The latter part of the speech of the hon. Member for Glagow, Cathcart (Mr. Maxton) was quite offensive. No one could seriously believe that in Britain, the mother of democracies, any of us would attempt to destroy our democracy. If the hon. Gentleman sincerely believes that, perhaps he is more out of touch than some of us believed.
The hon. Gentleman gave us an interesting introduction and mentioned the problems of my hon. Friend the Member for Edinburgh, South (Mr. Ancram) in understanding economics. I listened carefully to what the hon. Gentleman said, because I presumed—obviously incorrectly—that he was about to make a speech that illustrated clearly that he had some knowledge of economics and that he would clarify what he said about my hon. Friend. However, his speech contained no economically sound proposals.
The hon. Gentleman mentioned the problems of the inner cities and the environment. Everyone in politics cares genuinely about the problems that many of our citizens face. However, the hon. Gentleman, as usual, managed to score some own goals. I am glad that I do not play in a football team with him, because trying to score more goals than he scores against his team would make life difficult. Everyone knows that the right hon. Member for Glasgow, Craigton (Mr. Millan), when he was Secretary of State, was forced to face the problem of overborrowing and overspending. He took action to deal with the problem. Sometimes his hon. Friends do not recognise the tremendous courage that that required at the time. I commend the right hon. Gentleman, because it took real courage.
It still takes real courage to face the facts of life. The Labour Government, under the direction of the IMF, were forced to face the fact of life that somehow central and local government borrowing at that time had to be reduced. I emphasise the words "at that time". The hon. Member for Cathcart should face that lesson in economics. Many of the things that everyone would wish to be done sometimes cannot be done by a given time because of circumstances over which national Governments have no full control. An example of such circumstances is overseas events. The problem faced by the Labour Administration was caused by the escalating price of oil. It would be nonsense to claim that that factor did not affect our plans.
The basis that we use to work out local government expenditure programmes and fund-raising programmes—indeed, the entire financing of local government—is unsatisfactory. The guidelines are a rough and ready way of achieving our objective and are most unsatisfactory. I hope that my right hon. and hon. Friends on the Front Bench are trying to find a more satisfactory way of achieving our goals. The right hon. Member for Craigton put his finger on it when he mentioned the problems that Perth and Kinross district council will face. It would be nonsense to pretend otherwise, and I shall never come to the House and do other than present the facts as I see them. The district council faces the problem because the guidelines are rough and ready and are based largely on historical fact. If one starts with a low expenditure base and adds to it year by year, and others who start from a higher expenditure base do the same, inevitably the expenditure per head of population becomes increasingly compounded and distorted. That is basic mathematics. It may not be economics as the hon. Member for Cathcart understands it, but there is no doubt that if one uses an historical basis and one authority has been prudent for 10 years and has said "We shall be careful with our expenditure programme over a long period" and has started at a cut-off point, that authority will be disadvantaged from then on in terms of the guidelines that are worked out.
It would be better to take as a base the expenditure per head of population. As my hon. Friend the Member for Dumfries (Sir H. Monro) said, there are problems in rural areas as well as in urban areas. I do not want to argue for either, because our job is to do the best that we can for both. If we work on the expenditure per head of population and the services that are provided per head of population, we get closer to a fairer method. That is all that I want. I am not asking the Government to increase expenditure, and there would be no point in doing that in these difficult times. However, we must make sure that what we do is fair to all.
I should be quite happy to argue on behalf of the residents of Dundee if there were areas there that needed attention. However, I am not prepared to accept a situation whereby the residents of Perth and Kinross are disadvantaged because they have been more prudent than others over a long period. That is the argument that I wish to put to my hon. Friend the Minister. I hope that he will study the expenditure per head of population and the services that are provided within that authority to see whether we can find a more equitable way of spending the funds that are deemed to be available.
We should also look carefully at how any deficiencies and gaps in planned expenditure are to be covered. Under the present system, it is done by rating. If the local government contribution is to be reduced, we must be careful not to distort the balance between one area and another in rating. To illustrate that, one only has to look at the massive plans for house building in the area immediately adjacent to Dundee district, where rates are so much lower than in Perth and Kinross. However, the residents of Perth and Kinross know that they have a prudent authority and they expect this Government to support prudent and responsible authorities in the most meaningful way.
I fully understand that the guidelines are a broad brush. They are rough and ready, as I said earlier. I accept that the authority of the right hon. Member for Orkney and Shetland (Mr. Grimond) was given proper consideration because it was well above the proposed guidelines in previous years. I hope that the Minister will assure me that the same consideration will be given to the good and prudent authority of Perth and Kinross.