Social and Economic Situation

Part of Orders of the Day — Debate on the Address – in the House of Commons at 5:45 pm on 29 June 1987.

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Photo of Mr David Howell Mr David Howell , Guildford 5:45, 29 June 1987

Yes, indeed. If the behaviour of those on the Opposition Benches during the speech of my right hon. Friend the Secretary of State is any guide to the way in which the Scots would run their own affairs, it could well be that devolution would leave the rest of us much better off. I dread to think, however, what it would do to the poor Scots. I recognise—I am sure that many of my right hon. and hon. Friends do as well, and more than have been given credit for doing so—the colossal problems that have faced, and do face, the Scottish economy in the huge restructuring that the modern information technology age is forcing upon that immensely able country. I recognise also the jarring social difficulties that ensue. I greatly admire the undying enterprise and energy of the Scots that is being demonstrated in parts of the area. I am sure that the hon. Member for Garscadden wanted only to illustrate the difficulties and not to damn the enterprise and energy that are being shown. That is a reasonable position for an Opposition spokesman to take.

Miraculous and marvellous things are taking place in the Scottish economy, and some of us have the privilege of examining them closely. Despite these developments, the realism is that Scotland will need considerably more cushioning and help in the difficult times ahead. It used to be said by the braver and bolder Scots in the Parliaments of the late 1970s that Scotland would be all right if there were devolution because oil revenues would see it through. We then became involved in a terrific argument about which side of the dividing national line the great oilfields of the North sea really lay. Although oil prices may look firm in this morning's newspapers, there is no doubt that 12 months from now we shall begin to see extremely low oil prices. All the oil industries of the higher-cost areas of production will be in great difficulties, and these will have to be faced by the nation unitedly, as a whole kingdom. That is why I think that in the years ahead more cushioning will be required to ensure that our Scottish friends, brothers and cousins come through all their difficulties. I very much doubt whether that cushioning will be available if there is devolution and a tax-raising assembly in Edinburgh.

Those are the general remarks that I want to make about Scotland. I want to concentrate on the theme of alleged, and, in some instances, clear, divisions between communities, groups and families in their circumstances and outlook. I want to bring the rest of Britain into my remarks.

I shall begin with the interesting maiden speech of the hon. Member for Sheffield, Brightside (Mr. Blunkett), which he delivered on Thursday evening. I was not in the Chamber at the time, but I have since read the report of his speech. I have considerable sympathy with a part of his thesis, which is one that we should all hear more of and examine. It is based on leaving local communities alone as far as possible so that the local government, business and enterprise of an area can work together. Let there be as much diversity as possible and as little imposition of national conformity in the way in which we develop enterprise and new jobs. That is the theme that should be allowed to flourish.

When the hon. Member for Brightside said those things, he struck a good chord. As we move to the new industrial stucture and the new labour market patterns of the 1990s, which will be greatly influenced by new technology and electronic communications, it will become easier, rather than more difficult, to allow greater local variety in a whole range of policies and to allow communities to do their own thing.

In that sense, I part company from my right hon. Friend the Member for Henley (Mr. Heseltine), who spoke of the need for an English development agency. That is not the right level at which to tackle the problem. I salute my right hon. Friend's experience and energy, but his proposed solution sounds too general. We need to allow greatern diversity between communities. Perhaps local town or area development agencies would work, but let us not have another vast layer of bureacracy to spend money and achieve very little.

I suspect that most of us would agree with the first part of the speech of the hon. Member for Brightside, but thereafter his thesis begins to come apart. He asks for areas to be left alone, while at the same time recognising—he did not say so, but I am sure that he does recognise it—that the nation's taxpayers, most of whom are on low incomes, because that is the nature of our taxpaying structure, fork out £12·8 billion each year, which is about half the total expenditure of the local authorities.

As long as the taxpayers finance half the activity of local government, the House and the Government have not merely a right, but a duty, to intervene to ensure that their money is used effectively to produce results and is not wasted. The taxpayers' criticism so far must be that, while there has been much sincere effort—even on the part of the Left-wing councils which some of us have some fun condemning as "loony"—to use the billions of pounds for development, their methods have failed. When they were left alone they did not succeed, even with vast resources, and they must not be surprised that taxpayers from the south, the midlands, the north, Scotland and Wales have begun to wake up and ask, "Is this the right way in which to carry on our affairs?"

The hon. Member for Brightside says that his preferred formula is the continuation of what he describes as "the democracy that has existed for generations" in local government. I have to tell him that he and his colleagues have moved into a world of fantasy and fairy tale. The thinly-based democracy with a narrow voting base that has been called local democracy in England, Wales and Scotland has not proved to be a particularly democratic force. On the contrary, it has proved to be a very divisive force. Time and again the obvious divisions between one city and another—not just between one region and another—have resulted from highly divisive local government.

I am convinced that if we want to overcome divisions we are right to start by tackling the issue of local government reform in all its difficult elements. Some people say that rushing into local government financial reform will lead to grave difficulties, that it will not win votes, and so on. However, as a Parliament, we have to tackle the reform of local government and local government finance. We must put a stop to the non-democratic squabbling within local government to which my right hon. Friend the Member for Henley referred and eliminate the appalling undemocratic principle of taxation without representation, which has dogged and dominated business in all the great cities of the United Kingdom for far too long. That is why we must turn to major reforms.

This may not be the time to go into detail about the community charge. There will be plenty of time to do that in the long nights to come. However, I ask my right hon. Friends to learn one lesson from recent history: do not repeat the mistakes of 1972. In 1972 I was a member of a Government who sought to reform local government. Our error was to reform the structure without touching the finance. I now fear that we are about to reform the finance without dealing with the structure. If we fail to link the two together—sequentially, if not in the same package—we shall make our task infinitely more difficult. That is why we must address our minds very quickly to the functions of local government, which are ill defined and which, for many years, have not been properly structured or set out. In particular, we must re-examine many of the statutory functions placed on local government by central Government. If they are really statutory functions conferred by central Government, perhaps central Government should pay.

Above all, we must re-examine the cost of the education services—the biggest of all the functions placed on local government by central Government—which has undermined local democracy more than anything else. We are on the verge of recognising the truth of something that has been argued by some of us for almost a decade. It is that education should not be financed through local authorities, and therefore the total expenditure of the local authorities should he much more in line with what they raise locally, whether by the old rating system or by a new community charge.

That is one area in which we must apply policies to overcome divisions. What are the others? The Opposition tell us that this is a divided nation. What is the most visible division of all?