Orders of the Day — Rate Support Grants Bill

– in the House of Commons at 12:00 am on 31st October 1988.

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Order for Second Reading read.

Photo of John Gummer John Gummer Minister of State (Department of Environment) (Local Government) 3:30 pm, 31st October 1988

I beg to move, That the Bill he now read a Second time.

The Bill provides the basis for an orderly transition from the existing system of grants to the new system which will operate from April 1990.

Amongst all the arguments about the replacement of domestic rates and the competing alternative, the important role of the rate support grant has received relatively little attention. The Bill gives us the opportunity to focus on that grant system which does, after all, account for about half of local authorities' expenditure. The decision in principle has been made. Parliament passed the Local Government Finance Act in July. That Act abolished rate support grant after next year and provided for the introduction of a new grant system, which is intended to be simpler and more accountable than the old. One particular feature is that, unlike the present system, the amount of grant paid to each authority will not depend on its expenditure. It will depend only on the assessed need of each area, taking account of the local characteristics.

My problem is that we call that the revenue support grant, so we move from RSG to RSG. I intend to call it the needs grant so that at least I can understand about which one we are talking. I hope that the Opposition will not see anything difficult in that. [Interruption.] We are dealing with a matter which is not the easiest in the world. I was told by one civil servant when I moved from the Ministry of Agriculture, Fisheries and Food to the Department of the Environment that, as I appeared to have understood the common agricultural policy, I would have done at least the warm-up for trying to understand the rate support grant.

Under both Governments there has been a tendency throughout the country to believe that this is a matter to be left to the experts—those who are forced to understand RSG rather than those who choose to do so. I cannot believe that that is a sensible way to run local government or a proper way to arrange for taxation. I made a motto, in which I have continued to believe, that there should he no taxation without comprehension. It is important that we at least try to make this system as satisfactory as possible. One advantage of this system is that it has been widely welcomed by local authorities of differing political persuasions. I do not think that the concept of moving from this direction is a subject of controversy on either side of the House.

Photo of Mr Dafydd Wigley Mr Dafydd Wigley , Caernarfon

Although councillors of all political complexions would welcome simplification—this is recognised by both sides of the House—councillors in many areas are unhappy that the Government are basing their change on the estimated figures as opposed to the final outturn figures for 1987–88. In many instances, the final outturn figures are lower than the estimates, because of slippage and so on. Can the right hon. Gentleman give an assurance that any money that is clawed back by the Government as a result of those differences will be recycled, that local authorities will not lose in total and that this money may be available in the following financial year?

Photo of John Gummer John Gummer Minister of State (Department of Environment) (Local Government)

I think that that point will be covered as I proceed. I was referring to the new system, not to the interim system proposed in the Bill. The purpose of the Bill is to close down the old system before moving to the new. My remarks about simplicity related to the new system. Today's discussion, however, centres on whether the interim system in the Bill is the best way to move from the old system to the new. The hon. Gentleman has raised a reasonable point. That concern is shared by many authorities of differing political persuasions and I shall try to cover it when dealing with the new system.

If we continue with a system that is understood by so few, it is entirely understandable that people throughout the country will be unable to make a proper assessment of the efficacy of their local authorities. It is hard to decide whether a local authority is doing its job properly if one does not understand such a major element as the contribution made by the Government, and hence by the taxpayer, in terms of grant.

Photo of Mr Harry Greenway Mr Harry Greenway , Ealing North

My constituents have been asking about possible arrangements between local authorities under the new system in terms of moving housing expenditure around. There is a proposal in Ealing for houses to be built with payment by that local authority for three years less a day, then to move to Brent authority, then to Hounslow and then to yet another Labour-controlled authority. That is highly confusing and unsatisfactory for my constituents. Will the Bill do anything about that?

Photo of John Gummer John Gummer Minister of State (Department of Environment) (Local Government)

The Bill is designed specifically to deal with the change from the present system to the new system. We shall be introducing a further Bill to deal with capital and the kind of arrangement to which my hon. Friend refers will be important in that context. That legislation will provide for the control of capital expenditure and for local aithorities to have a wider discretion in the choices that they make. However, that is really a matter for the next Bill in the new Session of Parliament as it relates to the new system rather than to the transitional arrangements under consideration today.

The transitional arrangements have been produced for two basic reasons. The first is certainty. If we allowed the old system simply to run into the buffers of the new, it would be a long time before anyone knew the final outturn of the last year of the old system. Next spring, for instance, we shall be making the final grant adjustments for 1985–86, so if we allowed the old system to continue to the end of its present run without any change we should be discussing the old system well after the new system had come into operation. Local authorities would thus not know where they stood. I am pleased to say that for that reason most authorities have recognised that special arrangements need to be made. I do not think that there is any disagreement on the principle that it is a good idea to have a stocktaking end to the old system. The question is whether the Bill constitutes the best way to do this. I am happy to accept that views will differ on that, but I hope that there is no disagreement on the principle that we should bring the old system to a close before beginning the new so that people will know where they stand.

Photo of Mr Tony Banks Mr Tony Banks , Newham North West

I welcome the Minister to his new box of nails. The new system is uacceptable to many hon. Members. As a result of the cut-off in the Bill, some authorities will lose. Will there be any flexibility to allow the Government to compensate authorities which can show that they have lost badly under the new provisions?

Photo of John Gummer John Gummer Minister of State (Department of Environment) (Local Government)

On the hon. Gentleman's second point, if he remains in the Chamber for the debate I am sure that he will follow my argument. I am certainly facing that issue, not ignoring it. Although some hon. Members may not like the new system, the fact is that the House has introduced it and it will operate. It would be foolish to re-argue something on which we have already agreed. Perhaps in this debate at least we can argue the issues raised by the Bill rather than a Bill that we have already discussed. I know that the hon. Gentleman takes a different view from me on the community charge, which is quite reasonable. He is in favour of having two taxes. However, we have made our decision, and we must stick to that and get on with discussing this Bill.

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North

Can my right hon. Friend tell the House—it has always been a bit of a mystery to many of us—how those needs will be calculated? In particular, can he tell us why needs seem to be rather greater in Labour local authority areas than in Conservative local authority areas? A formula that gives more money to those with the greatest need is actually a formula for moving money from Conservative parts of the country to those maladministered parts that are appallingly run by the Labour party.

Photo of John Gummer John Gummer Minister of State (Department of Environment) (Local Government)

That was true of the previous system where the needs element was mixed up with the expenditure element. An historically high-spending local authority would, even though its needs may have been similar to another sensibly run authority, obtain greater grant because of the attraction arrangements for expenditure. That will not happen under the new system because the expenditure level is no longer part of the argument, which will now be based entirely upon needs. They are already assessed under a complicated system with many different indices, many of them hardly fought over by different branches of local authority representation. We hope that there will be a much simpler and clearer method under the new system. We shall consult the local authorities, which will no doubt put their various points to us. I think that the House will be content with some of our suggestions because they take into account the real needs of communities. Of course, those real needs do not always coincide with the supposed needs of those elected to represent the communities. It is necessary to try to meet the real needs.

Photo of Alun Michael Alun Michael , Cardiff South and Penarth

I understand the Minister to be saying that it is a good principle for local authorities to operate on a basis of certainty and to know what will happen as a result of particular actions. Does he accept that many local authorities, especially Cardiff city council and South Glamorgan county council, acted on the basis of statements to the House by Ministers and, as a result, found that a retrospective decision took £3·5 million away from them? Without looking at the faults of the past, on which the Minister may have a reasonable case, and without looking to the future, which is another matter, does the right hon. Gentleman accept that there are flaws in the Bill because it does not fill exactly the criteria that he has stated in respect of 1987–88?

Photo of John Gummer John Gummer Minister of State (Department of Environment) (Local Government)

I hope that when I come to discuss those matters the hon. Gentleman will think my case reasonable. I recognise that Cardiff may not wholeheartedly agree with it—[Interruption.] The hon. Gentleman knows that I am on a raw point when he discusses whether Cardiff is reasonable. There is a real problem because, wherever the stocktaking line is drawn, people will say, "If only you pushed it another few weeks, or if only you would take into account this, that and the other, it would be much fairer." Whatever we do, people will always say that—

Photo of Mr Irvine Patnick Mr Irvine Patnick , Sheffield, Hallam

Will my right hon. Friend give away?

Photo of John Gummer John Gummer Minister of State (Department of Environment) (Local Government)

I must continue or we shall not make progress. I will give way to my hon. Friend later.

Another reason why it is important to do this is not just to create certainty, but it is said that, if local authorities knew that whatever they did this year would not attract penalty or pay-back next year, they would be prepared to go in for creative accounting techniques, which they would not otherwise do. I am sure that the House will understand that the matter does not involve all local authorities, or a majority of local authorities, but it is sufficiently important for it to be concerned with it.

If one can reduce one's total expenditure in the current year under consideration and thereby attract extra grant, that is OK if the reduction of the current expenditure is real; but, if it is not real, one will attract extra grant to which one is not entitled. I understand that many Opposition Members in particular would say that there should be more money for local authorities, that money should be shared out more generously and that, therefore, it is not unreasonable for them to grab what they can. That argument is not acceptable, because, in the end, all Governments must be responsible for local authorities' total spending, both capital and revenue. Therefore, if, as a matter of economic policy, the Government decide that we should not spend—

Photo of John Gummer John Gummer Minister of State (Department of Environment) (Local Government)

If the hon. Gentleman were in office, which is unlikely to happen, he would have to do the same. Anybody running a sensible economic policy would have to take into account local authority spending.

Photo of John Gummer John Gummer Minister of State (Department of Environment) (Local Government)

The hon. Gentleman says "Garbage". That is a good reason for the people of Britain to recognise that to elect a Government who do not think that it is important to restrict and control total public sector spending means that they would elect a Government who do not think that the conquest of inflation is important. It means also that they would elect a Government who would get us into precisely the same problems as we had before.

Photo of Dr Jack Cunningham Dr Jack Cunningham Shadow Secretary of State, Shadow Secretary of State for Environment

The Minister is right to say that any Government would want rigorously to control their share of local government finance—what is provided through the Exchequer and the taxpayer. Will he tell us the macro-economic arguments for controlling local authorities' expenditure from their own resources?

Photo of John Gummer John Gummer Minister of State (Department of Environment) (Local Government)

Certainly. If the hon. Gentleman does not recognise that the money that is spent by the public sector is different from that which is available for enterprise in the private sector, he does not realise why Britain is now growing so much faster and why we are providing the jobs that we are providing. If the hon. Gentleman says that we should allow local authorities or national authorities to spend money that should be for the expansion of other aspects of the economy, he has not learnt anything since his party's defeat in 1979. That defeat will continue until that basic economic fact is learnt.

We have to face the problem because some local authorities have decided to do certain things that the House as a whole would agree to be unacceptable. Let me give one example. A certain local authority decides to sell off to City institutions the future receipts from its sales of council housing. It happens to be a local authority that does not believe in selling council houses, but, on this occasion, it decides to do so. Let us suppose that it raises £20 million. It would then be able to put that £20 million into the bank and take the interest from it, and thereby—

Photo of Mr Tony Banks Mr Tony Banks , Newham North West

What is wrong with that?

Photo of John Gummer John Gummer Minister of State (Department of Environment) (Local Government)

I shall explain to the hon. Gentleman what is wrong with that. It would then pay that money back in four or five years. In the meantime, it would have technically reduced its own spending to attract to itself what might have been £3 million of extra grant.

Photo of Mr Tony Banks Mr Tony Banks , Newham North West

What is wrong with that?

Photo of John Gummer John Gummer Minister of State (Department of Environment) (Local Government)

I shall tell the hon. Gentleman what is wrong with that. It would attract £3 million of general taxpayers' money to which it was not entitled and which could have been spent on the National Health Service, for example. It would mean that that local authority had tried to cheat on the system and remove from others who needed it money to which it was not entitled. Of course, as far as the ratepayer is concerned, it would be perfectly reasonable to do that if it were smoothing out spending year on year, but it would be reasonable only if the person who paid the bill at the end was the same person who incurred it at the beginning. If a local authority decides to shift £3 million of its spending from itself, as it were, to the general taxpayer, the authority is seeking to use the system to its advantage and to ignore the spirit of the system that we operate.

Historically, local authorities would not have acted in this way. They would have eschewed that obvious cheating of the system. They would have said, "That would not be acceptable in a public authority." There are many authorities, controlled either by the Labour or the Conservative parties, or the alliance, that would not take such a step. The idea of not closing the gap for the authorities that would do what most would consider to be wrong would be unacceptable. Those who would treat the public purse in such a cavalier manner must not be allowed to get away with it when many other authorities of similar political persuasion would not dream of acting in such a way. That is why we think it necessary to close the loophole.

Photo of Mr Tony Banks Mr Tony Banks , Newham North West

I know that the Minister is new to his present position, but surely he must appreciate that the creative accounting, as it is called, in which a number of authorities get themselves involved, is not done because authorities want to take such a course. They do it because the penalties and the regime imposed upon them from Marsham street are such that, if they want to defend jobs and services in their area, perforce they have to do this sort of thing. The Minister is wrong to suggest that they are cheats. If authorities have problems, they have a duty to deal with them in the best way that they can. They go in for so-called creative accounting to mitigate the effect of Government policies upon their spending programmes.

Photo of John Gummer John Gummer Minister of State (Department of Environment) (Local Government)

The hon. Gentleman cannot get away with that. The Government had to make these arrangements because local authorities were precepting upon the taxpayer to pay inflated staffs, to run services which were not properly run or costed, and to implement many arrangements that should not have been paid for by the taxpayer. If the hon. Gentleman runs through some of the services that are provided by the authority from which he draws his representation, he will come across many items that could be cut. The resultant savings could be spent on the real needs of his area of London.

Photo of John Gummer John Gummer Minister of State (Department of Environment) (Local Government)

The hon. Gentleman chooses to shout at me. Does he think, for example, that the plethora of committees that deal with race, women's issues, gay issues and the rest are doing any good for women, racial minorities or gay people? They do much to delay matters and to create the need for greater expenditure. The money that they cause to be spent could be much better spent in the deprived area of the hon. Gentleman's borough. Those of us who live in boroughs that act in that way and that treat the ratepayers in that way—I have experience of this, as I live in Ealing—understand that large sums could be properly spent if only money were not spent unnecessarily.

We are discussing—the hon. Member for Newham North-West (Mr. Banks) has sought to discuss something else—whether we should have a system which enables local authorities to determine what national spending should be, or whether we should have a system whereby the Government determine national spending and individual local authorities abide by the rules that apply to the sharing out. I think that it would be wrong if individual local authorities were in a position to buck the rules. It would be wrong if authorities could adopt creative accounting and thereby make themselves better off at the taxpayers' cost while other authorities which behaved properly, obeyed the rules and kept to the spirit of them—authorities controlled by whatever party—found themselves less well off.

Photo of John Gummer John Gummer Minister of State (Department of Environment) (Local Government)

I would be delighted to give way to the hon. Gentleman, but he will accept that I have already given way many times. Therefore, I shall continue with my speech.

Photo of Mr Frank Haynes Mr Frank Haynes , Ashfield

Why is the Minister frightened?

Photo of Mr Bernard Weatherill Mr Bernard Weatherill , Croydon North East

Order. I am sure that the Minister is not frightened, and he is not giving way.

Photo of John Gummer John Gummer Minister of State (Department of Environment) (Local Government)

The hon. Gentleman and I have crossed swords on many occasions in the past.

Photo of Mr Frank Haynes Mr Frank Haynes , Ashfield

I want to cross swords again.

Photo of John Gummer John Gummer Minister of State (Department of Environment) (Local Government)

I shall be happy to give the hon. Gentleman an opportunity later in my speech to cross swords with me again. For the moment I must get on with the argument.

There is another argument that we must face. When we come to the end of one system and move to a new one, there is an additional encouragement for people to bend the rules. Normally, when creative accounting is carried out in one year, it must be paid for the following year. If the new system is enforced and there is no penalty for creative accounting in the first year, a particular local authority will receive grant at the taxpayers' expense. The authority will never have to pay the price. Therefore, it is necessary to introduce this legislation.

We could have taken a different route and I must tell Opposition Members that there is a different route. We could have said that we expected local authorities to behave in that way and that we expected them to operate on the edge of the law. Therefore, we could have cut back the settlement to take that into account. Had we done that, we would have destroyed our credibility with local authorities. That would have meant that we expected all authorities to behave like a small minority whose behaviour we have always attacked. It would also have meant that some authorities, unable or unwilling to behave in that way, would have been extremely harshly penalised by the very tough settlement which would have followed. I do not believe that that would have been a proper way to deal with the matter.

Photo of John Gummer John Gummer Minister of State (Department of Environment) (Local Government)

I am certain that the hon. Gentleman will find an opportunity to intervene later.

We decided to introduce arrangements so that future changes in total expenditure would not affect grant entitlements. We announced that in July along with the initial proposals for next year's RSG settlements in England and Wales so that authorities could be clear on what basis the settlement was to operate. We have followed that up quickly with the legislation so that authorities will have certainty about those issues before they make their budgets for 1989–90.

The Bill provides that grant for the remaining years of the old system—in practice, that means 1985–86 to 1989–90 —should be based on the spending figures available to us before the new arrangements were announced on 7 July. That is our stocktaking date. Any new information received after that date will not be taken into account.

Photo of John Gummer John Gummer Minister of State (Department of Environment) (Local Government)

The hon. Gentleman asks why. If it was an open-ended date, it would allow precisely the kind of changes in retrospect about which I have spoken. Local authorities, this year and in successive years, going back as they can now over years, could change their total expenditure figures because the books are not closed. They could change the figures, not in reality—it would not mean that they had spent less—but merely through creative accounting. That must mean that less money would be available for spending in other areas even if that is not seen as a means of taking less in taxation. There would be less available for spending in other areas if local authorities acted in that way. That clearly would be unfair.

Photo of John Gummer John Gummer Minister of State (Department of Environment) (Local Government)

I will give way in a moment.

I will give the hon. Member for Newham, North-West another reason. I thought I had said before that the authorities would not know where they were for years to come because the final settlement and closure of the books would go on year after year as it does today.

Clause 1 deals with grant calculations for the years 1985–86 to 1988–89 in England and 1986–87 to 1988–89 in Wales. Wales has caught up a little on us and has already closed 1985–86. The clause provides that, instead of final outturn total expenditure, we should use an expenditure figure, which we will call the relevant amount, derived from the rules set out. The figures that we will use are the figures provided by local authorities in the official forms which arrive before 7 July.

That is already a very generous date. The authorities were supposed to produce figures before the end of March. That provides a pretty large gap. Each of the figures is signed by the chief financial officer as the best figure available. Therefore, we know that they are official figures on the official form. All local authorities, bar two, have provided us with the figures and I will consider the exceptions shortly.

Those two authorities were telephoned and were asked again and again to produce their figures by the required date. Unfortunately, they have not done so. I do not imagine that any right hon. Member would object to the argument that people ought to fulfil their obligations under the law. It is the law that local authorities should make such returns, and therefore we have had to calculate the figures in that way.

The rules are designed to provide an unambiguous figure for every authority and for every year. We have sought all the way along to stick to that stocktaking rule. However carefully Opposition Members may examine the system, they will not be able to suggest that it disadvantages some political parties rather than others. Clearly, different local authorities of different political persuasions would like different dates, because they are all in the position of trying to maximise their advantage. I do not blame them for that, but whatever date one applies, and whatever deadline one imposes, there are bound to be some authorities which fall on one side rather than the other. It seems more sensible to fix on the date that has been decided; it is not unfair, and it is applied equally, right across the board.

Clause 2 deals only with 1985–86, which was the last year for which expenditure targets were issued. People say to me, "We are surprised that that year is still being dealt with", and certainly that was the first comment that I made as somebody new to the subject. The fact remains that seven local authorities still have not closed their books for 1985–86. One of the great drawbacks of the current system is that we are left lacking right along the line.

Photo of John Gummer John Gummer Minister of State (Department of Environment) (Local Government)

The hon. Member for Copeland (Dr. Cunningham) must accept that I have stated—I hope it will be thought perfectly honourably—that I am not talking just about systems derived from a Labour Administration but also those produced under a Conservative Government. I shall not argue why that is so. Some of us would say that it is in response to action by authorities that behaved in outrageous ways, while others would not. I did not intend to enter into an argument about why change is required, but it would be foolish not to admit that the present system needs a fundamental overhaul—and that is what we propose.

Photo of Alun Michael Alun Michael , Cardiff South and Penarth

Is it not reasonable for the Minister to accept that, while trying to improve the system in the way that he mentions, local authorities should be able to depend on statements that have been made by Cabinet Ministers to the House, and that those local authorities that have depended on such statements should not face the risk of having them contradicted retrospectively, as is the case with this Bill?

Photo of John Gummer John Gummer Minister of State (Department of Environment) (Local Government)

The hon. Member should accept that in changing from one system to another, one must close off the possibility that people will change their figures retrospectively to gain an advantage at the expense of others. At the same time, if one imposes a fixed date, one must implement it in the same way for everyone. One cannot make exceptions for Cardiff or for Suffolk—and I use those two examples of local authorities of different political persuasions as they affect both the hon. Gentleman and myself. Exactly the same comment has been made to me by the Suffolk authority, saying, "If you change the rules a bit, you will meet the problem that we have." But wherever one draws the line, it must be drawn in the same place for everybody; it is not possible to make exceptions.

Clause 3 deals with 1989–90. Naturally, for this year we have no information as yet about individual authorities' likely total expenditure. In that respect we were faced with a real problem. If one were to allow the existing system to continue in respect of the current year, it would enable all kinds of creative accounting to take place, because there will never be any bill to pay later. Therefore, it seems reasonable to make a special arrangement for the next year. We have set out a formula for deriving the basic figure upon which each authority's total expenditure is calculated.

I shall say this very carefully, particularly for the benefit of the hon. Member for Newham, North-West because I believe that it refers specifically to his local authority. For the seven authorities selected for rate capping in 1989–90, their expenditure will be assumed to be equal to their "expenditure limit" announced on 7 July. However, for most authorities the figure is calculated by taking their expenditure in 1988–89 using the rules in schedule 1 and projecting forward. In other words, there is a fixed stocktaking date on 7 July and one then projects that figure forward for the following year, so that there is a transitional period for introducing the new system.

There will be two adjustments for English authorities. I have told Opposition Members that it would be unfair to make any special arrangements, but I hope that these will be seen as sensible adjustments. First, there will be an adjustment for education authorities because local authorities will no longer be responsible for funding polytechnics after April 1989. Secondly, London boroughs and district councils will incur extra expenditure in preparing for the community charge. Part of those costs will be met by specific grants that have already been announced, but the remaining part will be reflected in the formula for the total expenditure next year, because that will be covered by the normal block grant arrangements. If we had not made that provision, the authorities in question could not have been given extra help and allocation for the community charge. I feel sure that right hon. and hon. Members in all parts of the House would have found that unacceptable.

For Welsh authorities, there is an adjustment for the community charge but no adjustment for polytechnics. Additionally, there is one particular adjustment reflecting the transfer of responsibility for public libraries from Gwent county council to Newport district council. All that is done to meet promises that have been made as to future spending.

Photo of Mr Tony Banks Mr Tony Banks , Newham North West

The Minister probably does not know London very well, but I come from the London borough of Newham. It is a Tory-free zone, with 59 Labour councillors and one representing the SDP—and we are working on that. The Minister ought to understand that Newham is not rate-capped for next year, but the arrangement that he has just announced represents a further unfair burden on rate-capped councils in London.

Photo of John Gummer John Gummer Minister of State (Department of Environment) (Local Government)

I am sorry if I misunderstood the hon. Member for Newham, North-West, but he made several important points about rate capping and I thought it proper to refer to him in that context. I apologise if I was wrong to do so. I thought that the hon. Gentleman had drawn particular attention to the way in which rate capping worked, and I apologise if I misunderstood him.

The 1988–89 expenditure figures will be increased by a factor that will be set out in the rate support grant report. I am trying very hard to make the system as simple as possible. This is the one area where I have failed to achieve that, but I shall try to describe it as clearly as possible.[Interruption.] The hon. Member for Copeland laughs. I know that he is very comfortable, being in the position that he will never have to assume this responsibility himself. That makes it possible for him to laugh. We must try to make the system acceptable to people, and that means expressing it in language that most of us can understand. I realise that the hon. Member for Copeland is so clever that he has always been able to understand these matters, but others do not.

The Secretary of State has already proposed that the provision for current expenditure in England for 1989–90 should be an increase of 4·8 per cent. over 1988–89 budgets, after allowing for the polytechnics adjustment. This factor, which is defined in the Bill as the Z factor, will be consistent with 4·8 per cent. but not identical, because of technical adjustments between current and total expenditure.

I have now described that part of the Bill that I could not find a better way of describing more simply but still accurately. It is important to recognise that we seek to uprate the amount that is based on figures provided by local authorities by a sufficient amount to cover expected extra expenditure by local authorities.

Clause 4 deals with consultation. This autumn we shall be making the RSG settlement for 1989–90 and four supplementary reports for earlier years—which shows how much is still on the go—and consultation will take place then. There is a substantial volume of material for local authority associations and individual authorities to consider, and we had to discuss whether it was fair not to start the consultation until the passage of the Bill was completed. If we did that, we would be cramming the consultation period into what we considered far too short a time; on the other hand, if we extended the period, we could not make the RSG announcements early enough for local authorities to take the action that they wished to take. In clause 4 we are taking powers to enable us to start consultation before the Bill receives Royal Assent, as that seemed the better of the two alternatives. I hope that the House agrees.

About 60 authorities have written arguing that the Bill will result in their receiving less grant for some earlier years than they would otherwise have been entitled to receive. That point was raised by the hon. Member for Cardiff, South and Penarth (Mr. Michael). They have argued that the rules that we have set up in the Bill could be modified to allow them to benefit from reductions in expenditure between the time when they made the last return to the Department and 7 July. They have said, "We made our expenditure returns rather early. Cannot we have a supplementary grant between the two dates?" Initially, I thought the proposition not unreasonable, and I am attracted by any suggestion that might make the system fairer.

Photo of John Gummer John Gummer Minister of State (Department of Environment) (Local Government)

I was going to say "but", because I must explain why I decided that 7 July was a better date. If local authorities were able to do that, we would have to try to make a distinction between authorities that had already made such decisions and authorities that were saying that they were about to make them, that they had done so but it had not happened to get through to the right committee at the time, or that they had done so but that no auditing had been done.

I have come to believe that one cannot make a proper decision: whatever date was decided upon, there would be an argument for some other date. If there is to be a change from one system to another, there is bound to be a "stocktaking" date. Rather than a continual and protracted argument over a long period, with auditors being brought in in an attempt to claim that "this is in" and "this is out", there should be a direct answer. The agony should not be extended.

Photo of John Gummer John Gummer Minister of State (Department of Environment) (Local Government)

I have already given way to the hon. Gentleman a number of times.

The rules provide that we should take into account only information about total expenditure submitted by local authorities and received by the Secretary of State before 7 July. The timing does not seem unreasonable, and the system is based on what the chief finance officer of each authority said was the best information available. The problem is that sometimes later information would obtain a better result for a local authority, but the only better information that we would hear would be information that obtained a better result. Although information might be more accurate later, if it obtained a worse result we should never hear it.

The problem is the same with any accounting system. A single date would at least avoid the argument that we would hear everything that was of benefit to a local authority and nothing that was not—even in the case of the same authority—and that an authority would be able to say that this, that and the other had changed the position for its benefit but we would hear nothing of other matters that had been changed to its disadvantage.

Several Hon. Members:

rose—

Photo of John Gummer John Gummer Minister of State (Department of Environment) (Local Government)

I have given way to other hon. Gentlemen, but I have not given way to the hon. Member for Burnley (Mr. Pike) as I promised that I would. I therefore do so now.

Photo of Mr Peter Pike Mr Peter Pike , Burnley

Does the Minister accept that he is making these decisions because he believes that some local authorities may use the rules to their advantage—rules that I must emphasise were drawn up by the present Government and which they now choose to change? Is it not wrong to penalise local authorities that try to use those rules to the best advantage of their local electors and ratepayers?

Photo of John Gummer John Gummer Minister of State (Department of Environment) (Local Government)

I hope that the hon. Gentleman is not defending the concept that I mentioned earlier of selling future receipts from local authority housing sales to a City institution, using the money artificially—in other words, lyingly—to reduce this year's expenditure, and obtaining money from the taxpayer that is never paid back later. I hope that the hon. Gentleman is not saying that, because I have great respect for him. [Interruption.] The hon. Member for Liverpool, Walton (Mr. Heffer) has not been present for all of the debate, but he is now shouting from a seated position. He has not been here to follow the argument—which has so far been conducted in a perfectly reasonable and rational way. I do not intend to change that simply because the hon. Gentleman has entered the Chamber.

Photo of Mr Nicholas Bennett Mr Nicholas Bennett , Pembroke

I am grateful to my right hon. Friend for giving way, and for explaining so well a Bill that seems as complex as the Schleswig-Holstein question. Can he explain the position of local authorities whose expenditure has increased because their income has fallen, because they are not operating their housing revenue account properly or collecting the rates properly? I am thinking particularly of Brent, where nine Labour councillors owe £11,000 in rates and rent. Can my right hon. Friend assure the House that the taxpayer will not be subsidising the authority?

Photo of John Gummer John Gummer Minister of State (Department of Environment) (Local Government)

The hon. Gentleman must allow me to answer. I have given way to him several times.

Photo of John Gummer John Gummer Minister of State (Department of Environment) (Local Government)

That is not the answer that I would have given my hon. Friend.

One of the sadnesses in local authority finance is that many local authorities that could act to improve the conditions of the people whom they are supposed to represent do not do so but instead blame the Government and the RSG system for faults within their own control. I can give an example from a debate last week. An hon. Member complained that the Government had not yet given permission for the building of council accommodation for the homeless, because it was still in the pipeline. I had to point out that the authority—which was run by the alliance—had thousands of empty properties that could have been taken into account before that stage was reached. His argument was undermined by the authority's failure to do all that could be done locally before whingeing about what the Government were doing.

I accept that for past years, when final outturn has traditionally been slightly below earlier estimates, authorities in aggregate will receive less grant than would otherwise have been the case. I am not disagreeing with what the hon. Member for Cardiff, South and Penarth says, in general as well as in particular. I am making an admission, and I shall admit one or two other things about which I hope that he will be pleased.

As I have explained, authorities can be certain that there will be no grant left unclaimed next year. There will be no penalties either: that is another aspect that local authorities can take seriously. In the past two years substantial amounts of grant have gone unclaimed authorities' expenditure has been higher than was assumed for the purposes of the settlement. That cannot happen in 1989–90. The amount of grant available for 1989–90 will be 9 per cent.—£1·1 billion—higher than the amount likely to be paid out this year, an increase considerably above the rate of inflation.

Taken as a whole, the proposals are very fair to local government. It will not be possible for several years—until we have final outturn expenditure for all the years concerned—to work out whether the Bill has resulted in more or less grant being paid than would otherwise have been the case. But it is symptomatic of the fact that we do not expect the Exchequer to gain out of this that we are bringing forward a money Bill so that extra moneys can be spent if necessary.

Whatever may be the date of the stocktaking, some will benefit from it more than others; they will feel that another date would be better. We have attempted to produce an answer that means that neither taxpayers nor the Treasury are natural gainers from the system. That is not our intention. We are taking powers to ensure that if we are losers we shall be able to pay out the extra money.

Many people in local government, of all parties, believe that a measure of this kind is necessary. Some favour a different method of reaching the close-down date, but they welcome the certainty that it will provide about grant entitlement. They welcome particularly the fact that it guarantees that the amount of grant available for 1989–90 will be paid in full, and many have been sensible enough to welcome the increase in the total amount of grant that will be paid.

The Bill has been brought forward in the interests of good and orderly administration. It is designed to protect the Exchequer against the risk of unjustified grant claims resulting from creative accounting, to provide authorities with certainty as they prepare for the new system, and to provide for an orderly close down to the existing system. A change was made imperative by the switch to the new grant system in 1990. The proposals in the Bill are designed to give a clear and unambiguous set of rules for achieving these objectives. It defines the position so that both local authorities and the Secretary of State know exactly where they stand.

On that basis, I hope that we shall be able to proceed sensibly and reasonably to the new, much fairer system of local government finance. It will enable local government from year to year to become much more accountable and much more able to see where it stands. It would not be possible sensibly to introduce that system if there were not a measure such as this. I hope that the House will accept that this is a sensible Bill and that it will give certainty to local authorities that this system of local government finance will be much simpler to understand, much fairer to all and much more local in its implementation.

Mr. Eric S. Heller:

On a point of order, Mr. Speaker. I apologise for delaying the start of the speech of my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker), but it is not true for the Minister to say that I was not here for his speech. I missed only five minutes of it. I am not sorry that I missed those five minutes.

Photo of Mr Jeff Rooker Mr Jeff Rooker , Birmingham, Perry Barr 4:22 pm, 31st October 1988

It is a fair time since the Minister stood up to present the Bill to the House. It has been a constant source of amazement to me over the years that Tory Ministers have come to the House of Commons and spoken such gibberish. The Minister admitted that this is an extremely complicated matter. Nobody denies that the Bill must be given a Second Reading and that there will have to be, albeit briefly, detailed consideration of it. The Bill involves considerable sums of local and central Government expenditure that will affect the citizens of this country.

When a Bill is introduced in this way, there is inevitably bound to be a blend of half truth, loads of jargon, choice abuse of one's political opponents in local government, and expressions of distaste for local government and local democracy if it does not deliver what the political party in power desires. It is a shabby form of government when such large sums of money are involved. It protects this Minister and other Ministers from having to face the reality and the consequences of their legislation.

One cannot be certain about the effects of the Bill, because of the number of years involved. Money that local government could reasonably have expected to receive in 1988–89 will be down by £500 million. The Minister referred to the assistance that is to be given to introduce the poll tax, but the so-called extra cash that is to be given for its introduction is not extra cash at all. Some of it is bound to be offset by what local authorities are to lose. A cut to pay for a grant is dishonest. The Government are giving with one hand and taking away with the other, but this is not the first time that that has happened.

Some local authorities will end up with windfall gains. Others will face unexpected, and in some cases unprecedented, losses. It is all being done in such a rush. We are three weeks away—two weeks if certain authorities in the House have their way—from the end of what will have been the longest Session of this Parliament. I am not surprised by this Government's contempt for the House and its procedures, but that is no reason for hon. Members to acquiesce silently. Why the rush? Why can we not wait until the new Session when the Bill could be properly debated and scrutinised in detail? I accept that we were told in July that the Bill would be pushed through this Session. It could have been published before the summer recess. It is not without precedent for the Government to introduce Bills during the spill-over. They can introduce Bills whenever they like. However, it is not normal for Bills to be introduced during the spill-over.

I have found—more correctly, I asked and the Library found—just two Bills that have been introduced in the spill-over period during the nearly 15 years that I have served in the House. The first was introduced on 21 October 1975 at 11.56 pm. The Minister then moved the Second Reading of the Cinematographic Films Bill. It was welcomed by the then Opposition in the form of the hon. Member for Uxbridge (Mr. Shersby). That Bill was not contested and there was no Division. A Labour Government were in power in 1975. Conservative Ministers thrive on the basis that everything that is wrong today, after 10 years of Tory rule, is the fault of past Labour Governments. One therefore has to take the wise precaution of checking precedents.

The other Bill was introduced on 28 October 1980. The then Home Secretary introduced the Imprisonment (Temporary Provisions) Bill. Such a measure was urgent because of the industrial action that was being taken by prison officers. The Bill went through all its stages in one day. The Opposition did not divide on Second Reading; nevertheless, they divided on certain amendments to the Bill.

One of those Bills was not contested and was dealt with as a fill-in late at night. The other Bill was urgently required. This Bill does not fit into either of those categories. There is no earthly reason why this Bill should not be introduced in the new Session. The Bill does not have all-party support. There is no question of the Opposition not dividing the House on Second Reading or in Committee.

I accept that the Minister could not mention everything during his 50-minute speech, but he concentrated exclusively on local authorities. However, the police—another area of public service—are affected by the Bill. The suggestion that there has been a decline in crime is absolute nonsense. Last year sex crimes and crimes of violence increased by 16 and 17 per cent. respectively. I agree that burglaries went down by 6 per cent., but compared with the position 10 years ago there has been a massive increase in crime, resulting in considerable pressure on police resources.

The Government are creating a society that is based on greed and on "To hell with tomorrow." [Interruption] Conservative Members do not like to hear it, but that is the reality of the society that the Government are creating. Their policies are leading to violent crime, burglaries, generally loutish behaviour and to the white collar crime that is taking place on the stock exchange. It would be possible for police forces in London, the metropolitan areas and Northumbria to lose £18 million as a direct result of the Bill. Shire county forces will also potentially lose, but, because the figures are subsumed in figures for the county councils as a whole, it is not possible to express that information separately.

What greater encouragement can there be to vigilantes to take to the streets than a higher crime rate and a further squeeze on police budgets? In recent days, in my constituency and in London, imported American vigilantes have been attempting to patrol the streets and the London underground. In Birmingham such activities have been supported by at least one Conservative councillor. I read yesterday that in Tyne and Wear, where some neighbourhoods have called in private security firms to patrol their streets, the Northumbria police authority is pressing the Home Office for an extra 500 officers, whereas the Bill potentially cuts the authority's grant by £668,000. I can account for £400,000 of that, which is itemised in detail in complaints that that authority has made as a result of the statement by the Secretary of State in July.

Other police authorities, such as South Yorkshire, will be affected. I am not talking about local government or local councils. As far as I know, the police authorities have not been accused of ripping off the system by creative accounting. Nevertheless, they stand to lose considerable sums. The West Midlands authority has made a request for a further 350 officers, which would add about 2p to the rate precept. The Bill cuts £1·8 million from the expected grant entitlement of the West Midlands police authority.

It is no wonder that no Minister has yet moved to control the vigilante patrols or the private security firms in Washington. It is no wonder that Ministers have not taken firm action to control the foreigners who encourage people to set up private amateur vigilante patrols on our streets. If there is to be more of a squeeze on the police budget, the obvious way out is to privatise the service. It is the thin end of the wedge. Such a development is dishonest and dishonourable, and if the Government cannot see that it is dangerous now, they will never see it.

Why are the police authorities covered by the Bill? Why will the police authorities potentially lose such substantial sums? I have cited the West Midlands. The Metropolitan police authority stands to lose £11·5 million in grant entitlement. Greater Manchester stands to lose £1·7 million, West Yorkshire just over £1 million, and Merseyside and South Yorkshire about £750,000 each. Someone must give us some answers about a side effect of the Bill to which the Minister did not once refer.

Photo of John Redwood John Redwood , Wokingham

I find the hon. Gentleman's criticism surprising, given that the Government have allowed record numbers of policemen to be recruited and appointed, and given also that they have voted money for record pay settlements, which the police deserve. Given the hon. Gentleman's concern and respect for law and order, what does he have to say to those Labour Members and those members of the Labour party in Scotland who have urged people not to pay the community charge, whose implementation has been duly approved by the Parliament of the United Kingdom on a majority vote?

Photo of Mr Jeff Rooker Mr Jeff Rooker , Birmingham, Perry Barr

That has nothing whatever to do with the police, and anyway that is not Labour party policy.

Photo of Mr Eric Heffer Mr Eric Heffer , Liverpool, Walton

I entirely agree with the point made by my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker). The case that he is making is first class. Is he aware that a Tory Member who once lived in a city in the United States of America—in Miami, I think—said that the whole area was controlled by the Mafia? There was no local petty crime and residents paid a certain amount to the Mafia. If anybody committed a petty crime he was quickly seen off, no doubt with leaded boots. Is that the sort of thing that we want in this country?

Photo of Mr Jeff Rooker Mr Jeff Rooker , Birmingham, Perry Barr

My hon. Friend is right. So far, no Minister has discouraged or expressed much concern about such activities. Everyone must know that vigilante patrols, however well organised, are nothing more than large-scale corruption-protection rackets by which money is taken from people who pay their taxes and who should be getting a proper service from a properly trained police force. That is what people want. They certainly do not want encouragement to be given to the setting up of vigilante patrols. The potential effect of the Bill on the police and the police budget must be made clear and the case answered.

The Minister went out of his way to imply that local authorities of different political complexions would be covered by the Bill. That is absolutely right. Under the Bill, because of the legitimisation of what is technically known as the hold-back system, £500 million or thereabouts of expected grant entitlement may not be paid. According to our best estimates, Conservative-controlled authorities will obtain £134 million less than they had reason to expect. For Labour-controlled authorities the amount will be £157 million; for authorities controlled by what I shall call the minor party the figure will be £4 million. Those controlled by independents will lose £3 million, and the substantial number of authorities in which there is no overall control will lose £210 million. Those figures are separate from the figures for the joint boards affecting the police and transport. Those figures cut right across the spectrum of public services, and the sum involved is substantial. Conservative Members are bound to receive representations from their local authorities.

Photo of Mr Kenneth Hind Mr Kenneth Hind , West Lancashire

Is the information that the hon. Gentleman is giving based on his calculations, or on official figures with which he has been provided?

Photo of Mr Jeff Rooker Mr Jeff Rooker , Birmingham, Perry Barr

They are the best estimates available to the Opposition of the traditional grant that would be due in 1988–89, although the Minister relied principally on the figures for 1989–90, and I understand the reason for that. I was referring to the additional grant due in 1988–89 if there were no hold back. When the Secretary of State introduced the rate support grant order he referred to the "generous settlement" of £13·775 million. His remarks were reported at column 465 of Hansard for 9 December 1987. One must exclude from that sum specific and supplementary grants and domestic rate relief, giving the block grant figure of £9·471 million which was referred to in the local government finance order approved by the House. The local authorities could reasonably have expected to receive that money. I shall not go through the whole list of authorities, as hundreds are involved. I have made it clear that authorities controlled by either party and by no party are affected. All sectors of local government will be affected.

Photo of John Gummer John Gummer Minister of State (Department of Environment) (Local Government)

The figure of £500 million could be arrived at only if every local authority reduced its expenditure to the amount that it was allowed. As that has never happened, the hon. Gentleman is postulating a figure much larger than could arise in any known circumstances. Because outturn is usually lower than estimated earlier in the year, the hon. Gentleman is right to say that some grant that might have been paid will not now be paid under the Bill. The hon. Gentleman ought also to consider the amount of grant that will be available.

Photo of Mr Jeff Rooker Mr Jeff Rooker , Birmingham, Perry Barr

I have gone out of my way to talk of the amount that is potentially available to local government when talking about the £500 million —£512 million to be precise. I accept what the Minister said, so I shall meet him half way. Perhaps we can split the difference and settle for £250 million. In that case, all the figures that I shall give henceforth should be halved. I think that local government would accept that. The metropolitan authorities and the shire counties and districts would be prepared to meet the Minister half way and say, "We understand the problems, so let us talk about £250 million coming to local government."

If the Minister is prepared to meet local government half way, all the figures that I shall give can be halved. For Kent county council, a potential £15·3 million could be available. It heads the list of affected Tory shires. Berkshire could have an extra £10·5 million, Surrey an extra £9·4 million. West Sussex could have an extra £8·2 million. It must be remembered that West Sussex has to share the massive security costs of the Conservative party conference. It and East Sussex must dip into the budget to find £1·4 million for it. Bradford could have an extra £3·7 million. The Prime Minister's local authority of Barnet could have an extra £3·4 million. The Minister's local authority of Suffolk, Coastal could have an extra £112,000. Epping Forest, where there is to be a by-election soon, could have an extra £95,000.

My own city of Birmingham heads the list of Labour-controlled losers. It could have an extra £13 million. Staffordshire could have an extra £10 million, Nottinghamshire an extra £9·8 million, Manchester an extra £5 million, Sheffield £4·8 million and Coventry £3 million. The tale of what local government had good reason to expect but will not get is pretty sorry.

Essex county council heads the list of losers where there is no overall control. It could have an extra £18·7 million. Hampshire, where there is due to be a by-election for the European Parliament soon, could have an extra £17·4 million. Lancashire could have an extra £11·5 million, Cheshire £10·9 million and East Sussex, which with West Sussex makes up the Sussex constabulary and must find the £1·4 million needed for security at the Conservative party conference, stands to lose £8 million. Warwickshire could have an extra £5·5 million.

Those are substantial sums, which could affect the quality of life and the taxes paid by our constituents. Local authorities are required to deal with and finance many unexpected items for which, with the best will in the world, no budget can cater. I should like to give just one example of that, and I do not apologise for its being from the city of Birmingham.

In late July the then Secretary of State for Social Services received a letter from Councillor Barton, who chairs the Birmingham social services committee. The letter arose because Birmingham's director of social services had reported to the committee her action in agreeing to the long-term placement at a named youth treatment centre of a child in care. The placement—of a 14-year-old boy—was considered essential and the centre is the only one that meets the youngster's needs.

I do not propose to go into the details, but the director drew the matter to the social services committee's attention because the annual cost of the placement to Birmingham's ratepayers was £72,000 a year. That is close to £200 a day. Councillor Barton said that the cost of protecting society from the youngster should not fall wholly on the local authority. The cost of the placement is equivalent to 10 day care places for people with mental handicap, five fully trained social workers, or 10 home helps.

Councillor Barton, whose concerns I supported in a letter to the Minister, received a response from the hon. Member for Derbyshire, South (Mrs. Currie) as Under-Secretary of State for Health and Social Security, the effect of which was "Tough". She said that if the young man was in Birmingham's care the cost would fall on Birmingham, and that the nature of the placement did not affect that.

If the youngster had committed some of the offences that it was feared he might commit, the Home Office would have had to meet the bill. The Minister said that there are lots of youngsters in places that cost more than £40,000 a year. That is but one example, but it shows that budgets cannot take account of everything. That is what local government is all about—coping with unforeseen problems as they rise as efficiently and sensibly as possible. Local authorities must act in the best interests of the community as a whole and of the individual concerned. In such a case, no help is forthcoming to Birmingham or any other council, although it is a wholly unexpected impost on the budget.

There is one Conservative Member who insists that there is no such thing as the poll tax but, like the poll tax, the changes in rate support grant or revenue support grant —if the Minister can get the name changed to needs grant that will be fine, but I suspect that the Department still likes to use the jargon expression RSG—are designed to undermine rather than to underpin democratic local government.

Coupled with the Local Government Finance Act 1988, the Bill and other legislation to come will free Ministers to manipulate Government funding to local government and business rates and to fix the poll tax. Unfortunately, from the Government's point of view, local government does not run scared of the Prime Minister as she operates her agenda to emasculate it. We did not hear much from the Minister about the purpose and function of local government. The idea is abroad in the speeches and comments of many Conservative Members that local government is simply an agency that provides services dictated by the centre. I reject that view, as should all democrats.

We live in a unitary state, and if we do not have genuine, local, democratic government, we cannot divide political power—it will all reside at the centre. We need genuine, democratic, local government to increase political participation and emancipation and to provide responsive, appropriate local services based on local needs, locally assessed. I am pleased to see that the Minister approves that latter point.

It was written a long time ago that a unitary state will end up a dictatorship if there is no freedom in the localities. If there is no freedom in the localities, it naturally follows that all power goes to the centre. Dictatorship is the inevitable consequence. It follows the suppression of local freedoms and initiative and the curtailment of local responsibility and opportunity.

As Opposition Members said in Committee when considering the Local Government Finance Bill, the political liberty of British citizens demands a system of local government that commands confidence. It must have the confidence and power to operate in our pluralistic society, not as a challenge to Parliament or to the Government, but as a clear challenge to Whitehall obtaining all the power, and to scrutinise other agencies at work within the state. That is an important role for local government.

As the poll tax legislation comes into operation—and there is much more still to come to the House—Ministers will realise that in the past local authorities have been intermediaries, a buffer between central power and what has been termed the ultimately unmeetable pressures of a mass democracy by Dr. Ken Young, formerly of the Policy Studies Institute, in one of his essays. In other words, good quality, democratically accountable local government has protected Ministers from the demands of a mass democracy. It has buttressed them and put a fence around them, because, as they know, many of the pressures are unmeetable, and local democracy was one way of assisting that part of a political process. That has been an advantage to Ministers, and as people increasingly realise that it is not worth bothering with local government—I question why people will want to become councillors in future—the buck will stop at the door of the Ministers. It will be no good their telling people to go back to their local authorities because, generally speaking, the local authorities will be in no position to deal with the matter.

Photo of Mr Bob Cryer Mr Bob Cryer , Bradford South

I followed very closely my hon. Friend's comments about dictatorship from the centre. Does he agree that on occasion Conservative councils have been prepared to stand up to a Conservative Government and point out the error of their ways? Is it not a matter of regret that the Government have a greater tendency towards dictatorship from the centre, particularly in Bradford, where Tory councillors are being manipulated by the centre to impose cuts and sackings to further the political ambitions of a clique in the leadership?

Photo of Mr Jeff Rooker Mr Jeff Rooker , Birmingham, Perry Barr

My hon. Friend is right. I suspect that later today right hon. and hon. Members will quite rightly hear a lot more about what is happening in Bradford. I am not an expert on Bradford, but I understand that at one time there was a move to replace the lord mayor with an elected chairman of the council, and that that move came from my own party, but the Tories in Bradford said, "You cannot do that. You will bring the chief citizen of the city into political arguments day after day." The Tories used that argument when we wanted an elected chairman, but if we look at what is happening in Bradford today, it is clear that the mayor is taking all the decisions.

Photo of Mr Irvine Patnick Mr Irvine Patnick , Sheffield, Hallam

I thank the hon. Gentleman for giving way. The lord mayor of Sheffield has been in the Labour party for the past six years and looks like staying there for ever more.

Photo of Mr Jeff Rooker Mr Jeff Rooker , Birmingham, Perry Barr

The hon. Gentleman can make his own speech.

The Minister did not mention one aspect of local government, and that is that quality local government, and confident local government, enlarges the power that people have over their own lives. We have to make the point again and again. Whether it is putting pressure on the Government—a legitimate activity so far as I am aware—working with local employers, or expressing local concerns, it is providing an infrastructure for our lives and dividing power so that it is shared more equally than it would be if it resided at the centre.

Although it is on record that the Prime Minister wants to snuff out a political party that happens to have a greater share of local power in our unitary state than the central governing party—she is on record as wishing to snuff out the Labour party and she has made that quite clear—I am not sure whether the Cabinet is aware of the profound constitutional dangers in further weakening local government.

Whether we have local government or local agencies, we cannot all have a library in our home, we cannot build and maintain the road outside our home, and we cannot all be personal fire fighters, teachers, home helps, drain cleaners, plumbers and refuse collectors. However, we can do all those vital activities as a community or, dare I say, as a society. We do not need all the services all the time. The key is to make the connection between benefit to the individual and the family so that it is there when required and should not be dependent upon being rich, which is what the Government are setting out to achieve. We are a much healthier and much richer society when we club together to provide what we could not achieve as individuals.

Contrary to what Ministers say, local government is about local differences— the difference between a Lakeland district and a London borough, the difference between rural villages and urban villages. Such differences in our society have to be taken into account.

To Ministers, accountability means doing what they say, but accountability should reside at the ballot box, not in ministerial declarations. I regret that there are two snags. First, the new Minister for Local Government considers the right to vote as being purchased by taxation. He sees no alternative to the point that he made in a speech in Norfolk earlier this month—I do not usually use these words, but I shall quote him—when he said: The community charge will provide a 'ready reckoner' so that when each charge payer votes in local elections he will cast that vote not only responsibly —he emphasised "responsibly"— because he is making a contribution towards the cost of local services". In other words, if one does not make a contribution towards the cost of local services, one's vote cannot be a responsible vote. I do not think that such an attitude should be expressed by a Minister for Local Government.

Photo of John Gummer John Gummer Minister of State (Department of Environment) (Local Government)

If I had said that the hon. Gentleman would be quite right, but he failed to quote the rest of the speech. I said that every individual should be given the means to pay the community charge, that 9 million people —a quarter of the electorate—would be given that means and that that was why the Labour party hated calling it a community charge and insisted upon mis-calling it a poll tax. If the hon. Gentleman wishes to quote, he must quote correctly.

Photo of Mr Jeff Rooker Mr Jeff Rooker , Birmingham, Perry Barr

I quoted word for word the beginning of the paragraph on the last page of the Department of the Environment's press release on 7 October. The rest of it was packed full of half truths about the poll tax, as I said in a speech in Croydon recently, where they believed me to such an extent that in the by-election in the Bensham Manor ward last week, in which the poll tax was the key issue, Labour not only gained 65 per cent. of the votes, but there was a 12 per cent. Swing to Labour, after the voters had been told the other half of the truth.

My second point about accountability is more important than the Minister's speech, because the ballot box is more important. Our rightful complaint is that the Government have deprived the constituents of my hon. Friends and of one or two Conservative hon. Members in the metropolitan districts of the right to vote in 1989. It will be a vote-free year because the Government have refused to return to the big cities the annual vote that they lost by the abolition of the metropolitan counties. We vote every year in the big cities. It is a much more effective form of democracy than to vote every four years, whether it be in London or the shire counties. We are prepared to live or die politically by the ballot box. The Government do not believe in that, or they would have restored the right of the people in Bradford, Birmingham and other large cities to vote for or against their council in 1989. They would also have introduced annual elections in London—something that they have avoided.

When the Bill was published the Minister spent some time dealing with creative accountancy. We should note that he did not call it illegal accounting, but creative accounting, the Government's term. People would think that that was exclusive to Labour-controlled local authorities. That is not the case. I saw the leader of a Conservative council being interviewed on television and he was boasting about a project and admitted that it had been carried out legally by accountancy techniques used in industry every day.

The more we learn about what happens in the local council in which the House of Commons resides, the less we are willing to take lectures from Tory Ministers. The freehold of the Conservative party's headquarters was purchased from Westminster council in 1981 for £1·3 million and was sold in 1983 for £3·7 million, against the advice of the director of property of Westminster council. It was sold at a profit to the Tory party of £2·4 million and a loss to the ratepayers of £2·4 million. I do not know whether the sale took place early in 1983 or later in the year when the Minister was the chairman of the Conservative party. I know that the Conservative party and Westminster council conspired to deprive the ratepayers of Westminster of £2·4 million, and for that reason we will take no lectures on accounting from the Government.

Photo of Mr Irvine Patnick Mr Irvine Patnick , Sheffield, Hallam 5:02 pm, 31st October 1988

The hon. Member for Birmingham, Perry Barr (Mr. Rooker) made an interesting speech.

The Bill is divided into four parts—the rate support closedown, how the closedown will take place, the control of creative accounting and the rate support grant settlement for 1989–90. The Bill details all that and I am pleased to see that the aggregate Exchequer grant for 1989–90 has been set at £13·575 billion. That is a £1·1 billion increase on the grant being paid for 1988–89. It allows for the change in the funding for polytechnics and is a 9 per cent. increase in the amount of grant to be paid out this year. I am also pleased to see that £110 million is being provided in respect of the extra cost that the local authorities will incur in preparing for the community charge. That is in line with the estimate of the cost involved by Price Waterhouse and is consistent with the figures put forward by the local authorities.

I was distressed that my right hon. Friend the Minister would not let me bear gifts. I understand that the 7 July deadline, which gave three months' notice to local authorities, was met by all local authorities, except two.

I listened to the challenge to my right hon. Friend the Minister by the hon. Member for Newham, North-West (Mr. Banks). I shall read the litany of Newham. The

Labour councillor, Mr. John Wilson, has resigned from the Council. He claimed that free speech in the all-Labour council was stifled, and compared his colleagues' behaviour to 'Hitler's Fascist State.' That was reported in the Newham Recorder on 18 December 1986.

Photo of Mr Bob Cryer Mr Bob Cryer , Bradford South

What about Sheffield?

Photo of Mr Irvine Patnick Mr Irvine Patnick , Sheffield, Hallam

I shall come to Sheffield.

Photo of Mr Irvine Patnick Mr Irvine Patnick , Sheffield, Hallam

I am sorry but I will not. The hon. Member for Perry Barr gave way to me only once and has refused to give way before.

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. The hon. Gentleman has made it clear that he does not intend to give way at this time.

Photo of Mr Irvine Patnick Mr Irvine Patnick , Sheffield, Hallam

I will give way when I finish the litany of hate. It continues: The Council has refused to run an advertisement for the Metropolitan Police's major anti-racial harassment campaign on the grounds that it was 'patronising' and a 'cosmetic gesture.' That was reported in The Daily Telegraph on 16 January and the Newham Recorder on 15 January 1987.

The Council has added 'Count Zeppelin' to a list of approved names for local buildings and streets. East London suffered badly from bombs dropped by Zeppelins in the First World War. That was reported in the Evening Standard in February 1987.

Newham's auditors, the same auditors who found the £110 million that will be used to implement the community charge—Arthur Young International— have called for urgent action to stop 'needless' waste of cash in Newham's education system. Two years ago the auditors said that the council was wasting £250,000 each year by failing to reorganise senior schools in order to match the places available with the lower level of demand. The report states: 'Continued delays in matching provision to need are giving rise to additional and needless cost while also leading to under-achievement.' That was reported in the Newham Recorder in February 1987.

A Government report shows that Newham has the second highest percentage of empty council homes in the country. 2,420 council homes are empty, 7·8 per cent. of the stock. That was reported in the Newham Recorder in February 1987.

Photo of Mr Irvine Patnick Mr Irvine Patnick , Sheffield, Hallam

On 12 February 1987 the Newham Recorder said: The Labour Council leader, Councillor Fred Jones, has called the Newham Chamber of Commerce 'fifth columnists' for allegedly undermining the Council's campaign against ratecapping. Councillor Jones has written to the Chamber 'we have been repaid by betrayal' and presumably he is referring to last year's 13 per cent. rate increase, the highest in London.

Photo of Mr Eric Heffer Mr Eric Heffer , Liverpool, Walton

Why does the hon. Gentleman not talk about the other side of the fence?

Photo of Mr Irvine Patnick Mr Irvine Patnick , Sheffield, Hallam

Does the hon. Member for Liverpool, Walton (Mr. Heffer) wish to intervene?

Photo of Mr Eric Heffer Mr Eric Heffer , Liverpool, Walton

Yes. The hon. Gentleman spoke about what is happening to repairs and so on in Newham. It can apply to Liverpool or elsewhere. Government Front Bench spokesmen have admitted that the Government have taken millions of pounds away from local authorities. That is why local authorities are in that position. The hon. Gentleman does not give that side of the story—[Interruption.]

Photo of Mr Irvine Patnick Mr Irvine Patnick , Sheffield, Hallam

The hon. Member for Sheffield, Hillsborough (Mr. Flannery) enjoys making seated interventions, but it is very rare for him to stand and make his comments.

Several Hon. Members:

rose

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. Is the hon. Member for Sheffield, Hallam (Mr. Patnick) giving way to anyone at this time?

Photo of Mr Irvine Patnick Mr Irvine Patnick , Sheffield, Hallam

I will give way when I have finished dealing with Newham.

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. The hon. Gentleman said that he will give way when he has finished this section of his speech.

Photo of Mr Irvine Patnick Mr Irvine Patnick , Sheffield, Hallam

Thank you for your protection, Madam Deputy Speaker.

On 7 September 1987 the Evening Standard said that the

Residents of a Council block were refused a £200 grant by the Council because the tenants' account is banked with Barclays Bank. In December 1987 The Guardian reported:

The council advertised last December for a Senior Women's Equality Officer at a salary of £15,000. The job involves working within the Women's Equality Unit, 'raising the profile of women's equality' and 'encouraging and supporting women's groups and activities.' I apologise to the House for this list. I ceased being a member of Sheffield city council in May this year. Until the beginning of January these little snippets of information allowed me to place the antics of Sheffield in the scale of what I would call the oddball things that happen. In that regard, Newham was always ahead of Sheffield by an average that I could never work out.

I shall give a quotation from the bible of the hon. Member for Newham, North-West (Mr. Banks)—The Guardian of 20 January 1988. It states: Newham council has advertised for a Race Equality Research Officer who must have 'a knowledge of racial disadvantage in housing' and for a Central Race Equality Officer who must display 'a knowledge of discrimination and racial harassment'. Both posts carry salaries in excess of £22,000 a year.

Photo of Mr Tony Banks Mr Tony Banks , Newham North West

I cannot understand why the hon. Member for Sheffield, Hallam (Mr. Patnick) is spending so much of his speech talking about the London borough of Newham when he should be concerning himself with Sheffield. I am touched that he should show so much concern, but inadvertently he has misled the House a number of times and has hardly been quoting from impartial sources. I cannot answer all his points because I do not have sufficient time in this intervention, but I shall write to the hon. Gentleman. I shall have to consider carefully my involvement with the Newham chamber of commerce—I am having dinner there next week—and perhaps I should not have gone to Barclays bank to open the business centre. If Newham council is so bad, why does the hon. Gentleman think that there are 59 Labour councillors and one Social Democratic party councillor? It is a Tory-free zone. Last week, the Labour party won two by-elections. The Tories do not stand a chance in Newham, yet the Labour party receives massive support. If what the hon. Gentleman says is true—he must know that it is not—why does he think that the people of Newham give the Labour party so much support?

Photo of Mr Irvine Patnick Mr Irvine Patnick , Sheffield, Hallam

The hon. Member for Newham, North-West is quite wrong. I am giving examples of what Newham council has done. I do not recollect hearing any retraction concerning these allegations since I have been in the House.

Photo of Mr Martin Flannery Mr Martin Flannery , Sheffield, Hillsborough

The hon. Gentleman has traduced Sheffield city council. He belongs to a minority party in Sheffield, which is routed and defeated every year. It held power only once, in 1926. The hon. Gentleman fought its transport policy tooth and nail, but every year the Labour party's vote increased. The hon. Gentleman has a nerve denouncing his own council when his party is defeated every year.

Photo of Mr Irvine Patnick Mr Irvine Patnick , Sheffield, Hallam

I wonder whether the hon. Member for Sheffield, Hillsborough (Mr. Flannery) could be given a hearing aid. I have been reciting the litany of Newham council's activities; I have not mentioned Sheffield, Bradford or any other areas. I thank the hon. Member for Hillsborough for his help and assistance.

The 1986 manifesto of Sheffield district Labour party, which is larger than the Conservative party manifesto about which everyone keeps arguing—

Photo of Mr Irvine Patnick Mr Irvine Patnick , Sheffield, Hallam

I shall do so, if hon. Members wish.

Photo of Mr Irvine Patnick Mr Irvine Patnick , Sheffield, Hallam

Thank you for your protection, Madam Deputy Speaker.

The hon. Member for Perry Barr will have heard before the quotation that I am about to give from the manifesto, but, sadly, the hon. Member for Copeland (Dr. Cunningham) is not present. The front page of the manifesto says: The best local government is superb and private enterprise could never improve on it, with Sheffield a shining example. John Banham made those remarks, and in Sheffield city council's inimitable manner it gives him as the chairman of the Audit Commission in 1985.

It is worthy of note that some local authorities have indulged in creative accounting and other activities. Some decided to fund a Left-wing newspaper, the News on Sunday. Manchester city council gave it £268,000, Southwark £250,000, Brent £250,000, Islington £250,000 and Derbyshire council also contributed. Ratepayers' cash was given to an enterprise that failed completely.

Rent arrears in those wonderfully run organisations are running high. Manchester city council's rent arrears are £5 million—10 per cent. of its rents are uncollected. For Haringey, the figure is 28 per cent., or £5·6 million, for Southwark it is £24 million, for Islington it is £6 million and for Camden it is £7 million.

My right hon. Friend the Minister referred to deferred loans. Manchester city council has £100 million of deferred loans, Islington has £74 million, Camden has £100 million and, for the benefit of the hon. Member for Hillsborough, let me say that Sheffield has £110 million. Its repayments were due to start three years from the start of the loan, which was for seven years. The cost of repaying that loan is £175 million. The bank that is involved is the Banque

Bradford city council spends money on things that I can describe only as odd. Mr. Pickles—everybody seems to think that he arrived on the scene yesterday afternoon—has been chairman of Bradford education committee for some time. The hon. Member for Hillsborough remarked on the fares policy. When I sought advice about that policy from the Conservative party, it was not forthcoming, as, I imagine, advice has not been forthcoming for the leader of Bradford city council. Bradford city council told the electorate what it intended to do and has implemented its policy. I remind those who have the temerity and cheek to remark on the lord mayor using his casting vote of the time when the Labour party and Conservative party had parity on Sheffield city council.

Photo of Mr Irvine Patnick Mr Irvine Patnick , Sheffield, Hallam

It was in 1968, comrade. At that time, the lord mayor of Sheffield city council had a casting vote. The hon. Member for Bassetlaw (Mr. Ashton) was chief whip of the Labour group. It operated the ultimate fiddle to maintain control of that council. The city had 27 aldermen, but if the Conservatives had been given the correct number of aldermen it would have remained in control of the city. The hon. Member for Bassetlaw did a fantastic job by granting the Tories three aldermen, and keeping the remaining 24 for the Labour party.

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. This is all very interesting, but it does not relate to the Bill. I wonder whether the hon. Gentleman could relate his remarks to the Bill.

Photo of Mr Irvine Patnick Mr Irvine Patnick , Sheffield, Hallam

With respect, Madam Deputy Speaker, it is related to the Bill because we are discussing creative accounting—

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. I am not getting into an argument with the hon. Gentleman. He is not relating his remarks to the Bill, and I am asking him to do so.

Photo of Mr Martin Flannery Mr Martin Flannery , Sheffield, Hillsborough

The hon. Member for Sheffield, Hallam (Mr. Patnick) should put his notes away and get on with his speech.

Photo of Mr Irvine Patnick Mr Irvine Patnick , Sheffield, Hallam

That is more than the hon. Member for Hillsborough has done since I have been in Parliament.

Under the community charge, more than half the households will be better off, four out of five single pensioners will be better off and nearly nine out of 10 one-parent families will be better off. Almost everybody pays. That means that the poorest can pay less. Four million people will pay only 20 per cent., and even get help with that, and 5 million more people will pay a reduced charge. More than one quarter of local voters will get help with their bills. They will all contribute something to the cost of their local council, so everyone will know how well this money is spent. On every community charge bill they will see how much they have to pay, and next to it what they could pay if there was a sensible council providing a reasonable service. People will know whether they are properly governed. There will be accountable councils and responsible voters.

I have referred to the Labour party's 1986 manifesto for Sheffield. The council summons for the business to be debated on Wednesday contains a notice of motion, which states: That, in view of the continuing hardship and distress caused to Sheffield tenants and home owners by the backlog, delays and errors in administering housing benefit the council will have to take certain action.

Money would be available if Sheffield city council made savings. I shall quote the report by the district auditor— believe it or not—which was issued on 31 December 1987.

Photo of Mr Irvine Patnick Mr Irvine Patnick , Sheffield, Hallam

I wonder whether the hon. Gentleman knows that I served my time in the guerilla trenches of south Yorkshire and Sheffield. His remarks do not worry me. I shall make the speech that I intended to make.

The district auditor's report said that a saving of £600,000 a year could be made on the cleaning and caretaking of schools. Referring to the cost of £12 million for heating and lighting the council's premises, the district auditor said that, despite the savings achieved, further savings were possible and that, using a 25 per cent. national figure, the council could save £1 million. He told the council to reduce its stockholding by £500,000 and to save £150,000 on overheads.

The works department spends £40 million a year on supplies and its running costs exceed £1 million. The district auditor said that vehicle fleet management could be improved and a saving of £400,000 made and that the fleet size could be reduced by six vehicles. On maintenance, the council was over target by 50 per cent. and could save £90,000. An amount of £125 million was collected in rates income, and the auditor identified possible savings of £1·75 million on rates collection, mortgage advances and off-street parking. On the sundries deficit of £37 million, the auditor identified room for a saving of £50,000 and possibly a further saving of £180,000.

Why is Sheffield city council involved in skip hire, window cleaning and municipal funeral services? [Interruption.] It is all very well for the hon. Member for Kirkcaldy (Dr. Moonie) to create a diversion, but those are the savings that Sheffield could make, without creative accountancy.

Sheffield city council always screams about Government grants. On 44 claims with a total grant of £100 million, the council could have saved £323,000 if the claims had been submitted within 60 days of the period to which they related. The direct labour organisation gets £10 million for housing repairs, yet there was an overpayment of bonus costs of £200,000 a year, with 15 per cent. overclaimed in housing costs.

The authority's magazine says that it is worried about sickness and absence, which costs £1 million a year. If this were controlled, £400,000 a year could be saved. If the council could restore levels of performance to those of two years ago, a saving of £300,000 on incentive bonuses could be made. The council's manpower has increased by 2,500 full-time workers, or 12 per cent. and by 1,500 part-time workers, or 15 per cent.

When the report was published, the works department said that it revealed a total loss of £1·2 million last year. The report gave this warning: Severe financial and competitive pressure in the department has been caused by a combination of legislation, forcing the department to compete for tender with the private sector. Rent arrears were £9·1 million in March 1985 and £8·5 million in July 1987. This cost the city £900,000 in interest.

The district auditor—not Conservative central office —identified possible savings of £6·793 million. But all was not lost. Sheffield city council's treasurer issued to the council a report on revenue budgets. That was a new approach for 1988–89, which was approved by the council. The Treasurer said that he would set a cash limit on the council's total expenditure for each of the next three years in advance of the preparation of detailed budgets. He said that he would give each committee a cash allocation for 1988–89, together with guideline allocations for 1989–90 and 1990–91, which would require the committees to absorb inflation and growth.

The treasurer introduced an incentive procedure whereby committees could find ways of increasing their cash limits and reinvest the money in service provision. He said: The impact in future years will be important and subsequent cash limits must not be exceeded. The treasurer introduced a holdback procedure whereby a sum of money over and above the cash limits to which he had already referred would be set aside each year and distributed to committees. He introduced a direct link between the service delivery plans and the revenue budgets, with a built-in process of review, and gave the opportunity to introduce activity budgets linked to spending. We call that rate capping. The treasurer turned the system round and said, "This is what Sheffield intends to do."

My litany is not one just of gloom. In Sheffield there is now £1·3 billion of private enterprise investment and a development is taking place which will be the pride of England. The Opposition say that no savings can be made in local government.

Photo of Mr Irvine Patnick Mr Irvine Patnick , Sheffield, Hallam

The hon. Member for Perry Barr said it. He pointed out where the South Yorkshire police authority was short of money. Sheffield city council is short of £3·7 million. There is still fat on the bones of Sheffield city council, despite all the hard work it has done to come into the 20th century. I am proud to have been a member of Sheffield city council. Despite the comments by the hon. Member for Hillsborough, I am proud to have been a member of South Yorkshire county council. It is a matter of record that that council collected £1 billion from ratepayers and spent £500 million on fare subsidies. The police were short of accommodation and highways were disintegrating. Spending by other services was needed and could have been achieved if the council had not otherwise used the money.

I am proud to have been a member of Sheffield city council for 20 years. Sheffield is a great place in which to live and I recommend it to anyone.

Photo of Mr Bob Cryer Mr Bob Cryer , Bradford South

It is under Labour control.

Photo of Mr Irvine Patnick Mr Irvine Patnick , Sheffield, Hallam

It is under Labour control, as the MEP for Sheffield keeps reminding us. I often wonder what the people of Sheffield are getting out of Europe when the hon. Gentleman is sitting in this Chamber. Nevertheless, he wears two hats, one representing Bradford and the other Sheffield, but I suppose that both places are in the north of England.

I repeat that I am proud to have been a Sheffield city councillor for 20 years. Sheffield is a wonderful place to live and for people to come to, but economies could be made in the council's budget, as the district auditor has made clear—and if those economies can be made in Sheffield, they can also be made elsewhere.

Photo of Mr Pat Wall Mr Pat Wall , Bradford North 5:30 pm, 31st October 1988

When I spoke in the debate on rate support grant at the beginning of December last year I used a quotation from Howard Davies, controller of the Audit Commission, pointing out that if all the Government's privatisation plans affecting local government were put into operation it would mean a reduction in local government expenditure of approximately one third and a loss of jobs in local government which I put at about 500,000 and Howard Davies estimated at more than 700,000, at least 50 per cent. of whom would not get their jobs back in the private firms taking over services from local authorities. Even a month ago I did not expect to come here today with such a graphic example of that, but Bradford council is now attempting to carry out—on the basis of the mayor's casting vote, known as "one person, two votes"—a programme that has in no sense been put to the people of Bradford and which will mean devastation not just for employment but for services in the city.

Photo of Mr Pat Wall Mr Pat Wall , Bradford North

I shall not give way at this stage.

That programme includes the announcement of 9,000 redundancies. We are told that it means only 2,600 full-time jobs but for the employees involved it means 9,000 jobs—in a city with 25,000 unemployed people and staff shortages at benefit offices and DHSS offices dealing with existing cases. Cuts of £2·6 million are planned for next year, and cuts of £5·8 million in total, with a £687,000 cut in environmental employment, and there are plans to close the benefit shops in Bradford, which deal with 55,000 cases per year. The excuse is that the council cannot deal with DHSS queries, but only people who have never been unemployed and have never tried to fill up a DHSS form claiming benefit could be unaware of the enormous difficulty that many people have in filling up such forms and appealing against decisions. In Bradford. 55,000 people come to the benefit shops every year, to say nothing of those who consult Members of Parliament, councillors and voluntary organisations in the city.

The council is talking about increasing charges for car parking and cemeteries, and cutting standby road gritting. Cuts of £3⅓ million are proposed, in education, with school meals going up by one third to 80p, and creches being cut or scrapped. There will also be cuts in teaching jobs and in school repairs, although a third of our schools were built before 1906 and we have one of the worst backlogs in school repairs of any city in Britain. Moreover, unlike most cities that have falling school rolls, the number of children entering our schools is increasing. There are calls for the scrapping of special books and equipment for inner city schools, although Bradford is one of Britain's most deprived cities, with a large immigrant population, and, like Leeds, historically has had one of the worst capitation figures in Britain for expenditure on books.

The council is taking £367,000 out of museums and libraries, increasing charges at sports centres and swimming baths and cutting jobs in outdoor recreation. Sports centres are being sold off, as is the historic and beautiful St. Ives estate, which was given to the people of Bingley by the Ferrands family in the 1920s for community and public use. There are to be cuts of £832,000 in social services, and 15 old people's homes are to be sold off. How can any Tory Member maintain that services will be better than those provided by local authorites when the people taking over have to make a profit, which can be achieved only by cuts in services to the old people or reductions in staff wages?

Photo of Mr Pat Wall Mr Pat Wall , Bradford North

I see that the hon. Member for Shipley (Sir M. Fox) has arrived. He knows the result of that process in relation to hospital cleaning. As a result of privatisation, the lowest paid in our community, many of them battling against enormous social problems, had to bargain down their pitiful wages to get their own jobs back. Let no one talk about morality, decency and family life in that situation.

Photo of Mr Marcus Fox Mr Marcus Fox , Shipley

Will the hon. Gentleman give way as he has mentioned me?

Photo of Mr Pat Wall Mr Pat Wall , Bradford North

I shall sit down in a minute. The hon. Gentleman has only just come in.

Bolton house was renovated by the ratepayers of Bradford at a cost of nearly £1 million—a heart-warming example of renovation and refurbishment for residents and staff—but it is now being put up for sale to private interests. A £1 home help charge is being introduced, and meals on wheels are going up from 49p to 60p. There are to be further cuts in housing and the environment of £170,000, cuts in emergency accommodation for the homeless and cuts in action against employers under the Health and Safety at Work, etc. Act. All those measures will directly hit working people, the young homeless and other problems in the city. In central administration, £380,000 is being saved by cutting 109 jobs immediately.

Photo of Mr Marcus Fox Mr Marcus Fox , Shipley

If the Labour party had remained in control in Bradford, the 15 homes that the hon. Gentleman says should not be privatised would have required between £10 million and £15 million expenditure to bring them up to standard. What would the hon. Gentleman have done about that?

Photo of Mr Pat Wall Mr Pat Wall , Bradford North

The standards in a privatised home in London were reported in the newspapers recently—40 residents got two chickens between them and one and a half sprouts each. That is how the savings are made. In fact, the Labour council in Bradford had plans to refurbish two more old people's homes this year as part of a rolling programme, and if the results are half as good as they were at Bolton house and Peel house they will be a proud memorial to the Labour council and good for the old people of the city.

Photo of Mr Bob Cryer Mr Bob Cryer , Bradford South

The hon. Member for Shipley (Sir M. Fox) has reservations about the subject. In our local newspaper he rightly expressed concern about old people who are to be sold off lock, stock and barrel like so many cattle to profiteering friends of the Conservative party. The hon. Gentleman is trying to ride two horses at once—locally he expresses concern about the deplorable standards caused by private exploitation and ownership, but here in the House he tries to make out that everything will be all right.

Photo of Mr Pat Wall Mr Pat Wall , Bradford North

I support my hon. Friend's views. I could refer to privatised homes not that far from the constituency of the hon. Member for Shipley, but this debate is about local government expenditure and services.

The leader of Bradford council has a rather mysterious job. No one knows where he is employed, who employs him or what his legal qualifications are. Rumours have abounded during the past three or four weeks. One was that the right hon. Member for Chingford (Mr. Tebbit) was in town last Tuesday when the council was about to debate the cuts package. Although, unfortunately, the Conservative proposals were agreed to at that meeting, the right hon. Member for Chingford actually got no further than Leeds, where he was signing copies of his book. That seems to be a priority activity for far too many politicians.

It is unfortunate that the right hon. Gentleman found time to appear on television and refer to Bradford. He said: Councils cannot be an employer of people just because they are there. He also said: Bradford people deserve to get their services at the right price and they should not be rooked by people who have been rooking them for years. I have been careful to get the quotes correct. I even looked at the video of the television programme this morning. The right hon. Gentleman has interfered in Bradford matters before. During the general election I and my fellow Labour candidates in Bradford found our pictures on Conservative advertisements. The House will remember that the right hon. Gentleman was chairman of the Conservative party at that time. The advertisements attributed to me a quote that not only did not belong to me, but was a summary of someone's views as reported by the Journalist, that someone being my opponent in a debate. I am being careful to quote correctly the right hon. Gentleman's words, whereas he was not so careful about the quotes that he used during the general election campaign.

Photo of Mr Irvine Patnick Mr Irvine Patnick , Sheffield, Hallam

On a point of order, Madam Deputy Speaker. During my speech you ruled that I was straying from the subject matter and I immediately returned to it. I do not think that the hon. Member for Bradford, North (Mr. Wall) has yet come anywhere near the subject matter.

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. The hon. Gentleman was straying for some time before I called him to order.

Photo of Mr Pat Wall Mr Pat Wall , Bradford North

The right hon. Member for Chingford implied that lower prices for Bradford people would result from privatisation, but what has actually happened? There has been an average increase of £3 in council house rents, with further increases to come in March. Are not council tenants the people of Bradford? There are increased costs for users of sports centres, swimming pools and leisure facilities. Are not those users the people of Bradford? Schoolchildren will have to pay another one third for school meals. Are they not part of the population of Bradford? Old people will have to pay more for meals on wheels, and the sick and the disabled more for home helps. Are they not the people of Bradford?

The crux of the matter is that the Bill is designed to cut expenditure and to put a burden on the backs of the poor, the children, the council house tenant and the young people who wish to use art, sport and leisure facilities. As the late Earl of Stockton said, we are selling off the family silver to amass capital to reduce the poll tax charge. It is a political move that will benefit the wealthier sections of Bradford at the expense of the poorest in our community.

The right hon. Member for Chingford implied that people have no right to be employed. A deprived town needs more services. What is wrong with the Government's local government policy, especially the poll tax, is that Government expenditure is calculated on a capitation basis. The problems of East Anglia and the Thames valley are nowhere near as great as those of Glasgow, Newcastle, Birmingham, Liverpool and Bradford. The people who supply the services in our cities are necessary, but they are easy targets for the Conservative party. People working in local government, the Inland Revenue and the DHSS have families, just as we have families. They live next door to us, go to the supermarket and the church with us and have a drink with us at the local pub. Their children play football with our children. Those 9,000 jobs in Bradford, even if most of them are part time, are important. Unemployment is just as real for them as it was for the textile and engineering workers who lost their jobs in tens of thousands after 1975 because of the recessions in Bradford.

Part of the Government's so-called economic miracle is the movement of large numbers of people to part-time employment. Their jobs are important to them and form part of their standard of living. The loss of their jobs will be devastating for them. The Labour party must support the part-time workers so that they can have proportional rates of pay with full-time employees and full employment, pension, health and welfare rights. Their jobs are just as important as full-time jobs.

Bradford is a proud town, but it has real problems. There is a £130 million backlog in housing repair. Bradford has the worst health record in Britain, with the highest rate of infant mortality. A girl born in Bradford has two years less life expectancy than average, and a middle-aged man has three times more chance of a heart attack than someone living in the more prosperous south-east. There are 10,000 people on the housing waiting list, and it has the lowest wage rates of any town in Britain. Bradford needs services; it does not need to be attacked by its Conservative council. Was a £3 rent increase outlined in its Conservative manifesto? Were cuts of £5 million included? Did it refer to the sacking of 9,000 people? What about the additional charges for meals on wheels? Was that contained in the manifesto? Of course none of those was in the manifesto. They form part of a secret manifesto brought from Smith square by the Tory party's messenger boy who parades as leader of the city council.

There has been a great deal of talk from Conservatives about trendy, lunatic Lefties in local councils. I can only say that neither I nor my hon. Friends the Members for Bradford. South (Mr. Cryer) and for Bradford, West (Mr. Madden) have been accused of being trendy, either sartorially, socially or politically—although we have been accused of many other things. I have spoken politically and publicly against the danger of developing a positive discrimination that makes working men feel that, somehow, they are responsible for all the horrors of the British empire, colonialism and the slave trade.

There are real problems. Some people's small excesses do not deny the real problems. Three quarters of the people in this country who are underpaid according to the Common Market's level of decent wages are women. Women are poorly represented at any of the higher levels of society, including Parliament. Our wives, daughters and sisters do not have the same opportunities as men. Therefore, local authorities are quite right to make efforts to find a better life and position for women in general.

In Bradford, where about one quarter of the population are Asian, we have special language and social deprivation problems that need to be tackled by the council. One of the most shameful things that has happened in Bradford is that grants to 25 local organisations have been cut. After public pressure, the council managed to find enough money for 22 of them until March of next year. The three organisations that were left out were one Pakistani organisation and two Bengali organisations. Bradford is composed of Bangladeshis.

A few weeks ago I had a small housing surgery with the Bangladeshi Youth Organisation. Seven people came in. They were denied improvement grants by the city of Bradford during the freeze that was carried out by the Conservative administration. Those people did not want fancy bathrooms or kitchens. They had holes in their roofs, collapsed ceilings, doors that did not fasten, and windows that let the wind and rain pour through. They were denied grants. That shows the meanness, spitefulness and anti-working class approach of the Bradford council.

In conclusion, I thank Eric Pickles. I spent 20 years trying to revitalise Bradford's enormous radical tradition as a pioneering town. We are the town of education, of Foster and Margaret Macmillan. We are the town that saw the early birth and development of the trade union movement. We are the city in which the independent Labour party was founded—the forerunner of the modern Labour party. In some ways we have strayed from those traditions, but after the mass demonstration outside Bradford town hall, the enormous upheaval of community spirit, and the demand for community action, we shall come to praise Eric Pickles for refounding Bradford as a centre not only of pioneering in the past but of Socialism today.

Photo of David Wilshire David Wilshire , Spelthorne 5:52 pm, 31st October 1988

When I first jotted down some thoughts about the Bill, I noted that it offers an almost irresistible temptation to redebate local government finance. Having listened to the hon. Member for Birmingham, Perry Barr (Mr. Rooker), my hon. Friend the Member for Sheffield, Hallam (Mr. Patnick) and, just a moment ago, the hon. Member for Bradford, North (Mr. Wall), I find that I need not have put the word "almost" in front of the word "irresistible". It has been amply demonstrated that the temptation is totally irresistible. I can understand why that is so, as the Bill relates to the winding-up of the current rate support grant system.

It is perfectly possible for anybody who has ever been connected with local government to wish the current system a fond farewell. I do not believe that anybody, whatever their party politics, will lament the end of an uncertain system or the end of uncertainty about the amount of money that they will get until several years after they spent it. They will not lament that they will no longer have a formula that they probably do not understand, and, even if they do understand it, that will be changed before it is put into effect. It is also perfectly possible to have such a debate about the new rate support grant system.

As the Bill paves the way towards that new RSG system—I was horrified to know that "RSG" will probably lurk with us even longer and mean something different, but perhaps we can debate that another time—it is perfectly possible to extol the virtues of paying grant as the basis of assessment of need rather than on the basis of somebody's expenditure. I can also understand why we could use the Bill as a means of debating all over again why it has become necessary to overhaul local government finance. As my hon. Friend the Member for Hallam said, it would enable all of us to deplore the tactics of the loony Left in local government and the fact that it has forced central Government to do what has been done. It could even force us, as the hon. Member for Bradford, North has done, to have a long discussion about Bradford, but I shall resist that temptation, except to point out that several things were omitted from his catalogue.

When the hon. Gentleman referred to the number of staff in Bradford who were no longer required, he did not point out that the overwhelming majority of the 2,500 jobs that will be lost will occur through natural wastage or redeployment. That is different from what is going on in Brent, where staff are simply being got rid off. There was no reference to the fact that some of the staff who are leaving Bradford are peace officers and anti-nuclear people—and the quicker they go the better. No reference was made to some of the so-called services that are to be affected. The fact that the women's committee will disappear is a good thing, not something that we should regret. We should applaud the fact that peace studies are likely to be scrapped. It is not something about which we should wring our hands. The fact that no longer will £15,000 be spent on anti-apartheid weeks in Bradford must be a good thing, and not a loss of services. No longer will Bradford fly terrorist flags in the shape of SWAPO and ANC flags. That is not something that the people of Bradford will regret.

Photo of Mr Max Madden Mr Max Madden , Bradford West

In recent days the hon. Gentleman has taken a keen interest in Bradford. He has tabled an amendment to that which was tabled by my hon. Friend's the Members for Bradford, North (Mr. Wall) and for Bradford, South (Mr. Cryer). In his list of committees that have been abolished, he omitted reference to the health advisory committee and the race relations committee. Does he commend the abolition of such committees with the same enthusiasm with which he supports the abolition of other committees?

Photo of David Wilshire David Wilshire , Spelthorne

I have no doubt that Opposition Members and Conservative Members will produce their own lists. I have produced my list. The hon. Member for Bradford, West (Mr. Madden) will make his speech later. Hon. Members have demonstrated that there is almost endless scope for a political kick-about based on the Bill. It will probably come as a great relief to those Opposition Members whose blood pressure usually goes up when I speak about local government to know that most of what I shall say will not be at that level.

On an occasion such as this, we could usefully take the facts of local government life as read and, for a moment or two as we discuss the Bill, accept that the old RSG system is operating whether we like it or not. We should equally accept that the Local Government Finance Act is with us and will be implemented. Given those facts of life, we must now wind up one system and make it possible to introduce the other.

We must say whether the Bill is the best way of achieving that transition. To answer that question, we must first establish whether we know exactly what a good, smooth transition period needs. Before 1990, we need a simple system—a system that is certain and, therefore, will not divert the time of officers and councillors in racking their brains about what to do in the years leading up to 1990 but will allow them to concentrate on bringing in the new system. For the next few years, we need a clear-cut system. We cannot possibly contemplate a system that will drag on for two, three, or four years after 1990, as the current system does, so that officers and councillors will not only try to appraise the effect of the new method of collecting money but will agonise about whether they have got the figures for the previous years right.

Above all else, any transitional system must make it sure that neither side—neither central Government nor local government—can manipulate what goes on, as that would divert people from what they need to do. The current RSG system fails that test in every respect. If we continued with anything remotely like it, we would still have a complex system leading up to 1990. If we continued with what we have, we would have a highly variable system. For this year and next, we probably would not know where we stood until it was too late. If major changes are not made now, we will probably have to take retrospective action for years after 1990.

Not to put too fine a point on it, central Government of both political colours, and over many years, have a record of tinkering regularly with the rate support grant. When the Bill is enacted, there will no longer be that temptation. Local authorities of all political persuasions, not only Labour-controlled authorities, have a legendary reputation for creative accounting. The current system cannot be continued for the final two years. We must opt for an entirely different approach in bringing the transition into effect.

How does the Bill pass the various tests and how does it match the requirements that will lead to the easiest possible transition? Above all, the Bill will break the link, once and for all, between grant and spending. That must be the best news of all. The Bill proposes a system that will be simple, although it might be seen as slightly arbitrary. It proposes a system that will be certain for this year and for next. It proposes amounts that can be fixed so that central Government cannot tinker with them. The Bill's provisions block any possibility of local government entering into creative accounting to try to take advantage of the transitional period.

The Bill passes the relevant tests extremely well. Therefore, it has my entire support. However, I wish to draw attention to a number of issues that arise from the transitional period. In closing off the years 1985 to 1988 and taking 7 July as the relevant date, it seems that the Government might be taking a fairly arbitrary approach. I accept, of course, that some date had to be taken, and I judge that ample notice was given. That the proposal is reasonable is borne out by the fact that all but two councils have found it possible to co-operate. None of the councils affected by the proposals has complained especially vigorously.

I am concerned that some councils, in having to settle for interim figures, will face a potential loss of grant. That loss is likely to be at its maximum during 1987–88. Outturn figures are often the lowest of all figures when it comes to assessing grant over a number of years. However, we can live with that potential loss of grant because there is scope in what will follow to claw back some of the potential loss. The House will appreciate that there could be an over-assessment.

The issue arising in the current year—the year in which local government now finds itself—equates mainly with good news. The use of budget figures must he the best news in the current year. It means that for this year there will be no penalty for overspending. There will be no likelihood of a reduction in grant when there are variations in expenditure. The absence of penalties and any possibility of clawback will go a long way to offset any losses and any criticism that is directed to the years before the current one.

I have a personal concern which I hope my hon. Friend the Minister will comment upon when she replies. In all settlement assessments made by the Department of the Environment and local government at the earliest stages, there is always a great risk that some of the assumptions will be wrong. Later adjustments have always been the mechanism for putting right the assumptions. If it transpires that there is something tremendously wrong and that a real clanger has been dropped that no one could have foreseen, will the Minister be willing at some stage to address that? If experience teaches us something that is horrible, will the Government be prepared to take action?

The issues are especially relevant for the final year of the system, which will be 1988–89. To use the current budget and then to adjust it and uprate it by inflation plus is the fairest possible way of handling the problem. The way in which the budget will be uprated, by what will amount to 9 per cent., seems extremely fair. It should mean that local government can go through the last year of the current financial regime without all the time having to rack its brains about the current year. It will thus be able to spend the maximum amount of time looking to the future. The proposed approach to uprating will provide a further chance for any council which has lost out through its accounts having been closed off too soon—as a result, it would have lost money in the previous years—to recoup moneys that might have been lost.

I accept that the adjustment that is being made for the introduction of the community charge seems to be sensible, for the amount is in line with what the Association of District Councils suggested. It is in line also with independent research and its findings. The formula, which means that half of the amount is arrived at by special calculation, meets the real worry of authorities that will have to introduce the charge in areas of high mobility. That formula has been devised in good faith in advance, but if certain councils find that the fairly rough-and-ready formula of taking the number of rented properties in the area as the only available measure to determine how mobile is the population has not been the best method of arriving at a conclusion and that an awful wrong has been committed, will the Government, in the light of experience, he prepared to consider making some adjustments to what they have proposed for the moment?

The House would do well to resist all the temptations that are before it and to refrain from mixing it politically, as it were. It would not be profitable to go over issues that we have argued about for hour upon hour on previous occasions. Let us accept the fact that the Local Government Finance Act 1988 is with us and that it will produce benefits for the entire country by 1990. I urge the House to keep its eye firmly on the practical issues that are raised by the Bill. If it does, it will be able to determine whether the Bill is the best way to handle the transition and whether it will produce the simplest and smoothest mechanism and the maximum time to prepare for the future. If the House takes local government as it is, I believe that it will be supporting a measure that will minimise hassle and produce the easiest possible way of introducing the changes that must be made. In that context, I urge Opposition Members, who normally bridle at such things, to swallow hard and to give the Bill a unanimous Second Reading.

Photo of Matthew Taylor Matthew Taylor Liberal Democrat Spokesperson (Local Government, Housing and Transport) 6:08 pm, 31st October 1988

I cannot but start my comments by saying that I join those who have expressed regret that we should be debating the Bill during the parliamentary spill-over period. It is not an urgent Bill, nor is it uncontroversial. I regret that the Government have taken an almost unprecedented decision by introducing it to the House at this stage. It would have been better to have had a lengthier and more informed debate at the beginning of the new Session rather than a necessarily restricted debate during the brief interim period that we are passing through. Nevertheless, we are here and we have heard what the Minister has to say in trying to refute many of the criticisms of those who are concerned about the effect that the Bill will have on certain councils.

The Minister repeatedly told the House about what he saw as the deplorable cash management and mismanagement of a few councillors and councils throughout the country. He justified the impact of the Bill in those terms. I cannot believe that the Minister would say that the only councils to be hit by the Bill will be those which have mismanaged or have used their funds—ratepayers' funds —in what he would term a deplorable way. Surely he realises that many well-managed, honest and upright councils representing all political complexions will be hit by the rigidities of the proposed mechanism that he is introducing.

As the Minister said, it is helpful to know in advance exactly how much money will be received by a local authority. Unfortunately, many councils that have planned their budgets carefully will be jeopardised by the new method of setting the RSG because of the rigidities within the proposed mechanism and the way in which it will be introduced.

The Minister was right to criticise the present system. There is no party dispute about that and we all agree that the present complications cause great difficulties. However, simply to pick a random month in the summer and to project forward from then is no solution. It is merely yet another arbitrary decision on top of many other such decisions which have caused the present complications with the RSG.

The proposal takes away an element of flexibility and local control, and that is particularly damaging. I want to cite a local example of that. As many hon. Members will be aware, my district council, Carrick district council, had to deal with the problems caused by flooding a few weeks ago. No budget was set aside to cover that, but councillors locally and in Truro decided to put money aside to deal with the problem. By supplying drying machines to people who were terribly affected by the floods, they had to put aside money for which no allowance had been made. Under the proposed system as I understand it, the flexibility to take such local decisions will be greatly reduced because the financial impact of taking them will be increased greatly.

The position is made worse by the poll tax, because those elements of extra spending will hit the ratepayer four times harder than they might otherwise have done. If there is no possibility of RSG contributing towards that as it is adjusted in the light of councils' experience of natural disasters, for example, we will reduce councillors' abilities to respond to that type of local difficulty.

Photo of John Gummer John Gummer Minister of State (Department of Environment) (Local Government)

I do not follow the hon. Gentleman. If the expenditure was greater than the expected budget, there might have been a penalty previously. Under the arrangements that we have presented now, that penalty will not take place. The hon. Gentleman's local authority in those circumstances, if they are as he presented them, should be better off. Taking one year with another across the board, we have tried to meet the concerns. However, the hon. Gentleman's worry is imagined.

Photo of Matthew Taylor Matthew Taylor Liberal Democrat Spokesperson (Local Government, Housing and Transport)

I do not believe that the Minister is correct in the case that I have cited. He misses the point that previously the council could have expected to get part of that money back through the rate support grant system in future years as the actual expenditure was accounted for. Under the poll tax, more of that expenditure which the council must deal with locally will multiply into poll tax and so hit the local ratepayer harder and harder.

Photo of John Gummer John Gummer Minister of State (Department of Environment) (Local Government)

I am not sure that the hon. Gentleman has got that quite right. If his local authority is sensible, as I am sure he thinks it is, he will find that, because of the new needs basis for grant, instead of it being penalised because other authorities have been big spenders and attracted more grant proportionately than perhaps they should have, his council will get a grant based on its needs. If the hon. Gentleman is talking about real needs, he will find that the grant meets those needs. The community charge can be charged at a standard rate around the country. I think that he will find that, under the community charge, because it is a community charge and not a poll tax—that is why I always argue the case—the effect is exactly the opposite. He should look at this again because it is important that we argue about things about which we disagree rather than about something upon which in the end he will agree with me.

Photo of Matthew Taylor Matthew Taylor Liberal Democrat Spokesperson (Local Government, Housing and Transport)

Obviously we cannot finalise the argument now. Perhaps we can take it up in correspondence. However, where councils have to deal with unexpected events and put aside money which was not planned for or could not have been planned for, councils will be hit harder in future rather than hit less hard, as the Minister suggests.

There is no dispute that some local authorities will be hit by the proposal and others will be windfall gainers. The explanatory memorandum to the Bill shows that the Government are not certain which way it will go. It states: As a result the aggregate amount of block grant payable for the years 1985–86 to 1989–90 may be more or less than if block grant entitlements were based on total expenditure. As that is a move away from flexibility which would allow local decision makers a say in their budgeting, it is an interesting irony that there are changes happening at the moment in Bradford. There have been substantial changes in Bradford's policy over the past few days.

On 7 July 1988 Bradford was controlled by the Labour party. The Tories inherited the expenditure levels as of 7 July 1988, but are now undertaking massive changes of policy to make drastic cuts. The straitjacket that the Government are imposing, whatever the Tories in Bradford do from now on, however many cuts they make and whatever savings they make, means that they will receive the same amount of RSG. They will not receive back the RSG taken from them for previous overspending. They will be affected like some other councils about which we have already heard which will lose the advantages of previous expenditure cuts. In other words, Bradford will be penalised permanently by this Government for the Labour administration's decisions on expenditure, whatever cuts are made.

A noticeable part of this legislation is the increase in revenue that will accrue back to the Treasury. We have heard different figures for that. The Minister claimed that the reason for parts of the money aspects of the Bill was that the Government are afraid that they might not get money back and actually might put out more money. The fear remains—and this is the strong belief of people in local government to whom I have spoken—that, in effect, there will-be a net outflow from local authorities of cash which has been built up over the years which they might expect to receive, but with the Treasury benefiting when the local authorities must accept extra costs associated with Government legislation, including the poll tax. Some local authorities could have expected reduced expenditure to bring back some of the extra grant that they have lost.

Both Wolverhampton and Merton reduced expenditure and believed that they would receive additional grants as a result. They have been two-timed by the Government. Wolverhampton expected £2 million additional grant from expenditure reductions in 1987–88 and 1988–89 which are now lost. Merton's final accounts incorporate expenditure reductions of £15 million for which no additional grant will be forthcoming.

Those are the kinds of problems and unfairnesses inflicted by the Bill's rigidity. Were the Government to have introduced this Bill after the Queen's Speech, we might have had more time to consult to ensure that such problems did not arise.

Photo of Mr Barry Field Mr Barry Field , Isle of Wight

Will the hon. Gentleman explain how tenants of GLC retirement homes were two-timed by the Liberal-controlled borough council which played politics rather than making progress and looking after people by turning its face against the purchase of GLC retirement homes on the Isle of Wight? As a result, those homes now belong to North British Housing Association and the rents are increasing considerably. Many Conservative-controlled district councils negotiated with the GLC and bought in the local GLC homes to the considerable advantage of the local population.

Photo of Matthew Taylor Matthew Taylor Liberal Democrat Spokesperson (Local Government, Housing and Transport)

I am amazed that the hon. Gentleman used GLC homes as an example of how the Government's policy is right. There are GLC homes in my constituency. The hon. Gentleman said that houses had been bought by a housing association. The pensioners in those properties are now suffering the consequences of massive rent increases. Had those homes stayed in the public sector, and had the London Residuary Body not sold them, that would not have happened. I receive a constant flow of pensioners who are bitter about the way in which the Government have let them down. They are bitter because the Government abolished the GLC, maintaining that that was power to the people as it would help them. Those pensioners now have to pick up the tab.

Photo of Mr Max Madden Mr Max Madden , Bradford West

There have been many references made in this debate to Bradford. Does the hon. Gentleman know that Tories there are now saying to council tenants on the Lower Grange estate that they can have no hope of new council homes being built on that estate, which is something that they have been promised for many years? Those tenants have been given an ultimatum that they must either co-operate with a housing association in developing that estate or the houses will be allowed to become derelict and the land sold to private developers. That is the kind of Tory democracy that is now confronting tenants of a Bradford council estate: "Either you co-operate with a housing association or you will not have a new home in the foreseeable future."

Photo of Matthew Taylor Matthew Taylor Liberal Democrat Spokesperson (Local Government, Housing and Transport)

The hon. Member gives a good example of the way in which tenants are frightened by the implications of the Bill in terms of rent and the development of their properties. Those councils that would like to act are hamstrung by the kind of expenditure controls we are debating today.

Some authorities will lose while others will gain. The outcome will be arbitrary because the Bill's provisions are not sufficiently flexible and cannot meet local needs in the way that local authorities can respond to them. The Minister repeatedly defended his actions by giving the example of a small number of councils that were not exercising proper management. The Bill itself is not exercising proper management in Government terms in respect of the vast majority of councils that will be affected. Some of them will be hit by these proposals, while others may gain in an arbitrary way simply because those councils that have tried to work the Government system, to manage matters sensibly, to look to the future and create some stability, are having the rug pulled from under their feet now that a different system is being imposed upon them.

When the Secretary of State for the Environment made his announcement on 7 July, he stated that he proposed to set a level of 4·7 per cent. for next year's settlement for England. He said: That increase is slightly above the anticipated level of inflation."—[Official Report, 7 July 1988; Vol. 136, c. 1200.] The country's "anticipated level of inflation" is rapidly changing and I understand that the Chancellor of the Exchequer may be coming to the House tomorrow to give the House an update. I use the word "update" advisedly. May the House be given a guarantee by Ministers that a degree of flexibility will be exercised by the Government in matching the needs of councils under a changing inflation rate?

What special efforts will the Government make in respect of the extra costs that central Government often impose on local authorities, which in turn increase their costs above the general rate of inflation? If account is not taken of that aspect, the Government's promise that the new system will be more helpful to local authorities, will more closely match their needs, and will give them a long-term ability to plan will not be fulfilled.

I look forward with interest to hearing the Minister's response at the end of this debate.

Photo of Mr Robin Squire Mr Robin Squire , Hornchurch 6:22 pm, 31st October 1988

I begin by apologising to my own and the Opposition Front Bench if I am slightly delayed in returning to hear the closing speeches. If I miss the beginning of them, I shall read those speeches in Hansard, and certainly my hon. Friend the Minister can be assured that 1 shall be joining her in the Lobby in support of the Government.

I welcome, however belatedly, my right hon. Friend the Minister for Housing and Planning to these rather arcane matters. I believe that this is his first local government Bill. He may well hope that it is his only local government Bill. Many of his predecessors thought the same, but over the years they found in practice a substantial chunk of legislation being introduced. I speak as someone who has served on not a few of the Standing Committees.

This is a promising measure. It is not as large as its putative dad—the Local Government, Planning and Land Act 1980—but it bears reasonable comparison with the Local Government Finance Act 1982, to which I shall also refer, because it has certain family links.

A wave of nostalgia started to come over me when I heard my right hon. Friend imply that this is a simple little measure. I turned immediately to page 14, schedule 2 to the Bill, where, in paragraph 4(3), the formula for arriving at expenditure levels is given: In the case of an authority which is a charging authority but is not an education authority the appropriate formula is—(TE x Z) + CC. As experts in this kind of debate, we can all tell my right hon. Friend that we know such things off by heart, and that it is only the world outside which wrongly finds them a fraction confusing.

That was not the only element of nostalgia. For one moment in my right hon. Friend's speech, I thought that I detected phrases such as, "This is going to be a better system," and "This system will measure need as never before." 1 believe my right hon. Friend and that it will do so. However, I must utter a solemn warning. The last time that I can remember almost those exact words being uttered in this Chamber was when the then Secretary of State for the Environment introduced what became the local Government, Planning and Land Act 1980, when we were also told that it would "measure need as never before." I invite other right hon. and hon. Members to say whether it did. In case my tight hon. Friend the Minister does not recall who the Secretary of State was, I can tell him that it was my right hon. Friend the Member for Henley (Mr. Heseltine). There must be a warning there for all of us.

As to block grants, which were at the heart of the 1980 Act, I have a confession to make, at least to newer Members of the House, because my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) and I were the only Conservative Members who voted against that measure.

Photo of Mr Robin Squire Mr Robin Squire , Hornchurch

I shall pretend that I did not hear that noise from my hon. Friend the Member for Wokingham (Mr. Redwood).

If these are not the last rites, then this is the semi-final stage in recognising that the percipience shown by my hon. Friend the Member for Selly Oak and myself in 1980 is receiving its due reward and that a system that was never likely to stand up to the strains that we were bound to place upon it is now admitted to be a fallible and failing system that needs to he removed. I have no regrets about the disappearance of block grants.

The Bill in general is a fairly ordinary transitional measure, although, as right hon. and hon. Members on both sides of the House have pointed out, there is bound to be an element of rough justice when one says that, after a fixed date, one will work to a slightly different system. That would be memorable and worthy of comment only if it could be said that the present system has, by and large, delivered other than rough justice over the past eight years. Most of my hon. Friends and a number of Opposition Members would undoubtedly claim that the system has neither rewarded virtue nor necessarily penalised vice—if only we could say that it had—but the element of rough justice has been there from the very beginning, and it is certainly continued in this Bill.

I cannot complain about that, but I hope that my right hon. Friend the Minister will bear in mind the comments made by my hon. Friend the Member for Spelthorne (Mr. Wilshire), that if, as a consequence of the Bill, one or more authorities obviously suffer financially in a major way, he will give that matter his consideration. At present, nobody knows what the outturn will be in two to three years' time, but it must be right in principle that local authorities are answerable more to their electorate and less to the Government.

I welcome the statement that the Bill should also reduce the scope for creative accountancy. It may be claimed that it will remove such scope; I prefer the word "reduce." Speaking as a former local authority finance chairman back in the mid-1970s, in the days when one could still discuss in public the fact that one proposed leasing the odd item or two, I am sorry that some of the flexibility that used to attend local authority funding is no longer there. None the less, the system has been tightened up for a number of reasons, the main one being that a very small number of authorities are going way beyond what we might reasonably have accepted as being the ordinary to-ing and fro-ing between parties, which has provoked the inevitable response.

Photo of Mr Tony Banks Mr Tony Banks , Newham North West

The hon. Gentleman is very learned and wise in the ways of local government. It is a pity that his Front-Bench colleagues did not listen to him more often in the past. If they had done so, they might not have made so many mistakes.

The hon. Gentleman was a finance chair in the mid-1970s. Does he agree that at that time central Government interfered far less in the financial affairs of local authorities, and that made it unnecessary for local authorities to become involved in creative accounting?

Photo of Mr Robin Squire Mr Robin Squire , Hornchurch

Some marvellous suggestions are being put to me. First, I should upset some of my colleagues if I did not say that I was a chairman rather than a chair.

Let me turn to the hon. Gentleman's substantive point. According to my memory of 1975–76, the doors came down with a dirty great clang and every local authority suffered as a result of IMF borrowing. The hon. Gentleman may be right in saying that the details of control between central Government and local authorities were very different—and, of course, there was a very different financial system—but the impact of that Labour Government and the cuts required in one year were way beyond anything contemplated either under the present Government or—as it seems to be the flavour of the night—by Bradford council.

My next point concerns the abolition of certainty of grant entitlement. The key benefit of the system to local authorities will be that before each financial year they will know the exact amount of their grant. That, too, sets certain bells ringing in my long memory. Some people will remember a little measure called the Local Government Finance Act 1982. Its centrepiece at one stage was to be something called "mid-term holdback". I suspect that my right hon. Friend's advisers in the Civil Service will have been kind to him in his first few months and will not yet have tried to bounce mid-term holdback on him. If they have not, he will find, if he looks again at the record of our past discussions, that there was an attempt to ensure that local authorities would not be able to know at the beginning of each year how much income they would receive. That was scheduled to be part of the 1982 measure, but it fell among thieves in Committee. I speak as one of the aforementioned offenders. When the Act emerged that provision was no longer part of it. I am delighted that we recognise the importance of local authorities being able to plan ahead and being certain about their budgets.

I do not wish to say too much about Bradford, because it might then become the flavour of the year. I do not, of course, object to hon. Members who represent the area putting their case as forcefully as they can. But, as a former finance chairman and leader of the council, I must say that if cuts of 1 or 2 per cent. are being discussed—I shall give way if the figure is dramatically different—that is something less than catastrophe. It is very much less than the cuts imposed across the board by the Labour Government in 1976. Let me also make the obvious point that if Bradford council's actions turn out in practice to be as unpopular as was suggested by the hon. Member for Bradford, West (Mr. Madden), the political consequences will be plain. My own feeling from what I have read so far is that they may turn out to be surprisingly popular among the majority of the electorate.

Let me conclude my—I hope—shortish speech by reaffirming my belief in local government, whether we are talking about Bradford or about local authorities in general. That bears some resemblance to the sentiments of the hon. Member for Birmingham, Perry Barr (Mr. Rooker), who rightly said that independent local government is an essential part of the structure of government. By that I mean a council that is able to determine its own priorities—they must not be imposed on it—and is able to raise a substantial chunk, if not all, of its revenue from the local people to whom it must ultimately be accountable.

With those words, I give the Bill my best wishes and commend it to the House.

Photo of Mr Robert Litherland Mr Robert Litherland , Manchester Central 6:34 pm, 31st October 1988

We have heard several references to the needs of various authorities, and the assessment of those needs. I find it rather bewildering, because I could not assess the needs of Sheffield, Bradford or Newham. I have always thought that that is what local authorities are there to do—to assess the needs of their areas. I can give my views on an area that I know—Manchester.

Let us look at the history of Manchester, which is a core city. Since 1961 there has been a rapid drop in its population. The younger and more able, the more professional and probably the more affluent have moved to the suburbs, the green belt and the new towns. With the advent of more cars, they are now able to commute into the city. In 1961 the population was 657,000; in 1987 it was 450,000.

People are still leaving the city, but for different reasons. They are now leaving in search of jobs. In desperation, some are even emigrating. Left behind are the less skilled, the disabled, the elderly—all of them dependent on the welfare services provided by the local authority. On top of that Manchester must still provide for the funding of its libraries, its art centres, the Hallé orchestra, its theatres and all the amenities expected of a major city.

In the past few years, however, there have been vicious rate cutbacks, on central Government's assessment. The only people who are really affected are the ordinary people of Manchester, the very same people who were dealt a humiliating blow as manufacturing industry shed thousands of workers, and closures brought in their wake family breakups, more medical referrals and even suicides. But the most tragic expression of deprivation is the high premature death rate.

Deprivation in the inner city meant more demand for local authority welfare services, but those services were diminishing because of the lack of Government support. Then along came the cuts in benefits, and we now have the problem of a poll tax. The effect is manifest in the present poverty in Manchester. A recent report highlighted the number of people who lack or are even denied resources that should be accepted as essential—resources for heating, indoor toilets, damp-free homes, beds for everyone in the household, clothing and nutritious food. Those are hardly the luxuries of life.

A recent survey shows that about 30,000 people in Manchester live in homes without essential heating; about 20,000 homes are affected by damp; about 80,000 people do not sit down to a roast joint or its equivalent once a week because they cannot afford it; approximately 20,000 households contain at least one person who lacks a warm waterproof coat; and nearly half Manchester's residents are unable to afford a week's holiday away from home other than by staying with relatives.

Those are real needs and they should be assessed by the local authorities. If a local authority wishes to raise revenue to meet those needs, it should be able to do so. The democratic procedure is already there. If the rates are put up and the voters do not like it, they have something called a ballot box. They can kick out any councillor or Member of Parliament, if they so wish.

Photo of Mr Nicholas Bennett Mr Nicholas Bennett , Pembroke

Is it not true that in Manchester only 25 per cent. of the voters pay rates?

Photo of Mr Robert Litherland Mr Robert Litherland , Manchester Central

I do not know where the hon. Gentleman gets that figure from. He probably thinks that council tenants do not pay rates, but that is a red herring. The notion that one section of the community keeps another section is wrong. The truth is completely different.

The survey was based on "Breadline Britain." It set out the minimum standards of living that are considered to be acceptable and a list of the necessities that provide a reasonable standard of living. One of the criteria was whether people are able to afford the basic necessities of life or whether they have to go without. The survey found that 54 per cent. of households with at least one person unemployed in the household cannot afford three or four of the necessities of life, that one-parent families are particularly at risk and that one half of black and Asian householders go without three or more essential items because they cannot afford them. It also found that 29 per cent. of pensioners living alone are poor, that a high proportion of them are in deep poverty and that they cannot afford five or more essential items.

The survey found that 40 per cent. of households that include a person with a disability or long-standing health problems are living in poverty, that council tenants are three times more likely to be living in poverty than owner-occupiers and that large families are especially vulnerable. It found that in Manchester 36 per cent. of large families are poor. Most of these people are accumulating big debts. They are falling victim to the loan sharks. That is job creation; the Government probably regard it as private enterprise. To be in debt, however, and in the hands of unscrupulous individuals only compounds the misery of the people of Manchester.

The lives of the majority of the people of Manchester are drab and fall far below average expectations. Mancunians, however, are independent. All they ask is to be treated as members of a civilised society. They have not developed a dependency culture. All that they want to do is to work so that they can obtain the necessities of life that will give back to them the dignity that they enjoyed years ago.

The Government could assist by providing realistic funding for local authority activities, just to help to ease the inequalities of life. However, if it is a Labour-controlled local authority the Government say that its activities must be curbed. The Conservatives sell off cemeteries for peanuts, buy them back with ratepayers' money and nothing is said. That is creative accountancy, but Labour local authority power or trade union power has to be crushed. That is the kind of sinister centralisation that is going on now. I used to be a Manchester councillor. I would not want to be a councillor now, because in future councils will be central Government agencies.

Photo of Mr Robert Litherland Mr Robert Litherland , Manchester Central

No. The hon. Gentleman has only just walked into the Chamber. I have been here since 3.30 pm.

My hon. Friends have referred to the inequalities of life. There is a report in The Guardian today of a London insurance broker who makes £5,500 a day. It says: Mr. Bill Brown, chairman of Walsham Brothers insurance brokers, earns more than £2 million a year. What sort of society can accept that standard of living while it stands by and sees the elderly dying of hypothermia and children going without proper meals? That is a sick society—greedy and lacking in compassion. Only a sick Government would heap more injustices on ordinary people. I can refer only to the people of Manchester, but I am sure that every Opposition Member could refer to what he sees and hears in his local authority's advice bureau and would reach the same conclusion.

Photo of John Redwood John Redwood , Wokingham 6:44 pm, 31st October 1988

I welcome the transitional system that is outlined in the Bill and the new system to which my right hon. Friend the Minister for Housing and Planning referred in his opening speech. I hope that the new system will define need fairly simply and that it will relate it to the number of people in different age categories. I hope that it will also take into account the fact that, while some councils are experiencing a constant migration of people, as we have just heard is happening in Manchester, and feel that their needs are special, other councils that are attracting enterprise, prosperity and new business have to spend money on providing the infrastructure and services that are necessary to receive those people and provide homes, roads and other facilities for them. I hope that their needs will also be taken into account.

When my hon. Friend the Under-Secretary of State replies to the debate, I hope that she will answer one question that I could not work out from the statement. If a relatively low-spending council is none the less over grant-related expenditure and therefore out of grant, will it be eligible under the transitional arrangements for some of the money that is to be provided towards the cost of the community charge? All councils will have to face that cost, whatever their position may be in relation to GRE. Some of the councils that are out of grant have run their affairs prudently. If other pressures are reflected in their budgets, that does not mean that they have been feckless with ratepayers' money.

I hope that the transitional system will continue to take into account the way in which some councils have been squandering their cash. Reference has already been made to some of the excesses. Not many years ago the Leader of the Opposition felt that he had to intervene in the then state of Labour local government and castigate one of the great bastions or fortresses of Socialist local government, Liverpool. He reminded Liverpool council that it did not become it well if councillors were seen scuttling around in taxis paying out redundancy money to staff who had been recruited not very long ago during the council's great spending splurge.

To those of us who hoped that that might represent the nadir of Labour local government, it is ironical that we should now be witnessing events in Brent where things seem to have come to an even sorrier pass than they did in Liverpool only a few years ago. When grants and rate capping are looked at again by Ministers, I hope that they will ask Brent council hard questions. I hope that they will ask why rubbish is uncollected and lying in the streets and why ratepayers are not being given even the basic standard of service that they have a right to expect from that local authority, even though the spending seems to be going on at an ever-increasing rate.

Photo of Mr Tony Banks Mr Tony Banks , Newham North West

If the hon. Gentleman considers the impact of this Bill on the London borough of Brent, he will see that it is to be one of the major losers. The Bill means that it will lose £9 million.

Photo of John Redwood John Redwood , Wokingham

I am glad that the Minister has already heard my point. Brent deserves to lose money because it has been wasting it profligately.

To turn to the flavour of this debate, Bradford council, we see what happens when there is a change of control, albeit by a very slender majority that upsets the opposition. A large number of savings were immediately identified and budget plans were changed. What are to go? Not essential services—the collection of rubbish or housing repairs—but the unnecessary excesses of a large number of committees. The awful waste on the women's committee and the equal opportunities committee will go; so will the racial officers—things for which the public are not clamouring. They want their basic local government services to be delivered well. It is high time that Labour councils recognised that fact.

Photo of Mr Bob Cryer Mr Bob Cryer , Bradford South

Does the hon. Gentleman accept that the picture he has painted of Bradford is completely distorted and inaccurate? The so-called savings by the Tory clique, marginally in office by the lord mayor's casting vote, include £3 million on education and community centres where elderly people meet socially in the afternoon. There has been widespread pressure from ordinary people to keep community centres, but they have been attacked by the Tory council. It is not a question of just a few committees. The budget savings are a massive attack on the people of Bradford.

Photo of John Redwood John Redwood , Wokingham

I am not sure that the people of Bradford will agree. The Conservative administration has said that it will provide the basic services that are needed and will provide services of a better quality and standard for less cash. All Conservative Members welcome that.

I should like to make a plea to Ministers when they come to consider, yet again, the system of capital expenditure and controls on it. Conservative Members —and possibly others—want to encourage councils to continue the sale of unwanted assets, such as houses and flats, to those who want to buy them and who are now being given the opportunity to do so at prices that they can afford. Councils that have done that but that have not run up big bills which result in large debts should be free to spend a reasonable proportion of those capital receipts. Ministers should consider introducing an external financial limit which would hit and penalise spendthrift local authorities which overborrow, but would leave incentives for well-run authorities that receive capital from receipts, particularly from the sale of houses.

I welcome the transitional arrangements. Anything that can be done to make local government genuinely accountable and to make local authorities concentrate on the high quality services that they should provide at a low cost is be welcomed.

Photo of Alun Michael Alun Michael , Cardiff South and Penarth 6:52 pm, 31st October 1988

I want to persuade the Minister that at least one element of the Bill is improper and should be withdrawn. The Bill has been introduced in an atmosphere of rush and panic and is being pushed through with inordinate haste. It is supported by Conservative Members who are of the rabid Right and who show no respect for local government.

By contrast, I, too, have been the chairman of a local authority finance committee, and I agreed with the hon. Member for Wokingham (Mr. Redwood) when he regretted the degree to which freedom of operation has been taken away from local authorities. The apparent simplicity of the Bill is open to question, in view of the Government's record of mindless attacks on local government. However, none of that is my target tonight.

I want to challenge the Minister on the constitutional impropriety in the Bill, which I urge him to correct. My speech could be ended now by an offer from the Minister or the Parliamentary Under-Secretary of State for Wales —who, I regret to say, is not here, but whose constituency, like mine, will be affected by the theft of £3·5 million from Cardiff city council and South Glamorgan county council. I was chairman of the finance committee of Cardiff city council, and I believe that we should aim for a system that meets the slogan of "no taxation without comprehension", as the Minister suggested. That is an excellent aim, but fairness is also essential and cannot include the moving of goalposts long after the game is over.

In his introduction, the Minister made great play of the offer of certainty for the future. Another biblical quotation that will probably not be understood by "She who must be obeyed" is, by their fruits, ye shall know them". I hope that Ministers will listen with care to my evidence. I welcome the Secretary of State for Wales to the experience of hearing that evidence, and hope that he and other Ministers will change their minds on this point at least, if only so that Ministers are seen to keep faith with the House.

Clause 1(8)(b) of the Bill refers to the retrospective operation of arrangements in Wales. Paragraph 3 of schedule 1 relates to arrangements for 1987–88. Paragraph 4(2) refers to the relevant amount in terms of the calculation of the final grant as being "the amount submitted", which in that paragraph refers to estimated rather than actual expenditure. That contrasts starkly with the statements made in March 1987 by the then Secretary of State for Wales and by the Secretary of State for the Environment, that what mattered was a local authority's actual expenditure.

I refer to their statements of 13 March 1987 and 16 March 1987, respectively. What was said to the House—not just in correspondence—was that ultimately the grant paid to a local authority in respect of the year would depend on what the authority actually spent. That is perfectly simple and clear. It is without ambiguity, and it should be adhered to. The rule has nothing to do with estimates, as the Minister tried to suggest earlier in response to my intervention; it has to do with the money spent.

The July statement to the House changed the rule without notice. In case Ministers are in any doubt about it, let me underline the incontrovertible evidence on this point. The Secretary of State for Wales has been told of Cardiff city council's profound dismay regarding the implications of the statement to the House on 7 July whose terms are incorporated in the Bill. The March 1987 report said: Essentially relevant expenditure is the total of revenue expenditure properly debited by a local authority to the general rate fund revenue account. The Secretary of State told Parliament that he intended that the settlement for 1987–88 should give the further certainty of ensuring that each authority's grant entitlement would depend "solely" —I emphasise that—on its own spending decisions and would not be affected by decisions taken by other authorities. Are the ministerial statements about certainty made earlier today as dependable as that statement? If so, they are not worth the air into which they were spoken.

Cardiff city council accepted those statements in good faith as made by the Secretary of State to Parliament in accordance with the law. As a result, substantial reductions were made in the council's expenditure. There were reductions in staffing levels; staff were retired early and departments were amalgamated. As a result of the economies by the council actual expenditure in 1987–88 was reduced to some £1·3 million below the Government's own guideline figures. Those reductions in expenditure were made in the full knowledge and expectation that they would attract substantial extra grant from central Government. They were measures of substance, and in some instances affected the services provided by the city council. They involved no superficial accounting measures such as transfers from funds or other measures of short-term expediency. In other words, they involved none of the expedients to which the Minister referred in response to my earlier intervention. They were reductions in costs within the spirit and the letter of the announcement by the Secretary of State.

There was astonishment and anger on the part of everyone concerned when it was learnt that the Secretary of State proposed arbitrarily and retrospectively that the grant calculations would be made on the basis of information with the Welsh Office by midnight on the day preceding the July statement. The statement was made despite the fact that the relevant forms seeking information about actual expenditure in 1987–88 were not received from the Welsh Office until 29 June, and those forms stated that information should be submitted by 31 July. Those clearly defined goalposts were moved in the statement.

I emphasise that the city council's financial accounts for 1987–88 were closed early in June, and the final position reported to the finance committee on 16 June—three weeks before the announcement by the Secretary of State. If he had requested the information even a day or two in advance of the statement, it could have been provided. If a reasonable deadline had been given, it would have been met. It will be unfair to the citizens of Cardiff if the statement in July is interpreted as it appears to have been interpreted in the Bill. I repeat what I said before the Parliamentary Under-Secretary of State for Wales entered the Chamber: his constituency, like mine, will be affected by the decisions, which constitute a theft of £3·5 million from the ratepayers of Cardiff.

Photo of Paul Flynn Paul Flynn Shadow Spokesperson (Health)

Is my hon. Friend aware that many constituencies in other parts of the country will be similarly affected? For example, Newport in Gwent, which is a good authority, with a fine reputation for providing good services at good value prices, reduced its expenditure by £600,000, but now finds itself in precisely the same position as Cardiff city council. It is about to be cheated by the Government.

Photo of Alun Michael Alun Michael , Cardiff South and Penarth

I agree; and I know that Newport has been efficient. Ministers should accept that, when decisions are taken efficiently and in good faith, the Government should respect them and their outcome.

The arguments that I have advanced were put to the Welsh Office, which suggested that Cardiff city council could have reported the level of outturn. Such figures could have been provided earlier, but a target is not an achievement. It is nonsense to insist on targets being the measure. Secondly, the level of outturn was not what the Government said would be the test. The test that the Government laid down was the total of actual expenditure. It is clear that past practice was to calculate grant on the basis of returns in the forms which show the revenue outturn. Those forms were not sent out until 29 June, and their return by 1 August was requested.

If Welsh Office Ministers wanted those outturn figures by midnight on 6 July, it would have been open to them to have said so when the forms were sent out. I am certain that that requirement could and would have been met.

If Ministers now say that what matters for calculating grant is estimated outturn rather than actual outturn, presumably it would have been open to a local authority to have grossly underestimated likely expenditure, to claim substantially extra grant on the basis of it, and still to overspend without suffering any penalty. That seems the logical consequence of what the Minister said, but it would have been complete nonsense and a travesty of justice.

In any event, our local authorities did not resort to such subterfuges. They simply provided the correct information in the form in which the Government requested it. In his statement of 29 July, when he wrote to the Welsh Office, the city treasurer said: the Council's reduction in costs did not involve transfers from funds or other such financial expediencies, and … the Council would be happy for the District Auditor to check that that is true. What better safeguard is there? Since July, efforts have been made to put the simple facts before officials in the Welsh Office. I hope that Ministers will take account of the representations and evidence that is being presented to them and, during the Bill's passage through Parliament, change at least this element in the Bill.

When the Secretary of State announced the 1987–88 rate support grant settlement, he drew attention to the fact that, by reducing expenditure, local authorities could earn extra grant. We must say that the Secretary of State is going back on that undertaking. That is unacceptable and highly questionable.

The problem is that the conclusive calculation of grant will be based not on authorities' actual spending and decisions—which Conservative Members have told us for the past hour or two is how it should be calculated—but on an artificial basis. The outturn has tended previously to be below revised estimates, so the Government could have expected to have to disburse extra grant. Is this a calculated attempt to avoid being fair and to avoid following accepted practice? Surely not.

Authorities may take decisions in good faith which affect their expenditure and block grant entitlement. Some authorities could have undertaken interim valuations on superannuation funds or taken account of reduced employers' contributions in their revised estimates. Others may have decided not to take them into account until the law was clearer, but have done so when closing their accounts. Why should authorities be dealt with differently because they are more prudent when drawing conclusions on figures?

If the Minister wants to pursue his stated purpose without unfairness and without constitutional impropriety, he is being offered a way out. First, when an authority has, by 7 July, already approved its accounts as minuted by a meeting of the full council or the appropriate committee or sub-committee, grant entitlement should be based on total expenditure as contained in the approved accounts and certified by the external auditor. Secondly, when an authority has not approved its final accounts by 7 July, grant entitlement should be based on final expenditure as certified by the external auditor. Either course could exclude the effects of changes in capital financing policies, in accounting practice and of transfers from funds, so all the points that the Minister made earlier in response to my intervention could be met.

I shall not go into futher detail, but I am convinced that the council's case is overwhelming. If Ministers are unable to respond now, they should read the details with fair minds. I am sure that they will be convinced. The Minister referred several times to the figures received by 7 July and said that if the period was open ended it would allow changes to be made in retrospect. It is the Government who, if they push the Bill through unamended, will be guilty of such practice. The Minister failed to deal with the unfair penalty put on councils, which will have depended on the assurance of Cabinet Ministers that it is actual expenditure that counts.

In his introduction today the Minister said that we should have certainty about the results of certain actions but, in its present form, the Bill tells local authorities, "Do not trust Ministers, even when they come bearing an offer of certainty." Certainty was offered, but it is being stolen by the Bill. There is every likelihood of a legal challenge to the Government because moving the goalposts in this way is so questionable. We are used to the Government moving the goalposts in the middle of the match, which is bad enough, but in this case the posts have been moved long after the match has ended. Moreover, the goal scorers, who have left the field, are being told that their win has been redefined as a defeat.

I am distressed at the Government's onslaught, which has gone on for several years, on local authorities. The Bill takes money from local authorities once again, but my criticism goes much deeper than that. I question the constitutional propriety of the Bill in its present form. I criticise a Bill which seems to legitimise a retrospective adjustment, despite promises made in the House by Cabinet Ministers. I object to a Bill that steals from local authorities assurances that have been given by Cabinet Ministers. I resent a Bill that takes money from local authorities that have observed, met and even done better than the Government's own targets and requirements.

I hope that the Under-Secretary of State for Wales will recognise and support my description of Cardiff city council and South Glamorgan county council. It is accurate. I appeal to Ministers to withdraw from the Bill the element on which I have concentrated and to restore at least a modicum of fairness and propriety. I ask Ministers to recognise the simplicity, logic and justice of my plea. If they fail to deal with it today, I ask them at least to concede the point and to amend the Bill during its passage through Parliament.

Photo of Mr Peter Thurnham Mr Peter Thurnham , Bolton North East 7:08 pm, 31st October 1988

I welcome the Bill, which my right hon. Friend the Minister for Housing and Planning introduced so excellently. I absolutely reject the criticisms made of it by the hon. Member for Birmingham, Perry Barr (Mr. Rooker). He criticised the Government for introducing a Bill in the spill-over session and said that he had analysed other Bills that were introduced in the spill-over.

I cannot think of a better time for the Government to introduce such a Bill as it deals with the problem of spill-over—the spill-over of expense and the use of creative accounting to allow councils to distort their spending pattern and make it appear as though they qualify for a larger grant. It is important to introduce a Bill such as this now so that we can ensure an orderly transition to the community charge. The Bill will stop some of the games of deferring expenditure. If companies use creative accounting, it catches up with them in the following financial year, if not in the same one. With councils, however, there was obviously an opportunity to try to dodge the issue until the community charge came into operation.

The great advantage of the community charge is that it is so much simpler, as my hon. Friend the Member for Wokingham (Mr. Redwood) said. I have never been able to understand the rate support grant system. I understand that it had to be worked out on a computer in America, because no computer in this country was big enough and fast enough to calculate all the complexities of the present system. Everyone, whether or not they understand the system, must be very glad to see the end of it and the introduction of the new system which is based on an assessment of needs. That must be the right and proper method, carried out in a simple way so that each local authority throughout the country charged exactly the same community charge of approximately £200 per head if spending were on a level basis.

Bolton council is calculated to have a figure of £228 for 1988–89—£26 above the national average. I hope that the council will introduce greater efficiencies now, and not wait until 1990 when the full impact of additional expenses will be clear and the community charge for each local authority can be compared.

The new system is much fairer. What could be fairer than everybody paying the same? Obviously, when the system is changed there will be some gainers and some losers, and the losers will not see it in that way. I point out to those who feel that they will be paying more that the alternative would have involved a revaluation. Independent surveys have shown that those who would lose most would include the owners of small terraced properties in the north and those houses which have had central heating fitted since 1973. The notion that how much one should py towards a local authority depends upon how many radiators one has in one's house shows the absurdity of the current system. When it is put in those terms, everyone must agree that the change to a fairer system must be right and proper, and that the old rating system will look as absurd as the window tax in the days when people had to block up their windows. I hope that anyone who has delayed installing central heating in his house will now feel that he can do so.

There will be gainers in the areas where the business rate will fall. I am glad to note that in Bolton there will be an 8 per cent. reduction in the business rate and a £17 million gain to the council from the new way in which the business rate will be shared nationally. Therefore, the new system can be seen as a benefit to the north at the expense of the south and should be welcomed by hon. Members representing the north.

There is the prospect of very exciting changes and developments in Bradford. I very much hope that many more councils will follow the route taken by Bradford in choosing a Conservative council which will bring in much-needed efficiencies and economies, a whole new way of running the council and a wholesale transfer of departments to the private sector wherever possible.

The greatest change for councils when the full pressure of the community charge is brought to bear will be that they will have to be more efficient and conduct their businesses in much the same way as private firms have operated because they are in competition and cannot afford the inefficiencies which a local authority monopoly has allowed to build up over the years. There is enormous scope for improvement in Bradford. It is absolute nonsense to suggest that the people of Bradford will suffer. They will benefit from the changes. I am quite sure that at the next elections in Bradford there will be no need for the mayor to cast his vote because there will be a substantially increased Conservative majority. I hope that there will be the same increase in the Conservative vote in all councils in the country.

Photo of Mr Bob Cryer Mr Bob Cryer , Bradford South 7:14 pm, 31st October 1988

I would be very pleased indeed if there were an opportunity to put the claims made by the hon. Member for Bolton, North-East (Mr. Thurnham) to the test in an election in Bradford, say next year. However, the truth is that the Government robbed the people of Bradford and other cities of an election when they abolished the metropolitan county councils in the major industrial conurbations in London and other major cities. If they give us an election next year, I guarantee that Labour will sweep the board in Bradford and elsewhere.

The Tories have sent a shockwave through the people of Bradford, because the Tory group has been taken over by a handful of political extremists who are now putting forward their politically noxious notions in a way that was never revealed to the voters in May or in the two recent by-elections. There was no mandate for the massive cuts that they propose. That was shown very strongly when 5,000 people demonstrated outside the city hall in Bradford against the proposed cuts. The local evening paper did a service for the community by comparing the proposals of the Tory clique with the claims in the Tory candidate's manifesto at the last by-election which slipped the Tories into power. It reached the conclusion that there was no hint, except in the most general, platitudinous, meaningless terms, of the massive cuts which the Tories are proposing.

The Bill is about preparation for the poll tax. The actions of the Tories on Bradford council are in preparation for the poll tax. We are talking about a city in which there are more than 22,000 people on the dole and a total of 1,700 vacancies. The Tories propose to add 9,000 full-time and part-time jobs, but to create mass redundancies through cuts in education and community provision. A Conservative Member spoke about a narrow handful of committees. However, the three Labour Members representing Bradford have been inundated with requests from ordinary people who feel that their community centres are now hanging on a thread, subject to extinction and being kicked into the dust by the ruthless Tory clique on the local authority.

Photo of David Wilshire David Wilshire , Spelthorne

Will the hon. Gentleman give way?

Photo of Mr Bob Cryer Mr Bob Cryer , Bradford South

No. I do not have the time, because I want to give my hon. Friends time to take part in the debate. Unlike the Tory Whips, we have not had to go round getting speakers. We have plenty to say.

The Tories in Bradford are talking about cuts in education and in community provision. They are shoving up council rents by £3 a week and closing benefit shops that give advice to more than 50,000 people a year. I can give the House an example of what has happened. At a recent social security tribunal, two elderly men were represented in separate cases, one in the morning and one in the afternoon. One of the members of the tribunal told me that the 87-year-old man who wanted to improve his claim from the DHSS for payment to the private enterprise nursing home in which he had lived for more than 10 years because when his £500 savings had gone he would be thrown out could not possibly have represented his case without the benefit advice worker. Between the morning and afternoon cases, the benefit advice worker who had represented that case so proficiently was told that she would be made redundant as a result of the Bradford Tory cuts. That is the practical application of those ruthless measures. There will be charges for home helps, after such charges were removed by the Labour-controlled council. School meals are almost doubling in price, because one of the last decisions of the Labour council was to reduce school meal prices to the second lowest in the country.

Bradford needs an injection of money from the Government. As my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) pointed out, the legislation will mean a denial of £3·7 million to Bradford, yet again. Already local government officials from Bradford have pointed out that because of Government cuts over three years and the working of the multiplier Bradford has been denied £38 million. That sort of money would have helped to put Bradford on its feet. As my hon. Friend the Member for Bradford, North (Mr. Wall) said in a debate on 9 December 1987 —and the position has not changed—

More than 30 per cent. of Bradford's schools were built before 1906. Forty per cent. of Bradford's sewers are more than 100 years old and we have constant problems of collapsing sewers which require renovation or renewal. Our backlog of housing repairs amounts to some £130 million, representing the sum that we would receive in 10 years from the total housing investment programme for our city."— [Official Report, 9 December 1987; Vol.124, c. 513.] That is the scale of the problem. Cutting back will do nothing to alleviate it. In fact, it will worsen the problem and worsen the economic crisis in which Bradford finds itself.

The Tories, instead of cutting back and acting as puppets of Thatcherism and Conservative Central Office, should be standing up to the pressure from the Government and arguing for more money for Bradford. An old industrial city needs a higher level of investment. For example, there are 500 temporary classrooms in our education system. We have expanding school rolls, unlike most major cities in our country. Money that has been allocated for increasing permanent accommodation has now to be used to repair temporary classrooms because they have been temporary for so long that they are sustaining damage that was never intended. That is the sort of problem that needs to be solved in Bradford.

The Tories have written their death knell by the extremism of their views. The majority of Bradford people will never forgive them for their attack on the citizens and the fabric of a proud industrial city. As soon as there is an election we will run them out and put Labour back in control.

Photo of Mr Marcus Fox Mr Marcus Fox , Shipley 7:23 pm, 31st October 1988

I was intrigued by the speech of the hon. Member for Bradford, South (Mr. Cryer). He should be careful when he talks about Labour winning back local government seats. With his wafer-thin majority, he will be hard pressed to win his seat in Parliament at the next election. I remember when the hon. Gentleman was my neighbour in Keighley. It is a shame that his views have not changed since he left there. I welcomed his departure to Europe. In one way it is a shame that he is not still there. One would have thought that with his experience in the House over past years he would have a new message to give. That is not the case. He has learned nothing.

I support the Bill. The present rate support grant system has outlived its usefulness and has to go. I welcome the orderly transition that is intended. It may be difficult because it is not based on actual spending. The Opposition love actual spending, not spending needs. I welcome the fact that, if our councils are prudent, they will know exactly where they stand.

I hope that you will forgive me, Mr. Deputy Speaker, if I spend some time talking about Bradford. I have represented the area for longer than anyone in the House. The biggest problems I have to face are the hon. Members for Bradford, North (Mr. Wall), for Bradford, South and for Bradford, West (Mr. Madden). They have done little to restore the fortunes of Bradford. Their policies have done the reverse. It is interesting that they still talk as if we have not had nine years of growth and expansion and as if things in the city were not considerably better than when their party was in government.

I wish to mention another "moderate", the hon. Member for Workington (Mr. Campbell-Savours). He has seen fit to draw the attention of the House to a conflict between my outside interests and my chairmanship of the Committee of Selection. I take great exception to that. I fulfill the duties placed on me by the House and declare all my interests. I find it objectionable that it has been suggested that after four years I cannot carry out the job for which I was elected. It is all supposition. If anyone wishes to raise a question about anything I do on that Committee, he is entitled to do so. It is within the power of the House to remove me.

Photo of Mr Bill O'Brien Mr Bill O'Brien , Normanton

On a point of order, Mr. Speaker. Does this have anything to do with the Bill?

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

This is a Second Reading debate and, conventionally, such debates are wide. However, the hon. Gentleman might be pressing matters a little.

Photo of Mr Marcus Fox Mr Marcus Fox , Shipley

The hon. Member for Workington raised the matter in the House again today and that is why I have referred to it.

Photo of Mr Bob Cryer Mr Bob Cryer , Bradford South

Will the hon. Gentleman relate his comments to the Bill by telling us how much he receives from his 12 directorships and parliamentary consultancies to enable him to pay the poll tax in comparison with one of the employees of the privatised cleaning services company of which he is a director?

Photo of Mr Marcus Fox Mr Marcus Fox , Shipley

If the House, in its wisdom, decides that we should fill in our emoluments, I will do so. The companies in which I am involved provide thousands of jobs to enable people to pay the community charge. How many jobs has the hon. Gentleman provided outside?

Photo of Mr Kenneth Hind Mr Kenneth Hind , West Lancashire

My hon. Friend knows that for eight years I went to school on the fringes of Bradford and for 10 years I worked in Bradford on many occasions. No doubt he will agree that the people who run down a community and constantly repeat what is wrong with it—I faced that problem with the Labour party in Skelmersdale—do that community no service.

Photo of Mr Marcus Fox Mr Marcus Fox , Shipley

I agree with my hon. Friend. The hon. Member for Bradford, South emphasised the point I am trying to make. It is the Labour party's antagonism to the private sector that I find objectionable. Labour Members know that the majority of their constituents work in the private sector, but they still have that attitude. That applies to local government and is why they are opposed to the Bill. They do not believe that the private sector can do anything to provide a better service for the ratepayers or community charge payers.

The game is up for the Labour party in Bradford. It was rumbled. The money had run out and it had had years to do something about it. All ended in failure. The Labour party bought votes because 26,000 people are now employed by Bradford metropolitan council. Councillor Pickles and his brave friends—I believe that they are brave —are talking about 2,500 job losses in five years through voluntary retirement and non-recruitment. How can that be said to be impossible? It is not impossible. We do a great disservice to people who have to pay the bill if we pretend that the number of job losses is larger than that, as some Labour Members have suggested. I have heard the figure of 9,000 mentioned. It is not correct.

Photo of Mrs Teresa Gorman Mrs Teresa Gorman , Billericay

Does my hon. Friend agree that the burgeoning tourist industry in Bradford—I have been on a tour of the Bronte country which included Bradford—might absorb some of those people? The older citizens of Bradford who might be made redundant could act as guides to the interesting sights in and around the city.

Photo of Mr Marcus Fox Mr Marcus Fox , Shipley

I congratulate my hon. Friend on her sense. Of all the tourist attractions in the United Kingdom, Bradford is the fourth most popular. Labour Members say that things will not get better, but we have had a Conservative Government for some time and they will improve. The change of control in Bradford is long overdue.

The hon. Member for Bradford, South mentioned extremists. He must have forgotten the people who have been ruling Bradford for the past few years. Indeed, one or two of his old friends from Keighley have been doing so, and by no manner of means could they be said to be supporters of the Leader of the Opposition. The hon. Gentleman is the last person who should speak of extremism.

As I have said, the change of control in Bradford is welcome, but what did people expect? The idea that economies were to be made was news is nonsense. We stood by the Government's commitment to reduce costs for those who must pay. I wish that Labour Members would spend more time thinking of those who must foot the bill; it is all very well to demand more and more services if one does not have to pay rates or make a contribution. That has been a problem for many years.

I admit a failing of a Conservative Government, which is unusual for me. Before we reorganised local government we should have reorganised local government finance. Had we done so, we might have made a better job of the boundary changes.

Photo of Mr Pat Wall Mr Pat Wall , Bradford North

Will the hon. Gentleman give way?

Photo of Mr Marcus Fox Mr Marcus Fox , Shipley

I always give way, unlike the hon. Member for Bradford, North.

Photo of Mr Pat Wall Mr Pat Wall , Bradford North

I gave way to the hon. Member for Shipley (Sir M. Fox). Is it not true that an all-party delegation from Bradford protested about the loss of £38 million in Government support, which was due mainly to the multiplier—a matter that I raised in the House last year? They demanded that the £38 million be paid to Bradford because it had never exceeded grant-related expenditure. Nevertheless, we lost that money. Had we not—enormous cuts have been made nationally in rate support grant—would it not have solved many of the problems facing Bradford's people?

Photo of Mr Marcus Fox Mr Marcus Fox , Shipley

Various Administrations have experienced much difficulty in deciding how the rate support grant should be worked out. Indeed, when I was a Minister at the Department of the Environment I think that only three people understood it. It has never worked fairly, but it is always a good excuse to blame the rate support grant.

Expenditure in Bradford is £300 million a year and it has debts of £350 million. We cannot claim to have been deprived, but there is still much to be done. The formula has been made clear not only in by-elections that we have won. In May, we won not only Bradford but a couple of seats in wards that were not Conservative controlled.

Photo of Mr Marcus Fox Mr Marcus Fox , Shipley

The hon. Member for Wolverhampton, South-East (Mr. Turner) is preventing other hon. Members from speaking by intervening.

Photo of Mr Dennis Turner Mr Dennis Turner , Wolverhampton South East

I am hoping to speak myself.

The hon. Gentleman said that he was a Minister in a previous Government. Surely he studied all the information and reports from the borough of Dudley and the great city of Birmingham. What is being proposed is not new. We experienced the effects of the Conservatives' experiments with local government in Dudley. There was much talk of frontiers being broken down, yet it was an abysmal failure, and many problems arose in Birmingham. Surely the hon. Gentleman is not saying that this is a new revolution. If he is, the people of Bradford will be on their knees in the next few weeks.

Photo of Mr Marcus Fox Mr Marcus Fox , Shipley

I have considerable difficulty coping with my responsibilities as the Member for Shipley and with being involved with Bradford. I cannot possibly argue the case for Birmingham.

Successive changes in financing local government have failed because they have encouraged spending. Despite increased money being given to local authorities, services have declined and demands have increased. I welcome the community charge because at long last it will get to grips with the problem.

Competitive tendering, reductions in manpower and bureaucracy and performance related pay are not bad ideas. It is not a bad idea to get to grips with the introduction of the community charge in 1990. Why should it be deemed disgraceful that the new council in Bradford should be taking measures to try to make the community charge more acceptable? It is financial prudence; there is nothing secret about it. Opposition Members are concerned about those who have never paid rates, but if measures are taken that mean they will have to pay less in community charge they should welcome what is taking place in Bradford.

The hon. Members for Bradford, North, Bradford, South and Bradford, West harped on about the sale of three old people's homes. They ignored the fact that several million pounds would have to be spent on those homes to bring them up to standards acceptable to the private and public sector. The only way in which that money could be found was by bringing in the private sector. Protection will be given to residents; they will not be turfed out or be any worse off than they are today. That assurance must be given, and in no way would a Conservative local authority embark on that road without making such provision.

The citizens of Bradford metropolitan district are glad that change has come and are thankful that they do not live in Labour-controlled Camden or Brent.

Photo of Mr Tony Banks Mr Tony Banks , Newham North West 7:36 pm, 31st October 1988

I am grateful to the hon. Member for Shipley (Sir M. Fox) for putting me on so many interesting Committees. It was not until I read early-day motion 1526 that I realised he had so many outside jobs. My admiration for him increased when I realised that he is such a busy person. We should be grateful for the fact that he has found time to make his contribution this evening.

I am pleased to see the Under-Secretary of State for the Environment in the Chamber. She is a welcome addition to the Front Bench, and it certainly needed some adornment.

Photo of Mr Tony Banks Mr Tony Banks , Newham North West

I was thinking of intellectual adornment. I should not have been thinking of anything else, as I am sure my hon. Friend the Member for Bradford, South (Mr. Cryer) appreciates.

We have heard from two new Ministers today. The Government's new ploy is to change Environment Ministers, thus presenting moving targets and making it more difficult for us to get to them. I am sorry that two new political sacrifices are about to throw themselves on to the barbed wire of local government legislation. No doubt we shall be able to assist the Minister in the difficult times that she will face in the weeks ahead.

It is a bit optimistic and cheeky, to put it mildly, for the Government to expect to get the Bill through in the carry-over period. I do not know whether anything has been said through the usual channels, but I expect that we shall have some hairy times with the Bill. I see no reason why it could not have waited until the new Session.

The Minister said that the Bill would simplify the grant system for local authorities. Like other hon. Members, I echo the wish for a simpler system of local authority finance, which these days makes the oft-quoted Schleswig-Holstein question seem like something out of Blankety-Blank. A number of provisions in the Bill are iniquitous and inequitable. They will be bitterly opposed by Labour Members.

The Minister said that the Bill would bring certainty as we move towards the new system. He encouraged us not to talk about the poll tax because he said that it had been settled. It might have been settled in the House, but it certainly has not been settled in the country as a whole. The poll tax will undoubtedly remain the central and most controversial issue in local government in the months and years ahead.

The Minister said that we should not reopen the debate, and I do not intend to do so, but we cannot ignore the new system towards which we are moving. It is predictable that we should go towards that new system with a Bill that imposes on local authorities a retrospective set of injustices. The Bill's overall intention is to prevent grant entitlement varying with expenditure for the years 1985–86 to 1989–90 inclusive. The result will be that some local authorities will be left with windfall gains of grant, and other with unjustifiable and unpredictable losses.

The Minister made a big issue of the end of the link between grant and expenditure, which will prevent local authorities from indulging in grant maximisation through creative accounting. Creative accounting has come in for much criticism in the House, with the Minister and Conservative Members attacking it. All that we have had from them are the usual half-truths, caricatures and often downright lies about the way that creative accounting has been used in Labour authorities.I say "downright lies" because I know that Conservative Members have not deliberately set out to lie to the House, but have merely repeated the sorts of lies that have been published time and time again by the loony Right-wing press, such as The Sun, the Daily Mail and the Daily Express. It is amazing that Conservative Members are so lazy that they are not prepared to find out the truth about Labour-controlled local authorities in London and elsewhere. They merely reproduce the smears that are inflicted on local authorities by the press.

Why do authorities go in for creative accounting? Is it because they find it the easiest thing in the world to do? Conservative Members have suggested that the only reason why Labour local authorities have become involved in creative accounting is to spend more money —on women's committees, police committees and gay and lesbian committees. Some have, and I welcome the fact that they have brought this new and necessary dimension into local government. Let us be clear: the amount of money that all local authorities together have spent on those various committees that cause so much offence to Conservative Members is peanuts in terms of the global sum of local authority public expenditure. It is no justification for these wholesale, regular changes in local authority finance and for this continual assault on local authority accountability and democracy, which is all that we have had from the Conservative party since 1979.

Most local authorities have got themselves involved in creative accounting as their only way of protecting services and jobs in their areas. They have spent most of the money that they obtained through creative accounting on maintaining the standard of the statutory duties that they have to fulfil—for housing, social services and education. Those local authorities have been acting in the best interests of their constituents and ratepayers in the face of this hostile Government.

I defy Conservative Members to say that there is any Labour local authority that behaved as reprehensibly as Tory-controlled Westminster, which has become involved in some very shady creative accounting—not in the interests of its ratepayers, but to rip them off. There was the selling of the cemeteries for 1p. When suddenly everything goes wrong, there is the attempt to use ratepayers' money to buy back through compulsory purchase. There was also the scandal of the sale of the freehold of the Tory party's Central Office so that the Tories could sell it on. It is a nice piece of creative accounting, if one happens to be a Tory—

Photo of Mr Tony Banks Mr Tony Banks , Newham North West

Hang on—sell it on to pay off the debts of a general election. That is ripping off the ratepayers of Westminster. If that had been a Labour local authority there would have been demands from the Dispatch Box for a public inquiry, but there was nothing but double standards and hypocrisy. I give way to two hon. Members who are specialists in it.

Photo of Mrs Teresa Gorman Mrs Teresa Gorman , Billericay

Is the hon. Gentleman aware that the advice given to those councillors by members of NALGO, who were highly paid executives of Westminster city council, was that those cemeteries should be disposed of? It is they, if anyone, who should be held responsible. They were men on salary scales of £25,000 to £30,000 a year —of which I am sure the hon. Gentleman would approve —who were giving duff advice to elected members.

Photo of Mr Tony Banks Mr Tony Banks , Newham North West

It is a very poor councillor who shelters behind officers. That is a dereliction of duty, and the hon. Lady should know that an elected member is responsible for his or her actions. It is no good saying, "I am very sorry, but we were badly advised." Conservative Members should start thinking about some of the other examples, such as the Royal Ordnance factories, when Ministers said, "We got some bad advice, perhaps." It is a poor politician who cannot take responsibility for his or her actions.

Photo of Mr Robert Hughes Mr Robert Hughes , Harrow West

Does the hon. Gentleman accept that it is also a poor politician who will not withdraw a comment that he knows to be fictitious? Will the hon. Gentleman confirm that the story that he has given to the House—I accept that it was in one of the newspapers, but the hon. Gentleman's views on the gutter press are well known—is completely fictitious in respect of Central Office? There is not a shred of evidence to support the hon. Gentleman's comment. It is inaccurate.

Photo of Mr Tony Banks Mr Tony Banks , Newham North West

I am confident that the facts that I have given to the House are correct.

Photo of Mr Tony Banks Mr Tony Banks , Newham North West

If I have misled the House in any way, I shall be big enough to withdraw what I said.

Photo of Mr Robert Hughes Mr Robert Hughes , Harrow West

Perhaps when the hon. Gentleman makes those investigations he will look at the fairly important matter of whether No. 32 Smith square ever belonged to Westminster city council. It did not, and this point is rather germane to the hon. Gentleman's comments.

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

Order. Hon. Members should return to the Bill.

Photo of Mr Tony Banks Mr Tony Banks , Newham North West

If we have the public inquiry for which the Opposition call into the affairs of Westminster city council and the facts stated by the hon. Gentleman are correct, they will emerge. For the moment the Opposition are satisfied that a scandal has been under way in the city of Westminster. We need more facts. They will speak for themselves and will show that the facts that I have put to the House are accurate.

Photo of Mr Max Madden Mr Max Madden , Bradford West

Why did Lady Porter not deny it?

Photo of Mr Tony Banks Mr Tony Banks , Newham North West

Yes. I would accept the point from the Minister, but not from a young puppy of a Conservative Back Bencher. Would the Minister care to tell me whether my facts are correct? We must assume that they are, because she has remained in her seat.

There is a great deal of arrogance in the Bill. Local authorities will lose grant which they were entitled to expect to receive. They have made budget calculations and it is grossly unfair, once again, for the Government to change the rules. The Bill's impact is arbitrary.

I shall give the specific examples of three London authorities, one of which, Brent, has been mentioned innumerable times in the debate. Greenwich, Southwark and Brent have reported that they will lose grant because of the Bill. In the case of Greenwich, this is because the Government will assume a higher expenditure figure for 1986–87 than the council spent. The council approved its accounts for that year on 6 July 1988, but of course had not notified the Department of the Environment. The Department will assume that Greenwich spent £102 million when in fact it spent only £93 million in 1986–87. The council will lose £1·2 million as a result. Is that fair? Is the Minister prepared to listen to representations by authorities such as Greenwich when the Bill is seen to have adverse effect on them?

Brent suffers even more. The Department assumes that the council spent £185 million in 1987–88 when the latest estimate available at the time it set the budget was only £178 million. As a consequence of the reduction in expenditure in 1987–88, Brent increased its 1988–89 budget from an original level of £188 million to £195 million. Brent did not submit a form showing the lower 1987–88 spending and the higher 1988–89 spending before the 7 July secret deadline because it was still working out the details of the budget. However, the Department rang the council, secured the higher figure for 1988–89 and confirmed it in writing, but did not ask about the revised estimate for the previous year, which would have been shown on the same form. As a result, the Department is assuming a higher spending figure for both 1987–88 and 1988–89, although the figures are inconsistent, because to have a higher figure in 1988–89 Brent must have had a lower figure in 1987–88. Those figures were reported publicly in March 1988.

As a result of the Bill, Brent stands to lose £9 million in grant. [Interruption.] Tory Members who think that that is a good thing should understand the range of problems in Brent. I am not an unqualified admirer of Brent council. It makes mistakes, but the Government make mistakes to the tune of handing over millions of pounds of taxpayers' money to private companies and it sits ill on their lips to be so critical of a London borough which everyone should know—I am sure that in their hearts most people in the House do know—faces enormous social and economic problems.

I know that a line has to be drawn, and it might be said that some may lose while others gain, but the impact of the Bill is arbitrary, and when Labour authorities have so many problems pressing down on them it is unfair that they should lose anything at all, because they do not have enough to deal with the problems that they already face. I know the Minister to be a reasonable and decent Conservative, which puts her in a fairly unique position on the Government Front Bench, so when those authorities come and tell her the truth of the situation I trust that she will find some room in her heart to give way. If she does not, I assure her that our opposition to the Bill will be implacable.

Photo of Mr Kenneth Hind Mr Kenneth Hind , West Lancashire 7:51 pm, 31st October 1988

I welcome the Bill, as drafted, and echo some of the thoughts expressed by the hon. Member for Newham, North-West (Mr. Banks). If there are genuine arguments, I am sure that Ministers will be prepared to listen. Like the rest of us, however, the hon. Gentleman must welcome the end of the rate support grant system. It is indeed like the Schleswig-Holstein problem, which has already been mentioned, as no one really seems to have understood the basis of calculation. The hon. Member for Birmingham, Perry Barr (Mr. Rooker) said that one could not blame everything on that, and I agree, but the system was not readily understood either by Members of Parliament or by the general public, and its demise is thoroughly welcome.

As supporters of local government, we must recognise that there is a balance to be struck between central and local government. They are like the balances on a weighing machine. As the hon. Member for Perry Barr pointed out, there are two mandates. If a local authority is predominantly of one party while the Government of the day are of another, one view must prevail. That must surely be of the view of the elected Government as having a superior mandate to that of the local authority, and in that circumstance central Government must interfere when local government has not shown itself responsible and has not used the proper mechanisms to protect the ratepayer and the taxpayer in the provision of services.

We have seen many examples. The hon. Member for Newham, North-West mentioned Brent. I could mention other London boroughs. Liverpool is an example on my own doorstep. Those and other councils in the past have proved themselves to be totally incompetent to run a local authority and thus, in the years since I first came to the House, we have had arguments about local government. Targets, rate capping and other devices have been necessary, not because the House wants to interfere in the activities of local government but because a minority of local councils have shown themselves to be incapable of looking after the authorities that they were elected to control and of safeguarding the interests of the ratepayer and the taxpayer.

It does not come well from Labour Members to attack what the Government have done with the rate support grant in recent times. The rate support grant for 1988–89 is £13·575 billion. That is a terrific amount of money and a £1·1 billion increase on the previous year. The county of Lancashire, part of which I am proud to represent, has an increase of 9·8 per cent. in its grant compared with the previous year—that allows for changes in the funding of the polytechnics—and there is no reason, projecting forward to 1988–89, for any responsible local authority to need an increase in funding above the rate of inflation. Yet Lancashire increased its rates by 18·5 per cent. this year. People on fixed incomes, the elderly and families with children have been hit extremely hard by a totally unnecessary increase which was opposed by Conservative councillors who argued that the increase should have been between 6 and 8 per cent.—much closer to the rate of inflation.

Ministers have been obliged to introduce legislation of this kind because local authorities have been seeking to expand the basis of their services into areas entirely unconnected with the services that they are expected to provide. The best example is probably the local authority of the hon. Member for Newham, North-West, who I see is still in his place. That authority is providing two scholarships at a local college for members of the African National Congress. The authority is paying £2,000 per year in fees for each student as well as offering to pay for flights to South Africa and so on. I appreciate the wish to help people in the Third world to achieve a better education, but is that really the function of a local authority? Surely that is something that should be taken on board by the national Government if it is thought appropriate. Yet that is typical of the kind of activity going on in local government which Conservative Members oppose and to which we call attention.

Photo of Mr Tony Banks Mr Tony Banks , Newham North West

First, Newham is an education authority and thus fully entitled to do just that. Secondly, citing such a tiny example among the many services and millions of pounds of expenditure as justifying changes in the whole structure of local government is not worthy of the hon. Gentleman.

Photo of Mr Kenneth Hind Mr Kenneth Hind , West Lancashire

I was brought up on the principle that if one looks after the pennies the pounds will look after themselves. All too often we are told by Labour Members that something is just a drop in the bucket, but if you drip into the bucket often enough it will overflow. We want responsible management of local authorities. That is the aim of the Bill.

Photo of Mr Patrick Thompson Mr Patrick Thompson , Norwich North

If we move to a community charge and the weakening of the link between local and central Government that such a change implies, does my hon. Friend agree that in the longer term there is a case for taking education out of the local authority sector altogether?

Photo of Mr Tony Banks Mr Tony Banks , Newham North West

They will scrap local authorities altogether in the end.

Photo of Mr Kenneth Hind Mr Kenneth Hind , West Lancashire

I will not go down that avenue today as I should no doubt be called to order, Madam Deputy Speaker.

What we want above all is better value for money. The Bill calls for efficiency, to build on what has gone before—on competitive tendering. It will help to prepare the 70 per cent. of the population who have not paid their rates in the past but who will be called upon to pay the community charge and it will soften the burden that they will have to bear. Some 9 million people will pay only 20 per cent. or less, but equally others will be called on to pay for the first time. They will say, "We want good value for our money in the services that the local authority provides." The Government are entitled to meet that challenge and to respect the fact that people are making a contribution towards the services provided.

It is no good arguing about the past. Westminster has been referred to and we have heard a great deal about Bradford. Those of us who live on the fringes of Liverpool cannot escape from its past, when high rates were levelled by a local authority that has contributed to the destruction of Liverpool's economic base. The community charge and the national industrial rate will restore opportunities for new industry by a reduction of 30 per cent. in the industrial rate. Because rates are such a large proportion of industry's costs, that will be a major attraction to industries in other parts of the country to relocate in the Liverpool area.

Liverpool is not untypical of many authorities. Do those who will pay the community charge expect us to spend money on scholarships for the ANC, on gay rights and on racial committees? They expect us to ensure that those authorities are run properly. Some of the Labour authorities are appallingly run. The Comptroller and Auditor General's report 18 months ago on the London boroughs effectively said that they were going bust and being very badly managed. Southwark, the borough in which I have the misfortune to reside when in London, had £24 million of rent arrears that it simply had not bothered to collect. Where is the management responsibility in that? Its management style was criticised and it certainly had no sense of cost management.

The local authorities in Liverpool wanted to take on the Government to such an extent that Liverpool city council was prepared to put 32,000 local government workers on the dole—yet the Government are criticised for introducing this Bill. We have only to study history and the way that many local authorities have behaved to realise the need for this legislation. For the first time, there will be a cut-off point and a new, clearer system that will define the needs of local authorities. They will know at the beginning of the financial year exactly how much money they will have. It is a wonderfully clear system.

There will be an end to creative accounting, such as leasing park benches and lights on bridges. I hope that during the Lancashire county council election in May the public will bear in mind that no effort has been made by the controlling Labour group to make efficient cost savings. Instead, it has imposed an 18 per cent. increase in rates. It wanted to spend £600,000 on expanding the county hall. Fortunately, the Conservative group, supported by the Liberals, voted that down. That money could be spent on old people's homes, social services, education and other facilities—not on bureaucracy.

There has been a problem in Lancashire with competitive tendering. Lancashire wanted the contract for the grass cutting in three local authorities, West Lancashire being one. It bought £100,000 of new grass-cutting machines and then tendered in such a way that 20 per cent. of the county was put together in one tender, effectively cutting out not only the in-house operations of the local authorities concerned, but every other local contractor who wanted to tender. It wanted to ensure that its own in-house operation would get the contract—yet I guarantee that that will not be as cost effective or as cheap as other tenders would have been had other contractors had the opportunity to tender. I and other Conservative Members in Lancashire have written to my hon. Friend the Minister about that, and I hope that a robust response will be given from the Dispatch Box this evening.

Lancashire, like many local authorities, is mismanaged. In an Adjournment debate, the hon. Member for Burnley (Mr. Pike) dealt with capital expenditure on schools in Lancashire last year. Lancashire complained that it had lost a large amount of grant, but it had never applied for it. It did not apply in the priority areas where the Government had indicated that money would be available. It applied in the wrong areas, thereby mismanaging the whole business. We are entitled to call upon local government to be responsible and not to act in such a way.

I support what my right hon. Friends are seeking to achieve. I hope that there will be a more organised, more clearly understood and more cost-effective local government system. I commend the Bill to the House.

Photo of Mr Max Madden Mr Max Madden , Bradford West 8:06 pm, 31st October 1988

I wish to thank three hon. Members who have taken part in the debate —my hon. Friends the Members for Bradford, North (Mr. Wall) and for Bradford, South (Mr. Cryer), who ma de passionate speeches, and my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker), who spoke from the Front Bench. I am especially grateful to him because he spoke passionately and with great effect about the importance of local government to democracy. He said that effective, democratic local government was all important to a democratic society.

Many comments have been made about the city of Bradford, and I make no apology for devoting my speech to democracy in that city. It is under threat because of the actions of the controlling Conservative group, which has absolutely no electoral mandate for the policies that it is seeking to steamroller through the council by means of the mayor's casting vote on all matters. The objection of many citizens of Bradford to that arrangement has been compounded with the announcement by the controlling Conservative group of its intention to retain the mayoralty next year. It is rejecting the convention that has hitherto applied of the mayoralty changing according to political groups on an annual basis. It is breaking a long-standing convention that has been upheld by successive political groups for many years.

An autocratic umbrella guillotine motion was introduced last Tuesday at the first full council meeting under the Conservative controlling group. It means that at all meetings all debates will be terminated, with the mayor using his casting vote, at 10 o'clock. It will be assumed that all motions have been moved and seconded and, without debate by councillors, the guillotine will fall and all motions will be carried by the mayor's casting vote. That is more draconian—[Interruption.]

Photo of Mr Max Madden Mr Max Madden , Bradford West

I am most grateful, Madam Deputy Speaker. I hope to make a brief contribution.

The Bradford council guillotine is far more draconian than anything that is practised in the House of Commons. As we all know, in the event of a tied vote, it is the long-standing tradition of all occupants of the chair to preserve the status quo and not to seek to carry controversial political matters for which there is no popular electoral mandate. We in the city of Bradford face a major challenge to local democracy, and that matter will be reported to the House on numerous occasions.

The vast majority of Bradford citizens feel cheated and betrayed by the way in which Bradford Conservatives have sought to manipulate democracy and are seeking to introduce into our city extremely controversial and unpopular policies. Bradford Conservatives have been dishonest by concealing their plans from the electorate. They were revealed only in late September after the by-elections in June and September and the election last May.

It is extraordinary that the hon. Member for Shipley (Sir M. Fox), a Member of Parliament with 12 jobs, should lightly dismiss the fact that tonight 9,000 people in Bradford are threatened with the loss of their jobs. It is extraordinary that the hon. Member for Shipley should say that, when they voted in the by-elections and the district election last May, the people of Bradford knew what they were voting for—that is, if they were silly enough to vote Conservative. They certainly did not know what they were voting for. It is extraordinary also that the hon. Member for Shipley should speak ambivalently about one of Bradford council's most controversial measures—the sale of 15 old people's homes.

A few days ago, a street ballot was conducted on that issue in Bradford. It showed that 15,000 people are against the selling of such homes and that fewer than 400 are in favour of it. That is an authentic expression of popular view about that extremely controversial issue. The hon. Member for Shipley is no longer in the Chamber. He is obviously looking after the many jobs that he has to perform. For him to say that, when they voted Conservative in the by-election and district elections, the people of Bradford knew that they were voting to sell 15 old people's homes is to mislead the House and the people of Bradford.

The people of Bradford who voted in recent elections had no idea that, if elected to power, the Conservatives would seek to sack 9,000 council staff, sell 15 old people's homes, increase the price of school dinners to 80p a day, increase home help and meals-on-wheels charges, close benefit shops and independent advice centres, or increase rents by £3 a week, and, I guess, by even more next March.

The people of Bradford are angry that the Conservatives' hidden agenda is to go through on the mayor's casting vote. They feel angry that their councillors are being denied full information about council policy. They feel extremely angry that their councillors will be gagged at 10 o'clock at every council meeting so that measures that are deliberately placed down the agenda because they are politically controversial will be steamrollered through on the mayor's casting vote. The people of Bradford feel angry that, already, all council staff have been gagged to prevent them from talking to the media. All members of staff employed by Bradford council have been informed by circular that if they talk to the media about any aspect of their employment with the council they will face immediate disciplinary action. So much for Tory democracy in Bradford. It is a disgrace, and it rightly deserves national attention.

The more that the people of this country get to know about what the Tories in Bradford are seeking to do, the more they dislike it and the more fearful they are that Tories in their own localities will seek to introduce the same policies if they have the same opportunities to mislead the electorate that the Bradford Conservatives have had to mislead the people of Bradford.

Last Tuesday, 5,000 men and women gathered in Bradford to protest against the council's policies. It was the most spontaneous, genuine expression of popular opposition to Conservative policies that has been seen in Bradford for many years. Let my say to some people who may not know much about the political history of Bradford that, since 1980, the Conservatives have been in power, Labour has been in power, and there have been successive hung councils. Do not let us be misled into thinking that Bradford has been administered by Labour for generations, because that is completely untrue. The men and women who gathered outside city hall last week—whole families, pensioners, the disabled, council staff, and workers from the voluntary sector—came together to say no to Conservative policies in Bradford.

Bradford has a proud past. It has many difficulties at present, but it faces a most exciting future. Bradford pioneered public services, especially education. Our people are radical and hard working, with masses of common sense. They do not like being conned or used. They will not allow their families or their city to become the victims of a Tory experiment in southern imported Thatcherism. They know that Bradford needs jobs and community services, not more sackings and community cuts.

Every social and economic index published about Bradford shows poverty in Bradford and that, since 1979, it has been robbed of millions in rate support grant. Even this Bill robs Bradford of still more. Another £3 million will be withheld.

The Bishop of Bradford and other religious leaders—Moslem, Hindu and Sikh—know that Tory council policies will hurt poor people and low-paid families. The bishop has asked all priests in the city of Bradford urgently to report to him on how people will be affected by the Tory policies that are now being introduced in our city.

The sackings and cuts are to reduce expenditure to allow a nil rate increase next year and, thereafter, to reduce the poll tax. The price to be paid by those on benefit and by the low-paid for a small reduction in a high poll tax will be increased charges for all council services and the loss of some services. That is too high a price for the thousands upon thousands in Bradford to be forced to pay. They should not be asked to subsidise the Conservative party or the political ambitions of certain Tory councillors in Bradford.

The hon. Member for Shipley said that people will welcome paying a lower poll tax as a result of the expenditure reductions that Bradford Tories are proposing. At the recent annual Conservative party conference in Brighton, the Minister had the audacity to say that the elections in Bradford were won by the Conservatives on the basis of the poll tax. What nonsense. The leader of the Bradford Conservative group dodged every debate on the poll tax. The Conservatives accused the Labour party of spreading lies and misinformation about the poll tax. They did everything possible to conceal the impact of the poll tax on the city of Bradford. There are only 80,000 poll tax gainers but 220,000 poll tax losers in Bradford. That is the effect of the poll tax on Bradford.

Let us not have any more nonsense to the effect that the controlling Conservative group in Bradford has been elected on the back of the popularity of the poll tax. If that group makes 9,000 redundant and slashes community services to reduce expenditure and thereby reduce the poll tax, it will not be met with popular acclaim. Those who will lose under the poll tax are those who depend on community service for the quality of their lives. If they see a substantial increase in their cost of living by virtue of increased charges for school meals, home helps and all the other services that the council provides, and if at the same time they see the destruction of many other community services, that will not create popularity.

The Conservative party in Bradford will reveal what it has always been over generations. It exists to support the rich and the privileged at the expense of the poor, the underprivileged and the disadvantaged. This will rebound on the Conservative party in Bradford. The price that the Conservative party in Bradford is asking the poor to pay is far too high. They are saying no now and they will say no more loudly as the days, weeks and months pass. Let us have an election to test the popularity of Conservative policies in Bradford. Let us have a district election next year. Let the true candidates who have been proposed for mayor, Conservative and Labour candidates, subject themselves to the people of Bradford. Let the existing mayor stand for election in Worth valley. Let us see whether he can get re-elected so that he can use his casting vote to steamroller through the Conservative party's unpopular measures. Let us talk about democracy, especially in Bradford. The Conservative party is trying to strangle it, and the people of Bradford will not let that happen.

Photo of Mrs Teresa Gorman Mrs Teresa Gorman , Billericay 8:22 pm, 31st October 1988

After the peroration of the hon. Member for Bradford, West (Mr. Madden), I feel that it would be a good idea to bring the debate down a tone or two.

I support the Government's general intention of stopping fiddling during the change over from one form of rate support grant to another. However, I am not euphoric at the prospect of a 9 per cent. increase in the money that is spent on RSG, that increase having been announced in the Government's proposals. It is said that that will amount to £1 billion, and I believe that that sum should be left in the pockets of the taxpayers where, as Mr. Gladstone once told the population, it would fructify and do a great deal more good. When my hon. Friend the Minister replies to the debate, I hope that she will explain in more detail why we need this increase in taxation, for that is what the proposal means.

The Government's purpose has been to reduce the gross over-expenditure within local government. The Local Government Finance Act 1988 will make local authorities tender out a certain number of their services. I look forward to the day when we have digested that part of the Act. We can then introduce new legislation to reduce still further the activities that local government performs. My right hon. Friend the Secretary of State for the Environment has expressed what I consider to be some of the best thoughts on local government, and I am a great supporter of him. He said that local councillors should meet two or three times a year to award tenders and then return to their homes to tend their gardens. They should keep their noses out of other people's affairs as far as possible. That is the sort of local government that I should like to see.

There is ample evidence to show that, wherever local authorities tender out work and introduce competition and the private sector, massive savings are made. That is the way in which we shall help the ratepayers of Bradford, Newham, Brent and elsewhere. I did not understand why the hon. Member for Newham North-West (Mr. Banks) spoke for the hon. Member for Brent, East (Mr. Livingstone), who is conspicuous by his absence, but who knows a great deal about creative accounting. He initiated a great deal of creative accounting when he led the Greater London council. For example, he spent £20 million to try to stop the GLC from being disbanded. That creative accounting was indulged in to try to keep him in a job until he was elected to this place.

Photo of Mrs Teresa Gorman Mrs Teresa Gorman , Billericay

The hon. Members for Newham, North-West and for Brent, East have nothing to complain about. The community charge and the new arrangement for local government will advantage high-spending Labour boroughs. The redistribution of the business rate will do them a favour. Having driven away businesses in their areas by imposing high rates upon them, they will benefit by the new system. They should be thanking the Government and congratulating them on helping them out of a hole.

Photo of Mr Roger Knapman Mr Roger Knapman , Stroud

My hon. Friend is right. Many businesses in northern constituencies will benefit considerably. Perhaps my hon. Friend should give way to the hon. Member for Bradford, South (Mr. Cryer) if he wishes to intervene. It may be that that is the very point that he wishes to make.

Photo of Mrs Teresa Gorman Mrs Teresa Gorman , Billericay

I shall give way to the hon. Member for Bradford, South if he asks again to be allowed to intervene.

Photo of Mr Bob Cryer Mr Bob Cryer , Bradford South

The hon. Lady said that the Bill would curtail fiddling and creative accounting. Will she confirm that she is talking about the way in which councils try to obtain additional moneys because of the crushing pressure of Government policies? Whatever they did was done legitimately. They did not indulge in the illegal activities that Conservatives have got up to in the City, Lloyd's of London and various companies which have come to grief in the criminal courts.

Photo of Mrs Teresa Gorman Mrs Teresa Gorman , Billericay

There is a world of difference between the way in which those in the private sector are answerable to their shareholders and to those who deal in stocks and shares, and the way in which local government has in the past, in many respects, been almost unanswerable to local electorates when accounting systems have been altered to accommodate spending tendencies.

Creative accounting has been getting an extremely bad press today. Like "gay", "creative" seems to have acquired a pejorative meaning, which I deplore. There are many ways in which creative accounting can help ratepayers. The hon. Member for Manchester, Central (Mr. Litherland) moaned and groaned about poor people who are left in the centres of cities while everyone else moves off to the suburbs. I have news for the hon. Member for Manchester, Central—I shall bring it to his attention when he returns—and for many moaning and groaning councillors. Most councils are sitting on a fortune in the shape of land and property, and in many instances they do not have a list or register of it. If it were converted into cash or some means of paying off local debts, councils in some instances would be able to pay a bonus to ratepayers or introduce a rate holiday for several years. Local councils, especially those of Left-wing persuasion, are in many instances sitting on a small fortune. They would be able to convert land and property to cash if they were bothered to do something about it.

Let me give an example. Barking—the hon. Member for Barking (Ms. Richardson) happens not to be present today—has suddenly found enough land to build the equivalent of a new town within the confines of the borough. It has been sitting on the land for donkey's years. Tens of thousands of new homes will be built. The Government are bringing pressure on boroughs to release the land and assets on which they have been sitting for many years. When the land is sold to the private sector for the building of new homes for sale, that will help to reduce the cost of running the borough. Local ratepayers have every reason to be grateful for creative accounting of that sort.

I share to some extent the feelings of my hon. Friend the Member for Wokingham (Mr. Redwood). More of the money that local authorities realise from the disposal of assets should be made available for reducing rates. That would be a creative use of the economic powers that the Government could bestow on local government.

I do not share the idea, which is referred to constantly in the House, that local government must always be on the receiving end of more and more cash. There is no need for local authorities to be doing half the things that they are doing. The elderly are probably much better looked after by contracting out the homes which some need so that they are not subjected to the kind of abuses that we heard about in the Nye Bevan scandal, which was another of our wonderful local government efforts which the ratepayers supported and which the poor people who lived in that institution had to endure for many years.

In my opinion, local government should decide some of those issues, but it should not attempt to provide the services, because when it does corruption and neglect creep in. There is not enough supervision of the direct labour services, and that includes all social services. People get a much better deal as and when the private sector sets the example. In that regard I mention Marks and Spencer, which decides on a certain budget and quality control, but does not try to do the work. That is how we will eventually introduce legislation which does not require increases of 9 per cent. or similar amounts every time we make a change in the system.

We should put all local government services into the hands of the competitive private sector. Only then will we know that the local ratepayer will get a really good deal for his or her money.

Photo of Mr Dennis Turner Mr Dennis Turner , Wolverhampton South East 8:31 pm, 31st October 1988

The contribution from the hon. Member for Billericay (Mrs. Gorman) illustrates clearly the new breed of Conservative inside and outside the House. The hon. Lady would have been much happier if this had been a local government annex or abolition Bill. Clearly she has nothing to say about local democracy, local government and the role that local government has historically played and should continue to play in its relationship to central Government. Her contribution was a typical and classical example of the old adage—she

knows the price of everything and the value of nothing". Clearly the hon. Member for Billericay is very new to local government. She is a new Member of Parliament, as I am, but I spent 20 years in local government and I got a tremendous amount of satisfaction from that, as have thousands of local councillors of all political persuasions, in making a contribution and providing a service to the community. Some of tonight's contributions to the debate do a great disservice to the many thousands of men and women who are public representatives or servants of local government and have contributed in a huge way to our society. They have made significant advances with central Government in trying to provide the services that we all want.

The difficulties in local government have been exacerbated by the return of the Conservative Government in 1979 and the major changes that local government has had to accommodate over the past nine years. Local government has experienced frustration through the on-off availability of funds and the impossibility of any logical planning for services which Parliament has determined local government should deliver. While we talk about the needs of local government today, it must be evident to all hon. Members who take any interest in local government that it is facing problems at the moment. Many of the problems have been born from the Government's failure to come to terms with the needs of local government and to work with local government to achieve the required objectives.

It is said that people pay their taxes in sorrow and their rates in anger. If the Bill is enacted, ratepayers will have every reason to be angry. In some respects we can call the Bill a paving Bill for the poll tax, because that is precisely what it is. The past three Secretaries of State for the Environment, whom I would call faith, hope and charity, have contributed nothing meaningful to the needs of local government.

I want to refer to the problems that my authority in Wolverhampton and the rest of the west midlands will experience as a result of the Bill and the interim proposals in the rate support grant. The difficulty facing my local authority is that, as in previous years, the provision for current expenditure set by the Government is substantially lower than what is likely to occur. The Association of Metropolitan Authorities has estimated that that might be £l billion. I hope that the Minister will answer my queries.

I know that inflation is always the subject of a great deal of controversy. My local authority has submitted its view to the Secretary of State that the levels of inflation in terms of pay awards and interest are not fully reflected in the rate support grant for 1989–90. Legitimately, we are concerned about that. That problem will have an impact on the level of rates that must be set by the authority.

Reference has been made on many occasions to the suggested 9 per cent., or £1·1 billion increase. I believe that that is very misleading. On the basis of the assessment for the current year, it is expected that £500 million will be returned to the Treasury because final grant entitlements for 1988–89 and earlier years were based on estimates rather than on final audited figures. I want the Minister to comment on that, because if that is true we are talking about an increase, not of £1·1 billion, but of £600 million, because £500 million has already been clawed back in the current year.

My next plea is very important in terms of equity and fairness. An arbitrary decision has been taken in the revaluation of the west midlands ratepayers' superannuation fund. Will the Minister please reconsider that arbitrary decision, which is likely to cost the ratepayers of the west midlands £25 million and my local authority an extra £2·7 million?

Photo of John Gummer John Gummer Minister of State (Department of Environment) (Local Government)

Will the hon. Gentleman explain exactly his question on the superannuation fund, because I want to answer him clearly? What would he like us to do?

Photo of Mr Dennis Turner Mr Dennis Turner , Wolverhampton South East

The Treasury and the Department of the Environment have undertaken a revaluation of the superannuation fund. The information that I have from my local authority is that, on the basis of that revaluation, the West Midlands authority has been placed at a disadvantage to the extent of £25 million, and to the extent of £2·7 million in the case of my own local authority. My authority has asked me to raise this matter with the Minister, as it feels that, irrespective of the other decisions that the Government have taken—some of which might be said to be political—this matter is one that he should reconsider.

Photo of John Gummer John Gummer Minister of State (Department of Environment) (Local Government)

I should explain to the hon. Member that it is not a matter of a Government revaluation, but that the West Midlands authority would like to revalue its superannuation fund. However, under present law that would be illegal, so it would not be proper for the Government to give the authority permission to do so—although we may be able to make some changes later. There is no way in which we could make legal that which at the moment is not legal.

Photo of Mr Dennis Turner Mr Dennis Turner , Wolverhampton South East

I thank the Minister for his answer. If he proposes to be fair, he might be able to find a mechanism whereby he can still make a response in order to obviate the loss that the West Midlands will otherwise suffer. I hope that he will take on board my comments and will be in a position to respond positively.

The overall thrust of my argument is that there is a serious element of unfairness in the Bill. I am making the point that my own local authority has been dealt with unfairly and that there is cause for the Minister to reconsider that matter. All local authorities, not just Wolverhampton, know that since 1979 there had been a contribution of about 62 to 63 per cent. from the Exchequer to support local government in all its many services. Now, the Exchequer's contribution is about 46 per cent. That tells people why they are suffering huge indirect taxation imposed by a Tory Government. It is that that has created major problems in our towns and cities over the past few years.

I ask that the Bill be voted down and that, in the run-up to the iniquitous poll tax, greater fairness and equity be enjoyed by local government by giving it the support that it needs to provide the services that the House has, in passing legislation over many years, decided it should provide.

Photo of Mr Martin Brandon-Bravo Mr Martin Brandon-Bravo , Nottingham South 8:42 pm, 31st October 1988

When considering the Bill, one can only wonder why it is that rate support grant was not abolished years ago. My right hon. Friend the Minister, in opening this debate, implied that one of two people in the Ministry understood rate support grant, and my hon. Friend the Member for Shipley (Sir M. Fox) observed that when he was a Minister perhaps three people in the Department understood it. In my humble position as a PPS for a couple of years, well below the salt on the ministerial table, I had a strong suspicion that the only thing that understood rate support grant was the computer, buried in the bowels of the Ministry's building, that produced the figures every year, and that very few people, if any, really understood how it arrived at them.

Given—hallelujah!—that the present system is at last going, my right hon. Friend the Minister is absolutely right in saying that we cannot change from the present arrangement to the community charge in one jump and that there has to be a mechanism covering the interim period. The Bill meets that challenge admirably. If we are to have a break between support for spending, which is crazy, and instead support for needs, however difficult that may be to assess but which makes much more sense than just support for spending, then I welcome the Bill if it can achieve that.

Nobody in the House can doubt that it is the role of Parliament and of the Government in particular to set the totality of public spending nationally. No one can doubt either that, in order to do that, the House must set aside an amount of money—or at least set a maximum—that is to be spent locally. That is a view held not just by my right hon. and hon. Friends, but one that has had all-party support for years. When in government, the right hon. Member for Manchester, Gorton (Mr. Kaufman) made a powerful speech arguing just that point. The right hon. Member for Bethnal Green and Stepney (Mr. Shore), when he was Secretary of State for the Environment, argued precisely that the House was right to control national and local expenditure. He not only said that, but acted on it.

It was in 1966–67, or in 1967–68, when the Labour Government got themselves into a fearful tangle with the IMF, that the right hon. Member for Bethnal Green and Stepney rightly asked local authorities to reduce their expenditure—and this was in mid-year—by £1,000 million. Bearing in mind the inflation that has taken place since those years, one is talking about a very large sum of money. So it sits ill in the mouths of Opposition Members to talk as though constraints on local government spending have only just been introduced by the present Government. They have always been there.

What has been missing in the past few years has been the willingness of Labour authorities to recognise the paramountcy of the House and to act in a voluntary way in meeting Government targets. Because those authorities refused to meet targets in the way convention always arranged in the past, the Conservative Government have been compelled to legislate much more than my right hon. and hon. Friends really would have wished.

There have been cries from the Opposition Benches, particularly from the three hon. Members for Bradford, for more money for Bradford—a voice from the bottomless pit. Their cries and arguments had all the overtones and language of the debates about Liverpool that we had three or three and a half years ago. It was the same story. Liverpool wanted to spend. The councillors there felt that as they had been elected they had a right to spend—but somebody else's money. I recall that at the time I served on Nottingham city council as well as in the House. Nottingham Labour councillors came down to London wearing their stickers proclaiming, "I support Liverpool." I said to them at the time that, apart from the waste of money in coming all the way to London to see me —because, as a city councillor, I could just as easily have seen them in Nottingham—I was elected as a Nottingham city councillor and as a Member of Parliament to represent the people of Nottingham.

I objected then, as I have since and do now, that spending by other authorities—be it in Bradford, Liverpool, or anywhere else—should take money away from a city such as Nottingham, which I represent. If the new system does away with that and makes each city stand up and answer to its own electorate as to how it spends, then we shall have done a great service to local government. We shall have returned to local government the kind of democracy that we all want to see.

Photo of Matthew Taylor Matthew Taylor Liberal Democrat Spokesperson (Local Government, Housing and Transport)

I was interested to hear the hon. Gentleman say that. Is he aware that business men in my part of the country are steaming with anger because their business rates will be raised to reduce the rates of other areas that have spent the money on extra services? They are angry because services have been held down in my area to keep rates down, and they now find that they will be penalised for action taken by sensible councils.

Photo of Mr Martin Brandon-Bravo Mr Martin Brandon-Bravo , Nottingham South

I have some sympathy with the hon. Gentleman. Many local authorities were, in effect, penalised for being prudent under the old system. There is no dispute about that.

Photo of Mr Martin Brandon-Bravo Mr Martin Brandon-Bravo , Nottingham South

No. Under the new system each authority will be answerable to its electorate for what it spends.

Photo of Mr Martin Brandon-Bravo Mr Martin Brandon-Bravo , Nottingham South

No, I will not give way again.

I referred to Bradford because there are a number of similarities between Bradford and the city of Nottingham. The city of Nottingham, too, has a hung council, and for two or three more days its future depends on the casting vote of the lord mayor.

Photo of Mr Martin Brandon-Bravo Mr Martin Brandon-Bravo , Nottingham South

Yes, a Tory lord mayor with a casting vote. But, happily, this Thursday the citizens of Nottingham will have the opportunity to say to their council, "Yes, we approve of what you have been doing in the city for the past 18 months." We hope that they will return a Conservative councillor to replace a Conservative colleague, David Flowerday, who died of cancer three or four weeks ago.

If, heaven forbid, the citizens of Nottingham—for whatever reason—elect a Labour councillor, theirs will be a very unusual council. It will have 27 Labour members, 27 Conservatives and one Communist. The city will then have to depend on the whim of a single Communist for its policies. In this place we sometimes forget just how important local government is and how much effect it has on people's lives. I venture to suggest that the by-election in Byron ward in the city of Nottingham on Thursday is probably more important than some of the parliamentary elections in the coming months.

Eighteen months ago, when the Conservatives won control of Nottingham, they began—perhaps without the drama of the past few days in Bradford—to put their financial house in order, and it is to their credit that they did so without much fuss or publicity. They froze the rate last year: there was no increase in Nottingham city council's rate at the end of the first year of Conservative administration. If hon. Members wish to visit the queen of the midlands, they will now see more businesses, factories and houses being built than in the past 30 years. That is what is at stake on Thursday.

Photo of John Gummer John Gummer Minister of State (Department of Environment) (Local Government)

Before he leaves that point, will my hon. Friend draw to the House's attention that council houses are now refurbished in five weeks, providing homes for those who would otherwise be homeless, whereas under the previous Labour administration it took a year? As a result very few people are now in bed-and-breakfast accommodation.

Photo of Mr Martin Brandon-Bravo Mr Martin Brandon-Bravo , Nottingham South

I am grateful to my right hon. Friend for pointing that out. My Conservative colleagues in Nottingham have received some publicity and some deserved compliments for what was known as the "mini-mod" scheme. Instead of leaving properties empty for months on end and trying to carry out major modifications, they are now handling 1,500 modernisations a year. It is going extremely well, and all credit to them.

We have heard a good deal about creative accountancy tonight. To be fair, all councils—Tory and Labour—have used creative accountancy to some extent. Some of it would make us simply nod and smile, because it was not terribly naughty. If a local authority set its budget to a proper level, it would obtain the maximum grant; that was sensible local authority financial planning. But if the authority found towards the end of the year that it was not going to spend its full budget and was foolish enough to underspend, it would receive less grant under the old system. The local authority, if it had its wits about it, put the money into reserve. That counted as expenditure, so it would receive its full grant. That was called creative accountancy, and I suppose it was, but it was excusable and understandable and no one broke many bones.

What the Bill addresses, and what has happened in the past few years, is creative accountancy of a very different kind. It is much more evil. Financial deals have almost made future generations hostage to the vast debts that those deals built up. I think that the Government were absolutely right to stop those phoney deals and to stop local authorities—whatever their colour—from acting in an irresponsible way that mortgaged the future of those yet to come.

My right hon. Friend the Minister specifically referred to an adjustment being made because local authorities would no longer control the polytechnics. That could not be more germane to my comments about the city of Nottingham. In 1952 I went to what was then called the Nottingham district technical college—and it was the district technical college. Now Trent polytechnic is an enormous institute of higher education. It is far from being the local tech. It is not even the city tech or the regional tech. It is a national—even an international—institution, quite the equal of Nottingham university. The fact that under the new Bill it will be an independent, stand-alone institute of higher education, out of the clutches of the local authority, is the best thing that could have happened to it. If that means a minor adjustment to rate support grant, so be it.

Let us be clear about this. Local authorities have a duty to provide proper services, and they have a duty of care. But, as my hon. Friend the Member for Billericay (Mrs. Gorman) pointed out, having a duty to provide services and a duty of care does not mean that the authority must provide those services and that care. If it can provide more care and more services more efficiently and cheaply by contracting out, then let it do so.

This is what the argument about staffing levels means. Bradford is saying that over a period 2,500 jobs are going —we have heard 5,000 and 9,000 mentioned: think of a number and double it—but those jobs will not disappear. The services are going out to tender, and the vast majority may well reappear in the private sector where they belong.

Photo of Mr Dennis Turner Mr Dennis Turner , Wolverhampton South East

I asked earlier whether we had learnt anything from the experience of Dudley and Birmingham a few years ago when they were under Conservative control. School cleaning in Dudley was contracted out. Within a matter of weeks the schools were closed down because they were absolutely filthy. A report stated that contracting out had been an abject failure. Conservative Members should not say that contracting out is the answer in Bradford or anywhere else. The Conservative party has proved that it is an abysmal failure. In Birmingham, the school meals service was contracted out, but that had to be stopped in no time.

Photo of Mr Martin Brandon-Bravo Mr Martin Brandon-Bravo , Nottingham South

I am sure that the hon. Gentleman will acknowledge that there is good and bad in both the public and the private sectors. I simply make the point that if a local authority accepts that its role is that of an enabling body, and that if it has the mechanism to ensure that a contractor meets his tender obligations, services can be properly provided by the private sector. It has never meant that a local authority can put something out to tender and then turn its back on it and not ensure that it is handled properly. If what the hon. Gentleman described went wrong, that sounds to me like very bad supervision.

Photo of Mr Dennis Turner Mr Dennis Turner , Wolverhampton South East

It went wrong because of greed.

Photo of Mr Martin Brandon-Bravo Mr Martin Brandon-Bravo , Nottingham South

That may be the hon. Gentleman's view. I acknowledge that a local authority has a duty to provide services and care. In most cases, services and caring can be provided by the private sector, with the local authority acting as both the enabling authority and the mechanism whereby it can ensure that in the public interest its services are properly provided. I hope that the Bill will reduce the patronage and control that local authorities have exercised over many people's lives. If that is the result of this interim Bill and of the Bill relating to the community charge, I shall be a very happy man.

9 pm

Photo of Graham Allen Graham Allen , Nottingham North

I am very proud to speak on behalf of my constituency and of the people of Nottingham, having been born and bred there. All Nottinghamians are proud of their city. It is a beautiful place. Its people are some of the finest in the world, but they are very worried. They look up the motorway to Bradford and see what a Tory authority with the slimmest possibly majority can do to a city. What has happened during the last week to the people of Bradford may happen to the people of Nottingham.

The Bradford authority is seeking not to serve the people of Bradford but merely to impress its mistress in No. 10. In many ways the people of Bradford are suffering because their Tory city council is taking the lead from the Tories in Nottingham. The Tory city council in Nottingham does not care about many groups of people. It does not care about the handicapped in the city of Nottingham. There are 643 handicapped people on the waiting list for purpose-built accommodation, but it is being sold off by the Tory city council. It is flogging off that accommodation, thereby creating longer waiting lists and fewer homes.

The Tory city council does not care about the young newly weds who cannot get a home of their own either because the council is not building any more new council houses or because mortgages are too expensive in the city of Nottingham. [Interruption.] know that Conservative Members do not like this, but they are going to have to listen to it.

The Tory city council does not care about its ratepayers. Every person in a household who is over 18 will soon have to pay £252 under the poll tax, yet the Tory city council utters not a word of protest to its mistress at No. 10. It does not care about the green spaces in our proud and beautiful city that are being sold off and asset-stripped. Allotment holders are being squeezed out for private development and speculation. The Tory city council of Nottingham does not care about council tenants whose estates may soon be sold to speculators. It does not care either about the elderly whose hedges are no longer trimmed and whose houses are no longer painted by community programme workers, who now face the dole.

The Tory city council of Nottingham is so incompetent that it has been unable to put correct rent demands before people. The result is that during the past few days the elderly and the disabled in Nottingham have received demands for rent arrears amounting to £500, £600 and in one case £1,000, sums which were unknown to those people. They have built up because of the Tory city council's incompetence. The council is involved in seedy land deals in the city and is stripping the assets of our city fair. A cut of 80 per cent. in Nottingham's housing investment programme has been inflicted on the city by this Conservative Government without a murmur from the Tory city council. That council has crawled on its belly to ingratiate itself with the Prime Minister, when the defence of our city services was needed. The council is not fit to safeguard the city of Nottingham and its assets and services are not safe in the hands of a Tory city council.

The by-election on Thursday will be the day of reckoning for a Tory city council that has followed in the footsteps of Bradford. It will no longer rule Nottingham because we shall have a Labour administration.

Photo of Mr Roger Knapman Mr Roger Knapman , Stroud 9:06 pm, 31st October 1988

You, Madam Deputy Speaker, know how keen the competition is to participate in local government finance debates, so I thank you for calling me.

I have listened with some interest to hon. Members who represent Bradford constituencies and who are suddenly taking a keen interest in local government finance. They have seen fit to sign early-day motion 1502, which suggests that 9,000 employees are to be sacked over five years. There is an amendment to it which suggests that the number is in fact 2,500 and that redundancies will be rare. One can understand why the Socialists think that the greater the number of people working in central and local government and elsewhere who are dependent on the Government, the more likely it is that they will be in a Socialist fairyland.

I am not impressed by the huge march that so impressed hon. Members who represent Bradford constituencies. Bradford has a population of 320,000 and they say that 5,000 took part in the march. The average Labour rent-a-mob is about 50 per cent. home grown and 50 per cent. imported. If one assumes that 4,000 took part in the march, that means that there were about 2,000 people from Bradford in the march out of a population of 320,000. We are happy to fight a by-election at any time on that basis.

Photo of John Gummer John Gummer Minister of State (Department of Environment) (Local Government)

I want to comment on the fact that that crowd filled the town hall, shrieked so loudly that no Tory could be heard and threw coins on to the floor. Does my hon. Friend think that that was a reasonable way to carry on a democratic discussion?

Photo of Mr Roger Knapman Mr Roger Knapman , Stroud

I agree that that is not a reasonable way of carrying on, but I am sure my right hon. Friend will agree that it is a typical way for them to carry on, although the marches and protests of eight or 10 years ago were much larger than anything that we have seen recently, including the little demonstration organised in Bradford. One can understand why the hon. Member for Bradford, South (Mr. Cryer), who has a tiny majority of a few hundred, is desperate to be seen to be doing something. I am sure that his turn will come at the next election.

Local government finance does not generally create such interest as we have seen this evening. My right hon. Friend the Secretary of State for Education and Science, when he was Minister for Local Government, said: In the years that I have been in the House, when I have looked in on such debates, I have soon found that on the whole hon. Members keep away from them unless they have been alerted to attend by their local authorities."—[Official Report, 16 January 1985; Vol. 71, c.413.] I have one small and perhaps narrow point which my right hon. Friend the Minister for Housing and Planning may care to consider. Should supplementary credit approval be granted when the Secretary of State approves a compulsory purchase order under section 114 of the Town and Country Planning Act 1971 in respect of listed buildings? It seems that the local authority has some responsibilities for listed buildings. Some are large, and some are constructed of ancient or traditional materials, and may be expensive to improve or to put into good order. I should like my right hon. Friend's comments on that if possible, because in my constituency there is one listed building in poor repair for which expenditure of about £720,000 is anticipated.

I have been a chartered surveyor for 20 years. To listen to the debate, one would think that Opposition Members were keen on the existing system. Quite how one can even dovetail the existing system with the Opposition's current proposals on the community charge is open to question, but I shall leave that point alone.

I dislike the ever-increasing complexity of the whole system, what with capping, penalties, targets, recycling, holdbacks, slopes and thresholds. I congratulate my right hon. Friend on his new appointment. He has worked in the Ministry of Agriculture, Fisheries and Food, so he is used to dealing with green pounds, ecus and all that sort of thing. He will know how to deal with capping and penalties and he has a ready appreciation of all the matters before us.

I am anxious for clarification of the position regarding historic buildings and the possible liability of councils for them. I do not think that such liability would arise often, but would it be possible to make provision in the Bill to deal with it should it occasionally occur?

Photo of Mr Allen McKay Mr Allen McKay , Barnsley West and Penistone 9:10 pm, 31st October 1988

There are just 10 minutes left before the winding-up speeches. [HON. MEMBERS: "Five minutes."] Conservative Members should not get too excited, or it really will be 10 minutes.

A lot of phrases have been used in the debate. We have referred to the need of the people. I think that we all agree that local expenditure should be directed to meeting need. Opposition Members are concerned with establishing who determines that need. It is local people who determine the need and who vote each year for their local authority representatives to decide how that need is to be met.

Let us consider what has happened since 1979. It should not be forgotten that the problem with local government has been central Government. Each and every year since 1979, central Government have eroded local authority grants. That is what has caused local government problems. Even in the face of that, local government wanted to be left alone and said, "Let central Government determine their grant and let us go to local people and say how we propose, with that grant, to supply their needs." That did not satisfy central Government.

Only two great bodies of people are in the way of the Government's attempts to move control away from local government. One is the trade union movement, against which the Government have repeatedly legislated; the other is local government itself, against which they have legislated continually. It does not take much imagination to realise that in the case of Salazar's Portugal, Franco's Spain and Hitler's Germany such moves led to the establishment of totalitarian states, and that is what we need to guard against.

Schedule 2, paragraph 6(1) says: For the purposes of paragraph 4 above Z is a figure which is 1 or, if the Secretary of State so provides, the figure can be two. The schedule further states: in deciding what figure to specify, the Secretary of State may take into account various factors. Paragraph 6(4) provides: Sub-paragraph (2) above operates without prejudice to the generality of the Secretary of State's powers". Paragraph 7(1) says that for the purposes of paragraph 4 the Secretary of State is to determine the figure. Paragraph 7(2) provides that the Secretary of State shall secure the aggregate, and paragraph 7(4) that the Secretary of State shall specify certain figures and principles.

Nowhere does the Bill say, "The Secretary of State shall discuss with local authority organisations what shall be done". The Bill is moving powers away from local government into the hands of central Government and that is why we protest against it.

Let us not kid ourselves about the poll tax. It is not about local authority accountability to the people. By its very nature, it takes accountability away from local councils. All this talk about improving accountability through the poll tax is hogwash. It is concerned with much else, but not that. At present, local government provides 50 per cent. of the rate fund and the Government provide the other 50 per cent. Under the poll tax, the Government will provide 75 per cent. of the rate fund. Where, then, is the accountability?

In reality, local authorities will merely get the blame for what the Secretary of State does because the only thing that the Government want to do is to destroy local authorities.

Photo of Mr Robert Hughes Mr Robert Hughes , Harrow West 9:14 pm, 31st October 1988

This debate is about a minor matter, although one would think, from the complaints of Opposition Members, that it was a large-scale change in local government finance. In reality, the Bill is merely a winding-up of the old system. It is reasonable and fair.

The ground rules have to be changed, and dates by which decisions have to be made have to be set because, without legislation, there is a risk that some unscrupulous local authorities will engage in bookkeeping exercises that are simply creative accounting. They have become a way of life for some local authorities. How else did Camden arrive at a £15 million gap in its budget? How else did Brent arrive at a similar position? They lived beyond their means and creative accountancy became a way of life. They did that not because they wanted to protect local services or because they were desperate to do something about bad housing, but to avoid making difficult decisions.

Labour-controlled councils have put off the difficult decisions. They have said, "Perhaps we can pay tomorrow. We can think about how to live within our means later." That is how it has been in Bradford.

We have heard much about Bradford today. The incoming Conservative administration has taken the bull by the horns and said, "We have to make these decisions on behalf of people in Bradford. Without them, the long-term suffering will be greater." In one respect, we have not heard enough from Opposition Members about Bradford. "I would have thought that after all that has happened during this week we would have heard at least a few words condemning what has happened to the council in Bradford from the other side this week. I would have thought we would have heard a few words from the Opposition Benches—perhaps from the Labour Members for Bradford city—about the intimidation, the lies and the innuendoes that have been spread about the leaders of the Conservative-controlled council, perhaps condemning the Labour Opposition leader in Bradford who even quoted those lies and innuendo inside the council chamber, even though he must have known when he said it that what he was saying was simply not true."

Opposition Members have not said that they regret what happened in Bradford. Perhaps they do not regret it. Perhaps they ought to regret it. Perhaps they ought to regret the fact that the 68-year-old lord mayor had to have a police guard. The fact that they have not mentioned any of those matters means that we must conclude that they approve of what has happened and that their political friends organised it.

The Bradford revolution, as it has been called, is about protecting services. It will protect people in the long run by making difficult decisions now. If Opposition Members want proof that the Bradford Conservatives are ensuring the future of their city—enabling industry to thrive, creating jobs and wealth and providing better services—they have only to consider the parallel decisions being made by the London borough of Brent. The contrast proves that those who do not make difficult decisions are eventually forced to make them, whereupon they are harmful to local people. The Labour party is culpable. It has done deliberate harm to people in areas where it has political control. The Conservatives in Bradford are protecting people in Bradford.

Labour Members are worried about something that Councillor Pickles said at the Conservative party conference. He said: If we can do it in Bradford, we can do it anywhere. He is right. If they can protect their services and transform the economy in Bradford by what they do in the council chamber, it can be done in any of the other northern cities. I believe that the Labour party is desperately worried about what will happen to its vote in those areas when people see the success that Eric Pickles and his colleagues will bring to the economy, understand what they are doing and vote that council into a majority so that it can continue with those successful policies.

Photo of Mr Bill O'Brien Mr Bill O'Brien , Normanton 9:19 pm, 31st October 1988

The hon. Member for Harrow, West (Mr. Hughes) described this issue as a minor one. That point reflects the general view of Tory Members who consider the financing of local government to be a minor issue. The Bill, which represents a further cut in the rate support grant, and tightens the regulations restricting capital expenditure by local government, is a deliberate move to prevent local authorities from embarking on expenditure to provide the services needed by the people served by local government. There is no doubt that the Bill seeks to portray the way in which the poll tax will apply and at the same time to discredit the present rating system. It restricts local authorities in improving the environment and providing the services that people rely upon in the cities, towns and villages throughout England and Wales.

The Bill is cruel and dishonest and does nothing for local government. The Minister referred to changing the grant title to the needs grant. All we require now is to add to that the resources element and we shall be back to where we were in the 1950s and 1960s when the rate support grant was made up of needs and resources elements.

Will the Minister identify how the needs of local authorities will be determined? If we are to end the present system and introduce something in its place, there should be some explanation as to how we are to identify the needs of various authorities. My hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) spelt it out that local government is about differences, about different areas having different needs and requiring different services. Local government is about differences. Therefore, hon. Members—particularly Opposition Members—those who serve local government and those who rely upon its services are interested to know how the Minister will determine the needs element within the new formula.

The Bill is cruel and dishonest and does nothing to improve the environment. At the Tory conference the Prime Minister, the Secretary of State, Ministers and Conservative Members declared that they care about the environment, but to say that they care about the environment without providing the resources to protect the environment is cruel and dishonest. People expect their streets to be cleaned. They expect to have street lighting, which is important in our towns and villages. Local authorities and their planning departments must be able to tackle the dereliction in our towns and cities. Greater consultation and public involvement in planning matters which influence people's destiny must be a part of local democracy. The Bill does nothing to meet the call for greater public participation in planning issues.

The hon. Member for Billericay (Mrs. Gorman), who is not in her place, suggested that councillors and people working in local authorities should have no influence and that a few contractors should decide the level of services to be provided. The hon. Lady also said that in some areas there have been increases of up to 9 per cent. and that that is deplorable. She did not say anything about the fact that water authorities have increased their expenditure by 9, 10 or 11 per cent. over the past few years. I wonder what she will say about the Yorkshire water authority, which is planning to increase its charges by 27 per cent. in the coming year. What will Conservative Members say about accountability and about the fact that people's money is being spent? What will Conservative Members say about such increases, which are simply to justify privatisation?

It is cruel and dishonest to deny local authorities the right to better monitoring, inspection and enforcement of pollution control. The Bill acts against the better protection of the environment by local authorities.

Waste disposal, particularly hazardous waste disposal, is a major responsibility for local authorities. People are concerned about where waste is dumped and how it is disposed of. Their concern is greater than ever before. Since the Government took office the importation of hazardous waste to Britain has increased ten times. The Bill restricts the ability of local authorities to employ the necessary trained people to carry out monitoring of pollution control. Hon. Members should do more than pay lip service to concern for the environment. That is cruel and dishonest. Words are cheap.

Photo of John Redwood John Redwood , Wokingham

How much extra money would the Labour party suggest should be spent and how would it be allocated?

Photo of Mr Bill O'Brien Mr Bill O'Brien , Normanton

It would not be for a Labour Government to decide the needs of local authorities. That is our point. The local authorities should determine their own needs. Local government should be provided with adequatee resources, properly trained manpower and back-up services to ensure that the environment is protected.

The Government have cut pollution research staff by 42 per cent. Reported cases of water pollution have increased by two thirds since 1980. Two of the most serious environmental issues causing concern to communities are noise and dirt. The problems are not restricted to inner city areas or Labour-controlled authorities.

Local government is concerned not only with hazardous waste disposal but with waste disposal in general. Because of the financial restrictions that the Secretary of State has imposed on them, local authorities must cut corners and, in many instances, act against the best interests of the environment.

It is significant that Tory-controlled North Yorkshire county council is intending to turn a beauty spot in the North Yorkshire national park into a refuse dump. The reason given is that it would cost £175,000 a year to provide an alternative means of refuse disposal. It would prefer to dump refuse in the North Yorkshire national park than to provide an alternative means of disposal costing £175,000 a year. If the Bill is passed and we approve the Secretary of State's proposal to change the allocation of rate support grant, North Yorkshire county council stands to be robbed of £8·6 million over two years.

Photo of Mr Irvine Patnick Mr Irvine Patnick , Sheffield, Hallam

Has the North Yorkshire national park any planning controls, or are they vested in the North Yorkshire county council?

Photo of Mr Bill O'Brien Mr Bill O'Brien , Normanton

I should have expected the hon. Member for Sheffield, Hallam (Mr. Patnick) to be aware that the planning department of North Yorkshire county council overrides the planning committee of the North Yorkshire national park. If the hon. Gentleman is as concerned as Labour Members about this matter, he should make representations to Ministers:

As I said, North Yorkshire county council stands to be robbed of £8·6 million over two years. Suffice it to say that the money that will be held back would provide a tipping area or alternative for refuse disposal for 50 years. That is the measure of the way in which the Bill will attack local government.

The position in north Yorkshire is dramatically heightened by the comments of the right hon. and learned Member for Richmond, Yorks (Mr. Brittan), whose constituency is so near to the rubbish tip that this weekend he said: I am a little concerned about the use the county council has made of its powers to override the national parks committee. I hope that the right hon. and learned Gentleman will say that during the by-election next year.

Much of the debate has centred on the problems in Bradford. My hon. Friends representing Bradford constituencies have made it clear that the programme being carried out there by the Tories has not been put to the electorate. Nowhere in their manifesto was reference made to £830,000 being cut from the social services budget. Nothing was said about the selling off of 15 old people's homes and the old people in them. Nothing was said about the massive charges for the meals-on-wheels service. If Conservative Members have democracy at heart, they should give Bradford's people the opportunity to go to the polls next year and test the programme that is being put forward. There is little difference between the Tories in Bradford and North Yorkshire and the Secretary of State. They are out to destroy local government and, in the process, commit the environment to untold damage and destruction. The Bill effectively adds to that process.

Practically every hon. Member who has spoken referred to Bradford, including the hon. Member for Spelthorne (Mr. Wilshire), who praised the Bill. Is he aware that, under the Bill, Spelthorne council stands to lose £64,000 and Surrey county council £9·5 million?

Photo of David Wilshire David Wilshire , Spelthorne

If the hon. Gentleman wants to talk about my borough council, perhaps he should make it clear that it has managed to cut its rate by 73 per cent. this year and is now providing better services. That is the truth.

Photo of Mr Bill O'Brien Mr Bill O'Brien , Normanton

And still Spelthorne council loses £64,000 and Surrey county council £9·5 million because of the Bill. Will the Minister include in the needs element the flooding to which the hon. Member for Truro (Mr. Taylor) referred? Such issues should be included.

The continuing migration to rural areas is causing concern to local authorities in terms of access, communications and housing. There is also the matter of law and order in the cities and towns, but particularly in rural towns where the police forces are stretched to the limit. My hon. Friend the Member for Perry Barr dwelt at length on the amount of money that will be cut from the police committees' budgets if the Bill is passed in its present form. I hope that we shall be given answers to my hon. Friend's questions.

If we consider the holdback of rate support grant in 1987–88 and 1988–89, we realise the dramatic effect that there will be on police authorities. I should like to add to some of the points made on this important issue. The Northumbria police authority is robbed of £272,000 in the first year and £660,000 in the second year. The West Midlands police authority is robbed of £750,000 in the first year and £1·8 million in the second year. The West Yorkshire police authority is robbed of about £500,000 in the first year and £1·33 million in the second year. All the police authorities will lose if the Bill remains in its present form. The Metropolitan police are robbed of £4·6 million in the first year and £11·3 million in the second year. If Conservative Members are sincere about law and order, they will realise that to vote for the Bill is to vote down the resources which the police authorities require to maintain law and order.

Tory-controlled local authorities will be robbed of £134 million because of the proposals introduced by the Secretary of State on 7 July. My hon. Friend the Member for Nottingham, North (Mr. Allen) referred to the wonderful work that is done in Nottingham. The people of Nottingham must be made aware that, under the Bill, the county council will lose £9·8 million and Nottingham city council £492,000. It is true that the decision on the future of Nottingham will be made on Thursday. I hope that hon. Members will be honest and will tell the people of Nottingham the exact consequences of voting Tory.

Among those authorities, North Yorkshire county council will lose some £8·8 million, the authorities in the Humberside region will collectively lose £260,000 in the first year and £725,000 in the second and those in North Yorkshire will lose £175,000 in the first year and £391,000 in the second, with Richmond council being robbed of £47,000 and Harrogate of £ 152,000. Bradford is robbed of £3·7 million, so one can readily understand why the Tories who have taken over that authority are selling off old people in their homes to make up the void created by the Bill.

I trust that answers will be forthcoming to the questions that have been asked about this attack on local authorities, and I hope that Conservative Members will take note of the dramatic effect that the Bill will have on their authorities and join us in voting against the Bill.

Photo of Mrs Virginia Bottomley Mrs Virginia Bottomley Parliamentary Under-Secretary (Department of Environment) 9:41 pm, 31st October 1988

I hope that the hon. Member for Normanton (Mr. O'Brien) will bear with me if I turn down his invitation to walk round the North Yorkshire national park with him and instead refer to the matters at hand in the Bill.

Most hon. Members with experience of rate support grant matters have given a warm welcome to the Bill, which heralds, if not the end of the present rate support grant system, at least the beginning of the end. We still have the 1989–90 settlement to come. The Bill is principally designed to tidy up loose ends from the present system before the community charge system is introduced from 1 April 1990 in England and Wales. The House has recognised that the new system will encourage greater local accountability and will be easier to understand than the present arrangements. In the words of my right hon. Friend the Minister for Housing and Planning, there should be no taxation without comprehension. The community charge also removes the unfairnesses of the present rating system. Local government's attention is moving away from rate support grant to revenue support grant, but I think that we all welcome my right hon. Friend's suggestion that we should refer to it as the needs grant, which makes it absolutely clear how the new system will work.

From April 1990, an authority's grant entitlement will be fixed in relation to its spending needs and will not depend on the level of expenditure incurred. That feature of the new system has been widely welcomed and the Bill paves the way for the new fixed grant arrangements. Local authorities have generally welcomed our proposal that grant should be fixed in relation to expenditure for 1989–90, which will provide them with certainty about their grant entitlement and assist them in making their budgets. The Department will shortly be issuing a consultation paper setting out full details of our proposals for next year. Having only recently turned from being a poacher to being a gamekeeper in this regard, I speak most strongly about the need for local authorities to be able to plan for the future and to know where they stand. The Bill opens the way for that to happen.

It was inevitable that at some point we would need to act to bring the present system to a close. Otherwise, we should have had to ask the House to approve a string of supplementary reports concerned with the present system until well into the 1990s. For those in local government, for central Government and for community charge payers alike, it is better to make a clean break with the past before the new system comes in, and local authorities have generally accepted the logic of our arguments about the principles underlying the intention to close down the present rate support grant system. The rules that we have put forward are clearcut and impartial and, so far as anything in this area can be, they are understandable. They are based on sound principles. The rules, which are set out in detail in the Bill, are based on total expenditure information with the Department by 7 July. That is not just any information available. It has been certified by chief financial officers as being the best estimates available to the best of their knowledge and belief. The Bill provides for common rules that apply to all authorities. The expenditure figures on which grant will be calculated are not the result of the Department exercising substantial discretion. The rules produce figures that provide a clear and unambiguous basis for the payment of grant and they are accepted by local authorities—

Photo of Mrs Virginia Bottomley Mrs Virginia Bottomley Parliamentary Under-Secretary (Department of Environment)

If the hon. Gentleman will bear with me, I hope to come to the points that he raised, but I need to make progress before getting there.

The hon. Members for Birmingham, Perry Barr (Mr. Rooker), for Truro (Mr. Taylor) and for Newham, North-West (Mr. Banks) made the surprising suggestion that the legislation was being rushed through, and said that they resented that. I should have thought that all local authorities would welcome a firm end to the current system so that they would know where they stood and could plan for the future. Local authorities frequently complain about not having known the arrangements until they were already far down the budget system. If we had waited until the next parliamentary Session to introduce the Bill, the reports could not have been debated until February or March at the earliest. That would have been far too late to give local authorities certainty about their grant entitlement for the next year in time for their budget-making.

We intend to issue a consultation paper on next year's settlement during November and to make the settlement itself before Christmas. Local authority associations certainly do not want the settlement delayed any longer than need be. They want the 1989–90 settlement made as soon as possible, and preferably in December, so that it can be debated in January.

The hon. Member for Truro asked whether 7 July was an appropriate date for close down. Most hon. Members accept the principles underlying our intention to close down the present RSG system, although some, like the hon. Gentleman, argued that 7 July was not necessarily the best date available. However, by 7 July all authorities bar two had provided the Department with total expenditure information about their budgets for 1988–89 and with revised budget information for 1987–88. It was requested that that information be in by 31 March 1988. Authorities have had a further three months in which to get the information to the Department.

In July my right hon. Friend the Secretary of State announced details of grant and provision to give local authorities an early indication of next year's RSG settlement. To make that announcement without indicating our intention to close down the present RSG system would have been misleading. It is now clear that the full amount of grant—£13,575 million—will be paid to authorities next year when grant will no longer depend on expenditure. Delaying the announcement of close down beyond the end of July would have meant that we could not announce details while the House was sitting.

Photo of Matthew Taylor Matthew Taylor Liberal Democrat Spokesperson (Local Government, Housing and Transport)

What will happen to those local authorities that have not yet approved their final accounts, and where major decisions affecting those accounts had been taken prior to that date? Will the Government take that into account? Those authorities had already taken those decisions, but, if I understand the Minister, they would not be taken into account by the Government.

Photo of Mrs Virginia Bottomley Mrs Virginia Bottomley Parliamentary Under-Secretary (Department of Environment)

The most straightforward way to proceed is to set a cut-off point by which the Department decides the information must be provided. Once we open the door to exceptions and special cases and take into account whether local authorities have made decisions, we open the door also to every sort of indecision. Every constituency would have a special plea and a special case and the matter would never be settled. We would be perpetuating the present system of supplementary reports year after year as special cases were found. We must find a way to move forward.

Photo of Mrs Virginia Bottomley Mrs Virginia Bottomley Parliamentary Under-Secretary (Department of Environment)

I shall not give way. I am about to deal with some of the hon. Gentleman's points.

The hon. Member for Perry Barr, supported by the hon. Member for Normanton, claimed that the Bill would deprive local authorities of £500 million grant in 1988–89. He quoted a series of figures. I wonder whether hon. Members think that they are real figures. They are,