HC Deb 16 January 1974 vol 867 cc845-68

7.36 a.m.

Mr. Clinton Davis (Hackney, Central)

May I, at the outset, congratulate the hon. Member for Hornsey (Mr. Rossi) on his elevation, very temporary though it is, to the Front Bench. His appointment gives me a certain amount of pleasure, because the hon. Gentleman happens to be a very old friend of mine. We went to the same university and college, we debated against each other at that time and he is also a member of the same profession as myself, but now he seems to have gone off the rails altogether.

The Chancellor's mini-budget—the budget that never was in relation to the needs of the nation—totally misjudged the mood of the nation at the time. It failed to demand any real sacrifices from the wealthy to whom so much had been given gratuitously under the stewardship of the Chancellor of the Exchequer, and so foolishly. The budget made terrible demands, and it will continue to do so in future, on local government, particularly in the stress areas such as Hackney, of which my constituency and that of my hon. Friend the Member for Shoreditch and Finsbury (Mr. Ronald Brown) form part.

The Chancellor had the audacity during his speech on 19th December to say that local authorities would have no need to impose additional rate burdens. That remark depicted crass incompetence and lack of understanding or, worse, a terrifying hypocrisy. On that occasion the Chancellor said: There is one point about rates that I want to make absolutely clear and I hope that hon. and right hon. Gentlemen opposite will make it clear, as will my hon. Friends. In his speech yesterday the right hon. Gentleman the Leader of the Opposition said, '. to cut rate support grant… can only mean an additional rate burden on millions of householders.'—[OFFICIAL REPORT, 18th December 1973; Vol. 866, c. 1185.] I gather that the Opposition say 'Hear hear, and that was echoed last night in the right hon. Gentleman's television broadcast when he spoke of the result being another whopping rise in rates … I must tell the House that there is not one shred of truth in those assertons, and I will explain why. The rate support grant will be reduced only in line with the savings in expenditure and if, like the rest of the public sector, the local authorities reduce their current expenditure in accordance with the Government's request, that will not lead to one extra penny on the rates. That should be perfectly clear. If, on the other hand, any local authority deliberately sets outs to flaunt the national interest ——the right hon. Gentleman's grammar is as defective as his economics—— if it deliberately sets out to pursue a policy counter to the request that we have made and the rates go up in consequence, the necessary steps will no doubt be taken to remind electors where responsibility lies."—[OFFICIAL REPORT, 19th December 1973; Vol 866, c. 1470.] It was important to quote in full that statement by the Chancellor, because it shows either an astonishing lask of candour, or such ignorance of the activities and affairs of local government as to be absolutely astonishing coming from the lips of a holder of that office. The fact of the matter is that in questions affecting the economy the integrity and posturing of the right hon. Gentleman and his right hon. Friend the Secretary of State for Trade and Industry can only be likened to the meanest of Mississippi showboat gamblers.

To impose 20 per cent. cuts on capital expenditure in an area such as mine, to impose a 10 per cent. cut-back in services provided out of revenue in an area such as mine, will have a crippling effect on the progressive work of the London borough of Hackney. We are not, of course, responsible for education, but let it be said that we already know that the vital improvements which were proposed at 19 primary schools are to be deferred, except in the case of one of them.

I am most concerned, however, about the effect there will be on essential social services in my borough because, unlike certain Tory boroughs, we perform our statutory obligations to the homeless, an issue that is hardily recognised in areas such as Richmond. There they do not think that there is such a thing as home-lessness.

It is not something that can simply be talked about in terms of statistics and figures. In areas like ours, the welfare and social services enable thousands of people to lead more dignified and fuller lives than they could possibly do otherwise. The local authority takes the lead in the provision of such services and is assisted substantially by voluntary bodies which unquestionably will feel the pinch. To the handicapped, the elderly, the homeless and the deprived these things represent a lifeline which in certain material respects can well be cut at this time when the pressures of the economic situation already will have a devastating effect.

Let me clothe this with the reality of the facts concerning the pensioners and the handicapped. Many of them depend on the meals-on-wheels service that is provided by my local authority and is assisted notably by a number of voluntary organisations, more particularly the Victoria Kosher meals on wheels service. Let us examine that for a moment.

To maintain the present service, let alone consider any reductions, a substantial increase in expenditure is contemplated. It has to be recognised that in Hackney, perhaps most especially in the constituency of my hon. and learned Friend the Member for Stoke Newington and Hackney, North (Mr. Weitzman), there are a large number of elderly Jewish pensioners who are orthodox, who cannot participate in the council's ordinary meals-on-wheels service for that reason. Many are housebound and are in desperate need of such a service.

The Victoria Kosher meals-on-wheels service runs three vans for over 300 elderly persons and a local handicapped club. It is stated on behalf of that service that, if it does not get the extra £1,700 that it needs for 1974, there will be problems. We would have to depend more heavily on voluntary drivers", it says, and if the price of petrol goes on rocketing, then some will find it hard to keep up the work unpaid. It is the people who can protect themselves least, therefore, the disabled and the handicapped—there are more of them in an area such as ours than probably in an area like Hornsey, which is represented by the Minister, although that is not an area without deprivation either—who are dependent on these services. Those are the people who will feel the brunt of this savage attack.

There has been no equality of sacrifice demanded by the Chancellor of the Exchequer, the meanest and most incompetent Chancellor to have been seen since the war. When I get angry about this situation it is because I see the effects on my constituency of what is going on. My constituents are already terrified about it. It is not as though these are people who can stand up and fight for themselves. These are the very people about whom the Tory Party speaks so glibly when attacking the trade unions when Tories ask, "What about the pensioners?" Well, what about the pensioners and the handicapped? Will the Minister make a serious reply on this issue this morning?

Unhappily, in determining the cuts to be imposed and their effect, the local authority will have to determine how to allocate grants to voluntary organisations. There can be little doubt that, as with so many other places, Hackney will have to reduce such grants in some respects, much against the will and inclination of the local authority, which has expanded its services perhaps more than almost any other local authority. I emphasise that in my area these demands are not diminishing. They are rapidly increasing day by day, and petrol price increases on top will only make things even worse.

In Hackney we have a bold plan for a new centre at Ferncliff Road. A centre for the elderly, it was to provide a base for the meals-on-wheels service and cost £250,000. That plan has had to be put on to the scrap heap for another year. I invite the Minister to come to Ferncliff Road and look at the whole area and see how desperately that centre is needed.

In my constituency is the Kingsmead Estate which has been promised a centre since 1968. This is an estate with enormous problems and a community centre is vital. Yet we now know that it may well have to be delayed for another year, although the local authority is considering the situation to see whether it can get over these difficulties. If it cannot, let it be clear that the real responsibilities lies with this Tory Government.

Those are just two examples of plans that may have to be deferred with critical effects on the lives of thousands of people who cannot fight back. I turn to another issue causing great anxiety to those of us who represent the borough. It is the problem of homelessness.

Because the Hackney Council undertakes its statutory functions, it spends no less than £250,000 a year on the provision of bed and breakfast accommodation for the homeless. Some Tories may say that that is frivolous expenditure and I heard one—I cannot remember which—say in the debate on 19th December that it would teach Labour authorities a lesson to cut out this form of frivolous expenditure. We do not regard dealing with the homeless as frivolous.

Mr. Ronald Brown (Shoreditch and Finsbury)

My hon. Friend will recall that there is the suspicion in our borough and many others that Tory boroughs in outer London actually pay homeless people in their areas to travel to our area so that they will not be responsible for rehousing them.

Mr. Davis

Yes, I am aware of that. It is more than a suspicion. I do not know whether they go to the lengths of paying people to do that. I suspect that they pay their fares, at the very least.

A whole number of outer London Tory authorities are as remiss in their obligations, which are legal obligations in this connection, as they are in dealing with the needs of areas of housing stress such as Hackney. We have had the scandal of Barnet in relation to its dealings with Brent, and the scandals of Bromley and of Richmond. They talk of increasing their allocation for provision of Greater London Council housing, but it is almost miniscule in comparison with the needs of the GLC and especially of the specific local authority areas within inner London. They are not only reneging upon their true responsibilities but are fostering class policies in order that they may not diminish their electoral chances. Nothing could be more abject than that sort of policy, and the Minister knows that full well.

Whether or not Richmond and all the other recalcitrant authorities recognise it, in inner London homelessness is worsening day by day. It is not a problem which will disappear just because they do not recognise it. Someone must recognise it. Areas which have a social conscience, such as Hackney, and which already have enormous housing problems, find themselves obligated to do this, and the problems are exacerbated because others fail to do so. The hoteliers who have to be paid for bed-and-breakfast accommodation cannot be told, "Because the Government have imposed a cut we are sorry but we shall have to cut the rates that we pay you." They must be paid at the same rate. Therefore, the burden increases proportionately.

What sort of advice is the Minister's Department or the Department of Social Services giving to local authorities such as Hackney about the ways in which cuts are to be imposed? The Government are suggesting that salaries should not be cut, but supplies and services are to be cut. I think that they call it "the procurement area", as though they were dealing with the Mafia. It is absolute nonsense to deal with the situation on that basis. Apparently one can have labour standing by but unable to deal with the matters with which it is capable of dealing. Therefore, we want guidance on that issue from the Minister's Department and especially from the Department of Social Services.

We want to know what sort of analysis was made of the needs of the stress areas when these cuts were imposed, because they are across-the-board cuts. That is as nonsensical as the imposition of the three-day working week in certain areas. I do not, however, want to debate the three-day working week as a matter of principle. I would not dignify it in that way. There was no proper analysis of the needs of individual areas in respect of the three-day working week, and the same applies in this case.

My hon. Friend the Member for Shoreditch and Finsbury and I have been arguing since 1970—and before then, when we got rather more help from the Labour Government—that areas such as Hackney need special help. The Government have said, "You are right as a matter of principle, but it is the practice about which we are a little worried." We do not get the special help that we need. Urban aid to the voluntary organisations is useful but it hardly touches the basic problems that we face.

Does the Minister begin to understand the increasing hardships that are being experienced in inner London or in boroughs such as mine? By resiling from the promise given only a month ago of a 4½ per cent. growth in spending on education and social services his Department has administered a terrible judgment on Hackney and other areas. It all emanates from the Government's complete incompetence in handling our affairs. Their profligacy has led to the current incredible balance of payments deficit, and they know that the miners' overtime ban has little to do with the disastrous state of the nation.

The Government have allowed the situation to get completely out of hand and in dissipating the nation's resources, in squandering the opportunities for industrial peace, in adhering to their outworn dogma, the judgment that falls from them upon the poor and deprived, who number so many in an area such as mine, will be savage indeed. However, those people will know where the responsibility lies and they will soon have the opportunity of making their voices heard.

7.57 a.m.

Mr. Ronald Brown (Shoreditch and Finsbury)

At this late hour I congratulate my hon. Friend the Member for Hackney, Central (Mr. Clinton Davis) on the manner in which he has addressed himself to the problems facing our area. Hackney is perhaps one of the premier boroughs in the country. As for his general theme, we had a debate on 20th November in which we deployed the arguments about the chaos in London. There were two answers from the Government Front Bench, both completely inadequate and neither of them addressed to the problems described by my hon. Friends. We have been waiting for some sort of action to follow that.

The only development since we raised the question of London services grinding to a halt has been that the Government have turned out the troops in London. That was a new venture for which we still await an explanation. The only statement we had was that they were going to use the tanks on terrorists. That is an absurd and inadequate excuse. May we know why the tanks were put on the streets of London? Was that a rational reaction to a terrorist threat? If it was, will the Minister describe how that threat was to be dealt with? It was alleged there were four or five terrorists who had stolen a SAM missile. How were they to be dealt with if they could ever be found? There is therefore a suspicion in London that there is more to this than has been admitted. My hon. Friends and I will return to this matter if we are permitted, and provided a General Election does not intervene, to demand a much more reasonable answer than we have had hitherto.

If an answer is not forthcoming we can make certain assumptions, but not least of all is the assumption that it was an absurd and silly reaction. Friends throughout the world are writing to me asking what is happening in Britain. People are withdrawing investments from this country, because they fear what is happening. Either there was a rational explanation for what the Home Secretary did, but which he has failed to give us, or it was sublime stupidity.

That was the only follow-up to the substantial debate on 20th November. My hon. Friends representing London constituencies and I were so concerned about the deteriorating situation in London that we decided by December that it would be a good idea if a deputation of us waited on the Prime Minister. I wrote to him on their behalf on 4th December asking him to receive us to discuss the continuing deterioration in the public services in London and to see whether we could have an advance on the inadequate replies by Ministers on 20th November.

The Prime Minister replied on 7th December that I would have seen that he had told my hon. Friend the Member for Wandsworth, Central (Mr. Thomas Cox) that he would be meeting Sir Reginald Goodwin on 19th December. He said that it was primarily a matter for the GLC, and in those circumstances he did not think there could be any advantage in his meeting our deputation.

I rang the Prime Minister's office, and told his secretary that although he was a London Member the right hon. Gentleman had not had the courtesy to attend our debate on 20th November, whereas my right hon. Friend the Member for Huyton (Mr. Harold Wilson) had listened to the debate to understand the problems of the metropolis. I also said that, if the Prime Minister were unaware that the hospital service was not a matter for the GLC, the sooner he left politics in London the better. I asked the Prime Minister to review his attitude, but he refused to do so, and there has been only a continuing deterioration.

During an earlier debate on the Bill I put to the Under-Secretary of State for Education and Science many times the problem of the children in my constituency who still have two half days a week out of school. That was the problem I highlighted on 20th November. I had previously had discussions with the Secretary of State for Education and Science. Time and again I asked the Under-Secretary what were his proposals to get the children in my constituency back to school full time. When he wound up the debate, with an appalling series of platitudes, he did not have the courtesy to refer to the matter once. On a point of order, I asked that somebody should instruct the Minister to address himself to the problems that were put to him.

We still have in the London Borough of Hackney, and in my constituency in particular, more children out of school than we have ever had. The Secretary of State's approach to the problem is indolent. She saw me to discuss the matter, and treated me with courtesy. I explained the problem to her, and I believe that after that meeting she appreciated perhaps for the first time the difficulties in the specific circumstances of my constituency. She offered to send the Under-Secretary and an inspector to look at the school in question. As is the usual form with this Government, I heard nothing. I telephoned the right hon. Lady's office and asked what had happened. It appeared that she had received the report from the inspector. The Under-Secretary of State, so it appeared, had also received the report. Many months later there are more children out of school and fewer teachers. The whole situation, to which I drew the right hon. Lady's attention in September, has deteriorated.

The present Under-Secretary of State for Education and Science seemed to find it inconvenient to refer to the matter. It is a great misuse of this House when Ministers are asked specific questions of which they have full knowledge and yet make no attempt to reply. I congratulate the hon. Member for Hornsey (Mr. Rossi) on his preferment. I trust that he will have a short but happy stay. I ask him to address himself to what the Government are doing to ensure that children in my constituency obtain full-time education as is demanded by the Act.

I noted in the Supply Estimates that the Department of Education and Science was making available another £4 million for direct grant schools. It appears that that is not subject to the 10 per cent. cut. It seems that more children in my constituency can be kept out of school, yet the Government feel that it is propitious to give £1 million, in addition to the £11 million which they have already given, to direct-grant schools which will be exempted from any cuts under the Chancellor's measures.

The three-day week is nonsense. Perhaps I do not take the same view as my hon. Friend the Member for Hackney, Central (Mr. Clinton Davis).

Mr. Clinton Davis

I was not suggesting in any sense that I approved of the three-day week as a matter of principle. I was being charitable about it. I believe it to be an alibi for the Government's complete failure in other directions.

Mr. Brown

I thought that my hon. Friend took that view. I am grateful to him for supporting my view.

If we accept that the Government are to go ahead with such a ridiculous charade, it must be understood that it has already caused grave concern in the constituencies of my hon. Friend and myself because of difficulties arising from the cycle. Difficulty has arisen in many of the industries in my constituency which have been allocated Thursdays, Fridays and Saturdays because half the labour force is Jewish and the other half is Moslem. The Jewish community does not work on Saturdays and the Moslem community does not work on Fridays. The result is that some firms work only on Thursdays.

When I raised the matter with Ministers it appeared that they had not thought about it. They did not exactly laugh about it but they thought the matter rather humorous. They said that they would think about it. I am still waiting. The characteristic of this Government is that they never tell us. Often we do not know whether they have taken the argument on board.

I note that the Minister for Energy, in answer to a Written Question, said that he would consider whether to rotate the cycle if the charade of the three-day week continued, so that firms allocated Thursdays, Fridays and Saturdays would get a turn on the Monday, Tuesday and Wednesday rota and that those on the Monday, Tuesday and Wednesday rota would get a turn on the Thursday, Friday and Saturday cycle. The Minister is not even clear about that. He said that he would give consideration to the matter. As with most other matters, we shall probably hear no more about it.

A firm in my constituency has a labour force of nearly 2,000. In London terms it is quite substantial. I regret to say that the chairman is not one of my supporters. Nevertheless, I have had close contact with him for some years. He has received much patronage from the Conservative benches. He is chairman of this, that and the other. Name any organisation, and he is chairman of it. I say that with great respect, although he is not a Labour supporter. I would not expect him to try to create problems for a Conservative Government. But he pleaded with me about this when I spoke to him.

The day fixed for starting the three-day week charade was 31st December. That was not ordained by the Almighty but was decided by the Government. The Government were well aware, when they chose 31st December, that they had already agreed to 1st January being a national holiday and most firms had made arrangements well in advance. This industry has good labour relations and had discussed this with the trade unions and had agreed how to operate 31st December and 1st January, so when the Government ordained that 31st December should be the day to commence the three-day week charade these people were left in total disarray because they could work only on Wednesday of that week.

My constituent was not wanting to buck the system, or to attack the Government, but was asking that for that one week he could change to working on Thursday, Friday and Saturday, or to have Wednesday, Thursday and Friday, letting him keep the agreement reached with his workpeople to avoid confusion.

I said, "I will have a go, but I do not think I shall get much response because this Government of yours is not exactly one which understands simple issues". So I got in touch with the Department of Energy—or what was then the Department of Trade and Industry—and put the case. The man at the Ministry said, "It is an impressive case, but we cannot give dispensations". I said, "Don't be silly. You are ordering it to start. Surely when a case is put to you and last week there were no power cuts and this week there will be none, why have you to be so adamant about this firm?".

After a long discussion, they said, "It is not our responsibility now. We have discharged our responsibility. The regulation has been laid and, in London, the London Electricity Board has the responsibility of implementing the three-day week policy. We have laid it down in principle and if you can get the LEB to change this, you go ahead."

So, since we have a good relationship with the LEB, who do a good job, off we go to see the Chairman. At the LEB they said it was a matter for the Government, but I said, "No, they say you have a concession to implement the three-day week." After much discussion, the man talking with me said that it was a matter of complete indifference to him whether this firm had Monday, Tuesday, and Wednesday, or Thursday, Friday, and Saturday, or whether they chose to work Wednesday, Thursday and Friday. He said, "They will be subject to power cuts if any take place", but I said, "You have had no cuts before. Why should there be any now?". He replied, "Yes. I am only saying that if there are cuts they will have to have them." I said, "As far as you are concerned it is all right?", and he replied, "Yes. It is a matter of complete indifference to me which three days they have."

So, hot-foot, we went back to the Department of Trade and Industry. There the man said, "You mean to say that they have agreed? I will have a word with them." I said, "No. I don't want you to lean on them. All I want is a dispensation to my industrialist so that he feels he is an honourable guy." They said that they would telephone me back, and I was telephoned back at my constituency advice centre that evening when I was told that they had been through to the Chairman's office of the LEB who denied having said that to me. I commented, "That does not surprise me."

I found it outrageous that such a thing should happen in Government in any event. I asked, "What will you do about it? It is your responsibility." I was told that the chairman had been asked to telephone me later that evening. Sure enough, about eight o'clock I had a telephone call at my advice centre from the LEB. I was told that what I had said was right at the time it was said, but now the board was an agent of the Government and no longer free but had to do what the Government told the board to do. I said that the Government were on the slippery slope to dictatorship when they could lean on people and twist their arms in that way—that we were getting perilously too close to dictatorship which many of us fought a long time not to have. I told the board that I was astounded that it should have allowed this wretched Minister to lean on it in this way.

So 31st December came, and went. A solution was found with the good will of the workforce. We do not hear much about that sort of thing. The industry was able to function because of the good will of the workforce, with the management being prepared to discuss with the men. The fact that I had done my best on behalf of the firm satisfied the workforce that its help was needed.

I had a Question to the Minister and it was answered this morning—or yesterday. After a long sitting like this it is not easy to remember the date. I asked the Minister whether having regard to the fact that he has appointed the London Electricity Board to act as agent for the Government in the implementation of its three-day work policy, what will be the financial cost of the board of carrying out that agency ; and what proportion will be borne by the Government. I also asked, in another Question, whether the Minister was aware it was impossible to telephone the board about the very business it was set up to do—electricity supplying.

The answer the Minister gave me was, I have not appointed the London Electricity Board as my agent."—[OFFICIAL REPORT, 15th January 1973 ; Vol. 867, c. 58.] That is exactly what he has done. That is exactly what I was told. The Government lay down the policy, the board implements it. It is acting in the Minister's stead. One can only call that answer an utter untruth. The board is acting as agent of the Minister and is not independent of the Minister. That is another illustration of the dangerous situation in which we find ourselves when even in this House Ministers are prepared to give that sort of untruthful answer, knowing that the facts do not coincide with it.

I return to the issue raised by my hon. Friend, and that is, money for local government, in London in particular. It is significant that we have not seen the like of this situation before. We have had some bad Tory Governments. I served in local government for more than 20 years, and was chairman of many committees. I had a number of skirmishes with Tory Governments. But I feel sorry for my colleagues in local government today having to deal with this Government, because it really is the world's worst. From all those years when I was in local government I do not recall an occasion when in London in January we did not know what the rates support grant was to be. The estimates have to be prepared to be approved at full committee meetings in February.

Even more tragic, the Government are now demanding a cutting of the services, but they have not said so. How can the Secretary of State demand a 20 per cent. cut on capital expenditure and a 10 per cent. cut in procurement? And if "procurement" means goods and services, why does he not say so? But the only way of observing his caveat that there should be no redundancy or unemployment is to cut goods and services, because local government is labour-intensive.

When asked which goods or services should be cut, I am advised, the Secretary of State said that that was not for him to say. When told that some services, such as the meals-on-wheels, cannot be cut, he says that he does not mind the rates being increased by up to 10p in the pound, but that if it goes beyond that, although he does not intend to take any sanctions, he will identify the area and tell the people there that he regards it as wrong that the local authority should have tried to spend that amount on services.

So the right hon. and learned Gentleman does not have the guts to order cuts in services and threaten sanctions for non-compliance. He adopts the bully boy attitude of which he is a past master. This is another example of the Government not having the courage to stand by their own decisions and of trying to shuffle off responsibility for the results of their actions.

I have been trying for a long time to get more money spent on highways and pavements in my constituency. My hon. Friend the Member for Hackney, Central knows this because, unlike many solicitors, he has been kind enough to help me in preparing the cases of elderly folk who have fallen and injured themselves on badly maintained surfaces and who have been thought to have a case for suing the council under the 1961 Highways Act.

It is now impossible to sue a council under the 1961 Act. I raised this matter in the House and with the Lord Chancellor's office on many occasions and I was told that this was because of the Appeal Court ruling in Meggs v. Liverpool Corporation in 1968 that because the paving stones were so out of line the unevenness was obvious and anyone falling over them did so through his own negligence. Anyone with sufficient money may test that ruling, but my constituents have not that sort of money and have to rely upon legal aid. The legal aid committee immediately decides that because of the 1968 ruling there is no reasonable case for testing the law. We have effectively negated the procedure of the 1961 Act by that 1968 ruling.

The Government take no interest and nothing has been done. People in my constituency are still falling over paving stones at the rate of about one a month. Elderly persons who fall over physically injure themselves and the shock of falling over may shorten their expected life-span.

The Secretary of State for the Environment tells local authorities that they cannot cut back on housing and certain other services but they can cut back on the maintenance of highways. He does so in full knowledge of the facts that I have given to the House. Paving stones are in a disgraceful state. Paving stones that are repaired on one day are broken again on the following day by 20-ton juggernauts going over them and snapping them. The Department of the Environment is powerless to do anything about it, yet local authorities are told to save the 10 per cent. by cutting down on the maintenance of pavements and highways.

Are constituents of mine who fall over broken paving stones to have thrown at them the 1968 Appeal Court ruling, when the Government have wilfully said that pavements and roads are not to be properly maintained? I hope to be told what will happen to a constituent in those circumstances. Am I to understand that the Department of the Environment will take full responsibility, and should I send my constituent to the Secretary of State for the Environment rather than to the local authority as hitherto?

The Government are oblivious to the fact that the public services in London are grinding to a halt. Even at 6.30 am queues of cars can be seen on the roads into London.

Hospitals are closing down their operating theatres, teachers are unable or unwilling to teach in London's schools, so our children suffer. I could catalogue items showing that London is grinding to a halt. I ask the Government, recognising that—and they have never admitted that this is so—what will they do to help the London boroughs to understand how much money they have for works next year? When will the boroughs be told what their rate support grant is to be in figures? I do not want a White Paper at the end of the month, giving a formula no one can understand.

I heard an amusing story which I cannot believe is true. I am told that the Department of the Environment had determined the formula by using a computer. The Secretary of State was asked, "That's all very well. You have given us a formula. But tell us the reason for it". "Ah," said the Secretary of State, "I do not know why, but the computer says so." That is where we are. There is no explanation at all. I am told that the Secretary of State cannot and will not say why he is giving that formula. When the information was put into the computer an answer was given but there was no explanation because computers do not give explanations.

I understand that the White Paper may be published towards the end of the month in the hope that the computer has been re-programmed in such a way that it will explain its answer. We know that London will suffer again. The basis of the formula is rateable value per capita. In London we have the highest rateable value per capita. We also pay the highest rates per head in the country. As a result of taking the rateable value per capita we are losing on the rate support grant. This is absolutely unforgivable. I understand that in this formula there is a bit of "put and take" and there is a glimmer of hope because it is alleged that in the end, when we know the figures, we shall be satisfied that it is not so bad.

It is time that the figures were known. How shall we work out the London equalisation scheme? The Minister and I know about it because we both worked on it years ago. We know that if the London equalisation scheme is not worked out by February it cannot be done at all. There are many boroughs which will suffer badly if the scheme is not determined. A whole range of issues flow from that and cannot be resolved. Will the Minister say how he believes the 32 London boroughs can determine a new scheme if they do not know the vital figures?

I have intervened more in sorrow than in anger. I do not believe that the Government are capable of carrying out their work. When we saw them on 20th November, we saw a Government stripped of any vestige of understanding. The water is over their heads. They are long past the time for getting out and I hope that today the Prime Minister will make his fateful decision and decide that the people of the country ought to have their say now. If he does not, then a very sad future faces us in London.

8.35 a.m.

The Under-Secretary of State for the Environment (Mr. Hugh Rossi)

May I thank the hon. Members for Hackney, Central (Mr. Clinton Davis) and for Shoreditch and Finsbury (Mr. Ronald Brown) for their welcome on my first appearance at this Dispatch Box. I assure them that it is the intention of my colleagues and, I am sure, of the electorate as a whole to see to it that I make numerous appearances here over a long period of time.

I welcome this opportunity to answer a debate initiated by the hon. Member for Hackney, Central in view of our association over many years going back to our debating days as students.

Having exchanged those courtesies, I must say that I regret certain elements in the speeches of both hon. Members. They were in stark contrast to the very constructive tone which the Greater London Council and the London boroughs have taken in their discussions about cuts in public expenditure. Local authorities realise the difficulties that the nation faces, and they are responding in their desire to help the Government to meet the emergency we face.

The hon. Member for Hackney, Central began by making a long quotation from the statement by my right hon. Friend the Chancellor of the Exchequer on 17th December. The object of the quotation was to suggest that it was nonsense to say that cuts in expenditure would not involve an increase in the rates. The hon. Member for Shoreditch and Finsbury went even further and said that in his opinion there would be a 10p increase in rates in London.

Mr. Ronald Brown

I said that it was possible that the local authorities would have to put up the rates by 10p and that I understood that the Secretary of State would be prepared to accept that figure.

Mr. Rossi

There is no justification in that assumption. My right hon. and hon. Friends have made it clear that their aim in the rate support grant settlement has been to ensure that the domestic ratepayer will not face unreasonable increases. Increases of the order suggested by the hon. Gentleman would be unreasonable.

With regard to the rate support grant, a White Paper is to be published shortly. Subject to printing, it is hoped that it will appear next week. It is inappropriate for me to anticipate what will be contained in that White Paper, but I think I can say that it appears that London will be slightly better off as a result of the rate support grant which will be announced in the White Paper and that the grant will provide for a 2 per cent. growth in real terms in local government for next year.

As for personal services, it is anticipated that there will be a 3.8 per cent. growth. I mention that specifically because of the fears which both hon. Members have expressed about these cuts in public expenditure and their effect upon personal services.

Having listened to the speeches very carefully, I think that there is a great deal of misunderstanding in the minds of the hon. Gentlemen as to what these cuts are about and what they seek to do. I hope that they will bear with me while I go into these matters in a little detail.

The reasons for the cuts were given by my right hon. Friend the Chancellor of the Exchequer in his statement in the House on 17th December. He made it clear that the objective was to reduce public expenditure in areas where there would be a demand upon energy supply. Therefore, the reduction in public expenditure must not only be in such obvious things as heating and lighting of buildings but in the indirect demand for energy such as public construction programmes and public purchases of supplies of all kinds.

This was explained a little further in the circular issued by my Department on 19th December, No. 157/73, which made it clear again that demand must not exceed available resources in total in respect of particular supplies, especially those which make heavy demands on our limited resources of fuel. Therefore, it was determined to make these cuts which have been mentioned of 20 per cent. of planned capital expenditure for 1974–75 and 10 per cent. of procurement. This requires a little amplification, because obviously it is in this area that hon. Gentlemen have found some difficulty.

I have just referred to planned capital expenditure for the next financial year. Therefore, the current capital expenditure remains unaffected. In the future planned programme there was a significant measure of expansion over and above the current programme. Therefore, what is being asked for is a large measure of restraint which will still leave local government with some expansion, as the rate support grant envisages, and as I have already indicated.

The term "procurement" in the statement seems to cause some difficulty. Procurement is of goods and services, excluding wages and salaries and loan charges. It follows that since local government is a labour-intensive industry in which the wage bill forms a substantial part of current expenditure, a 10 per cent. cut in current expenditure not touching wages and salaries and, additionally, loan charges is not as severe as it seems at first sight.

I should have mentioned, when speaking of a 20 per cent. cut in the proposed capital programme, that housing is specifically exempt. This is because of the high priority that the Government place on housing. The exemption applies not only to new house building by local authorities, but to general housing expenditure in the public sector. This includes housing associations, slum clearance, house improvements, improvement grants and local authority lending for private house purchasers.

Therefore, there are two important sectors in local government expenditure exempt from the cuts—first, in the staffing of personal services provided by an authority to its local community—this is inherent in the cut of 10 per cent. in procurement—and, secondly, in the provision of homes. These are exemptions of major significance for the London boroughs.

Having said that, I must add that I realise that the reductions that have to be made will not be easy to achieve. Inevitably, they will involve some disruption of planned programmes. Each authority will have to make its own decision on how best to achieve the cuts, but there are three priorities on which the Government have given guidance. First, essential services should be kept going. Secondly, authorities should reserve the ability to meet the exceptional needs of the community that could arise in the difficult years ahead. This implies meals on wheels and services for the elderly—people, who, in their private lives, would be most ill affected by the cuts that the nation is having to suffer. Thirdly, the disruption will be minimised if the reductions are concentrated in areas where fuel shortages are in any case likely to affect the supply of materials. Contrary to the impression which the hon. Gentleman sought to give, discussions are going on all. the time on these matters with the local authorities.

Mr. Clinton Davis

I have it on impeccable authority that although the hon. Gentleman says guidance is being given, the quality of that guidance is very much in dispute. My authority finds that it is being given no real guidance. It is all very well to talk about guidance and advice, but which services will be cut? In an area such as mine, what does the Minister regard as essential?

Mr. Ronald Brown

Saving 10 per cent.

Mr. Rossi

As I said, each authority makes its own decision within the priorities indicated. Whatever the source of the hon. Gentleman's information, he is being less than fair to the officials of my Department, because discussions have taken place and guidance has already been given on the allocation of the reductions.

Mr. Brown

Which services?

Mr. Rossi

A further, more detailed circular dealing with the matter is to be issued.

Mr. Brown

Which services?

Mr. Rossi

If there is time, I shall deal with some of the individual services.

The 20 per cent. cuts in capital expenditure comprehensively affect the following: the locally determined sector allocation, which is now fixed for 1974–75 at £278 million, the large projects pool, which will be issued shortly, and the financing of capital projects from revenue. Local authorities will also be required to reduce their expenditure on land acquisition for key sector purposes other than housing, even though this is not directly controlled by the Government.

With regard to the reduction in current expenditure by 10 per cent. of expenditure on procurement, the intention is not to cut staff, particularly those in personal services. Inevitably, however, it will not be possible to maintain work for some staff where, because of a national shortage, materials are not available for their work. In those circumstances, the Government will expect local authorities to be flexible in achieving cuts and the priorities that I have mentioned, and in maintaining efficiency through redeployment and the re-use of staff on other work.

So far I have spoken about general principles in relation to the cuts and the priorities to which regard must be had, and I should now like to turn——

Mr. Ronald Brown

The Minister promised to describe in detail the cuts which he thinks can be made. What my authority and I want to know is which services the Minister suggests should be cut.

Mr. Rossi

I appreciate the hon. Gentleman's impatience, but if he had allowed me to complete my sentence he would have heard me say that I wanted to deal with particular services, especially those in London, that are likely to be affected.

I refer first to education, because that was the first service referred to by the hon. Member for Hackney, Central. As a result of the moratorium in October 1973, the Department of Education and Science's 1973–74 building programme has been extended to 30th June 1974. The cuts announced by my right hon. Friend the Chancellor of the Exchequer mean that, in the ILEA area, 14 replacement or improvement projects for primary schools costing nearly £3 million are likely to be lost from the 1973–74 programme, but primary schools costing £296,000 will probably go ahead.

In the 1974–75 programme for the ILEA area, one primary school is likely to be approved at a cost of £157,000, but up to 18 primary school improvement projects are likely to be lost, totalling about £3½ million.

Despite these cuts, the basic need for additional places will still be met, special school projects will go ahead, the 1974–75 nursery allocations already announced remain valid, but will run from 1st July 1974 to 30th June 1975, and the minor work allocations remain, though on a reduced scale. Reduction of capital expenditure from revenue by local education authorities will not be at the expense of employed people, namely, teaching and non-teaching staff, or at the cost of essential education supplies, such as books. The expenditure will be reduced by postponing repairs and maintenance and by a delay of replacement of less essential equipment.

As for the health and personal social services, details of how the reduction of 20 per cent. in capital expenditure in 1974–75 will affect the Department of Health and Social Security programme have not yet been worked out, and so I cannot help hon. Members about that, but the social service projects, such as residential accommodation for the elderly, will inevitably be restricted to a lower level than had been envisaged, and authorities will be notified as soon as possible which projects may be given provisional approval, with a view to their receiving approval in principle and, if resources permit, final approval in 1974–75.

Local health authority building projects, such as health centres and clinics, will be taken over by the new health authorities on 1st April 1974, but to avoid a hiatus in building the Department of Health and Social Security will continue to approve new health centre projects after that date and will notify individual local authorities whether contracts may be placed before them, but the number of new starts will be substantially less than local authorities would wish.

The hon. Member referred to the road programme. Local authorities were asked not to let new principal road contracts after 20th December pending a review by my Department of the national picture. The Department has acted similarly on trunk road contracts. Local authorities have been told that there is no present intention of interfering with contracts already let but that the prospect of starting new schemes in the near future is poor. Since 1st September 1973, contracts have been let and started for about £9 million on which the estimated expenditure in 1974–75 will be £3.5 million, and the decision not to place new contracts for the time being affects about £9 million worth of contracts which are ready for letting.

In the time available to me I have tried to deal with some of the specific areas covered by the hon. Member. I conclude simply by emphasising that this is a time of a national energy crisis in which every individual in the nation is affected. It requires the co-operation of every one of us to see the nation through these difficult times. This means doing without some of the things we would like to have had. In this the local authorities have been asked to make their contribution, particularly where their future programmes would have had a significant effect upon the national energy supplies.

Mr. Clinton Davis

The Chancellor conceded that this had nothing to do with the energy crisis. It was due to the terrifying balance of payments deficit and the profligacy of the Government. The Chancellor said that he would have had to introduce these cuts regardless of the crisis.

Mr. Rossi

I am sorry I gave way. That is simply not true. I invite the hon. Member to read the statement, and in particular the extract which is appended at the end of Circular 157/73. There the rationale of the request for capital and procurement cuts is given in detail. The hon. Gentleman will see that it is clearly related to the problem of energy supply. If he and his colleagues do not recognise this, the local authorities do. I conclude as I opened. The speeches of the hon. Member and his hon. Friends are in regrettable contrast to the very constructive, helpful way in which the local authorities are approaching this national emergency.