow in the current period. If Glasgow were to increase its assumed payment rate by 5 per cent. to 95 per cent.—which is the existing level in Edinburgh and Dundee—the tax increase would be reduced by some £50. If it actually reached the level that is pertinent in Aberdeen—which is 97 per cent.—the tax increase would be reduced by some £70.
§ Mr. KynochNo, I will not—the hon. Member for Springburn has secured this debate, and I wish to address the points that he raised.
474 While I do not deny that the new Glasgow council faces a range of difficult decisions, the truth of the matter is that, within an overall favourable settlement, it has been treated generously. It has scope to increase spending next year by £40 million—or almost 5 per cent.—and it has received by far the highest per capita level of AEF of all the new mainland councils. Its special difficulties have been recognised by the provision of almost £31 million from the mismatch transitional scheme.
The council could receive more money only by increasing the overall local government settlement, at the expense of other Scottish expenditure programmes; or by skewing the distribution even more in Glasgow's favour, at the expense of other Scottish councils.
Reference was made to savings. I say to the hon. Member for Springburn that, on the radio, I heard a councillor from Glasgow refer to £500,000 being spent by the council on a celebration of the centenary of the Scottish Trades Union Congress. I question whether that is wise funding at a time when Glasgow is crying out that it is short of funds.
In the light of all that I have said, I do not think that there is justification for either of the steps that I have talked about. The council must use the resources that are available to it in the most effective and efficient way. I ask the councillors to be responsible in setting their budget, to think of the council tax payers, and to look at the cost-effective delivery of service. I hope that a budget will be set that is sensible and reasonable for the people of Glasgow.
§ Question put and agreed to.
§ Adjourned accordingly at fifteen minutes to Eleven o'clock.