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Rating And Valuation (Amendment) (Scotland) Bill

Volume 57: debated on Thursday 29 March 1984

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As amended (in the Standing Committee), considered.

New Clause 1

Restriction Of Secretary Of State's Power To Control Rates

'After section 108C of the Local Government (Scotland) Act 1973 there shall be inserted the following section—

"Restriction Of Secretary Of State's Power To Control Rates

108D. No order under section 108B of this Act may be made in respect of any local authority whose expenditure has not risen in real terms in the immediately preceding financial year".'.— [Mr Dewar.]

Brought up, and read the First time.

I beg to move, That the clause be read a Second time.

We come to consider the Bill on Report after what I must categorise as a long and dreich consideration in Committee that I found peculiarly unrewarding, being an example of the worst sort of parliamentary trench warfare. I hope that the Minister will not resent me saying that I thought that he was something of an immovable object with very little interest in the arguments that were advanced. At times the whole exercise seemed to be merely a way of showing his determination to serve his master and to establish beyond doubt his orthodoxy on every facet of Tory doctrine. He does not need to worry, for there has not been a touch of innovation or originality in his approach to his job. There was not a hint of heresy to lighten the dark days.

The new clause represents a last effort at this stage of the Bill's consideration to strike at one of the most obnoxious and resented parts of the Bill. Clause 3 gives the Secretary of State power to reduce rate poundage in a given year as against the previous year. This will be set by grouping a number of local authorities in Scotland. There is a provision in the clause for individual authorities to go scrambling cap in hand, looking for individual mercy or derogations from the general ban and limitation.

The new clause sets out the thoroughly reasonable proposition that an order limiting rate poundage as I have described should be possible only if the local authority that is to be affected has had a rise in expenditure in real terms during the previous financial year. I hope that this is recognised by the House to be self-evidently sensible and that the clause will find favour with the House.

The power to make an order under clause 3 should be used only sparingly. That principle has been conceded by the Minister. He has made it clear that it is a power of last resort which will be used only after lengthy warning, and that it is something that he hopes he will never have to do. In that context, it is not unreasonable to suggest that we should further limit the circumstances in which it can be used by confining it to local authorities whose expenditure has risen in real terms in the immediately preceding financial year. That is the simple message of the clause.

Our arguments go against the principle of rate capping and against the powers that are being taken by the Secretary of State in the Bill. I referred to those powers earlier as being oppressive and offensive, and I make no apology for using stern language. In deciding whether we want the restriction that is embodied in the clause, we are entitled to ask whether the Government have made out their case, or any case, with a shred of intellectual respectability for introducing the Bill to Scottish statute law.

The basis of the Government's case is that they have been struggling for many a long and weary year with a set of obdurate, profligate and irresponsible local authorities which are putting at risk the recovery of the nation's economy. There are times when the Secretary of State appears to be obsessed with local authority expenditure. Figures are bandied around in the House and in Committee by Government and Opposition Members, and there are endless technical arguments on the shape of the graph of local authority expenditure over the past year or two.

I shall accept for the moment the Government's premise that there is a problem with the extent of public sector expenditure. That is not a premise that I actually accept, but that is the subject of a wider political argument. However, for the purpose of testing the Government's case that leads them to ask for untrammeled and unrestricted powers to make orders under the clause, I am prepared to accept that there is a problem. If there is one, it is not the responsibility of the local authorities to any great extent.

The Third Report from the Treasury and Civil Service Select Committee for the Session 1983–84 is the result of an investigation of the Government's expenditure plans until 1986–87. It sets out simply the argument that I am trying to advance. The Select Committee states that by the test that the Government have applied to their own economic competency—the ability to reduce or at least contain public expenditure—they have failed miserably. The increase in the five financial years to 1983–84 is put in real terms by the Select Committee at 12·3 per cent.

I stress that I do not accept the premise on which the Government's case is built because there is room for expansion in the public sector, especially in Scotland where 351,000 people are in the dole queues. However, I shall accept it for the moment for the purpose of the argument. The Select Committee produces some extremely interesting figures in the first table which suggest that the root of the problem, if problem there be, is central Government expenditure and not local government expenditure.

Table 1 sets out a simple column of figures. If we consider local government expenditure in real terms and take a base figure of 100 for the year 1978–79, the first year for which the Secretary of State was responsible, local government expenditure has risen to 106·9. That provides some support for the argument that there is a problem, but central Government expenditure over the same period rose to 111·2. Therefore, the rise in central Government expenditure has been much faster and much greater than the rise in local government expenditure.

Is the hon. Gentleman talking about current expenditure or capital and current expenditure together?

I am referring to public expenditure as defined in table 1 of the Select Committee's report. If the Minister is suggesting that the figures are an attack upon the integrity of the Government, I remind him that his right hon. Friend the Member for Taunton (Mr. du Cann) chairs the Committee. I believe that the report sets out an independent view which suggests that central Government expenditure has been rising considerably faster than local government expenditure since 1978–79. The Minister will no doubt make his own remarks and attack the figures later, if he wishes to do so. I shall give him some others that he may wish to use.

I am grateful to the hon. Gentleman for giving way. I do not wish to disturb his speech, but he is using important statistics, so it is important to know whether we are talking about current expenditure or a mixture of capital and current expenditure.

4.30 pm

I believe that the figures refer to capital and current expenditure. I am sure that the Minister will be able to make his point in a little while.

If we take the totality of public expenditure, which is the Government's King Charles's head, and consider the basis for comparison used by the Select Committee, which was chaired by a distinguished Conservative Member, the simple and unanswerable fact is that central Government expenditure has been rising much faster than that of local authorities.

If we project those figures to 1986–87, it is evident that the Government plan their expenditure to remain static and that local authority expenditure should decrease to 96·9 — going back to our 100 base figure — below the 1978–79 level. I make that point in passing because it is interesting that the Government choose to victimise local authorities on that basis. Whether they will succeed is another question, but they intend to control local goverment expenditure much more severely than that of central Government.

There may be much argument about those figures. As the House knows the Convention of Scottish Local Authorities puts the increase in local authority spending in real terms since 1978–79 at 1·6 per cent., which is lower than the Select Committee's figure. Undoubtedly, the Select Committee, COSLA and others are united in the view that local authorities cannot be made the scapegoats for global public expenditure totals as Ministers have tried to do in seeking to justify an untrammeled right to bring in the sort of orders envisaged in clause 3. I believe that new clause 1 would sensibly limit the effect of that measure to some extent.

The Minister may remember that when we were debating revenue figures on Second Reading I pointed out that the total over guidelines for 1983–84 budgets was £121 million for all Scottish local authorities. If one takes into account the £19 million clawed back by section 5 selective action and the £45 million that was taken back by general abatement there is an overspend on revenue — a distinction that the Minister will cling to—of only £57 million. That is a small fraction—perhaps 2 per cent.—of predicted expenditure of local authorities as a whole, which runs at about £2·6 billion. I believe that there is paranoia, lack of proportion and lack of perspective, Mr. Armstrong — [Interruption.] I apologise for not addressing you correctly, Mr. Deputy Speaker. I spent so long on the Bill in Committee that when I am on my feet anywhere else or at any other time I assume that I am still in Committee and address the Chair accordingly. I feel sure that most hon. Members who served or, that Committee have a fellow feeling, having been in the same prison, so to speak.

I hope that I have said enough to establish what I believe to be self-evident—the element of hysteria in the way in which Ministers try to establish that public expenditure is in some way the problem of local government alone, given the Minister's own terms of reference.

The second line of argument, as I understand it, is that Ministers need the power as a protection for the ratepayers and that it must not be limited by new clause 1. I do not wish to spend much time on that area of argument, but rates have risen substantially in the past few years. Even allowing for inflation, there have been substantial real increases. I regret that just as much as elected councillors, who have been left to strike the impossible balance between preserving essential services and compensating for the radical reductions in Government support which have resulted from the way in which rating and housing support grant settlements have been manipulated in recent years.

The Minister knows well that if we assume that the same percentage of expenditure was met by Government grants as was paid in 1978–79 that would be the equivalent for many local authorities of a substantial reduction in the rate poundage. In Glasgow the reduction in rate poundage would be the equivalent of 18p, and I am told that it would be 25p in Dundee. When Ministers complain about rate increases, they must consider their own part. They have a right to make radical reductions, but they cannot duck the consequences for maintenance of services.

Such rate increases could have been avoided only through substantial disruption of services and serious job losses in many areas. The Secretary of State purses his lips primly and shakes his head adamantly, but that is the experience of authorities that have taken such decisions and whose people are faced daily with the problem of maintaining important services.

The hon. Gentleman cannot get away with that. How does he answer the charge that many authorities have kept their expenditure well within the guidelines with no sign of decimation of important services?

The Minister must be referring to local authorities which provide low services or which do not have to deal with the substantial problems of urban deprivation in areas of declining population and industrial dereliction. Many authorities in west central Scotland are in that position.

The Minister may not accept my subjective evidence but I have spent much time with responsible councillors and officials. They are not trying to make trouble for anyone, but they face great dilemmas. If the Minister believes that the evident pain felt in local authorities is in some way synthetic, he is deeply mistaken.

I am grateful to the hon. Gentleman for giving way. I have heard before his words about the effects of rate decreases on services. Indeed, I heard them last summer when Glasgow district council's representatives came to see me about the reduction that my right hon. Friend asked of them. In that context, can the hon. Gentleman explain how, if it was so difficult and dangerous for Glasgow district council to reduce the rate last August, the council decided to maintain its rate this year at the same level sought by the Government and proudly boasted that it had done so without cutting services?

The council made a proud boast about no redundancies and has tried hard to maintain services, but if the Under-Secretary of State, the hon. Member for Edinburgh, South (Mr. Ancram), cares to leave Morningside and come to the part of Glasgow that I represent — I know that he has been to Glasgow recently, so I must not suggest that he is frightened to go there—and saw the deterioration in the district council's housing stock he would not be so complacent about what is happening in the local authority world.

It is sometimes assumed in Government circles that people do not want to pay for services, but want reduced rates, irrespective of the cost in terms of the lack of services. I do not believe that. It is a matter for argument, which should properly be conducted at the ballot box.

One of the reasons why I dislike the Bill so much is that it gives the Secretary of State powers to pre-empt decisions and arguments that are properly the preserve of local government. If the electors want services they will vote for parties that believe in providing them, knowing that increased rates will be almost inevitable. If the Minister is right about what people want, they will vote the other way and I shall have to live with disappointment and defeat for my point of view. My objection is to the fact that local communities will not have the right to choose because the Government are to be the arbiter, not just of rate levels under this clause but of rents under a later clause and are thus seeking to regulate the whole pattern of local authority spending. That is entirely wrong.

In new clause 1 we seek to restrict rate capping because we believe that the Bill is unnecessary and that any restriction of damage is to be welcomed and will help relationships between central and local government. The rate-capping proposal is friendless and unwanted. By and large, even Tory councillors in Scotland are embarrassed and silent about it. To be fair, many of them have voted against it through COSLA and have made it clear that they regard it as at best unnecessary. I have quoted the views of the leader of the Tory majority of Edinburgh district council who made his position very clear when he visited the House. Nor is he the only Tory councillor to have shown sufficient independence to say exactly what he thinks, an attitude sadly lacking on the Tory Back Benches here.

In the past two days Conservative Members of Parliament have spoken and voted against the Government on exactly this issue in respect of England and Wales, so we hope that they will join us in voting for the new clause to show that their principles extend to Scotland as well as to England.

I cannot answer for them, but we shall wait with interest to see what they do. My hon. Friend is certainly right in saying that those hon. Members have taken a difficult stand in terms of party loyalty on a matter of principle. I hope that they will continue to take that attitude when the same principle is at issue in the Scottish legislation.

Most Conservative councillors, understandably, believe that the Bill is unnecessary. Again, I give the Government the best of the case. If the Government believe that local authorities must be disciplined on expenditure, they have specific powers in relation to excessive and unreasonable expenditure under section 5 of the 1966 Act. If that does not work, there are the general abatement fallback powers, which are being streamlined in clause 1. In view of the plethora of powers available, it is clear that clause 3 is pointless overkill. That is a further reason for writing in a limitation to ensure that the power is used only in the circumstances with which it was originally designed to deal — that is, in cases of irresponsibility and overspending by an authority or a class of authorities. That safeguard, at least, must be built in.

The whole exercise has damaged confidence and done much to destroy the good will that is necessary if local and central Government are to work together for the best government of Scotland. It has been a tragic mistake and will lead to great bitterness in the months ahead. If the orders are used with the virulence with which the Government have used the other powers that they have taken in recent years we shall be in for a touch of the bully-boy tactics and, metaphorically if not literally, there will be civil war between St. Andrew's house and the regional and district councils of Scotland. That would be a tragedy and it would give us no pleasure. We stand firmly on the principle that, wherever possible, decisions should be made locally by the communities affected by them. We see no need whatever for this further layer of oppressive legislation on top of the considerable burden already placed on local authorities. If the Bill is to proceed, at the very least it should include the safeguard of new clause 1.

We offer the new clause to the House—or rather to the Minister, as Conservative Back Benchers are likely to take their instructions from him—as a last chance to limit the friction that will arise out of the Bill and in the genuine hope that even now the Minister will consider it sympathetically.

4.45 pm

I should make it clear that I shall not be taking instructions from the Government Front Bench. I rise to speak against the new clause because, although the arguments, like so many others, have been interesting and in some respects tantalising, the fact remains that we are in this position because of the actions of district and regional councils. I hope that the Government will reject the new clause.

It is interesting to consider what the situation would have been if the Bill and the new clause had been on the statute book now. [Interruption.] There is nothing frivolous or funny about the situation in Dundee. The Labour-controlled district council there could not have protected itself against itself. Rates there have risen by 207 per cent. in the past four years and constituents of mine with businesses in Dundee have seen those enterprises put at risk by the actions of the council. Jobs are therefore also at risk, and it is not only my constituents' jobs that are at risk. Jobs are at risk in five Labour clubs in Dundee because of the high level of rates.

The Tayside health board has faced massive rate increases. If the level of rates were the same as those in Perth and Kinross and Angus, the board would have £1 million more per year to spend on health care, which would be extremely important for the cottage hospitals in my own and other rural constituencies. The hundreds of thousands of pounds in rate increases on schools have also put educational facilities at risk. Money that should have been spent on education and health has been filched by Dundee district council.

The district council is elected by the people of Dundee. The candidates told the people of Dundee what they intended to do, and they were elected. In May the people of Dundee can choose again. If they make the same choice as they have made for some years past and elect a Labour council, will the hon. Gentleman withdraw all his criticisms, because that is what the people of Dundee want?

I shall not withdraw any of them. If the hon. Gentleman listens a little longer he will realise that he has once again scored into his own goal. The Dundee Labour councillors were not elected to put up rates to such an extent—because they did not tell the electorate so—that they could no longer pay the rates to the regional council on the five Labour clubs that they manage and run. My constituency has an interest in how those rates are collected, and this has a bearing on all the other services that I have mentioned. If rate levels had been realistic, that situation would not have arisen. The district council owes rates not only on the five Labour clubs, but on both its present and previous headquarters, as well as on the offices of the newspaper that it used to run but which is no longer published. The Labour councillors put up the rates in their area, but almost every commercial venture that they undertake suffers as a result of the excessive level of rates. Those councillors expect other business people and other ratepayers to pay rates which they themselves are unable to pay. Two of those Labour clubs owe rent to the district council which runs them—both rates and rents are a problem for them. The Bill also deals with rents—mostly domestic rents—but they are not covered by the new clause.

If the new clauses and the Bill were already on the statute book, I doubt whether they would have helped those Labour councillors to meet the penal level of rates that they have inflicted on themselves. Their positive action of raising the rates to such penal levels has made them unable to pay.

The Bill is long overdue. Those councillors have put cottage hospitals and village schools at risk because of the penal level of rates. They have sucked in money from facilities which my constituency desperately requires and wishes to keep. Any doubts that I ever had about the Government taking control of local government expenditure have vanished because of that. The Bill enables the Government to control expenditure——

Real life is about what is happening, not about our theories. The evidence is plain — Labour councillors fail to run commercial enterprises effectively. Many people think that running such clubs is a licence to print money, yet those five clubs have not met their commitments. Those Labour councillors are totally unfit to run a council if they cannot even run a club. They could not be members of a responsible council. If they were responsible to those who elected them, they would resign. They have clearly shown that they are not fit to run a council, because they cannot pay the rates which they themselves set.

I support new clause 1. One of the most important results of the Bill is that it will do great damage to the relationship between local authorities and Government, which has traditionally been harmonious. During the past 10 or 15 years there have been temporary difficulties, but no real confrontations, head-on collisions or clashes of the sort which we may be storing up for ourselves if the Bill reaches the statute book.

I listened with interest to the hon. Member for Tayside, North (Mr. Walker). I do not altogether understand the basis of his arguments, because in my part of the world we do not suffer to the same extent from party political intransigence but I understand that it is a problem.

Sections 4 and 5 of the Local Government (Scotland) Act 1966 give the Secretary of State powers to take account of overspending by setting a general level of rate support grant. Under section 5 he has the power selectively to take account of circumstances which he thinks are getting out of hand in district and regional councils. Those powers are effective. The Minister keeps telling us about his sterling work last autumn when he took selective action against four councils and how it was a marvellous, effective and salutary exercise. If those powers which he has in his inside pocket are so readily available and effective, why does he need the extra powers for which he is asking? He said that he hopes never to have to use them. That is a bad principle on which to legislate. He could say that he needs powers for any number of hard-line, repressive actions which he hopes never to use. The House must recognise that that is a bad principle on which to legislate.

The Liberals are always fair, and therefore to be fair to the Government I looked carefully at the general election Conservative manifesto under the section headed "Local government: saving ratepayers' money". It states:
"In Scotland we are already effectively using powers to reduce the rates of councils which plan excessive and unreasonable expenditure. England and Wales now intend to introduce measures with a similar aim."
The real reason for the legislation is that it is necessary, not for Scotland, but for England and Wales. The manifesto continues:
"If necessary we will propose in addition a general scheme of limitation on rate increases for all local authorities".
What has happened since June that invokes the condition "if necessary" and suddenly makes the powers available under section 5 and 6 of the 1966 Act insufficient for the realities of today?

The hon. Member for Glasgow, Garscadden (Mr. Dewar) said that if local democracy was not working and the electorate could not effectively express its wishes about the way in which local authorities spend their money—if there is no effective system to enable them to take an interest in that, there is no point in having local democracy—there were ways of dealing with it other than those which the Government propose. If local democracy is at risk because it is not working, it is important that we should tackle the root of the problem and make sure that the system works. Proportional representation is one method of dealing with the problem and different systems of rating is another. Local democracy can be made more sensitive in a variety of ways, but the last thing that we need to do is to give Government more say in what is happening in town halls. The Government are tackling the problem in the reverse order. If they feel that voters at local government elections are not controlling local authorities, they should remedy that by changing the electoral system to make it more relevant and sensitive.

The Bill produces no great benefit for local authorities. If it is enacted and the penal provisions are exercised the year after that in which the rates were set and that happened to be an election year that changed the local authority administration, the Secretary of State may find himself inflicting a penalty on one local authority for rates set by its predecessor. That may happen this year, after our local government elections.

The Bill is unnecessary and friendless and it will not achieve what the Minister hopes to achieve. If he has to make use of it, he will have a hard job persuading the Opposition that the exercise is worth while. Therefore, I support new clause 1.

I do not intend to delay the House for long, because the arguments of principle on rate capping have been deployed fully in Committee and, with regard to England and Wales, earlier this week in the Chamber. The speech to which the hon. Member for Tayside, North (Mr. Walker) treated us was a graphic illustration of the path on which we are embarking. He gave us a parochial, detailed and bitchy little speech about circumstances, as he sees them, in just one local authority in Scotland. We shall get more and more of that because the Government are asking for powers to fix the budgets of local authorities in Scotland. It is extraordinary that Parliament here in London should be making such detailed, individual and local decisions. The House should not be fixing rates for local authorities, as the corollary of that is that the House should fix their budgets.

5 pm

I work from the simple premise that local councillors are best qualified to deal with local affairs. That is what they are there for, that is what they have been elected for and that is what they are accountable for. If people in Scotland do not like what their local authorities do, they can turn them out and elect others every four years. That will be far from the case if the Bill is passed without new clause 1. Without it, the present Secretary of State for Scotland will use the powers that he is taking under the Bill to make decisions that affect Scottish local authorities in spite of the fact that he does not have a vestige of a mandate to do so.

Indeed. The Secretary of State for Scotland is not accountable to people in Scottish local authority areas, so it cannot be right for him to take such powers.

Another deplorable feature of the Bill is the fundamental dishonesty of the Government and the Secretary of State in droning on about local authorities being responsible for major increases in rates. We know that the cut in rate support grant is principally responsible for recent increases in rates. In 1979–80, East Lothian council levied 16p in the pound. That has increased to 28p in the pound for 1983–84. That is a substantial increase which has created difficulties for many ratepayers. Where do we go to find the culprit for that increase? I contend that the culprit is not the local authority but the Secretary of State. As a percentage of net expenditure, rate support grant was 45·9 per cent. in 1979–80 but is 29·6 per cent. for 1983–84. That is the principal cause of the increase in rates and it is the Secretary of State who is to blame. It is humbug for him to go on and on about being the protector of Scottish ratepayers—he is nothing of the sort.

The issues before us are far greater than what happens in Dundee, East Lothian or anywhere else. We are discussing an important constitutional issue, which many English Conservative Members have told us about recently. It is to the shame of Scottish Conservative Members that they have not done the same. We should give credit to the 11 Conservative Members who last night voted against parallel legislation for England being given a Third Reading. We shall watch eagerly to see how they vote when they are asked to make a decision on exactly the same principle as it affects Scotland.

New clause 1 attempts to improve a fundamentally obnoxious piece of legislation. I applaud my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) for his efforts to make the best of a bad job. Even with new clause 1, the Bill will remain fundamentally obnoxious and constitutionally obscene. Nevertheless, I support my hon. Friend's effort and obviously support new clause 1.

This is the first time that I have had an opportunity to speak on this Bill as I did not catch the Chair's eye on Second Reading and I was not a member of the Committee. I am therefore grateful for the opportunity that new clause 1 affords to tackle some of the basic principles involved.

I take issue with what the hon. Member for Tayside, North (Mr. Walker) said. His attacks on Dundee district council are becoming repetitive and increasingly vindictive. If we examine the percentage increase in rates in the past few years we find that Dundee's increase is no higher than that of other district councils in Tayside. I do not disagree that its rate poundage is higher but, if anything, the percentage increase it has imposed is lower than that imposed by other authorities. Moreover, the average domestic rate bill in each of the three council areas is similar.

The hon. Member for Tayside, North shakes his head, so I shall give the figures for 1982–83. The average domestic rate bill in Angus was £225, in Dundee it was £296 and in Perth and in Kinross it was £239.

Although Angus and Perth and Kinross have a much lower rate poundage, they ask their domestic ratepayers to pay nearly as much as Dundee. Dundee has to have a higher rate poundage to achieve the same income because of the number of unemployed people and the amount of poor housing, which attracts a lower income, in its area. Because it is a more deprived area, it has to provide more services.

The hon. Member for Tayside, North said that five Labour clubs cannot pay their rates. I do not know about Dundee and it is not my job to comment on it, but Cathcart Labour party has a Labour club. We have not yet had difficulty paying our rates bill, but the club's income has dropped dramatically during the past five years. That has nothing to do with whether Glasgow district council asks for more rent or rates. In 1979, about 15 per cent. of the club's members were unemployed — that number has now increased to well over 30 per cent. The income of members has declined so dramatically that they can no longer afford to spend so much in the club. That is why the club's income is much lower than it was in 1979 and that is why the club has more difficulty paying rent and rates. That, I am sure, is the reason why many businesses have difficulty. It is not to do with the rates bill. Of course, if they have rates to pay, it becomes more difficult, but the real reason is the decline in people's incomes over the past few years.

This whole Bill—the new clause is attempting to do something about this — is an attack upon local democracy. It is an attack upon the ability of local authorities to decide for themselves.

The hon. Member for Tayside, North made the point that he thought that the district councils in Dundee should resign. The point that I made in my intervention was that that is exactly what they are going to do. All of them are going to resign on 3 May, and they will then be standing for re-election. The Government should leave any action, in this attack upon the local people of Scotland, until after those elections. No matter which party is elected by the people to control those district authorities after 3 May, the Government, in a democracy, ought to recognise that the people have spoken; they have had the opportunity to make their decision about local matters and that is the decision which they have made. Therefore, the Government ought to accept it and abide by it. That is the way democracy works.

There is a local mandate as well as a national mandate for the Government. I do not believe, of course, that the present Government have a mandate to operate in Scotland at all but, leaving that aside, there is a local mandate for local government to decide its own affairs. The Government, by putting through a Bill of this sort, are refusing to give local democracy the opportunity to operate.

The argument we have heard from Conservative Members on this local mandate is twofold. First, it is that only 30 to 40 per cent. of the people vote. That is a spurious argument, because it can be assumed that, if people were as outraged by what their district council is doing as suggested by hon. Gentlemen, they would take the opportunity to vote against it. If they do not do so, there is a measure of passive support for what the local authority is doing.

The second argument is that local business men do not have the vote, but provide a fair amount of the rates, so they should have a say, presumably — I do not know whether this is going to happen—or the local mandate argument does not carry any weight. But, of course, that argument is not continued into national Government. There is no suggestion that the big companies which pay corporation tax and individuals who pay capital gains tax and the other taxes on business be given a say in the national Government of the day. Although, with the Conservative party, I think they are given a say, it is very much in the smoke-filled rooms of the Tory party; they are not given a legitimate say in how the Government operate. If that is true for the national Government, surely it is true for local government as well.

5.15 pm

I assume that the Government do not intend to reintroduce the business vote, which is one way in which their argument on business rates could be put into practice. They could reintroduce the old business vote and give businessmen two votes — one where they have their business and one where they have their home.

I hope that the Minister will be making some statement during the evening on whether he will be taking the same line as the Secretary of State for the Environment—that the Government have abandoned any attempt to reform the rating system.

Local democracy should be allowed to operate. The Government are making it much more difficult for local councillors to take the sort of decisions that they are elected to take. All Conservative Members who have been in local government must be aware of the frustration felt by councillors, who feel that their power is being taken away.

It would be possible to have some sympathy with, or at least to be rather more tolerant about, what the Government are doing in terms of local democracy if it were based on any decent, logical, economic policy, but it is not. It is based upon the fallacious economic theory that somehow or other, if public expenditure is cut, in particular the expenditure of what the Government call "spendthrift local authorities", this will allow money to flow into the private sector. The private sector will then invest that money in new industries and, as a result, there will be more employment.

That has been the argument for five years now and it has led only to increasing cuts in public expenditure on services provided and a concomitant increase in public expenditure on those who have been made unemployed and are receiving unemployment benefit and all the other social services which they need. So, far from having a decrease in public expenditure, we have had a decrease in services but the same level of public expenditure. At the same time, there has not been the increase in investment in industry in this country that the so-called cuts are supposed to have brought about. There has not been any increase. We have not yet reached the levels of investment in the economy that were pertaining in 1979.

The Government have put us through all this process of cutting public expenditure, cutting local government services, cutting local democracy and putting up taxes, for the sake of an economic policy that has dismally failed. All that we have got out of it is 3·5 million unemployed. Local authorities have to take a lot of the burden of looking after those 3·5 million unemployed and dealing with the economic and social problems created by that unemployment, but they are having to cut the services they provide.

At the end of the day—this is where Conservative Members really do not worry much about local government expenditure—it is the poorest in our society who most require the services which local government provides. The poorest in society, those who need help and protection, do not look to the Conservative party for them because they know very well that they will not get them.

This is a squalid measure which the new clause at least attempts to do something about. Even if the new clause is accepted, it will not solve all the problems, but it will take from the Secretary of State some of the powers which he has taken upon himself to curtail local democracy.

I was interested in the comments of the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), who asked why the Secretary of State found it necessary to introduce a Bill of this kind at all. Perhaps I could help him. The answer is very simple. The Secretary of State does not like the fact that far too many local authorities, particularly in the central belt, elect Labour councils which are doing things which the Secretary of State does not like them doing.

I believe that that is one of the reasons why the Secretary of State, if he cannot get his own way, and his party cannot get its own way with the electors, comes to the House of Commons and declares that, since he has been frustrated in his attempts to persuade the electorate to vote for Conservative councils, he will have to deal with the matter in this way.

Secondly, I wish to answer briefly the point made by the hon. Member for Tayside, North (Mr. Walker). I found his speech very worrying indeed. Much of it was very trivial, but I picked up one sentence in which he said that he was very much more in favour of central control than he had ever been before. I found that very peculiar coming from a Conservative Member of Parliament. I can only refer him to the quite exceptional speech by his right hon. and learned Friend the Member for Hexham (Mr. Rippon) last night. I disagreed with much of what the right hon. and learned Gentleman said, but there is one point that I wish to put to the hon. Member for Tayside, North.

The right hon. and learned Gentleman said:
"I commend to my right hon. and hon. Friends Junius's famous declaration to the English nation."
I did not quite understand that bit, and I thought that I would let it pass, but the right hon. and learned Gentleman went on to say:
"What does this Bill do? It is a pure Socialist measure, and I take a high Right-wing Tory attitude to it." — [Official Report, 28 March 1984; Vol. 57, c. 373.]
The right hon. and learned Gentleman then voted against the Bill.

I should have thought that the Bill was anything but a Socialist measure. Opposition Members, and particularly those who have been privileged to serve on local authorities, are very conscious of their obligations and powers as locally elected representatives. In a few weeks time there will be elections in Scotland and we shall see what the people of Glasgow and elsewhere think not only about the policies pursued by Glasgow district council but about this Government and their dictatorial attitude towards local authorities.

No matter how we may dress up this whole business, a fundamental principle is involved — whether people who are democratically elected members of a council should be allowed to pursue the policies on which they were elected. That point is vital, and I believe that it will be one of the main issues in the election contest.

I respect the right hon. Gentleman, because he is a very experienced Opposition Member. He was a member of the Labour Government in the late 1970s who requested, invited and used other measures to bring about reductions in local authority expenditure. Does he now believe that they were wrong to bring about the biggest reduction in local government spending and support, in real terms, that has ever taken place?

I can only say what I have told Conservative Members many times before. If they talk to local authority members over the length and breadth of Scotland they will find that they would rather have the rate support of about 68 per cent. that my right hon. Friend the Member for Glasgow, Govan (Mr. Millan), myself and our colleagues gave than the miserable figure that they are now getting. That is the answer, and the hon. Gentleman should not shirk it.

What is the Secretary of State really saying now? I understand him to be saying that he is denying local authorities the power to make up their own minds about various issues and that they are simply to be his agents. As I know from when I was a Minister, and as the Secretary of State will know, the Government place considerable responsibilities on local authorities. It is therefore very bad government for the Secretary of State to place additional responsibilities on them and then to deny them the means of raising the money to pursue his various ambitions.

I want to see local authorities working, and working effectively. I hope that the Secretary of State also wants that, but he has placed himself—with the help of his Ministers — in a position of confrontation with both Labour and Conservative-controlled local authorities, the like of which I have not seen in the 30 years in which I have been associated with local government. We want the Scottish Office, through the Secretary of State, to be more conciliatory. The right hon. Gentleman should not bully those with whom he does not agree but should, instead, seek their co-operation. If he adopts a more conciliatory attitude, there will be more co-operation and much more effective local government.

It is always interesting to speak after the right hon. Member for Glasgow, Rutherglen (Mr. MacKenzie). He spoke about the local elections that are due to take place in a few weeks time, but perhaps he should not count his chickens—or votes—until they are hatched.

The hon. Member for Glasgow, Garscadden (Mr. Dewar) reminded us rather nostalgically of the many happy hours that we spent in Committee. The only sour note that he introduced was when he said that he had found me an immovable force. But perhaps I was an immovable force only because during our Committee proceedings I never came into contact with an irresistible object.

However, I should remind the House of the reasons why we are seeking the powers which the new clause seeks to amend. Local authority expenditure is a significant part of all public expenditure and amounts to a quarter of it. As part of our policy of reducing public expenditure, we have made it clear to local authorities since 1979 that they would have to reduce their expenditure in real terms. However, that, quite simply, has not happened. In 1983–84 local authorities were still budgeting to spend more than they spent in 1979–80.

Equally, as a Government, we have had to look to the interests of ratepayers. Given, as the hon. Member for Garscadden rightly pointed out, the cumulative increases of the past few years, the Government must protect ratepayers from such excessive rate increases.

I wonder what the right hon. Gentleman would say to his constituents if they suffered a few more rate increases of the size that we have seen in the past few years.

My local authority has had to levy a rate of 152p in the pound to maintain very attenuated services, yet people have accepted that. They do not like it, but they know where responsibility for it lies. It is the function of councillors to act and then to be judged at the next election.

The right hon. Gentleman and I will, I believe, be debating the issue next Monday evening. I am sure that he does not wish to rehearse his speech, and I do not wish to rehearse mine. We shall no doubt cover the points then. I think that he also feels that it is better to wait until Monday, when the matter can be discussed in context.

In the past four years there have been two years in succession when rate rises have been over 30 per cent. It is all very well for the hon. Member for Garscadden to say that high rate increases are caused by reductions in the rate support grant, but the Opposition should explain in a moment why, in that case, there were high rate increases in the years before the basic reductions in the rate support grant, whereas in the last two years rate increases have begun to taper off. The hon. Gentleman's argument is that when rate support grant is reduced there are high rate increases, and when it is not reduced there are low rate increases. I shall not trouble the House with the figures, as I have given them before, but if the hon. Gentleman studies them he will see that his argument is not true to experience.

In the years that have been mentioned rates went beyond the target mainly because the Government failed, in the RSG settlement, to take into account the level of inflation and the level of wage settlements that local councils had to meet.

The hon. Gentleman is not looking up the actual statistics. If the hon. Member for Garscadden's argument is right, when reductions were made in the year 1982–83 to 1983–84 we should have expected high rate increases. In fact, we saw a 2 per cent. rate increase across the board before selective action, and only a 0·5 per cent. increase after selective action. This argument, which is constantly put forward by the hon. Member for Garscadden, bears no relation to the facts.

What bears much more relation is the point made by my hon. Friend the Member for Tayside, North (Mr. Walker), who showed in practical terms what the results of high rate increases such as he described mean in practice. Although, after these two years of high rate increases, the increases have been less, this is largely due to our success in tackling inflation, but rates are still higher than they need to be and local authorities are still continuing to spend above the Government's plans.

5.30 pm

The hon. Member for Garscadden compared expenditure by central Government to that by local government and I asked him at the time, because these figures are relevant to this debate, whether he was talking about all public expenditure or current public expenditure. He agreed that he was combining current and capital expenditure. If one takes current expenditure, and if one generously takes into account the last year of the Labour Government, the year 1978–79, one sees that the increase in central Government current expenditure to 1983–84 was 78·8 per cent., while the increase in local government current expenditure over the same period was 96·1 per cent. The statistics do not match the logic of the hon. Gentleman's case.

Against the background of cumulative levels of rate increases and continued overspending, it obviously makes sense for us to bring in the reserve power which I have described before, and which I shall describe again, but which I hope we shall never have to use. It will be brought in for use if the approved form of general abatement and selective action fails to bring local authority rates and expenditure into line with the Government's plans, and it will be available for use in the ratepayers' interests should we see an unacceptable level of rate increases across the board.

The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) referred to this as a bad Bill, giving the reason that it was bad to bring in something which we hoped never to have to use. All I say to him, and to the right hon. Member for Western Isles (Mr. Stewart), is that that is a strange attitude to take. Many of us put burglar alarms in our houses, not because we have been burgled, but because we want to prevent a burglary taking place. That is a logical and legitimate way in which to proceed and I shall not embarrass the hon. Member for Roxburgh and Berwickshire by asking him whether he has a lock on his front door.

I move on to the new clause, and I may be unique in doing so in this debate. It is based on the assumption that a general rate limitation could be applied selectively. However, this is to misunderstand the nature of the provisions in clause 3. If a general rate limitation order is made, it applies to all the authorities within the class of authorities to which the order applies. Provision is, of course, made, as the hon. Member for Garscadden recognised, for exemption or derogation for individual authorities from the general limit. However, such exemption would be granted, as I said in Committee, only in exceptional circumstances. The fact that an authority's expenditure had not increased in real terms would not be a ground for exemption, given that the Government's policy since coming to office has been to achieve a reduction in local authority expenditure in real terms. However, in 1983–84 authorities were still budgeting to spend more in real terms than they spent in 1979–80. Quite apart from that, an authority's expenditure could still be far too high as a result of a period of expenditure increases, even though it might not have gone up in real terms from the previous year.

In addition to that, the new clause is vaguely worded and unworkable. Perhaps the hon. Member for Glasgow, Maryhill (Mr. Craigen) will be able to shed some light on these matters. What are "real terms", and how are they to be defined in the terms of the new clause? What is more important, what is
"the immediately preceding financial year"?
If it means what it seems to mean, the clause would be unworkable. We have already discussed the timetable for rate limitation in Committee. The general rate limit would be set in the autumn of the financial year to which it was to apply—that is before the end of the immediately preceding financial year. Authorities would have to set a rate in accordance with the limit by 5 March before the information about their outturn for the immediately preceding financial year was available. By the time the information was available to make the clause work, they would be into the financial year to which the rate limitation order applied.

On that basis, as well as on the basis that the new clause is imprecise and misconceived, and is based on a misconception about clause 3 as a whole, I ask the House to reject it.

I am sorry that the Minister was unable to accept the points made by my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) and others of my hon. Friends. It was significant that the only Conservative Member who spoke was the hon. Member for Tayside, North (Mr. Walker). I regret that my hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) was not a member of the Committee. Had he been so, he would have had the pleasure of spending over 100 hours with the hon. Member for Tayside, North and I have no doubt that there would have been some useful exchanges.

I wish to correct one misapprehension. My hon. Friend the Member for Garscadden is far too generous. I should never have described the Minister as an immovable force—immovable perhaps, but when it comes to force the Minister is the Scottish version of the Foreign Secretary.

It is regrettable that, at a time when the Prime Minister wants to extend privatisation, the Secretary of State, through this Bill, is seeking to bring Scotland's local authorities into Government ownership and outwith local accountability and public control. Rate capping has been sold to the general public as a kind of painkiller for the rating problem. My hon. Friend the Member for Cathcart need not worry about whether the Government intend to do anything about rating reform in the future. We need only read the Glasgow Herald of 24 March to see what the Secretary of State for the Environment, addressing the Conservative party central council in Birmingham, said, which was that rates are here to stay "for the foreseeable future."

My hon. Friend must not be too impatient. This Minister never tells anybody anything.

This ostensive painkiller for the rating system will not numb the harsh truth that services will be cut even more, additional jobs will be axed, either through redundancy or natural wastage, and that local accountability will go for a Burton.

I am worried that the Government will, by denying local authorities some of their existing responsibilities, create a general climate of irresponsibility. Nobody will be responsible, or at least be seen to be responsible, for anything. The Government, by the rate support grant order for 1984–85, have largely decreed higher rate increases for the ratepayers in Scotland. It will mean £1 a week on the domestic household bill in Strathclyde alone, according to a statement made by the region's chairman of the finance committee earlier this month.

The right hon. Member for Western Isles (Mr. Stewart) talked about his problems, and I am getting letters in Maryhill from some of his constituents who are attending Jordanhill college of education who are much concerned about the plight of Western Isles.

I recollect reading an article by the hon. Member for Aldershot (Mr. Critchley) in which he wrote some time ago that the Prime Minister felt compelled to strike any institution with her handbag. That attitude to institutions is reflected in the Government's approach to local authorities. Rate capping, as it is euphemistically called, is the great Conservative betrayal of the ever-promised reform of the rating system. The Government have done a U-turn on rating reform.

It will be increasingly difficult to tell where the buck stops. One thing is sure—if one writes to the Minister or the Secretary of State they will say that it is not their responsibility. They will say that the district, the regional or the island councils make the decisions. If one approaches those authorities one will be told that everything is determined by the faceless civil servants sitting in the box and occupying the offices at St. Andrew's house.

The Convention of Scottish Local Authorities has made it clear that it is opposed to rate capping. Even the Edinburgh chamber of commerce—which is not exactly affiliated to the Labour party—has said that it has some misgivings, judging by statements from the secretary of the chamber.

Once the truth sinks in after the legislation is operating the public will realise that it is a con trick. It will then be understood why only one Government Back Bencher, the hon. Member for Tayside, North, spoke on Report in favour of the proposal. More and more the Government will act as the trapper and local government as the trapped. Both will be ensnared in the process. I do not have much faith in the ability of the Secretary of State, and far less in that of the Minister responsible for local government in Scotland, to get us out of the mess.

The public will pay in the end. There will be more administration and more time will be spent on working parties and committees trying to sort out the budgetary problems. Scarce resources will be diverted from the local authorities to bureaucratic exercises and administration.

We should be concentrating our energies on trying to ensure that local authorities work as effectively as possible. The councillors, whom the people elect to serve on local authorities, should be responsible for ensuring that local government runs efficently. Local government has never been popular, but once the Government take a stranglehold on the local authorities in the way proposed in the Bill, unlimited and undesirable powers will, I fear, operate in an unjust manner. I hope that the House will give the new clause its approval.

Question put, That the clause be read a Second time——

The House divided: Ayes 151, Noes 245.

Division No. 212]

[5.43 pm


Abse, LeoAshley, Rt Hon Jack
Archer, Rt Hon PeterAshton, Joe

Atkinson, N. (Tottenham)Kilroy-Silk, Robert
Banks, Tony (Newham NW)Kirkwood, Archibald
Barnett, GuyLambie, David
Barron, KevinLamond, James
Beith, A. J.Lewis, Ron (Carlisle)
Bell, StuartLewis, Terence (Worsley)
Benn, TonyLitherland, Robert
Bennett, A. (Dent'n & Red'sh)Lloyd, Tony (Stretford)
Bermingham, GeraldLofthouse, Geoffrey
Blair, AnthonyMcCartney, Hugh
Boothroyd, Miss BettyMcDonald, Dr Oonagh
Bray, Dr JeremyMcKay, Allen (Penistone)
Brown, Gordon (D't'mline E)McKelvey, William
Brown, Hugh D. (Provan)Mackenzie, Rt Hon Gregor
Brown, N. (N'c'tle-u-Tyne E)McNamara, Kevin
Brown, R. (N'c'tle-u-Tyne N)McTaggart, Robert
Bruce, MalcolmMcWilliam, John
Buchan, NormanMadden, Max
Caborn, RichardMarek, Dr John
Callaghan, Jim (Heyw'd & M)Marshall, David (Shettleston)
Campbell-Savours, DaleMartin, Michael
Canavan, DennisMason, Rt Hon Roy
Carter-Jones, LewisMaxton, John
Clark, Dr David (S Shields)Meacher, Michael
Clarke, ThomasMeadowcroft, Michael
Clay, RobertMichie, William
Cocks, Rt Hon M. (Bristol S.)Mikardo, Ian
Coleman, DonaldMiller, Dr M. S. (E Kilbride)
Concannon, Rt Hon J. D.Mitchell, Austin (G't Grimsby)
Cook, Frank (Stockton North)Morris, Rt Hon J. (Aberavon)
Corbett, RobinO'Brien, William
Corbyn, JeremyO'Neill, Martin
Craigen, J. M.Orme, Rt Hon Stanley
Crowther, StanPavitt, Laurie
Cunningham, Dr JohnPenhaligon, David
Deakins, EricPike, Peter
Dewar, DonaldPowell, Raymond (Ogmore)
Dobson, FrankPrescott, John
Dubs, AlfredRandall, Stuart
Dunwoody, Hon Mrs G.Rees, Rt Hon M. (Leeds S)
Eadie, AlexRichardson, Ms Jo
Eastham, KenRobertson, George
Edwards, Bob (W'h'mpt'n SE)Robinson, G. (Coventry NW)
Evans, John (St. Helens N)Robinson, P. (Belfast E)
Fatchett, DerekRoss, Ernest (Dundee W)
Faulds, AndrewSedgemore, Brian
Flannery, MartinSheerman, Barry
Foot, Rt Hon MichaelSheldon, Rt Hon R.
Foster, DerekShore, Rt Hon Peter
Foulkes, GeorgeShort, Ms Clare (Ladywood)
Fraser, J. (Norwood)Short, Mrs R.(W'hampt'n NE)
Freeson, Rt Hon ReginaldSilkin, Rt Hon J.
George, BruceSkinner, Dennis
Godman, Dr NormanSmith, C.(Isl'ton S & F'bury)
Gould, BryanSnape, Peter
Hamllton, James (M'well N)Soley, Clive
Harman, Ms HarrietSpearing, Nigel
Harrison, Rt Hon WalterSteel, Rt Hon David
Hart, Rt Hon Dame JudithStewart, Rt Hon D. (W Isles)
Hattersley, Rt Hon RoyStrang, Gavin
Haynes, FrankThomas, Dafydd (Merioneth)
Healey, Rt Hon DenisThompson, J. (Wansbeck)
Heffer, Eric S.Tinn, James
Hogg, N. (C'nauld & Kilsyth)Torney, Tom
Holland, Stuart (Vauxhall)Wallace, James
Howells, GeraintWeetch, Ken
Hoyle, DouglasWhite, James
Hughes, Robert (Aberdeen N)Williams, Rt Hon A.
Hughes, Roy (Newport East)Winnick, David
Hughes, Sean (Knowsley S)Woodall, Alec
Janner, Hon GrevilleYoung, David (Bolton SE)
John, Brynmor
Johnston, RussellTellers for the Ayes:
Kaufman, Rt Hon GeraldMr. John Home Robertson and Mr. Don Dixon.
Kennedy, Charles
Kilfedder, James A.


Adley, RobertAlison, Rt Hon Michael
Alexander, RichardAncram, Michael

Ashby, DavidGrant, Sir Anthony
Aspinwall, JackGreenway, Harry
Atkins, Robert (South Ribble)Gregory, Conal
Atkinson, David (B'm'th E)Griffiths, E. (B'y St Edm'ds)
Baker, Rt Hon K. (Mole Vall'y)Griffiths, Peter (Portsmth N)
Baker, Nicholas (N Dorset)Grist, Ian
Baldry, AnthonyGround, Patrick
Batiste, SpencerGrylls, Michael
Bendall, VivianGummer, John Selwyn
Bennett, Sir Frederic (T'bay)Hamilton, Hon A. (Epsom)
Berry, Sir AnthonyHamilton, Neil (Tatton)
Biffen, Rt Hon JohnHanley, Jeremy
Blaker, Rt Hon Sir PeterHannam, John
Body, RichardHarvey, Robert
Bonsor, Sir NicholasHaselhurst, Alan
Boscawen, Hon RobertHavers, Rt Hon Sir Michael
Bottomley, PeterHawkins, Sir Paul (SW N'folk)
Bowden, Gerald (Duiwich)Hawksley, Warren
Boyson, Dr RhodesHayhoe, Barney
Brandon-Bravo, MartinHayward, Robert
Bright, GrahamHeathcoat-Amory, David
Brinton, TimHeddle, John
Brittan, Rt Hon LeonHenderson, Barry
Brooke, Hon PeterHickmet, Richard
Brown, M. (Brigg & Cl'thpes)Hicks, Robert
Bruinvels, PeterHiggins, Rt Hon Terence L.
Bryan, Sir PaulHill, James
Buck, Sir AntonyHind, Kenneth
Budgen, NickHirst, Michael
Burt, AlistairHogg, Hon Douglas (Gr'th'm)
Carlisle, John (N Luton)Holland, Sir Philip (Gedling)
Carlisle, Kenneth (Lincoln)Holt, Richard
Carttiss, MichaelHooson, Tom
Channon, Rt Hon PaulHordern, Peter
Chapman, SydneyHowarth, Gerald (Cannock)
Chope, ChristopherHowell, Rt Hon D. (G'ldford)
Churchill, W. S.Howell, Ralph (N Norfolk)
Clark, Hon A. (Plym'th S'n)Hubbard-Miles, Peter
Clark, Dr Michael (Rochford)Hunt, John (Ravensbourne)
Clark, Sir W. (Croydon S)Hunter, Andrew
Clarke, Rt Hon K. (Rushcliffe)Hurd, Rt Hon Douglas
Cockeram, EricJackson, Robert
Conway, DerekJessel, Toby
Coombs, SimonJohnson-Smith, Sir Geoffrey
Cope, JohnJones, Gwilym (Cardiff N)
Corrie, JohnJones, Robert (W Herts)
Couchman, JamesJoseph, Rt Hon Sir Keith
Cranborne, ViscountKershaw, Sir Anthony
Currie, Mrs EdwinaKing, Rt Hon Tom
Dickens, GeoffreyKnight, Gregory (Derby N)
Dorrell, StephenKnight, Mrs Jill (Edgbaston)
Douglas-Hamilton, Lord J.Knowles, Michael
Dover, DenLamont, Norman
du Cann, Rt Hon EdwardLang, Ian
Durant, TonyLatham, Michael
Edwards, Rt Hon N. (P'broke)Lawler, Geoffrey
Eggar, TimLawrence, Ivan
Emery, Sir PeterLee, John (Pendle)
Evennett, DavidLeigh, Edward (Gainsbor'gh)
Fallon, MichaelLennox-Boyd, Hon Mark
Favell, AnthonyLester, Jim
Finsberg, Sir GeoffreyLilley, Peter
Fookes, Miss JanetMcCurley, Mrs Anna
Forman, NigelMacKay, Andrew (Berkshire)
Forsyth, Michael (Stirling)MacKay, John (Argyll & Bute)
Fowler, Rt Hon NormanMaclean, David John
Fox, MarcusMcQuarrie, Albert
Franks, CecilMajor, John
Fraser, Peter (Angus East)Marlow, Antony
Freeman, RogerMather, Carol
Gale, RogerMawhinney, Dr Brian
Galley, RoyMayhew, Sir Patrick
Gardiner, George (Reigate)Mellor, David
Garel-Jones, TristanMiller, Hal (B'grove)
Glyn, Dr AlanMoate, Roger
Goodhart, Sir PhilipMonro, Sir Hector
Goodlad, AlastairMoore, John
Gorst, JohnMoynihan, Hon C.
Gow, IanMurphy, Christopher
Gower, Sir RaymondNewton, Tony

Nicholls, PatrickStradling Thomas, J.
Oppenheim, Rt Hon Mrs S.Sumberg, David
Osborn, Sir JohnTapsell, Peter
Page, Richard (Herts SW)Taylor, John (Solihull)
Parris, MatthewTaylor, Teddy (S'end E)
Pawsey, JamesTebbit, Rt Hon Norman
Percival, Rt Hon Sir IanTerlezki, Stefan
Pink, R. BonnerThomas, Rt Hon Peter
Pollock, AlexanderThompson, Donald (Calder V)
Powley, JohnThompson, Patrick (N'ich N)
Proctor, K. HarveyThurnham, Peter
Raison, Rt Hon TimothyTownend, John (Bridlington)
Rathbone, TimTracey, Richard
Roberts, Wyn (Conwy)Trotter, Neville
Robinson, Mark (N'port W)Twinn, Dr Ian
Roe, Mrs Marionvan Straubenzee, Sir W.
Rossi, Sir HughVaughan, Sir Gerard
Rowe, AndrewViggers, Peter
Rumbold, Mrs AngelaWaddington, David
Ryder, RichardWakeham, Rt Hon John
Sainsbury, Hon TimothyWaldegrave, Hon William
Sayeed, JonathanWalden, George
Shaw, Giles (Pudsey)Walker, Bill (T'side N)
Shelton, William (Streatham)Waller, Gary
Shepherd, Colin (Hereford)Ward, John
Shepherd, Richard (Aldridge)Wardle, C. (Bexhill)
Shersby, MichaelWarren, Kenneth
Sims, RogerWatson, John
Smith, Sir Dudley (Warwick)Watts, John
Smith, Tim (Beaconsfield)Wells, John (Maidstone)
Soames, Hon NicholasWheeler, John
Speller, TonyWilkinson, John
Spencer, DerekWinterton, Mrs Ann
Spicer, Michael (S Worcs)Winterton, Nicholas
Squire, RobinWolfson, Mark
Stanbrook, IvorWood, Timothy
Stanley, JohnYeo, Tim
Steen, AnthonyYoung, Sir George (Acton)
Stern, Michael
Stevens, Martin (Fulham)Tellers for the Noes:
Stewart, Allan (Eastwood)Mr. David Hunt and Mr. Michael Neubert.
Stewart, Ian (N Hertf'dshire)
Stokes, John

Question accordingly negatived.

New Clause 2

Factors To Be Considered In Relation To Section 23A Of The Housing (Financial Provisions) (Scotland) Act I972

'After section 23A of the Housing (Financial Provisions) (Scotland) Act 1972 there shall be inserted the following section—

"Factors To Be Considered In Relation To Section 23A

23B. Before making an order under section 23A of this Act the Secretary of State shall take account of any reduction in housing support grant to, and shall have regard to the impact of levels of rents in, the local authority or class thereof specified in the order".'.— [Mr. Craigen.]

Brought up, and read the First time.

With this we may discuss the following amendments:

No. 20, in clause 6, page 6, leave out lines 14 to 16 and insert—

`Any limit must take full account of evidence submitted by a local authority demonstrating significant changes in the council house waiting list or other special needs.'.

No. 21, in page 6, line 31, at end insert—

'(6)(a) The Secretary of State shall not make any order under this section applying to any local authority if it appears that X is less than Y.

Where X =(H+C)÷N

and Y=I÷M

(b) In subsection 6(a) above, H is defined as the total amount of Housing Support Grant payable to that local authority for the year specified in the order; C is the total contribution which that local authority estimates it will make out of their general fund to the credit of their housing revenue account for the year specified in the order; N is the number of tenants of houses owned by the local authority; I is the total estimated amount of mortgage tax relief given by the Government and M is the estimated number of recipients of mortgage tax relief in the United Kingdom for the year specified in the order.'.

The purpose of the new clause is to draw out some of the arguments that were partly discussed in Committee concerning the level of rents and the housing responsibilities of district councils. As matters stand, the Secretary of State will now fix rent levels in 1985–86. Effectively, he will take from the local authorities that power to determine the prevailing level of rents within their areas.

The operation of the present system of housing expenditure limits has never been satisfactory to the housing authorities, but there is even greater dissatisfaction among local authorities over the Government's proposals for determining rents and limiting rate fund contributions. Rents have more than doubled since this Government came to office. That is why the legislation should include a provision that takes account of the level of rents.

Moreover, it is essential that the Government be fairer in their assessment of the kind of responsibilities now facing Scottish housing authorities as landlords. The Minister, like myself, is well aware of the debates that took place during our consideration of the Scottish tenants' rights legislation, particularly in relation to the consultation document on right to repair. That highlighted some of the problems that face local authorities in carrying out their statutory responsibilities as public landlords and drew attention to some of the difficulties and costs involved in adequate maintenance and repair of Scotland's public sector housing.

According to Shelter, about 40 per cent. of pre-war housing owned by local authorities is still awaiting modernisation. I do not intend to overstress the situation in Glasgow, but the percentage of pre-1940 stock awaiting modernisation is 68 per cent. in north-east Fife, 59 per cent. in Inverness, 50 per cent. in Banff and Buchan, 88 per cent. in Badenoch and Strathspey, and 77 per cent. in Renfrew. Consequently, a sizeable proportion of council housing is still awaiting modernisation.

That will cost money. As the Government have been cutting back on housing support grant to local authorities, it is important that they should take that fact into account when determining the rate fund contribution limits—one of the other main sources of finance available to the majority, but not all, of district housing authorities in Scotland.

I need hardly remind my hon. Friends of the report recently published on dampness by the Select Committee on Scottish Affairs. I know that my hon. Friend the Member for Cunninghame, South (Mr. Lambie) hopes to catch your eye, Mr. Deputy Speaker, to say a word on that subject. The Minister knows that he and I may again be together in Committee to deal with a Bill on housing defects in non-traditional housing, following investigations by the Building Research Establishment. The Government have a duty to take into account all these factors in determining their approach to the rate fund contribution and the availability of funds for housing authorities to carry out their statutory duties.

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In Committee, the Minister questioned the maintenance and repair costs of some local authorities. The maintenance costs of multi-storey buildings and of a number of tenement properties tend to be higher than the average, and that should be more adequately reflected in the housing support grant that is given to local authorities.

We debated the housing support grant earlier this year. In fact, 30 out of the 56 Scottish authorities get no support whatever, and what has been available for Scottish local authorities receiving HSG has been steadily decreasing since this Government came to office.

The Government should be more straightforward in telling Scottish tenants that the Secretary of State will fix their rents as from 1985–86. During this debate, we should like to elicit from the Minister whether the principle of having each authority's housing expenditure fixed by the Secretary of State will open the way for similar proposals in education, social work, cleansing and so on. In our view, it is a principle that should be looked at much more closely before the Bill reaches the statute book. I hope, therefore, that the House will approve the new clause.

I want to take up what my hon. Friend the Member for Glasgow, Maryhill (Mr. Craigen) said about 30 out of 56 housing authorities in Scotland not qualifying for housing support grant in 1984–85. This is happening at a time when the Government have been steadily increasing national subsidies to owner-occupiers by way of tax relief on mortgage interest. With increasing building costs and—until recently—the high rate of interest, the amount of money given in tax relief on mortgage interest has been escalating throughout the period of office of this Government. In 1979–80, the average tax relief on mortgage interest in the United Kingdom amounted to £250 per annum, or £5 a week. In 1983–84, it had increased to £400 per annum, or £8 per week. I say that to draw attention to the discrimination that has been exercised by this Government in favour of owner-occupiers against council and other public sector housing.

I do not object to that. It is Tory party policy, and it has been so since the end of the war. I object to the fact that they have no mandate for that policy in Scotland, even though they have a mandate for it in the United Kingdom. Two thirds of our people in Scotland still live in public sector housing or in private tenanted sector housing, and those people are entitled to a different policy from the one that has been carried out by the Conservative Government in England and Wales. Even Conservative Members must realise that this is discrimination against Scotland and that it is giving more money to the richer areas of the United Kingdom than to the poorer areas such as the industrial parts of Scotland and my area of west central Scotland.

The overall figures show that mortgage interest tax relief this year amounted to £2·5 billion. National subsidies to council tenants throughout the United Kingdom amount to only about one quarter or one fifth of that sum. In the old days, Conservative Members used to say that if one took into account the rate fund contributions, as well as the national subsidy, the equation evened itself out. Even under Labour Governments, the money allocated for housing finance in the United Kingdom was divided more or less equally between owner-occupiers and council tenants. It was Labour policy to give people the opportunity to decide for themselves whether to be a tenant receiving national subsidies and rate fund contribution, or to be an owner-occupier receiving subsidies by way of tax relief on mortgage interest.

:Does the hon. Gentleman agree that one of the most significant reasons for increasing mortgage relief is the vast number of council tenants who have taken advantage of the opportunity to buy their homes? They are no longer tenants, and they are getting mortgage interest relief on their new mortgages.

The hon. Member for Strathkelvin and Bearsden (Mr. Hirst) is a young boy in the House. When he has had more experience, he will know that that is not the argument. We are not arguing whether the owner-occupier should receive tax relief subsidy from the Government. Before the hon. Gentleman pursues that argument, he should remember the recent findings of the Chancellor of the Exchequer, and perhaps next year, in this or a similar debate, he will be asking me to go into the Lobby in support of his revolt against the Conservative Government's policy to stop tax relief on mortgage interest. The hon. Gentleman may be looking for friends next year to defend his people, the owner-occupiers, from attack by the Conservative Government and the Chancellor who are at present attacking council tenants.

I shall not give way to my right hon. Friend because of the guillotine, and I know that others of my colleagues want to speak. I do not mind giving way to a Conservative Member, but not to my right hon. Friend, because I know that I shall agree with him. I hope that he will not mind.

I was saying that, in the old days, Conservatives used to say that council tenants get a rate fund contribution as well as a national subsidy. That was correct. I was saying that under Labour Governments, and even under good Conservative Governments — I say that in inverted commas; the wets are no longer in the Cabinet—that equation was given effect. It was a fair equation for both the owner-occupier and the council tenant. Now we are seeing discrimination against the public sector.

The average rate fund contribution in 1979–80 in Scotland was £82 per house. In the same year the housing support grant was £239 per house, making a total national and local subsidy of £321 per house. In the financial year 1984–85 the rate fund contribution will be increased, in spite of Government policy, to £113 per house, but the housing support grant will go down to £59 per house, making a total national and local subsidy of £172. Despite the rate fund contribution, when the total subsidy of £172 for the council tenant is compared with the £400 per annum given to the average owner-occupier in Britain, my claim of Government discrimination against council tenants can be seen to be justified.

I say again that Conservative Members should be representing the views of the people of Scotland. They are here by their votes and they should be standing with us and attacking their English colleagues who are carrying out the policies in England where they can get away with it because the majority are owner-occupiers. However, they will not get away with it in Scotland, as they will find out in the district council elections next month when Labour will sweep the board again and keep control of most Scottish councils.

Not only are there council houses in Scotland, but over large areas there are many houses owned by the Scottish Special Housing Association and in my constituency by the Irvine development corporation. We were told at the end of January that because of the Secretary of State's diktat, SSHA tenants' rents were increased by an average of £1·10 per week. In my new town of Irvine the development corporation said that it was increasing its rents by £1 per week. It was given a choice by the Secretary of State of increases between £1 and £1·20. Because of pressure from Labour Members on the board — there are still some such members despite the Secretary of State's attempts to remove them at every opportunity and to replace them with Tory lap dogs—the increase was at the lower end of the scale.

Yesterday we received from the secretary of the SSHA a breakdown of rents for the individual areas within our constituency. Irvine has a large number of SSHA tenants and I discovered that the increases range from just over 10 per cent. to just over 12 per cent. That is a 12 per cent. increase in rents when the cost of living has increased only from 4 to 5 per cent. Not only are the SSHA and the Government asking tenants to pay increases in rents to keep them in line with the cost of living, but they have more than doubled them. If the Government are proved correct and the cost of living goes down this year, that discrimination against SSHA tenants will become greater.

In Springside, a mining village, the male unemployment rate is 25 per cent. Many areas have a tremendous problem of long-term unemployment, and Springside is one. There was an 11 per cent. increase in rents. In Dreghorn there was a rent increase of just under 11 per cent. In Kilwinning there was an increase of over 12 per cent. In Stevenston there was an increase of just under 13 per cent. The SSHA also sent me information about its housing in Saltcoats and, although I do not represent the place, many people there think that I do, so I had better mention it as well. There was an average increase in rents from 11 per cent. to nearly 13 per cent.

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The Government are not only discriminating against council tenants in general but they are being particularly harsh towards tenants of the SSHA and the new town corporation. My constituency is fortunate to have solid Labour councillors who will increase their majority after the local elections in May. The council recognises the tremendous economic problems in the area and the problems of long-term unemployment when one man in four is unemployed. In spite of the Secretary of State's diktat that it should increase rents—he is taking power in the Bill to take action against them—it decided to freeze rents during the year. That decision was justified, but it creates a serious anomaly. Council house tenants' rents will be frozen, but people living in the same street in an SSHA house will have to pay an increase of from 11 to 12 per cent. That creates much bad feeling among tenants. I hope that that bad feeling will be directed not against the council but against the Government and the Secretary of State for Scotland.

When the Labour party is returned to power I hope that we shall be as discriminating in favour of council tenants as the Government are in favouri of their supporters—the owner-occupiers who live mainly in the rural areas in south and central England. If we do that, we shall always have a Labour Government and we shall then be able to organise national housing finance on a fair basis to divide equally the money available between both the owner-occupiers and the council tenants.

I want to speak briefly in support of amendment No. 21 in my name, although I whole-heartedly support new clause 2, which was moved by my hon. Friend the Member for Glasgow, Maryhill (Mr. Craigen).

I am against clause 6 because it is an attack on local democracy and, even worse, an attack on the living standards of council house tenants and their families. In essence, the Bill is an attack on local democracy and local freedoms. It virtually dictates to local authorities the amount of money that they can take from their general fund and put into their housing revenue account.

There is no justification for this further intervention by the Government into the affairs of local government. The net effect will be a further attack on the living standards of council house tenants. Unless one of the amendments to clause 6 is accepted, the clause will further escalate council house rents. Underlying the clause is a political doctrinaire attitude. The propaganda that the Minister is trying to put across to owner-occupiers in particular is that council house tenants are receiving far too much subsidy, and that the people who are paying that subsidy are those who own their houses or have mortgages to buy their houses. The underlying philosophy behind clause 6, if it can be called a philosophy, is that there is an inequitable distribution by way of subsidy in favour of council house tenants, and that the clause will correct the imbalance.

The underlying thought in the Minister's mind seems to be that housing authorities are not responsible enough to decide how much should come from the general rate fund and be put into the housing revenue account. If the Minister is suffering from that underlying thought, it is a misapprehension and a delusion, as the Government's statistics reveal. The Minister appears to want to use the old Tory tactic of divide and rule, to set the owner-occupier against the council house tenant, making one lot jealous of the other, and blaming the council house tenant for getting far too much subsidy at the expense of the owner-occupier.

The net effect of the clause will be a further escalation in rent levels of council houses in Scotland. While the Tory Government have been in power—and the figure is already out of date, but it was the most up-to-date figure that was available in the Library—between 1979 and 1983 the average weekly rent in the public sector in Scotland has increased by 100·2 per cent. In other words, since the Laird of Leckie became the Secretary of State for Scotland, and his boss became the tenant of 10 Downing street, council house rents in Scotland have more than doubled. That is a statistical fact which I think not even the Minister would attempt to deny.

Although there have been price increases in general, and wage increases for people still fortunate enough to have jobs, the increase in the retail price index over the same period was only 45·6 per cent., and the increase in the index of average earnings in Great Britain was 60·8 per cent. Rent increase have far outstripped the rate of inflation and the increase average earnings. There is no justification for the draconian increase in rents that has taken place. The net effect of the clause, unless my hon. Friend's amendment or my amendment is accepted, will be further rent increases.

My hon. Friend the Member for Cunninghame, South (Mr. Lambie) dealt with the alleged imbalance between the amount of subsidy that goes to council house tenants and the situation of private sector owner-occupiers. Lest the Minister doubts the source of my hon. Friend's statistics, I wish to back them up, although not with the same figures that my hon. Friend quoted, because they cover a slightly different period. However, they reinforce the general trend and the argument of my hon. Friend. In considering central Government subsidy to local authority housing, it must be borne in mind that over half the housing authorities in Scotland now receive no housing support grant. Indeed, the local authority covering my constituency, Falkirk district council, will receive not a penny from the Government in housing support grant for the second year running, yet the Government can afford to spend millions of pounds on prefabricated houses for people on the Falkland Islands.

Taking Scotland as a whole, the central Government subsidy, or housing support grant, amounts to £123 per tenant. The local authority subsidy to local authority tenants, the rate fund contribution to the housing revenue account, amounts to £98 per tenant, giving a total of £221 per tenant for the financial year 1983–84. As to the corresponding amount of subsidy, namely, mortgage tax relief given to people in the private sector who are buying their houses, my hon. Friend the Member for Cunninghame, South gave an average figure of £400 per mortgagor per annum throughout the United Kingdom. I understand that the total income tax relief for the United Kingdom on mortgage interest is £2,700 million.

I have a Scottish figure that was supplied by the Library. For the record, I should point out that the librarian did not get these figures off the top of his head. The figures that I have already quoted were given in the Scottish public expenditure White Paper, and the Scottish housing statistics 1982, fourth quarter, table 26. The source for the figure that I am about to quote is Hansard, 18 April 1983, at column 50. The Treasury's estimate of the cost of mortgage interest tax relief in Scotland for 1983–84 amounted to £140 million, representing approximately £450 per mortgagor receiving tax relief. The amount of tax relief per mortgagor in Scotland is by any estimate over twice the amount of subsidy per council house tenant. I hope that the Minister will deal with these figures. Nobody dealt with them, or refuted them, in Committee. The Minister knows that they are correct. Indeed, if they are not correct, he will be calling into question the veracity of his own Department.

It is worth pointing out to my hon. Friend that the owner-occupier has the added benefit of not having to pay capital gains tax when he sells his house. That tax benefit is given to him by the Government.

My hon. Friend is right. Many other forms of subsidy are given to owner-occupiers. I am taking this as a rough yardstick to compare the amount of subsidy given to council house tenants and the amount of tax relief of various kinds given to people who take out a mortgage. Even the most biased Conservative Member would surely agree that there is a strong case for a more equitable distribution by having subsidy in favour of council house tenants, rather than discriminating against them, which is the aim of the clause.

As to amendment No. 21, if one adds the amount of housing support grant given to a particular local authority to the authority's estimate of rate fund contribution for the year to which the order would apply, if approved, and divides that by the number of council house tenants in the local authority, the result is a rough measure of the amount involved. Indeed, if all the variables were accurately measured, there would be an accurate measure of the average subsidy per council house tenant. The other variable in the second equation is the average amount of mortgage tax relief.

6.30 pm

Does the hon. Gentleman agree that the fundamental flaw in the algebra of the equation is that it fails to differentiate between the capital value of owner-occupied houses and tenanted accommodation? Therefore, his comparison is specious.

The hon. Gentleman forgets that, once a mortgage has been fully paid, the owner-occupier is left with a capital asset. If there is an imbalance in the equation, and if it was corrected, it would have to be in favour of council house tenants. The hon. Gentleman may have difficulty in understanding algebra. The amount of subsidy per council house tenant is less than the national average subsidy for mortgage tax relief.

The Secretary of State should not have the power to intervene and make an order that virtually dictates to a local authority how much it can take out of the general fund to put into the housing revenue account.

I appeal to the Minister to consider these constructive amendments. He failed to refute the arguments in Committee. If he had one ounce of fairness in him, he would accept the amendments. He pretends to speak for public sector tenants. We all know the background of some of the Government Front Bench spokesmen, from the Secretary of State downwards. Many of them do not know much about council tenants and the difficulties that they face because of the Government's vicious attacks on them. The Government refuse to intervene to keep prices down, but are prepared to intervene to push up rent levels. They intervened today to push up the price of electricity—a further measure to attack the living standards of people on low incomes. I appeal to the House to accept new clause 2 and amendment No. 21.

I wish to speak briefly to amendment No. 20, which asks the Government to take account of the growing housing problem resulting from the simplicity of their housing policy.

Despite a successful council house sales policy, the gap between those who do not have a council house and cannot afford to buy a house and those who have council houses and intend to buy them is becoming wider. As a result council house waiting lists are growing longer. There is nothing in the Bill to encourage me to believe that local authorities can do anything other than watch the council house waiting lists grow.

I shall cite one or two examples from my area. The housing waiting list in Aberdeen has reached 4,700, with virtually no council houses being built. The list is growing steadily year by year. The purpose of the amendment is to require the Secretary of State to take account of that problem. I attended a meeting in Aberdeen earlier this week at which a member of the Tory group fairly pointed out that the Labour group had held down the rates and, as a consequence, had forfeited capital allocation. That had reduced its ability to meet the housing problem. Although I acknowledge that, in a district such as Gordon—where rents have risen fully in accord with the cost of living and are economic—the gap is still growing. The number of people looking for council houses is increasing, while the council's ability to meet that demand is reducing. The Bill can only make the problem significantly worse, unless the amendment is accepted.

I urge the Minister to tell me why he believes that local authorities can meet that growing problem. In all the time that we served together in Committee on the Tenants' Rights, Etc. (Scotland) Amendment Bill he did not answer that question, even though it was asked on numerous occasions by many hon. Members. All we obtained were statistics on how successful was the policy of selling council houses—which was irrelevant to the problem.

The Minister will know that the problem of housing associations, which might legitimately be regarded as able to fill the gap, is that they are grossly over-subscribed and under-funded. I would not be satisfied if I thought that the Minister regarded them as a solution to the problem.

The danger that has emerged in the debate is that Conservative Members appear to believe that selling council houses will meet every need, while Labour Members believe that only the problems of council tenants should have priority. Yet there are people who do not fall into either category. They do not have a council house and they cannot afford to buy a house. Those people form the bulk of the growing waiting list. It is no good saying that Mr. Barratt can satisfy people who have no way of raising a deposit, let alone of paying a mortgage. Many of my constituents feel insulted because their neighbours who have a council house have the opportunity to buy it at a discount, while they receive no help at all. The Bill will do nothing to solve that problem. Indeed, it will make it worse unless the amendment is accepted.

I urge the Minister to recognise that we need a more flexible approach to housing. Local authorities should be able to demonstrate to the Secretary of State the need within their areas, and that need should be taken into account when their rates are being set and their housing allocations calculated.

It might help the hon. Member for Galloway and Upper Nithsdale (Mr. Lang) if I tell him that I expect support from his colleagues who were upset by the rate-capping proposals for England and Wales. The hon. Member for Glasgow, Cathcart (Mr. Maxton) also mentioned that. Twelve Conservative Members voted against the proposals for England and Wales, yet they voted for the proposal for Scotland. They were the right hon. Members for Chesham and Amersham (Sir I. Gilmour) and for Daventry (Mr. Prentice) and the hon. Members for Aldershot (Mr. Critchley), for Harrow, East (Mr. Dykes), for St. Ives (Mr. Harris), for Staffordshire, Moorlands (Mr. Knox), for Rutland and Melton (Mr. Latham), for Brentwood and Ongar (Mr. McCrindle), for Clwyd, North-West (Sir A. Meyer), for Ashford (Mr. Speed), for Congleton (Mrs. Winterton) and for Macclesfield (Mr. Winterton). I hope that they will support us in the Lobbies tonight. We hear much about the West Lothian question, but this is the reverse.

I hope that not only my colleagues will support the amendment, but those Conservative Members who have stated their opposition to such legislation. I hope that they will follow the logic of their argument and vote against the Bill.

I am astonished that the hon. Member for Gordon (Mr. Bruce), who pretends to take a rational position somewhere between wherever the Labour and Conservative parties happen to be, should support the concept of rate fund contribution to housing revenue account. That is essentially what the new clause and the amendments are about. The whole concept of such a rate fund contribution is as outdated as the dogma of Socialism preached by Opposition Members.

It is a concept that gives the impression that it would help less well-off tenants of council houses to have that form of rate fund contribution. It is a fallacy to think that that approach would help those tenants financially in a way in which they would not otherwise be helped. Only ratepayers would be hurt because, if tenants were in receipt of such a low income that they needed the help of the rate fund contribution, they would be entitled to housing benefit. The rate fund contribution would put on the back of the ratepayer costs which would otherwise fall on the back of the Exchequer and the national taxpayer.

Ratepayers who are not well-off and are council house tenants would be hit by the rate fund contribution burden that the Opposition want to place upon them, whereas retired teachers enjoying Members' salaries and living in council houses would enjoy a rate fund contribution. The Opposition are proposing to hurt ratepayers, and their scheme will not help tenants. I commend as a much better example of good sense the policies of the North-East Fife district council, which receives no housing support grant and makes no rate fund contribution to the housing revenue account. No rent increase was introduced by the council this year and there will be no rate increase either.

You have rightly and eloquently reminded the House, Mr. Deputy Speaker, that one of your principal tasks is to protect the rights of Back Benchers. I urge that view upon the Minister and the Government. The more that Back Benchers are given the opportunity to examine the Bill, the weaker it will turn out to be. As my hon. Friends the Members for Cunninghame, South (Mr. Lambie) and for Falkirk, West (Mr. Canavan) have shown, our responsibility is to listen to our colleagues who are working in local government and doing a first-class job in difficult circumstances. Many of them serve on housing committees; they face the realities of the problems that the House is debating, but more immediately so than Members of this place.

If Conservative Members suggest that the Labour party does not put high priority on the needs of the owner-occupier, I recommend that they refer to the record of the previous Labour Government, which was infinitely better in terms of mortgages, rates and grants for home improvements than the record of this Government. I say to my right hon. and hon. Friends that none of us should be modest about the Labour Government's housing record.

There is a great economic depression in Scotland and there are high levels of unemployment. Great problems stem from fuel poverty. However, the Government are inflicting even more hardship on many council tenants by means of the Bill by making respectable by way of legislation a reduction in housing support grant. In addition, they have introduced most subtly yet another reduction in the rate fund contribution to the housing revenue account, which means that the burden of dealing with housing expenditure will be carried in the main by increasing rents.

Although the Government may win the vote this evening and may think that that will solve the problem and further their vendetta against council tenants, I think that they will have to return to this subject before this Parliament concludes. I say that in the knowledge that rent increases, many of them substantial, have taken place in authority after authority. That is certainly so in districts in Monklands and in the part of Strathkelvin which I represent. Council house tenants — good people who place a high priority on good housekeeping and who are canny in every aspect of it—are finding that they cannot meet the demands that are being placed upon them by Government legislation and the Government's hysterical attempt to put almost all the housing burden on rents.

The Government are clearly influenced by economic theory and not by the needs of council tenants and the Bill will be seen as hollow and irrelevant to the housing problems that the Scottish people are facing. The Government's economic theory will fall on its face. I regret that it will be some time before the Government are persuaded that that is so, given their large but temporary majority. I have no doubt that the views that I have expressed are those of the Scottish people.

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I have listened carefully to the arguments of Labour Members in this debate, which were well aired when the Bill was being considered at length and exhaustively in Committee. I have no need to repeat the basic purpose of clause 6, which I think is well known. It will enable my right hon. Friend the Secretary of State for Scotland to limit by order the contributions that local authorities budget to make from their rates towards expenditure on their housing account. We have been prompted to take the new power by our concern that local authorities continue to budget for rate contributions to housing current expenditure in excess of the levels that we believe are necessary or justified. This is unfair to both the ratepayer and the tenant because it pre-empts for a general subsidy on rents resources which would be better spent on the modernisation and improvement of the housing stock.

The Government have been criticised in the past and during the debate for linking rate contributions to current expenditure with housing capital expenditure in this way. Labour Members have suggested that the Government's actions are an attack on local democracy. They must recognise that the Government have an undeniable responsibility to take decisions on the total amount of public expenditure which can be devoted to housing and on the broad division of that total between capital expenditure, to which the hon. Member for Gordon (Mr. Bruce) was referring, and subsidies on current expenditure to ensure that scarce resources are applied where they are most needed. It is my understanding of the remarks of the hon. Member for Gordon that he would find little to disagree with in that.

New clause 2 seeks to ensure that before making an order setting limits to rate contributions my right hon. Friend should have regard to any reductions in housing support grant and to the likely impact on rents.

Will the Minister comment on the statistics that appeared in The Scotsman on 14 December 1983? In comparing the financial year 1979–80 with the estimates for 1984–85, and taking the rate fund contribution as a percentage of income, it showed that the contribution of all the local authorities in Scotland was 14 per cent. in 1979–80. It is estimated that it will be the same for 1984–85, whereas the percentage of income by way of housing support grant will fall from 39 per cent. to 7 per cent.

If the hon. Gentleman will let me develop my argument in my own way, he may find the answer to the question he poses by means of those figures. He has not detracted from the argument that I have been advancing, that resources that are pre-empted for current expenditure are at the end of the day often necessary for capital expenditure. That is the crux of the issue that we are discussing. The level of housing support grant and the impact on rents will be factors to be taken into consideration in setting the appropriate limits to rate contributions, but I do not think that they can be viewed in isolation.

The hon. Member for Glasgow, Maryhill (Mr. Craigen) alleged that the reduction in housing support grant, when taken with the steps that we are taking to limit rate contributions, will remove local discretion in setting rages and lead to unreasonable increases in the average rents paid by tenants in Scotland.

I refute the charges, first, because local authorities will remain responsible for determining their level of expenditure on management, repairs and maintenance, which can have a significant impact on rent levels. For example, Glasgow's expenditure on management and maintenance per house, the highest in mainland Scotland, is nearly one and a half times the average of other authorities. If Glasgow reduced its expenditure per house to the average, it would save the equivalent of rent reductions of £2·20 per a week.

If anyone accuses me of not comparing like with like, let me give an example of neighbouring Labour-controlled authorities. If Stirling reduced its management and maintenance expenditure to the same level as Falkirk, that would permit a reduction in rent of about 75p per week in Stirling. Rate fund contributions are genuinely two-sided and local authorities will retain considerable discretion and responsibility in setting rents.

Secondly, the current average rent in Scotland of £9·87 per week is still only 6·8 per cent. of the average weekly earnings of a manual worker. If one takes that as a proportion of all average earnings, the figure is lower still. I make no apology for drawing attention to the fact that the average weekly in England is just over £14, although the average weekly earnings of a manual worker are slightly below the Scottish level. Those with genuine difficulty in paying rent can qualify for housing benefit. Those hon. Members who argue that it is unreasonable for rents to rise beyond their present level are totally out of touch with the real world.

I shall deal later with amendment No. 21. Amendment No. 20, in the name of the hon. Member for Gordon, seeks to ensure that in setting limits to rate contributions my right hon. Friend must take account of evidence submitted by local authorities demonstrating significant changes in council house waiting lists and other special needs. With respect, I believe that the amendment is muddled, and I shall try to explain why.

Clause 6 will enable the Secretary of State to limit the rate contributions that authorities may make to their current—I stress the word "current" —expenditure on housing, which goes towards management and maintenance costs, together with loan charges on the authorities' historic debt. New building and renovation to meet general and special needs is financed out of capital expenditure. My Department collects information on general and special needs, including waiting lists, in the context of the housing plans that authorities are required to submit. Such information is fully taken into account in determining the capital expenditure consents that we allocate to local authorities at the beginning of each financial year.

An authority's requirement for capital expenditure has no direct bearing on the current expenditure costs that it would be expected to meet in any year from its housing revenue account. Where public expenditure resources are limited as they are at present, and if authorities can be encouraged to reduce rate subsidies from current expenditure, that will free the rate subsidies for current expenditure and provide additional resources for capital expenditure. I understood that that was the argument advanced by the hon. Member for Gordon. On that basis I should expect the hon. Gentleman and his hon. Friends to support us in the Lobby if a Division is called on the new clause.

The hon. Member for Falkirk, West (Mr. Canavan) must be complimented on the ingenuity of his amendment. However, those who have read his amendment and listened to his explanation may still be a little confused, so perhaps I can simplify matters for them. The amendment seeks to ensure that the Secretary of State shall not set limits to an authority's rate contribution if the combined total of that authority's housing support grant and estimated rate contribution per tenant is lower than the average amount of mortgage tax relief per mortgagor in the United Kingdom.

The hon. Gentleman alleged that the Government had given a disproportionate subsidy to owner-occupiers, while reducing the subsidies for council tenants. I do not accept that. In the first place, the hon. Gentleman is not comparing like with like when he seeks to relate the average subsidy per tenant to housing support grant and rate fund contributions, which between them amount to £227 per tenant in the current financial year, with average tax relief per mortgagor.

One must also take into account the rent rebate element of housing benefit, which accounts for £90 per council tenant. In the current financial year, therefore, the total average subsidy per council tenant is £317, whereas the average tax relief per owner-occupier is £246. The hon. Gentleman seeks to compare the average subsidy to council tenants not with the average tax relief for all owner-occupiers but with the average tax relief received by owners with mortgages, which amounts to £432 per mortgagor.

I shall not give way to the hon. Gentleman as I imagine that the hon. Member for Glasgow, Garscadden (Mr. Dewar) wants a little time at the end of the debate in which to tell the House whether he wishes to press the new clause to a Division.

If the average tax relief received by owners who have mortgages is taken as a base, a fair comparison must be with those tenants who receive the rent rebate element of housing benefit, for whom the average subsidy is even higher, at £535 in the current year. Whatever basis is used for the calculation, the argument put forward by the hon. Member for Falkirk, West does not stand up.

I do not accept that council tenants are in some way getting an unfair deal. Substantial sums are being made available by taxpayers and ratepayers in the form of subsidies for council housing. Our concern is that the subsidy from the ratepayers towards rents is already higher than can be justified by need and is pre-empting resources that would be better spent — I refer again to the argument of the hon. Member for Gordon — on modernisation and improvement of the housing stock. That is why we consider it necessary to take the powers in clause 6.

Clause 6 will discourage authorities from taking short-term political decisions to pre-empt scarce resources and to subsidise those with no need of subsidies. The clause will be welcomed by ratepayers. It is fair to tenants, who are themselves ratepayers, it makes economic sense and it is in the longer-term interest of the housing stock. For those reasons, I must ask the House to reject the new clause and the amendments taken with it.

I am glad to have the opportunity to disabuse the Minister. We have no intention of withdrawing the new clause. On the contrary, the Minister's comments have made us even firmer in our intention to press it.

I congratulate my hon. Friend the Member for Falkirk, West (Mr. Canavan)—I do not always agree with him—on his brilliant analysis of the real situation and on the brilliant simplicity of his solution. This whole subject has undoubtedly been bedevilled by the mad way in which over the years the Tory party has played politics with rates, rents and subsidies. In housing, as in other sectors, the Tories have used their friends in the press—whatever Opposition Members say in public speeches, the press is not behind us — to give the impression that the tax evader is somehow a hero while the person who tries to improve his social security benefit is a scrounger; that the person who obtains large tax relief on his mortgage somehow represents the roast beef of old England and the best mutton of Scotland while the person who properly receives housing support from central and local funding is somehow — the Tories have said this themselves — a second-class citizen.

The fairly simple formula adopted by my hon. Friend the Member for Falkirk, West—seeing the Secretary of State for Education and Science arrive in the Chamber, I thought that he had come to explain the algebra to his colleagues in the Government—sets the two factors in their proper relationship. Housing support for rent and rates is not a handout but the proper application of public funds to support housing programmes and should be treated in the same way as tax relief for those buying their homes, especially the less well-off. The figures show, however, that the well-off benefit from Government policy by a factor of two to one compared with the average owner-occupier or council tenant. My hon. Friend has made that clear in stark terms.

The new clause allows that concept to be introduced and I strongly commend it to the House.

It being Seven o'clock, Mr. DEPUTY SPEAKER proceeded, pursuant to the Order [5 March] and the resolution this day, to put forthwith the Question already proposed from the Chair.

Question put, That the clause be read a Second time:

The House divided: Ayes 153, Noes 223.

Division No. 213]



Anderson, DonaldGeorge, Bruce
Archer, Rt Hon PeterGould, Bryan
Ashley, Rt Hon JackHamilton, James (M'well N)
Ashton, JoeHarman, Ms Harriet
Banks, Tony (Newham NW)Harrison, Rt Hon Walter
Barnett, GuyHart, Rt Hon Dame Judith
Barron, KevinHattersley, Rt Hon Roy
Beith, A. J.Haynes, Frank
Bell, StuartHealey, Rt Hon Denis
Benn, TonyHeffer, Eric S.
Bennett, A. (Dent'n & Red'sh)Hogg, N. (C'nauld & Kilsyth)
Bermingham, GeraldHolland, Stuart (Vauxhall)
Blair, AnthonyHowells, Geraint
Boothroyd, Miss BettyHoyle, Douglas
Bray, Dr JeremyHughes, Robert (Aberdeen N)
Brown, Gordon (D'f'mline E)Hughes, Roy (Newport East)
Brown, Hugh D. (Provan)Hughes, Sean (Knowsley S)
Brown, N. (N'c'tle-u-Tyne E)Hughes, Simon (Southwark)
Brown, R. (N'c'tle-u-Tyne N)Janner, Hon Greville
Bruce, MalcolmJohn, Brynmor
Buchan, NormanJohnston, Russell
Caborn, RichardKaufman, Rt Hon Gerald
Callaghan, Jim (Heyw'd & M)Kennedy, Charles
Campbell-Savours, DaieKilfedder, James A.
Canavan, DennisKilroy-Silk, Robert
Carter-Jones, LewisKinnock, Rt Hon Neil
Clark, Dr David (S Shields)Kirkwood, Archibald
Clarke, ThomasLambie, David
Clay, RobertLamond, James
Cocks, Rt Hon M. (Bristol S.)Lewis, Ron (Carlisle)
Coleman, DonaldLewis, Terence (Worsley)
Concannon, Rt Hon J. D.Litherland, Robert
Cook, Frank (Stockton North)Lloyd, Tony (Stretford)
Corbett, RobinLofthouse, Geoffrey
Corbyn, JeremyMcCartney, Hugh
Craigen, J. M.McCrea, Rev William
Crowther, StanMcDonald, Dr Oonagh
Davies, Rt Hon Denzil (L'lli)McKelvey, William
Deakins, EricMackenzie, Rt Hon Gregor
Dewar, DonaldMcNamara, Kevin
Dixon, DonaldMcTaggart, Robert
Dobson, FrankMcWilliam, John
Dubs, AlfredMadden, Max
Dunwoody, Hon Mrs G.Marek, Dr John
Eadie, AlexMarshall, David (Shettleston)
Eastham, KenMartin, Michael
Edwards, Bob (Wh'mpt'n SE)Mason, Rt Hon Roy
Evans, John (St. Helens N)Maxton, John
Fatchett, DerekMeacher, Michael
Faulds, AndrewMeadowcroft, Michael
Flannery, MartinMichie, William
Foot, Rt Hon MichaelMikardo, Ian
Foster, DerekMillan, Rt Hon Bruce
Foulkes, GeorgeMiller, Dr M. S. (E Kilbride)
Fraser, J. (Norwood)Morris, Rt Hon J. (Aberavon)
Freeson, Rt Hon ReginaldNellist, David

O'Brien, WilliamSmith, C.(Isl'ton S & F'bury)
O'Neill, MartinSnape, Peter
Orme, Rt Hon StanleySoley, Clive
Pavitt, LaurieSpearing, Nigel
Penhaligon, DavidSteel, Rt Hon David
Pike, PeterStewart, Rt Hon D. (W Isles)
Powell, Raymond (Ogmore)Strang, Gavin
Prescott, JohnThomas, Dafydd (Merioneth)
Randall, StuartThompson, J. (Wansbeck)
Rees, Rt Hon M. (Leeds S)Tinn, James
Richardson, Ms JoTorney, Tom
Roberts, Ernest (Hackney N)Wallace, James
Robertson, GeorgeWeetch, Ken
Robinson, G. (Coventry NW)White, James
Robinson, P. (Belfast E)Williams, Rt Hon A.
Ross, Ernest (Dundee W)Winnick, David
Rowlands, TedWoodall, Alec
Sheerman, BarryYoung, David (Bolton SE)
Shore, Rt Hon Peter
Short, Ms Clare (Ladywood)Tellers for the Ayes:
Short, Mrs H.(W'hampt'n NE)Mr. John Home Robertson and Mr. Allen McKay.
Silkin, Rt Hon J.
Skinner, Dennis


Adley, Robertdu Cann, Rt Hon Edward
Aitken, JonathanDurant, Tony
Alexander, RichardEdwards, Rt Hon N. (P'broke)
Alison, Rt Hon MichaelEggar, Tim
Ancram, MichaelEmery, Sir Peter
Arnold, TomEvennett, David
Ashby, DavidFallon, Michael
Aspinwall, JackFavell, Anthony
Atkins, Robert (South Ribble)Finsberg, Sir Geoffrey
Atkinson, David (B'm'th E)Fletcher, Alexander
Baker, Nicholas (N Dorset)Fookes, Miss Janet
Baldry, AnthonyForman, Nigel
Batiste, SpencerForsyth, Michael (Stirling)
Bendall, VivianFowler, Rt Hon Norman
Berry, Sir AnthonyFox, Marcus
Biffen, Rt Hon JohnFranks, Cecil
Blaker, Rt Hon Sir PeterFraser, Peter (Angus East)
Bonsor, Sir NicholasFreeman, Roger
Boscawen, Hon RobertGale, Roger
Bottomley, PeterGalley, Roy
Bowden, Gerald (Dulwich)Gardiner, George (Reigate)
Boyson, Dr RhodesGarel-Jones, Tristan
Brandon-Bravo, MartinGlyn, Dr Alan
Bright, GrahamGoodhart, Sir Philip
Brinton, TimGoodlad, Alastair
Brittan, Rt Hon LeonGow, Ian
Brooke, Hon PeterGower, Sir Raymond
Brown, M. (Brigg & Cl'thpes)Grant, Sir Anthony
Bruinvels, PeterGreenway, Harry
Bryan, Sir PaulGregory, Conal
Buck, Sir AntonyGriffiths, E. (B'y St Edm'ds)
Budgen, NickGriffiths, Peter (Portsm'th N)
Burt, AlistairGrist, Ian
Carlisle, John (N Luton)Ground, Patrick
Carlisle, Kenneth (Lincoln)Grylls, Michael
Carttiss, MichaelGummer, John Selwyn
Channon, Rt Hon PaulHamilton, Neil (Tatton)
Chapman, SydneyHampson, Dr Keith
Chope, ChristopherHanley, Jeremy
Churchill, W. S.Hannam, John
Clark, Hon A. (Plym'th S'n)Harvey, Robert
Clark, Dr Michael (Rochford)Haselhurst, Alan
Clark, Sir W. (Croydon S)Havers, Rt Hon Sir Michael
Clarke, Rt Hon K. (Rushcliffe)Hawkins, Sir Paul (SW N'folk)
Cockeram, EricHawksley, Warren
Conway, DerekHayes, J.
Coombs, SimonHayhoe, Barney
Cope, JohnHayward, Robert
Corrie, JohnHeathcoat-Amory, David
Couchman, JamesHenderson, Barry
Cranborne, ViscountHickmet, Richard
Crouch, DavidHicks, Robert
Dorrell, StephenHiggins, Rt Hon Terence L.
Douglas-Hamilton, Lord J.Hind, Kenneth
Dover, DenHirst, Michael

Hogg, Hon Douglas (Gr'th'm)Sainsbury, Hon Timothy
Holland, Sir Philip (Gedling)Sayeed, Jonathan
Holt, RichardShaw, Giles (Pudsey)
Hooson, TomShaw, Sir Michael (Scarb')
Hordern, PeterShelton, William (Streatham)
Howarth, Gerald (Cannock)Shepherd, Colin (Hereford)
Howell, Rt Hon D. (G'ldford)Shepherd, Richard (Aldridge)
Howell, Ralph (N Norfolk)Shersby, Michael
Hubbard-Miles, PeterSims, Roger
Hunt, John (Ravensbourne)Smith, Sir Dudley (Warwick)
Hunter, AndrewSmith, Tim (Beaconsfield)
Hurd, Rt Hon DouglasSoames, Hon Nicholas
Jessel, TobySpeller, Tony
Johnson-Smith, Sir GeoffreySpencer, Derek
Jones, Gwilym (Cardiff N)Squire, Robin
Jones, Robert (W Herts)Stanbrook, Ivor
Joseph, Rt Hon Sir KeithStanley, John
Kershaw, Sir AnthonySteen, Anthony
King, Roger (B'ham N'field)Stern, Michael
Knight, Gregory (Derby N)Stewart, Allan (Eastwood)
Knowles, MichaelStewart, Ian (N Hertf'dshire)
Lamont, NormanStokes, John
Lang, IanSumberg, David
Lawler, GeoffreyTapsell, Peter
Lawrence, IvanTaylor, John (Solihull)
Lee, John (Pendle)Taylor, Teddy (S'end E)
Leigh, Edward (Gainsbor'gh)Terlezki, Stefan
Lilley, PeterThomas, Rt Hon Peter
McCurley, Mrs AnnaThompson, Donald (Calder V)
MacKay, Andrew (Berkshire)Thompson, Patrick (N'ich N)
MacKay, John (Argyll & Bute)Thurnham, Peter
Maclean, David JohnTracey, Richard
Major, JohnTrotter, Neville
Mather, CarolTwinn, Dr Ian
Mayhew, Sir Patrickvan Straubenzee, Sir W.
Miller, Hal (B'grove)Vaughan, Sir Gerard
Monro, Sir HectorViggers, Peter
Moore, JohnWaddington, David
Morris, M. (N'hampton, S)Wakeham, Rt Hon John
Moynihan, Hon C.Waldegrave, Hon William
Murphy, ChristopherWalden, George
Neubert, MichaelWalker, Bill (T'side N)
Nicholls, PatrickWard, John
Oppenheim, Rt Hon Mrs S.Wardle, C. (Bexhill)
Page, Richard (Herts SW)Watson, John
Parris, MatthewWatts, John
Percival, Rt Hon Sir IanWells, Bowen (Hertford)
Pink, R. BonnerWells, John (Maidstone)
Pollock, AlexanderWheeler, John
Powley, JohnWilkinson, John
Proctor, K. HarveyWinterton, Mrs Ann
Raison, Rt Hon TimothyWinterton, Nicholas
Rathbone, TimWolfson, Mark
Roberts, Wyn (Conwy)Wood, Timothy
Robinson, Mark (N'port W)
Roe, Mrs MarionTellers for the Noes:
Rossi, Sir HughMr. David Hunt and Mr. Archie Hamilton
Rumbold, Mrs Angela
Ryder, Richard

Question accordingly negatived.

Clause 1

Basis Of Apportionment Of Needs Element Of Rate Support Grants

I beg to move amendment No. 1, in page 1, line 12, leave out from 'above' to 'either' in line 15 and insert

'the Secretary of State may, in prescribing a basis for apportionment under either of those paragraphs or in providing for apportionment under paragraph 3 above, have regard to the extent to which, in his opinion,'.
The amendment is of a technical and drafting nature and clarifies a power which was welcomed by all parties in Committee. The clause aims to permit my right hon. Friend, when apportioning any general abatement of rate support grant arising from local authority overspending, to relate the penalties of individual authorities to the extent of their overspend, measured against the guidelines issued by him. The statutory powers governing the distribution of the needs element of rate support grant are set out in part 1 of schedule 1 to the Local Government (Scotland) Act 1966, a copy of which is usefully reprinted in the schedule at the back of the Bill.

Paragraphs 1 and 3 provide for apportionment on the basis prescribed, and during the years up to 1983–84 the annual rate support grant order contained schedules prescribing a basis for distribution. Paragraph 3 contains powers for apportionment of a prescribed amount of needs element to such classes of authorities, or to any such authority, as may be prescribed. The latter power was used in the needs element of distribution for 1984–85, and we expect to continue to use it in the future. The change was a consequence of the use of the client group assessments of relative need for the distribution of the needs element of the rate support grant.

The amendment seeks to ensure that where the needs grant is distributed on the basis prescribed in earlier years, or by way of the prescribed amount for each authority, as in 1984–85, any general abatement can be apportioned among authorities in proportion to the overspend. The House will accept that the amendment is proposed in the spirit of the clause, which was welcomed by the Committee, and seeks to remove doubt. I ask the House to approve it.

The Minister read his script with an air of quiet triumph, safe in the assumption that few people would understand the gobbledegook with which he favoured us.

The hon. Gentleman said that clause 1 was welcomed, but that overstates the case. He assumes that because the Committee did not divide against it. We believed that there was some virtue in the new distribution formula for a general abatement. But I do not want the word "welcomed" to encompass any sly suggestion that we see virtue in general abatements. They are unpleasant and have been over-used of late by more than one Government. That should save the Minister from making another tiresome party political point. They have become endemic in recent years and I hope that they will be curbed.

I am prepared to accept that it is a tidying-up amendment and does not alter the general principle of clause 1: that the apportionment of general abatement should be on the ratio of an individual local authority's share of the overspend which has attracted that abatement. On the understanding that it is in line with that, and merely enables that object to be achieved, I shall not occupy the House's time further.

Amendment agreed to.

That amendment having been agreed to, I will direct the Public Bill Office to make the necessary consequential alteration to schedule 1, which sets out the law as amended.

7.15 pm

I beg to move amendment No. 2, in page 2, line 10, leave out clause 2.

This involves a more substantial matter. The amendment seeks to delete clause 2. It is perhaps a little unusual that such a radical and fundamental amendment should come before the House on Report, especially as we debated it fully in Committee. There are special reasons for that, and I make no apologies for it. I am grateful to those in charge of selection that we can debate the matter again.

Clause 2 is innocently entitled:
"Procedure under section 5 of the Local Government (Scotland) Act 1966."
But behind that facade hides a nasty proposal, of constitutional significance, which is of importance to anyone who is interested in the proceedings of the House.

Section 5 of the 1966 Act empowers the Secretary of State to make a judgment at the beginning of the financial year about the estimated budget of a local authority. If, in accordance with vague and ill-defined criteria, the Secretary of State concludes that the estimated expenditure is excessive and unreasonable, he is entitled to ask the House to reduce the rate support grant settlement during the year to deal with what he considers to be extravagant budgeting by the local authority.

We have had a long and sad series of debates on this matter. They have always been conducted on the basis that there was an order for each local authority under threat, and that at the end of the debate there would be an opportunity for the House to pass judgment on each local authority's case.

Clause 2 seeks to allow the Secretary of State to take more than one local authority — perhaps four, five or six, if it is a busy year—and put them all in one order so that only one vote will be taken. That is a thoroughly bad proposition, which has pricked the consciences of a considerable number of Conservative Members.

The matter has had a long history. The 28th report of the Joint Committee on Statutory Instruments considered the matter in 1980–81. There were excessive and unreasonable orders against both Dundee and Stirling and it was proposed that they should be taken together. Under the chairmanship of our then colleague, Mr. Bob Cryer, the Committee considered the matter and, to use the rather quaint phraseology of the report, it concluded that taking the orders together was an "unexpected use" of the powers conferred on the Secretary of State under section 5. No further attempt was made and subsequent orders have been taken separately — as, for example, last year when, unfortunately, four local authorities attracted the adverse attention of the Secretary of State. Each was the subject of a separate debate.

It is fundamentally important to the procedures of the House and the House's ability to scrutinise what the Executive is doing that the option of taking each order separately and voting on each separately should be preserved. I stress that this is an option, as I am not suggesting that we want to take the orders separately every year. We might, by agreement, take them together. That is a matter of common sense.

There is no doubt that excessive and unreasonable expenditure orders are highly controversial. There is also no doubt that they raise the strongest possible feeling among local authority representatives in the area that is to be penalised. By definition, we do not get such an order until there has been a breakdown in negotiations and relations between the local authorities and St. Andrew's house. It is only then when, by definition, at least in the local authority's mind, there will be a strong case to put forward that a Minister will come to the House with an order asking for the House's sanction to take the unusual and serious step of docking rate support grant during a financial year.

In those circumstances, it is common courtesy—I put it no higher than that at the moment—that the local authority should have the opportunity to put its case and have it properly debated and examined in the House. That is implicit in the machinery of section 5 of the 1966 Act. The House will remember that it requires the Secretary of State to consult the local authority concerned and to consider its representations. When he brings his report to the Floor of the House, it is required by statute that he provides copies of those representations, because it is essential, since the Secretary of State's considerations seem to amount to a kangaroo court, that the court of appeal, which is the House of Commons, should be supplied with information about the case for the defence and have a proper, opportunity to consider it.

It would make a farce of the statutory requirement to print such representations if we had just one debate on five or six cases and if all the problems that they represented were bundled together in one unsatisfactory and confused debate. We are right to protest about that. I know that the Minister will say that he is a nice chap who went to a good school and would not do anything so unreasonable. He has tried to shelter behind that argument at various stages of our discussions. I am grateful that we have recently had a good deal more than the minimum amount of time for such debates. If, unfortunately, we have to examine such orders, I hope that that type of agreement will continue. However, we are being invited to enable a Government, if they want to, to say, "You will get one and a half hours to debate all the authorities." When deciding whether to give a nod of approval to clause 2 or to accept amendment No. 2 which deletes it, we must consider whether it is right to open up that possibility. The Government are the masters of the management of the House, and if they have a statutory power to limit us to one and a half hours we cannot rule out the possibility of that being done. It is dangerous to open up that possibility. If the Minister's defence is that that will never happen, why do we need to put on the statute book a power that will allow it?

It would be fundamentally wrong to have the possibility of just one order on which the House can debate, ventilate and examine the case of local authorities that are under threat and in open conflict with the Scottish Office. I am not raising a red herring or a transitory fear, because we know from the 28th report of the Joint Committee on Statutory Instruments for 1980–81 that Scottish Office officials, in evidence to that Committee, made it clear that in 1980–81 it was being considered whether to put five or six local authorities in one order.

If the Government were so unreasonable as to exercise their right to expect the House to debate the cases of five or six authorities in one and a half hours, the House could do nothing about it. That eloquently makes the case against opening up such a possibility. It would mean that local Members of Parliament would not get a hearing in the debate, as only two or three Back Benchers would be able to speak, even if right hon. and hon. Members were disciplined and brief. Many right hon. and hon. Members would then have to explain to their local authorities and constituents why they did not open their mouths. That would be extremely bad for the House.

The Minister is furiously pulling faces at me. Does he deny that one of the points of clause 2 is to make it possible for five or six orders to be taken together and, if the Government wish, for them all to be debated in one and a half hours? If that is what clause 2 allows, there is a strong prima facie case against it.

The hon. Gentleman seems to be suggesting that clause 2 will do hon. Members out of a chance to speak about their local authorities. In so arguing, he seems to be suggesting that all local authorities are represented by exactly the same number of Members of Parliament. Last summer we had four authorities in orders before the House—Glasgow district council, which is represented by 11 Members of Parliament, Kirkcaldy, which is represented by two, and Stirling, which undoubtedly has one. In that context the hon. Gentleman's argument does not hold up, because Glasgow would be represented by 11 Members of Parliament speaking in one and a half hours and Stirling would be represented by only one Member of Parliament speaking in a debate of one and a half hours. The hon. Gentleman must see that a more extended debate of the type that we had in Committee is fairer.

Of course I agree with the Minister that a more extended debate is fairer and that if we agree on a full day's debate, that is more satisfactory. We object to putting on the statute book a power that will allow a future Secretary of State to say, "You will have one and a half hours for Glasgow, Kirkcaldy, Stirling, uncle Tom Cobleigh and all." I do not doubt that it will often be possible to get something more satisfactory, but why should we give the Secretary of State powers which might mean that we have no room for manoeuvre?

The more important point is that if we have only one order we have only one vote. I find it difficult to know what to say about that; it is so monstrous. The point about excessive and unreasonable expenditure orders is that the Secretary of State carefully exercises his judgment in the special circumstances of each local authority and makes a decision about whether they have been irresponsible. That is a subjective judgment which comes to the House because it is important that final authority lies with us. Built into that, by definition, is the proposition that the House may decide that for local authority A the Secretary of State is justified but that for local authority B he is not. With separate orders we can sanction penalisation and the clawing back of rate support grant in one case and not in another.

However, if we put clause 2 on the statute book, and if we are then faced with one order covering four or five local authorities, there is no way in which we can select those which we think deserve to be punished by the Secretary of State for their conduct and those which do not. We are left with a blanket situation which makes a mockery of any attempt at parliamentary scrutiny. That cannot be right, and I do not believe that the Under-Secretary, in his private moments, would for one moment pretend that it was. I do not understand why we are being faced with such a ludicrous proposition, which strikes at the whole ability of this House to do its duty and protect local authorities in Scotland. It is beyond my comprehension why we should be asked to do this.

7.30 pm

I have re-read during the course of the day the report of the Committee stage of the Bill. The Under-Secretary made no attempt to produce a coherent intellectual defence of something which makes a farce of the already inadequate scrutiny which the House procedures allow on matters of this kind.

There is no doubt at all that for many people these orders and the whole use of section 5 of the 1966 Act represent arbitrary authority. This is seen by many people as having constitutional significance and importance—as a shift in the balance of power between central Government and local government. There may be differing views about that, but certainly it is a matter of serious import which will have enormous implications for authorities when questions arise.

In that situation, some of us might feel that even an order on which there will be whipping on a United Kingdom basis and something will be pushed through in a one-and-a-half hour debate is a very flimsy safeguard in terms of scrutiny by the legislature of the actions of the executive. But, if we are going to undermine what little there is by allowing one order and only one vote, with no differentiation, I believe that we shall do a disservice to the parliamentary system of which we are part, and certainly a disservice to our constituents. I therefore hope that he will think very hard about that.

I do not need to tell the House that this is a clause which has attracted criticism from everyone, I think, except those on the Government Front Bench. I do not know of anyone outside the Conservative parliamentary group who has tried to support it. COSLA—I think very properly—has referred to the fact that it will lead to confused debates and detract from detailed consideration of the cases of individual local authorities. Glasgow district council, more trenchantly, and I think very fairly, said that it was making a mockery of parliamentary control.

To be fair, the hon. Member for Cunninghame, North (Mr. Corrie)—he is not present at the moment but was here earlier in the debate—made it perfectly clear on Second Reading that he had grave reservations about what the Government were trying to do. He ended by saying, rather hopefully:
"I genuinely hope that my right hon. Friend and other Ministers will consider that matter in Committee." [Official Report, 5 December 1983; Vol. 50, c. 75.]
They did, but of course to no avail, because the Government used their all-too-obedient majority on that Committee to force the matter through.

Sadly, if this had been a debate in Scotland, totally divorced from the rest of the United Kingdom in terms of local government structure, without any other consideration, I believe that we would not have been faced with this clause. I very much fear that the reason we have it is that in England, where there is an enormous multiplicity of local auhorities, there would be a genuine procedural difficulty in having 70 or 80 orders placed before the House in one financial year. Therefore, for purposes of expediency, this clause was introduced into the English Rates Bill and, because it was there, the Scottish Office fell into line. Thus, we have been lumbered with something which I believe is damaging and dangerous, and totally unnecessary in the Scottish context.

In practical terms, this is certainly not as important as the rate-capping or the rate fund contribution clause, but I cannot remember—I say this with consideration—any clause in my time in the House for which I have seen less of a case. I cannot for the life of me understand why we have it. It is so thoroughly bad that I hope that the Minister, even at this late stage, will think again, stay his hand and promise to reconsider this matter. It is a discredit to the House of Commons. It makes us something of a laughing stock. It certainly means that those of us who have to stay on the Opposition Benches temporarily, or those who try to defend their local authorities or see that they get justice at some future date, are being placed at a hopeless disadvantage. Expediency is being allowed to overrule principle in a most fundamental and, in my view, repugnant way.

I must first apologise to my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) for guffawing at one point during his speech. I think perhaps he did not understand why I did so. It was because he said that the conscience of Conservative Members had been pricked by this matter. I guffawed because, of course, I do not believe that any of them has a conscience.

My hon. Friend the Member for Garscadden is right in a sense, however. There is some concern among certain hon. Gentlemen with some low political cunning, because they have worked out what the implications of a one and a half hour order with five or six local authorities in it could mean for them in terms of voting. As these local government measures start to bite on local authorities, as the Conservative members of local authorities make clear to their Members of Parliament their views on this legislation and the action that the Government are taking, and as, even more specifically, the electors of Conservative Members begin to make clear in local authority elections what they think of this legislation and this Conservative Government, hon. Gentlemen will possibly find themselves in a situation in which one of their local authorities is on the list—that in fact Bearsden and Milngavie or Strathkelvin or Eastwood is on the hit list.

My hon. Friend keeps referring to "hon. Gentlemen" when there is, in fact, only one hon. Gentleman present on the Government Benches. The entire Tory party, other than the paid Front Bench, has stayed away. I beg my hon. Friend to be accurate.

I like to talk about ghosts, or to ghosts. They are somewhere about, I presume.

One of their local authorities—it could very well be the Stirling district council—might be on the hit list. Let us suppose that with all these Left-wing, Marxist local authorities there are five on a hit list, to be dealt with in a one and a half hour debate, with a vote at the end of it. We have Strathclyde, Glasgow district council, Dundee, Stirling and Bearsden and Milngavie. It is unlikely, but not impossible. After all, Bearsden and Milngavie has the second highest average domestic rate payment of any local authority in Scotland, one of the highest payments in terms of housing costs, so it is just possible that it will be on that list.

If that happens, what will the hon. Member for Strathkelvin and Bearsden (Mr. Hirst) do? First, he will have difficulty in getting into the debate, because all the Labour Members from Strathclyde, all the Members from the Glasgow district and the two Members from Dundee will want to get into the debate. The hon. Gentleman may have difficulty getting into the debate in the first place, but he and all his hon. Friends will find, at the end of the debate, that they are asked to vote. They will want to vote against these Marxist, Left-wing district councils and regional councils, but they will also have to vote against the Tory district council of Bearsden and Milngavie.

I hesitate to remind the hon. Gentleman—because I know that it will vex the hon. Member for Glasgow, Garscadden (Mr. Dewar) — but when we had a chance to vote, on separate orders, the prospect of that 11.30 pm train seemed enough not to give some of us the chance of voting against the extravagance of some Left-wing councils. In practice, if such a debate were to occur on a Thursday evening, previous examples suggest that it certainly would not result in a vote.

I assume that the hon. Gentleman will now have to sit out the whole of my speech. After all, he will find it difficult to leave the Conservative Back Benches totally bare. However, if he listens a little longer, I shall come to that point. He and the hon. Member for Strathkelvin and Bearsden may well have to vote against their local and district authorities, and all the Conservative councillors will not be very happy about that. Therefore, there is a certain amount of low cunning in the provision. It is an attack on democracy. Indeed, the whole Bill is an attack on local democracy, and the clause takes it one stage further. It is an attack on the legislature's right to scrutinise Government action, and as such the Government are limiting democracy even more.

My hon. Friend the Member for Garscadden said that he could not understand the reason for the clause. Unfortunately, I can understand why such legislation is introduced, particularly in a Scottish Bill. The simple fact is that the House finds it extremely difficult to accommodate the Scots with separate legislation and orders. The Scots are given insufficient time for their legislation. Not enough Question Times are given to Scottish affairs and we are not given enough time to debate our issues.

The Minister shakes his head, but the Scots have to ask questions covering 10 different subjects during Question Time, whereas our English colleagues have separate Question Times for separate subjects. The Report stage of the Bill is limited to one day, whereas the equivalent English legislation is given two days. Next week and the week after, three days, I understand, are to be given to the Report stage of the London Regional Transport Bill. That is an important Bill and it should be scrutinised properly, but to compare London Transport or one part of England with local government and the attack on democracy throughout Scotland is unfair.

I gather that we are debating the Bill tonight rather than last night or the night before simply because the Secretary of State for the Environment wants to parade his ego on "Question Time" tonight. The debate is being held tonight only because he wants to appear on that programme. That is disgraceful. [Interruption.] One day perhaps I shall parade my ego on "Question Time", but that is another matter.

I see that the hon. Member for Strathkelvin and Bearsden has entered the Chamber. If he is still in Parliament after the next bit of legislation, he will, I hope. represent one of the Glasgow seats once we have brought Beasden and Milngavie into Glasgow district.

7.45 pm

That is true.

There is insufficient time for Scottish business. In addition, the time that we are given is resented by other hon. Members. We all know how our colleagues resent it when Scottish business is being considered. We get remarks about how it is the Scots again, and English Members ask why the House is not dealing with this or that rather than with the Scottish matters. If the Government believed in proper Scottish legislation, carried out close to the Scottish people, by the Scots and for the Scots, and in genuine democracy, they would satisfy the clear wish of the Scottish people to have an Assembly in Scotland. That Assembly would be elected by the Scottish people. There would be 140 Members representing Scottish constituencies and the true wishes of the people of Scotland, rather than, as under this Government, a small minority of them. The Assembly would represent the majority of Scottish people and it would pass legislation.

I can see that you are beginning to get slightly nervous, Mr. Deputy Speaker, that I may be drifting a little wide of the amendment.

I should be very interested to know why the hon. Gentleman thinks that England should have nothing to do with Scotland and that Scotland should have nothing to do with England. He is wearing a badge in support of the GLC. What has that got to do with Scotland?

I am wearing the badge because the attack on the GLC is part of the attack on local democracy. While I am part of the United Kingdom Parliament, I shall defend local authorities from attack, wherever they may be.

I know that to talk about an Assembly is to drift slightly away from the subject, but the point is that the Scots are given insufficient time and the House is not prepared to allow us time for proper scrutiny of Scottish matters. If that is the reason for the clause, both sides of the House should be considering how to ensure that there is proper time for such scrutiny. That can best be done by ensuring that there is an Assembly in Scotland that can properly scrutinise Scottish affairs.

If there is such a chronic shortage of time when it comes to Scottish Members scrutinising such important legislation, why was only one Opposition Member present at the last sitting of the Committee and why was he left to carry out that scrutiny single handed?

I did not serve on that Committee, but I can understand why some of my hon. Friends who spent sitting after sitting being quite unable to get across the majority view of the Scottish people—because the rules of the House ensure that the minority party in Scotland has the majority in Committee—may have felt so frustrated that they decided not to attend. However, I do not think that that was the case. I think that some were ill, and some had other reasons for not being there. Nevertheless, I could understand it if they felt frustrated, because the majority party in Scotland is in a minority in Committee and thus is unable to carry out the wishes of the Scottish people.

If we had a Scottish Assembly there would be proper scrutiny of Scottish legislation and we would be able to enact the legislation that the majority of Scottish people want, instead of having to suffer the legislation that is enacted with an English majority against the wishes of the Scottish people as expressed at the last general election, and at the district and regional elections. At election after election, the Scottish people have rejected the Conservative party. The best way of ensuring that the Conservative party's wishes are not carried out is to have that Assembly. I shall vote with my right hon. and hon. Friends to remove this iniquitous clause from the Bill, as to do so is to take at least one step towards ensuring proper scrutiny of Scottish matters.

I have several worries about the clause, the first of which is due to the fact that I have a very old-fashioned view about Acts of Parliament. I was interested to hear the comments of my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar). He said that at some stage in our deliberations tonight the Minister might say that he had no intention of using clause 2 in the way that some of us think he might do so. As I have said, I am a bit old-fashioned about Acts of Parliament. A provision should not be in a Bill unless the Minister intends to use it.

I well remember that when the hon. and learned Member for Perth and Kinross (Mr. Fairbairn) was Solicitor-General for Scotland he said at the Dispatch Box that he, as a Law Officer of the Crown, could promise us that the Government would never use a certain section in an Act. The hon. Member for Grantham (Mr. Hogg), who, like his hon. and learned Friend, is a legal practitioner, said that that was the worst comment that he had ever heard from a Minister, because the law is the law, and if it is not to be put into practice it should not be written into a statute. My main concern about this matter is that if this is not put into effect the whole practice of law-making is called into disrepute.

I might be able to reassure the right hon. Gentleman. The intention of the Government is to use the clause if the circumstances warrant it. As I said in Committee, and as I shall say again later, we shall use it where it is reasonable to to do in the light of the actions of various authorities. At this stage, not knowing whether there is to be selective action, what authorities there will be, and what the similarity will be, I cannot give an undertaking whether the clause will or will not be used in a particular area.

I am glad to hear the Minister being so forthcoming. When my hon. Friend the Member for Garscadden made a similar point the Minister intervened, but he did not satisfy us. This is a matter of considerable concern to all of us. My main objection to the Bill is a purely practical one. We cannot have a proper discussion of local authority questions if part of the Bill is put in this way.

Many of us feel that the Secretary of State has denied local authorities their rights. Rate capping is a denial of the rights of local authority representatives and the people whom they are privileged to represent. Members of Parliament will be denied their right to put forward, on behalf of their constituents and their local authorities, their particular point of view. I know that the Minister's hon. Friends from south of the border took some exception to the measures that have been passed in the last few days, but knowing the record of Scottish Conservative Back Benchers I doubt whether any of them will say a word, or vote, against this measure.

It is conceivable that the Minister will take exception to what is being done by the Glasgow district council, by Lanarkshire or by Stirling. Those areas account for about 20 Members of Parliament, and all of them, with the exception of the hon. Member for Stirling (Mr. Forsyth) and the right hon. Member for Glasgow, Hillhead (Mr. Jenkins), are Labour Members of Parliament. We would have an hour and a half to debate the order. We would have to allow for the two Front Bench speakers, who, if they are kind to Back Benchers, will take up 20 minutes. That will leave 70 minutes, of which only 35 minutes will be for Opposition Back Benchers to put their case. Eleven hon. Members represent the Glasgow area, and if the right hon. Member for Hillhead or my right hon. Friend the Member for Glasgow, Govan (Mr. Millan) or even I chose to exercise our rights as Privy Councillors and speak we might talk for quite some time. I hope that we should not do so, but there is that possibility.

There is also the practical difficulty that the speakers would have to be called from alternative sides of the House. There is not a Conservative Member for Glasgow or Lanarkshire, and there is only one Conservative Member for Stirling. If we all wanted to say something, we should get only a minute and a half each. That, in purely practical terms, is one of the reasons why I object to the clause. As I said earlier, this is a House of Commons matter, and the House of Commons should express a view and uphold the traditional rights of its Members to put a point of view for their constituents. This cannot be done if the clause is allowed to remain in the Bill.

I do not normally talk on matters of rating, local government and housing, but the Report stage of this Bill gives us an opportunity to discuss such matters. The average lay Member, as opposed to the specialist in local government or housing, has the chance to give Parliament's view of the Bill. My hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) is right. This clause is a democratic monstrosity, and a disgrace to the party who brought it in, to the Conservative Members who have sat silent while the Government have introduced it for their convenience, and to the institution of Parliament that we serve.

My right hon. Friend the Member for Glasgow, Rutherglen (Mr. MacKenzie) made a valid point about the sheer technical problem facing us. I agree with my hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) about the lack of time for Scottish affairs. However, we do not need these technical arguments. This proposition in itself is a constitutional monstrosity. It is disgraceful that while in English and Welsh matters a number of Conservative Members have protested about recent Government action and the continual drift towards centralisation and extending Government power, no Scottish Conservative Member has complained about this Bill. In almost every action taken by the Government since they came into power five years ago, they — the Government that boasted about rolling back the powers of the state — have in every action, in all legislation, extended the powers of the state.

We see that every day on our television screens with the practices of the protective arm of the state, and its provocative attitude. We are seeing it here because this clause is a further attempt to buttress the malevolence of the Bill towards the freedom of local authorities in financial and other terms by limiting their opportunities to protest to the House of Commons. That is an exact parallel to what we see happening to the pickets on our television screens.

What I am saying is true in any event. That is why the silence is so terrible. Whether the Labour or Conservative parties are in power, as a unitary state, if we do nor have the checks and balances that come from local government, we are heading towards a highly centralised authoritarian political structure. It becomes a matter not only for local democracy but for national democracy. We are above political arguments—they are not the important ones.

If local authorities are treated in this way by a Government who limit their powers, they will expect us to advocate their position in the House of Commons. Even if there were only one Tory in Glasgow—which there is not—and a Labour Government were taking this action against Glasgow, I should expect that Tory to participate in putting up the case for that local authority. All of us know that our function is to be not only political animals but the last line of defence for our constituents and the areas that we represent.

It is no use talking as the Minister did about the relative numbers of Members of Parliament who might be available — 20-odd for Strathclyde or whatever. The problem is that that local area may be left without representation because all authorities are put into the one portmanteau of an hour and a half.

8 pm

Whatever the political complexion of the hon. Member or the local authority, an authority can be left without representation, as happened recently when four authorities were considered by this holy court.

We are talking about a matter of intense importance for local and national democracy. The issue involves the representative nature of our constituency and area structure. The clause cuts the power of the tongue. The terrible thing is that the clause is introduced so casually in a Bill dealing with rating and valuation. The Government have slipped in a major constitutional change which is central to local and national democracy and to parliamentary control.

Never since 1812 and the time of Sidmouth and Castlereagh has such a succession of measures been introduced to whittle the power of the individual Member to represent the people and the power of bodies outwith the House to act as a balance and check upon central Government. Such power, when not written into legislation, can be seen in the Government's activities. It applies to the Government's behaviour towards trade unions and local authorities. Now it is true in their behaviour towards individual hon. Members.

The measure is a monstrosity, conceived out of malice and put forward in a hidden silence. It has been smuggled into the Bill. It is shameful that only one hon. Member representing the Conservative party in Scotland is here even to listen to the argument. The hon. Member for Stirling has not yet dared to defend or, as he should, attack the proposition. I fear that the hon. Gentleman is here because he has no means of contacting his hon. Friends outside to ask them to come in and relieve him. That is a great shame. We feel sorry for him. He must remember that his area, too, could be under attack. If his area were subsumed within a mass of orders to be taken in one and a half hours I hope that he would have the courage to say, "I cannot leave my area unrepresented. I must challenge the Government." Under the proposal he will not have the opportunity.

We must remember what Pastor Niemoller said, that they
"came for the Communists and I didn't speak up because I was not a Communist. … Then they came for the trade unionists and I didn't speak up because I was not a trade unionist … Then they came for me … By that time there was no one to speak up for anyone."
I say to the Government, please take care of what you are doing to the democracy of this country.

I make a brief intervention to prove that the fish are biting after all. We have heard the most exaggerated argument conceivable. It is nonsense to suggest that if orders are made against Glasgow, Kirkcaldy, Stirling, Dundee or any of the other extreme councils under which we have to suffer, it would be necessary for every Scottish Member to participate in the debate to defend those authorities' interests.

I remember that on a similar occasion the biggest difficulty for hon. Members on both sides was having to say something different in the time allocated. The arguments were the same. One advantage of restricting the time available and reducing the opportunities for hon. Members to jump up and repeat the same arguments is that the ratepayers might benefit, not only because the Secretary of State will be curtailing those authorities' expenditure, but because ratepayers will have to pay for the large delegations of councillors who sometimes swell the Strangers Gallery to watch hon. Members perform. We should not then have to watch hon. Members perform for the sake of such delegations.

That is a disgraceful attack upon local councillors who come here. The hon. Member for Stirling (Mr. Forsyth) reinforces my argument that local authorities cannot properly lobby their Members of Parliament because Parliament is too far from them. If we had an Assembly in Edinburgh, they would find it easier and cheaper to lobby us.

I am always happy to see councillors in my constituency. It is odd that they find it necessary to come to London to consult me in the House when more time is available when I am in the constituency. I understand that in the case that I have in mind the councillors combined their visit with a meeting at county hall with the Labour group to discuss other matters. I have no doubt that they made suitable recompense to the ratepayers since they were making that journey for two purposes.

The serious point is that every local authority in Scotland that has deliberately gone out of its way to try to frustrate the Government's economic policy and deliberately taken a path of extravagance and overspending has come up with the same arguments. They argue that financial cuts result in cuts in services. In all cases, including Stirling, we are still waiting for the cuts in services. Stirling had a surplus at the end of last year.

The notion that 11 hon. Members should stand up to put the case for Glasgow is absurd. The argument is nothing to do with constitution, but everything to do with putting on a show for the media and for Labour Members' friends who have come down for the show. The argument has little to do with Scottish ratepayers' interests.

I wonder whether the hon. Member for Stirling (Mr. Forsyth) was putting on a show before the Select Committee on Scottish Affairs when he took up so much time moving amendments to the report on Scott Lithgow.

The difference is that Select Committee proceedings are in private, so there is no question of putting on a show. Obviously some hon. Members feel that they are not bound by the privacy stricture.

The hon. Member for Stirling (Mr. Forsyth) has done his duty as the only Government Back Bencher to support his Front Bench. Perhaps he will be made a Parliamentary Private Secretary if he continues in that fashion.

The hon. Gentleman said that the powers sought by the Government will be used only against Left-wing councils. Anything can be sacrificed on the altar of expediency by this Government in defence of their economic policies. If a local authority stands in the way of the Government's economic policy it will be swept aside by any means. I am glad that the Under-Secretary of State nods his head; we like to know how he feels about such matters.

I warn the hon. Member for Stirling that, whether he likes it or not, his party will not always be in power. A Government of another political complexion may one day have the powers that will be put on the statute book if the Bill is passed. I too have my prejudices. I should love to have a go at some of the underspending authorities in Scotland which do not provide adequate services. By varying the legislation, we might be able to have a go at them. The hon. Member for Stirling should remember that it will not always be like that. The point of principle is that, if central Government and this House interfere in local affairs, local Members of Parliament should at least be able to say something about it.

Will the hon. Gentleman say which local authorities in Scotland are underspending and which he would like to have a go at?

The list is quite long. In fact, I reside in one such authority, and as my Member of Parliament is sitting beside me perhaps I can mention the Border regional council. I notice that my Member of Parliament — the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) — is indicating assent. Many more Scottish local authorities are not providing adequate services—Tayside, Grampian and so on.

A genuinely important point of principle is involved. If Parliament is to be wheeled in by any Government to interfere in local affairs, surely in a parliamentary democracy such as Britain the Members of Parliament concerned should be able to have their say. Under the procedures in clause 2, I very much fear that it will be possible to override even that basic principle. The hon. Members concerned might lose the vote, but they would at least have had the opportunity of having their say.

Much has been said about the constitutional significance of the Bill, but this debate goes to the practical heart of the matter. The principle is enshrined in clause 3, but clause 2 facilitates this oppressive measure being dragged through the House.

As my hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) has already said, Scottish business receives pretty inadequate attention in the House because of the very nature of this House. That is not the fault of the House: it is the fault of the constitution. For example, a sparsely attended House of Commons is now dealing with extremely important constitutional legislation. Not many hon. Members are now present, but, hey presto, come the time to vote, many hon. Members from both sides will pour in. I freely admit that the votes will be whipped in, but as this is Scottish legislation the majority of hon. Members will not know very much about what they are voting for.

About an hour ago we discussed rate capping. Only last night a number of Conservative Members saw fit to defy their Whips and vote against their own Government on the principle of rate capping. Earlier today I was a Teller in the Lobby and was able to see who was voting against one of our new clauses. The hon. Members for Kettering (Mr. Freeman), for South Hams (Mr. Steen), for Macclesfield (Mr. Winterton), for Aldershot (Mr. Critchley) and for Congleton (Mrs. Winterton) voted for rate capping in Scotland when yesterday they rebelled against their own Government.

I do not necessarily blame those hon. Members—the system is wrong, rather than those hon. Members. As this does not affect their constituencies, why should they know what is going on? The system is fundamentally flawed. As my hon. Friend the Member for Cathcart also said, this legislation should be dealt with in a Scottish Assembly rather than in this House.

8.15 pm

Clause 2 compounds a basically bad state of affairs. By this clause the Government want us to make possible mass production of oppressive orders affecting Scottish local authorities. The clause will enable whole batches of Scottish local authorities to be clobbered in rapid order following a late-night debate lasting one and a half hours. It will be possible to gag the local Members of Parliament, yet there is a guaranteed right for hundreds of hon. Members from England, Wales and Northern Ireland to vote on purely local Scottish issues.

This is a deplorable proposal. It is a graphic example of the centralisation that the Government keep foisting on Scotland and, indeed, the whole of the United Kingdom, in spite of the principles of decentralisation of local democracy about which Tories keep talking. This is also a deplorable example of the suppression of democracy in general, and local democracy in particular. It must be resisted.

I wish to make a brief intervention merely to put my position on the record and to make sure that everyone knows that I am here, especially as much of the debate is concerned with who is and who is not present.

Can the hon. Gentleman advise me how my hon. Friend the Member for Glasgow, Central (Mr. McTaggart) and I, without making speeches, can ensure that everyone knows that we have been here?

I am not quite sure how to handle that intervention. Both hon. Members are practised exponents of intervening and making their presence felt from sedentary positions. I look forward to their doing so in the next few moments.

I closely followed the argument deployed by the hon. Member for Glasgow, Garscadden (Mr. Dewar). We should concentrate on the constitutional issue. The hon. Members for East Lothian (Mr. Home Robertson) and for Glasgow, Cathcart (Mr. Maxton) deployed different arguments, and I agree with what they said. However, I do not think that this is the time or the place to deploy them fruitfully.

From a House of Commons, rather than a party political, point of view, it is indefensible to lump these authorities together in a one a half hour debate to be followed by only one vote. All hon. Members should objectively take that view. I sometimes have difficulty in justifying the debates and votes that take place from time to time in the House. We often spend hours debating abstruse subjects which do not affect too many people. it is, therefore, difficult to justify spending one and a half hours on abstruse and arcane statutory instruments and secondary pieces of legislation, and then have to explain to our constituents why we did not have a chance to put on the record a view that needs to be expressed when discussing local government regulations.

In essence, this measure has nothing to do with rating and valuation. The powers that the Secretary of State is taking could stand just as easily without clause 2. If the right hon. Gentleman feels that in future he must use these powers, he should take time to argue the case. Even if it takes four or five one and a half hour debates, it is only right and proper that he should exhaustively rehearse the arguments for taking and using these draconian powers.

The procedure under clause 2 is not necessary for that to be done. It is gratuitous to the extent that it will inflame the situation and cause a needless raising of the temperature of the political debate north of the border. Some of these matters are contentious and difficult, and the situation will be made needlessly worse if things are lumped together for the sake of the parliamentary timetable.

As a new Member, I am told that the only thing we need here is stamina—not intelligence or anything else. This is a new form of Government power.

Incidentally, if I had drafted the amendment, I should have left in subsection (2). Those of us who study these issues into the late hours of the night find solace in the fact that sections 2 to 7 of the 1966 Act have been out in schedule 1 to the Bill. Any practising lawyer—I declare a bit of an interest; though only a wee bit—would say that there was some force in doing that.

In my opinion, the clause will aggravate the situation. It is unnecessary and, from the point of view of the House of Commons, it is indefensible. I shall vote against it.

I listened carefully to the debate, and I was entertained by the histrionics of the hon. Member for Paisley, South (Mr. Buchan). I listened carefully to the speech of the hon. Member for Glasgow, Garscadden (Mr. Dewar). My hon. Friend the Member for Stirling (Mr. Forsyth) made a good point. In fact, had he not made it, I should have done so. He said that one reason for the Opposition's dislike of this provision is that they use such occasions to make a lot of heat and noise. As we know from experience of the Labour party, that is much more their way of opposition than constructive debate.

I shall try to deal with the arguments that have been put forward. I do so from the starting point that the Government's intention in introducing the clause was, as I said in Committee, to streamline the procedure. However, when I said that, I also said that it would be used only when it was reasonable so to do. That was what the White Paper said, and that remains the Government's position. I shall return to that matter.

I listened to — and was puzzled by — the basic arguments that were put forward this evening. I was told by the hon. Member for Garscadden and others that it was all a question of time. They said that all these orders—they did not know how many, and all sorts of numbers were suggested—would go through at the dead of night in one and a half hours. The hon. Member for Garscadden was honest enough to admit that he knows from experience that more time has been given than that. Indeed, on rating matters, this Government have always tried to co-operate with the Opposition in considering Scottish rating business, and business to do with rate support grant, on the Floor of the House during the day. Our record is considerably better in that respect than that of Labour Governments.

The hon. Gentleman said that one and a half hours was not enough because of the number of Members of Parliament who would wish to speak on behalf of their local authorities. I could understand the logic of that if he said that the present system — the system that has endured up to now — was wrong, because last year Stirling got one and a half hours with only one Member of Parliament, while Glasgow district got one and a half hours with 11 Members of Parliament. If the hon. Gentleman had said that we should therefore have a system in which Glasgow had 11 times as much time to debate the order——

The hon. Member for Paisley, South said that these authorities had a right for their Members of Parliament to speak on their behalf in the House of Commons. He cannot have it both ways.

I am afraid that the Minister has completely misunderstood the point. The question is not whether every Member of Parliament for Scotland, or for the area involved, would necessarily choose to participate in the debate, but that the area under attack would be represented. By having that number, entire areas can go without being represented here. Certainly, many of them will have to go without proper representation. No one has said that they want to have 11 hon. Members speaking for Glasgow. We have all argued the necessity of that local authority having the opportunity at least to have an advocate in the House. If there is only one Member for Stirling for that area, so be it. He will have to make the case. We are not talking in political or personal terms. I hope the Minister will take on board what we are saying. We are talking about the institution of central Government as against the institution of local democracy. We say that this provision is eroding and crushing local democracy, more than the Government have done so far.

What the hon. Gentleman has just said does not detract from what I said, that he wished those authorities to be represented on the Floor of the House. He wanted their spokesmen to get up and speak for them. Their spokesmen can get up and speak for them in a debate where they are all taken in one order.

The hon. Gentleman says an hour and a half. At least his hon. Friend the Member for Garscadden admitted that it is a matter for the House how long a debate on an order should take. There are ways of having a debate for considerably longer than one and a half hours, and obviously during that time there should be a chance for all the authorities — we never know how many are concerned—to be represented.

Can the Minister at this stage say whether there will be selective action in the current year? Normally it would arise at about the time of the district council elections in May. The hon. Gentleman might find it embarrassing if Edinburgh and Eastwood district councils were to rank alongside the others that might be selected for action.

I am sure the hon. Gentleman is aware that the budgets of all the Scottish authorities have only just been made available to my Department, and we shall want to consider them carefully. We have never taken the view that we could take selective action lightly. We examine all the budgets carefully to ensure that cases on which we decide to take action—if we do so decide—merit such action.

On the question of time, it is hard to argue on the basis of precedent that during a debate on an order of this nature there would not be enough time for the cases of the various authorities to be properly represented.

Next, I come to the question of votes. The hon. Member for East Lothian (Mr. Home Robertson) surprised me when he said that the important thing was to let them have their say, and that it did not matter if one lost the vote.

If the hon. Gentleman reads Hansard tomorrow, I think that he will find that that is what he said. The question of voting was tied to the line that the hon. Member for Garscadden took, that Parliament was a court of last resort—I think that that was the phrase he used —and that these authorities had the right to come to Parliament to have their cases heard. It was a form of appeal system against the decision that had been taken by the Administration.

I do not accept that argument. The argument has two sides to it, and they do not fit. There is the argument that was used by a number of hon. Members—including, I think, the hon. Member for Garscadden — that the Government would push through these composite orders on their majority, without due consideration of the merits. If Parliament were to operate in that way—I do not say for a moment that Parliament would operate in that way —it could operate on a number of individual votes just as much as it could on one. If it did that, it would not be acting in the way the hon. Gentleman described, as a court of last resort.

Perhaps I may be allowed to finish my argument. However, if Parliament were to discriminate, and if it found that the Secretary of State had come forward with a case of selective action which had no merits, on an individual case it would refuse to vote for the order, but equally, if it were in a composite order, the Government, by putting it into a composite order alongside other stronger cases, would risk losing the lot. It was for that reason that I said in Committee that the Government would only use this power where it was reasonable to do so in the individual circumstances. The logic of that is that no Government could operate in any other way. This is not a mandatory provision but an enabling provision. The word is not "shall" but "may". Obviously any sensible Government would have to operate in the way that I have been explaining.

8.30 pm

Does the Minister not recognise that where three local authorities are dealt with on one order there is a real risk that a Government Back Bencher, although he may have considerable doubts whether authority A is being properly dealt with, if he feels that the Government are right about authorities B and C, rather than defeat the Government and lose all three, will trudge into the Lobby, whereas if there were a separate debate and vote on each there would be a much fairer chance of real justice for authority A.

The hon. Gentleman is being unfair to hon. Members in taking that line. If an hon. Member believes that an injustice is being done he will act accordingly.

I must sum up my remarks by reiterating what I said in Committee. It is not necessarily the intention to put together all the authorities subject to selective action as a matter of course. That is why the legislation is enabling rather than mandatory. I went further when I told the hon. Gentleman that combined reports would be used only when it seemed reasonable in the light of individual cases. The purpose of this provision is to streamline.

Labour Members said that local authorities had a right to be heard, and that is correct. I took over my present job after the election in June, and I spent the first part of my time in the job meeting a number of the councils against whom selective action was being taken. I listened to their representations, as did my right hon. Friend the Secretary of State. In each case a reduction was made. That is a measure of the care and attention that we paid to the cases that were put forward. Therefore, it is not possible for Labour Members to say that local authorities will not be heard. If selective action is taken against local authorities they have a right to see the Minister to put their case.

A lot of lather has been worked up during the course of the debate by Labour Members. This is a straightforward streamlining measure which will be used only when it is reasonable so to do, and for that reason I ask the House to reject the amendment.

The Minister is being loyal but obtuse. I accept that he has a reasonable record in giving time on the Floor of the House for orders under section 5 of the 1966 Act and I am glad to acknowledge that. But what he is inviting us to do, as I said earlier, is to put on the statute book a power which would allow an unreasonable Minister to deal with four or five authorities together in an hour and a half and that is completely indefensible.

I find almost laughable the argument that a Government Back Bencher, faced with four or five authorities in one order and having doubts about one, would vote against the Government and cost them the order. It does not work like that. The Minister invited us to look at the practicalities of the situation. If he considers them, he will see what a ludicrous situation he is presupposing. It is as logical for me to say that we should not table any amendments to the Finance Bill, that we should not look at it clause by clause and amendment by amendment, because if there is one clause that we do not like the whole Budget can be brought down.

As always when a vote is imminent, a number of hon. Members from the United Kingdom are gathering. They will probably troop into the Lobbies knowing nothing about what they are voting for. I make no attack on them for that because I have been in the same situation and I am honest enough to admit it. But if they knew just what nonsense they were being asked to endorse, some at least would hesitate.

I raised this matter with the Leader of the House in an intervention during the debate on the guillotine motion. If I may say so, he looked somewhat taken aback and said in an offhand way that he was in favour of anything that shortened debates. That is the kangaroo court logic of clause 2. It is an insult to the House, which has the power to scrutinise, control and examine what the Executive are doing, to say that we shall do it all on the kind of telescoped time scale that is now theoretically possible. After all, in any negotiations the Minister will be in a position to bargain from great strength. If negotiations break down, he will give the legal minimum of one and a half hours for the lot. In that situation, Parliament will not be allowed the basic right to support the Government in penalising authority A but to withhold support for penalising authority B. People cannot be tried together and given a group verdict. Every one cannot be exonerated because a jury is unhappy about one individual. That is nonsense. That is a perfectly fair parallel to what the Government are inviting the House to do on this occasion.

I have no doubt that we shall lose a few minutes in protesting against the clause, but this is a pretty shabby business. We are not getting into a lather or any hypocritical or synthetic party rage. We have a genuine concern about the way in which the procedures are being abused and the way in which the Minister, for no good reason at all except the vague slogan of streamlining procedures, is destroying the basic rights of Opposition Back Benchers.

Question put, That the amendment be made:—

The House divided: Ayes 29, Noes 197.

Division No. 214]

[8.37 pm


Adams, Allen (Paisley N)Carter-Jones, Lewis
Anderson, DonaldClark, Dr David (S Shields)
Archer, Rt Hon PeterClarke, Thomas
Ashley, Rt Hon JackClay, Robert
Ashton, JoeCocks, Rt Hon M. (Bristol S.)
Barnett, GuyColeman, Donald
Barron, KevinCook, Frank (Stockton North)
Bell, StuartCorbett, Robin
Benn, TonyCorbyn, Jeremy
Bermingham, GeraldCraigen, J. M.
Bray, Dr JeremyCrowther, Stan
Brown, Gordon (D'f'mline E)Deakins, Eric
Brown, Hugh D. (Provan)Dewar, Donald
Brown, N. (N'c'tle-u-Tyne E)Dobson, Frank
Brown, R. (N'c'tle-u-Tyne N)Dunwoody, Hon Mrs G.
Brown, Ron (E'burgh, Leith)Eadie, Alex
Bruce, MalcolmEastham, Ken
Buchan, NormanEvans, John (St. Helens N)
Callaghan, Jim (Heyw'd & M)Fatchett, Derek
Campbell-Savours, DaleFaulds, Andrew
Canavan, DennisFlannery, Martin
Carlile, Alexander (Montg'y)Foot, Rt Hon Michael

Foster, DerekMeacher, Michael
Foulkes, GeorgeMeadowcroft, Michael
Fraser, J. (Norwood)Michie, William
Freeson, Rt Hon ReginaldMillan, Rt Hon Bruce
George, BruceMiller, Dr M. S. (E Kilbride)
Godman, Dr NormanMorris, Rt Hon J. (Aberavon)
Gould, BryanNellist, David
Harman, Ms HarrietO'Brien, William
Harrison, Rt Hon WalterO'Neill, Martin
Hart, Rt Hon Dame JudithPavitt, Laurie
Haynes, FrankPenhaligon, David
Healey, Rt Hon DenisPowell, Raymond (Ogmore)
Heffer, Eric S.Prescott, John
Hogg, N. (C'nauld & Kilsyth)Rees, Rt Hon M. (Leeds S)
Holland, Stuart (Vauxhall)Richardson, Ms Jo
Howells, GeraintRobertson, George
Hughes, Robert (Aberdeen N)Robinson, G. (Coventry NW)
Hughes, Roy (Newport East)Robinson, P. (Belfast E)
Hughes, Sean (Knowsley S)Ross, Ernest (Dundee W)
Janner, Hon GrevilleRowlands, Ted
John, BrynmorShore, Rt Hon Peter
Johnston, RussellShort, Ms Clare (Ladywood)
Kaufman, Rt Hon GeraldShort, Mrs R.(W'hampt'n NE)
Kennedy, CharlesSilkin, Rt Hon J.
Kilfedder, James A.Skinner, Dennis
Kilroy-Silk, RobertSmith, Rt Hon J. (M'kl'ds E)
Kirkwood, ArchibaldSnape, Peter
Lambie, DavidSpearing, Nigel
Lamond, JamesSteel, Rt Hon David
Lewis, Ron (Carlisle)Stewart, Rt Hon D. (W Isles)
Litherland, RobertStrang, Gavin
McCartney, HughThomas, Dafydd (Merioneth)
McCrea, Rev WilliamTinn, James
McDonald, Dr OonaghTorney, Tom
McKay, Allen (Penistone)Wallace, James
McKelvey, WilliamWeetch, Ken
Mackenzie, Rt Hon GregorWhite, James
McNamara, KevinWinnick, David
McTaggart, RobertYoung, David (Bolton SE)
McWilliam, John
Madden, MaxTellers for the Ayes:
Marshall, David (Shettleston)Mr. John Home-Robertson and Mr. James Hamilton.
Martin, Michael
Maxton, John


Alexander, RichardChope, Christopher
Ancram, MichaelChurchill, W. S.
Arnold, TomClark, Hon A. (Plym'th S'n)
Ashby, DavidClark, Dr Michael (Rochford)
Aspinwall, JackClark, Sir W. (Croydon S)
Atkins, Robert (South Ribble)Clarke, Rt Hon K. (Rushcliffe)
Atkinson, David (B'm'th E)Conway, Derek
Baker, Nicholas (N Dorset)Coombs, Simon
Batiste, SpencerCope, John
Bellingham, HenryCouchman, James
Bendall, VivianCranborne, Viscount
Berry, Sir AnthonyCrouch, David
Best, KeithDorrell, Stephen
Biffen, Rt Hon JohnDover, Den
Blaker, Rt Hon Sir Peterdu Cann, Rt Hon Edward
Body, RichardDurant, Tony
Bonsor, Sir NicholasEdwards, Rt Hon N. (P'broke)
Boscawen, Hon RobertEggar, Tim
Bottomley, PeterEmery, Sir Peter
Bowden, Gerald (Dulwich)Evennett, David
Boyson, Dr RhodesFallon, Michael
Braine, Sir BernardFavell, Anthony
Brandon-Bravo, MartinFenner, Mrs Peggy
Bright, GrahamFinsberg, Sir Geoffrey
Brinton, TimFletcher, Alexander
Brown, M. (Brigg & Cl'thpes)Fookes, Miss Janet
Bruinvels, PeterForsyth, Michael (Stirling)
Bryan, Sir PaulFranks, Cecil
Buck, Sir AntonyFraser, Peter (Angus East)
Burt, AlistairFreeman, Roger
Carlisle, Kenneth (Lincoln)Gale, Roger
Carttiss, MichaelGalley, Roy
Channon, Rt Hon PaulGardiner, George (Reigate)
Chapman, SydneyGarel-Jones, Tristan

Glyn, Dr AlanOppenheim, Rt Hon Mrs S.
Goodhart, Sir PhilipParris, Matthew
Goodlad, AlastairPercival, Rt Hon Sir Ian
Gower, Sir RaymondPink, R. Bonner
Grant, Sir AnthonyPollock, Alexander
Gregory, ConalRaison, Rt Hon Timothy
Griffiths, E. (B'y St Edm'ds)Roberts, Wyn (Conwy)
Griffiths, Peter (Portsm'th N)Robinson, Mark (N'port W)
Grist, IanRoe, Mrs Marion
Ground, PatrickRossi, Sir Hugh
Grylls, MichaelRumbold, Mrs Angela
Hamilton, Hon A. (Epsom)Ryder, Richard
Hamilton, Neil (Tatton)Sayeed, Jonathan
Hampson, Dr KeithShaw, Giles (Pudsey)
Hanley, JeremyShaw, Sir Michael (Scarb')
Hannam, JohnShelton, William (Streatham)
Harvey, RobertShepherd, Richard (Aldridge)
Haselhurst, AlanShersby, Michael
Havers, Rt Hon Sir MichaelSims, Roger
Hawkins, Sir Paul (SW N'folk)Smith, Sir Dudley (Warwick)
Hawksley, WarrenSmith, Tim (Beaconsfield)
Hayes, J.Soames, Hon Nicholas
Hayward, RobertSpeller, Tony
Heathcoat-Amory, DavidSpencer, Derek
Heddle, JohnSquire, Robin
Henderson, BarryStanbrook, Ivor
Hickmet, RichardStanley, John
Hicks, RobertSteen, Anthony
Hind, KennethStern, Michael
Hirst, MichaelStewart, Allan (Eastwood)
Hogg, Hon Douglas (Gr'th'm)Stewart, Ian (N Hertf'dshire)
Holland, Sir Philip (Gedling)Stokes, John
Holt, RichardStradling Thomas, J.
Hooson, TomSumberg, David
Hordern, PeterTaylor, Teddy (S'end E)
Howarth, Gerald (Cannock)Tebbit, Rt Hon Norman
Howell, Rt Hon D. (G'ldford)Terlezki, Stefan
Hubbard-Miles, PeterThompson, Donald (Calder V)
Hunt, David (Wirral)Thompson, Patrick (N'ich N)
Hunt, John (Ravensbourne)Thurnham, Peter
Hunter, AndrewTracey, Richard
Jessel, TobyTrotter, Neville
Johnson-Smith, Sir GeoffreyTwinn, Dr Ian
Jones, Gwilym (Cardiff N)van Straubenzee, Sir W.
Jones, Robert (W Herts)Vaughan, Sir Gerard
Joseph, Rt Hon Sir KeithWaddington, David
Kershaw, Sir AnthonyWakeham, Rt Hon John
King, Roger (B'ham N'field)Walden, George
Knight, Gregory (Derby N)Walker, Bill (T'side N)
Knowles, MichaelWaller, Gary
Lawler, GeoffreyWard, John
Lawrence, IvanWardle, C. (Bexhill)
Lee, John (Pendle)Watson, John
Leigh, Edward (Gainsbor'gh)Watts, John
Lilley, PeterWells, Bowen (Hertford)
McCurley, Mrs AnnaWells, John (Maidstone)
MacKay, Andrew (Berkshire)Wheeler, John
MacKay, John (Argyll & Bute)Wilkinson, John
Maclean, David JohnWinterton, Mrs Ann
Major, JohnWinterton, Nicholas
Mather, CarolWolfson, Mark
Monro, Sir HectorWood, Timothy
Moore, John
Moynihan, Hon C.Tellers for the Noes:
Murphy, ChristopherMr. Ian Lang and Mr. Tim Sainsbury.
Neubert, Michael
Norris, Steven

Question accordingly negatived.

Clause 3

Power Of Secretary Of State To Control Rates

I beg to move amendment No. 17, in page 3, line 31, at end insert—

'(9) The Secretary of State shall not make any order under this section if it appears that any local authority as a result of the order may fail to fulfil any of its statutory duties.'.
This part of the Bill deals with the rate-capping proposals, and the procedure under which the Secretary of State would have the power to lay an order before Parliament to seek approval on rate capping. In dealing with the amendment, I do not wish to go into any great detail about the financial implications.

It is a pity that, in the debates on Second Reading, in Committee and on Report, much time was taken up with matters of finance, because the thinking behind the Bill stems from the doctrinaire monetarist theory of the Government, involving savage cuts in public expenditure and the mistaken belief that, if central Government are given more interventionist powers to control the expenditure of local government, that in itself is a good thing, irrespective of the fact that local government historically, and, indeed, in recent times, has a far better track record in meeting its expenditure targets and, to that extent, controlling its expenditure than central Government.

The Government have not fully thought out the consequences in human terms of a cut in the essential services provided by local authorities. Many of those services are laid down in statute. There is an increasing trend—for worse, not better—of authorities being forced to reduce the standards of many of those essential services. I suspect that that trend spreads south of the border. There is a distinct danger that authorities might fail to meet the minimum statutory requirements. Amendment No. 17 would prohibit the Secretary of State from making an order if, as a result, local authorities that are victims of the order would find it impossible to meet their statutory duties.

There is also a distinct danger that this one piece of legislation—if this rubbish Bill becomes an Act—could make it increasingly difficult, if not impossible, to meet the requirements of other legislation. Surely that would bring our system of parliamentary democracy into disrepute. We place statutory duties on local authorities, but deprive them of sufficient funds to meet them. An example of that is the rate support grant. We then prohibit them from even raising the revenue to meet their duties.

Earlier tonight there was an interesting debate on housing. I am sure that hon. Members on both sides of the House—even if it is expressed only by Labour Members — are concerned that the standards of housing could drop because of the proposals for the capping of the rate fund contribution to the housing revenue account and the general rate-capping proposals. The proposals will have an adverse effect on the living standards of many council house tenants and their families. The average rents have more than doubled since this iniquitous Tory Government took up the reins of office in 1979.

The Scottish Select Committee, among other bodies, has pointed to the deteriorating standards of dampness in many council houses. Legislation for rate capping and for limiting the amount that local authorities can take out of rates to put into the housing revenue account will make it increasingly difficult for them to deal with many of the housing problems. I do not wish to dwell too long on housing, as we debated it earlier.

There is a statutory duty to provide adequate education services. I am sure that all hon. Members receive complaints from their constituents about the difficulties faced by many of our children in their schools. No doubt the Minister will tell us that expenditure per pupil is the highest that it has ever been. That is more a reflection of the drop in school population——

The Minister knows that it is true. Expenditure per pupil is now higher than ever because of the drop in school population rather than because of the Government's generosity.

The Minister does not understand the economics of education. He imagines that if a school population decreases by 10 per cent. or 20 per cent., expenditure per pupil can be automatically reduced by the same amount. Education does not work that way.

Does not the hon. Gentleman's argument imply that he is more concerned with preserving over-manning among teachers than looking after the interests of the pupils? With higher expenditure per pupil, it should be possible to provide a higher standard of education.

The hon. Gentleman does not have any educational experience, other than the disadvantage of having attended St. Andrew's university.

I shall not withdraw. I urge the hon. Gentleman to visit schools in his constituency to look at the quality of education that can be achieved in smaller classes.

A great deal of well-researched evidence shows that if class sizes are reduced that can lead to an improvement in educational standards. When I argue for a reduction in class sizes, I am not arguing for more jobs for teachers —I am arguing for increased educational standards leading to increased educational attainment for thousands of children in Scottish schools. Many children are herded into composite classes, not for any educational reasons—although there might be some in certain cases—but simply because the local authority cannot afford to meet the optimum class size. Children of different age groups are herded into composite classes, which leads to a lessening of educational opportunities.

Recently, the Government have almost admitted that, because of the financial straitjacket, local authorities will find it increasingly difficult to meet their statutory obligations. In recent years there has been a weakening of statutory obligations—for example, in nursery provision —because of an Act passed during the last Parliament. It was to remove any doubt or ambiguity about a local authority's obligation to provide nursery education that. the Government made it clear in previous legislation that they would abolish that statutory duty. As a result. many schoolchildren are being deprived of the education which should be their birthright.

The Under-Secretary of State is completely disinterested because he knows nothing about Scottish education. His sidekick, the Under-Secretary of State with responsibility for education in Scotland, knows that I have made many representations on behalf of parents in the Bannock area of my constituency, who have been pressing the Central regional council for some time for nursery school provision. It is an area in which many young families require their children to receive nursery education. I am sure that the local authority would dearly love to provide nursery education tomorrow or next year, but it is not receiving the necessary funds from central Government. The difficulty is not confined to capital expenditure—for example, getting an allocation from the Government to enable a building to be erected. In some areas, the capital allocation has already been made and the space is available.

I am talking to my amendment, which is directed to the difficulty of meeting statutory functions. I am providing an example of the way in which the Government are trying to reduce statutory obligations. The Minister is trying to do your job, Mr. Deputy Speaker, as well as his own. If he is as incompetent in chairmanship as he is in performing his ministerial functions, I hope that he never takes the Chair in this place.

The problem that the hon. Gentleman has highlighted in the Central region is experienced in many other parts of Scotland. In the short time since the 1983 general election, I have discovered that the Plockton and Kyle of Lochalsh area in my constituency, which is in the Highland region, would dearly love to provide preschool and nursery education. It is prohibited from doing so, although the necessary buildings are available, because the finance is not available from central Government. If the authority provided that extra support from the community, it would be penalised by the rate-capping measures. This makes nonsense of the Government's claim that they are concerned about social welfare.

The hon. Gentleman is correct. If a local authority wants to raise more revenue from rates to provide nursery teachers for existing nursery school accommodation so that pre-school children can be educated, the Secretary of State can step in and say, "No, we are not having that. We are setting a limit on how much you can raise on revenue through the rates." As a result, there will be less education provision in many areas.

It is interesting that many of us have received letters recently about the deplorable situation in the Western Isles, where there is a grave and imminent danger of the education authority failing to meet statutory standards of education. The proposed cuts in that area are the worst throughout the whole of Scotland. I do not point the finger entirely at the door of the Western Isles council. I point it also at the Minister, who through legislation such as the Bill is making it increasingly difficult for the Western Isles education authority, and for all education authorities in Scotland, to fulfil statutory functions.

School transport provision, another statutory function, is also in danger. During the previous Parliament, there was a move by the Government completely to remove the duty on local education authorities to provide free school transport. Fortunately, the proposal was thrown out by those in another place. That goes to show that the Government are more reactionary even than the House of Lords. Many of those in another place come from rural areas and they were aware of the difficulties facing children in rural areas in getting to school unless the statutory provision was retained.

The statutory duty to provide school transport has been kept, but I suspect that many local authorities, if the Bill is enacted and other expenditure cuts are pushed through by the Government, will find it increasingly difficult to meet the cost of providing free school transport. I am sorry that the hon. Member for Stirling (Mr. Forsyth) is not seeking to intervene. I believe that he was involved recently in pressing the Central regional council to increase expenditure on this transport. That is partly because the rural school in which he was interested was attended by his own children. It is interesting to note that even the most confirmed monetarist will at times call for more public expenditure in his own interests or those of his family.

That story emanated from one of the Labour councillors on the Central regional council. Like so much of what is said about cuts and other matters in Central region, it was totally without foundation. As the hon. Gentleman should know, my children attend a private school and do not go to the school that he alleges. The hon. Gentleman missed the point completely.

With regard to the lack of transport, I wonder what the hon. Gentleman thinks about Central regional council's policy on rural transport, which I support, of encouraging parents to band together and organise their own transport.

I chose my words carefully. If the hon. Gentleman reads Hansard, he will see that I referred to the school that was "attended"—I used the past tense—by his children. I understood that the hon. Gentleman had moved his children to a private, fee-paying school because of the inadequate school transport provisions. The fact remains that he made representations to Central regional council to improve the school transport provisions for children attending the rural school. That goes to show that even lovers of the Adam Smith institute and the economic doctrines that he espouses sometimes have to call for more public expenditure, if not for their families then for constituents who happen to live in rural areas and whose children need to get to school.

I support the hon. Gentleman in his representations and I am sorry that his children have the disadvantage of going to one of the worst schools in Central region. It is one of the few fee-paying schools left there. Its educational standards are abysmal compared with the very good standards of the local education authority's school where his children used to go. I am only sorry that the hon. Gentleman did not seek my advice on that matter earlier.

I turn to another statutory function—social work—that is undertaken by Central regional council, indeed by all regional councils in Scotland and by the islands councils. Many social work authorities find it increasingly difficult to fulfil their duties under existing statutes. I know that many local councillors have been so constrained by Government policy and the financial straitjacket in which they find themselves that they have reluctantly had to reduce certain services.

For example, the number of home helps has been reduced in many areas and wardens for old folks' sheltered housing are being phased out. I remember that my right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris) piloted the Chronically Sick and Disabled Persons Bill through the House when he was shadow Minister for the disabled. Under that legislation, local authorities have a duty to compile a fairly detailed register of all those who require assistance and those who, for example, suffer from disabilities and may require special services under that or other legislation. To this day, many authorities have not been able to find the time or, more importantly, the resources to compile such a comprehensive register, so technically they are failing in their statutory duties because of the failure of central Government to provide adequate resources.

Many extra duties have been put on the backs of local authorities over the years. The Goverment have imposed extra duties on them in relation to civil defence. To my mind, that is a complete waste of public money. Instead of handing out peanuts in support of so-called civil defence, the surest form of self-defence, saving billions of pounds, would be to cancel Trident and tell Reagan to take his cruise missiles home. The country would then be a much safer place to live in, without all the extra impositions on local authorities for civil defence. Most of the expenditure is supposed to be met by central Government, but some must be met by local authorities and they will find it increasingly difficult to do so.

Clause 4 also puts an extra statutory duty on local authorities to consult non-domestic ratepayers. That might involve considerable extra expense, especially in rural areas. Members and officers of Strathclyde regional health authority, for example, may have to go to Oban and south Ayrshire to meet the local chambers of commerce as well as to the Isle of Mull to meet interested non-domestic ratepayers there. That statutory duty may involve thousands, perhaps even hundreds of thousands, of pounds in travel expenses alone, quite apart from subsistence costs if councillors and officials have to overnight in Tobermory because they cannot get back to their beds in Glasgow. The Secretary of State has not thought this through. If a local authority feels that it needs to raise extra revenue but the Secretary of State says that it must not increase the rates, the authority will find it difficult if not impossible to fulfil all those statutory duties.

Quite apart from examples of trivial or secondary importance such as civil defence and consultation with non-domestic ratepayers, the essence of local government is in the quality of service that it provides for human beings. A great deal of the discussion on the Bill, however, has been about finance and economics and the general thinking behind it stems from the Government's macroeconomic theory of doctrinaire monetarism or whatever one cares to call it. As I said at the outset, we should be considering the consequences of this measure in terms of the essential services required to improve the quality of life of the people whom councillors are elected to represent. I refer to the right of children and indeed people of all ages to a decent standard of education. There are the social service needs of the elderly, the sick and the disabled — some of the most deserving members of society.

Ministers have constantly talked about the need to control expenditure, but what about the quality of life of the human beings involved? We should put people first. If we do that, I believe that there will be support for my amendment.

I intervene briefly, if only to point out that the amendment appears to be defective in that we are asked to take into account the fact that an authority might not be able to fulfil its statutory obligations. How on earth can one assess that? Stirling has always claimed that services will suffer as a result of selective action, but whenever such action has been taken and the ratepayers have benefited from a rebate there have been no cuts in services. On the contrary, the services about which the hon. Member for Falkirk, West (Mr. Canavan) claims to be concerned have actually been improved. He dealt with the range of services at some length, but in housing, for example, considerable savings have beeen made in management and maintenance and the service has been improved by bringing in computers, and so on. In every area of activity economies have been found. When the money supply is turned off it concentrates the mind of the council concerned and the standard of services is improved.

Although the Stirling authority has been subject to selective action, it is staging a jamboree on 16 April, in the middle of the election campaign, at a cost of £35,000 to ratepayers. Invitations have been sent to people all over Scotland on pieces of parchment sent in cardboard tubes at vast expense. Yet Opposition Members tell us to sympathise with such local authorities. There is no danger to education, social services, housing, or any of the areas which worry Tory Members, by exercising financial restraint. Ideological activities, which many authorities have embarked on, will be the only casualties.

9.15 pm

We are led to believe that action against local authorities must mean action against the most vulnerable in society. Authorities such as the Stirling authority still find money to fund the Campaign for Nuclear Disarmament, advertise in Labour party publications, provide support and resources for towns in Nicaragua, and be involved in many activities which have nothing to do with their statutory duties.

The amendment is, once again, an attempt to divert attention from the real issue which dominates the Bill, which is to get value for money for ratepayers and better services by finding better means of provision.

I support the amendment, and shall use it to highlight the problems experienced by some sections of the community.

My hon. Friend the Member for Falkirk, West (Mr. Canavan) mentioned the statutory rights of local authorities. They have a statutory obligation to raise rates both from football grounds and race courses. No doubt the Minister has received a great deal of correspondence from race course owners and football associations.

Race courses in England pay a quarter in rates of what their counterparts in Scotland pay. [Interruption.] The Minister should not interrupt me. He is not the custodian of the rules of the House, but is here to listen to hon. Members. It is not his place to tell hon. Members whether they are speaking to the correct amendment. I wanted to put a matter on the record and would be happy to have the Minister's comment about it. The more he interrupts me the longer I shall take to make my point. I hoped to make a brief intervention, but he is making the usual mess of proceedings.

I am worried that the Ayr race course pays five times more in rates than the Newbury race course, and that Scottish football grounds pay three times more than English ones.

The Government have caused a great deal of unemployment in Scotland. It is deplorable. In some parts of my constituency, unemployment is as high as 50 per cent. because of the failure of the Government Front Bench, who have the cheek to call themselves Ministers. The only break for many of my constituents is to go to a football match and enjoy themselves. The pressures that the Government are putting on football associations make it increasingly difficult for football clubs to maintain their premises. Conservative Members often tell us that business men have been hit by high rates. Why does the Minister therefore not do something about the problems of the rating system for football clubs in Scotland which have been brought to his notice? If he spoke up for football associations, unemployed people would be able to watch the national sport more cheaply. I am glad that I have woken the Minister up as he was looking a little cheesed off earlier. For the sake of the sporting fraternity in Scotland, I hope that he will do something.

I listened with great care and attention to the hon. Member for Glasgow, Springburn (Mr. Martin). I suspect that he decided to speak now because he wants to go and have a meal or something. If he wants an answer, I hope that he will wait until we consider the clause that concerns the rating of football grounds. It would be wrong for me to comment on such rating on amendment No. 17.

Amendment No. 17 suggests to me a misunderstanding of the working of clause 3 and of the way in which my right hon. Friend intends to apply it. In arriving at the rate support grant settlement each year, the Secretary of State is bound by section 2 of the Local Government (Scotland) Act 1966 to take into consideration, among other things,
"any probable fluctuation in the demand for services giving rise to reckonable expenditure so far as the fluctuation is attributable to circumstances prevailing in Scotland as a whole which are not under the control of local authorities".
I am sure that the hon. Member for Falkirk, West (Mr. Canavan) appreciates that those words mean the statutory duties to which he referred. Therefore, the Secretary of State must have regard to those factors at an early stage when rate support grant is being calculated. What might follow—I say "might" as clause 3 is an enabling and not a mandatory clause—will depend to a large extent on the Secretary of State's overall view of local authority expenditure. Part of that will be the same assessment as he made when arriving at the rate support grant.

The factors that the hon. Member for Falkirk, West is worried about will have been in my right hon. Friend's mind before he considers whether the powers given by clause 3 should be used. I took great pains in Committee to point out that we are discussing a reserve power which will be used only if local authorities fail to bring their expenditure into line with the Government's plans and impose unreasonable rate increases. No Government, let alone the present one, will set a rate limit that makes it impossible for local authorities to carry out their statutory functions. Such action would be in nobody's interests, and it cannot realistically be suggested by the hon. Gentleman.

There might be exceptional factors outside their control which could cause some authorities difficulties. Clause 2 makes provision to meet that. The new section, 108C, which clause 3 introduces enables the Secretary of State to direct that the general rate limit shall not apply to any given authority. It will be open to any authority that is faced, for example, with unusual expenditure or a sudden drop in rate resources to apply for such a derogation which would receive careful consideration.

I hope that I have reassured the House that the general considerations will have been taken account of in arriving at the rate support grant settlement and that if there are individual cases in which authorities, for exceptional reasons, find themselves in difficulties, and particularly if they affect their statutory responsibilities, there is a power within this Bill for them to apply to the Secretary of State for a derogation.

I therefore think that the provision and the security which the hon. Member is seeking are already in the clause and I hope that on that basis he will withdraw the amendment.

I make the point, in supporting the amendment, that despite the assurance just given by the Minster from the Dispatch Box, he received pressure from various Highland Members—me, my hon. Friends the Members for Inverness, Nairn and Lochaber (Mr. Johnston) and Caithness and Sutherland (Mr. Maclennan)—at the new year about roads provision in the area of the Highland regional council. He must be aware that already that regional authority is unable to provide adequately for its statutory obligation in terms of roads provision.

The reality of this is brought home particularly by the fact that, as was pointed out to us at a meeting which the three of us attended with the Highland regional council, 10 years ago the local authority before local government reorganisation spent in real terms half what the entire Highland regional council now spends on its roadways. Under the former local authority, the part they were talking about was for 400 miles of roadway in the island of Skye. Now, 10 years later, the Highland region has control of 4,000 miles of roadway throughout the Highland regional area. In real terms the expenditure is only double for 10 times as much roadway. That brings home very clearly that the amount of cash available to them, or certainly the amount of money that they feel able to spend, is quite insufficient.

Therefore, as roads are such a crucial statutory function in the Highlands, I think that the amendment proposed by the hon. Member for Falkirk, West (Mr. Canavan) is important and should be supported. The assurance that we have had from the Minister is inadequate. I hope, therefore, that the House will give its full support to the amendment, which would certainly be warmly received in my constituency and those of my hon. Friends in the Highland region.

This has been an interesting debate, Mr. Speaker, and I am sure you have observed that the law-abiding Members on this side of the House have been attempting to advance a rather obvious case for keeping the law in local government as well as in Parliament. It was appropriate that my hon. Friend the Member for Falkirk, West (Mr. Canavan), a highly responsible and respected Member of the House, as you know, Mr. Speaker, should have been arguing for the right of local authorities to act in accordance with the statutes imposed upon them by this House.

My hon. Friend was joined by my hon. Friend the Member for Glasgow, Springburn (Mr. Martin), who ought not to be too perplexed because the Minister apparently did not understand his argument. I spent the entire time in the Committee getting a similar response from the Minister, because, although on those occasions he actually listened to the speeches, I found that he responded in the same perplexed way when I spoke.

I did not, until tonight, understand the reason, but now I should like to assert publicly what I understand that reason to be. Clearly, my hon. Friend the Member for Springburn pitched his argument on far too high an intellectual level for the Minister to comprehend. I now understand the difficulties which I encountered.

My hon. Friends and the hon. Member for Ross, Cromarty and — I should not forget — Skye (Mr. Kennedy), as that is an important part of the Highlands, referred to particular functions of local authorities. All of them are important. There was an exchange between hon. Members on the subject of education. When the Bill is enacted I shall be worried, because the hon. Member for Strathkelvin and Bearsden (Mr. Hirst)——

It being half-past Nine o'clock, MR. SPEAKER proceeded, pursuant to the Order [5 March] and the resolution this day, to put forthwith the Question already proposed from the Chair.

Amendment negatived.

I am now required to put the Questions on any amendments up to the end of clause 8 moved by a member of the Government. I refer to amendments Nos. 3 to 7 inclusive. Does any hon. Member wish to divide against any of those amendments?

Clause 5

Premises Qualifying For Rates Relief For Institutions For The Disabled

Amendmen ts made: No. 3, in page 4, leave out lines 35 to 39 and insert

'of so much of any building or, where there are more than one, those buildings as is comprehended in the lands and heritages'.

No. 4, in page 5, line 36 after 'appeals)' insert ` (a)'.

No. 5, in page 5 leave out from beginning of line 40 to 'may' in line 41 and insert 'amount of rebate'.

No. 6, in page 5, line 43 leave out 'those matters' and insert

'the matters mentioned in subsection (5) of that section'.

No. 7, in page 5, line 44 at end insert

; and
  • (b) in subsection (6) after the word "(5)" there shall be inserted the words "or (5A)".'.—[Mr. Ancram.]
  • Clause 15

    Comparison With Hereditaments In England And Wales

    I beg to move amendment No. 23, in page 10, leave out from beginning of line 38 to end of line 6 on page 11 and insert—

    '(1A) It shall be competent to found, by way of comparison, on hereditaments in England and Wales comparable to those which are the subject of the proceedings to enable the committee or, as the case may be, the Lands Tribunal for Scotland, to draw conclusions as to the rent at which the lands and heritages which are the subject of the proceedings might reasonably be expected to let from year to year in the circumstances mentioned in section 6(2) or, as the case may be, 6(8) of the Valuation and Rating (Scotland) Act 1956 (ascertainment of gross and net annual values by reference to expected rent.)'.

    With this it will be convenient to discuss the following amendments: No. 8, in page 10, line 39, leave out 'only'.

    No. 22, in page 10, line 39, leave out from 'Wales' to end of line 30.

    No. 9, in page 11, line 6, at end insert

    'or if it is, in the opinion of the committee or, as the case may be, the Lands Tribunal for Scotland, equitable so to do'.

    The aim of the amendment is to widen the opportunity for comparison between properties in Scotland and those in England and Wales for the purposes of valuation without—as the Bill presently proposes—the need to prove that there is insufficient evidence on Scotland for comparability. Before the Bill was published the Government issued a White Paper in which they referred to complaints that they received from many interested bodies, particularly sporting organisations in Scotland, and to anomalies between valuation in Scotland and that south of the border. The net effect is that many sporting organisations face a much heftier rates bill in Scotland on their properties than similar organisations and properties south of the border.

    The Government's White Paper clearly gave the impression that their aim was to eradicate that anomaly. They made specific reference to the effect that it would have on sport. Unfortunately, they produced clause 15. It does not do anything like meet the good intentions expressed in that White Paper. It would appear that the Government have deceived many people in Scottish sporting circles. They built up false expectations and many people thought that they were obtaining a concession from the Government which would enable them, when making representations to the appropriate committee or tribunal, to make comparisons with similar properties south of the border.

    It now appears that in most cases they will have no such opportunity, because the committee or tribunal can turn round and tell the person or organisation making the representations that it is sorry but that there are enough football stadiums, indoor bowling rinks and race tracks in Scotland for adequate comparisons to be drawn on a Scottish basis without going south of the border. I see that the Minister wants to intervene, and I shall give way to him, but I hope that he will do me a favour and give us the assurance that he failed to give in Committee—that clause 15 will definitely have a beneficial effect on sporting organisations in Scotland.

    I shall make my own speech in my own time. The hon. Gentleman has been making assertions about football grounds and race courses. As he knows, I made it clear in Committee that where there was adequate rental evidence available in Scotland the powers of clause 15 would not be available. Where there was not adequate rental evidence, the person who felt aggrieved would be able to use the provisions of clause 15. I do not know of any football grounds or race courses that are let. Perhaps the hon. Gentleman will be able to give us some examples, as he is making such statements. If he cannot give us examples of adequate rental evidence, he cannot claim that the clause will not work for those people.

    In the first part of what he said the Minister merely repeated what I said, that if the committee or tribunal considers that there is adequate evidence in Scotland it will deem it to be irrelevant, whatever evidence is produced from south of the border.

    I hope that when the Minister replies to the debate he will give a categorical assurance to all sporting organisations that have made representations on this matter. If no stadiums, race courses or indoor bowling rinks are rented out, an assessor could take a notional rental figure out of his head and say that if they were put out for rental the management could get so much for rent, and use that figure to assess the rateable value of the property. The Minister is shaking his head, and I look forward to hearing his reply. There was a great deal of confusion in his skull in Committee, and that caused a great deal of disappointment to many sporting organisations and individuals in Scotland, who felt let down by clause 15.

    If the Minister means that if there are no football stadiums or few sporting properties that are rented out in Scotland, that will automatically mean that the person making representations to the tribunal or the committee will be able to call in evidence rentals from south of the border for similar properties, I should welcome a categorical statement to that effect.

    That is what I said in Committee, and I shall say it again now. What is more, if there is no rental evidence available in England, the applicant will be entitled to look at the net annual value in the register in England and treat that as rental evidence, so this is even stronger than the reassurance for which the hon. Gentleman asked.

    In other words, it will be possible for a football club or an indoor bowling club or whatever to make these representations. The Minister did not go as far as saying that in Committee. He was hesitant when we asked him explicitly whether the clause would be of benefit to sporting organisations or whether it would simply be left to the discretion of the committee or the tribunal. Neither the Minister nor any hon. Members will be sitting on the tribunal or committee, but we are charged with passing this legislation. My amendment is much tougher than the Bills. It will improve the opportunities for all organisations, not just sporting organisations, to make comparisons with the situation south of the border.

    I shall refresh the Minister's memory and that of other hon. Members on some of the anomalies. I notice an hon. Member from south of the border, the hon. Member for Nottingham, South (Mr. Brandon-Bravo). In December, just before the Bill received its Second Reading, I had a letter from the president of the Falkirk indoor bowling club, enclosing some statistics given to him by the Scottish Indoor Bowling Association, which said:
    "To make the simple comparison, the rateable value of Auchinleck Indoor Bowling Club is £19,747, as against similar clubs in the north-east of England which have rateable values as follows: Hartlepool, £4,513, Teesside, £5,735, Darlington £4,972."
    The rateable value of Auchinleck indoor bowling club with premises similar to those of comparable English clubs is three or four times greater.

    Complaints are not confined to the sporting world. I have received complaints from the Central Region Licensed Trade Association. Mr. Prentice, the secretary, has told hon. Members that the rates of licensed premises in Scotland are out of all proportion to what hoteliers and publicans in England have to pay. Everyone knows the difficulties that the tourist trade in Scotland is experiencing because of the Government's failed economic policies. Any stimulus would be welcome.

    One of the most glaring anomalies concerns football stadiums. Glasgow has at least three large football stadiums. Ibrox park has a rateable value of £82,500, Celtic park has a rateable value of £64,800, and Hampden park one of £55,000. I do not compare Scottish grounds with Wembley stadium, because I am sure that people south of the border regard Glasgow as part of the provinces, like Manchester.

    The rateable value of Manchester United's ground is £37,000. Everton's rateable value is £30,250. Leeds United has a rateable value of £28,650 and Anfield, Liverpool one of £27,000. In London, Arsenal's rateable value is £30,500. Rateable values of stadiums in Glasgow are double those of similar premises south of the border, and sometimes even three times greater.

    Football clubs are suffering from the economic recession. If we could eradicate the anomaly, football clubs would be helped, as would indoor bowling clubs. Other hon. Members have race courses and other sporting facilites in their constituencies and will cite examples of anomalies.

    The anomalies are not confined to sport. Anomalies between Scotland and England exist in relation to housing, office premises, shops and other commercial premises. Two or three years ago the Government tackled the anomaly in the rating of external industrial plant and machinery. I did not agree with what they did, but they claimed that Scottish industry was at a disadvantage and removed the anomaly by derating external plant and machinery in Scotland. Several Scottish local authorities, including Central regional council, were disadvantaged because they were deprived of revenue. The industrialists who benefited mainly were the big multinational companies such as BP and ICI.

    In this case, many small businesses are involved. Many small and medium-sized enterprises and sporting organisations are finding it difficult to make ends meet. If amendment No. 23 were accepted and this anomaly were eradicted, not just big business interests would be helped; it would be of considerable benefit to Scottish ratepayers in general.

    9.45 pm

    Many people in Scotland feel let down by clause 15 as it stands. The Minister shakes his head, but he cannot but admit that my amendment is superior to the clause as drafted. It would enhance the opportunity to make comparisons with what happens south of the border. If, in turn, that helps to eradicate the unfair anomalies that exist between Scotland and south of the border, that would be of great benefit, particularly to Scottish sport.

    The hon. Member for Dumfries, (Sir H. Monro) spoke out vociferously, courageously and eloquently in Committee. He was so persuasive that he even managed to get Opposition Members to support him. Unfortunately, his gifts of persuasion were lost on some of his own colleagues, most of whom are not present tonight. They have no interest in sport, whereas the hon. Member for Dumfries obviously has.

    The hon. Member for Aberdeen, South (Mr. Malone) hardly opened his cheeper during the entire Committee stage. His sole contribution was to leak a gossipy piece to The Sunday Times in an attempt to discredit me. In fact, I had been up all night constructively fighting against the Bill and was trying to improve it, yet the hon. Member for Aberdeen, South was on the verge of breaching parliamentary privilege by giving snippets of gossip to The Sunday Times. Fortunately, the newspaper checked the story with me and got the true version from Hansard. Many of us had been up throughout the night when, for much of the time, the hon. Member for Aberdeen, South had been lying outside on a bench paralytic and horizontal.

    Order. I hope that paralytic is a medical term and that it has nothing to do with drink.

    I obviously meant it as a medical term, Mr. Speaker. In addition, the hon. Member for Strathkelvin and Bearsden (Mr. Hirst) had a go at me in my absence when I was addressing a miners' meeting in Stirling in an attempt to save Polmaise colliery. As a result, I was unable to be here for the guillotine debate. The hon. Gentleman said that my contributions during one of the all-night sessions had not been completely rational. I stand by what is in black and white in Hansard, rather than on any distorted version by the hon. Member for Strathkelvin and Bearsden. He, too, was unconscious for at least part of that all-night sitting, or if he was not unconcious he was only semi-compos mentis.

    Unfortunately, we cannot on this occasion go through the night, because of the guillotine, but I hope that we can end with some constructive unity, with the hon. Member for Dumfries and I fighting for Scottish sport and supporting my amendment.

    I shall make only a brief intervention, because time is not on our side. I want to go over one or two points that we dealt with in Committee, but which are still important.

    There is no doubt at all, as the hon. Member for Falkirk, West (Mr. Canavan) implied, that there were great expectations from the White Paper that clause 13 — or, as it now is, clause 15 — would improve the position of Scottish race courses, major stadiums and other subjects that are important in Scotland, which were accepted by the White Paper as paying significantly higher rates than the equivalent in England and Wales.

    The hon. Member for Falkirk, West gave many comparisons from the Standing Committee, and I shall not go over the differences between race courses and football grounds in Scotland, but, broadly speaking, their assessment is three times higher in Scotland than in England and Wales. The Minister took immense pains, over several Committee sittings, to explain that clause 13 would, in fact, do what the Government intended, and that was to allow the sports bodies or race courses or other subjects to use the rental evidence as a comparison between England and Scotland. His firm words tonight have been of immense help to me in assessing the value of clause 15. I hope that when he winds up shortly he will tell us again, in his own strikingly clear words, what clause 15 will do to implement the White Paper, because, despite our prolonged discussions in Committee, the race courses, major football stadiums and many of the voluntary sports clubs still do not think that the clause will do what the Government wish it to do. Since the completion of the Committee stage, I have received letters showing that they are still concerned and do not understand how clause 15 will work in their favour. All I want my hon. Friend to do tonight is to spell out the matter for the last time so that there is no doubt about it.

    My hon. Friend explained in Committee that the revenue principle in England would be converted into rental evidence to be set against the contractors principle in Scotland, again as rental evidence. Frankly, relatively few subjects will have rental evidence to provide. Many of the grounds are owner-occupied, the race courses are owner-occupied, and many of the sports grounds either pay a nominal rent or, again, are owner-occupied. So I hope that the rental evidence will be so sparse that we will be able to use the comparators with England, where the assessments are much lower.

    I hope, therefore, that the Minister will spell the matter out once more, so that there is not a shadow of doubt that the White Paper will be implemented through using the comparators of England and Wales.

    This area of law is one of considerable complexity, in which few of us have any personal expertise. Certainly I do not pretend to have any such expertise. I enjoyed some of the discussions and arguments in Committee, and I felt towards the end that I had an inkling of the bones of the valuation system—or, rather, a better inkling than I had at the start.

    This is an obscure matter, and I entirely take the point that was made by the hon. Member for Dumfries (Sir H. Monro) that there is still a great deal of anxiety among a number of sporting interests, in particular—although, of course, it goes much wider than that—who feel that their rateable values put them at a distinct disadvantage as compared with comparable units south of the border. Despite what the Minister has said so far, and despite what he may say in the remainder of this debate, I suspect that those doubts will continue until we see what effect the proposals have in reality, when the Bill is enacted, on the financial burden which is such a disadvantage to race courses, football grounds, indoor bowling clubs and all the other people who have anxiously and understandably lobbied us on this matter.

    I have tabled several amendments, and amendments Nos. 8 and 9 in my name strike at the same end as amendment No. 23 which my hon. Friend the Member for Falkirk, West (Mr. Canavan) has propounded. The idea was to try to close the gap between the statement in the original White Paper, which gave the impression that there would be an unqualified right of comparison with hereditaments in England and Wales in Scottish valuation cases, and the heavily qualified right of comparison which emerged in clause 15 where there has to be an inadequacy of rental evidence in Scotland before the comparison can be introduced. That real gap is the basic cause of anxiety. It was to strike at that that the amendments in my name and that of my hon. Friend have been tabled.

    As I understand the Minister's case—I hope that I am not crudely over-simplifying or misunderstanding it —in at least a number of areas of tension, particularly race courses and football grounds, there is an inadequacy of rental evidence and that is why the contractor's principle is used in order to fix the rateable value. In that situation the criteria in clause 15 would be met and we are nearly in the position — so nearly as to make no difference—where if the contractor's principle has to be used in Scotland because of the paucity of rental evidence it will fall within the qualification of clause 15 and the comparison with England and Wales will be in order. Therefore, the Minister is reasonably confident that those areas where the contractor's principle has led to the anomalies and financial differences will benefit from the comparisons. I do not wish to push the Minister into absolutes because I realise that he will not carry out the law. That is a matter for the assessor, the lands tribunal and the local valuation committee.

    What the comparisons will mean—I made this point in Committee and I make it again — is a matter for speculation because the large gap at the moment in rateable values between England and Scotland at least partially reflects the fact that there has not been a revaluation in England since 1973 whereas Scotland has kept largely to the quinquennial revaluation cycle until the recent hiccup because of the Government's abortive pledge for domestic rating reform. Once that revaluation takes place in England, or once there is an upgrading when the comparison is made, as must be done under clause 15, the dramatic differential, which is the foundation of many of the hopes of people looking at the comparison north and south of the border may be seriously eroded.

    As I understand it, the basic hope is that where the contractor's principle has led to anomalies it will go and we shall be able to import under the amendment to section 15 of the 1963 Act the kind of comparison evidence, not only of rents but also of valuations which the football grounds, race course owners and other various interests feel will be of help.

    If I have fairly stated that—I hope that I have—it may be that we shall see some help with the particular anomalies in the Bill. I hope that I have because it is on that basis I am prepared to look reasonably sympathetically at the position. May I say in passing that I do not think that one could possibly support amendment No. 14 at this stage? I do not suppose that the hon. Member for Dumfries will push it at this stage. To move on a one-off base for race courses to the revenue principle would be an anomaly that would create great difficulties. I do not think that the hon. Member would seriously wish to push that suggestion.

    10 pm

    If the Minister can say that I have rightly understood the case he is putting, and that he shares my hopes, and is reasonably confident, I would not press the matter to a Division at this stage. However, I want another assurance from the Minister, and I am sure that he will be prepared to give it. First, I hope that he will be prepared to look at further representations, or to hold discussions with interested parties during the remaining stages of the Bill when it goes through the House of Lords, if there are worries that he is over-confident in his expectations. Secondly, if it turns out, despite the hopes, that the anomalies remain as apparent as they now are, and that the difficulties are as serious as they clearly are at present, despite the effect of clause 15, I hope that he will give an assurance that he will be prepared to reconsider the situation at some future date. I hope that he will monitor it on a running basis, and will not regard this as the final full-stop to the argument. If his hopes are dashed, and if we do not get the kind of progress that he is confident will come from the attack on the contractor's principle in the way that I have described, I hope that he will be prepared to start further conversations and see whether an early opportunity can be found to reconsider the question. If he can give those assurances, I will advise my hon. Friends to let the clause pass in its present form, at this stage at least.

    I support the amendment moved by my hon. Friend the Member for Falkirk, West (Mr. Canavan). I believe that the hon. Member for Dumfries (Sir H. Monro), and the people connected with the supportive groups who have made representations to us, are being conned by the Government in this clause. Members of Parliament have received representations from Ayr race course, Auchinleck and Ardrossan indoor bowling clubs, and Bob Kelly, the chairman of Celtic football club, in support of the other senior football clubs in Scotland. They have all been demanding a reduction in the valuations based on a comparison with similar valuations in England and Wales. In the White Paper, the Government gave the impression that they would listen to the representations, but, now that we see the wording of the clauses in the Bill, I am not so sure that that is so. I should like further clarification from the Minister.

    I should like to advise my hon. Friend that the chairman of Celtic football club is not Bob Kelly, but Desmond White.

    I apologise, and I thank my hon. Friend for clearing up the matter.

    It is impossible to make a legitimate comparison between the valuations in England and Wales, and those in Scotland, because the people carrying out the valuation are different, as is the period of the valuation. As has been stated, the Inland Revenue completes the valuations in England and Wales and, because of pressure, revaluation has not taken place in England and Wales since 1973. In Scotland the assessors, who are nominally employed by the regions, but are independent of the regions, carry out the valuation of properties. Because they have a specialist interest, and that is their only interest, they have ensured that revaluations have been carried out in Scotland every five years, except during the period when there is a two-year delay. It is therefore impossible to compare valuations in Scotland with valuations in England and Wales because of the time lag, and the different methods of carrying them out. I put it to my hon. Friends, and to Conservative Members who are worried about the clauses, that they should look hard at how the assessors in Scotland have been operating in comparison with those in England and Wales, and other areas, with regard to properties in the region, and in Scotland.

    Following the 1978 revaluations, I received representations from the ratepayers of Troon. They formed the Troon action group on rates. We joined the right hon. Member for Ayr (Mr. Younger)—now the Secretary of State for Scotland—who was associated with the Ayr ratepayers' group. We organised a delegation to visit my right hon. Friend the Member for Glasgow, Rutherglen (Mr. Mackenzie), who was the Minister of State at the Scottish Office with special responsibility for valuations and rating. The right hon. Gentleman and I complained about the actions of the Ayr assessor in fixing valuations in Ayr and Troon that were well outwith comparable valuations in other areas of Strathclyde and other areas in Scotland.

    At that time, we were trying to get comparisons between valuations in Ayr and Troon with valuations in Fife. We visited my right hon. Friend and appealed for an inquiry into the action of the assessor in Ayr. My right hon. Friend said that he was in favour of an inquiry, but that it could not take place until we had been through all the processes of appeal to the local valuation appeal committee and the land valuation appeal court. Unfortunately, before that inquiry could be held, there was a general election in 1979, with a change of Government.

    The right hon. Member for Ayr suddenly found himself not only a Member of Parliament but the Secretary of State for Scotland. He forgot about the deputation that he and I had led. He said that it was impossible to hold an inquiry because the assessor was independent, even though he was employed by the Strathclyde regional council. I advised the rate action group to appeal to the local valuation appeal committee, but that appeal was turned down. The group then appealed to the land valuation appeal court. However, because of the money involved, only 50 ratepayers took part in the block appeal. They won their appeal and obtained a substantial reduction in valuation, which meant substantial reductions in their rates. That proved that the criticism of the present Secretary of State and myself about the assessor was correct.

    Following that, 600 ratepayers from Troon submitted a block appeal on the ground that the new decision affecting the original 50 ratepayers should be taken into account. The court said that, although the ratepayers might have a case about being over-valued, they were time-barred because they had not put in their appeal at the time of the revaluation in 1978.

    I hope that the Solicitor-General for Scotland will confirm that when the Bill becomes law, the Troon and Ayr ratepayers who were denied the opportunity of revaluation will be paid retrospectively from the time that they made their appeal.

    In Committee the Solicitor-General for Scotland stated initially that the Troon and Ayr ratepayers were not entitled to retrospective payments but, when my hon. Friend the Member for Glasgow, Maryhill (Mr. Craigen) intervened, the hon. and learned Gentleman was advised by his officials that the Secretary of State for Scotland had guaranteed that the ratepayers would be paid retrospectively. I hope that the Solicitor-General for Scotland will state this evening that he will ensure that the Troon and Ayr ratepayers — unfortunately, I no longer represent them now that they are to receive a large payment—will be paid retrospectively.

    The hon. Member for Dumfries (Sir H. Monro) has been conned. I received today a letter on behalf of the Troon action group on rates and the Ayr and District ratepayers association which was sent to Mr. Robert Calderwood, the chief executive of Strathclyde regional council. It states:
    "we write to make a formal complaint against the actions of the Strathclyde Regional Assessor since revaluation 1978 on the grounds: — 1. of his intimidating and obstructing domestic ratepayers in their valuation appeals; 2. of his consistently refusing to disseminate information legitimately requested; 3. of his complete disregard for Her Majesty's Judge's opinion that 'the ratepayer is entitled to an intelligible explanation of the method employed in the valuation of his or her property'".
    There is further criticism in a similar vein.

    Whatever laws we pass in this place, they will not be implemented until we change the system that maintains the independence of the assessors in Scotland. My former constituents found that they could not challenge the assessor because it would be too costly to take him through the process of appeal.

    Instead of introducing the Bill and dealing with the various clauses and amendments, the Government should scrap the Bill. Why do the Tories not do what they said they would do in 1979 and abolish the rating system? I think that that should be done. We should abolish the system; but the Tory Government do not have the confidence to do so. We are perpetuating anomalies that first arose at the end of the middle ages, and they can be ended only by getting rid of the rating and valuation system and moving on to block grants, which would allow local authorities the independence to decide how the moneys should be spent.

    That proposal will not go down well with local government officials and assessors. If the Government are not prepared to do that, they should scrap the assessors' department in Scotland and allow valuations to be undertaken by the Inland Revenue in the same way as in England and Wales. If the Inland Revenue is allowed to undertake valuations throughout the United Kingdom, the Government will receive legitimate comparisons.

    We are being conned this evening by the Government in the same way as the ratepayers of Troon and Ayr. The con will continue unless the Solicitor-General for Scotland tells us that the Troon and Ayr ratepayers will be paid retrospectively. If that happens, justice will have been done and the promise made by my right hon. Friend the Member for Glasgow, Rutherglen (Mr. MacKenzie) in 1978 will finally have been carried out.

    I shall deal first with the issues raised by the hon. Member for Cunninghame, South (Mr. Lambie), who asked about the Troon ratepayers. Clause 16, which deals with that problem, will operate as from two months after this measure receives the Royal Assent. An appeal lodged then could lead to a reduction in rateable value from 1 April this year. Clearly, that must depend on whether the Bill gets through in good time. Because of the hon. Gentleman's hard work on behalf of the Troon and Ayr ratepayers and the keenness that he has shown tonight to see them receive the benefit as soon as possible, I look forward to his support in the Lobby on Third Reading.

    The hon. Member for Cunninghame, South asked what had happened since the 1978 revaluation. My right hon. Friend the Secretary of State asked the Scottish Valuation Advisory Council to review the outcome of the 1978 revaluation and to review appeal procedures to be effective from 1985. The provisions in the Bill have in part resulted from that review. When the hon. Gentleman refers to the Bill as a con, he might ponder upon that point. I hope, too, that when some of the organisations for whom he spoke tonight find that they benefit from the Bill he will withdraw his suggestion that the Government have deliberately conned people on that issue.

    I shall deal first with the general point. The hon. Member for Glasgow, Garscadden (Mr. Dewar) set out his view of my view of how the provisions will work. He was correct, so far as I followed him. However, I shall carefully read Hansard to check what he said. The hon. Gentleman appreciates that the issue is complex and if II find that there is an area where he was not on all fours with the view that I put forward. I shall write to him. The hon. Gentleman was basically correct in saying that the clause tries to achieve a position in which an applicant can turn to English valuations—not just English rental valuations as at present — if no adequate rental evidence is available in Scotland in order to achieve a fairer valuation than that which they believe has been achieved under the contractors' principal.

    In cases where adequate rental evidence is not available—many cases mentioned tonight fall into that category —the provision will be available to benefit those applicants. I cannot be categorical about who will benefit as I said many times in Committee. I must be fair to the House and say that it depends upon the circumstances of each applicant, the basis of the original valuation and whether adequate rental evidence is available in Scotland. It would be wrong for me to say today that this football club or that race course will be covered, and I am sure that the hon. member for Garscadden would not expect me to do so.

    Ishall not give way because time is short. The hon. Gentleman has made a lengthy speech.

    Although I cannot say that, I can say that the provisions are available to help in the circumstances that I have outlined.

    I shall raise a further qualification, which was referred to by the hon. Member for Garscadden. Where a net annual value is taken from the English register, the court must have regard to the time at which that value was ascribed. That must be right because, to claim a valuation that is so historically out of date and which would then pertain in Scotland for the next five years whatever happened in England, would create an equally anomalous situation. I believe that clause 15 brings about that improvement.

    The amendments go much further because they ignore adequate rental evidence available in Scotland. It is a fundamental principle of valuation law that where rental evidence is available it is used to estimate values, because rental evidence is real evidence, of what somebody is prepared to pay in rent. To ignore the best evidence available, which in those circumstances it must be, would make a mockery of the word "valuation".

    The amendments move away from that principle and undermine the basic principle that must underpin Scots valuation law. For that reason, I ask hon. Members to follow the lead of the hon. Member for Garscadden and not to press the amendments.

    I believe that the clause as it stands fulfils the commitment that we made at the election.

    Applicants told us that their competitors south of the border were rated much lower. Valuation north of the border was on the contrators' principle, whereas south of the border the principle was quite different and the applicants could do nothing about it. We are giving them the chance to do something about it if their complaint is justified. That was our commitment, and the Bill fulfils it.

    Amendment negatived.

    Clause 16

    Alteration Of Material Change Of Circumstances"

    I beg to move amendment No. 10, in page 11, line 30, at end insert—

    '(c) after the word "means" shall be inserted the words ", for a period of three years from the coming into effect of section 16 of the Rating and Valuation (Amendment) (Scotland) Act 1984".'.
    I hope to deal with this in two or three sentences. It relates to the area referred to by my hon. Friend the Member for Cunninghame, South (Mr. Lambie). As the Solicitor-General knows, the Bill will give, as it were, a running right of repair, giving the right of appeal to the valuation appeal committee on the basis of comparisons with like properties in Scotland. As the Solicitor-General knows, there are serious anxieties among assessors and others connected with the valuation system that the result may be instability and a situation in which the tone of the role will be constantly changing throughout the quinquennium so that many of the virtues of the Scottish valuation system with its five-yearly updatings will be lost.

    As I made clear in Committee, we support the general wish to ensure that anomalies can be put right and therefore do not oppose the right of appeal. I do not intend to press the amendment, but I ask the Minister for an assurance that he will keep a close eye on the technical anxieties that have fairly been brought to our attention and that, with the assessors and other interested bodies, he will monitor exactly how matters develop and take any remedial action that may be necessary on a technical level to ensure that we do not create problems for ourselves through what I know is a genuinely well-intentioned effort to put right anomalies which may appear in individual valuations during the quinquennium.

    With respect to the hon. Member for Glasgow, Garscaddan (Mr. Dewar), the effect of the amendment would be to give a limited life to the whole of the definition "material change of circumstances", both that which is on the statute book already and that which is proposed in the Bill. Three years from the date of the Royal Assent, there would be complete confusion because ratepayers, assessors and the courts would be left without any guidance as to what amounts to a material change although assessors would still have a duty to amend the roll to give effect to a material change and ratepayers would have the right to appeal on the same grounds.

    There can also be no question of limiting the amendment made by clause 16, as that improvement in the law is needed to remedy continuing inequities. It is not just a transitional measure.

    I think that the hon. Gentleman appreciates that the president of the Scottish Assessors Association has commented further on the clause since the debates in Committee. I think that it is fair to say that he has now given a nod of agreement in my direction, accepting what I said on the vexed issue of the effect of the deletion in section 37 of the Local Government (Scotland) Act 1975 brought about by clause 16. He is worried about the concept of value shift once it is permissible to consider rentals subsequent to the date of revaluation. I believe that my comments in Committee were correct and that the president now accepts that. If I am wrong, the difficulty of the amendment would be that within three years there would be no prospect whatever of anyone having the matter tested in the courts.

    I give the hon. Gentleman this undertaking. We appreciate that we have introduced a significant change in the way in which valuations are to be achieved in Scotland. We shall follow very carefully the effect of the changes in part II of the Bill, especially in clause 16, which my hon. Friend the Under-Secretary of State indicated would be the interest in clause 15. We shall want to know, for example, what the value in comparable decisions proved to be to ratepayers and assessors. We shall also want to see what administrative costs and burdens are imposed on the assessors in the future.

    In those circumstances, I hope that the hon. Gentleman will agree that the amendment should be withdrawn.

    Amendment, by leave, withdrawn.

    Schedule 2

    Amendments Of Enactments

    Amendment made: No. 11, in page 26, line 13, at end insert

    '13A. In subsection (2) of section 2 of the Local Government (Scotland) Act 1975 (date of effect of alteration in the valuation roll) after paragraph (c) there shall be inserted the following paragraph—
    "(cc) made under subsection (1)(ee) above following upon an appeal by virtue of section 3(2A) of this Act by a person who have become the proprietor, tenant or occupier of lands and heritages shall have effect only as from the date when he became such proprietor, tenant or occupier.".'. — [The Solicitor-General for Scotland.]

    Clause 19

    Citation Commencement And Extent

    Amendment made: No. 12, in page 12, line 9, after '15', insert

    'and paragraphs 9, 12 to 14, and 16 of Schedule 2'.—[The Solicitor-General for Scotland.]

    10,25 pm

    I beg to move, That the Bill be now read the Third time.

    The purpose of the Bill is simple and, therefore, I shall not go into it in detail. We have covered many aspects of it on Report. Much has been made of the constitutional argument about the rate limitation provisions, but it is completely unfounded to say that it marks a significant constitutional change. Local authorities are not free agents, nor are they at liberty to decide what action to take regardless of Government. They are, and always have been, creatures of statute. They derive their powers from Parliament, and their actions take place within the statutory and economic framework set by a democratically elected Parliament. Since local authorities are responsible for a quarter of public spending, no Government, nor any party, can afford to ignore local authority spending when determining national economic policies — and no Government have.

    The Bill helps ratepayers. Two additional new clauses were added to the Bill in Committee, through the efforts of my hon. Friends the Members for Stirling (Mr. Forsyth) and for Edinburgh, West (Lord James Douglas-Hamilton). They increase public access to accounts, improve accountability, and will be good for ratepayers.

    The Bill seeks to help ratepayers by protecting them from high expenditure and high rates, and by enabling individual valuation anomalies to be corrected. It aims at the two pillars on which excessive rate burdens can be based — over high rate poundages and anomalous valuations. It is not, and never has been intended to be an attack on local government. There is nothing in the Bill which a responsible local authority need fear.

    When I listened, as I had to, to the dramatic scare stories and doom-laden predictions about the end of local democracy from Opposition Members, I wondered whether those prophets of gloom understood the Bill. Sometimes I thought that they did. They are so bereft of policies to put before Scottish people and ratepayers,— although I have challenged them to do so—that they have had to take refuge in a display of synthetic anger against the Bill. It may be good politics in the absence of anything more constructive, but it is undeniable that by that display they have shown total indifference to the feelings of Scottish ratepayers. Scottish ratepayers will not easily forgive or forget.

    The Government have fulfilled in the Bill the commitments made to the Scottish people at the general election. We have stood by ratepayers and have given them the protection that we believe should be theirs and, therefore, I recommend the Bill to the House.

    10.24 pm

    The Bill is the Government's cover up on rates. It masks the Government's about-turn over the long-standing promise of rates reform. In Committee Ministers were unwilling to make amendments, and they have proved equally inflexible on Report.

    Under Part I the Secretary of State takes more powers than he needs, more powers than are good for him, and more powers than are good for Scottish ratepayers. He will fix the rate poundage and the rent level. In reality, it will be left to a few advisers effectively to act the gauleiters of Scottish local government and to do the job that ought properly to be done by paid local government officers and elected members.

    Part II on valuation was, I believe, born out of expediency. By changing some aspects of valuation, without in any way changing the basic principles of valuation law in Scotland, the Government will be found wanting. There will be a demand for a United Kingdom review of valuation methods and practice once it begins to penetrate, as it is already doing that what football and other sports people and others see in the Bill will not materialise.

    The Bill marks a further step, some would say a fatal step, towards the collision course with local government on which the Government have embarked. Even if right hon. and hon. Members are unable to defeat the Bill, I hope that they will register their disapproval of this abominable piece of legislation.

    Question put, That the Bill be now read the Third time:—

    The House divided: Ayes 204, Noes 138

    Division No. 215]

    [10.31 pm


    Alexander, RichardBest, Keith
    Ancram, MichaelBiffen, Rt Hon John
    Ashby, DavidBlaker, Rt Hon Sir Peter
    Aspinwall, JackBonsor, Sir Nicholas
    Atkins, Robert (South Ribble)Boscawen, Hon Robert
    Atkinson, David (B'm'th E)Bottomley, Peter
    Baker, Nicholas (N Dorset)Bowden, Gerald (Dulwich)
    Baldry, AnthonyBoyson, Dr Rhodes
    Batiste, SpencerBraine, Sir Bernard
    Bendall, VivianBrandon-Bravo, Martin
    Berry, Sir AnthonyBright, Graham

    Brinton, TimHolland, Sir Philip (Gedling)
    Brittan, Rt Hon LeonHolt, Richard
    Brown, M. (Brigg & Cl'thpes)Hooson, Tom
    Bruinvels, PeterHordern, Peter
    Bryan, Sir PaulHowarth, Gerald (Cannock)
    Buck, Sir AntonyHowell, Rt Hon D. (G'ldford)
    Burt, AlistairHubbard-Miles, Peter
    Carlisle, John (N Luton)Hunt, David (Wirral)
    Carlisle, Kenneth (Lincoln)Hunt, John (Ravensbourne)
    Channon, Rt Hon PaulHunter, Andrew
    Chapman, SydneyJessel, Toby
    Chope, ChristopherJohnson-Smith, Sir Geoffrey
    Churchill, W. S.Jones, Gwilym (Cardiff N)
    Clark, Hon A. (Plym'th S'n)Jones, Robert (W Herts)
    Clark, Dr Michael (Rochford)Joseph, Rt Hon Sir Keith
    Clark, Sir W. (Croydon S)Kershaw, Sir Anthony
    Clarke, Rt Hon K. (Rushcliffe)King, Roger (B'ham N'field)
    Conway, DerekKnight, Gregory (Derby N)
    Coombs, SimonKnowles, Michael
    Cope, JohnLamont, Norman
    Corrie, JohnLang, Ian
    Couchman, JamesLawler, Geoffrey
    Cranborne, ViscountLee, John (Pendle)
    Crouch, DavidLeigh, Edward (Gainsbor'gh)
    Dicks, TerryLilley, Peter
    Dorrell, StephenMcCurley, Mrs Anna
    Dover, DenMacKay, Andrew (Berkshire)
    du Cann, Rt Hon EdwardMacKay, John (Argyll & Bute)
    Dunn, RobertMajor, John
    Durant, TonyMather, Carol
    Edwards, Rt Hon N. (P'broke)Monro, Sir Hector
    Eggar, TimMoore, John
    Emery, Sir PeterMorris, M. (N'hampton, S)
    Evennett, DavidMoynihan, Hon C.
    Fallon, MichaelMurphy, Christopher
    Favell, AnthonyNeubert, Michael
    Finsberg, Sir GeoffreyNewton, Tony
    Fletcher, AlexanderOppenheim, Rt Hon Mrs S.
    Fookes, Miss JanetParris, Matthew
    Forman, NigelPercival, Rt Hon Sir Ian
    Forsyth, Michael (Stirling)Pink, R. Bonner
    Fowler, Rt Hon NormanPollock, Alexander
    Fox, MarcusRaison, Rt Hon Timothy
    Franks, CecilRoberts, Wyn (Conwy)
    Fraser, Peter (Angus East)Robinson, Mark (N'port W)
    Freeman, RogerRoe, Mrs Marion
    Gale, RogerRossi, Sir Hugh
    Galley, RoyRumbold, Mrs Angela
    Gardiner, George (Reigate)Ryder, Richard
    Glyn, Dr AlanSainsoury, Hon Timothy
    Goodhart, Sir PhilipSayeed, Jonathan
    Goodlad, AlastairShaw, Giles (Pudsey)
    Gow, IanShaw, Sir Michael (Scarb')
    Gower, Sir RaymondShelton, William (Streatham)
    Grant, Sir AnthonyShepherd, Colin (Hereford)
    Gregory, ConalShersby, Michael
    Griffiths, E. (B'y St Edm'ds)Sims, Roger
    Griffiths, Peter (Portsm'th N)Smith, Sir Dudley (Warwick)
    Grist, IanSmith, Tim (Beaconsfield)
    Ground, PatrickSoames, Hon Nicholas
    Grylls, MichaelSpeller, Tony
    Hamilton, Hon A. (Epsom)Spencer, Derek
    Hampson, Dr KeithSquire, Robin
    Hanley, JeremyStanbrook, Ivor
    Hannam, JohnStanley, John
    Harvey, RobertSteen, Anthony
    Haselhurst, AlanStern, Michael
    Havers, Rt Hon Sir MichaelStewart, Allan (Eastwood)
    Hawkins, Sir Paul (SW N'folk)Stewart, Ian (N Hertf'dshire)
    Hawksley, WarrenStokes, John
    Hayes, J.Stradling Thomas, J.
    Hayward, RobertSumberg, David
    Heathcoat-Amory, DavidTaylor, Teddy (S'end E)
    Heddle, JohnTebbit, Rt Hon Norman
    Henderson, BarryTerlezki, Stefan
    Hickmet, RichardThomas, Rt Hon Peter
    Hicks, RobertThompson, Donald (Calder V)
    Higgins, Rt Hon Terence L.Thompson, Patrick (N'ich N)
    Hind, KennethThurnham, Peter
    Hirst, MichaelTracey, Richard

    Trotter, NevilleWatson, John
    Twinn, Dr IanWatts, John
    van Straubenzee, Sir W.Wells, Bowen (Hertford)
    Vaughan, Sir GerardWells, John (Maidstone)
    Viggers, PeterWheeler, John
    Waddington, DavidWinterton, Mrs Ann
    Wakeham, Rt Hon JohnWinterton, Nicholas
    Walden, GeorgeWolfson, Mark
    Walker, Bill (T'side N)Wood, Timothy
    Waller, Gary
    Ward, JohnTellers for the Ayes:
    Wardle, C. (Bexhill)Mr. Tristan Garel-Jones and Mr. Douglas Hogg.
    Warren, Kenneth


    Adams, Allen (Paisley N)Hughes, Roy (Newport East)
    Anderson, DonaldHughes, Sean (Knowsley S)
    Archer, Rt Hon PeterJanner, Hon Greville
    Ashley, Rt Hon JackJohn, Brynmor
    Ashton, JoeKaufman, Rt Hon Gerald
    Atkinson, N. (Tottenham)Kennedy, Charles
    Banks, Tony (Newham NW)Kilroy-Silk, Robert
    Barnett, GuyKinnock, Rt Hon Neil
    Barron, KevinKirkwood, Archibald
    Beith, A. J.Lambie, David
    Bell, StuartLamond, James
    Benn, TonyLewis, Ron (Carlisle)
    Bermingham, GeraldLewis, Terence (Worsley)
    Bray, Dr JeremyLitherland, Robert
    Brown, Gordon (D'f'mline E)Lloyd, Tony (Stretford)
    Brown, Hugh D. (Provan)McCartney, Hugh
    Brown, N. (N'c'tle-u-Tyne E)McCrea, Rev William
    Brown, R. (N'c'tle-u-Tyne N)McDonald, Dr Oonagh
    Brown, Ron (E'burgh, Leith)McKay, Allen (Penistone)
    Bruce, MalcolmMcKelvey, William
    Buchan, NormanMackenzie, Rt Hon Gregor
    Callaghan, Jim (Heyw'd & M)McNamara, Kevin
    Campbell-Savours, DaleMcTaggart, Robert
    Canavan, DennisMcWilliam, John
    Carlile, Alexander (Montg'y)Madden, Max
    Carter-Jones, LewisMarek, Dr John
    Clark, Dr David (S Shields)Marshall, David (Shettleston)
    Clarke, ThomasMartin, Michael
    Clay, RobertMaxton, John
    Cocks, Rt Hon M. (Bristol S.)Meacher, Michael
    Coleman, DonaldMeadowcroft, Michael
    Concannon, Rt Hon J. D.Michie, William
    Cook, Frank (Stockton North)Millan, Rt Hon Bruce
    Corbett, RobinMiller, Dr M. S. (E Kilbride)
    Corbyn, JeremyMitchell, Austin (G't Grimsby)
    Craigen, J. M.Morris, Rt Hon J. (Aberavon)
    Crowther, StanNellist, David
    Deakins, EricO'Brien, William
    Dewar, DonaldO'Neill, Martin
    Dobson, FrankPavitt, Laurie
    Dubs, AlfredPenhaligon, David
    Dunwoody, Hon Mrs G.Pike, Peter
    Eadie, AlexPowell, Raymond (Ogmore)
    Eastham, KenPrescott, John
    Evans, John (St. Helens N)Rees, Rt Hon M. (Leeds S)
    Fatchett, DerekRichardson, Ms Jo
    Faulds, AndrewRobertson, George
    Flannery, MartinRobinson, G. (Coventry NW)
    Foot, Rt Hon MichaelRobinson, P. (Belfast E)
    Foster, DerekRoss, Ernest (Dundee W)
    Foulkes, GeorgeRowlands, Ted
    Fraser, J. (Norwood)Sedgemore, Brian
    Freeson, Rt Hon ReginaldSheldon, Rt Hon R.
    George, BruceShore, Rt Hon Peter
    Godman, Dr NormanShort, Ms Clare (Ladywood)
    Gould, BryanSilkin, Rt Hon J.
    Hamilton, James (M'well N)Skinner, Dennis
    Harman, Ms HarrietSmith, C.(Isl'ton S & Fbury)
    Harrison, Rt Hon WalterSmith, Rt Hon J. (M'kl'ds E)
    Heffer, Eric S.Snape, Peter
    Hogg, N. (C'nauld & Kilsyth)Soley, Clive
    Holland, Stuart (Vauxhall)Spearing, Nigel
    Howells, GeraintSteel, Rt Hon David
    Hoyle, DouglasStewart, Rt Hon D. (W Isles)
    Hughes, Robert (Aberdeen N)Strang, Gavin

    Thomas, Dafydd (Merioneth)Winnick, David
    Tinn, JamesYoung, David (Bolton SE)
    Torney, Tom
    Wallace, JamesTellers for the Noes:
    White, JamesMr. Frank Haynes and Mr. John Home Robertson.
    Williams, Rt Hon A.

    Question accordingly agreed to.

    Bill read the Third time, and passed.