HC Deb 22 April 1975 vol 890 cc1241-7

3.35 p.m.

Mr. Ivor Clemitson (Luton, East)

I beg to move, That leave be given to bring in a Bill to extend the powers of local authorities in relation to commercial and trading activities. Parliament and central Government doubt the ability of local governors, within the straitjacket of the present system, to run local affairs. Those are not my words. They are from the Redcliffe-Maud Report.

Mr. Russell Kerr (Feltham and Heston)

On a point of order, Mr. Speaker. Many of us are interested in this subject. May we have some quietness from hon. Members departing?

Mr. Speaker

I am grateful to the hon. Gentleman for his usual help in these matters.

Mr. Clemitson

Many hon. Members may be suspicious of the growth of certain supranational bodies. But what of our suspicion of our own local government? We have enshrined the principle that local authorities can perform only such specific functions as have a statutory basis. If they step out of line, we have a convenient doctrine, ultra vires, with which to clobber them. In other words, if local authorities wish to perform any function outside what have come to be regarded as their "proper" functions, they must either seek special statutory powers at great expense of time, money and effort or resort to some circuitous dodges to get round the blessed doctrine.

I should like to quote from a letter which I recently received from the secretary of one of our great cities. He writes: My own council has for some time been most concerned at the restrictive effects of what is commonly referred to as the 'ultra vires' rule which, in their view, unreasonably inhibits them from engaging in commercial and trading activities which they feel would be of direct benefit to the citizens as consumers and indirect benefit to them as ratepayers. … Indeed, leading members of my council are at the present moment considering whether to seek local Act powers in this regard. Our latest attempt at local government reform hardly improved the situation. Indeed, if anything, it made it worse as the ancient charters of the boroughs went into the sausage machine of reorganisation.

This may not seem to be the best of times to propose greater powers for local authorities, which are hardly the most popular of British institutions at the moment. Criticism of them rises at an even faster rate than does the rise of the rate demands that drop on the nation's doormats. Yet I believe that it is not at all a bad time to do what the Bill proposes—that is, to give a general enabling power to local authorities to perform functions in the spheres of trading and commerce. One of the recent causes of the unpopularity of local government is precisely that it is set about by limitations, that local enterprise and initiative are stifled, and that local authorities have had heaped upon them by the central Government just those functions which, by their nature, are very expensive and nonprofit-making. As their expenditures have increased, so their real powers have decreased. Municipal enterprise has withered on the vine.

Those who are so quick to raise their hands in horror at the prospect of more municipalisation should consider these simple facts. In 1913, on the eve of the First World War, 80 per cent. of water, 65 per cent. of electricity and 40 per cent. of gas were supplied by local authorities and 80 per cent. of tramways were run by them. It may be that gas and electricity, for example, are better produced and managed on a national scale, but there are many things which can be produced and many services which can be performed better on a local scale.

The spirit of local authority enterprise which flourished at the turn of the century could be resurrected and developed in many new and imaginative ways. Why should local councils not run, for example, estate agency services? Why should they not perform—if you will pardon me saying so, Mr. Speaker, in view of my previous experience—undertaking since they control many of the cemeteries and crematoria in this country? Why should they not sell local products and engage in manufacturing enterprises and a hundred and one different activities? In other words, why should local authorities not be entrepreneurs? Why should they not become initiators rather than merely unpopular agents for an increasing range of powers thrust upon them by the central Government?

If they were given the chance to be creative it would provide an invaluable injection of interest into local government. Instead of them being the whipping boys for the central Government, why should they not become innovators and initiators as they once were? If it be asked where the check is on all this, the answer is simply in the local electorate. The local authority is responsible in proper democratic fashion to the local electors, and that surely is where accountability should lie and where the checks should operate. I need not mention the functions of the district auditor as well.

The one score on which local authorities are most unpopular—that they are the imposers of local taxation and the big spenders of much public money—does not apply to the powers this Bill would confer. Far from it. Local enterprise should, and I believe would, be no drain on the public purse. On the contrary, I believe it would be of some help to it. In a number of activities, local authorities could provide better services at the same cost—or lower—as services provided at the moment or services which now are not provided at all.

In 1973, within the severe limitations which exist on their activities at the moment, local authority trading services achieved a gross trading surplus of £154 million, and that came from a range of enterprises, from Birmingham's bank to Sheffield's printing works and—dare I mention it?—Luton Airport. Would it not make much more sense to enable local authorities to earn more money through local authority enterprise than through local lotteries? Would it not be better to encourage interest in local enterprises than in the number of the winning ticket in the weekly lottery?

There is a perfectly legitimate fear of the growth of remote State power. There is a growing demand for democracy to extend beyond the limits of the narrowly political into industry and into every facet and sphere of social life. Yet suspicion of local authorities continues. We are reluctant to enable and encourage local authorities to reach out into new areas of enterprise, and yet democracy needs small units, units of such a size that words like "participation", "accountability" and "involvement" can take on real meaning and not be merely dry academic abstractions.

I leave the last word as the first with the recommendations of the RedcliffeMaud Report: Local authorities must—and can—be given a real measure of freedom in reaching their own decisions and in settling, within broad national policies, their own priorities. They must be allowed to develop their own methods, to use their own initiative, to experiment. This Bill is one attempt to translate those words into law.

3.45 p.m.

Mr. Michael Latham (Melton)

Before I came into the House, I thought that I might be seeking to catch your eye, Mr. Deputy Speaker, to oppose the hon. Member for Luton, East (Mr. Clemitson) in his attempt to bring in his Bill. Having heard his speech, I am all the more convinced that it should not be allowed to pass without challenge. I intend to oppose it briefly because the House must get on to more important business, and we know that the Bill has no chance of passing into law in the current Session of Parliament. I want to declare an interest as a director in the building industry.

When I go to my constituency every weekend, there is no subject to which my constituents draw my attention more frequently than the position of the ratepayer. Ratepayers are very gravely concerned about the burdens which have been placed upon them in recent years, and particularly at the present time. I can think of nothing which ratepayers would want less than increases in local government staffing. Having listened to the hon. Member for Luton, East describe the new duties and powers which he wants to give local government, I dread to think of the number of staff who would be involved and the burden that would fall on ratepayers as a result.

The hon. Member referred briefly to the ultra vires rule. There is no greater defence of ratepayers than this rule. By placing on local authorities the duty to be able to point to a specific legal power to do anything on behalf of the ratepayers, there is a very great constraint on them going into activities in which they have no particular expertise or experience. The Labour Party manifesto in the last General Election, with which the hon. Member's Bill deals, said, Local councils' lending will be expanded so that they can play a major part in helping house purchasers and keep down costs by supplying unified services for estate agency, surveying, conveyancing and mortgages". Can it really be believed that local authorities, already struggling with shortages of staff in many directions to fulfil all their existing duties under the law, will be able to cope competently with conveyancing, estate agency, mortgages and all the rest? Surely, no one, unless he is blinded by political prejudice, can believe that local authorities have the expertise or power to deal with these things.

I know that Labour Members would like to expand local authority powers to cover endless possible spheres of activity. However, the hon. Member for Luton, East did not tell us, and we have not heard it from the Tribune Group or any-one else, where the money and the staff are to come from and what control the

ratepayers will have over these new activities. The hon. Member for Luton, East talked about local authorities benefiting from the profits of these commercial activities. It may not have escaped the attention of some hon. Members that occasionally, particularly under this Government, businesses lose money. If the local authorities lose money, it is not the shareholders or the business men but the ratepayers who bear the costs every time. The ratepayers are going to be landed with huge bills if local authorities are given the powers that the hon. Member for Luton, East wishes them to have. It would be wholly improper at a time when the country is facing a rates revolution for the House to give leave for the hon. Member to introduce his Bill.

Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of Public Business):—

The House divided: Ayes 187, Noes 124.

Division No. 175.] AYES [3.50 p.m.
Archer, Peter Edelman, Maurice Irvine, Rt Hon Sir A. (Edge Hill)
Ashton, Joe Edge, Geoff Irving, Rt Hon S. (Dartford)
Atkinson, Norman Edwards, Robert (Wolv SE) Jackson, Colin (Brighouse)
Bagler, Gordon A. T. Ellis, John (Brigg & Scun) Jay, Rt Hon Douglas
Bates, Alf English, Michael Jeger, Mrs Lena
Beith, A. J. Ennals, David Jenkins, Hugh (Putney)
Benn, Rt Hon Anthony Wedgwood Evans, Gwynfor (Carmarnan) John, Brynmor
Bennett, Andrew (Stockport N) Evans, Ioan (Aberdare) Johnson, James (Hull West)
Bidwell, Sydney Evans, John (Newton) Johnson, Walter (Derby S)
Bishop, E. S. Ewing, Harry (Stirling) Jones, Alec (Rhondda)
Booth, Albert Fernyhough, Rt Hon E. Judd, Frank
Bottomley, Rt Hon Arthur Flannery, Martin Kaufman, Gerald
Bray, Dr Jeremy Fletcher, Ted (Darlington) Kelley, Richard
Brown, Robert C.(Newcastle W) Foot, Rt Hon Michael Kerr, Russell
Buchanan, Richard Forrester, John Kilroy-Silk, Robert
Butler, Mrs Joyce (Wood Green) Fowler, Gerald (The Wrekin) Lamborn, Harry
Callaghan, Jim (Middleton & P) Fraser, John (Lambeth, N'w'd) Lamond, James
Canavan, Dennis Freeson, Reginald Leadbitter, Ted
Cant, R. B. Gardner, Edward (S Fylde) Lee, John
Cartwright, John Garrett, John (Norwich S) Loyden, Eddie
Clemitson, Ivor Ginsburg, David Luard, Evan
Cocks, Michael (Bristol S) Gourlay, Harry McElhone, Frank
Colquhoun, Mrs Maureen Grant, George (Morpeth) MacFarquhar, Roderick
Cook, Robin F. (Edin C) Grant, John (Islington C) McNamara, Kevin
Corbett, Robin Grocott, Bruce Madden, Max
Cox, Thomas (Tooting) Hamilton, James (Bothwell) Magee, Bryan
Cryer, Bob Hamilton, W. W. (Central Fife) Mahon, Simon
Cunningham, Dr J. (Whiteh) Hardy, Peter Marks, Kenneth
Dalyell, Tam Harrison, Walter (Wakefield) Marshall, Jim (Leicester S)
Davidson, Arthur Hatton, Frank Maynard, Miss Joan
Davies, Bryan (Enfield N) Hayman, Mrs Helene Meacher, Michael
Davis, Clinton (Hackney C) Healey, Rt Hon Denis Mellish, Rt Hon Robert
Deakins, Eric Heffer, Eric S. Mikardo, Ian
Dean, Joseph (Leeds West) Hooley, Frank Miller, Dr M. S. (E Klibride)
Delargy, Hugh Horam, John Miller, Mrs Millie (Ilford N)
Dell, Rt Hon Edmund Hoyle, Doug (Nelson) Moonman, Eric
Dempsey, James Hughes, Rt Hon C. (Anglesey) Morris, Alfred (Wythenshawe)
Dormand, J. D. Hughes, Mark (Durham) Morris, Charles R. (Openshaw)
Dunn, James A. Hughes, Robert (Aberdeen N) Murray, Rt Hon Ronald King
Dunwoody, Mrs Gwyneth Hughes, Roy (Newport) Newens, Stanley
Eadie, Alex Hunter, Adam Noble, Mike
O'Halloran, Michael Sedgemore, Brian Torney, Tom
O'Malley, Rt Hon Brian Selby, Harry Varley, Rt Hon Eric G.
Orbach, Maurice Shaw, Arnold (Ilford South) Wainwright, Edwin (Dearne V)
Ovenden, John Sheldon, Robert (Ashton-u-Lyne) Walker, Harold (Doncaster)
Owen, Dr David Short, Rt Hon E. (Newcastle C) Ward, Michael
Padley, Walter Silkin, Rt Hon S. C. (Dulwich) Watkins, David
Palmer, Arthur Silverman, Julius Weetch, Ken
Park, George Skinner, Dennis Weitzman, David
Parry, Robert Small, William Wellbeloved, James
Pavitt, Laurie Spearing, Nigel White, Frank R. (Bury)
Peart, Rt Hon Fred Stallard, A. W. Whitlock, William
Perry, Ernest Stewart, Rt Hon M. (Fulham) Wigley, Dafydd
Phipps, Dr Colin Stoddart, David Willey, Rt Hon Frederick
Price, C. (Lewisham W) Stott, Roger Williams, Alan Lee (Hornch'ch)
Price, William (Rugby) Strang, Gavin Wise, Mrs Audrey
Radice, Giles Summersklli, Hon Dr Shirley Woodall, Alec
Roberts, Albert (Normanton) Swain, Thomas Wrigglesworth, Ian
Roberts, Gwilym (Cannock) Taylor, Mrs Ann (Bolton W) Young, David (Bolton E)
Robertson, John (Paisley) Thomas, Mike (Newcastle E)
Roderick, Caerwyn Thomas, Ron (Bristol NW) TELLERS FOR THE AYES:
Rodgers, William (Stockton) Thorne, Stan (Preston South) Mr. George Rodgers and
Rooker, J. W. Tierney, Sydney Mr. Terry Walker.
Ross, Rt Hon W. (Kilmarnock) Tinn, James
Adley, Robert Hamilton, Michael (Salisbury) Onslow, Cranley
Banks, Robert Hannam, John Pardee, John
Benyon, W. Harvie Anderson, Rt Hon Miss Parkinson, Cecil
Berry, Hon Anthony Havers, Sir Michael Pattie, Geoffrey
Biggs-Davison, John Holland, Philip Penhallgon, David
Blaker, Peter Hordern, Peter Percival, Ian
Body, Richard Howell, David (Guildford) Powell, Rt Hon J. Enoch
Boscawen, Hon Robert Howell, Ralph (North Norfolk) Raison, Timothy
Braine, Sir Bernard Howells, Geraint (Cardigan) Rathbone, Tim
Brittan, Leon Hurd, Douglas Renton, Rt Hon Sir D. (Hunts)
Buck, Antony Irvine, Bryant Godman (Rye) Rhys Williams, Sir Brandon
Budgen, Nick James, David Ridley, Hon Nicholas
Bulmer, Esmond Jenkin, Rt Hon P.(Wanst'd&W'df'd) Rifkind, Malcolm
Burden, F. A. Jessel, Toby Rippon, Rt Hon Geoffrey
Butler, Adam (Bosworth) Jopling, Michael Roberts, Michael (Cardiff NW)
Chalker, Mrs Lynda Kitson, Sir Timothy Roberts, Wyn (Conway)
Clarke, Kenneth(Rushcliffe) Knight, Mrs Jill Rost, Peter (SE Derbyshire)
Clegg, Walter Lamont, Norman Shaw, Giles (Pudsey)
Cope, John Lane, David Shaw, Michael (Scarborough)
Cormack, Patrick Langford-Holt, Sir John Silvester, Fred
Costain, A. P. Lawrence, Ivan Sims, Roger
Davies, Rt Hon J. (Knutsford) Le Merchant, Spencer Smith, Cyril (Rochdale)
Drayson, Burnaby Lloyd, Ian Smith, Dudley (Warwick)
Durant, Tony Luce, Richard Spicer, Jim (W Dorset)
Edwards, Nicholas (Pembroke) McAdden, Sir Stephen Sproat, Iain
Emery, Peter Macfarlane, Neil Stainton, Keith
Fairbairn, Nicholas McNair-Wilson, M. (Newbury) Stanbrook, Ivor
Fairgrieve, Russell McNair-Wilson, P. (New Forest) Stanley, John
Finsberg, Geoffrey Marten, Neil Steel, David (Roxburgh)
Fletcher, Alex (Edinburgh N) Mates, Michael Stokes, John
Fookes, Miss Janet Maude, Angus Tebbit, Norman
Freud, Clement Maudling, Rt Hon Reginald Thorpe, Rt Hon Jeremy (N Devon)
Gilmour, Rt Hon Ian (Chesham) Molyneaux, James Wainwright, Richard (Colne V)
Gilmour, Sir John (East Fife) Monro, Hector Weatheriil, Bernard
Glyn, Dr Alan Montgomery, Fergus Whltelaw, Rt Hon William
Goodhart, Philip Morgan-Giles, Rear-Admiral Wiggin, Jerry
Goodhew, Victor Morris, Michael (Northampton S) Wood, Rt Hon Richard
Gow, Ian (Eastbourne) Morrison, Charles (Devizes) Young, Sir G. (Ealing, Acton)
Gower, Sir Raymond (Barry) Morrison, Hon Peter (Chester)
Gray, Hamish Mudd, David TELLERS FOR THE NOES:
Grimond, Rt Hon J. Neave, Airey Mr. Michael Latham and
Grist, Ian Nelson, Anthony Mr. Cyril D. Townsend.
Hall-Davis, A. G. F. Neubert, Michael

Question accordingly agreed to.

Bill order to be brought in by Mr. Ivor Clemitson, Mr. George Rodgers, Mr. Ken Weetch, Mr. John Ovenden, Mr. Gwilym Roberts, Mr. Paul B. Rose, Mr. Joseph Dean, Mr. John Cartwright and Mr. Jim Marshall.