I must just say a few words at this point because some matters have occurred since the Committee stage in the summer which we have been unable to consider during the Report stage. The Bill provides financial assistance to local authorities. That is its main concern. Rates in Scotland will continue to be of great concern. The Under-Secretary of State told us earlier today that, in the current year, the rising burden will cause an increase of an estimated 16 per cent. in the rates and this is a matter which all of us must be greatly anxious about.
The Allen Committee, specially set up to consider the impact of rates, in a general conclusion found that, in Scotland, rates were high, rents were low and that the former subsidised the latter. During the Committee stage of the Bill, we were in the extraordinary position that discussions and negotiations were going on with the local authority associations about matters in the Bill at the same time. As a result, the formula of distribution of the new grants was not known while we were discussing the Bill in Committee and, indeed, it appears it has not yet been worked out or agreed upon.
We have had some enlightenment about the formula in a Written Answer to a Question on 26th October, when we were told that we shall hear more in the House after the Bill has been passed. So we still do not know the effect of the rate support grant of individual local authorities and I ask the Government how we are to have the opportunity of discussing the formula later, as we were promised. Will it be in order for us to discuss this when the first rate support grant order comes before us? When we have tried to do this in the past, Mr. Speaker, your predecessor has ruled it out of order.
I want to mention briefly the question of roads and the new system of classification. There is no doubt that this also is causing concern among the local authority associations but it is not yet clear how the new system is to be worked out and it may be some time before we can see the financial effect on local authorities.
Another point concerns the decision of the Secretary of State on what is the notional reasonable rent which a local authority should prescribe. In Part II of Schedule 1 there is still a blank, because the Secretary of State has to prescribe what a reasonable rent should be. Perhaps we can be told about that as we leave this Bill.
In general, the Government have adopted our system of general grants which we brought in some years ago and have expanded and refined it. To that extent we support them. The old proposals that the Labour Party put forward previously from time to time for a return to specific grants for education and other subjects have been dropped. Again we applaud this.
We have made it clear, throughout the passage of the Bill, where we differ with the Government and they have accepted some of our Amendments, many on important points such as the agreement not to include rating of off-peak storage heaters and the question of rating of Church property. We look forward now to discussing in the House the first rate support grant order for Scotland under this Bill.
I welcome the opportunity to put briefly the Liberal view of the Bill. I have sat through most of its proceedings. It was pointed out by right hon. and hon. Members opposite that the Bill is, in effect, an interim Measure pending the findings of the Royal Commission on Local Government and on this basis we are prepared to accept it. Although it is full of disappointments and omissions, what it does it does quite efficiently. We particularly welcome the new system of rate support grants for local authorities. This has been very successfully managed through the medium of the Bill.
During the debate tonight it was said that a whole new system of rating was required. I could not agree more with that sentiment. I have tried to explain the advantages of rating by site valuation, particularly the encouragement which that would give to the occupation of empty properties, the development of underdeveloped sites and the encouragement which people would be given to develop their own properties. There would be no disincentives in such a scheme of valuation.
I hope that the Bill will not be used as an opportunity to downgrade Class A roads. I hope that most of them will become principal roads. If they do not, a heavy burden will fall on counties, particularly those in the North-East of Scotland and on the Border, where there is a high proportion of back roads to main or trunk roads.
I want to refer to one or two omissions, although it is rather unfair to call them that. They are matters which ought to be considered in future, when we finally get the report of the Royal Commission on Local Government. I am disappointed that no effort as been made to make some link between the advisory committees which have been established and elected representatives on local authorities. It is a great pity and I hope that that omission will be rectified in future.
In Committee I asked what the words "educational units" meant and the Under-Secretary said that he did not wish to explain the phrase, because he was still having conversations with the local authorities about the formula which appears in Schedule 1, but we were assured that we would be told what the formula was. We still do not know.
This matter concerns Edinburgh very much, particularly in its expenditure on education, because under the general grant as at present all children under the age of 15 are in the weightings, whereas, I suspect, under the Bill only children at corporation schools will be included. I think that that is what is in the Government's mind and the result will be that Edinburgh will lose about £50,000 a year in grant. I must protest at not having been told what we were assured we would be told and I protest on behalf of the Edinburgh citizens who will be swindled out of this money. I hope that when the Unionist Government are returned to office this injustice will be put right.
I am sure that the hon. Member for Edinburgh, South (Mr. Clark Hutchison) did not want to be unfair, but he should recall that just before or during our discussion of Schedule 1 in Committee, I made a statement fulfilling my promise—the hon. Member for Moray and Nairn (Mr. G. Campbell) complimented me on it at the time—when I specifically referred to the hon. Gentleman. I presume that he was detained elsewhere on that occasion, for he was a faithful attender of the Committee and he may not have heard what I said about the discussion on 15th July with the local authorities when it was clear that they were not in favour of the proposal promoted by the hon. Gentleman and the Edinburgh Corporation. Since then, on 14th October, the local authorities have overwhelmingly confirmed that, with the exception of Edinburgh, they endorsed the formula as announced in the Written Answer to my hon. Friend the Member for Glasgow, Provan (Mr. Hugh D. Brown).
I am not anxious to take sides in this matter. We promised that we would consult the local authorities about this formula and in a situation in which all the local authorities bar one are agreed, it is impossible to defend the position of the Edinburgh Corporation. I promised that we would drop the phrase "educational unit" during the progress of the Committee stage and I can assure the hon. Gentleman that I meant no discourtesy when I said to him that we would tell him about this matter at some appropriate moment. I am sorry that he was not present on the morning of the relevant debate, but I can assure him that this matter has been discussed at length with the representatives of Edinburgh Corporation.
I am grateful to the hon. Member for Aberdeenshire, West (Mr. James Davidson) who has been very helpful during the stages of the Bill and I endorse what he said about the Bill's interim nature. We are seeking to achieve what we set out in the White Paper on Local Government Finance, published in February. Hon. Members will recall that the Government gave an undertaking, set out in paragraph 7, that the percentage of Exchequer grant to estimated expenditure will rise each year instead of being virtually static, as it has been for almost a decade.
The greater part of the extra percentage grant will be devoted to assisting the householder in quite a new way, by giving him a lower rate poundage than applies to commercial, industrial and other types of ratepayers. We are collecting information from the local authorities on their likely expenditure for the next year and detailed dicussions will start soon on the amount of grant.
Despite the comments of the hon. Gentleman the Member for Moray and Nairn, I feel that we have had a unique experience. I do not mean just this Government but any government in its dealings with local authority associations. During the current year, for the first time, we are passing into Statute, unlike the English Measure, a Bill which relies for the formula upon agreement outside of the Bill. It is rather commendable that we should have this trust between local authority associations and the Government. Perhaps the case in England and Wales could be explained by the fact that there is a larger number of authorities to deal with, while we in Scotland are a very tightly-knit, close and intimate community. That can hardly be said of a population of 45 million which is the case in England and Wales.
We have perhaps taken advantage of our comparative smallness to have this intimate consultation. As I said in Committee on 22nd July, this is unanimously welcomed by the local authorities. Hon. Gentlemen opposite have pressed on us in Committee the need to have written into the Statute provisions that would ensure that we will always consult the local authorities in certain circumstances. We have readily agreed to this and this is a testimony of our belief that we should work closely with local authorities in carrying forward the Rate Support Grant.
I may say, perhaps a little boastfully, that this Government have provided more information during the passage of this Bill than the previous Government did during the passage of the 1963 Bill. I have looked up the relevant passages. We have done this for the very good reason that hon. Members opposite have been willing to accept the difficulties facing the Minister putting a Bill of this kind through, without having reached agreement with the authorities, and having to carry out this concurrently. I have thanked hon. Members before for their co-operation in this regard and I thank them again.
I am very glad that my hon. Friends gave us their co-operation too. We are reaching a stage when we shall discuss the rate support grant and I hope that we will be pretty well unanimous in our support of local authorities. Even though some will lose here and there in certain matters and gain here and there in others, we hope that that which we seek to propose in an Order consequent upon the passing of this Bill will be seen to be in the best interests of Scotland and in the best interests of good local government also.
I have inquired into this and the ruling depends upon the appreciation of Mr. Speaker, but it is my understanding that, because last time we had so much written in Statute, the hon. Gentleman was disbarred from speaking, I think very properly, by the Chair. On this occasion, when there is not so much written into a Statute it is fairly desirable that we should be able to discuss the principles which are not written into the Act but which are within the Order. I am quite certain that the Chair will look at the new situation created by the passage of this Bill in relation to what has passed and will perhaps be willing to allow us to discuss these matters, which I would certainly like to discuss with those concerned.