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be surprised if I make reference to them. I shall not dwell for long on what might, at first glance, appear to be the greatest sinner of them all. I notice from the list that I have--at present it is a proposal--that in the case of one local authority, at district council level there is a proposal to increase the community charge by no less than 116 per cent. That might imply a wicked imposition on the local electorate, but when I look further I find that it is Sutherland district council, whose community charge in the current year was the princely sum of £6 per head, which it is proposing to increase to £13 per head. I do not want to give the impression that even an increase of £7 is acceptable or can be defended, but I acknowledge that that authority is not entirely comparable with others.

However, the same cannot be said for some other authorities, such as Stirling district council and Edinburgh district council.

Dr. John Reid (Motherwell, North) : In order to put the figures that the right hon. and learned Gentleman is about to give us in context, along with the political comments that he will no doubt make, will he tell us who controls Sutherland district council? Is it the Labour party or the aptly named independents, who everybody knows are the Scottish equivalent of the Conservative party?

Mr. Rifkind : I would like to believe that it was the Scottish equivalent of the Conservative party, but I am not sure that Councillor Jamieson, the vice-president of COSLA, who sits as an independent, would agree with that description.

Sutherland is not a Conservative-controlled authority because, if it were, it would not be contemplating a 100 per cent. increase in the community charge. That seems to be a fairly conclusive argument. I was about to refer to authorities that are going for substantial increases, for which they will have to account to their local electorate. Stirling district council, an authority that had an increase in grant and non-domestic rate income for the year that is about to begin of no less than 20 per cent., instead of reducing its community charge, or even maintaining it, starts off with the second highest community charge in Scotland at district council level and is proposing an increase of some 18 per cent. in order to fund new expenditure.

Edinburgh district council, my local authority, has approved an increase of some 24 per cent. I see that no Edinburgh Labour Members are in the Chamber today, and I am not surprised because they will not be anxious to defend that decision--

Mr. George Galloway (Glasgow, Hillhead) : I am anxious that fairness should be done. Is it not the case that my hon. Friends from Edinburgh are occupied with the important issue of Ferranti, and the right hon. and learned Gentleman's remarks might just be the cheapest of shots?

Mr. Rifkind : That might be convincing if the hon. Member for Edinburgh, South (Mr. Griffiths) had not just walked into the Chamber.

Mr. Nigel Griffiths (Edinburgh, South) rose--

Mr. Rifkind : I shall give way to the hon. Gentleman, but he might like to wait until he has heard what I am about to say about his fraternal colleagues, when I am sure that he will wish to intervene in order to make his views known.

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Before there is any suggestion that Edinburgh's Labour-controlled district council's 24 per cent. increase in the community charge--which enables it to retain the unenviable position of having the highest community charge in Scotland, combined with the Labour- controlled regional council--was due to the level of Government grant, the hon. Gentleman might like to be aware of the explanation given by his colleague, Councillor Mark Lazarowicz, who explained that extraordinary increase by saying that it was regrettable but that the council had a commitment to provide good service and that it proposed to increase expenditure on the staffing of new sports centres and libraries, and on grants to various other organisations. Councillor Vestri of Edinburgh district council, talking of the rent increase of £3.50, said :

"No one wants to increase rents but we have no alternative. The rise will include an increase in spending on repairs and maintenance".

He went on to say :

"The problem, of course, was that the amount to which the council could subsidise the rents had been reduced by the Government." Councillor Lazarowicz said that as well. If it had not been reduced by the Government, the community charge increase would have been not 24 per cent. but 34 per cent., as a consequence of the authority's profligacy.

Mr. Nigel Griffiths : I wanted to take this opportunity Madam Deputy Speaker, to apologise to you and to Mr. Speaker for coming late to the debate, when I had said that I hoped to catch your eye. The reason for my lateness is that the figures that I intend to use to rebut some of the Secretary of State's arguments were in my room, which was locked because of the masonry falling off the roof of the building. It has taken me half an hour to persuade the Serjeant at Arms' office, which is hard pressed, to unlock that door. My hon. Friend the Member for Edinburgh, Central (Mr. Darling) is a member of the Committee presently considering the Broadcasting Bill, and my hon. Friend the Member for Edinburgh, East (Mr. Strang) is dealing with the Ferranti matter, which is of pressing importance, not just to him but, I am sure, to the Secretary of State and his colleagues.

I shall come to a defence of Edinburgh, and a stout defence at that, and will refer to the Secretary of State's figures and his appalling meanness towards his city if I am fortunate enough to catch your eye, Madam Deputy Speaker.

Mr. Rifkind : Methinks the hon. Gentleman doth protest too much. The House is fascinated to know where some of his hon. Friends are, but we were waiting in eager anticipation to know where the hon. Member for Edinburgh, Leith (Mr. Brown) was ; clearly the hon. Gentleman has not been given such information, for reasons on which we can speculate.

We shall all be interested to know whether Edinburgh district council and Stirling district council, in proposing such massive increases, appear to be following the advice of one Labour local authority in the south of the United Kingdom, which encouraged Labour local authorities to set their charges

"at the highest you can get away with."

That is clearly the aspiration of Labour local authorities.

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Mr. Brian Wilson (Cunninghame, North) : The Secretary of State obviously has a clear idea of Edinburgh district council's requirements. Therefore, will he tell us which of the budgets that were debated at the meeting of the Tory group on Edinburgh district council yesterday he supports? Does he support the views of the leader of the Tory group, who is somewhat fancifully represented in The Scotsman today as the leader of the Left faction, or does he support Mr. Paul Martin, who triumphed over the leader and put forward a budget that contains even more cuts in services?

Mr. Rifkind : The proposals before the group involved a substantial reduction in the community charge compared with the Labour party's proposal. I should have been content if either had been adopted by the district council, as would the community charge payers in Edinburgh.

I am conscious of the fact that Her Majesty's Opposition are in the process yet again of trying to find an alternative to the community charge and to the domestic rates that it replaced. We have had a pretty miserable saga over the past couple of years, as the Labour party has twisted and turned from one option to another before abandoning each and desperately looking for a new solution. We started off with a Labour party committed to the retention of the rating system, believing that somehow it was preferable to the alternative. Then it came up with the rather extraordinary idea that one unpopular tax should be replaced by two unpopular taxes and we had the proposition that there should be a property tax and a local income tax as an alternative to the community charge.

The Leader of the Opposition made a most delightful comment on the proposition of two taxes to replace one, when in The Guardian on 21 September last year, he said :

"What we are contemplating may involve a tax based on the value of property supplemented by a small, a very small, local income tax". That is rather like the housemaid's baby. As long as it is very small, it is somehow considered acceptable. But clearly that view has since been repudiated by the Labour party, because it is now telling us that that has been abandoned. Earlier this week we heard that the Labour party is to come forward with a proposal for a property tax based on the capital value of property as opposed to the rateable value, which would be supplemented in some form or fashion by reference to income.

Dr. Reid rose--

Mr. Rifkind : I shall give way in a moment.

We shall all be intrigued to know whether there is any truth in the report in The Scotsman, which said :

"Labour is to adopt a different poll tax alternative in Scotland than in the rest of Britain."

If I were a more suspicious and uncomplimentary sort of fellow, I might have accused the Labour party of wishing to treat Scotland as some sort of guinea pig, some sort of experiment, with Scotland being treated differently from elsewhere in the United Kingdom. That is a most extraordinary proposition and I find it difficult to believe that it can seriously represent the views of Opposition Members. However, that is what it says in The Scotsman and Mr. McLoughlin is a well-recognised and respectable correspondent, and if he says that Labour intends to adopt a different alternative in Scotland from that in the rest of Britain, presumably he has been in receipt of some

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information from the Labour party. Perhaps the hon. Member for Motherwell, North (Dr. Reid) will tell us whether Mr. McLoughlin is correct.

Dr. Reid : As the right hon. and learned Gentleman has already entered his statutory attack on the Labour party, I assume that he has finished saying anything of substance about his Government's policies. I apologise, however, as I want to drag him back to those policies. If the right hon. and learned Gentleman is so keen on having uniformity of taxation throughout the United Kingdom, why has he not mentioned poll tax capping in his speech--I may have missed his reference to it--as such capping will certainly be employed in England and Wales? The raison d'etre of the poll tax was to make councillors accountable to the electorate, so that if those councillors increased the poll tax, they would be held accountable. Why does the operation of such a tax apparently now merit interference from the Government? Such interference will remove accountability, as the local electorate will be told that their duly elected councillors will be unable to raise the poll tax to the required or suitable level because the Government will then cap that authority. Will such capping operate in Scotland?

Mr. Rifkind : I note that the hon. Gentleman is reluctant to comment on the Labour party's policy, but I have every intention of pursuing that matter. However, the hon. Gentleman--will be aware that the statutory basis for intervention in Scotland is different from that south of the border. In Scotland, the Secretary of State can intervene only if he is satisfied that the proposed expenditure of a local authority is excessive and unreasonable. If the believes that that is so, he tables an order before the House. That has happened in previous years, but it did not happen in the current years under the new system. It is for the House to consider whether such an order is appropriate, but such action can be considered only when the budgets of the local authorities have been duly analysed.

Mr. Ernie Ross (Dundee, West) : Will there be capping?

Mr. Rifkind : I cannot comment now on whether there will or will not be any capping. In the past, I have said that I should be extremely reluctant to take action against local authorities, as I believe that, under the arrangements for much greater accountability, it is primarily for the electorate to pass their verdict on a local authority.

Parliament still provides for action to be taken, if the House so approves, but I cannot contemplate whether such action would be appropriate until the local authority budgets have been considered.

Dr. Reid : It is important to clarify this issue. Was the right hon. and learned Gentleman searching for the word "yes"? Will poll tax capping be used in Scotland? Under the different circumstances that prevail in Scotland, will circumstances arise under which he will take a course of action entirely opposite to the essence of the poll tax, which he introduced in the first place?

Mr. Rifkind : The hon. Gentleman knows that that power remains on the statute book. I did not deem it appropriate to use it in the current year and I have already said that I should be reluctant to use it in the future, for the

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reasons given. Any final decision cannot be taken now, at the end of the previous financial year and the hon. Gentleman knows that perfectly well.

Let us return, as promised, to the alternatives to the community charge. We are told that it would be a property tax based on the capital values of properties in Scotland. If the Labour party were to continue with such a proposition, it would make the controversy over the community charge look like a General Assembly garden party in comparison.

Such a tax would be a most appalling innovation in several respects. First, it would be a recipe for an explosion in local tax payments. As we know, property values have soared over the years, and under a system where one's liabilities were based on the value of one's house, one's local tax obligations would also soar. Secondly, such a tax would be a tax on home improvements. People seeking to improve their homes, especially the 170,000 council tenants who, having bought their homes from their local authorities have, in many cases, initiated substantial improvements to them, would find that they were faced with a massive increase in their tax obligations to their local authorities.

To seek to discourage young married couples from improving their lot and that of their families is an extraordinary proposition. If they should build an extra room for their growing families, erect a garage or install central heating to keep the family warm in winter, it will not only cost them in terms of providing such facilities, but the Labour party will tax them more heavily as a consequence. Mr. Michael J. Martin (Glasgow, Springburn) rose

Mr. Rifkind : I give way to the hon. Gentleman, as I cannot believe that he would want to support such an inequitable proposition.

Mr. Martin : I am glad that the right hon. and learned Gentleman mentioned young couples' ability to get homes. In the high-demand areas of my community, local authority houses are now changing hands at £30,000 a time, but he will know that those houses were acquired by the sitting tenants for £7,000. Young couples who are on the dole cannot obtain a local authority home in the area in which they were brought up, because they cannot afford such prices. The right hon. and learned Gentleman should study the problem to see whether he can find any answers.

Mr. Rifkind : I shall be happy to look at that problem if the hon. Gentleman will inform his constituents that, under his party's proposal, the tax that they would pay to their local authority would be based not on the £7,000 that they paid for their council houses, but on the £30,000 which the hon. Gentleman says such houses are now deemed to be worth. I am sure that his constituents will not thank him for advocating a proposition that would result in an explosion in the amount of tax that they would pay to their local authorities. Such tax increases would also be faced elsewhere in Scotland.

Sir Nicholas Fairbairn (Perth and Kinross) : If that proposal was put forward, there would be another triumph for the Labour party, particularly the Scottish Labour party--that since property prices in Scotland are so much lower than they are in the south-east of England, that region would be taxed at a much lower rate.

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Mr. Rifkind : My hon. and learned Friend is right.

Several factors are associated with the Labour party's proposal and, so far, I have mentioned two. The third is the hundreds of thousands of people in Scotland who did not pay rates because they were not owner-occupiers or tenants, but who are now contributing to the community charge. Under the Labour party's proposal, they would once again, be exempt from any direct contribution to the cost of local government. The sums that such people currently pay under the community charge would have to be borne again, as they were under the rating system, by the minority--

Dr. Reid : The poor would be exempt.

Mr. Rifkind : No, the hon. Gentleman is wrong. Those exempted would include many young adult sons and daughters who would be in receipt of a much greater income than their elderly next-door neighbours. Under the Labour party's proposal, those young people would not make a penny contribution to the revenues raised by local authorities. It appears that the Labour party wants us to return to the time when hundreds and thousands of young adults, on good incomes and in employment, were exempt from making a contribution simply because they were living with their parents or in someone else's house. Such an attitude is fundamentally unfair.

Fourthly, the Labour party's proposal would represent a tax on the elderly. The longer one lives in one's own home, the more its value will increase and the more one's taxes will increase, irrespective of whether one is retired or not. Furthermore, there would be no question of a pensioner's tax contribution being halved when his spouse died--such an exemption operates under the community charge. Under the Labour party's proposal, the remaining partner would continue to make the maximum contribution based on the value of the home.

Fifthly, we would return to the days of revaluation on a regular basis, with all the horrors that that produced. I speak with some feeling on that matter ; should the Opposition introduce a system that required regular revaluations, they would live to rue that day.

Mr. Wilson : Does the Secretary of State accept that he is building a rather melodramatic fantasy on the basis of a third of a column in The Scotsman ?

Mr. Rifkind : If the hon. Gentleman is suggesting that the report is entirely inaccurate and that the Labour party does not intend to propose an alternative based on capital values, we shall look forward to hearing more. The hon. Gentleman says that what I have said is a melodramatic fantasy. If the Labour party is not proposing a capital value-based local tax, I shall happily withdraw the accusation. But if it is, then, by the hon. Gentleman's own words, it is a melodramatic fantasy. That is a most interesting description.

Mr. Wilson : Although I am unable to aspire to the right hon. and learned Gentleman's legal sleight of tongue, there is a great difference between a system based on capital values and what he has spun out of it, for it bears no relation to anything that the Labour party is ever likely to put forward. The right hon. and learned Gentleman has constructed something in order then to knock it down.

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Mr. Rifkind : We look forward to hearing the hon. Gentleman explain why it is that a tax based on capital values would not increase a person's liability to tax if he improved his home and thereby increased its capital value. We shall also look forward to hearing him explain how, under a system based on capital values, people who live in somebody else's house will cease to make any contribution to local taxes. We look forward to hearing how the elderly will be protected. I am aware that reports imply that the Labour party admits the inherent unfairness of a tax based solely on capital values and that it has suggested that it will also wish to take account of income. The Labour party, we understand, would modify tax liability on the grounds of income, but what about savings? The elderly rely primarily on savings. I hope that the hon. Member for Cunninghame, North (Mr. Wilson) will say whether savings, too, will be exempt.

Mr. John Home Robertson (East Lothian) : On a point of order, Madam Deputy Speaker. The Secretary of State is weaving fantasies about what he thinks The Scotsman thinks the Labour party's policies might be. Am I not right in thinking that the debate is supposed to be about the level of poll tax and rents which he, the minority Secretary of State for Scotland, seeks to impose on the people of Scotland? Will you please ask him to direct his remarks to the reality of life in Scotland rather than to his fantasies?

Madam Deputy Speaker (Miss Betty Boothroyd) : I remind the hon. Gentleman that we have wide-ranging debates on such motions. Mr. Galloway rose --

Madam Deputy Speaker : Order. I believe that the hon. Gentleman is seeking to catch my eye. He is not going the right way about it. I also remind the Opposition that they will have an opportunity to refute the arguments in due course.

Mr. Rifkind : The House, and the people of Scotland, will be aware of the sensitivity--the raw nerve--that I appear to have touched, such is the reluctance of the Opposition to have their policies examined and considered. I am surprised that my modest comments about what I presume the Labour party firmly believes will be wildly popular throughout the length and breadth of Scotland should have given rise to accusations of irrelevance, unfairness, misrepresentation and all sorts of other terrible sins.

Mr. Robert Hughes (Aberdeen, North) rose--

Mr. Galloway rose--

Mr. Rifkind : Opposition Members are anxious to tell me what a popular tax this will be. I happily give way to the hon. Member for Aberdeen, North (Mr. Hughes), who no doubt wishes to say that.

Mr. Robert Hughes : I am anxious to point out to the Secretary of State that in a debate which is to end at 7 o'clock he has spent 30 of the 35 minutes of his speech explaining what he thinks is Labour party policy. He has spent only five minutes on the subject of the debate. I know that he tries to be a fair-minded Secretary of State for Scotland, but it is carrying matters a little far, to cover his blushes, deficiencies and embarrassment, not to bother to make the case for his own orders.

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Mr. Rifkind : I have spent half my time responding to Opposition interventions. They would have been the first to criticise me if I had declined to give way. I sense the Labour party's embarrassment. We shall have many other opportunities to consider its policies. I look forward to hearing the Oppositions's version of them. As for the alleged non-payment of the community charge, I know that a number of Opposition Members have a personal pecuniary interest in it, either because they have or have not paid it. We shall no doubt wish to identify which hon. Members have or have not paid the community charge.

It has been suggested by the Labour party and the Scottish National party that the levels of non-payment of the community charge in Scotland give a message to the Government and to the wider public. If they examined what happened under the old rating system, they would find that at this time of the year local authorities, including Strathclyde regional council, issued summary warrants to almost exactly the same number of non-payers of domestic rates--

Mr. Jim Sillars (Glasgow, Govan) : Apples and oranges.

Mr. Rifkind : If the hon. Gentleman wishes to intervene, I shall happily give way to him. Apples and oranges are fruit, so they have a considerable amount in common.

Mr. Sillars : They are different kinds of fruit.

Mr. Rifkind : Of course they are different, and domestic rates and the community charge are different. However, when it comes to some people preferring not to pay their taxes, there appears to be a great similarity between them. In Strathclyde, 15 per cent. of those who were liable to pay domestic rates directly to the regional council declined to do so at this time of the year and received summary warrants. It is an interesting coincidence that, at this time of the year, 15 per cent. of community charge payers have similarly declined to pay it.

Before the Scottish National party grows too excited, I ought to say to the SNP Members of Parliament that Scotland would be more interested in what the SNP did than in what it says. In the one local authority that is controlled by the SNP, Angus district council, respectable, law-abiding people are anxious to obey the law and to encourage others to do the same. They are participating fully in the implementation and collection of the community charge.

However, the hon. Member for Glasgow, Govan (Mr. Sillars), and the infant Robespierre from Banff and Buchan are encouraging law-breaking thoughout the length and breadth of Scotland--so much so that their colleague, Mr. Hamish Watt, a former Member of this House, felt it necessary, along with his colleagues, to resign from the SNP precisely because the hon. Member for Govan and the infant Robespierre from Banff and Buchan hijacked his party and turned it into another Left-wing Socialist party which is unacceptable to people in the north-east of Scotland. The hon. Member for Govan will no doubt wish to comment on these matters in due course.

Mr. Bill Walker (Tayside, North) : My right hon. and learned Friend has referred to a distinguished former Member of this House who left the Scottish National

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party. He did not refer to a regional councillor, Flora Iles, who also left the SNP because it has no policies for anything and different policies for everywhere.

Mr. Rifkind : There will soon be more people leaving the Scottish National party than attend its constitutional convention. The orders that are before the House are representative of a Government who have given a generous settlement to local authorities. It accords with what they asked for a year ago, when these matters were first considered. Any reservations that anyone might have had about the community charge will pale into insignificance the more the House and the people of Scotland have the opportunity, which the Labour party will be anxious for them to have, to examine the capital-value-based local tax that the Labour party wishes to propose and its implications for the elderly, those who wish to improve their homes and those who want a fair deal from local government in Scotland.

5.7 pm

Mr. Donald Dewar (Glasgow, Garscadden) : The Secretary of State has certainly painted a broad canvas. At one stage, I thought that I might follow him by showing my holiday snaps. They would have just about as much relevance. He was clearly enjoying himself, but it was a disgraceful speech. The Secretary of State made no attempt to deal with what is happening under his Government. It was a diversionary tactic and intermittently it was amusing--for example, the important piece of information that Mr. McLoughlin of The Scotsman is a respectable reporter and, according to the Secretary of State, a respected one. We were also told that there was something intrinsically comic about the poll tax in Sutherland.

I had hoped to make a brisk and brief speech, but it will take a little longer than I had anticipated. However, I am conscious that many of my hon. Friends want to take part in the debate.

The orders relate to the delivery of services and the quality of life. Both are directly affected by local government finance and housing finance in Scotland. It is not just a nice Treasury balancing act that can be shrugged off in a few minutes before the Secretary of State takes off to go somewhere else. We shall want to consider the consequences of what is happening in our constituencies and in Scotland generally as a result of the inadequate way in which these matters have been dealt with by the Government.

I invite whoever is to wind up the debate for the Government to consider certain matters. I presume that it will be the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) who is sitting there, as always, looking extremely alert--a pet by his master's side. I have no doubt that the hon. Member might say a word or two about councillors' allowances, which of course are part and parcel of the whole business.

The Parliamentary Under-Secretary of State for Scotland (Lord James Douglas-Hamilton) : Is the hon. Member aware that decisions on thesematters have been deferred for three months, at the request of COSLA and other associations, in order that further investigations may

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be made? We look to COSLA to return to us with further information for my right hon. Friend, who will be seeing them on 9 February. That is the up-to-date information.

Mr. Dewar : The hon. Member will soon be known as Action Man. I am delighted to hear this, because--it is not often that I ride to the defence of Councillor Brian Meek and his colleagues--undoubtedly there was widespread concern right across the board, embracing all parties and all political persuasions, about what was proposed. It is very important that those who wish to serve as elected councillors and who carry the confidence of the electorate should be in a position to get on with the job.

The danger of the scheme that he proposed and the Government had embraced was that this would become the preserve of those who could afford to serve but were not necessarily best qualified to do so. It would have been tragic if a clumsy little manoeuvre of the Department of the Environment had damaged local democracy, which has already been put under unreasonable pressure by the Government. I very much hope that we shall now be able to get away from the very crude two-tier system based on an annual payment of £3,400 per regional councillor and £2,700 per district councillor, as was proposed. I can only hope that the Minister has learnt something from his traumatic experience with the poll tax about the dangers of flat-rate systems and cash limits in that context. It is very important indeed that, if we cannot reach agreement on something that will allow people of talent and commitment to remain in local government, we should continue, perhaps for longer than three months, an attendance allowance system which at least has the basic virtue of being based upon the work that is done by councillors.

My attention was drawn in the Largs and Milport Weekly News to a very typical statement by the leader of the Conservative group on Cunninghame council, Councillor Edith Clarkson, who complained very bitterly about Members of Parliament :

"They see us councillors as incompetent and useless, and people who do not do anything. There is no will in Parliament on any side of the House to look at it and see what we are doing."

She went on to complain bitterly about the Government's schemes, plans and proposals and their impact on local authority allowances and the new way of compensating councillors for the inevitable loss of income which they incur because they are elected to local government. I very much hope that the Minister will use the three months' period of grace which he has announced to find a way to get over these problems.

I turn first to the revenue support grant, because it is very basic. I expected that the Secretary of State would say that COSLA had asked for 7 per cent. I put that to one or two COSLA officials the other day and got a very robust reaction. As the Secretary of State well knows, that figure was produced at a period when the situation was rather different in terms, for example, of interest rates. The 7 per cent. or 7.5 per cent. that was then announced included within it a number of factors which could not have been anticipated.

I am thinking of the mandatory rating relief for charities and the rating relief for universities in Scotland. I do not think that these are necessarily bad in themselves--in fact, I strongly support them--but they have been

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announced as concessions by central Government, and they have been financed entirely out of the revenue support grant that had already been fixed.

When Sir Kerr Fraser says, understandably in some alarm, that he thinks that it will take £40 million merely to preserve the fabric of Sir Gilbert Scott's Gothic imagination on Gilmorehill, no doubt he is thankful for the small mercy brought by rating relief, but I am sure that he would also accept that it is unfortunate that such a concession should be financed entirely at the expense of local government and local government services, or the poll tax payer, or some combination of both.

I believe that the figure is inadequate and that there is plenty of reason and evidence for saying so. Obviously, there was some initial confusion. The Secretary of State will remember the illuminating incident of Glasgow's allocation--a situation in which the Minister had forgotten to use his toes as well as his fingers when he did the initial calculation. When we have time to look at the final figures, the shape that emerges is one of enormous importance to the poll tax payers whose health is of such concern to the Secretary of State. There is no doubt that there is a direct correlation between what is happening to the poll tax in the individual areas of Scotland and what the Secretary of State has achieved in his grant distribution. If we take the aggregate Exchequer grant and the non-domestic rate income of an authority and put them together, we find that the cash available to an authority such as Bearsden and Milngavie will in the coming year be 51 per cent. higher. In Eastwood, the increase is 50 per cent. Going down to some of the authorities which have been the butt of criticism by the Secretary of State, we begin to see, with the unwinding of the safety net and other grant distribution difficulties, some of the reasons why they have been faced with particular problems.

Bearsden plus 51 per cent. and Eastwood plus 50 per cent. : these are not areas that spring to the minds of my hon. Friends as those of highest deprivation or outstanding need when one considers the social profile of Scotland. Glasgow had a cut in cash terms of 2.6 per cent. Edinburgh had an increase of 0.082 per cent.--less than 1 per cent. When we compare that with the 50 per cent. and 51 per cent. figures at the top of the scale, we begin to see the gap that had to be bridged and the difficulties that had to be faced.

I think that the Secretary of State was ungracious and misleading in not recognising that and accepting that there was that genuine problem. He was the author of that problem, and this does him no credit.

Mr. Rifkind rose--

Mr. Dewar : I will give way to him in a moment, but first I want to add a couple of points that he may want to deal with ; I do not want to accept as many interruptions as he did, in the interests of other hon. Members who want to take part in the debate.

I do not disguise the fact that there is a difference of philosophy. In a sense, the Secretary of State outlined it perfectly clearly when he quoted my colleague Mark Lazarowicz. He said that the leader of the majority group on the Edinburgh district council had apparently said something unforgivable--that the council had to bear in mind its commitment to provide new services. I do not think that that is something of which he should be

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ashamed. Commitments have to be tempered in every authority by the realities of the situation and balances have to be struck. The Secretary of State and I might have a disagreement about where that balance should be struck, but I find it offensive that he should suggest that it is some kind of grotesque, absurd or ludicrous proposition that someone looking at the social problems in Edinburgh's peripheral housing schemes or some of the inner-city areas of Edinburgh should consider improving services and tackling those problems.

If the Secretary of State intends to intervene, perhaps he can deal with this point.

If we look at the other part of the equation of that area, at the Lothian region budget meeting we had an extremely well-documented account of what the alternative is. It came from a man who is admired as the sort of civilised face of the new Conservative party ; someone who is still clinging on to some of the older civilised values, despite the efforts of the chairman of the party and his dominating philosophy. I refer to Conservative Councillor Brian Meek. Brian Meek was suggesting the abolition of welfare rights and pensioners' free bus passes. He was suggesting the privatisation of Hillend ski centre and seven old people's homes, as well as a number of other items of that type.

I really do not think that the Secretary of State can suggest, in the face of the grant allocation made in Edinburgh and the cut that occurred in Glasgow, that if they had responsible people at the helm, good Tories, men of integrity, men who could manage a bawbee or two, who knew how to make ends meet, they could cut back on our present extravagances, as he would see them ; they could reduce the poll tax without hurting vulnerable people, without doing genuine and real damage to services ; and they could carry out the kind of policies that even a moderate such as Brian Mack is having to suggest in the Lothian region.

It is a real problem, which to some extent relates to the philosophical divide between us and our views about community and the duty of a council, but it also goes back to the Secretary of State and his grant allocations. The same applies to the regions. Although the figures are less dramatic, the amounts are larger and therefore the variations are just as significant. The grant allocation has increased by 13.2 per cent. in the Borders ; by 13.1 per cent. in Dumfries and Galloway ; by 12 per cent. in the Highlands ; and by 10 per cent. in Grampian. Then there is a substantial drop--a chasm in local government financial terms--until we reach Lothian and Strathclyde which have received 4.6 per cent. and 3.8 per cent. respectively.

We cannot banish the problem by saying that they are black and white figures on a page and they mean nothing. Inevitably they will present dilemmas for councillors and burdens for poll tax payers. If the Secretary of State were prepared to concede that, perhaps we could have a reasonable argument.

One of the great tales about the poll tax is that it strengthens local authority accountability. I believe that the present message--although it may change over the years--is that what matters is the grant that a local authority receives and that conditions the poll tax that has to be paid.

I shall take just two examples, which are not politically contentious because the authorities concerned are not in

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