Commons Sitting of 28 April 1976

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
ORAL ANSWERS TO QUESTIONS
  FOREIGN AND COMMONWEALTH AFFAIRS

    Rhodesia
    Mr. Laneasked the Secretary of State for Foreign and Commonwealth Affairs whether he will make a further statement on recent developments in Rhodesia.
    Mr. Whiteheadasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a further statement about Rhodesia.
    Mr. Biggs-Davisonasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about the latest situation in Rhodesia.
    The Secretary of State for Foreign and Commonwealth Affairs (Mr. Anthony Crosland): My right hon. Friend the Prime Minister, in his former capacity as Secretary of State for Foreign and Commonwealth Affairs, set out in his statement of 22nd March the terms on which Her Majesty's Government would be prepared to become involved in further efforts to negotiate a settlement. Recent events in Rhodesia can only have underlined the need for the white community to face up to the realities of the situation and to do so soon.
    Mr. Lane: As it is increasingly clear that the only hope of a secure and peaceful future in Rhodesia for both European and Africans lies in a negotiated settlement leading to early majority rule, has not the time come for a new British
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    attempt to stop the drift to disaster and to disaster and to restart negotiations—subject, of course, to the hesitation of the Secretary of State—for example, by calling together a conference outside Rhodesia to which the right hon. Gentleman could invite not only Mr. Smith and the African leaders but perhaps some representatives of neigh bouring States?
    Mr. Crosland: No, Sir. I have considered this very carefully, as obviously my predecessor did, and I share his view that no further direct intervention by Her Majesty's Government would be effective unless there were a prior commitment on the part of the Smith régime in Rhodesia to the four preconditions set out by my predecessor in his statement of 22nd March. Otherwise we should simply start off again on that long, stony road that we did not advance up but tried to inch up over the last 12 years.
    Mr. Whitehead: I congratulate my right hon. Friend on his new responsibilities, and on the elevation of Grimsby to be one of the chancelleries of Europe. Could he now perhaps accept that the whole House would welcome the Kissinger acceptance of the British Government's initiatives, and particularly the undertaking on the part of the American Administration to repeal the Byrd amendment concerning the sale of chrome by Rhodesia to the United States? Will not my right hon. Friend agree that there is now a case for saying to the Rhodesian people, black and white alike, that Her Majesty's Government will talk to any representatives of both communities there who will move for a settlement not by the cosmetic means now being employed by Mr. Smith?
    Mr. Crosland: I am grateful to my hon. Friend for his congratulations. I approach this new task with great diffidence, and I hope that hon. Members will be tolerant if during my apprenticeship I fail to answer all their questions to their total satisfaction.
    On the substance of my hon. Friend's question, I entirely agree with him. Dr. Kissinger's speech is, of course, a major contribution to African policy. What it makes clear is that the views which my predecessor and I have been expressing on Rhodesia are not simply those of the British Government. They are not simply

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    those of the leaders of African Governments. They are the views of all the other members of the European Economic Community and also now the views, clearly expressed, of the United States. This is a major contribution—in my view, at any rate—to a possible solution of this problem.
    Mr. Maudling: I add our congratulations to the new Foreign Secretary, and hope that he has a very successful and very brief tenure of office. Will he confirm that it is really his intention to do nothing whatsoever about Rhodesia?
    Mr. Crosland: I am grateful to the right hon. Gentleman and, indeed, grateful for the letter he wrote to me in the columns of The Times. It at least had the advantage that I did not have to send an acknowledgement.
    On the substance of the question, I adhere to what my right hon. Friend the Prime Minister said on 22nd March. This is a matter which obviously I had the privilege of discussing with Dr. Kissinger when I met him last Saturday. It is my view that as of now, until the Smith regime accepts the four preconditions set out by my right hon. Friend the Prime Minister, a direct or personal British initiative would not contribute.
    Mr. MacFarquhar: I add my congratulations to my right hon. Friend. In the light of the very important Kissinger speech, would it not be wise for Her Majesty's Government at least to explore whether behind the brave words that Mr. Smith is putting out in Salisbury there may not now be a realisation that he is totally isolated in the Western world and that it is time to come to terms with the African majority?
    Mr. Crosland: I shall certainly continue to consider—and consider daily—whether there is a new initiative that I could take, or that Her Majesty's Government could take, that would ease the situation. But for the moment the essential thing is for the white community in Rhodesia to grasp the full significance of the Kissinger speech, which means that they are dealing not just with the British Government and the four presidents, but with an opinion now held by the whole world community.
    Mr. Biggs-Davison: Is the right hon Gentleman aware that, although we wish him well, he and Dr. Kissinger have made a bad start in Africa and that between them the Foreign and Commonwealth Secretary and the American Secretary of State are undermining every moderate person in Rhodesia and giving comfort to Soviet imperialism in Southern Africa? Since Southern Africa is vital to the European economy and to Western strategy, how does the right hon. Gentleman now propose to make his stand to defend those vital British interests?
    Mr. Crosland: Apart from questions of morality and justice about majority rule, which I leave aside for the moment, if the hon. Gentleman is talking about legitimacy in terms of national interests and in terms of the global balance of power, I suggest to him that. if the United Kingdom Government and Dr. Kissinger had not taken the line that we have taken, we should have undermined every single moderate black leader in the entire continent of Africa.
    Several Hon. Members rose—
    Mr. Speaker: Order. This subject arises again.
    Mr. Brocklebank-Fowlerasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a further statement on Rhodesia.
    Mr. Crosland: I would refer the hon. Gentleman to my reply to the hon. Member for Cambridge (Mr. Lane).
    Mr. Brocklebank-Fowler: Does the right hon. Gentleman accept that in the light of Mr. Smith's response to Dr. Kissinger's speech yesterday, the Government should now recognise the apprehensions that are felt by all minority groups in Rhodesia, and not only white minority groups, as to their future in an independent Zimbabwe? In those circumstances, will he now publicise Her Majesty's Government's proposals for their protection during any transfer of power and afterwards?
    Mr. Crosland: No, as of now I am not prepared to go beyond what my right hon. Friend the Prime Minister said on 22nd March. As the hon. Gentleman knows, my right hon. Friend said that

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    any consideration of safeguards and guarantees for the white minority must come in stage two, after, not before, the Smith regime has announced its acceptance of the four preconditions mentioned in his statement. That still seems to be the right order in which to proceed, but this is something that I am keeping very much in mind in case the situation changes.
    Mr. George Rodgers: Does my right hon. Friend agree that Mr. Smith has proved a very slippery customer who has utilised every gesture and overture that has been made by the British Government to extend his period in power? Is there not a danger that even a progression of two years, as suggested by Dr. Kissinger, towards majority rule would be utilised for further procrastination?
    Mr. Crosland: There is no doubt that there has been a lot of procrastination on the part of Mr. Smith over the past 12 years. The "18 months to two years", as the Prime Minister put it, is not a period during which we think no movement should occur. It should be a period during which the elections to provide majority rule must occur. Of course, it will take some time to work out electoral arrangements. Therefore, it is not unreasonable to take a period of 18 months to two years. Should any change in the situation occur which alters our view, we shall still be able to alter it.
    Mr. Churchill: Is the right hon. Gentleman aware that Dr. Kissinger's one-sided approach to the problem of Rhodesia, an approach that was made without even going to see the situation at first-hand or informing himself of the position of the Opposition, is widely regretted? Furthermore, is he aware that any decision to give economic assistance, either by the British Government or the American Government, to Governments which are countenancing the use of their territory for terrorist activity against British territory is widely resented by millions of people in this country?
    Mr. Crosland: The question of British aid to Mozambique has been many times discussed at Question Time. We have made it clear more than once why we think that the aid should be given. They are the reasons which were repeated by Dr. Kissinger in his speech in Lusaka
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    yesterday. It seems a proper stance to adopt, to be one-sided in support of democracy.
    Mr. Maudling: What representations has the right hon. Gentleman made to President Machel of Mozambique about the actions of terrorist gangs from Mozambique, such as committing armed robbery and murder in the British territory of Rhodesia?
    Mr. Crosland: I deplore that incident as it was reasonably and properly deplored by the South African Government. Such incidents are regrettable wherever they occur and whoever is responsible, but we have said repeatedly that violence is inevitable in Rhodesia unless agreement can be reached on a rapid transfer to majority rule.
    Mr. Maudling: What representations are being made by the Foreign Secretary?
    Mr. Crosland: There have been no representations—
    Mr. Churchill: Disgraceful!
    Mr. Crosland:—because acts of violence will be committed in different parts of the sub-continent by different sides as long as there is no sign of any settlement over Rhodesia. It is impossible to make representations every time an act of violence occurs. The lesson to be drawn from the violence is the need for an early settlement of the Rhodesian problem.
    Mr. Robert Hughes: Will my right hon. Friend look further into the interesting question put to him by the hon. Member for Norfolk, North-West (Mr. Brocklebank-Fowler) about closing the border between South Africa and Rhodesia, since clearly to impose the widest sanctions will drive home to white Rhodesians that they are totally isolated?
    Mr. Crosland: I will look into that matter, but I stress, as I did in answer to the Question, that there is a limit to our power or, indeed, influence in a matter of this kind.
    I should like to see sanctions tightened up. We constantly attempt that, but the experience of the last 12 years has shown that sanctions alone will not solve the problem. I regret to say that the problem has become not an economic but a political and military one.

    Foreign Embassies (Parking Fines)
    Mr. Jesselasked the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to foreign embassies in London concerning the number of parking fines unpaid by personnel on embassy staffs enjoying diplomatic immunity.
    The Minister of State for Foreign and Commonwealth Affairs (Mr. Roy Hattersley): Every month a formal note is sent to the head of each diplomatic mission in London enclosing a list of the fixed penalty notices cancelled for members of his staff on the grounds of diplomatic immunity and requesting the head of mission to take appropriate action.
    Mr. Jessel: As 53,477 fines were cancelled on grounds of diplomatic immunity in 1975—more than 1,000 a week—can the Minister of State say why other people in London should have to endure worse traffic jams just because diplomats who ought to obey the laws of the host countries in which they are working are exploiting their immunity for a purpose which was never intended? What does the right hon. Gentleman intend to do about it?
    Mr. Hattersley: Other people do not enjoy the same benefits because other people are not covered by the Vienna Convention on Diplomatic Relations, which makes two matters quite clear. One is that we cannot distinguish between one sort of crime or offence and another. The other is that we must either sign the convention—every part and every aspect of it—or not sign it and thereby put our own diplomats abroad under grave threat and at very difficult risks. I understand the point that the hon. Gentleman makes and, as a London driver and occasional parker, I share some of the difficulties which he has described. But I do not believe that there is any alternative to the present system.
    Mr. Goodhart: As the most persistent offenders, apart from Cuba and Egypt, are the oil-rich States of Iran, Nigeria and Saudi Arabia, ought not we to consider some form of rate surcharge on the embassies of those States—[Interruption]— since the cost to London is £250,000 a year?
    Mr. Hattersley: I did not quite get the final part of the hon. Gentleman's supplementary question because of the unanimous support for it which seemed to come from both sides of the House. However, I am sure that questions of a rate surcharge have to go to a Department other than the Foreign Office. On the general application of fines, I think that there is nothing that we can do.
    Mr. Tugendhat: Is the right hon. Gentleman aware that this problem is probably worst in my own constituency and that there are sections of the diplomatic community who behave in flagrant disregard of the interests of the people of London? Does not he agree that, if he cannot do anything else, the Foreign Office could at least publish a list of offenders so that we might see which missions behaved in an irresponsible fashion and abused our hospitality so grievously?
    Mr. Hattersley: I am sure that on reflection the hon. Gentleman will agree that it would not make any contribution to good international relations or serve the purposes which we hope that missions in this country are intended to serve were we to publish such a list. What would most certainly be revealed by such a list is that, although there are bad offenders, there are other missions which behave in quite the opposite way and, although they are under no obligation to do so, occasionally refund the total costs of ignored parking fines immediately. But I do not think that discriminating between the good and the bad by publishing their names would really do very much to help.

    Young People (Exchange Fund)
    Mr. Steenasked the Secretary of State for Foreign and Commonwealth Affairs if the Government will establish an exchange fund, on a permanent basis, with the aim of stimulating reciprocal programmes involving young people.
    The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Evan Luard): Her Majesty's Government are in favour of programmes for the exchange of young people but allocations of finance for such exchanges are made in the light of the available resources, the priorities of competing demands for funds,

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    and our cultural relations with other countries. Separate and reciprocal exchange funds would offer no advantages and might prove less flexible in application.
    Mr. Steen: Perhaps the hon. Gentleman has not got the point of my Question. I am suggesting that when he meets the Council of Ministers he should try to persuade it to set up a fund pari passu each youth population in each of the Common Market countries so that young people from all the Common Market countries can involve themselves in community work in each of the countries in proportion to the numbers of young people in each of those countries. Perhaps the hon. Gentleman could—
    Mr. Speaker: Order. That is enough for now.
    Mr. Luard: I was fully aware of the point in the original Question. I am also aware of the proposals of the working group of which the hon. Gentleman was chairman. The Government are very much in favour of the maximum possible exchanges between the young people of the Community countries. We have to consider the best way of doing this, and the British Council is already considering the proposals of the hon. Gentleman and his team. We must await its report.

    United Nations
    Mr. McCrindleasked the Secretary of State for Foreign and Commonwealth Affairs if he or one of his Ministers plans an early meeting with the Secretary-General of the United Nations.
    Mr. Luard: Neither my right hon. Friend nor any of his Ministers has any plans to do so at present.
    Mr. McCrindle: Although I appreciate the reluctance of the Front Bench team to answer my Question, when the Foreign Secretary or one of his Ministers next visits the United Nations will he take the opportunity to reaffirm this country's support of that international body and draw attention to the concern felt in many parts of this country at the seeming double standards of the United Nations when on occasions it appears to condemn aggression and on others to condone it depending entirely, apparently,
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    on whether the aggression comes from a Third World country?
    Mr. Luard: First, I welcome the hon. Gentleman's support for the United Nations and its purposes—a support shared by Her Majesty's Government with which I personally agree very much. As to whether the hon. Gentleman agrees with individual resolutions, I am sure that he will agree that no country will ever find itself in agreement with every resolution passed by the United Nations. It is dangerous if the United Nations appears to display double standards. But unless the hon. Gentleman is a good deal more explicit than he has been, it is impossible for me to answer the second part of his supplementary question.
    Mr. Luce: On the subject of double standards, was not the recent resolution passed by the Security Council on 31st March condemning South African intervention in Angola after the South Africans had withdrawn their troops and without even mentioning Cuban or Russian intervention utterly one-sided and hypocritical? Will the British Government go to the United Nations and seek the withdrawal of Cuban and Russian imperialism from Southern Africa?
    Mr. Luard: I cannot accept the hon. Gentleman's criticism of that resolution. He should bear in mind that when that resolution was being put forward there were still South African forces in Angola, completely against the will of the Government already established in Angola, which had been recognised by a large proportion of the nations of the world, including Her Majesty's Government. In that situation, it was not surprising that the United Nations should seek to pass a resolution condemning the continued presence of those forces in Angola against the will of the Angolan Government.
    Mr. Ioan Evans: As well as reiterating our commitment to the United Nations, will Her Majesty's Government also work within the United Nations to bring about majority rule in Namibia and Rhodesia, especially in view of the new American initiative, and at the same time try to take off the agenda the item which has been there longest, which is the item to work to end the apartheid system in South Africa?
    Mr. Luard: On Rhodesia, my hon. Friend knows that we are committed to the principle of introducing majority rule and that we have asked the Smith Government to agree to this within two years. That has now been supported by the United States Government.
    As for Namibia, I agree that we should do everything possible to ensure that there, too, a Government elected and accepted by the majority of the people come to power.
    South Africa is a much more difficult question. But we are committed as a Government against the principles of apartheid applied there at present.
    Mr. Gordon Wilson: When the Minister visits the General Secretary of the United Nations, will he tell him that the British Government accept the general terms of Dr. Kissinger's recent declaration and that on those grounds it will not object to the admission of an independent Scotland to the United Nations?
    Mr. Luard: We support and welcome the statement made by Dr. Kissinger on Rhodesia, but that is irrelevant to whether there should be an independent Government of Scotland.

    United States of America
    Mr. Peter Morrisonasked the Secretary of State for Foreign and Commonwealth Affairs whether he has any plans to pay an official visit to the United States of America.
    Mr. Frank Allaunasked the Secretary of State for Foreign and Commonwealth Affairs whether he has any plans to pay an official visit to the United States of America.
    Mr. Crosland: Yes, Sir. I look forward to accompanying Her Majesty the Queen and His Royal Highness the Duke of Edinburgh on their State visit to the United States of America from 6th to 11th July.
    Mr. Morrison: When the right hon. Gentleman goes to the United States will he make sure that he gets his priorities right and that if, for example, he meets the President or Dr. Kissinger he will not require him to get up at 5 o'clock in the morning to fly to some out-of-the-
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    way airport simply to suit his own party political whims?
    Mr. Crosland: The ignorance of British geography which must exist in Chester is very remarkable. Lincolnshire and that whole area of Humberside is one of the premier parts of the country and, in my view, Grimsby is one of the most remarkable towns in the whole Commonwealth. I can assure the hon. Gentleman that I shall get my priorities absolutely right when I go to the United States.
    Mr. Allaun: Will my right hon. Friend ask Washington to keep the CIA out of Britain and to stop it recruiting mercenaries for Africa?
    Mr. Crosland: I shall certainly consider my hon. Friend's suggestion very carefully indeed. There is a later Question about mercenaries.
    Mr. Amery: In any further conversations the right hon. Gentleman has with Dr. Kissinger when he visits the United States, will he bear in mind that Dr. Kissinger's speech in Lusaka had ominous echoes of Mr. Foster Dulles' attempt to pre-empt Soviet diplomacy in the Middle East in the 1950s? Will the right hon. Gentleman also bear in mind that many of us feel that he has encouraged Dr. Kissinger to cook a dinner which is more likely to be eaten by the Soviets than by the West?
    Mr. Crosland: Dr. Kissinger and I had breakfast together, not dinner. If there are echoes of a previous speech, they are echoes of Mr. Harold Macmillan's "wind of change" speech. The right hon. Member has close and cordial and familiar links with Mr. Macmillan and I imagine that he strongly supported that speech. I believe that Dr. Kissinger's speech was a major event for good in Africa. If he had not made it or had made a speech of a contrary character, the possible effects—apart from the morality of the matter—on the world balance of power would have been disastrous.
    Mr. Tugendhat: When the right hon. Gentleman goes to the United States, will he ensure that he meets Democratic candidates for the presidency as well as the Republican candidate? Is he aware that in a recent article on Mr. Jimmy Carter

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    in the Economist, a picture of the candidate showed him wearing a prominent "England get out of Ireland" button? Does that not show that Mr. Carter must have disregarded Mr. Cosgrave's speech to Cogress and representations made by the British Government to which the American Government have so far helpfully responded?
    Mr. Crosland: I shall seek to meet the leading Democratic candidates for the presidency. I certainly support the implications of the hon. Member's remarks about American arms for Ulster, which the police are constantly uncovering. I shall do whatever I can to strengthen the efforts already being made by the British Government to persuade the American Government to take every possible action to prevent this flow of arms.

    Namibia
    Mr. Formanasked the Secretary of State for Foreign and Commonwealth Affairs whether he has any plans to make an early visit to Pretoria.
    Mr. Crosland: I have at present no such plans.
    Mr. Forman: When he does have talks with members of the South African Government, will the right hon. Gentleman impress upon them the importance of early progress being made on a timetable for independence for Namibia so that the world can avoid witnessing in that country the kind of bloodshed I now feel to be inevitable in Rhodesia?
    Mr. Crosland: I very much agree with the hon. Member. My hon. Friend the Under-Secretary has already referred to our view on Namibia, which is much in line with that of the hon. Member. Early progress in this direction is crucial if we are to avoid another of the racial situations which are proving so disastrous in Southern Africa.
    Mr. David Steel: May I offer the right hon. Gentleman congratulations on behalf of my party on his appointment? I do not know whether he has been to Pretoria in a previous capacity but, if not, is he aware that he will find it a distinctly less congenial place than Grimsby? However, is he aware that we hope that he will not hesitate to go there if he thinks that a visit to his opposite
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    number in South Africa would help the situation in Rhodesia or Namibia?
    Mr. Crosland: If I thought a visit would help to contribute to a solution of the racial problems in South Africa, I should not hesitate to go, but at the moment it does not seem that anything particularly profound or good would follow from an early visit.
    Mr. Robert Hughes: If my right hon. Friend does consider going to Pretoria, will he make clear that the British Government oppose apartheid with such vehemence that there is no question of any South African defence commitment being allied to NATO?
    Mr. Crosland: I would certainly make that clear. It is on the record and our total opposition to apartheid has been stated many times.
    Mr. Brocklebank-Fowler: What discussions has the right hon. Gentleman had with the South African Government about the possibility of closing South Africa's road and rail links with Rhodesia and blocking Rhodesia's access to foreign exchange?
    Mr. Crosland: I have not had discussions on this subject in the three weeks I have been in office. The hon. Gentleman makes an important point, but we have no particular power to impose policies on South Africa, whether we want to or not. There is a limit in practice to the influence we can bring to bear.
    Mr. Frank Allaun: In the light of six recent revelations of vast exports of arms from Great Britain to South Africa, will my right hon. Friend tell Pretoria there will be no more—either direct or indirect—and that this is part of the programme on which we fought the General Election?
    Mr. Crosland: Defence equipment is a matter for my right hon. Friends the Secretaries of State for Defence and Trade. On trade in general, it has been our policy to trade with all nations, regardless of their internal political structure.
    Rear-Admiral Morgan-Giles: As part of his apprenticeship, as the right hon. Gentleman so charmingly put it, will he resolve to put British interests first and consider where we are to get our uranium and chromium rather than moralising

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    about the internal problems of other countries?
    Mr. Crosland: In my period of apprenticeship, to which the hon. and gallant Member has referred, I am new to considerations of foreign policy, but I have always assumed that the foreign policy of this country under successive Governments must be a reasonable balance between national self-interest and morality. The difficulty is in drawing the line where it should be drawn, but I can assure the hon. and gallant Member that I am not lacking in national patriotism.

    Israel
    Mr. Luceasked the Secretary of State for Foreign and Commonwealth Affairs whether he plans to meet the Foreign Minister of Irael.
    Mr. Hattersley: My right hon. Friend will be delighted to meet Mr. Allon, but there are no plans for a meeting at present.
    Mr. Luce: As it is in the British interest to see peace in the Middle East, will the right hon. Gentleman seek an opportunity of telling the Israeli Government that, whatever the injustices they have suffered over the past few years, their policy of deliberately establishing Jewish settlements in Arab-occupied territory in contravention of United Nations resolutions is likely to exacerbate the situation and to increase tensions in the area? Will the right hon. Gentleman convey that view to the Israeli Government?
    Mr. Haftersley: I share the hon. Gentleman's view that to continue building settlements in occupied territory can only impede negotiations and the beginning of negotiations. As I hold that view, I am pleased to hear it articulated by the hon. Gentleman and to endorse it.
    Mr. Robert Hughes: Will my right hon. Friend seek an early meeting with the Foreign Minister of Israel to express disquiet about reports that Rhodesian forces are at present training with and awaiting shipments of Israeli-made machine guns? Will he make it clear to the Foreign Minister of Israel that it would be a great disappointment to many of Israel's friends in Great Britain if Israel were to conclude an arms deal
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    in respect of arms and equipment to South African forces?
    Mr. Hattersley: As I have not heard of such reports, I am reluctant to comment on them. I share my hon. Friend's view that, if such reports were proved to be accurate, they would represent a great mistake, and many of Israel's friends in this country, among whom I number myself, would be deeply grieved.

    Cyprus
    Mr. Atkinsonasked the Secretary of State for Foreign and Commonwealth Affairs what is the latest position in regard to the Cyprus situation; and if he will make a statement.
    Mr. Hattersley: Her Majesty's Government hope that genuine negotiations at the intercommunal talks will soon be resumed. We maintain warm support for the efforts of Dr. Waldheim.
    Mr. Atkinson: Does my right hon. Friend agree that the interests and future of the island are being sacrificed and that the island is being used as a pawn in terms of ageing oil politics, possible membership of the European Community and as a means, possibly, of gaining NATO arms? Is it not time that the British Government, as a guarantor nation, decided to take some initiative to help bring bout a solution and an agreement on the so far unacceptable proposals submitted by both Turkey and Greece?
    Mr. Hattersley: I do not think that any of the causes that my hon. Friend lists have contributed towards a failure to make the sort of progress that both he and I wish to see. The real basis of the difficulty is that old hatreds, fears and exploitations are now being played out in new circumstances. I assure my hon. Friend that Her Majesty's Government are willing to take whatever initiatives seem practicable and possible. Although both my hon. Friend and I can only decry the unhappy situation in which the island now finds itself, all of us find it much more difficult to suggest remedies that the United Kingdom could apply. Therefore, I fear that the situation must continue until the intercommunal talks make some real progress.
    Mr. Geoffrey Finsberg: What steps will the right hon. Gentleman take to ensure that goods in the ownership of Turkish

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    Cypriots which are now in one of the two British sovereign bases on the island, are returned to their legitimate owners? Secondly, what will he do to prevent the importation to this country of illegally seized Greek Cypriot works of antiquity?
    Mr. Hattersley: The second part of the hon. Gentleman's question involves a matter which needs a good deal of qualification and a legal interpretation. If the hon. Gentleman needs an answer to that issue, he must table a Question so that the Law Officers are able to give a considered judgment upon it.
    I understand the hon. Gentleman's first point very well. He refers to the problems associated with goods which are now in the sovereign bases. This is not a matter of Britain holding on to them illegally or according to its wishes; it is a technical problem rather than a problem of our desires. The sooner all the problems associated with what happened at the sovereign bases, thanks to the refugees which it was our duty to look after during the early months of the civil war, are sorted out, the happier will be the British Government in general and the Ministry of Defence in particular.
    Mr. Hurd: Is it not a fact that the bilateral talks to which the Minister has referred, which are taking place in Vienna, have broken down as a result of the resignation of Mr. Clerides as the representative of the Government of Cyprus? If that is so, do not Her Majestys Government have distinct responsibilities, as the right hon. Gentleman indicated, to take some initiative to get the talks going again, or, if that is not possible, to find some other way of making progress towards a solution?
    Mr. Hattersley: Unfortunately, Mr. Clerides has resigned, but new negotiators have been appointed from both sides and I understand that they enjoy the support of both communities on the island. The task now is to get them talking, leading to intercommunal talks. We are doing all that we can quietly and privately, which is often a rather more successful approach in these matters than publicised initiatives, to make sure that the talks begin and continue satisfactorily. If the hon. Gentleman has any practical suggestions, or if any of my hon. Friends have any practical suggestions about what
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    else we should be doing, I shall be happy to consider them, but practical suggestions in this area have been very scarce.

  EUROPEAN COMMUNITY

    Foreign Ministers
    Mr. Blakerasked the Secretary of State for Foreign and Commonwealth Affairs when he next expects to meet the other Foreign Ministers of the EEC.
    Mr. Skinnerasked the Secretary of State for Foreign and Commonwealth Affairs whether he expects to meet EEC leaders in the near future.
    Mr. Crosland: I shall be meeting the other Foreign Ministers of the EEC in Luxembourg on 14th and 15th May.
    Mr. Blaker: Does the Foreign Secretary agree that one of the areas in which the Community has the best prospect of making progress is the concerting of foreign policy? In that connection, will he pay attention to the situation in Yugoslavia, to which country concerted EEC and, indeed, NATO policy is desirable in view of the clear evidence that the Soviet Union is making preparations to attempt to put Yugoslavia under Soviet control?
    Mr. Crosland: I agree with the hon. Gentleman's general proposition that one of the most fruitful lines of development in the Community should be to concert foreign policy. Indeed, it was in the belief that that was possible that I first became a supporter of our entry into the Common Market. [Interruption.]I am still, on the whole, a supporter as long as the EEC allows the fisheries policy to come all right. I have no statement to make on Yugoslavia.
    Mr. Skinner: Will my right hon. Friend ask Common Market leaders to produce a joint list indicating all those occasions when other Common Market countries have contravened the Treaty of Rome? Has not the issue been highlighted by the recent shipping convention, which seemingly allows three Common Market nations to take part in an activity which contravenes the article about free competition at a time when we in Britain are being weighed down by VAT, surrounded by surpluses, and have a massive

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    trade deficit with the rest of the Common Market which seemingly British trade unions are now being asked to resolve by having a pay policy of 3 per cent. or whatever goes with it?
    Mr. Crosland: It is on the tip of my tongue to give my hon. Friend the latest house building figures, but I know from long experience of his deep concern for the rule of European law. I should like seriously to consider his suggestion.
    Mr. Marten: On Rhodesia and the Foreign Ministers of the Common Market, as all the EEC countries are in favour of a transfer to majority rule as speedily as possible—one of the few occasions on which they have spoken with one voice—will the right hon. Gentleman tell us whether Common Market Ministers agree with Dr. Kissinger's policy as well?
    Mr. Crosland: Common Market Ministers have certainly reinforced and publicly supported the Prime Minister's statement of 22nd March. As I understand Dr. Kissinger's speech—like the hon. Gentleman, I have read only a summary of it—it is very much on the same lines as the Prime Minister's statement. If so—I do not know whether there are differences in detail—I think that it can be assumed that the Common Market Ministers support it.
    Mr. Jay: Is my right hon. Friend wholly satisfied with the Common Market fisheries policy?
    Mr. Crosland: No, Sir. Even though people in Chester do not know where Grimsby is, I shall certainly make sure that other countries of the Common Market know where it is. My right hon. Friend will not be surprised to hear that I propose to take a personal interest in the renegotiation of the common fisheries policy, which is absolutely crucial to the future of the British fishing industry.

    Democratic Control
    Sir A. Meyerasked the Secretary of State for Foreign and Commonwealth Affairs what proposals he intends to put forward for effective democratic control of the EEC.
    Mr. Hattersley: The Council of Ministers, where the important Community decisions are taken, consists of Ministers of the Governments of the member States,
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    each of whom is accountable to a democratically elected Parliament. We see this as providing the main effective channel of democratic control at the present stage of the Community's development. The European Parliament can also play a useful rôle, as we recognised in our proposals to strengthen financial control in the Community.
    Sir A. Meyer: I am sure that the hon. Gentleman is as unhappy with that answer as I am. Now that he has a new Secretary of State, will he make it plain that he has the opportunity of improving on the lamentable and purely negative record of his predecessor? Instead of clucking about in Europe like a wet hen, he should start making proposals to the people who expected the British to have something to say about democratic control.
    Mr. Hattersley: I am not unhappy with that answer, not least because I wrote it myself. I know the point that the hon. Gentleman is making. I must say that I fear it, not only as one who wants to be realistic about the EEC, but as one who supports the EEC and wants it to gain support throughout the entire Community, because people like the hon. Gentleman, who constantly want the Community to do more, without defining what "more" should be and the value of more, do the Community more harm than good.
    Mr. Raphael Tuck: Has my right hon. Friend read the various letters in The Times recently by prominent members of the European Movement who maintain that the European Parliament should have the power not only to influence the decisions of the Council of Ministers but to reject them if necessary? If that is not the complete abrogation of national sovereignty and is not federalism rearing its ugly head, I should like to know what is.
    Mr. Hattersley: I have read those views, but I do not share them.
    Mr. Dykes: Is the right hon. Gentleman worried that the momentum towards direct elections by 1978, or close to it, is now fading away? Does not that underline the importance of the July meeting of the European Council?
    Mr. Hattersley: I am always worried by metaphysical concepts such as momentum towards integration and other things which

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    I hear both in this House and in Brussels and which I find it difficult to describe or draw or give any quantitative value to. I am sure that most member nations, like Great Britain, are prepared to see direct elections when they are practically possible. I think that some other countries now realise something that we discovered a year ago—namely, that there are some technical and constitutional difficulties involved in preparing for direct elections and in ensuring that Governments who have committed themselves in Brussels and elsewhere have the support of their domestic legislatures. We have always accepted that position and we accept it today.
    Mr. Hurd: Following that answer, when will the Government put before the House practical proposals for a Select Committee, which the former Foreign Secretary announced in our debate on this subject well before Easter?
    Mr. Hattersley: I do not think that I should transgress any further. The next Question is directly concerned with direct elections, so perhaps I should leave that answer to the subsequent Question.

    Direct Elections
    Mr. Martenasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a further statement on direct elections to the European Parliament.
    Mr. Moateasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the present position with regard to direct elections to the European Parliament.
    Mr. Gowasked the Secretary of State for Foreign and Commonwealth Affairs whether he will make a statement about direct elections to the European Assembly, following the meeting of EEC Heads of State in Luxembourg.
    Mr. Hattersley: The European Council asked the Foreign Ministers to do further work on the subject and to report back to the Heads of Government in July. The Council of Ministers will consider the matter further at its meeting on 3rd and 4th May.
    Mr. Marten: May we have an assurance from the Minister that after that meeting he will come to the House and make a statement on what went on,
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    because this House is very much in the dark as to what goes on? Will he tell the House what the French proposed at the Council meeting?
    Mr. Hattersley: It is not possible to go into many details about suggestions made by our colleagues in preparation—[HON. MEMBERS: "Why not?"]—for negotiations carried on by the nine Foreign Ministers. Indeed, it has been the tradition of the House, accepted by all other than those who always make that kind of noise when I explain the conventions of the Council of Ministers, that the negotiations carried on by the nine Foreign Ministers are best not carried on in a blaze of major publicity. The idea that the French Government have put forward as perhaps the best solution is a Parliament or an Assembly of approximately the same size as that which has previously not been elected, and that idea has appeared in newspapers and is well known. If the hon. Gentleman wants a statement after next Monday or Tuesday, I shall be happy to make one. The record in the House following Councils of Foreign Ministers is clear. When a statement is not made, hon. Members complain. When a statement is made, they are bored. I shall do what I can to meet the wishes of the House.
    Mr. Moate: What is the British Government's reaction to this French proposal as reported? Would the right hon. Gentleman consider that one advantage of a smaller number, roughly the same size as the present Assembly, would be that, if an individual country did not wish to proceed to direct elections, we could continue to send the same number of Members as at present without any extra burden on the House?
    Mr. Hattersley: The Government have made clear that, when they come, we should like to see direct elections to an Assembly of a rather larger size than the present Assembly. We should find it very difficult to proceed to direct elections on the basis of the French proposals. That would produce a situation which was altogether unsatisfactory.
    As to whether some countries have to move at different speeds, that will be determined and decided on the ability of Foreign Ministers to come to agree on

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    a generally acceptable scheme in which we can take part on the same dates as the others. That is certainly our wish, but it may be impossible if the constitutional proprieties cannot be observed and the tehcnicalities cannot be completed.
    Mr. Jay: As a Select Committee is to be appointed to inquire into this whole problem, will my right hon. Friend assure us that the Government will take no decisions until the Committee has reported and its report has been debated by the House?
    Mr. Hattersley: I certainly assure my right hon. Friend that the Government's wish is to do exactly as he describes. But this must be a two-way process. The other Governments of the Community want to move quickly on these matters. Therefore, if we are to move as a Government one step behind the Select Committee, the Select Committee will have to carry out its functions with a great deal of dispatch. If there is good will on both sides, I am sure that we shall observe the principle that my right hon. Friend has laid down, but there will be pressures on both the Government and the Select Committee.
    Mr. Gow: Does the Minister understand that his answers are entirely unsatisfactory even to those of us, including myself, who voted "Yes" in the referendum last year? Does he further understand that crucial to the issue of direct elections to the European Parliament are the powers of that Parliament and the future organisation of the constitution of the European Community? Will the right hon. Gentleman tell us the Government's thinking about that crucial subject?
    Mr. Hattersley: I did so at the end of the two-day debate on direct elections three weeks ago—a debate, if my mind serves me correctly, in which the hon. Gentleman did not take part. It took me 10 minutes to describe the constitutional provisions governing the power of the European Assembly. Its powers are as described in the Treaty of Rome. They cannot be changed without the support of this Parliament, and I cannot imagine this Parliament giving support for excessive increases in the powers of the European Assembly.
    Mr. Atkinson: Will my right hon. Friend reconsider his answer on the international discussions taking place at the Council of Ministers? Is it not an absolute outrage that he should suggest that these discussions take place in private? Is not this some indication that the declaration of the Prime Minister and the Leader of the House that we were to move towards open government is to be very short-lived
    Mr. Hattersley: I think that on reflection my hon. Friend will agree that for progress to be made in international discussions, with nine Foreign Ministers trying to come to a consensus and general compromise, it is not always the wisest course either to announce what we propose to say at the beginning or to announce what we are prepared to accept at the end. Let me mention two facts. We have always been willing to make a statement after Council meetings describing the conclusions reached on those occasions. Secondly, there is the most absolute safeguard about direct elections. Nothing can happen without legislation in this House and the will of the House being demonstrated by its votes. There is no question of my right hon. Friend the Foreign Secretary, or the Prime Minister or anyone else, doing something without my hon. Friend's knowledge.
    Mr. Hurd: Does the right hon. Gentleman agree that it is not much use his urging the Select Committee to make speed when the Government have not produced proposals for the Select Committee? When will these proposals be made?
    Mr. Hattersley: I hope that the announcement of the Select Committee's terms of reference, or suggestions for it and suggested membership, can be made to the House very soon. My right hon. Friend the Leader of the House is present. He is well aware of the need for progress. I think that the hon. Gentleman will find that there is an announcement in the very near future.
    Mr. David Steel: Has the Minister of State discovered whether the new Foreign Secretary is any more open minded or far-sighted on the question of the method of electing representatives to the European Parliament than his predecessor?
    Mr. Hattersley: I do not quite understand the implication of that question, and I fear that if I did I should be unwilling to answer it. The simple position is that the Government feel themselves committed by their treaty obligations to hold direct elections, and that we shall do as soon as constitutionally and practically possible.

    Harmonisation
    Mr. Cryerasked the Secretary of State for Foreign and Commonwealth Affairs if he is satisfied with the moves towards harmonisation within the EEC.
    Mr. Hattersley: Provided our national interests are safeguarded, we support measures to remove technical barriers to trade and to facilitate fair competition. We do not, however, believe in gratuitous harmonisation or harmonisation for its own sake.
    Mr. Cryer: Will my right hon. Friend explain to the House what he is doing to curb the apparently insatiable zest for harmonisation by the Brussels bureaucrats, from dressed poultry to skimmed milk? Will he comment on his earlier answer on the votes of the House given towards Community proposals, bearing in mind that on the skimmed milk Order the votes of this House made not a whit of difference? What moves on harmonisation are we making on wages, which are generally higher in the other Community countries, and on holidays, which are generally fewer in the United Kingdom? Will those two matters be harmonised?
    Mr. Hattersley: On the final point, I doubt it. On the previous two points, on the skimmed milk directive the House proceeded in a way recommended and endorsed by the Scrutiny Committee, which said that it knew that there might have to be progress made before the wishes of the House were finally known. Notwithstanding that, the Leader of the House made it clear that there could be a second debate on this subject, and no doubt there will be. My hon. Friend also refers—if I may mix a metaphor—to the hoary old chestnut of eviscerated chicken. This is one of the occasions, as is so often the case, when something that the Community is doing is wholly approved of by the domestic Department. As I understand it, the Minister
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    of Agriculture believed that proposition to be in the interests of hygiene. It so happens, in the current state of national opinion, that the Community gets blamed for these things and is accused of reckless harmonisation. It happens to be a good thing, as are so many of the Community proposals.
    Mr. John Davies: Is the right hon. Gentleman aware that in accepting the comment on the subject of skimmed milk he is dealing with something on which there is no harmony at all, nor any harmonisation envisaged? Perhaps he will also recognise that by introducing the principle of the optional directive on harmonisation the Community is greatly assisting intra-Community trade and has done nothing but good in this field. Will he encourage the Community to proceed with this line?
    Mr. Hattersley: The new principle of optional harmonisation is altogether desirable. It helps to facilitate those measures to reduce non-tariff barriers to trade without bearing over-onerously on individual member Governments. I am glad that the right hon. Gentleman drew that to the attention of the House.
    Mr. Bidwell: Is my right hon. Friend aware that the previous Prime Minister quite recently described the common agricultural policy as a nonsense, or alluded to the nonsenses of its operation? Does he also agree that most people thought that there would be economic advantages in remaining in the Common Market but that no one thought that there would be much advantage from retaining the so-called common agricultural policy? What hope does my right hon. Friend hold out for a British contribution to changing the situation fairly rapidly?
    Mr. Hattersley: The House has been told by my right hon. Friend the Minister of Agriculture every month that we have made substantial alterations to the CAP during the past two years. We made them during renegotiation and have made them since. We intend to continue making those improvements which we regard as essential if the CAP is properly to reflect the needs of consumers as well as producers.
    Sir B. Rhys Williams: While it must now be obvious that to proceed to economic and monetary union as originally

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    suggested in the Werner Report would be futile, have not the last few weeks shown that it is highly desirable to co-ordinate our exchange rate policy and interest-rate policy with other members of the EEC?
    Mr. Hattersley: I certainly subscribe to the hon. Gentleman's first point—that the old concept of economic and monetary union was something which would never work and which has now been demonstrated as certain to fail. The hon. Gentleman's second point is more appropriate for my right hon. Friend the Chancellor of the Exchequer.
    Mrs. Dunwoody: Is my right hon. Friend aware that his right hon. Friend the Minister of Agriculture, Fisheries and Food goes to Luxembourg for an emergency meeting of the Common Market Agriculture Ministers tomorrow? We hope that he will strongly resist any attempt to change the rate of the green pound, as to do so would add considerably to the food bill in this country and make it totally impossible to continue a decent incomes policy.
    Mr. Hattersley: I assure my hon. Friend that there is absolutely no question of the green pound being changed in any way which does not observe the assurances and safeguards for British financing within the common agricultural policy which were specified in the Treaty of Accession.

EUROPEAN COMMUNITY (MEETINGS OF COUNCIL OF MINISTERS)
The Minister of State for Foreign and Commonwealth Affairs (Mr. Roy Hattersley): With your permission, Mr. Speaker, I will make a statement about business to be taken in the Council of Ministers of the European Community during May. The monthly forecast for May was deposited yesterday.
At present, four meetings of the Council of Ministers are proposed for May. Foreign Ministers will meet on 3rd and 4th May and on 31st May and 1st June, Finance Ministers on 17th May and Agriculture Ministers on 17th and 18th May.
As part of the follow-up to the European Council meeting on 1st and 2nd
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April, Ministers at the Foreign Affairs Council are likely to resume consideration of the Tindemans Report and direct elections to the European Assembly. Passport union is also to be discussed. Ministers will hope to conclude negotiations with Portugal and to discuss the resumption of negotiations with Spain. There will be preparations for an Association Council meeting with Cyprus and consideration of the negotiating mandate for Greek accession. Ministers are expected to consider the Community's external commitments, including the insertion of financial chapters in the Mashraq agreements.
Ministers are likely to consider the stage reached in the continuing dialogue between industrialised and developing countries. This will entail a review of the work to date of the four Commissions of the Conference on International Economic Co-operation, and consideration of the Community position for UNCTAD IV in Niarobi. Foreign Ministers will also consider the question of the siting of the JET experiment, which is to be the centrepiece of the Community's five-year fusion programme up to 1980.
Ministers at the Finance Council are likely to have their regular discussions of the economic situation in the Community and may consider Commission proposals for reform of the budget unit of account.
Agriculture Ministers are likely to consider amended arrangements for beef imports, the proposed Community sheep-meat regime, arrangements for New Zealand butter imports for 1978–80 and a number of proposed measures for improving agricultural structures. They may also discuss improvements in the market organisation for fish.
Mr. Hurd: I thank the right hon. Gentleman for his usual comprehensive statement. Does he accept that we are in some difficulty about the discussion by the Council of Ministers of direct elections? The Minister told us earlier that the Foreign Ministers will discuss this subject at their meeting on 3rd and 4th May. Is the right hon. Gentleman aware that we have had no clear statement from the Government of their view on the vital question of the size which they will advocate for the European Parliament at this meeting? As this is of such

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importance to all hon. Members, particularly those representing Scotland, Wales and Northern Ireland, will the right hon. Gentleman ensure that before 3rd May we know what proposals the Government will take to that meeting?
Secondly, will the Minister say something about the emergency meeting of Agriculture Ministers which I understand from the Press, is being held tomorrow. It does not perhaps, by a few hours, fit into his statement today, nor did it fit into his previous statement. Will he confirm that one purpose of the emergency meeting is to consider the high rate of subsidies paid by the Community under the common agricultural policy to this country to help protect British consumers from the failure of British Ministers to sustain the value of the pound?
Mr. Hattersley: The hon. Gentleman again asks me to make a precise statement of the position we shall take up during what is essentially a negotiation, and I think that he will understand why it is impossible to do that. I assure him that the Government's position on the size of the Assembly remains as it was when the matter was debated in the House three weeks ago, when the Prime Minister—the then Foreign Secretary—made clear that we favour larger alternatives rather than smaller, because larger alternatives give a better chance of a proper distribution of seats within the entire United Kingdom and a better chance of the creation of manageable constituencies by individual European Members of the Assembly. We are on the side of size and will do our best to make the Assembly fit those needs and those justifications.
The hon. Gentleman is right in assuming that tomorrow the Agriculture Ministers will consider the present rate of the green pound and proposals made for a change in its value by the Agricultural Commissioner. Of course, the hon. Gentleman will not expect me to comment on the political remarks he felt it necessary to make at the end of his question. Let me assure him that the Minister of Agriculture will not accept any revision in the green pound rate—as I said in reply to an earlier question—which does not make sure that the guarantees of costs and advantages within the CAP which
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are stipulated in the Treaty of Accession are properly observed.
Mr. Spearing: In respect of the discussions about UNCTAD IV at the next Foreign Ministers' Council, will my right hon. Friend confirm that the new Foreign Secretary is also de jure the Minister for Overseas Development, and will he explain to the House the extent to which any decision taken at that meeting will bind this country in respect of negotiations at UNCTAD IV in a way which it would not have done before we became a member of the Community?
Mr. Hattersley: The United Kingdom will be represented individually at UNCTAD IV. While I hope that we can assume a common position with our colleagues in the Community on these matters, the word "bind" is inappropriate to the decision we might take in what I hope is the inconceivable prospect of the nine members of the Community disagreeing on what the decision should be.
Mr. Blaker: Should not trade Ministers be making an effort to concert policies on trade credits for the Soviet Union? Does not the position in which member countries are falling over each other to be more and more generous to the Soviet Union at the expense of their taxpayers need re-examination? Will the Minister invite his right hon. Friend to ask his colleagues to meet him to discuss that subject?
Mr. Hattersley: I can almost never resist answering questions which are in part concerned with substance rather than business, but as that question is concerned entirely with the substance of Government policy I must ask the hon. Gentleman to put it down to the appropriate Minister.
Mr. John Mendelson: Is it not clear that the Opposition—particularly Front Bench spokesmen—are again trying to belabour my right hon. Friend, who is making a simple announcement about the forthcoming business at Common Market level? Questions of policy arise which cover at least half a dozen Ministers. Should not the Select Committee on Procedure have referred to it the vital business of how to deal with policies which affect the Common Market so that

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a reasonable procedure can be established for considering all policies, instead of expecting my right hon. Friend to act for six Ministers each time he makes a simple announcement?
Mr. Hattersley: I am a passionate supporter of the point of view put by my hon. Friend. I perform this task each month because it is required of me under the Government's acceptance of the Foster Committee's Report on how the House can be informed of Government proposals and commitments to the EEC Foreign Ministers during the following month. I share my hon. Friend's implied comment that what the statement amounts to is an invitation to any hon. Member to ask any question he chooses about any aspect of Government policy. I cannot help wondering whether hon. Members find it a rewarding exercise, as I am not qualified to answer seven out of 10 of the questions put to me.
Mr. Gordon Wilson: If I may add to the Minister's temptation, may I ask him to comment on the fact that the renegotiation of the Common Market fisheries policy does not figure amongst the business for this month? There is only the merest mention of fish marketing. Does he realise that unless the fisheries policy is renegotiated there may be no fish to market? Will the Minister comment on the part played by the Scottish Office in such negotiations in the Council of Ministers?
Mr. Hattersley: Representing Her Majesty's Government, I propose to make a further statement about our need—I do not think "demand" is too strong—for changes in the common fisheries policy, I hope at the beginning of business on Monday afternoon. Although it is not a formal item inscribed on the agenda, I shall be under the strongest instructions to make a number of robust points. I cannot tell the hon. Gentleman of the involvement of the Scottish Office in terms of ministerial attendance on Monday and Tuesday. but It has been the practice for Scottish Office Ministers to attend those meetings when they believe that a Scottish point of view has to be put. My right hon. Friend the former Secretary of State for Scotland—a job which he
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occupied with distinction for so long—came to Luxembourg some weeks ago. I have no doubt that the present Secretary of State for Scotland will continue to take such an interest in these matters.
Mr. Leadbitter: My right hon. Friend has mentioned that in May the subject of the siting of the JET project is to be discussed by the appropriate Ministers. Bearing in mind that my right hon. Friend has admitted that he is not qualified to make a categoric reply to many questions, may I ask him to take the opportunity of assuring the House that the Secretary of State for Energy will come here and make clear what is the Government's policy? May we know what stand the Secretary of State will take, bearing in mind the serious interests we have in the Culham Research Laboratory?
Mr. Hattersley: By a happy chance this is a question which falls into the category of the 30 per cent. of the questions I am almost entitled to answer. I can assure my hon. Friend that it continues to be our view that the JET project should be located at Culham. We shall continue to press for that.
Mr. Biffen: Arising directly out of that last question, may I ask the right hon. Gentleman to say whether the siting of the Joint European Torus will be discussed at the Ministers' meeting on 3rd and 4th May or at the later meeting of 31st May–1st June? In the light of the motion that has already been passed by this House, can the right hon. Gentleman say who from the Department of Energy will accompany the Foreign and Commonwealth Office Minister at this meeting to ensure that the technical factors which overwhelmingly point to Culham as the site for this project are fully maintained and sustained in the discussions?
Mr. Hattersley: The first discussion is to be held at the early meeting, on 3rd and 4th May. It is not our intention to have a Minister from the Department of Energy present because it is the wont of Common Market Ministers to go over the general and sometimes political implications of a project before it is dealt with in more detail, and perhaps more sensibly, by technical Ministers. On this occasion there is a meeting of research

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Ministers scheduled for 18th June, when a Minister from the Department of Energy will represent the United Kingdom and will make the technical points to which the hon. Gentleman refers. On Monday and Tuesday it is a matter of making the political points about Culham. The hon. Gentleman will understand that perhaps argument about the siting, which we believe overwhelmingly favour Culham on technical grounds, may also have some political content. It is that argument which will take place on Monday and Tuesday.
Mr. Skinner: In view of my right hon. Friend's earlier suggestion that Back-Bench Members will not be allowed to know what is taking place in the discussions at the Council of Ministers, may I ask him to take advance notice from me of two subjects which I should like to see discussed by the Council, namely, the question of removing some of the coal stocks that are piled up in this country—30 million tons at present—and also, as regards employment, the suggestion that there should be retirement at the age of 60 for all those engaged in heavy industrial work?
Mr. Hattersley indicated assent.
Mr. John Davies: In view of the right hon. Gentleman's anxiety about being exposed to such a wide range of problems in this period, might I ask him whether he does not recognise that the very democratic form of control which he was advocating just now requires the House to be informed in this way so that it may be in a position to probe Ministers on these issues? For instance, without wishing to ask the right hon. Gentleman a specific question of substance, might I say that it would be of great interest to the House to know whether a change in the unit of account as applied to the budget would have a profound effect on the budgetary contribution of this country. It would be interesting to know what effect there would be in the years 1975–76 and 1976–77. It would be unreasonable for the House to expect the right hon. Gentleman to reply to that question but it is a valuable opportunity to be able to put it.
Mr. Hattersley: I am grateful to the right hon. Gentleman for his confidence. I am happy to reiterate that I am per-
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fectly prepared—indeed, I am under instructions—to make the statement for as long as the House wishes it to be made. I am also prepared—it is one of my principal duties—to ensure that the Committee which the right hon. Gentleman chairs and other organs of the House are given the opportunity of expressing their views on Community matters in time for them to influence the judgment of the Government. I have made the point because my hon. Friend the Member for Penistone (Mr. Mendelson), with some wisdom I thought. drew attention to the shortcomings of this procedure. If anyone has a scheme by which more authoritative answers can be given and departmental Ministers can be enabled to answer on behalf of their Departments, thereby satisfying the needs of the House in a much better way, I would not stand in the way of such a scheme.
Mr. loan Evans: As regards the meeting of Agriculture Ministers tomorrow, may I ask my right hon. Friend to convey to the Minister of Agriculture our views about the harmonisation of high food prices in the Market which are causing discord among consumers, especially when accompanied by a British beef mountain and a British dried milk mountain? Will my right hon. Friend suggest that the Minister of Agriculture goes to this meeting not to amend the common agricultural policy but to end it?
Mr. Hattersley: My hon. Friend knows that it is not within the power of the Minister of Agriculture to end the common agricultural policy. I am sure that he will take note of what my hon. Friend has said. I feel that much of the spirit of my hon. Friend's comments is shared by my right hon. Friend the Minister of Agriculture. I am sure that he will take with him tomorrow some of the sentiments which have been expressed.
Mr. Dykes: Can the right hon. Gentleman say when the Council of Ministers will get round to discussing the draft proposals for a European export bank? Will the right hon. Gentleman give a firm assurance on behalf of the Government that this will not be proceeded with further without a searching scrutiny of the operational consequences and the financial implications of such an institution?
Mr. Hattersley: In reply to the first part of the hon. Gentleman's question, I can say "Certainly not next month." I can assure him on the point he has raised in the second part of his question.
Mr. Jay: Since my right hon. Friend is representing the whole Government, at the Box at this moment anyway, may I ask him to give an assurance that Ministers, whether at this week's meeting or at any other meeting, will not accept further manipulations of the green pound which will lead to further rises in food prices in this country?
Mr. Hattersley: Yes.
Mr. Marten: As the Commission has now taken over negotiations on behalf of the United Kingdom with our old Commonwealth sugar producer partners, and as I understand that in these negotiations the Commission is fairly grinding down the faces of the Commonwealth sugar producers to reach the minimum price possible, may we have the opportunity of a statement from the Minister as soon as possible, perhaps early next week, following some of the meetings on the list that he has given us, dealing with this most important subject? Otherwise Parliament will lose all control and influence over the Commonwealth sugar-producing countries and their agreement with the Common Market.
Mr. Hattersley: I shall certainly suggest to my right hon. Friend the Minister of Agriculture that such a statement would be welcome, at least in some quarters of the House. I do not accept, of course, the preamble to the hon. Gentleman's question. Without the Community, there would not be the stable, assured market for Commonwealth sugar which now exists—
Mr. Spearing: It is not assured.
Mr. Hattersley:—and without which we would have had a period either of intense sugar shortage or of high sugar prices. That is the simple fact of the matter.
Mr. Atkinson: Is it not the case that the Minister is competent now to make a statement whether the Government will support the admission of Greece into the Economic Community? Would not my right hon. Friend also agree that with-
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out that knowledge it is impossible for the House to make sense of the sequence of meetings he has announced? With regard to the middle five of the meetings that have been announced, may I ask how sense can be made of them in the absence of any knowledge about possible Greek membership of the Community?
Mr. Hattersley: I am competent to answer that question, first, because it is directly relevant to my departmental responsibilities and, secondly, because our position has been made public for the past three months. Of course, we accept the accession of Greece to the Community.
Mr. Raphael Tuck: Can my right hon. Friend answer a question which I have asked on a number of occasions but to which I have never received a satisfactory reply? In the event of direct elections to the Community, what are the issues upon which such an election might be fought in this country?
Mr. Hattersley: That is a matter for the parties rather than for the British Government. As hon. Members, notably those on the Conservative Benches, have discovered, it is never very easy to decide before an election is held what are the issues on which the election will be fought. It will be up to my hon. Friends and me and people like us to decide the issues in the same way as issues in other elections are decided.
Mr. Peyton: May I ask the right hon. Gentleman to call the attention of his right hon. Friend the Leader of the House to the rather absurd position he has been put in today? Will he point out to the Leader of the House the need to set up the Select Committee on Procedure so that this matter may be discussed sensibly and reasonable accommodation may be made for European business?
Mr. Hattersley: I am sure that my right hon. Friend the Leader of the House will have had his attention drawn to that point and will have noted it. The Government are prepared to go on serving the House as the House chooses in providing as much information on the subject as possible. That is our policy and that we shall do, according to the liking of the House.

COMMITTEE OF SELECTION
Mr. Ridley: On a point of order, Mr. Speaker. I wish to raise with you a matter which seems to me to be important. The Committee of Selection is meeting in 10 minutes' time and will be considering its policy for appointing members of Standing Committees and Select Committees in accordance with the change in the representation in the House of the various political parties. That policy will be of fundamental importance to the future of the legislative programme and is a subject which is exercising hon. Members on both sides of the House.
Before the Committee of Selection proceeds to that task, it seems to me right that the Committee should be representative itself of this House. At the moment, five of its members are supporters of the Government and only three represent the Opposition parties. Indeed, there are no members of the Committee who represent the four minor parties which sit on this side of the House. That seems to me to represent a totally undemocratic situation and one which should not be allowed to proceed.
The Committee does not report to the House and have its policy approved by a motion, and the House does not have the opportunity to approve the general principles upon which the Committee will be proceeding. That means that the Committee could proceed to nominate Standing Committee representation which could be totally unrepresentative of the House. It is for that reason that it seems to me all the more important that the Committee itself should a least carry parity of membership from both sides of the House before it deliberates on its policy.
I have informed the Leader of the House that I wished to raise this matter. I merely invite him to try to get a motion on the Order Paper, perhaps in time for tomorrow, to appoint an equal number of Members from each side of the House to the Committee of Selection. I am sure that the Committee would be prepared to suspend its sitting until that motion had been carried by the House, and then we would all feel that we could see that justice 0had been done.
Mr. Speaker: The hon. Gentleman gave me notice of his intention to raise
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this matter, and I am much obliged to him for so doing. The selection of the Committee of Selection is a matter for the House and not for me. Therefore, no point of order arises out of it with which I can deal.

MINISTERS' STATEMENTS (EEC MEETINGS)
Mr. Marten: On a point of order, Mr. Speaker. Yesterday, I asked whether we were to have a statement from the Chancellor of the Exchequer on his ministerial meeting in Brussels. I asked for that statement because, as I understand it, our Common Market partners agreed with the Government's economic policy in today's situation, whereas the Opposition in this House disagree with it and, therefore, with our partners in the Common Market. The principle of democracy here is that, if we get a conflict between the two parties or between Governments in the Common Market, we have a debate, and that is why I ask for a statement. Have you had notice of the intention of the Chancellor of the Echequer to make a statement?
Mr. Speaker: I congratulate the hon. Gentleman on getting in order. The answer is "No, Sir."

BLENNERHASSETT COMMITTEE (AVAILABILITY OF REPORT)
Mr. Norman Fowler: On a point of order, Mr. Speaker. May I seek your guidance? The Blennerhassett Committee's Report on drinking and driving has been published today. A week or so ago, when the transport consultative document was published, we raised the question that it was made available both to the Press and to other interested bodies many hours before becoming available to hon. Members. The same thing has happened again with the Blennerhassett Report, with the added refinement that at 11.30 a.m. Mr. Blennerhassett held a Press conference at the headquarters of the Department of the Environment. It was, however, not possible for a Member of this House—I gather on the instructions of the Department—to get a copy of the report from the Vote Office until 12 o'clock, half an hour after the Press conference had begun.

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This seems to me to be an extension of a situation which many of us on both sides of the House regard as already unsatisfactory, and the position seems to be that a newspaper correspondent has the opportunity not only of studying the report but also of asking questions on it before Members of this House. Because of the deplorable failure of the Government to make a statement in the House on the report today, we are not having an opportunity of questioning at at all.
It is not a satisfactory position for hon. Members that they should have fewer rights than either newspapers or other interested organisations. This is the second time this sort of thing has happened within a few weeks with reports emanating from the Department of the Environment, so may we have an assurance from the Leader of the House that he will examine the position, because I believe that it is regarded as unsatisfactory on both sides of the House?
The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot): Further to that point of order, Mr. Speaker. Through no fault of the hon. Member for Sutton Coldfield (Mr. Fowler), I heard that he was raising this matter as a point of order in the House today only a minute or so before I came into the Chamber, so I do not know the full details. But, on the general point that he raised, I can say that we are inquiring into the question whether we could alter the practice, which has prevailed for many years, of supplying this kind of document to the Press before hon. Members. Whether we can alter it I do not konw, but we are looking at it to see whether there is the possibility of doing so. The matter raises considerable questions, and we shall make a statement to the House as soon as we have come to a conclusion.
As I have said, I have not all the details concerning the question raised by the hon. Gentleman. But I understand that the document was in the Vote Office at 11 o'clock and not at the time he stated, so I do not think that his criticism arises there. I understand that at an earlier date certain allegations were made, and that these are being investigated.
Mr. Norman Fowler: I am grateful to the right hon. Gentleman for his state-
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ment and for his assurance that an investigation is taking place. We hope that such a statement will be made at the earliest opportunity.

STATUTORY INSTRUMENTS, &c.
Ordered,
That the Farm Capital Grant (Variation) Scheme 1976 (S.I. 1976, No. 547) be referred to a Standing Committee on Statutory Instruments, &c.
Ordered,
That the draft Farm and Horticulture Development (Amendment) Regulations 1976, be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Foot.]

CONSUMER PROTECTION (MOTOR VEHICLES)
3.57 p.m.
Sir George Young (Ealing, Acton): I beg to move,
That leave be given to bring in a Bill to amend the law on consumer protection with respect to the advertisement for sale of motor vehicles; and for connected purposes.
The object of my Bill is to prevent motor car manufacturers from advertising their new cars at prices which bear little relation to what the public eventually pay. In particular, it would prevent advertisement of prices which exclude the cost of seat belts and number plates, both of which are legally necessary, or which exclude delivery charges.
The principle of the Bill is supported by the Consumers' Association. In its April 1973 publication there was a feature on hidden extras. On page 79 it said:
"seat-belts and number plates—each as integral a part of your car as steering wheel or headlights—shouldn't be extras at all: their cost should be included in the car's price".
It went on to say:
"Delivery charges should also be included in the price of the car, or at the very least, fixed and enforced by the manufacturer. You don't pay extra for a fridge to come from the factory to the shop. What's so different about car shops?"
The principle of my Bill is also supported by the Motor Agents Association. Its code of practice for the motor industry, drawn up by the Society of Motor Manufacturers and Traders, the

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Motor Agents Association and the Scottish Motor Trade Association, in consultation with the Director General of Fair Trading, states in paragraph 6.6:
"In principle, a price quoted should be a price at which the consumer can buy the goods. Manufacturers and dealers should therefore quote prices for new cars, whether in advertisements or in show-rooms, inclusive of the price of any extras known to be fitted to the car together with the appropriate VAT (quoting the rate applicable) and car tax."
That is not being done.
I also have the support of the Office of Fair Trading, with which I have been corresponding on this subject. In a letter to me dated 29th December 1975, the Deputy-Director General said:
"However, I remain of the opinion that in principle the display of prices which exclude part of the minimum sum which the consumer must pay in order to buy the goods or services concerned is an undesirable practice."
In the same month the Office of Fair Trading sent out a consultative letter which dealt with the practice of pricing goods and services. It said:
"At present some prices are displayed or advertised which exclude part of the minimum sum which the consumer must pay in order to buy the goods or services to which they relate. I think that in principle this is unfair to the consumer. If a price figure is quoted, that figure should be a price at which the consumer can buy; the quotation of amounts lower than this misleads and confuses the consumer."
It went on to say:
"Misleading pricing of this kind takes many forms …the omission from car prices of obligatory charges for delivery, seat belts and number plates."
I have seen a range of invoices which show that the so-called extras add up to a significant sum. On a Fiat costing £1,347, the delivery charge, number plates and seat belts came to an extra £56, or 4·2 per cent. of the total cost. On a modest vehicle which I purchased recently, seat belts, number plates and delivery charges came to £51·19.
There is no reason why car manufacturers should not be required to advertise their products at a price at which the consumer can buy them. Some cat manufacturers have a standard delivery charge which is now included in the advertised price. Number plates and seat belts, which are an integral part of a car, should be an integral part of the price. I have seen advertisements by an
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enlightened distributor which advertise cars at an all-inclusive price. It can, therefore, be done. But manufacturers show no signs of implementing their new code of practice—that the price quoted should be a price at which the customer can deal.
Some of the advertisements show how the recommendations of their own society are being flouted by car manufacturers. For example, an advertisement for a Citroen entitled "GS Comfort" states:
"Prices start at £1,898·91 for the well equipped 1015 c.c. G. Special."
However, this well-equipped vehicle cannot be bought at that price since the equipment excludes seat belts and number plates. Further, since the vehicle is locked in a distributor's depot, and will remain there until a delivery charge is paid, the price is additionally misleading. That advertisement appeared in the Sunday Times on 11th April.
In the Sunday Times of 18th April there was a full-page advertisement for an Audi. It stated:
"The Audi 80 range starts at £2,548."
Of course, it does no such thing. The small print says that this price includes VAT and car tax, but it does not say that it excludes delivery, seat belts and number plates. This advertisement flagrantly conflicts with the code as the omissions are not made explicit.
That advertisement begins as follows:
"Why is it that your car so often seems to use so much more petrol on the road than it does in advertisements?"
It seems to add insult to injury by making the car seem cheaper than it is on the road. I have since spoken to the company, which has agreed that the advertisement breaches the code and it has promised that it will change it.
An advertisement for a Renault 30 T.S. states:
"The Renault 30 T.S. costs £3,952·26."
It does not, since that price excludes delivery, front seat belts and number plates.
The Vauxhall Chevette is also advertised at a fictitious price, as are the Chrysler Alpine, the Vauxhall Cavalier and the Peugeot 104. But, to its credit, Peugeot includes seat belts in the recommended retail price However, the

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Peugeot advertisement for L states:
"At just £2,782 it will enable you to join the ever increasing group of discriminating motorists who are already 504 owners "—
but only if one sat in the car with no number plates or seat belts, locked in the distributor's car park. Few discriminating motorists wish to do that.
I shall not weary the House by quoting from any further advertisements, but most hon. Members know from experience that constituents who buy cars face an additional burden about which they are not told when they read about the cars in advertisements. I know of no other commodity which is advertised in this way, and I find the practice misleading and offensive. The industry is clearly reluctant to introduce realistic advertising voluntarily. I hope, therefore, that hon. Members on both sides will support this modest measure to introduce honesty into motor-car advertising.
Question put and agreed to.
Bill ordered to be brought in by Sir George Young, Mrs. Lynda Chalker, Mr. Anthony Steen, Mr. Peter Bottomley, Mr. Giles Shaw and Mr. Tony Durant.
Mr. Andrew Faulds: The hon. Gentleman may include my name as well.

CONSUMER PROTECTION (MOTOR VEHICLES)
Sir George Youngaccordingly presented a Bill to amend the law on consumer protection with respect to the advertisement for sale of motor vehicles and for connected purposes; and the same was read the First time; and ordered to be read a Second time upon Friday 14th May and to be printed.
ORDERS OF THE DAY SUPPLY
[18TH ALLOTTED DAY]—considered

LOCAL GOVERNMENT
4.5 p.m.
Mr. Timothy Raison: I beg to move,
That this House believes that the newly elected district councils in England and Wales resulting from the forthcoming local elections will best serve the interests of ratepayers and the country at large by committing themselves to—

(a) maximum value for money in local services and a rigorous management of their budgets;

(b) making the best use of existing housing stock, including the sale of council houses to tenants; and

(c) strict limitation of municipal trading and direct labour.

As the House realises, the debate is directly related to the local government elections next Thursday. I make no bones about that or about the fact that I regard these elections as crucial. We believe that there is a need to evict Socialist majorities and to replace them with Conservative-controlled councils dedicated to certain objectives—good housekeeping, concentration on essential services, the conviction that local government has enough to do without having thrust upon it new powers and duties, the conviction that it is not the job of local government to set up in unnecessary and unfair competition with the private sector and the commitment to a housing policy aimed at value for money and sustaining human aspirations rather than a paternalistic pattern of social ownership.
I wish to speak briefly about my general approach to local government. I have served in local government and I believe in it deeply. My outlook has been influenced by it in a number of ways. I feel deeply about it for several reasons. At its best local government is capable of responding to local feelings and needs in local matters, in a way which is more accurate and legitimate than even the best intentioned pressure group.
Councillors should not be apologetic for doing those things that they are elected to do and we should be grateful to them for what they try to do on our

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behalf. Local government has a great tradition. It has a Victorian philosophy of improvement, coupled with dedication and imagination. But it also has its bureaucracy and slackness over spending and manpower. Those must be watched and curbed, but I do not believe that they outweigh or override the merits of local government.
Mr. Andrew Welsh: There is tremendous dissatisfaction with local government in Scotland. Will the hon. Gentleman explain why the official Opposition made this debate exclusively English?
Mr. Raison: The elections next week take place in England and Wales. I shall be surprised, Mr. Speaker, if you were to prevent an hon. Member speaking about local government in Scotland on a Supply Day when the interpretation of the motion is usually fairly liberal.
Mr. Speaker: First, I always dislike canvassing and, secondly, we shall keep to the terms of the motion.
Mr. Raison: I stand rebuked, Mr. Speaker. I know that you will be as austere as ever.
Local government is important because our political system is based on a true democracy. But at a time when power over the Government's economic policy is increasingly being taken out of the hands of the elected body, it is particularly important that we should retain at local level an additional form of true democracy. Local government is therefore vital. If we believe that, local elections are equally vital.
I hope for a high turnout, whatever the result, and for an electorate which is prepared to cast its vote on local as well as national issues. As realists we must recognise that the latter looms large. The metropolitan and non-metropolitan district elections are also important because they mark a stage in the development of local government. They are taking place in the new authorities created by the 1972 Act.
The shaking-down period is largely over and we are at the stage when we can move on to consultation and the real advantages which can be derived, perhaps particularly in the strong non-metropolitan district councils but also elsewhere. In many parts of the country
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—in my own county of Buckinghamshire, for example—I believe that the bigger districts will be able to show the advantages of their greater clout, to use the fashionable word, compared with the old district councils. I think that a number of the metropolitan districts will be able to deal more effectively with, for example, housing within their new boundaries.
It is true that in time there may need to be further adjustment of the pattern of local government. Most of us recognise that the final decision about the allocation of planning powers have yet to be taken, and that perhaps in time we should look at the work of the metropolitan counties, the Greater London Council and so on. But the need now, as I believe the country recognises, is to get on with the job.
What is the background to that job? Inevitably, it is the public expenditure situation and above all the desperate condition of the pound. We know that local government is a large ingredient in public expenditure. For that reason it is legitimate to say that public expenditure is bound to dominate discussion of local government at present.
It is tempting to say that public expenditure is out of control. Indeed, I have said that myself, but it is not quite accurate, because what has happened is that this Government have deliberately engineered a vast expansion of public spending since they came to power in February 1974. As I think most of the country now recognises, it was an utterly irresponsible expansion for which we shall pay the price for years to come, but it was a deliberate expansion and in that sense it was controlled by Labour politicians rather than being out of control. It was a shameful episode in our politics.
The result of the refusal for so long to face the economic crisis can now be seen in all sorts of ways. It can be seen in the cuts and curtailments, such as they are, which are now being made, although they are sometimes cloaked. An example is the increase in public housing rent of about £1 a house per week which we are likely to see next year. It can be seen above all in our appalling public sector borrowing requirement, which is roughly equivalent to the total cost of our education and health service put together.

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The need to curtail public spending is the overriding fact in local government. It has led, under pressure from our side of the House, to the introduction of cash limits for local government. It has also led, although to varying extents, to local government looking more critically at its own spending. The result is that rate increases are down overall compared with last year. After two horrendous experiences in many parts of the country, this year is not so bad, particularly in the districts where the elections are taking place. Some have held over from last year money which they were able to keep in the till.
The fact remains that the increases are still very large in many parts of the country by any normal standards. The overall amount may be in single figures, although that is not very creditable, but outside the cities the bill for ratepayers, including the water rate is up by about 15 per cent.; according to the Chartered Institute of Public Finance and Accountancy figures. It is a grim picture, even if the amounts are lower than the£40,£50 and£100 of previous times.
Mr. Jim Marshall: The hon. Gentleman mentioned two horrendous years. I assume that he was referring to 1973–74 and 1974–75. Is he aware that the amount paid in rates as a percentage of personal disposable income was less in 1974–75 than in 1938?
Mr. Raison: The hon. Gentleman overlooks the fact that a sharp increase in one year is what really concerns people. There were enormous increases for two years running, increases of more than 40 per cent. in my constituency. Many people were brought to a state of absolute misery as a result. I hope that the hon. Gentleman will recognise that, as I believe Ministers did at the time.
I congratulate the councillors and officials in many areas on their efforts to bring expenditure down. But in other areas Socialist councils in particular are still showing no recognition that, to use the words of the previous Secretary of State, the party is over. Indeed, it is being said that to some extent the Government depend on substantial Tory gains throughout the country if they are to implement their new public expen-
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diture policy, because they cannot trust Socialist councils to do the lob that must be done.
If local government is tightening up on spending in many areas, there is still a good way to go. In particular, there is no doubt that pay and pensions in local government have all too often left the private sector standing. I want to quote a short extract from the Local Government Chronicle of 9th April. Under the heading
"Local government pays best for lawyers and accountants"
it said:
"Solicitors and accountants in local government continue to earn more than their counterparts in private industry, according to a survey of salaries published by Accountancy Personnel Ltd. and Legal Personnel Ltd. on Monday.
Senior accountants/auditors at St. Helens MBC can expect to earn between£4,689 and£5,250, while the man in private industry would earn between £4,000 and £4,500; a cost assistant at Norwich would be on between £3,825 and £4,095, some £625 above the starting point in private industry.…The picture is the same for solicitors, with an assistant solicitor post at Lewisham LBC advertised at£5,000, a solicitor for Arun DC being offered between£5,000 and£6,000, and an assistant prosecuting solicitor for Suffolk CC between£4,689 and £5,250l; the equivalent salaries in the private sector would be£4,000 to£4,250, £3,400 to£4,250, and £3,500 to£4,000 respectively.
The loading in favour of the public sector is increased by generous fringe benefits, examples quoted being car allowances, loan schemes for housing, flexible working hours, and resettlement expenses."
The House may find the reading out of those figures a little tedious, but they represent an important reality which is causing a great deal of resentment in the country. Local government officials not only have higher pay but in most cases have the advantage of absolute security of tenure.
This is an important part of what is going on. It is not so much that one begrudges officials their salaries. No doubt most of them work hard for those salaries. But an imbalance between local government salaries and salaries elsewhere in the public sector and in the private sector generally will produce great resentment.
Mrs. Millie Miller: Will the hon. Gentleman kindly tell us when this phenomenon began?
Mr. Raison: I make no bones about it. It has been going on for the past year or two. I do not dispute that it began under a Conservative Government, but many people believe that it has got out of hand. It is up to the Government to try to influence what is going on. I am not saying that they should take Draconian powers beyond those that they took last summer in their counter-inflation policy. But they have influence, and in their amendment they boast of their influence. The country expects something to be done.
The previous Secretary of State adopted a rather ambivalent attitude towards public expenditure. He was very committed to public spending, but at least he had enough economic understanding to realise that his commitment to public spending could not be allowed to run unchecked.
The right hon. Gentleman had one achievement for which I pay tribute to him. I refer to his creation of the Consultative Council, which was a useful innovation. It may have done something to make the attempt to control local government spending a little more effective.
But what about the new Secretary of State, whom we see here today? Perhaps I could welcome him. I welcomed him the other day when he had a rather stormy first appearance at the time of the publication of the transport review document. I must say that my hopes of what he will do in this field are not terribly high. He has the reputation of being a pretty classic obscurantist old-fashioned Socialist dedicated to the "We know best" approach. I am anxious to give him the benefit of the doubt and also to give him a little advice as to how he might avoid some of the worst features of Labour's approach to local government in recent times. I can assure the right hon. Gentleman that our motion is designed to help him.
Despite the protestations of virtue, which are repeated in the Government's amendment, the truth is that the Government have treated local government very roughly and even, sometimes, brutally, in a number of ways. In other respects they have shown a serious misunderstanding of what local government ought to be about. There is, as the
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House knows, a phrase in the Government's amendment about
"a new and closer partnership between central and local government."
In fact, that is a mockery when one looks at what is being done. First of all they have weakened the power of local government in one or two important ways. The most obvious example, perhaps, is over secondary education. A Bill is now in Committee which alters the delicate balance of the 1944 Education Act. I suppose that this Education Bill is an example of this new and closer partnership. I also suppose that a ventriloquist and a doll have a close relationship, too, because, in this respect, that is what the Government are after. They are trying to take away from local government a decision they have been free to take since 1944.
They have also taken away the ability of the local authority side in the pay negotiations—at any rate, that was the case last year. What happened in the local government pay negotiations early last autumn was that the Government told the employers firmly that they had to pay the full £6 regardless of the Government's earlier protestations that that was a maximum rather than an entitlement. They told the employers that they must pay up and that if they did not, the Government would give them no backing. That is an example of a closer partnership but not a very creditable one.
The Government are also now proposing to place a difficult burden on the district councils by their new tied cottages legislation. I would quote briefly from the Explanatory Memorandum concerning Clauses 28 and 29:
"Clauses 28 and 29 place a duty on the housing authority concerned to rehouse a protected occupier or statutory tenant, on application by the employer, if vacant possession of the dwelling-house is needed in order to house a new employee, the employer is unable to obtain vacant possession himself by any reasonable means, and, in the interests of efficient agriculture, the authority ought to rehouse him. If the authority are satisfied they arc required to use their best endeavours to provide suitable alternative accommodation, taking account of the urgency of the case and the competing claims on the accommodation they can provide."
I believe that that places the local authorities in an impossible position. how are they to make this decision

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between the person who has had to leave his so-called tied cottage and another person who has been on the housing list perhaps for years and who has an equally powerful case for housing?
There was a letter in the Daily Telegraph yesterday from Commander Lock, the Chairman of the Association of District Councils. It referred to this problem. He said:
"District councils have already a general statutory duty for housing in their areas. They exercise that duty by deciding each case on its merits but—and this is important—housing stocks are limited and there are seldom enough to meet all demands. The more special cases therefore that have to be met, the longer will those on council housing waiting lists have to wait their turn for accommodation."
As I said, this places local authorities in many parts of the country—my own, for example—in a very difficult position indeed.
Equally damaging to local government is the Community Land Act. Above all, it would be if it were ever to reach the second appointed day. It imposes a duty which much of local government does not want. On the face of it, it increases local government powers but I believe that it may do harm to local government. First, it will certainly arouse hostility and resentment as compulsory purchase spreads. The powers for takeover for genuine planning reasons, after all, have existed since the 1971 Planning Act and, indeed, earlier than that. There is no reason for these additional powers and they will inflame feeling where they are offered. It will add to the bureaucracy and cost, and we all know about that.
It has also led to the imposition of land acquisition and management schemes. In spite of the notion that this is some sort of new strength for local government, the reality is that the powers lie in the hands of the Government.
There is a real danger, which has not perhaps been stressed in much of the discussion so far, that local authorities may use their powers to dispose of land they have acquired in order to block schemes which they do not like. In other words, there is the possibility that they will refuse to sell land that they have acquired to users of whose purpose they disapprove. There has already been an ugly foretaste of this possibility in an
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instance which was quoted in The Times of 12th April. This was a story headed "Councillors oppose new hospital" It said:
"Members of a London borough council are trying to use planning procedures to thwart proposals for a new private hospital, which they object to on the grounds that it may increase National Health Service staffing difficulties.
The proposal is for a surgical unit with 90 beds in the grounds of the Priory Hospital, a private psychiatric nursing home in Roehampton.
After modifications to the original plans, the scheme was put before Wandsworth council's planning applications sub-committee with a recommendation by planning officers that it should be accepted.
The committee, however, deferred consideration and ordered the officials to seek a wider range of views, including those of the area health authority and community health councils.
The decision angered some Conservative members of the Labour-controlled council, who say that the committee has allowed politics to interfere with what should have been a simple planning decision.
Mrs. Margaret Morgan, chairman of the committee, says she shares the view that the development ought to be stopped, but fears that will not be possible under present planning laws."
The fact is, as I understand it, that present planning laws make it clear that considerations affecting applications must be of a genuine planning nature. I ask the Secretary of State or the Minister for Planning to make clear that they will not countenance this sort of threatened abuse of planning procedures. If they are used poltically in this manner, they will discredit the whole planning system. I also ask the Secretary of State to make clear where the Government stand about the reports that there are discussions going on in Labour Party circles, and elsewhere, about so-called worker participation in local government. We had a rather healf-hearted reassurance about this the other day, but the fact is that the Labour Party is brooding about this, and there was a rather perturbing example of the kind of thinking going on in an article in the Local Government Chronicle of 23rd April about a man called John Daly, of NALGO, who attended a conference at Leeds University. It said:
"John Daly, on the other hand. considered that too many limits on the powers of worker representatives on committees or council would devalue the whole exercise. There was

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a danger that the process would thus be reduced to the level of the old joint consultative committees, which had not had an out standing record."
Mr. Daly went on to consider that:
"seats on committees and councils in proportion to their membership, and their powers should include the right of voting at committee levels even if not at full council meetings."
This is something which has aroused a great deal of anxiety in the field of local government and it is why I hope the Secretary of State will take this opportunity to set out the Government's views on this matter.
This is still in the hypothetical future. I now want to turn to the recent past, and, perhaps, the most serious damage to the spirit of local government which has been done by the Government and the Labour Government. I refer, of course, to the Housing Finance (Special Provisions) Act. It was an Act which let off those councillors who defied the Housing Finance Act of 1972 from both surcharge and disqualification and substituted the rent loss certificates. I will not go through the whole of this sorry story again, but it was a shaming example of a Government helping its own political friends who had broken the law. Again, I suppose, this is an instance of the new and closer partnership between the Government and local government that their amendment speaks about.
The Government's view during the passage of the Bill was that the odium for incurring rent and/or rate increases would be some form of deterrence. The hon. Member for Manchester, Ardwick (Mr. Kaufman), who was then Under-Secretary of State for the Environment, said in Committee, speaking of the councillors who had broken the law:
"they will all have to face the electorate in their areas to justify a rent or rate increase as a result of the Bill. That is no mean burden to have to carry on to the doorsteps and into the polling booths."—[official Report, Standing Committee D; 8th April 1975; c. 25.]
I hope that the electorate will now note what the Minister then said.
We are now beginning to find out where the law was defied. Rent loss certificates have been issued for the old councils of Conisbrough, Derby, Don-caster, Eccles, Halstead, Long Eaton, Mansfield, Skelmersdale and Holland. There may be others whose names have
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not yet been made available to the House. The names of the councillors who defied the law are listed in those certificates and I hope that, when they stand in elections, their electorate will take note of what has happened. After all, the integrity of local government is of paramount importance. The Government should be concerned to uphold it, not to diminish it as they did in that Act. The Government have not served the true interests of local government well, and the electorate should take the chance to say so next Thursday.
We know that national and local politics are now closely intertwined, but these elections are primarily about the composition of district authorities and their power and will to act on behalf of their communities. In our motion, we pick out three areas in which they can do that.
The first is to stress the need for maximum value for money in local services and the rigorous management of their budgets. The reasons for this are obvious enough. I have already referred to the public expenditure crisis and the soaring increases which have fallen on the ratepayer— domestic and perhaps particularly commercial. The commercial ratepayer has felt particularly bludgeoned by this Government over the last two years.
In the longer term, there is clearly a need, which we fully accept, for a drastic reform of the rating system. We await the publication of the Layfield Report with great interest. But immediately, and I am afraid for years to come, the need will be for the tightest possible management— not Scrooge-like reasons but simply because, if we do not have the tightest management, both the country in general and essential local services in particular will suffer. I do not say this with pleasure, because temperamentally I find it easier to think of ways of spending more money than of saving more money, but at the moment we must save.
As I said, many councils have gone to work, perhaps not with enthusiasm but very responsibly, on pruning their budgets, and impressive, savings have been obtained in some places. Some of them will not easily be repeated in future years, but at least a new determination to protect the ratepayer and the

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national economy can be seen in those areas.
In the local government debate on 9th April, my hon. Friend the Member for Ashford (Mr. Speed) quoted some Tory examples. He talked of the staff reductions of 280 in Stockport without any redundancies having to be incurred. He talked about the effective use of private house building sales for new council house building in Sefton to save time and 20 per cent. in costs. He also talked about the impressive reduction of the district rate by 6·3 per cent. in Leeds since the Tory leadership took over last year. That performance has been outstanding. My hon. Friend referred to the speech by the leader in Leeds, Mr. Bellow. It seemed an absolute pattern of the style of thing that we should be going for today.
This kind of development has been seen in many parts of the country, but against this there are still Socialist authorities which are cocking a snook at the Government's pleas. As I have said, for them the party is still on. For example, there is South Yorkshire's refusal to listen to the Government's policies on fares and the continued extravagance of authorities such as Wandsworth, Hillingdon and others which are well known or not so well known, and the sheer glorying in spending in the borough of Camden. This last was vividly described in an article in the Evening Standard on 13th April by Christopher Booker:
"Three minutes walk from where I live, half way down Fitzjohns Avenue, there is a corrugated iron fence. It has been there for some years—and behind it is an acre of derelict land for which, three years ago, Camden paid the staggering sum of £520,000.
Every penny of that sum was borrowed. Nothing has been done with the land for three years. And yet the interest charges alone to keep that piece of waste land empty are costing the council more than £80,000 a year—or £1,500 a week!"
That is an appalling example of financial irresponsibility. Alas, Camden has no elections this year, but that example shows what Socialism can mean in practice.
Much of this trend is due to a kind of municipal folie de grandeur. We can see this above all in housing, especially in the astonishing story of the massive sweeping away of viable houses to be
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replaced by the barrack blocks of a few years ago. Alas, this is still going on. This inhumanity, which has been so well documented in places like Sunderland, from which the Under-Secretary of State comes, is persisting.
I am intrigued by the Government's amendment when it comes to housing. It talks of
"…a substantial programme of house building and improvement for owner occupation, renting and other forms of tenure."
I have been wondering, and I look forward to hearing, what other forms of tenure they mean. After all, they mention owner-occupation and renting, whether local authority, private or housing association. I suppose that this could be a reference to co-operatives or coownership—I do not know—but the other form of tenure that the Government have stimulated is squatting. There has been a substantial programme in that direction.
The Government are belatedly making obeisance to the need to make better use of the housing stock. They have raised the improvement grants rateable value limits after long pressure from us. The Minister for Housing and Construction even made a speech on this theme on 13th April, in which he went so far as to say:
"We shall also, in the course of the coming Rent Act review, be looking at the particular problem of securing improvements to private rented housing …"
That is a welcome change of heart compared to what he used to say about the private rented sector and social ownership.
But on one point, the Government are still obdurate—the sale of council houses to sitting tenants. Astonishingly, they persist in their flat refusal to allow new town houses to be sold, and they have done all that they can to stop the sale by local authorities with their circular 70/74, which said that it was generally wrong to sell them.
As the House knows, the Conservative Party is utterly committed to the view that council houses should be available for sale to sitting tenants, and we shall give every encouragement to local authorities which pass under Tory control on 6th May to initiate schemes for sale. When we were in power, we helped to stimulate very good schemes for sale and they produced admirable results.
Mr. Joseph Dean: Is the hon. Gentleman aware that, under the last Conservative Government, the figures for the sale of council houses dropped?
Mr. Raison: The figures for the sale of council houses reached a high level around 1972 and then dropped inevitably in 1973, with a deteriorating economy, as there was unquestionably—[Laughter.] This is the point that we have tried to make over and over again. In the latter half of 1973, the economic crisis began and the present Government took two years before they were prepared to recognise the fact. Things began to go wrong before the end of 1973, as oil prices soared ahead, which had an effect on the country's economy, and for the present Government to try to deny that that happened is shameful.
There are great advantages to be gained from the sale of council houses. For a start, it does not diminish the overall stock of housing and adds greatly to the overall stock of human happiness. Second, it encourages a commitment to the maintenance and improvement of housing, as well as giving people an added stake in the community. Third, it benefits public expenditure. The revenue from sales in 1972–73 was £351 million. This was down, by 1975–76, to £47·2 million at 1975 survey prices. What nonsense that Labour, nationally and locally, should be going all out to prevent it.
I hope that every council house tenant in the country understands what is at stake in this respect. Support for the sale of council houses is spreading on all sides, even among unexpected people such as Mr. Frank Field of the Child Poverty Action Group. In a pamphlet which was quoted in our debate on new towns he spoke of
"the growing sourness in the council estates themselves as tenants become more and more aware of the extent of the serfdom imposed on them by their council tenancies."
Those may be colourful words, but on social grounds the case for the sale of council houses is overwhelming. Labour's housing policy is now cracking under the twin pressures of financial crisis and human desires.
Our motion calls for a strict limitation on municipal trading and direct labour. On municipal trading the point has been made effectively in this House on several occasions this year, and the House has
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already given a bloody nose to the schemes of the West Midlands County Council and the GLC. It was right to do so. But it is still official Labour Party policy to encourage both. The Minister for Planning and Local Government reiterated the point in relation to municipal trading on 16th April last year in reply to a question on conveyancing, running taxis and other services. The Minister for Housing and Construction has repeatedly talked of his desire to see direct labour extended. He set up a committee on its operation but significantly did not include anyone on it from private industry.
The Minister has failed to take up suggestions in the, CIPFA report on direct works undertaking accounting, published last June, the recommendations of which provided for fair and decent standards for the use of direct labour. We believe that they provide a basis for ensuring competitive efficiency and that they could be implemented straight away, thus avoiding abuses, unfairnesses, and incompetence which so often occur.
We quoted examples of this in the debate earlier this year, but I will quote one more recent example. The magazine Building on 19th March had an article headed:
"Southwark loses £500,000 on direct labour housing schemes".
The article reads:
"A scathing 100-page report published by the London borough of Southwark last week reveals that the council's own direct labour department overspent by £1·3 million on two recent housing contracts originally priced at £889,906. Included in the overspending is a loss of £570,000 for which the department is held directly responsible."
Mr. Donald Anderson: Will the hon. Member put that into perspective by mentioning the loss made by the Kensington and Chelsea Borough Council, when I was a councillor there, on the World's End scheme, of several million pounds to a private contractor?
Mr. Raison: I believe that in that scheme there were very difficult industrial disputes over a very long time.
Over the last year or two a truly formidable dossier on the misuse of direct labour has grown up, and there is widespread concern about what is happening in direct labour departments. Astonishingly, as we see from the Daily Telegraph

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today, the Wandsworth Borough Council proposes to add a further 73 administrative staff to its direct labour division. What folly that is.
Let me sum up our case and the reasons why we hope and believe there must be a massive swing away from Socialism next Thursday. Socialism is suffocating the country at all levels. One Tory Slogan which I like is that of the Oxford Tories, "Let Oxford live". That catches the spirit of what we are putting forward. Socialism is leading to extravagance, paternalism, and to the relentless placing of the collective above the individual. It is denying far too many council tenants and others the chance of obtaining the housing they really want.
Socialism is concerned with the folly of expanding municipal activity for its own sake when every effort should be concentrated on the cost effectiveness and maintenance of essential basic services. Socialism regards commercial and domestic ratepayers as people to be milked rather than served. It is a worn-out creed and on 6th May millions of the electorate will have a chance to show that they are sick of it.
The House can give a splendid lead by supporting our motion tonight and rejecting the Government's entirely unconvincing amendment.
4.45 p.m.
The Secretary of State for the Environment (Mr. Peter Shore): I beg to move, to leave out from 'large' to the end of the Question and to add instead thereof:
'if they and the Government are committed to—

(i) the maintenance and development of the new and closer partnership between central and local Government which has already contributed significantly to the fight against inflation; and

(ii)sensible economy in the use of resources which affords priority to vitally needed services including a substantial programme of house building and improvement for owner occupation, renting and other forms of tenure.'

Before addressing myself to the terms of our amendment and before commenting on the matters raised in the speech that we have just heard from the hon. Member for Aylesbury (Mr. Raison) I hope that the House will allow me to
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make, on this the first occasion that I have addressed it on local government affairs, some general observations on local government and on the economic circumstances in which we all have to operate today.
The hon. Member in the early part of his speech—and what a long time ago that seems—paid his tribute to local government. I should like to commence my term of office as Secretary of State for the Environment by paying my tribute to local government and to the members and officers of local authorities who have achieved so much, often in very difficult circumstances and rarely with the recognition that those achievements deserve.
We all acknowledge the immense part played by local authorities in our national life and in particular in building up and maintaining the wide range of services on which so much of our social life depends. But local authorities have a special claim to our attention and support. Except for this House, local authorities are the only element in our constitution—so far—based on direct election.
Local Government in Britain is run and the services are provided not by prefects or major-generals or special commissioners but by ordinary people elected by their own communities and responsible to their electorates. If we believe in democracy, in the arrangements of our affairs by discussion, as I believe we all do, I am sure that we will wish in all possible ways to help make local government effective.
I pay my tribute all the more willingly because local authorities have recently come under intense and sustained attack. Much of it I believe to be unfair, although the reasons can be readily explained. From the point of view of the ordinary householder, rate increases in particular have been a major source of grievance. In the Press and on radio and television local authorities have been criticised because of the number of staff they employ and the size of their overall expenditure on local services.
It is, of course, true that both these totals have been increasing, but what so many of the critics fail to recognise is that this expansion of services is in the main a response by local authorities to public demands—demands which have been actively encouraged for the most

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part by successive Governments at Westminster. Consequently, we have seen a great expansion in recent years in education, in social services, housing, transport, leisure services and amenities, and inevitably employment in local government has increased, because so many of the services that local government provides are labour-intensive. And, of course, a higher level of services has to be paid for. In these circumstances it seems to me quite wrong to point the finger of blame at local government for meeting public demands.
Now, of course, we and the local authorities face far more difficult circumstances than we have known in the past. It is not that the wish to provide or indeed the demand for local government services has in any sense diminished It is that our capacity to meet new demands has been seriously, though temporarily, impaired. We have had to give priority to the urgent task of strengthening the economy, and in particular to defeating inflation, to reviving investment in industry, and to closing the hideous gap that opened up three years ago in our balance of payments.
As my right hon. Friend the Chancellor of the Exchequer has made clear, these objectives necessarily entail restraint in the growth of public expenditure—a restraint which in our present judgment must be maintained for some years ahead. As the House will know, our broad assessment was spelt out in the Public Expenditure White Paper published in February this year.
Table 1.4 of the White Paper makes plain that total public expenditure, which reached some £46,000 million in 1975–76, is to fall slowly to £44,600 million by 1979x2013;80. Within this total of public expenditure, local authority expenditure in England and Wales, which reached £11,100 million in 1975–76, is estimated to run at £10,300 million in 1979–80.
This is bound to be very unwelcome to all those in local government who see the pressing needs of their communities and who wish to make further provision for them. I understand and share their concern. But let no one assert that this is a brutal and Draconian attack on local government services, or that we envisage uniform and unselective cuts across the whole field of local government services. But the new constraints mean that we
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shall need very close co-operation and understanding between local government and the Government in the period ahead, and they also mean that we shall require a very firm determination of priorities—subjects to which I shall turn at a little greater length later. It is against this background that I now want to comment on the views expressed in the speech we have just heard from the hon. Member for Aylesbury and the views expressed in the Opposition motion.
I found the hon. Gentleman's speech extraordinarily discursive. It covered ground which, on the face of it, did not, as it were, directly relate either to the subjects which are itemised in the Conservative motion or, indeed, to matters which I would consider to be of major national concern.
I am aware, of course, that there is an election in a week's time. The fact that that election is about to take place may have had more to do with the nature of the hon. Gentleman's speech and the quality of his argument than the facts themselves on which he purported to comment. I shall not, therefore, say a great deal about his speech. What I shall do instead is to comment on the three propositions, which I assume were thought about and which appear on the Order Paper—propositions which the hon. Gentleman reached, I thought, at a very late stage in the course of his remarks.
He spoke about value for money. I am sure that that is a sentiment which no one in the House, or indeed in local government, would seek to challenge. Let me assure the hon. Gentleman that we entirely support his view that everyone should be encouraged to seek value for money.
The second theme in the motion is
"making the best use of existing housing stock".
That is an equally impeccable sentiment, but in this context there are two particular points which deserve further comment. I was surprised that in this context we did not hear more of the hon. Gentleman's own proposal for making, as he would hope, better use of existing housing stock. This proposal formed the theme of a speech he made outside the House a week ago, which I think it is fair to describe as a recommendation for some form of shorthold. I think that is the term used.

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I do not believe that this is a serious solution to the problem; nor do I think that it is a very attractive one. It is a variation of the plea that landlords should let property outside the Rent Act. It would mean the creation of lettings without security of tenure and with no obligation to rehouse when the short lease expired. We plan to review the Rent Act, but we shall certainly not go back on the fundamental and sound principle of security of tenure.
Mr. Charles Morrison: In the light of what the right hon. Gentleman said about shorthold, may I ask whether he has studied the scheme introduced by the North Wiltshire District Council? If so, would he care to comment on that? Looked at objectively, that scheme would seem to have the merit of providing an indirect security of tenure.
Mr. Shore: Yes, I will comment on the North Wiltshire scheme. I understand, incidentally, that it has now been taken up by some 40 district authorities. I regard that scheme in a rather different way. It is an interesting and worthwhile experiment and we are watching its progress very closely. It is, I am told, now several months since the Department asked Sir Dennis Pilcher and Mr. Derek Wood to undertake a study of the practicalities of leasing arrangements of this kind. As soon as we have their report, we shall aim to issue general guidance on such schemes to local authorities.
Mr. Michael Shersby: Before the right hon. Gentleman leaves the subject of shorthold tenancies, will he indicate whether he would agree with the proposition that in a number of cities, London and elsewhere, there are many thousands of people who require accommodation for a short period of time and who do not require the kind of security of tenure offered by the Rent Acts? For example, there are nurses and many young people working in big cities who want temporary accommodation and would benefit from this type of shorthold tenancy.
Mr. Shore: It would not be right for me, at this stage of my career as Secretary of State, to give a blanket and categorical reply to the lion. Gentleman's
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point. I was seeking to comment on this proposal in the context, as it were, of its being a major contribution to the solution of the general problem of getting the best use out of our housing stock. I do not believe that there is anything of great value in this proposal, and I see very many difficulties in it. It contrasts with the North Wiltshire scheme, because in that scheme the important aspect is that there is an obligation on the local authority to rehouse at the end of the leasehold period. That gives a measure of security, which other arrangements lack.
The other proposal put forward by the hon. Member for Aylesbury—again it is in the motion—is to sell off council houses. I do not wish to be dogmatic about this. We do not want to dictate to local authorites. But, as was made clear in our Circular 70/74, issued in April 1974, whether selling is right or wrong must depend on local circumstances and, above all, on the effects that it would have on housing shortage and housing need. Obviously, the situation in the inner areas of London is different from that in the rural counties. There must, therefore, be a proper and balanced assessment of local housing situations before decisions are made.
Mr. Raison: The right hon. Gentleman says that there should be regard for local circumstances, and that is a sensible point. However, he has taken steps in the new towns and in Circular 70/74 to make it virtually impossible in any circumstances to sell off council houses or new town houses. The present figure of council house sales is virtually nil.
Mr. Shore: The fact that there is very little sale of council houses in different parts of the country is not the consequence of the circular. Obviously, we have given advice there. But if certain local councils, in the light of that advice, think it to their advantage or think it right to sell council houses, they are able to do so. I hope very much that they will take full account of that guidance. If they do not, they will not be properly serving the interests of their people. But, as one of my hon. Friends pointed out to the hon. Member for Aylesbury, the fall in the sale of council houses had already taken place during the period in

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which the hon. Gentleman's party was in power.
Mr. Michael Morris: Still on the subject of new towns—
Mr. Shore: I shall not give way to the hon. Gentleman now. My right hon. Friend the Minister for Planning and Local Government has the most enormous expertise in new towns policy. I shall ask him specifically to deal with this question when he winds up the debate.
The third part of the Opposition motion calls for a strict limitation on municipal trading and direct labour. This is predictable stuff, and I do not propose to spend time going over ground so heavily trodden in past debates. I do not recall any major initiatives on the practice of direct labour when the Conservatives were last in power, apart from the miserable decision not to allow direct labour departments to build houses for sale. Our view is that local authorities know best their own requirements in this respect, and we propose to make certain changes so that direct labour departments may operate across the boundaries of their own authorities where this will lead to a better use of resources.
On municipal trading, I suspect that there is a more serious division between the two sides of the House. The division is between those who believe that local authorities should be encouraged to expand their activities for the good of the community in a spirit of initiative and enterprise and those who wish to see authorities limited to a list of closely defined functions. If the speech of the hon. Member for Aylesbury is any guide, gone from the Opposition Benches is that spirit which inspired local authorities in the past to develop essential services like gas, water and electricity or which led Neville Chamberlain to work for the establishment in Birmingham of the Municipal Bank. Of course, local authority enterprise must be organised on sound and efficient lines, but let us look forward to its expansion, not its restriction.
So much for what is in the Opposition motion. But what I find much more interesting and much more significant is what was omitted. First, I am sure that the House and the country will have noted
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that in the Opposition's advice to the newly-elected councils no reference is made whatever to the need to add to the housing stock. There is not a word about new house building. We know that during their last period in office local authority house building fell year by year until, in 1973, they achieved the lowest figure of housing completions that we had known in any year since 1947 and the lowest level of public housing starts since long before the Second World War. Are we now to infer that their policy is to improve still further on their previous performance by building still less? Indeed, are we right to deduce that local authority house building is to be the prime target of Conservative public expenditure cuts if they were to be returned to power?
I pause. The hon. Member for Aylesbury has his moment. Am I right in assuming that the absence of any mention of the need to expand the stock of houses in the Opposition's official motion is evidence of the fact that it is their intention to build still fewer houses than they did in 1973 and to focus upon house building one of the main thrusts of their attack upon public expenditure?
Obviously, there is to be no response from the hon. Member for Aylesbury. In that case, we are entitled to draw appropriate conclusions.
The second omission from the hon. Gentleman's motion—I assume that he was responsible for it—follows closely from the first. It is the failure of the Conservative Opposition yet again to take this opportunity of telling the nation just where their local authority expenditure should be cut. I understand very well why Opposition spokesmen are shy about these matters, but it really is not good enough for the Shadow Chancellor to complain week after week about the excesses in public expenditure without telling the country, himself or through his hon. Friend the Member for Aylesbury the orders of magnitude which he proposes to retrench in local authority spending.
Of course, we know the drift of the Shadow Chancellor's thinking. In the public expenditure debate on 9th March 1976, he mentioned the figure of £4 billion and in his list of specific complaints he included housing subsidies and

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the acquisition of building land. This is a splendid opportunity for the hon. Member for Aylesbury to tell us precisely what he and his colleagues intend. We are not prepared to be lectured about public spending in general and nor shall we take notice of particular complaints unless and until the honourable Gentleman and his colleagues have the courage to tell us what it is that they really propose.
Let us have an end to waffle and cant of the kind that we heard earlier this afternoon and let us know what is really in the mind of the hon. Member for Aylesbury. I agree with the Shadow Chancellor, who has addressed himself to these matters before, that this is a time when the political parties have to come clean. They have to tell the people what it is that they believe has to be done.
We have said what we think, and we have backed our judgment. We have put it in print. We have gone through a long process of debate. We are now entitled to have a response from the Opposition.
Mr. Raison: Will the right hon. Gentleman give just one example of the candour of which he boasts? Will he confirm that the level of rent increase that he expects in the next financial year in respect of local authority housing is about £1?
Mr. Shore: The answer to that question depends upon a number of factors which we cannot at this stage turn into an answer in terms of rents. What we have done is to indicate what our approach is to housing subsidies in the public expenditure White Paper.
Mr. Joseph Dean: Is my right hon. Friend aware that the Housing Finance Act imposed initially an increase of £1 when inflation was running at a far lower rate than it is today? Is it not unworthy of Opposition spokesmen to be highlighting a £1 increase next year with the rate of inflation running at the level that it is today?
Mr. Shore: The one factor of which I am certain—and this is part of the reason for the difficulty in expressing public expenditure figures in terms of actual rent increases—is that the level of inflation is one of the unknowns in the period lying ahead of us.
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I now turn to our amendment. The first point we stress is the need for a new and closer partnership between the Government and local govenment and this is not a matter to be derided. In the past there have, of course, been regular and detailed discussions on the level and distribution of the rate support grant, but only perfunctory exchanges between the Government and local authorities on the planning of national expenditure. It is our aim to bring local government fully into national expenditure planning—into the annual PESC exercise—and at a time sufficiently in advance of a decision for the views of local government to be taken into account.
This is the reason why we set up last year the Consultative Council on Local Government Finance which provides a forum for a regular discussion between Ministers and elected members and local authorities. This has, I believe, already shown its worth. I am grateful for the tribute the hon. Member for Aylesbury paid to my predecessor on this matter.
There are three particular areas where I think we have all benefited. First, it has greatly eased the task of achieving the desired changes in public expenditure. Last year we had to stem the rapid increase in local authority expenditure. This was achieved, but I do not think that it would have been possible to have brought about so marked a change in trend without the discussions in the consultative council and the whole-hearted co-operation of the local authorities that ensued.
Secondly, we have had welcome and effective co-operation from the local authorities in our efforts to keep the rates down. This, of course, is an essential part of our general counter-inflation strategy. On average we expect domestic rates to rise by no more than 10 per cent. this year. Just how great an achievement that is can be seen by recalling the level of domestic rate increases in recent years—13 per cent. in 1971–72, 14 per cent. in 1972–73, 9 per cent. in 1973–74, 17 per cent. in 1974–73 and the really serious inflation-reflecting 34 per cent. last year.
The rate support grant settlement for this year and its expenditure base were the subject of full discussion in the consultative council. Local authorities knew what the Government wanted; we knew

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their difficulties. We managed together to achieve what most will regard as a fair deal for the ratepayers.
Thirdly, we have sought local authority co-operation in the stabilisation of man-power. We have agreed with local authorities through the consultative council a joint exercise to watch and examine manpower in local government. The purpose of this exercise is to supply a more comprehensive and more up-to-date information on a quarterly basis about total employment in local government.
The joint watch was established only six months ago, so it would be premature to draw any firm conclusions as to its effects, but the latest returns published on 14th April show a stabilisation of local government manpower. We have also just launched a joint manpower study Its purpose is not to tell individual authorities how they should organise their own affairs, but to ensure that all have ready access to the benefits of collective local authority advice when they are making management decisions which involve manpower. My right hon. Friend the Minister for Planning and Local Government and I will continue to discuss in the council the large financial questions that are of interest to the Government and local government. One of the most important of these will undoubtedly be the consideration of the Layfield Report, which I hope to see published very soon.
I now turn to the second of our amendments—the crucial question of priorities. Those who have studied the public expenditure White Paper will recognise that within the overall restraints on public expenditure we have preserved services to which we attach high importance at the expense, inevitably, of others. Road construction and maintenance have been obvious casualties. The transport policy review again shows our approach in seeking to establish priorities. We asked in the document which has now gone out for consultation, a number of questions to enable us to choose specific priorities, to help to decide where we must concentrate our resources to the best effect.
In the distribution of rate support grant we are also seeking to establish priorities. over the past two years, we
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have worked to bring about a distribution of the grant which will favour areas of greatest stress, where the gravest social problems lie—the big conurbations. Inevitably other areas have done less well. Housing has been—and rightly so—our first priority. Public expenditure on housing now amounts to £4,000 million—a very substantial increase on the 1973–4 figure of£3,330 million.
I have already referred to the lamentable total of new starts in 1973. Since then, there has been a remarkable and welcome change. New starts in the public sector rose from 113,000 in 1973 to 147,000 in 1974 to 174,000 in 1975. We have achieved this by the encouragement of local authorities and the provision of adequate Exchequer support for new building. Nor has this marked improvement been achieved at the expense of private sector construction.
We inherited a serious slump in private housebuilding. A mortgage famine had developed and the confidence of the private housebuilder had been seriously shaken. From the boom of 1972 and early 1973 new starts began to fall away dramatically towards the end of 1973, with the result that starts were only 105,000 in 1974.
We acted by encouraging local authorities to buy the newly completed houses which were standing empty for want of buyers and by providing £500 million in lending facilities for the building societies. These loans prevented seemingly inevitable increases in the mortgage interest rate and provided more funds for lending. They were the first step in the stabilisation arrangements that we have continued to develop with the building societies. We can now see confidence returning. We look forward to about 160,000 private sector starts in 1976.
These figures expose the absurd charge that the Labour Government are indifferent to owner-occupation. The percentage of housing in owner-occupation grew substantially during the period of the 1964–70 Labour Government when for the first time owner-occupation reached 50 per cent. of the housing stock. It is now 53 per cent. and we hope to see it continue to grow.
We must not only expand the housing stock, but make the best use of existing

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housing. This means improving it. In fact we are now spending three times as much in improving local authority housing as the Conservative Government did five years ago.
The programme for municipalisation is also contributing to the best use of housing stock. Indeed, it is an essential part of the machinery we must use to improve living conditions in the inner urban areas. It is a policy not of indiscriminate acquisition, but of using resources primarily for the acquisition of older private housing in the areas of housing stress in order to secure its improvement and to bring empty properties into use.
Mr. Shersby: Can the Secretary of State tell us how the municipalisation programme has provided a net housing gain?
Mr. Shore: By bringing into use houses which were previously unoccupied and in many cases helping to make habitable houses which were previously uninhabitable.
I fully recognise the difficulties now faced by local authorities and the Government, but I do not think we should approach our task in a spirit of gloom. Resources available fall short of what we wish, but compared with the expenditure levels of only a few years ago there are far more resources for the councils that will be elected next week and the people they serve.
Providing we avoid the savage and mindless cuts implicit in the Opposition motion and in the whole Opposition approach, the new councils can look forward to a period of great opportunities to serve their communities and to provide the vital services on which the standard of life of ordinary people depends.
5.21 p.m.
Mr. Wyn Roberts: I add my welcome to that already extended to the Secretary of State in his new office. Perhaps the welcome would be less muted if I had detected some glimmers of a change of policy on the part of the Government. Perhaps it is early days to expect such changes, but they may come in the light of experience.
I am bound to tell the right hon. Gentleman that the Opposition have spelt out
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clearly their thoughts on public expenditure cuts by their opposition to the Community Land Act and to other measures which the Government have put forward. They have all been very costly measures.
I shall say a few words about local government in Wales, which is in a more agitated state than local government in the rest of the United Kingdom. The agitation has arisen largely because of the implications of the Government's devolution proposals. There is general agreement that if the proposals are implemented we shall have one tier of government too many in Wales.
Those who favour devolution argue for further local government reforms, by which they mean, in effect, the abolition of the county councils and the setting up of unitary authorities. It is ironic, to say the least, that the devolution proposals, which were inspired by a desire to bring Government closer to the people, should have as one of their first consequences the corollary that a tier of local government will have to be eliminated which is very much closer to the people than any tier of regional government can ever be.
The fear that the county authorities will have to be abolished in the event of devolution is very real. That will be readily agreed by those who have read the county councils' submissions on devolution. I shall quote the Under-Secretary of State for Wales, the hon. Member for Rhondda (Mr. Jones), who said:
"There will be no diminution of local government power and influence."—[Official Report, Welsh Grand Committee, 7th April 1976; c. 91.]
The Welsh Counties Committee takes a very different view. It foresees that the counties' powers will be eroded, and that the powers that might have been given to them will be given to other institutions responsible to a Welsh Assembly.
I feel that the Government will not propose further reform of local government before implementing the devolution proposals. They will be content that we shall be over-governed while the Welsh Assembly is establishing itself. Thereafter, some changes are clearly inevitable if we are not to be one of the most over-governed countries in Europe. The changes are bound to be at the expense of the existing local authorities.

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In the past, the Opposition have expressed the view that Wales needs an indirectly elected council which, as one of its functions, has the task of coordinating the local authorities, of bringing them together and acting as an apex for them. There is still a great deal to be said for that proposal. It would certainly help to avoid a conflict between regional and local authorities, a conflict that seems inevitable under the Government's devolution proposals. Such a council might also, if it included Members of Parliament, improve the relationship between Wales and Westminster, a relationship which is likely to deteriorate under the present devolution proposals.
The prospect of devolution overshadows local government, as so much else in Wales. The majority of district councils and county councils are demanding a referendum on the issue. Underlying this concern about constitutional change is a more immediate concern about our economic and social wellbeing. We appreciate the need for cuts in public expenditure and we are willing to bear our share of restraint, but there is a suspicion that we are being manipulated into a financial straitjacket and that an ever-increasing proportion of the financial resources available to Wales is slipping beyond our control.
In the event of the Government's devolution proposals coming into effect, the rate support grant for the Welsh authorities will be part of the block grant for the Assembly. The Welsh authorities will have to haggle with that body for their share rather than directly with central Government alongside their English counterparts, as now.
The Government argue—in my opinion, superficially—that the local authorities will have a more direct influence. Again, I quote from the debate of 7th April in the Welsh Grand Committee. The hon. Gentleman said:
"Welsh local authorities would have a more direct influence on their grant allocations than they have now as a small part of the negotiating machinery covering England and Wales as a whole."—[Official Report, Welsh Grand Committee, 7th April 1976; c. 91.]
But the resources of the Assembly will be finite and already negotiated with central Government. The rate support element in the block grant will have been predetermined, and the Assembly and the
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local authorities will have very little scope for manoeuvre in their negotiations.
Currently the local authorities are going through a difficult period in Wales as elsewhere. They are subject to a great deal of popular criticism on account of staff increases, rising rates and inadequate services. Undoubtedly, some of the criticism is justified. When I last checked staff increases I found that the two most significant increases were in construction staff and in education staff. Although the increase in the number of teachers was justifiable, I could not say the same of the increase in construction workers, whose jobs could have been done by outside contractors engaged on an ad hoc basis. The Government have surely accumulated enough adverse experience of direct labour by now to convince them that direct labour employment does not generally provide good value for money either to the taxpayer or the ratepayer.
I received Written Answers on 20th February 1976 from the Secretary of State for Education and Science relating to the Soulbury Committee's recommendations for increases in the salaries of education advisers employed by local authorities. The increases were very substantial and came as a shock to my local authority of Gwynedd. The right hon. Gentleman told me that it was not his role to accept or reject recommendations from the Committee. I believe that he should have such a role, especially in stringent times such as these. I should be grateful if the Government considered the possibility of establishing such a role. The cost increases entailed by these recommendations can have a very serious unbalancing effect on a local education authority's budget.
The county precept in Wales for 1976–77 is 66·63p in the pound on average–10·6 per cent. up on last year and about 8½p higher than the average for English counties. Of course, we get a higher domestic rate relief which helps us with our higher water rate as well as the local authority rate. But the business community—the small shopkeeper—is not similarly assisted. There is no doubt that small businesses are suffering badly under the heavy rate burden. That is particularly regrettable in Wales, because we have such high unemployment. Wales, for the most part, is an essential area and

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there is no doubt that the rate burden is a considerable disincentive to employment.
Generally, the public welcome the attempts which are being made to restrain local authority expenditure. I believe that the public wish to encourage those attempts, and I am sure that they will be looking hard at their candidates in the forthcoming elections from this point of view.
The elimination of waste and the obtaining of value for money in services to which citizens are entitled are the ratepayers' priorities, and I believe that they are popular priorities. We all know of instances of waste in local authority expenditure. Our constituents also know of those instances. I believe that there is a new awareness and anxiety on the part of the public about getting value for money, and we are right to mention that particular desire on the part of the public in our motion. I hope that these priorities will have an even more respected place after the coming elections.
We must appreciate that the demands on local authorities have increased over the years. The Association of District Councils has pointed out that the number of children in care in England and Wales rose by 26 per cent. between 1966 and 1971 and that the number of people over 65 rose from 7·7 million to 9·5 million—an increase of 23 per cent—between 1961 and 1974. There has been a considerable additional demand on local authority services, and Parliament has laid further duties upon local authorities. Therefore, we must not be entirely unsympathetic to the difficulties of local authorities.
The number of council houses has also risen from 4·4 million in 1960 to 6·23 million in 1974—an increase of 42 per cent. I fully support the argument put forward by my hon. Friend the Member for Aylesbury (Mr. Raison) for the sale of council houses to sitting tenants not only because, as a constituency Member, I am constantly under pressure from council tenants who wish to acquire their own homes, but also because those homes are becoming such a burden on local authorities that I doubt whether the taxpayer and the ratepayer can sustain that burden for much longer.
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We in Wales have the same problems with our local authorities as the rest of the United Kingdom. But, as I said at the beginning of my speech, we have the added problem that the shadow of the Government's devolution proposals now hangs over us. That shadow has, in turn, produced a significant fear among local authorities that they will be subject to yet further reorganisation. Whatever we may have learned from the last reorganisation, it would certainly gain agreement in this House that it is a costly and difficult business. The main concern of local authorities at present is that they will be subjected to yet further reorganisation in the not too distant future.
5.36 p.m.
Mr. Frank Hatton: I welcome the opportunity of supporting the amendment. I was delighted to hear my right hon. Friend, at the outset of his remarks, express appreciation for the work done by members and officers of local authorities. I believe that we owe a great debt to them, because they provide the vital services which people desperately need.
I was saddened that the hon. Member for Aylesbury (Mr. Raison), in his reference to some of the things which he said were damaging to local government—I will not go over the details again—did not recall the great damage which was done to local government by the recent reorganisation. I make no apology for reiterating that point.
I represent a constituency in one of our major conurbations. Indeed, I had the privilege of serving on one of the city authorities. I am no longer a member of that authority, but I know from my colleagues who serve on it how they view reorganisation and how it affects our major conurbations.
It is disastrous that we should now have a county authority where previously we had a major city authority which provided all the services. Chief officers of local authorities in our major conurbations could often solve their problems by crossing the corridors of their town hall. Now they are involved not only in writing long letters but in attending meetings in many other parts of the city.
That is not all. One of the tragedies of reorganisation was that two major services—water and health—were taken

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away from democratic control. I make no apology for raising that matter. Whatever the Government do in future about the reorganisation of local government—it is difficult to think about reorganisation again in terms of the upheaval created for the staff involved—I can see no reason why a keen look should not be taken at the possibility of returning water and health to democratic control in local authorities.
A consultative document
"Review of the Water Industry in England and Wales"
was published only a few weeks ago. In paragraph 43 there is a reference to the fact that representations have been made by a number of local authorities for an increase in their representation on water authorities. Then I read:
"Given that most of the water authorities necessarily cover wide areas, any substantially larger scale of local authority representation could mean that their membership would be increased very greatly"—
note this—
" to the detriment of the efficient management of the water authorities and of the influence of individual members."
I do not know who wrote that, but I know that the North-West Water Authority is largely the old Manchester Corporation Waterworks undertaking which supplied water practically to the whole of the North-West in a most efficient manner. I have read today of areas of the country which are likely to be affected by drought in the ensuing months. It is scandalous to think of the efficiency of the old Manchester Corporation Waterworks and the fact that the authority does not have one representative on the North-West Water Authority. That state of affairs should be remedied very quickly.
I turn very briefly to some of the propositions that appear in the motion on the Order Paper, and first to the phrase
"maximum value for money in local services."
In my experience in local government, that is what we were always looking for. We always had to look for it. It was a very difficult task. Some people generalised and said that we ought to cut the rates, but in the main, the man in the street, or the person one met at the advice bureau or the bus stop, was always saying on what one should spend
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money. Such people were dissatisfied with some of the old schools, and with the highways and street lighting. There was always a list of things that needed doing, so one was searching constantly for ways in which one could obtain value for money in order to satisfy those by whom one had been democratically elected to the local authority.
We ought not to forget some of the additional services that local government has had imposed upon it. I am proud of the fact that Manchester has an extremely fine record in terms of the Chronically Sick and Disabled Persons Act. During the period of this Act, more than 21,000 cases have been registered, over 4,000 telephones have been installed, nearly 4,000 aids have been issued, and over 1,000 bus passes have been issued. We ought not to forget all the administration involved in this and the need for staff.
I turn briefly to the second proposition in the motion, on the subject of the sale of council houses. I cannot imagine any more dishonest electioneering slogan than this. As one who comes from a major conurbation and knows the problems of housing, I can illustrate this very easily. There are very many people who have no hope of a new home at all unless it is provided by the local authority. In latter years many local authorities have built dwellings—they are really not worthy of a better word than that; deck access accommodation and multi-storey flats—that are not the best of homes and are not the most suitable places in which to bring up families. However, if local authorities sell off their housing stock, those are not the units that will be bought. It will be the best houses on the suburban estates that will be bought, and the poorest people will be left with the choice of only the deck access accommodation and multi-storey flats. Let that be said when electioneering slogans are being put about in the next few days. I hope that many electors in the major conurbations who may be caught by slogans about selling council houses will remember that it will make a great difference to their choice if the best council houses are sold.
I come finally to the subject of direct labour. I come from a city that has an outstanding record in this matter and a major direct labour department. That

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department is not merely building houses. At the time when this country was in need of teachers, it was building teacher training colleges at a rate that could be compared with any of the best building organisations in Britain. It was erecting new primary schools in three months, and doing that at a competitive rate and a rate that gave value for money to every elector in the city.
Many other hon. Members who have a genuine interest in local government wish to take part in the debate. I conclude briefly by saying that for the people of this country, the best thing that could happen is that the Labour-controlled councils in Manchester should return again on 6th May.
5.45 p.m.
Mr. Michael Shersby: First, I add my congratulations to the Secretary of State on his assuming his new post at the Department of the Environment. I have had the interesting pleasure in the last year or two of facing him across the Dispatch Box in his former incarnation, and I wish him well in his new job.
I speak today as one who served for 12 years in local government before entering this House, on two London local authorities. I therefore have a fairly good knowledge of the problems that face local authorities in a large city such as London. The motion on the Order Paper provides the House with a useful opportunity to discuss the operation of local government and the need for ratepayers to ensure that they get value for money.
Many of those who will be voting next week in the forthcoming district council elections will have value for money uppermost in their minds. That is right, as the Secretary of State has pointed out. They will make a judgment on the record in office of the councillors and they will vote accordingly.
Another important question that many people will have in mind is the degree to which they, as members of the public, feel that they have been consulted by their local councillors on the matters that vitally affect them—matters that councillors will decide on their behalf and matters involving millions of pounds of ratepayers' money. They will want to be sure that the men and women whom
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they are electing to serve them as councillors will not forget the electorate when they are elected, that they will not be remote, and that they will not act in a high-handed or doctrinaire manner. Those are the qualities for which the electorate looks in its elected councillors.
Up and down the country one can find many fine examples of excellent public service by local councillors that set a high standard. People will want the local councillors they elect to represent all the people in their ward. They will not wish them to be too party-political and they will want them to have regard to important matters such as the conservation and the preservation and enhancement of the environment in which they live.
The voters will, therefore, make their choice on the basis of the individuals who offer themselves as candidates in the elections. They will make their choice, as well, on the programme that is offered to them by the political parties. This will mean, inevitably, that they will have to make a comparison between the policies of the main political parties, and in my view, one of the most important criteria they will consider is the ability of a particular party to control and reduce public expenditure. That means that many people will choose between the Conservative Party, which, as my hon. Friend the Member for Aylesbury (Mr. Raison) has said, is clearly dedicated to controlling and, where possible, reducing public expenditure—certainly reducing unnecessary public expenditure in local government—and the Labour Party, which is soft-pedalling this particular issue. I cannot speak for the Liberal Party, which will no doubt speak for itself.
Therefore, before the electorate cast their votes next Thursday, they will have much to think about. In most cases they will be presented with a clear choice between candidates of differing political views. That is not the case in some elections, such as those for parish councils, which are still, happily, non-political—
Mr. Joseph Dean: The hon. Gentleman must be joking.
Mr. Shersby:—and where people vote for the local vicar or local people who stand as independents and are genuinely

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independent, dealing with parish pump matters.
Whatever Labour Members may say from a sedentary position, the fact is that today there are still many parish councils that are, happily, elected on that basis.
All those who vote in the district council elections next week are indeed fortunate. They are certainly more fortunate than the electors of Greater London, in which my constituency is situated, who will have to wait for another two years before they can pronounce judgment on the record of the councils which were elected some two years ago. However, if the people of London have to wait, at least the example of what is going on in some of the Labour-controlled London boroughs can be a dreadful warning to others of what can happen if they do not elect men and women who will control public expenditure and respect the rights of individuals.
I was interested to hear the Prime Minister in his television broadcast on the night he was appointed say that he wanted the Labour Party to stand for individual freedom. I strongly agree with that. I hope that what he said will be felt right through the boroughs and will be remembered by councillors of all parties when they exert their powers in the new councils.
I want to take as my example the Labour-controlled council of the London Boroughs of Hillingdon in which my constituency is situated and which may have come to the attention of the Secretary of State and other right hon. and hon. Members. It gives me no pleasure to do so, for I am proud of the borough in which my constituency is situated, but I cannot be proud of the record of this local authority Labour Party, and it is for that reason only that I mention Hillingdon.
The Labour Party gained control of Hillingdon in 1971 by a minority vote. It controls the council because of the way in which the ward boundaries are arranged—a situation which the Labour Party is trying to perpetuate. At the time Labour took over, Hillingdon had one of the lowest rate increases over a two-year period, but it now has one of the highest rates in the pound in the whole of Greater London. Local councillors rightly say that much of this is
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due to inflation, but inflation hits other local authorities thoughout the length and breadth of the country. In 1974–1975 Hillingdon had a rate increase over the two-year period of 113 per cent. That is more than any other London borough. On its own admission, Hillingdon was spending at the rate of 42 per cent. above the national average for 1974–1975, and the only reason why this year's rate has remained steady is that the taxpayer is bailing out the borough by means of extra grants.
Little or no attempt seems to be made by the Labour Party to control public expenditure. On the contrary, the Labour Party seems to revel in it. The massive expenditure by the council has been constantly criticised, not just by the Conservative opposition on the council but by the Press and the local ratepayers' associations, and it is now attracting unwelcome national attention. I say "unwelcome" because it is unwelcome to the people who live there and do not necessarily support the Labour Party's policies. A recent article in the Daily Mail appeared under this title:
"What the hell are they playing at in Hillingdon?"
What are they playing at with my money on my doorstep?
In case it should be thought that I am exaggerating, I would explain that the council is spending £15 million on a new civic centre—air conditioned of course. It was originally estimated to cost £3·2 million. It incorporates a Swedish telephone system, personally chosen by the Labour leader of the council, which can take special video equipment enabling callers to see as well as speak to officials—a doubtful privilege.
Mr. Anderson: The hon. Gentleman is trying to be as fair as possible, so will he also examine the escalation of costs for the new town hall of the Conservative-controlled London borough of Kensington and Chelsea and, if he wants to pursue the financial competence of councils, will he look at the London borough of Bexley which is also Conservative-controlled?
Mr. Shersby: I am grateful to the hon. Gentleman for saying that I am fair. I will examine the points he made. When he has heard what else I have to say, he may think that the experiences of other

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local authorities pale into insignificance. The cost of the luxury telephone equipment to which I referred has risen to a massive£692,000. If the Secretary of State does not think that is extravagance on a massive scale—by any political party—I should be interested to hear why.
We have a wonderful new Olympic ski-slope which will cost the ratepayers £103,000. I am all in favour of leisure activities, but at a time of economic stringency when the Chancellor of the Exchequer is exhorting the local authorities throughout the country, individuals and firms to exercise restraint, this type of expenditure is beyond understanding.
The motion refers to
"making the best use of existing housing stock, including the sale of council houses to tenants".
I believe—I hope that the Secretary of State believes—that making the best use of the housing stock means encouraging the improvement of owner-occupied private housing by means of improvement grants, as well as modernising local authority accommodation. That is vitally important, not only in the centre of towns but in the outer areas of the big cities where houses built in the early part of the century now need modernisations. Improvement grants are an important instrument for improving the housing stock, but they are not easily come by in many boroughs which are Labourcontrolled—certainly not in the Labour-controlled borough of Hillingdon.
Making the best use of housing stock also means encouraging the owner-occupier by assuring him that his home is his castle and that no attempt will be made to dispossess him by means of compulsory purchase orders unless that is necessary in the national interest. Compulsory purchase orders should not be used like a shotgun. They should not be spread around and used to intimidate owner-occupiers to give up their homes. That creates a tremendous sense of unease in the area and leads to a rundown in the condition of the housing stock.
Only a Conservative-controlled council will give the owner-occupier the kind of encouragement and assurance of security in his freehold that he is entitled to expect. I say that because I have seen for myself the infamous policy of the
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compulsory purchase of private houses and gardens by my local authority. This policy of municipal winkling has attracted the attention of no less a person than Bernard Levin. The Minister may have seen his excellent article published recently in The Times entitled:
"How municipal victims are winkled out of their homes".
In that article Bernard Levin compares the municipal winkling by Hillingdon with the Rachmanism of the 1950s. He based his article on an excellent Bow Group pamphlet by Councillor Michael Lawrence, a Conservative member of the Hillingdon council.
Bernard Levin suggested that we needed a new noun to describe those who behaved in that way. He coined the word "Hillinger" to describe them. What a shame that the name of a beautiful borough should be used to describe municipal winkling. But that is what my local Labour Party stands for, and it is not chastened by Bernard Levin's words in The Times. Alderman John Bartlett, the Labour leader of Hillingdon council in a letter in The Times on Monday wrote as follows:
"The job of the local authority is to provide homes for people in housing need: the private developer operates entirely to make money. The developer, of course, can look for land anywhere in the country, but the local authority, in the present way in which we arrange things, can only look for land in the area which it covers. At the present moment there is virtually no undeveloped land in this area, other than 14,000 acres of Green Belt and open spaces, and therefore the only way of increasing the number of council houses for letting is by redevelopment of land occupied by low density housing to a higher density, so that housing gain can be achieved."
That is an interesting statement. With the new powers available to local authorities under the Community Land Act, owner-occupiers will have less security than in the past. They may not even have the right to a local inquiry if a compulsory purchase order is made on their home. I say to the electors in the district council elections that they should heed the example of Hillingdon and make sure that the Labour Party in their borough is not in a position to put a compulsory purchase order on their homes or engage in this type of disreputable municipal winkling.
What is required is the encouragement that is so vitally necessary for the private

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home builder to build homes for sale and to balance public home building by the local authorities. The Secretary of State said today that expenditure of£4,000 million was involved in municipal home building but that this was not at the expense of the private householder. He spoke of the encouragement which the Government have rightly given to building societies. He mentioned the encouraging figures for new housing starts in the private sector this year, which I welcome.
Will the right hon. Gentleman or his right hon. Friends say firmly that it is the policy of the Government to encourage both private and public home building to achieve a balanced community? Will he say clearly to his Labour colleagues in local authorities that it is not the policy of the Labour Government to encourage municipal development to the exclusion of the private developer? I see the right hon. Gentleman nodding. I am glad. I hope that he will issue a circular to that effect. I ask him seriously to think about the desirability of doing so. At the least perhaps he could spare the time to send an individual letter to the Hillingdon Council.
I would be grateful, when the Minister replies, if he would say what is his policy for making more land and homes available, in the new towns, for example. I have in mind, particularly, young people who live in the cities and the urban conurbations, many of whom see me at my weekly surgery, looking for a home. They are seeking the opportunity to have a small home and garden somewhere where they can bring up their children. New towns provide that oportunity. Unfortunately, many young people are understandably unwilling to move from the area in which they have grown up or spent a large part of their lives. Much more needs to be done to encourage young people to be more mobile and to seek their future in the new towns where new jobs and homes are available. We cannot afford to go on developing and redeveloping the urban and suburban areas of our towns for ever. New towns offer the opportunity for new growth points to which young people can move.
I come now to the sale of council houses, which is referred to in the motion. It is wise and sensible for local authori-
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ties to sell council houses and council flats to those tenants who wish to buy them. I do not say that they should sell them all. I say that local authorities should decide what proportion of their housing stock they ought to sell. There are many council tenants who wish to buy their own house and who are prevented from doing so by doctrinaire decisions taken by Labour councils. This has to stop. I hope that the electors next week will make it possible for many local authorities to take those decisions. I beg the Government to have another look at this question.
I remind the Secretary of State of the remarks made by my hon. Friend the Member for Aylesbury when he drew attention to the considerable revenue available to local authorities from the sale of council housing which enables new building to take place more easily.
I hope that when those fortunate electors in the district councils cast their votes next Thursday they will have read of the activities of the one Labour-controlled local authority which I have described today. I hope that those electors will vote for wise men and women who will serve them well and get rid once and for all of the Socialist tyranny I have described.
6.5 p.m.
Mr. Jim Marshall: I hesitate to follow the remarks of the hon. Member for Uxbridge (Mr. Shersby) at all except perhaps to say that the spiritual presence of Bernard Levin in the hon. Gentleman's speech renders further comment from me upon that speech somewhat superfluous.
It is tempting for me to do a number of things today. First, I am tempted to criticise the two-tier system of local government and implicitly or explicitly to criticise the former Tory Government which introduced that system. I do not think that today is the time to do that, even though the two-tier system is not the most efficient way of providing services to electors. I am also tempted to make a non-political speech—the type of speech made many times this afternoon—praising the virtues of my Labour colleagues in next week's non-metropolitan district elections, particularly those Labour colleagues of mine seeking re-election in Leicester who have done a good job so

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far and who, I am sure, despite the hon. Gentleman's remarks, will be successful in next week's elections. Again, I do not feel that this is the time to make those comments.
I am also tempted to praise my Government colleagues for the additional powers they have given to local government, particularly those given under the Community Land Act. Those of us who served on the Committee which considered that measure know the extent of the powers which have been given to local government. Again I do not think this is the time or place to do that. It is not often that we get the opportunity to discuss local government at peak parliamentary times. Perhaps it is not peak listening time but it is peak parliamentary time.
I wish to concentrate on something about which I feel a great sense of urgency, namely, the relationship between central and local government. This is referred to in the Government's amendment and it is one of the reasons why I shall be supporting the Government tonight. In many ways the lack of understanding of this relationship has given rise to much of the mutual suspicion that has existed for many years between local and central Government. We could spend a good deal of time discussing what the relationship ought to be between local and central Government. At one extreme there are those who say that because local councillors are elected by a separate and distinct electoral process they ought to be entirely independent of Government. At the other extreme there are those who say that local government must slavishly carry out the diktats of Whitehall.
I do not consider that either of those extremes is the truth, if the truth can be found. The balance probably lies somewhere between the two. Whatever the relationship may or may not have been in the past, in the future it must be one of partnership. We must have a new era of partnership between local and central Government. No one would deny that the independence of local government cannot mean the freedom to operate without proper regard to overall financial constraints and within the overall national policy laid down by the Government.
Local government cannot expect a blank cheque, which amounts to 25 per
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cent. of the public sector expenditure, to distribute as it will. Nor can it expect a corresponding amount the following year, with additional sums to cover additional commitments. However, the central Government must also recognise that, once the overall financial expenditure of local authorities has been determined, the local authorities must be free to determine how that money should be spent, bearing in mind—I say this in the light of the views on comprehensive education expressed by the hon. Member for Aylesbury (Mr. Raison)—the Government's overall policies.
The partnership must be based on a close and continuing dialogue between central and local government. In my view—which I am sure is not shared by all my colleagues in local government—the central Government will inevitably be the senior partner, and local government must accept that. But even within that constraint, the partnership will flourish and be sustained if it is built upon four essential pillars.
The first pillar is the agreement of both sides on the main policy objectives; the second is improved channels of communication between and within central Departments and local authorities; the third is greater realism in the basic economic data pertaining to local government; the fourth is regular performance reviews so that we get away from the situation in which people think that local authority expenditure is not under control. It is because of a lack of regular performance reviews that this myth has been allowed to perpetuate. Local authority expenditure is under control, but we must be able to show—and one can do so only by reconciling various figures—that it is.
Inevitably, the central Government will have the responsibility of ensuring effective consultation with local government and seeking agreement on all major items of policy with which both are concerned. However, once the broad policy outlines are agreed, the individual local authority should be free to pursue its policies within that context. We must have less of government by circular, whereby, in effect, local authorities are asked or cajoled—one may choose one's own verb—to carry out certain policies within certain specific constraints. I would like

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to get away from that situation. Once the broad policy outlines are determined, the individual local authority should be allowed freedom and should not be the slavish puppet of Whitehall.
The sense of partnership will inevitably depend on a free flow of information between central Government Departments and local government. Up to 12 months ago, at the centre at least, there has often been a lack of cohesion, in many senses a rivalry, between various Departments dealing with local government, with the result that resources available for local government have not been optimised in the interests of local government. In a sense, each Department has vied with the others to obtain as much as possible of the central financial pie available rather than taking into account the overall needs of local government.
Far more effort must be spent in ensuring that we have co-operation between the central Departments rather than competition for the available financial resources. This process has, in effect, already started in local government—or is supposed to have done—since the policy and resource committees are supposed to ensure that the financial resources available to the local authorities are optimised to the best advantage. One hopes that this sense of co-operation will also take place within central Government.
It is essential that Government policy on the deployment of resources should be made clear, especially if the total of local government expenditure has to be controlled in the interests of the economy as a whole. It is equally important that the central Government should receive the best advice from the local authorities about the resource implications of the Government's policies. There is urgent need for a continuous two-way flow of information between central and local government, particularly to improve forward planning. This should bring benefits to the central Government in managing the national economy and helping to remove the occasions when the central Government appear to make major policy changes without any idea of the resource implications at local authority level.
I have mentioned the need to have greater realism in the basic economic planning data pertaining to local Govern-442
ment. I mention this because, at present, local government expenditure is only loosely incorporated into the public expenditure survey system, despite what my right hon. Friend has said. Even then, it is done only on the basis of the most recent rate support grant negotiations available. There has hitherto been no consultation with the local authorities on the growth rates which appear in the annual White Paper. Nor has consultation taken place since. But it is my view—and I think that now the Department is coming to a similar view—that such consultation should take place, since it would encourage local authority forward planning on a much firmer basis than hitherto. It would in no way undermine the central Government's need to alter the approved level of expenditure if the overall economic situation so dictated.
It is no excuse for the central Government to say, "we have the job of managing the overall economy, and therefore we cannot allow the local authorities to be involved in the planning process which goes to make up the economic models used by the Treasury when determining the course of the economy over the next 12 months."
Again, to counter the unjustified assertion that local authority expenditure is out of control, there should be a demonstrable reconciliation between the annual expenditure forecast in the White Paper, the annual rate support grant settlement, the combined budgets of the local authorities, and the final outturn figures. Until this reconciliation is carried out, the myth will persist that local authority expenditure is out of control. It is up to us in this House to do away with that myth and to provide the mechanism for doing the reconciliation.
I hope that the Consultative Council on Local Government Finance will be the vehicle for carrying out some of the ideas I have attempted to bring to the attention of the House. When the idea of the council was first mooted 10 months ago, I viewed it with a great deal of cynicism. Having been active for many years in local government, I thought that here was yet another Treasury vehicle to curtail freedom of action of local government. That was my initial view. But experience over the past ten months has removed some of my cynicism. At least local authority associations appear to

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like playing the game—whatever the game may be.
The Association of District Councils says of the Consultative Council:
"The problem of central and local government relations is a fundamental one and we are confident that the Consultative Council on Local Government Finance will, in due course, go a long way towards ensuring that the voice of local government is heard in national deliberations on the assessment of the value of funds which are available for local government services."
The Association also makes other pleasant noises about the council. The council can be a vehicle, but we must escape from the situation where only finance can be discussed. There are no formal terms of reference, but perhaps the use of the word "Finance" in the title is unnecesary. All the problems of local government should be discussed by the council. I am sure that if the Government wish to see a worthwhile and developing relationship between central and local government they will make the remit of the Consultative Council as wide as possible so that all problems may be discussed.
Another virtue of the council is that for the first time all the right people are in one place at the right time. The chair is taken by my right hon. Friend the Secretary of State for the Environment and Members include other Ministers from spending Departments, including the Welsh Office—if that spends money at all—the Department of Health and Social Security and the Department of Education and Science. Ministers from the Treasury are also represented. The right people are there to discuss with their colleague from local government the problems which local government faces.
The council is only 10 months old and we must ensure that it develops and that it does not die a death of slow strangulation once the promised upturn in the economy materialises. The mutual suspicion felt by central and local government towards each other can be dispelled only by a continuing partnership between them.
In the past, every time there was a major policy change by central government, local councillors wanted to jump on the next train from Leicester, Sunder-
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land or Birmingham to cajole or threaten their political colleagues in Parliament or harangue Ministers if they represented a different political party. We must try to escape from that state of affairs. If the Consultative Council continues to develop in the right way is augers well for the future of local government. With renewed confidence and increased vigour, local government will stride into the future as one of the main agents of democracy. That will be good, not just for parochial politics but for the country as a whole.
6.25 p.m.
Mr. Stephen Ross: I welcome the speech by the hon. Member for Leicester, South (Mr. Marshall). It was instructive and I wish that I could have delivered such a speech. I hope that it will be read by many hon. Members who are not present in the Chamber. It was a good lesson on how local government should develop and I congratulate the hon. Member. I also congratulate the Secretary of State on staying so long in the Chamber and I hope that he will not leave during my speech.
I agree with a few of the opening remarks by the hon. Member for Aylesbury (Mr. Raison). I agree about the important role of local government. That has always been important to Liberals, because we believe that democracy itself is important. We want to see a strong and healthy local government. But it is too important a matter to be treated as a party political extravaganza as the hon. Member for Aylesbury treated it. I agreed with his opening remarks but with not much more. I was left wishing that we could return to true independence for local government and remove party politics from it.
I suspect that this debate is a cover-up and an effort to hide and ignore the defects of the past. It is an attempt to criticise the present Government for policies and problems for which they are not wholly responsible. The hon. Member for Ilford, North (Mrs. Miller) in an intervention dealt with the reference to wage structures. To refuse to accept responsibility for the fixing of those structures was almost insolent because they were fixed centrally and councillors on the interim committees were virtually told what sums they had to pay. The

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Conservatives cannot dodge that responsibility.
Some unnecessary local government appointments have been made since then, but generally, local government has behaved responsibly. Most of the present wage structures hearken back to that time so that today two-thirds of local rates are used to pay council employees. It may have been desirable at the time to inflation-proof local government pensions but we are stuck with it now. I should like to know what the Opposition intend to do about that. Are we to embark on a round of cutting chief executives' salaries? Are we to say that their pensions are no longer inflation-proof? I assume that we are not and that the intention is to do the right thing and try by natural wastage, to run down some of the extravagant appointments which have been made. That will take a long time and the responsibility for the present situation must be laid squarely where it belongs—with the Opposition.
The tragedy about the elections on Thursday is that many able councillors who have given years of worthy service to the community will be cast on one side because of the popularity or otherwise of the national political parties and their leaders. I have sympathy for councillors of whatever political allegiance who serve local government today. Many were elected three or four years ago hoping to achieve great things for their communities, only to have their visions cast aside one after another by lack of finance and Government interference and diktats.
No wonder many leading citizens, who in years past would have wished to play their part in local affairs, shy away from the prospect. Who can blame them, faced as they are with false claims and the nonsense which is published in some local government election addresses. I feel strongly about the Conservative election address for the Medina borough in my constituency which says:
"For the past three years the Medina Borough has been dominated by its Labour councillors who have generally had the support of the Liberals—and Lib.-Lab. policies have held sway. The results have been, as we all know, massive increases in rates without any corresponding benefits in services provided."
It does not say that the council comprises 33 councillors, 11 of whom are Labour, three Liberals and the rest Tories and
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independents. In fact, the rate was cut this time and most decisions were made on a fairly unanimous basis. It is deplorable that we should put up with such statements. That one is not true.
I have no specific criticisms of the Conservative motion. As I said when we debated the new towns, I favour the sale of council houses where local conditions are favourable. I agree with what the Secretary of State said about that. I believe that there is an increasing number of areas where waiting lists are shortening and authorities should be encouraged to adopt this policy.
In the debate to which I have referred I asked questions about waiting lists in new towns. Because I did not receive all the answers, I asked some Written Questions. I was told that Bracknell has a waiting list of only two to four weeks, Northampton four to eight weeks, Peterborough one to two weeks, Stevenage eight to 12 weeks, Aycliffe up to 12 weeks, and Redditch 10 weeks. Those are low figures.
I know from conversations with officers serving new towns that they would very much like to be able to sell some of their properties. I understand the problems, and I know that it is part of the conditions that purchasers should have a job, which presumably is difficult at present. But houses are available, and I agree with the hon. Member for Uxbridge (Mr. Shersby) that we should be encouraging young people and others to go into new towns and buy property when they can. It seems to be readily available, and there must be other parts of the country, not necessarily new towns, in a similar situation.
However, I accept that where waiting lists are long and growing, as some unfortunately are—Medina borough in my constituency is an example—this policy should not be pursued, particularly where there is a plentiful supply of private houses to purchase. That is true in most of my constituency. I must tell the hon. Member for Aylesbury that I knocked on many doors over the Easter Recess, particularly on council estates, and only one person expressed the wish to buy his own house. There is no great demand there, though the position may be different in other parts of the country.

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Selling council houses means saddling the buyers with a mortgage at very high rates of interest at present. The rate is now 10½per cent., but it is likely to go up, so they could be paying rates of between 10½per cent. and 14 per cent. Many people should not be encouraged to take on such commitments, although admittedly the situation is more favourable now than it was two or three years ago, as wage rates have increased substantially.
I am all for encouraging the sale of council houses in the right areas, but in many parts of the country it should not be encouraged and local authorities should maintain their stock. I was impressed by the speech of the hon. Member for Manchester, Moss Side (Mr. Hatton), who talked about the situation in the inner urban areas, where the more desirable homes would be sold first and the high rise flats would be left.
I should like to leave the matter entirely to the local authorities. I hope that the Secretary of State will reconsider the question and see whether encouragement can be given to certain areas to sell some of their properties, because the housing revenue accounts are getting deeper and deeper into debt. That cannot go on.
In answer to a recent Written Question I was told that the average percentage contribution of rent towards total housing costs in England is now only 53 per cent. of unrebated rents. In some inner London authorities it is as low as 26 per cent. In Scotland it is 46 per cent., in Wales 54 per cent. and in Northern Ireland 38·2 per cent.
We cannot bear these costs indefinitely. The new councillors should give urgent consideration to how best to reduce them. There have been glowing tributes to certain Conservative councils. I do not normally make party points in local government debates, but perhaps I may draw attention to the Liberal Adur council in Sussex, which already obtains 65 per cent. of its housing revenue from rent and which has produced a number of interesting schemes, such as assisting elderly people out of under-occupied accommodation by purchasing their homes and re housing them, and then renovating and selling the houses to young married
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couples. The council has also negotiated nomination rights with four building societies and is initiating joint schemes with private builders. I know that other authorities have done that, but it has done it for the construction of low-cost homes.
The council has the lowest rate of any district in Sussex, where the majority of councils have been Conservative-controlled over the past three years. Since 1974 the Adur rate has gone up by only 6·9 per cent., compared with 9·6 per cent. in Conservative Horsham, 19·6 per cent. in Conservative Chichester, 20 per cent. in Conservative Mid-Sussex and 32·8 per cent. in Labour Crawley. Liberals have fought hard to obtain control there. Now that they have control, they run their affairs very well. I am not saying that there are not perfectly good, ably run Labour- and Conservative-controlled councils, but it is time other parties occasionally paid tribute in the House to a third party which has done a good job and deserves to succeed in the coming elections.
Liverpool has gone in for building houses for sale, and has managed to reduce its waiting list from the very high figure of 22,000 to 16,000. It has also managed by this method substantially to reduce the charges going on to the housing revenue account, but it would be wrong to weary the House with figures.
We must encourage tenants to take over far more responsibility for maintenance and management of their estates. Councillors could do a great deal to assist by talking to council tenants and trying to persuade them to form co-operative groups and to take more responsibility. One knows how often when canvassing one is asked to see the back door which needs to be repaired, a window which needs painting, or a tap which needs a new washer. One feels that such mattters could be dealt with more cheaply by a local management group.
Savings can be made where local authorities have compulsorily acquired short-life homes for future demolition. They should be able to hand them over to housing associations which can renovate them much more cheaply. Some of the London boroughs have done this, but it could be done on a larger scale. I am involved with a housing association

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which now has the help of volunteer labour. Such bodies can take people off the housing list at a cost of about£2,000 a property compared with £7,000 or£8,000 under the local authority. That is a considerable saving. It is by such methods that we shall get our housing revenue accounts into some sort of sense. If new councillors adopt some of those ideas, they can help enormously to make constructive moves in their councils and produce much-needed finance.
We seem to have interminable arguments about direct labour. It is surely a matter for councils to decide, provided they adopt the proper criteria, which have been set down. The Liberal Party has nothing against councils carrying out their own building repairs, but one sees money being wasted. Only recently I saw new windows left to rot on council estates for more than six months. That sort of thing does not inspire full confidence in all direct labour teams.
There needs to be strict control. In present circumstances private contractors can often do the work more cheaply and efficiently, but that is by no means always the case. I ask the official Opposition to remember the situation three years ago, when it was very difficult to get a builder to do anything and work cost many local authorities double the money that it need have cost because they had to do the job all over again.
I am totally against any extension of municipal trading. I trust that we have heard the last of the subject after the demise of the West Midlands County Council Bill.
There is little to cavil at in the Government's amendment, except the glaring omission of any reference to the private rented sector. If the Government really mean, as they should, to make sensible use of resources in housing, that is an area in which they could act now, by bringing into immediate use properties that are lying empty or that private owners wish to lease for short, definite periods.
I urge them, and I urge the new Secretary of State, now he has come into office, to look again at the provisions of the Bill in the name of the hon. Member for Cambridge (Mr. Lane) which was sadly dismissed by this House. It went a long way to meeting both sides by bring
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ing into use premises such as those over shops or accommodation for students. There was a lot to that Bill and it was a shame we had to turn down only to be told that the Government were going to look again at the position relating to the contracts but that this will not happen for a couple of years, and two years is far too long. I accept that the North Wilts scheme is an admirable one but it is slow to get off the ground and some authorities are not desperately keen to take it up because they have worries about being able to honour the contract they have entered into at the end of the lease.
Looking back on my own seven years in council work I realise now that there was probably far more I could have achieved when I was there, even with the limitations then imposed. I would urge newly elected councillors to try to reach agreement across party lines right at the outset about their priorities.
As a start, those local authorities which have day-time meetings should now all revert to evening sessions. In doing so, I suggest, they could cut out some of these expenses about which we are hearing so much and which are inevitable if councillors are giving up day-time work. In some cases I think local authorities have been unfairly criticised, but there are certainly some isolated cases where the situation appears to have got completely out of hand. This is an area which local authorities themselves should look at to see whether they cannot reach some voluntary agreement.
I should like to see new councillors attacking waste whether in empty buildings or in their own offices. They are using too many properties which were handed over by the old authorities, which are probably grossly wasteful of heat and so on. They should look at some of the road schemes which are often too expensive and unnecessarily elaborate. They ought to look at the insulation of houses, a point which has not been made fully clear to local councils by the Department of the Environment. There are grants available, certainly where council housing is concerned, but many authorities have not taken up these grants. They should look at possible recycling schemes. There are many areas in which cuts could be made and better use made of actual resources.

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I also wonder what consideration has been given to the usefulness of running a lottery. We fought very hard for a much higher figure to be included in the Act, but there is a£40,000 limit. If such a lottery were run including some volunteer labour, it could provide much needed sports facilities or even possibly a day centre which local authorities would like to provide for the elderly. I am sad that, as far as I know, no authority has yet taken this up.
There is also the Government's own job creation unit. Unfortunately, only some authorities have made proposals under the Scheme and this is sad, particularly where unemployment is high. In my own constituency a scheme has been passed and we have taken advantage of it. Councillors coming in might think about this. They ought to find out what grants are available from the Government and make full use of them.
Above all, new councillors should try to improve their communication with their electorate so that the ratepayers know what is actually happening and the reason behind the decisions taken. When I was chairman—for a short time—of the policy resources committee, it was my intention to go to various meetings within the constituency and explain why we had fixed a certain rate. If this is put over clearly by councillors not hiding behind the officials, the ratepayers themselves should understand the reasons why certain decisions have been made and probably accept them. Councillors do not need expensive PR men to put this across. It is their job to do it themselves and I hope that they will.
One outcome of the Bains Report was the corporate management structure and corporate planning. I believe that if properly used—the hon. Member for Leicester, South was getting very much towards this—this is the right way to proceed. The experience we have had over the past three years shows that this system can contribute to the successful working of a local authority provided it is not allowed to dominate. It is rather sad, therefore, to see the system breaking down in some authorities. I urge perseverance.
I condemn councils and councillors who, having gone through the whole exercise, from the officers' team through to
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the recommendation of the policy and resources committee, following agreement about what the rate is to be, in full council, where, for some political advantage, someone proposes a penny cut, throw the whole project out of line again. This was done on my own county council, by one vote which cut l½p off the rate, which was already cut to the quick, and we are now having enormous problems over education. This is the sort of thing which should not happen after the proper procedures have been gone through.
Finally, it must be said that the Liberal Party does not believe that any Government will be able to avoid for much longer further reform in our local government structures. On Friday 2nd April last my colleague, the hon. Member for Rochdale (Mr. Smith), outlined our views on this subject to otherwise empty Opposition Benches though they were amply filled by him alone. I am not going to outline them again, but I draw attention to this subject in our own amendment, which has not been selected, and no doubt we shall be able to debate the matter more fully when the proopsals for English and Welsh regionalism are published.
There are, however, some minor steps which the Government can take with advantage now. I ask the House to consider them. There are certain areas in the country where it is quite obvious that the two-tier structure is wasteful and is not working. I think that in these cases we could create all-purpose authorities like the old county borough which was in my belief the finest form of local government. My own constituency happens to be one of those but there are other areas where pressure has been put on—I know that Hereford is one, but I shall not name others. There are areas where this could be done and it need not lead to a further great upheaval.
Why must we adhere rigidly to the two-tier structure where it does not make sense? There are far too many councillors who seem to appear on both authorities anyway. There are 18 in my own area on the two districts who also serve on the county council. There seem to be far too many who are playing this dual role. I ask the Secretary of State seriously to consider transferring all planning to the districts and to speed up the introduction of neighbourhood councils into urban areas.

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There are great gaps in towns of some 20,000 population or more where people do not have truly local councillors to whom they feel they can talk at the lowest level. Parishes have this quality. It is true some successor town councils have been set up in a few areas and have worked rather well by expressing local views on planning and on traffic regulations, but it is a shame that we will apparently have to wait a great deal longer before we can do anything to extend the system more widely into urban areas. I would ask the Secretary of State to see whether he cannot do something about this.
The Government can also help by a dramatic cutback in circulars and paperwork, particularly the Press handouts pouring forth in ever-increasing amounts from the right hon. Gentleman's own Department. It absolutely appals me. Now the Community Land Act seems to be getting slowly off the ground. To ask local government officers to assimilate all this legislation is too much and every effort must be made to try to cut back on it. As it happens, I asked for a circular from the Department the other day about surcharges on rating. I hope that the Secretary of State will not cut that one out, but he can cut many of the others.
We must give local authorities far greater responsibility for decision-making in matters which do not adversely affect the Government's own economic structure. About 4,500 Liberals will be standing in these elections. That is not a bad effort—I think, more than ever before. I think that we shall have some successes and I wish those candidates well.
As we cannot, unfortunately, vote on our amendment, because I have some sympathy with the Government for being landed with a local government structure which both they and my predecessors on this Bench opposed at the time, and because I find in their amendment much with which I agree—I admit that I do not disagree with all that much in the Opposition motion—we shall be supporting the Government tonight.
6.51 p.m.
Mrs. Millie Miller: I take as an earnest of the sincerity and wild enthusiasm of the Opposition for local government the attendance of their
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Members in this debate. However, it is a great improvement on the last time that I addressed the House. Their average attendance has increased by 500 per cent.—from none to five. Perhaps my arithmetic is at fault, but the last time I spoke the only occupant of any Opposition Bench was the hon. Member for Rochdale (Mr. Smith) who, like the hon. Member for the Isle of Wight (Mr. Ross) today, was supporting the Government's view on local government. This attendance is a rousing start to the Conservatives' intention to take over vast areas of local government in a few days.
There were moments during the speech of the hon. Member for Aylesbury (Mr. Raison) when I thought that we were entering the realms of farce rather than of serious discussion of vital local government matters. As he talked about slackness, over-spending and increases in manpower, my mind went back to the origins of those evils. They were begun and encouraged during the disastrous period of Conservative Government from 1970 to 1974. Much as I wish to resist the temptation, I shall have to go back over at least a few of the causes of the present situation.
I earlier asked the hon. Member what had precipitated the vast salary increases. He vaguely admitted that they had been going on for a year or two. Of course they have. They began when the Conservative Government told local authorities what salary structures were to be and when, against the strongest protests, they fixed structures which involved, as I have said before, sometimes doubling the salaries of chief officers.
Then the whole of the local government salary structure moved up to accommodate differentials and to create a promotion pattern. Without doubt, in many ways that started the drive for increased wages. The fact that local government professional salaries are now so much higher does nothing to destroy my case that they set off the inflation in wage demands which we are still trying to overcome in many areas of industry and the public service.
The Conservatives talk about value for money, but there is another way of looking at that—that we pay for what we get. If local government services are

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cut or extended in a profligate way, we are bound to run into disaster. In this way, one fixes a pattern of expectations of more than can be provided, or of dejection at what is provided, which distorts the pattern of relationships between local government and its electors.
The Conservatives talk of brutal treatment of local government organisations by this Government. I recall the AMC Policy Committee tearing its hair month after month at the absolutely arbitrary decisions forced on it by the previous Government. Recollections such as that make me think that the Conservatives must have been living in cloud-cuckoo-land during the terrible years 1971, 1972 and 1973.
It was then that the Housing Finance Act was imposed on this country. I shall say more about that later because I am freer to say it now than I have been in the past. It was then that the National Health Service was being reorganised, when the water reorganisation and the second round of local government reorganisation were being proposed. Much of this was decided against the opposition not just of Labour councils but of Labour, Conservative, Liberal and independent councils and councillors throughout the country.
When we hear snide references to the opposition of many people throughout the country, including Conservatives, to the iniquitous Housing Finance Act, I cannot avoid mentioning Lord Devlin's attitude to conscience. I willingly admit that I was opposed as strongly as it was possible to be to the Government's measure—as were hundreds of my colleagues throughout the country—and I never asked to be let off the hook. I opposed the then Government on this matter because I sincerely thought, as did my colleagues, that they were deliberately imposing penalties on council tenants to keep them in line with the exploitation of property values which was otherwise distorting our economy.
Part of the pattern of rents which was proposed was to keep council rents in line with the impossible costs being imposed on the whole community by gambling in property—one of the worst features of the previous Administration. Now that the Government have decided to deal
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with this matter as they have, I say that if a Government impose a measure such as the Housing Finance Act which is contrary to the conscience of those who oppose it, such people have the right in conscience to show their opposition. I make no excuses for that.
Implicit in this is the fact that the then Government had powers in their own hands to end any so-called abuse right from the outset through the mechanism which they had devised of the housing commissioner but which they forbore to use. They therefore share responsibility in this matter.
In the reorganisation of the health and water services, the country has been overburdened with additional expenditure, particularly on administration. I agree absolutely with the hon. Member for the Isle of Wight in what he said about the Conservatives' continual demands for public expenditure cuts. What exactly would they cut? Would they sack all the chief officers or all the office boys? Would they take away all pension entitlement or would they get rid of the home helps? Public expenditure cuts must come from somewhere and the Conservatives are not ready to say where.
There is a tremendous well of endeavour in local government that is still untapped. Large numbers of people have tremendous enthusiasm to improve the situation in their own areas. They will not be encouraged by not the words of the Opposition motion, but the intention behind it that we have heard from the hon. Member for Aylesbury.
Of course everyone wants the best value he can get for every penny he spends. There is nothing very original in that. But cuts in public expenditure are not quite as simplistic as the Conservatives would have us believe. The Opposition are merely being, as they have been in the past, penny wise and pound foolish.
If there is a surplus of council housing, it is fair enough that there should be an opportunity for people to buy their homes. But even in new towns with short waiting lists there are serious considerations about the future. Today's new town, composed almost entirely of young and active families, may be a domitory area in 20 years' time if everyone gets the opportunity to buy his new town house today. There will be no mobility. People

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are not keen to move about. They do not want to tear up their roots and go elsewhere. After the war the London County Council built a vast estate in my constituency to house the young families of that time. Today it is almost entirely an old people's dormitory. The sale of council houses in that kind of area would be a serious deterrent.
There is another point about owner-occupation generally. Two days ago the Nationwide Building Society issued its latest occasional bulletin on housing trends and told us among other interesting facts about the growing number of people taking on mortgages at a more advanced age than in the past. A serious problem is in store for us, because the older the age at which a person takes on a mortgage, the greater the problem when that person reaches pension age. If people buy council houses, even at cut prices as in some areas, and if they take on a mortgage equal to 54 per cent. of their current income, when they get to pension age and their income is halved—because the coming generation will not benefit from the recent pensions legislation—they will be able only to afford to pay the remainder of their mortgage. That is a serious warning for the future.
Local authorities have been bedevilled in recent years by Government pressure. The structuring of the rate support grant, and the way in which successive kinds of circulars introducing new legislation have been putting additional pressure on local government services have made it extremely difficult for people working in local government, especially in a voluntary capacity, to cope with the complications. Stop-go policies have meant that councils which sincerely plan ahead to do certain task suddenly find their opportunities of doing the work being undermined. That is especially so in housing.
To get the best possible use from the available housing stock we in the Labour Party have repeatedly appealed for the use of empty housing. It is no use asking councils to acquire empty houses. The councils which do not do so—the Conservative councils—often have the largest stock of empty property. One only has to look at Westminster and Kensington and Chelsea to know that the pressure areas in inner London will not be relieved by the voluntary acquisition of empty property. Young couples should have the
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opportunity to spread out. But the opportunity exists for them on their own doorstep, where their jobs and families are, if it were only taken.
I deeply regret that the Government have taken so long in their short lifetime to start thinking up a proper policy for housing which will benefit from the use of all the housing stock. Much more should be done on council estates to use the housing stock properly. There are many opportunities for co-operation, better management and imaginative use of the properties which already exist. If only the Government will come off the hook about this and say that they positively want local authorities to act in this sphere, without changing their mind half way through and taking away money that they have already indicated will be available, if we had a consistent policy on housing, we should begin to see a breakthrough.
Housing is a subject about which many of us on the Labour side have talked, dreamed, and had nightmares for many years. I believe that everyone has a right to a house and that housing is a social service. As a former member of a local authority, and as a Member of this House who has served on Select Committees such as that on violence in marriage, I know how terrible are the pressures of inadequate housing. I know what it means to a woman on her own, or a couple trying to bring up children in an inadequate home, and how much that adds to the social costs of society.
We used to talk a lot in local government about cost benefit analysis. If only we could talk about social benefit analysis and look at the way in which we spend our money; if only we could ask whether value for money is being obtained by the right spending! I am not talking about cutting expenditure, but about using it in areas where of greatest need. I am talking about cross finance, not merely between, for example, the Department of Health and Social Security and the National Health Service, but between other Government Departments and local authorities.
Local government is a subject on which there are many experts in this House. I shall therefore take only my allotted time. I could say so much more. The Government have shown in their two years, in spite of my serious criticism on

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housing, that they have made great strides and shown an understanding of the needs and the problems of local government. As vice-president of the AMA I know how much this has been appreciated by the bigger local authorities, and I hope that the Government will not draw back from the path on which they have set themselves—that of developing this excellent relationship and make the whole of Government and the democratic system far more fruitful for all concerned.
7.9 p.m.
Mr. D. E. Thomas: I agree almost entirely with the hon. Lady particularly, on cross-finance between central Government Departments and local government departments. We have the right to expect central Government, as a result of such things as the CPRS paper on the joint approach to social policy, to take a lead to inspire local government into cross-financing between services.
I agree entirely with the hon. Lady's comments about empty properties in London. I have a strong interest in empty or partially empty properties. Twenty per cent. of the housing stock in one council area in my constituency is empty for most of the year. These are second homes. I have advocated the utilisation of these for the winter period by young couples.
It is quite miserable to have many cases in constituency surgeries of young people who have been forced out of these properties for the summer period because of the lack of adequate housing stock. If we had better control over second home development, and either a voluntary or a compulsory scheme for utilising this stock outside the summer period, we could alleviate much of the housing crisis in rural areas.
As to the amendment, I am in a similar position to the spokesman of the Liberal Party, in that I shall support it tonight in the hope that the Government takes its words seriously. The first part of the amendment refers to the relationship between the Government and local authorities. I am bound to look at this in the context of the Government's proposals to devolve power from the House to Edinburgh and Cardiff. There is a growing consensus within the Labour
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Party in Wales—I am sure that the hon. Member for Swansea, East (Mr. Anderson), if he catches your eye, Mr. Deputy Speaker, will bear me out on this—as well as within the Liberal Party that there ought to be a total reappraisal by the Welsh Assembly of the local government structure.
In a recent Welsh Grand Committee debate on devolution, we pressed the Secretary of State for Wales to make a statement on this very issue and to indicate that he considered it would be appropriate for the Welsh Assembly, as one of its priorities, to take a new look at the structure of local government. We hope that an examination will be made not only of the two-tier system, which has been much criticised in the debate, but also of the structure of the other arms of central Government, the location of offices such as DHSS and the Department of Employment, and the functions now being carried out by nominated bodies and agencies within Wales. We could then devise for the first time ever, a local government system which is answerable and sensitive to the needs of the people. When that has been done, it is the district council that will be the fundamental unit, developing, on the basis of the existing councils, most-purpose authorities.
In the interim, there ought to be more effective links between county and district levels, with far more use made of the joint committees. This is particularly urgent in sparsely populated rural areas, where the travelling time to Caernarvon, Llandrindod Wells, or wherever the centre of county government happens to be, makes the place even more remote from the people it is intended to serve.
But not only must we seek an opportunity, in the context of devolution, to restructure local government in Wales. We must also seek an opportunity to make that system more efficient. We have already heard a tremendous amount from the Conservative Opposition about efficiency in local government, yet there has been an increase of 14,000 in the numbers employed by local government in Wales as a result of the 1972 reorganisation.
I find the anti-bureaucracy posture of the Conservative Opposition in the debate rather odd, because they arc the people who have created bureaucracy not only

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in local government but in the National Health Service, as well as in the water and sewerage services—particularly in that great monstrosity called the Welsh National Water Development Authority. It is urgent, in my view, for reasons of bureaucracy and efficiency as well as for reasons of answerability, that both local government and the all-Wales bodies, such as the water authority, should be restructured.
The return of the water services and the sewerage services to the local government sector is an urgent reform. I am very much opposed to the recent antics of the Welsh Water Authority in starting up a system of direct billing. This means that the rebate system, which functions as part of the charge in the rating system, will not be able to function as part of direct billing. I hope that the Secretary of State for Wales, if he reads my comments, will take this up with the water authority.
But the major crisis facing local government in Wales, as in England, is financial. The hon. Member for Leicester, South (Mr. Marshall)—I agree entirely with most of what he said—inquired whether the Welsh Office was a spending Department. I am sure that the Under-Secretary will confirm that it is a spending Department. It is, in fact, a reducing spending Department, and it is with the reduction in capital spending by Welsh local authorities that I am concerned tonight.
There is to be a scheduled drop by a staggering figure of£25 million in real terms in 1976–77 as compared with 1975–76, and for the following three years, as we see from the White Paper on Public Expenditure, a further reduction of£26 million. This will mean not only the abandonment of capital projects, but undoubtedly we must also be concerned about redundancies that will occur in the direct labour units of district councils. Indeed, the terms of the Conservative motion will no doubt be carried out by the cuts of the Government.
These cuts are particularly severe in the Welsh context when we take into account the identifiable per capita expenditure in Wales. In important sectors it is already below the United Kingdom average. Spokesmen for the Government in Wales are always telling us how much higher public expenditure in Wales
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is, and what a marvellous benefit it is, therefore, for us to be part of a centralised United Kingdom system.
Mr. Joseph Dean: The hon. Member stated that the public expenditure in Wales per capita was lower than the average in the United Kingdom. Would he say that the per capita expenditure in the Principality is lower than in the English regions? I think, with respect, that the hon. Gentleman is confusing the issue, and that he will find that it is lower there. The proportion per capita in Scotland is the one that inflates it, not the English one.
Mr. Thomas: I take part of the hon. Gentleman's point but I referred to specific sectors. If we take the general figure, public expenditure per capita in Wales is higher, but it is higher because it is inflated by the massive expenditure in Wales on social security benefits. The figure for England was£126 per head in 1974–75, and the figure for Wales was a massive£151 per head. This results from the higher percentage of elderly people and the higher percentage of low income people in Wales. It is our dependance on social security benefits that makes us the recipient of higher public expenditure per head, and not direct investment in the improvement of services.
I should like to highlight specifically the expenditure per capita on housing. The figure for England in 1974–75 was£74, but the figure for Wales was only£65. This is despite the fact—
Mr. Anderson: Is not that figure accounted for by the higher proportion of owner-occupation in Wales as compared with that in England?
Mr. Thomas: I am coming to that. Part of the problem in Wales is that we have a higher figure of owner-occupancy, but much of that owner-occupied sector is in property which is substantially in need of improvement. Therefore the need for public expenditure on housing in Wales is greater than it is in the United Kingdom generally. There are comparisons which can be made with other regions in England, such as the North-East in particular.
There is to be a real reduction in the housing allocations to local authorities in Wales despite the fact that 45 per cent. of our housing stock is pre–1918. The

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fact is that one in seven of all houses in Wales has been officially classified as unfit, in the house condition survey. We have more than 61,000 people on Welsh council house waiting lists–11,000 more than 12 months ago.
What is the Government's response to the Welsh housing crisis? We saw a peak figure of 17,236 new houses completed in Wales last year, the highest since 1969. I give credit to the Government for that figure, which is a substantial improvement on the annual performance of the Conservative Government, who managed to build only 4,000 public sector houses annually in Wales.
But if that figure is compared with the international league table, we find that Wales is the lowest in Europe, with the exception of Italy. The United Kingdom figure for dwellings completed per 1,000 of the population compared with European Community and OECD countries is extremely low, and this is where we must make up the leeway in the course of the next five years. But there is no indication from the Government that they intend to make up this leeway in house building or house improvement, despite the wording of the second part of their amendment. That is what I meant by saying that I supported the amendment in the hope that the Government took it seriously.
Time and time again, the research department of Plaid Cymru has put forward the figure of 25,000 new houses per annum if we are to tackle our housing problems in Wales—problems not only of an older housing stock with the consequent need for improvement, but such problems as homelessness and other serious matters like housing stress through the over-occupancy of properties. This figure has not been challenged by the Welsh Office and, when we present it with yet a further study of housing needs in Wales—we hope tomorrow—this again bears out the discrepancy and the inequality in the housing position in Wales compared with the United Kingdom as a whole and other European countries. Therefore, we want to see a relative increase to meet that gap in the allocations to district councils in Wales both for new building and improvements and not the kind of reduction that we see in the public expenditure White Paper.
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I am concerned about the Welsh Office's latest attitude, which is to say that it is giving priority to new building rather than to house improvement. We were told last year when we had the totally unexpected and unjustifiable freeze on local government lending that these reductions in local authority mortgages and the reductions coming this year in the money available for improvements both to the councils' own stock and the improvement of private housing stock were due to a new priority which the Government were giving to house building. This is a totally wrong attitude.
When dealing with a situation in Wales where there is a preponderance of older housing stock with its need for improvement, we require not only a programme of new building but a parallel programme of improvement, otherwise the existing housing stock gets worse, with the result that the problem of new building in future years will be even worse than it is now. In other words, the shortfall in real terms will be worse in future because improvement has been neglected.
I press the Welsh Office to look again at this. Many arguments have been put forward that good, cheap improvements are more beneficial in the short term for an improved housing stock. I am certain that, bearing in mind the situation which is likely to exist in 1977–78, the Welsh Office must review its allocations.
I am not happy about the way in which these allocations have been set out in the circular to local authorities dated 27th February. The Welsh Office has lumped together all the categories for the improvement and conversion of dwellings, acquisitions from the private market, environmental work and capitalised repairs. The argument put forward by the Under-Secretary of State for Wales was that this was being done to ensure that local government had more flexibility. But the true result is that local government has been given more flexibility but substantially fewer resources with which to be flexible.
What has happened is that in Blaenau Ffestiniog, for example, the district council planned to acquire 40 empty properties which had come on to the market but now cannot do so. What will happen to them? They will become second homes,

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and the housing crisis in the town will be made even worse. I press the Under-Secretary to talk to his colleagues in the Welsh Office about this issue and about the needs of certain district councils with older property and second home problems in their areas with a view to seeing whether the Welsh Office cannot be more flexible in its approach.
The Government's present tendency is that which was reflected in a parliamentary answer which appeared in column 639 of Hansard of 3rd March to the right hon. Member for Anglesey (Mr. Hughes). The tendency is that these allocations are arbitrarily based on last year's performance in terms of what is achieved by various district councils and not on real need.
The housing crisis in Wales will be a major issue in the present campaign in the district council elections. Since other hon. Members have referred to the candidates representing their respective parties, the least that I can do is briefly to follow suit.
We are fielding more than 360 Plaid Cymru candidates throughout Wales, not only in the industrial valleys—like the Rhymney Valley, where we are fighting to gain control for the first time—but in rural areas where many independent candidates are now fighting under a political label as a response to what they see to be the increasingly arbitrary interference of the Welsh Office in the policies and priorities of district councils. Naturally, I wish them well. I hope to be able to return to the House next week after the local government elections with a Plaid Cymru control in at least three authorities in the industrial valleys.
7.27 p.m.
Mr. Terry Walker: Having studied the motion tabled by the official Opposition and having sat through the speech of the hon. Member for Aylesbury (Mr. Raison) it strikes me that there is a definite lack of understanding of the needs of our society at the moment among Opposition Members.
When I heard the hon. Member for Conway (Mr. Roberts) say that people were coming to his surgeries to put pressure on him about buying council houses, I reflected that in my own constituency I experienced a completely
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different situation. The kind of person who comes to my surgeries every week wants a roof over his head and has not the resources to buy a council house. He needs to have one provided for him to rent. Many of these people are separated from their families because they cannot find homes of their own. Many are separated from their children. The need is to build more houses to rent. I make no apology for saying that, because I believe it to be the predominant need in urban areas like Bristol.
My own constituency of Kingwoods inherited a waiting list of some 1,400 people. After three years of an independent Tory residents' control, the number on the waiting list is still about 1,400. This is not good enough.
But our position in Bristol and in Kingswood is aggravated by the fact that we have a reactionary Tory-controlled council in the County of Avon, and we very much regret that the previous Tory Government refused to give metropolitan status to Bristol and South Gloucestershire. This was a political move, because they knew that if South Gloucestershire and Bristol became a metropolitan area, it would be Labour-controlled. So instead they chose to add part of rural Somerset, so making sure that the new County of Avon stayed in the hands of the independents and their supporters, the Conservative Party.
I resent the fact that this political motion has been tabled by the Opposition. I believe that people are more important than politics. When we see the political actions which created the Avon County Council that we now have to endure, it is a matter of regret that we have a motion of this kind under discussion today. When talking about local government, we cannot consider district councils in isolation. We must also look at county councils.
Bigger local government has not meant better local government. The 1972 Act has resulted in large increases in administration and bureaucracy, particularly in the Avon area. There are too many chiefs and not enough workers. The rates have increased, but people have not received value for money. In an area like Avon, local government spending has increased because of the large

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salaries being paid to officials. Things are getting out of control.
New districts like Avon have been a let-down. Considerable control has been taken out of the hands of elected councils and is now held by officials. The area I represent is coming off worse in social services, education and roads because the local councillors are not members of the ruling Conservative group. The Tory achievement in Avon has been a kind of dictatorship, which I completely abhor.
Social services, which include provision for the homeless, should be transferred to district councillors. A large part of my area is being used to rehouse homeless people from throughout Avon. Those houses should be given to the 1,400 people on the district council waiting list. This is one area in which urgent reform is needed.
The Chronically Sick and Disabled Persons Act seems to have been forgotten in Avon. When the council is asked about the provision of telephones under the Act, the reply is that they cannot be provided because no money is available. The district council made representations about home adaptations and was told that if people liked to pay for the work, they could have it done. If they could not afford it, nothing would be done.
We have heard much today about the possibility of Tories winning control of councils next week. If this is an indication of the platform on which they will be standing, it leaves a lot to be desired.
More money must be made available to district councils. We must come to terms with the overriding practices of counties like Avon which are controlled by politically motivated men who pay no regard to the needs of the community.
We also need to consider the planning laws relating to district councils. Hon. Members who hold constituency surgeries will know of people who have not been consulted by local authorities about planning matters.
If we are talking about serving the interests of the ratepayers, we must ensure that ordinary folk do not lose confidence in local government, as have two of my constituents, one of whom has been legally prevented from occupy-
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ing his own home for the last four years because the local authority has not ensured that a developer brought roads up to the required standard. My constituent has used all the proper channels to seek to remedy this serious injustice, but has received no help from local authorities.
Unless such matters are remedied, local government will continue to fall into disrepute, as it has since the 1972 Act.
The Labour Party is seeking to retain control of large cities like Bristol in the elections next week and also to control areas like Kingswood. We want to bring fairness and compassion back to local government. It is the only way to overcome the cynicism which has grown up over the inactivity and reactionary actions of Tory local authorities since the new councils were created.
7.36 p.m.
Mr. Michael Morris: I would not wish to follow the remarks of the hon. Member for Kings-wood (Mr. Walker) too far. Unlike him, I think it is appropriate that we should debate local government just before local elections. Far too often in the past Westminster has been divorced from local government and it can only be healthy to have more involvement.
I am sorry that the new Secretary of State is not here. That is not a reflection on the Minister for Planning and Local Government, who is on the Front Bench, though I suspect I know the answer he will give me to a question I shall be asking later.
The Secretary of State looked at the facts local government has to face and there are two facts we should always bear in mind. First, in the period from before the Second World War until 1960, local government expenditure, under successive Governments, totalled about 10 per cent. of our gross national product. In the early 1960s we saw the start of the change which has resulted in nearly 20 per cent. of GNP now being spent by local government. Expenditure has doubled in real terms. Secondly in that same period the number of local government employees has increased from½million to 2½million. These are worrying statistics. They indicate part of the problem we face.

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The Chancellor of the Exchequer has referred in the past to people in non-productive work and many workers in local government fall into this category. That does not mean that they do not do their job seriously or conscientiously, but it is non-productive work.
It is too easy for the Government to say that the faults of local government reorganisation lie with this side of the House. They know that the first phase of the reorganisation took place in London in 1965, and that was reasonably successful. We did not have the problems experienced in the later re-organisation.
The reason for this can be found in the nature of the people in charge of local government since that time. It is a sad fact that the majority of district councils, particularly in urban areas, are controlled by the Labour Party and have been so for the last three years. So, too, are many county councils, and we have also had a Labour Government for just over two years.
One of the reasons for things having gone wrong has been the lack of financial discipline in local government in the past two or three years. I accept as willingly as anybody that inflation has been a major problem. However, if the Government had taken a grip on local expenditure at an earlier date than the current financial year, many of the problems would not have been on the present scale. Even now we have only a rather weak apology for cash limits. If the hon. Gentleman and his hon. Friends believe in cash limits, the time has come for them to say so. I am sure that in their hearts they wish that they believe in them. If they have a belief in cash limits, they should implement them.
The third problem area is the level of legislation. The hon. Gentleman is one of the main causes of excessive local government legislation. Local government is now having to digest the Community Land Act—
The Minister for Planning and Local Government (Mr. John Silkin): Is the hon. Gentleman attacking my hon. Friend the Under-Secretary of State for the Environment, the hon. Member for Greenwich (Mr. Barnett)? He keeps on referring to "the hon. Gentleman" and suggests that he is responsible for exces-
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sive legislation. My hon. Friend has been a Minister in the Department of the Environment for only a week.
Mr. Morris: I was referring to the night-and-day sustenance which he gave to the Minister for Planning and Local Government to keep him going.
My right hon. and hon. Friends are worried that the Labour Government's attitude as reflected through the district councils, is that on the whole it should De the council that does things, that only as a last resort should voluntary labour be introduced, should the private sector be used.
I turn to the motion and the three aspects that it highlights. I deal first with housing. We must examine the best use of the housing stock. It is regrettable that the Minister for Housing and Construction is not in the Chamber. We constantly hear him saying what a good job is being done. Press releases to that effect leave his Department almost daily. However, examining the figures in detail makes it clear that as a country we are not doing a very good job.
The hon. Member for Merioneth (Mr. Thomas) mentioned our performance in relation to Europe. It is a great pity that up-to-date statistics are not available, but for 1974, the last year for which statistics are available, the public and private sectors in the United Kingdom produced five dwellings per 1,000 inhabitants. That compares with France producing 9·5; Denmark, 9·6; Germany, 9·7; and the Netherland, 10·8. Regrettably they are not all Conservative-controlled countries, but nor are they all Socialist-controlled. The figures suggest to me that Britain is not performing very well in absolute terms, regardless of where the mix lies within it. We have little about which to pat ourselves on the back.
The Minister for Housing and Construction persistently suggests that the homeless situation is not as bad as is made out. On 31st March, in a Written Answer to my hon. Friend the Member for Burton (Mr. Lawrence) the hon. Gentleman gave some statistics which indicated that in London there were 13,500 homeless families and 15,364 in the rest of England. Do we really think that there are only the best part of 29,000 homeless families in Britain, or

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that there were in 1974? Surely there is sufficient evidence from Shelter, from Shack, from local authority symposiums and from our own experience as Members of Parliament that the figure is considerably in excess of 29,000. It seems that the Government are pulling the wool over our eyes in suggesting, by the use of official statistics, that the figure is as low as they say.
Further, we are not doing very well in producing municipal housing at a reasonable cost, regardless of the number of units that are produced. Perhaps there will be an argument about the number of units that should be produced, but surely it is common grounds that the cost of municipal housing is totally out of hand. It is good to see that the hon. Member for Ilford, North (Mrs. Miller) has returned to the Chamber. Her former borough probably heads the league table in producing the most expensive housing in the country. With average deficits running from£1,200 to£1,400 per unit for municipal housing, it seems that things are getting out of hand. No wonder the Government's borrowing requirement is increasing.
The Secretary of State mentioned improvements. Britain's performance in the improvement sector can only be described as pathetic. From a peak of 361,000 in 1973 the number has declined to last year's figure of 126,900. That is not a good performance by any yardstick. There is a major need for a review.
There is evidence of waste. The Secretary of State and his hon. Friends were very keen to seek details from my hon. Friend the Member for Aylesbury (Mr. Raison) as to where we should cut or save. However, they have direct evidence from their own housing advisor, Mr. Roger Warren Evans. In a report submitted to the Government it was suggested that inefficient councils wasted a staggering £140 million on house building. I refer to the report that was submitted in September 1975. Apparently, the councils were wasting the money because they were employing too many architects, paying over the odds for design and building, and taking too long to start work on site.
At lunch time today I passed a site in my former borough—namely, the
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London borough of Islington. The site was owned by the Greater London Council when I was elected in 1968. I am sorry to say that even now not one family has been housed on that site. The development is still being built. As I have said, the site was in the ownership of the GLC nearly 10 years ago. I suspect that it has been owned by the GLC for well over 10 years.
Mr. Warren Evans slates parts of local government for failing to impose tight schedules on builders and refusing to stick to standard designs. I suggest that local authorities, especially Labour-controlled councils, are not making the best use of resources.
I do not know whether the right hon. Gentleman saw a television programme during the recess in the "Man Alive" series. It was on council housing. If he did not, I recommend him to ask his officials to provide time to show it to him. He will be pleased to know that it was a completely non-party-political programme. Some features of the programme were very worring for those of us who know local government in some depth.
For example, there were two huge blocks in Liverpool that were totally empty and it transpired that the local authority had approached his right hon. Friend for permission to demolish. They were post-war blocks. The programme also dealt with blocks of flats in London where the external features were falling off. The reaction of the borough officers was that their research department suggested that it should not happen.
It should not be for individual authorities to undertake their own research. We have a research station to undertake that work. It must be a waste of manpower and resources for every local authority to set up its own research department. If the results are as appalling as they appeared to be in the television programme to which I have referred, it seems that we could well do without local authority research departments in any case.
As the right hon. Gentleman knows full well, people want to own their own homes. I appreciate that it is within his power to try to prevent people from buying their own homes, but it does not make sense to adopt that approach. It

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does not make sense when in 1976 a Labour-controlled council, as it will be for another seven days, is selling council houses, when all-party development corporations that command widespread support want to sell houses.
The waiting lists have dropped dramatically, as I forecast. They have dropped again according to the figures quoted in reply to the hon. Member for the Isle of Wight (Mr. Ross). They were four to eight weeks, and they have dropped again. I suggest that before long the right hon. Gentleman will have to give way, or he is sticking his head in the sand.
I turn now to value for money—something which we all seek. The problem is that the Conservative Party tends to achieve that more often than the Labour Party. Examples have been quoted from Hillingdon, Sunderland, Coventry, Leicester and other places. There are too many examples where, mainly in direct labour, value for money is not being achieved.
I was interested to note that, before the right hon. Member for Cardiff, South-East (Mr. Callaghan) became Prime Minister, Cardiff reckoned to spend about £25,000 a year on civic entertainment. That, by any yardstick, is quite a sum for any city to spend on entertaiment. I hope it will not go up now.
The Government have made it clear that they will expand direct labour, and expand it outside their own boundaries. Indeed, that was an advance in terms of Government policy from what we understood even a week or so ago.
We have had some horrifying figures quoted. I suppose that some of the most horrifying come from Salford where more than £1 million was lost on the direct labour scheme. The CIPFA report suggested that we should never know the true figure. The Government should not ignore the CIPFA report. The Government tended to suggest that perhaps direct labour should be looked at, and they would set up another working party to look at it. When an independent organisation has already done the work in a thorough and detailed way, as CIPFA has, it seems a waste of time, energy and resources to do it again. I think that the Government should accept, at least on an interim basis, the majority of the recommendations in that report. If they want to go over the ground again, I suppose
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that is their right, but it would seem a waste of time.
We refer specifically to municipal trading. The Conservative and Labour concepts of trading are totally different. We have seen created in the West Midlands the concept that local authorities should, in effect, take over almost every aspect of trading. They are still intent on annexing for themselves as much of small business and shopkeeping as they can get hold of.
The Conservative Party totally rejects the concept of municipal trading. We have no evidence that the public want it, that it works, or that it will succeed. But we have evidence that it has failed consistently. That is hard evidence. Municipal trading has cost ratepayers dearly throughout the country. Above all, financial resources are so tight that this is no time for responsible local government to contemplate extending its services into the wide range which the West Midlands County Council Bill sought to enter.
I turn now to staffing. I think that the Government are to be congratulated, because there is now a detailed review of the number of persons employed in local government. The two quarters' figures which we have had show little movement. However, I suggest that the time has come for us in this House and local authorities to reappraise what local authorities should be doing. We should ask ourselves whether there are not too many architects directly employed by local government. Are there not too many planners, engineers and administrative educationists? Have we got the wrong mix of teachers? Are we not beginning to question whether Seebohm was right and that the deficiencies of the all-embracing social worker are demonstrating themselves all too clearly? Above all, we probably have too many traffic wardens. However, that may be a personal irritant.
In addition—this is where Government supporters are unfair to my hon. Friend the Member for Aylesbury—the biggest increases in staff have been in the London boroughs. Those increases were nothing to do with the reorganisation which was carried out when we were in power. When I was the leader of the London Borough of Islington, staff numbers did not increase. I should like to quote from

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the Islington Gazette of 13th February this year. That responsible paper headlines:
"Did you know that if the borough's population continues falling as fast as Islington Council continues recruiting extra staff, then by 1984, everyone in Islington will work for the Council!"
The council has taken on 700 extra staff in just four years. That is a shattering number of people to take on. When I asked Islington ratepayers whether housing conditions had improved since we lost control in 1971, whether the repairs were done any better, and so on, the answer I got was that they had not. The answer in the Islington Gazette is that they certainly have not.
The inner London boroughs have been the most profligate in terms of staff numbers in recent years. I should be the first to agree that not all Conservative-controlled councils are perfect, just as not all Labour controlled councils are disasters. However, there is hard evidence that the new Conservative-controlled councils are doing a good job.
Leeds—a tough and difficult area—is a prime example where a deficit of£4·8 million has been turned into a surplus of£2·6 million. Stockport has reduced its staff by over 280 in six months without redundancies, merely by natural wastage. In Kent there has been no growth of expenditure.
On 7th May there will be more Conservative-controlled councils, because the people who vote—we all hope that they will vote in greater numbers this time than previously—will want good housekeeping and better value for money. There was a time, not so long ago, when the rates formed a tiny part of the ordinary housekeeping problems of life. Now they represent a major burden for families. The rates burden increasingly affects both domestic and small and, indeed, large business ratepayers. There is no room for complacency.
We all know in our hearts that the rating system has had it and needs to be replaced. However, it was only my right hon. Friend and his colleagues who were prepared in 1974 to stand up and say that the system had had it and ought to be replaced. The right hon. Gentleman the Minister and his hon. Friends shelved
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the problem, and the Layfield Report. We were promised that report in December. I forecast before Christmas that the report would not see the light of day before the local elections on 6th May. It will be interesting to see whether it will see the light of day in the next week. I suspect that it will not and that it will be conveniently delayed.
We believe that local government has an essential role, geared to essential services, and that it ought to draw back from so many of the fringe areas into which it has been tempted, at least until it can perform its essential services properly. We do not believe that it should be involved in all the fringe areas.
The Government should set real cash limits. We urge the right hon. Gentleman to be tough with local authorities, tough in terms of setting strict cash limits. However, we urge that local government should then be allowed to decide without interference how to spend its cash.
Above all, we at Westminster need to recognise that we must cease flooding local government with more and more legislation, because it cannot cope. We should encourage local government, the people who are in it and those who will be seeking election in the next few days.
I am thankful that we have had the opportunity of this debate today. Many districts will change controlling hands. I am confident that my own town of Northampton will be won back—and towns like it—for two reasons: electors know that the Conservatives are better at housekeeping and electors know where the blame for the current problems of our economy can be laid.
8.3 p.m.
Mr. Joseph Dean: I hope to take a little less time than that taken by the hon. Member for Northampton, South (Mr. Morris), because hon. Members on both sides of the House wish to make contributions which they think merit attention.
The Opposition's motion on the Order Paper and the Government amendment illustrate the division of philosophy between the Government and the major Opposition party. After listening to the hon. Member for Aylesbury (Mr. Raison), I wondered what sort of case he was presenting. In view of its inadequacy of

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content, I suggest that he ought to have a look at who is advising him on the facts about local government and its quite recent history.
It is relevant to look at the performance of the present Government over the past two years or more and that of the previous Conservative Government of about three years, and to see what both of them have done. I welcome the Conservative Party's acceptance and embracing of local government. I am delighted that the Conservatives have been converted. It is a marriage of convenience.
I had to be involved in local government when the measures that the Conservatives introduced almost destroyed some of the best features of the existing system in local government. At the time, some of the major stress areas which were well run and providing all-embracing services were quite brutally emasculated. Some of these areas were very progressive in education services. As my hon. Friend the Member for Kingswood (Mr. Walker) said, Bristol was one of the first areas to introduce the comprehensive system. However, this is no longer a totality. This has happened also in Stoke. The Conservative Party talks about believing in democracy, but it is a charade because it does not believe in that system.
The Conservatives also set up the new water authorities. These wonderful new bodies were set up, we were told, to save money. The chairmen of these authorities were plucked out of the hat, but, needless to say, in the main they were Conservative supporters. They were given jobs at salaries of about£12,000 or£13,000 a year and were answerable to no one. Some of these men—I make this statement quite specifically—were among the biggest hindrances to local authorities which were trying to develop an increased water supply to meet increasing demand. However, these men were put in such prominent positions.
I hope that my right hon. Friend the Minister for Planning and Local Government is taking note of this point. I know that he has the matter under consideration. I hope that in replying to the debate, he will make a statement about the very serious situation in regard to water supplies in certain areas. I hope that he
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will be delighted to do so, because the House will expect that.
I return to looking at what the Conservative Government did about helping local government financially. I am talking with big city experience behind me. If one wants to see the bitter stresses and to ascertain where the emphasis ought to be put, one must look to the London boroughs and the six or seven major conurbations. I have heard Conservative Members weeping about 25 per cent. to 30 per cent. increases in rates, when they caught up with them. I have news for them. Under Conservative Governments the major cities were suffering vast increases of between 15 per cent. and 25 per cent. because of the actions of Conservatives, and they got no increase in help such as that provided by the present Labour Government.
In 1971 the situation had become absurd. The rate support grant was supposed to be worked on the basis of 60 per cent. of expenditure being found by central Government and 40 per cent. by local authorities from rates. In the stress areas of London, Leeds, Manchester and Liverpool—taken as a rule of thumb—because of the inadequacies of the rate apportionment system, those authorities were receiving only about 40 per cent. and were having to find the 60 per cent. Some of that was caused by the same Conservative Government.
During that period, the Alf Morris Bill—the Chronically Sick and Disabled Persons Act—was passed. Everyone welcomed that. However, as a prominent figure in local government, I did not welcome it because it arrived without an accompanying cheque. I did not welcome it because it crucified the rates in the stress areas. Although it was not a mandatory Act, if one had any compassion as regards introducing its main features, one could appreciate that it exploded the rates in areas such as Leeds and Manchester, upwards of 20 per cent. immediately, to provide the basics of what the Act requested. We had a saying then that every time the right hon. Member for Leeds, North-East (Sir K. Joseph), the then Secretary of State for Social Services, opened his mouth, he put 2p on the rates but we got nothing from the Chancellor of the Exchequer.

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Conservative Members are now saying that they care for local government. But they do not. The AMC sent a deputation to appeal to the then Prime Minister, the right hon. Member for Sidcup (Mr. Heath), to try to correct this inadequacy. He met the deputation. I believe that my hon. Friend the Member for Ilford, North (Mrs. Miller) was a member of the deputation, as were Sir Robert Thomas, from Manchester, and Sir Albert King, from Leeds. The then Prime Minister fully agreed with them. He said that it was totally unfair. However, he did nothing about it. That is the Conservatives' form of consultation. They did nothing to alter the situation.
In the next 12 months there was a change of Secretary of State for the Environment and the disaster of local government reorganisation, which also left in the pipeline the worst building record since the war in the public building sector, which was brought about by the right hon. Member for Worcester (Mr. Walker), now on the Back Benches, where he does well to languish, because if his record in those two spheres is any indication of his ability, that is where he ought to remain for a long time.
That is the type of situation with which we were faced when the right hon. and learned Member for Hexham (Mr. Rippon) listened to representations and decided to alter matters. He suddenly found that the rates in Conservative areas would have to go up because some people in those areas who were paying less than half the rates paid by people living in big cities would have their rates dramatically increased. The Conservatives talk about rate increases of 80 per cent. but that figure did not bring the rates anywhere near those already paid in the stress areas. The Conservatives said that they would have an equalisation system until, under pressure from the Tory county authorities, they withdrew that suggestion. When my right hon. Friend the Member for Grimsby (Mr. Crosland) was appointed Secretary of State for the Environment we had rate equalisation, and it was welcomed. Why should rural areas receive 13p on the domestic rate element and Leeds and Manchester receive only 7p?
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In July 1974 the Labour Government made a mistake—no doubt with the forthcoming October General Election on their mind. In Leeds the original inhabitants paid a certain rate poundage, but the people who had been absorbed into Leeds and who occupied similar semidetached houses, because they had been paying low rates before and their rates had gone up above 35 per cent., were given a handout. Is there anything more ridiculous than two families living on different sides of the road paying rates at a different level in the same authority? I criticised that decision then, and I do so again.
I come now to the Housing Finance Act. I do not accept the standpoint of the Clay Cross councillors. I do not believe that we can get away from democratic decisions, however unpalatable they are. What did you do? The decision that you rammed down people's throats—
Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Order. I have no such powers.
Mr. Dean: The decision that the Tories rammed down people's throats was one reason for the Clay Cross reaction. There was no need for the Housing Finance Act. Historically, local authorities had to balance the housing revenue accounts. The Manchester local authority had to raise rents periodically to finance large municiple house building programmes. We sometimes had to face unpopular election results, but we did not run away from that task. The Conservative Party introduced the 50p increase immediately and the £1 a few months later. Such a system had never been known before, and that was done in advance of the legislation which authorised such increases.
The Conservatives are the champions of owner-occupiers. I am an owner-occupier and I am not against the sale of council houses where they are surplus, but it is criminal to sell council houses when there is no surplus.
Mr. Nicholas Winterton: Why?
Mr. Dean: You have only just walked in. I have been here all the time.
Mr. Deputy Speaker: Order. The hon. Gentleman must address his remarks to the Chair.
Mr. Dean: The hon. Member lot Macclesfield (Mr. Winterton) has only just walked in. Had he taken more interest in the debate he might have caught your eye later, Mr. Deputy Speaker. If the municipal tenant had received a tax rebate on the same basis as the owner-occupier on the money he was paying for the council house there would have been no need for any subsidy on council houses before 1974. The figures are there to prove that, and it is deplorable that we have not considered this aspect.
The hon. Member for Aylesbury spoke about Mr. Frank Field and his declaration about the sale of council houses. Anyone is entitled to his opinion, but that does not make him an expert. There may be some merit in certain of Mr. Field's comments on housing but there are others with which I violently disagree. I should like to quote from the editorial in The Guardian of 12th April which deals with what Mr. Field said:
"There are more serious objections, however, to the wholesale transfer of council houses to tenants. To begin with it would probably increase public expenditure because the cost of a council house gradually decreases whereas tax relief on mortgages—given the frequency of reselling—rises steeply. Secondly, in areas such as London"—
and, I would add, the other major stress areas—
"where there is already a chronic housing shortage, who would house the next generation of low income workers? If all the existing stock is sold off, councils would have no cheaper housing to offset the economic cost of the new houses that they might build. They would, of course, have the proceeds from the houses that they have sold but this would not be nearly as valuable as the property. Clearly, a minority of the poor would benefit from the transfer but an even larger group would suffer."
Mrs. Millie Miller: Does my hon. Friend recall during that period a leaflet written by an eminent local authority officer, Mr. Henry Aughton, in which he referred to successive Conservative Chancellors of the Exchequer who must have had sleepless nights at the thought of council tenants purchasing their own homes?
Mr. Dean: I recall that, and I pay tribute to my hon. Friend the Member
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for Ilford, North for the tremendous career and work she has had in local government. The editorial goes on:
"Poor people in privately rented accommodation would not only miss out on a home of their own but would also find it more difficult to transfer to a council house."
This is the second occasion during the last few weeks when the Opposition have chosen housing as the subject for debate on a Supply Day. On the last occasion we debated the sale of council houses. I do not understand why the Conservatives think that this is an election winner. I recall that when the Conservatives brought in a scheme for 20 per cent. discount for a period of maximum tenancy when the tenant wished to buy his council house, good pre-war houses were sold, but I know of no tenant who bought a council walkup flat. The houses that the tenants want to buy are the best houses. What happened was that desirable post-war houses were being undervalued and sold for£1,900 after discount. As soon as the five-year convenant expired, those houses were bought back by the local council for between£9,000 and£10,000 for rehousing needy housing cases.
The Opposition amaze me when they pose as the guardians of the public purse. Who do they think they are guarding? My hon. Friend the Member for Kingswood is grief-stricken because his authority has a waiting list of 1,400. He has a simple problem in comparison with other authorities. The city of Leeds has a waiting list of over 20,000 and its building programme is slowing up. As a Leeds Member, I must deal with the point raised by the hon. Members for Aylesbury and Northampton, South. They said that the Tories had achieved something in Leeds and had reduced the rates by 6p. They have done so by hitting the most underprivileged section of society—the old, the handicapped, mentally handicapped children and children at primary and nursery schools.
A fortnight ago I had the privilege of showing some handicapped children from Leeds round the House. The teachers were tremendously upset about some of the things that were having to be denied to these children because of the cuts by the Leeds authority. Are Opposition Members telling me, as people who are

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supposed to look after society, that that is good politics? The City Council in Leeds stands accused of dereliction of duty towards handicapped people. There is no question about that. There are certains sections of the community who can be looked after only by a local authority. Unfortunately, these are the very people whom Conservatives attack when they take control. They do not attack at the top. They attack the weakest section of the community. They always have done and they always will do.
Mr. Nicholas Winterton: Absolute humbug.
Mr. Dean: Would the hon. Member mind speaking for himself?
Mr. Nicholas Winterton: I am. Will the hon. Gentleman give way?
Mr. Dean: No. The hon. Gentleman should have been in earlier.
Mr. Nicholas Winterton: I have been in a Select Committee dealing with preventive medicine.
Mr. Dean: The hon. Member did not take enough of it.
Mr. Nicholas Winterton: Touché. I have a few doses left if the hon. Member will give way.
Mr. Dean: The hon. Member is not big enough.
Mr. Nicholas Winterton: He is bigger than you.
Mr. Dean: Let us carry on with the serious business. The clowning is over. I return to the time of the passage through this House of that great democratic measure the Housing Finance Act. I was part of a deputation which met the then Secretary of State for the Environment, the right hon. and learned Member for Hexham. It was a high-powered deputation of which I was a junior member. It was made up of members of the TUC and the AMC. The two leaders were Sir Robert Thomas from Manchester and Vic Feather.
People talk about increases of 15 per cent. or 20 per cent. and say what a terrible crime it is. I produced figures at that meeting showing that over an 18-month period municipal tenants in some areas had suffered rent and rate increases
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of 40 per cent. What was so tragic was that the figures were accepted by the right hon. and learned Gentleman. He did nothing about them. In those circumstances why should the Opposition be surprised when some people over-react?
I have never believed in the phoney argument that council tenants can be told that their rent is static for all time. That is like saying that the price of a loaf of bread will never rise. I had better not mention potatoes. There has to be some sense of balance. My view is that the stress areas of the country which are historically Labour-controlled have been badly done by in past years under Tory Governments. The hon. Member for Aylesbury ought to have a closer look at the history of his own party. Quite blatantly it did not place the emphasis on the stress areas. Only three or four years ago, in the days of the AMC, figures were produced showing that some Conservative-controlled areas were receiving more money by way of education grant than they were spending on the whole of their budget. They were actually saving and being enabled to reduce the following year's rates as a result of the money received in education grants.
I will give one example. The Tory-controlled Hampshire authority had£6 million that it could not spend. This was at a time when the London boroughs and cities such as Leeds, with all the strains and stresses of overcrowding, and with homeless families moving into the area, could not get an extra halfpenny These are the people who are now hoping to take control of local authorities next week. That would be the biggest disaster imaginable.
There has been talk of direct labour departments. I have been heavily involved in the administration of such a department and I do not believe that direct labour organisations are altogether free from faults. I do not say that there cannot be any improvements made. But I do not believe that the private sector is any different. I do not condemn every private builder. I would not want to see a situation in which direct labour operated in a monopoly position, where the market was not tested. I believe in testing the market. I do not believe in giving hand-outs to direct labour departments. When, following the Barnwell Report, the procedure was adopted of

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awarding one contract with the two following ones to be negotiated on the basis of the first one, the private sector grabbed at it because it gave it the chance of continuity of building, to which it was entitled. I make no criticism of the private sector when it performs well. We must be fair to direct labour departments when they operate successfully.
The hon. Member for Northampton, South mentioned Salford. He did not, however, mention Manchester, which has the biggest direct labour organisation outside the GLC area and Glasgow. He did not mention the fact that Manchester broke the back of its primary school problem in three years. He did not say that it has just finished the largest educational project in Europe, carried out in competition with private enterprise. The Conservatives showed their concern for the ratepayer when they won control by saying, after a short time, "Smash the direct labour organisation." If the hon. Member for Macclesfield wants to look it up, there is an Adjournment debate, reported in Hansard, in which evidence that I sent at the time was quoted.
Because the direct works department had been so successful, the Tories passed a resolution that in future it would only be able to build houses and to maintain the fabric of corporation buildings—in other words, that it would be denied the opportunity to build such things as community centres, schools, sports and educational facilities. The excuse was not that the department could not build successfully but that it could build houses cheaper than it built schools, for example. Nothing was further from the truth.
The city treasurer, Sir Harry Page, a distinguished gentleman, was instructed to carry out an investigation. He showed clearly that on educational projects there had been a saving of between 7 per cent. and 10 per cent. measured against the lowest private tenders. The Conservatives who ruled Manchester at the time did not think about the ratepayers. When a large contract came up for educational provision, the tender of the direct works department was the lowest by 2½per cent. The Tories decided that the contract should go to private industry. Such are the people the Opposition are now saying are best fitted to guard the public purse. Everything that I have said can be confirmed. It is on record.
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I began by saying that there is a deep difference between the philosophies of the two parties. But there would be no point in our having the House of Commons if there were not. Politics is about power and applying policies. The type of policy supported by the Opposition is what the ruling Conservative group has followed in Leeds, with its attack on the chronically sick and disabled, the elderly, handicapped children, and the educational services in general. The Opposition are debasing public debate, and I hope that tonight's vote will show the contempt of the House for them.
8.32 p.m.
Mr. Geoffrey Dodsworth: The debate has been full of substantial and well-informed contributions, making clear that there is in the House a high level of expertise in and knowledge of local government. I hope that the constituencies of England and Wales will listen carefully, but I doubt it. I believe that on Thursday next week democracy will be on trial. The real test is how many people will bother to vote. That must be the critical issue.
We have a problem of communication both in national and in local government. The issues in local government are complex and perplexing. We have heard interesting illustrations of the difficult social choices and economic priorities facing those responsible for the conduct of affairs in local government. I share the view that it has been the practice of the Government to set out requirements, lay down the criteria and make demands, without necessarily willing the means.
Over the years, standards have been set on education, housing and the social services, but the means have never been willed by Parliament. That fact has emerged from some of the speeches in this debate. My concern is that the debate at local and national level is not reaching the ears of those affected—the ratepayers and electors.
The simplicity of the rate demand is such that it comes as a blow. It is a missive in the post, something which can be received with a gasp very often, with heart-searching as to how it is to be paid. But it is capable of rapid assessment. It is not easy, however, to work out how the figures are calculated. On the back of the demand is a series of complicated

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poundage calculations which one has to make in order to arrive at how the rates are spent. It is difficult also for people to assess the performance of their local authority. I do not think that on the whole people are able to say whether a good job is being done.
The financial affairs of local authorities are complex. A simple illustration is the ability to finance capital expenditure by a mixture of long-term and short-term borrowing which requires judgment y local authorities. forecast has to be made on the level of commitment in either direction. If, for example, the authority feels that it should borrow money cheaply on a short-term basis, because that is the condition of the market at the time, it may suddenly find itself having to meet rising interest costs. Equally, it might find that it is not able to arrange its long-term finance on a satisfactory basis.
A substantial part of the revenue of local authorities comes from the Government through the rate support grant. Often the Government set the standard and form of the services to be provided but supply only half the income required by local authorities.
The Hertfordshire county authority has faced serious problems caused by both the rate support grant and inflation. Half its increased rate costs are caused by inflation and half by the problems of the rate support grant. I shall refer briefly to some of the difficulties which that has presented. I have tabled an Early-Day Motion, signed by hon. Members from Hertfordshire constituencies from both sides of the House, drawing attention to the deficiencies of and the dissatisfaction with the present system.
This year Hertfordshire increased its rates by 20 per cent. That was substantial but it was caused half by inflation and half by the problems of the rate support grant.
A further illustration of the difficulties of planning in local government is that it was assumed that the adjustment involved in assisting the London area would involve£5 million loss in grant for Hertfordshire, but the sum turned out to be£8 million. The authority scratched around to make last-minute adjustments in its spending programme, having al-
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ready set itself a rational target. That had to be changed at the last minute. and that is not satisfactory.
The chairman of the finance committee of the Hertfordshire County Council has been making representations to the Department of the Environment for many years. The chairman is a member of the Labour Party. He pointed out that the county council had suffered loss of grant for two years but had had to make special payments to staff because of the area's proximity to London.
The resources element of the rate support grant is designed to augment the rate resources of the so-called poor areas, and that brings me to the complex of the calculations involved. The complex distribution arrangements for the needs and resources elements illustrate the difficulty of communicating to the public the method by which rates are calculated. For the needs element eight different factors have to be taken into account, except in outer London boroughs, where there are nine, and in the inner London boroughs, where there are 10.
It is impossible for a member of an authority to communicate that problem to the electors to whom he is accountable. It is clear that we must seek a way to restructure the financing of local authority operations. I was concerned about the suggestion in the debate that there should be no change, that the status quo was fine and that in making changes we had destroyed good things. I understand that difficulty.
I had the pleasure of working in a local authority for many years. I enjoyed the experience, and learned that the officers and councillors were fine people, dedicated to the service of the public. But they have a difficult problem of communication. We need a source of income which is much more related to the ability to pay, much more related to the prosperity of the area to which the services are being provided.
We should have a dual system, maintaining the present rating by occupation for certain services. In that way we can bring the control of all the expenditure under the one umbrella of the authority. I understand the need for co-operation with the Government and the need to communicate about the standards of service, but I believe that local government is very good government, and that the

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more local it is, the better and more democratic it is likely to be. On that basis, control over the income is more likely to bring true democracy in the deployment of local resources.
There is one thing which can be done by local authorities and which represents a true opportunity for economy. Many of us are dissatisfied with the quality and standard of local transport. We believe that there are services which could be used if licences were made available to local operators. My inquiries lead me to believe that services could be provided at only half the cost to the local authority in providing subsidy and with a substantial reduction in fares.
This is a classic illustration of how there could be economic benefit to the community at large. It would require a political decision. It would mean a change from the status quo. Some Labour Members have suggested that the Conservatives have destroyed existing situations, but we are always seeking a better way. There is a better way to do everything. Change must be made on a controlled and logical basis. In the case of local transport, it is clear that there are operators available, that the resources exist and that there is a travelling public with a need.
I hope that next Thursday we shall see substantial interest by the public in the way in which we conduct our local authority affairs. I think that that day will be a turning point in local government democracy. I hope that it is an opportunity that the people will not miss.
8.44 p.m.
Mr. Donald Anderson: The hon. Member for Hertfordshire, South-West (Mr. Dodsworth) may know that the Government have set up a steering committee to look into the problem of flexibility of transport in rural areas.
I very much agree with the hon. Gentleman that we look forward hopefully to a good turn-out in the elections on 6th May. Those elections are the reason for the timing of this debate. The hon. Member for Aylesbury (Mr. Raison) was in a dilemma. He did not know whether he should indulge in a political knockabout because of the proximity of the local elections. Certainly, in the
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flourish of his speech, he began talking about a suffocating Socialism and about setting Oxford free. The only freedom characteristic of the Opposition during this debate has been the wish to be free of their own rather embarrassing record when in office in matters such as the erosion of local democracy, the Housing Finance Act and others which have been dealt with by my hon. Friends.
Apart from that, there has been the repetition of rather synonymous platitudes in the motion. Indeed, this is the most obvious impact on reading through the motion and the two amendments. They are almost competing, one with the other, in the repetition of fairly unexceptionable statements. We are told that the Conservative Opposition believes in "maximum value for money" and in "a rigorous management" whereas the Government, for their part, believe in "closer partnership" and "sensible economy". The Liberals believe in efficiency and realism. No one has added apple pie and mother to these unexceptionable statements.
I was surprised by what the hon. Member for Aylesbury said about the erosion of local independence. I have mentioned already the extent to which the record of his own party in office stands as an answer to that charge. I was also surprised by his suggestion that he did not know, in relation to the effect of the legislation on tied cottages, how a local authority was to take a decision on competing claims between those on their housing waiting list and those—who must be relatively few in any event—from tenants in tied cottages who may be displaced. I do not know what experience the hon. Gentleman has in local government, but taking decisions on competing claims is something which housing departments are doing every day. That is part of the normal work of local housing departments.
I would applaud what the motion says about making the best use of the existing housing stock. One feature of the housing situation in Britain today is the crude surplus of housing as against households. I hope the Government will look closely at providing a better allocation of housing resources. This could be done, for example, by encouraging mobility of tenants and avoiding a situation of under-utilisation of a three-bedroomed council

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house. Perhaps the people of sheltered accommodation could release a large part of such housing stock for younger families. One could also look at the possibility of encouraging council tenants to take lodgers in order to have greater flexibility in the system. This would certainly be applauded.
In relation to what the Government amendment says about tenures, I might say in passing that I have been impressed with the personal commitment of the Minister for Housing and Construction to look more closely at developing new forms of tenure and, particularly, to try to ensure greater flexibility in the system. At present there is only the owner-occupied stock and the council stock. The mobile, the single, and the student find difficulty in obtaining accommodation. Different forms of tenure could add greater flexibility to the system.
I turn briefly to what the hon. Member for Merioneth (Mr. Thomas) said about the Welsh housing situation. I was glad that he paid tribute to the good figures of council completions. They are very impressive. In 1973, the figure was 2,700, in 1974 it was roughly 3,000 and then there was a massive increase, of 140 per cent., in 1975—to 7,300. Although the hon. Gentleman criticised the projections in the public expenditure White Paper about housing in Wales, he will note that there is an open-ended commitment to the building of new houses, which is very significant.
I take the hon. Member's point that there has to be a balance, particularly because of the structure and the age of the housing stock, between the improvement of our older housing stock and the building of new accommodation, but I believe that that balance is being maintained in the Government's public expenditure projections.
I want to dwell briefly on only one point in relation to Wales—local government reorganisation. There are at the moment two key factors in local government in Wales—first, the continuing effects of the 1973 local government reorganisation, and second, the poor image of local government within the Principality, in part necessarily because of the rates increases and the consequent unpopularity. There is also the increase in manpower to which the hon. Member for
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Merioneth referred and the evident overlap and duplication of functions between the two tiers of local authorities.
This dissatisfaction and the unpopularity of local government in Wales has been used by both sides in the devolution debate. The anti-devolutionists are saying that the Welsh Assembly would lead only to more bureaucracy on the lines with which we are already familiar in local government reorganisation, while the pro-devolutionists say that this is just the opportunity for change and for getting rid of the old system that they have been waiting for.
Welsh local government is haunted by the spectre of yet further reorganisation. The Government give the impression of being unwilling to face this issue, just as, in terms of devolution, they still appear to argue what I think is a self-delusion—that there can be no effects as a result of devolution on Westminster or the voting system. Yet devolution will have profound effects, first, on the powers of local government. The argument has been cogently put in submissions by the County Councils Association which have been sent to hon. Members. But more important in my present argument, it will have important effects on the structure of local government.
It is easy to criticise the present system for duplication, overmanning and various other problems which have arisen. Rather more difficult is it to give a constructive alternative to the present system. It is always easier to form a coalition against a particular proposal than to have a clear majority in favour of an alternative.
The two suggestions for local government reorganisation which were mooted in Wales in the late 1960s—that in 1967, which broadly foresaw a tidying of the existing old structure, and that in 1970, which foresaw some large unitary authorities in Wales—both appear now not to be seriously regarded. What is being discussed is a system of perhaps 20, perhaps 30, multi-purpose authorities within the Principality. That suggestion has a certain attraction, but it has considerable dangers and needs to be carefully thought through.
Is it suggested, for example, that these multi-purpose authorities will be responsible for the big spending areas such as education, social services, and highways? If not—and there is a need for

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co-ordination—would the groupings of these authorities mean the re-creation of the county councils in a new guise? If there are too many authorities, and they are too small—one is reminded of the Redcliffe-Maud suggestion of a 250,000 population, which many argue is not appropriate in Welsh conditions anyway—there is the danger of more and more power slipping to a rather remote all-Wales authority and the possibility of that authority having to set up agency functions as with the Welsh Land Authority and the Welsh Development Agency.
There is general dissatisfaction with the existing system, but no agreement on an alternative. Each alternative would have to be looked at carefully because of the attendant dangers. There is uncertainty in Wales about local government reorganisation. That is wrong for the public, wrong for members of local authorities and wrong for the staff when there is a prospect of redundancy, given the small number of authorities and redeployment, just when they were beginning to adjust to the new responsibilities of the 1973 reorganisation.
Certainly devolution will have a profound effect on local government in Wales. The Government cannot avoid this issue. There is uncertainty, and that will continue until the Government make some statement about their intentions on local government reform. It is now incumbent upon the Government to give some indication of their views on this vital issue.
8.57 p.m.
Mr. John MacGregor: I apologise for being unable to attend the whole debate, owing to inescapable commitments elsewhere. Last year I was fortunate enough to win a place in the Ballot for Private Members' Bills, and I chose from a vast range of alternatives a Bill to give rate relief to small businesses. The Minister for Planning and Local Government told me then that he could not accept my Bill because I should await the Layfield Report.
I introduced that Bill because I was aware of the burden of the rates on small businesses, and the more I have looked at the situation and received representations since, the more I have believed that the burden of rates on small, medium-sized and, sometimes, even quite large
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businesses, is becoming increasingly onerous. My modest Bill may not be sufficient to alleviate the problems for some, but it would help.
Rates can be a very heavy burden on businesses when their turnover and profits generally are not increasing. The other difficulty for businesses is that the impact of the rate burden cannot be planned from year to year. Businesses have to try to anticipate their other costs—wage costs especially—and they are finding nationalised industry, fuel and other costs rising heavily, and there is often a significant increase in total overheads through the rates burden.
We should look very seriously at the impact of the rates on the productive and private sector. This was illustrated very graphically at the annual conference of the Rating and Valuation Association which I attended last year to speak about my Bill. Several councillors, mainly from the north of England, made the point that British local government is the best in the world, that its services are the best, that ratepayers get a marvellous deal, and that the overall rates burden has not increased all that much.
Another speaker then said that during the evening as a local councillor he was trying to plan local services and during the day he was an accountant mainly involved in the liquidation of businesses. He found very often that it was what he had been doing in the evening as a councillor that had produced the last straw, as it were, for the businesses he was winding up during the day. That contribution brought the whole point out very clearly indeed to those who had up to then looked at only one side of the equation.
Just as the rate burden cannot be planned for businesses for the ensuing year, it cannot be planned for individual ratepayers. We are moving into an era in which net take-home pay will not increase by very much at all, as a result of the pay policy, and I welcome that. Next year's rate burden, although modest in comparison with that of the year before, will for many domestic ratepayers take up the whole of their increase in net take-home pay.
We have the major problem now of the burden of local authority expenditure on the individual recipients. Domestic ratepayers have some ultimate sanction—

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which has gone some way in restraining expenditure this year—in that that they have a vote in local elections. Whatever we do in the light of the Layfield Report, one of the worries we all have is that if we remove some of that sanction in regard to the domestic ratepayer, the industrial and commercial ratepayers may find themselves carrying a bigger part of the can, without any form of sanction or discipline over the local authorities, because they have no vote whatever.
Some local authorities that are particularly profligate and that do not look at the effects on the local community of their increasing expenditure may feel that it does not matter what they do to local businesses. Unless we get this matter right, we shall be doing a great disservice to a great many businesses in the community at large.
It is only too easy for people to draw attention to the services which are being affected, and to the desirable social services in which we should like to see expansion. But the profligate local authorities, however well-meaning they may be, can easily spend other people's money on a very large scale without seriously looking at the effects of that spending.
I accept fully that we all want to see increases of expenditure in these desirable areas, but we should now question whether we have the right balance between the expenditure on these desirable services and the burden we are putting on the productive sector. I do not think that the balance is right.
Those on the other side who say that we are arguing for cuts in desirable expansion should look also at the burdens they are inflicting on businesses and on the people who are creating employment for the local communities. We must, therefore, make sure that the balance is right This may mean that some pipe dreams will have to be abandoned.
This leads me to a thought which has been increasingly borne in on me in studying the whole problem of local government finance in the past year. I refer to cash limits. I am increasingly beginning to feel that the only way to tackle the problem is by imposing cash limits, not just on the Government grants to local authorities, but on the totality of local government expenditure.
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I believe that this is necessary for two reasons. The first is the enormous impact that local government expenditure now has on public resources as a whole and on the gross national product. The level that local government expenditure as a whole reaches therefore becomes a very substantial matter of concern for the House.
All the various suggested methods of reform of local government finance and rating lead to the conclusion that unless we transfer the whole of local authority expenditure to Government grant, we still run the risk that local authority expenditure in any given year will be excessive in relation to what the economy can bear. That leads to the conclusion that perhaps we should consider establishing cash limits to the expenditure of individual local authorities.
Another reason why this may be desirable is that well-run local authorities, which over the past two years have been making tremendous efforts to contain their expenditure, naturally feel very aggrieved when they see countless examples of authorities in other areas still undertaking expenditure of the sort which ratepayers and the national community through the taxpayers should not be bearing.
I have been looking at some of the salary levels paid by local authorities and asking questions about salaries each time an individual example has been suggested in the national Press of excessive salaries being paid to individual local authority officials. Recently, the Manchester University Appointments Board drew attention to the fact that among its graduates last year it found that some local authorities were prepared to pay almost double what the same type of graduate was getting for the same type of job in the private sector.
I wrote round to local authorities to discover what they were paying, for example, in their planning departments. I am pleased to say that in my own county the district councils were well within the limits paid in the private sector. But other boroughs, some of them in London, confirmed that what the university appointments board said was correct. These local authorities appointed people on the legitimate salary scales, but well up them, no doubt in the belief that

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they still had to do that to attract people to their staffs. They had not understood that in the private sector, among chartered surveyors, for example, quite different salaries were being offered.
This sort of thing goes on quite often in local authorities, and it is one factor which accounts for excessive expenditure in local government, and it is only one example. I believe that cash limits would end that.
It will be said immediately that if individual cash limits are applied to individual local authorities, we shall erode local authority freedom. I believe that the right way to get this balance is to say that in establishing overall cash limits for local authorities, at the same time we should say that from the Government we have much less detailed control over the way in which individual local authorities carry out their expenditures. In other words, we should have stricter control over the totality but much greater discretion in the detailed control, and then the local authority authorities would have clearer choices.
I have not yet come to a final conclusion on cash limits because I see the difficulty of taking discretion from local authorities. But it may have to come, and I believe that the Government's position on cash limits for local authorities is still unsatisfactory from a different point of view, which is that we cannot yet be sure that they will establish proper cash limits on local authorities in the same way as they are in terms of central Government expenditure.
I want to put one point to the Minister on the way in which the cash limits for the rate support grant increase order have been calculated. I sit on the General Sub-Committee of the Public Expenditure Committee. Recently, we questioned a senior Treasury official on cash limits. We were told that the estimate for wages and salaries in local government in terms of cash limits fixed for the increase in the rate support grant was based on an assumption that the increase would be of the order of between 5 per cent. and 10 per cent.
I make no criticism of that, because it had to be drawn up last autumn, and since then the Government have moved back in their estimate of what the economy can bear after 1st August this
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year in terms of the total increase in the incomes policy. It was between 5 per cent. and 10 per cent. in the autumn. When they came to look at central Government expenditure in November, they scaled it down to 5 per cent., and the Chancellor has indicated that he will now go for 3 per cent.
Assuming that the Chancellor is successful in getting 3 per cent., or a little over 3 per cent., what will happen to the calculation of the local authority rate support grant increase order? That will have to be based on an increase of between 3 per cent. and 3·5 per cent. Therefore, the assumptions in the original White Paper must be scaled down.
When we asked the senior Treasury official about this, he said that it had been indicated to the local authorities that there might be an adjustment if the wage situation proved different from the estimated increase of between 5 per cent. and 10 per cent. Then we asked him whether it would be an adjustment upwards, or both upwards and downwards. His reply was "upwards only". I think that we have to get it clear now that the rate support grant limit must be downwards.
During my two years in this House, I have liaised very closely with the local authorities in my area and they are trying hard to keep down expenditure. It is increasingly frustrating to them that so many of the factors which cause the rate burden to rise are outside their control. Of course, they cannot explain this to their ratepayers.
Increases in the cost of fuel, postage and travel are created by nationalised industries, over which local authorities have no control. The general level of interest rates is rising, particularly as older debts become due. This is a direct effect of inflation, over which local authorities have no control.
More serious is the fact that wages and salaries form a major part of local government expenditure, yet individual local authorities cannot have much impact on the size of wage increases. With a new pay limit, this may not matter too much, but it mattered last year before the£6 pay limit was imposed. I believe that many local authorities could not afford the full£6, and this has been

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another major cause of the increased rate burden.
I think that, in the interests of getting agreement on the pay policy, the Government connived at and encouraged a settlement by the management side in the national negotiations on pay for local authority workers at the£6. The Government should have been trying to get a lower settlement. If we are to get local authority spending under control, we shall have to look at the way in which wages and salaries are negotiated.
The rate support grant is a key factor for all local authorities and the switch of resources to London has made a material difference to the rate burden in country areas. But for the switch to London and the difference in the way the needs element has been drawn up, Norfolk County Council would have received an extra£9·3 million. It would have received that much extra if the grant had been worked out on the basis used between 1971 and 1974, when the Conservative Government was in office. The changes will add 17 per cent. to the rate burden in Norfolk this year.
Local authorities also have no control over the impact of Parliament's actions. The councillors and senior officials of authorities in my area have been pressing this point on me almost weekly. They despair of the extra burden we impose on them with legislation, which is often well-meaning and is sometimes passed with the agreement of the whole House.
Local authorities have obligations under the Health and Safety at Work Act, and the poultry inspection regulations which are to go through soon will have a significant impact on the inspectorate. Local authorities are also given extra work by Home Office regulations affecting the Probation Service.
Local council officials have been trained through a lifetime to carry out these requirements to the best of their ability, but we ought now to question, every time we pass legislation which has a bearing on local authorities, whether the additional expenditure we shall be imposing on them is justified.
The Chief Secretary to the Treasury told the General Sub-Committee of the Expenditure Committee that he was
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aware of this problem and that the committee he had set up to scrutinise cash limits of public expenditure would regard as a major element of its work the impact of our actions on local authorities. I hope that he will get the support of all Government Departments and that the House will be able to carry out a monitoring role. It is not satisfactory that this task should be done by the Chief Secretary alone. It must become a major responsibility for us all.
The Government could do a great service by helping the local authorities which are fighting to contain their expenditure because of the burden on ratepayers. However, I see no evidence that the Government are trying to help these authorities.
Finally, I refer to the Layfield Report. Clearly, we shall have a long debate on the report when it comes before the House. There are many aspects of local government financial assistance which are clearly in need of reform. In particular, I believe that we shall need to have significant reforms for the domestic ratepayer. However, I suspect that the Government will be unable to put forward positive proposals to the House before the next General Election. In view of the increasing burdens which local authorities are imposing on businesses, it is incumbent upon the Government, prior to major reform, to come forward with specific proposals to tackle the problem.
I do not think that many ratepayers can wait for the three, four or five years which will inevitably ensue before we get a fundamental change in the method of local government finance. Prior to rating reform, I hope that the Government will take fully on board the importance of containing local expenditure, bearing in mind the impact that it has had on many of those who have had to pay for it. I ask the Government to take the side of the local authorities which are carrying the real fight on their behalf at the front line.
9.17 p.m.
Mr. George Park: I suppose that it is difficult in framing a motion or an amendment on a subject such as this to avoid the all-embracing approach. If there is one thing that has emerged from the contributions of Members from both sides

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of the House it is the immense variety of circumstance and need that comes under the umbrella description of local government.
There is an immense difference in the way in which different local authorities tackle or respond to the circumstances as they see them. The hon. Member for Aylesbury (Mr. Raison) almost had the grace to admit that his speech was more related to propaganda than fact. He came close to making that admission. His speech sounded like an election address. He used the time-honoured tactic of calling for something to be done which is already taking place so that he would be able to claim credit for it.
In paragraph (a) of their motion the Opposition talk about "rigorous management". I am sure that the hon. Gentleman knows as well as anyone else that local authorities throughout the country have made tremendous efforts to limit their expenditure. It was evident to me that the 50 local authorities in the Midland region that I studied had made great efforts to restrict their expenditure. The average of the 50 authorities was an additional 10 per cent. on domestic rates after taking into account inflation and including water authorities.
I support my hon. Friend the Member for Leeds, West (Mr. Dean). I ask my right hon. Friend to deal with the water shortage. In industrial areas it is assumed serious proportions.
The subject of rates brings us inevitably to the Layfield Report. I noted with interest that the hon. Member for Aylesbury called for reform. That is in some distinction to what his right hon. Friend the Leader of the Opposition calls for—namely, the abolition of the rating system. She does so without saying what will take its place.
This is not a new matter for those who have been involved in local government. It has been the subject of many investigations over the years. So far we have failed to provide a viable alternative. I hope that we can do so, but it is not easy. No one should imagine that there is a simple approach.
As regards local authority expenditure, I welcome the fact that the authorities are now involved in the planning of national expenditure on a continuing basis through the consultative councils. This is
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a big step forward. I hope that it will be nourished and encouraged. The fact of life in local government is that expenditure cannot be turned on and off like a tap. I hope that there will be a more corporate approach. I have vivid memories of coming here and having three meetings where one would have done.
The hon. Member for Aylesbury said "Take a chance next Thursday". I hope that the people in Coventry will remember the last time that they took a chance. I hope that they will remember the shambles that we had to pick up.
9.20 p.m.
Mr. Keith Speed: I should like to draw the attention of the hon. Member for Coventry, North-East (Mr. Park) to the Daily Mail today which points out that Coventry has
"Plans to spend£7,000 modernising 20 houses; private builders could do the same work for between£3,000 and£4,000."
I have no doubt that Coventry electors will have that in mind tomorrow week.
I should like to add my greetings to the Secretary of State on his appointment to his important position and define where we can agree, because there are many areas where we cannot agree.
I agree with the right hon. Gentleman about and pay my tribute to the councillors and officers of local authorities throughout the country, who are often unfairly criticised. They do an extremely difficult job. It is a difficult job at any time, but it is particularly difficult in a labour-intensive industry, as local government is, at a time of high inflation.
I agree with all hon. Members who called for a high turn out at the elections next week. It cannot please anybody here that often only one or two in every five people bother to vote at local elections. I hope that we can improve on that situation.
I agree with the right hon. Gentleman that often the public demand increases in services which require increases in staff and therefore push up the costs. I hope that over the next few years—indeed, over the next few weeks—we can try to educate the people we represent to the fact that for the next two or three years it will not be possible to increase standards and to meet every no doubt worthy desire for improvement in services. That message does not appear to have got

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through to some Members who have taken part in the debate today. The fact of the matter is that the money is not available. The Chancellor of the Exchequer is now saying that, and it is about time that all parties said it. By doing so, we would be backing those local authorities which are cutting their suits according to their cloth and are often roundly criticised for doing so.
The Secretary of State said that the Government's first priority was to defend the economy. However, looking at the Community Land Act, the Rent Act 1974 and the secondary reorganisation Bill which is now going through, to name three pieces of legislation affecting local authorities, I am inclined to say "Come off it", because those three measures have nothing to do with the economy. At best, they are irrelevant. At worst, they are downright damaging.
We call for cuts in local authority expenditure just as the Chancellor and the Treasury team have to call for cuts not because, as my hon. Friend the Member for Aylesbury (Mr. Raison) said, we believe in cuts for their own sake—like my hon. Friend, I am an expansionist at heart—but because we are living beyond our means. That cannot be said too often.
That being so, there are three areas where we can save money. The first is efficiency. I gave many details regarding efficiency in the debate on 9th April. I gave details of various local authorities which are carrying out cost cutting exercises and are saving a great deal of money. I do not care what local authority it is, but there cannot be one in the country which cannot save yet more money by improving its efficiency. That goes for Government Departments and businesses as well.
Secondly, there is the nonsense of the Community Land Act with a net cost of£312 million over the next few years. We regard the major municipalisation programme, involving quite a few hundred million pounds, as another nonsense.
Thirdly, we must face the fact that lower standards will unfortunately be the rule in many local authority services. I do not think that we should try to burke that issue. The unions and people concerned and the consumers will not like it.
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We, as elected representatives, will not like it. But we are deceiving ourselves if we do not accept that in many cases a no-growth policy means substantially lower standards in certain services.
I turn now to good housekeeping. Leeds has been mentioned. I reject what was said by the hon. Member for Leeds, West (Mr. Dean). The various economies which Leeds has made since the Conservative Party became the largest party there last May have not been at the expense of the poor or the handicapped. That was made clear in the budget speech, which I read in its entirety, by the leader of the Leeds City Council. Most of the savings have been in administration and direct labour. There have also been savings on internal transport, post, telephones, and not filling 1,200 vacancies.
Mr. Joseph Dean: The hon. Gentleman refers to the Leeds direct labour department. Building is one of the smallest of its activities. It does not build anything. It only demolishes. How there will be a saving by ceasing to demolish, I do not know.
Mr. Speed: The hon. Gentleman ought to listen. I said that economies had been made primarily in administration and in the direct labour department, and that there are 1,200 vacancies which have not been filled. At the same time, Leeds has managed not only to reduce its rate demand and, indeed, the overall cost, but not radically to affect ally of the main services.
Mr. Joseph Dean: Rubbish.
Mr. Speed: I am prepared to leave it to the judgment of the citizens of Leeds next Thursday, who will give the Conservatives overall control.
I put a particular point to the right hon. Gentleman the Minister for Planning and Local Government when we had our previous little debate—we are always having these little debates—on 9th April. He has now had a few days to think about it. It is a specific "for instance" that would save the Secretary of State—although he was not the Secretary of State then, he might be interested—a great deal of money on the local authority building programme. A few days ago I outlined the housing programme of the Sefton Metropolitan

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District Council, which happens to be Conservative-controlled, building the Marsh Side housing project, using standard designs and a good local builder building attractive houses that are going down extremely well with those living in them. It is saving over 20 per cent. in cost, which on this particular project is£500,000. Extrapolating that nationally in the council house building programme, it is about£200 million to£300 million.
I invited the Minister then to endorse this scheme, which has been approved by the regional office of the Department of the Environment in Manchester. I invite him again, in winding up the debate, to endorse it and to encourage other local authorities to have such a building scheme. I accept that in one or two minor aspects it does not meet Parker Morris standards, but the houses are infinitely more attractive than are most council houses elsewhere. I hope that the right hon. Gentleman will endorse this scheme. It is one way in which the nation can save a great deal of money almost straight away.
The Secretary of State got himself into a little muddle about the sale of council houses. He was strangely selective in his statistics about improvements five years ago. That was all right. It was 1971. However, as my hon. Friend the Member for Northampton, South (Mr. Morris) pointed out, there was a constant build-up in improvements to local authority houses and to private houses, and that build-up has now gone right down again.
Perhaps what is more important is that the Secretary of State did not say why—I hope that the right hon. Gentleman will answer this—if he has this apparently flexible view about tenants being able to buy the houses in which they live, that should not apply to new town tenants. My hon. Friend gave a clear example in Northampton of a very small list and the development corporation wishing to sell houses to its tenants. It would help us all if the right hon. Gentleman could say that he accepts this open-minded flexibility, as the Secretary of State has accepted it, and that very soon there will be a circular enabling new town tenants to buy their houses. That would save a great deal of time for new town corporation committees as well, and
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it would help the Government in many ways.
One can see—there have been little strains of this in the debate—certain Socialist councillors who live in their own homes but seek to deny a council house tenant the right to buy his home. One can see others who may be Socialist councillors who send their children to independent schools or fashionable comprehensives but who are seeking to enforce no-choice neighbourhood comprehensives on their fellow citizens' children. There are always clinical reasons why a particular councillor should receive private treatment in a single-bed ward when under Government legislation only apparently the Arabs will, by choice, have such a facility.
That is the sort of approach that I have been seeing in the election campaigns over the last few weeks. That sort of approach is now being seen through by the great British public. They regard it as a fair degree of humbug.
Mr. Joseph Dean: Terrible.
Mr. Speed: I agree that it is terrible. I agree with the hon. Gentleman about that.
I come to direct works and municipal trading. I was interested that the Secretary of State came back to Neville Chamberlain. In the previous debate on this subject Joe Chamberlain was mentioned. To try to reconcile 1976—after the enormous increase in the scope of local authorities, the enormous increase in local authority staff and the enormous increase in the local government share of the gross national product—with the old municipal traditions of Birmingham 60 years ago will not wash.
What has come out of the debate is the enormous pressure upon officers and councillors. Local authorities account for over 30 per cent. of public expenditure. Is there such an abundance of talent among officers and councillors that they can go into these entrepreneurial municipal schemes? We know what will happen. The schemes will run up losses and at the end of the day those losses will be paid for by the ratepayer, often the same ratepayer who is discriminated against because he is trying to run a small business. That does not make much sense.

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What certainly does not make sense is the Government's attitude to direct labour. As my hon. Friend the Member for Northampton, South pointed out, the CIPFA recommendations have been in being for nearly a year. We have not had from any Minister a reply that makes sense. Even on an interim basis, the Government could at least say that if the local authorities adopted the CIPFA recommendations until the interdepartmental committee reported, it might improve their efficiency. Do the Government believe that the recommendations will not improve local government efficiency? If they do, let them say so. If, on the other hand, the Government believe that the recommendations from this independent and expert body are a step forward, it would be perfectly reasonable for them to say, albeit on an interim basis, that they go along with them. If they said that, the Government and the Opposition might get a little closer together on the vexed subject of direct labour.
We are not against direct labour but we say that we should first see whether it is needed. If it is needed, we must make sure that it is done on a properly accountable and competitive basis, which is what the CIPFA say. If we can agree on the CIPFA report we shall have come a long way towards meeting each other. I invite the right hon. Gentleman to try to meet us on this and to say that the CIPFA report is at least a basis for action in the interim before we receive the report of the committee which the Minister for Housing and Construction set up.
There has been mention of the corporate approach. The Bains Report had a lot to say about that. That report was a series of guidelines, not a management blueprint. One problem is that too many local authorities have taken it as a blueprint. Undoubtedly, the consultative council has been a success, and I welcome it. We must build upon that success and make the council even more successful.
One example from my constituency is an indication that something is wrong with the system. There was a proposal to build a new magistrates' court at a cost of £500,000. Kent County Council, realising that we are in a difficult economic situation, said that the project
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should be postponed with the resultant saving of£500,000—which is an idea which should appeal to us all. But the Home Office says that if the magistrates' court is not built, not only is there no chance of getting money in future for the magistrates' court but the money will be earmarked for something else. There would be no saving there. What can we do but say that the money will be spent on building the magistrates' court? As the Member for Ashford I would happily make my sacrifice on this.
The present system penalises the local authority that wishes to be thrifty and rewards the spendthrift. That cannot be right. I know that it has gone on under all Governments. We need to take a long hard look at it, and at Government Departments other than the Department of the Environment, particularly the Home Office, and the Department of Education and Science which is apparently encouraging local authorities to spend, often against the better judgment and instincts of the Secretary of State for the Environment.
The Secretary of State made some play of the manpower watch on local authorities. That is fine, but what of the Whitehall Departments? Local government is beginning to do its stuff. We have had examples from Stockport, Leeds and elsewhere of reductions being made. At least the rise in the number of local government staff has stopped. It is not unreasonable that in the Department of the Environment, the Department of Education and Science and elsewhere there should be matching reductions in the number of civil servants, not necessarily by wholesale sackings but by the methods used by local authorities. It would be helpful if in his reply the right hon. Gentleman could tell us what progress is being made towards this.
We have heard a lot of talk about wages and salaries in local government. I was told in a parliamentary reply not long ago that between April and October last year the salary bill in the Department of the Environment rose by£45 million. That is a great deal of money. Surely it is not unreasonable to ask, if local authorities are having to make cuts and look closely at their vacancies, for a progress report on what is happening in the Government Departments which oversee local authorities.

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The question of reorganisation has raised its head on a number of occasions. Apparently reorganisation has been said to be responsible for the high level of salaries and for all the troubles and problems of local government. That is total nonsense, as the right hon. Gentleman was honest enough to admit in part when we last debated the subject. As my hon. Friends have pointed out, London was reorganised 13 years ago. The Labour Party has been in power for nine of those 13 years. If London government were wrong, the Labour Party has had ample opportunity to do something about it. Yet we know that the London boroughs and the Greater London Council have exprienced rises in costs and staff. Their rate levels have risen every bit as much as those of the districts and counties in other parts of the country. The facts are there for all to see. Let us cut out this reorganisation alibi.
I shall he interested to see what excuse the Labour Party gives when it is fighting the London elections on the next occasion because it cannot fall back on the reorganisation argument as it is trying to do in the district elections. The fact of the matter is that we believe that there has to be overall control of local government expenditure. We very much believe that there has to be a greater freedom within that overall control. I agree with my hon. Friend the Member for Norfolk, South (Mr. MacGregor) that there has to be much less legislation and fewer circulars. We have to examine the rate support grant system. The Conservatives certainly intend, over the period of a Parliament, to replace the domestic rating system and to do something specifically for small businesses.
The Labour Party use local government as an agent to carry out its policy of social engineering. The Labour Party, which has been drifting inexorably Left-ward in this House, has been drifting in a similar direction in local authorities. We have seen the municipal excesses of the West Midlands County Council. We have seen the chaos at County Hall with the GLC. We can look to that unhappy part of the North-East which has been groaning for far too long under a local administration which even its best friends would not claim as the most efficient, the most
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social or the most democratic in the country.
We certainly reject the approach of the Government. We believe that local authorities should provide the wide range of social and environmental services at local level which they can do better than central Government or free enterprise. We believe that local government is a valuable check and balance on the power of the Government and central bureaucracy. We reject the social engineering concept which far too many Socialists have put forward.
I invite the House to support this motion and I am quite convinced that a week tomorrow there will be important Conservative victories. They will be important for three reasons. First, they will enable many more local authorities. including many of our major towns and cities, to put Conservative policies into practice. Secondly, a strong Conservative local government will be a bulwark against the Left-wing nonsense which the Government have to pursue to satisfy the mindless militants within and without this House. Thirdly, the Conservative victories will show people at home and abroad who are fearful for this country that we have a future, that the British people are rejecting Socialism and turning back to free enterprise and the Conservative Party in the only way that counts, which is through the ballot box. I commend the motion to the House.
9.40 p.m.
The Minister for Planning and Local Government(Mr. John Silkin): The House has listened with great interest to the speech of the hon. Member for Ashford (Mr. Speed). He made his points as courteously as he always does. But I could not help feeling, as I watched him and as the temperature of his voice grew, that he felt somewhat uncomfortable. After all, as he himself hinted, this is the sixth debate on local government in the past four months.
I have no doubt that he is, like myself, a strong protagonist of local government, but I wonder whether his uncomfortable feeling is not due to the belief on his part that the Opposition may be going for overkill. I imagine that he suspects, as I do, that once the local government elections have taken place next week, we

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shall hear no more of the subject from the Opposition until the next local elections.
The Opposition motion is framed in such a way as to make the hon. Member feel even more uncomfortable. The first part of the motion is plain platitudinous. The second part is a positive insult to local government and to the many devotees of his own party as well as of mine who play their part in it.
The motion ignores entirely the efforts that have been made under this Government to achieve, for example, by the setting up of the consultative council and the metropolitan conferences, at which I personally take the chair, a partnership approach to the thorny problems of value for money and the use of resources about which the Opposition claim to be so concerned. The truth is, as the Government's amendment makes clear, and as my right hon. Friend has said, that it is only by the maintenance and development of such closer partnership between the Government and local authorities that we can achieve the right results of providing the greatest service for our people as economically as possible. The balance between local government and central Government is a very delicate one, and I hope that the House will agree that, while the central Government must very often lead and guide, they must avoid destroying the independence of a system of local government that is far older than that of Westminster itself.
The true attitude of the Opposition towards the independence of local government is revealed by the intervention they seek to make in the matter, for example, of municipal trading. I had thought that the Opposition would at least say "Let us leave things as they are; let us agree that local government should have its independence". But no. Yet the cases in which local authorities have indulged in municipal trading have a very respectable history as my right hon. Friend said, despite Neville Chamberlain.
Many councils are responsible for extremely large budgets and are not unfamiliar with the management of large municipal enterprises. Many authorities run extremely good civic restaurants; many have good entertainment facilities; some for example, have very fine
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municipal orchestras performing in extremely good places of entertainment. Local authorities run markets, harbours, and cemeteries and crematoria as well. There are other instances where private enterprise is not providing the facilities that should be provided, and there again municipal trading can play its part.
There is yet another case where, as I understand it, hon. Members opposite have taken the view that municipal trading should be encouraged. I refer to the gambling business. My predecessor as Minister for Planning and Local Government, the right hon. Member for Crosby (Mr. Page), fought very hard to introduce his Lotteries Bill whereby municipal authorities might have run lotteries. If I had started this part of my speech by saying that I could surely take hon. Members opposite with me in agreeing that local authorities ought to be allowed to gamble with their ratepayers' money, there would have been a scream of protest from them. But it was right hon. and hon. Members opposite who tried to introduce the Lotteries Bill in the Session before last.
The question of municipal trading is simply one of judgment in each particular case. The hon. Member for Rochdale (Mr. Smith), who was in the Chamber earlier, asked me last year what my view was on this subject and I told him:
"I certainly sympathise with any local authority which seeks responsibly to use or to extend its powers for the communal good, but specific proposals need to be considered on their merits."—[Official Report 11th November 1975; Vol. 899, c. 674.]
That is my view, it is the Government's view, and it is the correct view.
Sir Derek Walker-Smith: The right hon. Gentleman previously referred to cemeteries and crematoria. Is he putting them within the ambit of trading?
Mr. Silkin: I think it is a lucrative form of trading.
I turn now to the Opposition motion and the existing housing stock. It is interesting that the Opposition appear to be confusing this with obtaining the maximum value for money. Even in this they appear to be in a quandary.
There are three possible methods by which council houses might be disposed

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of: they can be sold at market value, at market value less a discount of perhaps 20 per cent., or, as the right hon. Member for Worcester (Mr. Walker) recommended, they can be given away after a tenant has occupied one for 20 years. All three of those suggestions have been advocated by Conservatives and I wonder whether the real Conservative spokesman will now stand up.
Are the Conservatives proposing to sell council houses at market value, or at market value less a discount? It is not clear whether the Opposition know whether they will sell at a discount or give them away. If they sell them at a discount, they will not get the maximum value out of the house. The truth is that the best use of housing stock is not to dispose of it in every case, but it is to use it for the benefit of those who need it. That, as my hon. Friend the Member for Kingswood (Mr. Walker) eloquently pointed out, is the way it should be done. The sale of council houses should he seen in that perspective.
I have been challenged a number of times to state why I have adopted a policy of stopping the sale of new town houses to sitting tenants, what the policy is and whether it is logical. It is curious that the Opposition do not appear to have read the consultative document which says:
"It would be a mistake if the new towns did not make some provision for people who want to own their own homes. It would be an even greater mistake if the new towns did not provide for those people whose only hope of a decent home is a house or flat for rent. Until it becomes possible to build enough housing in the new towns to meet the whole range of demand, there will inevitably remain a need to strike the right balance at the margin between the various categories of people concerned."
The hon. Member for Northampton, South (Mr. Morris) and the hon. Member for Isle of Wight (Mr. Ross) have made my point for me. The latter said that in Bracknell the housing waiting list was now only two weeks. Two years ago, when I came to office, it was one year. The former said that the waiting list in his constituency was only six weeks. Two years ago, when I came into office, it was a year in Northampton, South. Who was right to hold up the sale of council houses?
I do not say that there should not be a review of the situation. But we have
514
always rightly taken the view that as long as there are people in need, we must satisfy that need. We believe that need is the criterion of housing. After the need is satisfied, by all means let us return to what was the Labour policy in the days when we were producing the largest number of houses ever built in this country.
As my right hon. Friend pointed out, it is significant that the Conservative motion deals merely with the existing stock of housing. Of course it does, because it is based on the assumption that there are sufficient houses. That no doubt accounts for the fact that in the last year of Conservative Government the number of completions of new houses went down to the lowest total for 30 years. It has been up to a Labour Government to start to alter the situation, to bring us up again, as last year to more than 300,000 houses—to 310,000.
My right hon. Friend asked the hon. Member for Aylesbury (Mr. Raison) how much of the housing he would cut. The hon. Gentleman did not reply: I suspect because the Shadow Chancellor did not wish him to reply and he had been so instructed. Perhaps the hon. Gentleman will now reply. I resume my seat.
Mr. Patrick Cormack rose—
Mr. Silkin: When the hon. Gentleman becomes Shadow Secretary of State for the Environment, he can answer. Perhaps he will answer anyway.
Mr. Cormack: On a point of order, Mr. Deputy Speaker. I was on my feet. The right hon. Gentleman had sat down. My hon. Friend the Member for Aylesbury (Mr. Raison) did not rise, and therefore his speech had terminated.
Mr. Deputy Speaker (Mr. Oscar Murton): The right hon. Gentleman was making an invitation to the hon. Member for Aylesbury (Mr. Raison) on the Opposition Front Bench.
Mr. Silkin: I was dealing—
Sir D. Walker-Smith: Further to that: point of order, Mr. Deputy Speaker. Surely there must be a limit to time for which a Minister or any other Member may remain seated without any other Member catching your eye. Surely in

515
those circumstances my hon. Friend the Member for Staffordshire, South-West (Mr. Cormack) was entitled to seek to catch your eye.
Mr. Deputy Speaker: That is entirely a matter for the discretion of the Chair, and on this occasion I think that the time was not adequate.
Mr. Silkin: I feel immensely complimented that two of the greatest intellects in the House are trying to stop me from continuing with my speech.
The hon. Member for Aylesbury mentioned the Community Land Act, as did his hon. Friend the Member for Uxbridge (Mr. Shersby). The hon. Member for Uxbridge asked whether any guidance had been given about private housing taking place on municipally-owned land. The answer is "Yes". There are two circulars on the matter. I shall write to the hon. Gentleman about it.
As to the Act, the hon. Member for Aylesbury said "What a terrible thing it is! You are destroying the independence of local government. You are giving it powers." That is how one destroys local government—one gives it powers. The hon. Gentleman added "This will mean that a creeping Socialism will take place. Thank God we have the district council elections!" He was not very confident about the result, but he just hoped.
It may interest him to know that as a result of researches by regional offices of the Department we found that an overwhelming number of Conservative councils as well as Labour councils are anxious to avail themselves of the advantages of the Act. The hon. Gentleman is a bit out of date. The Act has become part of the life of our country.
Like the hon. Member for Isle of Wight and the hon. Member for Merioneth (Mr. Thomas), I find it increasingly curious that an Opposition which railroaded health, water and, above all, local government reorganisation through a lukewarm House of Commons and a resentful population four years ago—many of whose members, incidentally, are doing their best to dissociate themselves now from their own endeavours—should dare to speak about getting value for money in local government. The effects of the
516
Local Government Act 1972 are still very much with us, but not everyone remembers the promises that went with that reorganisation.
Let me quote from the Explanatory and Financial Memorandum to the Tory Local Government Bill:
"Since the Bill is mainly concerned with altering the structure within which the existing powers and duties of local government are exercsed, it will have little direct effect upon either local authority finance or expenditure overall. Reorganisation of local government will in the long run enable staff to be more effectively and economically deployed."
How long is a "long run"? This particular run would seem to me to be in the nature of a boundary.
Incidentally, the hon. Member for Aylesbury, talking of rent increases, brought into the general picture the water rates. As was said by my hon. Friends the Members for Leeds, West (Mr. Dean) and Manchester, Moss Side (Mr. Hatton)—who I am glad to see back in the House after what I know has been a very difficult illness—it was also the reorganisation of water taking place at the same time as the reorganisation of local government which added monumentally to the costs, manpower and extravagant bureaucracy which has been created. Yet this feeble, divided, trivial Opposition came in for the sixth time in four months to try to debate local government with us. It is ridiculous.
Certainly, the newly-elected district councils in England and Wales will have to play their part in serving the interests of their voters and the country at large. With that I entirely agree. But they can best serve those twin objectives if they play their part with central Government in maintaining and developing those closer relationships which have emerged since the formation of the consultative council. In the special case of the metropolitan districts they should continue in the metropolitan conferences their discusions with central Government to help to identify in cost-effectiveness the priorities which can best assist the people who live and work in their areas.
Above all, the district councils must help in providing the housing, by whatever method of tenure—by owner-occupation, renting, or anything else—which so many of our people so badly need. It is in a spirit of pride that we

517
should aproach local authorities, not in a spirit of shame. It is in that spirit that I ask the House to support the amendment and totally reject the foolish and trivial motion of the Opposition.
Question put. That the amendment be made:—
The House divided: Ayes 289, Noes 250.

Division No 113.

AYES

10.0 p.m

Abse, Leo

Ennals, David

Litterick, Tom

Allaun, Frank

Evans, Fred (Caerphilly)

Leyden, Eddie

Anderson, Donald

Evans, loan (Aberdare)

Luard, Evan

Archer, Peter

Ewing, Harry (Stirling)

Lyon, Alexander (York)

Armstrong, Ernest

Faulds, Andrew

Lyons, Edward (Bradford W)

Ashley, Jack

Fernyhough, Rt Hon E.

Mabon, Dr J. Dickson

Ashton, Joe

Flannery, Marlin

McCartney, Hugh

Atkins, Ronald (Preston N)

Fletcher, Raymond (Ilkeston)

McCusker, H.

Atkinson, Norman

Fletcher, Ted (Darlington)

McElhone, Frank

Bagier, Gordon A. T.

Foot, Rt Hon Michael

MacFarquhar, Roderick

Barnett, Guy (Greenwich)

Ford, Ben

McGuire, Michael (Ince)

Barnett, Rt Hon Joel (Heywood)

Forrester, John

Mackenzie, Gregor

Bates, Alf

Fowler, Norman (Sutton C'f'd)

Mackintosh, John P.

Bean, R. E.

Fraser, John (Lambeth, N'w'd)

Maclennan, Robert

Beith, A. J.

Freeson, Reginald

McMillan, Tom (Glasgow C)

Benn, Rt Hn Anthony Wedgwood

Freud, Clement

McNamara, Kevin

Bennett, Andrew (Stockport N)

Garrett, John (Norwich S)

Madden, Max

Bidwell, Sydney

Garrett, W. E. (Wallsend)

Magee, Bryan

Bishop, E. S.

George, Bruce

Mahon, Simon

Blenkinsop, Arthur

Gilbert, Dr John

Mallalleu, J. P. W.

Boardman, H.

Ginsburg, David

Marks, Kenneth

Booth, Rt Hon Albert

Golding, John

Marquand, David

Boyden, James (Bish Auck)

Gould, Bryan

Marshall, Dr Edmund (Goole)

Bradley, Tom

Gourley, Harry

Marshall, Jim (Leicester S)

Bray, Dr Jeremy

Graham, Ted

Mason, Rt Hon Roy

Brown, Hugh D. (Provan)

Grant, George (Morpeth)

Maynard, Miss Joan

Brown, Robert C. (Newcastle W)

Grant, John (Islington C)

Meacher, Michael

Buchan, Norman

Grocott, Bruce

Mellish, Rt Hon Robert

Buchanan, Richard

Hamilton, James (Bothwell)

Mendelson, John

Butler, Mrs Joyce(Wood Green)

Hardy, Peter

Mikardo, Ian

Callaghan, Rt Hon J. (Cardiff SE)

Harrison, Walter (Wakefield)

Milian, Bruce

Callaghan, Jim (Middleton & P)

Hart, Rt Hon Judith

Miller, Dr M. S. (E Kilbride)

Campbell, Ian

Hatton, Frank

Miller, Mrs Millie (Ilford N)

Canavan, Dennis

Hayman, Mrs Helene

Molloy, William

Cant, R. B.

Healey, Rt Hon Denis

Morris, Alfred (Wythenshawe)

Carmichael, Neil

Hooley, Frank

Morris, Charles R. (Openshaw)

Carter, Ray

Horam, John

Morris, Rt Hon J. (Aberavon)

Carter-Jones, Lewis

Howell, Rt Hon Denis

Moyle, Roland

Cartwright, John

Howells, Geraint (Cardigan)

Mulley, Rt Hon Frederick

Castle, Rt Hon Barbara

Hoyle, Doug (Nelson)

Murray, Rt Hon Ronald King

Clemitson, Ivor

Huckfleld, Les

Newens, Stanley

Cocks, Michael (Bristol S)

Hughes, Rt Hon C. (Anglesey)

Noble, Mike

Coleman, Donald

Hughes, Robert (Aberdeen N)

Oakes, Gordon

Colquhoun, Ms Maureen

Hughes, Roy (Newport)

Ogden, Eric

Concannon, J. D.

Hunter, Adam

O'Halloran, Michael

Conlan, Bernard

Irvine, Rt Hon Sir A. (Edge Hill)

Orbach, Maurice

Cook, Robin F. (Edin C)

Irving, Rt Hon S. (Dartford)

Orme, Rt Hon Stanley

Corbett, Robin

Jackson, Colin (Brighouse)

Ovenden, John

Cox, Thomas (Tooting)

Jackson, Miss Margaret (Lincoln)

Owen, Dr David

Craigen, J. M. (Maryhill)

Janner, Greville

Padley, Walter

Crawshaw, Richard

Jay, Rt Hon Douglas

Palmer, Arthur

Crosland, Rt Hon Anthony

Jenkins, Hugh (Putney)

Pardoe, John

Cryer, Bob

Jenkins, Rt Hon Roy (Stechford)

Park, George

Cunningham, G. (Islington S)

John, Brynmor

Parker, John

Cunningham, Dr J. (Whiteh)

Johnson, James (Hull West)

Parry, Robert

Davidson, Arthur

Johnston, Russell (Inverness)

Paviit, Laurie

Davies, Bryan (Enfield N)

Jones, Alec (Rhondda)

Peart, Rt Hon Fred

Davies, Denzil (Llanelli)

Jones, Barry (East Flint)

Pendry, Tom

Davies, Ifor (Gower)

Jones, Dan (Burnley)

Perry, Ernest

Davis, Clinton (Hackney, C)

Judd, Frank

Phipps, Dr Colin

Deakins, Eric

Kaufman. Gerald

Prentice, Rt Hon Reg

Dean, Joseph (Leeds W)

Kelley, Richard

Prescott, John

Delargy, Hugh

Kerr, Russell

Price, C. (Lewisham W)

Dell, Rt Hon Edmund

Kilroy-Silk, Robert

Price, William (Rugby)

Dempsey, James

Kinnock Neil

Radice, Giles

Doig, Peter

Lambie, David

Rees, Rt Hon Merlyn (Leeds S)

Dormand, J. D.

Lamborn, Harry

Richardson, Miss Jo

Douglas-Mann, Bruce

Lamond. James

Roberts, Gwilym (Cannock)

Duffy, A. E. P.

Latham, Arthur (Paddington)

Robinson, Geoffrey

Dunn, James A.

Leadbitter, Ted

Roderick, Caerwyn

Dunnett, Jack

Lee, John

Rodgers, George (Chorley)

Eadie, Alex

Lester, Miss Joan (Eton & Slough)

Rodgers, William (Stockton)

Edge, Geoff

Lever, Rt Hon Harold

Rooker, J. W.

Ellis, John (Brigg & Scun)

Lewis, Ron (Carlisle)

Roper, John

English, Michael

Lipton, Marcus

Rose. Paul B.

Ross, Stephen (Isle of Wight)

Strauss, Rt Hon G. R.

Weetch, Ken

Ross, Rt Hon W. (Kilmarnock)

Summerskill, Hon Dr Shirley

Weilzman, David

Sandelson, Neville

Swain, Thomas

Wellbeloved, James

Sedgemore, Brian

Taylor, Mrs Ann (Bolton W)

White, Frank R. (Bury)

Selby, Harry

Thomas, Dafydd (Merioneth)

White, James (Pollok)

Shaw, Arnold (Ilford South)

Thomas, Ron (Bristol NW)

Whitlock, William

Sheldon, Robert (Ashton-u-Lyne)

Thorne, Stan (Preston South)

Whitehead, Phillip

Shore, Rt Hon Peter

Thorpe, Rt Hon Jeremy (N Devon)

Willey, Rt Hon Frederic.

Short. At Hon E. (Newcastle C)

Tierney, Sydney

Williams, Alan (Swansea W)

Short, Mrs Renée (Wolv NE)

Tinn, James

Williams, Alan Lee (Hornch'ch)

Silkin, Rt Hon John (Deptford)

Tomlinson, John

Williams, Rt Hon Shirley (Hertford)

Silkin, Rt Hon S. C. (Dulwich)

Tomney, Frank

Wilson, Alexander (Hamilton)

Silverman, Julius

Torney, Tom

Wilson, William (Coventry SE)

Skinner, Dennis

Tuck, Raphael

Wise, Mrs Audrey

Small, William

Urwin, T. W.

Woodall, Alec

Smith, John (N Lanarkshire)

Varley, Rt Hon Eric G.

Woof, Robert

Spearing, Nigel

Wainwright, Edwin (Dearne V)

Wrigglesworth, Ian

Spriggs, Leslie

Walden, Brian (B'ham, L'dyw'd)

Young, David (Bolton E)

Stallard, A. W.

Walker, Harold (Doncaster)

Stewart, Rt Hon M. (Fulham)

Walker, Terry (Kingswood)

TELLERS FOR THE AYES:

Stoddart, David

Ward, Michael

Mr. Joseph Harper and

Stott, Roger

Watkins, David

Mr. Peter Snape.

Strang, Gavin

Watkinson, John

NOES

Adley, Robert

Eden, Rt Hon Sir John

Jones, Arthur (Daventry)

Aitken, Jonathan

Edwards, Nicholas (Pembroke)

Jopling, Michael

Alison, Michael

Elliott, Sir William

Joseph, Rt Hon Sir Keith

Amery, Rt Hon Julian

Emery, Peter

Kaberry, Sir Donald

Arnold, Tom

Eyre, Reginald

Kilfedder, James

Atkins, Rt Hon H. (Spelthorne)

Falrbairn, Nicholas

Kimball, Marcus

Awdry, Daniel

Fairgrieve, Russell

King, Evelyn (South Dorset)

Baker, Kenneth

Fell, Anthony

King, Tom (Bridgwater)

Banks, Robert

Flnsberg, Geoffrey

Knight, Mrs Jill

Bell, Ronald

Fisher, Sir Nigel

Knox, David

Bennett, Sir Frederic (Torbay)

Fletcher-Cooke, Charles

Lamont, Norman

Bennett, Dr Reginald (Fareham)

Fookes, Miss Janet

Lane, David

Benyon, W.

Forman, Nigel

Langford-Holt, Sir John

Berry, Hon Anthony

Fowler, Norman (Sutton C'f'd)

Latham, Michael (Melton)

Bitten, John

Fox, Marcus

Lawrence, Ivan

Blaker, Peter

Fraser, Rt Hon H. (Stafford & St)

Lawson, Nigel

Body, Richard

Fry, Peter

Lester, Jim (Beeston)

Boscawen, Hon Robert

Galbraith, Hon T. G. D.

Lewis, Kenneth (Rutland)

Bottomley, Peter

Gardiner, George (Reigate)

Lloyd, Ian

Bowden, A. (Brighton, Kemptown)

Gardner, Edward (S Fylde)

Loveridge, John

Boyson, Dr Rhodes (Brent)

Gilmour, Rt Hon Ian (Chesham)

Luce, Richard

Braine, Sir Bernard

Gilmour, Sir John (East Fife)

McAdden, Sir Stephen

Brittan, Leon

Glyn, Dr Alan

McCrindle, Robert

Brocklebank-Fowler, C.

Godber, Rt Hon Joseph

Macfarlane, Neil

Brotherton, Michael

Goodhart, Philip

MacGregor, John

Brown, Sir Edward (Bath)

Goodhew, Victor

Macmillan, Rt Hon M. (Farnham)

Bryan, Sir Paul

Goodlad, Alastair

McNair-Wilson, M. (Newbury)

Buchanan-Smith, Alick

Gorst, John

McNair-Wilson, P. (New Forest)

Buck, Anthony

Gow, Ian (Eastbourne)

Madel, David

Budgen, Nick

Gower, Sir Raymond (Barry)

Marshall, Michael (Arundel)

Bulmer, Esmond

Grant, Anthony (Harrow C)

Marten, Neil

Burden, F. A.

Gray, Hamish

Mates, Michael

Butler, Adam (Bosworth)

Griffiths, Eldon

Mather, Carol

Carlisle, Mark

Grist, Ian

Maude, Angus

Chalker, Mrs Lynda

Grylls, Michael

Maudling, Rt Hon Reginald

Channon, Paul

Hall, Sir John

Mawby, Ray

Churchill, W. S.

Hall-Davis, A. G. F.

Maxwell-Hyslop, Robin

Clark, Alan (Plymouth, Sutton)

Hamilton, Michael (Salisbury)

Mayhew, Patrick

Clark, William(Croydon S)

Hampson, Dr Keith

Meyer, Sir Anthony

Clarke, Kenneth (Rushcliffe)

Hannam, John

Miller, Hal (Bromsgrove)

Clegg, Walter

Harrison, Col Sir Harwood (Eye)

Miscampbell, Norman

Cockcroft, John

Hastings, Stephen

Mitchell, David (Basingstoke)

Cooke, Robert (Bristol W)

Havers, Sir Michael

Moate, Roger

Cope, John

Hayhoe, Barney

Monro, Hector

Cordle, John H.

Heseltine, Michael

Montgomery, Fergus

Cormack, Patrick

Hicks, Robert

Moore, John (Croydon C)

Carrie, John

Higgins, Terence L.

More, Jasper (Ludlow)

Costain, A. P.

Holland, Philip

Morgan, Geraint

Craig, Rt Hon W. (Belfast E)

Hordern, Peter

Morgan-Giles, Rear-Admiral

Critchley, Julian

Howe, Rt Hon Sir Geoffrey

Morris, Michael (Northampton S)

Crouch, David

Howell, David (Guildford)

Morrison, Charles (Devizes)

Davies, Rt Hon J. (Knutsford)

Hunt, David (Wirral)

Morrison, Hon Peter (Chester)

Dean, Paul (N Somerset)

Hunt, John

Mudd, David

Dodsworth, Geoffrey

Hurd, Douglas

Neave, Airey

Douglas-Hamilton, Lord James

Hutchison, Michael Clark

Nelson, Anthony

Drayson, Burnaby

Irving, Charles (Cheltenham)

Neubert, Michael

du Cann, Rt Hon Edward

James, David

Newton, Tony

Durant, Tony

Jenkin, Rt Hn P. (Wanst'd & W'df'd)

Nott, John

Dykes, Hh

Johnson Smith, G. (E Grinstead)

Oppenheim, Mrs Sally

520

521

Page, Rt Hon R. Graham (Crosby)

Shaw, Giles (Pudsey)

Thomas, Rt Hon P. (Hendon S)

Pattle, Geoffrey

Shelton, William (Streatham)

Townsend, Cyril D.

Percival, Ian

Shepherd, Colin

Trotter, Neville

Peyton, Rt Hon John

Shersby, Michael

Tugendhat, Christopher

Pink, R. Bonner

Silvester, Fred

van Straubenzee, W. R.

Price, David (Eastleigh)

Sims, Roger

Vaughan, Dr Gerard

Prior, Rt Hon James

Sinclair, Sir George

Viggers, Peter

Pym, Rt Hon Francis

Skeet, T. H. H.

Wakeham, John

Raison, Timothy

Smith, Dudley (Warwick)

Walder, David (Clitheroe)

Rathbone, Tim

Speed, Keith

Walker, Rt Hon P. (Worcester)

Rees, Peter (Dover & Deal)

Spence, John

Walker-Smith, Rt Hon Sir Derek

Rees-Davies, W. R.

Spicer, Michael (S Worcester)

Walters, Dennis

Renton, Rt Hon Sir D. (Hunts)

Stainton, Keith

Warren, Kenneth

Renton, Tim (Mid-Sussex)

Stanbrook, Ivor

Weatherill, Bernard

Rhys Williams. Sir Brandon

Stanley, John

Wells, John

Ridsdale, Julian

Steen, Anthony (Wavertree)

Whitelaw, Rt Hon William

Rifkind, Malcolm

Stewart, Ian (Hitchin)

Wiggin, Jerry

Rippon, Rt Hon Geoffrey

Stokes, John

Winterton, Nicholas

Roberts, Michael (Cardiff NW)

Stonehouse, Rt Hon John

Wood, Rt Hon Richard

Roberts, Wyn (Conway)

Stradling Thomas, J.

Young, Sir G. (Ealing, Acton)

Ross, William (Londonderry)

Tapsell, Peter

Younger, Hon George

Rossi, Hugh (Hornsey)

Taylor, R. (Croydon NW)

Rost, Peter (SE Derbyshire)

Taylor, Teddy (Cathcart)

TELLERS FOR THE NOES:

Sainsbury, Tim

Tebbit, Norman

Mr. Spencer Le Marchant and

St. John-Stevas, Norman

Temple-Morris, Peter

Mr Cecil Parkinson.

Scott, Nicholas

Thatcher, Rt Hon Margaret

Question accordingly agreed to.
Main Question, as amended, put and agreed to.
Resolved,
That this House believes that the newly elected district councils in England and Wales resulting from the forthcoming local elections will best serve the interests of ratepayers and the country at large if they and the Government are committed to—

(i) the maintenance and development of the new and closer partnership between central and local Government which has already contributed significantly to the fight against inflation; and

(ii) sensible economy in the use of resources which affords priority to vitally needed
522
services including a substantial programme of house building and improvement for owner occupation, renting and other forms of tenure.

EXPENDITURE
Ordered,
That notwithstanding the Order of the House of 18th November in the last Session of Parliament relating to nomination of Members of the Expenditure Committee, Mr. Alf Bates he discharged from the Committee and Mr. Michael Ward be added to the Committee for the remainder of this Parliament.
Ordered,
That this Order be a Standing Order of the House.—[Mr. Walter Harrison.]

CONSTRUCTION INDUSTRY (SOUTH-WEST REGION)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Pendry.]
10.17 p.m.
Mr. Arthur Palmer: I have on several occasions attempted to get this subject of the position of the construction industry in the South-West raised on the Adjournment of the House by the usual method of the Ballot, only to find myself successful on an evening when I have just returned from Select Committee business elsewhere in the country. As a result, I have not had the opportunity to prepare my argument in perhaps the detail that I should have liked.
I begin by agreeing that the depression in the building and construction industry is common to the whole country and not simply to the South-West. I also agree that it is not likely to right itself until the excess of inflation in the economy is checked and industrial profitability and productivity restored.
There is this to be said about the building and construction industry. It is an industry which follows the general level of industrial and commercial activity and normally does not precede it. However, the decline in building and construction in the South-West has perhaps been more steep than elsewhere because there was, only two or three years ago, a very high level of activity.
At that time, we had a property boom, a fair amount of speculative building, industrial building and fair council housing development, certainly in the larger cities of the South-West. Unfortunately, the reverse is now true. The property development market has collapsed and private building has declined. Although Bristol has a very good public building programme, to which I pay tribute, I doubt whether this is matched by the great majority of local authorities in the South-West. The rapid change in the situation in the past two or three years has resulted in large-scale unemployment in the building industry, bankruptcies of small and less stable firms, and a general
524
decline in building and construction of all kinds.
The building workers' trade unions have argued forcefully that building employees are taking more than their fair share of unemployment. The whole industry has gone into reverse, nationally and regionally, in the past two years. Output is down by between 8 per cent. and 10 per cent. and if the decline in the South-West has been greater, as I say, it is probably because the peak of activity was once that much higher.
I am told by building trade unionists in my constituency that there is no real sign of the situation improving. It is sometimes thought that the South-West is an area of fair prosperity, but the unemployment figures do not bear this out. According to the Department of Employment, the general unemployment rate in the South-West is 6·2 per cent., which is above the national average and which compares most Unfortunately with the 3·9 per cent. unemployment rate in the South-East. Unemployment among South-Western building workers is three times the general rate of unemployment.
Every section of the construction industry has been affected—labourers, skilled men, large firms, small employers and the architectural profession. There are several youngish, highly-trained architectural assistants in my constituency who are unable to get work of any kind. The Minister may argue that this is a matter for the Department of Employment, but the first cause lies elsewhere
The problem with stop-go policies in the construction industry is that when an overheated boom is followed by a chilly period, such as the one we are now going through, firms contract and do not pick up again very easily. Fewer trainees are taken on and when the revival conies, the industry is in poor shape to take advantage of it. In Bristol and the South-West the strongest representations have been made to hon. Members by both sides of the industry who, in a recent joint deputation, asked us to assist with remedial measures.
The unions' position is clear enough They want more public expenditure in order to stimulate employment. The position of the employers is more ambiguous. Many of them, in other

525
capacities, are advocates of cuts in public expenditure. Many of them would say that reductions in Government expenditure leading to taxation relief would bring about more private investment and stimulate their trade.
That appears to be the argument of some employers, but I am not so sure about its validity. I do not believe that there is any rigid dividing line which implies that all public spending is bad and all private spending is good. There is wasteful public spending and wasteful private spending. It should be common ground that in present national circumstances the country needs to spend less individually and collectively on current consumption and more on increasing the stock of productive national capital.
If we apply that rule to public spending, I argue that while expenditure on new town halls, for example, can hardly be justified at the moment, there are other forms of local authority construction that are justified. I believe, for instance, that housing is a way of building up productive national capital. Bad housing leads to ill health, social dislocation and a general loss of national efficiency. The building of schools and colleges, especially those devoted to offering a technical and technological education, is productive expenditure.
I agree that in a mixed economy there is much good productive private sector investment that should be assisted where appropriate. New units of housing accommodation are always welcome outside the public sector—for example, units provided for owner-occupation, units related to co-operatives and housing associations.
Industrial and commercial development, especially for the export trade, also needs to be encouraged in every way. I know that last September my right hon. Friend the Chancellor of the Exchequer made an allocation of about £32 million. It was supposed to assist the construction industry, but in the same month construction orders fell back by £132 million. I fear that my right hon. Friend's allocation was just a drop in the ocean for all the effect that it had on stimulating employment in the construction industry.
There are other forms of private investment which should be encouraged. For example, grants should be given at
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favourable interest rates for heat insulation for buildings. That would meet my test of adding to national efficiency here through energy conservation.
I do not want to be too long in developing these arguments as I recognise that they are probably fairly familiar to my hon. Friend, but I think that the Government should now be considering the possibilities of long-term capital works, especially those which are in full or in part revenue producing, where the full costs can be spread over a decade or more ahead and where the preliminary work would give stimulation and hope for the future, a kind of declaration of intent.
Water is an obvious example. Certainly there is still a great need for an improved supply. Such water works are usually spread over a long period. Many could now be started without the financial effect falling on this year's accounts, or on next year's. The effect could be spread into the future. In the South-West, my extra candidates would be the Severn tidal barrage for power production and the electrification of the railway system from London to Bristol and on to Exeter. These two large projects—one is almost fully revenue producing and the other is part revenue producing—would add materially to improving employment prospects in the construction industry in the South-West.
I should like to know what national measures the Government have in mind to bring about the revival of the construction industry, and the more that my hon. Friend can relate his remarks to the situation in the South-West, the better I shall he pleased.
10.31 p.m.
The Under-Secretary of State for the Environment (Mr. Ernest Armstrong): My hon. Friend the Member for Bristol, North-East (Mr. Palmer) has raised a very important matter. I am glad to have this opportunity of discussing in the House the state of the construction industry in Bristol and the South-West.
Unemployment in any family or in any part of the country is a serious human problem. My hon. Friend is right that no industry has suffered more from the sudden lurches, as it were, between the trough and the peak situations which we have had in the past.

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We are well aware of the problems which face the construction industry. We have a frequent and continuing dialogue with the industry both at national and regional level. Concerning the South-West, I would mention that my hon. Friend the Minister for Housing and Construction attended a meeting of the Department's South-West regional joint committee for the building and civil engineering industries in Bristol last July. I visited the region and took part in a television programme about the problems of the industry in the region in January. My hon. Friend will be receiving a deputation from the regional joint committee in a few days. We have also carefully studied the various memoranda which have been produced by the industry's emergency joint committee for the building, civil engineering and extractive industries in the South-West. If we were in danger of being complacent in any way—which we are not—I should mention that we have been subject to considerable, very proper, lobbying by Members of Parliament, as my hon. Friend said, because of their great concern.
The construction industry nationally employs over 2 million people and accounts for 14 per cent of all industrial production. Its role in the provision of houses, roads, factories and buildings and services of all kinds is vital to the national economy and to the success of the measures that we are taking to deal with our present economic difficulties. I should make it clear at the outset that the Government are deeply concerned about the problems which the industry faces.
In the South-West the rate of unemployment in the industry is 17 per cent. That represents a great deal of human tragedy. I realise that it is of little comfort to the region or to my hon. Friend to be told that this is part of a national problem, as my hon. Friend indicated, and that there are other parts of the country, including my own—the Northern Region—where there is a similarly bleak picture in the industry. Indeed, the unemployment level in the industry as a whole is 15 per cent.
This problem is not limited to one region or, indeed, to this country. I do not wish to minimise the seriousness of
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the situation, but it is a small consolation that there has been no increase in construction unemployment since the beginning of the year either nationally or in the South-West Region.
While the period ahead will not be easy, the position is not one of total gloom. As a result of the substantial measures that we have taken to encourage housing in both the public and private sectors, there has been a considerable improvement in house building. The number of housing starts in the South-West in 1975 was 28 per cent. higher than in 1974. In February there were over 37,000 houses under construction in the region, and this is a near record figure.
The House will recall that, in the measures which we have taken to counter unemployment, we have paid particular attention to the needs of the construction industry—though I would not claim that they can do more than make a modest contribution. I know that this is little consolation to a skilled tradesman who happens to find himself out of work, but I want to give the whole picture.
Last October we announced that arrangements were being made to commission an additional£32 million worth of new work to help provide employment where it is most needed in the industry. Nearly £2 million was provided in the South-West for improvements to publicly-owned housing, and for projects relating to the National Health Service, education, and other local authority services. In February, we allocated a further £50 million for the improvement of public sector housing, and the South-West's share was£3 million, making a total of£5 million in all.
While the constraints on public expenditure have inevitably led to reductions in public sector construction work, I should make it clear that the scale of the programme still remains very substantial. Public sector construction output in 1975 in Great Britain totalled over£6,000 million.
There are numbers of projects providing employment in the South-West. For example, since the beginning of the year, four contracts worth more than£20 million have been let for improvements to the A30 and A38, and another two

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contracts for road improvements are expected to begin later this year. The Property Services Agency has also let a contract for new Government offices in Swindon worth more than£1 million, and another worth nearly £400,000 for a new headquarters building at the Royal Naval Air Station at Yeovilton, and the new sorting office extension in Bristol will cost over £150,000. The regional health authority has schemes in Bristol worth just under£500,000, and other major public projects in the city include a school at Hanham costing£900,000. Some 1,000 staff from my Department are due to move to Bristol, a move which is likely to generate expenditure of over £500,000 on office conversions later this year. Also, there are other major schemes taking place elsewhere in the region.
The measures we are taking to stimulate industrial investment generally should also help the construction industry. We have made considerable sums available for the acceleration of capital projects by individual firms and last September an extra £20 million was allocated for the building of advance factories. There is a rolling programme of advance factory building in the South-West, and the construction of 12 units with a total area of 100,000 square feet is either in hand or due to begin within the next few weeks.
In addition, regional development grants continue to generate building work. These grants have assisted in the provision of over £5 million worth of building work in the South-West in 1974–75.
Mr. Palmer: My hon. Friend will agree that these regional grants apply only to part of the South-West. Is that not so?
Mr. Armstrong: Yes.
Special measures have also been taken to maintain the training effort and the Training Services Agency and the Construction Industry Training Board have made a number of grants available for this purpose. These bodies are making special arrangements to assist redundant trainees and one means currently being considered is the provision of site training schemes to give on-site training for those who have completed their off-site training. Looking to the future, the industry strategy committee of the
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Economic development committees for the building and civil engineering industries has just produced a report on construction into the 1980s, and the recommendations are being studied in my hon. Friend's construction industry liaison group.
We recognise, as my hon. Friend emphasised, the importance of seeking to ensure a reasonably stable level of demand in the industry. We already have some action in hand in order to help in achieving this. We are examining very fully the idea of creating moving shelves of projects. These could provide a reserve of fully designed projects which could be brought forward more quickly when circumstances justified encouraging a growth in demand.
We are also providing much more information than before about future public sector work to help the industry with its own planning. By our giving as much notice as possible of changes in levels of public expenditure, as we have done over the last 12 months, the industry is better able to adjust. But we need to remember that public sector work accounts for only about half of total construction output. There is scope, too, for the industry to seek to help itself, and I am pleased that the building EDC is undertaking a study to demonstrate the benefits of new industrial building.
I do not wish to suggest that the action which we have been able to take provides anything like a complete answer to the problems facing the construction industry. I am sure that my hon. Friend will appreciate that in the present economic position the scope for action is limited. Nor is it possible to insulate the construction industry from the effect of the measures that we have to take to manage the economy. But we shall continue to give whatever help we can to the industry.
I assure my hon. Friend that I and my Department are concerned about the construction industry and are very much aware of the situation in the South-West. We are certainly not complacent. I shall study carefully again the position in the context of my hon. Friend's helpful speech.
Question put and agreed to.
Adjourned accordingly at nineteen minutes to Eleven o'clock.