Local Government Finance (Scotland)

HC Deb 28 February 1996 vol 272 cc921-46 5.40 pm

The Parliamentary Under-Secretary of State for Scotland (Mr. George Kynoch)

I beg to move, That the Local Government Finance (Scotland) Order 1996, dated 12th February 1996, a copy of which was laid before this House on 27th February, be approved.

Mr. Deputy Speaker (Mr. Michael Morris)

I understand that with this, it will be convenient to discuss the following motions: That the Local Government Finance (Scotland) Notional Amounts Report 1996 (House of Commons Paper No. 145), which was laid before this House on 24th January, be approved. That the Revenue Support Grant (Scotland) Order 1996, dated 12th February 1996, a copy of which was laid before this House on 27th February, be approved. We have precisely one hour and 20 minutes for this debate. I appeal to Front-Bench and Back-Bench Members to make speeches that are shorter than those that they had planned. [Interruption.]

Mr. Kynoch

I applaud the sense of humour of Opposition Back Benchers.

The motions relating to the Local Government Finance (Scotland) Order and the Revenue Support Grant (Scotland) Order state that they have not yet been considered by the Select Committee on Statutory Instruments. The Select Committee considered the original orders that were laid on 14 February at its meeting on Tuesday 20 February. Unfortunately, due to a mistake in the coming into force date, the instruments were withdrawn and were re-laid yesterday. The Select Committee will reconsider the amended orders at a future sitting, although I stress that their substance has not changed at all. I apologise to the House for any inconvenience that that may have caused and I am grateful to the members of the Select Committee for their assistance in this matter.

This is the annual opportunity for the House to debate local government finance. The debate takes place against the background of an unprecedented level of consultation and discussion about the settlement for the year ahead. In addition to the normal statutory consultation with the Convention of Scottish Local Authorities, I held a briefing in the House a week ago which was attended by many right hon. and hon. Members. During the past 24 hours, my right hon. Friend the Secretary of State and I held a series of meetings with hon. Members from all parts of the House and with council representatives. I look forward to a lively and, I hope, informed debate.

Mr. Nigel Griffiths (Edinburgh, South)

Will the Minister give way?

Mr. Kynoch

Because of the time, I should like to proceed and until I reach the substance of figures I will not give way.

I propose to speak briefly about the detail of each of the two orders and the report. The purpose of the Revenue Support Grant (Scotland) Order is explained in detail in the report which accompanies the order, but the position is relatively straightforward and I do not think that I need say much about the order. Under the so-called AEF—aggregate external finance—guarantee, the revenue support grant that is payable to local authorities for each of the years 1990–91, 1991–92 and 1992–93 is adjusted either up or down in the light of any variation between their estimated and their actual level of non-domestic rate income. The order deals only with the two later years. We have agreed with COSLA that there is no need for any further adjustments of RSG in respect of 1990–91.

The objective of the guarantee, which was fully discussed and agreed with COSLA, is to ensure that each authority receives the combined amount of revenue support grant and non-domestic rate income that they were promised when they were first notified of their settlement for the year in question. At that stage my Department made an estimate of the non-domestic rate income that each authority would receive. The guarantee arrangement has been necessary because of the difficulty of estimating non-domestic rate income with any degree of accuracy—mainly because of appeals against valuation which take some time to resolve.

The order makes a further adjustment to the levels of RSG that are payable for each of the two years that are still covered by the guarantee in the light of returns that local authorities submitted to the Scottish Office last autumn of their actual rate income for the years in question. Because of the effect of successful appeals against 1990 valuations, in general there has been a reduction in rate income compared with previous estimates. Therefore, the order provides for the payment of extra RSG totalling just over £15 million to compensate for this reduction in rate income. Nearly £5.5 million of that amount relates to 1991–92 and the remaining £9.6 million relates to 1992–93. The total adjustment of just over £15 million is much reduced from that which was made 12 months ago, reflecting the fact that, as time passes, the non-domestic rate income for those years has tended to settle down.

I should make it clear that the figure of £15 million is net. Although most authorities will receive extra RSG, a few will receive less. That is because, against the general trend, their rate income has increased compared with previous estimates. Because we are dealing with the years 1991–92 and 1992–93, the RSG adjustments obviously relate to existing local authorities. Subject to the House approving the order, the adjustments will be made at the beginning of the new financial year and will obviously be taken into account in the closure of the accounts of the authorities concerned.

The House may wonder why the AEF guarantee related only to the three years from 1990–91 to 1992–93 and not to subsequent years. The answer is that, since the introduction of the arrangements for the pooling of business rate income from 1993–94, it has been possible to deal with fluctuations in the level of rate income administratively. However, exactly the same principle applies, namely, that local authorities do not lose out if the actual rate income is below the estimated amount.

I shall now turn to the notional amounts report. The report's purpose is to specify for each of the 21 new mainland councils an amount that will be their base line for considering any capping action this year. My right hon. Friend has power to cap an authority either when he considers that its budget is excessive in absolute terms or when there has been an excessive increase in its budget compared with that for the previous year. In practice, the second of these powers—the power to control the year-on-year increase in spending—has been the basis of the capping regimes north and south of the border in recent years.

Obviously, the new mainland councils do not have actual budgets for 1995–96. However, the Local Government etc. (Scotland) Act 1994 made provision for my right hon. Friend to specify in a report to the House the amount for each new council which, in his opinion, should be used as a basis for comparison for capping purposes. That is the report which is under debate. In effect, it specifies notional 1995–96 budget figures for each of the new councils. It is important to stress that those figures have not been plucked out of the air in St. Andrew's house.

Mr. Ernie Ross (Dundee, West)

Oh yes they have.

Mr. Kynoch

They have not. They are the product of a great deal of consultation with and co-operation from COSLA and local authorities, especially the 10 disaggregating authorities. The overriding objective in producing the figures has been to ensure that they reflect as accurately as possible the planned level of expenditure in the current year by the old councils in each of the new council areas. In other words, it is the actual level of planned expenditure that the new councils will inherit from their predecessors. For councils in the aggregating areas, that was done by adding together the 1995–96 budgets of the relative regional and district councils. In the other areas it was, where appropriate, necessary for the old councils to disaggregate their 1995–96 budgets among the new council areas.

The disaggregation exercise was carried out in accordance with a set of detailed principles which are in annex 2 to the report. Those principles were fully discussed with and agreed by COSLA and the relevant local authorities. I pay tribute to the thorough and professional way in which each of the 10 disaggregating authorities has carried out the exercise of apportioning its 1995–96 budget to the new council areas.

Mr. Malcolm Chisholm (Edinburgh, Leith)

Does the Minister accept that the cash increase between this year's notional budget and next year's budget for Scotland as a whole is roughly 1 per cent? In particular, does he accept that the increase for Edinburgh is 1 per cent. and not the 2.66 per cent. that he mentioned when I met him this morning, which includes community care transfers, the cost of local government reorganisation and other disregards? The key figure is 1 per cent. in cash terms, which is a massive real terms cut.

Mr. Kynoch

I do not accept that. I went through the argument with the hon. Gentleman this morning and I do not propose to go through the detail again because of time constraints.

Inevitably, there have been some local disagreements about the figures, but the Scottish Office has been in no position to second-guess the apportionments made by the disaggregating authorities. [Interruption.] If the hon. Member for Hamilton (Mr. Robertson) wants to intervene, I will happily give way to him.

The amount shown in annex 1 to the report for each of the new councils is a pretty true indication of what the outgoing councils plan to spend in each of the new council areas during the current financial year. Consequently, the amounts are a fair base line for the 1996–97 capping regime.

The Local Government Finance (Scotland) Order 1996 represents the final stage of the local government finance settlement, which my right hon. Friend the Secretary of State first announced on 28 November. I gave the House details of the settlement last week when replying to an Adjournment debate initiated by the hon. Member for Glasgow, Springburn (Mr. Martin), but it is appropriate to repeat the figures.

The settlement provides for Government-supported expenditure to be set at a level of £6.168 billion. That is an increase of £136.9 million—or 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 with the current year's settlement can be made. Hon. Members who attended the briefing session that I arranged last week will recall that Government-supported expenditure comprises provision for debt servicing costs and services. The provision for services is known as grant-aided expenditure.

The settlement also provides for aggregate external finance to be set at a level of just less than £5.369 billion. That is an increase of £148 million—or 2.9 per cent.—on the current year. That increase is £26.5 million more than the Barnett formula consequences of the English local government settlement. My right hon. Friend the Secretary of State could have quite reasonably allocated that £26.5 million to other Scottish expenditure programmes, but instead it has been used to increase the local government settlement.

The AEF total comprises three elements. First, a little more than £417 million is estimated for specific grants. The great bulk of that figure is for a specific police grant. Secondly, the total includes the amount that is being distributed to local authorities from the non-domestic rate income pool, which totals a little more than £1.313 billion. Thirdly, the AEF total includes revenue support grant totalling nearly £3.639 billion.

The report that accompanies the order provides a very detailed explanation of its purpose, but it may be helpful to the House if I briefly summarise the position. The first and by far the main purpose of the order is to distribute the second and third components of the AEF total—non-domestic rate income and revenue support grant, to which I have just referred—among the 32 councils. Subject to the House approving the order, those amounts, which total nearly £4.952 billion, will be paid to the councils during next year.

The order does not deal with the distribution of the provision for specific grants. That is paid out in the light of claims during the year from councils. In distributing non-domestic rate income and revenue support grant, however, we make as good an estimate as we can of what each council will receive in specific grants.

The AEF total has been distributed among councils using exactly the same methodology as in previous years. That methodology is well understood and accepted by COSLA. There are two main stages to the distribution. The first stage is to equalise for differences in councils' need to incur expenditure as measured by their grant-aided expenditure assessments. Those assessments are determined using the client group system that was first introduced in 1985 and is kept under regular review by the distribution committee comprising representatives from the Scottish Office and COSLA. A total of £1.863 billion is being distributed to equalise for differences in councils' GAE assessments.

The second stage is to equalise for differences in councils' tax base and consequently their ability to raise income locally from the council tax. A council with a low tax base obviously receives more AEF support than one with a high tax base. A total of £3.465 billion is distributed under that stage in proportion to the number of band D-equivalent properties in each council area.

The second purpose of the order is to make a number of relatively minor changes to the 1995–96 AEF figures. First, the order increases by relatively small amounts the level of AEF payable to two local authorities—Kirkcaldy district council and East Kilbride district council, both of which have taken on additional housing benefit responsibilities.

The order also transfers £162,000 of AEF for 1995–96 from East Kilbride district council to Eastwood district council. That corrects an error in the population data used in the original 1995–96 distribution for those two councils, stemming from the transfer of the Busby area from East Kilbride to Eastwood.

The order redetermines the level of AEF for all the existing authorities, to take account of an increase in the City of Aberdeen district council's share of the support for loan and leasing charges. COSLA has been fully consulted and has agreed all the changes in the 1995–96 AEF distribution.

The final purpose of the order is to redetermine the levels of AEF for 1993–94 and 1994–95 taking into account changes in the council tax base of each existing authority. Those changes arise because of, for example, successful appeals by householders regarding the tax band of their property.

I should add that for 1994–95 only, the order also increases by £2,000 the level of AEF payable to the Western Isles islands council.

Mrs. Maria Fyfe (Glasgow, Maryhill)

Now that the Minister has had the opportunity to go through Glasgow council's books in detail, does he think that a 36 per cent. increase in council tax is acceptable? Does he understand why that 36 per cent. increase is necessary unless he takes action?

Mr. Kynoch

For a start, I have not had a chance to go through Glasgow council's complete figures. Despite meeting Glasgow council members this morning, I have yet to hear a proper explanation of why, with a notional budget of about £800.1 million and a capping limit of £839.5 million—an increase in funding of about 4.93 per cent. that the council could spend and remain within its capping limit—they are talking about cuts. At this stage, they are talking about the budget being 13.4 per cent. up on the notional budget.

I have explained how notional budgets were prepared. They were prepared by the disaggregation of Strathclyde regional council's regional budget to the Glasgow area. We then added the district budget, and obviously transfers of responsibility were taken into account. The new Glasgow city council is at the moment talking about a budget increase—clearly it has not yet set a budget, so I urge it to set a responsible budget—of 13.4 per cent. When one takes it into account that all wage increases should be funded from within by efficiency improvements and so on, as in the public sector, that 13.4 per cent. represents an enormous increase, given that inflation is running at less than 3 per cent. The hon. Member for Glasgow, Maryhill (Mrs. Fyfe) should go back and ask the councillors of Glasgow rather than me why they are proposing a budget that is almost five times the rate of inflation.

Mrs. Fyfe

rose—

Mr. Kynoch

I will not give way again to the hon. Lady.

Mr. Phil Gallie (Ayr)

Considering the way in which the agreement has been reached by the disaggregation of budgets, have my constituents not been disadvantaged to the benefit of Glasgow?

Mr. Kynoch

That is not quite correct. The transition scheme proposed by COSLA and accepted by my right hon. Friend the Secretary of State and me has made it possible for my hon. Friend's council to benefit during the transition this year. It will get one third of the mismatch benefit. My hon. Friend is absolutely right that in the past Glasgow has benefited from some of the GAE that perhaps rightly should have been allocated to my hon. Friend's area. My hon. Friend makes a valid point. In past years, Glasgow has enjoyed a heavier level of expenditure than the GAE formula justified. Clearly, that decision was taken by the councillors of Strathclyde and it is something with which Glasgow is now having to deal.

Mrs. Fyfe

On a point of order, Mr. Deputy Speaker. I am sure that it was inadvertent, but the Minister misled the House. Glasgow council can explain, line by line, exactly what it is doing, but the Minister—

Mr. Deputy Speaker

Order. The hon. Lady might like to rephrase what she is saying.

Mrs. Fyfe

Perhaps you did not hear me, Mr. Deputy Speaker, but I did use the word "inadvertent". Nevertheless, the Minister misled—

Mr. Deputy Speaker

Order. The hon. Lady is making a debating point; it is not a matter for the Chair.

Mr. Kynoch

The hon. Member for Maryhill should debate these issues with the councillors of Glasgow city council and ask them to explain why their projected budget is so much above the notional budget prepared by the outgoing councils.

The changes to which I referred in relation to redetermining the level—

Mr. Michael Connarty (Falkirk, East)

I am grateful to the Minister for giving way. At our meeting last night he hung on to notional budgets like a drowning man—it was the only thing he had to keep him afloat. Does he accept that, for example, a wage war for teachers would cost Falkirk £2.4 million just to keep its teachers? Is he saying tonight that in—his words—the interests of efficiency savings, the council should cut the number of teachers and reduce education in Falkirk, so that it can keep within the notional budget that he is demanding it meets? Is the Minister even listening?

Mr. Kynoch

The hon. Gentleman referred to a teachers' settlement. I am not aware of the teachers having even started, let alone completed negotiations. The hon. Gentleman must be patient. The points I made about notional budgets are valid. I explained to the House how the budgets were prepared.

As I was saying, the changes to which I have referred in relation to redetermining the levels of AEF for 1993–94 and 1994–95 arise, for example, because of successful appeals by householders regarding the tax band their property should be in. I should add that for 1994–95 only, the order also increases by £2,000 the level of AEF payable to the Western Isles islands council. That is an increase in the amount being paid to the council to enable it to subsidise the costs of internal air travel, following the introduction of the air passenger tax in 1994.

I should make it clear to the House that COSLA has been consulted about the two orders and the report under consideration, but has made no comment on the detail of them. Despite the reaction from the Opposition parties and from COSLA, there is no doubt that Scottish local authority current expenditure was treated very generously in the 1995 public expenditure survey. AEF has been increased by £26.5 million more than the formula consequences of the English settlement and is no less than 43 per cent. per head of population higher than the level for English authorities and 21 per cent. higher than the level for Welsh authorities.

Spending provision for Scottish authorities is 30 per cent. higher per head of population than the provision for English authorities and 22 per cent. higher than the provision for Welsh authorities. It is no wonder that local authorities in both England and Wales are envious of the level of funding for Scottish local government.

Mr. Andrew Welsh (Angus, East)

Will the Minister give way?

Mr. Kynoch

Opposition Members have been complaining about the time that I am taking, but I have tried to give way to hon. Members. I am sure that the hon. Gentleman will have an opportunity to speak later.

The Opposition and COSLA argue that a further £395 million should be provided for Scottish authorities, but we have yet to hear which other programmes in the Scottish Office block should be cut to provide that extra funding. It is senseless to argue for extra money on top of the significant increase that we have made and at a time of tight public expenditure—and unless Opposition Members can say where that money should come from.

Mr. Dennis Canavan (Falkirk, West)

Will the Minister give way?

Mr. Kynoch

No, I shall not give way as I want to leave sufficient opportunity for Back-Bench Members to participate in the debate.

It has also been argued that extra help should be provided to particular councils, but we have yet to hear which councils should receive less in order to provide more for others. We have yet to hear why virtually all of the new councils claim that they need to increase spending by well over 10 per cent. next year when inflation is below 3 per cent. and likely to go even lower during the next 12 months.

Mr. Malcolm Bruce (Gordon)

Rubbish.

Mr. Kynoch

I hear the hon. Gentleman, but the difference between my party and his party is that mine actually recognises that we must control expenditure because it is taxpayers' funds that we are using. To give 3 per cent. extra funding to local government at a time when others are taking cuts is a more than reasonable settlement.

I should like to think that during the debate the House will receive answers from the Opposition to the three questions I posed. If the questions are not answered, any criticism of the settlement will be entirely hollow. The truth is that Scottish local government is very generously funded and I commend the two orders and the notional amounts report to the House.

6.5 pm

Mr. George Robertson (Hamilton)

This is a scandalously short time to debate something so critical to Scottish local government. It is disgraceful that the debate is being squashed into such a short time. Another disgraceful aspect of the debate is that the Secretary of State was not at the Dispatch Box. Three weeks ago, the Secretary of State for Wales presented the revenue support grant orders for Wales. Before that, the Secretary of State for the Environment did so for England. Last year, the then Secretary of State for Scotland stood at the Dispatch Box and defended his position—but not this Secretary of State today. He did not even do so at Scottish questions this afternoon. He sidelines the issue because he knows how embarrassing it is for him. It brings to mind that old Glasgow expression, "We want the engineer, not the sweat rag."

The Secretary of State for Scotland (Mr. Michael Forsyth)

When will the hon. Gentleman treat the House seriously? He knows that the debate has been squeezed because my right hon. Friend the Prime Minister made a statement on Northern Ireland. He also knows that we will have a debate in Scotland on Monday, in the Grand Committee, when I will be happy to open the debate and the hon. Gentleman will have another opportunity to speak. Why does not he address the issues instead of making silly points?

Mr. Robertson

If there was a world competition for silly points, the right hon. Gentleman would win. I do not deny that the Northern Ireland statement was important, but the Government determine the business before the House and the amount of time we have for this debate is inadequate. It is the right hon. Gentleman who does not take the House seriously. This is the third major debate on Scotland since Christmas. One was on the effects of the winter, on a motion for the Adjournment on a Wednesday morning. It was the junior Minister who attended that debate. Then there was a debate on the privatisation of water, but the Secretary of State was absent. This is the third debate, but still he was not at the Dispatch Box answering for what is happening—

Mr. Forsyth

The hon. Gentleman really does take the biscuit. He is criticising me for not answering an Adjournment debate on a Wednesday morning—something traditionally done by a junior Minister—when he did not attend the Grand Committee to debate law and order and other serious issues. He boasts about winding up a debate on water privatisation as it affects England. I confine my activities to looking to Scotland's interests in Scotland. It is the hon. Gentleman who, at every opportunity, has run away from debates on Scottish issues in the Grand Committee. If he wants an opportunity to debate today's subject with me, he will get it on Monday.

Several hon. Members

rose—

Mr. Deputy Speaker

Order. Let us return to local government finance now, please.

Mr. Robertson

That is what we hoped to hear the Secretary of State speaking about, but he did not even speak about it at Scottish questions today. There is genuine anger and outrage in Scotland about what is happening to local authorities. Some 40,000 people were on the streets of Edinburgh over the weekend to make their point known. They expect someone who claims to be Scotland's man in the capital to give an explanation, rather than to have the sandbagging performance of a junior Minister who just repeats the same script, irrespective of the facts.

Mr. Kynoch

rose—

Mr. Robertson

Come on, the Minister took 22 minutes.

Mr. Kynoch

If the hon. Gentleman is so concerned about the facts that I quoted during the debate, will he once and for all tell the House where he would find the £395 million and how much he would give to local government should he ever be in power?

Mr. Robertson

Although he is only a very junior member, the Minister is currently in the Government. If he will tell me where they found £1.5 billion of public money to waste on railway privatisation, I will tell him where we will find money for vital front-line services.

The problem with this debate is quite simple: it is whether we can ever again believe Ministers in this Government. It was demonstrated on Monday, after the Scott report, that one Minister misled the House on 37 occasions on a vital—

Mr. Deputy Speaker

Order. What on earth has this to do with local government finance in Scotland?

Mr. Robertson

Mr. Deputy Speaker, it has everything to do with it because, this evening, we have to believe the Minister. It goes to the root—

Mr. Deputy Speaker

Order. It does not go to the root of anything. Let us keep to the debate that is before us—local government finance, Scotland.

Mr. Robertson

Mr. Deputy Speaker, Scottish Office Ministers expect to be believed about the revenue support grant order. They spew out figures, like some demented bingo machine, but no one believes them in Scotland, nor should they be believed. Believing that Scottish Office Ministers are telling the truth about local government finance amounts to calling Councillor John Young, the Tory leader of Glasgow city council, a liar. He was in London today to make a case to the Government about the problems that have been inflicted on Glasgow by Tory Ministers, and he is not a liar.

To accept that Ministers are telling us the truth about local government finance would mean making a liar out of Councillor Tom Hogg, the Conservative leader on the new Borders council, who was quoted in The Scotsman on 31 January as expressing his disgust at a package of 30 education spending cuts forced on the authority by Scottish Office expenditure limits. Councillor Hogg, who said that he could not change the mind of the Secretary of State, is not a liar.

To accept that the junior Minister, the hon. Member for Kincardine and Deeside (Mr. Kynoch), is being truthful today means saying that Tory, Labour, Liberal and SNP councillors all over Scotland have invented a crisis.

Mr. Deputy Speaker

Order. The hon. Gentleman has been a Member of Parliament for a long time—

Mr. James Wallace (Orkney and Shetland)

He never said anything like—

Mr. Deputy Speaker

Order. If the hon. Gentleman wishes to be called this evening, he must listen. The hon. Member for Hamilton (Mr. Robertson) might like to withdraw what he has just said. There was a double negative on "is it truthful" or words to that effect—[Interruption.] Order. The Chair rules on these matters.

Mr. Robertson

Absolutely, Mr. Deputy Speaker; I am simply saying that we have two sets of people to believe—the Minister or a set of councillors from all parties, including the Conservative party. If Ministers are telling the truth, those people are inventing a crisis in Scotland. I do not believe that they are inventing a crisis. We would have to believe that those councillors are conspiring to cut schools, homes and community centres and to increase council tax by five times the rate of inflation. We would have to believe that they are doing all that simply to embarrass the Secretary of State for Scotland.

Is anyone expected to believe that all that pain, all those threatened jobs and all the agonised judgments of Solomon that have been made in almost every council before next Tuesday are, in Sir Michael Hirst's words, simply to force the Government "on to the defensive"? The fact is that we do not believe—

Mr. Allan Stewart (Eastwood)

Will the hon. Gentleman give way?

Mr. Robertson

I genuinely want to spare some time for other hon. Members in this debate, but I have already given way twice to a highly intemperate and very excitable Secretary of State. Ministers in this damaged and discredited Government may have great difficulty in separating truth from untruth, but the Scottish people do not have that difficulty. They know that, whatever propaganda, spin or mirrors are used on the manipulated figures, there is a crisis in local government, that the 23rd Tory tax increase will go on to their council tax bills and that they will have to pay more to get less.

During the next three years, central Government will take another £500 million out of local government. On council tax, that is the equivalent of 4p on the standard rate of income tax, and the local taxpayers will have to stump up that cash. This year, every independent expert agrees that a crisis has been induced by the Government in Scottish local government. In Scotland on Sunday, Claire Monaghan, one of the most respected experts in Scottish local government and academic life, from Strathclyde university, was asked about the Government's figures. She said: In real terms there has undoubtedly been a decline. When she was asked whom to blame, she said: Central Government. Not just the current administration but those in office throughout the 1980s. What does Prof. Arthur Midwinter, whom the Government are prone to quote often, say about the Government's views on local government? He said: The present crisis results from the cumulative effect of the Government's squeeze on spending, and assumptions about the cost of local government reorganisation … The Conservatives present themselves as the party of sound finance, but their record in local government is one of fiscal incompetence. Those are the words of Prof. Midwinter, not of representatives of Labour-controlled local authorities.

How dare this gang of Ministers peddle the distortion that there is no problem and that councils have much more money to spend? The Government cannot tell the difference between truth and untruth and have completely lost the ability to distinguish between propaganda and fact. Last week, Sir Michael Hirst sent a letter out asking people to spy on local councils throughout Scotland. In his briefing, he said: Every council will have the scope for an increase of at least 2 per cent. in its budget and most 2.5 per cent. That is a fantasy, rivalled only by the famous words, "The guidelines have not been changed."

Tory propaganda says that Government support to local authorities is to be increased next year by £148 million, but the truth—the whole truth—is completely different. Councils must operate on real cuts in financing and not on the rich manure of propaganda. The Secretary of State said that there is £148 million extra this year—but there are some deductions. The first deduction is caused by inflation, which is now rising at 2.9 per cent. So, even on the Government's own figures, there is no real increase at all. We must then deduct the £39 million of transfers from the Department of Social Security, and then all the new priority needs that have been imposed on councils. Finally, and most important of all, we must deduct the huge cost of the botched local government reorganisation that was forced on Scotland.

Ministers say that the reorganisation will save £30 million a year. The reality is that it will cost £200 million in next year, and another £200 million in the next two years. That is a reorganisation tax of £200 million, and there is nothing to show for it. That is why the Government's statistics are misleading—they are designed to mislead the public. That is why, when the Secretary of State cries "more money", he means less money. That is why, when the blame lies with him and his Ministers, he passes the buck and blames local councils for the damage that will be done.

Instead of 2 per cent. increases in budgets, as they were promised, people will see schools closing, community centres shutting, old folks' homes closing, charges going up and social services being stretched. Community facilities are now at a premium. The stark reality behind the propaganda, which has been paid for by our rates and taxes, is that we pay more and get much less.

Of course Ministers ask us—they have to ask us—where they are going to find the extra money. I tell them: do not ask where the money is coming from but ask where it has gone to. They have always found money for their own pet schemes and obsessions, never mind the money spent on a botched reorganisation. What about the money that was spent on Health Care International and poured down the drain? What about the hundreds of millions of pounds that have been squandered on rail privatisation and on NHS bureaucracy? What about the billions of pounds that were wasted and squandered on the poll tax—the Secretary of State's brainchild?

It is funny how the Government can find £9 million for the assisted places scheme to prop up the private school sector in Scotland while cash is short for front-line services, such as schools and social services. They can find £30 million for a nursery voucher scheme which nobody in Scotland wants, while quality local government nurseries are savaged by the cuts. Only a couple of weeks ago, the Government found £89 million for the water quangos and managed to reschedule—

Mr. Kynoch

Will the hon. Gentleman give way?

Mr. Robertson

No. The Minister can answer at the end of the debate.

Mr. Kynoch

Will the hon. Gentleman give way?

Mr. Robertson

I am not giving way; there is not enough time. The Minister will be able to answer in his winding-up speech. I assume that he wants time to wind up; perhaps he would like to give another plausible explanation.

Some £700 million was wiped off the capital debt of the new water quangos. The Government can always find cash for their dogma, for their political playthings and for their waste, but they plead poverty when it comes to the vital services on which whole communities depend.

This year's settlement for local government in Scotland is a disgrace and a sad start for the new councils, which the Government wished on Scotland but could not capture for their own party. The people of Scotland are being punished for the lamentable political failure of the Conservative party last year. That is an act of cynical betrayal which will not be forgiven by the people of Scotland.

It is not too late for the Government to redeem themselves, and it is not too late for them to look again at the truth and the misery behind the partial and selective use of the figures with which they play. It is not too late for Ministers, who sit giggling and laughing on the Front Bench while people outside face the cuts that they will impose, to watch the trail of misery for which they are responsible, to recognise the damage that they have done and to change. It is not too late for the Government to change their mind and they should start doing so tonight.

6.21 pm

Mr. Bill Walker (North Tayside)

The hon. Member for Hamilton (Mr. Robertson) asked where the money had gone. My speech is about social work and in particular about funding for care in the community. I hope that I shall go some way towards answering some of the questions.

I ask my right hon. and hon. Friends to seek an explanation of the cost models that have been created by social work departments throughout Scotland. Social work departments control almost every avenue of inquiry and make it extremely difficult for meaningful data, such as their expenditure arrangements, to leave their control. How do they spend the money allocated?

My understanding is that social work throughout Scotland received a real increase in 1994–95 of more than 44 per cent.; the amount went up from £110 million to £158.3 million in Department of Social Security transfer moneys. Over and above that, the health boards are making almost £40 million a year available to local authorities. Did the social work departments, through their policies, influence how the money was spent? How have they been monitored? Can they demonstrate due economy and efficiency in their use of financial resources? Do they abuse their power?

A Tayside region social work committee meeting on 23 November 1995 considered a report on community care implementation. At that meeting, the director of social work sought council approval for a joint venture agreement with the Church of Scotland—incidentally, in my constituency. Ostensibly, the venture concerned the provision of dementia care.

It should be noted that the director, Mr. Bates, had previously put it to the social work committee, in item 3 from report No. 1550/95, that the regional authority should turn down the opportunity to purchase dementia care services from the private sector at costs beginning at only £195 per week. Mr. Bates stated that the £195 gross was not financially advantageous to the council. The council accepted Mr. Bates's recommendation and turned down the £195 per week option.

In appendix 1 of report No. 1554/95, Mr. Bates states that the running costs for the joint venture agreement option are £423 per week per place provided. He also advises that the cost does not include any element of capital cost. In paragraph 2 of item 2, he says: In recognition of this background the Church of Scotland and the Social Work department have been working jointly on the refurbishment of Belmont Castle Residential Home for Older People"— in my constituency— in a project whose capital costs have been fully met by the church. It appears, however, that Mr. Bates may have failed to identify to the members of the social work committee the fact that the Belmont Castle home appears to belong to Dundee city council, which has leased it to the Church of Scotland. Furthermore, the money for the refurbishment came from the taxpayer via a grant from Scottish Homes, at an apparent cost of about £60,000 per bed.

In making his submission, Mr. Bates would seem to be ignoring his own advice. He stated in the press on 30 November 1995: The fact of the matter is that we are now involved in quite extensive rationing of a number of the services we provide in Tayside … the fact of the matter is that we cannot spend pound notes that we have not got. Furthermore—[Interruption.] Hon. Members will enjoy the rest of this. Mr. Bates states that it was my decision to introduce rationing … and that means making tough choices. Consequently, Mr. Bates is responsible for and should be held accountable for the following. The joint venture project was not put to the social work committee until the capital work had been done.

Mr. Deputy Speaker

Order. The hon. Gentleman must relate his remarks to the order. I hope that he will do that very quickly.

Mr. Walker

I thank you for your guidance, Mr. Deputy Speaker. My remarks relate directly to the order because the claim being made throughout Scotland, by Mr. Bates and others, is that the order is inadequate. He claims that he cannot fund the project he has in hand. I have to look at the projects he has in hand so that we can assess whether his claim in genuine.

The joint venture project was not put to the social work committee until the capital work had been more or less completed. That is a serious point, because if the funding came from Scottish Homes, as it appears to have done, there would have been a requirement for an endorsement by Tayside regional council before the funds could be approved by Scottish Homes.

How can Mr. Bates possibly justify recommending the joint venture option with the Church of Scotland as it costs 216 per cent. more per bed to support than the option he could purchase from the open market? The joint venture project provides only eight registered beds and 20 unregistered beds in the form of tenancies. I suggest that that is a manoeuvre, creating an unregistered environment for people who have definite care needs and who will deteriorate.

Mr. Nigel Griffiths

Will the hon. Gentleman give way?

Mr. Walker

I will not give way because of the time restriction.

I have reams of evidence of other matters to do with Tayside region social work department which affect my constituency. Because of that—

Mr. Welsh

On a point of order, Mr. Deputy Speaker. It appears that the hon. Gentleman is addressing specific points to Mr. Peter Bates. If the hon. Gentleman had bothered to turn up at the Select Committee on Scottish Affairs this morning, he could have put those points directly to Mr. Bates, who has been in the Palace of Westminster today to give evidence. The hon. Gentleman was not there. Perhaps he should get in touch with Mr. Bates.

Mr. Deputy Speaker

That is an interesting point of information, but it is not a matter for the Chair.

Mr. Walker

Thank you, Mr. Deputy Speaker. It is fairly obvious that Opposition Members do not want to know how and where the money was spent, despite what the hon. Member for Hamilton said.

I understand that there have been failures to use funds wisely in Argyll and Bute and in Fife, and I shall send my right hon. and hon. Friends a detailed dossier on the matter. In Tayside, the Perth and Kinross care manager service is having problems because it claims that the funding allocated by the orders will be inadequate. Yet the Association of Nursing Homes in Tayside, an organisation advising the Perth and Kinross care manager service, took minutes at a meeting—I will not bore the House with the details of the minutes, but I do have them—at which the care managers said that they were not bothered about the law or about accountability because the regional council's social work department had the power to do what it thought was right, regardless of the law or of financial constraints.

We are debating the matters tonight against a background of misinformation that is based largely on notional budgets and on the gross mismanagement by social work departments—particularly in Tayside—of community care. That failure is impacting on the most vulnerable people, who are least able to fight their case. Historically, social work has always demonstrated that its organisational culture is closed and defensive, and its bureaucratic and fragmented decision-making structure enables it largely to disregard operational outcomes. That state of affairs remains unchallenged because no effective avenue of accountability exists. I hope that the orders and the new councils will provide that avenue of accountability. It should not be forgotten that social work was the lead agency responsible for the Cleveland, Rochdale, Ayrshire and Orkney debacles concerning the forced removal of children from their homes.

The key manoeuvre that social work departments employ to avoid accountability is their collective case management approach, which advocates the virtues of multidisciplinary contributions and collective responsibility. That means that it is almost impossible for an individual social work representative to be made accountable for his actions. The real issues facing us tonight are the notional budgets set by the new councils and the basis on which they were set, how moneys were spent in the past and how moneys in the present budget are to be allocated. I welcome the opportunity to have those matters properly addressed.

6.32 pm

Mr. Norman Hogg (Cumbernauld and Kilsyth)

The hon. Member for North Tayside (Mr. Walker) will forgive me if I do not follow what he said, but, in common with most of humanity, I do not have a clue what he was talking about.

I should begin by drawing attention to the fact that I have a registered interest. I have attended debates on this subject for many years, and I must tell the Secretary of State that this is the worst settlement that I can remember. It will certainly undermine local authority services, it is below the rate of inflation, and it will cost jobs.

In addition, the settlement will cut across the very plans that the Government have for local government, such as devolved school government, school transport safety, care in the community and the pressures on local authorities resulting from our aging population. The very things that the Government want to do will be undermined by the way in which they have dealt with the revenue support grant.

I want to speak about jobs this evening. The Secretary of State told the Convention of Scottish Local Authorities that he wants local government costs to match those in England, and indeed he drew a comparison with England at Question Time today.

Mr. Michael Forsyth

Just for the record, I told COSLA nothing of the sort. I have heard a rumour that COSLA left the meeting and said that, but I pointed out that the grant was 44 per cent. higher per head than in England, and that expenditure in Scotland was 30 per cent higher. At no stage have I said that expenditure should be brought down to English levels. Had I thought that, I would not have fought so hard for a block that provides for 30 per cent. more expenditure per head in Scotland.

Mr. Hogg

I hear what the Secretary of State says, but the implications of what he said to COSLA and what he said in the House this afternoon are absolutely clear. He cannot escape the fact that he has been drawing comparisons with England. We have a different education system from England, and we have higher standards on class sizes. The right hon. Gentleman will accept that he constantly says that education is one of his priorities, but the truth is that he is not willing to provide the means for education.

We should not seek to emulate England in education. England's staffing figures provide a dubious comparison with those of Scotland, because there are more grant-maintained schools in England. [Interruption.] The Minister responsible for education, housing and fisheries, who is trying to make sedentary interventions from the Treasury Bench, has failed to persuade Scottish parents to adopt the opting-out system. We all remember his brave speeches at Christmas, but he has failed to deliver the policy objective of the Secretary of State.

The fact that there are more contracted-out functions in the English education system means that staffing figures are distorted. In any event, we have every right to assert our separate education system. Indeed, we have a constitutional right to a different education system, and it is the duty of the Secretary of State for Scotland to defend that. But he is not doing so with the revenue support grant, because he is financially undermining the education system.

Mrs. Fyfe

Will my hon. Friend give way?

Mr. Hogg

I am sorry, but I have been asked by, among others, Mr. Deputy Speaker—for whom I have great respect—not to take up too much time, and I know that the hon. Member for Orkney and Shetland (Mr. Wallace), the Scottish spokesman for the Liberal Democrats, is hoping to speak.

The Secretary of State inherited the local government reorganisation, and I do not blame him for that reorganisation. I blame the hon. Member for Eastwood (Mr. Stewart), who was the architect of a system that is costing the council tax payer and the British taxpayer a great deal of money. Its structure is most unsuitable to the delivery of services in Scotland, and the shambolic situation that now exists is directly his responsibility.

The reorganisation was forced on an unwilling Scotland, and the result is that 4,500 employees—and probably more—will leave local government this year. More jobs will be lost because of the phasing of vacancies and temporary posts. These people are not bureaucrats—they work in front-line jobs, and include teachers, social work staff, library staff and so on.

Some 600 senior officers—persons employed in senior official jobs earning £42,000 or more—will be leaving local government. The new councils have streamlined their management structures, and have done their best to make new provisions. But the loss of experienced staff should worry the Secretary of State, and that is a part of the inheritance that has been handed to him by the hon. Member for Eastwood.

The Tories have created an enormous explosion in the number of bureaucrats in the health service, so they are not in a position to lecture local government administrators and management. That is impudence on the part of the Government, but they constantly denigrate local government and its officers, and they constantly say that local government is top-heavy with officials. The Government are deliberately curbing local government expenditure for reasons of which we are all very well aware.

We all know the objective of the cuts. The Secretary of State wants to be able to tell his Cabinet colleagues that he is making cuts to support the creation of a cut in direct taxation later in the year. That is all for the sake of trying to save the day for the Tory party before the next general election.

Thanks to the hon. Member for Eastwood and the Government, an attempt is being made to force uniformity of management and services on us. That is very different from what is required by local government. We have a diverse system of local government, thanks to the structure that has been introduced. The authorities are diverse in size. It is not possible to create similar management structures in every case. The Government are doing their usual trick of trying to impose centralism on everything.

The Scottish people, their councillors and those who work in local government day after day know that the Government's day is over. There is no doubt about it. There is no authority for what the Government do in Scotland. That is not the mandate argument of which we have heard so much over the years, but simply a fact.

In the elections to the new unitary authorities in April last year, the Government were heavily defeated. There are no Tory councillors to speak of in Scotland, and they do not control any authorities. The Government have no right to do what they are doing. We know that the Tory ranks are broken. Not a single Minister on the Treasury Bench tonight will serve in the next Parliament.

6.41 pm

Sir Hector Monro (Dumfries)

On a night when we have heard the tremendous news of the order for three new frigates from Yarrow in Glasgow, we ought to be full of good cheer instead of listening to the moaning and groaning of the Opposition, led by the hon. Member for Hamilton (Mr. Robertson).

Local authority finance is an annual ritual. It is always the same, whatever Government are in power. In 1964–70 and 1974–79, there were equally contentious local government finance settlements. I was a councillor for 15 years, and I knew each year that we would face difficult decisions on reducing the budgets that we might like to set, to bring prudent housekeeping to the local authority.

The attitude of Opposition Members is that everything is always cut, cut, cut. We are really dealing with reductions in the budgets that local authorities would like to set if they had carte blanche. Those are the cuts we are talking about, not cuts by Government. The Government have been very reasonable in giving authorities an increase of 2.88 per cent. against 2.9 per cent. inflation. By and large, spending should about equate to what was spent last year, allowing for inflation.

The only major change this year is reorganisation. My right hon. Friend the Secretary of State has built in additional money for the transition. He rightly expects some financial savings from reorganisation. When we consider that, in my area, five councils have been reduced to one, we would expect a reduction in the administrative costs of the local authority, especially when aggregate external finance this year is virtually the same as last year. There is only a £500,000 difference in £152 million of grant from the Government.

The Opposition are not putting sufficient pressure on their local authorities to trim their budgets to what any prudent housekeeper would spend. [Interruption.] That is a statement of fact. Over the past 10 years, local authorities have increased their expenditure in real terms by 20 per cent. They have increased expenditure in real terms year by year. Until we get a balance far nearer to what is fair and prudent, we will have the same problem every year with local government finance.

We must consider the overall position. Roughly the same population requires the same services each year, yet, out of the blue, local authorities want to increase their expenditure far above the rate of inflation. Of course one would like to have marginal increases to improve services, housing and all the other aspects of local authority expenditure, but nothing like the 10, 20, 30, or 40 per cent. figures that are being thrown around the Chamber.

We have to consider the comparison between Scotland and England and Wales. My right hon. Friend the Secretary of State has made clear the position that he took with the Convention of Scottish Local Authorities. There is no question of bringing down expenditure to the level of England, but it is right to point out to councillors in Scotland that Government-supported expenditure in Scotland is 30 per cent. higher than in England, 22 per cent. higher than in Wales, and 70 per cent. higher in respect of capital expenditure. Those are facts. We are spending far more than we ought in Scotland on providing the services that we all want.

This is a difficult year, as the transition is made from the old authorities to the new. Now that we have achieved the changes, let us go forward with some positive thoughts, rather than all the negatives that are being thrown out by the Opposition. We want the new streamlined councils to work, to be more economical in their use of financial resources, to provide the services we want, and to develop the housing and social aspects of their duties.

All in all, we want positive development and not the continual moaning of the Opposition that it is not possible to achieve anything. Of course it is possible to achieve things. I bet that, when council taxes are set, they will be much less than the figures bandied about in the Chamber tonight.

6.46 pm

Mr. James Wallace (Orkney and Shetland)

I was astounded to hear the right hon. Member for Dumfries (Sir H. Monro) say that we are talking about mythical cuts to wish lists. When schools close, real schools are involved; when staff are laid off, real people lose their jobs. The cuts are real, and they will be laid at the door of the Conservative Government.

It may well be that local authorities wish to spend more on repair and maintenance of school buildings. When there is a £500 million backlog of school building repair and maintenance work, it is not unreasonable that they should wish our children to be taught in decent surroundings. That may be a cut to a wish, but it has real effects on the young people who have to study in those buildings.

This debate takes place against a background of cuts in services, proposed increases in council tax and staffing reductions. Although the Minister has been trotting out the same line week after week and it has been clearly shown that his figures are a gloss, he has no new song to sing.

The Minister says that a £148 million increase has been given to local authorities. Of that, £40 million is the cost of reorganisation. When the Secretary of State and the Minister say that they have managed to get £26.5 million more than the equivalent under the Barnett formula that applies to local government in England, it ignores the fact that that sum is £13.5 million less than they say is necessary for local government reorganisation. There has been no local government reorganisation in England and Wales except for two or three councils in England. Some £39.5 million is being transferred from social security to care in the community. They want a £44 million increase for the police, a £13 million increase for fire services and £500,000 for the district courts. If we add all that up, we are left with £11 million for everything else. The Government are supposed to be keen on education. If we assume that education spending represents half the overall budget, they have provided an extra £5 million for the whole of Scotland.

Mrs. Fyfe

Is it not incredible that, today of all days, the Government should announce an increase of £2.12 million, or 17 per cent., for the assisted places scheme, when council education is deteriorating across Scotland?

Mr. Wallace

The people of Scotland will note that a substantial sum is being given to a relatively small number of pupils, when the vast majority are suffering from education cuts.

In the highlands and islands, both the chief constable and the chief firemaster believe that even the amount that the Government think should be spent will not provide adequate services. The Government blame local authorities, but the people of Scotland have seen through that. The Government have blamed the outgoing authorities for spending reserves, although those authorities have often been encouraged to do so—and, in any event, that would be an explanation of, rather than a solution to, the problems faced by the new authorities.

The Minister did not deal properly with the point that I raised at Question Time. I salute the islands authorities for managing to control council tax increases. In some cases, they merely kept pace with inflation; the Western Isles increase was only 5 per cent. Many cuts in services or increases in charges have been made, affecting care centres in the islands. Unlike mainland Scotland, however, the islands have not had to contend with reorganisation. That is the cause of a substantial proportion of the council tax increases—£40 million, we hear.

According to the explanatory and financial memorandum to the Local Government etc. (Scotland) Bill, enacted in 1994, the transitional costs were expected to be between £120 million and £196 million, and would be offset by on-going savings of between £22 million and £66 million per annum. I accept that not all the transitional costs will be incurred in the first year, but I think it fair to say that they will be front-loaded in the first year. The savings will come later. Even on the basis of the figures given by the Government at the time they published the Bill, £40 million is wholly inadequate to meet local authorities' costs.

I suspect that, privately, the Secretary of State is furious with his predecessor, who persuaded the Treasury—not that it probably needed much persuasion; no doubt it clapped its hands in glee—that the changes in Scottish local government could be funded from the block grant. That defied history: I do not think that savings have ever been possible in a local government change.

The Secretary of State challenges the Opposition parties to say where savings can be made in the block grant. At the weekend, he said in a speech at Banchory, quoted in the Aberdeen Press and Journal, Councils are undoubtedly feeling the strain of reorganising themselves". They did not want the reorganisation; it was forced on them. Having obliged councils to undergo reorganisation, the Government should do what they did following the debacles of the poll tax and the revaluation of 1985.

The Government should go to the Treasury and secure an amount that will allow local authorities to meet reorganisation costs and save the Scottish people from the service cuts and council tax increases that will otherwise be inevitable. The Government are imposing more cuts and more taxes in a vain attempt—a last desperate throw of the die—to cling to office.

6.53 pm

Mr. Andrew Welsh (Angus, East)

I have just four minutes in which to speak. I shall do so as briefly as I can, so that others can speak as well. I do not wish to speak briefly, however; there is much to be said.

The debate may be an annual ritual, but this one is different. In the past, there has been much talk of cuts, but these cuts are for real, and will affect local authorities in the future. Cuts that began in 1976, under Denis Healey, have now run their course, but, as I have said, these cuts are for real, and once they have been implemented there will be no going back on them. The Government's 2.6 per cent. increase for local authorities is really only a 1 per cent. increase; given inflation, it represents a cut. We shall end up with the worst of all possible worlds. The council tax will inevitably rise, as will local charges, and services will be reduced.

Even a financially prudent authority such as Angus could not remain within the Government's cap—even with a standstill budget. The Government propose to take £9 million out of its local economy, which will increase unemployment, reduce services and affect local businesses. The policy on capital receipts and capital from revenue, which has halved the amount that the authority would otherwise receive, will inevitably have that result, which will be mirrored throughout the country.

Central Government now dominate local authorities, which are not allowed to set their own budgets or determine their policies according to local need. Central Government determine their priorities for them. The Secretary of State has told them which core services will be given more resources; within a fixed budget, that means cuts in every other service.

There is no new money for the police, fire services, education or any other service. The Government have financed those services by taking 4.9 per cent. out of every other service budget. That means that every other council service budget will be cut not just by the Secretary of State's 4.39 per cent., but by an additional 3 per cent. for inflation. The real cuts amount to some 7.39 per cent.

The Government's way of running local authorities is to force the departments dealing with social work, libraries, roads, infrastructure and other services to cut 7.39 per cent. from their budgets. All that is deliberate, calculated Conservative Government policy. Central Government have set capping and revenue levels, and determined revenue spending patterns and priorities. They have set capital levels, capital-from-revenue levels and end use of capital-from-sales revenues. Central Government now run local authorities: there is no longer an independent local democratic service. The Government have a cheek to claim that they are giving local authorities more power.

Central Government now rigidly fix the total amount of local authority revenue, and thereby local services. Every unnecessary school closure, every unnecesary rent rise, every unnecessary increased charge—all the inevitable consequences of the order that we are discussing—will stand firmly at the door of the Conservative party. This is not a budget for Scotland's democratic local authorities; it belongs to the Conservative party.

The Conservatives can run now, but they cannot for ever hide from the electorate. They will surely get their come-uppance when the people of Scotland have the chance to judge them.

Mr. Deputy Speaker (Sir Geoffrey Lofthouse)

I call the Under-Secretary of State for Scotland.

Mr. John Maxton (Glasgow, Cathcart)

On a point of order, Mr. Deputy Speaker.

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

On a point of order, Mr. Deputy Speaker.

6.58 pm

Mr. Kynoch

With the leave of the House, Mr. Deputy Speaker—[Interruption.]

Mr. Deputy Speaker

Order. Settle down. The Minister does not need the leave of the House—[HON. MEMBERS: "He does."] Order. I have ruled that he does not.

Mr. Kynoch

Thank you, Mr. Deputy Speaker. In the few seconds that I have left—

Mr. Foulkes

On a point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker

I hope that it does not arise from my earlier decision. If it does, there is no point in the hon. Gentleman's raising it.

Mr. Foulkes

A number of my hon. Friends representing certain parts of the country have not had an opportunity to speak. The Minister took 25 minutes to introduce the debate. Is it not unfair for him to be allowed to reply? He will not actually reply; he will make party political points, as he did at the outset. I urge you, Mr. Deputy Speaker, to call one of my hon. Friends.

Mr. Deputy Speaker

That is not a point of order for me. I have already ruled that the Minister does not need the leave of the House.

Mr. Kynoch

We have heard nothing constructive from the Opposition. That is typical. None of them has recognised that an extra £148 million has been put into local government, and that Scottish local government is being given significantly more than the rest of the United Kingdom. They are trying to shield their local councillors, who are spending and spending taxpayers' money.

All we have heard from the Opposition parties was outlined earlier in the week. It is clear that they want to increase taxation. They want to do away with compulsory competitive tendering and remove capping. They want to remove the uniform business rate from central Government and take it back to local government—and local businesses know what that will mean: increased costs. However, it is consistent with everything that Labour Members have said.

I posed the following questions to the hon. Member for Hamilton (Mr. Robertson): where would he find the funding? How would he find the funding? What would the funding be under Labour? He has not answered those questions. I commend the order to the House.

Question put:—

The House divided: Ayes 284, Noes 252.

Division No. 63]	[6.59 pm
AYES
Ainsworth, Peter (East Surrey)	Arnold, Sir Thomas (Hazel Grv)
Aitken, Rt Hon Jonathan	Ashby, David
Alexander, Richard	Atkinson, Peter (Hexham)
Alison, Rt Hon Michael (Selby)	Baker, Nicholas (North Dorset)
Allason, Rupert (Torbay)	Baldry, Tony
Amess, David	Banks, Matthew (Southport)
Ancram, Rt Hon Michael	Banks, Robert (Harrogate)
Arbuthnot, James	Batiste, Spencer
Arnold, Jacques (Gravesham)	Bellingham, Henry

Bendall, Vivian	Freeman, Rt Hon Roger
Beresford, Sir Paul	French, Douglas
Biffen, Rt Hon John	Gale, Roger
Body, Sir Richard	Gallie, Phil
Bonsor, Sir Nicholas	Gardiner, Sir George
Booth, Hartley	Garnier, Edward
Boswell, Tim	Gill, Christopher
Bottomley, Peter (Eltham)	Gillan, Cheryl
Bottomley, Rt Hon Virginia	Goodlad, Rt Hon Alastair
Bowden, Sir Andrew	Gorman, Mrs Teresa
Bowis, John	Gorst, Sir John
Brandreth, Gyles	Greenway, Harry (Ealing N)
Brazier, Julian	Greenway, John (Ryedale)
Bright, Sir Graham	Griffiths, Peter (Portsmouth, N)
Brooke, Rt Hon Peter	Grylls, Sir Michael
Brown, M (Brigg & Cl'thorpes)	Gummer, Rt Hon John Selwyn
Browning, Mrs Angela	Hague, Rt Hon William
Bruce, Ian (South Dorset)	Hamilton, Rt Hon Sir Archibald
Burns, Simon	Hamilton, Neil (Tatton)
Burt, Alistair	Hannam, Sir John
Butcher, John	Hargreaves, Andrew
Butler, Peter	Harris, David
Carlisle, John (Luton North)	Haselhurst, Sir Alan
Carlisle, Sir Kenneth (Lincoln)	Hawkins, Nick
Carrington, Matthew	Hawksley, Warren
Carttiss, Michael	Hayes, Jerry
Cash, William	Heald, Oliver
Channon, Rt Hon Paul	Heathcoat-Amory, Rt Hon David
Chapman, Sir Sydney	Hendry, Charles
Churchill, Mr	Heseltine, Rt Hon Michael
Clappison, James	Hicks, Robert
Clark, Dr Michael (Rochford)	Higgins, Rt Hon Sir Terence
Clarke, Rt Hon Kenneth (Ru'clif)	Hill, James (Southampton Test)
Clifton-Brown, Geoffrey	Hogg, Rt Hon Douglas (G'tham)
Coe, Sebastian	Horam, John
Colvin, Michael	Hordern, Rt Hon Sir Peter
Congdon, David	Howard, Rt Hon Michael
Conway, Derek	Howell, Sir Ralph (N Norfolk)
Coombs, Anthony (Wyre For'st)	Hughes, Robert G (Harrow W)
Coombs, Simon (Swindon)	Hunt, Rt Hon David (Wirral W)
Cope, Rt Hon Sir John	Hunt, Sir John (Ravensbourne)
Cormack, Sir Patrick	Hunter, Andrew
Couchman, James	Hurd, Rt Hon Douglas
Cran, James	Jack, Michael
Currie, Mrs Edwina (S D'by'ire)	Jackson, Robert (Wantage)
Curry, David (Skipton & Ripon)	Jenkin, Bernard
Davies, Quentin (Stamford)	Jessel, Toby
Day, Stephen	Johnson Smith, Sir Geoffrey
Devlin, Tim	Jones, Gwilym (Cardiff N)
Dicks, Terry	Jones, Robert B (W Hertfdshr)
Dorrell, Rt Hon Stephen	Jopling, Rt Hon Michael
Douglas-Hamilton, Lord James	Kellett-Bowman, Dame Elaine
Dover, Den	Key, Robert
Duncan-Smith, Iain	King, Rt Hon Tom
Dunn, Bob	Kirkhope, Timothy
Durant, Sir Anthony	Knapman, Roger
Dykes, Hugh	Knight, Mrs Angela (Erewash)
Eggar, Rt Hon Tim	Knight, Rt Hon Greg (Derby N)
Elletson, Harold	Knight, Dame Jill (Bir'm E'st'n)
Emery, Rt Hon Sir Peter	Knox, Sir David
Evans, David (Welwyn Hatfield)	Kynoch, George (Kincardine)
Evans, Jonathan (Brecon)	Lait, Mrs Jacqui
Evans, Nigel (Ribble Valley)	Lamont, Rt Hon Norman
Evans, Roger (Monmouth)	Legg, Barry
Evennett, David	Lennox-Boyd, Sir Mark
Faber, David	Lester, Jim (Broxtowe)
Fabricant, Michael	Lidington, David
Fenner, Dame Peggy	Lilley, Rt Hon Peter
Field, Barry (Isle of Wight)	Lloyd, Rt Hon Sir Peter (Fareham)
Fishburn, Dudley	Lord, Michael
Forman, Nigel	Luff, Peter
Forsyth, Rt Hon Michael (Stirling)	Lyell, Rt Hon Sir Nicholas
Forth, Eric	MacGregor, Rt Hon John
Fowler, Rt Hon Sir Norman	MacKay, Andrew
Fox, Dr Liam (Woodspring)	Maclean, Rt Hon David
Fox, Rt Hon Sir Marcus (Shipley)	McLoughlin, Patrick

McNair-Wilson, Sir Patrick	Skeet, Sir Trevor
Madel, Sir David	Smith, Sir Dudley (Warwick)
Maitland, Lady Olga	Smith, Tim (Beaconsfield)
Malone, Gerald	Soames, Nicholas
Mans, Keith	Spencer, Sir Derek
Marland, Paul	Spicer, Sir James (W Dorset)
Marlow, Tony	Spicer, Sir Michael (S Worcs)
Marshall, John (Hendon S)	Spink, Dr Robert
Martin, David (Portsmouth S)	Spring, Richard
Mates, Michael	Sproat, Iain
Mayhew, Rt Hon Sir Patrick	Squire, Robin (Hornchurch)
Merchant, Piers	Stanley, Rt Hon Sir John
Mills, Iain	Stephen, Michael
Mitchell, Andrew (Gedling)	Stem, Michael
Mitchell, Sir David (NW Hants)	Stewart, Allan
Moate, Sir Roger	Sumberg, David
Monro, Rt Hon Sir Hector	Sweeney, Walter
Montgomery, Sir Fergus	Sykes, John
Needham, Rt Hon Richard	Tapsell, Sir Peter
Neubert, Sir Michael	Taylor, John M (Solihull)
Newton, Rt Hon Tony	Taylor, Sir Teddy (Southend, E)
Nicholls, Patrick	Temple-Morris, Peter
Nicholson, David (Taunton)	Thomason, Roy
Norris, Steve	Thompson, Sir Donald (C'er V)
Oppenheim, Phillip	Thompson, Patrick (Norwich N)
Ottaway, Richard	Thornton, Sir Malcolm
Page, Richard	Thurnham, Peter
Paice, James	Townend, John (Bridlington)
Patnick, Sir Irvine	Townsend, Cyril D (Bexl'yh'th)
Patten, Rt Hon John	Tracey, Richard
Pattie, Rt Hon Sir Geoffrey	Tredinnick, David
Pawsey, James	Trend, Michael
Peacock, Mrs Elizabeth	Twinn, Dr Ian
Pickles, Eric	Vaughan, Sir Gerard
Porter, David (Waveney)	Viggers, Peter
Portillo, Rt Hon Michael	Walden, George
Powell, William (Corby)	Walker, Bill (N Tayside)
Rathbone, Tim	Wallace, James
Redwood, Rt Hon John	Waller, Gary
Renton, Rt Hon Tim	Wardle, Charles (Bexhill)
Richards, Rod	Waterson, Nigel
Riddick, Graham	Wells, Bowen
Rifkind, Rt Hon Malcolm	Whitney, Ray
Robathan, Andrew	Whittingdale, John
Robertson, Raymond (Ab'd'n S)	Widdecombe, Ann
Robinson, Mark (Somerton)	Wiggin, Sir Jerry
Roe, Mrs Marion (Broxbourne)	Wilkinson, John
Rowe, Andrew (Mid Kent)	Willetts, David
Rumbold, Rt Hon Dame Angela	Wilshire, David
Ryder, Rt Hon Richard	Winterton, Mrs Ann (Congleton)
Sackville, Tom	Winterton, Nicholas (Macc'f'ld)
Sainsbury, Rt Hon Sir Timothy	Wolfson, Mark
Scott, Rt Hon Sir Nicholas	Wood, Timothy
Shaw, David (Dover)	Yeo, Tim
Shaw, Sir Giles (Pudsey)	Young, Rt Hon Sir George
Shephard, Rt Hon Gillian
Shepherd, Sir Colin (Hereford)	Tellers for the Ayes:
Shersby, Sir Michael	Mr. Michael Bates and Mr. Gary Streeter.
Sims, Roger

NOES
Abbott, Ms Diane	Beith, Rt Hon A J
Adams, Mrs Irene	Benn, Rt Hon Tony
Ainger, Nick	Bennett, Andrew F
Ainsworth, Robert (Cov'try NE)
Allen, Graham	Bermingham, Gerald
Anderson, Donald (Swansea E)	Betts, Clive
Anderson, Ms Janet (Ros'dale)	Blair, Rt Hon Tony
Ashdown, Rt Hon Paddy	Blunkett, David
Ashton, Joe	Boateng, Paul
Austin-Walker, John	Bradley, Keith
Banks, Tony (Newham NW)	Bray, Dr Jeremy
Barnes, Harry
Battle, John	Brown, Gordon (Dunfermline E)
Bayley, Hugh	Brown, N (N'c'tle upon Tyne E)
Beckett, Rt Hon Margaret	Bruce, Malcolm (Gordon)

Burden, Richard	Harvey, Nick
Byers, Stephen	Hattersley, Rt Hon Roy
Caborn, Richard	Henderson, Doug
Callaghan, Jim	Heppell, John
Campbell, Mrs Anne (C'bridge)	Hill, Keith (Streatham)
Campbell, Menzies (Fife NE)	Hinchliffe, David
Campbell-Savours, D N	Hodge, Margaret
Canavan, Dennis	Hogg, Norman (Cumbernauld)
Cann, Jamie	Home Robertson, John
Chisholm, Malcolm	Hood, Jimmy
Clark, Dr David (South Shields)	Hoon, Geoffrey
Clarke, Eric (Midlothian)	Howarth, Alan (Strat'rd-on-A)
Clarke, Tom (Monklands W)	Howarth, George (Knowsley North)
Clelland, David	Howells, Dr Kim (Pontypridd)
Clwyd, Mrs Ann	Hoyle, Doug
Coffey, Ann	Hughes, Kevin (Doncaster N)
Cohen, Harry	Hughes, Robert (Aberdeen N)
Connarty, Michael	Hughes, Simon (Southwark)
Cook, Frank (Stockton N)	Hutton, John
Cook, Robin (Livingston)	Illsley, Eric
Corbett, Robin	Ingram, Adam
Corston, Jean	Jackson, Glenda (H'stead)
Cousins, Jim	Jackson, Helen (Shef'ld, H)
Cunliffe, Lawrence	Jamieson, David
Cunningham, Jim (Covy SE)	Janner, Greville
Cunningham, Roseanna	Jones, Barry (Alyn and D'side)
Dafis, Cynog	Jones, Ieuan Wyn (Ynys Môn)
Dalyell, Tam	Jones, Lynne (B'ham S O)
Darling, Alistair	Jones, Martyn (Clwyd, SW)
Davidson, Ian	Jones, Nigel (Cheltenham)
Davies, Rt Hon Denzil (Llanelli)	Jowell, Tessa
Davies, Ron (Caerphilly)	Kaufman, Rt Hon Gerald
Davis, Terry (B'ham, H'dge H'l)	Keen, Alan
Denham, John	Kennedy, Jane (L'pool Br'dg'n)
Dewar, Donald	Kilfoyle, Peter
Dixon, Don	Kirkwood, Archy
Dobson, Frank	Liddell, Mrs Helen
Donohoe, Brian H	Litherland, Robert
Dowd, Jim	Livingstone, Ken
Dunwoody, Mrs Gwyneth	Lloyd, Tony (Stretford)
Eagle, Ms Angela	Llwyd, Elfyn
Eastham, Ken	Lynne, Ms Liz
Etherington, Bill	McAllion, John
Evans, John (St Helens N)	McAvoy, Thomas
Ewing, Mrs Margaret	Macdonald, Calum
Fatchett, Derek	McFall, John
Faulds, Andrew	McKelvey, William
Fisher, Mark	Mackinlay, Andrew
Flynn, Paul	McLeish, Henry
Foster, Rt Hon Derek	McMaster, Gordon
Foster, Don (Bath)	McNamara, Kevin
Foulkes, George	MacShane, Denis
Fyfe, Maria	McWilliam, John
Galbraith, Sam	Madden, Max
Galloway, George	Mahon, Alice
Gapes, Mike	Marek, Dr John
Garrett, John	Marshall, David (Shettleston)
George, Bruce	Marshall, Jim (Leicester, S)
Gerrard, Neil	Martin, Michael J (Springburn)
Gilbert, Rt Hon Dr John	Martlew, Eric
Godman, Dr Norman A	Maxton, John
Godsiff, Roger	Meacher, Michael
Golding, Mrs Llin	Michael, Alun
Gordon, Mildred	Michie, Bill (Sheffield Heeley)
Griffiths, Nigel (Edinburgh S)	Michie, Mrs Ray (Argyll & Bute)
Griffiths, Win (Bridgend)	Milburn, Alan
Grocott, Bruce	Miller, Andrew
Gunnell, John	Mitchell, Austin (Gt Grimsby)
Hain, Peter	Moonie, Dr Lewis
Hall, Mike	Morgan, Rhodri
Hanson, David	Morley, Elliot
Hardy, Peter	Morris, Rt Hon Alfred (Wy'nshawe)
Harman, Ms Harriet	Morris, Estelle (B'ham Yardley)

Mowlam, Marjorie	Smyth, The Reverend Martin
Mullin, Chris	Snape, Peter
Murphy, Paul	Soley, Clive
Oakes, Rt Hon Gordon	Spearing, Nigel
O'Brien, Mike (N W'kshire)	Spellar, John
O'Brien, William (Normanton)	Squire, Rachel (Dunfermline W)
O'Hara, Edward	Steinberg, Gerry
Olner, Bill	Stevenson, George
Orme, Rt Hon Stanley	Stott, Roger
Parry, Robert	Strang, Dr. Gavin
Pearson, Ian	Straw, Jack
Pike, Peter L	Sutcliffe, Gerry
Pope, Greg	Taylor, Mrs Ann (Dewsbury)
Powell, Ray (Ogmore)	Taylor, Matthew (Truro)
Prentice, Bridget (Lew'm E)	Thompson, Jack (Wansbeck)
Prentice, Gordon (Pendle)	Timms, Stephen
Prescott, Rt Hon John	Tipping, Paddy
Primarolo, Dawn	Touhig, Don
Quin, Ms Joyce	Trickett, Jon
Randall, Stuart	Turner, Dennis
Raynsford, Nick	Tyler, Paul
Reid, Dr John	Walker, Rt Hon Sir Harold
Rendel, David	Wallace, James
Robertson, George (Hamilton)	Wardell, Gareth (Gower)
Robinson, Geoffrey (Co'try NW)	Wareing, Robert N
Roche, Mrs Barbara	Watson, Mike
Rooney, Terry	Welsh, Andrew
Ross, Ernie (Dundee W)	Wicks, Malcolm
Rowlands, Ted	Williams, Rt Hon Alan (Sw'n W)
Ruddock, Joan	Williams, Alan W (Carmarthen)
Salmond, Alex	Wilson, Brian
Sedgemore, Brian	Winnick, David
Sheerman, Barry	Wise, Audrey
Sheldon, Rt Hon Robert	Worthington, Tony
Shore, Rt Hon Peter	Wray, Jimmy
Short, Clare	Wright, Dr Tony
Simpson, Alan	Young, David (Bolton SE)
Skinner, Dennis
Smith, Andrew (Oxford E)	Tellers for the Noes:
Smith, Chris (Isl'ton S & F'sbury)	Mr. Jon Owen Jones and Mr. Joe Benton.
Smith, Llew (Blaenau Gwent)

Question accordingly agreed to.

Resolved, That the Local Government Finance (Scotland) Order 1996, dated 12th February 1996, a copy of which was laid before this House on 27th February, be approved.

Resolved, That the Local Government Finance (Scotland) Notional Amounts Report 1996 (House of Commons Paper No. 145), which was laid before this House on 24th January, be approved. That the Revenue Support Grant (Scotland) Order 1996, dated 12th February 1996, a copy of which was laid before this House on 27th February, be approved.—[Mr. Knapman.]

Mr.Robert G. Hughes (Harrow, West)

On a point of order, Mr. Deputy Speaker. Doubtless you will have seen on the tapes that the divorce of His Royal Highness the Prince of Wales and Diana, Princess of Wales has been formally announced, which will be greeted with great sadness in this House and by our constituents. I wonder whether you have had a request from the Government for a statement on that matter. It is important and we should hear the facts in this House.

Mr. Deputy Speaker

I have received no such request. It is not a matter for me.