Rate Support Grant (Scotland)

Part of the debate – in the House of Commons at 4:27 pm on 10th February 1982.

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Photo of Mr Bruce Millan Mr Bruce Millan , Glasgow Craigton 4:27 pm, 10th February 1982

I begin by saying something agreeable, after which I shall say very little that is agreeable. I acknowledge the help given by the Government so that we could have this debate at this time. The same can be said of the housing support grant debate that will take place later today. I hope that by mutual agreement we shall be able to divide the time so that we may have a reasonable debate on each of these important subjects. If this arrangement works satisfactorily, I hope that it will become the pattern for the future. It is a welcome change, and at least on that score the Government deserve our thanks.

I am afraid that the Government do not deserve our thanks on anything else. This debate is being held against a background of local authority bitterness and anger about the way in which they have been treated by the Government. That treatment is unknown in local government—central Government relationships in Scotland. Anyone present at the meeting that Labour Members had this morning with a deputation from CoSLA can affirm and attest that there is considerable anger amoung local authorities, even among traditional Government supporters, about the way in which they have been treated. That anger is not just about the merits of the order but about the fact that under this Government negotiations have become an absolute farce.

As one of the representatives said this morning, "The Government pronounce what they will do and there are no genuine negotiations at all". Indeed, the main elements of the order were announced on 2 December, on the day of the public expenditure statement by the Chancellor of the Exchequer in the House, a full fortnight before the meeting with the local authorities that was meant to settle these matters.

Let us be under no misapprehension. There is considerable concern among local authorities about the way in which they have been treated by the Government. It is no exaggeration to say that there is a crisis of confidence.

The two questions that ratepayers ask about rate support grant settlements, without going into the technicalities, as I shall inevitably have to do in a minute, are, how much will their rates go up in 1982–83, and who is responsible for the increases that they shall have to pay? The answer to the first question is that the rates will go up considerably. I shall later say something about what I think the figure will be, unlike the Secretary of State, who is always apprehensive about giving an estimate or any information. Secondly, the reason for the increases will lie fairly and squarely on the Government and not on the local authorities, which, by and large, have tried manfully, in the difficult circumstances of recent years, to behave responsibly towards their ratepayers, and to act with regard to the national economic situation.

I want, as I have done in earlier debates on RSG orders, to run through the various elements which will contribute to the considerable increase in rates that we shall have in 1982–83. The Government have repeatedly said that I was scaremongering, and that the increases would be modest. The estimates that I have given have always been on the low side and I do not intend to exaggerate today because the position is disastrous enough for both local authorities and their unfortunate ratepayers.

Ratepayers will have to pay a penalty for 1980–81. The Secretary of State for Scotland explained to us today why he is imposing that penalty. He said that in 1980–81 there was excessive expenditure of £70 million—that is, excessive in terms of the Secretary of State's assessment of what is excessive. Some of us do not accept that it is excessive at all. What he did not say was that CoSLA has produced, in the document that has come to the Opposition and to the Secretary of State, reasons why some of that socalled excess was not because of extravagance by local authorities but for legitimate reasons. Whether or not these reasons are valid, the Secretary of State, neither today nor in his negotiations with the local authorities, has attempted to answer the points made by CoSLA about the so-called excessive expenditure in 1980–81.

CoSLA demonstrated, to its own satisfaction and to the satisfaction of many Labour Members, that the real so—called excess is much more likely to be £35 million than £70 million. That is a matter for argument, but we have not heard any argument from the Secretary of State, who simply said that no attention should be paid to CoSLA representations and that the Government have said that the excess was £70 million, of which £50 million will be imposed as a penalty.

It does not matter how the £50 million is distributed. It can be done over three years, as the Secretary of State is doing, but apart from the whole process being objectionable in principle—we object in principle to this kind of retrospective adjustment—the whole of that £50 million will fall on the Scottish ratepayer in 1982–83 and will add to the considerable rate increases in that year.

There is also the question of 1981–82 and the penalty that is being imposed on the local authorities for the current financial year. The Secretary of State has fairly pointed out that some of that penalty has been imposed as an individual penalty on particular local authorities such as Lothian. However, we remember that when the Bill was passing through the House, giving power to the Secretary of State to do that, one of the great arguments for the power was that all the good authorities—good according to the Secretary of State—would not have to worry because they would not be punished in any way.

However, a £27 million penalty for 1981–82 is being imposed on every local authority in Scotland whether or not it has met the Government's so—called guidelines. [Interruption.] The £27 million will be imposed as a general penalty on local authorities in Scotland, despite the Secretary of State's boast. [Interruption.] I shall come to the six authorities a little later.