Orders of the Day — Scotland (Housing Support Grant)

Part of the debate – in the House of Commons at 10:40 pm on 14th January 1980.

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Photo of Mr Bruce Millan Mr Bruce Millan , Glasgow Craigton 10:40 pm, 14th January 1980

I cannot say that the Secretary of State has given an adequate explanation of the orders. As soon as he was asked anything that was not dealt with in the bits of paper in front of him, he told us that he did not know the answer. He did not have to tell us that. It was obvious from his manner that he knows little about many of these matters.

That would not be too bad except that COSLA has been treated in exactly the same way, because a lot of the basic information that ought to be made available to COSLA—and was made available by me in the first housing support grant order—has not been made available this year. If the right hon. Gentleman thinks that COSLA is satisfied with the present method of consultation and with what happened this year, he could not be more wrong, because there was no genuine consultation. I have had that confirmed from COSLA as recently as today. One has only to read the COSLA memorandum, with its complaints about the inadequacy of the information—and, indeed, more than that, the absolute refusal of the Secretary of State to give basic infor- mation to COSLA—to understand how unsatisfactory the position is.

I want to deal briefly with the 1979–80 variation order, and I have only two points to raise. With regard to paragraph 7 of the covering report, it seems to me to be simply an impertinence and a gratuitous penalty on local authorities to make the abatement of wages and salaries of three percentage points. No justification is given for that. There is no suggestion that the local authorities have behaved in any way irresponsibly. It is simply a way for the Government to avoid or welsh on their obligations by taking a certain percentage of what ought to be paid to the authorities in terms of inflation, which is not their responsibility.

The second point is that although the variation order obviously contains a certain recompense for increased interest charges, it is still done on the basis of interest charges which do not take account, as I understand from COSLA, of the latest information about the very high recent interest charges and the effect they will have by the end of the current financial year. Indeed, the COSLA people estimate that on current interest charges—that is, interest charges that are already known in the current year—there may be additional local authority expenditure of more than £7 million compared with what is allowed for in the order. I want an assurance that when the figures for the end of the year are known the Secretary of State will bring forward another variation order to recompense the authorities for that additional money, because I think that they are entitled to it under the normal provisions of the scheme.

I am very much opposed to the main order, and we shall vote against it for a very simple reason. The order imposes burdens on the local authorities, which means that there will have to be very substantial rent increases and, indeed, rate increases as well. The Secretary of State was not able to give the figures. He gave a figure of £1·40 as an increased rent figure, and I have seen quoted in the press a percentage increase relating to that of 29 per cent. That is at the minimum. In other words, the Government are assuming at the minimum that local authorities will raise their rents next year by 29 per cent. In my innocence, I was accepting the £1·40 figure and the 29 per cent., until I studied the orders a little more carefully and also studied the recent COSLA memorandum.

The rent contribution in the order, on COSLA's estimate—the arithmetic is perfectly straightforward—is 37 per cent., not 29 per cent. I shall not go into the technicalities, because it is rather a complicated business. The basic income amounts, including rent and rates, included in the orders are not the total rent and income of the local authorities, because there is ultimately, from the figures obtained from the order, an 85 per cent. factor applied in calculating the grant. That means that rather less than 100 per cent.—not necessarily arithmetically 85 per cent.—is all that is included in the order. So it is completely untrue that, as stated in paragraph 8 of the order, to meet the obligations that the Government are imposing on local authorities rent increases of 1·40 per week will be required. That is only about 85 per cent. of what is required.