HC Deb 17 December 1980 vol 996 cc404-503 12.35 am
Mr. Clive Soley (Hammersmith, North)

In the interests of humanity, taking into account the speech of the Under-Secretary of State for Industry and the lateness of the hour, I shall not keep the House too long on the issues that I want to raise. However, I raise two important issues that affect London in a major way. The first issue on which I wish to comment is race relations in London and the second is housing associations.

Race relations is one of the problems that tick away under the surface but which we rarely discuss until it impinges upon our consciences as a result of some explosion in society. Part of the art of politics is to be able to spot a problem in advance, to discuss it, find a solution to it and to head off the worst of the clashes that can otherwise develop. It is clear that we have a race problem in London as well as in the country generally.

Language can be a trap. Serious errors can be made that are offensive to ethnic minorities unless statements are thought through. For example, it is said that there is a problem of young unemployed blacks. That is the wrong way of stating the problem. There is not a problem of unemployed blacks; there is a problem of racialism and unemployment. Those who do not hold that view find themselves trapped and having to agree that the Germans pre-war in the early Nazi period had a Jewish problem when they did not. They had a problem of racialism. That is the problem that we have in London and elsewhere.

Race relations tend to deteriorate as economic conditions worsen. The two conditions that are most important are unemployment and inflation, with which housing is closely linked. One could talk for a long time on housing and employment alone, but I do not intend to do so. I shall comment on the general strategy and the general problems and perhaps expand on them at some other time.

I turn to the problem of the police in a multi-racial society. The police are aware of the problem, but we must accept that it has not been tackled effectively. We are told in the Official Report of 2 April that the annual intake of recruits to the Metropolitan Police from various ethnic groups is varied. In 1971 it suddenly shot up from one a year to 22. In 1972 it was four. In 1977 it was 16 compared with a total of other recruits of 1,782. In 1978 it fell to nine, out of a total of 1,456 other recruits. In 1979 it was 14, with a total of 2,065 recruits. It is variable and, of course, extremely small.

In the Official Report of 31 January, the Metropolitan Police force was shown to have 32 officers who had their origins in the West Indies, 21 who were born in the United Kingdom from ethnic minorities, nine from India, seven from Kenya and a smaller number from a variety of countries ranging from Uganda through to Malaysia, Mauritius and even Germany. We are nowhere near as successful as we should be in recruiting into the police. This is one of the most important areas on which to concentrate, because if we are to talk about law and order meaningfully to the ethnic minority groups we must have them represented not only in the ranks of the police force but in the officer ranks. Of the figures that I have given, I think that I am right in saying that until about a year ago there was only one at sergeant level. There were to my knowledge no officers, although I have not been able to check that out so as to be sure that that is correct. I should like to think that there are senior officers from the ethnic minorities, but I doubt it.

If we are to discuss the strategy, we need first to accept certain basic facts and get the public to accept them. Government, central and local, and large organisations, public and private, have a responsibility to get across these facts. The first is that we live in a multi-racial society and that there is no way of changing that. I welcome it. I find it a much more interesting, much more varied society. I often envy some of the children at our schools, despite the many problems, when I see the variety of cultural experience that they get, which was denied to me and others of my generation and to those of earlier generations. We had only one or two people from the colonies, as they were then. In my area, which is multi-racial, I am impressed by the way in which the variety of ethnic groups contributes to the standard of culture.

We also need to distinguish between prejudice and discrimination. Prejudice is basically a psychological problem—a feeling that someone from another ethnic group is in some way inherently inferior. It is a largely irrational feeling—one that is difficult but not impossible to change.

Discrimination is a much more difficult and profound problem. It is social and economic, and we can all engage in it without being aware of it. In many respects, people from ethnic minority groups can accept and deal with prejudice, because they can recognise that some people are of such an emotive type that they will have these irrational feelings. What is much more difficult to deal with is discrimination, when a person knows that—in housing, employment or whatever—he is, for whatever reason, getting less than a fair deal, for no clear reason.

Both those important concepts represent a poverty of morality, culture and civilisation. Above all, in Britain it is a poverty of historical knowledge. We all owe a great debt to the many ethnic minority groups and the countries from which they come. It is a great tragedy that the contribution of the slave trade to the early stage of our development is not better known in the country at large. If it were, we should have a better understanding not only of West Indian culture but of the West Indians' needs.

It is not going too far to say that the Industrial Revolution might never have happened, or not to the extent that it did, without the slave trade financing it. As a deliberate act of policy at that time, we broke up the families of the Africans that we transported to the West Indies. We see some of the hang-over of the problems. We often talk of young blacks who do not have close family ties. That is partly because many years ago we deliberately changed the family structure of the people that we took from Africa to the West Indies and North America. A greater awareness of that might lead people to a better understanding of the problem.

The Minister's Department and the other Departments involved need to lead concerted action before the problem becomes more severe and before we are forced into action by other troubles. One of the obvious places to start is the schools. We must recognise that schools in certain areas—not always areas of large ethnic minority groups, but sometimes on the fringe—produce feelings of prejudice in some of the children. Those feelings are not engendered by the teachers, but people on the fringe of an ethnic minority area can feel threatened in jobs and housing, and if there is not an attempt to counteract that feeling at school and at other levels we shall reap the whirlwind.

I should also like the Minister to consider what we could do through some of the large organisations, both public and private. For example, local authorities, other large concerns such as private companies and certainly the nationalised industries ought to have some way of looking at racial equality problems in their organisations. One trade union that I know has recommended, and I believe is setting up, an advisory committee on racial equality. Monitoring has, indeed, already been done successfully by such organisations as the Tavistock Institute for Human Relations. It has monitored a number of organisations on the effectiveness of their racial policies. That sort of thing should be much more widely done and encouraged. The Government could take a lead and could encourage local authorities and the nationalised industries to do so as well. Some private organisations do quite well.

Mr. Martin Stevens (Fulham)

I am sympathetic to the hon. Gentleman's point of view. I think that he would accept that if monitoring of any kind is to take place, whether by the Tavistock Institute or anybody else, it will be necessary for public records—in housing, education, the census or whatever—to provide information about the ethnic origin of the individuals to whom they refer. But when a growing majority—as it is now—of people of different ethnic bakgrounds from those of hon. Members have actually been born in this country, that is much harder to do than it sounds.

Mr. Soley

I commented on that aspect when we discussed the subject about 12 months ago. It has been my view for some years—I was converted to it by a number of the ethnic minority groups—that it would have been a good idea to put an ethnic origin question in the census. But that, as we know, is too late now, and therefore we have to rely on monitoring of some type. Although I would prefer it to he done on the basis of the census, I think that there are some organisations that could do it quite acceptably to the ethnic minority groups, which are willing to co-operate in most areas.

I turn now to an aspect that should be of particular importance to all hon. Members—the involvement of the ethnic minorities in the political process. To those interested, I recommend the votes and policies booklet issued by the Commission for Racial Equality, which is basically an analysis of the ethnic minorities in the 1979 general election. It is full of facts and very useful.

One finds that about 7 per cent. of whites are not registered to vote; the proportion among non-whites is 22 per cent. Within the figures there are curious factors. For example, the Asians registered are not only much more likely to vote than are other coloureds; they are much more likely to vote than are whites. So there is a willingness to be involved, and I suspect that again we could do much more work on the language problem and on advertising to the ethnic minority groups the importance of registering in order to get them to participate in that way.

The booklet suggests that ethnic minority groups are less likely to attend political meetings but are looking for ways of participating. I am a member of the Greater London regional council of the Labour Party and we have an anti-racist sub-committee, of which I am also a member. We are there trying actively to work out ways of getting the ethnic minority groups to participate.

Every hon. Member should be aware of the importance of this aspect, and perhaps we should emphasise to the ethnic minority groups themselves the fact that there are about 41 constituencies in the United Kingdom, slightly over half of which are in London, where the voters from the New Commonwealth have sufficient votes to decide the outcome of an election. That has been true of the last three general elections. It is a significant number, and it may well have increased.

It is interesting to consider the attitude of whites towards encouraging the ethnic minority groups to participate. We can never he satisfied by this, but 83 per cent. of Tory voters 98 per cent. of Labour voters and 92 per cent. of Liberal voters thought that ethnic minority groups should be encouraged to participate. On the other side, of those who said that they should not be encouraged, 6 per cent. were Conservative voters, there were no Labour voters and 2 per cent. were Liberals. Although those latter percentages are small in all three parties, we should not be fully satisfied, because to say that ethnic minority groups should not participate is an act of discrimination of a real and forceful type.

It was encouraging to find that 77 per cent. of candidates in elections were in favour of more involvement. However, there were only two ethnic minority candidates in London for the last general election and only five in the whole of the United Kingdom. Again, we cannot be satisfied about those figures.

I move on to a particularly disturbing issue, in view of what I have said about the deteriorating economic conditions, unemployment and inflation. I refer to the support that exists for Fascist-type organisations—the National Front, the British Movement and so on. The highest support for the National Front in the general election was in London. Five constituencies had candidates who polled 5 per cent. or more, and all of them were in East London. That is a sobering thought and one that should cause us all to be extremely disturbed. To my mind, it emphasises the importance of education.

We see a belt running from the Southwark area through to Hackney with a disturbingly high level of attachment to Fascist ideals. Thinking back to the 1930s, we remember some of the origins of Fascism amd many hon. Members will remember them. I am concerned that at times we dismiss this state of affairs too lightly, by talking of "mindless young thugs". We see 16, 17 and 18-year-olds giving Fascist salutes and wearing swastikas, with no idea of the origin of the symbol.

It is too easy to dismiss such people as mindless young thugs. There is a job to be done. In a way, they represent our failing, and it is important that an extra effort should be made, especially in East and South-East London, to head this off. I appeal to the Minister to use his good offices in this connection. I am not sure what his view is on toughening up the Race Relations Act, but that is really what is needed.

If we are to deal effectively with marches through ethnic areas, the way to do it is to toughen up on incitement to racial hatred. It is no good saying that we must allow marches to go through areas where there are large ethnic minority groups. That is not only offensive; it is, above all, threatening. It is a good idea to look at such a march as a form of threatening behaviour. If we took tougher action, we should not have to worry so much about the need to ban marches. In other words, the power to arrest is important, and the courts must be empowered to impose effective sentences.

Mr. Clinton Davis (Hackney, Central)

Does not my hon. Friend feel that there have been too many incidents in which breaches of the present law have been committed by people of this character and in which, seemingly, the police authorities have been very reticent about taking action?

Mr. Soley

I agree, and it is important to point out that we put the police in an impossible position unless we spell out clearly that we want tougher action. We end up with the police marching side by side with groups giving Fascist salutes and wearing swastikas. What does that do for the police image in the eyes of anyone who fought in the last war, let alone a member of an ethnic minority group? We cannot allow that to go on. But the answer is not just to ban all marches of any kind. We have to recognise that when such people march through an area where there is an ethnic minority group of some significance, that in itself is a form of threatening behaviour and the only way to deal with it is by means of a toughened-up Race Relations Act.

Racism is perhaps the most insidious and destructive of political forces. Although groups on the Right or on the Left are often criticised for being anti-democratic, we have to recognise that conventional political discussions allow people to change their views.

A person cannot change his racial identity. Once he is identified, that is how he is identified and there is no getting out of it. He cannot change the colour of his skin or the shape of his nose—or not easily, anyway—and so on. That is what identifies people, and that is what can so easily and readily turn them into scapegoats for groups that have problems of their own. That is an important issue. It is one that we should debate more often. Perhaps we can find time to debate it in more detail on another occasion.

I deal next with housing associations. I do this because they are getting into a difficult situation, and I want to put a number of questions to the Minister. Although housing associations take up a relatively small part of the total housing market, they are crucial, particularly in inner city areas. They meet an unmet need, and they do so with a degree of flexibility and response to vulnerable groups that local authorities and the private market cannot meet.

Let me perhaps kill one thing stone dead. There is no way in which the private rented sector can provide for this group. Apart from anything else, many of the people for whom the housing associations cater are not up to paying the rents that are expected in the private market. Secondly, the evidence is that since the turn of the century the private rented sector has been declining, and although a little more housing might be brought in by changes to council regulations, and so on, basically it will not be a significant amount. Above all, in inner city areas where it does bring it in, it will be at rents higher than many people can afford. Certainly many people in my area cannot get bed-sitters for much less than £15, and often it is very much more than that. I cannot see the private sector catering for this group, and when it does it is often at substandard levels, because since the turn of the century it has not been economic to let rented housing. It has been a declining market for a long time.

The Housing Corporation's capital expenditure limit for 1980–81 was set at £420 million. Then, the Minister said that the high levels of approvals given in previous years meant that the corporation would exceed expenditure and, therefore, the Government had to ask the corporation to reduce the levels of tender and loan approvals. I think that this has become known as the temporary moratorium, or it was then.

Last Monday, the Secretary of State for the Environment said that the Housing Corporation would receive £491 million. The first thing that we have to ask ourselves is what that means in terms of actual housing in inner city areas. I want to quote a few cases, because they put the meat on the bone of my argument. A number of housing associations in my area have written to me, or have come to see me or have asked me to visit them to see these situations. I have seen a number, and they are very disturbing.

One property is riddled with dry rot and the front bay has already collapsed. There is an elderly tenant in the ground-floor flat who currently has to live in the back room of the ground-floor flat and the back room of the first-floor flat. The front room is uninhabitable. The cost of capital repairs would be £7,000. The local authority moratorium is preventing this work from being done, and the housing association concerned is losing a rent of £14.38 per week and has the equivalent of one empty flat.

Another property was severely damaged by the heavy frost in the winter of 1978–79. The stucco on the property began to fall off and created a danger to passers-by. Scaffolding has been erected and emergency action taken to hack off the stucco and remove dangerous parts. There is no outside cladding on the brickwork. The estimated cost of replacing the stucco, hiring the scaffolding and dealing with dry rot is about £15,000. There are four tenants who are unable to use part of their flats. Because of the moratorium, there is no money to carry out the necessary repairs. The condition of the property will worsen, the rental income of the association will decrease and the tenants will continue to suffer.

In another property there has been an outbreak of dry rot in the ground floor. This is a property with three flats above. The dry rot must be eradicated immediately to prevent it growing through the building and affecting other flats and possibly neighbouring properties. The moratorium is preventing capital repair work from being carried out. The association has had to pay, out of its maintenance budget, which is already too tight, for the removal of defective timbers and the hacking out of defective plaster. The tenant is moving temporarily but wishes to return to her flat. She does not know how long this will be. Because of the moratorium, the association is unable to replace the floor and renew the plaster and redecorate, but is having to leave the flat empty once the spread of the dry rot has been prevented.

Finally, I quote another example: A property with an old lady in where the water is coming through the roof. Because of the moratorium there is no capital repair money to pay for the renewal of the roof. Patching up is just no longer sufficient to prevent the rain coming in. It is far too expensive to keep patching. Consequently buckets and bowls have to be used in heavy rain and the roof timbers will continue to deteriorate, thus causing increased expenditure at the end of the day. Will extra money be available for capital repairs in the future? That is an important question. I shall return to it shortly.

I quote a much shorter comment from a small housing association—the Women's Pioneer housing association. It very fairly says: Since 1974 we have been actively expanding and have increased our number of units from about 480 to 730 in an effort to meet the demand for accommodation … However, the cuts in housing expenditure seem likely to mean that we shall be unable to maintain even the present inadequate levels of production, for example, our application to purchase houses to provide a further 60 units, 43 of which are a sheltered scheme for the elderly, now seems in jeopardy … During the 1970s the Housing Association movement has enjoyed the fullest support from the Government of the day irrespective of its political persuasion. We cannot believe that there is now a change of heart. The association asks me to do all that I can to help housing associations to continue their vital work. I do not think that the housing associations could put it in fairer political terms than that.

Will extra money be available for capital repairs in the future? If not, all that will happen is that houses will be left empty and they will decay. In doing so, they will drag down neighbouring properties as well as leaving people living in appalling conditions.

Another significant factor is that for the first time ever in my experience former self-employed or small builders are telling me that they have gone bankrupt and are having difficulty in getting social security. A number of builders are suffering in this way, and we all know the effect on the building industry generally.

There is a further very insidious danger that in areas such as Hammersmith, where the buildings are old, the buildings will decay unless something is done in the reasonably near future. Often one is talking about the next five years. If we let them get beyond a certain point we shall end up by going back to the old clearances of the 1950s and 1960s, which produced so many of today's housing problems.

I want to comment on the very good effect that the housing associations can have in an area. I have had comments from the police, the council, social workers and others to indicate that in one area of Shepherds Bush not only have they produced less overcrowding by improving the housing; there are less crime and fewer social problems generally.

It is the flexibility of housing associations, their ability to marry different needs, to involve the private sector at times in terms of keeping alive shops that would otherwise be closed down and their ability to bring nurseries into schemes and to help vulnerable groups that is so important.

I ask the Minister specifically to reply on one point. It has been put to me by a number of housing associations that they cannot survive for long with the present financial restrictions. They tell me that they will go bankrupt in the fairly near future unless they get help in terms of revenue deficit grants. Will the Minister help on this matter? There is no way out for these housing associations, unlike private industry, in a sense, which can change and stretch things, and so on. They are suddenly faced with an axe or a line coming down, saying "This is your limit."

Even if housing associations dismiss staff straight away—as some are doing—this cannot make up the difference. They cannot sell the houses. Why not? A new house cannot be sold at a profit, and an old house will have occupants. Under the Housing Act 1980, it would be wrong in principle and in many cases, I suspect, wrong in law to move the tenant out, as has been done in order to renovate the property, and then, instead of moving the person back in, or into an alternative property, to sell the property. The associations rightly would be open to charges of neglecting the needs of the tenant in such cases.

They cannot do it by those methods, therefore. They cannot do it by merging, either. They would be merging similar problems, and although that might work in one or two cases, generally they would go to the wall unless they got help by means of revenue deficit grants.

The overall message from the housing associations to the Government is that they must have some guidance on the Government's strategy. What do they want from the associations? Will they give them some idea of the Government's long-term plans, and are they prepared to indicate that they will guarantee the survival of this crucially important part of the housing market?

1.6 am

Mr. John Wheeler (Paddington)

I am glad to speak after the hon. Member for Hammersmith, North (Mr. Soley). He introduced a number of important and interesting subjects of concern to all London Members.

The Metropolitan Police is 3,000 under strength. Curiously, the force would willingly recruit suitable persons from any background, including the ethnic minorities, but, sadly, they do not seem to come forward. Perhaps it should be our concern to establish why. I am glad to be able to say that there is now an inspector from the ethnic minority community. I am sure we all welcome that and want to see more such people achieving that rank.

An enormous burden of rates is being placed on London business. An illustration of the problem is provided by my authority, the Westminster city council. In 1980–81, commercial business will contribute more than £180 million to the City of Westminster. That is more than five times the expected domestic contribution of £35 million, even though two-thirds of properties in Westminster are domestic. That rates bill continues to increase each year. Between 1979–80 and 1980–81 the rate for each pound of rateable value will increase from 78.30p to 94.30p, an increase of 20.43 per cent.

The contribution from the Government to the City of Westminster's rates remains relatively small. Even after allowing for police and transport grants paid directly to the Metropolitan Police and the Greater London Council, the level of Government assistance to Westminster is well below half the national average of 61 per cent. A major reason for this is that the Westminster council receives no grant in respect of the resources element of the rate support grant because rateable values are so high in Westminster. Business does not, of course, enjoy the 23.4p in the pound subsidy given to the domestic ratepayer.

These high rates have inevitably become a material factor in management decisions, not only in terms of their effect on cash flow and of the way they bite into profits. Businesses now have to reduce the numbers that they employ in order to pay the rates. Every £5,000 increase in rates charges to London businesses can result in another job lost. The cost cannot be passed on to the customer under current trading conditions. That applies particularly to small firms that are operating in highly competitive markets. More and more busineses are having to move out of central London, and it is not surprising that the Location of Offices Bureau became redundant in 1977. Rates bills were doing its job for it.

Business frustration is further exacerbated by a total lack of control over the way in which the money that is paid in rates is spent by local authorities. This is a classic case of taxation without representation. Those who elect the Westminster city council—the domestic ratepayers—foot only a small fraction of the bills incurred by the council. They are cushioned by such schemes as the rate rebates and domestic relief schemes that were introduced in 1967 and 1968 respectively by the then Labour Government. London commerce has to foot the major part of the rates bill. Therefore, voters are inadequately aware of the financial and economic consequences of supporting spendthrift councils. Perhaps the idea of reintroducing the business vote should not he rejected out of hand. There are precedents for block voting in British politics.

The GLC elections next May will be crucial from the point of view of London business and long-term employment in our capital. Nevertheless, even if business had a vote in the Westminster city council elections, it would have a say only in the way that 16 per cent. of the councils's revenue was spent. More than 50 per cent. of the council's expenditure is precepted by the Inner London Education Authority. The ILEA is a cumbersome and inefficient educational giant. Its members are not directly elected, and it has no fewer than 17 co-opted members.

Mr. Nigel Spearing (Newham, South)

It is true that some of the members of the authority are appointed by the boroughs, including the City of London and Westminster, but can the hon. Gentleman deny that the other members—the representation is coterminous with the constituencies represented in this House—are directly elected by the electors to that authority?

Mr. Wheeler

They are not. As I was about to say, its members are not directly elected, and it has no fewer than 17 co-opted members and 13 representatives of the inner London boroughs. In practice, the decisions of the non-elected members determine the level of expenditure on education. That expenditure is then passed on to the London councils, which have to cover it by raising rates. London business is forced to sign the cheques, while the Inner London Education Authority fills in whatever figures it likes. That lack of democratic and financial accountability has the usual inevitable consequences.

Almost anyone connected with the ILEA can give many examples of unwise and inefficient expenditure—for example, the need to spend £500,000 on repairing a modern school block because someone had used ordinary plywood instead of marine plywood for infill panels, so that water inundated the building. Another decision was taken to provide classrooms with fitted carpets at £13 a square metre, in the belief that it would reduce vandalism and bad behaviour.

Mr. Stuart Holland (Vauxhall)

Does not the hon. Gentleman agree that there is a contradiction in his argument, inasmuch as when plywood is used for filling a wall for a school it will be supplied not by the direct labour department of a council but by a private enterprise contractor? There is no public enterprise in this country that supplies carpet. The hon. Gentleman sees only the direct tax cost of, for example, ILEA's expenditure but fails to see that cutting ILEA expenditure cuts demand for private sector goods. That is a fundamental contradiction in the Government's policy, which the hon. Gentleman is faithfully echoing.

Mr. Wheeler

I am grateful to the hon. Gentleman, but, as I have made clear, if the rates are spent in the way in which they have been spent in the last few years we shall lose business and jobs in London.

I am encouraged by some of the steps that the Government have taken to alleviate the burden of rates on the wealth-creating section of our economy. I welcome the decision to reduce the maximum level of rates on empty commercial property to 50 per cent. of what would be charged if the property were occupied. That is obviously fair in view of the reduced ability of the owner to pay and the lesser demand that such property makes on local authority services.

I welcome also the provisions in the Local Government, Planning and Land (No. 2) Act to extend domestic rate relief to a wider range of mixed business and domestic properties. This should help to relieve the rates burden on small businesses. However, the Government have yet to tackle the rest of the rates problem faced by London business.

Under section 53 of the new Act, the Inner London Education Authority will receive grant entitlement from the Government, but if the ILEA chooses to spend above the level prescribed by the Government and the Government then pay a reduced level of grant support there is nothing to stop the ILEA from precepting additional funds from London councils. In the case of the City of Westminster particularly, this means even higher rate charges for businesses.

I suggest to the House that the rates burden of London business is enormously high and that if we want commerce to remain in our capital some way must be found of controlling the rates that business is forced to pay.

1.16 am
Mr. John Fraser (Norwood)

I propose to talk about my own inner London borough of Lambeth. I make no apologies for doing that, and I hope that I shall be able to keep my speech reasonably brief.

I suppose that it would not be appropriate at this time of year to have an end-of-year audit and assessment of the effect of Government policies on a borough such as Lambeth. I can summarise the position very quickly. The effect of Conservative Government policies has been to put Lambeth, and probably other London inner city boroughs, into at least a triple crisis. There is a crisis of council business and individual finance, a crisis in housing and a crisis in unemployment. Each, in turn, acts upon the other.

The epidemic nature of national Government policy might be evil enough in itself. I refer, for example, to high interest rates, which are crippling to individuals, to business, to local authorities and to home buyers. There are the epidemic proportions of the Government's deliberate creation of unemployment as a method of reducing inflation. There are also the Government's epidemic revulsion for public spending on social needs and their disastrous inflation policy. Those national policies in themselves would be bad enough, but to them we have had added a particular malignancy that is directed towards inner London boroughs and to London in general.

Indeed, if one wanted evidence not just of the disinterest that the Government have now about London but of their malice, that can be found in the rate support grant settlement that was declared to the House yesterday, together with the housing figures announced earlier. Some boroughs have more committed in actual expenditure for 1981–82 than the Government have allocated. My own borough is not in that position, but that is the position of many boroughs. Added to this, there is a malice towards London that shows itself quite clearly in the recent announcements.

What will the consequences be in my borough for the winter of 1980–81 and for the time that follows? First, we have in Lambeth an immediate financial crisis that is a direct result of high interest rates, of inflation and of the Government's failing to finance the reasonable pay settlements that were reached with local authority workers, together with the penal nature of the transitional provisions of the Local Government, Planning and Land (No. 2) Act of this year.

As a result of those four things, Lambeth might be faced with bankruptcy—and I do not use the word lightly. On the other hand, it might have to abdicate its responsibilities to its electorate or impose a supplementary rate increase of 20p in the pound, payable over a period of 10 weeks. That means an average burden on individual families of about £4 per week. In turn, the burden will fall on industry and on shops. Indeed, shops are major employers in our area. The burden will also fall on small firms and individuals.

The hon. Member for Paddington (Mr. Wheeler) spoke about the effect of high rates on small businesses and about the knock-on effect on unemployment.

Mr. Stevens

The hon. Gentleman has related the dolorous tale of the misfortunes of the London borough of Lambeth. Would he care to comment on the district auditor's report—which I brought to light in the House this time last year—which condemned the financial irresponsibility of the council both philosophically and in the day-to-day mechanical and functional conduct of its affairs?

Mr. Fraser

The district auditor reported only two or three days ago. He found nothing against the council in respect of rent arrears or the level of rents or in respect of one other matter that I cannot immediately recall. However, the district auditor told the local authority that it would have to impose a supplementary rate as a result of inflation and as a result of those other matters. The district auditor is still investigating one small matter, but when the report was published it did not go against Lambeth borough council. I think that that disposes of that intervention.

I am sure that my colleagues in Lambeth will confirm that during the past few months the housing crisis has become more acute than it has been for many years. The financial policies have had their effect on the borough council and on the Tories at the GLC. In my borough, there are about 18,000 families on the housing waiting list. Every Friday I leave my advice bureau in despair. Until a few months ago a family that stood no chance of receiving help from Lambeth borough council, because of the length of its waiting list, faced other options. I could tell such a family to go to a housing association. That option has been cut off by the most cruel round of cuts against the organisations that provide some flexibility in housing.

I used to be able to tell people that I could find them somewhere outside London. However, the Government have authorised the GLC to get rid of its outside London estates, and no hope can be obtained from that source. I used to tell people to go to a new town, but the change in the structure of financing new towns and the degree of unemployment found in some new towns has cut out that avenue. I used to suggest that they should try to buy something somewhere. However, as a result of cuts in housing finance to the GLC and Lambeth, no home ownership schemes are available to them. That has been cut as well.

Every time I meet constituents with housing problems, I am faced with a feeling of impotence and despair. That is the direct result of the financial policies that are being pursued. The other day, a family came to see me. Their case illustrates the sort of rackets that are creeping in. They said that they wanted to be rehoused and asked me to help them form a company. I asked them whether they wanted me to form a property company. They said that it did not matter what type of company it was. They said that they were caught in the corporate letting racket. They said they had seen a potential landlord and that he had told them that he did not care about shortholds, and so on, and that he would not let to an individual. He told them that if they beat their way, up to Companies House, in City Road, and stumped up about £200 and formed their own limited company, he would be prepared to let a flat to the company. In turn, he said, the company would let them reside there as the licensee. As they would control the company, they would have no problems.

In that way the landlord can avoid any form of security of tenure and rent control. That is the new corporate lettings racket that is creeping in. Apart from tramping up to Companies House and forming a company and finding a landlord who is willing to let, there appears to be little immediate hope for those who come to my advice bureau.

Mr. Spearing

That is the property-owning democracy.

Mr. Fraser

That crisis in housing has been compounded by the cuts in housing allocations this week—a cut of 50 per cent. to the GLC and a cut of 37 per cent. to Lambeth—on top of the cuts that took place last year.

I come to the third aspect of the crisis—unemployment —which completes the vortex that is dragging people deeper and deeper—

Mr. Ronald W. Brown (Hackney, South and Shoreditch)

Does my hon. Friend accept that the Government's strategy is designed to make the shorthold principle work? If they cannot shut off all the other avenues, no one will be daft enough to go for shorthold, but if they are driven to it the Government may hope to make it work.

Mr. Fraser

I have grave doubts about shorthold working at all. Landlords know the vagaries of housing and letting law. They have been caught, so to speak, by one Administration or the other so often and for so long that they are not prepared to put their properties on the market. They know that they cannot expect to have a Conservative Government for the next five or 10 years. Landlords have made a proper assessment. They know that the Government's days are numbered. Therefore, they will not take the risk of letting properties on shorthold. That is no answer.

I turn to the last crisis point in Lambeth—unemployment. That has been brought about by general Government policies. Unemployment has been exacerbated by cuts in public expenditure, particularly on housing. I am talking not of revenue but of capital expenditure. The immediate effect of cutting back on house construction and improvement programmes, and of having a moratorium for local authorities and housing associations, is to cut employment in the building industry, which is already severely affected by the recession and Government policies. One policy begins to bear on another. Cutting back on direct works departments has the effect of cutting down on apprenticeships and training.

Young people, well qualified and anxious to work, are tramping from firm to firm seeking jobs. One young man told me that yesterday that he had telephoned 30 firms in an attempt to get a job but was unsuccessful. The degree of unemployment among young people has been unprecedented in my experience as a public representative.

The situation has been further exacerbated because the Government have shifted more municipal expenditure on to the shoulders of the individual and the business man. There is a limit to the rate burden that businesses can bear. Thus, the vortex spins faster and recedes deeper.

Mr. Spearing

Is not this the answer to the hon. Member for Paddington (Mr. Wheeler), who said that rates were driving businesses out? The proportion of proper local government expenditure borne by central Government should be higher than it is to maintain services and to lessen the strain upon businesses. If the Government do not do that, are they not guilty of providing service shortfall and driving out the business man at the same time?

Mr. Fraser: That

is right. The phenomenon is that businesses and individuals are bearing a higher financial burden with less demand in their local economies.

Mr. David Mellor (Putney)

As the hon. Gentleman will later hear, I do not defend everything that the Government have done in relation to the rate support grant, but he cannot continue to talk about the financial burden on businesses. Does he appreciate that in 1978 the business rate in Lambeth was lower than that in Wandsworth and that it is now double? Has that not had any effect on employment prospects in his constituency?

Mr. Fraser: I

do not dispute for one moment that the burden of rates has an effect on the viability of businesses and that that in turn has an effect on employment prospects. However, that effect is being exacerbated by Government policies, which are shifting the burden of expenditure away from the Government on to businesses and individuals. It is wrong, whether it is shifted on to businesses or on to individuals. It is particularly wrong when it is shifted on to small businesses, which are likely to be the growth points inside the economies of places like Lambeth. However, it is even worse when that increased financial burden is combined with a lowering of available money inside the local economy—when the spending power of the local population diminishes at the same time as the financial burden increases. The vortex then gets deeper and spins faster.

Mr. Stuart Holland

We heard a great deal—this applied during the last general election, when we were shown a road one side of which was in Lambeth and the other in Wandsworth—about rates being higher in Lambeth. That is also stated in Conservative political propaganda on television. However, it is not pointed out that rents in Wandsworth are significantly higher than in Lambeth and that there is not a net social gain for the resident population as a whole. What is not included in the rates is lumped on to the rents.

Mr. Fraser

I believe that that is right, but I shall not pursue the point in greater detail. Many hon. Members wish to take part in the debate and I shall leave them to make their own speeches.

At the time of the last general election I warned my constituents and the people of Lambeth about the effects of a Conservative Government. I wondered at times whether I was guilty of exaggeration. I was not. I was guilty of flattery. I felt that we might have a period of standstill, but we are having a period of regression. I am not a prophet of gloom, but I see very serious consequences if the Government continue to pursue the policies that they are applying with malice towards the inner city areas of London and towards Lambeth in particular.

1.32 am
Mr. David Mellor (Putney)

I am interested to follow the hon. Member for Norwood (Mr. Fraser) but sorry to see that throughout his observations—the party political diatribe to which we have been treated—there was not a word of criticism of the local authority and the way that it is being run by "Red Ted" Knight. If there is one classic reason why the Labour Party is in the state that it is in, it is that people like the hon. Gentleman, who had some sort of reputation for reasonableness, are quite unable to stand out against what is happening with the likes of Knight and in the London Labour Party and are merely allowing themselves to become catspaws and mouthpieces, seeking to justify with lawyerish tricks what is happening in Lambeth. We all know that Lambeth is one of the worst-run local authorities that one could ever conceive of. It is a byword for financial profligacy.

Mr. Stuart Holland


Mr. Mellor

If the hon. Gentleman wishes me to specify—

Mr. Harry Greenway (Ealing, North)

Will my hon. Friend give way?

Mr. Mellor

When I have finished this point. My hon. Friend seems to feel that I need help at this time of night.

If the hon. Member for Vauxhall (Mr. Holland) really wants to know about financial profligacy, I shall repeat the telling statistic that I gave to his hon. Friend the Member for Norwood. In 1978, rates in Lambeth were lower than in the comparable borough of Wandsworth. They are now double the rates in Wandsworth. I believe that if one cuts through the nonsense and hogwash that is spoken about services being cut in Wandsworth, money is being thrown around hand over fist in Lambeth and one will find no difference in quality of the basic services. One is merely enormously more expensive than the other. The hon. Member for Vauxhall may shake his head. I should be interested to see how he could refute that statement on any factual basis.

I do not want to curb my hon. Friend's enthusiasm any longer.

Mr. Greenway

I merely want to draw attention to the £29 million or so being spent on the town hall in Lambeth. Is not that a gross waste of money?

Mr. Mellor

One could go on multiplying examples. There is never much point in earning a reputation for being able to hit a barn door at 10 paces.

Mr. John Fraser

I want to put "Absolute rubbish" on the record.

Mr. Mellor

The hon. Gentleman can put rubbish on the record. He will find that the street cleansing department of Lambeth is every bit as inefficient as practically the whole of the rest of the enterprise. I am not in the business of shooting barn doors from 10 paces. I shall leave the matter of Lambeth borough council. I feel sure that others less perceptive than I can make the case against it.

A matter that concerns me more and one on which I have to become a little less partisan is the rate support grant settlement. I do not believe in pursuing the matter from a narrow and parochial viewpoint. I accept fully that my right hon. Friend the Secretary of State, when making his dispensations, has to take account of the interests of the whole nation. This is a difficult balancing act and an unenviable one. I accept that my right hon. Friend felt that the present system of rate support grant was unsatisfactory, especially for the way it builds in increased assistance for the big spending councils.

I also accept that my right hon. Friend was under enormous pressure to channel aid back to the counties which had suffered so badly under the previous Government. I shall not question the motivations of the right hon. Member for Stepney and Poplar (Mr. Shore) and the resons why he chose to channel so much aid to London. There are various interpretations that one could apply.

One has to accept that London received, as a percentage of the total rate support grant settlement, an increase from 13.7 per cent. to 17 per cent. in the span of four years. One accepts that the increase was bought at quite a high price when efficient local authorities in the counties were obliged to go to their ratepayers for high rate increases, not because they were joining the ranks of "Red Ted" Knight and his crew but because they found, however great their efficiency, that the supply of funds from the Government was cut back.

I accept the basic pressure upon the Secretary of State to make some adjustment. That is not to say that I can support fully what he has chosen to do, especially in the case of Wandsworth. One is not seeking to defend the continuing spendthrift activities of certain Labour councils which should have learnt the ultimate importance, at this time in our country's affairs, of exercising some restraint in spending. I make the case for a borough which, when run by the Labour. Party, almost rivalled Lambeth in its rate of expenditure but which, for the last two years, has been moderately and sensibly run with financial prudence of a kind that I do not think any member of the Government, if serving on Wandsworth council, could have improved upon. The council has certainly been run according to the principles accepted by the Government.

The problem is that Wandsworth does not come well out of the settlement. The Government need to ask themselves whether this is fair and whether they are not placing an intolerable burden on the councillors of Wandsworth in discharging their duties according to the principles that they follow. A dramatic change has been made in one year.

Mr. John Fraser

I should like to get the matter straight. Is not Wandsworth the second most severely treated borough in the whole of London?

Mr. Mellor

I do not think that the situation is quite as bad as the hon. Gentleman describes. It is certainly one of the top six. [Interruption.] I am sorry that trying to answer the question honestly should lead to ribaldry from the Opposition Benches. I do not know whether the hon. Gentleman would prefer that I had invented an answer. I am prepared to take the question again and perhaps try to give a more appropriate answer.

Mr. Stuart Holland

I stated while the hon. Gentleman was speaking that the casual empiricism of the debate is staggering, and in his case it is. If he sets out to make an argument on a factual basis and combines it with sweeping generalisations that have no factual support for them, his argument is weak and is seen by the House to be weak.

Mr. Mellor

The hon. Gentleman's lectures on casual empiricism will do better at university than they do here. I prefer to deal with the facts as I see them and the problems confronted by my local authority. No doubt the hon. Gentleman's eloquence will be the tool of Lambeth borough council and he will delight us later with his thoughts.

When looking at what the Secretary of State is trying to do, I find it difficult to understand how the needs of local authorities have been planned by the Department. There is a suggestion of omniscience of a sort that I do not find particularly persuasive. It rolls off the tongue to say "We have looked at the needs of all 400 or so authorities and we have decided exactly what they should have", but a limited number of civil servants will have to do that and I suspect that they will not find the task any easier than did those who were supposed to be doing sophisticated comparisons between what people should earn, what they did earn, and so on.

I am a little worried that we may be dogmatic about the issue. I hope that the Minister will tell us that there will be second thoughts if it appears that unfairness has resulted for individual authorities and that the Government will listen with care to the various points that are being made. The process is necessary—someone has to make the decisions—but it is highly fallible and it is important that the Government also recognise it as fallible.

Wandsworth will have lost the product of a lop rate by the time that all the various assessments are taken account of. The council is placed in a particularly difficult situation. It is difficult to see an alternative, having regard to the history of what certain inner London boroughs did when the right hon. Member for Stepney and Poplar was so liberally making funds available to London.

For example, the needs element from the Government to Wandsworth was about £21 million in 1975. By 1978 that had leapt to £35 million—far in excess of the rise in the cost of living—but the Labour-run council still felt it necessary to go to the domestic ratepayer for a rate increase from 41p to 66p in the pound. The constant demand on ratepayers and the receipt of increased aid from the Government have placed the present council in difficulty, leading to the syndrome, which the hon. Member for Norwood has set out, of businesses leaving the borough, further eroding the rate base, declining employment and a system of municipal inefficiency of a sort that was criticised so much at the 1978 local elections.

Since then, a determined and successful effort has been made to change the position. Manpower has been pruned and, where necessary, charges have been increased realistically. It will still be possible in the new year for a pensioner in Wandsworth to get an excellent three-course lunch and coffee for 40p. In the context of pensions at their present level, that cannot be called excessive. It was certainly nonsense that two years ago those lunches were available for 6½p. Looked at from the point of view of the limited number of pensioners who availed themselves of lunches, one might say that they were a public service but little thought was given to the rest of the community, many of whom were not particularly well off themselves, who were having to fund those meals. A high proportion of those taking up Wandsworth lunches did not even reside in the borough, so attractive was the prospect of getting on a bus and going to Wandsworth for lunch.

The social services department has been reduced, but it still costs ratepayers £84 per head. It is staffed 19 per cent. above the average of a sample of nine other London boroughs. The services compare well with those on offer in any other borough. All that does not disguise the real efforts that the council has made to curb expenditure and to charge realistic sums.

The council has dealt with the difficult matter, which nobody takes lightly, of making increases in the rents for local authority tenants. It has not taken the easy way out of pork-barrel politics of the sort practised in Lambeth, where council rents are kept artificially low so that the council can rely on a steady supply of voters. That is not an agreeable way to conduct politics. Instead, Wandsworth has made an attempt to balance the books so that the rent account actually balances the money required for administration and maintenance. It did not even do that under the previous council, leaving aside the question of paying off the debts incurred in building the properties.

It is important that my hon. Friend the Minister should realise that Wandsworth council has raised its rents in my constituency by £3 per week in each of the past two years. Against that background, it will have to confront the problems imposed by the withdrawal of several millions of pounds of funds. Wandsworth, with its proud record of only a 20 per cent. rate increase in two years—giving the hard-pressed Wandsworth ratepayers a rest from excessive rate demands, which is what the council was elected to achieve—will not turn to the ratepayers for an excessive rate increase unless it absolutely has to do so. There is no question of supplementary rate demands in Wandsworth, as there is in Lambeth. Equally, I do not want to disguise from my hon. Friend the difficulty of avoiding that, unless the council is prepared to countenance rent increases—which I should not be prepared to countenance—that are well in excess of the £3 per week suggested by the Government.

It is not good that the Government make so much play of a £3 per week increase when the consequence of the combined effect of the housing circular and the rate support grant settlement will put boroughs such as Wandsworth in an enormously difficult position. If it is to follow through to the logical conclusion of the Government's policy, it will have to increase rents by a good deal more than £3. That is not supportable. I have made that clear to my colleagues on the council, and I make it clear to the House. One can make academic points about the cost of local authority housing and the amount of subsidies, but at a time when we are rightly asking for restraint in wage demands we cannot support a position in which rent increases go beyond a certain level. Once we move beyond £3 per week, we are moving into difficult territory.

Mr. Clinton Davis

I largely agree with the hon. Gentleman's analysis, but does he recognise that that is the ineluctable conclusion of the Government's desires? They are waging a vendetta against the council tenant. That is precisely what they want to happen.

Mr. Mellor

It is a question, not of waging a vendetta but of trying to re-establish a balance. I accept the hon. Gentleman's good faith, but I do not believe in coming here and blindly defending my party's actions. My point is that the consequences in certain parts of inner London are quite serious. But that cannot be turned into a vendetta against council tenants across the country. Tenants outside inner London will no doubt benefit by the rate support grant settlement that has been made to certain councils in the remainder of Britain.

Having made that point, I wish to pass on. It is equally important that the point be made to my hon. Friend the Under-Secretary of State that these problems are being posed to a council which has followed sound Conservative principles and which cannot be criticised for any of the actions that it has taken against the basis of the need for sound management. That should give my hon. Friend and his right hon. Friend the Secretary of State reason to pause and think. It is all very well saying that it is intended to hit at spendthrift Socialist authorities, but when we catch councils such as Wandsworth I think that the instrument is rather too blunt. That is not to say that the paths of virtue presently being followed by Wandsworth council could not be emulated by the likes of Lambeth if it had the good sense to do so.

Mr. Ronald W. Brown

Is the hon. Gentleman aware that Wandsworth was given special dispensation? Its over-expenditure was worse than Hackney's, but the Minister decided that Wandsworth should not go on the hit list.

Mr. Mellor

I do not think that that is right. Inherited expenditure must be taken into account. Councils have to start from the position in which they find themselves when they have changed hands. As we all know—this is the tragedy of so many Labour councils in London—expenditure is terribly easy to start. It is easy to advertise for jobs to fill the departments and to create recreation departments and the great machinery of the fine upstanding Socialist council. The dismantling of the machinery and giving the ratepayers value for money takes much longer to achieve than the erection of the empire. Rome was not built in a day, and the dismantling of the Romanesque apparatus that is found in town halls is equally as difficult and cannot be done quickly.

London has an unemployment problem, as my hon. Friend knows only too well. In the 15 years prior to its not regretted demise, the Location of Offices Bureau was responsible for the flow from London of about 900,000 jobs, something from which London is still suffering. It must be borne in mind that London in many respects is as much in need of assistance from the Government as any of the parts of the North-West and the North-East, which the Government obviously feel are more sensitive.

I regret that only one enterprise zone has been granted to London. That is the zone that the GLC did not want as its top priority. The zone was created in dockland, where there was a development corporation already in existence. One feels that the advantages are being duplicated. I suppose that at this time of night one should not be surprised to hear the amusement with which the concept of the enterprise zone is greeted on the Opposition Benches. Labour Members will be aware that all the authorities that have been granted enterprise zones are Socialist, all of which applied for them and which obviously wanted to try to make them work. It is not right for them to laugh.

Mr. Stuart Holland


Mr. Mellor

Any device that is intended to stimulate the return of industries to inner city areas, so badly hit by the blight that we all know about, should surely be welcomed and not made an object for sniggering.

Mr. Holland


Mr. Mellor

If people are really concerned with getting jobs back to London—

Mr. Holland


Mr. Deputy Speaker (Mr. Richard Crawshaw)

Order. If the hon. Member for Vauxhall (Mr. Holland) wishes to intervene, he must indicate that wish and ask the hon. Member for Putney (Mr. Mellor) to give way and not merely rise in his place.

Mr. Holland

Will the hon. Gentleman give way?

Mr. Mellor

I do not want to go on interminably. All good things must come to an end, and I do not think that I should give way any more. The hon. Gentleman can make his own speech.

Mr. Holland

Will the hon. Gentleman give way?

Mr. Mellor

Very well.

Mr. Holland

The hon. Gentleman was surprised by the reaction of my hon. Friends and myself. My surprise is at the fact that he said that the enterprise zone would, after all, duplicate the benefits from a docklands agency that is already there. The point is that if the policy does not work in the first place—there is plenty of evidence from the Expenditure Committee of this House that incentives do not bite and do not pull in the enterprise—the duplication is the multiplication of zero by zero, and that, frankly, gives rise to some surprise and some cynicism on this side of the House.

Mr. Mellor

That would go down better in the lecture halls of Sussex than it does here. It does not lie in the mouths of members of a party that has run so much of London for so long, and has led us to the present pass, to sneer at a device designed to respond to London's problems. In five years' time, the hon. Gentleman may be in a position to say that it has not worked, but I suspect that he will not be; indeed, he may not even be here to say it if things go as well as we have reason to think.

We face in inner London problems that require careful attention, but we should have not have the apocalyptic view of one or two Labour Members, The hon. Member for Norwood talked about unemployment at a level that he had never seen. I think that in 1977 unemployment in inner London was higher than it is now.

However, none of us, including my hon. Friend the Minister, takes lightly the fact that inner London requires assistance from the Government. There is a feeling among some Inner London boroughs, and some people on the GLC, that perhaps the relationship between those authorities and the Department of the Environment has not been of the easiest. We look forward to an improvement in the months and years ahead, so that we can work in partnership for the improvement of the city that we all have the honour to represent.

1.56 am
Mr. Nigel Spearing (Newham, South)

The speech of the hon. Member for Putney (Mr. Mellor) could be titled "Virtue unrewarded". Perhaps he does not realise that had the system of needs and means been continued by the present Government his borough might have been in a happier position than it is.

The hon. Gentleman also referred to the urban development corporation. That corporation does not yet exist. A statutory instrument must first be approved by this House and the other place. Far from its being welcomed, there are 14 petitions against setting up the corporation, and those petitions will almost cetainly be heard in another place in a judicial-style Select Committee. The petitioners include all three boroughs concerned, as well as the unlikely News International, which owns the News of the World, and some property owners in part of the dockland area.

The hon. Gentleman is also wrong about enterprise zones. The Minister does not wish the London borough of Tower Hamlets to run the enterprise zone on the Isle of Dogs; he wants the urban development corporation to do so. The main attraction of an enterprise zone, wherever it is and no matter whose aegis it is set up under, is a rate-free site. It is almost bound to be successful, but it is not replicable elsewhere, except at great public expense, on a scale that would probably not meet with the hon. Gentleman's approval.

The area of Wandsworth that the hon. Gentleman represents is, ironically, made possible by extensive public enterprise, by substantial public housing built in the postwar period in large estates. I can understand the hon. Gentleman's sensitivity about rates. But he should realise that if Wandsworth stands in need the areas of Victorian London, particularly East London, stand in much greater housing need.

The 1971 census shows that only one-third of the housing stock of the London borough of Wandsworth then had outside lavatories and that a much larger number did not have bathrooms. Happily, that is not the position today. In the past nine years municipal enterprise has markedly decreased those proportions. It has also provided until recently, when the Government stopped it, housing for sale to some of its young people. So much for the doctrinaire approach to housing that the Conservatives so often think we have. Unfortunately, a great deal of that is shortly to stop because of the moratorium.

At least as bad as that, the housing association position described by my hon. Friend the Member for Hammersmith, North (Mr. Soley) is exactly the same in my borough of Newham.

Recently I visited the East of London Housing Association's sites, where scores of Victorian houses which it has purchased are now awaiting rehabilitation The funds are just not there. I believe that about 80 such houses in my constituency are awaiting rehabilitation. Yet there are building workers out of work and building firms going bankrupt. Due to the Government's moratorium, the two cannot meet.

It is, of course, the housing associations which are filling the gap in housing in the private sector. That is acknowledged everywhere. Indeed, the housing association movement—to some extent bipartisan—was given great acceleration by the Conservative Party, particularly at County Hall. Now, however, the associations are even stopped from doing what Conservative Members encouraged them to do.

I have gone so far as to ask whether the housing associations could not total up the amount of capital they have in empty property, calculate the interest they are having to pay on that capital—which, after all, is public money—and ask the Government to let them use the equivalent of the interest they are paying to get those properties into occupation and thereby get some revenue from them. That might even be a net saving to public expenditure, which should appeal to hon. Members opposite.

If Conservative Members are really concerned about housing, they should tell the Secretary of State for the Environment at least to let the housing associations get on with their work, because that work is compatible with their political philosophy.

London's rating situation is going to be very serious. The Secretary of State made no secret of that in his announcement yesterday. He made it clear that London is to have its share from the Government reduced at least proportionately and possibly absolutely. He made it sound as though the available money was not greatly to be cut. The figures show that the current 61 per cent. of local government expenditure funded by rate support grant is to be reduced to about 59 per cent. But, of course, it is the internal distribution that will hit London, and the right hon. Gentleman made no secret of that. Presumably, therefore, the reduction for London is to be much greater.

Has the Under-Secretary of State a figure for the proportionate reduction for London? But even if we get that figure it will still not be the end of the story, because it is only a proportion of the cake that is available. It is the size of the cake, which certainly does not grow much larger, which we are concerned with tonight. The hon. Member for Putney expressed some puzzlement about how the size of the cake had been arrived at by the Government, because he was shocked and surprised that it means a lop increase for his ratepayers.

The hon. Gentleman has overlooked the fact that the new system introduced by the Government in legislation to which he gave some support in his speech has a totally new philosophy of local government finance. Indeed, it is not local government finance at all—that is the point. The Secretary of State talks about a completely new era of debate about local government, but that is just not true, because through the Government's legislation and the rate support grant there will not be local government as we understand it. That is shown clearly in the blue document which the right hon. Gentleman has put in the Vote Office entitled "Grant related expenditure", setting out how the expenditure needs of local authorities are assessed in the new block grant.

I do not know whether the accompanying statement has been released to the press. In case it has not, I want to quote from it. In paragraph 4, we read: The new system establishes clear links between spending, grant and rates; these links will be strengthened"— that has a nice, healthy sound— by the increased flow of comparative information which will result from provisions of the 1980 Act. This high degree of visibility should enable the local electorate to reach a more informed judgment of the performance of their authority.

The Under-Secretary of State for the Environment (Mr. Geoffrey Finsberg)

Hear, hear.

Mr. Spearing

The Minister expresses his agreement, but the performance is in relation to what the authority has available, and the performance will be constricted by the other document to which I referred, the calculation of the grant-related expenditure.

Later in the same document, we read in paragraph 27: The mechanics work as follows. An authority will be assumed to be levying a notional rate poundage—a 'grant-related poundage'—as its own contribution towards its expenditure. I add, which the system did not, that that grant-related poundage sounds as though it is the authority's own choice. But I put it to the Minister that the reality of it is that the Secretary of State will try to choose that rate poundage for the authority.

The paragraph goes on: There will be a schedule of these poundages, which will of course be higher for higher spending levels as measured against the authority's grant-related expenditure. The grant will be the difference between the sum that would be raised by this grant-related poundage and the authority's expenditure. In this way the grant equalises needs and resources by meeting the whole of the costs faced by the local authority over and above those that can be funded from the grant-related poundage. That sounds very reasonable, but, in practice, the local authority is caught in three ways. First, the Minister makes it quite clear what he expects the grant-related poundage to be. Secondly, he then makes it clear what the grant will be. Thirdly, and most important, he says: the whole of the costs faced by the local authority", and, if I were writing it, I should add the word "sic". That is the level of service which the local authority is expected to provide, and that, too, will be determined by the Minister. So all three elements in what up till now has been a relatively flexible system will be tightened up into a triple tourniquet.

I put it to the hon. Member for Putney that that is the answer to his question. The virtue unrewarded which apparently has arrived at Wandsworth is that this way of doing things does not take account of the political points that the hon. Gentleman was making. How does the Minister determine the levels of service that ought to be provided—in his newspeak, the costs faced by the local authority"? It is at that point that we turn to the blue document, "Grant related expenditure". In the annex, we have a table which tells us the total grant-related expenditure which the Government believe the local authorities should make in the coming year at 1981–82 prices. They calculate it at £16.9 billion.

There then follows a table that splits that figure, or a figure that is comparable—these documents are not very well laid out—and shows that of that figure, or of a similar one, no less than £9 billion is taken by the major local authority service—namely, education. Then there are figures for personal social services, £1,643 million; libraries, £245 million; going right down to civil defence, with £2 million, which the Government reckon is what local government throughout the country will spend, or ought to spend, in that financial year. I am not sure how the Government have arrived at these figures. They might be related to existing expenditure, and the Government are therefore putting a limit on it. I hope that the Minister will confirm or correct the points that I have been making.

How do we decide the distribution of those sums within each local authority? As my hon. Friends have said, in London different areas have different needs. Indeed, that is why the needs element was in the old grant structure. How do the Government calculate it? I shall take the example of education, because that is the big sector, and look at it in more detail.

The annex contains a whole section on education, and we get another table. It says: For assessment purposes expenditure on education is subdivided into the following categories". We then get national categories of what I presume is the national expenditure on nursery education, primary and secondary schools, and so on. The total there is £9 billion. What the Government then do is to take each of these headings in turn and tell us how they will split each of the totals among the local authorities.

I shall take nursery education as an example. Paragraph 1.1.3 says: GRE is calculated by multiplying the number of children under 5 in each local education authority by the unit cost; the latter is calculated by dividing the total expenditure assumed for nursery education nationally by the total number of children under 5". I assume that the Government will take account of the actual number of children under 5 presently in nursery schools. The London borough of Newham has been particularly progressive in the number of children that it has in nursery education. As I read the paragraph, I am not sure that it takes account of those who are there. If it is not to take account of those who are there, in whatever borough one takes, how can a borough go ahead with putting in children who ought to be there?

A similar consideration applies to the services of all the paragraphs under education. I refer particularly to paragraph 1.1.6, where the Government quite properly say—

Mr. Greenway

The question of nursery education was raised with my right hon. and learned Friend the Secretary of State for Education and Science before the Select Committee yesterday morning. He said that the figures that have been referred to by the hon. Gentleman do not include children under 5 in nursery and primary schools. We know that there is an increasing factor there, so one has treat those figures with some caution.

Mr. Spearing

I am grateful to the hon. Gentleman, because he points out that inherent in this approach, are a number of fixed elements that might not be parallel with what is found in practice. That might have been true of the old system, but I think that as we go on we will find that the old system, difficult and complex though it was, probably took account of these things in a rather more flexible way than will this system, which is of equal complexity.

The point I make about schools is that the Government quite properly say that there are children in groups that require, because of social deprivation, greater educational resources. The Government accede to that fact. Then they say: The incidence of these children has therefore been assumed to be related to a number of socio-economic factors: each authority's share of the 13.2 per cent. special needs group nationally is assumed to be proportional", and then a number of criteria are given.

What is this 13.2 per cent. special needs group nationally? Is it that proportion of schoolchildren who are thought to be having a special need, and, if so, what is the sum allocated to them? Is the Minister satisfied that this is a good, proper and rational way of distributing it? I mention this particularly because London has a much higher proportion of pupils of this character than probably the rest of the country put together. It is a very large number.

My last point on the education aspect concerns the allocations to adult education and the youth service. Paragraph 1.1.13 deals with adult education, which, in the table to which I have referred, is given the magnificent national total of £130 million. Subject to correction, I assume that this national total is to be divided out among all local authorities in the country. Similarly, the youth service is given £112 million.

Whatever is said in Acts of Parliament, we all know that both these services are to some extent optional or semi-optional. I suggest to Conservative Members, particularly those who are worried about rates and other matters, that it is these types of additional but very important educational services that some authorities will be tempted to cut very heavily indeed. Yet we all know from our constituency experience that in terms of value for money, both in terms of education and of irrigating the community life, sometimes that is the best way in which one can spend one's money.

Mr. Greenway

We should have the record absolutely straight. What the hon. Gentleman says about adult education is true, but the youth service is not to be cut at all during the coming year. It is important to point that out. Perhaps I may also clarify for the hon. Gentleman the expenditure on the needs element, to which he referred in relation to schoolchildren. Children in each category of need, whatever it be, receive "times two" in terms of expenditure compared with what ordinary children receive. They get double.

Mr. Spearing

I am grateful to the hon. Gentleman. Perhaps this is part of the fruits of the Select Committees, which provide opportunities which otherwise would not be available.

Mr. Greenway

Not only that.

Mr. Spearing

I want to take up what the hon. Gentleman said about the youth service. It may be that that sum is not a cut on the general expenditure which has been current in the youth service over the country. I shall not deny that. But local authorities—particularly the ILEA—will have to look very carefully at the internal distribution of their actual spending, because these are only calculations to determine what the grants will be. They do not necessarily require expenditure to be pro rata inside the authority. The hon. Gentleman nods his head. So, although he can say that there will be no cuts in the youth service, there may not be cuts in the arithmetic but I suggest that there almost certainly will have to be cuts, and in adult education, when it comes to practice.

Mr. Greenway

The hon. Gentleman does not wish to deny local democracy any more than the Government do. It is up to a local authority to decide how to spend the money made available to it. It is reasonable to say that there is no cut in the youth service, and I do not see the authority to which he referred making such a cut.

Mr. Spearing

I disagree. The hon. Gentleman believes the propaganda of his Secretary of State. While it will notionally be up to the local authorities to determine their expenditure, because of the way in which it is calculated and because of the philosophy of the Secretary of State, it will be difficult for them to make any choices. There will be no money to do that. There will be hardly any discretionary expenditure by the time the right hon. and learned Gentleman has finished. And this is only the interim scheme, to be followed by another the next year or the year after, if the Secretary of State has his way. That will be even more draconian and will leave the authorities with even less choice.

What will be the effect on the ILEA's range of expenditure? The Secretary of State will say that it is up to the authority, after it has received the grant, to precept more or less on the boroughs. That is correct, but he can tell us what the grant will be. He will have done calculations on the basis of the precept in the previous year and of what he would like it to do. How much does he think that ILEA should spend in the coming financial year? It is no good his refusing to say and leaving it to the authority. In the book and in his speech, the Secretary of State for the Environment has made clear how much he thinks every local education authority ought to spend. It is in the book.

Mr. Ronald W. Brown

The right hon. Gentleman has gone a bit further than that. He has illustrated that there is a £55 million safety net. He has not said in the book that the ILEA would have to cut its expenditure by £60 million to qualify for the £55 million safety net. In addition, it will suffer a 5 per cent. cut. So the whole thing is a fraud.

Mr. Spearing

My hon. Friend illustrates the difficulty that confronts even those who are relatively familiar with this extremely complex structure of local government finance which is now thrown into the melting pot. He highlights the way in which the Secretary of State is handling the issue. I have shown some of the newspeak in some of the quotations I have made.

The hon. Member for Paddington (Mr. Wheeler) may not like carpets in classrooms, and I might not either. I suggest to him that what appear to be extras in the ILEA can be cut to the extent of a million pounds here and there. But there will be a noticeable difference in the necessary expenditure of one of the greatest education authorities in the world. Professionally, I do not think that the Department of Education and Science knows much about education, but it knows a bit more about it than the Department of the Environment. Apparently the Government are saying that the funding of the education services will be in the judgment and on the advice of officials from the Department of the Environment. Will the Under-Secretary tell us, if that is not true, what advice he receives and whether the proposals have been drawn up on the advice of the Department of Education and Science? If that is so, why not leave the system as it is?

2.25 am
Mr. Martin Stevens (Fulham)

I feel a little sorry for my poor hon. Friend the Under-Secretary of State, who has to sit here in the middle of the night listening to London Members moaning and groaning about the facts of life when there is much to be said for revealing a little of our national supposed quality of improvisation and adaptability, in which, in other aspects of life, we take some pride.

It is absurd to suggest that local government, or even local government in our capital city, can insulate itself against the economic facts of life that affect us no less than they affect other parts of the world. It is equally absurd for the hon. Member for Newham, South (Mr. Spearing) to speak about bringing an end to local government or civilisation as we know it. We cannot ask the Secretary of State to look at an area of public life that spends £20,000 million a year and say that he must not do anything to try to control this vast swelling doughnut in case he wounds the susceptibilities of indivduals who feel that local government officers or members are in a privileged position. They are not. They have spent far too much—the level has grown to an absurd extent—and someone must have the courage to grasp the nettle. In so many different aspects of life the Government are having to do the cleaning-up job that previous Governments over the last 20 years should have done as they went along and not left so much mess to be tidied up by my hon. Friend the Under-Secretary of State and his colleagues.

Last year—the first year of this Administration—local government overspent by upwards of £750 million. Then, when my right hon. Friend the Secretary of State for the Environment imposed a moratorium, which I hope will end in a few weeks, and told local authorities that they could not overspend again this year and that he wished to see the estimates before more money was thrown up the chimney, everyone screamed. He would not have had to impose his moratorium if, in the first year of this Administration, local government had been more responsible. If gradually, with pain and grief, this Administration can teach local government, along with other elements in our public life, to behave responsibly, the trials and tribulations of today will not have been wasted.

Mr. John Cartwright (Woolwich, East)

Does the hon. Gentleman take the same view about the overspending by the Ministry of Defence?

Mr. Stevens

I do not wish to start an excursus on the Ministry of Defence. [HON. MEMBERS: "Answer the question. 'Yes' or `No'?"] I shall try to answer the question truthfully—my hon. Friend the Member for Putney (Mr. Mellor) was attacked for trying to answer truthfully—even if it does not mean a glib "Yes" or "No" response. The Government's approach to defence expenditure is correct in principle. I do not suggest that there is not extravagance in matters of detail. [HoN. MEMBERS "Millions and millions".] Hon. Members are so unused to hearing a truthful answer from any part of the Chamber that anyone would think that I had let loose a couple of ferrets.

Mr. Clinton Davis

It is not that we are so unused to hearing a truthful answer from the hon. Gentleman but that we are so unused to hearing a truthful answer from the Secretary of State. Will the hon. Gentleman indicate to the House, amidst this apologia for the Government on which he has embarked, whether he supports the dramatic shift of resources away from inner London in favour of the shire counties?

Mr. Stevens

I would love it if I received a letter this morning from my right hon. Friend saying "Here is a cheque for £2 million for Hammersmith and Fulham."

Naturally, I am sorry, but I do not think anyone can criticise the Secretary of State for seeking to redress the balance which was so crudely upset a couple of years ago. One should display some sort of understanding for the kinds of problems that he seeks to solve.

Mr. Alfred Dubs (Battersea, South)

Does it mean that the hon. Gentleman disagrees with the views expressed a little earlier by the hon. Member for Putney (Mr. Mellor), who was critical of the transfer of resources out of inner cities?

Mr. Stevens

I said that I regretted it. I do not know what more the hon. Gentleman wants me to say. I have suggested that we should try to look at the problem not from our own parochial points of view. I have talked about pain and grief and I have used all the expressions that I should have thought would be satisfactory to Labour Members. I have tried to look at the problem for a moment from a national point of view and not from our own narrow, partisan point of view. Of course I am sorry. I am very sorry that the price of oil has gone up. I am very sorry that I have a beastly, stinking cold. But I understand the Secretary of State's problems.

What has the London borough of Hammersmith and Fulham done? In my view, it has not done at all badly. With restricted resources, it has looked at our housing position and recognised that, with the large proportion of older people in the borough, sheltered housing probably offers the most fruitful method of spending limited resources. We have already doubled the number of sheltered housing units in our borough and are in the process of quadrupling them. I do not need to explain to distinguished hon. Members on each side of the House the benefits of that process.

A couple of weeks ago we won the national award for the borough with the best record of improvement grant management in the whole of the United Kingdom. That was not too bad. At last, after months of battering at the authority, I believe that I have played a modest part in persuading it to approach the question of the 3,400-plus houses and flats in private ownership which have been standing empty for years—and which are a source of outrage and resentment to the citizens—and to begin, at least on a restricted scale, an experiment. which I do not need to describe in detail to hon. Members. Clearly, it would be a bitter reproach if, with a housing waiting list of 10,000 families, the borough council were to go out of office in 18 months' time having done nothing to fill the 3,400 or so dwellings which have been standing empty for so long.

These are all examples of ways in which a sensible council, instead of wringing its hands in despair, can buckle to and do the very best effectively with the money that is available to it.

It is also right to note that when we talk about Government cuts and council cuts, sometimes we talk with such enthusiasm as to outstrip the facts. My borough's social services budget has been increased from £11.9 million in 1979 to something approaching £17 million today, an increase in the last 18 months of about 50 per cent. and far in excess of the rise in costs. But the increased budget has to a great extent been eroded by the fact that during that period the white and blue collar workers within the social services department have had wage and salary increases not far short of 60 per cent., and, as we know, the level of wage increases nationally over the past 18 months for public servants has hovered over the 48 per cent. mark.

I have made clear that the next time a constituent tells me that he has not received his blanket bath or his meals on wheels service because of cuts in the social services budget I shall make every effort—I am not wholly without resources—to publicise and embarrass the individual, whoever he or she may be. In our case, any loss of services is the result not of Government or local authority cuts but of an absurd increase in salaries. I shall not try to apportion the blame, but I hope and believe that that will not be repeated in this year's salary review.

Mr. Soley

The hon. Gentleman is in acute danger of misleading the House. As he knows, the balance of power in Hammersmith and Fulham is held by the Liberal Party. The Conservatives gave the social services committee chairmanship to a Liberal, who guaranteed to cut the biggest spending department as far as he could. He has cut it and he has created a crisis in that department. As a result, even the Conservative Party has disowned him and has removed him from power. Yet, for several years, the hon. Gentleman's party and he himself supported him. The hon. Gentleman is now trying to dress up the cuts as if they were of no significance and as if the wage earners were to blame. They are the result of the Conservative Party's policy, which has been supported by the Liberals.

Mr. Stevens

I should be happy to argue the toss about the individual concerned on a more appropriate occasion. The facts are as I have given them. The social service budget for the borough which the hon. Gentleman and I have the honour to serve has been increased from £11.9 million last year to £17 million this year. Whether the Liberal Party, the Labour Party or the Conservative Party was responsible, the increase is far in excess of the cost of living. If there is any shortfall in services, it is not the result of Government or local authority cuts. I am not saying that that is true of everything that happens in every borough. However, we must be careful when we groan about cuts. We must make sure that a cut has taken place and that it is the type of cut that we can rightly criticise.

Mr. Reg Race (Wood Green)

The hon. Gentleman told the House that wage costs in the social services. department had increased by, I think, 60 per cent. Will he specify the precise wage rates of manual and white collar staff in order to justify that figure? If the hon. Gentleman is talking about a 12-month period, the amount is far in excess of any of the national and local settlements that have been negotiated by either staff sector. I am sure that the House would like to know the facts on which the hon. Gentleman's assertion is based.

Mr. Stevens

I base the facts on the figures supplied by the department. I refer to the period from the beginning of 1979 to Christmas 1980. I cannot tell the hon. Gentleman about each move, level and date of change as divided between white and blue collar workers. I assure the hon. Gentleman that the figures are correct, and I should be happy to show them to him in due course. They were supplied by the department.

Mr. Race

Does that cover a period that includes the wage settlements for manual workers which were delayed from November and December 1978 and which were made at the beginning of 1979? They were followed by annual wage increases at the end of 1979 and by the annual wage increases of November 1980. Three annual wage increases, covering a period of three years, were telescoped into a period of 18 months. I do not accept that the overall wage cost rise for manual workers or white collar staff was 60 per cent. That is not true of national settlements, and I do not know where the department got those figures from.

Mr. Stevens

At all events, whether these rises were good or bad, they happened. Therefore, the problems from which we are suffering are not the result of cuts imposed by either local or national Government.

I have tried to persuade our library services to be more flexible in the use of voluntary helpers. The Charing Cross hospital has between 300 and 400 volunteers, who, in addition to their normal daily jobs, regularly work in the hospital service. The Milsom Road health centre has between 30 and 40 volunteer helpers.

I understand from the library service that of 4,000 disabled persons, only 300 can be supplied with books delivered to their homes. I asked whether they made use of the volunteers who were willing to do this work, only to be told that they would not let unprofessional hands touch their precious volumes. I suggested that at times such as these I did not consider that attitude acceptable.

Having sought not to defend the administration but to try to redress the balance of the argument I should like to make one definite proposal for which I hope to gain the support of hon. Members on both sides of the House. I suggest that we should consider some form of housing legislation for inner London. Whether that should be by ministerial order or primary legislation is a matter for decision.

Many problems in housing and related matters are unique to London and are not reflected anywhere else in the United Kingdom. When we ask for a reform or reexamination of a matter, Ministers properly ask the local government organisations for their views. But none of them—not even the London Boroughs Association—has a majority of members who represent, say, the 10 inner London boroughs. Therefore, there never seems to be much political weight or muscle behind the arguments that inner London Members put forward.

I refer to matters such as the burden that the Housing (Homeless Persons) Act imposes on the 10 inner London boroughs, the burden of holiday lets, which are almost exclusively an inner London problem, and the burden of service charges and other obstacles to purchase which weigh heavily on those who live in mansion blocks of flats in the centre of London. I refer to the grants to new, small businesses which are springing up. I understand that under the national rules my hon. Friend's Department is permitted to help in the acquisition and modernisation of property but not in the provision of plant, which, in inner London, is often more important for a new business than the provision of quarters. I ask hon. Members, whatever interest they may reflect in our discussions, who have sympathy with my general thought to put forward ideas which may contribute to a workmanlike and sensible package.

My case is simply that, particularly in inner London, those whom we represent suffer from special burdens in areas for which my hon. Friend's Department is responsible. Those burdens should be examined as a special problem of the capital and solved accordingly, not necessarily in line with the solutions found appropriate for the remainder of the country. I seriously ask hon. Members on both sides of the House to give the proposal their consideration and perhaps their support.

2.45 am
Mr. Ronald W. Brown (Hackney, South and Shoreditch)

It is a peculiar debate. We were invited by Mr. Speaker to state in the ballot the subjects that we wished to discuss today. Fourteen of my hon. Friends chose this subject. However, not one Conservative Member chose any subject related to London. We are pleased to welcome their participation, but it should be made clear that it was not their first choice to discuss London at 2 am.

Some of my hon. Friends tried to persuade the hon. Member for Fulham (Mr. Stevens) to state clearly whether he was in favour of the redistribution of resources from London to the shires. He first said that he regretted such a move. He was then drawn to the view of one of his hon. Friends, who positively objected to it. He then said "I have a cold, and I do not like that either."

May I put the record straight? I take for my text the statement of the Secretary of State for the Environment to the consultative council. As always, he does not number his pages, but at paragraph 30 he states: First, the major shift of grant away from the shires to London which we halted last year will now be reversed, as illustrated in the following table". There is then a table showing the percentage of the needs and resources element and block grant shares right from 1975–to 1981–82. In 1975–76 the percentage for London was 13.3.

We fought manfully from 1964 onwards—and the Under-Secretary of State joined us in 1970—with Labour and Conservative Governments to get over the very argument propounded by the hon. Member for Fulham. There are special circumstances in London. Those special factors were not considered, because the Government conspired to refuse to include in the regression analysis the needs resources of London. It was said that the needs of London were so great that they would scoop the pool. I recognise that we could not scoop the pool and we would have to agree that we could not have it all. However, we should at least be able to show the country the needs of London and compare how much we should have with how much we are getting.

In 1976–77, the late Mr. Crosland, the then Secretary of State, was persuaded by our arguments to include the needs element in the regression analysis. He made it clear that he would not be able to give us all the money. For the first time, we saw that we were entitled to about £600 million in extra resources. He agreed that we would receive only a part of that amount. It would be paid over three years. The first tranche of £150 million extra was received in 1976–77. In 1977–78, however, we did not get the second tranche. Once again, there was hell fire from the counties. Mr. Crosland backed away a little. We received only about half the amount that should have been paid. In 1978–79, my right hon. Friend the Member for Stepney and Poplar (Mr. Shore) picked up the ball and gave us a little more of what we rightfully should have received. However, we never got the total to which we were entitled. In 1979–80, the Secretary of State stopped it.

There was no transfer of resources from the shires to London. All that happened was that London was seen to be cheated of hundreds of millions of pounds a year. The Secretary of State has put us back to the position that we previously occupied. The right hon. Gentleman has refused wilfully to recognise that London has special features. It is time to stop the mythology that there is any movement of money from the shires to London. On the contrary, we have been contributing to the shires for years and also trying to solve our own problems. Those sums of money add up to hundreds of millions of pounds that have been taken away from London.

The Secretary of State is not only ensuring that this money is taken away from London. He is going further and taking more from London. Hon. Members recognise that this is a political issue. There are elections in the counties next year. The right hon. Gentleman hopes to buy his way out. I suppose that that is understandable. He has a propensity for that type of skulduggery. My guess is that people will not be so easily misled as to believe that this type of issue has any merit.

I hope that I have put on record the actual facts about the transfer of money from London to the shires rather than what is illustrated in paragraph 30 of this wretched speech of the Secretary of State, which is totally untrue. It is misleading. The Secretary of State knows that it is misleading. I hope that the right hon, Gentleman will have the courtesy to make a statement to the House as he had to do on a previous occasion when he told me an untruth. The right hon. Gentleman had to come to the House on the tracked hovertrain to say that he had told me a lie and that he did not mean it. I hope that the right hon. Gentleman will put this paragraph right.

Mr. Deputy Speaker

Order. I hope that the hon. Gentleman is not saying that the Minister has lied on this matter. If he is, he must withdraw the remark.

Mr. Brown

I cannot recall the phrase that the right hon. Gentleman used when he came to the House. His words were to the effect that "I did not intend to mislead the hon. Gentleman, but, if I did, I am sorry." I know only that something I was told was untrue. Whether the right hon. Gentleman actually said that he had told a lie, I am not sure. He illustrated that he had misled me. I challenged him. He refused to withdraw the remark and finally had to come to the Dispatch Box in the House—

Mr. Deputy Speaker

Order. I am not dealing with any previous incident. I think that the hon. Gentleman was suggesting that some statement made now was a lie.

Mr. Brown

I was pointing out that paragraph 30 is comparable with the manner in which the right hon. Gentleman misled the House on the previous occasion. I hope that he will come to the House and put the matter right. What is stated in paragraph 30 is not in accordance the facts.

Mr. Soley

Before my hon. Friend leaves the point of the transfer of money to the shires, may I ask him whether he agrees that what we are witnessing in this debate and in Government policy generally is the devastation of inner city areas, particularly in London? A number of Conservative Members, including the hon. Members for Fulham (Mr. Stevens) and for Putney (Mr. Mellor), are becoming frightened and are running around their constituencies bleating about what is happening to housing, the closing of toilets and the cutting back of services. They are saying to the Government "We support you, but please give us some extra help." This hypocrisy will be found out not only in the GLC elections but, one hopes, in other elections.

Mr. Brown

I accept that. The worth of the hon. Gentlemen will be judged by whether they support the Government in the Lobby. They are right to raise their concerns. I support them. I go further than the hon. Member for Fulham, because I do not merely regret the Government's proposal. I think that it is utterly disgraceful. I shall watch with interest how the hon. Gentleman votes on the orders. I trust that he will be in the Lobby with the Opposition, otherwise he will be seen to be a man of straw. The hon. Gentleman and I have been friends for many years and we knew each other well in local government. I know that he is not a man of straw, and I expect him to vote with me against the Government.

Mr. Stevens

If we cannot all be hon. Friends at 3 o'clock in the morning in the week before Christmas, we are coming to a sad pass. I am grateful to the hon. Gentleman for paying so much attention to my modest remarks, hut, having made a rather passionate defence of the Government, I am not clear why I should be told that I shall be a man of straw if I do not go into the Lobby against them.

Mr. Brown

The hon. Gentleman made clear that he was not in favour of the transfer of resources from London to the shires. I expect him to be with me when we defeat the Government on this squalid issue.

The Secretary of State tries to continue the mythology about the transfer of money from the shires to London. He

said on Tuesday: In present circumstances, the broad effect is that about £300 million has been shifted to London. There is bound to be an effect when a system is introduced that depends on independent measurement rather than on the arbitrary decisions of politicians."—[Official Report, 16 December 1980; Vol. 996, c. 148.] I thought that I would find out what was meant by "independent measurement" and the "arbitrary decisions of politicians". The general premise set by the Government wag for grant-related expenditure assessments to move away from seeking to reflect patterns of actual local authority expenditure and towards judgmental approaches that are derived from a variety of bases.

However, the assessments that will apply under the block grant are no more than the aggregate of subjective assumptions about what authorities ought to be spending, derived from a variety of past and limited academic researches and average unit costs and preconceptions as to who are underspenders or overspenders—all constrained by the availability of some appropriate data. I went into the matter in depth in a debate on 25 November.

Therefore, the most crucial general point is that the assessments will be presented as having emerged from a great professorial, technical process, whereas in fact they have no basis beyond the subjective judgments of civil servants and those involved in compiling statistics and the academic studies that they have relied on. There is no way in which it can be contended that the systems that are being developed are any simpler or more intelligible than the alleged complex regression analysis approach that they are designed to replace. Let us have no more of the nonsense from the Secretary of State about getting rid of the judgment of the politician. What we have now is "The man in Whitehall knows best." Apparently, we shall have to put up with that.

Mr. Frank Dobson (Holborn and St. Pancras, South)

Is my hon. Friend aware that there are rumours of doubts about whether the man in Whitehall knows best, because he had to rely on American computers to do the calculations for him?

Mr. Brown

That is interesting. It does not surprise me. We speak about buying British, but the Government do not seem to encourage that.

How does the new system affect Hackney borough council? In the documents that we received we noted that Hackney, under the base position, would. have received £42,435,000. Under the new position, it will receive only £34,430,000. That is a loss of 12.9p or 10.6 per cent. Those are Government figures, so I can only presume that they are correct. That is only for starters. That is taking the present position of previous expenditure, which is now being confirmed, based on the old and new systems. There is already a loss simply on the change alone. More differences will occur because of the cutting by the Government of the rate support grant. Hackney borough council, which is in tremendous difficulty, will find itself in even worse difficulty.

I heard the hon. Member for Putney refer to the virtues of Wandsworth. Wandsworth overspent more than Hackney, yet the Secretary of State chose to look kindly upon it and not put it on the hit list. I looked at the position of Wandsworth. Under the old system it would have received £48,295,000. Under the new grant system it will receive £40,082,000. Yet the Secretary of State claimed that Wandsworth is not a high spender. It is spending more than Hackney, but it is not on the hit list. We are now seeing the most disgraceful piece of squalid party political issue. The Government are deliberately picking out councils. Hackney is not the highest spender. That is shown in the documents. It is below Wandsworth. Will the Under-Secretary look at that? It is quite disgraceful that Hackney should be treated in that way.

The hon. Member for Putney kept underlining Labour authorities or Conservative authorities. We are seeing clearly that the Secretary of State is differentiating between the boroughs that are elected by the people of this country and happen to be Conservative and those that are elected by the people of this country and happen to be Labour. The Secretary of State is saying that he does not care a fig for their vote; he will change the balance in this way. It is a new and novel concept. If he proceeds with it, those of us who argued that local government should not be in the cockpit of politics—it is not fair to deal with it in that way—will have to revise our view.

There will be a time when the Minister is sitting in the corner behind me, which was his favourite seat when in Opposition. It will be no good his grumbling, as he grumbled before, about political intervention by the central Government in local government and complaining bitterly that it should be left alone. He will have not only been a part of the charade but will have deliberately contributed to the appalling behaviour of the Government—more than simply as a Back Bencher but as part of the system, and taking the Queen's shilling for doing it. The Government have made the position worse for Hackney than they should have done.

I ask the Minister to look at the effect that the hit programme is having on Hackney. The Secretary of State made a great issue about housing. As I pointed out to the House on 25 November, Hackney has 16,000 families on the waiting list. That number is rising by some 100 families a month. I illustrated to the House the hopeless position in Hackney. It is on the record, so I shall not rehearse the argument again.

When I studied the housing improvement programme, I found that in 1980–81 Hackney was receiving £34,945,000. In 1981–82 it is being allocated £21,598,000. The Secretary of State is aware that in 1981–82 £15,274,000 has already been allocated. The housing improvement programme is giving Hackney, with its tremendous problems, £6 million. The people of Hackney should be clear about exactly what the Government are doing to them.

It is a total no-hope situation. My hon. Friend the Member for Norwood (Mr. Fraser) has told the House what is happening in Lambeth, and that is precisely the situation in Hackney. As I said in a previous debate, we are now getting people coming to Hackney who were misled by the Prime Minister and persuaded to travel from other parts of the country. They go into a room somewhere, double up with a group or family and are declared homeless. They then bring their family to Hackney to go into hotel accommodation and try to obtain some priority for rehousing in a borough with 16,000 families on the waiting list. The Government's contribution to solving some of the problems in Hackney is nonsensical.

Mr. Clinton Davis

The bed and breakfast problem seems to be increasing week by week. Is it not a fact that my hon. Friend and I found that the council is required to pay an ever-increasing amount to support the system? Whatever may be the rights and wrongs of those who occupy the bed and breakfast accommodation, is it not a fact that there is tremendous deprivation within that accommodation in terms of basic standard amenities that are not available?

Mr. Brown

My hon. Friend is right. Hackney borough council is trying desperately to alleviate the problem. There are fewer and fewer hotels that it can use. The absurdity is that the Prime Minister invited people to travel from other parts of the county. At one of my recent surgeries on a Friday night, I was told by someone of the appalling conditions in which he was living. I asked where he came from and it transpired that he came from Birmingham. I asked why he had left Birmingham and he replied "Because the Prime Minister said that we had to travel to look for work." I asked him why he had not tried Bromley. I told him that it was a good place that did not have many problems.

Barnet and Bromley do not appear on the hit list. I do not know why Hackney appears on it. Bromley is a pretty high spender. I do not know how Bromley did not get on to the hit list. I turned up Hansardof 15 December 1980 and studied column 76. A question had been asked about the rate and grantborne expenditure of each authority. I noted that Hackney's expenditure was £63,985,000 while Bromley's was £84,933,000. I wonder why Hackney is being called a high spending authority or a profligate authority. Why has it had to suffer the Government's appalling attack with a view to withdrawing its funds? Barnet has expenditure of £85,691,000. I turned to Ealing. I thought that that would be interesting as I anticipated the presence in the Chamber of the hon. Member for Ealing, North (Mr. Greenway). Ealing's expenditure was £98,057,000. Apparently all the highspenders are all right, whereas Hackney, because it is Labour-controlled, is subjected to appalling behaviour.

Mr. Greenway


Mr. Brown

I shall give way to the hon. Gentleman if he can explain why spending £63 million is profligacy whereas spending nearly £100 million is not.

Mr. Greenway

The hon. Gentleman has not mentioned the population of the boroughs to which he has referred and the relative expenditure per head, which is a much fairer way of talking about the matter.

Mr. Brown

The hon. Gentleman is right. His right hon. Friend has not talked about the problems. If we in Hackney had only the problems of Ealing, Bromley and Barnet, we should be happy. Unfortunately, we get the problems from Ealing and Bromley. Their provision of services is so appalling that people come to Hackney on the buses.

Mr. Greenway


Mr. Brown

That must be taken into account as well. That is why I am so concerned that the hon. Gentleman's hon. Friends have put Hackney on the hit list. We have once again nailed as a downright untruth the argument that Hackney is a profligate borough, spending money like water, when, it is said, Broniley, Barnet, Ealing and Croydon are all doing so much better in the spending of money.

The Secretary of State has appointed himself the gauleiter of local government, from the Reichstag in Marsham Street. He says "When freedom comes, you will do as you are told. Local government will do exactly as I tell it." The Tory führer makes it clear that he will have his way. We had a classic example a few weeks ago, when the right hon. Gentleman decided that he would raise rents by £2.50 to £3. We had an exchange of view with him on the way in which he announced it. The right hon. Gentleman was clearly very petulant, and after having a couple of free meals he has now decided that the increase will be £3.25 instead.

This great gauleiter apparently no longer has any view about local government being local. The great theme of the present Secretary of State for Industry when he raped London in 1963 was that the primary unit of local government was the borough. That right hon. Gentleman created the enormous problem that the Secretary of State for the Environment is now struggling with. Now, from on high, the right hon. Gentleman is to determine all the various issues.

Where is the voice of freedom, that of Sir Horace Cutler, which we heard from 1967 to 1973 and from 1977 until the present day? We have not heard a word from the great Sir Horace, the bastion of freedom, the man who defended local government from the wicked Labour Government—who, in fact, gave London more money. Perhaps he has gone on holiday. We used to hear his voice trumpeting as he travelled between Buckinghamshire and London.

Weeks have gone by, and we have heard nothing from Sir Horace. We have heard no bitter complaint about the raping of London by his friends here. I thought that he was all right, as he did not have to fight for his KBE any more. As the doyen d'age in local government in London, he could have added his voice in complaint about his Government's appalling behaviour. His silence is deafening.

I turn to the issue of unemployment, which I have raised a number of times. It is no use our skirting round the issue. I recall sitting on the Government Benches and hearing the present Under-Secretary grumbling about unemployment in London, blaming the Labour Government for every conceivable ill. In 1978 he even attributed the snow at Christmas to my right hon. Friend the then Secretary of State for the Environment. The hon. Gentleman was so upset in those days.

Yet unemployment in London has risen from 130,900 in December 1979 to 220,000 in December 1980—a 70 per cent. increase in one year. The figure might even double by the end of the year. We shall see when the latest figures are announced next Tuesday. That means that London has about one-twelfth of the country's total unemployment and that one-quarter of the total increase in the country's unemployment this year has been in London.

How the Under-Secretary of State can continue to sit on the Government Front Bench after all the words he had to say in those days is beyond me. I have looked up Hansard and I can tell him now that if, when he replies, he tries to deny the statements he made in those days, about unemployment and about what was happening under the then Government, I shall intervene to correct him. We had not even reached 1 million unemployed then; now, we are nearly at 2½llion—probably nearer 3 million if we use the proper figures.

That is the situation for which the Government must answer. It is no good simply saying "Well, we're getting the economy straight." Everybody has said that. When Labour was in power, the right hon. Gentleman did not accept that argument from the Government. He did not accept that there was an international recession; he did not accept that it was due to the gnomes of Zurich pushing up the value of our money because we have an oil well in the back garden. Those were not acceptable answers to him as to why things had gone wrong.

Earlier today, a Minister claimed that there was a great problem because the pound was rising and the Government could not do anything about it. That is not what the present Ministers said when we had a Labour Government. Then, it was all Labour's fault. They used to say "Don't keep blaming somebody else; take your own responsibilities." Now, they blame everybody else. They blame the gnomes of Zurich; they blame the Arabs; they blame the French; they blame the EEC—they blame everybody. There is not a soul they do not blame—except themselves. They will not look in a mirror to see the obvious cause of the situation. If only they did that, they would see the problem. But no. They simply go on and on blaming everybody else.

Not only is the capital's unemployment at a record level, but London lost more jobs in 1980 than in any year since records have been kept. The hon. Member for Putney recalled 1977. He was quite wrong. This year is the worst year for London since records have been kept. The Under-Secretary of State and I used to argue about jobs leaving London. We used to complain bitterly about stupid Governments, of both colours, moving industry out voluntarily. We used to argue the importance of keeping industry in London. But now the Under-Secretary of State is part of a system that is not only deliberately forcing industry out but is deliberately raising unemployment in London to the highest level ever. It will be his memorial that he was the mastermind behind ensuring that London got the highest level of unemployment it has ever reached.

What a record! How proud the hon. Gentleman must be of it. All it has done is to make this Tory Government look the shabby, incompetent bunch that they really are. But what effect does it have on the ordinary people in my constituency? We get case after case of people's electricity being cut off, for example. What are the Government doing? How are they making any sort of effort to ensure that people are saved from the appalling problem of having their electricity disconnected and being made to live in shocking circumstances?

The Child Poverty Action Group recently circularised all Members of Parliament drawing their attention to this situation. I have seen the Under-Secretary of State for Health and Social Security about it and have urged her to see the chairman of the electricity board in order to try to ensure that families, old people and others in poor circumstances do not have their electricity cut off and are not made to freeze as they are now being made to freeze until some way can be found to restore it.

It is a situation of no hope. Once people are cut off, there is no way of getting them back on again. The electricity board says that it is not a social service. The social security office says that it can do nothing because heating is included in people's benefits. The social services department of the council is being cut and cut and cannot do anything because it has no funds. The mayor's charities cannot do any more, because we have lost industries which used to contribute substantially.

I do not suppose that the Minister cares about the people. Someone in his Department should know how many families are cut off at present, so that he is made aware of the problem. We see elderly people being treated like chequers on a chequer board. No one cares. This is the most uncaring Government that I have ever seen.

The hon. Gentleman will recall that the Labour Government intervened with the eletricity and gas boards to make sure that a procedure was gone through before disconnections took place, and help was given for heating. This Government have discarded all that machinery, and we now have a situation where the electricity board, on instructions from the Government, are simply cutting off people without any consultation with anyone.

Mr. Clinton Davis

Is my hon. Friend aware that the present Secretary of State was not always so concerned about public expenditure? When the right hon. Gentleman moved into the Department of Trade and Industry, as it was, in 1970, a vast amount of money was spent on decorating his room. His present attitude comes very sadly from a gentleman with those rather luxurious tastes.

Mr. Brown

I am not a frequent visitor to Victoria Street, but I accept what my hon. Friend said. It is another example of profligate expenditure, about which this Government know so much.

I know of case after case of people being treated badly by the GLC. The GLC is treating its tenants badly because, it claims, it has no money. I cite as an example the case of two sisters whose GLC flat has dangerous wiring. They told me about it, and I raised the matter with the GLC. I received a letter on 3 November saying that it was being attended to. Apparently the landlord did not know the dangerous state of the wiring in the flat. When I received that letter, I presumed that, since the local authority told me that it was being attended to, that was the end of the matter. Accordingly, I wrote to the tenant asking her to let me know when the rewiring had been completed. I got a letter back from her saying that nothing had happened, although she had a letter from the district manager saying that the work would be done and that it was in hand.

Following that, I contacted the GLC again. I said "Why don't you do this job? The wiring is dangerous. It could start a fire. The tenant can't have fires on because of the risk of the wiring exploding."

Finally, I received another letter from the tenant: I regret to have to tell you that my dear sister died on 24 November, so the matter is no longer urgent. This Government should be proud of themselves, I must say. The GLC cannot do its work because it has no money with which to do it. This is the sacrifice that the Government are making on the altar of monetarism, and it is an absolute scandal.

I would not mind so much if it was just the occasional case, but there is case after case. I had occasion to get in touch with the GLC about the flat of an elderly lady of 87 whose heating was off. The GLC assured me that it would do its best to do something about it. I telephoned again this morning so that I could tell the House about it. Nothing has been done, of course. I repeat that this is an old lady of 87. This is contempt by the Tory GLC on the one hand and by the Tory Government on the other. It is disgraceful to treat peope in this way, and it cannot go unsaid that the appalling situation that we are facing is a direct result of the way in which the Government are deploying themselves and insisting that councils should behave in a certain way.

I had a classic case only last weekend. After fighting for five or six years to get a man transferred—one would have thought that he was asking to get a piece of moon rock—from a two-bedroom property to a one-bedroom property, with his wife, we made it. He went into a new estate. He is very lucky, because the new estate is up for sale and properties are being advertised at £42,000 to £43,000. There are not many takers, of course, but the properties are being advertised. The one-bedroom properties could not be sold, so they are being let.

After waiting all those years, my constituent, instead of going on holiday, decided to put his money into new furniture—which makes me very proud for my furniture workers. He carpeted his little place, and it is his home. Last Thursday, a joint on the main water supply pipe blew. These things happen, I suppose, although I am advised that it was sheer bad workmanship—private enterprise building, of course. The result was that 130 gallons of water poured into his flat. There was water in every room.

The reason for the 130 gallons pouring in was that nobody knew where the stopcock was to turn off the water supply. The contractors are still on the site, but they did not know. The GLC said that someone would come at some time, but it would have to be fitted in between a visit to a district office and a visit to an estate, and someone turned up 24 hours later. The fire brigade was called. The police were called. Everybody was called, but nobody could find the stopcock. Finally, some people from the water board came. They knew where the stopcock was, but they did not have a long enough key, so they could not turn the water off immediately. They tackled the problem by breaking up the ground around the stopcock in order to turn it off.

Because of the delay, my constituent had 130 gallons of water in his flat. The place was ruined, and when I said to the GLC "What are you going to do about it?" the reply was "We will give him a form for a claim." I said "The man is paddling in water in his flat", but he was left there. It is a scandal that the GLC can behave in this manner, because what happened was inexcusable.

The Secretary of State spoke today about empty properties in Hackney. I am pleased that he is keeping a close eye on Hackney. I hope to invite him to come and see us. The Under-Secretary does come, so he knows. Does he know what those empty properties are? They are being kept empty by the GLC so that they can be sold. It will not let anyone rent them. Some belong to housing associations, but they cannot complete them because they have no money to get them into good order. I have received a cri de coeur from every housing association in my constituency, begging me to do something with the Government so that they can carry out the work that they have undertaken to do.

Mr. Geoffrey Finsberg

I do not want to misquote the hon. Gentleman when I reply to the debate. Will he repeat the figure of empty properties owned by Hackney borough council?

Mr. Brown

I thought that the Secretary of State said that there were 1.000 empty properties in Hackney. I am going through the group to tell the hon. Gentleman why they are all empty. I am surprised that there are only 1,000. I thought that there were many more. I am coming to another one. I ask the House not to hurry me, because I am coming to the next one.

I come now to that great company that is so close to the heart of the Secretary of State—Fairview Estates. The House will recall that there was a public inquiry to determine whether the council should build 34 sheltered homes for the elderly. The inspector was satisfied that it was a right and proper use of the site. Unfortunately, the determination came before the present Secretary of State. He took a different view. He decided that these sheltered homes could wait and that someone else could provide them. He gave it to his old friends, Fairview Estates.

Fairview Estates owns more empty property in my constituency than that. I have already had words with the Under-Secretary, who has even intervened in the matter. These properties are still empty, disgraceful and falling down. I have got the public health authority to look at them. That authority is in trouble because it has not been allowed to recruit, so it does not have the necessary staff to process section 89 orders. Therefore, these friends of the Secretary of State are still allowed to have all these empty properties hanging around in Victoria Park Road, with no one doing a thing about it.

Therefore, I am surprised that the Secretary of State could add up only 1,000. It ought to be a lot more than that, with all his friends holding them empty. Perhaps he can explain why. Perhaps this is part of the shorthold story. Perhaps this is the fiddle that is going on.

I was very surprised, but I am pleased, that the Secretary of State has his eye on the matter. When I return to my constituency in the early hours of this morning, I hope to learn that he has taken action with Fairview Estates, his friends, and has asked them what they are going to do about tidying up that site and all their empty properties.

The Under-Secretary has been very kind. He intervened earlier. I asked him what to do about the poor woman waiting to be rehoused. Nothing has happened. She is still there, in the most appalling conditions. Lead has been stolen from her roof. She is being harassed by people who are simply going into her property thinking that it is empty like all the others round about her, owned by Fairview Estates—private enterprise, the boys who know how to do it. This is a part of the story as to why there are 1,000 empty properties in Hackney, many of them in my constituency.

The housing associations are desperate. Will the Under-Secretary get in touch with the housing associations? He knows them. He helped to set up many of them, arguing that they were the great creature that would do all the great work for us. Now, they are in desperate trouble. They want his help. I should like to know tonight what he is doing about it and how much money he will be giving to all these areas. Circle 33 and the World of Property Housing Trust hold vast numbers of properties in my area—quite wrongly, I think, but they have got them. They are doing nothing with them because they have no money with which to do it. I hope that the Minister will tell me what he is doing.

The private landlords in my area do not come out too well, either. Recently I have been having some exchanges with a private landlord over the problems of installing baths. There are houses owned by private enterprise in my area that still do not have baths, toilets and the like. Because it has been declared a general improvement area, we are trying to get the private landlord to do some work in this regard. We are trying to get some of the tenants rehoused pending renovations by the owner. I finally got Hackney borough council to agree, but the landlord wished to have six nominations for each empty property, for which he would give a reciprocal arrangement. If the council rehoused the family, it would be able to give six choices for the replacement. But the landlord is not satisfied with that. In his letter to me, he says: The Council have indicated to you that they will try to put forward suitable nominees. All we are saying is that they must provide reasonable proof that the nominees are suitable. How can one do a deal with people like that? The people who are suffering are my constituents. The landlord cannot do the work, has not done the work over all these years, cannot rehouse the families anyway, and the council is prepared to help, yet we can make no progress. The only losers are my constituents, who are desperate to be rehoused in a place where they can have a bath.

The more that I listen to the shorthold story, the more I realise that this is part of what the shorthold lessee's position will be if ever he gets into the clutches of the private landlord.

So one could go on. There has been a total destruction of housing in London, and there is a total destruction of the whole means of not only the councils but the housing associations and in other associated areas.

The House has heard me many times on the question of the St. Leonard's hospital and the appalling way in which the area health authority has chosen to close it, first temporarily and subsequently by putting it in the position of never again being the hospital that it was. The authority had the opportunity of a public discussion of the working party report on what to do about the hospital. However, because it objected to that report it was never discussed. Instead, there was a dirge on who would vote for the proposal from the area health authority. Any chance of consultation was lost.

I visited the hospital yesterday. It is like a dosshouse. The same thing is happening at Bart's. The deterioration in the Health Service is a direct result of the Government's policies and is unbelievable. Beds are empty and wards have been closed. Those that are open are like dosshouses. As from the near future, breakfasts will be reduced to a slice of bread and a cup of tea. It is to be called a Continental breakfast. Apparently, patients will shortly have to arrange to have their breakfast brought in or have sandwiches left behind at night as an economy.

In my area a building is being redecorated and painted. It stands out like a sore thumb. It is the office for the relief of the poor. The GLC has just arranged for the road to be opened—presumably, to allow the queues to form and to disperse after having obtained their relief. So, under 1980s Toryism, offices for the relief of the poor are being opened.

The Government are presiding over the greatest rundown of our society ever attempted. Every basic element of our compassionate society is to be destroyed. The Welfare State is to be non-existent by 1984. We have returned to the pre-1944 position of poor housing, poor health service, poor schooling and poor retirement pensions and benefits, all in a society based on fear. Two basic factors remain: if people have the money, the world is their oyster; if they do not, it is the knacker's yard for them. If we have the biggest nuclear fleet, as apparently we shall have with Trident, we shall be the finest nation outside NATO in that regard.

Mr. Peter Bottomley (Woolwich, West)

Our nation is inside NATO.

Mr. Brown

It is most unseemly for the hon. Gentleman to interrupt from a sedentary position. Hon. Members usually have the courtesy to get up, but since he has not I forgive him. He is as much a part of the behaviour of his Government as anyone else. He is a nice fellow. I like him. But he cannot opt out of what the Secretary of State is doing. I merely ask him to consider, and I ask his hon. Friend the Under-Secretary to consider: For what shall a man be profited, if he shall gain the whole world, and lose his own soul.

3.40 am
Mr. John Hunt (Ravensbourne)

At the beginning of his speech—which seems a very long time ago—the hon. Member for Hackney, South and Shoreditch (Mr. Brown) was kind enough to welcome Conservative Members to the debate. I thank him for that welcome, and I am bound to admit that if he and his colleagues had not entered their names in Mr. Speaker's ballot for the Consolidated Fund Bill we should not be sitting on these Benches at this absurd hour today. However, we shall not bear the hon. Gentleman any lasting ill will in that respect.

I shall not comment in detail on the hon. Gentleman's speech, for fear of continuing for the same length of time that he took to deliver his remarks. However, he spoilt some aspects of his case by overstatement and exaggeration. Inevitably, in a debate on the subject of Government assistance to London, the question of the rate support grant must figure prominently. It has tonight, and a number of speakers, including the hon. Members for Norwood (Mr. Fraser) and Newham, South (Mr. Spearing) and my hon. Friend the Member for Putney (Mr. Mellor) have dealt with that aspect of London's current problems.

Few hon. Members can yet forecast with certainty the precise effect of the rate support grant on their individual boroughs. I am sure that the borough treasurers are now working feverishly with slide rules and pocket calculators, and in due course we shall know the result of their labours. I do not understand why the Labour Party, faced with Government decisions of this sort that it is so quick to criticise, always presents the public with the stark alternative of cuts in services or increases in the rates when there is a third choice that it rarely mentions—a cut-back in staffing levels.

The media fall into the same trap. Shortly after the announcement of the Secretary of State on Tuesday afternoon, LBC broadcast an interview with the deputy Labour leader at County Hall, Mr. Illtyd Harrington. It would be interesting to know upon what basis that gentleman was chosen to speak for London. Again, he was allowed to get away with the myth that the only course available to local government was higher rates or a cut in services. Yeterday morning, on the "AM" programme, LBC again demonstrated its political balance and impartiality by calling Mr. Ted Knight of Lambeth to the studio to discuss the same matter. At no time did any interviewer even raise the question of staffing levels in local government.

Quite fortuitously, on Tuesday in The Daily Telegraph my hon. Friend the Member for Horsham and Crawley (Mr. Hordern) wrote an article on the overstaffing of local authorities, and he gave some staggering figures. He told us that 20 years ago the total number of full-time and part-time employees in local government in England and Wales was 1,500,000; 10 years ago it was 2 million; and it is now 2½ million. That is a frightening progression, and that is at the very root of our current problems in respect of public expenditure.

Mr. Race

The figures are wrong.

Mr. Hunt

If the figures are wrong, the hon. Gentleman must take them up with my hon. Friend the Member for Horsham and Crawley. I am quoting his figures.

Mr. Race

According to the local government manpower watch figures, the number of full-time employees in local government has never gone beyond 2.1 million. I do not know from where the hon. Member for Horsham and Crawley (Mr. Hordern) gets his figures.

Mr. Hunt

I have told the hon. Gentleman from where I get my figures. If there is a dispute, he must take it up with my hon. Friend, who wrote the article. At least, we are agreed that the figures are over 2 million, which is a very large—

Mr. Race

As I understand, the figure is now below 2 million.

Mr. Hunt

I hope we can count on the hon. Gentleman's support for that welcome trend.

Mr. Race


Mr. Hunt

I am interested to hear that we cannot. I often wonder whether the hon. Gentleman represents the constituency of Wood Green or NUPE in these discussions. Perhaps one day we shall be told.

My point is that it is possible for local government totals to come down, and if the national trend is now in the direction that the hon. Gentleman suggests I certainly welcome that and suggest that the trail has been blazed in that respect by the GLC, which, in the course of the three years since 1977, has reduced its staff by about 4,000. This has been done on the basis of the sound housekeeping which it has practised since the Conservatives won control of County Hall. This sound housekeeping has in turn been reflected in the rate precepts which have been levied. In the two years of Labour control prior to the Conservatives winning, the rate precept went up by 235 per cent. In the five years since then the precept has gone up by 23 per cent. Those figures speak for themselves.

Mr. Clinton Davis

As a well-known wit who seems to have spent a great deal of time in the Sahara desert, will the hon. Gentleman indicate whether he agrees with the view that with average London domestic rate bills already more than 40 per cent. above the rest of the country, it cannot be accepted that London has been favourably treated in the least. This makes it all the harder to swallow a significant movement of grant away from the capital which can only jeopardise London's efforts to cope with the problems of decline, particularly in the inner areas. Does the hon. Gentleman agree with that statement? Would he be surprised to know that those are the words of Richard Brew, the deputy leader of the GLC?

Mr. Hunt

I am not entirely surprised. From my soundings, I know that there is some unhappiness in London government circles concerning the present position. It is something of an exaggeration to talk of a significant shift. I am prepared to wait until all the figures have been finally worked out. I do not know the precise effect on my own borough. It is a little premature to talk precisely in the hon. Gentleman's terms, although I would not dispute that there is concern at County Hall and among some Conservative authorities within the London area.

I was struck, in the exchanges which followed the Secretary of State's announcement on Tuesday, by his comment that the fundamental assumption of so many inner city authorities that if they increase expenditure and rates they will improve the local environment does not stand up to examination. In fact, they drive more and more people and firms out of the area, thus aggravating the problems that they are trying to cure".—[Official Report, 16 December 1980; Vol. 996, c. 152.] There is a great deal of truth in that comment and a great deal of strength in the argument. It meets to some extent the point that the hon. Member for Hackney, South and Shoreditch was making about unemployment in London. It is being exacerbated and accentuated by the high rate demands which have been a feature, particularly in Labour boroughs, for many years now.

Mr. Race

Would the hon. Gentleman care to substantiate his very serious allegations by naming the firms which have moved out of any one Labour-controlled borough over, say, the past 10 or 20 years, and tell us how he knows that those firms have moved because of rate rises?

Mr. Hunt

I do not think that the hon. Gentleman would seriously expect me to have figures of that kind at my fingertips.

Mr. Race

It is absolute rubbish.

Mr. Hunt

The hon. Gentleman is entitled to think that it is rubbish. What I am saying in reply is that, in my contacts and links with those who run small businesses, one finds that they are very perturbed about the level of rate demands.

Several Hon. Members


Mr. Greenway

Charrington's has moved almost completely out of Tower Hamlets. I regret that, because it has been in Tower Hamlets for a long time. I know the firm well. The move was largely due to the rates. It has taken a substantial proportion of its operations to Buxton in Derbyshire. I could list several firms that have moved out of Tower Hamlets. I was a candidate there for several years.

Several Hon. Members


Mr. Hunt

I do not think that hon. Members can intervene on an intervention, and I shall not give way. I am grateful to my hon. Friend for providing the name of a firm [Interruption.] Names should not be bandied around the House. Evidence could easily be assembled. Many cases will bear out my point.

My right hon. Friend the Secretary of State sought to make it clear that the most profligate authorities do not spend money to the best effect. I shall give one practical example. Lewisham borough council is a neighbour of Bromley borough council. Lewisham boasts that it can offer free services to the elderly. I understand that it does not charge for home helps, regardless of a person's financial position. However, Bromley charges according to need. That tradition of wise and prudent housekeeping has helped to provide the necessary resources for other worthwhile projects within the borough of Bromely. For example, we built the Bertha James centre. It is a leisure centre for the elderly that any borough would he proud of. It cannot be matched by Lewisham or any other borough.

Mr. Dubs

Will not the hon. Gentleman concede that good arguments can be made for refusing to charge? The cost of administering a means-tested service for home helps is often so high that local authorities such as Lewisham rightly decide that it is not worth while.

Mr. Hunt

I can retort only that that is not the experience in Bromley. A charge of £2 per hour is made to those who can afford it. That provides revenue for the council. That is symptomatic of a wise and prudent approach to local government expenditure. At the same time, it has enabled us to undertake other valuable projects such as the leisure centre, which provides chiropody, hairdressing, bathing facilities and so on. In addition, for the past three years Bromley has held the rates steady when the neighbouring borough of Lewisham has increased them by 40 per cent. to 50 per cent.

It is possible to curb expenditure and yet to make adequate provision for the most needy and deserving. If the rate support grant proposals impose some restraint and instill some sense of responsibility into councils such as Lewisham and Lambeth, we shall be moving in the right direction.

3.53 am
Mr. Stuart Holland (Vauxhall)

I shall address my remarks to areas such as housing, health and social services, particularly in relation to private and public spending.

Several hon. Members have stressed the multiple deprivation of inner city areas. I shall not repeat what is already clear to Labour Members. But it is important to stress that much of the housing stock in constituencies such as mine was constructed in the 1930s and 1940s and is coming to the end of its natural life cycle. Instead of simply needing someone to repair the roofs or clear the drains, it needs new roofs and drainage systems and major capital expenditure. That expenditure is bound to be bunched inasmuch as the initial housing projects were bunched—a point admitted in the current issue of "Social Trends".

While the need for housing expenditure rises for that reason, we are in a situation where the cuts in housing allocation at the GLC level are of 50 per cent. and in Lambeth of nearly 40 per cent. That, as my hon. Friend the Member for Norwood (Mr. Fraser) stressed earlier, is imposing a sense of real desperation on people who, instead of imagining, as it seems some Conservative Members imagine, that the housing problem is due to bureaucracy, have come to realise that they are actually going to die in damp, uninhabitable conditions and that asthmatic and bronchial people, whether old or young, are still going to have to climb up four, five or six flights of stairs.

Recently I saw a young woman constituent who has half a kidney, a chest complaint and a collar round her neck as a result of pulling a pram up a flight of stairs on the Brandon estate, where the lifts simply do not work. They are regularly out of action. The Tory GLC last summer broke a written commitment to the tenants' association to modernise and improve that estate. I say "modernise" in the sense that the estate itself is only seven to eight years old, yet it is in need of dramatic remedial action to make it habitable and functional.

A broken commitment there has a dramatic effect on the feasibility of the tenants' association being able to deal effectively with local vandalism. If the tenants' association has no authority, cannot bargain with the local authority and cannot have some kind of assurance that the local authority will stand by a guarantee to improve the estate, confidence in local government is profoundly undermined. In my constituency, it is not the left jabs which are passingly made by Conservative Members towards what they call the people's republic of Lambeth which are giving concern but the Right-wing slam which is coming from this Government with their cuts in public housing and their reneging on written promises.

Another example is Kilner House on the Kennington Park estate, where a written commitment was made by the GLC to tenants that they would be able to move into a modernised block on that estate. This covered people who had special needs for ground floor housing. In fact, the Tory GLC again reneged on this commitment and put the properties up for sale. It is hardly surprising in this circumstance that there is a very strong reaction by the tenants' association of the whole estate in support of the occupation of Kilner House by the London squatters' union on condition that, if the GLC stands by its original commitment to let rather than to sell the properties, it will relinquish the properties concerned.

People are losing confidence in a profound manner not in Lambeth and its Labour council but in the Conservative GLC and its policy of council house sales, which have, in effect, ended outward movement from boroughs such as Lambeth. Also, they are losing confidence inasmuch as the Tory GLC cannot be trusted any more by tenants on estates for whom what previously had been a housing problem has been translated by the Government into a housing disaster.

One thing that I find most surprising in, for example, the contribution made by the hon. Member for Paddington (Mr. Wheeler) is that he seems to believe that public spending is inherently bad—that there is an almost Manichaean division between public spending, bad, and private spending, good—without realising that public spending mainly sustains rather than drains the private sector.

That point is directly relevant to an answer that the Secretary of State gave me to a parliamentary question earlier this year. I asked the Secretary of State for the Environment: what proportion of council house building in the United Kingdom was represented by … direct labour departments of councils and … private companies in the years since 1974."—[Official Report, 28 July 1980; Vol. 989, c. 540.] The reply was that in England and Wales for each individual year since 1974 direct labour departments had represented less than 8 per cent. of total local authority house building. What does that mean? We have had many sweeping generalisations from the Government Benches tonight, with a failure to present facts to support their arguments. Here is a fact that I suggest that the Government take into account if their political future is to be even vaguely ensured. As a result of direct labour departments representing less than 8 per cent. of spending, for every £100 of public spending cuts in housing, £92 is taken away from private and not public contractors. I asked for the breakdown for the greater London area but was told that it was not available. The figures are likely to be similar in the London area.

While the Government and the CBI are focusing their attention on high interest rate policy, inasmuch as very few firms and councils like having high interest rates hung around their necks, the Government, by cutting public expenditure on modernisation programmes, such as on the Brandon estate, and on new housing, which in the local authority sector is sizably more than one-third of total housing in the country, are dropping the floor of demand from under the feet of private enterprise. They are aggravating the problem of both the public and private sectors in housing.

The assumption is made by the hon. Member for Ravensbourne (Mr. Hunt) that in some way public employment is bad and should be reduced. What kind of productivism or mercantalist philosophy is that? Is the society that he wants one that produces only goods rather than services? Is it a society in which only private health services, education or housing are legitimate? Is he really planning to reverse the trend since the last war for the private rented sector in housing to be reduced from 60 per cent. of total housing provision to only some 10 to 14 per cent.? Does he wish to reverse that trend on the assumption that private is in some way better than public?

Are Conservative Members, who throughout the debate have inveighed against rates—local taxes—as if local tax is breaking the back of business, really unaware that corporation tax has virtually been abolished in this country by successive Governments and that the biggest problem for small business in the inner city is not big spending by local government but big business and centralisation of capital? The large firms grow larger, in large part by eating up the small firms. Half the growth in the rising share in manufacturing of the top 100 companies over the main part of the period since 1950 was by takeover of other firms. The Government are looking in the wrong direction.

I am surprised that the hon. Member for Ravensbourne talked with such confidence. I am glad that he was challenged by my my hon. Friend the Member for Wood Green (Mr. Race). I have studied the question of location and mobility of enterprise in some depth. I find that much of the argument that high rate costs cause the outflow from the South-East, like the argument that there are locational costs in going to the North-East, is boardroom myth. It seems clear that if business men or civil servants, isolated from the real world either by their class or by the Official Secrets Act, repeat something to each other for long enough, they come to believe it to be fact. It was interesting to note that the hon. Gentleman, when challenged, produced no facts.

Mr. Peter Bottomley

If we are talking about facts and about Lambeth, will the hon. Gentleman tell the House the rates per week on his own house now compared with five years ago? Does he recognise that many of his constituents, business people and residents, feel like moving out of Lambeth because of the accelerating increase in rates, cascading year after year? The hon. Gentleman, as an economist, must know that this is a disincentive to remain.

Mr. Holland

The increase in rates in Lambeth has not been decided by Lambeth because it wishes to increase the rates. If local boroughs have no option but to finance either maintained levels of spending on social service or contracting levels, other than rates, it is because they are being given a godfather offer by the Government.

Mr. Bottomley

What are the hon. Gentleman's rates?

Mr. Holland

There has been a very sizeable increase in rates in Lambeth. It is going to be worse. I am not disputing the points that the hon. Gentleman makes. I am disputing the context in which he makes them. It is not a situation in which local authorities can sustain indefinitely spending levels on housing, health services or welfare services simply by rate finance. The tragic aspect of the Government's current policies is that a new form of tax will be imposed on consumers locally inasmuch as, if local authorities exceed the spending targets that the Secretary of State sets for them, the right hon. Gentleman will reduce the rate support grant the following year. That will cause a severe crisis for local authorities such as Lambeth. It is a regressive and reactionary policy. It is cynically taking with one hand and taking with the other hand as well.

The consequence for several councils, possibly including Lambeth—I say "possibly"—is that the Conservative Party, apparently the party of democracy and local devolution of decision-making, will appoint commissioners to impose its draconian policy and cuts. The irony is that the commissioners will be precisely what the Conservatives have wrongly accused the Labour Party of wishing to introduce in industry. The commissioners will be the commissars of local communities.

The policy pursued by the Government is not only bad for working people but devastating to industry. It might be advisable for at least some Conservative Members to realise that the Confederation of British Industry has only got the matter half right when it says that interest rates are high. Its claim that the Government should "really cut public spending" is precisely what is going to unemploy business not only in the inner city but in the country at large.

I wish to refer to some problems that are arising in my constituency. One—the threatened closure of the Belgrave hospital for children at the Oval—relates to the Government's general principle of the privatisation of services and their opposition to public services.

In line with the Government's general policy, the Variety Club of Great Britain, on a charitable basis, has promised £750,000 towards the cost of providing new facilities for children at King's College hospital, which is a considerable distance from the Belgrave site. However, the total estimated cost of two new wards at King's is £1.8 million. The rest of the money has to be found by savings in the rest of the King's health district. Where is the value for money in closing an existing hospital and starting a new facility for which the private charitable contribution cannot provide even half of the estimated cost? Indeed, it appears that the Variety Club is having some difficulty in raising the £750,000. Where is the economic sense in closing the Belgrave, where the cost of in-patient care is £358, when the cost at King's is an average of £544 per patient?

The new high-technology equipment that is due to be installed at King's College hospital will be for specialist, rather than general, medicine and will not meet the general needs of those in my constituency and other areas of South London served by the Belgrave hospital. This is much more of a community care hospital, serving the interests of families—oftern one-parent families with problems of multiple deprivation—for whom the care of children in a local hospital, even on a short-term basis, is so desirable.

In practice, because of the specialist beds to be provided at King's, where there will be 24 beds for high-technology cases and 16 beds for less acute cases, there will be a net loss of 23 beds for general cases. That is crazy logic in Health Service policy. The private charity's expenditure will lead to additional public expenditure and a reduction in the number of general beds.

There is a social class dimension to such a policy. The specialist beds will not serve the local area, where the demand for them would not be sufficient, but are likely to be serviced by private health provision over a much wider area—indeed, internationally. I am not so opposed to people coming to this country for medical health care, especially when they cannot receive care of a comparable standard in their own country, but I strongly oppose a prestige project that is of more direct interest to the expansion of mini-empires by certain consultants than to the serving of the interests of the local community. That is related to the Government's policies of giving support to privatised services.

The Government lay great emphasis on the fact that they want to disengage the statutory sector and involve the voluntary sector in certain services. One of those services in my area is, I regret to say, housing associations. That involves the St. Mungo community housing association, which has been in the news recently following the prosecution and conviction of Mr. Jim Horne, the founder of St. Mungo's. I do not wish to comment in the House on that trial and conviction, which has clearly been covered by the courts. I am far more concerned that on a voluntary sector basis, without adequate involvement of the statutory sector, St. Mungo's is failing to run either an adequate service or even a remotely adequate service for the people concerned.

There is a building, the Lennox building, in Parry Road, by Vauxhall Cross, which basically should be condemned and where the life scheduled for the property is only another two years. The conditions in that building, under the supervision of St. Mungo's, are absolutely staggering. I visited several of the flats concerned. Some of them have no connection between the sink and the drainage. The water is literally dripping from the sink. There are loose power points. There is wire hanging loose and inadequate wiring. There is seepage from lavatories. The conditions are thoroughly unsatisfactory. I am awaiting the report of the environmental health inspector on more than one flat. Yet when I submitted to St. Mungo's that it has a responsibility to those who are its tenants to undertake repairs and a certain amount of maintenance—because in many cases, although some of the flats are zero rated, it is charging £10 and £16 a week to couples—I find that little or nothing is being done.

For example, I have studied the case of a Mr. Carr. The windows in his flat are falling apart. They do not have sash cords. They cannot be properly closed. A reply from St. Mungo's dated 11 September stated: you will just have to prop your windows open. In another case a gas cooker has not been provided, so there are no cooking facilities. In the case of a Mr. Boyle in one of the flats that I visited earlier in the year, there appears still to be no cooker in the kitchen, while water seepage and flooding render the floor damp and unhygienic. Tonight, to my surprise—and, I think, to the surprise of other hon. Members—at the hour of about three o'clock I was given a green card. I was surprised because I had not anticipated being approached at that hour of the morning. I have been approached by a Mr. Tippler and a Miss Cherry Winfield, who are at the moment in the Strangers Gallery and who have been—

Mr. Deputy Speaker (Mr. Bernard Weatherill)

Order. We never refer to anybody who is not actually in the Chamber.

Mr. Holland

I am most grateful to you, Mr. Deputy Speaker, since I was unaware of that. I assume that that record will not be in Hansard. I have been approached by constituents. I have no desire to refer to them being present here tonight. If that part of the Hansard record has to be struck, I should be happy with that.

Mr. Deputy Speaker

Order. I do not think that Hansard can be edited in that way. The hon. Gentleman has said what he has said, and I have said what I have said.

Mr. Holland

I have been approached during the past months by a Mr. Tippler and a Miss Cherry Winfield, who have a series of cumulative problems in their relations with St. Mungo's which clearly raise in question the capacity of that charity to manage effectively a property or a service of that kind. I made repeated representations. I found that some of the statutory authorities involved, especially Lambeth, have been most co-operative in attending meetings and giving support and pressure basically to remedy problems in the St. Mungo's trust. I found less responsiveness from the GLC.

I have written to the Minister asking him to have the situation investigated, and it has not been investigated. In fact, we now face the situation where St. Mungo's, which became notorious because of the misappropriation of funds by its founder director, is being run by a committee which clearly lacks the competence to fulfil the tasks for which it is responsible. There are social problems in the building rather than simply housing problems.

These are people who have very considerable needs. They are single homeless people with serious problems. They are in a half-way house between night shelters and another more independent world. I advised the director of St. Mungo's that I would need to consider raising this matter in the House if he could not, in fact, respond by showing more direct action to resolve the problems concerned. I am not satisfied that he has done so, and I think that this matter should be made public.

Plans should be undertaken for the residents of Lennox Buildings to be decanted and found alternative accommodation from now. In one or two cases where I have pressed this individually as a Member of Parliament, this has happened. But I put it to the House, since I am aware that I have stressed this case at some length, that as a Member of Parliament I should not have to take up each individual rehousing case in a property of this kind because the management itself appears incompetent to take the initiative on it.

I urge the Minister in turn to urge the Housing Corporation that it should be more concerned with the social work aspect of management in a case such as St. Mungo's and that the Housing Corporation, if it feels that it does have the ability or the professional competence to do this, should take advice on how to sort out the problem and should work with the statutory authorities to see that adequate social work is provided.

I consider personally that John Lane, the director of St. Mungo's, is not able to resolve these problems by himself.

The further case which causes me very great concern is that of the North Lambeth day centre. It is a related problem inasmuch as St. Mungo's has been providing mainly night shelter for the deprived and the North Lambeth day centre has been providing, as its name suggests, day facilities—in effect, shelter for some 1,500 people who over the last year have used it, it is estimated, on some 10,500 occasions.

I am very glad that there has been an informal assurance from the Department of the Environment that the staff and running costs of the centre at present levels will be funded through until 1982. I am also glad that there has been a categoric assurance from Lambeth of continued funding on this basis. However, I am very concerned by the fact that from the 23rd of this month this day centre, which is in the Royal Waterloo hospital by Waterloo Bridge, will no longer have any claim in law to the premises and that as a "street level agency" it may itself literally be put on the street through the regional health authority's intention to sell the hospital premises.

This relates directly to the question of funding and spending, inasmuch as pressure has been put on the regional health authority, which I do not regard as primarily responsible in this matter, by the Government to reduce spending. One of the ways in which it feels that it can most easily reduce spending is by the sale of a capital asset. But the day centre using the ground floor of this hospital has, in fact, no alternative premises.

The North Lambeth day centre is a voluntary non-statutory body. In this case, I stress that it has very high professional competence and has made a major contribution to the area. It is complementary to Health Service provision, and in both these respects I should have thought that it should appeal to the Government as a voluntary sector agency.

The regional health authority is only the holder of the property on behalf of the Secretary of State. I therefore submit to the Secretary of State that if he is concerned that the men involved in this day centre should not literally be put on the streets through this winter—with a sense of uncanny timing—on 23 December, if they are not literally to be exposed during the winter and if there are not to be problems of increased vagrancy, very possibly increased alcoholism and increased pressure on psychiatric and other social services, he should personally intervene to extend the deadline with which this day centre has been faced.

A real search has been made by the centre for alternative premises, but there are none that are suitable in the area. I urge the Secretary of State preferably to ensure that any future commitment of the property includes the continued use of the ground floor, at present occupied by the clay centre. An extended deadline of midsummer next year would be reasonable, even if the sale of the building, which I would oppose on certain grounds, proceeds. That extension would be reasonable on the ground that, even if it were sold without hitches and delays, the sale would involve advertisements, bids and tenders, which would not permit the beginning of work on the premises before midsummer. It is not unreasonable to assume that the building may not be sold quickly. Certainly its vacant disposal is not required in the time schedule demanded by the regional health authority, under pressure from the Government.

Elsewhere in my constituency there are hospital premises, which should have been demolished, being used as nurses' accommodation. That is in the area of the Lambeth hospital related to the St. Thomas' group. I do not indict St. Thomas' for this, but nurses are living in accommodation that is like a derelict industrial site. The Royal Waterloo hospital could well be converted to provide accommodation for nurses, which it once was. This could be combined with use of the ground floor for the continuation of the day centre.

In addition, there is the crucial point made in a letter to the chairman of the community health council last December by the chairman of the regional health authority that the hospital should not be sold until a decision has been made about the future of the Coin Street site. That site raises the general issue of public spending on housing versus private expenditure on office development.

As a result of a public inquiry, the Secretary of State invited competition in design for the properties concerned at the Coin Street sites. The Conservative GLC has shown a dramatic interest in selling the sites before mid-spring next year. Coincidence between events next May and the desire to dispose of the properties does not need much subtlety to see. The GLC is in an unseemly haste to sell the site, and there has been an unseemly haste to have the competition, but the fundamental issues have not been resolved.

Office construction in central London is increasing, while new technologies have staff- and space-shrinking effects. There is a patent need for housing in inner London, as Labour Member after Labour Member has stressed through the night. Homelessness in London as a whole is dramatic, while 300,000 homes are unfit, lacking in amenity or in need of modernisation.

The current property boom could result in a 10–20 per cent. increase in office accommodation over the next few years, while new technology—microprocessors, word processors and data processors—could result in a 10–20 per cent. decline in demand for office space.

We hear a great deal about the waste of public money. But many of us on the Labour Benches are concerned about the waste of private money. Ironically—or with a certain inherent logic—when private money is lost on a major scale, public funds are employed to bail out the private sector."

I have asked the Secretary of State whether he had taken account of the space- and staff-shrinking effect of new technology in consideration of planning permissions in the central London area, and he replied, briefly, that indeed he had not. I asked whether the Government were making any overall evaluation of the supply and demand for office space in the central London area and was told, in a parliamentary reply, that the Government were relying on market forces to sort out the situation.

It is quite clear that if, in fact, continued office development is allowed in London on current trends, and if there is any significant net shrinkage of the demand for office space as a result of new technology, we shall have a collapse in the property market which will make the collapse of the early 1970s look like a tremor in the market.

It has been put to me by one former Minister that the financial collapse in the 1974–75 period of the last Labour Government which would have been involved for the secondary banks and the other financial institutions involved in that office boom would have been of 1929 proportions had not the Government intervened with a bail-out operation of over a billion pounds—a billion pounds of money which could have been mobilised towards investment, including public investment in the inner city. Over a billion pounds at the time was more than one-third of the nation's annual manufacturing investment. Yet we had to mobilise that to bail out the property companies, the private property companies, which had seen only the upswing of the market and had been taken for a ride.

Mr. Peter Bottomley

I was not sure whether the hon. Gentleman was saying that a billion pounds was one-third of manufacturing output five or six years ago. May I repeat the question I put to him earlier? What are his rates now, on his own house, and what were they five years ago?

Mr. Holland

I think the hon. Member will realise that I have moved on from that point. I do not deny that the rate increase in Lambeth has been very considerable indeed.

The question of the current property speculation and the scale of the current property boom is relevant inasmuch as the property companies now tell us that the public should not be concerned because, whereas last time round it was speculative capital which was involved, now it is the safe money of the pension funds and the insurance companies. But that is an even worse prospect for the public at large and for the Government in particular, for the obvious reason that, whereas last time pension fund and insurance money was not directly involved, and last time we could have been in a 1929-type financial crash, this time it is compounded by the involvement of pension fund and insurance finance, which affect the whole use of resources in the system.

We could be in a very serious situation. It is directly relevant to a debate on the Consolidated Fund. It shows the completely arbitrary, if not manic, division in Government reasoning between the public and the private sectors and the two-facedness of the argument that public expenditure is a drain on the economy rather than sustaining the economy. Private speculation does not match supply and demand in the manner of the market myth assumed by the Government and can lead to massive public intervention to bail out the private sector.

I urge the Government, though with very little persuasion that the argument will be acceptable to those for whom trivialisation and personalisation of issues is of far more interest, to take on board that the course on which they are embarked, involving public spending cuts, is decimating the private sector. The squeals of dismay to be heard from the Confederation of British Industry, which came first from small firms, now come increasingly from large firms. It is a mistake to think that public enterprise, public spending and local spending on housing, health and education in the public sector of the market is in some sense Socialist rather than socially justified. Being a Socialist, I should support its extension. If I were a capitalist and a Government supporter, I should also be concerned to urge the Government to spend rather than to cut.

If that message is not coming across from the Opposition Benches, the Government should consider, for example, the plea of the National Federation of Building Trades Employers. The federation says that if the moratorium if not lifted in three weeks, several of its members will be bankrupt and that if it is riot lifted in three months the industry will be in crisis. It has urged the Government to spend and to plan.

4.36 am
Mr. Neil Thorne (Ilford, South)

I should not like it to be thought that, in the few brief remarks that I wish to make, I ignore the importance of unemployment and of rate support grant.

My views on unemployment are clear. I was never in favour of the Location of Offices Bureau or any like organisation which had a mind to get rid of as much employment from London as possible. I am glad that that policy has been abandoned, and I hope that it will never return.

I was interested to hear what Opposition Members said about rate support grant and their view that the increase in rates was not a deterrent to the industries operating within their constituency boundaries.

In my experience, people are reluctant to move their homes or businesses to other districts and need a great deal of encouragement to do it. However, when people think of setting up businesses in the first place, they take these matters into account. If they find that the level of rates in one area is very high, they take that factor into account when considering the rent or the purchase price that they are asked to pay. In the event of the combined total being too expensive, they are likely to take their firms elsewhere. Therefore, those local authorities which overprice themselves must expect, over a period of time, to discourage businesses from opening in their areas, and they must accept the unemployment which is likely to result.

I move on to deal with the remarks of Opposition Members about housing. One hon. Member pointed out that the private sector had found the provision of rented accommodation uneconomic since the beginning of this century. I do not agree. In my view, the private sector has found it uneconomic to provide housing for rent only since the last war.

I want to renew my request to my hon. Friend the Minister to consider whether the fair rent system is failing. I believe that it is wrong to expect the fair rent system to provide a subsidy. If a subsidy is to be provided, it is right and proper that it should come from the Department of Health and Social Security. We should look to the vast resources that the trade unions, the insurance companies and the pension funds have at their disposal for investing in the residential property market. All of them invest very heavily in the commercial and industrial sectors. Why is it that they do not invest in the residential sector? The reason is, I think, that the fair rent system is not working, as it should be, to give them the encouragement that they need to put their money into that sphere.

I am surprised that throughout this long debate no one has mentioned the need to consider the transport system. We heard today that the Select Committee on Transport considers London roads to be a scandal. I think that the Government could give a lot more assistance to London, and they could give it in this way. The Greater London development plan brought out proposals for a road network that would serve the capital. When I served on the GLC, from 1967 to 1973, we liked to think of London as the capital not only of Great Britain but of the world. That may not always be the case, but the road transport system that we have in London leaves a lot to be desired when one looks at the systems in other capital cities.

It was a great shame, I believe, that the proposals that were put into the Greater London development plan were not implemented, owing to the alliance that was struck between the "Homes before Roads" lobby and the Labour Party when it entered the GLC election of 1973. It was a shame because, as it happened, the Labour Party would have won that election anyway, and therefore it was unnecessary to throw this important matter out of the window. The harm done will be suffered by London for many years to come. We cannot put in a road system in a short period of time. It does, of course, with our present system, take at least 10 years to set about, acquire and build any road network, and sometimes a good deal longer.

The M25 has been held out as the salvation of the road transport system of London, and from speeches made on both sides of the House we have been led to believe that people will find an enormous improvement in transport in the capital when the M25 has been completed, which, I believe, will be in 1986. I must say, from my own experience and knowledge, that I am sceptical of that view. I am afraid that, although a substantial volume of traffic moving from the docks, the Midlands and the North will no longer need to pass through the centre of London, at the same time it will not remove a lot of the traffic that has to visit parts of London itself. Certainly, if industry and commerce are to he encouraged in the centre of London in future, the vehicles that have business here will not wish to go all the way out to the M25 to travel round the outside. I think that the M25 will be of much more limited value than has been made out, and I am sorry indeed that the proposals to provide a proper South Circular Road were thrown out when the Labour Party returned to power in the GLC in 1973. As I have said, the whole of London will suffer for many years to come.

The Government have a part to play here. I do not agree with the Select Committee when it says that it thinks that transport matters dealing with roads should be put more in the hands of the local communities, because I think that the local communities are very much afraid of the effect it would have on their local voters. I think, therefore, that when one is dealing with strategic roads one has to deal with them from a strategic distance.

The main objection that I have found to the construction of new roads is the inadequacy of the present compensation system. We need to take a far more enlightened view of the compensation system and the way in which it can benefit those who are affected by road proposals. If this were done, it would save an enormous amount of time and effort by all concerned. If the country wishes to purchase a person's property, whether that person is a freeholder or a tenant of the premises he ought to be adequately compensated. Merely to talk in terms of paying compensation at market rental, on the basis of a willing seller and a willing purchaser, is nonsense. I have no doubt that we shall not resolve this problem until such time as we have a proper compensation code and we deal with these people properly.

I hope, therefore, that the Minister will look at both of these points and let me have a more encouraging reply than the one I had last time.

4.46 am
Mr. John Cartwright (Woolwich, East)

I confess that 4.46 am is not an ideal time to catch your eye, Mr. Deputy Speaker, but it is appropriate that we should be discussing this morning the question of Government assistance to London in a week which has seen two major statements from the Secretary of State for the Environment, both having a tremendous impact on Londoners, the first being on housing allocations and the second being on the rate support grant. In both statements London was picked out for special treatment.

The Secretary of State commented very clearly in the RSG statement that he was reversing what he called the recent drift of grant to London. I would quarrel with the term "drift", because it was not in my view a drift of grant to London; it was a deliberate policy which, as my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Brown) has reminded us, was the result of a great deal of pressure from hon. Members on both sides of the House, from London local authorities of both Labour and Conservative political control and from the London Boroughs Association and the Association of Metropolitan Authorities, all of us arguing that London had been unfairly treated under the old RSG system and that there was a strong case for righting that injustice.

It was a matter of gratification to all of us, whatever our politics, that previous Secretaries of State accepted that view and went some way towards righting the injustice that had been done to London. It was our case that the bright lights and great wealth which may be concentrated in some parts of London do not mean that every London street is paved with gold. We also argued that the high rateable values that exist in the City and the West End were no reason for clawing back a section of the RSG to which London was entitled.

We argued. too, with great justification—and the point has been made in this debate—that London had more than its fair share of social problems. Whatever social problems one picks, one finds that London, and certainly inner London, has far more than any other part of the country—whether it is single-parent families, homelessness, bad and overcrowded housing, vandalism, the growing problem of unemployment or the decline and collapse or departure of industry. Sometimes London industry has been lured away by deliberate Government policy. All these problems have had an impact on the life of London.

The problems of London are, therefore, different from those of the shire counties, areas which are starting to get their own back now that they have some supporters in high places. I sometimes wish that the Secretary of State for the Environment would leave his ivory tower in Marsham Street and come to see what it is like to live in council estates in the constituencies that I and my hon. Friends represent. He ought to see what it is like to live in a graffiti-covered council estate with the rubbish around, the smashed glass, the vandalism and the wrecked lifts. If he saw that, he might begin to understand why it costs so much more to provide services in these hard-pressed inner areas of London than it does in more peaceful, pleasant and greener surroundings.

Let me turn now to the impact of this week's rate support grant settlement on my borough of Greenwich. We have been singled out for particular treatment. It is losing about £7 million in grant compared with what it would have got under the old system. The London Boroughs Association estimates that the effect on the ratepayer in Greenwich of the loss of this grant is about 12.9p in the pound, a substantial sum. The loss is 12.7 per cent. on the general rate compared with the current year. That makes Greenwich the hardest hit borough in London under the settlement. The next nearest is Wandsworth, about which we heard and which loses out to the extent of 10.9 per cent.

The reaction of council officials and councillors in Greenwich is to ask what it has done to deserve such treatment. Greenwich is certainly not renowned as a profligate authority. It does not have a reputation as a municipal spendthrift. In terms of rates per head of the population, Greenwich has been one of the lowest and, on occasion, the lowest in London. The figures of rate and grantborne expenditure as set out in Hansard on Monday 15 December show that Greenwich has a total expenditure of £44,803,000 in the current financial year. That is considerably lower than Hammersmith and Fulham, about which we heard earlier, and substantially less than Wandsworth, about whch we heard a great deal. It has the lowest level of expenditure in Greater London, with two exceptions. They are Kensington and Chelsea and Kingston upon Thames.

On the basis of those figures, no one can suggest that Greenwich is a high-spending, wicked sort of authority. It has been tackling major problems of housing, for example, where it has undertaken substantial comprehensive redevelopment schemes in old and decaying areas. It is tackling the problem of a substantial and growing proportion of elderly in its population. It is tackling new problems such as the fact that one in every six families in the borough is reckoned to be a single-parent family. That creates problems. Instead of moaning about the devastation caused by the departure of industry, which has happened to a substantial extent, the borough has taken practical steps to attract new firms into Greenwich.

It has gone about its task in a reasonable and businesslike way. It has not featured in any of the Conservative Central Office propaganda. It has not been shown on television in Conservative Party broadcasts as being a wicked, high-spending, profligate authority—unlike Lambeth, for example, which always figures in our debates on this subject. The Conservatives always present it as the great villain of public spending in London. They always seek to make our flesh creep about the extravagance of Lambeth's spending. We have been told over the past few months that it would all be sorted out and that the Secretary of State would ensure that Lambeth would get its come-uppance. We were told that Tarzan would crack his whip and the Red Knight would be brought to heel when we had the new rate support grant system.

Having discovered that my borough was the hardest hit in London, I looked to see what dreadful things had been done to Lambeth on the basis of its extravagant expenditure. I thought that, as my borough, with its reasonable record, had been so hard hit, terrible things must be in store for Lambeth. Yet I find that the cut in rate support grant for Lambeth is not even 1 penny in the pound. It is 0.9 pence in the pound, and the percentage cut at 0.6 per cent. is one of the lowest in the whole of Greater London. I am left wondering what system it is that penalises reasonable spending authorities and apparently seems to let off those that are constantly castigated on the Tory Benches as being wicked, extravagant and profligate.

We have been told frequently that this new system of rate support grant would be more logical, intelligible and understandable than the old system. I hope that in his reply the Minister will explain how there can be this tremendous variation and how authorities such as Greenwich and Wandsworth, which are of different political colours, can show that they were not high spenders and were not unreasonable in their demands but can be hard hit, whereas an authority that has constantly been accused of high spending can apparently get away almost scot-free.

I turn to the question of housing financial allocations for Greater London. Here again, Greenwich has been incredibly hard hit. Expressed in 1981–82 outturn prices, this year's housing allocation for Greenwich is £23,515,000. We understand that that will drop next year to £14,859,000—a percentage drop of 37 per cent. That is bad enough, but the difficulty comes when, against the figure of £14,859,000 allowed for next year, no less than £21,156,000 is already committed expenditure. We have a minor problem. The committed expenditure is over £6 million more than the allocation. That is a clever trick, and I shall be interested to see whether the Minister can explain how that can be done. How can there be a committed expenditure which is in excess of £6 million more than the allocation? Where does the difference come from? Does it have to be put on the rates? Does expenditure have to be cut to meet the allocation? Do schemes already under construction have to be stopped or slowed down? What happens to new schemes that are desperately needed? In Greenwich, as in most inner London boroughs, the housing problem is worsening rapidly, waiting lists are growing steadily and the problem of homelessness is getting worse.

I wish to mention some of the impact of what is politely called the moratorium on spending—most ordinary people regard it as a freeze—on the modernisation of council property, on desperately needed environmental improvements on some of our older council estates and on housing associations. I find that ironical, because I recall the time when housing associations were the blue-eyed boys of the Conservative Party and when they were built up as alternatives to council housing. Now, they discover that life if different. I have had the same experince as my hon. Friends. Representatives of housing association after housing association are saying how monstrously they are being treated and that they cannot do even the basic bread and butter things they need to do because they are being so harshly treated in the allocation of finance. Essential repairs and modernisations are not being carried out.

My third point arising out of the freeze on housing expenditure is the problem of improvement grants. I know that the Secretary of State has said that underspending authorities—as he delightfully calls them—will be allowed to continue to make discretionary improvement grants. But that still leaves the problem of people in local authority areas that are not getting that sort of treatment. It may be right for the Government to be tough with local authorities. They may think that it is right and that that is the right way of going about things, but I question the Minister as to whether he is right to penalise individuals who are not responsible for what local authorities have or have not done. I know from my own experience that a number of people who are caught by the freeze on improvement grants are in real trouble. It is a matter of hardship for the individual home owner and of hardship for some of the small builders who were desperately relying on improvement grant work and who now find that it has suddenly dried up.

There are a number of schemes in my borough where improvement grants were all ready to be approved and the whole thing has been held up because of the housing freeze. Whatever else the Minister does, I ask him to look particularly at that point, because it is quite wrong that individuals should be penalised in this way. The issue of public transport has not figured very much in the debate, and it is a very important one for those who represent South-East London constituencies. Most of my constituents are very reluctant commuters. They do not want to commute into central London to work. It is something which has been forced upon them as a result of the decline of industry and the departure of industry from a borough such as Greenwich. It used to be a borough to which people came to work. Now, it is a borough from which people go to work. The change has happened very quickly. Many people dislike it, but they have to depend on the transport system to get them to and from jobs, sometimes a long way from their homes.

We have a number of newcomers who have settled in the borough, particularly in the new town of Thamesmead. They are forced to travel in order to get back to their jobs in more central parts of London. It is not an easy operation to travel from my constituency to central London. South-East London is certainly the forgotten corner of the public transport system in the London conurbation. We do not have an Underground system. We have to live without that. Our bus links are not particularly good with central London, as my postbag constantly makes clear. That is true also for the hon. Member for Woolwich West (Mr. Bottomley). There is the problem of traffic congestion, which is a real headache on our roads. It can often take 45 minutes, and sometimes an hour or more, to get from Woolwich into central London.

Now, we have the added problem of British Rail cutting back on its commuter services. There are problems about stations being shut in the evenings and at weekends. British Rail is now delightfully imposing some sort of curfew on my constituents. Whereas at the moment they can catch late trains at 11.35 pm, 11.56 pm and even—for those who really stay out late—a 12.59 am train, if British Rail has its way the last train from Charing Cross to get to my constituency will run at 11.27 pm, so there is a substantial reduction in the quality of service which my constituents will be getting from British Rail.

I want to make a particular plea for the Thamesmead development. As the House may recall, it was to be a great new city within London, a city of the twenty-first century, rising phoenix-like from the Thames mud. It has been a chapter of delays and difficulties which have slowed down the whole project. It is still very much an isolated community, cut off from its neighbouring areas by tracts of undeveloped open space. For them the transport links are absolutely vital, because so many of them have to get back to central London for their work.

Mr. Clinton Davis

As with so many other places in inner London, my hon. Friend is to get the ashes, but where is the damned phoenix?

Mr. Cartwright

It is probably sunk in the mud at Thamesmead at the moment. The problem is that transport for a community such as that is absolutely essential. I remind my hon. Friend that no doubt many of his constituents have found a new home at Thamesmead. They may find that they miss the bright lights of Hackney. We have considerable open spaces and a lot of cold-looking water and there is the occasional tree to amuse them. That is not adequate amusement for those who come from the high life of Hackney.

Transport is important. The Jubilee line seemed to be Thamesmead's salvation. It was proposed that the Jubilee line should run to Thamesmead. Sadly, the Labour Government showed little enthusiasm and gave little encouragement to the project. Sir Horace Cutler reacted in a robust fashion. In no uncertain terms, he said what he thought about the Labour Government's attitude to the Jubilee line. He made it clear that he would bash on regardless and would give London its Jubilee line.

I was surprised that when the Conservative Government buried the Jubilee line and cut it out from the plans for docklands Sir Horace did not say anything. We heard not a cheep, moan or squeak from County Hall when the Jubilee line's throat was cut. However, it has left a considerable gap in the transport provision for South-East London.

The GLC is suffering a cut in its housing allocation of approximately 50 per cent. That must raise considerable questions about whether the Thamesmead development will continue in its present form. It is many years behind schedule. There are about 20,000 residents, but if the development is finished there will be 50,000 residents or more. Many of my constituents in Thamesmead want to know whether they will be in a proper, independent new town or whether they will find themselves isolated on a sort of Devil's Island. They want to know whether they will find themselves in a half-finished ghost town that will be developed at a snail's pace for the rest of the foreseeable future. Perhaps the Minister will comment on that point.

Whatever Conservative Members may say, they know that the cuts in Government aid to London will undermine the quality of life in the city. The cuts in rate support grant, housing, transport, health and social services generally will make the social problems of inner London more difficult to resolve. In the weeks and months to come, it will become yet more clear that the people of inner London are being forced to pay far too high a price for the Government's financial and economic policies.

5.7 am

Mr. Reg Race (Wood Green)

The debate has been lengthy, and I shall not detain the House for long. I am sure that that will please many of my hon. Friends and perhaps some Conservative Members. I shall refer to several factors arising out of problems in my borough of Haringey and, in particular, to housing. That is the most important issue in the borough and the most important social priority.

The hon. Member for Ravensbourne (Mr. Hunt) spoke about the development of industry in London and about the impact of rates on location decisions by capitalists setting up industries and by firms that wish to find the most beneficial sites. In reply to the hon. Gentleman's strictures, I would argue that the rate burden on a company represents only a small part of its total costs. Recently, I visited all the industrial estates in my borough that have been developed by the London borough of Haringey. It was clear that those industrial estates, which the borough had let to ordinary commercial companies—some of them small companies—were developed because the borough could inject the right level of expertise and could impose rates at the right level. Rates in Haringey are higher than those in the neighbouring London borough of Enfield, but they were no disincentive to firms that chose locations in those industrial estates, some of which are on the border with the London borough of Enfield. Therefore, the argument that somehow the overall level of rates is a major disincentive to the location of industries in particular parts of London which have high rates is nonsense.

I asked the hon. Member for Ravensbourne to name firms and industries that had been badly affected by that problem. My question was not answered satisfactorily. I do not believe that it could be answered, because there is not the evidence to sustain that argument.

We have had two arguments advanced with no evidence to back them up. We had the argument by the hon. Member for Fulham (Mr. Stevens) about rises in wages in the social services department of his borough council. That clearly was not sustainable on the facts.

We then had the argument about the location of industries in relation to rate levels. I do not believe that that argument is sustainable on the facts. Hon. Members on both sides of the House have a duty to relate their arguments to the facts, not to produce airy-fairy generalisations that do not stand scrutiny.

A more general point relating to London's problems was raised by my hon. Friend the Member for Vauxhall (Mr. Holland) when he argued—correctly, in my view—that public enterprise and expenditure were beneficial to the development of employment, particularly in inner city boroughs. The Library brief makes clear that the cost of unemployment anywhere in the country, let alone in London, is £440 million for every 100,000 people on the register. That being so, the argument for sacking public or private employees involves the taxpayer and the ratepayer paying out more money to keep people idle. I am against keeping people idle for no purpose. It is a nonsensical political decision. I am sure that that policy breeds only frustration among the unemployed and creates no social product or utility.

Housing in Haringey is the most important social issue. Yesterday morning I went through my constituency files and discovered that I had dealt with nearly 300 families with housing problems during the past year and written more than 1,000 letters relating to them. I am sure that that is nothing out of the ordinary for any inner city Labour Member of Parliament. However, it shows that the housing problem in my borough is extremely serious and is likely, as a result of the Government's policies, to become more serious.

Haringey has the third highest crude deficit of dwellings in London, the deficit being the difference between the number of households and the number of dwellings to be lived in. It has the sixth highest percentage of households sharing dwellings and the fifth highest percentage of households lacking sole use of basic amenities. The 1979 Greater London housing condition survey shows that 14.4 per cent. of dwellings in the borough are unfit for human habitation, that 8.8 per cent. of the stock is lacking one standard amenity and that 17.4 per cent. of dwellings need at least £3,000 to be spent on repairs to bring them up to a satisfactory standard. That is the accepted, factual background to the housing crisis in the borough that I represent.

It is disgraceful that a Government can impose a policy that makes people in those conditions wait many, many years to be rehoused. It is outrageous for Conservative Members to talk about the need to cut back, to sack people and to reduce our spending, as if those are abstract phenomena and do not matter to anyone. It is as if we are talking about hot lunches. In fact, in Bromley the issue is hot lunches. The local authority in the constituency of the hon. Member for Ravensbourne has just decided to cut hot lunches for schoolchildren from 1 April. Some hon. Members talk as if we are debating philosophical abstractions that do not matter. However, we are talking about housing conditions that are becoming substantially and not merely marginally worse.

In my borough, it is unlikely that the housing authority will be able to sustain its statutory responsibilities under the Housing (Homeless Persons) Act 1977 in 12 or 18 months' time. The problem will not be solved by changing that legislation. The answer is to provide the resources so that the authority can meet its statutory duties and take people off the waiting list, which is the purpose of a public sector housing authority. The private sector cannot and never will produce the number of houses necessary to fulfil the housing needs of the people. If the market could do so, it would. It has not done so for many a long year. It has been in decline since the First World War. Since 1914, the percentage of private sector rented housing has been declining, and it will continue to decline in the foreseeable future, irrespective of what the Government have done about shorthold tenancies.

Mr. Soley

The decline started before the First World War. It began at the turn of the century.

Mr. Race

I bow to my hon. Friend's greater knowledge.

Homelessness in Haringey is becoming even more serious. In 1977, 379 families were rehoused under the authority's statutory obligation under the Act. In 1979–80, 617 families were rehoused. The growth is bound to continue. That is the basis for asserting that it is possible that the authority will not be able to meet its statutory duties in 12 to 18 months' time, given the cuts in the housing investment programme imposed by the Under-Secretary for State and his supporters in the Government. That is feeding through to a substantially increased number of people on the housing waiting list. The number of families on the waiting list in 1978 was 8,760. The figure in March 1980 was 10,165. That is, by any stretch of the imagination, a substantial increase. The figure increases inexorably every day, every week and every month of the year.

The situation is complicated by the fact that the Greater London Council, under Conservative Party control, has virtually stopped its house-building programme save for Thamesmead, which continues erratically. This has particular significance for inner London boroughs such as Hackney, Haringey and Lambeth because of the shortage of land in those areas and general lack of resources. Those boroughs depend on outer borough nominations to meet their housing requirements. The GLC nominations which Haringey receives have dropped substantially. They stand at 320 in 1980–81. Without those outside sources of assistance, Haringey council would hardly be able to rehouse any family in two-bedroom accommodation in 1980–81.

The freeze on house building and the other housing functions of local authorities has had a serious effect in my borough and, no doubt, in other London boroughs. One effect in my constituency has been the cutting of heating improvements costing £450,000 at Bounds Green Court, Winkfield Road and Albert Vittoria House. The Department of the Environment has frozen its own bureaucracy. By that I mean that the approvals that the Department has to give to rehabilitation schemes have been frozen in the pipeline. This means that the number of empty properties in any single London borough will increase substantially.

Mr. Clinton Davis

Is it not hypocritical for the Secretary of State to denounce local authorities for allowing properties to remain idle in the circumstances described by my hon. Friend when his own bureaucratic incompetence has manufactured the situation?

Mr. Race

My hon. Friend is right. My experience is that one of the first questions asked by constituents who cannot get housing from the local council is "What about the empty council house or flat down the road from me?" When they are told that the property is part of the rehabilitation programme and that the Department of the Environment is sitting on approval for the rehabilitation, they look blankly in disbelief. We know, however, that this is the situation and that the Department sometimes sits on approvals for many months.

The freeze on housing spending, applauded by some Conservative Members in their speeches, was based on a statistical piece of nonsense.

The Secretary of State argued to his Cabinet colleagues and the House that his action was necessary, but he knew that the figures on which he was relying were figures for projected expenditure received from local authorities at nearly the beginning of the financial year. Any housing authority will confirm that the slippage that occurs in housebuilding programmes, rehabilitation programmes and the housing investment programme generally is such that the alleged overspending that the Secretary of State thought would occur would not actually have occurred.The Guardian and other publications have made clear that the alleged £180 million overspending has been reduced to £6 million—well within the tolerances that are normally approved for the carrying forward of expenditure on the housing investment programmes from one year to another.

In those statistical circumstances, it is irresponsible and stupid for the Secretary of State to pretend that he is acting because of overspending. For him to pretend that his action is necessary and to attack the poorest and weakest sections of the community is despicable. I despise the Government for carrying out such a reactionary and nonsensical policy, especially when many members of the Cabinet are wealthy and have two or three houses of their own.

The housing situation is extremely serious. This week's Shelter report shows that 3 million households are without basic amenities or live in houses that are unfit or require major repairs, 2 million have no home of their own and 1 million families live in overcrowded conditions. In those circumstances, it is irresponsible, outrageous and wrong for the Government to impose such a stupid policy on the housing investment programme and they ought to sleep uneasily in their beds in the knowledge of what they are doing to the homeless and those on waiting lists.

5.27 am
Mr. Alfred Dubs (Battersea, South)

London faces many serious problems, which have been made worse by some of the decisions announced by the Government this week, but it is a pity that we have to debate the problems of London at such a ridiculous hour. I hope that we shall be able to manage our affairs differently in future, so that the problems of our capital city can be discussed at a time when clarity of thought can be added to the process of discussion.

I should like to discuss some of the problems concerning the Inner London Education Authority, London boroughs, particularly Wandsworth, and London Transport. I start by referring to the speech of the hon. Member for Putney (Mr. Mellor). He and I have constituencies within the borough of Wandsworth, and I noted with interest that he regretted the effect of the RSG settlement on the borough. He said that it was a disappointment. It adds another harsh measure to those already suffered by the people of Wandsworth, the other harsh measures having come from the borough council itself.

The hon. Member suggested that the council had indulged in good housekeeping and that the cuts in expenditure since the Conservatives took over in 1978 had been sensible. What was not said clearly was that Wandsworth council rents had risen by more than those for any other borough in London during the past three years, that virtually no council building was taking place in Wandsworth, that empty houses stood empty simply because they were awaiting purchasers—despite the fact that the waiting list was many thousands long and getting longer—that repairs to council properties had been cut, that under the heading of social services in my constituency a lunch club and a day nursery were closed, that there were cuts in the home help service, that social workers had suffered cuts and they were desperate because they were no longer able to undertake any preventive work but were simply trying to cope with the crises that occurred, and that there were cuts in transport for the disabled. The law centres in Wandsworth have disappeared, and other voluntary organisations have faced harsh cutbacks in their expenditure. Those and the many other cuts that have taken place in Wandsworth represent a heavy price for having a Conservative council that believes that it should keep down the rates. I suggest that it is too heavy a price to pay for the many people in Wandsworth who are dependent upon the services and now find that they are no longer available, are less adequate or are available only at a higher cost.

I understand that Wandsworth, in common with other inner London boroughs, was hit this week by the Government's decision. I cannot help feeling that the Government's decision to transfer resources from inner London to other parts of the country was a politically motivated act. As long ago as October 1978, the Secretary of State for the Environment made a speech to a Conservative Party conference in which he said that the next Conservative Government would not continue the practice of milking the county ratepayer to find cash for the problems of the inner areas. This week we have seen the inner area that has been made to bear the burden in inner London. I know that in that same speech the Secretary of State went on to say that it would be unwise to spend money in inner city areas because it would represent a misunderstanding of the causes of decline in the inner cities and the policies needed to restore them to health. I cannot see that the many difficulties and crises affecting people living in inner London can be solved by cutting the money that goes to inner London. The real needs of inner London demand more expenditure to improve the services and to tackle the deprivation that is there for all to see.

I turn briefly to the ILEA. I noted earlier in the debate that the hon. Member for Paddington (Mr. Wheeler) accused the ILEA of wasteful spending. He omitted to say that his local authority, the Westminster city council, has in recent years also been guilty of spending that would be difficult to justify. That is a problem with local authorities, and I understand that. But Westminster had new housing developments, and before they were occupied by tenants they had to have extensive repairs carried out to make them decent and habitable and to prevent water from coming in through the roof. It is not right for the hon. Gentleman to attack the ILEA and to pick it out in that way.

I do not wish to reiterate all the arguments about why the ILEA should not be broken up. We have heard the arguments in previous debates. The points are well known. There is no local support among parents, teachers and those concerned with education for the break-up of the ILEA. We are now waiting for the inquiry that was established by the Government. I ask the Minister to comment on the allegation that the inquiry has already reported to the Cabinet but the Cabinet did not like the report, rejected it and sent it back, presumably for further amendment. It adds to the uncertainty hanging over inner London if the inquiry is further delayed. I hope that we shall have its report soon.

What will be the effect of the rate support grant settlement on the ILEA? It is difficult to calculate the precise impact of the various measures on inner London education expenditure in the coming year. I understand that if the ILEA makes no cuts in its services and keeps them on the same level next year as this year, the effect of the rate support grant settlement will mean that the ILEA will have a cut in Government support of about £90 million a year.

If the ILEA were able to cut its expenditure to about £640 million, which I understand is an assumed budget figure, it would be getting £50 million or £60 million less next year than in the current year.

The penalty elements in the settlement will be brought to bear on the ILEA because to avoid them the ILEA would have to cut its expenditure to an impossibly low level. The ILEA is entirely an inner city authority. When comparing it with other education authorities, we should not omit to mention that they tend to go into suburban and less deprived areas whereas most of inner London is an area of deprivation.

I accept that that does not apply throughout. I concede that there are a couple of boroughs that are more affluent. However, in the main, inner London has to tackle some of the most difficult problems. I fear that the harsh cuts that the Government are imposing through the announcement that they made earlier this week will be extremely damaging to the well-being of schoolchildren in London and to the well-being of education in London. The level of the cuts that are demanded means that it will be difficult for the ILEA to cope with them. I fear for the future of education in London.

I turn briefly to some problems in Wandsworth. There are housing problems, and I am concerned especially about the HIP allocation, which was announced a few days ago. I understand that Wandsworth council asked for £35 million for the coming year and that the offer made to it is half that amount, to which can be added £6 million or million on the assumption that the sales of council housing will generate that much income plus a little more from one or two other sources.

I am not here to defend Wandsworth council, which is Tory-controlled. I am concerned about housing standards in the borough. It will be difficult for the council to meet its obligations, to carry out essential repairs to council properties to keep them at least to statutory levels. It will be difficult for it to do that without neglecting essential repairs, cutting the money going to housing associations or stopping the one housing scheme that the council has for next year, which is to build much-needed sheltered housing for the elderly. I fear that the way in which the HIP allocation has been set will make housing difficulties in Wandsworth extremely difficult. They are bad enough already, and I believe that they will be even worse in future.

I turn briefly to the problems of London Transport. Some years ago London Transport used to be among the best transport authorities, if not the best public transport authority in any major city. It has now gone into a sad decline. The standard is lower and the services are unreliable. All too often, one sees a notice board outside tube stations carrying information about train cancellations and delays. It might be instructive to compare London Transport with public transport in Paris. About 20 years ago public transport in Paris was run down and decayed. Recently there has been a dramatic improvement. Why is that? The answer is that extra resources have been made available. This is true not only in Paris but in most other major cities in the world. They are spending more on public transport than London is. We appear to be trying to spend less and less.

In 1976, the fare receipts of London Transport covered 65 per cent. of expenditure. In Paris they covered 41 per cent. In 1977, investment in public transport in Paris was £221 million. Investment in London in bus and rail services was £64 million.

Apart from the major advantage that Paris public transport has had adequate resources to provide good services, it has had other advantages. It has an integrated system of Metro, bus and rail, with easy interchange. It has a fare structure which does not provide a disincentive to people to use it. The fares are lower. It also has the carte orange system, whereby Paris is divided into a number of zones, but there are essentially flat fares and people can buy season tickets, lowering the cost, providing a more certain income to the undertaking and making it more workable.

It may be argued that Paris is smaller than London and that its transport system is smaller. But it is not that much smaller. I believe that the main comparison is valid, even allowing for the differences in size. London comes out very unfavourably in a comparison of what is being done about the services.

As a result of the extra effort that has gone into public transport in Paris, there have been increases in the services and in numbers of journeys, matched by a growth in productivity. In London there has been a decline in the number of journeys and the number of passenger-miles, which has inevitably resulted in a constant or declining productivity. Paris public transport has self-confidence and is reliable. I believe that the whole House will agree that public transport must be the lifeblood of a modern city.

Inner London desperately needs resources to have a proper transport system to tackle the deprivation and improve the standards of its housing. I hope that the Government will think again about their wish to denude central London and inner London of resources. I hope that they will reverse the trend, because only in that way lies a decent life for the people living in inner London.

5.42 am
Mr. Clinton Davis (Hackney, Central)

What has happened this week is that the Secretary of State for the Environment has declared war on inner London. That is the whole burden of the indictment made not only by Opposition Members but by Conservative Members representing Wandsworth and Hammersmith. It is the case made by Mr. Richard Brew, to which I referred earlier in an intervention. He has categorically stated that he believes that the policies being pursued by the Secretary of State are grossly inequitable.

That case was also convincingly argued in a leading article in The New Standard on 16 December. It said: Today the Environment Secretrary Mr. Heseltine makes his announcement of the Rate Support Grant to local authorities for the coming year. His proposed cut in the proportion of funds the Treasury pays out from 60.1 per cent. to 59.1 per cent. will do further injury to councils already half crippled by Mr. Heseltine's policy of slashing housing budgets in 1981–82. London, even more than most cities, will be seriously affected. The real reduction in housing funds for boroughs unable to sell many of their council homes could be nearer 25 per cent than the 15 per cent. Mr. Heseltine was claiming yesterday. Therefore, the case is advanced by both Labour and Conservative sources.

There can be no doubt that the main victims of the right hon. Gentleman's assault will be, as my hon. Friend the Member for Wood Green (Mr. Race) said, the poorest and most vulnerable members of the community, people on whom the Secretary of State's colleagues have already vented their spleen by cutting the value of unemployment, maternity, injury, sickness and invalidity benefits by 5 per cent. and child benefit by more than 8 per cent. The origin of these deliberate and disreputable attacks by what are already a discredited Government is the Prime Minister herself. I must say that I found it a bit thick the other day listening to her interview with Michael Charlton, justifying her toughness and her surgery with these words, difficult though it may be to believe: Now come on shake out. I know you had an operation yesterday. It's time you put your feet to the ground and took a few steps. Those were her words. Such advice medically can sometimes be fatal.

I wonder whether even the Prime Minister would be able to tell that to Mr. Andrews, who lives on the Pembury estate. After rent deduction he is left, to pay for his gas, electricity and food, with £28.85 a week. Mr Andrews is an elderly man who has suffered a terrifying stroke and desperately needs to have warm accommodation—much warmer than most people require.

Mr. Andrews fell into arrears with his electricity bill—some £500. There was a misunderstanding in relation to part of the bill, but nevertheless the arrears were substantial. No proper inquiries were made by the London electricity board before it disconnected his electricity. The code of practice was not honoured on that occasion. There was a mistake.

We know, of course, that the LEB itself was being required substantially to increase its prices—another form of taxation imposed by this Government. We are left with the position that Mr. Andrews cannot receive assistance from the local authority, for the reasons given by my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Brown), because its ability to help is restricted to section 1 of the Children and Young Persons Act 1963.

The Department of Health and Social Security can offer only very limited help. The fuel direct payment scheme really does not offer any solution in a case of this kind. The Department is further constrained because much of its discretion is now being removed. The LEB itself finds it extremely difficult to cope with a situation of this kind, where the arrears are so massive.

I am glad to say that discussions have taken place, and I believe that Mr. Andrews' electricity supply will be reconnected. How does somebody like Mr. Andrews, to use the Prime Minister's expression, put his feet to the ground? How does he help himself on £28.85 a week, out of which he has to pay for future electricity bills, consuming electricity at an above-average rate, and, of course, for his gas and his food as well?

It is no small wonder that I read in the Daily Mirror the other day that the Prime Minister was reported as being the most feared and hated figure at Madame Tussaud's. They took a poll of the visitors there. It is true that the visitors put her behind Hitler and Amin but in front of Dracula and Jack the Ripper.

To add insult to injury, we have had these two malevolent statements from the Government this week. The Secretary of State for the Environment has deliberately and, to make matters worse, gleefully chosen to disadvantage the inner city areas such as our own to the advantage of the shire counties. In this crazy new system of his, he seems to give very low priority to spending for personal social purposes.

In his substantial cuts in the housing programme, the Secretary of State has revealed a complete abdication of his responsibilities, and in particlar his responsibilities for housing in inner London, as though we needed any further abdication after the operations of the Greater London Council over recent years. My hon. Friend and I know very well—and I am sure that this happens in other London boroughs—that properties have been left vacant in the hope that someone will turn up and buy them. Mortgages are difficult to come by for people in the Hackney area because very few of them rank in the area of affluence which somehow the Secretary of State has managed to discover amongst council tenants.

I suppose the Secretary of State must have some fine attributes, but humility, compassion and a desire to discover how the real world goes about its business and the way in which ordinary people live are not, seemingly, amongst them. He seems to be totally unmoved, unconcerned and unaware of the plight of areas such as Hackney. That is not surprising in a way, because he occupies the lush pastures of Henley and he has a penchant for luxurious living himself. He is reputed to be a millionaire, so I do not suppose that he cares much about these matters. But I am surprised that he has ignored the reports that he must have received from the Under-Secretary of State, who is not unfamiliar with the Hackney area. He has been there, and I hope that he is not unconcerned about the plight of the people about whom I speak.

Some of the criteria which I should have thought would occupy the minds of those in the Department of the Environment seem to have escaped their attention, so perhaps I can turn to Hackney and deal with some of the criteria which I believe to be important.

In August, before we felt the full blast of the recession—it was a gathering storm at that stage—the level of adult male resident unemployment was 10.6 per cent. in Hackney. It is always difficult to get the exact percentage, but that was reported to the council. The figure is now of the order of 12 per cent., as against a national figure of 7.8 per cent. in August and 8.3 per cent. today. The Greater London average was 6.3 per cent. then. I am not sure what it is today, but it is still less than the national average.

The position now is considerably worse than it was in the summer, and unemployment in an area such as Hackney hits particularly the ethnic minorities. I accept the argument that my hon. Friend the Member for Hammersmith, North (Mr. Soley) advanced. It hits particularly the disabled and the unskilled. We have plenty of unskilled in Hackney, because more than half the unemployed there are unskilled or general labourers, and there are very few vacancies for such jobs in Hackney at present. Even for skilled workers, there are three unemployed for each vacancy. We are the lowest income area in the whole of inner London. If the Secretary of State took the trouble to find out, he would find that very few of that class of £8,000 per annum households about which he is so fond of speaking are to be found in my constituency.

My constituents are hit quite directly in two ways. They are hit by increased rents, although they are essentially low-income families, and by the reduced rate support grant.

I invite hon. Members to consider some of the criteria for deprivation—the incidence of perinatal deaths, the incidence of problems afflicting one-parent families and the incidence of problems afflicting the elderly and the disabled who struggle for survival. The figures again are higher in Hackney and Tower Hamlets than anywhere else in London. Yet these are factors which, apparently, the Secretary of State thinks are of very little consequence.

Some of these problems are reflected in a report that was issued by the head of social work and domiciliary services on 30 September 1980 in relation to fuel debts, a matter to which my hon. Friend alluded and which I should like to particularise, because this is a problem. Although I referred to Mr. Andrews in particular, it is a problem that will develop with devastating intensity, particularly if we have a cold winter. The head of those services informed the council in September that upwards of 100 families with children were approaching the Directorate each month for help with fuel debt problems. It should be noted that this estimate excludes elderly or handicapped persons. That was the scale of the problem in September, and if we have a very cold winter indeed I hesitate to think what the scale of the problem will be.

This is a problem that has arisen because of the high cost of fuel and low incomes, because of people living on pensions finding it enormously difficult to cope and because the powers that are available to local authorities are very limited indeed, even if one considers the provision where children are involved and where the local authority has to intervene under section 1 of the Children and Young Persons Act 1963 to prevent their going into care because of these problems. It is pointed out that the intention of the Act was never that responsibility for income maintenance should fall on the local authority, but that is what is increasingly happening.

It is reported that Based on expenditure last year, a notional amount of £4,340 was alowed within the 1980–81 estimates for expenditure under section 1 payments to clients for gas, water and electricity bills. On 16 September actual expenditure under this heading totalled £6,205. That was an overspend of more than 40 per cent. in less than six months, and with the winter months still to come we know that the fuel debt problem will obviously increase.

Nothing can be done for adults or for handicapped and elderly persons except to advise them how they can make use of alternative methods of heating and lighting, so what the Government say is "Rely on local charities". I believe that to be extremely time-consuming and difficult. In any event, charities these days are very reluctant to provide large sums to settle fuel debts.

We have already had cuts in expenditure on personal social services, which the Government do not seem to take into account at all. A survey was undertaken this year by the Association of Directors of Social Services, and I should like to refer the Minister—he may already be aware of the survey—to the introduction. This is from an independent source, not a politically motivated source. It says: Expenditure reductions have been achieved through abandonment, deferment or reduction in planned growth; by introducing new charges or increasing existing ones; and through cuts in current levels of services. They have affected every client group; the elderly and the handicapped are two of the groups who have been most seriously affected by cuts/savings which have often adversely influenced the quality of life. Services for children have also been badly affected and particularly disturbing are the cuts made in support services for families with children under five. What has emerged from this is that there was never any prospect that the cuts or savings could be achieved by reducing administrative and clerical costs alone. How much nonsense we have heard about that tonight from some Conservative Members, including the hon. Member for Ravensbourne (Mr. Hunt)—the good housekeeping argument. This is a group of independent officers who say that that argument is palpable nonsense.

I should like to quote another passage from the introduction, because I think that the Minister should direct his attention to this. The association says: It is in those very authorities where social services budgets have been subject to restraint and some cuts or savings for a lengthy period that clients have suffered most. These authorities are the underspenders or the uncarers. It goes on: Those authorities and those with traditionally low budgets, which might indicate that they do not have a tremendous commitment to the personal social services, have continued the cuts so that the people who turn to them for help have suffered a further diminution in already inadequate services. That may be what is happening up and down the country in some of the Tory-controlled boroughs, where the Tories are so proud of the fact that they underspend. Of course, they receive the affectionate pat on the back from the Secretary of State, who prefers to use the axe on those authorities which are carrying out their statutory duties. These are factors which ought to weigh very heavily in the Secretary of State's mind.

It seems a very long time ago, but I remember the contribution made to this debate by my hon. Friend the Member for Fulham (Mr. Stevens). It was a most remarkable contradictory contribution, but eventually he said that London was a special case. So it is. On every criterion, it ought to be a special case. Even though the hon. Gentleman's argument was jumbled and confused, at the end of the day that was the suggestion that he clearly made to the Under-Secretary.

Just as other hon. Members have referred to the problem of housing, I should like to spend a few moments dealing with that. I suppose that every hon. Member who represents an inner London constituency is most affected by the problems of housing. I share surgery premises with my hon. Friend the Member for Hackney, South and Shoreditch. Our problems are not dissimilar. At that surgery, which we hold weekly, and in the mailbag that I receive, certainly housing is the preponderant problem.

What is it that is being asked for by decent people who are at the end of their patience, and understandably so, people who have been on the waiting list for years, sometimes people who want to come back to Hackney but just cannot find anywhere to live? All that they are asking for is a roof over their heads, a decent home. That is a perfectly reasonable request. Yet so many of our people are living in grossly overcrowded conditions, often suffering from extreme dampness, and there are young kids who are ashamed to bring their friends to their homes, which in some cases have not even sufficient room for them to introduce them into their homes. Case after case of that kind occurs. Just as my hon. Friend cited cases, I could do so, but I shall not do that at this stage of the deabate.

Mr. John Hunt

Is the hon. Gentleman seriously telling the House that all this has happened in the last 18 months?

Mr. Davis

No, of course not. But it adds insult to injury when the Secretary of State imposes a moratorium on us against that backcloth. It is not so much a moratorium for our people as a crematorium for their reasonable aspirations.

Mr. Ronald W. Brown

Following the intervention of the hon. Member for Ravensbourne (Mr. Hunt), does my hon. Friend agree that over the past 10 or 15 years we have received no help whatsoever from the London borough of Bromley towards solving our problems in Hackney?

Mr. Davis

Representatives of the London borough of Bromley are a political incubus on the body politic of London. They are selfish and unprepared to co-operate, refusing over the years to allow the GLC to do what it should have been doing—that is, to act as a strategic housing authority. There they were selfishly standing on their own. The only thing in their favour is that they have quite a nice Member of Parliament and they do not deserve him. Some of his views are a bit odd, but he is quite a nice chap.

I remember the arguments adduced not so long ago by people like those from Bromley. They said that there was a housing surplus in London. There is not much of a surplus in Hackney. About 15,000 to 16,000 people are on the waiting list.

The GLC's house condition survey shows that 10 per cent. of London's housing stock is statutorily unfit, and the situation is worsening. An additional 5 per cent. is lacking one of the five basic amenities—an inside lavatory, a fixed bath in a bathroom, a washbasin, a sink, and hot and cold water at three points. Twenty-five per cent. of all London's housing stock needs substantial attention.

Given the position in London as a whole, the Under-Secretary will be prepared to agree that that in Hackney it is infinitely worse than the average. I agree with my hon. Friends who say that private landlordism cannot produce any sort of answer to these problems.

refer here to the Newlon housing trust, a housing association in my constituency. It wrote to me recently saying: Here in Hackney the housing associations have suffered a cut of over 50 per cent. in their allocation and we are told that even deeper cuts are scheduled for the financial year 1981–82. The effects of the cuts, as the association puts it, are reflected in two ways: first, the projected production of 200 units for this year 1980–81, will drop to 100 units and secondly the threat of redundancies which will put at risk the commitment and expertise that has been so painstakingly built up over the past six years. The work of the housing associations is of significance. Certainly the Government believe that, but now they are using their axe on them as well. So the Minister will have to deal with the housing associations, too. I hope that he will come down to Hackney to visit the Newlon housing trust.

The burden on local authorities in dealing with housing is not confined to the points I have outlined. I intervened in the speech of my hon. Friend the Member for Hackney, South and Shoreditch to refer to the need to provide bed and breakfast accommodation. He rightly described the burden being imposed on Hackney and, no doubt, other inner London boroughs by desperate people following the advice of the Prime Minister, given so glibly and without much thought, as is so often the case, to come down to London to look for work. There is a statutory obligation to provide bed and breakfast accommodation. Those numbers are rising. About 200 families in Hackney are receiving bed and breakfast accommodation. The predicted length of stay is 18 months, and that is unbelievable.

Many of these families with children—some of them single-parent families—are living in accommodation which is pretty overcrowded. Indeed, 80 per cent. of the hostels are deemed by the environmental health officers to be overcrowded. In those places there is no room for the children to play; the cooking facilities are sparse, if they exist at all; and the families are forced to go out to eat, if they can afford to eat out. There are inadequate washing facilities—nowhere to dry the clothes and the nappies. Obviously, all that leads to further frustration, hopelessness and humiliation, and the cost to local authorities is constantly growing.

Money is needed to remedy those problems. Conservative Members say that we cannot keep throwing money after them, but what do they suggest should be done? I hope that the Under-Secretary of State will not repeat that trite remark. I have heard him use it before, but he was not in the Government then. Perhaps he has learnt a little. I do not know. We cannot solve these problems with the provision of nurseries, play rooms and proper monitoring of such cases by case workers without money. There is no other way in which they can be solved.

The Under-Secretary has been interested in the concept of partnership schemes, although I wish he had not written such a nasty letter to the London borough of Hackney on 18 September. I hope that, with the benefit of hindsight, he will agree that to charge Hackney as being a profligate authority, a high spender and so on in the way that he did, and to write a nasty, solicitor's letter—I speak as a solicitor—was not right. I shall not read the letter unless the Under-Secretary urges me to do so. It was an unpleasant letter, and the Minister received a terse, effective reply. The deputy leader of the Hackney borough council pointed out that it is all very well for the Under-Secretary, acting under orders from the Secretary of State—from the commissar or gauleiter, whichever title one prefers to use—to criticise Hackney, but it was carrying out its statutory obligations and its moral duties to the people it represented. It also embarked upon a partnership scheme which had received the praise of the Under-Secretary of State for Employment. He congratulated the partnership on being one of the best in the employment field". He suggested that it might benefit other partnerships to see details of the Hackney/Islington partnership's work". No sooner had those words been uttered by the Under-Secretary of State for Employment than the Under-Secretary of State for the Environment, who obviously had not read his colleague's words, decided that Hackney should begin to dismantle this important venture. The venture has brought more than hope. It has brought new areas of employment to Hackney. It has done invaluable work. I need not rehearse all that because the Under-Secretary of State should know it. But that is now in peril, and it is no use the Under-Secretary of State asking why the Hackney borough council does not plead with the Government and say that it has not overspent so that they can cease to crack the whip. The burden is on the Secretary of State, not the Hackney council, because he knows the facts. But he is choosing to ignore them.

The Government say that councils such as Hackney are driving business away, but that is confuted by the Under-Secretary of State for Employment. But in any event, if a local authority is prepared to do its job properly, it will spend, it will be forced to put up the rates, and that can have the effect of deflecting the attention of new businesses. We concede that. But how does it escape from this Catch 22 position that the Government have created for it?

In Hackney and in other inner city areas there is a concentration of problems, and what the Secretary of State has done is to depict a blindness, a callousness and a deceit, as well as an incompetence, in failing to recognise the extent of those problems or that they exist at all.

The Under-Secretary of State has a lot to answer in the debate and, more importantly, he has a great deal to answer for

6.15 am
Mr. Frank Dobson (Holborn and St. Pancras, South)

Considerable changes have happened in the financing of local government services and housing in London this week, and those changes are so complicated that it is difficult to make any accurate assessment of their likely effects. Nevertheless, it is clear that the people of London have been dealt two very crushing blows by the Secretary of State for the Environment in his housing investment programme statement on Monday of this week and the rate support grant statement on Tuesday. They very severely damaged the hopes, aspirations and likely future living standards of a lot of the already worse-off people living in London.

The Secretary of State claims that the national cut in housing investment programmes for next year will be 15 per cent. down on the figure for this year. In the case of outer London, that 15 per cent. cut which applies in the rest of the country will be 31 per cent. and in inner London the reduction will be 41 per cent. In some cases, some of the inner London councils have already committed themselves to spending sums in excess of the amounts that the Secretary of State proposes to provide for them next year. Many others are quite near that limit, and five or six of them already have some overspending this year which will have to be deducted from their next year's spending, so they will all be in a bad way.

One might assume from this massive attack on housing investment in London that London was in some way better off than the rest of the country, but this is manifestly not so, because one-quarter of all London's housing stock is unsatisfactory and nearly one-third in inner London is unsatisfactory.

In London as a whole there is a shortage of about 100,000 homes, and for every household rehoused from a waiting list in 1979 six more households joined that waiting list. In 1979, around 17,000 homeless families were given temporary accommodation by the London boroughs. Council rent levels in London are already one-third higher than in the rest of the country. London ratepayers already contribute nearly £500 per dwelling, compared with £23 for district councils in the rest of the country.

As a result of the new Housing Act, which weakens the position of private tenants—of whom there are also a disproportionate number in London—more people will have to turn to the public sector for housing. Despite that, public sector building starts in Greater London have declined from 24,000 in 1975 to just over 4,000 in 1980. Led by the GLC, Tory councils in London sold more than 13,000 houses last year. Tremlett, the GLC's Tory housing chairman, said, in a burst of philosophy: to stop building council houses in the poor areas of London is an essential step. I do not know why it is essential, but that was what the man said. I can do no more than quote him accurately.

Another thing that came out of the housing investment programme statement was the Secretary of State's announcement that he was looking for rent increases of £2.95 per dwelling throughout the country. He said that he thought councils would have to introduce their own rent increases—averaging 30p—for the costs that fell outside the subsidy system. That brings the total to £3.25.

That is not the end of the matter for those living in council houses in London. A London Boroughs Association document, dated as recently as 3 December 1980, indicates that the national average addition of 30p may be as high as £2 for council tenants in some London boroughs. Most London boroughs and even outer London boroughs will considerably exceed that 30p national average. The Secretary of State, as if not satisfied with the dirty work that he did on Monday, jumped up—nothing daunted—at the Dispatch Box on Tuesday and tried to do the same thing again.

I am not an expert in the block grant system. Indeed, few hon. Members would claim that distinction. However, some might do so with more justification than I. I understand that the rate support grant settlement for next year represents a 3 per cent. reduction on this year. None of that reduction will be borne by Wales. The whole reduction will be borne by England. London will suffer considerably more than any other area. I have browsed through the figures and I understand that next year the total grant for London will be roughly the same as that for this year.

Next year, every increase, including inflation, will have to be borne by the ratepayers of London instead of by taxpayers. That is another unfair imposition on the people of London. The figures are extremely difficult to understand. I hope that I have understood them. If I have not, it is partly due to my inability to do so and partly due to the deliberately fraudulent nature of the documents circulated by the Department of the Environment. They are calculated to deceive rather than inform.

Councils will receive full grants only if they hit the targets set by the Department of the Environment for next year. If they fail to do so and exceed the target figures, their grants will be reduced. The newest local authority, the Inner London Education Authority, which the House created comparatively recently, will find that the Government's target for its expenditure is £468 million. This year, however, the Inner London Education Authority expects to spend about £700 million. If the new block grant system had not been introduced and the rate support grant system that had gone before had continued, ILEA could have expected to receive £145 million from the RSG settlement.

I asked the Secretary of State yesterday how much the ILEA would get under his new system. He said: it is estimated to receive £69.7 million. That, as can be seen, is a dramatic reduction on the estimated £145 million to which it would have been entitled had the existing system continued. Indeed, it represents a substantial reduction on the £180 million which it received by way of rate support grant settlement this year.

To get to the Government's target expenditure level of £468 million and thus to qualify for the maximum grant, which is in excess of the £69 million that the Secretary of State thinks that it might get, it is estimated that ILEA would, amongst other things, need to break the law. It is believed that to achieve that figure, having spent something approaching £700 million this year, ILEA would have to sack one-third of its staff and not give them any redundancy pay. As hon. Members will be aware, that is against the law.

Therefore, there seems to be little prospect of the ILEA achieving the Government's target and consequently entitling itself and the people of London and the children at inner London schools to the maximum figure that the Government might be able to give it under the new system. That is for an education authority 40 per cent. of whose children have mothers who were not born in the United Kingdom, 27 per cent. of whose children are not living with both natural parents and more than 10 per cent. of whose children do not speak English as a first language.

The Inner London Education Authority has also been subjected to much ignorant, prejudiced and despicable criticism by Conservative Members, led in particular by the hon. Member for St. Marylebone (Mr. Baker), and to a great deal of adverse press criticism as a result of the publication—I should add, at the request of ILEA—of a report by Her Majesty's inspectors of schools. The Minister is proposing draconian cuts in the amount of money available to ILEA—an authority that provides an education service to those of his constituents whose parents are not rich enough to buy their way out of the system.

The final conclusion of the report states: If, however, the authority can continue to develop its in-service training programme and retain the good will of its existing teachers, and if it can continue to recruit and keep sufficient good teachers, there is enough good practice in all sectors to justify reasonable confidence that considerable further improvement can be achieved. There are one or two big "ifs" there, and they have become bigger this week as a result of the proposed rate support grant settlement introduced by the Secretary of State. If ILEA, in order to meet the Government's target, needs to sack one-third of its staff, how can it retain the good will of its remaining teachers or continue to recruit and retain sufficient good teachers? It is absurd and disgraceful to suggest that it can do so in the face of the Government's decisions on the rate support grant.

The attack on the standard of provision for inner London in paricular is not confind to ILEA. From my quick reading of the figures, the inner London boroughs' total budgetary target for the next year is around £150 million less than they are getting this year. All the figures are still rather uncertain and remain so.

Under the mysterious and allegedly simple system that the Secretary of State has introduced, the announcement having been made, all local authorities have to calculate what they consider they are entitled to claim from the Government by way of grant. They then have to tell the Government what they feel they are entiltled to, and the merry men in Marsham Street consider the bids. It is certain that the amount of money that the totality of authorities in Britain claim will exceed the amount that the Secretary of State has announced that he wants to spend. The Department of the Environment will therefore have to tell the authorities that they are not getting all that they want, either by introducing a standard reduction for everyone or by being selective, biased or prejudiced, as the Secretary of State has been in every other stage of the propositions. Probably some time later in the year there will be further adjustments for inflation through external causes, in spite of the fact that the Secretary of State has denied that.

The system is intended to cut down bureeaucracy, to clear things up and make them simple. However, the final revision of all the figures and the final clear entitlement to grant for 1981–82 will not be known to local authorities until their books are well and truly closed and gone over by the district auditor. Next year's grants will be sorted out finally in 1983–84, which is an odd way to run any system. It is deliberately introducing uncertainty, and uncertainty and discretion on the scale envisaged by the Secretary of State are the breeding ground for bureaucracy. That will be the inevitable result, and it will be unproductive.

In introducing his new rate support grant in the House on 16 December, the Secretary of State talked of "new weapons" that had been placed in his hands by the legislation, Those new weapons are direected against the welfare of the people of London, as the figures that I have been able to give, even at this early stage, prove.

London has certain rich areas. Generally speaking, they tend to get richer towards the outskirts, although there ae patches of people of extreme elegance and wealth even in the middle. However, large areas still have bad housing, great poverty, high unemployment, a collapsing transport system, poor health provision and schools not as good as they should be. The Secretary of State is deliberately making the situation worse. That is the stated object of his housing investment programme and rate support grant announcements.

When the Chamber has been graced by the presence of, at best, half a dozen of the 50 Conservative Members for Greater London, I wonder what those Greater London Tories intend to do about the situation. Will they set about representing the people who elected them, or will they continue to creep and crawl to their own Front Bench and do nothing for the people of London, as they have done nothing since May 1979? They represent a Conservative overall majority in this Parliament. If they jib and say that they will not accept a settlement that is so damaging to the people of London, the settlement cannot go through. One of the major problems, I suspect, is that the Prime Minister is a London Member and feels that she has to play Jane to the Tarzan of Marsham Street. No one else on the jungle of the Tory Benches, to carry this metaphor to ridiculous extremes, will try to tangle with either Tarzan or Jane.

In circumstances where there are now 42 Labour Members and 50 Tory Members representing Greater London, there is nothing that the 42 on the Opposition side can do to put the rate support grant and housing investment programme settlement to rights. There are 50 Members able to sit on the Government Benches, if they deign to do so, who can put it right. If they do their duty by their electors, that is the course they will follow.

6.36 am
Mr. Thomas Cox (Tooting)

We are fast entering the period of Christmas. It is supposed to be the season of joy. There is no joy for the people of London or, indeed, for the people of this country this Christmas. The reason is not hard to find. It is the Tory Government and the policies they are pursuing. Whatever the issue, the outcome is bleak. The list extends from employment, housing, the social services and education to transport.

Week after week, however, the Prime Minister and the Chancellor of the Exchequer claim that we are on course. If we are on course, my reaction is to say "Heaven help us if, in the view of the Government, things start to go wrong." Many issues are discussed in the House. Whatever the issue and wherever it occurs, one can also say that it exists in London. The capital city of this country is in one hell of a mess. We are starting to become a rundown city that is full of despair.

I want to talk about several issues. They are issues within the responsibility of the Greater London Council and local authorities in the GLC area. Unless there is awareness of these issues by the Government, the problems will worsen. Every hon. Member holds advice centres. High on the list of the cases we hear and the letters that we receive is the issue of housing. I should like the Minister to inform the House what action the Government have taken in 19 months which has reduced the waiting list of those seeking housing in London, has helped people to purchase property on the open market, has helped the building industry and has helped to reduce the number of unemployed building workers.

The housing position in my area worsens monthly. I wonder whether the Prime Minister, the Chancellor of the Exchequer or the Secretary of State for the Environment have any idea of the problems faced by many people. I have received a letter from the Catholic housing aid centre in Wandsworth which states: We interviewed Elanie. She is a cheerful, independent young mother of a baby boy and was deserted by the child's father early in her pregnancy. She lives, eats and sleeps in a room 10 ft by 10 ft, cramped with furniture and personal belongings, which leaves virtually no activity space, and shares kitchen, bathroom and WC with the landlord's family in his overcrowded household. In the absence of a solution to date from either the council or housing associations, she writes to us 'I am having to walk the streets at all hours of the day with the baby. I am constantly being hassled by the landlord each time the baby cries or walks on the floor. It is not easy to keep him cooped up in his cot. I am getting to the stage where I am constantly hitting him for every cry and I know this is only because I am under pressure at home. I do try to go out or go away with friends, but I cannot keep it up very much longer'. That sort of letter provides an insight into the problems faced by many people in many parts of London each week, each month and, in many cases, all year round. That is why my hon. Friends have stressed that housing is so important.

The Minister must be aware of the figures. About ¼ million families are on waiting lists, 16,000 are classed as homeless, 18,000 families are in bed and breakfast accommodation and 2,000 people sleep rough in the city every night. One can add the special problems of the elderly, the handicapped, the mentally ill and the ex-prisoners with nowhere to go. They all need housing and, in many cases, special accommodation. How can they ever hope to find somewhere decent to live with their families if they are not helped by local councils or housing associations?

Father Noel O'Regan of Tooting was for many years chairman of the Threshold housing association. He was deeply committed to helping people and he worked seven days a week from early morning until late at night to try to get the housing association off the ground and to help my constituents. He was assisted by a first-class team of men and women who shared his concern. He recently wrote to me a letter that illustrates the enormous housing problems in Wandsworth which, without the help of the Government, will not be eased.

He said: In the year to 31 March 1980 the Tooting Centre, covering the Borough of Wandsworth, received 1,659 new enquiries of which 38 per cent. were either actually homeless, or had the prospect of becoming so within 28 days. Even if all the housing associations working in Wandsworth decided to devote all their programme to housing single people (neither a likely nor necessarily desirable turn of events) we could not even house the homeless, let alone any of the many other deserving cases. That illustrates the sort of problem that we face. Such are the housing problems in Wandsworth that without the help of housing associations in the borough many people would not be housed, because Wandsworth council cannot rehouse them. It repeatedly supplies names of people who should be rehoused and tries to get local housing associations to house them.

As a direct result of decisions taken by the Secretary of State for the Environment, whatever help in the past has been possible from housing associations is fast coming to an end. Recently, the four Members of Parliament for Wandsworth received a joint letter from all the housing associations in the borough. They asked for our help to fight the Government's cutbacks in the financial allocations to housing associations. My hon. Friend the Member for Battersea, South (Mr. Dubs), my right hon. Friend the Member for Battersea. North (Mr. Jay) and I went to visit a property at 13 Shelgate Road, S.W.11. It is owned by a housing association. It was bought at an auction at a cost of £23,000. We were told that it would cost about £30,000 to repair and modernise the property and bring it back into habitation, yet as a direct result of Government policy the work on the house has stopped.

Many hon. Members have mentioned housing associations during the course of the debate. Will the Minister tell the House of any housing association, anywhere in Britain, that has written to the Secretary of State in recent weeks to support fully his decision to cut back their finances? It would be interesting to hear what has been said. We know what has been said in Wandsworth. It would be interesting to hear the Minister tell us of the sort of comments that have been made by housing associations.

Will someone say how a policy that keeps people without a home and that boards up property can be justified while at the same time thousands of qualified building workers up and down the country are out of work? How can the Government justify that policy? The Government are causing that aspect of life in Britain. I am sure that at our advice services this weekend we shall be inundated with decent, hardworking, honest people asking us to help them to find somewhere to live. We say that that is hopeless. They will cite boarded-up properties that they have seen. They will ask why someone does not do something about those properties.

If the Minister does not know where those properties are, we can let him know. When will he tell us about the Government's policy to get those boarded-up houses back into circulation for those who need them?

Mr. Ronald W. Brown

My hon. Friend will be aware that yesterday afternoon the Minister made much of telling the House how many empty properties there are in various boroughs in London, as though it was a great thing that he had achieved.

Mr. Cox

My hon. Friend has made an interesting point. It is a valid one with which I intended to deal.

Comments have been made on the actions of the Secretary of State for the Environment against what he calls the overspending councils. Is it the right hon. Gentleman's intention to take action against councils, of which Wandsworth is one, which deliberately board up properties because they are trying to sell them and are not having much success in so doing? Those properties could be used for rehousing in Wandsworth. Is it the right hon. Gentleman's intention to take action against such councils?

I suggested to the Minister that the councils were denying revenue to their local authorities. They are denying revenue in the form of rent and rates. Is it his intention to say to the councils "Either you will start to get these properties back into circulation so that people can live in them or we intend to take action against you for not doing so"? It will be interesting to hear what he has to say about that.

Is the Minister aware of the rackets—we have heard about one or two of them, but there are many others—that operate in private housing? There are those who say "I can get no help from the local authority or housing association. Let us see whether there is any private rented accommodation available." Is he aware of the rackets that are being pursued? For example, I have had cases referred to me in which landlords have said to prospective tenants "Pay eight weeks' rent in advance, and the rent is £35 a week. If you cannot pay eight weeks in advance, at £35 a week, you will have to pay fortnightly a rent of £50 a week." Is he aware of the fees that are still charged to those who are seeking accommodation and the old racket that we have often discussed of a fixtures and fittings charge?

How can those who say "The only hope of getting somewhere decent to live for my family is in the private sector"—we know that that accommodation is pretty scarce, but let us assume that they find somewhere—ever have any hope of being able to save sufficient money to secure a deposit to buy a property of their own when they are faced with abuses by landlords in trying to get somewhere to live in the first place? I hope that we shall hear from the Minister what action his Department will take to deal with such abuses.

I cannot believe that the Minister who will reply, who is a London Member, is unaware of the problems of housing in London. I am sure that he has housing problems in his constituency. When will someone in the Government have the guts to fight for these people and to fight to secure the finances that are needed to help them? One of the most important aspects of life in our capital city is the right of people to live with their families in good accommodation. Unless the Government give them hope, they will remain in a life of depression, which many of them have had to suffer for too long.

I turn to the subject of transport. We have all recently received from British Rail a letter telling us of the cuts in Southern Region services. We are told that they are being made because of a need to save money. The suggested cuts in my area can be described only as utter madness, a comment that could be echoed by hon. Members on both sides of the House. Few London Members will not be affected by the cuts that British Rail will impose in the very near future.

We have little employment in Wandsworth; it all went away long ago. Local people were willing to travel to other parts of London to work, but I do not know how long they will be able to do that—or will want to.

I should like to speak of just a little of what British Rail's decision involves. Tooting and Wandsworth Common stations, which cater for a large number of people who come into the city to work, will close after 10 o'clock at night from Monday through to Saturday. Wandsworth Road station is to close after 10 o'clock from Monday through to Friday and will close all day on Saturday. Two other stations serving a wide area of the borough—Earlsfield and Putney—will be closed at night. What utter stupidity this is on the part of British Rail! Who thinks that the world ends at 10 o'clock? There are many shift workers. Shift work follows no set pattern. People can start and end at all hours of the day or night. What will happen to the transport services to take them to or from their work?

I hope that no hon. Member will mention the possibility of buses. Many of us find London bus services a joke—the long wait between buses, the bus that never comes and the lack of facilities for people who have to wait in the cold, the wind and the rain.

I wonder whether the Prime Minister, the Secretary of State for the Environment or the Minister of Transport ever travels on a bus. Whatever their position in the Government, I cannot believe that any of them should not travel on a bus. If they did, it would give them an indication of the problems that millions of Londoners have to face day in and day out.

There are still large numbers of people who do not own a car and rely exclusively on buses or train services to go to work or to go out to enjoy themselves. A few months ago the Prime Minister told a conference "What you do is not sit at home and mope about the fact that you have not got a job. You must be prepared to move and find alternative work in other areas." We all know that there is little hope that anyone coming into London, unless he is highly skilled and very well paid, will find anywhere to live. But the situation is fast approaching when, even if a person finds somewhere to live, he will not be able to get to work because of the transport system.

It is not only a question of going to work and getting home again. The fact that the stations I have mentioned are to be closed after 10 pm on a Saturday surely means that many people who like to go out on Saturday evening—that includes hon. Members and many of their constituents—will find that there will not be the trains to take them home. That is another aspect of the utter stupidity of this closure policy.

Mr. Spearing

Is it not much worse than that? Because a relatively few stations may be closing at 10 pm, people might well be dissuaded from going by rail because they are not to know whether the station they would want to use might be closing. The proportionate effect of this announcement upon the utility of the rail services is thereby much worsened.

Mr. Cox

That is a valid point. I hope that Members of Parliament representing London constituencies, Labour or Conservative, will kick up such a hell of a fuss that we shall make the people of London aware of what is happening. Here I pay tribute. Many of us are highly critical of the press situation in London, with the rundown in the number of newpapers. But I must in all honesty say that the kind of campaign that the New Standard is giving to this issue is something that many of us welcome, because it is a newspaper that is read—

Mr. Cartwright

It is the only one.

Mr. Cox

My hon. Friend is right, but at least a good many people of London read it. I hope that as they read it they become aware of what is happening to transport services in the near future.

I do not think that any of us is in doubt about what will happen in a few months' time. We shall then be told by British Rail or the Secretary of State or somebody else that the rail revenue is down and that there are more losses on the transport services, so more cuts will have to be made in what is left of the services. Or we shall have the other argument—that because of the loss of revenue fares must be increased even further. I do not need to tell anyone in the House about the escalation in fares that has taken place over the last two or three years, be it on buses or on trains. So again the people of London will be hit.

Earlier, my hon. Friend the Member for Battersea, South (Mr. Dubs) compared the Paris system with the London system. When will someone learn that what is taking place is the strangulation—the murder—of the London public transport system? When will someone say "We have to pump money into the system to build it up again"? The Under-Secretary is himself a London Member. I hope that he will be among the first to launch a campaign of that kind from within his Department.

It has been a long night, but I make no apology for the time I have taken. I believe that it is the duty of all London Members to bring to the attention of the Government the problems that we face and will continue to face unless there is a change of policy. We must remember that there is no going back. If services are withdrawn, in the vast majority of cases they will never restart. In the London borough of Wandsworth, land is being sold by the borough council to private developers. Once sold, that land is lost for ever to the people of the borough and to Londoners as a whole. It is our job as London Members to fight for the people whom we represent.

Despite what the Prime Minister says, we all know that the day will come—it may be a gradual process, but it will come—when the U-turn starts. Many of us hope that it will not be long in coming. The longer that it is delayed, the more the damage the Government cause not only to London but to the country as a whole. Only the Government can decide when the U-turn is made. I hope that they will have the courage to make the U-turn in the very near future.

7.7 am

Mr. Ted Graham (Edmonton)

This debate has been about London, about the Government's attitude to it and about the assistance that they are giving us.

When I began noting the salient points in hon. Members' speeches, I was thinking in terms of making my own intervention at some time between four o'clock and five o'clock. I revised that to between five o'clock and six o'clock and subsequently to between six o'clock and seven o'clock. However, this has been something of a record for London debates, because by the time we have finished we shall have been discussing these matters for nearly eight hours. That demonstrates how passionately we Opposition Members care about our responsibilities to our constituents. In my view, Labour Members have done their constituents proud by staying up as late as they have and demonstrating their concern for their constituents. However, it would be churlish not to acknowledge that the contributions from Government supporters have also added to the debate, although I suspect that their attendance owes a great deal to the fact that Opposition Members asked for the debate and to the desire of the Government Whips to make a debate of it.

I want to refer collectively to the speeches from the Opposition Benches by my hon. Friends the Members for Hammersmith, North (Mr. Soley), Norwood (Mr. Fraser), Newham, South (Mr. Spearing), Hackney, South and Shoreditch (Mr. Brown), Hackney, Central (Mr. Davis), Vauxhall (Mr. Holland), Wood Green (Mr. Race), Battersea, South (Mr. Dubs), Tooting (Mr. Cox) and Holborn and St. Pancras, South (Mr. Dobson). They have demonstrated their commitment to their constituents and they have shown, above all, a passionate concern and a basic knowledge and experience which have been built up not only in their time as Members of the House but during the many years that they served local government in London.

My hon. Friends ranged widely over the subjects that have been of concern tonight—housing, employment, race relations, transport, social services and education. At times we had illustrations that were heart-rending, distressing and in more than one instance, for me at any rate, haunting because of the poignant conditions in which constituents have found themselves—not wholly as a result of the actions of the Government during the past 18 months—and, as so many of my hon. Friends have said, insult has been added to injury by the damage that has been done to London this week by the announcements from the Dispatch Box.

What has happened this week? First, funds for London housing have been slashed. There have been further cuts in education. Council tenants have had their rents increased and there have been soaring rate increases. The Government have wished Londoners a merry Christmas with those announcements, and I submit that they amount to a kick in the teeth for London and a step back in our desperate fight for a decent life for all our people.

One theme that has run through all the speeches from the Labour Benches is not that our rates are going up but that the Government have been able to use the device of the new block grant. They have been able to find a method by which to punish London more than any other area. No doubt the Under-Secretary of State, who is to reply to the debate and who, to the best of my knowledge, has been awake for most of the debate and has not left his seat—he has been assiduous and has listened to everything that has been said—will tell us that what the Secretary of State has perpetrated is fair and reasonable.

Let me give the hon. Gentleman the only quotation that I shall use from a newspaper. Under the headline London badly hit by Heseltine rate system", the Financial Times said yesterday: London has been treated unexpectedly harshly in the new rate support system … The beneficiaries have been the mainly Tory-controlled shire county councils. There is a great deal more that can be said and a great deal more that will be understood, not only in the shire counties—and we know the shabby and shoddy deal that was done by the leader of the Association of County Councils with the Secretary of State and his colleagues to buy them off from opposition in the other place—and in every council that is represented by my hon. Friends but, as the hon. Member for Ravensbourne (Mr. Hunt) knows, in every Tory-controlled council in London, too. It will be understood that this device has been chosen to punish London and the inner city areas and to benefit the others.

Let us take a quick look at some of the winners and some of the losers over rates. The winners are Northampton, Solihull, West Somerset, Southend, Brighton, Bournemouth, Norwich, Hove, Eastbourne and Bath. Those are some of the areas that have benefited most by this settlement.

Let us now look at some of the losers. They are Tower Hamlets, Southwark, Islington, Hackney, Lewisham, Greenwich, Barking, Haringey, Wandsworth, Harlow, Newcastle and Brent. Only two of those are not London boroughs, and one would have said that that list comes from an independent source, or an independent observer, merely abstracting the situation as it has emerged. That is the true picture of what is happening.

Last year we saw the beginning of the Tory policy of punishing the cities, the urban areas and the deprived communities, and we now have a grant that is based not upon problems but upon population, where the wealthier communities fare comparatively better than the poorer ones. It was a grotesque assertion by the Secretary of State in his statement to the House on Tuesday that his new system was fair, rational and open to scrutiny."—[Official Report, 16 December 1980; Vol. 996, c. 217.] It is not fair. It is arbitrary, crude and capricious. It is not rational; it is irrational. It is open to scrutiny, but it is not open to influence, alteration or amendment. The arrogant statement will be seen for what it is—a brazen attempt by a discredited Secretary of State to try to delude and deceive the public. It is a blantant act of spite and political malice, aimed particularly at London and the cities.

What is the effect? This is the fourth cut in assistance to London and other areas in the past 20 months. The cuts have been made by Budget, by statement and by written answer. It is no wonder that the people of London and the inner cities are mourning the fact that their living standards are continuously being eroded. How will the Minister care to reply to the situation that we now face in the light of the Conservative election pledges to reduce taxation, to protect the needy, to safeguard standards in education and to encourage thrift?

Let us look at the block grant, because that is at the core of what we are now arguing about. First, let us nail the lie that the present Government meaningfully consulted anyone about the details of the block grant. I happened to serve on the Committee that considered the Local Government, Planning and Land (No. 2) Bill—now an Act—as did my hon. Friend the Member for Newham, South. Week after week we were inundated with submissions and pleas in despair from the Association of Metropolitan Authorities, the Association of District Councils, the GLC and every London borough. Every unit of local government throughout the country begged the Government to stop.

The Government will say to us tonight "The old system did not work." Local government recognises that the old system had blemishes, but there were ways in which improvements could be made in it which did not please the Government—quite rightly. It was said that if people were given more money to spend, they would he spending money that was not theirs. That was a problem. The associations said "We shall help you to find another system." Yet throughout 1980 the Government persisted and refused to alter the arrangements, except surreptitiously for their friends in the House of Lords, when it came to that shoddy deal whereby the united front of the local government associations was broken when the Association of County Councils reneged upon the agreements it had made and bought the kind of deal the pay-off for which we have seen today.

It is hypocrisy for the Government to say "We are giving more freedom to local government to do what it likes with its money." The Government forget that there will be less money available next year and that a smaller percentage of that money will rank for grant. It is certainly an arbitrary device.

Talking in terms of a very careful analysis of what needs to be spent, I can tell the Minister—he knows this very well, of course—that every time the working parties got to grips with his colleagues on the kind of indicators that were needed, there were dispute, frustration and anger on the part of local authority representatives. No part of this package has met with the full agreement of the local authority associations.

When we talk about the size of the problem in London, and when Opposition Members have sought to protect the interests of London, we must bear in mind that there are more than 1 million pensioners and more than 1½ million people of school age and under and that 6 million journeys are made on London Transport. We must bear in mind that although we live in London and have to pay very heavily for the privilege, there are hundreds of thousands of people who are poorly paid. The average wage of hospital domestic workers is £64 a week. For bus conductors it is £89 a week. For Underground cleaners it is £73 a week. For street cleaners it is £67 a week. These are the basic wages for which a great section of Londoners have to settle at the end of the week.

The Government announcement on HIP allocations will have a crippling effect on housing. The size of the problem is indicated by the waiting list of the London boroughs, which is growing by 100,000 every year. There are now 13,000 people registered as homeless in the capital. My hon. Friends have spelt out the very sad state of the housing stock—the percentages that are unfit and lack one of the five basic amenities.

It is not insignificant that three of the most needy authorities from the point of view of the quality of the housing stock are Islington, with 18 per cent. of its stock unfit, Haringey, with 15 per cent. and Hackney, with 20 per cent. These are the authorities that have tried desperately for many years to meet the needs of their people, but it is they who will be punished by the Minister in his objective of reversing the drift of aid from the centre. I am proud that it was a Labour Government who started the drift of centrally raised funds to London to deal with such problems. That is nothing of which my hon. Friends need to feel ashamed.

The Government's comprehensive assault on London began in May 1979. Labour Members, who are doing their best for their constituencies, are entitled to expect the Greater London Council to provide some relief. It is a regional government and as such it ought to be protecting London, just as my hon. Friends are. However, the GLC, particularly its leader, has been silent about the onslaught by the Government on its resources.

Let us consider the problems that individual Londoners will face on rates. London has always had to pay more rates. In my borough of Enfield, for instance, the domestic rateable value for the average hereditament is £270. In Newcastle it is only £154, in the Rhondda it is £62 and in Sedgemoor, in Bridgwater, the constituency of the Minister for Local Government (and Environmental Services, it is £178. In Enfield the average householder pays £240 a year. In Cardiff he pays only £147, in Rhondda £73 and in Bridgwater only £186. That illustrates that even in present conditions London ratepayers are paying pounds more in rates before they begin to carry the heavy burden that awaits them.

Let me cite the position of Enfield, Barnet and Haringey. Barnet is Conservative-controlled and Haringey is Labour-controlled, and they are located on either side of my borough of Enfield, which is Tory-controlled. Let us consider what they got last year and translate the effect of the grant as though that is how much they will get. No one knows how much they will get. The Department's figures are that Barnet and Enfield will be hit by 10.3p but that Haringey, which suffers the worst social problems, will be hit to the extent of 14.8p. That is the equity that is applied under this Government. The boroughs that have the worst social problems and need the most money will be given less, and the problems will get worse.

Two or three other problems gravely concern me. I am worried about the effect on the life and safety of people in the capital. Let us look at the ambulance service, which is part of the assistance that is given by the Government to London. The London ambulance service is in a parlous state because of cutbacks and restrictions. I am told by the service that it is now reduced to the level of being unable to provide ambulances, and emergency patients are having to be taken to hospitals by mini-cabs. People will be in the care of mini-cab drivers who are not qualified. They should be in the care of qualified ambulancemen. That is one of the ways in which the Government, wedded to the idea of privatisation and determined to keep as many people as possible off the public payroll, will run London into danger.

The Under-Secretary for the Environment is involved with and has a deep interest in the question of adequate fire cover for London. Before the last general election, when there were rumours that a future Tory Administration would not honour the salary agreement that had been made, the Under-Secretary of State declared that such rumours were nonsense. He said: May I make it quite clear that these rumours are utterly false and the Conservative Party is on record as to giving a commitment to underwrite the pledges on salary increases already made". But what happened two or three months ago? The negotiators had interviews with the Secretary of State for the Environment and the Home Secretary. The Prime Minister said that it was nothing to do with the Government and that the Government did not interfere in such matters. Will the Under-Secretary of State tell the House that in no way—by word, deed, nudge, wink or in any other way—did the Government seek to influence the negotiators to settle for less? I know that the GLC used as much pressure as possible to press for an increase of only 6 per cent. Fortunately, at the end of the day, good sense prevailed and the firemen will get the increase that they deserve.

The Government have produced a Green Paper and they have told all fire authorities that they believe that their standards can be reduced by 10 per cent. According to the GLC, one of the bases on which adequate fire cover is given is that in emergency, if we are short, we can call upon the fire brigades in Kent, Essex and other counties. But what happens if they decide, without consulting the GLC, to reduce their fire cover? At the fire at Alexandra Palace, every available fire appliance in London had to be brought in, as well as appliances in Kent.

Mr. Ronald W. Brown

Before my hon. Friend leaves that point, will he bear in mind that many outlying areas are using part-time firemen in order to cut down costs?

Mr. Graham

That is a dangerous situation, but it is inevitable. I feel sorry for anyone in local government, at any level, who is being put under pressure by the Government. Those people are being forced to consider ways of keeping their heads above water and providing some sort of service, even though it may be the sort of service that, professionally, they know they should not provide.

In his reply, will the Minister deal with the effect of the increases in rates on the small business man and the small business community? He must be aware that there have been more bankruptcies in the past 12 months than, if not for all time, at least for many years. Most have occurred as a result of Government imposts of taxation and rates, and particularly as a result of the high cost of borrowing money. Would the Minister care to tell us whether that has been taken into account?

Will the Minister also tell us what has happened to the Government's pledge—I call it an election bribe—that they were wedded to abolishing domestic rates completely? I wonder what the people who voted Conservative because they were promised that the rates would be abolished will say when their rates in Enfield, which last year went up by 20 per cent., go up by a figure not far short of that next year. They voted Conservative believing that one day—if not this year, then the year after or some time after that—rates would be abolished.

Does the Minister appreciate the enormous damage that these financial arrangements have made to the relationship between central and local government? Is he really aware of the anger and dismay that have been caused at every level in local government—lay, political and professional—by the arrogant manner in which the Secretary of State and his Ministers have ridden roughshod over the attempts of local government to help them in their work?

For London and Londoners, the picture that emerges in this week before Christmas is one of unrelieved gloom. The Government have shown their contempt for those who are at the sharp end in our capital city in their never-ending battle to master the nightmare of social deprivation, compounded by diminishing public resources to deal with it. For London's homeless, the stony response from this discredited Minister is clear and unbending—"There is no room at the inn." There is no room, no blanket, no food and no hope.

But the Londoners I know will deal with such selfish disregard of their problems in the only way they can. They will deal with the Minister's cronies at County Hall next spring by ensuring that their fight back begins by returning a Labour GLC to power. The cities have been plundered and pillaged while the Government's shire supporters are rewarded for their political faithfulness to this desperate gang of desperadoes masquerading as a Government.

The manner in which the Secretary of State has chosen to manipulate the variables available to him—and designed by him—confirms the worst fears of responsible local government of all political persuasions. The Secretary of State has provided himself with an instrument which gives him unprecedented dictatorial powers. In this first year he has used them to punish London mercilessly. Let me give the Under-Secretary a warning that I hope he will pass on to his right hon. Friend. When we are returned to power, we shall not hesitate to use those same powers for the ends of social justice and equality. That is the message of hope that I give to London this morning. The return of a Labour Government cannot come too soon.

7.33 am
The Under-Secretary of State for the Environment (Mr. Geoffrey Finsberg)

I am sure that people will treat the threat of an event that is not likely to happen for 10 years with the seriousness that it deserves.

This has been a very useful debate, but I must say—as we always say on occasions such as this—that it would have been much better had I been replying at 7.33 pm instead of 7.33 am. I hope that the problems of Liverpool will not take quite as long to deal with as the problems of London. I should like to deal with as many points as I can, and there would seem to be two options for me to follow. The first would be to give a brief summing-up of what I believe the debate has been about. The second would be to try to make some comments—some of which I hope will be found useful—on all that has been said by the hon. Members who have spoken, many of whom have been present throughout this long debate.

Many hours ago, the hon. Member for Hammersmith. North (Mr. Soley) brought a refreshing angle to our debates on London. I do not recall any other hon. Member presenting such an angle for 10 or 11 years. He mentioned the problems of racial harmony. He was right to do so. It is a subject that affects us all, because we all know that whatever our political views, whether we are capitalists or Socialists, neither system will survive without racial harmony. It is in the interests of us all to build on a foundation that is more solid than many like to think.

Many of tonight's speeches fell within the responsibilities of other Departments. I can comment briefly only on some of them. I shall pass on to my colleagues exactly what has been said so that they can see for themselves. The hon. Member for Hammersmith, North will appreciate that much of what he said fell within the responsibilities of the Department of Education and Science or of the Home Office.

There is one hopeful sign. I refer to the constructive way in which schools seem to be working. I hope we all agree that schools have an important part to play in the promotion of harmonious community relations. That is particularly true of areas such as inner London, Bradford, Leicester, Leeds and so on. In those cities, people from different cultures live in close proximity and share the same services. Schools cannot be isolated from the attitudes—good or not so good—which prevail in the outside world.

Given the potential for destructive divisions and dissensions in many parts of London and, regrettably, the occasional outbreak of communal violent behaviour, it is a tribute to schools that on the whole they have remained harmonious and stable communities. It is almost poetry to see some of the nativity plays that are being performed in infant and primary schools. A collection of children, representing 10 or 11 different religions, take part. The whole colour spectrum is represented. None of the children and few of the parents who watch see a difference in the children. They are children, participating in one particular act. That is important. While most schools strive with some success to promote attitudes of mutual respect, responsibility and courtesy and all the ingredients of enlightened behaviour, only a minority claims to teach racial harmony directly. I am not sure that it can be taught. It must be lived, felt and experienced. The juxtaposition of schoolchildren of all races and colours, both at work and at play, provides valuable clues as to how that can be achieved.

There is a lot of room for argument about means and ends. Last year, my right hon. and learned Friend the Secretary of State for Education and Science set up a committee of inquiry into the education of children of ethnic minority groups, under the chairmanship of Mr. Tony Rampton. The committee is expected to produce an interim report shortly and to complete its work by the end of 1982. I hope that it will have some significant things to say on this topic. We look forward to hearing from it.

The hon. Member for Hammersmith, North referred to the problems of the police in controlling demonstrations and to the signs in some areas of racial activities by various organisations, specifically in South-East and East London. My right hon. Friend the Home Secretary is aware of concern about an apparent resurgence of activity by extreme Right-wing groups. We have a tradition in this country that people should be able to come together to express political views, however objectionable they may be to others, provided that in so doing they do not break the law. That is a tradition that we should hesitate to abandon. But my right hon. Friend has consistently made it clear that where people break the law they can expect firm action.

I understand the dilemma of those who see pictures or television news flashes of marches with the police on either side. The police have their weekends regularly disrupted. We should remember that the police are present at marches and demonstrations to carry out their duty to preserve the peace, not to protect the participants.

A review of the Public Order Act 1936 is now taking place. We are currently considering the comments that we have received, and are still receiving, on the Green Paper that we published earlier this year as well as the report by the Select Committee on home affairs. Our conclusions will be announced in due course.

I disagree with the views of the hon. Member for Hammersmith, North on the private sector. I hope later to indicate why he is wrong.

I confirm that the Housing Corporation has received an allocation of £491 million for the next financial year to distribute to housing associations. That is the same in real terms as this year's allocation. There has been no cut of any kind in that finance. The spending of that capital is for the Housing Corporation, not for the Government, to decide. The Housing Corporation was created so that the Government would have an agency through which they could deal with the housing associations. We do not intend to tell either the Housing Corporation or the housing associations how to spend their money in detail. We have tried consistently to make that clear. There has been no change of heart by the Government. Within the limits of the money that is available, we still want to encourage the housing association movement, but it would be wrong for me to hold out any promise of more money being made available. I believe that by preserving the amount in real terms—£491 million—we have done as much as we can in the current situation.

The hon. Gentleman asked specifically about revenue deficit grant. We are examining on its merits each case that is put to us. There is no hard and fast rule either way.

Mr. Clinton Davis

There seems to be a common experience among a number of inner London Members of complaints being made to them by various housing associations that they are being hard done by as a result of the activities of the Housing Corporation under its present leadership. If the Minister can be convinced that the evidence that is being assembled is accurate and that the Housing Corporation does not seem to be doing its duty towards inner London, will he at least undertake to discuss the matter with the chairman of the Housing Corporation and, if the case is made out, put him on the right lines?

Mr. Finsberg

I am prepared, and so are my ministerial colleagues, to look at any evidence. None has yet been forthcoming. I am not prepared to be drawn any further than that.

Mr. Soley

Is the Minister saying that if a housing association claims that it is in severe financial trouble and could go bankrupt within six months or so, it should write to him putting its case?

Mr. Finsberg

The line of communication is with the Housing Corporation. Housing associations know that. There is also a line of communication to the Government. The housing associations know full well the way in which it operates. All I am saying is that if they have problems they should not hide them but put them forward for proper consideration.

My hon. Friend the Member for Paddington (Mr. Wheeler) referred to the Metropolitan Police. I am glad to be able to confirm that its strength has had a net gain of 880 this year and that the training school at Hendon is working at full capacity.

I noted with care and concern my hon. Friend's comments about high rates forcing jobs away from London. We all know that that is true. All I hope is that some local authorities will pay rather more attention to that than they appear to have done at the moment. The hon. Member for Norwood (Mr. Fraser) raised a considerable number of points. I shall be seeing him later today, I hope, together with one of his hon. Friends, about another matter. He told us of his borough of Lambeth. I have to say that Lambeth is notorious for its refusal to live in a real world. When penalties are visited on it, it tries to blame everyone but itself. The financial crisis in Lambeth was brought on by its refusal to make reductions in expenditure, which have been made by the overwhelming bulk of local authorities up and down the country, of both political persuasions.

The hon. Gentleman told us in graphic terms of the desperate plight of his constituents. Much can be done by Lambeth now. The borough council owns 3,100 vacant dwellings—9 per cent. of its stock. If it sells to its tenants, it can add substantially to its housing allocation by 50 per cent. of the proceeds. The sum of £548 million has been allocated to London for HIPs in this new round, which is more than 30 per cent. of the national total. There has been a continual trend in a reduction of resources allocated to public sector housing from 1974–75, and I do not remember Labour Members attacking their Government for a continued year-by-year reduction in capital expenditure. It is a hit hard for them to start now.

Mr. Stuart Holland

Will the hon. Gentleman give way?

Mr. Finsberg

I shall come to the hon. Gentleman, who made, if I may say so, a rather lengthy speech. I want to do him justice when I come to him and not take him out of turn.

I should like to join in the tribute that my hon. Friend the Member for Putney (Mr. Mellor) paid to the hard work done by Wandsworth council. One has only to talk to people who live and work in Wandsworth to know of the prayers that go up every night from them because they do not live across the border in Lambeth, which takes no notice of the people who work or live in the borough.

I recognise the worries that my hon. Friend expresses, but we have explained for the first time all the factors and put them all out in the open in the rate support grant settlement. Let us look at that and the method by which it was reached. During the years of the Labour Government, from 1974 to 1979, massive amounts of grant were drawn into London and away from other authorities. London's total share of grant is estimated to be down to 15.8 per cent., which lies between the 1977–78 and the 1978–79 levels. Several of my hon. Friends have said that the final figure will depend on what authorities actually spend. The actual total grant to London in 1981–82 is at present estimated to be £1,517 million. This is about the same as last year. Many London authorities are currently spending at levels substantially higher than their assessed needs. The high levels of grant going to London have encouraged them in this practice.

This year, the new block grant system is being introduced with new assessments of grant-related expenditure, which replaces the old assessments of spending need. We believe that the new grant-related expenditure assessments are based on more objective and open judgments of what authorities need to spend than was the previous regression-based formula. We have published in the booklet what those judgments are. They have been applied in the same way to all authorities. The results have shown the inner London authorities to be spending substantially in excess of their assessed need.

There should now be a wide-ranging debate about these new assessments and what they show. One of the virtues of the new assessments is that it is possible to do this. It was not possible under the previous system with its incomprehensible jumble of factors. The settlement will encourage tighter financial discipline, because the new grant system gives less to those providing higher standards of service than their needs assessment indicates is necessary. Generally, they stand to lose more grant if they fail to respond to the Government's request for savings and exceed the projections of expenditure which the Government have made.

There is a safety net which ensures that, provided authorities respond to the Government's call for expenditure reductions, the maximum grant loss in relation to any ratepayer as a result of the introduction of block grant is kept down to the equivalent of an 8p rate. There is a further safety net of 5p for the effect of grant losses which arise from authorities spending in excess of their grant-related expenditure.

There will, Mr. Speaker, as you know, be a full debate on the RSG settlement in the House shortly after the Christmas Recess. It would be wrong of me to anticipate the debate by having a substantive discussion on the settlement on this occasion. I have tried to respond to the points that have been made about the method and the fact that for the first time those who are interested can see for themselves how the matter has been worked out.

The hon. Member for Newham, South (Mr. Spearing) opened his interesting speech with what, I am afraid, is his familiar view on enterprise zones. It is known that the hon. Gentleman is opposed to them, as he is against sin and for bicycling. I do not think that he has added anything tonight to the debate on enterprise zones. The hon. Gentleman fell into the same trap as some of his hon Friends. I have, therefore, to repeat that there has been no cut in the allocation of cash to housing associations via the Housing Corporation this year. Nor has there been any cut in the allocation of money to local authorities for their own public housing schemes in this year.

The measures we have taken relating to local authorities are to make certain that they do not overspend. We will be happy if they spend right up to the limit. The hon. Gentleman referred to the grant-related expenditure book. The figures are given following interdepartmental consultation and discussion. They were not simply conjured out of the air by the Government on education, as, I am sure, the hon. Member understood.

My hon. Friend the Member for Fulham (Mr. Stevens) brought a breath of reality to the debate. He pointed to the unchecked growth of local government expenditure, which the Government are determined to reverse. The moratorium, as he says, hits the good and the bad. The overspending authorities such as Camden are penalising others such as Hackney in the sphere of housing expenditure. It should be remembered that Hackney has been basically an underspender. However, because Camden and others have deliberately flouted the figures that were given to them, Hackney, like a lot of other authorites, has had to suffer. I do not recall any Hackney Members publicly blaming Camden and others for the problems that have beset places such as Hackney.

Mr. Ronald W. Brown

Of course not. We blame the Government.

Mr. Finsberg

On the suggestion about London legislation, if there were a wish across the parties for that, it might be that the vehicle already exists in a GLC general powers Bill. It would be interesting to see whether there is a feeling that specific legislation should be introduced.

The hon. Member for Hackney, South and Shoreditch (Mr. Brown) made the mistake that many hon. Members have made in the debate of talking as though there are no inner city areas outside London. The problems of the inner city of Leicester, for example, are as great as those in Islington, Hackney, Lambeth and elsewhere in London and there are also the same racial problems. We have tried in our new method of analysis to give the same weighting to factors wherever they occur. I believe that by doing that we shall make a more positive contribution to a better balance.

The hon. Gentleman asked me to look again at the rate support grant position of Hackney. There is no question of the council having to come to the Government on bended knees, but it has to tell us what reductions it is making in order to get a waiver. Other authorities, including the other half of the Hackney-Islington partnership, have done that. We do not want councils to come crawling. We want the facts. Councils must tell us how they can qualify for a waiver. Islington and Hammersmith have done that, and I see no reason why Hackney council should not follow their example. If it can make a case on the waiver, it will incur no further penalties and that opportunity will remain until the RSG order is approved.

Following what I said about the sins of Camden overspend being visited on Hackney, I should add that Hackney will be able to add part of its housing underspend caught by the moratorium to its allocation for next year. It is not all lost.

I have known the hon. Member for Hackney, South and Shoreditch for a long time. He usually knows his facts, but there are not, as he claimed, 1,000 vacant dwellings in Hackney. The council owns 2,300 empty dwellings. The 1,000 properties to which the hon. Gentleman referred have been vacant for 12 months or more. It is the responsibility of the council to dispose of those properties and bring them into use. There are many ways in which that could be done if the will were there. I am sure that the hon. Gentleman, who cares passionately for the interests of his constituents, will be banging on the door of the town hall in Mare Street to ask why 1,000 properties have been vacant for 12 months or more. Why could not Hackney follow the GLC's example of hornesteading and put people in homes, instead of letting the homes rot and leaving the people on waiting lists as mere statistics?

Mr. Ronald W. Brown

The Minister's right hon. Friend said that there were 1,000 vacant dwellings in Hackney. I said that I did not believe him. The Under-Secretary is wrong to suggest that the GLC has put homesteaders in. There are many GLC houses in Hackney that have remained empty and on sale at £41,000. There are dozens of empty houses on the Fairview development. People cannot afford to buy them.

Mr. Finsberg

I wish that the hon. Gentleman would occasionally listen to what I say. My right hon. Friend said that the 1,000 properties in Hackney had been vacant for 12 months or more. I did not say that the GLC had been rehousing people in homesteads in Hackney. I was talking of GLC housing activity all over London. If the hon. Gentleman wants figures on the number of homesteads in Hackney, he has only to write to the chairman of the GLC housing committee, who will be delighted to provide the information. I pay a public tribute to George Tremlett, who is a most competent housing chairman.

I know that I shall upset the hon. Gentleman, but I do not mean to do so. He has failed to understand that the root of our ills is that for years we have been paying ourselves more than we have been earning. We have been raising people's expectations by saying that we could do more for them than we actually could. The tragedy is that this has gone right across the nation, in every area. We made it perfectly clear before we were elected that we would get the economy right, which would involve many hard decisions. I said that on platforms, as did my colleagues. We concealed nothing, because we were sick and tired of British electorates being conned by Governments making promises. We did not promise an easy life. We were clear about that.

The hon. Gentleman cited some sad cases of GLC tenants in Hackney. I could cite similar cases of tenants under the Socialist Camden council three years ago, when there was no shortage of money. The hon. Gentleman and I know that over the years we have both complained, with justification, that there seemed to be a lack of communication in many housing management authorities of both political colours. Occasionally, he overbakes his pudding and spoils his case by trying to imply that it happens only in Conservative authorities. If he would be more catholic and show that it goes much broader, that would be fairer.

The hon. Gentleman also raised the question of hospitals. I wish to clarify the position. The 1980–81 cash limit is based upon the planned spending proposed by the Labour Government. It restored the 3 per cent. squeeze and gave an increase in planned spending of ½ per cent. of that planned for 1979–80. The better-off regions such as the Thames region have been given 0.3 per cent., and the worst-off regions 0.6 per cent., of real growth. The cash limit provides for a 14 per cent. increase in prices between 1979–80 and 1980–81 and in earnings from due settlement dates. Separate provision has been made for increased pay arising from existing commitments and the staging of past awards. Full provision has also been made for the Clegg award on ancillaries and ambulance men. The 1980–81 cash limit has proved to be broadly adequate, and any degree of squeeze will be much smaller than last year. Cash limits for 1981–82 have not yet been fixed.

My hon. Friend the Member for Ravensbourne (Mr. Hunt) gave a wise analysis of how a sensible local authority could operate. As he said, the GLC has shown the way to make effective reductions to aid the ratepayers. He was right to point out that many firms had left the areas where rates had risen. The hon. Member for Vauxhall (Mr. Holland) uncharacteristically dodged my hon. Friend the Member for Woolwich, West (Mr. Bottomley) when he challenged him about Lambeth rates. He wriggled and he dodged. He tried to blame the Government, conveniently omitting to tell us that for most of the period in question there were both a Labour Government and a Labour Lambeth council. That was game, set and match to my hon. Friend the Member for Woolwich, West.

I shall try to help the hon. Member for Vauxhall about St. Mungo's. I am sorry that he has written to the Department and received no response. I shall have that investigated later today. It is possible that the letter did not reach us. That does happen. I shall get my private office to contact the hon. Gentleman to make sure that we have the letter. I shall then have the matter investigated as a matter of urgency. As the hon. Gentleman knows, the Housing Corporation, and not the Government, is the body statutorily charged with responsibility for housing associations. When I have the hon. Gentleman's letter, I may still have to say that it should go to the Housing Corporation. I undertake to carry out an investigation urgently.

Mr. Stuart Holland

The point that I am making about St. Mungo's and the Housing Corporation is that it seems that the Housing Corporation lacks the capacity to deal with cases which involve social needs and which demand social work in linkage with statutory authorities. I appreciate that at short notice the hon. Gentleman may not be able to comment on the North Lambeth day centre and the problems that I have stressed.

Mr. Finsberg

I think that that would be a matter for my right hon. Friend the Secretary of State for Social Services. I recall that the hon. Gentleman said that it was the property of a regional health authority. It would not be the responsibility of my Department. However, I shall pass his views to my right hon. Friend.

I turn to my hon. Friend the Member for Ilford, South (Mr. Thorne). The Housing Act 1980 has brought on to the market the possibility of a new form of tenancy—namely, the assured tenancy. We believe that it is one way of getting people to invest again in the rented sector. It is important that we do not let the rented sector continue to die and wither away. I give the House the encouraging news that the transport supplementary grant for London will be £130 million, an increase over last year of £10 million. My hon. Friend the Member for Woolwich, West referred to the rate support grant, and I have covered that. I merely add that Greenwich, to which he referred, could add to its capital receipts by selling its houses instead of defying the law. I hope that the council will reconsider its foolish attitude very swiftly.

The hon. Member for Wood Green (Mr. Race) offered reasons for the moratorium that were wild and inaccurate. He knows that the only reason for the moratorium was that there would be an overspend. It was clear from returns from local authorities since the moratorium first came in that there was a real risk of the £768 million London allocation being exceeded, and this could not be allowed to happen.

As for Haringey, there is much that it could do. The previous Administration made considerably more money available to the borough than it could possibly spend. It acquired 6,000 houses, a large number of which are still awaiting rehabilitation. Though there was no shortage of resources at that time, Haringey never made full use of its HIP allocation, and the hon. Gentleman knows that. It could now harness the private sector to assist it. I am glad to note that it is going to do a pilot improvement-for-sale scheme, which will ensure the rehabilitation of some properties and give the council capital receipts with which to augment its HIP allocation. It has 1,515 vacant houses owned by the borough, of which 548 have been empty for more than a year. The hon. Gentleman could do rather more than criticising the Government if he were to say to his authority "Why do you not, as a borough council, do a proper job of work?"

The hon. Member for Battersea, South (Mr. Dubs) asked me about ILEA. The Government's comprehensive examination of inner London's education is still in progress. My right hon. and learned Friend the Secretary of State for Education and Science has promised to make a statement when the review is complete. No decisions have been taken on the form of any further document that might be published. If major changes to ILEA are proposed, there will be an opportunity for public discussion and debate. The Government's decision will take full account of the evidence contained in Her Majesty's inspectorate's report on the authority, which shows that while ILEA's performance in some sectors is good there is considerable room for improvement in other parts of its provision, especially in secondary schools.

Outside the Chamber, the hon. Member for Hackney, Central (Mr. Davis) is my hon. Friend and regular pair, and we share the privilege of being ex-Prime Ministers in the Hampstead parliament. I assure him that the Government are far from being discredited. They were elected to clear up a mess, and we shall clear it up. I am confident that when we do the public will re-elect us handsomely.

The hon. Gentleman was rather unfair to the London borough of Bromley, which has only 229 vacant properties—1 per cent. of its total stock. When the authorities of Labour Members have as small a number of vacancies as that, those Labour Members can start criticising authorities such as Bromley.

The hon. Gentleman referred to my letter to Hackney in September. It was written much more in sorrow than in anger. It was neither rude nor discourteous, and I do not withdraw it. It made clear that it takes two to make a partnership, particularly when the Government are contributing 75 per cent. of the partnership money. I repeat that Hackney can escape its problems by seeking a waiver in the same way as Islington and Hammersmith have done. There is no begging; it needs to put facts to us.

Mr. Clinton Davis

I am grateful to my "hon. Friend" for giving way. He could have fooled me when he said that the letter was written more in sorrow than in anger. It is more in anger than in sorrow. I urge him to re-read it. He will see that it was written in the most intemperate and unfriendly terms, wholly inconsistent with the way in which he put the case earlier in his speech. I ask him to review that letter. I am not suggesting that he should write an abject apology, but he should put to Hackney in a rather more friendly way what he said earlier.

Secondly, did the Minister agree with the distribution of the rate support grant by my right hon. Friend the Member for Stepney and Poplar (Mr. Shore) some time ago, or does he take the view that that was grossly unfair and unjust, as is the view of his Secretary of State?

Mr. Finsberg

I shall deal with the second part of the hon. Gentleman's intervention later.

I do not think that the letter was intemperate. My noble Friend the Under-Secretary yesterday saw the leader and the deputy-leader of Hackney and conveyed in a discussion what I have said tonight and has been known all along, both to officials and to elected members of the Hackney council. I very much hope that they will respond, in the interests of their ratepayers, who are much more important than the hurt pride of the leader or deputy-leader or my hurt pride. The ratepayers and deprived citizens are much more important, and I very much hope that they will be put first after those conversations.

The hon. Member for Tooting (Mr. Cox) asked how many housing associations had written to Ministers to support our policy of cutting housing association finance. I cannot tell him, for one simple reason: we have not cut the finance. The same amount of cash as was allocated at the beginning of the year remains for the Housing Corporation to distribute to housing associations.

The hon. Gentleman asked what could be done. One way of bringing derelict houses on to the market is improvement for sale, which can be done both by housing associations and by local authorities.

Mr. Soley


Mr. Finsberg

I shall not give way, because I have been speaking for a fair time. I want to try to cover the points that have been made, and I am sure that there are one or two other hon. Members who hope to be called to initiate a debate.

The hon. Member for Edmonton (Mr. Graham) quoted from the Financial Times. I do not blame him. In his situation, I have picked the newspapers that suited my case. The hon. Gentleman did not quote from The Daily Telegraph, which gave a totally different view. If the hon. Gentleman looks across the spectrum of newspapers, he will find that more thought that what was being done was not a bad idea than thought that it was. I suggest that when he has a little leisure over Christmas the hon. Gentleman looks at all the press cuttings and sees the rate support grant arguments.

The hon. Gentleman based his speech on the assumption that the new rate support grant system was a punishment. It is not. It is a method of getting openness for the first time into this very complex subject, and I believe that we are very clear in giving as much fairness as we can by exposing all the factors which we have taken into account.

Mr. Graham

Would not the hon. Gentleman agree that at all stages while the Department has moved towards the present position and has sought to take informed opinion in local government with it, support has not been forthcoming? Although I would agree that in the event, when certain local authorities have seen what the method means in practice, some of them are relieved and satisfied, the fact remains that every organ of local government wanted to help the Government to improve the old system and has been opposed to the new system.

Mr. Finsberg

I think that that is basically because most of us are conservative at heart—and better the devil we know. After so many years of trying to work out an understanding of the old system, one or two people were actually beginning to understand it—not many. Like the hon. Gentleman, I have had a lot of experience of local government and I would not claim that I understood the system. This new method is a much clearer way because it is all set out and all explained and one can see its step-by-step reasoning. I believe that it is a wiser method.

The hon. Gentleman referred to the statement I was alleged to have made prior to the last general election about fire service pay. He quoted me accurately, but he put the emphasis where it was not. My pledge, very firmly, was given in the light of the rumours that were going round Hampstead that a Conservative Government would repudiate the salary increases already given and claw them back. My pledge was that the salary increases already given would not be clawed back. It is as simple as that. No one in his right mind—and I hope that occasionally I am in my right mind—would give the sort of pledge that would be permanent in guaranteeing an agreement in perpetuity.

I had no right to give such a pledge and, therefore, I did not give it. All I was saying was that the money already paid would not be clawed back. Those are the facts. On fire service pay, again I can only say that the Government did not intervene; they made it clear that 6 per cent. was all that the taxpayer would contribute. I will draw the points the hon. Gentleman made about fire cover to the attention of my right hon. Friend.

I turn now to the question of the abolition of the domestic rate. The hon. Gentleman lives in the past. It was not in the 1979 Conservative election manifesto, not even in the version that the hon. Gentleman could have brought from Transport House. We said in 1974 that we were going for the abolition of the domestic rate. We have said ever since that circumstances have changed and it is no longer a first priority. The economy has to be got right. But we have not withdrawn the pledge. Nobody could have voted for us in 1979 thinking that we were going to abolish the domestic rate, because it was not in our election manifesto.

Mr. Graham

In 1974, the Conservative Party said that when returned to power it would work towards the abolition of the domestic rating system. I admit that it said that this would not be completed in the lifetime of a single Parliament, but people who voted Conservative in 1979, if they believed what the hon. Gentleman said, would have believed that the Conservatives were still working towards the abolition of the domestic rate. How can the hon. Gentleman square that with the fact that in the meantime the Government are putting the impost that they are on the existing rates?

Mr. Finsberg

The hon. Gentleman and I are at one. We are still working towards it. We have not reneged on that pledge. All I said was that we did not repeat the pledge in 1979.

I have tried to comment on a range of subjects about which hon. Members have shown particular concern. I want now to turn to some rather more general remarks about the Government's policies for London. It is quite understandable that in the debate much attention has been given to the rate support grant and housing improvement programme allocations announced this week. Certainly the RSG distribution has given many London authorities much less assistance than they hoped for and has left them relatively worse off than some other parts of the country. There will be an early opportunity for the House to debate that fully. But it has to be seen against the pattern of recent RSG settlements, in which, for some years, the distribution favoured London and other metropolitan areas. This brings me to the next point I want to emphasise.

When the Government decide how assistance is to be distributed by way of RSG or for special services such as housing, transport and so on, they do so on the basis of using scarce resources to the best effect in dealing with real needs. It is inevitable, of course, that there are differing views about what the priorities are. London, like any other area, will fare relatively well under one distribution and relatively badly under another. Those of us who are especially concerned with London will feel correspondingly pleased or not as the case may be.

Mr. Spearing

Will the Minister give way?

Mr. Finsberg

No, I will not. Since my appointment, I have seen areas—inner cities and rural areas—outside London—

Mr. Spearing

The hon. Gentleman has not answered—

Mr. Finsberg

—suffering every bit as much as parts of inner London. Some of the rural deprivation that I have seen in visits to different parts of the country is just as grim as deprivation that I have seen in the inner cities, yet they have been penalised up till now.

Mr. Spearing

Will the Minister now give way?

Mr. Finsberg

The new settlement and the new arrangements try to give much more fairness than there has been.

Mr. Spearing


Mr. Finsberg

I shall welcome a chicken's product in a few moments.

In all conscience, I cannot feel that the overall settlement is wrong, and nor will most fair-minded Londoners.

Mr. Spearing

Tell us about the ILEA.

Mr. Finsberg

The assurance that they want is that we have been consistent and helped those in need within the contraints of our economic position. That assurance I can give.

The subject of this debate is assistance to London. Assistance can come in forms other than simply the distribution of grants. For many years, London was the target for a range of policies designed explicitly to control activity here so that it would be channelled to other parts of the country. The effect over the years was to add to the real physical and social problems of London a blanket of disincentives to commercial and industrial enterprise.

Since this Government came to power, we have swept away or relaxed very many of those controls. The office development permit system has gone and the Location of Offices Bureau has gone, as has the restriction on advertising the commercial and industrial advantages of London. The limit above which industrial development certificates are required has been raised from 12,500 to 50,000 square feet.

We have heard the usual catalogue of attack on the Greater London Council. Let me set the record straight. In housing, the GLC, between 1977 and 1980, sold 13,000 council houses, with a surplus to date of £61 million. On homesteading, 650 cases have been completed and there will be up to 1,200 next year. The council transferred 125,000 houses to the boroughs on 1 April.

In finance and administration, there are more than 4,300 net fewer staff, saving about £44 million a year. The rate precept has gone up by only 4p in five rating years. This equals only 4 per cent. a year cumulatively. I should love to see the Lambeths, the Haringeys, the Camdens and the Islingtons doing even one-tenth as well.

All non-housing debt, £123 million, has been paid off, and "pay as we go" for all non-housing capital spending is the way that the GLC now operates. It has been selling underused and unwanted land, and it has raised £100 million for reinvestment in London. Its special industry and employment centre has helped 1,000 firms to date.

London has enormous problems. It also has very great natural advantages. We feel that the greatest assistance that we can give London is to allow it to exploit those advantages to the full, so that its economy can thrive and prosper. If we do that, it will be much easier to tackle the remaining problems. What will not help is the continual begging-bowl attitude of the Labour Party.

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