I beg to move Amendment No. 9, in page 4, line 6, to leave out 'substantial' and to insert 'material'.
The hon. Gentleman will recognise this Amendment as arising from discussions in Committee. We had hoped that the arguments we then deployed would have persuaded the hon. Gentleman to table an Amendment to meet our points. The Clause concerns the rate support grant Orders which will come forward if there are increases in costs which make them necessary. The Clause provides that it will be increased costs which were unforeseen and which could not have been foreseen when the original grant Order was made that will be taken into account and which will affect the amount of the rate support grant increase Order.
We had hoped after putting our case in Committee that we had reminded the Secretary of State of the view which he himself had previously expressed about the necessity in future to consider more factors in deciding the amount of an increase Order than those which had previously been considered under the existing general grant system.
We think that in this simple Amendment, which would change only one word, and in a later one, we have neatly performed for the Under-Secretary the change which was necessary. The Secretary of State will not simply have to consider that there has been a substantial increase in costs. He will also be able to decide on a rate support grant increase Order if there has been such an increase in costs, even if it is not substantial, as to affect local authorities and their services.
I hope that I have reminded the hon. Gentleman of what we said in Committee. I have not seen any Government Amendment which seeks to deal with this point. About two years ago the Secretary of State said that when the time came for a change of the kind the Bill is making more factors ought to be taken into account. I hope that the Government will be more forthcoming tonight.
I would much prefer to meet the principal point of this argument in the discussion on Amendments Nos. 10 and 11. Hon. Members will recall that in Committee the hon. and learned Member for Edinburgh,
Pentlands (Mr. Wylie), who made many good suggestions in Committee and who has even made one tonight, said that I ought to
consider the use of the word 'material'
in place of the word "substantial". I said:
Without commitment, I should like to think about that and see what can be done on Report, if anything."—[OFFICIAL REPORT, Scottish Standing Committee; 7th July, 1966, c. 154.]
I can think of no more neutral a commitment that a Minister could make in Committee.
Despite that, I took advice. Sticking narrowly to the question whether "material" is superior in this context to "substantial", we are advised not merely by the experts in semantics or in etymology but also by the lawyers, that it would be better to stick to "substantial". The Government accept this advice. I hope that the House will endorse the Government's view and not incorporate "material" into the Bill, because I am told that "material" is, if anything, open to slightly more misunderstanding than is "substantial".
I should prefer it if the hon. Gentleman would raise the larger point on Amendments Nos. 10 and 11, when I will willingly give him a reply.
Mr. Edward M. Taylor:
I beg to move Amendment No. 10, in page 4, line 21, to leave out "only".
In view of what the Under-Secretary has just said, we approach this matter rather more hopefully than we otherwise would have done, because it is clear that the hon. Gentleman has given considerable thought to these Amendments. We are concerned about the prospects of local authorities which find themselves confronted with a sudden increase in their expenditure which could not reasonably have been foreseen.
The Bill makes provision for unforeseen increases in the level of prices, costs and remuneration. We are considerably worried, because there can be other unforeseen increases in expenditure which are not directly related to, although they may be associated with, increases in prices, costs and remuneration. When we put forward this suggestion in Committee, the Under-Secretary very kindly said that he was prepared to consider this matter, again without commitment. He expressed the view that in regard to acts of God—these were amongst the matters we had mentioned—there was flexibility in relation to specific grants, although he could not give any guarantee in relation to plagues.
This is a serious point. A situation could arise in which there could be unforeseen increases in local government expenditure. What better proof of this could there be than what we heard today from the Secretary of State? On the basis of the best estimates which we had and on all the advice of the experts about which the Under-Secretary has told us, it was indicated only a few weeks ago that it was probable that local government expenditure in Scotland would rise by about 9 per cent.
This is what the Secretary of State said in introducing the Bill in June, 1966. Today, we learned that there has been an increase of over 16 per cent. This is just the kind of thing which cannot be foreseen. If we had a Government who had a good record in prophecy, if they had a good idea of estimating, and if their estimates had proved to be reasonably accurate, we might be prepared to leave this matter. The tragedy is that in almost every single aspect of Scottish affairs the Government's ability to prophecy and estimate has not been 100 per cent. In the matter of prophecies they have not borne comparison with Old Moore's Almanack and other less reputable prophets. In these circumstances, we must, for the sake of local authorities, have some kind of reservation to protect them.
What kind of unforeseen things do we think of? For example, there is the question of the raising of the school-leaving age. This would involve a dramatic increase in spending. With a shortage of teachers and other difficulties in some areas about school building, it might be difficult to estimate even a year in advance when the decision will take place. If it were to take place in one of the periods of two years covered by an order, this would not be covered by Clause 4(1), because it would not be related to an increase in costs, prices or remuneration although, of course, there would be some increase for teachers. Basically, however, the dramatic increase involved would not be covered.
Then there could, perhaps, be an unforeseen increase in the number of children voluntarily staying on at school. We have all been impressed by the larger number staying on. Indeed, the rate of increase has taken both the Conservative and Labour Governments by surprise. We could see a dramatic increase in this in future and there must be some safeguard for local authorities which would spend so much more on this should the situation arise.
Then there is the problem of bad weather, which could seriously affect local authority expenditure. My hon. Friend the Member for Dumfries (Mr. Monro) has been agitating recently and effectively about problems experienced by some of his constituents as a direct result of bad weather. This involved the local authority in considerably increased expenditure. Is there provision in the Clause for such an eventuality? If there is severe bad weather, particularly in the north or in some of the agricultural areas, this can involve a considerable increase in local authority expenditure, yet there is no provision for it in the Clause.
We appreciate that, in the case of a major epidemic, probably provision would be made by way of a special grant by the Government, but what about extra expenditure through such things as an influenza outbreak, which may be considerable and can involve local authorities in considerable expenditure? In these circumstances, we feel that some provision should be made for this.
In Committee, the Under-Secretary of State, suggested that this was not the kind of thing which would happen nor be taken too seriously now. If he feels that, why cannot the Amendment be accepted? If this kind of situation is not likely to arise, why not have the Amendment in order to safeguard local authorities whose interests might be adversely affected? If there was a small increase in the services and expenditure of local authorities, we would not press this unduly, but the rate of increase in local authority expenditure is alarming and some provision must be made for the kind of circumstances we have mentioned.
We cannot look to the future with any definite point of view. We do not know exactly what will happen but this kind of situation could well arise and we should make provision accordingly. If the hon. Gentleman feels that the Clause makes full provision already, I remind him that, in the various estimates and prophecies made by the Government on all kinds of subjects, from housing to unemployment and rate expenditure, their ability has not been of an acceptable standard. We know how difficult it is to make estimates but please let us make provision for local authorities which might find themselves with unforeseen increases. If the hon. Gentleman feels that this will not arise there surely can be no difficulty in accepting the Amendment and we hope that he will.
There is considerable resentment in the Scottish Office, and not only among Ministers, of allegations about the figures for estimating. The hon. Gentleman said that my right hon. Friend, in his speech in the debate in Committee on the Second Reading principle, estimated a 9 per cent. increase for the current year and that I had given today a figure of 16·5 per cent.
If the hon. Gentleman the Member for Glasgow, Cathcart (Mr. Edward M. Taylor) will do himself the courtesy to read what Ministers actually said, he will find that the Secretary of State's words were:
The figure for 1965–66 is likely to be about 9 per cent."—[OFFICIAL REPORT, Scottish Grand Committee, 14th June, 1966; c. 6.]
In fact, it was 9 per cent. The figure I gave today is for the current year, 1966–67, and I explained what was meant.
The hon. Gentleman does a tremendous discourtesy, not only here but elsewhere, in constantly misrepresenting figures we give him, through his constant misuse—and I must put my objections on record—of the words and figures we use. We are not always right by any means, and I do not mind the hon. Gentleman complaining when we are wrong, but I resent it when he misrepresents us and misleads everyone.
Mr. Edward M. Taylor:
If I have taken this wrongly, then I unreservedly withdraw. But it is fair to say, and I am sure that the Under-Secretary of State will agree, that a clear indication was given that every endeavour would be made by the Government to limit the increase in expenditure so that we would not have the kind of dramatic increases which took place on the last revaluation. But that is a separate point. If I have misunderstood these figures and have interpreted them incorrectly, I entirely withdraw, and I am sorry.
I am glad to have that withdrawal, although it was qualified by partisan political points. The hon. Gentleman's argument is that, since the Scottish Office—and I do not just mean Ministers—is incompetent in making estimates, so he thinks, being cleverer than most of us, we must have an element of the unforeseen written into the Bill. I can think of no more disastrous argument.
The practice as between the Government and the local authorities is to try and get a reasonable understanding of what public expenditure will be involved, coupled with prices, costs and remuneration, the three essential elements which are kept as a fair reserve to be negotiated whenever an increase order is required between the rate support grant orders.
The hon. Gentleman argues for a fourth element. I said in Committee that I would think about it again in the light of the arguments which were advanced. I was thinking particularly of such things as acts of God—flooding, and so on, and even plagues. I did not regard the word "plague" as being humorous but rather as extraordinary in being mentioned in this context. But, having considered the matter, I realise that if we introduce such a fourth element which is so ill-defined as this—the words "unforeseeable expansion" could not be more unclear— we would ensure very great difficulties for the Government in arguing their case on increase orders. The same circumstances applied to the previous system, which the hon. Member for Moray and Nairn (Mr. G. Campbell) knows very well.
I cannot accept the view put by the hon. Member for Cathcart. If local authorities are to expand their programmes we hope that they will do so in a planned way. My complaint earlier today was that they were loading on to a revaluation year about 4 or 5 per cent. of expenditure because they wanted in some way or other to have it carried with less objections, which they thought would be the case in a revaluation year.
I cannot understand the logic of that view. The ratepayers, never mind what the rate poundage is, know whether the rates have gone up or not when the bills come in. That is why I invited the hon. Member for Moray and Nairn to be with us on this and ask for the ironing out of these projects. I do not quarrel with the projects as such, but with the bunching of them together in one particular year in five. We should try to get a gradually rising graph without peaks. That would allow us sensibly to plan the expansion of services.
Planning expenditure on services is difficult enough in the compass of two years and there may be an argument for having three or four years, but a period of two years is the option which we have taken. I plead with the hon. Gentleman to recognise that while we have given the points which he has made every consideration, we think that two years is a reasonable time in which to make these judgments. If any of the three elements now in the Clause is affected, then of course we will have an increase Order, but there should not be a fourth element. If a new service is introduced, it will almost certainly require legislation and the Government would then try to make special provision for a grant, which would be one of several ways of dealing with the matter.
I hope that we can deal with roads and floods, and so on, later and show that we have other means without having to resort to an increase Order to meet the expenditure. Such a provision would not fit here without disrupting the harmony between the Government and local authorities, however, and I hope that the House will not accept the Amendment.