The Secretary of State's bland account of his relationships with the local authorities will be completely unrecognisable to any hon. Member who met the representatives of CoSLA today and heard expressed in the most vigorous terms their extreme anger and bitterness about the way in which they have been dealt with by the Secretary of State, not only this year but in previous years as well. That was an anger expressed by some people on his side of the political fence as well as by others who are politically opposed to him.
I want to make two particular points before turning to the main substance of the debate. First, the timing of the debate this evening has not followed the rather more agreeable and desirable arrangements that we made last year. That is particularly serious for the housing support grant debate which will start at a late hour. That order, which will be dealt with by my hon. Friends later, represents a tremendous slashing of Government support to housing in Scotland and it is not good enough that that should be dealt with late in the evening, as it inevitably will be.
Secondly, the order on derating of external plant and machinery, which the Secretary of State mentioned, has been laid today, and I have just seen it. I shall not go into detail on that because we shall be able to have a separate debate on it. However, it is typical of the way in which the Secretary of State consults local authorities and listens to their representations that when they ask him, as indeed did the CBI, whether central Government could bear the burden of this derating rather than that it should be spread over the rest of the ratepayers in Scotland, he should do exactly the opposite. He has done that despite all his promises at various times during the passage of the main legislation that all was under consideration—something we did not believe for one moment. The rest of the ratepayers, including, let it be said, the industrial ratepayers represented by the CBI, are paying for this external derating of plant and machinery and we shall go into that betrayal of the Secretary of State's promise when we debate that order.
I shall inevitably be repeating the kind of criticisms that we have made in earlier years on previous rate support grant orders. First, the consultation has been a farce. This year it has been an even greater farce, because most of the details were announced to the House in July before the Secretary of State had met the local authorities. The Secretary of State has again set unrealistic expenditure levels. In past years he has assumed unrealistic inflation rates as well. The guidelines are simply unattainable by the vast majority of local authorities. He has continued the cuts in the previous rate of grant and he is continuing with the penalties on local authorities. The net result of all that over the years is that we in Scotland are paying a high rates bill and at the same time suffering from poorer services.
Before I mention the expenditure levels of 1983–84, let me look briefly at what happened in 1982–83, because this order contains a penalty provision for that year. The Secretary of State has earlier stated that the authorities overbudgeted by about £200 million in 1982–83 compared with the guidelines, or about 8·3 per cent. As it has turned out, the actual figure according to CoSLA is £182 million, rather less than £200 million, but no less than £47 million of that has been taken up with extra inflation which was not provided for in the Secretary of State's order last year. Therefore, the real overbudgeting has been about £135 million and it is on that figure that the penalty of £27 million is being made in the current year.
Let me say again that we are against the penalty provisions in the current legislation and that we therefore completely oppose this penalty which is being imposed virtually on the whole of Scotland's local authorities, with one or two exceptions, such as those authorities which will obtain refunds based exclusively on the guidelines that the Secretary of State says are only indicative and are not taken into account for any substantial purpose. Yet that particular refund to certain local authorities, in Scotland which is in any case minor, is being based exclusively on their performance in relation to the guidelines. I shall demonstrate later that the guidelines for most authorities are absolutely absurd. The Opposition are opposed to penalties and also to the way in which the guidelines have been used by the Secretary of State.
The right hon. Gentleman virtually boasted this afternoon that he had increased the amount of relevant expenditure on which he proposes to pay grant in 1983–84. For past rate support grant orders the relevant expenditure has been so completely out of line with local authority budgets and expenditure that the Secretary of State has added something to it to bring it nearer to the true figure—but at the same time he has reduced the rate of grant by about 2½ per cent. Rather remarkably and miraculously, the amount of grant payable is the same as it would have been had he not added £120 million to the relevant expenditure and had paid the rate of grant for 1983–84 at the same level as 1982–83. His generosity is not really generosity—he has increased one figure and reduced another to reach the original figure. The £120 million is not included in the guidelines, so there is no prospect of local authorities achieving their targets.
The Secretary of State had the impertinence to claim that there has been no great slashing of services by local authorities. He quoted the expenditure figures for the past few years but he did not say that in every case the figures were significantly more—about 7 or 8 per cent.—than the Secretary of State had said that local authorities should spend to meet his guidelines. There have been poor services but no slashing of services, because local authorities sensibly acted in the interests of their ratepayers and electors by not following the right hon. Gentleman's injunctions. They preserved a reasonable level of services. If they had followed his guidelines, there would have been a disastrous reduction in services in Scotland. I shall give the House figures to demonstrate that point later.
It is typical of the Secretary of State's dishonesty that, while he asks local authorities to slash their services, when they do not obey him he takes credit for the fact that the services are reasonably maintained.