I beg to move,
That the Rate Support Grant (Scotland) Order 1984, a copy of which was laid before this House on 19 January, be approved.
I take this opportunity to remind the House that this is the third successive year in which it has proved possible to hold this debate in prime time. I am sure that both sides wish to thank my right hon. Friend the Leader of the House for making that possible. Lest Opposition Members be tempted to complain about the time devoted to this important measure, I remind them that before 1982 debates on this subject always took place after 10 pm.
Before dealing with the details of the order, I should sketch the background essential to any debate on local authority finance at this time. Local authority expenditure is still too high and must be reduced. Scottish local authorities as a whole are budgeting to spend more in 1983–84 than they actually spent in 1979–80, even after taking account of inflation. That is in the face of the clear necessity for a substantial decrease in public expenditure to free resources for economic growth. Local authorities are responsible for a quarter of all public spending and must therefore reduce their expenditure if the general policy is to succeed.
It has been said often enough that, despite those necessities, it is not possible for local authorities to make savings. After all the discussions that we have had in recent years, I hope that we shall hear no more of that argument in this debate. Just under one third of all Scottish local authorities have cut their spending since I came to office five years ago and I congratulate them on that. Nor are all those authorities of the same political colour. I hope that the councils of Cunninghame, Dumbarton, Falkirk, Monklands and Motherwell will not take it amiss if I express my appreciation of their efforts in reducing their spending since 1979–80, even if they cannot quite come up to the standard of prudent economy set by Eastwood district council, which recorded a reduction of more than 20 per cent. in the same period.
I am glad to observe that the gap between the Government's provision and the authorities' spending has recently narrowed — partly due to the increases in provision that I have made to make it easier for authorities to bring their spending into line, and partly due to the selective action that I have had to take against some particularly high-spending authorities. Incidentally, the increases in provision were made in part at the expense of my other programmes at the Scottish Office. Opposition Members may care to reflect that years of local authority overspending have led to pressure on other areas of expenditure to which no doubt they and certainly I attach great importance.
Thanks to our policies, ratepayers have experienced some definite improvement in their position. Instead of average rate increases of up to 30 per cent., rising to 34 per cent., followed by 15 per cent., more recently increases have been 2 per cent., reduced in effect to 0·5 per cent. by selective action, in 1983–84. The average rate bill, excluding water rates, climbed from £183 in 1980–81 to £286 in 1982–83, but rose by only £1 to £287 in 1983–84. That is very satisfactory in one sense, but the figure should in fact have fallen rather than remaining more or less constant, so the picture is still unsatisfactory. That is why I have had to seek and, unfortunately, to use various powers granted by the House to take action to reduce local authority spending and that is why we now seek the authority of Parliament to strengthen those powers. I very much hope, of course, that I shall not have to use the powers, but if it becomes necessary I shall certainly do so.
If the Government's powers have been so successful already, why do they need the additional powers in the Rating and Valuation (Amendment) (Scotland) Bill to set and limit rates? Why cannot they rely on the facilities which they already have to cut the rate support grant?
I appreciate the hon. Gentleman's point, and I have made it clear that I hope never to have to use these powers, but if he had experienced the alarmingly high rate increases that I have described—the hon. Gentleman acknowledges that they have improved, but that is only because the Government took action—he would realise that we must have a fallback position to protect the ratepayers' interests if such increases ever recur.
The order embodies adjustments to the rate support grants for 1982–83 and 1983–84 and my proposals for grant and its distribution in 1984–85. These matters have been discussed with the Convention of Scottish Local Authorities. The format of the order is significantly different from earlier years. The schedules describing the basis for distributing the needs element, which constitutes about 87 per cent. of RSG, have been replaced by a schedule showing for each authority the amount of needs grant as initially estimated for 1984–85. This change results from my decision, of which I informed the House on 15 December, to distribute the needs element on the basis of the client group approach to assessing the relative expenditure needs of local authorities. The report on the order provides full details of the factors which I have taken into account in arriving at the amounts of grant set out in schedule 2 to the order. I hope that hon. Members will accept that these changes meet the criticisms voiced in previous years about the complexity of the order.
For 1982–83 the order proposes a very modest reduction of £1.3 million in grant, because the actual rate of interest affecting loan charges payable by local authorities is lower than the forecast used in the earlier calculations of grant. There is nothing unusual about this. It is an accepted feature of the system that adjustments are made, whether to the advantage or disadvantage of central or local governments, once the actual interest rate is known.
On 2 November 1983 the House approved the Rate Support Grant (Scotland) Order 1983 which reduced rate support grant by £45 million for 1983–84. The reduction was made because, even after some £19 million had been saved by the selective action which I initiated against four authorities, expenditure in local authority budgets remains more than £100 million in excess of the figure considered appropriate by the Government. The order now before the House provides for a further grant reduction in 1983–84 of £1.5 million, mainly because the present forecast of interest rates affecting loan charges is lower than the forecast used in the initial calculation of grant.
The order also revises the amount of needs element to be shared among authorities whose actual expenditure in 1982–83 was within current expenditure guidelines. The amount in respect of 1983–84 and its distribution will be reviewed in the autumn when actual expenditure is known. This provision means that an authority whose expenditure conforms to the guideline will bear no part of the general abatements of rate support grant made for 1982–83 and 1983–84 on account of the overall level of local authority expenditure. I regard this as eminently fair, as does the Convention of Scottish Local Authorities. I hope that the House will also accept it.
For local authority current expenditure in 1984–85, on 27 July I announced a provisional figure of £2,730 million. The final figure of £2,736·6 million shown in the report is almost unchanged except for certain technical adjustments. This figure is £64 million above the White Paper figure. In the Government's view, the enhanced figure should be attainable by local authorities. Within the total provision there is a margin of £75 million which is not allocated to services, reflecting the fact that authorities have been given more time to bring their spending into line with the Government's plans. After taking account of the four financing items detailed in the report, the total figure for relevant expenditure in 1984–85 is £3,205·9 million.
The current expenditure guidelines issued to local authorities on 18 November 1983 add up to the provision for relevant expenditure, including the margin of £75 million not allocated to services, but excluding the provision for expenditure on the urban programme. As in 1982–83 and 1983–84, the guidelines have been derived from the client group assessments of the relative expenditure needs of local authorities. These assessments apportion in a systematic and equitable way the total of relevant expenditure provided for the various services within the rate support grant settlement. For some authorities the guideline is set at the level of the client group assessment, but for the majority it has been necessary to make some adjustments. In accordance with the views of the convention, these adjustments have been kept to a minimum, but they have two simple purposes. The first is a limit on the client group assessments where, for an individual authority, they would imply a marked increase in expenditure. I am aware that some hon. Members are concerned about this, but to do otherwise would be wholly inconsistent with our policy of securing reductions in the level of local authority expenditure. The second adjustment is to increase the client group assessments where they are more than 5 per cent. below what authorities are spending. I consider the guidelines to be fair and certainly to be attainable, and I urge authorities to make every effort to bring their expenditure into line with them; as so many have already done.
I am grateful to my right hon. Friend for the way in which he has helped the transition to the client group approach. Will he confirm that he is willing to continue to discuss with COSLA and with local authorities possible ways of improving and refining the methodology of the client group approach?
I entirely agree with my hon. Friend that that is desirable. I am, indeed, only too ready at all times to discuss this further with COSLA, and I think that that would be very helpful.
I deal next with grant. In determining the grant for 1984–85. I had to weigh carefully the interests of ratepayers and the continuing need to reduce local authority expenditure. As I informed the House on 15 December, the maximum aggregate grant consistent with these considerations and broader policies is £1,930 million. This is more in cash than initially determined for 1983–84, some £25 million more than assumed by authorities when fixing rates for 1983–84, and represents 60.2 per cent. of relevant expenditure. This is 1·5 per cent. less than in 1983–84 and continues the policy of successive Administrations of reducing grant as a means of securing reductions in expenditure. Those who say that this transfers the burden from central to local taxpayers are missing an important point. The rates burden will increase only if authorities refuse to reduce expenditure. About £216·8 million of aggregate grant will be distributed as specific grants in support of expenditure on particular services. The balance of £1,713·2 million will be distributed as rate support grants, and this is the amount provided in the order before the House today.
The order also provides for the distribution of the grant, about which there has been extensive discussion with the convention. The domestic relief is to continue at 3p in the pound. The balance of the grant is allocated between needs and resources element in the ratio of 7:1. The resources element will be distributed in accordance with the normal statute. The amount of the general portion of the needs element to be paid to each authority in terms of this order is set out in schedule 2 and gives effect to the fundamental change made in the needs element distribution for 1984–85.
For a number of years distribution of the needs element has been based mainly on population and population-related factors, but in years up to 1979–80 it also took account of the actual expenditure of each authority. That meant that high spending could result in higher grant in a later year, and was at variance with the Government's commitment to securing reductions in the expenditure of local authorities. Since 1980–81, needs element distribution has been designed to secure stability in grant. However, this was clearly no more than an interim measure, and an alternative approach had to be developed.
I think it is fair to say that all concerned agree that the new system, namely, the client group approach to assessing the relative expenditure needs of local authorities, offers a fairer and more systematic basis for distribution of grant. I quite accept that the convention officially would have preferred to delay the changeover until the method had been further refined, but I carefully considered all the views given to me about timing, and I concluded that there was nothing to be gained from delay. While 1984–85 is the first year in which the client group method will be used for grant distribution, it has been used in the calculation of current expenditure guidelines since 1982–83. It seems to me logical that there should be a single assessment of relative expenditure needs underlying current expenditure guidelines and grant distribution.
The report accompanying the order describes the client group approach. Its central aim is to estimate the relative expenditure needs of authorities by taking into account the variations in the demand for services and the cost of providing them with a similar degree of efficiency.
The expenditure provision made in the rate support grant settlement for any particular service is allocated among authorities undertaking the service mainly on the basis of the factor which most directly determines the need for the expenditure. For example, provision for school teaching staff is apportioned on the basis of the number of school pupils in each authority. This assessment may be adjusted in the light of other factors which could affect the demand for a particular service or the cost of providing that service. In the case of schools, again an adjustment is made for the higher ratio of staff in rural areas. The table to appendix F to the report lists the various factors used for 1984–85. My hon. Friend the Under-Secretary of State for Scotland, who has responsibility for Home Affairs and the Environment, will be happy to give further details of the system should hon. Members wish. For grant distribution, estimates have also been made of other factors, mainly loans charges and income from specific revenue grants. That method has been agreed with the convention.
Before the right hon. Gentleman leaves the effect of the introduction of the client group approach, will he recognise that some authorities, such as Lothian and, indeed, Highland and Strathclyde, are adversely affected by that change? Is it his intention to take that into account when he comes to assess their overall level of expenditure in the forthcoming year?
I appreciate the point that the hon. Gentleman makes. First, I must say that we have deliberately dampened such an effect. If it is unfavourable, it is less unfavourable because of the phasing effect which we deliberately introduced. Secondly, we will, of course, take into account stresses and strains which this may put on the budget of an authority when considering whether any expenditure it incurs might be considered excessive and unreasonable.
In considering client groups, particularly those of the elderly and the disabled, does the right hon. Gentleman agree that Scotland is being seriously disadvantaged compared with the rest of the United Kingdom because of the failure of the Secretary of State to carry out joint funded schemes in this area with health boards, which is happening in England and Wales? The Secretary of State for the Environment has specifically allowed extra money to local authorities for this purpose, but in Scotland it is simply not taking place.
I am disappointed that it has not been taken up more widely in Scotland, but this is largely a question of the differing interests of those concerned being difficult to reconcile. It is desirable that there should be more of a meeting of minds on these matters. As to the spending of money, Scotland certainly gets more per head of the population for this matter than England and Wales, which is a point well worth remembering.
The objective of the needs element distribution is to enable authorities undertaking the same range of functions to levy the same rate for the same amount of expenditure per head of population. As this would mean significant changes from the present level of grant, I have limited the reduction from 1983–84 needs grant to £6·45 per head, a 2½p rate, at regional level and £2·58 per head, a 1p rate, at district level. This is a fundamental change to the basis of needs element distribution. I have agreed with the convention that officials should review the method used for 1984–85 and consider whether further refinements might usefully be made for later years.
The effect of the settlement upon rates depends upon final decisions yet to be taken by most local authorities. I have read, however, in the press that the rate in Glasgow next year is likely to be 58p, the level to which it was reduced this year as a result of the selective action taken by me against that authority. If that turns out to be the case, hard-pressed ratepayers will welcome it, I am certain, but I must confess to being disappointed that the council, in all the circumstances, does not intend to reduce its expenditure nearer to the guideline, which could have led to reductions in the rates, which would have been even more welcome to the citizens of Glasgow. Since 1979 I have consistently made clear to local authorities the Government's determination to secure reductions in the level of local authority expenditure, in the interests of ratepayers and the economy generally. I hope that reductions in expenditure will be the prime consideration of all authorities when they come to determine their rates for 1984–85.
As I said during the exchanges following my statement on 15 December, budgets in line with the expenditure provision made in the settlement could result in average rates falling in the coming year by between 5 and 6 per cent. It has been argued by the convention and others that, on the contrary, higher rates are inevitable, but what they omit in their assumption is that expenditure will be around the level of local authority budgets for 1983–84. That, in the light of all the expectations, cannot be regarded as acceptable. If authorities do not heed the warning given about the level of their expenditure, I shall end up inevitably having to take whatever action I consider appropriate to secure expenditure savings.
The order is important and provides for a very large amount of central Government grant in support of a considerable amount of local authority expenditure in 1984–85. I believe it to be a fair and reasonable settlement, and I therefore commend the order to the House.
This debate is important, and is held annually. On this occasion it has, perhaps, been rather overshadowed by industrial events in Scotland. The local authorities—their elected members and those whom they represent—would not want us to forget that crisis. Whatever may be happening elsewhere, and whatever we may read in the press, particularly about the lower Clyde and Scott Lithgow, I hope that no irrevocable decisions will be taken about slates being wiped clean or sales being made without the Secretary of State explaining to the House exactly what is happening and the impact on those involved.
I know that the Secretary of State will note that point, and I hope that he will bear it very much in mind. In his usual detached and unemotional way, he has given us a well-prepared script, full of bad news. I suppose that we are used to bad news. After all, it has become almost routine over the years. The Secretary of State continually gives us more of the same. He has sketched a pretty dreich and dreary outlook for Scottish local government in the rate support grant.
One of the Secretary of State's great weapons is tedium. [Interruption.] Not every hon. Member has served on the Rating and Valuation (Amendment) (Scotland) Bill, so that may be something of an "in" joke. However, the right hon. Gentleman's weapon is tedium and it is sometimes difficult to tell what the Government's intentions are from the right hon. Gentleman's low monotone. Nevertheless, the outlook is dreich and dreary, and the temper and morale of local authorities are not being improved by what has amounted in the past year or two to a campaign of misrepresentation. Indeed, I believe that that campaign is still being conducted by Scottish Office Ministers. Their general tactic is to create a crisis, deny what they have done, and then duck for cover, blaming everyone else in sight. I am sure that the Secretary of State's favourite slogan is, "It wasna me." But many of the troubles that we now face can clearly be laid entirely at his door.
The Secretary of State constantly poses as the ratepayers' champion, and has done so again this afternoon — [Interruption.] We hear the usual loyal bleating noises from behind him whenever that is said, but the reality is that there is a simple deception. The right hon. Gentleman is quite right to say that there has probably been an increase in real terms in local authority expenditure, in constant prices, since 1979–80. I do not know whether the right hon. Gentleman accepts the calculation that COSLA has done, but it amounts to 1·6 per cent. I understand that there is to be some joint consultation, and the figure may be adjusted. However, I think that it will be of that order.
Therefore, although there has been an increase in expenditure, it has been marginal. But during the same period, the average payment by a domestic ratepayer has increased by about 133 per cent. Accordingly, the answer must lie not in the marginal increase in expenditure but in the persistent reductions in central Government support, which have been the hallmarks of the Secretary of State's policy. The inescapable conclusion is that, for the ratepayers, the Government's fiscal policy has been the villain of the piece.
Of course, the Secretary of State would be right to say that that conclusion is not inescapable, in the sense that if local authorities were prepared to demolish essential services, they could no doubt escape the grim arithmetic of successful rate support grant settlements. However, that option is not open to them, because they have a duty to maintain essential services. It may not be necessary to expand or to go for the ultimately desirable, but they must at least maintain the fabric, for example, of their social, education and cleansing services, as every ratepayer and citizen expects. I object to the campaign of deception. We are being invited to finalise a rather bitter past and to accept what I fear, in the 1984–85 figures, is a grim future.
I turn to the general abatements for 1982–83 and 1983–84. As hon. Members will know, in the first year there was a clawback of £27 million and in the second year a clawback of £45 million. As the outturn figures are very different from the estimated expenditure in many local authorities, we shall be faced this year with a substantial grant reduction and with a redistribution of the burden of the abatement among several authorities, which will amount to more than £8 million.
During discussion of clause 1 of the Rating and Valuation (Amendment) (Scotland) Bill we made our protests, but we got cold comfort from the Under-Secretary of State, the hon. Member for Edinburgh, South (Mr. Ancram). However, I still believe that we should not look upon the general abatements as being routine. It is an indictment of the system that £185 million has been clawed back under this Government by that method. The general abatement and the selective action taken are now unashamedly tied to the guidelines. The Minister has talked at great length about the client group approach. I do not join in any general satisfaction about the guidelines and the way in which they have been drawn. It is significant that no fewer than 36 local authorities have guidelines for 1984–85 which contain less than their budgets for 1983–84.
Although the gap may have closed, as the Minister claimed, many of the guidelines are still totally unrealistic. Strathclyde regional council is an important authority and by far the largest in terms of expenditure. Its increase in guidelines this year over last year is only 1·5 per cent. In real terms, that must represent a very substantial cut. To talk about general satisfaction with the guidelines suggests only that the Secretary of State has not bothered to talk for long to Strathclyde. If he has done so, he has not listened to what the council had to say. Therefore, we should not forget the general abatement. The situation is unsatisfactory. The cover has been blown, and the guidelines are clearly now part of the very oppressive structure that the Secretary of State has put on the statute book in the past year or so.
The main item on the menu is the settlement for 1984–85. It is true that the relevant expenditure figure is up by just over £75 million. I think that the figure is £75·5 million or 2·8 per cent. However, that, of course, is very much less than the rate of inflation, however it is calculated, and represents a real decrease. The extent of the disaster can be seen by taking the current year's estimates. Let us assume that expenditure in real terms is static and that inflation is taken into account. In that case, local authorities would be paying about £140 million above the Secretary of State's planned figure of about £2,750 million. That would involve an increase of more than 4·9 per cent.
Some of the gaps that have appeared between the Government's settlement figures in specific areas of policy and local authorities' projected expenditure are dramatic. The Secretary of State will be familiar with the figures of 7·4 per cent. for education, 24·6 per cent. for transport and just over 33 per cent. for leisure and recreation. Although I seem to be dealing with rather academic and abstract concepts, they will mean substantial problems for local authorities which, in the real world, have to plan and maintain services.
I shall cite some examples from the areas that I have already mentioned. I may have a particular interest in transport and the section 20 grants that are paid by Strathclyde regional council. My understanding is that in 1984–85 these grants are likely to amount to some £32 million. When the subsidies for buses, ferries and other means of transport are added, Strathclyde is budgeting next year for about £55 million. The whole figure for Scotland in the Secretary of State's settlement is just over £56 million, which hardly covers Strathclyde, never mind making provision for all the other authorities. That is the measure of the unreality of the Secretary of State's arithmetic. On several occasions recently, at Question Time, when my hon. Friend the Member for Linlithgow (Mr. Dalyell) and I have raised the matter, we have heard that the Secretary of State and his people are considering section 20 payments and the way the section 20 figure is arrived at. Yet nothing seems to be happening. I hope the Secretary of State will bear this matter very much in mind.
In regard to concessionary fares, if Scottish local authorities were to meet the targets which the Secretary of State claims are reasonable and which he has set, the concession on the fare for senior citizens would be reduced to about 20 per cent., which is hardly generous. If Strathclyde were to meet the figures, the concessionary fare of lop would have to go up to 20p. It will not, and I hope we will not get carping criticism from the Secretary of State about profligate and unrealistic councillors if they try to protect senior citizens from that kind of burden.
On education I had correspondence recently with the Under-Secretary of State, the hon. Member for Argyll and Bute (Mr. MacKay) about a scheme in England under which money is being given to voluntary bodies by the Department of Health and Social Security to help with projects for the under-fives. It is expected that in the next two years expenditure will be about £2 million a year. When I asked the Under-Secretary about the Scottish equivalent, I was told that there will not be one, because it is all being done through the rate support grant. There was a great deal of bogus concern about the appropriate way of doing these things being by taking account of local circumstances and the needs to which these gave rise. I should like to take account of local circumstances and the needs to which they give rise. How can an education authority do that if there is a substantial cut in its provisions? It is bunkum to say these things when hard-pressed authorities will not be able to provide for the kind of expansion that would properly mirror the scheme put forward by central Government south of the border.
I do not want to labour what has already been said about the employment of teachers, but I understand that there is room for dispute about the figures for pupil numbers given by COSLA and the Secretary of State. Again, if the target laid down by the right hon. Gentleman is to be met, there will be a substantial decrease in the number of teachers employed in 1984–85. Let us not forget that COSLA is projecting on the basis of a drop of 800 teachers to account for falling school rolls. It reckons that, if it does what the Government ask, there will be 3,191 fewer teachers employed in Scotland. I invite the Under-Secretary to tell us whether he accepts that figure or to what extent there is margin for error.
There will be widespread distress and dismay in my constituency and every other constituency if local authorities are to do as they have been bid by the Secretary of State. He is relying on them not doing it because the outcry about the damage that would be done to education would be terrible.
Will my hon. Friend accept that the discrepancy in the figures may relate partly to the fact that many pupils have gone back to school because they have not been able to find productive and reasonable employment? Therefore, the number of teachers should be increased rather than decreased.
What my hon. Friend says is true. It is another example of how the Government's economic policy increases public spending in the worst of all possible ways. It leads, first, to enormous and insupportable dole queues and, secondly, to the situation to which my hon. Friend has referred. The Minister owes us a specific comment on the horrific loss in teaching staff that his figures seem to imply.
Not just relevant expenditure is down in real terms but, as the Secretary of State conceded, the grant percentage has been reduced too. It is down by 1·5 per cent., which I am advised is equivalent to 4p on the rate poundage. If the cut of 1·5 per cent. had not been imposed and the original grant had been made, local authorities in Scotland would have had another £48·1 million. Therefore, it is not something to be shrugged off. It represents a substantial cut in real income.
It is unfortunate that there should be a squeeze at each end of the calculation. Local authorities may well feel that they are losing in every way. For the Secretary of State to appear at the Dispatch Box and give the impression that all is for the best in the best of all possible worlds is the height of hypocrisy. It is unsatisfactory. Relationships between central and local Government will be further soured and damaged if Ministers continue down the path on which they seem to have set their way. The only thing they are doing is bringing in many irrelevant measures in the rating and valuation legislation which no one wants.
I agree with the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) that there seems to be no point in the rate-capping provision, given the formidable battery of weapons that has accumulated on the statute book since 1979. That view is shared by many Tory councillors, including, for example, the leader of the Tories on Edinburgh district council who put the point eloquently to us recently on a visit to Westminster. I was delighted to find that we had unexpected but welcome allies in Edinburgh chamber of commerce, which finds the whole rate-capping provision constitutionally offensive. It is to its credit that it has been prepared publicly to make that point.
Individual authorities have suffered, as the Secretary of State accepts. In regard to the needs element distribution formula, in 1983–84 Strathclyde was getting £680 million; in 1984·85 the figure is £665 million, a substantial drop. It is not a case of a rise being overtaken in real terms by inflation, but a drop in cash terms. I am informed that that is the equivalent of a loss of about 7p in rate poundage. It is to some extent offset by an increase in the resources element, but the damage is still real. Experiences like that have embittered people right across the political spectrum in local government.
In the Glasgow Herald of, I think, last Friday there was reported a speech by councillor John Young, a very senior Conservative, who was talking specifically in the context of the shipbuilding crisis. I find it interesting that he should say:
Merely condemning George Younger isn't going to achieve anything.
He did not try to defend the Secretary of State. He went on with a counsel of despair and cry of pain, asking that the hon. Member for Southend, East (Mr. Taylor) should be recalled to Scottish politics as Minister for the Clyde. It is worth recording in Hansard as a remarkable piece of loyalty that the hon. Member for Southend, East, while saying that it was a splendid idea, felt he had to decline the honour; he said:
I can assure people that George Younger is proving to be a real tiger fighting at every level for the country's interests".
The right hon. Member for Ayr (Mr. Younger) never struck me as a veritable tiger fighting for the rights of Scotland at every level. That phrase becomes perfectly laughable when we consider the right hon. Gentleman's record on rate support grant settlements in the past few years.
Strathclyde, Glasgow and west coast authorities are not the only ones that are worried. I have referred to some of Edinburgh's anxieties about the Government's legislative initiatives. Also in the Glasgow Herald we have a statement by Brian Meek, the convenor of the Tory-controlled Lothian Region, who was reported as saying:
it was almost inevitable that the rates would have to rise. Taking all the factors in the rate support grant settlement the region was starting with an additional rate bill of 7p.
If we remember the constant prating of Conservative politicians about how they have championed the ratepayer —no doubt it will be commonplace again during the district elections in May—it seems extraordinary that such a well-known Conservative as Mr. Meek should be saying that what the Government are doing to Lothian this year will put a substantial impost on the ratepayers there. Perhaps the ratepayers will not have to bear the full burden, because many councils such as Glasgow and Strathclyde will try to ensure that they are to some extent sheltered from the arithmetic and logic of what the Government are doing. The trouble with that, however, is that they will not be thanked by the Secretary of State. Indeed, they will be met by carping criticism and probably by harsh and unnecessary penalties. That is why the Government's proposals are so offensive.
This is a dishonest campaign, which will work out unjustly and inequitably. The Government's policy in the past few years has been a sham— a ramshackle and illogical hypocrisy. Because of that, we shall protest against their record and against what they are promising in this rate support grant settlement in the Lobby tonight.
I seem fated to speak after the hon. Member for Glasgow, Garscadden (Mr. Dewar), with his histrionics and short memory. We get used to them. He always fails to recall what his party did when last in government—it cut the rate support grant by a bigger percentage than any previous Government. Indeed, the Labour party must be in the "Guinness Book of Records" for the number of times that it reduced the rate support grant. The Opposition reduced it by as much as 4 per cent. in one year. Yet we heard nothing of that today.
My right hon. Friend the Member for Glasgow, Govan (Mr. Millan) got tired of this gramophone record. I intend to try to deal with it only once, whereupon I hope to be able to ignore it. Will the hon. Gentleman not recognise that the 4 per cent. decrease to which he referred was much heralded and came after a hike in the rate support grant to allow for the one-off costs of reorganisation when the regions and the districts were created? If the hon. Gentleman is worried I suggest that he does not go back to ancient history but examines the record of the Government whom he supports. They have reduced rate support grant by 8 per cent. since coming to power and seem intent on doing more damage.
The hon. Gentleman has given us another lesson in economics. I am not impressed, as a 4 per cent. cut in one year is far more dramatic than a 1 or 2 per cent. cut in an ordinary year. The hon. Gentleman should bear it in mind that being restrictive in public expenditure has been part of the Government's economic strategy for the past five years. Within that calculation, local government must be taken into account when considering Government expenditure.
Within the context of that policy, I do not disagree with the overall determination for this year, but I should like to make some constructive criticisms about the distribution of the rate support grant and about the fairness of the formula. I should also like an assurance that the client group method will bring advantages in 1985–86 to local authorities that keep within the guidelines.
In Committee, two weeks ago, I told my hon. Friend the Minister of my anxiety about how the formula will work for rural areas. He was good enough to tell me that he was acutely aware of the situation. I hope that he will go further today. Before the equivalent debate on the English rate support grant order, there was media comment to the effect that there would be concessions on rate support grant settlement to assist the counties and olive branches to the shires. I hope that rural areas in Scotland will receive similar comment. To that end, I should like rather more than refinements.
I cannot interrupt the hon. Gentleman unless he is standing. In view of the hon. Gentleman's anxiety about rural areas, does he agree with his hon. Friend the Member for Southend, East (Mr. Taylor) who suggested recently that one way in which to get extra money for rural areas was to rate farmers and their land? Does he agree with that, and will he propose such a course of action?
No, I most certainly will not. It is a complete waste of time giving way to the hon. Gentleman. The remarks of councillor Sewel of COSLA in today's newspapers about inconsistencies are utterly incorrect. The Government are right to set an example by reducing public expenditure. It is therefore also right that the Government should, by legislation, do all within their power to ensure that local authority expenditure is kept down as much as possible. I see no inconsistency in that. A few weeks ago councillor Sewel said that Conservative Members had no local government experience. I suspect that one or two have had more experience as elected representatives in local authorities than councillor Sewel has.
I have studied circulars 13 and 14 of 1983 and the statutory instrument. To say that they are complicated is a major understatement. I should like to examine the rate support grant and the proposed payments relative to the guidelines. Dumfries and Galloway council kept expenditure down, in the national interest, in the interests of ratepayers and in the interests of encouraging industry to the area.
That was highly commendable. The rates fell this year by 8p in the pound, to about the lowest level in Scotland. I shall not dwell on the compilation of the relevant expenditure by the Scottish Development Department, which includes loan charges and does not include specific grants such as those for police, which produces the rate support grant figure. There is a small element of domestic expenditure—one eighth for resources and seven eighths for needs. In future the resulting figures will be called the guidelines under the client group formula.
In 1983–84 the Dumfries and Galloway guideline was for £60,420,000. In 1984–85 it should have been £67,742,000 under the new formula, but it has been artificially reduced to £63,225,000 by the Scottish Development Department. I should be grateful if my hon. Friend the Minister would explain how the change in the formula was arrived at, as it seems to transfer the guidelines amount from some local authorities to others which are classed as high spenders.
The reduced figure of £63·2 million is not matched by the RSG and, in cash terms, it is lower than it was in 1983–84. Surely my right hon. Friend will agree that the RSG settlement should at least match inflation. While we have obtained an increased guideline, we have been saddled with a reduced grant.
Thanks to extremely prudent housekeeping by the regional council, through the use of reserves it may not be necessary to put the rates up the full amount. Under the present circumstances, the rates will inevitably have to go up, perhaps by 4p or 5p in the pound. The reason for that, as my right hon. Friend said when presenting the proposals, lies in the reduction to 60:40 in the relationship between local authority and Government contributions. In the interests of forward planning by local authority treasurers, can he say whether the formula of 60:40 is final? Will it continue to be in the Government's favour in future?
The client group method of compilation should, in theory, benefit rural areas. According to figures that were given to me, the new formula would mean an adjustment of 0·4p this year in Dumfries and Galloway. If that continues, it will be many years before the authority reaches the figure for proper distribution produced by the formula. Will my right hon. Friend say how far he will move towards a proper distribution by means of the new client group method?
I hope, too, that my right hon. Friend will say a little more about a matter that he touched upon in Committee. He dealt with the needs element for rural areas, and said how important it would be for them to achieve a more worthwhile settlement for 1985–86. The Government have stated that prudent authorities that keep within the guidelines will receive better settlements than those that are profligate with public funds.
Many of the issues that I have raised in relation to expenditure in sparsely populated areas, where more is spent on transport and other services, will affect district councils in the same way. I hope that the Minister will say something about the problems in rural areas affected by the RSG formula as well as in the regions, with which I am mainly concerned.
Capital spending in my region will remain virtually static compared with the current year, although my right hon. Friend has made detailed changes in the regions. I cannot but notice that the Borders, Central, Fife, Highland and Tayside have increases in capital expenditure, while Lothian and Strathclyde have less. However, Dumfries and Galloway has not been allowed an increase, although it has set as fine an example as any local authority in Scotland.
I should like to see a much more equitable distribution of RSG next year. I hope that we shall hear some encouraging news when the Under-Secretary winds up the debate. While the Government's policies are right overall to keep down public expenditure, the distribution formula as it affects rural areas is inconsistent with the Government's aims.
Like the hon. Member for Dumfries (Sir H. Monro), I have served on a local authority. I was elected to serve on a local authority in 1952, more than 30 years ago. I hasten to add, for the benefit of my junior colleagues, that I was elected as a young 23-year-old. I have had an interest in local authority matters for all those 30 years. I cannot think of any time when elected members of local authorities were more frustrated and demoralised than they are at present.
The hon. Member for Dumfries quoted yet again a set of selected figures. I have talked to councillors from both urban and rural authorities, and they often say that they much preferred the 68·5 per cent. rate support grant which they had from my right hon. Friend the Member for Glasgow, Govan (Mr. Millan) when he was Secretary of State to the rate support grant which they now receive.
My hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) said that it had been suggested by a Glasgow Tory that we should go outside Scotland, to Southend, to find someone to tackle our problems. That proposition does not appeal to me. The Secretary of State and his colleagues must realise that much anger and bitterness are felt by local councillors of all parties. They are doing a thoroughly good job. They are the people who know best the problems of their areas. It is only right and proper, if democracy means anything at all, that they should be allowed to get on with that task.
Those people bitterly resent—I would, too, if I were still a member of a local authority—the constant cutting of what they deem to be essential services. The hon. Member for Dumfries naturally and properly spoke about the problems of rural areas. However, I am sure he will concede that those who represent urban communities have serious problems too, and I hope to deal with them in a few moments.
Local councillors also resent the sneering cynics who tell them from time to time that they are nothing but big spenders. The Secretary of State said that again today. In a sweeping way, he said that local authorities were still spending far too much. I wish that the Secretary of State and his Ministers would get it into their heads that one of the reasons why local authorities are now under an obligation to spend more than they have had to spend for some time is that the problems with which they must deal, mainly created by this Administration, are greater now than they have ever been in the 30 years that I have been associated with local government.
We recently debated the Rates Bill, which is concerned with rate capping, which is an unfortunate expression, because people do not know what it means. It means simply that the Secretary of State will be the Big Brother of 1984 and will tell everyone what they should do. However, nothing much was said about the the Bill in Scotland.
There was not a cheep from Scottish Conservative Members. Nobody bothered about the matter and it was only last week, when their English counterparts came to the fore and rebelled, that the issue suddenly took life in the House. Those who represent the Conservative party in Scotland would be well advised to talk to local councillors about what they think about rate capping, and then tell us and the Secretary of State their views.
Conservative Members should also have a word with some of their colleagues in councils about another matter which they resent. The point was made effectively by a former Conservative Cabinet Minister last week, when he said that it was a crime for local authorities to be asked to reduce costs and be compelled by the Government to reduce expenditure at a time when central Government expenditure was increasing by 2 per cent. The right hon. Member for Cambridgeshire, South-East (Mr. Pym) gave the figure, and I can only repeat what he said.
I am bound to tell the Secretary of State, through his hon. Friend the Under-Secretary, that some of the services on which the money is being spent are not first priorities on our list. I read—I stand to be corrected if I am wrong—that we are to spend £800 million on an airstrip on the Falkland Islands, I have a great deal of sympathy with the Falkland Islanders, but then I think about what a district council in Scotland could do with that amount of money. The Falklands are hardly the size of Millport, but money is being poured in there. If such money were poured into the deprived areas of Scotland, the Secretary of State would get our genuine support.
My hon. Friend the Member for Garscadden referred to the COSLA paper on recreation and leisure. He said that the COSLA estimate of the shortfall there was about 33 per cent. I have seen the closure of sporting facilities in my constituency. In the region we have seen swimming baths and other sporting facilities closed. We have seen the posponement, yet again, of the building of running tracks, athletic fields, and so on, at a time when there are more unemployed young people than we have had in Scotland in all the time that I can remember. Instead of harnessing the energies of these young people into good, healthy sporting activities, this Government, in their concern about rates, are prepared to allow those young people to roam the streets of our big cities and often cause great mischief while doing so.
I have a number of deprived areas in my constituency, where there is massive unemployment. Let me give one example. I am privileged, in companionship with my hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton), to represent the people of Castlemilk. I am told that unemployment among young people there is about 50 per cent. I have also seen the housing in that part of the city. We do not have boarded-up houses or blocks of flats; we have boarded-up streets. It is a most depressing sight. One has to see it to believe the deprivation that exists there. There is no encouragement for young people to stay in their own homes. I should be rebuked by you, Mr. Deputy Speaker, if I were to refer to the next order, but that has been laid, because the local authority has not been given the proper resources to carry out effective and essential repairs.
There are many good local organisations in Castlemilk which do useful voluntary work, as my hon. Friend the Member for Cathcart and I know well. However, our councillors tell us constantly that they could do a great deal more if the resources were available to help these young people. I have heard many complaints, particularly during the past year—very proper complaints, and from all sides of the House—about glue sniffing, vandalism and young people taking drugs. I would rather the Secretary of State spent money on a new swimming pool or running track in my constituency than on trying to cure young people of glue sniffing and drug addiction. In my opinion, they are closely linked. If we are to harness the enthusiasm and energy of young people, that is what we must do.
Is my right hon. Friend aware that the problem of drug addiction in Scotland has been made marginally worse by the Government, who have cut back on Customs and Excise officers to such an extent that Scottish ports are no longer manned on a 24-hour basis, thus making drug smuggling that much easier?
I have heard that, and I deprecate the fact that it is making it easier for many people to take drugs.
At the other end of the scale—I shall not rehearse the arguments which I gave in the Scottish Grand Committee a few weeks ago—councillors in Scotland are genuinely concerned about the pathetic treatment by the Government of our elderly citizens. In the last couple of days our national newspapers have contained serious criticisms of that treatment. All of us, as Members of Parliament, have received representations from voluntary organisations such as the Crossroads Care Attention Scheme, which has been a useful adjunct to the services provided by local authorities.
We begin to realise that we shall not get much change out of the Secretary of State. Local councillors, and the local people whom they represent, know what they want to do for old people, if the Secretary of State does not know. They want more old folks' homes, certainly more day-care centres for the elderly, more home helps than the order will permit, sheltered housing, which will no doubt be considered on the next order, and the provision of better trained people to look after these old people and keep them in their own homes.
Frankly, the resources which the Secretary of State is giving local authorities will not match the growing problem of the elderly in Scotland. The Under-Secretary of State should pay more attention to this matter. When he winds up the debate, I hope that he will say something about the concessionary fares, which are much used and appreciated by elderly people — that is, Mr. Deputy Speaker, if he has the good fortune to catch your eye.
Most of us know—certainly I do—from talking to our local councillors, COSLA and the people whom we have the privilege to represent, what they want to do for both the young and the old in the community. If local democracy means anything, the Secretary of State should listen to the voices of the councillors and not just to the special interest groups, which he seems to favour more than the people who have been elected to do the job.
The Secretary of State recently offended all of us by taking unto himself powers greater than any Secretary of state has taken before. A few weeks ago, one of his right hon. Friends said to the Secretary of State for the Environment that Secretaries of State were taking on more powers than were given to Ministers even in time of war. That is something that we should all deprecate. If the Secretary of State for Scotland wants to be convenor, lord provost and Secretary of State all wrapped up in one, he should go out into the streets in Scotland. The people there will tell him what they want. They will tell him that they want a great deal more assistance for the local authorities.
The truth is that this is an issue upon which there is almost a consensus. It has been recognised for a significant time that restrictions on local authority spending are essential. That was recognised by the Opposition when they were in Government. We should compliment the Labour Government on its success in cutting manpower levels. Between 1966 and 1967 it achieved much more than we have achieved, cutting manpower by 10,000. There is a consensus that local authority expenditure is important and that it would escalate if the House did not put some ceiling upon it. The measures proposed by the Government today are sensible and impose a reasonable constraint.
I am pleased to note that local authorities that have behaved responsibly in the past will not now be penalised as they have been. Among those authorities I can include Aberdeen district council in whose area my constituency is located, because after its annual outturn last year its rate support grant will not be cut.
Grampian regional council is Tory controlled. It is bitter about the fact that, despite its pleas to the Secretary of State, its education budget has been severely cut. The City of Aberdeen district council, too, is very upset because the proposed leisure centre that has been on the stocks for some time has now been finally vetoed by the Secretary of State.
The hon. Gentleman knows full well that he is wrong about the leisure centre. I believe that Aberdeen district council received a letter from the Secretary of State yesterday and discussed it at a council meeting. The Secretary of State made it clear that this was the first time that he had had to consider a proposal for a leisure centre on such a scale. He gave the council the option of seeking private funds, if it chose to build a substantial leisure facility. Within the area of Aberdeen there are already substantial leisure facilities. I believe that this special complex should be supported, but not exclusively by the rate support grant or by central Government.
The hon. Gentleman referred to complaints from Conservative councillors in Grampian region. Conservative Members of Parliament must meet criticism from Conservative councillors head on and explain to them as to Labour councillors both in regions and in districts that restraint is necessary. As long as the restraint is imposed fairly, I think that it is right.
We will always be met by requests for more money, but there comes a time when we must stand up to those requests. That is why we are having this debate, and why I consider that the levels of rate support grant that have been set are fair.
Restraint will encourage more efficiency in local government. Efficiency should be encouraged wherever possible, and there is still scope for improvement. I congratulate Aberdeen district council for meeting its budget and running an efficient local authority. Like most people, the council wants more money, but it has managed to work well within its budget. That should he a source of satisfaction to all hon. Members.
Finally, I cannot believe that, in their hearts, the Opposition want an increase in local authority expenditure. When in office, the Labour party always did what we have done. Are the restraints being spread fairly throughout the community? That is the test, and I believe that they are. Manning levels in local authorities are in no way below what they have been during the past five or six years. Pupil-teacher ratios are better than they have ever been. If services are run efficiently, they can be better than in the past. It is the duty of the House to respect not only the ratepayer but the taxpayer. The taxpayer is being respected and supported by the Government in setting the rate support grant at this level. The Government are to be congratulated. The battle has been fought constantly by Governments of both parties. The Opposition will do themselves no good by being turncoats and suggesting that they would have done anything different.
The hon. Member for Aberdeen, South (Mr. Malone) talked about a consensus. He is right in one respect. There is a consensus among Scottish councillors of all political parties against the Government's action over the rate support grant. That is made clear in the press every day.
In his opening address the Secretary of State implied —as he has done before—that reductions could be made by reducing extravagance or ending unnecessary expenditure and that there was some great excess of fat to be trimmed away. However, even in far more affluent days, the local authorities which I have served never had any excess fat to trim away, and their position has become worse in recent years.
The hon. Member for Dumfries (Sir H. Monro) referred to the heavier costs of rural areas, but he made a mistake which is often made by Conservative Members. He avowed support of the Government's intention to reduce expenditure, but he does not want it to be done on his doorstep. I have a rural constituency which is in great financial difficulties, but I oppose the reduction in rate support grant on behalf of the whole of Scotland.
The hon. Member for Dumfries was right in claiming that control or reduction of the rate support grant is not a new policy.
Concern to control local expenditure is not new. It existed throughout the period of the last Labour Government.
Those are not my words or the words of my party. Those are the words of Dr. Arthur Midwinter, of Strathclyde university, who is an expert on administration and local government in Scotland, and he is correct. The Labour Government in 1976–77 and 1977–78 made cuts in Scottish local government spending, and it was the Labour Secretary of State who introduced the spending guidelines and cash limits. Using such guidelines, the present Secretary of State, now with increased powers of intervention and diktat, can break the chains of local democracy and accountability by coming between the local authority and its electorate. He can now determine expenditure and, effectively, rate levels, by deciding that expenditure is excessive and unreasonable.
The Secretary of State has chanted the phrase "excessive and unreasonable" in the hope that the public will come to believe it. Perhaps he has only succeeded in convincing himself that it is true, because no one else, outside his band of Tory monetarists, believes it. The methodology which underlies the determination of what is excessive and unreasonable is flawed and has no intellectual credibility. It would have none whether it was a Tory or Labour Secretary of State who uttered those now infamous words, because the guidelines themselves are unstable, illogical and unfair.
I shall give some details of the rate support grant. In 1976 the grant made up 76 per cent. of the planning total of Scottish local government expenditure. By 1983–84 it comprised only 61·7 per cent. of total relevant expenditure. In the coming financial year, 1984–85, it will have been reduced to just over 60 per cent. That drop in rate support grant means, inevitably, that local authority rates must rise if services are to be maintained at a satisfactory level. It seems, however, that the Government are determined that such services should be cut to the bone, and we all know what is happening in our constituencies.
The proposed settlement of the grant for 1984–85 is, in cash terms, only a 3·8 per cent. increase on the final 1983–84 settlement. In other words, given the rate of inflation over the past year, it is a cut in real terms. Just as with the housing support grant, which has been slashed to the point of non-existence in Scotland, the Government are determined to tighten the financial screw on Scottish local authorities.
As Mr. John Sewel, the president of COSLA said:
The two announcements together show that the Secretary of State is determined to hammer both ratepayers and local authority tenants.
There is good reason why we should not have to suffer in this way. Last year, Scottish oil revenues alone contributed some £9 billion to the Treasury, and that figure will increase during the next few years. In 1980–81, expenditure under Scottish Office control amounted to 5·65 per cent. of total United Kingdom expenditure. That expenditure has dropped steadily over the years and stood at only 5·3 per cent. in 1983–84. Other figures given in the Official Report on 2 December 1983 show that, in real terms, in the 1982–83 financial year the Scottish Office received only 96 per cent. of the spending total that it was awarded in 1975–76.
Taking 1975–76 as baseline 100, the Scottish programme plummeted to 90·8 per cent. of that in 1977–78 under Labour, and by 1982–83 it had still not recovered to its 1975–76 level. That is an appalling state of affairs, given what Scotland contributes to the Treasury. Whichever way one looks at it, it is daylight robbery, and it will go on.
Those who are supposed to be protecting Scotland and who claim the Scottish mandate — members of the Labour party—are allowing this to happen because they have bowed weakly before Westminster's sovereignty. The Scottish mandate exists, but has force only when it is wielded by those who believe in freedom and self-determination for the country, not when it is claimed spuriously by those whose real desire is to regain power at Westminster.
I do not accept the hon. Gentleman's statement about undemocratic means. We shall achieve it by a mandate from the Scottish electorate. We will come to the House and ask Parliament to recognise the wishes of the Scottish people. From what I heard during the devolution debates, I believe that there are sufficient English Members who will see justice done in accordance with the democratic wishes of the Scottish people. If they do not, we will stand on the United Nations charter and claim the right which the Scottish people have demanded.
The present Tory Administration in Scotland are not based on democracy and therefore we should not be surprised if they act undemocratically. Their actions are an affront to the Scottish tradition of local government and local autonomy. They have no moral basis for their actions, and unfortunately the Labour party in Scotland shows no signs of action to back up their moral right. Thus, Scotland is twice the loser and our people continue to suffer hammer blow after hammer blow.
No SNP majority which could legitimately claim the Scottish mandate would have allowed this dreadful position to develop. With the Scottish mandate behind us, an independent Scottish Parliament would already exist.
My hon. Friend the Member for Dumfries (Sir H. Monro) made a passing reference to comments in the Glasgow Herald. For the edification of my colleagues and, I suspect, Opposition Members I wish to quote what Councillor John Sewel had attributed to him in this morning's Glasgow Herald. He said:
Scottish Conservative MPs will lose any semblance of consistency and integrity if they vote in support of the Scottish Rate Support Grant settlement.
I take great exception to Councillor John Sewel making such a statement. That is rich coming from the representative of a party who made the largest single cut in the rate support grant.
The Opposition have an amazing facility for forgetting unpalatable political facts which reflect upon their years in office. We have watched synthetic indignation from this side of the House. The Opposition's pathetic attendance bears testimony to the fact that they are not interested.
There is a tendency for the Opposition to forget that local government expenditure takes a sizeable proportion of the resources available to my right hon. Friend the Secretary of State for Scotland and that overspending preempts funds that could go to other projects that Conservative Members happen to cherish.
Let us move on from the Falklands. I shall reiterate a point made by the hon. Member for Glasgow, Garscadden (Mr. Dewar). He grudgingly conceded that spending was higher in real terms in the current year than it was under the last year of the Labour Government. That gives the lie to the muted opposition that we are hearing this afternoon.
The rate support grant order provides a challenge to Scottish local authorities. They employ, on average, 20 per cent. more manpower than corresponding authorities south of the border. That is making allowances for the differences in services. There lies the challenge. If local authorities can contain their manpower, clearly they will be able to live perfectly easily within the rate support grant without having to cut services or increase rates.
I am hopeful, and I have justification for so being, that local authorities will take notice following the selective orders that my right hon. Friend the Secretary of State for Scotland found necessary to impose on four local authorities last year. The experience of Glasgow, and the opposition some monthe ago to the selective order, would have prompted one to believe that services there would have fallen apart. The contrary is true. It now appears to me and many Conservative Members that Glasgow is so flush with funds that it can, during an election year, offer the bribe of no increase in rents.
The Opposition cannot have it both ways. They cannot stand up as did the right hon. Member for Glasgow, Rutherglen (Mr. MacKenzie), who complained about the quality of housing in his constituency, and ask what can be done to improve it if, at the same time, the ruling Labour group refuses to increase rents.
There is a tendency in such a debate to be somewhat parochial, and I make no apology for that. The hon. Member for Cumbernauld and Kilsyth (Mr. Hogg) will appreciate this point because until recently he represented my part of the world. In Strathkelvin district council, which is unfortunately, but only until May, run by the Labour party, the provost has said that nothing is sacred in the district council's quest to get its budget down to near the guidelines set for it. I genuinely see that as welcome evidence that the district council has recognised that it has an obligation to its ratepayers to bring its spending into line with guidelines.
The experience of my other local authority suggests something very different—that it is possible to maintain services and to hold rates steady, or even to decrease them, while bearing a reduction in rate support grant. Conservative-controlled Bearsden and Milngavie is an excellent example of a prudent local authority that gives its ratepayers value for money. That district council has had an impressive record during recent years in balancing the need for economy with maintenance of services and protection of the ratepayers' pockets. Year after year, through prudent housekeeping, it has succeeded in keeping its final outturn of expenditure in line with its guidelines. Yet in the past, that authority has been penalised together with all the overspenders through a general abatement of its rate support grant.
In four years the Conservative administration has succeeded in keeping its rates increases to an absolute minimum. I am confident that the outcome of this year's budget will result in a further reduction. I wish to place on record my admiration for that district council. I am sure that hon. Members understand that the Conservative councillors will be glad that I have placed my appreciation on record.
Those achievements have been won in the face of the difficulties imposed by the cuts in rate support grant and the fact that the size of the authority makes economies especially difficult. If a local authority has 12 people in a certain department, it can reduce that number. But in departments in a small local authority such as Bearsden and Milngavie it is difficult to make a cut from two to one.
There have been no complaints from councillors, of whatever political hue, about rate capping or selective orders. They know, as all sensible councillors in Scotland know, that if they engage in prudent management and sensible policies within their councils, the prospect of rate capping or selective orders will not materialise.
A large number of the services provided for the hon. Gentleman's constituents are actually provided by Glasgow ratepayers—for example, leisure activities. The hon. Gentleman is explaining the difficulties of small staffs in small district councils. Would it not be better, therefore, to return to the original Wheatley proposals and include such areas as Bearsden, Bishopbriggs and Eastwood within Glasgow district council?
That proposal will be greeted with horror by my constituents because they would not wish to be governed by the people who returned the hon. Gentleman to Parliament. I wish to nail firmly the point that the hon. Gentleman makes about constituents who live just outwith the Glasgow city boundaries. They make a significant contribution to the well-being and the provision of resources within Glasgow and the west of Scotland. Not only are they people of enterprise and talent who create jobs and pay rates in Glasgow, but the rateable value of the property outwith Glasgow is artificially high. That means that they pay substantial contributions to the Strathclyde budget.
I do not want Glasgow Members to draw again across the scene that red herring about the advantages enjoyed by my constituents. I am confident that if the example of such local authorities as mine is followed throughout Scotland, in 1984–85 thus will have a great opportunity to bring their budget into line with the guidelines. In that way, they will avoid the necessity for selective orders or the fear of rate capping referred to by the Opposition.
If the plight of poor people in many parts of Scotland could be remedied by pomposity and platitudes, many of them would be better off having listened to the load of drivel from the hon. Member for Strathkelvin and Bearsden (Mr. Hirst). He should realise that there is a world outside Strathkelvin and Bearsden. The rosy, affluent comfortable picture which confronts him when he returns to his constituency at the weekend does not exist in many other parts of Scotland.
We know that the Government are culpable in the Highlands region, because they have caused industrial and social devastation by not supporting the Invergordon smelter, which had to close despite the fact that an entire population was dependent on it.
The Prime Minister's only response was that people should move elsewhere. Yet many people, as a deliberate part of the repopulation policy of successive Labour and Conservative Governments, had moved out of the central belt to the Highlands—to the Corpach pulp mill at Fort William and to Invergordon. Yet all that the Government can say is that they should move yet again. That is the true level of social concern shown by this Government.
The right hon. Gentleman knows that the enterprise zone opened amidst dubiety and doubt about its funding I was present at the opening of the zone, but the hon. Gentleman was not sufficiently interested in the plight of my constituents to be present. When the Scottish Office Minister for Industry opened the zone, he acknowledged that there were problems, and I compliment the Government on doing something about that—[Interruption.] Does the hon. Gentleman wish to intervene?
The hon. Gentleman has obviously expended enough energy for one evening.
I shall return to the rate support grant order. The change of method from the demographic to the client group approach affects the Highlands regional council. It has been estimated that, without any alteration in the level of services, it will add 2·5p to the rates this year, 2·5p next year and, over the three years during which it is to be phased in — and I welcome the fact that it is to be phased in only gradually — it will add a total of 7p to the rates. Last week the distribution committee of the local government finance working party, which includes representatives from the Scottish Office, acknowledged that there was a need for further refinement and investigation of the client group approach, and we welcome that.
The hon. Member for Dumfries (Sir H. Monro) was at particular pains to stress the problems faced by rural areas, and I agree with him on that. The Government must recognise that rural areas will be affected by the change in methodology to the client group approach. I hope that if increased costs are placed upon local authorities later in the year the Government will not turn round and use a heavy hand approach. They must acknowledge that 7p will be added to the rates in the Highlands regional council area simply because of the change. I ask for tolerance from the Government.
Will the hon. Gentleman accept that, far from asking the Government for tolerance, he is on very thin ice indeed, because his constituents are already more than privileged by getting a subsidy of nearly £100 per head from the Highlands and Islands Development Board? Those of us with rural constituencies who are not so privileged look on the efforts that are made by the Government on his behalf with some envy. He would do well not to bite the hand that feeds him.
My constituents will be interested to hear that an hon. Member from the Stirling area feels that they are privileged. That kind of patronising attitude will go down like a ton of bricks when the next Conservative candidate fights Ross, Cromarty and Skye, and in fairness to the hon. Member for Stirling (Mr. Forsyth) I shall remind my constituents of his words.
The Secretary of State acknowledged that some local authorities were spending more in real terms now than they were a few years ago. When the three Members of Parliament whose constituencies take in the Highland regional council area met representatives of the council during the Christmas recess—I refer to my hon. Friends the Members for Caithness and Sutherland (Mr. Maclennan) and for Inverness, Nairn and Lochaber (Mr. Johnston) and myself—the problem that is faced by the Highlands was highlighted by the sort of comparison that the Secretary of State made.
In real terms, Inverness district council was spending on 400 miles of roadway on Skye one half of what the entire Highland regional council now has to spend on 4,000 miles of roadway throughout the entire Highlands region. The Secretary of State is perhaps being selective in his choice of statistics when he portrays an image of local authorities spending more and more in real terms. In the Highlands regional council area that is certainly not the case.
I urge the Government, despite the draconian measures which they have introduced in the last two years for local government finance and the change in methodology which they are introducing this year, to be tolerant of the problems of the Highlands. We need no pomposity and patronising, but Government support.
We have just listened to what I would describe as middle of the road drivel and we know what happens to people who occupy the middle of the road. They get run over.
As my hon. Friend the Member for Stirling (Mr. Forsyth) said, the problems of the Highland area are recognised by the Government, so much so that they are permitting expenditure of £100 per head in excess of that which is spent in the Highland area of Perthshire.
I shall not drift into an area that is not covered by the debate. [HON. MEMBERS: "Answer."] I have been asked to limit my remarks and I have agreed to do so. Anyone who tries to run a business when the customers are not prepared to pay the true cost of the goods must expect that business to disappear. That is the logic of the real world, and the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) should be satisfied that real efforts are being made to assist his constituents.
I have news for the right hon. Member for Western Isles (Mr. Stewart); I agreed with him about the guidelines being unfair. However, I believe that they are still too high for authorities with a history of high spending and high borrowing. But as they are less unfair than they were, there has been an improvement in that respect.
From the speech of the right hon. Member for Glasgow, Rutherglen (Mr. MacKenzie) one would imagine that he had never been in government—that he was not part of the Administration who reduced expenditure massively at the behest of the IMF—and I regret that he is not in his place. He has a marvellous facility for ignoring the failures of many decades of Labour councils and many years of Labour Government. He said that we should listen to councillors. Labour Members did not listen to councillors when they savagely reduced the rate support grant during their years in office.
We must debate this issue against the background of the Government attempting—I put it no higher than that—to contain local authority expenditure in Scotland. After all, 53 per cent. of everything that the Secretary of State has in his budget is local authority expenditure, so the Secretary of State cannot ignore what the local authorities are doing
My hon. Friend the Member for Aberdeen, South (Mr. Malone) was right to say that there is a consensus across the Chamber on the question of restricting local government spending. There may be differences in emphasis and view about how it is to be achieved, which is no doubt why we are having such a muted response from the Opposition.
In the current year, Scottish local authorities budgeted to overspend on the Government's target by £126 million, or nearly 10 per cent., and that could not be ignored. The RSG settlement for 1983–84 allowed an unallocated sum to give local authorities more time in which to bring their expenditure into line. They did not do so, and when that is taken into account, we find that planned spending was still £121 million higher than the Government required, 4·5 per cent. higher than was assumed in the 1983–84 settlement.
That was why the Government were forced to act against four local authorities to reduce their rates by the equivalent of £19 million, and on 2 November 1983 a general abatement of £45 million was enacted. Unfortunately, when there are general abatements of that kind, the good guys suffer with the bad. That is unfortunate because the good authorities — there are many of them in Scotland—must watch the bad guys benefiting at their expense. That meant that 52 per cent. of local authorities' overspend for the 1983–84 period was contained. My complaint is that 48 per cent. was not. I find that disturbing and I should like to see even tougher measures taken to bring under control authorities which overspend.
It is against that background that we are debating the order for the rate support grant settlement for 1984–85, which shows a cash increase of 3·7 per cent. on the previous year. That sum takes into account the lower level of national insurance surcharge payable and changes in the administration of the housing benefit. I accept that this settlement represents a cut in the percentage rate support grant of 1·5 per cent.—from 61·7 per cent. to 60·2 per cent. — but that must be seen against the 1977–78 Labour Government cut of 4 per cent., and that was the year of truly savage cuts.
Bearing that in mind, we must consider the manpower of local authorities in Scotland. We have heard that it is about 20 per cent. higher per head of population than in England, and that cannot be explained away by the sparsity factor alone. Some authorities with large and extensive rural areas, such as Perth and Kinross, have relatively low staffing ratios, while in many city authorities they are relatively high.
Perhaps that explains why, since 1978–79, expenditure by Scottish local authorities has increased by 97 per cent. compared with only 85 per cent. in England and Wales. That is why the rates in Scotland during this period have increased by about 128 per cent., whereas the Scottish grant has gone up by about the rate of price increases. That has meant the ratepayers being forced to fund the increased expenditure. In other words, in my constituency the ratepayers and taxpayers are losing out to high-spending, high-rate authorities such as Dundee. If the Dundee rates were remotely near the rate levels of Perth and Kinross and those of Angus district council, the Tayside health board would have an extra £1 million or more to spend every year. There is a threat to rural hospitals in Tayside because of the high-spending and high-borrowing Labour authority.
Those in the Tayside region face hundreds of thousands of pounds of extra rates because of the Dundee district's high rate. The schools in Dundee are rated, and because of that the rural schools in Perthshire and Angus are forced to make economies. High-spending and high-borrowing authorities such as Dundee filch money that should be spent on education, health and other services. If those were the only areas of central Government expenditure to be affected by rates, that would be sufficient reason for my right hon. Friend the Secretary of State to intervene. However, many other central Government bodies face massive rates increases, not least the Ministry of Defence. Every time the rates increase, the Ministry of Defence faces a bigger bill.
Against that background, I welcome the changes being made. I recognise the position of low-borrowing and low-spending authorities, such as Perth and Kinross and Angus district council. They take into account the historical low base and allow for that in the calculations for the guidelines and their expenditure.
It is nonsense to talk about the destruction of local authorities. Staffing levels in schools show a pupil-teacher ratio of 20·3:1 in primary schools and 14·3:1 in secondary schools, the best that have ever been achieved. Parents are involved in school councils and they have the ability to select the school to which they want to send their children. They have the opportunity to buy their own homes, that is, their council houses. We should welcome the present situation and not carp about it.
The hon. Member for Tayside, North (Mr. Walker) had the effrontery to describe this as a muted debate. I do not agree with him. If there has been anything muted about it, it has been the remarkable failure of Conservative Members to criticise the Government's local government policies. Year in and year out, we have Conservative councillors coming to Westminster from Scotland to tell us how much damage central Government are inflicting on local government.
I shall name a councillor in the hon. Gentleman's constituency, or, to be more precise, in the constituency of the hon. and learned Member for Perth and Kinross (Mr. Fairbairn). Only at lunch-time today Councillor Proudfoot was telling us how disastrous this year's rate support grant would be for local authorities. Throughout the Christmas recess we were subjected to press reports in Scotland of English Tory Members of Parliament who were prepared to tell the Secretary of State for the Environment that the Government would not get away with their proposed impositions on local government. The Scottish Conservatives have gone along with rate capping. The Secretary of State's rate support grant cut is bound to force up rates, but not one Tory Member has raised a note of criticism.
I am surprised at the hon. Member for Tayside, North. As I understood it, Councillor Proudfoot was speaking for his local authority at an open meeting with Labour Members of Parliament. I am sure that he will be disappointed by the speech made by the hon. Gentleman.
The Secretary of State justifies the Government's policy on the need to impose further cuts in local government spending. The Opposition believe that those cuts in public expenditure are doing enormous damage to Scotland. They are responsible for mass unemployment and the standing army of young unemployed. For the first time, the majority of school leavers do not have proper jobs to go to, and they end up on the dole or on a youth training scheme. In addition, we have a Government with a grotesque sense of priorities. They are prepared to spend £800 million on the Falklands airport, and 10,000 million on Trident — that massive escalation of nuclear weaponry that will be based on the Clyde.
We are fundamentally opposed to the Government's policy towards local government. It is a bit slick for the Secretary of State to argue that cutting the rate support grant does not lead to an increase in rates. He says that they leave one factor out of the equation — that local authorities can cut their expenditure even more. We all know that in theory that is possible, but the reality is that the lower the percentage of rate support grant from central Government, the higher the rate will be.
Massive cuts in services are being imposed in the Lothian region. In response to the rate support grant settlement, we have to contend with the thinking of the Conservative chairman of the finance committee. On Saturday, 10 December, after the settlement was announced, the Evening News reported the chairman as saying:
Higher rates in Lothian and further cuts in social work and education frills were forecast today by the region's finance chairman, Councillor Malcolm Knore.
Even if we kept within the Secretary of State's guidelines on expenditure, it would be impossible to achieve lower rates.
By the way, among the services that he described as "frills" was nursery education.
The reality is that Lothian is suffering from the cuts. Last week Labour Members representing constituencies in Lothian were received by the Under-Secretary of State for Scotland with responsibility for the Health Service, the hon. Member for Argyll and Bute (Mr. MacKay). The purpose of the meeting was to discuss the effect of the cuts. In Lothian we have a real cut in expenditure on the National Health Service this year. Hundreds of nurses' jobs have been destroyed already. Over 1,500 households have been deprived of a home help since the cuts were imposed. More than 1,500 housebound people are now deprived of a home help.
My hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) referred especially to teaching. If there is any education area that is suffering cuts, it is Lothian. In last night's Evening News a front-page headline read:
Schools in cuts alert. Catastrophe lies ahead warn Lothian teachers.
The article reads:
Lothian teachers today warned of the 'catastrophic' effect continued cash cuts could have on education.
The teachers went on to outline the hundreds of jobs that have been destroyed in teaching. It appears that over 1,500 jobs have been destroyed in teaching since the Government started imposing the cuts.
Surely the hon. Gentleman is not advocating that we should increase the number of teachers, even though the number of children in our schools is declining. There are fewer teachers because there are fewer children in the schools.
Falling rolls provide an opportunity to improve education in our schools. However, real cuts in the standard of education are being imposed in Lothian schools. If the hon. Gentleman doubts that, I suggest that he speaks to any cross-section of Conservative voters in Edinburgh. At least, they will bear that out if they send their children to state schools.
The national vice-president of the EIS, Mr. Henry Philip, who I think is to be the local chairman of the EIS in Edinburgh and who I know is not a Labour supporter, said:
Lothian used to be the leading education authority in Scotland, because of the richness of the curriculum it offered its pupils and because of its care for the individual child. It is slipping back into mediocrity.
The short-term savings on maintenance and equipment are already proving more costly in the end. Effects on material things always show up sooner.
The most remarkable feature about the report is the response of the education chairman, Councillor James Gilchrist, who said:
I think this proves that the EIS are more opposed to the Conservative group than to the cuts.
He suggests that the teachers are against the Tory administration in Lothian, but are acquiescing in education cuts in Strathclyde.
I doubt that the EIS is acquiescing to that extent in accepting the cuts that the Government are trying to impose on Strathclyde. That chairman says that there will be virtually no end to the cuts in the standard of education that will be imposed in the forthcoming year on Lothian.
Constituents who supported the great campaign to reduce rates in Lothian believed that they would be much better off, but they did not realise what a pittance the rate cuts would be for the vast majority. Some, who have had significant reductions in their rate bills, were RAGE supporters. They are taking part in deputations to the education committee and doing everything possible to persuade local and national Tories that there must be some halt to the damage that is being done to services in Lothian. I hope that the Minister who replies—he is also a Scottish Member— will address himself to the enormity of the Government's actions in Lothian.
I shall not detain the House for long. The quality of life of ordinary working people on low incomes depends enormously on the services provided by local councils — housing, education, roads, police, recreational facilities, concessionary fares for old people and meals-on-wheels. The Tory Government, who are composed primarily of wealthy people, see that as anathema to their philosophy. They do not like the idea of ordinary working people receiving such services at the expense of taxpayers and ratepayers. They do not like a redistribution of wealth in terms of services.
My right hon. Friend the Member for Glasgow, Rutherglen (Mr. Mackenzie) made that point earlier when he talked about our objections to listening to the smooth speech of the wealthy Secretary of State for Scotland. He does not know how ordinary people live. He talks about spendthrift local councils, but he is a Cabinet Minister in a Tory Government who are to spend at least £700 million a year in each of the next three years on the Falkland Islands, with more than £100,000 on each prefabricated house that is being built there. Just this afternoon the Prime Minister said that we should not begrudge that expenditure, but the Government begrudge expenditure in Glasgow and Edinburgh. They should take Glasgow and Edinburgh to the Falklands and they would then have some idea of the catastrophe that must be faced. This is a matter of priorities and the will to spend money in the right directions.
Fife, Glasgow, Edinburgh and urban and rural areas throughout Scotland are deprived because the Government are not providing them with the resources to undertake measures to solve the unemployment problem. Youngsters, bricklayers, plumbers and electricians are raring to go, and throughout the country there are housing lists the length of an arm. For God's sake, bring the two together. Nurses and doctors throughout Britain are unemployed, yet they could be employed by the sensible, intelligent use of our resources.
We can indulge in an argy-bargy about figures and selectively cite one figure or another, but the basic question is: how do we distribute the country's enormous wealth? I take issue with the Scottish National party when it pretends that the simple solution is somehow to cut off Scotland from the rest of the United Kingdom and everything will be all right. The problem is more fundamental than that.
In past years, we have had a succession of debates similar to this. Local democracy, with democratically elected councils, is in great peril. We are in 1984 and are seeing Orwell's prophecies coming into effect as a direct result of the Government's actions. That is why over the years all-party delegations from the Convention of Scottish Local Authorities — Tories and Liberals — have said, "For God's sake, raise your voices against the dangerous trend upon which the Government have embarked." It is important that the people outside Parliament understand the problem. We are seeing dictatorship from the centre — the man in Whitehall and the woman in No. 10 Downing street with her son who know what is best for the British people. This is disgraceful and highly dangerous for the people of Scotland and the rest of Britain.
I wish to heaven that the Scottish Tory Members of Parliament had as much guts as their English colleagues showed last week when they made it clear that they did not like what they were seeing and would revolt too. In a previous debate I said to the hon. Member for Tayside, North (Mr. Walker) that if the Government murdered his grandmother he would say that they had done the right thing. He is an example of the type of spineless individual and the type of Lobby fodder that one finds on the Conservative Benches. That is why the Government are doing this evil thing, and why we shall vote against the measure.
Something that my hon. Friend the Member for Fife, Central (Mr. Hamilton) said about local authorities being imperilled made me recall the days when the Tories talked about keeping politics out of local government. We have come a long way from that. One of the most depressing aspects of today's debate has been the way Government Back Benchers seem to think that their role is to attack local authorities constantly while the defence of those authorities is left to Opposition Back Benchers. That is the message that is drummed out in many debates by people such as the hon. Member for Tayside, North (Mr. Walker). He seldom has a good word to say about local authorities.
They will be relieved to know that. The Government can hardly chastise local authorities for local taxation when the Government came into office in 1979 with a mandate to cut taxation and taxation has increased since then by £18 billion. If we are to regard local authorities as a Government Department, that Department must be one of the most over-administered and much scrutinised because its affairs receive much attention from Government Back Benchers and Ministers. They have elevated local government to a blood sport. Government Members seem to show a certain relish in pursuing this matter.
I am grateful to the Secretary of State for enabling this rate support grant order to be debated in prime time as I remember the debates that used to take place after 10 pm, although one ruefully recalls that there were more resources for local authorities in those days. We now have more time but less money. The Secretary of State should be more forthcoming when addressing the general public. By failing to match the rate of inflation or prevailing interest rates and lowering the percentage of grant the rate support grant order will bring about a 4p in the pound rate increase at a stroke, irrespective of any action by any one of the 65 Scottish local authorities. As my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) pointed out, 36 of them will have a worse deal and lower guidelines for 1984–85 than they had for 1983–84.
I hope that the Minister will deal specifically with three further complaints raised today. Why are there to be 3,100 fewer teachers in Scotland, in addition to the 800 that local authorities currently estimate will not be in post, at a time when there is a real opportunity to raise education standards due to considerably improved pupil-teacher ratios, especially in the inner cities?
When bus fares in Glasgow are perforce so high, why are grants for transport being cut? Why are old-age pensioners and others eligible for concessionary fares likely to receive only a 20 per cent. discount when it is generally acknowledged that it should be 50 per cent.? The Secretary of State said that the Government recognised that the Strathclyde passenger transport authority had a special problem. I hope that he is dealing with that and not just giving out the old soft soap. We should make a fortune if we were in charge of a soap factory, as we certainly get plenty of it.
At a time of such high unemployment especially among young people, how can the Secretary of State say that the Government will cut the money available for leisure and recreation by 33 per cent.? At the very time when we need to use local authority facilities, schools and public buildings cannot be used as much as they otherwise would be to cater for young people outside school hours.
The truth is that on rating reform the Government have fled the field and the local authorities have to bear the burden.
The hon. Member for Ross, Cromarty and Skye (Mr. Kennedy)—what a mouthful! [HON. MEMBERS: "What a man!"]—referred to the Fort William pulp mill. Since they came to office in 1979 the Government have eroded the rateable value base in Scotland. At the time when the closure of the pulp mill was announced I was with a Select Committee delegation in Thurso taking evidence on the employment situation in the highlands and islands. One man told me how he had left Glasgow many years before and bought a house in Fort William in the belief that a whole new life was opening up for him, but all those hopes were dashed by the inept policies of the Government. The rateable value of the Invergordon smelter was £923,000 in its last year of operation. The rateable value lost to Fort William was £352,000. The rateable value lost with the Linwood car factory was £887,000. I recall leading a delegation to the Secretary of State at the time when the Singer sewing machine factory was closed. He told us one thing, then went next door and told the press something different. The factory closed anyway and the rateable value lost was £487,000. I hope that he is working a good deal harder than he seems to be in respect of Scott Lithgow as the rateable value of those operations is more than £500,000. If the rateable value base disappears fewer resources are available for local authorities.
Finally, local authorities should not be punished for the Government's economic failures. The authorities get all the stick but very little of the credit when they do their very best to operate within the guidelines. The most depressing aspect of the debate has been the way in which relationships between local and central government have been poisoned by the Government. That augurs very badly indeed for the present and the future of Scottish local government.
As I have suggested on other occasions, the hon. Member for Glasgow, Maryhill (Mr. Craigen) should speak louder, or none of us will hear him.
The hon. Gentleman did the House a great favour in drawing attention to the rateable values of industries in Scotland. Nothing could better emphasise the fact that, in talking about rate levels and poundages, we are talking about the money that industry and commerce have to pay and in so doing endanger the jobs of those working for them. Perhaps inadvertently, when no one else had thought to do so, the hon. Gentleman provided the possible case for the rate support grant levels proposed by my right hon. Friend the Secretary of State.
The hon. Gentleman cannot have consulted his own side if he regards that as Labour party policy. He may have suggested that when he was a Back Bencher, but I shall not embarrass him now that he is on the Front Bench by taking that as Labour party policy until he has had the chance to discuss it with his hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) and the hon. Member for Garscadden has had time to ask permission to go to the Shadow Cabinet for endorsement of that policy.
The hon. Member for Maryhill made the usual point about the rate support grant order forcing up rates, but he never stopped to think about the effects of possible expenditure reductions on rates. One cannot talk about the one without considering the other.
The hon. Member for Garscadden claimed to have proved that rate support grant orders increased rates so that the Government were responsible for the increases in rates. He said that expenditure in real terms had risen by a very small percentage, which he gave as 1·6 per cent., in the past five years, whereas rates had risen by 133 per cent. in the same period, so it must be the Government's fault. He failed to realise, however, that the expenditure figures that he gave were at constant prices, whereas the figures for rates were at cash prices. Had he compared like with like, he would have discovered that the cash increase in expenditure over that period was 113·5 per cent. compared with a rate increase of 133·5 per cent. Therefore, it cannot be argued that the Government are responsible for rate increases in Scotland in the past five years.
When challenged by my hon. Friend the Member for Dumfries (Sir H. Monro) about the Labour Government's record in reducing the proportion of rate support grant, the hon. Member for Garscadden said that he wanted to put to bed once and for all the suggestion that the reduction made when his right hon. Friend the Member for Glasgow, Govan (Mr. Millan) was Secretary of State had anything to do with trying to control local government expenditure. I suggest again that the hon. Gentleman should talk to his right hon. Friend the Member for Govan, because that is not what his right hon. Friend said at the time. According to my understanding, the explanation given at that time was that it was to reinforce the Government's public expenditure policy by reducing in real terms the financial resources that local authorities would receive from the Government. That is not what he said to the House tonight. Before making categorical statements of that sort, I believe that the hon. Gentleman ought at least to check their accuracy against the record of the Labour Government.
The hon. Gentleman dealt with a number of specific points. I am sure that he will realise that, in the time available to me, I cannot answer them all. However, there are one or two that I want to answer. He spoke about teacher redundancies, but failed to point out that pupil numbers are declining. That point was very properly made by my hon. Friend the Member for Stirling (Mr. Forsyth). The Government's provision reflects that fact. If it did not reflect it, it would be very strange. Local authorities are aware of the Government's view that teacher numbers should decline as pupil numbers decline. It is for local authorities to determine their own policies and priorities, but resources necessarily expended in one area—this is something about which all local authorities must think —mean insufficient provision for others or, as the hon. Gentleman will realise, higher rates. It is for local authorities to look at their budgets in those terms.
The hon. Member for Garscadden claimed that the rate in Strathclyde was likely to increase by 7 per cent. because of the grant changes. That is not so. The grant loss is £14·65 million, which is the equivalent of a 2·4p increase in the rates without expenditure savings. I believe that if savings of 1 percent. of Strathclyde's budget can be made, no rate increase would be necessary.
The hon. Gentleman is, I think inadvertently, misrepresenting me. I said that the changes in the distribution formula, the needs element, had cost the Strathclyde region the equivalent of 7p in the pound. I was careful to go on to say that there were some compensating factors, by coincidence in other parts of the distribution formula. The authority that I said was claiming the final result was a 7p imposition was the Lothian region, which was quoting Brian Meek, the hon. Gentleman's Conservative colleague.
If I have misquoted the hon. Gentleman, I apologise; but I think it is worth pointing out—and this can be demonstrated from the figures that I have just given— that looking at the raw figures is no way of assuring that the answers one gets from them are correct. What the hon. Gentleman has just said tends to underline that.
I shall deal briefly with one or two of the points made by my hon. Friend the Member for Dumfries. He knows, I think, that the distribution system introduced this year has been damped—and my right hon. Friend said this in his opening remarks — in order to protect those who might have lost most from having too great a change in their budgets in one year. I am sure that he would appreciate, from his time in local government, that one of the essentials in local government budgeting is to be able to assume a degree of stability over a period of time that will allow forward planning. For that reason, we agreed in our discussions with COSLA that the damping effect that we have introduced on the distribution system this year would occur. It is from that, I think, that his complaint arises. I think he understands, too, that had we not changed the distribution system and introduced the client approach this year, his regional authority would have received less in cash than it is receiving now. He may not be satisfied with what it is receiving now because, had we not damped, it would be rather more.
It is the same in the case of the hon. Member for Roxborough and Berwickshire (Mr. Kirkwood). At the same time, I hope that he will point out to his regional authority, before it complains too much about the new system, that, had we not introduced it, it would have received less cash in grant support this year under the old system than it is receiving even under the damped system at present.
One of the important facets of the client group approach is that it is capable of being refined. There are primary indicators on which one makes the first calculations, and one can then adjust them by applying secondary indicators. The best example I can give my hon. Friend the Member for Dumfries, in terms of his own region, is in education. The primary indicator may be the number of children. As against that, the sparsity in the number of schools, because my hon. Friend is in a rural area, would be taken into account as a secondary indicator. Rural considerations are, therefore, taken into account. I accept that the system is capable of further refinement, and COSLA and my Department are prepared to look at it again in future.
Is my hon. Friend aware that Banff and Buchan district council, on the rating review, was the lowest spending rating authority in Scotland, yet it had granted to it from the guidelines, 1983–84, only £50,000? Can he tell me what happened to the £120 million, about which my right hon. Friend spoke in July 1983 when discussing the rate support grant, that he said he would make use of to give relief to local authorities which were not high spenders, such as East Lothian?
I think my hon. Friend must accept that a detailed question of that nature requires notice. I hope he will accept that I shall write to him on the subject.
The right hon. Member for Glasgow, Rutherglen (Mr. MacKenzie), made an unusually political speech tonight. He raised the issue of concessionary fares, and asked me to deal with it. We are aware of the disparity between local authority budgets and the provision for concessionary fares. The planned level of provision is a general judgment of what can be afforded. It would be difficult to devise a criterion as the cost of concessionary fares depends on many variable factors, and there is no standard that could be applied to all local authorities. Within the constraints on public expenditure, my right hon. Friend has arranged that increased provision be made for concessionary fares. As a consequence, the provision for these fares is set at 27 per cent. above that provided in the 1983 order. I hope the right hon. Gentleman will accept, therefore, that his point was taken seriously at an earlier stage, and that my right hon. Friend has already acted on it.
I hope that hon. Members will forgive me if I do not deal with all the points that they have made. The hon. Member for Ross, Cromarty and Skye (Mr. Kennedy), following an attack on one of my hon. Friends for referring to his constituency, made a fair case for his constituency during the course of his remarks. I think it is worth his considering the effect of the order on his constituency and, in particular, looking at the guidelines because, as I am sure he will accept, his regional authority has done well out of the guidelines. The guidelines accept some of the specific difficulties in that area. As the hon. Gentleman said, we have made efforts to damp the changes in the distribution system. Overall, therefore, I believe that some of the complaints he made tonight were more in the cause of effect rather than based on reality.
My hon. Friend the Member for Aberdeen, South (Mr. Malone) made an important point, which was touched on by several hon. Members, when he talked about the leisure centre. He made it clear that he accepted the need for private investment in such projects. I believe that, if that message were heard throughout the local authorities of Scotland to a far greater degree than that, he would be able to see the sort of provision that so many people want without having to rely always on the public purse to provide it.
Every year since taking office, my right hon. Friend has reminded authorities and the House that local authorities must pay particular attention to their manpower policies. Manpower in Scottish local authorities fell by approximately 2 per cent. in the year to September 1983. That trend has continued. It is welcome, but it is slowing down. When we talk about local government expenditure, it is worth looking at the figures. After allowing for some previous under-recording, local authorities are still employing about 5,000 more than in the summer of 1977. Even this comparitively modest target masks the true situation. In 1977, there were 4,000 more teachers than there are today, simply because there were more pupils. In addition, such reductions as there have been elsewhere have been concentrated on manual workers. There are now 11,000, or 16 per cent., more non-manual local government workers than there were in 1977, and nearly 7,000 more than when we took office. I find these figures very difficult to square with charges of wholesale destruction of local government services, about which we hear so much from Opposition Members.
I suggest that Opposition Members should go back to their local authorities and ask them to look very carefully at their manpower figures. They should also tell those local authorities that before coining to the House, they should look at their own budgets and ask themselves whether they are being as efficient as they could be. If local authorities did that, very few of them would be able to put their hands on their hearts and say that they were doing what they could. Few of them have the courage to test that claim in the market place.
When we ask local authorities to put their services out to tender, we are not necessarily asking them to contract out. We are asking them to test them in the market place. Until local authorities do that, it is hard to take seriously their claim that they have been cut to the bone.
Tonight's debate has generated much heat, but again it has been synthetic. Opposition Members know full well that local authority expenditure cannot be divorced from national economic requirements, and that the claims made to them by their authorities, like the claims made by Glasgow district to the hon. Member for Garscadden—which he echoed so faithfully last summer when we asked it to cut its rates—will ultimately turn out to be untrue.
Glasgow district said that the rate level that we forced on it last year was unacceptable, but it can now tell the people of Glasgow that it can sustain it. Therefore, the hon. Gentleman should ask that authority why it pulled the wool over his eyes last summer. He should then ask it to reconsider its expenditure and to see whether it can reduce its rates, as my right hon. Friend the Secretary of State wishes.
The order provides for a large amount of central Government rate support grant to a still considerable level of local government expenditure. It seeks nothing which cannot reasonably be achieved, and demands no further burdens on ratepayers. It looks for greater efficiency, greater responsibility, and greater value for money. Those should be the common goals that unite us all. Therefore, the order deserves our support.
|Division No.148||[7 pm|
|Aitken, Jonathan||Hanley, Jeremy|
|Alexander, Richard||Hannam, John|
|Alison, Rt Hon Michael||Hargreaves, Kenneth|
|Amery, Rt Hon Julian||Harris, David|
|Ancram, Michael||Harvey, Robert|
|Arnold, Tom||Haselhurst, Alan|
|Ashby, David||Hawksley, Warren|
|Aspinwall, Jack||Hayes, J.|
|Atkins, Rt Hon Sir H.||Hayhoe, Barney|
|Atkins, Robert (South Ribble)||Hayward, Robert|
|Baldry, Anthony||Heathcoat-Amory, David|
|Banks, Robert (Harrogate)||Henderson, Barry|
|Batiste, Spencer||Hickmet, Richard|
|Beaumont-Dark, Anthony||Hicks, Robert|
|Bellingham, Henry||Hind, Kenneth|
|Bendall, Vivian||Hirst, Michael|
|Biffen, Rt Hon John||Hogg, Hon Douglas (Gr'th'm)|
|Bonsor, Sir Nicholas||Holland, Sir Philip (Gedling)|
|Boscawen, Hon Robert||Holt, Richard|
|Brandon-Bravo, Martin||Hooson, Tom|
|Bright, Graham||Howarth, Alan (Stratf'd-on-A)|
|Browne, John||Howarth, Gerald (Cannock)|
|Buchanan-Smith, Rt Hon A.||Howell, Rt Hon D. (G'ldford)|
|Buck, Sir Antony||Hubbard-Miles, Peter|
|Butcher, John||Hunt, David (Wirral)|
|Butterfill, John||Hunt, John (Ravensbourne)|
|Carlisle, Rt Hon M. (W'ton S)||Hunter, Andrew|
|Carttiss, Michael||Hurd, Rt Hon Douglas|
|Chapman, Sydney||Irving, Charles|
|Clark, Hon A. (Plym'th S'n)||Jackson, Robert|
|Clark, Dr Michael (Rochford)||Jenkin, Rt Hon Patrick|
|Clark, Sir W. (Croydon S)||Jones, Gwilym (Cardiff N)|
|Clarke, Kenneth (Rushcliffe)||Jones, Robert (W Herts)|
|Clegg, Sir Walter||Joseph, Rt Hon Sir Keith|
|Cockeram, Eric||Key, Robert|
|Colvin, Michael||King, Roger (B'ham N'field)|
|Cope, John||King, Rt Hon Tom|
|Cranborne, Viscount||Knight, Gregory (Derby N)|
|Currie, Mrs Edwina||Knight, Mrs Jill (Edgbaston)|
|Dicks, T.||Knowles, Michael|
|Dorrell, Stephen||Knox, David|
|Douglas-Hamilton, Lord J.||Lamont, Norman|
|Durant, Tony||Lang, Ian|
|Evennett, David||Latham, Michael|
|Fairbairn, Nicholas||Lawler, Geoffrey|
|Fallon, Michael||Lee, John (Pendle)|
|Farr, John||Lennox-Boyd, Hon Mark|
|Favell, Anthony||Lester, Jim|
|Fenner, Mrs Peggy||Lewis, Sir Kenneth (Stamf'd)|
|Fletcher, Alexander||Lightbown, David|
|Fookes, Miss Janet||Lloyd, Ian (Havant)|
|Forman, Nigel||Lloyd, Peter, (Fareham)|
|Forsyth, Michael (Stirling)||Lord, Michael|
|Forth, Eric||Luce, Richard|
|Fowler, Rt Hon Norman||Lyell, Nicholas|
|Fox, Marcus||McCrindle, Robert|
|Fraser, Peter (Angus East)||McCurley, Mrs Anna|
|Freeman, Roger||Macfarlane, Neil|
|Fry, Peter||MacGregor, John|
|Gale, Roger||MacKay, Andrew (Berkshire)|
|Galley, Roy||MacKay, John (Argyll & Bute)|
|Gardiner, George (Reigate)||Maclean, David John.|
|Gardner, Sir Edward (Fylde)||Macmillan, Rt Hon M.|
|Glyn, Dr Alan||McNair-Wilson, P. (New F'st)|
|Goodhart, Sir Philip||McQuarrie, Albert|
|Goodlad, Alastair||Major, John|
|Gow, Ian||Malone, Gerald|
|Gower, Sir Raymond||Maples, John|
|Greenway, Harry||Marland, Paul|
|Gregory, Conal||Marshall, Michael (Arundel)|
|Griffiths, E. (B'y St Edm'ds)||Mates, Michael|
|Griffiths, Peter (Portsm'th N)||Mather, Carol|
|Grist, Ian||Maude, Francis|
|Ground, Patrick||Mawhinney, Dr Brian|
|Gummer, John Selwyn||Maxwell-Hyslop, Robin|
|Hamilton, Hon A. (Epsom)||Mellor, David|
|Hamilton, Neil (Tatton)||Merchant, Piers|
|Hampson, Dr Keith||Meyer, Sir Anthony|
|Miller, Hal (B'grove)||Skeet, T. H. H.|
|Mills, lain (Meriden)||Smith, Tim (Beaconsfield)|
|Mills, Sir Peter (West Devon)||Soames, Hon Nicholas|
|Miscampbell, Norman||Speller, Tony|
|Moate, Roger||Spence, John|
|Monro, Sir Hector||Spencer, D.|
|Montgomery, Fergus||Spicer, Jim (W Dorset)|
|Moore, John||Spicer, Michael (S Worcs)|
|Morrison, Hon C. (Devizes)||Squire, Robin|
|Morrison, Hon P. (Chester)||Stanbrook, Ivor|
|Moynihan, Hon C.||Stanley, John|
|Mudd, David||Steen, Anthony|
|Neale, Gerrard||Stern, Michael|
|Needham, Richard||Stevens, Lewis (Nuneaton)|
|Nelson, Anthony||Stewart, Allan (Eastwood)|
|Newton, Tony||Stewart, Andrew (Sherwood)|
|Nicholls, Patrick||Stradling Thomas, J.|
|Normanton, Tom||Sumberg, David|
|Norris, Steven||Tapsell, Peter|
|Onslow, Cranley||Taylor, Teddy (S'end E)|
|Oppenheim, Philip||Tebbit, Rt Hon Norman|
|Oppenheim, Rt Hon Mrs S.||Temple-Morris, Peter|
|Ottaway, Richard||Terlezki, Stefan|
|Parkinson, Rt Hon Cecil||Thomas, Rt Hon Peter|
|Parris, Matthew||Thompson, Donald (Calder V)|
|Patten, Christopher (Bath)||Thompson, Patrick (N'ich N)|
|Patten, John (Oxford)||Thorne, Neil (Ilford S)|
|Pattie, Geoffrey||Thornton, Malcolm|
|Pawsey, James||Thurnham, Peter|
|Peacock, Mrs Elizabeth||Townsend, Cyril D. (B'heath)|
|Pink, R. Bonner||Trotter, Neville|
|Pollock, Alexander||Twinn, Dr Ian|
|Powell, William (Corby)||van Straubenzee, Sir W.|
|Powley, John||Vaughan, Sir Gerard|
|Prentice, Rt Hon Reg||Viggers, Peter|
|Prior, Rt Hon James||Waddington, David|
|Proctor, K. Harvey||Wakeham, Rt Hon John|
|Raffan, Keith||Waldegrave, Hon William|
|Rathbone, Tim||Walden, George|
|Renton, Tim||Walker, Bill (T'side N)|
|Rhodes James, Robert||Waller, Gary|
|Ridley, Rt Hon Nicholas||Walters, Dennis|
|Ridsdale, Sir Julian||Wardle, C. (Bexhill)|
|Rifkind, Malcolm||Watson, John|
|Roberts, Wyn (Conwy)||Watts, John|
|Robinson, Mark (N'port W)||Wells, Bowen (Hertford)|
|Roe, Mrs Marion||Wells, John (Maidstone)|
|Rossi, Sir Hugh||Wheeler, John|
|Rost, Peter||Wiggin, Jerry|
|Rowe, Andrew||Winterton, Mrs Ann|
|Rumbold, Mrs Angela||Winterton, Nicholas|
|Ryder, Richard||Wolfson, Mark|
|Sackville, Hon Thomas||Wood, Timothy|
|Sayeed, Jonathan||Woodcock, Michael|
|Shaw, Giles (Pudsey)||Young, Sir George (Acton)|
|Shaw, Sir Michael (Scarb')||Younger, Rt Hon George|
|Shelton, William (Streatham)|
|Shepherd, Colin (Hereford)||Tellers for the Ayes:|
|Shepherd, Richard (Aldridge)||Mr. Tim Sainsbury and|
|Silvester, Fred||Mr. Michael Neubert|
|Adams, Allen (Paisley N)||Blair, Anthony|
|Alton, David||Boothroyd, Miss Betty|
|Anderson, Donald||Boyes, Roland|
|Archer, Rt Hon Peter||Bray, Dr Jeremy|
|Ashdown, Paddy||Brown, Gordon (D'f'mline E)|
|Ashley, Rt Hon Jack||Brown, Hugh D. (Provan)|
|Ashton, Joe||Brown, N. (N'c'tle-u-Tyne E)|
|Atkinson, N. (Tottenham)||Brown, Ron (E'burgh, Leith)|
|Bagier, Gordon A. T.||Bruce, Malcolm|
|Banks, Tony (Newham NW)||Buchan, Norman|
|Barnett, Guy||Callaghan, Jim (Heyw'd & M)|
|Barron, Kevin||Campbell, Ian|
|Beckett, Mrs Margaret||Campbell-Savours, Dale|
|Bell, Stuart||Canavan, Dennis|
|Bennett, A. (Dent'n & Red'sh)||Carlile, Alexander (Montg'y)|
|Bermingham, Gerald||Carter-Jones, Lewis|
|Bidwell, Sydney||Cartwright, John|
|Clark, Dr David (S Shields)||Leadbitter, Ted|
|Clarke, Thomas||Leighton, Ronald|
|Clay, Robert||Lewis, Ron (Carlisle)|
|Cocks, Rt Hon M. (Bristol S.)||Lewis, Terence (Worsley)|
|Cohen, Harry||Litherland, Robert|
|Concannon, Rt Hon J. D.||Lloyd, Tony (Stretford)|
|Conlan, Bernard||Lofthouse, Geoffrey|
|Cook, Frank (Stockton North)||Loyden, Edward|
|Cook, Robin F. (Livingston)||McCartney, Hugh|
|Corbett, Robin||McDonald, Dr Oonagh|
|Corbyn, Jeremy||McKay, Allen (Penistone)|
|Cowans, Harry||McKelvey, William|
|Craigen, J. M.||Mackenzie, Rt Hon Gregor|
|Crowther, Stan||Maclennan, Robert|
|Cunliffe, Lawrence||McNamara, Kevin|
|Cunningham, Dr John||McTaggart, Robert|
|Dalyell, Tam||McWilliam, John|
|Davies, Ronald (Caerphilly)||Madden, Max|
|Davis, Terry (B'ham, H'ge H'l)||Marek, Dr John|
|Deakins, Eric||Marshall, David (Shettleston)|
|Dewar, Donald||Martin, Michael|
|Dixon, Donald||Mason, Rt Hon Roy|
|Dobson, Frank||Maxton, John|
|Dormand, Jack||Maynard, Miss Joan|
|Douglas, Dick||Meacher, Michael|
|Dubs, Alfred||Meadowcroft, Michael|
|Duffy, A. E. P.||Michie, William|
|Dunwoody, Hon Mrs G.||Mikardo, Ian|
|Eadie, Alex||Mitchell, Austin (G't Grimsby)|
|Eastham, Ken||Morris, Rt Hon A. (W'shawe)|
|Ellis, Raymond||Morris, Rt Hon J. (Aberavon)|
|Evans, Ioan (Cynon Valley)||Oakes, Rt Hon Gordon|
|Evans, John (St. Helens N)||O'Brien, William|
|Fatchett, Derek||O'Neill, Martin|
|Field, Frank (Birkenhead)||Orme, Rt Hon Stanley|
|Fields, T. (L'pool Broad Gn)||Park, George|
|Fisher, Mark||Parry, Robert|
|Flannery, Martin||Pavitt, Laurie|
|Foot, Rt Hon Michael||Pendry, Tom|
|Forrester, John||Penhaligon, David|
|Foster, Derek||Pike, Peter|
|Foulkes, George||Powell, Raymond (Ogmore)|
|Fraser, J. (Norwood)||Prescott, John|
|Freud, Clement||Redmond, M.|
|George, Bruce||Rees, Rt Hon M. (Leeds S)|
|Gilbert, Rt Hon Dr John||Richardson, Ms Jo|
|Godman, Dr Norman||Roberts, Allan (Bootle)|
|Golding, John||Roberts, Ernest (Hackney N)|
|Gould, Bryan||Robertson, George|
|Gourlay, Harry||Robinson, G. (Coventry NW)|
|Hamilton, W. W. (Central Fife)||Rogers, Allan|
|Harman, Ms Harriet||Ross, Ernest (Dundee W)|
|Harrison, Rt Hon Walter||Ryman, John|
|Hart, Rt Hon Dame Judith||Sedgemore, Brian|
|Hattersley, Rt Hon Roy||Sheerman, Barry|
|Haynes, Frank||Sheldon, Rt Hon R.|
|Healey, Rt Hon Denis||Shore, Rt Hon Peter|
|Heffer, Eric S.||Short, Ms Clare (Ladywood)|
|Hogg, N. (C'nauld & Kilsyth)||Short, Mrs R. (W'hampt'n NE)|
|Holland, Stuart (Vauxhall)||Skinner, Dennis|
|Howell, Rt Hon D. (S'heath)||Smith, C.(Isl'ton S & F'bury)|
|Howells, Geraint||Smith, Rt Hon J. (M'kl'ds E)|
|Hoyle, Douglas||Snape, Peter|
|Hughes, Mark (Durham)||Soley, Clive|
|Hughes, Robert (Aberdeen N)||Spearing, Nigel|
|Hughes, Roy (Newport East)||Steel, Rt Hon David|
|Hughes, Sean (Knowsley S)||Stewart, Rt Hon D. (W Isles)|
|Hughes, Simon (Southwark)||Stott, Roger|
|Janner, Hon Greville||Strang, Gavin|
|Jenkins, Rt Hon Roy (Hillh'd)||Straw, Jack|
|John, Brynmor||Thomas, Dafydd (Merioneth)|
|Johnston, Russell||Thomas, Dr R. (Carmarthen)|
|Jones, Barry (Alyn & Deeside)||Thompson, J. (Wansbeck)|
|Kaufman, Rt Hon Gerald||Tinn, James|
|Kennedy, Charles||Torney, Tom|
|Kilroy-Silk, Robert||Wainwright, R.|
|Kinnock, Rt Hon Neil||Wardell, Gareth (Gower)|
|Kirkwood, Archibald||Wareing, Robert|
|Lambie, David||Weetch, Ken|
|Lamond, James||Welsh, Michael|
|White, James||Young, David (Bolton SE)|
|Williams, Rt Hon A.||Tellers for the Noes:|
|Wilson, Gordon||Mr. James Hamilton and|
|Winnick, David||Mr. John Home Robertson.|