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Rating Reform (Scotland)

10.27 pm

The Minister of State, Scottish Office (Mr. Ian Lang) : I beg to move,

That the Rate Support Grant (Scotland) (No. 2) Order 1988, dated 28th November 1988, a copy of which was laid before this House on 30th November, be approved.

I understand that it would be for the convenience of the House if we were to debate at the same time the second motion on the Order Paper :

That the Revenue Support Grant (Scotland) Order 1988, dated 28th November 1988, a copy of which was laid before this House on 30th November, be approved.

Mr. Speaker : If the House agrees, so be it.

Mr. Lang : The revenue support grant order, the first of its kind, marks the final stage of the revenue support grant settlement for 1989-90, first details of which were announced by my right hon. Friend to the House on 27 July. As my right hon. Friend stated at that time, public expenditure provision for the coming financial year has been fixed at 8 per cent. more than provision in the current year, and 4.6 per cent. above authorities' adjusted budgets for this year. It includes full provision for the extra administrative costs of operating the community charge. The increase in aggregate Exchequer grant for next year is 5.5 per cent., but after making provision for specific grant payments, the increase in revenue support grant, over the level of rate support grant for the current year, is 9.8 per cent. That is the relevant point for tonight's debate and I shall return to it later.

The grant settlement is, of course, in respect of the first year in which domestic rates will be replaced, in Scotland, by the community charge. This leads us in turn to a simplification in the system of grant support to local authorities, and the ending of the old rate support grant with its three separate apportionments into needs and resources elements and domestic rate relief each of which then required regular adjustments in subsequent years. We shall, of course, have the legacy of the old system in the continuing need for rate support grant orders for some time, in respect of years up to 1988-89, but I am glad to say that the new revenue support grant arrangements will be simpler.

In the first place, I propose to have only one revenue support grant order a year, and that will be a fairly short document, like the one we are considering this evening, dealing only with the year ahead. The order sets out how much grant each local authority will be paid in the following year, and the report on the order describes how these figures are arrived at. Once approved, each authority's grant will be fixed and the authority can be certain of precisely how much it will receive. There will, in general, be no subsequent adjustments, either for the various technical reasons that have required adjustment in the past or in respect of grant penalties. The effect of the community charge will be to make councils much more responsive and accountable to their electorates for their spending levels and for that reason the Government feel able to abandon the system of grant penalties.

It is worth mentioning at this point the other significant change which will begin to make its impact on local government next year and that is the introduction of the competition provisions in the Local Government Act 1988. The effect of competition will be to make the local

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authority operations to which it applies more efficient and to reduce their costs. This will be so irrespective of whether the successful bidders for business are outside contractors or the authorities' own direct labour organisations. The introduction of the community charge and the new competition provisions should between them bring considerable benefits to local charge payers, both in respect of the payments required of them and of the services with which they are provided.

When my right hon. and learned Friend announced in July the terms of the revenue support grant settlement for next year, he said that, if councils were to keep their expenditure increases within the present level of inflation, there would be no reason for community charge levels next year to be higher than they would have been if councils had been required to raise the same amounts as domestic rates this year. We published figures at the time showing that that would mean, for most community charge payers, payments in the range £200 to £300. Last month, we published our detailed estimates of what, on this basis, each community charge ought to be next year. The matter has been one of lively discussion since then and my right hon and learned Friend and I have been accused by local authorities of almost every crime in the book. May I say this evening that I do not withdraw a word of what we have said on this matter. Underlying our prognostications are a few simple facts. Local authorities have three main sources of income with which they finance their expenditure. These are non-domestic rates, grant and, from next April, the community charge.

Mr. Dennis Canavan (Falkirk, West) : In calculating the amount of revenue support grant, what estimate did the Government make of the number of people who will refuse to pay the poll tax?

Mr. Lang : The provision for non-payment is broadly similar to the provision that exists under domestic rates, although in that instance it is more a question of reliefs than of non-payment. Under the community charge, the reliefs and exemptions are likely to amount to about 2.3 per cent. compared with 6 per cent. of reliefs.

Mr. George Foulkes (Carrick, Cumnock and Doon Valley) : Is it not the case that the Government have said to the Convention of Scottish Local Authorities that the non-collection rate will be 5 per cent? Is it not also the case that everyone in local authorities and all others who make any reasonable judgment of the matter think that that is a gross under- estimate, and that the figure will be well in excess of 5 per cent? Local authorities will not, therefore, raise a substantial sum of money through the poll tax this year, as the Government expect.

Mr. Lang : The record of those who have estimated the success or failure of the various processes in preparation for the community charge is such that I think that our own figures are rather closer to reality than those of the others. The figure is broadly the same for shortfall, which is a total of around 7 per cent., as under the domestic rating system, and that includes reliefs and non-payment. Under the provisions of the 1987 legislation--

Mr. Harry Ewing (Falkirk, East) : I want to ask the Minister a simple question. What on earth has the level of the poll tax got to do with the Scottish Office? Was it not the case that, when the legislation was introduced, the Government argued that they introduced it to create a

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situation in which the matter was between the local authorities and their electorate? What has it to do with the Scottish Office?

Mr. Lang : It will be such a matter. Accountability is one of the central underlying themes. But throughout last year we heard various Labour councillors and directors of finance estimating outlandish figures such as £529, which was the figure that the finance director of Glasgow estimated. Curiously enough, that estimate emerged in the middle of the local government elections. We have waited until the facts were available to us and then, on the basis of the facts that I am describing now, we have said what the level of community charge would need to be if there was no volume increase in spending by local authorities.

Under the 1987 legislation, authorities now know the

inflation-related increase in their non-domestic rate income next year. They also know, subject to the agreement of the House this evening, their increase in grant income. The increase in revenue support grant for local authorities as a whole is 9.8 per cent. over the rate support grant first payable in respect of the present year. Many authorities will gain a much higher increase than that, and for the high-spending authorities that have incurred grant penalties this year, the actual increase in grant next year, by comparison with what they are receiving this year, will in some cases be very substantial.

Mr. John Maxton (Glasgow, Cathcart) : In view of what he has said about grant penalties, why does the Minister not, even now, write off all the penalties for last year? The Secretary of State for the Environment has said that he will not impose any penalties in the coming financial year simply to allow a better run into the poll tax.

Mr. Lang : As the hon. Gentleman knows, the systems are not the same. It is important to maintain downward pressure on local authority spending. That is why we made it clear at the outset that penalties would remain this year. The English have decided to close down their grant system. The effect of that is that there can be no adjustment, so they will not benefit, as we will, if authorities bring their spending into line, from grant adjustments of some £89 million.

All that is left for authorities to fix for themselves is the income that they can expect from community charges. It is absolutely clear, therefore, that if authorities propose to maintain the same volume of spending next year as they are planning this year, they ought to charge the level of community charge that my right hon. and learned Friend announced last month. If their charges are higher, the answer is simple--they are increasing the volume of their spending. Their electors are entitled to know that, and that is why we published our estimated figures when we did. As the House will see, the revenue support grant order is a very simple and straightforward document which simply sets out the amount of grant that we propose to pay to each authority. The basis on which these sums have been arrived at is set out in the report. This is in accordance with the provisions of schedule 4 of the 1987 Act.

First, an amount has been distributed among authorities on the basis of their assessed needs. This is a process akin to the distribution of the needs element of the present rate support grant, and the basis of distribution is to equalise for different per capita needs. The rest of the available grant is then distributed on a straightforward per capita basis. The result of this process is to increase

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substantially the share of grant going to some authorities by comparison with the present rate support grant arrangements, and correspondingly to reduce the share going to other authorities. There are various reasons for this, but the most notable is that under the old system an authority could actually gain grant by setting a high rate poundage. This encouraged overspending, so in our new grant arrangements it is of no benefit to a local authority to have a high non- domestic rate poundage.

Mr. Foulkes : The Minister wil know that Cumnock and Doon Valley has been a responsible authority. At a meeting in Lugar, when the Secretary of State visited the area recently, he said that he would bend over backwards to assist Cumnock and Doon Valley because of the high level of unemployment, the poverty and the deprivation in the area. Why has assistance to the authority been reduced by £500,000? That is surely not bending over backwards to help.

Mr. Lang : I shall gladly look into the matter if the hon. Gentleman would like to give me details of his anxieties. The authority benefits from the safety net, both in terms of the district and as a district in Strathclyde region, to the extent of some £19 a head.

Mr. Dick Douglas (Dunfermline, West) : How does the Minister respond to COSLA's assertion that safety-netting goes against accountability and that, if we really want to tackle accountability, we should try to direct the tapering device towards the individual?

Mr. Lang : Not since Saul set out for Tarsus has such a blinding flash of light led to such dramatic conversions to the principle of accountability such as we now hear from the Opposition. I shall answer the hon. Gentleman's question by saying exactly what I was about to say on safety-netting. The legislation provides that, having carried out the allocation process, the Secretary of State may then alter the resulting figures. That is the so-called safety-netting power. Its declared intention is to allow damping of swings in grant entitlement.

I understand the concern, but there is nothing new in this arrangement except that we are now starting to do away with it. I am glad to hear that there is a welcome for that from the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes). For years past there have been arrangements to modify grant entitlement to moderate fluctuations in any one local authority from one year to the next. Last year, for example, in distributing the needs element of rate support grant, each authority was guaranteed a minimum increase of 4 per cent. over the present year, and that was financed by imposing a 10 per cent. limit on gains. Last year, the precise detail of the arrangement was suggested to us by COSLA in the course of a meeting that it had with my right hon. and learned Friend and myself. So there is nothing new or unusual about that sort of arrangement. Indeed, it was a feature of the old grant system that, through the operation of the resources element, some high-spending authorities attracted more grant by virtue of their high rate poundages. The new arrangements for the distribution of revenue support grant will give no such advantage to high spenders. It is only now, under the greater transparency and accountability of

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the new arrangements, that we can see more easily the unacceptable degree of cross-subsidy of the high spenders by the low spenders that has existed in the past.

The Green Paper on local government reform assumed that the cross-subsidy would be carried over 100 per cent. into the first year of the new system. Legislation was enacted against the background of that assumption and all illustrations of community charge levels that the Government have published until recently have been based on it. I take the view--I am glad that some Opposition Members agree with me--that it is unacceptable--

Mr. Douglas : Will the Minister give way?

Mr. Lang : I would rather that the hon. Gentleman hear me out. When he has done so, I shall give way to him.

Mr. Douglas rose --

Mr. Lang : If the hon. Gentleman will hear me out, I shall give way to him. [Interruption.]

Madam Deputy Speaker (Miss Betty Boothroyd) : Order.

Mr. Douglas : On a point of order, Madam Deputy Speaker. I am willing to read Hansard and analyse what I said earlier, but I ask the Minister to respond to that which COSLA has said. I am willing to use my own phraseology. The Minister is prepared--

Madam Deputy Speaker : Order. The hon. Gentleman knows that he is raising a matter for debate and not a matter on which the Chair can rule.

Mr. Douglas : It is all right--

Madam Deputy Speaker : Order. Mr. Lang.

Mr. Lang : I am in the process of responding to the question of the hon. Member for Dunfermline, West (Mr. Douglas) about COSLA. If he will bear with me, I shall give him the rest of the answer. The Green Paper on local government reform assumed that the cross-subsidy would be carried over 100 per cent. in the first year of the new system. The legislation was enacted against the background of that assumption. We take the view that it is unacceptable to continue with this situation for other than the short term. That is why my right hon. and learned Friend the Secretary of State and I have taken steps to remove 38 per cent. of the cross-subsidy or safety net at once. We plan to withdraw the rest within the next three years or so. We must recognise, however, that for community charge payers in some authorities, especially in Glasgow and Strathclyde, too sudden a change in the grant arrangements would have had dramatic consequences as we move to a completely new and fairer system. The safety net merely reflects temporarily, and on a declining basis, the advantage that some authorities had under the old grant system to enable such authorities to adapt.

The authorities that are most vociferous in their complaints about the temporary continuance of a cross-subsidy should reflect that they are the direct beneficiaries of the change to the new system of grant distribution that gets away from the resource element contribution. They are benefiting further from the already substantial phasing out of safety nets, and they are the

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recipients of the largest increase in grant under the new system. For example, the Borders region stands to gain 13.5 per cent. more next year than this, and the Grampian region 14.6 per cent. more--more than double the rise in the cost of living--and many districts are receiving still larger increases.

The Revenue Support Grant (Scotland) Order before us tonight, represents an extremely good deal for both local authorities and domestic taxpayers. Every regional and islands council is receiving a grant increase well in excess of the rate of inflation. Taken together with the sums of grant being returned to authorities in respect of earlier years, there is every reason to expect community charges to be set at moderate levels. I commend the orders to the House.

10.45 pm

Mr. John Maxton (Glasgow, Cathcart) : I can understand why the Minister kept his head down and read every word of his dreary speech. If he had lifted his head and had happened to catch the eye of anyone on either side of the House, I doubt whether he could have kept a straight face. He would have broken into fits of laughter because, as my hon. Friend the Member for Dunfermline, West (Mr. Douglas) has said, he was talking nonsense.

Tonight we are debating for the first time the new grant arrangements under the poll tax legislation that the Government are imposing upon the Scottish people, despite almost total opposition to it. The levels of poll tax to be imposed will depend upon the Revenue Support Grant (Scotland) Order and I intend to limit my remarks to that.

The Minister tried to imply that this is a simple matter. Of course the order is simple, because it is simply a list of figures representing what each local authority will receive. The idea that the process by which those figures have been arrived at is more simple than past methods is absolute nonsense. Consider the document put to COSLA by the Scottish Office about how the safety netting is arrived at, which stated :

"Column 28 is calculated as follows :

For an area with no safety net community charge (column 27) over £275, and with a no safety net charge (column 27) greater than the fully safety- netted charge (column 26), column 28 is the greater of £275 and column 26, its fully safety-netted charge,"

etc., etc.

Mr. Henry McLeish (Fife, Central) : That is simple enough!

Mr. Maxton : Oh yes. If anyone believes that the method is simple and is anything other than gobbledegook, he is a con man. Perhaps that is exactly what the Secretary of State and the Minister are. The Secretary of State and the Minister have tried to claim that the settlement is generous and that the levels of poll tax are much lower than we had estimated. The Minister made much play of that in his speech. He forgets that our objection to the poll tax is not the level imposed on any individual, but the fact that it is grossly unfair that the tax can be imposed on someone who is just above the low rebate scheme and that the same level of tax is imposed on the wealthiest in the land. That is our moral objection to the poll tax : no matter the level, the tax is grossly unfair.

I accept that the settlement under the poll tax is more generous than past settlements, but that is not saying a

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great deal for it. Equally, that generosity does not stem from the Government's munificence to the Scottish people, but is part of cheap political opportunism and sheer accident.

The accident which increases the settlement to 9.8 per cent. is the £70 million that the Government, somehow or other, managed to con the Treasury into allowing them to keep. Normally they would have lost that money to the Treasury. The Secretary of State may smile, but I hope that he will be able to guarantee that that £70 million will not be clawed back by the Treasury next year, thus putting an extra burden on the Scottish poll tax payers.

The percentage of grant to relevant expenditure remains at 55.4 per cent., exactly the same as it was last year. It is worth saying again and again that, in 1979, the percentage of grant was 68.4 per cent. If that same figure of grant was being given by the Secretary of State today, the average poll tax in Scotland--based on the Secretary of State's formula-- would be not £275 but £180.

Mr. Lang : Perhaps the hon. Gentleman will extend his arithmetic and say what it would be if the level had not been reduced from 75 per cent. to 68.5 per cent. by the last Labour Administration.

Mr. Maxton : Nobody has denied that it was reduced by the last Labour Government, but the massive major reduction in grant has occurred under the Tories. The hon. Gentleman should admit that. It is his problem. The Conservatives have been in power for 10 years and he must accept responsibility for what they have done.

Mr. Harry Ewing : Perhaps my hon. Friend should remind the Minister that the rate support grant level was at 75 per cent. to compensate local authorities in Scotland for the reorganisation of local government imposed on them by the outgoing Conservative Government, who left the Labour Administration to pick up the tab. It was always understood that it would be reduced to 68.5 per cent.

Mr Maxton : My hon. Friend has explained the position as fully as I would have expected him to do. This is not a particularly generous settlement, so let us not get carried away into believing that the Minister is a late phoney Father Christmas.

Grant is given against the relevant expenditure figure that the Secretary of State claims each Scottish local authority should spend next year. If that figure is wrong, then so is the grant less generous than would appear to be the case. On the surface, as the Minister has tried to claim, there appears to be an increase of 8 per cent. in the level of relevant expenditure. But against this year's adjusted budgets it is only 4.3 per cent., and that is well below the level of inflation as estimated by the Government. It includes--but the Minister did not mention this--an extra £13 million for the implementation and administration of the poll tax, an admission that the Government got it wrong in terms of the cost of the poll tax all along.

If local authorities cannot live within that 4.3 per cent. increase--which, as I say, is well below the estimated rate of inflation and almost certainly well below the local government rate of inflation--the poll tax figures will be well above the guesses put out by the Secretary of State. It is difficult to see how local authorities will be able to maintain existing services within that figure, let alone meet the new burdens that have been placed on them--the

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revised staffing standards in schools, the introduction of school boards, the development of compulsory tendering and the pay awards for police and fire services that, as we know, will be well above 4.3 per cent.

When loan and interest charges are added, the total level of expenditure supported by grant is £4,505 million. But the sum for loan charges is based on an interest rate of 10.2 per cent. and no hon. Member believes that that is remotely realistic in the present economic climate. The Minister must give a guarantee to the House now that he will bring forward variation orders to take account of the changes in interest rates that have been imposed by the Government in recent months. If he fails to do that, the poll tax payer will again have to carry that burden.

The Government are arriving at their estimated poll tax figures assuming that exemptions and non-collections will be the same as for rates. Nobody, apart from the occupants of the Government Front Bench, believes that to be true. Everybody believes that the level of poll tax non-payment and the problems of collection will be so much greater that the poll tax figures for those who can and will pay will be that much higher.

I accept that if the Government had continued the trend since 1979 and reduced the support grant yet again, and if the safety net system based on the unrealistic £275 Scottish average had not been introduced, the poll tax in many authorities, particularly in the west of Scotland, would have been much higher. For instance, but for the safety net, the combined Glasgow and Strathclyde rate would have been £55 more than it will be. The deliberate depressing of the poll tax figures is not an attempt by the Government to be generous to the poll tax payers of Glasgow and Strathclyde ; it is a desperate attempt to reduce the political outcry on 1 April when the poll tax bills go out.

Mr. Douglas : This is governmental corruption.

Mr. Maxton : That is why my hon. Friend speaks in such terms, although I perhaps would not ; but he is right. This is an attempt to hide the great hatred for the poll tax in Scotland. At long last the Government seem to have realised that the poll tax is deeply unpopular among the vast majority of Scottish people. Knowing that they will have to take full responsibility for the tax and the level at which it is set this year, they have attempted to reduce its impact by these devious means.

I assume that over the next few years the Government will resume their reductions in grant to local authorities. The Minister has already said that they intend to run down the safety net procedures. By doing that they hope that the resultant increase in the poll tax will be blamed on what they call spendthrift Labour-controlled authorities, not on the Government.

Let us examine the safety net procedures. Non-domestic rates are now paid into a common pool and redistributed on a per capita basis to local authorities. That means that authorities such as Strathclyde and Glasgow, with high levels of non-domestic subjects and high domestic rate poundages, contribute more, and authorities with low levels gain.

So the Government decided in their wisdom, against the advice of COSLA, to ensure that the enormous disparities that this would create should be compensated for by a safety net. But this safety net does not help the poorer, as opposed to the richer, poll tax payer--as it

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should. It helps all local authorities and all poll tax payers in individual poll tax areas. Moreover, the safety net makes a complete mockery of the whole Government case for the poll tax. That case is all about accountability. We have heard time and again--and again from the Minister tonight--that the poll tax is about accountability. We heard that on Second Reading, in Committee and on Report and Third Reading of the Abolition of Domestic Rates Etc. (Scotland) Bill. Local authorities were to be made accountable for what they did. Now, under the sham that the Government have introduced, Strathclyde and Glasgow will not be accountable this year for the sums that they will raise in poll tax. [Laughter.] The Government have destroyed their own case, and all they can do is laugh.

There will be no accountability in Strathclyde and Glasgow because the local authorities there have not decided the level of the poll tax : the Government have. Accountability goes out the window as a result of this order. The fact that the Government have felt it necessary to introduce it illustrates the sorry mess of the new system. Something had to be done ; otherwise the Strathclyde ratepayers, particularly the poorer ones, would have had to pay much more.

Under the crazy scheme that the Government came up with, Sutherland district council would have received £30 for every poll tax payer in its area. There would have been no district poll tax payment by the council. It would have been able to reduce the regional poll tax by £30, too. How absurd! As the poll tax is phased out, so accountability disappears. Glasgow, Strathclyde and other local authorities will have to increase their poll taxes merely to stand still. Even if they reduce their expenditure or maintain it at the same level, their poll taxes will inevitably rise. [Laughter.] The Under-Secretary of State, the hon. Member for Stirling (Mr. Forsyth), who is the architect, the evil mind, behind this whole ridiculous affair, is laughing. He knows that is what he has wanted all along. Strathclyde has reduced expenditure but the poll tax will go up in every one of the local authority areas that benefited this time. However, those who have lost this year will find that they can both increase expenditure and reduce their poll tax at the same time. Where then is the accountability? I thought that this was supposed to stop local authorities from overspending, from increasing their expenditure. Authorities that keep expenditure at the same level will be penalised and those that increase it may well find that they will be all right.

This is an unfair system and makes nonsense of the case for local accountability. The settlement has little to do with the real needs of the people of Scotland or with the services that local government provides. It has all to do with the desperate political plight of the Secretary of State and his party. They know that they are in deep trouble over the poll tax and that the people of Scotland do not want it. Luckily, the people of Scotland are not stupid. Since 1979 they have shown that they know where to put the blame in local government matters. In election after election they have rejected the Conservatives and will continue to do so despite transparent misuses of political power such as this.

Several Hon. Members rose --

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Madam Deputy Speaker : Order. Many hon. Members want to participate in the debate. Therefore, I appeal for brevity. I hope that the House will respond to my appeal so that I can call all those concerned. 11.1 pm

Mr. Allan Stewart (Eastwood) : Much of what the hon. Member for Glasgow, Cathcart (Mr. Maxton) said was clearly predictable. It seemed that he had some difficulty in complaining about the details of the settlement and the orders that are before the House. I listened with particular interest to what he said about safety nets in Glasgow because I shall be a community charge payer in Glasgow. He delivered his speech with a great deal of verve and enthusiasm, but at the end of it I was wholly unclear about whether he and his party were in favour of the safety net provisions. As he represents Cathcart, he should have made it unequivocally clear that in the context of the new system the safety net provisions are sensible. I shall come back to that.

I emphasise that this is clearly a generous settlement with an increase of 9.8 per cent. in total grant. The grudging comments from the hon. Member for Cathcart were just about as near to a recognition of that as the Opposition will dare to go. The hon. Gentleman gave the impression that safety nets were a new concept and that somehow they had been introduced because of particular problems that had arisen at the last minute over the introduction of the community charge system. Nothing could be further from the truth.

If one goes back not to the Bill or the White Paper but to the original consultation document, the Green Paper, one sees that on page 64 it says :

"to move directly to the new grant arrangements would entail unacceptable disruption".

That is why there will be safey net provisions. There is nothing at all new about the introduction of safety net provisions for the first few years of the community charge system.

Mr. Douglas : Will the hon. Gentleman give way?

Mr. Stewart : No. I apologise to the hon. Gentleman but I am conscious of what you, Madam Deputy Speaker, have said about the amount of time available.

The settlement has evoked different reactions from different authorities. Perhaps unusually, I should like to congratulate Strathclyde regional council on its provisional budget because it has come out to within one pound of the Scottish Office estimates which are constantly derided and abused by the Labour party as being wholly unrealistic, fatuous and wrong. They were certainly not so in the case of Scotland's largest and overwhelmingly Labour-controlled local authority.

Of course, there have been different reactions elsewhere. The Lothian reaction has been to take the figures out of thin air and constantly revise them. We have heard the complaints from Borders and Grampian about safety nets, but it is worth emphasising that, after the safety net provisions, the grant increase for Grampian is 14.6 per cent. and for Borders 13.5 per cent. I do not know what is happening about the Grampian budget. No one appears to know what is happening about the administration of the Grampian region these days. Perhaps the hon. Member for Angus, East (Mr. Welsh) or the hon. Member for Argyll and Bute (Mrs. Michie) can tell us whether there is still an administration. However,

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we know that Borders appears to be intending to increase its expenditure by over 11 per cent. in the forthcoming year. That is a quite unreasonable increase and puts into context the complaints about the grant system that have emanated from that area. You have asked hon. Members to be brief, Madam Deputy Speaker. I therefore conclude by saying that the grant settlement is a fair and reasonable settlement. It was important that the Government obtain a just settlement for the introduction of the new community charge system. All the evidence is that the system is going ahead and will be implemented. The campaigns of non- payment and registration about which we have heard so much from Labour Members will clearly be a complete and utter failure.

11.6 pm

Mr. Tom Clarke (Monklands, West) : If it were not for the fact that I sought to catch your eye, Madam Deputy Speaker, on a specific point involving my constituency and that of my hon. Friend the Member for Strathkelvin and Bearsden (Mr. Galbraith)--it is an immediate problem concerning Strathkelvin district council--it would be tempting to enter into the mainstream debate.

The Secretary of State might recall that I was present at several meetings in another capacity when rate support grant settlements were debated. Hon. Members see a colossal amount of Government interference in local government matters which are not for the Government at all. There is more than a degree of unreality when we see clearly--COSLA has not been mentioned very often, although the Government have a statutory duty to consult it--that the inflation rate, for example, is well above the 4.3 per cent. that the order recognises.

We also see that, although the Government are forced to recognise the reality of increasing public expenditure, for example, in the Department of Social Security, they are pouring money into private residential homes which have arisen as a result of the strain on the health services. The Government do not recognise that those same strains apply to the social work departments of Scottish local government.

May I turn briefly to the specific problems of Strathkelvin district to which I referred. My concern is shared by my hon. Friend the Member for Strathkelvin and Bearsden and is known to the Minister. I thank the Minister and his staff for the attention that they have given to the matter. There has been a error in the calculation of the Strathkelvin rate support grant settlement. That is rather serious, because Strathkelvin district council will be underpaid by between £300,000 and £350,000 in 1989-90. The situation has arisen as a result of an incorrect figure supplied to the Department by the regional council in connection with non-domestic rating in the next financial year. As a result, the grant was calculated based on Strathkelvin receiving £2.731 million from non-domestic rates in 1989-90. The actual figure available is £2.273 million. I understand that the Scottish Office has told Strathkelvin that, although a recalculation cannot be made immediately, it has agreed that the amount underpaid will be recalculated during December 1989 and will be repaid then.

I invite the Minister to confirm the figures for the record, if only because Strathkelvin is concerned about its budget. When does the Minister think that any payment

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might be made? I hope that I will not sound churlish when I state that I recall on a previous occasion, when something similar happened to Monklands district council, my distinguished predecessor, the late Jimmy Dempsey, advocated the need for adjustments. The Government did meet his request in due course, but only after several years, and they did not meet the full amount. I hope that Strathkelvin will not endure the same experience.

11.10 pm

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