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Mrs. Maria Fyfe (Glasgow, Maryhill): Now that the Minister has had the opportunity to go through Glasgow council's books in detail, does he think that a 36 per cent. increase in council tax is acceptable? Does he understand why that 36 per cent. increase is necessary unless he takes action?
Mr. Kynoch: For a start, I have not had a chance to go through Glasgow council's complete figures. Despite meeting Glasgow council members this morning, I have yet to hear a proper explanation of why, with a notional budget of about £800.1 million and a capping limit of £839.5 million--an increase in funding of about 4.93 per cent. that the council could spend and remain within its capping limit--they are talking about cuts. At this stage, they are talking about the budget being 13.4 per cent. up on the notional budget.
I have explained how notional budgets were prepared. They were prepared by the disaggregation of Strathclyde regional council's regional budget to the Glasgow area. We then added the district budget, and obviously transfers of responsibility were taken into account. The new
Glasgow city council is at the moment talking about a budget increase--clearly it has not yet set a budget, so I urge it to set a responsible budget--of 13.4 per cent. When one takes it into account that all wage increases should be funded from within by efficiency improvements and so on, as in the public sector, that 13.4 per cent. represents an enormous increase, given that inflation is running at less than 3 per cent. The hon. Member for Glasgow, Maryhill (Mrs. Fyfe) should go back and ask the councillors of Glasgow rather than me why they are proposing a budget that is almost five times the rate of inflation.
Mr. Kynoch:
I will not give way again to the hon. Lady.
Mr. Phil Gallie (Ayr):
Considering the way in which the agreement has been reached by the disaggregation of budgets, have my constituents not been disadvantaged to the benefit of Glasgow?
Mr. Kynoch:
That is not quite correct. The transition scheme proposed by COSLA and accepted by my right hon. Friend the Secretary of State and me has made it possible for my hon. Friend's council to benefit during the transition this year. It will get one third of the mismatch benefit. My hon. Friend is absolutely right that in the past Glasgow has benefited from some of the GAE that perhaps rightly should have been allocated to my hon. Friend's area. My hon. Friend makes a valid point. In past years, Glasgow has enjoyed a heavier level of expenditure than the GAE formula justified. Clearly, that decision was taken by the councillors of Strathclyde and it is something with which Glasgow is now having to deal.
Mrs. Fyfe:
On a point of order, Mr. Deputy Speaker.I am sure that it was inadvertent, but the Minister misled the House. Glasgow council can explain, line by line, exactly what it is doing, but the Minister--
Mr. Deputy Speaker:
Order. The hon. Lady might like to rephrase what she is saying.
Mrs. Fyfe:
Perhaps you did not hear me, Mr. Deputy Speaker, but I did use the word "inadvertent". Nevertheless, the Minister misled--
Mr. Deputy Speaker:
Order. The hon. Lady is making a debating point; it is not a matter for the Chair.
Mr. Kynoch:
The hon. Member for Maryhill should debate these issues with the councillors of Glasgow city council and ask them to explain why their projected budget is so much above the notional budget prepared by the outgoing councils.
The changes to which I referred in relation to redetermining the level--
Mr. Michael Connarty (Falkirk, East):
I am grateful to the Minister for giving way. At our meeting last night he hung on to notional budgets like a drowning man--it was the only thing he had to keep him afloat. Does he accept that, for example, a wage war for teachers would
Mr. Kynoch:
The hon. Gentleman referred to a teachers' settlement. I am not aware of the teachers having even started, let alone completed negotiations. The hon. Gentleman must be patient. The points I made about notional budgets are valid. I explained to the House how the budgets were prepared.
As I was saying, the changes to which I have referred in relation to redetermining the levels of AEF for 1993-94 and 1994-95 arise, for example, because of successful appeals by householders regarding the tax band their property should be in. I should add that for 1994-95 only, the order also increases by £2,000 the level of AEF payable to the Western Isles islands council. That is an increase in the amount being paid to the council to enable it to subsidise the costs of internal air travel, following the introduction of the air passenger tax in 1994.
I should make it clear to the House that COSLA has been consulted about the two orders and the report under consideration, but has made no comment on the detail of them. Despite the reaction from the Opposition parties and from COSLA, there is no doubt that Scottish local authority current expenditure was treated very generously in the 1995 public expenditure survey. AEF has been increased by £26.5 million more than the formula consequences of the English settlement and is no less than 43 per cent. per head of population higher than the level for English authorities and 21 per cent. higher than the level for Welsh authorities.
Spending provision for Scottish authorities is 30 per cent. higher per head of population than the provision for English authorities and 22 per cent. higher than the provision for Welsh authorities. It is no wonder that local authorities in both England and Wales are envious of the level of funding for Scottish local government.
Mr. Andrew Welsh (Angus, East):
Will the Minister give way?
Mr. Kynoch:
Opposition Members have been complaining about the time that I am taking, but I have tried to give way to hon. Members. I am sure that the hon. Gentleman will have an opportunity to speak later.
The Opposition and COSLA argue that a further£395 million should be provided for Scottish authorities, but we have yet to hear which other programmes in the Scottish Office block should be cut to provide that extra funding. It is senseless to argue for extra money on top of the significant increase that we have made and at a time of tight public expenditure--and unless Opposition Members can say where that money should come from.
Mr. Dennis Canavan (Falkirk, West):
Will the Minister give way?
Mr. Kynoch:
No, I shall not give way as I want to leave sufficient opportunity for Back-Bench Members to participate in the debate.
It has also been argued that extra help should be provided to particular councils, but we have yet to hear which councils should receive less in order to provide more for others. We have yet to hear why virtually all of the new councils claim that they need to increase spending by well over 10 per cent. next year when inflation is below 3 per cent. and likely to go even lower during the next 12 months.
Mr. Malcolm Bruce (Gordon):
Rubbish.
Mr. Kynoch:
I hear the hon. Gentleman, but the difference between my party and his party is that mine actually recognises that we must control expenditure because it is taxpayers' funds that we are using. To give 3 per cent. extra funding to local government at a time when others are taking cuts is a more than reasonable settlement.
Mr. George Robertson (Hamilton):
This is a scandalously short time to debate something so critical to Scottish local government. It is disgraceful that the debate is being squashed into such a short time. Another disgraceful aspect of the debate is that the Secretary of State was not at the Dispatch Box. Three weeks ago, the Secretary of State for Wales presented the revenue support grant orders for Wales. Before that, the Secretary of State for the Environment did so for England. Last year, the then Secretary of State for Scotland stood at the Dispatch Box and defended his position--but not this Secretary of State today. He did not even do so at Scottish questions this afternoon. He sidelines the issue because he knows how embarrassing it is for him. It brings to mind that old Glasgow expression, "We want the engineer, not the sweat rag."
The Secretary of State for Scotland (Mr. Michael Forsyth):
When will the hon. Gentleman treat the House seriously? He knows that the debate has been squeezed because my right hon. Friend the Prime Minister made a statement on Northern Ireland. He also knows that we will have a debate in Scotland on Monday, in the Grand Committee, when I will be happy to open the debate and the hon. Gentleman will have another opportunity to speak. Why does not he address the issues instead of making silly points?
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