House of Commons Hansard Debates for 15 Feb 1995

Mr. Lang: If the estimated target yield is exceeded, the chances are that it will do so because the rating base has grown, which will be the result of the expansion of Scottish industry. I thought that the hon. Gentleman would welcome that, rather than detract from it. We are creating a level playing field. It is astonishing that, just as we have secured our goal, the policies of Opposition Members seek to throw away the benefits that Scottish business enjoys. The hon. Member for Holborn and St. Pancras (Mr. Dobson), speaking with all the authority of an official Front-Bench spokesman for the Labour party, has confirmed that a future Labour Government would return control over the level of poundages to local authorities. The hike in business rates that would inevitably result from local authority control and the destruction of the level playing field that we have achieved would seriously undermine the ability of Scottish companies to compete in the marketplace. Existing businesses would be threatened, new businesses would be deterred and our efforts to attract inward investment to Scotland would be jeopardised. Labour's motives in proposing such a policy have patently nothing to do with the needs of business and nothing to do with the needs of the Scottish economy. I have not heard a single Scottish business man calling for business rates to be returned to council control. Labour clearly aims to satisfy the desires of its free-spending councillors, irrespective of the needs of business.

I wrote to the hon. Member for Hamilton (Mr. Robertson) on 18 January asking him to confirm whether that policy would, indeed, apply in Scotland. I pressed him on the matter again in the House on 28 January.

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Despite that, I have yet to receive an answer from the hon. Member. I know that developing policy is a difficult and novel experience for Opposition Members, but the hon. Member for Hamilton only needs to tell the House whether he supports the policy of his colleague, the hon. Member for Holborn and St. Pancras; or is the hon. Member for Hamilton afraid of admitting Labour policy, as it would be so damaging to the interests of Scottish business? The hon. Gentleman need not fear answering; I can assure him that this is not a planted question from the Scottish National party.

Mr. George Robertson (Hamilton): That was a Conservative Central Office comment, meticulously delivered in the music hall style that has become the hallmark of the Secretary of State for Scotland. In the Secretary of State's consideration of the consultative document, which was published by my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson), and which relates solely to England and Wales, did the Secretary of State read the autobiography of the right hon. Member for Brent, North (Sir R. Boyson), the other man with the whiskers? In his fine book entitled "Speaking My Mind", he says that the universal business rate was a mistake, that it has separated businesses from their areas and

"diminished the calibre of councillors because local businessmen no longer stand for election to be financial watchdogs on local councils."

Conservative Members are not unanimous about the future of the UBR. Labour's consultation will take place in Scotland. It will have a Scottish policy to protect Scottish business and Scottish industry. My hon. Friend the Member for Holborn and St. Pancras will do the same down south.

Mr. Lang: I am not sure if I am supposed to take it from those latter remarks that policy will be the same north of the border. It is astonishing that the hon. Gentleman is not yet prepared to say that it will not be the same. He plans to allow a free-for-all for local business rates. That would lead back to the 76p in the pound level achieved by Labour authorities before we introduced the uniform business rate. It will be noted throughout the business community in Scotland that the Labour party shrinks from committing itself to maintaining the level playing field that we have so painstakingly secured for the Scottish business community.

The AEF total for next year has been distributed among individual local authorities using exactly the same methodology as in previous years. The methodology involves equalising, first, for variations in authorities' assessed need--as determined by their grant-aided expenditure assessments-- to incur expenditure and, secondly, for variations in their tax base and, consequently, in their ability to raise income locally from the council tax. Just over £1,303 million of the AEF total for next year is being used to equalise differences in authorities' GAE assessments, while a total of nearly £3,962 million is being shared among authorities in proportion to the number of council tax band D equivalent properties in each authority area. I hope that the House finds that clear.

Sir Russell Johnston: Does the Secretary of State regard this as an appropriate moment for me to pose again the question that I asked earlier? In the case of Highland

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regional council, the combined effect of the measures and the financial and capping arrangements will lead to 12.9 per cent. less money for services. That means that the council immediately faces the choice of closing its job and enterprise unit, with the loss of 120 jobs and of a great opportunity for people to enter new employment, or sacking X number of teachers. Is that the sort of choice that the Secretary of State wants to give local authorities?

Mr. Lang: It is not; nor do I accept that it is necessarily the choice that they face. Of course I acknowledge that Highland regional council has been one of the authorities that has argued about the distribution formula from time to time. Its argument, however, is not with me; it is with other local authorities and the Convention of Scottish Local Authorities, which has agreed with that formula, on the basis that money is equally and evenly distributed, taking account of relative need through a sensitive formula.

As for the overall quantum, it is well known that expenditure has risen sharply in local authorities in recent years. There has been an increase of some 20 per cent. in real terms in the past 10 years. Last year alone, in real terms, local authorities have had 2 per cent. more expenditure than had been anticipated following inflation rates estimates at the beginning of last year.

Mr. George Foulkes (Carrick, Cumnock and Doon Valley): The Secretary of State's convoluted prose serves only to obfuscate the truth. He is trying to pull wool over our eyes. The position described by the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) is replicated throughout the whole of Scotland, so it is not a question of distribution. Strathclyde is facing terrible options.

Mr. David Marshall (Glasgow, Shettleston): It faces a crisis.

Mr. Foulkes: Indeed. Community education is one the services that is threatened. Voluntary organisations will not have places in which to meet. That means that we will have more crime and more drug taking among young people. That is sort of thing that will happen. The Secretary of State knows that, as he has made cuts, local authorities have made efficiency savings year after year. He must give them some guidance. Where will they find the savings? Will they have to sack teachers or will they have to accept any of the other options? He must say, and he should not leave it to local authorities. I know what he is up to. He is hoping that they will get the blame for the problems when the election comes on 6 April. He is--

Mr. Deputy Speaker: Order. That is the end of a lengthy intervention. Interventions are supposed to be short and to the point.

Mr. Lang: If I were to seek to give guidance to local authorities of the kind that the hon. Gentleman suggests he would be the first on his feet, accusing the Government of intervening in local government decision making. The fact is that local authorities have had a substantial expansion in resources at their disposal over the years. If the problem in Strathclyde is so severe, why did the authority expand its staff numbers so substantially last year at a time when some other local authorities were

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retrenching? When the hon. Member for Hamilton makes his speech, perhaps he will be able to confirm whether the report in The Scotsman last Friday was correct. It reported that Hamilton district council is contemplating not an increase in next year's council tax but a 10 per cent. reduction. That is hardly the action of a council under the sort of pressures to which the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes).

Several hon. Members rose --

Mr. Lang: I think that I shall give way to a Conservative Member this time.

Mr. Phil Gallie (Ayr): Is not the previous intervention typical of the Opposition? They call for devolution and responsibility, but when they get that responsibility, what do they do? They whine and gurn and try to pass the buck back to my right hon. Friend.

Mr. Lang: I could not have put it better, so I shall not try.

Mr. James Wallace (Orkney and Shetland): Will the right hon. Gentleman give way?

Mr. Lang: No, I have given way many times and I must make progress.

The second purpose of the local government finance order is to increase by relatively small amounts the level of AEF payable to two local authorities for 1994-95. The authorities involved are West Lothian and Western Isles. In the case of West Lothian, the increase is the result of the district council taking on additional housing benefit responsibilities, and in the case of the Western Isles the additional AEF is to enable the islands' council to subsidise the costs of internal air travel in the Western Isles following the introduction of the air passenger tax last November.

The third purpose of the order is to redetermine the level of AEF for 1993- 94, taking into account changes in each authority's council tax base since the original distribution as a result of, for example, successful appeals by householders regarding the tax band in which their property should be located.

I should make it clear to the House that the Convention of Scottish Local Authorities has been consulted about the detail of all four orders and has had no points to raise on any of them. I fully recognise that COSLA is unhappy about the overall level of next year's local government finance settlement--I shall say something about that in a minute or two--but the convention has raised absolutely no complaint about the way in which the settlement total is being distributed among authorities.

The methodology for determining authorities' grant-aided expenditure assessments is kept under regular review by the distribution committee of the working party on local government finance which comprises representatives from the Scottish Office and the convention. While there are inevitably complaints from authorities which lose as a result of a change in the distribution methodology, I think that one of the strengths of the system is the extent to which it operates on the basis of consensus. I hope that tonight we shall not hear from the Opposition the sort of allegations that have been made in these debates in previous years--that, in some

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way or other, the distribution penalises particular authorities or that it has been manipulated by the Government. It has not. I said earlier that I proposed to say something about the overall level of next year's local government finance settlement. I fully accept that it is a tight settlement, but it should not come as a surprise to anyone in local government or to Opposition Members. I have consistently warned local authorities over a period of years that they needed to bear in mind the limits on the levels of public expenditure and to look closely at ways of delivering their services more efficiently. For the most part, they have chosen to ignore that advice. Most councils have continued to increase the numbers of staff that they employ.

I believe that local government must play its part along with the rest of the public sector in helping to control the level of public expenditure. Every extra £1 spent on local government would mean £1 less for health, £1 less for industry and £1 less for all the other areas for which I am responsible at the Scottish Office. If Opposition Members are arguing for more money to be given to local government, they should tell the House which other vital public services will be deprived of resources to fund this higher spending. How many millions would these services lose to finance the spending desires of local councils? Or perhaps they will tell us what taxes they would raise to enable local government to spend more. Would business rates be the first target? Or would they raise income taxes? Without those answers, no one need attach any credence to the Opposition's cries of underfunding.

Although I have acknowledged that it is a tight settlement, I certainly do not think that it is an unrealistic one, given low inflation. Nor do I think that it is unrealistic to expect local authorities--in common with the rest of the public sector--to fund any pay increases from efficiency savings. If authorities had made some attempt to find efficiency savings in the current year to meet the cost of 1994 pay increases, they would not have stored up for themselves the need to find savings in the forthcoming year to cover the cost of 1994 and 1995 pay increases.

Almost every year in these debates, we hear allegations from Opposition Members that the Government are underfunding local government in Scotland and have destroyed local services and local authority jobs. The hon. Member for Hamilton was no different in last year's debate. He claimed that the consequences of the 1994-95 settlement would be thousands of job losses, service reductions and an extra 10 per cent. on council tax bills across Scotland. What was the reality? The numbers employed in local government rose instead of falling; the average increase in council tax levels was, in fact, not 10 per cent., but 5.5 per cent.; and the hon. Member for Hamilton and his colleagues were also wrong about cuts in services.

The reality of the situation is very different from what is suggested in the Opposition's rhetoric. Let us consider the facts. In the past 10 years, expenditure by Scottish local authorities has increased in real terms by more than 20 per cent. and nearly doubled in cash terms. In the seven-year period up to June 1994, staffing levels in Scottish local authorities increased by more than 6 per cent. while, in the same period, staffing levels in English authorities reduced by almost the same percentage figure. Even after the 1995-96 settlement, the level of

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Government-supported expenditure is 33 per cent. per head of population higher than the comparable English figure.

I could go on to talk about improvements in particular local authority services and, if pressed, I should be happy to do so, but these figures demonstrate clearly that the Government, far from underfunding and attacking Scottish local government, have made it prosper.

It is against that background that next year's settlement must be viewed, and it is also against that background that I commend the orders to the House.

7.46 pm

Mr. George Robertson (Hamilton): The Secretary of State described this year's settlement as extremely tight, but that is surely an understatement. In fact, for two of the regional councils in Scotland-- Lothian and Strathclyde--it is not only tight but punitive and arbitrary and it will lead to reductions in real services for real people. The Government's decision will force up local council taxes, all local charges and, in the process, inflation, at the very time when the Government are yet again claiming that in Scotland and elsewhere the recovery has just started.

The Secretary of State did not have the gall to describe the housing settlement as extremely tight. It is not just extremely tight; it means strangulation. Without doubt, it is among the most savage and vindictive housing settlements for many years. Those who will pay the price will be council house tenants and the thousands who languish on council house waiting lists all over the country. Council taxes will be forced up by 10 per cent. on average, even after stringent cuts by many local authorities. There is little doubt about that now. Services will be affected and the quality and availability of housing will decline all over Scotland.

Why? Why are local authorities and the Scottish people being expected to bear all this pain? The reason is simple: the Government's need to find cash this year to fund election tax cuts next year. They want to pass on a tax increase one year in the form of a tax saving next year. It is a cynical, brazen abuse of central Government power so that tax bribes are available for an election Budget.

Mr. Raymond S. Robertson (Aberdeen, South): The hon. Gentleman said that this year's settlement is not sufficient. He has clearly done his sums but, if he wants to be taken seriously, he must tell us by how much this year's settlement is short. Which aspects of the block should be cut to fund the local government settlement? If new money is needed, has the shadow Chancellor agreed? If not, which of his shadow Cabinet colleagues' budgets will have to be cut to provide the hon. Gentleman with the money that he wants?

Mr. Robertson: I do not know whether that speech was given to the hon. Gentleman as a consolation for not being the new Minister. If so, he was sold cheap. Believe it or not, the Tory Members present on the Back Benches are the reservoir of talent now available to fill future resignations. I exclude the hon. Member for Tayside, North (Mr. Walker) from that reservoir as he beached himself long ago. The hon. Member for Aberdeen, South (Mr. Robertson) asked about the savings. Let us start with the money that was wasted on Health Care International. If that is not

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enough to fund the increases that should be made available for services, let us take the £700 million that will be wasted on the unnecessary and unwanted reorganisation of local government. That is a start for the hon. Gentleman. I suggest that he writes it all down and puts it in his next speech-- [Interruption.]

Mr. Deputy Speaker (Mr. Michael Morris): Order.

Mr. Robertson: I am slightly more understanding than you, Mr. Deputy Speaker. I understand the hon. Gentleman's frustration. All those cuts to keep back money for next year will be in vain because nobody will believe the Government on taxation ever again. A Government who lied so clearly and unequivocally before the last election are unlikely to be trusted on anything to do with financial management in the future. That is the verdict not of the Opposition but of an opinion poll that gives the Secretary of State for Scotland a rating only 2 per cent. higher than that given to Gerry Adams and Sinn Fein in the last elections in Northern Ireland. It is the Scottish people's verdict on what the Government have done for the past 16 years and what they are doing now. The Scottish people will not be fooled by a Government-dictated council tax increase this year, which may be followed by the same amount of money next year in tax reductions. They are much too intelligent to be taken in by that. The Government's disgraceful discrimination policy is in sharpest relief in their housing budget. The statistics speak for themselves. Fourteen years ago, the housing support grant stood at £228 million, with a further £100 million from general funds. Next year it will be reduced from £328 million to £22 million. That tells its own story.

Mr. Bill Walker (Tayside, North): Will the hon. Gentleman tell the House clearly about the difference in housing benefit during the same period, because that money goes directly into the housing coffers?

Mr. Robertson: It demonstrates the poverty that exists in Scotland. It is astonishing that a Conservative Member boasts about the amount of housing benefit being paid in Scotland. That is public expenditure to help people in need because of the poverty created by the Government's economic policies over the past 16 years.

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

Mr. Robertson: No, I have been generous enough in what I have said.

Over the past 14 years, some £200 million has been taken out of housing, in a housing environment where the Government's statistics tell the story of the problems that face Scottish housing. A survey carried out by Scottish Homes paints a bleak picture. Statistics collected and collated by that Government agency show that 4.5 per cent. of all Scottish housing is below what is defined as a tolerable standard. That is a total of 100,000 Scottish homes in both the public and private sectors. They also show that 13.5 per cent. of those homes suffer from dampness and 20 per cent.--one in every five--of houses in the public and private sector suffer from condensation, mould and dampness. Those conditions affect 500,000 houses.

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That is the extent of the problem facing Scotland today, yet the Government's public expenditure White Paper tells the Scottish people that they intend to cut expenditure on housing by 20 per cent. over the next three years. So, in response to a housing crisis that is unparalleled in modern times, the Government will cut the amount spent on housing. Under their convoluted system of calculating, rents for council house tenants will be forced up yet again by at least 5 per cent.-- 2 per cent. more than the Government's calculation of inflation. When the Government took power in Scotland, council house rents were on average £4.92 a week. When the new settlement comes in next week, they will be £27.77. That is a stark fact about the rents paid by ordinary Scottish families.

Now, 40 per cent. of Scottish housing investment goes not to local authorities but to the super-quango, Scottish Homes, which has been given more generous relief and flexible financial surroundings to spend the money.

Mr. Graham: Will my hon. Friend give way?

Mr. Robertson: May I just give my hon. Friend the benefit of a further statistic? No less than 80 per cent. of Government grant in aid now goes to Scottish Homes for it to spend.

Mr. Graham: My hon. Friend will be aware that I represent an area with one of the biggest concentrations of Scottish Homes property. It recently gave notification that, once again, rents would go up massively. Bearing in mind the fact that ever since Scottish Homes has been in operation, we have had year-on-year, massive rent increases, when will we reach the end of it?

Mr. Robertson: We shall reach the end of this bleak and dismal point of view at the next general election. It is part of a strategy, not an accident. It is not even a policy of the Scottish Homes board--weird, wonderful and highly political as its policy decisions are. It is a decision by Her Majesty's Government to drive people out of the rented sector. Using the excuse of choice, they drive people into a single form of housing tenure: owner-occupation. That is why rents have been artificially increased in both the rented and Scottish Homes sectors.

Two years ago, Scottish Homes received £250 million to write off its capital debt following the sale of 30,000 of its houses, presumably at a discount, which left it with an on-going capital debt. Why have not local authorities in Scotland, which, after all, had to dispose of some 300,000 houses, received relief for the capital debt that they continue to hold following the sale of council houses? Where is the equity of treatment? Are the Government interested in a balanced housing policy? Do they care for people who need a house, or are they simply obsessed with getting locally elected and democratically accountable councils out of the business of providing housing for rent? I fear that the answer to those questions is ominous.

Given the contrast between the housing settlement and the favourable treatment given to Scottish Homes, a new and sinister aspect is creeping into how that quango is operated. Not only is it taking over the bulk of Government assistance to housing, but it seems to be taking over the political job of the Government. The members of the Scottish Homes board, whose names the

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Secretary of State on Monday could not recall without referring to his notes, has taken on itself the decision deliberately to deny tenants--

Mr. Lang: Rubbish.

Mr. Robertson: The Secretary of State could not give the names when my hon. Friend the Member for Strathkelvin and Bearsden (Mr. Galbraith) asked him to tell him the names without looking at his list.

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

Mr. Robertson: I will give way to the Secretary of State if he would like to give me the names--

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

Mr. Robertson: No, I am not interested in the hon. Gentleman. Would the Secretary of State like to tell me now, without looking at a piece of paper, the names of the members--

Mr. Gallie rose --

Mr. Robertson: The hon. Gentleman is bobbing up and down like a jack -in-the-box, but it is the Secretary of State who cannot recall the names of those on that powerful board. He cannot name them, but they have taken a decision in his name. That board has made a policy decision deliberately to deny its tenants the right to choose a local authority landlord.

At least I know that the board includes Councillor Daphne Sleigh--who is one of that last remaining number of Tory elected councillors. Those board members get paid in salary and expenses £250,000 a year--that is what the Scottish Homes board pays its members. The chairman of the board gets paid more than a Member of Parliament, but rejects the advice and views of Members. The board of Scottish Homes is now dismissing the views of all Scotland's Opposition Members by deciding that it will deny its tenants a choice. We are beginning to see the untrammelled arrogance of the Tory quango state.

Last week, the chairman of Scottish Homes, Sir James Mellon, sent me a letter not just defending his board's indefensible decision to deny choice to tenants--defending it might have been technically legitimate--but going beyond that and attacking the Labour party and challenging it on its housing policy. He ended with an unconcealed sideswipe at Scotland's local councils. Sir James Mellon, a former diplomat, who has never stood for election in his life, said: "Real democracy is once again at work.

Yours sincerely, Jimmy".

He and Mr. McKinlay then offered themselves for interview and press conferences. They happily threw the whole weight of their publicity machine behind an unconcealed attack on the Labour party. Ministers are now able to stand aside and let the quangos do their political dirty work for them.

Why is Scottish Homes now engaged so blatantly in the party-political debate? Quangos are supposed to be responsible to Ministers; they are not supposed to free, party-political agents in their own right. The Secretary of State, not unelected placemen, is supposed to be responsible for policy, Scottish Homes should leave politics to the politicians.

Mr. Michael J. Martin (Glasgow, Springburn): Is my hon. Friend aware of another negation of democracy

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concerning Scottish Homes? When hon. Members table questions to Ministers about Scottish Homes the only response we get is that the chairman of Scottish Homes will reply to us. That letter is sent to the Member rather than being published in Hansard , available to the public gaze.

Mr. Robertson: My hon. Friend speaks with great wisdom and perception on this matter. He has underlined, as I have also sought to do, the remarkable and disturbing new development in the way in which that public body is now deploying its financial resources, and its considerable publicity resources, in the party political interests of the Government.

I find the behaviour of Scottish Homes quite extraordinary, because it represents a major and disturbing shift in the way in which quangos are run. I must inform the Secretary of State that I intend to write to the Prime Minister and to the Secretary to the Cabinet to ask whether that behaviour is in line with present policy. It should also be drawn to the attention of the Nolan committee that unelected chairmen of quangos are now entering into the party-political arena. As a consequence, the independence of public service is seriously in question.

Mr. Gordon McMaster (Paisley, South): When my hon. Friend writes to the Prime Minister he should point out that tonight's debate, which is a political one, essentially involving civil servants, is also being repeated not only in the media but door-to-door on Scottish housing estates, because the staff of Scottish Homes, who are understandably trying to make sure that they have a job to go to, are promoting a particular option, because that is all that Scottish Homes will allow. It will not allow free choice.

Mr. Robertson: My hon. Friend is absolutely right, because people are being denied the right to choose a local authority as their landlord. There is plenty of evidence to suggest that other choices are also being limited as a result of the deployment of the resources of Scottish Homes.

On previous occasions I have spoken highly of some of the work of Scottish Homes. Perhaps I should regret that, because Sir Jimmy Mellon quoted my commendable words in his letter to me. I accept that Scottish Homes has a creditable record and has done many innovative things. I am saddened by the fact that the chairman and the board have taken it upon themselves to become an extension of the Tory party political machine.

The local government settlement has been a tight one for all councils. For many councils, prudence and careful management--as in the case of Hamilton district council--has produced an outcome that will allow them to keep the council tax level stable or even, in some cases, to reduce it. In the case of Lothian, Strathclyde and other regions, the effects of the settlement will be punitive. The Secretary of State says that no representation about the distribution was made to him by the Convention of Scottish Local Authorities. However, according to annexe 1 of the briefing note--I am sure that even the Secretary of State has been handed it--Strathclyde's budget will be cut by £15 million in this year. There is little doubt that it is suffering far more than other regions.

Despite Strathclyde's long-standing record of financial prudence and cost- effectiveness, it will have to make serious cuts in service this year and perhaps put the

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council tax up by about 20 per cent. It will do so reluctantly, but necessarily because of the settlement. Cuts of £107 million are not just extremely tight for the council, but border on dangerous. They endanger key services such as education and the police and will force above-inflation charges for rail, bus and ferry services. That is bound to have an impact on concessionary fares for the most vulnerable. Strathclyde is cutting not at the fat, but at the bone. This year, cuts made by Lothian will also seriously affect the quality of valuable services.

One of the roots of the problem is the Government's failure to cover the pay settlements for this year, especially that for teachers. In the light of inflation increases, the pay settlement--5.1 per cent. over two years-- was not generous. It was a cautious one. A Scottish Office observer sits in at the teachers pay negotiations, but this year not a word was heard from that person. The local authorities across Scotland have now been left with a bill for £144 million to cover the pay settlements, £65 million of which is meant for the teachers' pay settlement.

What are the efficiency savings about which the Secretary of State talked? What are councils supposed to do? Are they meant to increase class sizes and the pupil-teacher ratio? This year, the Secretary of State published yet another glossy document entitled "The Parents Charter in Scotland". It was costly publication. On the quality of teaching it says:

"You"

--the voter; the public; the citizen; the council tax payer and the parent- -

"have the right to expect that the staff who teach your child will be suitably qualified, professionally competent and well motivated. You can also expect high standards of teaching at all times." The Secretary of State has said that people should expect that, but at the same time he is demanding massive efficiency savings, especially in education budgets. If they want the quality teaching and teacher motivation that is required to comply with their objectives, the Government cannot run away from their direct responsibility for financial settlement this year.

The Government continually tell us that the councils are increasing their staff. We hear that refrain year on year, as though it was a great crime for councils to increase their staff at a time when 250, 000 people are out of work. [Interruption.] The hon. Member for Hertford and Stortford (Mr. Wells) says, yes it is. No; he says that it is a crime. [Interruption.] The price that some people will pay to get on to the Front Bench. The Whip said nothing.

We are allowed to believe that it is a crime to increase jobs at a time when 250,000 of our fellow citizens are out of work but, if it is a crime, there are some remarkably obvious culprits in the dock. Tory Stirling district council, Tory Berwickshire district council and Tory Bearsden and Milngavie district council are all employing more people than they did last year.

Moreover, the Scottish Office is employing more people, although the Secretary of State massages the

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figures. Oh yes, the hard core of the Scottish Office has decreased in numbers, but when one takes account of the impact of the agencies, one finds that--

Mr. McMaster: Sir Jimmy Mellon.

Mr. Robertson: Not even Sir Jimmy Mellon. No; we are talking about the direct agencies such as the Prison Service. It emerges that, in 1990, there were 255,500 full-time equivalents in local government; in 1994, there were 255,300 local government employees, down by 0.8 per cent. However, in the same period, the Scottish Office, the Secretary of State's empire, has increased by 4 per cent. So if it is a great crime that the hon. Member for Aberdeen, South will pronounce on, in his propaganda role, let us ensure that the criminals are fully identified.

The Secretary of State genuinely knows--he is not an unintelligent man-- that local authorities, in many cases, have had to increase their labour force, including those Tory councils, because he has placed new burdens on them; massive new burdens in terms of community care, and continuing burdens in collecting the poll tax, something for which he and the Conservative Government should bear responsibility until the end of time. We should have no more homilies about the iniquities of increasing staff levels, because there is the same strong smell of humbug as comes so familiarly from the Government. I should like to add my voice--this may sound peculiar in this week of all weeks--to the opinion that the hon. Member for Banff and Buchan (Mr. Salmond) expressed in relation to notional receipts. Many councils--including the Conservative councils, because the representations made to the Secretary of State were from every council in Scotland--feel that the decision that has been taken about notional receipts is unfair, unjust and will work against the interests, not only of local government, but of industrial development.

Labour councils will make the best of the settlement, and they will work efficiently and with dedication to ensure that people are spared the full impact of the settlement. However, as usual, the Government have produced a bad deal for local government, especially for housing authorities, and a bad deal for Scotland in general. They simply will not now tackle the real problems confronting the Scottish people. This is simply one more settlement in a long line of attacks on the power and the services of locally elected councils. Those attacks have wounded more than the structure of local government, which can, and will, be revived by a new Government after the next election; they have hurt the people--many of whom are the most vulnerable in society--that local government helps and serves. The Government will never be forgiven for that, and they will pay a heavy price for it. 8.13 pm

Mr. Phil Gallie (Ayr): I admit that the hon. Member for Hamilton (Mr. Robertson) put a strong argument to persuade the green vote to join him. Indeed, I suggest that he is the champion of recycling because, if speeches are anything to go by, it appears that he uses the same whining and whingeing speech every year in this debate. He makes the same prophecies every year, but he never looks back and says, "Sorry, I was wrong last year; I will attempt to get it right this year."

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The hon. Member for Hamilton spoke about additional expenditure for local authorities and explained to my hon. Friend the Member for Aberdeen, South (Mr. Robertson) where all that money would come from. He would stop waste, like the money that was expended on Health Care International. As Government input of £30 million into HCI attracted private investment of £150 million, I do not regard it as anything to apologise for. As, in the past eight years, people in and around Clydebank have found employment, I do not think that the money has been wasted. I think that many people in that area will have been grateful for the £30 million injected by the Government and grateful for the jobs that have been provided.

At the end of that, we still have a first-class hospital, possibly the best hospital in Europe, which can be used to earn money for the United Kingdom, for Scotland, but, above all, for people who will find jobs in that hospital in the years to come.

Mr. Robert Hughes (Aberdeen, North): I admire the hon. Gentleman's new enthusiasm and conversion to the idea that the Government should be investing in industry to stimulate employment directly. That goes completely against the philosophy of the Government, or is he saying, "No; we do not invest directly in manufacturing, we invest only where private medicine can make a fast buck"? Is that the distinction that he makes?

Mr. Gallie: What I am saying is that when the Government have money to invest, they consider the best means of achieving a sound capital project and the best means of creating work with the money that they have to invest. I am suggesting that that project created a lot of work, and achieved many of the aspirations that I would expect if Government are to use much-valued taxpayers' money to try to support development of industry and commerce in our country. Dr. John Reid (Motherwell, North) rose --

Mr. Graham rose --

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