House of Commons Hansard Debates for 28 Feb 1994

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is currently being considered by the Select Committee on Home Affairs and, although it has a Conservative majority, I look forward to it proposing some radical reforms to party funding. I am pleased to welcome the Chairman of that Committee, the hon. and learned Member for Burton (Sir I. Lawrence), to our proceedings. He may care to comment at some point on the Committee's discussions on this important matter. I ask him to tell us, at the very least, whether the Committee may consider committing itself to the setting up of an independent electoral commission, along the lines of the Boundary Commission, to oversee the whole area of election expense regulation and to oblige all United Kingdom political parties to disclose in their annual accounts any donation from a single source above a particular limit, let us say £5,000 per calendar year. That is the minimum that we expect from the Select Committee and I should be pleased if the Chairman would comment on that or on any other point made so far if he can do so without giving away too many secrets.

Sir Ivan Lawrence (Burton) : The inquiry into the funding of political parties is in a state of activity at the moment. The Committee has not yet come to a conclusion and it is too early for me to say what conclusions we shall come to on the points that the hon. Gentleman has raised.

Mr. Allen : That is most helpful. I look forward to the report. No doubt I shall reciprocate with a slightly more elaborate set of comments when I see the report. I wish the hon. and learned Gentleman well in drafting it.

Another relevant point is the limit on local government expenses being extended from £192 per local government candidate plus 3.8p per head to £205 per candidate plus 4p per head. We certainly welcome and support that part of the order, but we also believe that there is now a very strong case indeed for examining the maximum and determining whether we are allowing sufficient resources to local authority candidates to fight their corners effectively.

It is little use the House sometimes rather complacently saying that our turnouts are a lot greater than local government turnouts, when it is within the power of the House to assist candidates of all parties to spend a little more money contacting their electorates through additional literature or whatever other means they seek to employ. Turnouts in local government elections are too low, and we should do our bit to ensure that they are increased. However, it is incumbent upon the House to examine seriously whether the amount to which we limit local government candidates is sufficient to help local government achieve the turnouts, involvement and local interest that we would all like to see. Perhaps the Minister will comment not on the specific amount but on the broad dimension of funding that we allow local government candidates to use.

Similarly, in the case of by-elections, there should be a higher maximum for parliamentary and local elections. Do we really expect the Eastleigh, Rotherham, Dagenham and Barking by-elections to be fought effectively on current limits ? Those events are of national interest and they will generate immense activity. In such circumstances, we might need to consider once more whether the admittedly more generous amounts that are allowed to people who are fighting by-elections could be considered yet again in the light of modern circumstances.

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The measures were drafted some time ago ; certainly before the advent of widespread computerisation, widespread direct mail, and the press conference every hour, it seems, in local by- elections. Perhaps, with future measures, we should take a step back to assess the level of expenditure and come up with a more realistic limit for local and parliamentary by-elections.

I have sought to place today's modest increases in expenses for candidates within the broader context of the enormous disparities within the levels of national party political funding which seriously undermine our democratic system. Recent allegations about the behaviour of certain Conservative councils suggest that the incestuous relationship between money and political power is alive and well in modern Britain. The problem, however, is not primarily that of illegality, important though it is to root out corruption from whatever source. The insidious problem is posed by large- scale, frequently clandestine but nevertheless legal financing of the governing party by the small wealthy minority who benefit directly from its tax policies. As we know, a number of the more substantial contributors to Conservative party funds

Mr. Deputy Speaker : Order. I am sure that the hon. Gentleman is aware that the scope of the debate is narrow. Although he has been in order until now, the hon. Gentleman is beginning to stray beyond the bounds of the debate.

Mr. Allen : The very important point that I am trying to make is that people in our respective constituencies, be they in a constituency Labour party, a Conservative association, and whatever it is that the Liberal Democrats have, work extremely hard to raise money. That is why we have the limits. Such people work very hard to raise money through socials, jumble sales, coffee mornings and so on. That hard graft of local party politics goes on in order to raise money, and we rightly put ceilings on expenditure.

However, that has to stand in stark contrast with those who, at national level, are without any limit whatsoever and who, because they happen to be a foreign shipping magnate or a business man in Hong Kong, can donate amounts of money far in excess of that which any constituency has raised in 10 or 20 years.

That element of fairness must be conveyed. Those individuals have a far greater and disproportionate effect, even though they might be citizens of a foreign country working on behalf of a foreign business, than the hundreds of people--I pay tribute to workers in party politics, be they Labour or Conservative--who work day in and day out, voluntarily and without payment to make local parties the engine of local democracy. Without those local parties we would not have politics ; we would just have top-down financed political parties. Sources of Conservative party finance raise several questions that I will not go into.

Although we support the orders, Opposition Members have a more radical agenda. The future Labour Government will remove the manifest unfairness of the existing system of party funding. We will legislate for limits on national spending, just as we have today on local spending. We will introduce state aid. We will ensure that party accounts are published. We will ban the funding of political parties by foreign individuals and foreign businesses. As part of our wider democratic agenda, we will work to create a level playing field for all political parties and candidates at local and national level, and we

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will create a democratic system in which elections cannot be bought by wealthy vested interests but are won by the party with practical and imaginative ideas. We alone require no loaded dice. We alone will welcome that fair fight.

5.46 pm

Mr. Robert Maclennan (Caithness and Sutherland) : I am not sure what the hon. Member for Nottingham, North (Mr. Allen) meant when he said, "We alone require no loaded dice." I do not know whether he sought to include or exclude the Liberal Democrats in that. The hon. Gentleman laid out a wide canvas of reforms. I will not imitate that tonight, but suffice it to say that I hope that he will think it appropriate to seek cross-party agreement for any such reforms. Part of the essence of the hon. Gentleman's fair criticism of the Government is that they proceed in matters such as the reform of our electoral system with scant regard for the views of other parties on matters that are central to the efficacy of our democracy.

Mr. Allen : If I was not clear, let make it clear that the association of ideas on the national maximum is shared by the Liberal Democrats, the Labour party and, indeed, other parties, too. Only one party stands against a national maximum, and that is the one which needs a national maximum in order to make its own case, because it is incapable of making it on a level playing field.

Mr. Maclennan : I am grateful to the hon. Gentleman for that clarification. None the less, I would value the opportunity of a dialogue with him on this as on other matters, as, I am sure, would other parties represented in this House. I am prompted to say that because of what the hon. Gentleman said about the different expenditures in borough and county electorates.

I remember serving on the Speaker's Conference on electoral law some years ago, when this matter was considered very carefully. Clear evidence persuaded the conference that the expenditure necessarily incurred in campaigning in county elections was higher per head of the population than in borough constituencies.

In the view of the Speaker's Conference, that was sufficient to advocate the difference which these measures carry forward today. I do not have a dogmatic view on whether the difference is justified in contemporary circumstances, because I recognise that there have been substantial changes in the methods of campaigning at local level since the Speaker's Conference reported in the 1970s.

It would make sense to carry out a deep study of the actual costs of campaigning at parliamentary and European elections in the latter decade of this century in order to have some justification for the figures, which we normally uprate once in the lifetime of a Parliament, to see whether they are a proper reflection of the costs.

The figures are somewhat artificial. For example, they do not reflect the extent to which telephone canvassing may have become a core part of campaigning today. Nor do they reflect the difficulty in tracing expenditure on such campaigning.

From my experience of campaigning in a very scattered rural constituency, I must reflect that the nature of the expenditure incurred is very different from that incurred in a borough. The expenditure on petrol in driving from one

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public meeting to another is considerable, and expenditure on advertising as many as four or five dozen meetings in different local newspapers is considerable because of present printing costs. I know that, at the current levels of expenditure permitted by Parliament, it is difficult in such a rural area to do more than publish two, or at the most three, leaflets locally during an election campaign. I am not sure that that makes total sense in present times.

Mr. Allen : I wonder whether the hon. Gentleman is coming towards the conclusion that, if the limits are too low--there is a case for saying that these limits are too low--we are in danger of introducing a possible element of corruption into the local electoral process, because the temptation that may exist to exceed the limits is great where they may be over-rigorous.

Mr. Maclennan : I think that that is a risk. Certainly it is one that we should be aware of in looking at the realism of these measures in uprating the limits. I think that the Government have tied the uprating simply to the increase in the cost of living, but I do not think that there has been any detailed analytical work on the components of electioneering in bringing forward these measures. Campaigning has been much more sophisticated recently. There is much more targeted campaigning locally. There is much more printing of letters which are directed to particular members of the electorate, in an attempt to have a more sensitive campaign than perhaps in the old days of the soapbox, which the Prime Minister, in his effort to get back to basics, employed--it must be said, with some success--at the last election.

Nonetheless, as we must be concerned about the evident cyclical decline in the number of our electors participating in elections, it is extremely important that election expenses which can be incurred at the local level should properly and fully reflect what it costs to run an informative campaign which allows candidates fully to display what they are offering to the public.

As I said, there is a certain artificiality about the limits today. Of course, the biggest artificiality of all is that to which the hon. Member for Nottingham, North referred--the tight control of local expenditure and the absence of control of national expenditure, which has a distorting effect on campaigning.

Although I am not one of those who believe that what happens locally does not matter much--electoral battles are fought on television and won by the party leaders ; and, provided that we control the amount of television time and cover of the principal advocates in a national election, what goes on below that does not matter greatly--the extraordinary disproportion of expenditure nationally is something we need to examine in a fair and modern democracy. However, we cannot look at that matter within the ambit of these measures, which deal with a limited part of our democratic process.

I put it to the Government that the time has come to set up a Speaker's Conference to look at the disproportion between the tight control of local expenditure, which we are seeking modestly to raise tonight, and the absence of control of national expenditure. Undoubtedly, the Labour party has a clear view about what evidence it might submit to a Speaker's Conference. The Liberal Democrats might submit slightly different evidence, because there are

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serious problems of control of national expenditure. We must take account of the practical difficulties of controlling national expenditure if we are to seek any change.

Mr. Andrew Mackinlay (Thurrock) : I agree with the hon. Gentleman. Is there not an urgent need also to look at the consequences of the incumbency ? Today, with the growth of regional and local media, Members of Parliament, local councillors and others have an increasing advantage over challenging candidates--that matter needs to be looked at--and generally there is no starting date in terms of knowing when an election campaign begins.

Mr. Maclennan : I agree with the hon. Gentleman. There is an advantage for the sitting tenant, whose record and history are known.

Mr. Mackinlay : I certainly hope they are.

Mr. Maclennan : In some cases it is an advantage, but it cannot be said that it is a universal advantage. The changeovers that occur suggest that it is not a sure-fire recipe for success at the polls. The hon. Gentleman is right : it is something that we should examine.

The opportunity for a new candidate to come forward and sell himself at an election on the basis of two or three little bits of paper seems to be inadequate. I do not want to see a huge increase in spending on elections, which would also militate against the challenge of small parties, new parties and local parties which are not well heeled and which have little to do with the merits of the candidature.

Mr. Allen : My hon. Friend the Member for Thurrock (Mr. Mackinlay) mentioned fixed-term Parliaments, which would have an interesting impact on local expenditure limits. If candidates were to know when an election was to take place, that might well affect the way that they plan their campaigns. Does the hon. Gentleman have a view on that ?

Mr. Maclennan : As the hon. Gentleman knows, I am in favour of fixed Parliaments. However, that goes far beyond the ambit of the measures. Although it may be interesting for me to go down those avenues, I must confine myself strictly to what we are considering today.

I put it to the Minister that the time has come for a new look at these matters in the round. There is plenty of time before his party will have to face the electorate and nemesis.

The Government are therefore in an ideal position to take that step. In my experience, Speaker's Conferences tend to be dominated by the partisan views of those who participate in them. Nonetheless, they have served a purpose in the past of enabling evidence to be accumulated which can then go into the public domain and lead to a public debate. Such a debate preceded the alteration in the voting age, for example. Incidentally, Parliament rejected the recommendation of the Speaker's Conference on the voting age. It is an appropriate process for considering how the matters should be taken forward. We should seek to modernise the system of the control of expenditure, and we should take account of the realities of campaigning in this day and age.

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6.1 pm

Mr. Peter Lloyd : The hon. Member for Nottingham, North (Mr. Allen) made a number of complaints about the orders, and he wanted them to do a lot of things which they cannot do. That is not merely because the orders do not contain the requisite material, but because they cannot do those things under the governing legislation. However, there were two or three points in particular upon which he asked my opinion.

The hon. Gentleman asked whether we could have increases automatically with inflation. I do not think that we can under the present law, because the Home Secretary is charged to come forward with regulations when he feels that it is appropriate to raise the expenses in line with the changing value of money. That must be his decision, and he has done that by consulting through his officials with the political parties. When there is a consensus--as there is on this occasion--he will introduce an order.

The hon. Gentleman also remarked on the disparity, as he saw it, between borough and county, with the latter having higher expenses. He thought that the differences were now out of date. That was an odd way of putting it, because the reason for the differences is geography, and that remains as it was. The distances in the hon. Gentleman's constituency, as compared with the constituency of the hon. Member for Caithness and Sutherland (Mr. Maclennan), are as they were previously.

There is no doubt that a large constituency, with long distances to travel and a spread population, involves greater expenses than a smaller, urban constituency. There is no reason why the differentials should be wrong now if they were right some years ago. They could be looked at, but they could be changed only if the Home Secretary introduced orders which did not raise the ceilings in county constituencies with inflation, as he was recommending the House did in borough constituencies.

Mr. Allen : The point that I was making in terms of the balance between counties and boroughs being slightly different now was based on the new campaigning techniques. There is greater emphasis on telephone calling and direct mail shots, and the physical moving of people and goods to different places around a constituency during a campaign has been somewhat diminished. The balance has shifted a little to more technological means of campaigning.

Will the Minister comment on the point about research, raised by the hon. Member for Caithness and Sutherland ? Would it not be helpful to look into a lot of those things and for the Home Office to undertake some serious research into whether we have it right at the moment ? That research could be even more serious than that which is undertaken already.

Mr. Lloyd : I will come to that point in a moment.

The hon. Member for Nottingham, North suggested that the ceilings on candidates' expenses were too low generally, and that he would like them raised. That would need legislation. I am not convinced that higher ceilings are needed. It is interesting that some 40 per cent. of Labour party candidates spend about 80 per cent. of what they could spend in elections. It does not appear that they are pressing on those ceilings.

There may be a need to look at the matter again. We last looked at it in conjunction with the other parties in 1987, when I did not have responsibility for these matters. The

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hon. Gentleman knows that a series of study groups is dealing with aspects of voting and electioneering. There are six groups, which are drawing lessons from the general election. They have presented their draft reports, and those have either been sent to the political parties for comment in the past few days or are about to go out. We do not ask that the matter of candidates' expenses should be looked at again. There are a large number of other issues which impinge upon those matters, and we will be interested to hear of any other issues when we meet with the political parties. It is sensible to take the matters forward by consensus because, at the very least, there needs to be agreement that certain aspects need to be looked at, rather than because of pressure from one party or another to make changes.

I am not sure that the hon. Member for Caithness and Sutherland is right when he says that we need a Speaker's Conference. I would much rather have meetings with the political parties on the basis of the wide-ranging reports which we are already putting forward. If additional issues arose, they could be examined to see whether it was agreed that certain aspects should be examined further--research, to use the hon. Gentleman's term.

The examinations could determine whether other discussions were needed, or whether there was not enough of a consensus to find a way forward. It would be much better to have meetings and discussions first. I do not want to rule anything out, but I would not like the hon. Gentleman to think that I was ruling anything in before the discussions.

Mr. Allen : While a Speaker's Conference may be going too far, and while many of us welcome the study groups and working groups which were established under the auspices of the Home Office, perhaps a middle way could be for an independent electoral commission, as I suggested. There may be matters which are to the benefit of the electors which may not necessarily be for the benefit of individual political parties, despite the fact that we always try to represent all our electors.

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Mr. Lloyd : The outcome of the discussions between the political parties will be for wider debate. For example, we are consulting local authority associations, and other interested groups will want to comment. I do not believe that general, non-partisan interested groupings will be excluded in any way, but it would be sensible to take things stage by stage.

A great deal of work has been done by the study groups which have already reported. We should take that work forward and add any other matters that the political parties combined want to study further as well.

I will finish on the funding of parties nationally. That matter is outside the substance of this debate, but has been mentioned several times. The matter is being looked at by the Select Committee, and observations have been made by both hon. Members who took part in the debate. I am tempted to make some counter-observations of my own, but it is better if hon. Members keep within the rules of the debate. It would be sensible to wait until we knew the recommendations of the Select Committee.

I hope and expect from what has been said in this short debate that the House will give approval to the four statutory instruments. Question put and agreed to.

Resolved ,

That the draft Representation of the People (Variation of Limits of Candidates' Election Expenses) Order 1994, which was laid before this House on 17th February, be approved.

Resolved,

That the draft European Parliamentary Elections (Amendment) Regulations 1994, which were laid before this House on 17th February, be approved.-- [ Mr. Peter Lloyd .]

Resolved,

That the draft European Parliamentary Elections (Northern Ireland) (Amendment) Regulations 1994, which were laid before this House on 17th February, be approved.--[ Mr. Peter Lloyd .]

Resolved,

That the draft Local Elections (Variation of Limits of Candidates' Election Expenses) (Northern Ireland) Order 1994, which was laid before this House on 17th February, be approved.--[ Mr. Peter Lloyd .]

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Local Government Finance (Scotland)

6.9 pm

The Parliamentary Under-Secretary of State for Scotland (Mr. Allan Stewart) : I beg to move,

That the Local Government Finance (Scotland) Order 1994, a copy of which was laid before this House on 17th February, be approved.

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse) : I understand that with this it will be convenient to discuss the following motion : That the Revenue Support Grant (Scotland) Order 1994, a copy of which was laid before this House on 17th February, be approved. This is the annual opportunity for the House to debate the Scottish local government finance settlement for the year ahead. It is common ground across the Chamber that it is an important debate for several reasons. Local authority services are clearly crucial to all those who receive them, be they the youngest or the oldest in our community.

The debate is also important because of the huge amount of money that is distributed under the orders that we are considering. The total sum involved is £5.3 billion. That represents about 40 per cent. of the total Scottish Office budget or, to put it another way, £1,034 for every man, woman and child in Scotland from the United Kingdom and business taxpayers. The figure of £1,034 compares to the English figure of £709 and the Welsh figure of £835. So the figure in Scotland is 46 per cent. higher than that in England and 24 per cent. higher than that in Wales.

The background to the two orders is provided in the reports on them, but I hope that it will be helpful to the House if I briefly summarise the position. I shall deal first with the main order, the Local Government Finance (Scotland) Order 1994. It represents the final stage of the 1994-95 settlement, details of which my right hon. Friend the Secretary of State first announced to the House on 30 November. He said that Government- supported expenditure--the total of grant-aided expenditure and the provision for loan and leasing charges--had been set at just less than £6,014 million and that aggregate external finance had been set at £5,272 million for next year. Those figures represent increases of 3.52 per cent. and 2.41 per cent. respectively on the 1993-94 figures, inclusive in both cases of the amounts being transferred to local authorities for the second year of their community care responsibilities.

The Local Government Finance (Scotland) Order 1994 deals with the distribution of aggregate external finance--AEF--for next year. As the report to the order explains, AEF has three components. The first is the provision for specific grants. For 1994-95, that provision is estimated at £421.5 million, and a breakdown of that estimate among the various specific grants is given in appendix B to the report. The second component of AEF is the distributable amount of non-domestic rate income, which for next year has been set at £1,109 million. That estimate takes account of the 1994-95 rate poundages which my right hon. Friend also announced on 30 November. Those poundages, in turn, took into account a further reduction of £60 million as part of the Government's policy of harmonising business rate poundages north and south of the border.

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Mr. Tam Dalyell (Linlithgow) : Do the figures take into account the costs already incurred of setting local government reform in motion ?

Mr. Stewart : Yes. The order provides an additional £5 million for local government reorganisation. As the hon. Gentleman will appreciate, the major costs and savings will come in years subsequent to the order.

Mr. George Foulkes (Carrick, Cumnock and Doon Valley) : It would be helpful if the Minister could elaborate on the exact basis on which the £5 million was calculated. It is important to know how much of the expenditure he envisages would take place in the next financial year. It would be helpful if he could set out briefly--I think that we have plenty of time--the types of expenditure that he expects to be incurred in the coming financial year.

Mr. Stewart : Certainly. As the hon. Gentleman will know, we sent out a circular to Scottish local authorities asking for an estimate of the costs of local government reorganisation in the forthcoming year. The costs mainly relate to information technology. As I said in answer to the hon. Member for Linlithgow (Mr. Dalyell), the main costs and savings will come in future years. We thought it right to allow a small increase in expenditure for costs in 1994-95. As the hon. Gentleman will appreciate, most costs will come in years thereafter.

Mr. Foulkes : We are talking about 1994-95, which goes on, as I understand it, right until the end of March 1995. It seems to me that £5 million is a small amount. From the discussions in which the Minister has been involved in the Standing Committee considering the Local Government etc. (Scotland) Bill, it seems likely that by the beginning of 1995, local authorities--whatever structure we ultimately decide--will be involved in fairly substantial expenditure around February and March 1995. I wonder whether information has been made available to the local authorities on which they can make reasonable judgments about what the expenditure is likely to be.

Mr. Stewart : Of course there will be substantial extra expenditure in the financial year 1995-96. The expenditure in 1994-95--the financial year that we are dealing with this evening--is likely to be very limited. No local authority suggests that it will incur other than preparatory expenditure. The hon. Gentleman is correct that, in 1995-96 and 1996-97, the picture will be different.

I informed the House last year that, with the agreement of the Convention of Scottish Local Authorities, it was proposed to distribute non-domestic rate income to regional and islands authorities only. That meant that district councils would receive their AEF support solely in the form of revenue support grant and specific grants. I am happy to say that those arrangements have been accepted by all involved and it is proposed to continue them for next year.

The third component of AEF is revenue support grant, which for 1994-95 totals £3,741.5 million. A detailed explanation of how AEF for next year has been distributed to individual local authorities is contained in the report to the order. It may be helpful to the House if I briefly summarise the procedure, the object of which is to equalise both for variations in authorities' assessed need to incur expenditure and for their tax base. There are broadly two stages in the process.

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Mr. George Robertson (Hamilton) : Broadly ?

Mr. Stewart : There are exactly two stages in the process. The first stage is to equalise differences in authorities' grant-aided expenditure assessments--GAEs--as determined by the client group methodology. That methodology, which is reviewed regularly, is agreed with COSLA in the distribution committee of the working party on local government finance. A little more than £1,303 million of the AEF total is used to equalise differences in GAE assessments. The second stage of the procedure is to equalise for differences in each authority's tax base--in other words, their ability to raise revenue locally. The balance of AEF remaining after equalising for differences in the GAE assessments is allocated to authorities in proportion to the number of council tax band D equivalent properties in each authority area. The sum of £3,927 million is distributed in that way.

The principle underlying the distribution procedure is that if all authorities spent at the level of GAE assessment, they should all be able to set the same level of council tax. In practice, there is often a significant variation in the levels of tax because some authorities decide to spend above GAE and others below. Variations in tax levels, however, are not the result of the aggregate external finance distribution system being used to reward or to penalise certain authorities. Any claims of that sort made in previous debates--I am sure that they will not be made today-- betray a lack of understanding of the system and the extent to which COSLA is fully consulted about the mechanisms that I have summarised.

Mr. Gordon McMaster (Paisley, South) : Is not taking the council band alone into account a rather crude way to assess the tax base of an area and the impact on local authority expenditure ? That crude formula alone will not take into account the fact that an area with many houses in the council band might also have been affected by unemployment or have a high level of poverty.

Mr. Stewart : The hon. Gentleman's argument is incorrect because of the two-stage process. Unemployment is an indicator in relation to the provision of a number of services and that is set out in detail in the distribution formula. If there were only one stage, the hon. Gentleman would be correct, but, because of the needs part of the procedure, indicators such as unemployment and deprivation are fully taken into account in the distribution of the grant.

Mr. Phil Gallie (Ayr) : Can my hon. Friend advise me whether COSLA has offered any constructive arguments on a change to the formula which would improve it, if that were possible ?

Mr. Stewart : The formula is constantly reviewed with COSLA. It is perhaps inevitable that authorities do not always wholly agree with the consequences of the formula because they are affected in different ways.

I certainly pay tribute to the very professional expertise commanded by the distribution committee of COSLA and the Scottish Office, as hon. Members who have studied the client group methodology in detail will be the first to attest. I see that the hon. Member for Glasgow, Garscadden (Mr. Dewar) is agreeing with me and I am sure that he studied it year in and year out when he was the shadow Secretary of State for Scotland. The methodology is extremely

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technical and sophisticated and I pay tribute to those who work very hard to improve it in the light of continuing representations.

Mr. Dalyell : Before we leave the subject of the professional expertise of COSLA, to which the Minister rightly pays tribute, if it has so much professional expertise, why does the Scottish Office challenge its estimates for costs of up to £720 million for local government reform ? Does he accept that that COSLA figure was put together not by a group of Opposition politicians, but by precisely the type of experts to whom he is paying tribute ; for example, David Chynoweth, who was president of the Chartered Institute of Public Finance and Administration last year ? Is it not dangerous to give such fulsome praise to COSLA's expertise--praise which is justified, in my opinion--but to say that it has its sums all wrong on another aspect of local government reform ? The Government cannot have it both ways.

Mr. Stewart : I do not accept that figure. When I paid tribute to the convention's technical expertise in one area, I do not think that anyone would imply that I necessarily meant that we accepted every figure that it produced on every subject under the sun. I merely said that the distribution formula is extremely complex and sophisticated and I paid due and proper tribute to those who worked very hard to ensure that the formula reflects changing circumstances ; it changes from year to year.

Mr. Gallie : I apologise to my hon. Friend for intervening again. If I heard him aright, he not only complimented those who were technically involved from COSLA, but also people from the Scottish Office. That office has come up with different figures for local government reform to COSLA, so the argument is balanced. Perhaps my hon. Friend should acknowledge that and advise Opposition Members of that fact.

Mr. Stewart : My hon. Friend is right, as always.

We are considering the distribution of the grant, which is done according to a formula agreed by the distribution committee. Both Scottish Office and COSLA officials do much extremely technical work. That does not mean that COSLA, by agreeing the distribution, necessarily agrees with the total, which is a different matter. COSLA is entitled to its view on that.

I do not think for a moment that the second order is controversial. The Revenue Support Grant (Scotland) Order 1994 redetermines the amount of revenue support grant payable to each Scottish authority for each of the years 1990-91, 1991-92 and 1992-93. Those are the three years covered by an agreement with COSLA to adjust, either up or down, the level of RSG payable to each authority in the light of any variations between the estimate of non-domestic rate income and the amount collected.

Hon. Members will appreciate, I am sure, that the amount can vary from the estimate because of changes in buildings, empty buildings and so forth. The introduction of pooling of non-domestic rate income--NDRI--from 1 April 1993 removed the need for the agreement to continue beyond 1992-93. With pooling, adjustments to the level of NDRI are made administratively.

The order provides for the level of RSG for 1990-91 to be increased by £26.6 million ; for the level of grant for 1991-92 to be increased by £39.7 million ; and for the level of grant for 1992-93 to be reduced by £34.5 million. All

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