Both sides will welcome the opportunity such a debate offers to have a discussion such as we do on no other occasion in the year, on the matter of rates and local authority spending, something which affects our constituents so much. The other great opportunity we have in a debate like this is to raise particular matters which affect our own constituencies and our own local authorities. As ever, we were entertained by the right hon. Member for Edinburgh, East (Mr. Willis) and his description of fair shares for everybody and fair play for everybody, and his criticism of my hon. Friend the Member for Edinburgh, South (Mr. Clark-Hutchison).
In a debate like this I always feel that there is something wrong with an hon. Member if his claim for fair shares does not mean a rather bigger share for the area he represents; and I thought the hon. Gentleman's speech was slightly out of keeping with previous utterances. I only hope that the people in Edinburgh will note what he has to say.
In general, this debate falls into two main parts and it is the main part, which is the most important, with which I would like to deal—what is being spent by the Government in supporting local authority services and how it is distributed between different services; and secondly, methods of distribution and in particular the needs element and the resources element. This has been raised by many hon. Members. My hon. Friend the Member for Edinburgh, South spoke of the way it affects his constituency and his own city.
My hon. Friend the Member for Banff (Mr. W. H. K. Baker) spoke with his usual persistence. No one in the House has been more persistent in raising particular problems of distribution over many years. He not only raised the question, but he put to the Minister of State concrete suggestions. We on this side of the House will look forward to hearing what the Minister has to say on that when he replies. The hon. Member for Caithness and Sutherland (Mr. Maclennan) raised similar problems affecting distribution in his particular area. I have some sympathy with the Minister of State in having to deal with questions of the distribution of the needs and resources elements, because it must require the wisdom of Solomon to try to please everybody in making a distribution.
I would like to raise a particular point in relation to the population factor which has been taken into account. In paragraph 3, the Secretary of State's report says that for the first time fluctuations in population are to be taken into account. Obviously, this is a very important factor as it will affect different authorities in different ways.
What is particularly noticeable here, comparing our Scottish Order with the English and Wales Order debated in December of last year, is that whilst the Scottish Order is based on estimates of population from the Registrar-General at the end of June last year, for the first time in an English Order, as well as considering the Registrar-General's figures, 1966 sample census figures in support of population changes have also been used. From what one has read of that debate in the House in December, these threw up quite different movements in population from those shown in the estimates from the Registrar-General and had quite a marked effect on the distribution of needs element of towns such as Birmingham, which happened to have a contracting population moving outside.
Obviously, this has an application to towns like Glasgow. We have heard about overspill. I would like to hear from the Minister why these other figures from the sample census have not been taken into account in the Scottish figures, to give a more up-to-date and realistic figure of population, so far as distribution is concerned.
As my hon. Friend the Member for Moray and Nairn (Mr. Gordon Campbell) said, we on this side accept the need to restrict Government expenditure. We have pressed for it to be restricted in view of the current economic circumstances of the country. We condemn the Government when they try to dress up their grants, as I believe the Secretary of State did this afternoon, as being particularly generous when they are not. We appreciate the difficulties, but he tried to put a gloss on the position when speaking of local authorities, a gloss that does not really belong there; because we have to recognise that when the estimates of expenditure for 1969–70 were negotiated with local authorities and estimates of local authorities exceeded the eventually negotiated sum of reckonable expenditure by over £11 million for 1970–71. For 1970–71 they still exceeded by £11 million the reckonable figure eventually agreed. Therefore, whether we like it or not, the fact about the rate support grant is that the Government give less to local authorities than local authorities themselves believe they need.
We appreciate why. There is a natural tendency for local authorities to pitch their desires fairly high so as to get as much as they can. We sympathise with that. The Secretary of State is wrong to put any gloss on this by claiming that he is being generous in the Order, because he has not met the desire of the local authorities in this matter.
What we come back to every time is the fact that the debate on the need for the support grant and the restriction of it stems from the need for stringency, which arises from the Government's failure to manage the economy. The hon. Member for Glasgow, Springburn (Mr. Buchanan) tried to blame this, as is so often done by hon. Members opposite, on mismanagement of the economy before 1964, harking back to balance of payments deficits, and so on. The right hon. Member for Belper (Mr. George Brown), after the last General Election, stated that there were no alibis now. Yet we still have this balance of payments crisis argument and this mismanagement of the economy argument thrown at us, which is what underlies the failure of the Secretary of State to be able to meet the local authorities' need.
The real thing for which we on this side condemn the Government is the effect that this will have on rates. The question we must ask is: can local authority expenditure be kept to those agreed estimates? Over the last two years the actual expenditure of local authorities exceeded the reckonable expenditure, even taking into account the increased Orders. In 1967–68, actual expenditure exceeded reckonable expenditure by over £3 million. In 1968–69, a year for which we can use only the close estimate, because we have not actual figures to work on—actual expenditure exceeded reckonable expenditure by over £12 million.
Where must the money come from to meet the difference between the reckonable expenditure, even taking into account the increase and the actual expenditure which local authorities must incur? The only place it can come from is out of the rates. It is true that through the domestic element there is a certain amount of relief for householders, but we must remember in these debates that for industry, trade and commerce there is no relief and their costs are rising, which increases the costs of industry and everything else in Scotland.
It is for these reasons that we condemn and criticise the Government. Despite the rate support grant and despite everything that the right hon. Gentleman said in introducing the Order, we find that the rates go remorselessly upwards; and they keep going up regardless of what he does. This puts local authorities into a very difficult position. As many of my hon. Friends have said, particularly my hon. Friends the Members for Galloway (Mr. Brewis) and Dumfries, they are faced with the dilemma of being charged by Parliament and by the Government with carrying out new social services, yet have must try to work within a very restricting budget and in the face of rising costs.
All of us sympathise with the local authorities in the difficult position into which the Government have put them. It is, therefore, no wonder that at this time the question is asked: why are our rates rising so fast, and what are the Labour Government doing about it? This question was asked in one of the Labour Party's own pamphlets— "Go Ahead Scotland"—back in 1965. Nearly four years later we in the House and the people in Scotland are still wondering when the Labour Government will find the answer.