Clause 6. — (Supplemental.)

Local Government (Scotland) Bill – in the House of Commons at 12:00 am on 9th November 1966.

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Photo of Mr Bill Baker Mr Bill Baker , Banffshire 12:00 am, 9th November 1966

I beg to move Amendment No. 75, in page 5, line 47, after 'circumstances', to insert: 'and in particular where it appears to the Secretary of State that in any county, because of the preponderance of small burghs, the formula does not truly reflect the intention of giving adequate grant for the additional expense of administering services in scattered rural areas, the Secretary of State shall have specific power to adjust the weighting for that particular county to such extent as in his opinion will secure for that county a fairer distribution of grant having regard to all the circumstances'. I am perfectly certain that the Under-Secretary is aware why the Amendment is suggested. He is also perfectly aware that during the course of the last two years he and I have had considerable correspondence on the subject and that I have spoken about it in the House and in Committee on several occasions. The effect of the Amendment would be that the Secretary of State would be able to make adjustments to the formula for the distribution of the grant in special cases. One special case is that of Banffshire, but there are probably examples in other counties.

In a Written Answer to the hon. Member for Glasgow, Provan (Mr. Hugh D. Brown), the Secretary of State, in dealing with the needs element of the rate support grant, said: The remainder of the needs element will be distributed between counties, including all burghs, on the one hand, and cities on the other, in proportion to weighted population. Weighted population will consist of actual population plus a number of pupils at education authority schools (differently weighted according to stage of education plus children under 5, plus all persons under 15, plus all persons over 65, plus two weightings for sparsity. These latter will depend on:—

  1. (i) proportion of population to miles of road, and
  2. (ii) ratio of landward to total population."—[OFFICIAL REPORT, 26th October, 1966; Vol. 734, c. 182.]
The operative phrase for the Amendment is the second of those two dependencies—ratio of landward to total population.

8.0 p.m.

It is pertinent to quote my own constituency in this respect. The population of Banffshire, landward and burghal is 45,000. Within that population we have 11 small burghs with a total population of 27,000 giving a landward population of 18,000. The population of the county is predominantly burghal through a sheer accident of history. The whole of the county suffers because of this. On the other hand, the background of the county is predominantly rural. The county cannot hope to benefit from the formula in the terms given in the Written Answer. I should like to remind the House what the Secretary of State had to say in a debate on the Local Authorities Scotland (General Grant) Order on 15th December, 1964. He said: It may well be—I hope that it will be the last time we shall have a General Grant (Increase) Order of this type, because"— This is the point that I wish to bring out— the equity of apportionment is, to my mind, suspect as between the central authority and local authorities and, indeed, as between services."—[OFFICIAL REPORT, 15th December, 1964; Vol. 704, c. 278.] That is the burden of this Amendment. Here we have again the same kind of formula as we had under the old General Grant system and again my constituency, and other like it, with a burghal population far out of proportion to the landward population, suffers as a result. I should like to make a comparison with the neighbouring county, Kincardineshire, which is similar, to all intents and purposes. It is not an exact comparison, but it is a relevant one. Kincardineshire is equal to Banffshire in its devotion to agriculture. It has a number of small industries, as has Banffshire, but its proportion of burghal to landward population is considerably different.

The landward population in Kincardeshire is very much greater in relation to the burghal population than it is in my county. In the old context of the Genernal Grant Order, Kincardeshire received 73 per cent. of General Grant relative to the local expenditure. Banffshire received only 57½ per cent., making a difference of 16½ per cent. To say the least, that is a considerable amount when one compares the two counties, both from, the point of view of population and the turnover of cash.

I understand that the new system will give a rate reduction to both counties of 4d. If both counties are getting the same advantage from this new Order it must follow that Banffshire is still as badly off, compared to other counties, as it was previously. The Government may not agree with the wording of the Amendment, but I trust that they will see the underlying principle and be able to accept it. It is necessary to alleviate the position because as time goes on it will get worse.

Photo of Mr William Baxter Mr William Baxter , West Stirlingshire

I should like to support the plea made by the hon. Gentleman the Member for Banff (Mr. Baker). This is not a compulsory power which would be vested in the Secretary of State; it would be a permissive power enabling him to increase grant to very rural areas, especially in the Highlands, and this would be in the best interests of all concerned. We all want to subscribe to the point of view of the hon. Gentleman for Banff, namely that we must not allow the burden of taxation in those rural areas to weigh too heavily upon them and militate against developments in those areas which we so much desire. This is not a constituency problem, it is one affecting; the rural areas of Scotland, and I advise my hon. Friend to accept the Amendment, as it gives the Secretary of State space to work in. In my opinion he is not compelled to do anything unreasonable.

Photo of Mr Gordon Campbell Mr Gordon Campbell , Moray and Nairnshire

The House has only a limited amount of information about the effect of the new formula on various local authorities in Scotland because, although we had the information in the Written Answer referred to, that does not take us very far. We are promised, in the Answer that we shall have further information after the Bill has become law.

My hon. Friend the Member for Banff seems to have obtained some information about the effects upon his own county. The position of Banffshire under the previous formula was a difficult one and I am very conscious of this. For the historical reasons which my hon. Friend has given, Banffshire found itself getting less than other counties which ought to have been considered, so it thought, similarly.

I hope that the hon. Gentleman will look at this, because in the Written Answer referred to it is stated that it was agreed, that the formula should be one which would not give rise to major changes in grant as between different authorities …". This means that the position under the new formula will not make great changes between different authorities, and that they will be much the same, vis-à-vis each other as on the existing formula.

I hope that the hon. Gentleman will consider the position of a county like Banffshire very carefully, not only for the sake of that county but for other counties which may find themselves worse off, compared to counties of similar size.

Photo of Dr Dickson Mabon Dr Dickson Mabon , Greenock

In the first place, even if the hon. Gentleman the Member for Banff (Mr. Baker) was absolutely right in principle, we should not need to accept this Amendment. My hon. Friend the Member for West Stirlingshire (Mr. W. Baxter) urged that my right hon. Friend ought to have additional powers in this respect. We do not really need this Amendment, because the Secretary of State already has such powers. I draw the hon. Gentleman's attention to the Written Answer, part of which he read out. In addition to a very long description of the grant there are two more sentences, one at the beginning and one at the end which I should like to read. The first is: … which will be submitted for the approval of the House after the Local Government (Scotland) Bill becomes law and later on: The whole formula will be subject to reconsideration when a further Rates Support Grant Order is made."—[OFFICIAL REPORT, 26th October, 1966; Vol. 734, c. 181–2.] It is important that we realise that because of the nature of this Bill the formula is flexible and can be altered as circumstances demand. The working party has been working hard on this matter for a long time. It is made up of men of immense knowledge drawn from all over Scotland who are trying to work out some kind of agreement which local authorities might make with the Government and acquaint themselves with many facts. The case of counties like Banff is discussed specifically.

I was surprised that the hon. Member for Banff was able to give the figure of 4d. That was interesting. I must go into the matter more deeply because he has information denied to me. I am told that because of the nature of matters it is not easy—in fact it is almost impossible—to make any comparison with the previous system until the expenditure figures for 1967–68 are known. I should not like to give estimates in view of what we heard earlier. I am counselled that, if anything, Banff will do slightly better, but that again is a matter of conjecture and I should not like to be held to it.

The matter has been discussed quite thoroughly in the working party and the formula published in HANSARD is what has been agreed so far. I have done my best to keep the Committee and the House informed of developments.

The best way of dealing with the matter is to take the average rate bill per household. There is not much point in talking about how much comes from the Government-borne share as distinct from the local authority's share because there are some counties—for example, Sutherland—where a very high percentage of the rate bill is covered by Government grant. I do not think that that gives a proper reflection of Sutherland's position. The best guide is to work out the average rate bill per household.

I gave the hon. Member for Banff some earlier figures, but the figures which I have now are as follows. In 1965–66, for Banff it was £20 17s. In Inverness County it was £21. In one of the counties of the hon. Member for Moray and Nairn, namely, Nairn, it was £20 4s. When one compares that with the average rate bill per household in Scotland, which is something over £36, one sees that the ratepayers in Banff are not unduly burdened compared with the position of ratepayers in other parts of Scotland. This is the proof of the pudding.

I cannot accept the hon. Member's Amendment. If what he says is true, we can make the adjustment without writing the Amendment into the Bill. I will draw this discussion to the attention of the local authority associations in the talks which we shall shortly have with them. If the hon. Member's point is not taken by the local authority associations on this occasion, when the figures become clear in 1967–68, there is no reason why, if he feels that his case is still solid, he should not pursue the matter again in the hope that when the next grant order is produced it will take account of his point.

I do not share the hon. Gentleman's view, although I admire his tenacity. It is perfectly right that he should pursue this matter if he feels that he has a case. This is the best that I can do at the moment. We shall consider the point in relation to the rate support grant order which is to come. If, in the hon. Gentleman's view, we make a mistake we shall have an opportunity later to correct it.

Amendment negatived.