Adjustment of Block Grant

New Clause 1 – in the House of Commons at 11:15 pm on 7th November 1988.

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`(1) In relation to the years beginning in 1987 and 1988 if it appears to the Secretary of State that the aggregate amount of block grant to which local authorities would be entitled in accordance with the Rate Support Grant Report or any supplementary report for the year differs from the aggregate amount available for that grant in that year he shall adjust the amount payable to each authority (whether by increasing or reducing it) so as to reconcile those aggregate amounts.(2) An adjustment under this section may be made in accordance with principles applicable to all local authorities.(3) Section 1(1) to (4) of the Rate Support Grants Act 1987 shall not have effect for the years beginning in 1987 and 1988.'.—[Mr. Rooker.]

Brought up, and read the First time.

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

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

It may help hon. Members who have come late to this Committee to know that this is a Second Reading debate not just on the new clause but on the Bill. The consequence of the new clause would be the expenditure of £500 million, just as the consequence of the Bill would be to cut from local authorities £500 million that they could reasonably have expected to receive. I shall not repeat my Second Reading speech, although I have it here and I could be tempted—

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

Perhaps I should do that.

I shall repeat a couple of points about the £500 million and then deal with an item that I did not mention on Second Reading. The thrust of the new clause is to require the Secretary of State to distribute all the block grant provided for in the rate support grant settlements. Hon. Members on both sides of the Committee and those in local government know that the House has approved rate support grant settlements.

The effect of the Bill is to reduce by £500 million the money that will be paid to local authorities. We think that that sum should be distributed to local government, and that is the thrust of the new clause. The evidence tells us that not all the £500 million would have been paid out and that there would have been a holdback, but, as I said on Second Reading, the local authorities have agreed to split the difference. They would settle for £250 million of the holdback being distributed to them in 1988–89. That is a firm proposal by the authorities to the Government, and it has not been met with a considered response.

The Government might respond to the new clause by saying that the powers under clause 1(9) permit the Secretary of State to distribute the additional grant, but that would be a discretionary act. The new clause would make the distribution mandatory. The Government have said, in effect, "This is rough justice. We have fixed a date. It will be tough for the losers but good luck for the gainers." It is alleged that the results of the rough justice in 1988–89 might be compensated for in 1989–90, for the Government have said that all the grant will be distributed in that year. That merely reinforces the local authority view that the Government had no intention in 1987–88 and 1988–89 of distributing the full amount of block grant that had been voted by Parliament to support local authorities. I emphasise that the £500 million has already been voted by the House. Authorities had a reasonable expectation that they would receive the money.

I said on Second Reading that this is not a party political matter when it comes to losers. In 1988–89, Conservative-controlled authorities stand to lose £134 million, Labour-controlled authorities £157 million, minor party-controlled authorities £4 million and independent authorities £3 million. The authorities that do not have an overall party control will lose the substantial sum of £210 million. The joint boards will lose £17 million. Those are the figures for one year, but the Bill applies to three years. On Second Reading, I concentrated in part of my speech—this would not have been realised by those who read the press reports the following day—on the effect of the Bill on the police authorities, which will be subject to substantial potential losses. I spoke of an overall loss of £18 million.

It may be said that we know what we mean, but not everyone will understand that the transport authorities come within the terms of the Bill.

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

The hon. Gentleman referred on an earlier occasion to the sum that he claimed the police authorities would lose. He did not mention that they could gain that sum only by making savings that would amount to £30 million. I ask him to tell the House of the savings that the transport authorities would have to make if they were to gain the grant that he is now asking us to put into the system.

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

To the best of my knowledge, none of the police authorities has been accused of engaging in creative accounting. No Minister has said that they have been doing what it is alleged that local authorities have been doing. Indeed, it is true that some authorities have engaged in what is described as creative accounting, but that is not illegal. Of course, that has upset Ministers, which in turn has caused their rigidity over the dates of 6 and 7 July.

I do not want to go back to the police, but the Northumbria police authority, which is one of those special authorities that one can identify, made representations late in September that, because of significant budget problems experienced by the authority in 1988–89, efforts were made to reduce the outturn expenditure in 1987–88, with the intention of increasing block grant entitlement and thereby securing a greater level of balances. That is important for bobbies on the beat in Northumbria. As a result of the savings achieved—because it did not fully realise what the Government were going to do—this authority has lost approximately £400,000 in grant. I alluded to the fact that this authority stood to lose more than £400,000 and I could show exactly how that £400,000 was lost.

11.45 pm

I shall use my figures and, if the Minister does not like them, it is up to him to give figures to rebut them. Police authorities are adversely affected by the Bill, as indeed are the transport authorities. Not all of them are affected negatively, but I intend to concentrate on one that is especially affected negatively.

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

I want to clear up what I believe is a mistake in the hon. Gentleman's mind. He talks about this £500 million, but in order to get that money it would mean considerable savings of £1·2 billion—savings which local authorities would not produce, have not produced and could not, in his view, produce, although I believe that they could. The hon. Gentleman suggested to the Committee that money was being taken from police authorities, but he never suggested how they would make a saving of £30 million in order to get that money. In fairness, he should explain that. If he does not want to do so for the police authorities, perhaps he could tell us how much, in aggregate, transport authorities would have to save to receive the extra grant that he says is being taken from them.

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

All that intervention proves is what I said a few moments ago: the Government never intended that this money voted by Parliament should go to the authorities. The Minister is saying that it is impossible for them to save and cut their budgets to get any of the £500 million. I repeat that that £500 million is not new money. The House approved that that money should go to local authorities, whereas the Minister has just said that it will be impossible for them ever to receive it. Of course, they were never intended to receive it, but no Minister—not this Minister, because it was not his responsibility—ever had the guts to stand at the Dispatch Box and say that the holdback was not available. The House can approve what it likes for local government, but the £500 million was not available. That being so, local authorities would not have had any expectation of receiving the money. It is fine that the Minister's view is that it is impossible for them to get it, but all that shows is that the local authorities were right when they believed that the intention was for them to be short-changed.

I want to concentrate on the West Midlands transport authority. I make no apology for doing so, because it is the first time in today's proceedings that I have referred to the Birmingham area in which my constituency is situated. I regret that the authority leadership was not informed until about Thursday of last week, because of the communication problem which is caused by having joint boards where there are lead authorities for a function covering, in this case, seven different authorities.

Communication cannot be that good when Bills are introduced in the fag end of a parliamentary Session and rollercoastered through without proper scrutiny. I make no complaints about the West Midlands passenger transport authority, or the lead authority on transport in the West Midlands, but what I am faced with at present is the fact that, because of the Bill, the West Midlands passenger transport authority stands to lose £8·9 million in grant over three years. It is not all to be lost in one year, but over the period 1986–87, 1987–88 and 1988–89. It reasonably expected to receive that money. West Midlands is by far the biggest loser. I understand that the Greater Manchester authority will gain about £5 million.

Approximately 50 per cent. of the budget of the West Midlands transport authority is taken up by concessionary fares—£31 million covers concessionary fares for pensioners and approximately £5 million covers concessionary fares for schoolchildren. Therefore, £36 million out of a budget of £65 million is taken up by concessionary fares. In the West Midlands county area, not the regional area, 400,000 pensioners enjoy the benefit of concessionary fares. Because of the unexpected loss of grant, for which the authority has been unable to budget, and without the ability to change its planned budget—it cannot put up fares—it will be impossible to maintain the concessionary fare structure in the west midlands.

I am not familiar with Suffolk, but I suspect that pensioners in that region do not get concessionary fares.

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

Generally speaking, there are no concessionary fares for pensioners in the Tory shires. Such fares are mostly available in the big cities only, and they represent a basic difference between Labour and Conservative control. I am pleased that such a progressive move has been taken in Suffolk and I can only assume that there is no overall control of that authority.

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

Well, that is fine.

Why is the Minister introducing a Bill that will deprive my constituents and those of my colleagues who represent the west midlands of their free bus passes? It cannot be denied that, when the Secretary of State began to legislate on transport, we always said that concessionary fares were at risk. We said that, under the new transport regime, it would be impossible for an authority to maintain concessionary fares. We were told that it would be okay, and that we were running scare stories. If so, why has the West Midlands authority been singled out? No other transport authority has been affected in this way.

It is not a scare story to say that pensioners could potentially suffer. I am not saying that such fares will be abolished; their provision could be cut in half, such fares could operate one day a week or in the mornings only. There are enough bureaucratic restrictions on bus passes as it is. They were introduced in Birmingham some 30 years ago in the teeth of opposition from the then Conservative Government—Birmingham pioneered concessionary fares for pensioners.

There are pensioner Members of this House who use their passes on London Transport and, of course, they receive salaries. They are the very people whom the Chancellor is after with his new-found desire to target any concession received by a pensioner that is not already means-tested. In the west midlands, in common with elsewhere, those fares are not means-tested. As such, they are easy prey for the Government.

It would be unacceptable if there were any move agai nst concessionary fares in the west midlands, whether by cutting the hours or reducing the days on which they operate. It must be said that such a move would not be the fault of the West Midlands passenger transport authority, West Midlands Travel, or of any of the seven metropolitan district councils in the west midlands. The fault lies with the Bill and the Tory Government.

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

The fact is that, if the West Midlands passenger transport authority had produced a budget at the correct level in the first place, it would have lost nothing. Indeed, if all authorities had produced in the first place the budgets that they should have produced, all £500 million would have been available to them, but the hon. Member for Birmingham, Perry Barr (Mr. Rooker) tried to suggest that there might be a means whereby, in the past few weeks, by adjustments of one sort or another, by changing the date or something similar, and not having produced sensible budgets or returned sensible estimates to the Department of the Environment, the £500 million could have been saved. The hon. Gentleman has been rumbled. If he had not moved the new clause, he would not have been rumbled so clearly.

In the debate last Monday, the hon. Gentleman said that, for example, Bradford would have been able to get a considerable extra amount—£3·7 million of grant. He did not mention that the only way in which the council could so so was if it could budget for a £20 million cut in its expenditure. That would have been possible and the council could have done that sensibly if it had budgeted sensibly in previous years and, indeed, in the budget for this year. But the hon. Gentleman suggested that the council could have made that difference in the few weeks over the edge of the date that we were talking about. Therefore, the hon. Gentleman applied hypothetical figures to a hypothetical situation and produced a wrong answer.

Today the hon. Gentleman is saying that, if there are any cuts in the services provided by the West Midlands passenger transport authority—he admits that others will not be in that position—people must blame the Bill. That is not so. They must blame the poor budgeting of that transport authority. If it had run the services according to needs, it would have been able to obtain the maximum grant and not lose any grant.

The hon. Gentleman cannot now say that, although the people have not made the savings and did not have the savings in the budget, and although they did not try to do what they were supposed to do, they must now have the money as well. We know why the hon. Gentleman says that. It is because his answer to everything is more money. But who pays? Many of the very pensioners whom the hon. Gentleman wants to have the concessionary fares; many of the people who are asked to pay rates and taxes are poorer than some of those who have the concessionary fares. Sometimes it is worth remembering that those fares are spread across a large number of people, distinguished from the rest of the population merely by their age. But that was decided by many of the hon. Gentleman's friends, and no doubt some of my friends take the same view. It is a reasonable decision, but they cannot say that it is the Bill's fault rather than that of the authority's budgeting.

In the new clause, the hon. Gentleman shows that he wants to insist that authorities which, through lack of prudent budgeting, were not able to see the savings come through earlier, should somehow still get the taxpayers' money that they could have got, had they budgeted from the beginning, and kept to that budget in the way that the Government propose.

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

I shall give way in a second, although the hon. Member—[Interruption]—has not been here during our debates.

I say to the hon. Member for Perry Barr that that was not a proper way in which to end the debate. If one looks at the overall settlement, at the supplementary figures, which are now being discussed, and at the 9 per cent. increase in the grant that will be available in future, one sees that there is no question of the taxpayer or the Treasury making a profit. I remain convinced of that. It would not be proper for us to pay local authorities sums that they have not earned by sensible budgeting.

Photo of Mr Terry Davis Mr Terry Davis , Birmingham, Hodge Hill

I thought that the Minister referred to the hon. Member for Bromsgrove. I have no idea whether the hon. Member for Bromsgrove (Sir H. Miller) has been present during the debate. I do not represent Bromsgrove; I represent part of Birmingham. Does the right hon. Gentleman accept that hon. Members are entitled to come to debates on clauses that interest them?

I have been in the Chamber throughout the debate on the new clause. It interests me very much because, like my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker), I represent part of the west midlands and my constituents will be affected if the West Midlands passenger transport authority loses £8·9 million as a result of the Bill. The Minister told us that the West Midlands PTA would lose that money only because it has not engaged in what he described as prudent budgeting and has failed to put forward a sensible budget. In the Minister's view, what would have been a sensible budget for the West Midlands PTA to adopt, in order not to lose the £8·9 million?

12 midnight

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

That is a decision for the PTA. All I am saying is that it did not put forward a budget which would result in the accretion of grant that it wanted. It decided that it did not want to do it that way. That was a perfectly reasonable thing for the PTA to do. However, it cannot now turn round and say that it wants that sum of money irrespective of the fact that it has not met the requirements for it.

I did not mention Bromsgrove. I am perfectly well aware that the hon. Member for Birmingham, Hodge Hill (Mr. Davis) is not the hon. Member for Bromsgrove. He was once, and he lost the seat. The hon. Member for Hodge Hill might consider it very interesting that in this debate the only people who have discussed the figures are the hon. Members who represent the one passenger transport authority which loses by the date under discussion. Earlier, Opposition Members suggested other dates. However, I must state that other PTAs gain by the date. The date cannot be construed as an attack on PTAs in general or on concessionary fares.

The new clause is not a suitable way of asking the taxpayer to foot a bill which he would not be able to foot except where local authorities had met the requirements that were perfectly clear at the beginning of the year. The West Midlands PTA decided in its wisdom not to meet those requirements.

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

I heard the Minister say that the local authorities were losing money because they had not made realistic budgets. That is unfair. I had hoped that we would hear answers during the debate on new clause 1 to the points raised on Second Reading, when we explained that many authorities were losing out badly because of the dates.

It is not good enough for the Minister to say that the authorities did not get their figures in on time or that in his opinion the budgets were unrealistic and therefore it is just tough luck on those authorities. The Minister must know—although he was not personally responsible—that the Department of the Environment has changed the rules, regulations and dates continually.

It has been impossible for many years for local authorities to have budgets that they can present in an orderly fashion to elected members and then ensure that they applied for the budgetary year in question. It is not surprising that at the end of a particular financial year a local authority would look at its budgetary outturn and discover that it was different from the estimates. Therefore authorities have always been able to come back to the Government and point that out. Now, with a set date of 6 July, a number of authorities will lose very badly, and I explained to the Parliamentary Under-Secretary of State on Second Reading that that was not fair.

My hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) referred to the West Midlands passenger travel authority. A number of other authorities will lose out badly because of the date that has been set by the Government. I refer once more to the examples that I quoted on Second Reading of Greenwich, Southwark and Brent. I will not go through all the facts again, but I hope that the Minister will respond as he did to the points made by my hon. Friend the Member for Perry Barr about the police authorities, and consider the London authorities.

Greenwich approved its account for 1986–87 on 6 July, but did not notify the Department of the Environment. The DOE assumed that Greenwich spent £102 million when it actually spent only £93 million, which means that the council will lose £1·2 million in grant. I do not know whether the Minister thinks that local authorities that do not fulfil all the provisions of their budgets by an arbitrary date are at fault. If he approaches the matter like that, where is the order in financial accounting for local authorities? How can they possibly budget sensibly under such conditions?

As I said to the Minister on Second Reading, he should be prepared to look sympathetically at local authorities that will clearly lose under the provisions of the Bill. I understand, but perhaps the Minister will tell me if I am wrong, that local authorities made representations to the Secretary of State to the effect that, since they will not be able to recoup grant holdback by reducing expenditure, £250 million of the holdback in 1988–89 should be distributed. Has the Secretary of State seriously considered the proposals put forward? If he has not, the local authorities were wasting their time in putting them forward. There is not much point in us trying to make a case if the Secretary of State does not listen.

The Minister must know, even in the short time that he has been responsible for the Bill, that there will be some injustices. New clause I at least gives him an opportunity to redress some of those. I hope that even at this late stage he will be prepared to change his mind.

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

Obviously, the Minister has a closed mind. I repeat that Parliament has approved the money, so it is not a question of money having to be raised from taxpayers. Parliament has already approved the rate support grant settlement. Prior to 1987–88, all the block grant money was paid out. New clause 1 seeks to introduce what was known as grant recycling. It is only in 1987–88 and 1988–89 that the Government have separated the block grant so that there is a provision in the settlement in the main year of £9·471 billion. The amount that they distributed on the basis of the estimates was £8,960 billion, leaving grant held back by the Treasury or the Department of £511 million. Until two years ago, in the normal course of events that would have been recycled.

All we are saying is that the new clause is justified on the grounds that the authorities will not be able to recoup some or all of the grant holdback by reducing the expenditure that would normally feed through into the grant calculations. That was what normally happened, but the process is no longer available to the authorities. Anyone would think, to hear the Government, that local authorities keep overspending on their estimates, but that is not true. In 1984–85, the actual expenditure of local authorities was £98 million lower than estimated. In 1985–86, the expenditure was £431 million lower than estimated and in 1986–87 it was £285 million lower than estimated.

Local authorities can justifiably claim a long run of years during which the actual outturn, which is never known until the end of the year, was lower than the estimated expenditure. All that the authorities want is credit for that.

I repeat what I said about the West Midlands passenger transport authority. Given the way that the Bill was brought in, the announcement in July and the rigidity with which Ministers have acted, it is clear that they have not been prepared to countenance any change in the Bill. Clearly the Bill has not been scrutinised as it would have been in a Committee upstairs. Earlier in the debate, the Minister let the cat out of the bag. Quite clearly, it was never intended that the £500 million should go to local authorities, police authorities or transport authorities. It is clearly going to go back to the Treasury, which is what was intended in the first place.

Question put, That the clause be read a Second time:—

The Committee divided: Ayes 59, Noes 155.

Division No. 474][12.09 am
AYES
Banks, Tony (Newham NW)Davis, Terry (B'ham Hodge H'l)
Barnes, Harry (Derbyshire NE)Dixon, Don
Beckett, MargaretEvans, John (St Helens N)
Beith, A. J.Faulds, Andrew
Bennett, A. F. (D'nt'n & R'dish)Foster, Derek
Bradley, KeithGalbraith, Sam
Brown, Ron (Edinburgh Leith)Golding, Mrs Llin
Buckley, George J.Gordon, Mildred
Campbell, Menzies (Fife NE)Henderson, Doug
Clay, BobHowarth, George (Knowsley N)
Clelland, DavidHughes, John (Coventry NE)
Cohen, HarryHughes, Sean (Knowsley S)
Cryer, BobHughes, Simon (Southwark)
Cunliffe, LawrenceKirkwood, Archy
Cunningham, Dr JohnLeadbitter, Ted
Davies, Ron (Caerphilly)Lewis, Terry
Livingstone, KenSkinner, Dennis
Lloyd, Tony (Stretford)Spearing, Nigel
Lofthouse, GeoffreySteel, Rt Hon David
McAvoy, ThomasTaylor, Matthew (Truro)
Mahon, Mrs AliceThompson, Jack (Wansbeck)
Michael, AlunTurner, Dennis
Michie, Bill (Sheffield Heeley)Wall, Pat
Mowlam, MarjorieWareing, Robert N.
Nellist, DaveWelsh, Michael (Doncaster N)
O'Brien, WilliamWilson, Brian
O'Neill, MartinWise, Mrs Audrey
Pike, Peter L.
Primarolo, DawnTellers for the Ayes:
Redmond, MartinMr. Frank Haynes and
Rooker, JeffMr. Frank Cook.
Short, Clare
NOES
Alexander, RichardGreenway, Harry (Ealing N)
Alison, Rt Hon MichaelGreenway, John (Ryedale)
Amess, DavidGregory, Conal
Amos, AlanGriffiths, Peter (Portsmouth N)
Ashby, DavidGrist, Ian
Aspinwall, JackGround, Patrick
Baker, Nicholas (Dorset N)Grylls, Michael
Baldry, TonyGummer, Rt Hon John Selwyn
Batiste, SpencerHamilton, Hon Archie (Epsom)
Beaumont-Dark, AnthonyHamilton, Neil (Tatton)
Bennett, Nicholas (Pembroke)Hanley, Jeremy
Bevan, David GilroyHargreaves, A. (B'ham H'll Gr')
Blackburn, Dr John G.Hargreaves, Ken (Hyndburn)
Bonsor, Sir NicholasHarris, David
Boswell, TimHayes, Jerry
Bottomley, PeterHeathcoat-Amory, David
Bottomley, Mrs VirginiaHeddle, John
Bowden, Gerald (Dulwich)Hicks, Mrs Maureen (Wolv' NE)
Bowis, JohnHordern, Sir Peter
Brazier, JulianHowarth, Alan (Strat'd-on-A)
Bright, GrahamHowarth, G. (Cannock & B'wd)
Brooke, Rt Hon PeterHowell, Rt Hon David (G'dford)
Brown, Michael (Brigg & CI't's)Howell, Ralph (North Norfolk)
Burns, SimonHughes, Robert G. (Harrow W)
Burt, AlistairHunt, David (Wirral W)
Butterfill, JohnHunt, John (Ravensbourne)
Carlisle, Kenneth (Lincoln)Irvine, Michael
Carrington, MatthewJack, Michael
Cash, WilliamJanman, Tim
Chope, ChristopherJohnson Smith, Sir Geoffrey
Clark, Dr Michael (Rochford)Jones, Robert B (Herts W)
Clarke, Rt Hon K. (Rushcliffe)Knapman, Roger
Coombs, Anthony (Wyrg F'rest)Knight, Dame Jill (Edgbaston)
Coombs, Simon (Swindon)Lawrence, Ivan
Cran, JamesLeigh, Edward (Gainsbor'gh)
Currie, Mrs EdwinaLennox-Boyd, Hon Mark
Davis, David (Boothferry)Lester, Jim (Broxtowe)
Day, StephenLord, Michael
Devlin, TimLyell, Sir Nicholas
Dorrell, StephenMacfarlane, Sir Neil
Dover, DenMacGregor, Rt Hon John
Durant, TonyMaclean, David
Dykes, HughMcLoughlin, Patrick
Emery, Sir PeterMcNair-Wilson, Sir Michael
Fairbairn, Sir NicholasMans, Keith
Favell, TonyMaples, John
Fenner, Dame PeggyMarshall, John (Hendon S)
Field, Barry (Isle of Wight)Martin, David (Portsmouth S)
Fishburn, John DudleyMayhew, Rt Hon Sir Patrick
Forman, NigelMellor, David
Forsyth, Michael (Stirling)Meyer, Sir Anthony
Forth, EricMiller, Sir Hal
Fox, Sir MarcusMills, Iain
Franks, CecilMitchell, David (Hants NW)
Freeman, RogerMoate, Roger
Gale, RogerMoss, Malcolm
Garel-Jones, TristanMoynihan, Hon Colin
Gill, ChristopherNelson, Anthony
Goodhart, Sir PhilipNeubert, Michael
Goodson-Wickes, Dr CharlesNicholls, Patrick
Gow, IanNicholson, David (Taunton)
Gower, Sir RaymondOnslow, Rt Hon Cranley
Paice, JamesShephard, Mrs G. (Norfolk SW)
Patnick, IrvineShepherd, Colin (Hereford)
Peacock, Mrs ElizabethSims, Roger
Porter, David (Waveney)Smith, Tim (Beaconsfield)
Portillo, MichaelSpeed, Keith
Powell, William (Corby)Spicer, Sir Jim (Dorset W)
Raffan, KeithStern, Michael
Renton, TimStewart, Andy (Sherwood)
Ridley, Rt Hon NicholasStradling Thomas, Sir John
Roe, Mrs MarionThurnham, Peter
Rost, PeterWaddington, Rt Hon David
Rowe, AndrewWheeler, John
Ryder, RichardWiddecombe, Ann
Sackville, Hon Tom
Sainsbury, Hon TimTellers for the Noes:
Shaw, David (Dover)Mr. Michael Fallon and
Shaw, Sir Michael (Scarb')Mr. John Taylor.
Shelton, William (Streatham)

Question accordingly negatived.

Bill reported, without amendment.

Motion made, and Question proposed, That the Bill be now read the Third time.

Photo of Mr Tony Banks Mr Tony Banks , Newham North West 12:21 am, 7th November 1988

I am glad to have caught your eye, Mr. Deputy Speaker. There was not a great deal of competition on this occasion, but I believe that it is necessary to keep Ministers here as they probably do not have anything more useful to do than listen to my speech.

It is a great pity that, despite our attempts in Committee to persuade the Minister to accept our amendments, he remained implacable and refused to see the justice of our case. He must know that a great deal of injustice will come about as a result of the Bill, that arbitrary dates have been set and that some local authorities will gain a great deal, although we have not made great play of that tonight. It is a case of good luck to those who gain, but we are most concerned with those who, unfortunately, lose. In local government, resources are hard to come by and if any authority loses, that must be a matter of regret for Opposition Members. A number of local authorities in Greater London are losing. Greenwich, Southwark and Brent, all of which I mentioned on Second Reading and on Report, will lose as a result of the Bill.

As the Minister has not seen fit to change his mind or the terms of the Bill, in the light of our amendments, our opposition on Second Reading should be sustained on Third Reading. We are all a little older and Conservative Members are none the wiser. A Bill that we opposed on Second Reading has simply moved nearer the statute book and, therefore—I am sure that Opposition Front Bench Members agree with me on this occasion—we must oppose the Bill on Third Reading.

The Government argue that the Bill paves the way for the poll tax. It does so by breaking the link between grant and expenditure and, in the process, ends resource equalisation. It starts the process whereby the Government believe that no authority is any richer or any poorer than any other authority. The Bill changes the rules retrospectively, as we have always maintained. Many authorities will suffer grant losses as a result through no fault of their own, merely because, once again, the Government have changed the rules.

I do not know whether the Minister has any local government experience. Perhaps he could indicate by moving some part of his body; any part will do, preferably his head. I take it, to judge by his somnambulant position, that he is either dead or has never served in local government—

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

I am sure that it was not a pleasure for the Minister, or for the teachers, pupils and others in the authority.

Let us assume that the Minister did sterling service when he was on ILEA. That must have been many years ago, when central Government did not interfere in the affairs of local authorities in the way in which this Government have done since 1979, since when interference has escalated. I had hoped for a response from the Minister to the point I made when discussing new clause 1, which was that these days it is virtually impossible for any borough treasurer or finance director to produce the sort of budget that council members—or the Department of the Environment, come to that—would want to receive. Expenditure after a budget has been set can never be forecast because of the rule changes that the Government keep introducing. Interest rates, regulations passed in this place and other factors combine to make certainty impossible.

In these circumstances, it is unrealistic of the Minister to blame local authorities for not being able to keep to budgets agreed at the beginning of the year. The Minister knows that that is unrealistic, yet he has worked on that assumption throughout proceedings on the Bill, which seems grossly unfair.

The Bill contains discretionary powers that the Minister may exercise, so I repeat the case even at this late stage: some local authorities, through no fault of their own, will lose badly under the Bill. The penalty for that will be paid by ratepayers. This is typical of the arrogant way in which the Government treat local authorities.

Collective and individual grant penalties will remain in place, even if no longer justified—[HON. MEMBERS: "Reading."] At least I can still read at this late stage—a facility which I doubt whether many Conservative Members could exercise.

Grant calculation for 1989–90 will be arbitrary and based on no principle apart from the need to prevent the Government from losing court cases.

The Bill is as bad as it was on Second Reading. The Minister refused to accept our reasoned amendments. I urge all my hon. Friends to vote against Third Reading.

Photo of Mr Peter Pike Mr Peter Pike , Burnley 12:28 am, 7th November 1988

Having sat through most of the debates last Monday and today, I believe that there is general recognition of the need for some sort of Bill to take us through the transitional period from the old rate support grant to the new poll tax. We oppose the new tax, but accept the need for a transitional arrangement.

I shall vote against Third Reading because I wholly oppose the Government's handling of the Bill. There was no reason for pushing it through at the end of this parliamentary Session. It was quite wrong of the Government to do that. Legislating in unnecessary haste often causes mistakes. There was no need for this Bill at this time. It could have been presented and debated in the proper manner at the start of the new Session, when all the relevant factors could have been discussed.

Opening the debate last Monday, the Minister said that this may not be the best way forward or the best solution to our problems, but that the Government thought it the right one. He also accepted that the Bill involved rough justice. But rough justice is indefensible: we need a Bill that is fair, and seen to be fair.

There may well be faults with the Bill. We recognise that the Government will use their majority to force through the Third Reading, but if there are faults the Government will have to return to the House during the next Session with different proposals.

The track record of the Secretary of State for the Environment shows how often he is wrong. It was the same when he was Secretary of State for Transport. Time and again he had to return to the House with retrospective legislation, often because he had been proved wrong in the courts. The Government may have to admit that they have made mistakes in the Bill and that they were wrong to push it through at this late stage.

We could have dealt with the Bill in a few weeks and made sure that everything in it provided a proper protection for local government. Like my hon. Friends, I still believe in local government—unlike Conservative Members, who want only to kill and knock nails in the coffin of local government.

Photo of Mr Frank Haynes Mr Frank Haynes , Ashfield 12:31 am, 7th November 1988

I want to speak on Third Reading—[HON. MEMBERS: "Oh no."] You will be aware, Mr. Deputy Speaker, that I have been in the Chamber for most of the debate, although for most of that time I was on duty and did not have the opportunity to say a few words. I shall be brief—[Interruption.] This is not a filibuster.

My hon. Friends the Members for Newham, North-West (Mr. Banks) and for Burnley (Mr. Pike) made true statements about this unfair Bill. Indeed, there have been many unfair Bills since this Government took office. The Bill does not allow local authorities to represent the people in their areas and to provide the necessary services. There are to be yet more cuts in local government.

I heard the Minister talking about the Bradford Conservatives and what they will do in future. They have set out their stall. The Minister is a loser—

Photo of Mr Frank Haynes Mr Frank Haynes , Ashfield

He is a loser. He came to Nottingham last week during the by-election

Photo of Mr Frank Haynes Mr Frank Haynes , Ashfield

I will. It was a Tory seat, but on Thursday we won it and took control of the city council. We will right many of the wrongs done by the Tories. The Nottingham Tories intended to do the same as the Bradford Tories.

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

I congratulate my hon. Friend on the Nottingham result, which is wonderful news and, no doubt, is the prelude to much good news.

Is my hon. Friend aware that just over a week ago in the London borough of Newham the Labour party again won two by-elections? The council has now returned to having 59 Labour councillors and one Democrat. It is a Tory-free zone.

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

Order. Let us get back to the Third Reading of the Bill.

Photo of Mr Frank Haynes Mr Frank Haynes , Ashfield

I am speaking to the Bill, Mr. Deputy Speaker. That comment was made by my hon. Friend the Member for Newham, North-West.

Things are changing. There is a clear sign in Nottingham and Newham that the people realise what is going on. There is no doubt that Govan will prove another point. [Interruption.] The Minister is laughing. Last Thursday, we knocked the grin off his face, and we shall continue to do it time and again until the next general election, when the people of this country realise what the Government have done to local government. They have done it to my local authority, too. My local authority is fair. It tries to provide the proper services for the people it represents. But, by cutting back, that lot deny local government the right to provide proper services.

The other day, I told the Minister that we lose finance every time there is a pit closure. I do not care what he may say at the Dispatch Box. We are losing money because of the Government's policies. I blame the Chief Whip, too. I shall drag him into the argument, because he makes sure that his Tory colleagues are present to vote for the Government's policies. Why does he not let his colleagues go home if they wish to, so that we can win now and again? [Interruption.] I am conscious of the time. There is a fight on television at a quarter to 4.

Photo of Mr Frank Haynes Mr Frank Haynes , Ashfield

The hon. Gentleman says, "Hear, hear." He told me that the fight was over in the fourth round, but it has not been held yet. However, the fight is on at a quarter to 4, and I aim to see it.

The important point is that the message is getting across to the people loud and clear. The Government have to go. They will go at the next general election. They can take the grins off their faces. Their grins will be knocked off. I say that quite sincerely. The Government's policies, particularly in relation to local government, are denying elected representatives the freedom to do the right thing on behalf of the people. The Government are cutting finance here, there and everywhere. They pour money into the pockets of the Tory rich. Tory local authorities look after Tory boroughs, but they do not look after Labour-controlled boroughs.

The Secretary of State makes me sick when he seriously criticises Labour-controlled local authorities. They are doing the right thing on behalf of the people. That lot are denying Opposition Members the right to do the right thing, and look after the people who need services.

I heard several of my hon. Friends talk about elderly people's homes in local authority areas. We in Labour-controlled local authorities are providing a first-class service for those who need it, particularly the elderly. They have made their contribution, and we should look after them properly. But the Chancellor of the Exchequer denies them their rights. [Interruption.] Conservative Members can laugh. I shall sit down in a minute. Those who are youngsters will be elderly one day. I am not far from retirement. You and I will draw the old-age pension, Mr. Deputy Speaker. I know that I am a little older than you. It is all right; do not get worried about it.

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

Order. I hope that the hon. Gentleman will speak for himself and will not presume my future.

Photo of Mr Frank Haynes Mr Frank Haynes , Ashfield

I shall withdraw the comment about your future, Mr. Deputy Speaker, and stick to my own. But one or two more hon. Members—on the Conservative Benches as well—are coming up to retirement age, and they are going to enjoy that pension. I want to remind that lot over there that I paid for it, and so did the people who were being denied when the Chancellor stood at the Dispatch Box today. Those people bought their pensions, and the Chancellor should be coming to the Dispatch Box and doing right by them.

The elderly people of this nation have been through two wars, and they worked very hard in heavy industry, particularly the industry that I came from, the mining industry.

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

Order. None of this seems to have much relevance to the Rate Support Grant Bill.

Photo of Mr Frank Haynes Mr Frank Haynes , Ashfield

With respect, Mr. Deputy Speaker, we are providing services in the community for elderly people, or are supposed to be. I am only adding a bit more about the Chancellor's denial of them at the Dispatch Box, and the way that the motley crew who sit on the Treasury Bench come to the Dispatch Box every now and again denying this, that and the other.

I am speaking on behalf of the people in my constituency, and my hon. Friends have been doing the same. But we did not hear a great deal of that from the other side of the Chamber. All that Conservative Members were doing was supporting the Minister. He was given a lesson or two upstairs when he was in the Department of Employment. I gave him one or two biblical lessons, which was a bit strange to him as a Member of the Synod. I tried very hard. The Minister has been given a lesson or two on the environment and a lesson or two on employment, and will continue to have lessons, but he does not listen. He ignores what he is told and ploughs on in his own sweet way, denying people their rights.

I am standing here asking for those rights, particularly for the people in the very low-income groups who really need it. The right hon. Gentleman stands at the Dispatch Box saying that they are the people he is going to help, but he and the other Ministers are denying them their rights to benefits and services.

Photo of Dennis Skinner Dennis Skinner Member, Labour Party National Executive Committee, Party Chair, Labour Party

My hon. Friend is doing exceptionally well, but I remind him that the fight is on at a quarter to 4.

Question put, That the Bill be read the Third time.

The House divided: Ayes 142, Noes 46.

Division No. 475][12.42 am
AYES
Alexander, RichardBonsor, Sir Nicholas
Alison, Rt Hon MichaelBoswell, Tim
Amess, DavidBottomley, Peter
Amos, AlanBottomley, Mrs Virginia
Arnold, Tom (Hazel Grove)Bowden, Gerald (Dulwich)
Ashby, DavidBowis, John
Baker, Nicholas (Dorset N)Brazier, Julian
Baldry, TonyBright, Graham
Batiste, SpencerBrooke, Rt Hon Peter
Beaumont-Dark, AnthonyBurns, Simon
Bennett, Nicholas (Pembroke)Burt, Alistair
Bevan, David GilroyButterfill, John
Blackburn, Dr John G.Carlisle, Kenneth (Lincoln)
Carrington, MatthewJanman, Tim
Chope, ChristopherJohnson Smith, Sir Geoffrey
Clark, Dr Michael (Rochford)Jones, Robert B (Herts W)
Clarke, Rt Hon K. (Rushcliffe)Knapman, Roger
Coombs, Anthony (Wyre F'rest)Knight, Dame Jill (Edgbaston)
Coombs, Simon (Swindon)Lawrence, Ivan
Cran, JamesLester, Jim (Broxtowe)
Currie, Mrs EdwinaLord, Michael
Davis, David (Boothferry)Lyell, Sir Nicholas
Day, StephenMacGregor, Rt Hon John
Devlin, TimMaclean, David
Dorrell, StephenMcLoughlin, Patrick
Dover, DenMcNair-Wilson, Sir Michael
Durant, TonyMans, Keith
Dykes, HughMaples, John
Emery, Sir PeterMarshall, John (Hendon S)
Favell, TonyMartin, David (Portsmouth S)
Fenner, Dame PeggyMayhew, Rt Hon Sir Patrick
Field, Barry (Isle of Wight)Mellor, David
Fishburn, John DudleyMeyer, Sir Anthony
Forman, NigelMiller, Sir Hal
Forsyth, Michael (Stirling)Mills, Iain
Forth, EricMitchell, David (Hants NW)
Freeman, RogerMoate, Roger
Gale, RogerMoss, Malcolm
Gill, ChristopherMoynihan, Hon Colin
Goodhart, Sir PhilipNelson, Anthony
Goodson-Wickes, Dr CharlesNeubert, Michael
Gow, IanNicholls, Patrick
Greenway, John (Ryedale)Nicholson, David (Taunton)
Gregory, ConalOnslow, Rt Hon Cranley
Griffiths, Peter (Portsmouth N)Paice, James
Grist, IanPatnick, Irvine
Ground, PatrickPeacock, Mrs Elizabeth
Grylls, MichaelPorter, David (Waveney)
Gummer, Rt Hon John SelwynPortillo, Michael
Hamilton, Hon Archie (Epsom)Powell, William (Corby)
Hamilton, Neil (Tatton)Raffan, Keith
Hanley, JeremyRidley, Rt Hon Nicholas
Hargreaves, Ken (Hyndburn)Roe, Mrs Marion
Harris, DavidRost, Peter
Hayes, JerryRowe, Andrew
Heathcoat-Amory, DavidRyder, Richard
Heddle, JohnSackville, Hon Tom
Hicks, Mrs Maureen (Wolv' NE)Sainsbury, Hon Tim
Hordern, Sir PeterShaw, David (Dover)
Howarth, Alan (Strat'd-on-A)Shaw, Sir Michael (Scarb')
Howatlh, G. (Cannock & B'wd)Shelton, William (Streatham)
Howell, Rt Hon David (G'dford)Shephard, Mrs G. (Norfolk SW)
Howell, Ralph (North Norfolk)Shepherd, Colin (Hereford)
Hughes, Robert G. (Harrow W)Sims, Roger
Hunt, David (Wirral W)Smith, Tim (Beaconsfield)
Hunt, John (Ravensbourne)Speed, Keith
Irvine, MichaelSpicer, Sir Jim (Dorset W)
Jack, MichaelStern, Michael
Stewart, Andy (Sherwood)Widdecombe, Ann
Stradling Thomas, Sir John
Thurnham, PeterTellers for the Ayes:
Waddington, Rt Hon DavidMr. John Taylor and
Wheeler, JohnMr. Michael Fallon.
NOES
Banks, Tony (Newham NW)Lofthouse, Geoffrey
Barnes, Harry (Derbyshire NE)McAvoy, Thomas
Beckett, MargaretMahon, Mrs Alice
Beith, A. J.Michael, Alun
Bennett, A. F. (D'nt'n & R'dish)Michie, Bill (Sheffield Heeley)
Buckley, George J.Nellist, Dave
Campbell, Menzies (Fife NE)O'Brien, William
Clay, BobO'Neill, Martin
Clelland, DavidPike, Peter L.
Cohen, HarryPrimarolo, Dawn
Cryer, BobRedmond, Martin
Cunliffe, LawrenceRooker, Jeff
Cunningham, Dr JohnSkinner, Dennis
Davies, Ron (Caerphilly)Spearing, Nigel
Davis, Terry (B'ham Hodge H'l)Steel, Rt Hon David
Dixon, DonTaylor, Matthew (Truro)
Evans, John (St Helens N)Turner, Dennis
Foster, DerekWall, Pat
Golding, Mrs LlinWareing, Robert N.
Henderson, DougWelsh, Michael (Doncaster N)
Hughes, John (Coventry NE)Wise, Mrs Audrey
Hughes, Simon (Southwark)
Kirkwood, ArchyTellers for the Noes:
Lewis, TerryMr. Frank Haynes and
Lloyd, Tony (Stretford)Mr. Frank Cook.

Question accordingly agreed to.

Bill read the Third time, and passed.