Housing Support Grant (Scotland)

Part of Business of the House – in the House of Commons at 10:02 pm on 10th February 1982.

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Photo of Donald Dewar Donald Dewar , Glasgow Garscadden 10:02 pm, 10th February 1982

This has been an interesting debate in which we have covered much ground.

I hope that we shall have some further comments from the Under-Secretary of State about the question of storm damage which was raised by my right hon. Friend the Member for Glasgow, Craigton (Mr. Millan). It is a question of overwhelming urgency. We are discussing a disaster of a considerable scale and, if we use Glasgow as the prime example, it is by no means the only local authority with a large headache. Most of the larger authorities do not carry insurance, not for something that is reasonably foreseeable, as the hon. Member for Fife, East (Mr. Henderson) seemed to suggest, but against quite unprecedented damage from some of the most severe weather that we have seen this century.

Indeed—I almost blush to quote him again—the hon. Member for Perth and East Perthshire (Mr. Walker) said that his local authority had a bill of £200,000 and that it too was not insured. That authority has a limited stock of council housing with only 17,000 houses. The problem occurs across the range of local authorities. In Glasgow we are looking at bills that run from £20 million to £25 million. It is difficult to be precise, but that was the best estimate that Glasgow district council could give to me today. This is not a dull accountancy exercise or a matter of moving balances and figures in an account book. We are talking about a human tragedy. Hundreds of families in Glasgow have had to be decanted and displaced from their homes and in my constituency—it would be true of almost all the constituencies of my hon. Friends—hundreds of tenants still have either no water supply or a defective supply.

When one is faced with such a catastrophe it is not right for Governments to stand upon legal niceties. It is not the time—I say this in no spirit of criticism because I realise that the Under-Secretary of State may be in difficulties with the Treasury—to pore over circulars of 1976 and 1978 and to consider the law of contract. It is not a matter for the honed professionalism of the faculty of advocates. The Government must consider their responsibility to people and act in accordance with that responsibility.

I would not go so far as to say that I do not care about the circulars. They are a relevant factor, but I care much more about the people, their suffering and the conditions in which they are being asked to live. If the Minister continues to take his present negative and rather stony-hearted approach to the problem, Glasgow will be in a desperate position.

It looks as if the total capital spending for Glasgow in the coming financial year will be about £50 million. I understand that just over £30 million of that total is legally committed. Even if the council cancelled every new building project and postponed every new modernisation project on its books, it would still not be able to meet the cost of the storm damage out of the capital expenditure that it is likely to be allocated. That situation cannot be allowed to continue. It would be a disaster if it continued. I hope that the Minister will be able to hold out some hope of an improved and more flexible situation.

My right hon. Friend the Member for Craigton was absolutely correct when he said that the precedent of the storm damage in 1968 was extremely valuable and that it should be looked at seriously by Ministers. I do not want to labour and repeat what has been said, but I shall briefly remind the House that at that time in the city of Glasgow, as it then was, £6.4 million was spent on repairs to private sector property. The point was properly urged on the House that the local authority might have taken a restrictive view and said that it was none of its business. However, the local authority moved in to help the tenants as much as the landlords and spent a substantial sum of money.

At the end of the day the total spent was £8·8 million. Only £2·8 million was recovered from landlords. Of the remainder, £5·4 million was met by the Government. If one excludes the sum that was recovered from private landlords, just over 90 per cent. of the total cost came from the Government. I do not know whether it would be possible for this Administration to be as generous on this occasion. However, this is something that the Government should aim for, not in terms of helping Glasgow or of riding rough shod over their business ethics that say that people who are not insured should pay the consequences. However, they should help the tenants whose life style is at risk and help to save property that has been extremely badly damaged by an act of God that was not reasonably foreseeable.

I say those things because that is an immediate catastrophe that must be dealt with. In the order we are looking at the continuing crisis of housing finance in Scotland. The Opposition have a number of fundamental objections to the present order.

First there is the vexed, but important, and, I apologise, technical question of the way in which individual authorities' rate fund contributions have been arrived at. When I first looked at this year's settlement in the order, I understood that there was common ground among the Government, the Opposition and almost all the local authorities that the old method of fixing the rate fund contribution was unsatisfactory.

It was a straight per capita amount—so much per head of the population within the housing authority area was taken to be the notional rate fund contribution in calculating the housing support grant and, ultimately, the level of rents. That led to a large number of distortions that. we discussed during last year's rate support grant debate. I understood that it had been abandoned and that we would take a standard reduction of 35 per cent. in last year's rate support grant.

The Minister will remember that in the Committee on the Local Government and Planning Bill we had a considerable debate about that matter. The Minister explained that, although in a minute of a meeting on 21 December 1981 the phrase "standard deduction" was used, the new method would involve a standard percentage reduction from the Authority's budgeted rate fund contribution for the current financial year. At the time the Minister told me that that was a misunderstanding and a mistake in the minute. He said that there was an ambiguity and contradiction in the minute and said that such a statement had never been intended. That was why the minute had to be re-written in suspicious circumstances, which gave a misleading impression to Glasgow and other authorities in Scotland. I accepted that at face value because the Under-Secretary told me that that was so. I thought that it was striking at his credibility in terms of his competence, but no more.

I am sorry to note that on 17 December—I am obliged to CoSLA for its information which I received today—Mr. Ian Penman of the Scottish Development Department, presumably with the Minister's authority, wrote to CoSLA. Paraphrasing at this point, he said that the old per capita system was to be abandoned. He continued: The limit for each authority will be set on the basis of a standard percentage reduction from the Authority's budgeted rate fund contribution for the current financial year. Again, as plain as a pikestaff, that letter of 17 December appears to contain a statement saying that it would be a standard percentage reduction. That makes it even more puzzling as to why it should have been repeated in the minute of 21 December. I am left with a question mark in my mind whether the Minister was entirely frank when he said that the standard rate percentage reduction was never intended and was all a misunderstanding.

What adds insult to injury and complicates the position even further is, even if we accept that the standard percentage reduction was never intended and that there was to be some measure of flexibility whereby the reduction could be varied from authority to authority, that no fewer than five different methods were used for calculating the individual authority's rate fund contributions. In 46 Scottish local authorities, although there were variations, last year's old per capita system was used.

In the Scottish Standing Committee of 2 February, when we debated the change in the minute of 21 December, the Minister never once departed from the position that, whatever system was being used, although it might not be a standard percentage reduction, it would be by means of a reduction in the rate fund contribution of last year.

CoSLA told me that that did not happen in those 46 authorities and that they were still back at the old per capita system. The kindest thing I can say to the Minister is that by his silence, when we specifically touched on these matters because of the confusion that arose and was so damaging to Glasgow's consideration of its rent and capital allowance positions, he at least had a duty to make it clear that we were no longer dealing with the deductions from last year's rate fund contribution but had returned to the old per capita system.

I must seriously tell the Minister that he has a reputation for reasonable competence and I would not wish to take that away from him, but that reputation is now considerably suffering from the confusion and difficulties which seem to be arising over this order, the rate support grant order, local government finance and generally between local and central government.

The Minister has done a great deal of damage. The debate in the First Scottish Standing Committee was held because the Glasgow council acted, I believe, properly on information imparted to it by telephone at a high level, between officials, and it was then spiritedly attacked by the Minister who said that he was astonished that it should take important decisions on the basis of "rumours, hints and suggestions".

The trouble is that the lack of information and the misinformation issued by CoSLA and hon. Members to the Scottish Standing Committee appears to have left us acting on the basis of rumours, hints and suggestions because we have not had a frank statement from the Government. They have not dealt with it in an honest or proper fashion.

My other main point is the way that the Government have dealt with capital allowances in this Housing Support Order. Of course, I recognise and would be the first to concede that Governments will never be able to satisfy demand on the capital side. No doubt, the £298 million which I understand is the theoretical total available in the coming year is totally inadequate compared with the need which is generally shown by local authorities.