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New clause 2 --

Initial review of local government areas

.--(1) As soon as practicable the Boundary Commission shall review such local government areas or parts thereof as the Secretary of State may direct, for the purpose of considering whether to make such proposals in relation to them as are authorised by section 13 of the 1973 Act, and what proposals, if any, to make ; and the commission shall formulate any such proposals accordingly.

(2) The provisions of paragraph 2 of Schedule 5 to the 1973 Act shall apply to a review under subsection (1) above.'.-- [Mr. McLeish.]

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Brought up, and read the First time .

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

Mr. Deputy Speaker : With this we may discuss the following : New clause 3-- Cost of re-organisation

.--(1) The Treasury shall undertake a review and publish a report on the costs likely to be incurred as a result of the provisions of this Act ; and the report shall be laid before Parliament no later than 6th April 1995.'.

New clause 29-- Review of cost of reorganisation

(1) The Comptroller and Auditor General shall report annually to Parliament on the costs incurred by the Secretary of State, any Staff Commission, residuary bodies, and Property Commission established by this Act, and by local authorities as a result of the implementation of the provisions of this Act and associated costs, in respect of each of the Financial years ending on 31st March in each of 1995, 1996, 1997 and 1998.

(2) It shall be the duty of the Secretary of State and local authorities to provide the National Audit Office with all the information required to compile the reports referred to in subsection (1) above.

(3) In this section, "local authority" includes all new authorities and joint boards, (including Orkney Islands, Shetland Islands and the Western Isles) and until 31st March 1996, all existing local authorities (including the islands councils), and joint committees and joint boards.'.

Amendment No. 25, in schedule 1, page 124, line 8, leave out Banff and Buchan District Council'.

Government amendments Nos. 287 and 288.

Amendment No. 26 in page 124, line 39, at end insert


'Banff and Buchan                    |Banff and Buchan District Council.'.                                     

Amendment No. 42 in page 124, leave out lines 40 to 44 and insert--


'Ayrshire                                 |Kilmarnock and Loudoun District Council;                                           

                                          |Cumnock and Doon Valley District Council;                                          

                                          |Cunninghame District Council;                                                      

                                          |Kyle and Carrick District Council.'.                                               

Amendment No. 5, in page 124, line 45, after The', insert Scottish'.

Government amendments Nos. 289 and 290.

Amendment No. 28, in page 125, line 2, leave out East Dunbartonshire' and insert Lennox'.

Amendment No. 29, in page 125, leave out lines 3 to 8 and insert Cumbernauld and Kilsyth District Council and Strathkelvin District Council.'.

Government amendments Nos. 292, 291 and 293.

Amendment No. 169, in page 125, leave out line 25 and insert--


'North Highland                               |Caithness, Sutherland, and Ross and Cromarty                                               

                                              |District Councils                                                                          

South Highland                                |Badenoch and Strathspey, Inverness,                                                        

                                              |Lochaber, Nairn, and Skye and Lochalsh                                                     

                                              |District Councils'.                                                                        

Amendment No. 30, in page 125, line 27, leave out Cumbernauld and Kilsyth'.

Amendment No. 31, in page 125, leave out lines 29 to 31. Government amendments Nos. 294 to 296.

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Amendment No. 170, in page 125, line 46, leave out from Council' to end of line 39 on page 126 and insert


'Renfrewshire               |Renfrew District Council.'.                            

Amendment No. 270, in page 125, line 46, leave out from

Council' to end of line 37 on page 126.

Government amendment No. 297.

Amendment No. 271, in page 126, line 38, leave out

(except the areas included in East Renfrewshire)'.

Amendment No. 272, in clause 5, page 3, line 43, at end insert (7) For the purpose of the first ordinary election of councillors, referred to in sub- section (2) above, the electoral wards for each local government area shall comprise the electoral wards for existing district councils insofar as they fall entirely within a local government area established under section 1 of this Act, and provided that where the boundary between two local government areas divides an existing district council ward, the Local Government Boundary Commission for Scotland shall, within eight weeks of this Act coming into force, submit to the Secretary of State proposals for areas within such part district council wards to be added to contiguous district council wards within the new local government area. (8) Within twenty-one days of receiving proposals from the Local Government Boundary Commission of Scotland in accordance with subsection (7) above, the Secretary of State shall, by order, give effect to the proposals without modification.

(9) An order made under subsection (8) above shall be subject to annulment in pursuance of a Resolution of either House of Parliament.'.

Government amendments Nos. 280 to 285.

Mr. McLeish : I wish to speak to new clause 3 and amendment No. 42.

The debate is important because it covers not only local government boundaries but the important question of how they were determined and the costs of what the Opposition still regard as a half-baked proposal. There has been widespread concern in Scotland throughout the passage of the Bill ; that concern has been apparent both during the Committee stage and right up to Report.

The key issue about which we are all concerned is how the Government arrived at some of the boundaries that we see not only in the Bill but in the amendments before us. The Bill has been framed with no consensus in Scotland among political parties, local government or the trade unions. There is no consensus for any form of change. There has been no in-depth independent review. The hallmark of the 73 proposals building on Wheatley was the desire not only to attain consensus but to have an independent commission assess the implications of change and report to the House where decisions were taken.

The boundaries in the Bill are not built on any notion of improved service delivery. It seems ludicrous that we are debating boundaries this evening when no consideration has been given to the link between boundaries and effective service delivery. I shall develop that theme later. Despite the Government's rantings, no regard has been given to historical communities, historical links or natural boundaries. If the boundary changes are not linked to any of those issues, what we are faced with is simple gerrymandering. The Government do not like that word ; they complained in another place about its use. There is no other word to sum up how the Opposition and the people of Scotland feel

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about a set of proposals that bear no relationship to their needs and aspirations, but much relationship to the needs and aspirations of the Conservative party.

After the trouncing that the Conservatives were given in the regional elections in Scotland, England and Wales, one might have thought that Ministers would be visited with some degree of humility. It is clear from the initial water debate that that has not happened. We wait with interest to see whether that will change in relation to this debate.

No one--even the Government--could argue that policies and boundaries that were built on gerrymandering could ever endure. I warn the Government that we will fight to ensure that the elections that the Government hope will take place next year will be derailed and delayed. The proposals before us, because of their instability, simply could not endure a change of Government ? Why are the Government not saying, "Yes, we need to build consensus. Yes, we need an independent review." If they did that, it would save us having to move and debate the issues this evening.

Mr. Stewart : Which of the Government's proposals is the Labour party specifically against ? Is the hon. Gentleman saying, for example, that the Labour party is specifically against moving Kincardine-on-Forth into Fife ?

Mr. McLeish : The Minister is trying to challenge my humility. The suggestion was daft in the first place. I do not think that I should applaud in any way the Government coming to their senses in one minus way to deliver Kincardine back to its people. We are against the Bill root and branch. It will do nothing for Scottish local government. It will do everything for the Conservative party

Mr. Stewart : Well, maybe.

Mr. McLeish : I will qualify that. I want to discuss that in a minute.

The Bill does not deserve to survive. The Secretary of State may smile. The Under-Secretary of State, the hon. Member for Eastwood (Mr. Stewart) and his colleague the hon. Member for Edinburgh, West (Lord Douglas-Hamilton) may just carry on with note filling, but the point is that the Bill is thoroughly bad and obnoxious.

On gerrymandering, when the Bill was conceived, the hon. Members for Eastwood and for Stirling (Mr. Forsyth) and some of the other apparatchiks who work out of Conservative central office decided, "Let us build the reorganisation around those two seats. So what we had in the first instance was Stirling becoming a single tier. We need not go into it, but it is legendary"

Mr. Graham : Eastwood.

Mr. McLeish : My hon. Friend makes the point. That constituency seems to have been the marvellous focus for a Bill, which you, Mr. Deputy Speaker, may not have read, but which, clearly, we have. It is great credit to the Minister that he has been able to wrap the whole of the Conservative machine in Scotland around his little finger to come up with such a daft, divisive and dangerous system. Perhaps he should be applauded for that, but he will get little applause from the Opposition.

Clearly, major issues are involved in the boundaries. I cannot miss the opportunity to say that, last Friday, when the Government tabled new amendments, they also conceived the smallest unitary council so far. We started with 28. Then, through the Government's inspiration--or, I should say, that of the hon. Member for Ayr (Mr. Gallie)

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as he rampaged through Scottish councils looking for anyone for whom he could move an amendment--we ended up with 30. On Friday, the figure went up to 32.

I ask the Government to accept a challenge. Can a council covering 47,000 people constitute an all-singing, all-dancing, all-purpose authority ? That is what we now have in Central region. I do not doubt for a moment the quality of either councillors or officials, but it is important for us to flag up one point. Fiction has been turned into sheer farce. We now know that Stirling was gerrymandered for political reasons--and we have also discovered that the Government are willing to go to any lengths to demean the processes of review and local government reorganisation. We have seen that with Clackmannan, a council covering 47,000 people.

7.30 pm

I am led to believe that Clackmannan has half the number of schools that my constituency contains. Now its water will be provided by three super- quangos, its police will be provided by one of the eight police authority boards and its fire services will be delivered by one of the eight fire authorities. Sadly, the Stirlings and Clackmannans of the world will be wholly dependent on larger authorities : they will be like colonies of Fife regional council, which will bestride it with its 350,000 people. Where on earth is Clackmannan to find its education and social services ? That is not an abstract question. The Minister smiles, but he knows full well that, although the Government's plan may fulfil the politics of madness on the Conservative Benches, it does not fulfil the politics of reality for those poor people in small authorities. They will suffer greatly.

The Minister laughs ruefully, because that is not his agenda. His agenda does not concern the quality of services enjoyed by people in Central region, Lothian, Tayside and Grampian, whose councils will be dismembered. His interest is in what the Government call enabling councils, referring to the ability of any council--regardless of its size--to purchase services wherever it wishes. Health boards do it ; health trusts will do it. It is called "purchaser provider". But it simply is not working, and if the Government approve the relevant amendments--the vote may take place tomorrow, because of the scheduling of business--certain people in certain communities all over Scotland will be condemned to much poorer services. We cannot accept that that could be a legitimate aspiration in any reorganisation, Conservative or otherwise. It seems to us that the Government have now come clean, and decided that they are willing to plumb any depths to provide local councils with few services to administer. One of the key issues behind all the rantings of Ministers and all the gerrymandering has been cost. In new clause 3, we ask for a Treasury inquiry into Scottish Office-inspired madness--for that is all that it can be. I am delighted to see the Secretary of State sitting in on the debate ; he was absent during the 170 hours that we spent in Committee, and we sincerely hope that he will wish to contribute to the debate on costs. Costs are crucial. Whether we believe the £720 million figure given by the Convention of Scottish Local Authorities or the back-of-an-envelope job provided by the Scottish Office--which suggested savings of £60 million for 1995-96--we cannot deny that there is a huge disparity in the estimates of the cost implications of the Bill.

That would be enough to persuade any sane Government to submit the matter to independent scrutiny.

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We do not argue that the Treasury is independent ; but we have a feeling that--when faced with a possible public sector borrowing requirement of £35 billion at the next election, a position in which front-line services are starved of resources and circumstances in which such innovations as "care in the community" have little funding to implement the proposals involved--the Treasury would be happy to investigate the kind of madness that we are seeing in the Scottish Office.

The crucial aspect of costs is the question of staff cuts, with which the question of savings is inextricably linked. It was in the House, at our last Scottish Question Time, that the Secretary of State let the cat out of the bag : for the first time, he talked about redundancies.

Mr. Lang : Rubbish.

Mr. McLeish : The Secretary of State says, "Rubbish." I hope that the Minister who replies will explain away that first reference to redundancies. In the House and elsewhere, the Government have given the impression that these massive savings can be made by means of a painless cut in staff numbers--but the word "redundancy" implies something more sinister and significant. I hope that the Minister will begin to clarify its meaning.

Playing politics with 300,000 jobs in Scotland is not just a sinister process, however ; it is even worse than that. The Government were unwilling to write into the Bill the arrangement introduced by the Local Government (Scotland) Act 1973, which automatically transferred all dedicated committee staff to the new authorities. Why ? And why did the Government then decide to turn their back on the European acquired rights directive and the transfer of undertakings legislation ? Every conceivable legal opinion is telling the Government that of course all the staff will be transferred ; whether it takes the courts to do that is immaterial. The Government have sought to justify this half-baked reorganisation by reference to savings. That is why they did not include in the Bill provisions for those people to be transferred automatically and why they have turned their back on European legislation. Ultimately, however, there will be no savings, because there will be no staff sacrificed on the altar of this

reorganisation. The Minister should tell us why the Government are able to ignore both precedent and Europe, and play politics with the future of 300,000 people.

It has already been suggested that 30,000 jobs could be lost--up to 10 per cent. of the current number of jobs in Scottish local authorities. Is the Minister willing to say from the Dispatch Box, "Yes, that is the case," or will he continue to play politics and talk about figures between 700 and 2,000 ? However we look at the figures, they simply do not add up : the Government are behaving in a sinister fashion, unwilling to own up to the truth about costs. If we take the labour savings out of the equation, it will mean that the Government will save nothing at all. Unison, the public service union in Scotland, will take the matter to the European Commissioner and to every existing local authority : if they decide that there will be no scrapping of staff but an automatic transfer, the Government will have no savings with which to justify the reorganisation.

The Government amendments constitute a firm commitment to gerrymandering of a high order. They also constitute a commitment to massive savings, when none will be made. If we discount the gerrymandering and the

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bogus savings, what on earth are we left with ? Why did we spend 170 hours in Committee, and why are we to spend two and a half days on the Floor of the House for Report and Third Reading, when the Government have now been fully exposed ?

I believe that this is a real tragedy. We gave the Government a chance to rescue themselves in the last debate, and they failed ; in our new clauses and amendments on boundaries, we ask them to see common sense. When will they wake up to the fact that there is no suspension of political reality in Scotland ? That has not happened over the past 12 months, and it will not happen over the next 12 months. Scots simply do not want this reorganisation, and opinion polls show that two thirds of them do not support the single-tier concept.

What we need is an independent commission, and at least a Treasury first look at the costs involved. We want the people of Scotland to appreciate that what the Government are doing is not in their interests, but in the interests of the Conservative party. I hope that what I have said, and what my hon. Friends will say, will be taken on board.

It is a sad occasion when the Secretary of State and his junior Ministers totally ignore public opinion. There can be no greater and more sinister development in any democracy than when the gap between the Government and the governed grows so large with no prospect of being bridged ; at that point, we move from an issue of reorganisation to a dangerous issue of democracy and politics. Even if the Government do not give a damn about the services enjoyed by 5 million Scots, the effectiveness of the £7.5 billion spent every year on services or the Strathclyde water referendum, do they not have any pride in democracy ? Hon. Members on both sides of the House are supposed to support that, but at times it seems that, while the Opposition support democracy, the Government only pay lip service to it. We have reached a dangerous situation in Scotland, and all because the Government will not listen. Tonight, they have an opportunity to listen and to respond. We hope that they do so.

Mr. Salmond : On a point of order, Mr. Deputy Speaker. I understand that Channel 4 news has just released information that the Cabinet Committee will meet on Thursday to consider the selling off of 51 per cent. of the Royal Mail and 51 per cent. of Parcelforce. Have you received notification of a statement on that matter ? Given that Scottish Office Ministers are present, and that they must surely have been consulted about such a proposal, perhaps one of them can make a statement at the Dispatch Box to confirm that Channel 4 report.

Mr. Deputy Speaker : I have received no notification of anything, other than the fact that the House is debating new clause 2.

Mr. Stewart : The hon. Member for Fife, Central (Mr. McLeish) made an astonishing attack on Clackmannan and East Lothian district councils, which are the subject of Government amendments before the House. I expected the hon. Gentleman to speak to the Opposition new clauses but he chose not to do so.

For the record, new clause 2, to which the hon. Gentleman did not refer, is unnecessary because the

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legislative powers to which it refers already exist. The hon. Gentleman referred to costs. New clause 3, which he did not address at any length, suggests that the Treasury should make a fundamental review of the costs of reorganising local government in Scotland. That demonstrates a fundamental misunderstanding of how central Government conduct their business. With the greatest respect to the hon. Gentleman, he and his colleagues displayed that misunderstanding in Committee, when they constantly suggested that the Scottish Office was putting forward figures without the Treasury's consent. That kind of scenario is completely inconceivable.

Mr. McLeish : Will the Minister confirm that he suggested to the Treasury that this muddled mess might cost £720 million ? Did that happen ?

Mr. Stewart : No. The Treasury has rather more sense than that. My right hon. and hon. Friends at the Treasury have more sense than to believe the figures presented by the hon. Member for Fife, Central. As he raised the point, I will refer to his own estimates of council tax rises in Fife, which he represents, following reorganisation. They suggest that band D council tax in Dunfermline would rise from £621 to £1,061, and in Kirkcaldy from £664 to £1,094.

Mr. McLeish : May we have the Minister's estimates ?

Mr. Stewart : I am not giving the hon. Gentleman my own estimates ; I am simply giving him the estimates of Labour-controlled Fife regional council.

Mr. John Home Robertson (East Lothian) : How many Conservatives are on that council ?

Mr. Stewart : Not a lot. That is precisely my point. That council cannot reasonably be regarded as some kind of crypto-Conservative organisation, yet it estimates that a single-tier Fife authority would produce savings of £4.9 million per annum. That is the estimate of Labour-controlled Fife regional council.

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Mr. Foulkes : Does the Minister agree that all the arguments relating to Fife apply equally to Ayrshire ?

Mr. Stewart : No, I do not agree--but I have no doubt that the hon. Gentleman will seek to catch your eye, Mr. Deputy Speaker, so I hope to be able to respond to his points later. I will have to take fully into account the points made by the hon. Members for Cunninghame, North (Mr. Wilson) and for Cunninghame, South (Mr. Donohue) in favour of the Government's present proposals for Ayrshire.

Mr. Connarty : Before we debate who prefers what in relation to democratic responses and public feeling about representation, perhaps we may focus on costs. Has the Secretary of State asked the Treasury to make a reasonable and rational assessment of the report on which he based his figures, compared with that produced for COSLA by the Chartered Institute of Public Finance and Accountancy ? They seem to take different views and to give different estimates. In Committee, more credibility was attached to the CIPFA report. Has the Secretary of State asked for an independent assessment of costs ? That aspect will affect every other decision on resources and services, as my hon. Friend the Member for Fife, Central (Mr. McLeish) said.

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Mr. Stewart : I can reassure the hon. Gentleman that we in the Scottish Office are in constant and close touch with the Treasury.

Mr. Canavan : The Treasury tells him what to do.

Mr. Stewart : The hon. Gentleman suggests that the Treasury tells me what to do, but Labour Members suggest that the Treasury ought to tell us what to do. That is the purpose of their new clause. The hon. Gentleman cannot have it both ways.

Mr. Canavan : We are calling for an independent element in assessing the costs.

Mr. Stewart : Labour's amendment suggests that the Treasury should have an estimate of the costs. I am saying that that happens in any event. It is inconceivable that any major Government measure is adopted without the Treasury's full involvement. That has been the case in relation to the Bill, as with every Government Bill that is put before the House.

The hon. Member for Fife, Central did not refer specifically to new clause 29, which would involve the National Audit Office in the auditing of local government reorganisation costs. I am sorry about that because I was going to say that the amendment's heart was in the right place but that it is unnecessary because the NAO has a relationship with central Government costs, not local government costs.

My right hon. Friend the Secretary of State hopes to catch your eye later, Mr. Deputy Speaker, to respond specifically to points made by hon. Members representing highlands constituencies, because the highlands case was not, by agreement, debated in Committee. It may help the House if I said something about costs and and about the Government amendments. My main point in answer to the hon. Member for Fife, Central is that the estimates to which he has referred to, and especially the COSLA estimates, assume, first, that more than 3, 000 local government staff will be made redundant and paid extremely generous sums--my understanding is that the sum would be between £100, 000 and £200,000 each--and, secondly, that they will all be replaced by new staff. I regard that as a ridiculous and unreasonable proposition and certainly the Government would not finance a scheme of that nature.

Moreover, estimates by individual local authorities of all political persuasions throughout Scotland consistently show savings as a result of the Government's proposals. The Scottish National party authority of Angus shows savings of £8.45 million over the status quo ; the Borders shows savings of £22.4 million, for the unitary authorities in Tayside ; Dundee shows savings. I have already referred to Fife and I know that the hon. Member for Fife, Central will have studied Fife regional council's estimates in great detail. Mr. McLeish indicated dissent .

Mr. Stewart : He is wrongly shaking his head.

Mr. McLeish : I do not like statistics.

Mr. Stewart : The hon. Gentleman says that he does not like statistics. [Interruption.]

Mr. Dalyell rose

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Mr. Stewart : I shall give way when I have finished the point. Fife is suggesting that the Government's proposals would result in savings, over 15 years, of some £68 million.

Mr. Dalyell : May I ensure that we have understood exactly what the Minister said ? Do I misquote him in saying that, when he was talking about compensation to employees, he said that the Government would not finance figures of that nature ? The figures are put at £100,000. There are many employees, who have to make decisions about their futures and their careers, and who would like to know exactly on what basis they are to be compensated. If the Government are saying that they are to compensate in a niggardly manner, that ought to be known.

Mr. Stewart : I accept that the hon. Gentleman has raised a legitimate point. What I regard as completely unreasonable is the proposition that local authorities--because. ultimately, it is their responsibility--would make people redundant at an enormous cost and then take people on to replace them, which is the essential assumption made in the COSLA figures. In the Bill, we are introducing powers to control such things.

Mr. Welsh : Why is no transitional figure given for property in Scotland when the figure has been calculated for England and for Wales ? Will the Minister comment on COSLA's point about the staff turnover effect, following on from what he said ? Does he dismiss that idea, and does he think that that would not have an effect on costs ?

Mr. Stewart : Of course there must be staff turnover ; nobody denies that. The hon. Gentleman asks about property. I hope that he will recognise that the decisions are for local authorities--and, as I understand it, his own SNP-controlled local authority has no particular difficulty over that matter.

Government amendments Nos. 287, 292, and 295--which relate to Dundee-- reflect the undertaking that I made in Committee to look closely at the boundary of the city. They have the effect of including Invergowrie in Perthshire and Kinross. In response to the reasoned arguments advanced by the hon. Members for Dundee, East (Mr. McAllion) and for Dundee, West (Mr. Ross) and by the City of Dundee district council, we proposed to include in the city the Balgarthno area to the east, Birkhill cemetery, Clatto Moor and Baldovan Wood, and an area to the east of the Forfar road. The case put to us was that those areas were integral parts of the city's overall strategy for future development.

The only essential difference between the amendments and the case put to the Government by the hon. Members for Dundee, East and for Dundee, West was over Strathmartine. The community council there argued that the area is predominantly rural, and we have respected that view, which favours an Angus link.

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