Orders of the Day — Rating and Valuation (Amendment) (Scotland) Bill

Part of the debate – in the House of Commons at 4:58 pm on 5 December 1983.

Alert me about debates like this

Photo of Donald Dewar Donald Dewar , Glasgow Garscadden 4:58, 5 December 1983

I shall come to that. It is interesting that the Secretary of State spent the first 20 minutes of his speech defending the Local Government (Miscellaneous Provisions) Act 1982 and hardly mentioned the additional powers that he is taking in the Bill. He hurried over them with indecent haste when he went over the contents clause by clause. I shall deal with that later.

I shall not try to deal with every clause in the Bill, because that would try the patience, already sorely tried, of hon. Members. However, I shall examine one or two of the more objectionable clauses. Exhibit No. 1 is clause 6. It deals with rate fund contributions to the housing revenue account. It is a grey, anonymous and highly technical clause. However, in all seriousness I believe that it is full of menace for those in my constituency as well as others in every constituency in Scotland. We are handing a blank cheque to the Secretary of State, who is taking power to limit the rate fund contribution to the housing revenue account. The right hon. Gentleman is doing so in the most sweeping terms, because the Bill says, in whatever way the Secretary of State thinks fit. The right hon. Gentleman is taking powers to limit the rate fund contribution, and in so doing council house rents will be put up at his whim and will. There is to be no messing about. The clause goes straight in with the bovver boots.

Let me make clear what will happen. There are three sources of income on the housing revenue account. The first is the housing support grant, the second is the rate fund contribution and the third is rents. No one complains about this. The Secretary of State has complete control over the housing support grant contribution. He is now taking powers to limit, if he wishes, the rate fund contribution. If he controls two of the three, inevitably he controls the third and will be able to lay down exactly what rent levels should be. There is no escape from that unless one assumes that massive savings can be made, probably on the repairs and maintenance side of the housing revenue exchequer. However, with housing stock deteriorating, and faced with the problem of delivering a decent service, no wide-scale savings can be made in that department.

Therefore, we are faced with a fearful prospect. The constant theme of Ministers over the past few years has been that rents in Scotland are too low as a matter of social judgment. Ministers are not saying, "Unfortunately, because of what the Treasury is dictating, we shall have to put a hike on rents on a temporary basis." When the hon. Members for Edinburgh, Pentlands (Mr. Rifkind), and for Eastwood (Mr. Stewart), and all the others who have passed unmemorably before our eyes, stood at the Dispatch Box, they said on all occasions that they wanted to force up rents.

The figures are there for anyone to see. I did an amateurish thing, but it shows the general situation fairly accurately. I took the 1979–80 rating review and the same set of figures for 1983–84. On the 1978–80 housing revenue account, 48 per cent. of it was a contribution from rent revenue — rent that tenants paid to local district councils in Scotland. Some 35 per cent. came from the housing support grant and 16 per cent. from the rate fund contribution. In 1983–84 the contribution from rents rose from 48 to 67 per cent. The rate fund contribution was largely the same at 19 per cent. and housing support grant had collapsed from 35 to 11 per cent. Therefore, rents had to take a larger share of the burden when the average council house rent in Scotland went up by 115 per cent. in the four years of the previous Conservative Administration.

We are on course for a grotesque distortion. The only alibi used by the Secretary of State, which was that in the end it did not matter how high rents went up because there would always be the rebate system or, more recently, the housing benefit system, has been undermined in the months when we have been considering the legislation by the actions of the Chancellor of the Exchequer in his autumn statement.

I have never seen such crocodile tears as those shed in the White Paper over, for example, the loss of capital for the housing account of district councils in Scotland. The Secretary of State has the confounded brass cheek to say, "We need this piece of oppressive legislation because we have seen housing authorities lose their capital grant as they have not raised their rents enough." Who linked rent levels to capital grant allocations? It was the right hon. Gentleman who did that. Having erected a piece of machinery which he knows is inequitable, indefensible and unjust, he says that it is disgraceful that we have ended up like this, so we must do something worse. That is the basis of the right hon. Gentleman's argument. It is a disgrace that we should he insulted by such a level of argument.

On the rate-capping clause, clause 3, the right hon. Gentleman hurried through his argument. The Secretary of State is apologetic about the rate-capping argument. He says that it is a fallback position and that he probably would not use it without a year's notice. That is what he said to COSLA on 7 November. If we know almost every informed body of opinion that deals with local authorities is opposed to that provision, we are entitled to ask why we need it.

This is where we come to the argument of the hon. Member for Fife, North-East (Mr. Henderson). Even if we assumed that there the situation was out of hand in terms of local government expenditure—I shall challenge that in a minute—and there was a problem to be overcome, we have in any event passed out of that phase. Rightly or wrongly, we have the Local Government and Planning (Scotland) Act 1982 and the Local Government (Miscellaneous Provisions) Act 1982. Even if one assumes that that state of affairs has to be dealt with, we have to look at the situation in this financial year and what is happening now in local government. We must ask whether we need the rate-capping provision and the rate fund contribution limitation which I have already discussed.