Public Expenditure (Scotland)

Part of the debate – in the House of Commons at 3:45 pm on 15th December 1982.

Alert me about debates like this

Photo of Mr Bruce Millan Mr Bruce Millan , Glasgow Craigton 3:45 pm, 15th December 1982

This statement is long and complicated, but unfortunately its overall effect is all too depressingly clear, as I shall demonstrate.

In the first place, is it not a fact that many of the figures quoted in the statement are absolutely meaningless because they are now given in cash terms and take no account of inflation? Worse, some of the presentation of the figures is deliberately misleading. I shall give one example. I imagine that the Secretary of State hopes that the overall effect of the statement will be a boost to the Scottish economy. For example, the right hon. Gentleman says in his third paragraph that his total programme for 1983–84 will be £127 million higher than the plan for that year, which was set out in the public expenditure White Paper published in March of this year. In fact, that £127 million includes £120 million for local authority spending, which is not included in the local authority guidelines, which the Secretary of State is asking local authorities not to spend, and on which he is threatening to penalise them if they do spend it. If we exclude that £120 million, the real figure for 1983–84 is almost exactly the same—within £7 million—as the figure that was published in March 1982 in the public expenditure White Paper, and will represent a reduction in public expenditure in real terms in 1983–84.

The Secretary of State said that we can debate rate support grant and housing support grant later. We shall look forward to those debates. On rate support grant, will the Secretary of State confirm what he knows is true, that if local authorities met his guidelines for expenditure in 1983–84, they would have to reduce their expenditure in real terms by about 7·9 per cent., compared with their budgets in the current year? Is it not also a fact that the rate of grant for rate support grant next year is being reduced from 64·2 per cent. to 61·5 per cent.? A consequence of those two facts is that if local authorities met the Secretary of State's figures for 1983–84, they would, for example, have to dispense with 6,000 of the teachers who are now employed in Scottish schools.

Surely the background to the housing support grant is that in 1980–81, only three years ago, the total housing support grant in Scotland was £288 million, and that in 1983–84 it will be only £72 million. That is less than a third in cash terms, and if we allow for inflation, the housing support grant for next year will be less than a quarter of the figure for 1980–81, which itself was a reduction on the figures under the Labour Government.

Is it not also a fact that 20 local housing authorities in Scotland will get no grant at all for 1983–84? Those authorities include major housing authorities such as Edinburgh, Dundee, Dunfermline, Falkirk, Dumbarton and Renfrew. Is it not also a fact that the assumed rent increases in Scotland, at an average of about £1·40 per week, are considerably higher than the 85p a week that is being assumed for England and Wales? For some of the major local authorities in Scotland, including Glasgow, for example, the increase to meet the Secretary of State's figures would have to be a 25 per cent. rent increase in 1983–84.

The Secretary of State gave the figure for total housing expenditure in 1983–84, but he was careful not to give the equivalent figure for 1982–83. Will he confirm that total housing expenditure for 1982–83 will be £741 million and for 1983–84 is projected to be £656 million—a reduction of nearly 12 per cent. in cash terms and considerably more in real terms? Therefore, we shall have a major housing crisis in Scotland. That is the background against which we can judge the frantic efforts of the Government to encourage local authorities to spend more in capital expenditure. No wonder they are making such efforts when there are 46,000 construction workers in Scotland at present on the dole and when building work is desperately needed.

When will the Secretary of State get it into his head that he will not get additional capital expenditure by local authorities unless he meets the revenue consequences of that capital expenditure? If he asks local authorities to reduce their expenditure in 1983–84 by 7·9 per cent. in real terms compared with this year's Budget, he will not get a boost to capital expenditure. Is he not aware that he is imposing even greater penalties on local authority housing by saying that unless they increase their rent levels to figures that he lays down he will cut their capital expenditure? Housing in Scotland has already lost nearly £50 million in capital expenditure in the current year and we shall lose the same again next year. That puts in proper perspective the simulated and artificial concern about housing in Scotland that has been expressed by the Secretary of State and other Ministers.

To sum up, the Government's attempts to curb public expenditure have led to a crisis of confidence in local authorities. They have led to cuts in essential services, particularly in housing, and have added to the disastrous unemployment figures in Scotland and to the slump there. Despite the careful presentation of the figures in today's statement, Government policies are continuing along the road that has already proved disastrous for Scotland.