HC Deb 05 February 1980 vol 978 cc244-390

Order for Second Reading read.

Mr. Speaker

I have not selected the amendment on the Order Paper.

Mr. Neil Kinnock (Bedwellty)

On a point of order, Mr. Speaker.

I do not wish to inconvenience you or the House, but you may recall that at the end of Question Time the Under-Secretary of State for Education and Science said that an answer sought by the hon. Member for Berwick-upon-Tweed (Mr. Beith) would be given later in the day in written form. This caused certain disquiet in the House. I was all the more surprised, therefore, to find on entering the Tea Room that the Evening Standard has a full report of precisely what the Government will be saying in the form of a written answer later this afternoon. It seems an extraordinary denial of the rights of the House that the press has the details of the answer before the House has been permitted to see it.

Mr. Speaker

All that I can say to the hon. Gentleman is that I have no control over what the Government give to the press or what the Opposition give to the press. It is not a matter on which I am able to rule.

I propose to operate the 10-minute rule from 7 pm until 9 pm. I must warn the House that, even then, it will be very hard to call everyone who wishes to be called.

3.53 pm
The Secretary of State for the Environment (Mr. Michael Heseltine)

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

I do not want to underestimate the importance of this Bill on local government and local democracy. Nor do I want to understate the scale of what it proposes. In a number of ways, it challenges long established habits and attitudes. It encourages the more effective use of resources, the creation of a better understanding within local communities—councillors, officials and electors—of the opportunities and options they face, and a more open relationship between central and local government.

Changes of this nature, challenging as they do many deeply held convictions, cannot expect to lack controversy. They are overdue in any circumstances, but in the economic circumstances of today they are essential. I start with the present regime of central control over local government.

A statutory framework is first approved by Parliament to give duties, powers and discretions to local government. But, from that moment on, by circular, by project control, by the refusal to sanction expenditure, and by borrowing limit, the central Government impose a detailed control at incalculable expense on the opportunities of local government. This web of detailed control is little understood, rarely examined, but its existence gives central Government the most comprehensive and detailed control over virtually any and every significant choice that, in theory, is the prerogative of local government.

It is perfectly true that central government provide 61 per cent. of local government current expenditure. But the very system of distributing this £8 billion a year compounds the problems to which I refer, by rewarding those who spend more at the expense of those who spend less and by allocating the money by methods that few people understand.

Finally, local authorities operate in a financial climate that gives no indication of the available underused capital resources, principally land, that they own and that could be better used. There is little comparative information that could enable councillors or ratepayers to judge their council's performance against that of a similar council.

No one in this House and very few in local Government challenge the right of central Government to set priority for overall policy. The last Government's Education Bill and our sale of council houses are both controversial examples of that fact. Central Government has to set the frontiers. But, once those frontiers are set, we want to enhance the opportunities of local government to carry out those responsibilities that are theirs. The first general objective of the Government is to pull back in many areas from detailed interference with local government discretion. As an example of this intention, my Department has issued only 39 circulars and circular letters in nine months compared with 222 in the last 12 months of Labour Government. Part I of this Bill relaxes a substantial number of detailed controls.

We examined, as a Government, nearly 1,000 powers held by central Government over local. In general terms, we did not feel it correct to enhance the rights of local authorities at the expense of the individual. So we kept the 100 or so such powers that would affect this. Fifty more are default provisions and these also remain. Of the remaining powers, we have agreed, in this Bill, or elsewhere, to repeal or remove 300. They vary considerably in importance. Some are very small. Others are significant. What we have announced, in total, adds up to the largest repeal of such powers ever undertaken.

But the real thrust of our removal from detailed control comes in part VIII of the Bill, where we proposed capital ceilings for local authority expenditure.

I must ask the House to step back from the proposals in the Bill for a moment and understand the present arrangements currently in force in connection with capital expenditure. I am often told that there is no need to introduce capital controls because local government has a good record of keeping within present ceilings. But the fact is that central Government detailed controls are so stringent that anything else is virtually impossible. Block borrowing approvals cover local authority plans for personal social services and the locally determined sector. The Home Office has its range of controls. For transport, there is a combination of grant and borrowing approvals.

Under my own Department, in housing, there is a combination of expenditure ceiling and specific borrowing approvals. Before one brick can be laid on the ground, a local authority has to answer up to 100 different questions in form after form. In addition, borrowing approval and subsidy entitlement involve another 80 or so questions. We expect to receive half a dozen plans and, when all of that is carried through to the satisfaction of my officials, an authority is free to proceed. Parker Morris and cost yardstick standards ensure that not a house is built which has not been looked at in detail by my officials in respect of cost, size and design. That is the background, and words like "freedom" have no part to play in that process.

It is because this Government are drawing back from this web of detailed control upon which they and their predecessors have, for decades, relied that it is necessary to ask what new controls would be needed in the climate of freedom that will consequently emerge. We need to know that local government will still keep within ceilings of capital expenditure. The Bill gives us powers to ensure this.

Authorities will receive annual capital blocks for housing, education, social services, transport and miscellaneous, as they do now. But, having received firm allocations, they will be free to aggregate these allocations into one single block and then to decide their own priorities for expenditure as between services.

Mr. Dafydd Wigley (Caernarvon) rose

Mr. Heseltine

The annual allocation will carry with it automatic borrowing approval. In addition, capital receipts can supplement allocations, and 50 per cent. of housing capital receipts may be used for any capital purpose.

Housing services especially benefit. The abolition of housing project control restores to authorities the freedom to decide what sort of houses to build, and at what cost, to meet local needs. Parker Morris and cost yardstick as we know them will no longer apply. Authorities will no longer be caught between prescribed standards and costs. Government will intervene only by use of reserve powers in instances of flagrant extravagance that the taxpayer cannot fairly be asked to support, or to prevent building of an unacceptably low quality having regard to the practice of other local authorities or the private sector.

There are a number of further points. Law and order services will not be included in the new system.

Mr. Wigley

Does the Minister accept that to determine a fair provision of capital allocation to local authorities he will need a tremendous number of bureau- crats, and a method of assessing the needs in the localities and balancing them against his relaxation of the restrictions on local authorities? Bearing in mind that local authorities in total have kept within 5 per cent. of the White Paper capital expenditure forecast over the past five years, does the right hon. Gentleman regard that exercise as worth while?

Mr. Heseltine

The hon. Member for Caernarvon (Mr. Wigley) could not have been listening to what I was saying. The reason why local authorities keep within 5 per cent. of the total is that the central Government machine is so detailed that they have no choice. It is because we are drawing back from those detailed controls and introducing a new system of ceiling controls that it will be necessary to deliver, in the new climate of freedom and discretion, the same close proximity to totals that we have experienced in the past.

Several Hon. Members rose

Mr. Heseltine

I have a long speech to make, and many hon. Members wish to speak. Looking back over the past two occasions on which I have addressed the House, when I have given way to Opposition Members, their interruptions have added about one-third to the length of time for which I intended to speak. In giving way to the hon. Member for Batley and Morley (Mr. Woolmer), I ask hon. Members not to make too many interruptions.

Mr. K. J. Woolmer (Batley and Morley)

If the Minister says that local authorities have kept within Government guidelines for their capital spending because of central controls over loan approvals, can he confirm that local council financing of capital spending by revenue contributions from the local rate did not cause any significant problems? In that case, why does he intend to prevent local councils using rate contributions to finance the local capital needs, so denying local councils the flexibility to use their own funds to respond to local needs?

Mr. Heseltine

The hon. Gentleman is missing the point. We are seeking control over the level of capital ceilings. No one questions that there should be such an overall level of capital control. The only question is whether the control should be detailed or open by having known published totals and allowing local authorities flexibility in operating within them. That position is absolutely clear. I am sure that when he looks at what I have said the hon. Gentleman will realise that this new discretion to local authorities is far wider than any they have had under any previous Government.

There will still be a need for specific government approval where capital projects could have a regional or national impact. Capital expenditure by parish councils and de minimis expenditure on equipment below £5,000 by all authorities will be outside the new controls. Individual authorities will enjoy a 10 per cent. tolerance carried forward or back on a year-to-year basis and will be able to vire with other authorities within a county areas. The Bill provides a fallback for authorities that exceed their capital ceilings.

In the last resort, should an authority deliberately seek to break the new system, the Government can either remove the new freedoms from that authority specifically or put all authorities back into the present straitjacket. We have chosen the former as the only proper way to protect the overwhelming majority who will observe the new limits faithfully. The Bill provides for a direction to a local authority that has overspent or looks certain to overspend. This is essentially a reserve power, and no directions will be made in respect of marginal or accidental overspending.

It is a common view that the politicians and the electorate know too little of what happens in the bureaucracies that serve them. The House has greatly extended the Select Committee system in recognition of this mood. The Government want local communities—councillors, officials and electors—to know more of the options that face them. In general terms, part II of the Bill enables Parliament to request local authorities to publish information about their activities in such a form that judgments can be made locally about them. Let me give the House just three examples of where I think such information should be available, authority by authority. First, manpower: every three months figures are supplied confidentially by each authority to a central body, the Manpower Watch, showing the total number of employees that it has in each principal activity. These individual figures are added up and published in total, but they are not published at individual authority level, where they would have real meaning. I believe that these figures should be published.

Secondly, planning: anecdotal comment about the delays in the planning system are commonplace, but facts have been hard to come by. Yet jobs, investment, environmental improvement and wealth creation are intimately tied up in this process. I ask no authority to change the nature of the decisions it takes. But I shall ask authorities to provide for publication details of the time it takes to deal with planning applications, in straightforward tabular form. My Department handles planning appeals. I can see no reason, save in the most extraordinary case, for decisions to take two or even three years to reach. I shall accordingly publish the time taken by my Department in reaching decisions on appeals in broadly the same form as I expect local government to do with planning applications.

Thirdly, housing: in replacing the detailed approval of individual projects with the freer system I have already outlined, I shall expect local authorities to make available to councillors, and to publish, details of housing schemes in a form that will enable the cost, subsidy and value to be judged by those who are expected increasingly to pay for them.

In general, enough comparisons between authorities cannot easily be made. This requires information on a common basis. I do not believe that my proposals will lead to a significant extra cost, because all authorities keep records. It is a question of seeing that the records are in common form and that more of them are open to public inspection. There will be discussions of the detail with the local authority associations and the Chartered Institute of Public Finance and Accountancy before the House is asked to decide on final proposals.

Mr. Eric Ogden (Liverpool, West Derby)

Has any local city council or county council ever denied the Minister's Department any information for which it asked? If not, why does the right hon. Gentleman require to change the law? Is he not in danger of trying to do for local people what local people are perfectly capable of doing for themselves?

Mr. Heseltine

I have not yet been able to persuade the local authority associations to publish details locally of their manpower figures, although I am optimistic that it may be possible to reach agreement on that. Unless there is central co-ordination of the publication of this information it will not happen. I put it to the hon. Gentleman with all respect that within the private sector the House has ensured that there is a range of comparative information about the performance and activity of that part of our society, and it is perfectly reasonable that we should take exactly the same steps where appropriate to ensure that the public sector operates in such a way that its activities can be clearly seen.

Mr. Anthony Steen (Liverpool, Wavertree)

Is my right hon. Friend aware that in Liverpool the planning department and the architect's department recently refused to tell me how many people they employed?

Mr. Heseltine

I know that the whole House in its pursuit of open government will reflect upon my proposals and welcome them.

The Bill provides for a new block grant system to be brought into effect by order of Parliament and similarly for transitional arrangements to apply in 1980–81. The House will know that I set out our proposals in considerable detail on 16 January, when we discussed the rate support grant orders. The new system in no way sets limits to what an authority spends, nor does it fix the level of an authority's rates. Those decisions remain with the authority.

The new system ensures that the high spending authorities do not pre-empt even larger shares of a fixed amount of taxpayers' support away from those that remain within the Government's guidelines. Electors will more easily be able to judge the nature of the decisions being taken by an authority. In addition, the new system ends the present automatic assumption that the more an authority spends the more it pre-empts for itself at the expense of more cost-conscious authorities.

The House has seen how the county share of grant has diminished until this year under such principles. But perhaps the clearest exposition is to be found in the press release issued by the right hon. Member for Stockton (Mr. Rodgers) on 15 December 1978 when, as Secretary of State for Transport, he turned down South Yorkshire's transport bid. He said: It is also important that all counties get a fair share of the limited resources available. If one county absorbs too much of these, others must suffer. He went on: But it would have been unfair to give them relatively more money in total than other authorities with similar inner area problems. That is precisely the position. It is to end the automatic rewarding of high expenditure that the present RSG proposals are designed.

The new arrangements mean that grant support on marginal expenditure is progressively reduced as expenditure rises substantially above the standard levels of authorities with similar economic and social circumstances. No cash is actually removed from an authority, but authorities that wish to pursue abnormally high levels of expenditure will have to bear a much higher proportion of the burden directly through rates or charges rather than at the expense of other authorities. Operational details will be worked out in consultation with the local authority representatives.

The associations themselves have suggested that there may be other means, which they would prefer, to meet the objectives of block grant. They have not yet put forward an agreed alternative that meets our objectives. If they are able to put forward such an alternative I will of course consider it carefully and discuss it with them, but as I have told them, we are doubtful whether a practical alternative exists.

Mr. Jack Straw (Blackburn)

While we are on the matter of alternatives to the rating system, will the right hon. Gentleman clarify this matter? Three years ago he told the House that the commitment of his party to abolishing the domestic rating system was one of the wisest political commitments that the Conservatives had ever made. Does he still believe that that is the wisest commitment that he ever made? If so, why is not a proposal to abolish the domestic rating system, rather than one to make it more complicated, included in the Bill?

Mr. Heseltine

Since then, we made a commitment to reduce the levels of income tax. That was even wiser in the circumstances.

The whole future of domestic rating is being considered by the Government, as we made clear in our manifesto. However, today we are dealing with the systems of distributing grant within an existing or revised rate support grant situation and we are not considering the alternatives to the present domestic rate situation.

The Bill also provides for transitional arrangements for the year 1980–81 prior to the working of the new block grant that will be introduced in 1981–82, if Parliament approves. It has been suggested that the powers of the transitional arrangements should be retrospective and arbitrary. The powers are not retrospective because right from the start of this year's arrangements I made the Government's plans known.

In June the Government's expenditure plans for 1980–81 were set out, asking for a further 1 per cent. reduction on the revised targets that we set for 1979–80. The RSG allocations were made conditional on the transitional arrangements. It is for Parliament to decide whether to give the Bill a Second Reading. Further, the only power in my hands is to invite Parliament to approve an order introducing the transitional arrangements. It is for Parliament to decide whether it approves the order.

It will be for Parliament to approve the proposals. The arrangements will have to comply with general rules. I expect that these rules will affect very few authorities. However, the House will want to bear in mind that without such arrangements we shall have a continuation of the situation in which the majority of authorities will see resources drift to authorities less responsible and less prudent than themselves.

If anyone in the House feels that Governments have hesitated to go back on their plans once they have been agreed with local government, let me quote from the circular issued on 29 December 1976 asking for cuts in 1977–78. It said: The Government appreciate that to achieve this, authorities will need to consider a combination of lower staffing levels, less spending on goods and services, and increases in income from fees, charges, etc.rising at a faster rate than costs. There is built into the rate support system an element of retrospection. The resource grant is fixed retrospectively. Indeed, the Government announced that they would reduce this year's increase order by £300 million during the course of the current year on the basis that the Government could no longer afford to pay the underlying totals. Of course, the House will be aware that in taking that decision—as it could be suggested, retrospectively—we were acting totally in keeping with the precedent established in 1976, when the previous Government did exactly the same thing.

This Bill is also concerned in a number of ways with the better use of resources. Part III introduces a new regime for direct labour organisations. The case for legislation in this area is overwhelming, and action is long overdue. There are endless examples of overspending and abuses within direct labour organisations. The last Government promised action, and that promise was the only action that we actually got.

Our objective is simply to cut waste and inefficiency. Authorities will have to put their DLO accounts on a sound footing, closely comparable with a commercial undertaking. Unless they can do this they would be better employed using their assets in a more productive area elsewhere. The Labour Party is always calling for more competition, and fairer competition, with the private sector, and can therefore enthusiastically support these proposals in the Bill in this respect.

Mr. Bruce Douglas-Mann (Mitcham and Morden)

Will the Secretary of State confirm that the object of part III is to ensure that direct labour organisations compete on terms that are neither more nor less favourable than the terms upon which private contractors operate? Will he give undertakings that if in Committee he is satisfied that any of the provisions or restrictions in this part of the Bill impose unfair burdens on direct labour organisations, he will accept amendments and that the regulations that he will have power to introduce will also ensure that there is fairness? In doing so, will he explain to the House why he feels that it would be unfair for direct labour organisations to undertake work outside the scope of public works? There is profit there, and they are deprived from obtaining that profit.

Mr. Heseltine

It would be wise for the direct labour organisations to prove that they can work effectively within their own areas before we consider whether we should extend the areas in which they trade. The Committee will want to consider the points that the hon. Gentleman raised—as will other hon. Members who are not on the Committee, when we come to the Report stage, if any other issues remain outstanding.

A second area where I believe we can cut out waste is planning. The overlap of jurisdiction of districts and counties on development control contributes to this problem. The Bill will make development control, except in respect of minerals and one or two other instances, a district matter. This will not, however, affect the strategic role of the county. Districts will continue to be obliged to have regard to the structure plan and to refer to me applications which would be substantial departures from the structure plan.

I also intend to reduce the case load of about 500,000 applications to local authorities—by about 20 per cent.—by raising the present limits of development permitted in the general development order. My proposals will include safeguards in sensitive areas such as areas of outstanding natural beauty, the national parks or conservation areas. Clause 63 gives a power to introduce a charging system, which I expect to raise £30 million in a full year. It will be universal, mandatory and simple. I also hope to bring forward shortly a range of other improvements to the planning system.

I have talked about the planning system, and that brings me to the next area of the Bill, which concentrates on better use of resources. One glance at any of our cities and the scale of unused or underused land is evident. But nobody knows just how much there is, although all the evidence is that most of it is owned by the public sector.

The land registers provided for in part X of the Bill are part of the drive to release this land. The provisions will enable the land to be identified. The provisions also give me, and my right hon. Friend the Secretary of State for Wales, subject to Parliamentary control, a power to direct public bodies to dispose of land entered on a register which is demonstrably surplus to their requirements. I intend to announce shortly where the first registers will be and the size of sites to be registered.

The Bill also repeals the Community Land Act, which has required nearly 200 circulars, guidance notes, directions and statutory instruments. Its administration has cost nearly £15 million and in three years it has provided less than 300 hectares of land for private development in England. Its passing will be unmourned.

The proper role of local authorities in bringing land forward for development is recognised and their powers are clarified in clause 67. The Land Authority for Wales is retained but in future it will operate commercially, free from the doctrine that public ownership is desirable in its own right. The scale of operations will remain roughly at the present level.

The previous Government reduced the population targets for some new towns and the designated areas now contain more land than is needed. The Bill provides for the de-designation of surplus land, but we are going further. This Bill also clarifies present disposal powers and gives the Government power to regulate the pace and direction of the disposals programme.

The final part of the Bill deals with derelict docklands in an exciting and challenging concept—the urban development Corporation. The problem of the inner city areas is stark; there is tragic decay of vast areas which—as in London and Merseyside docklands—were once thriving parts of the country's prosperity. The problems of Merseyside and London are of such scale and national importance that special solutions are needed.

I have made it clear—and I reaffirm today—that the Government intend to set up UDCs with the individual and specific approval of Parliament only in these areas, where single-minded agencies can secure development, bring in the private sector, and secure improvements of benefit to the areas and the country as a whole. There must be no loss of momentum in setting the bodies to work.

The Bill gives wide permissive powers but nothing happens in respect of powers, boundaries or financial regimes until Parliament considers these matters and approves the necessary orders. That gives the necessary flexibility for the widest possible consultation, particularly with the local authorities, and for the establishment of organisations tailor-made for each local situation.

My UDC proposals have been widely welcomed by many of those with knowledge of the areas concerned. There is much to be done. In the event of this Bill receiving a Second Reading today, I intend to appoint the two chairmen on a shadow basis, so that each can plan now to begin work effectively on vesting day. In respect of Merseyside I am pleased to announce that the chairman of Bibby's, Mr. Leslie Young, has agreed to take the chair and that Sir Kenneth Thompson, leader of the Merseyside county council, has agreed to be deputy chairman.

London offers an even bigger challenge and I am pleased to tell the House that Mr. Nigel Broackes, chairman of Trafalgar House Investments Ltd., has agreed to be shadow chairman. I know that the whole House will be particularly pleased that the right hon. Member for Bermondsey (Mr. Mellish) has agreed to be deputy chairman. I shall make further announcements shortly.

Mr. Ogden

On a point of order, Mr. Deputy Speaker. Are any of these appointments paid appointments? Are they offices of profit under the Crown?

Mr. Deputy Speaker (Mr. Bernard Weatherill)

That is not a point of order. It is an interruption.

Mr. Heseltine

This is a major and central Bill in the Government's programme. It is one that seeks better value for money and a range of new opportunities for local government. Of course, the House can sympathise with the dilemma of the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) when he decides how to oppose the Bill. He knows that much of the Bill is concerned with getting better value for money from the public sector. His party believes in the extension of the public sector as long as it is not expected to be accountable or efficient. He knows his party promised to reform direct labour organisations but was stopped by Labour authorities with inefficient direct labour organisations. He knows his party wants more open government, but he is going to resist my proposals for fuller and better information. He knows his party wanted to reform the rate support grant system but that it gave in to the pressure from Labour over spenders. He resents my decision to postpone the rating revaluation because his party has postponed every revaluation it could since the war.

The right hon. Gentleman finds himself in the traditional role of the social democrat, sandwiched between the Labour Party and common sense. For five days a week he preaches moderation and balance from the columns of the serious press. Then, at weekends, he sets off to Labour conferences to get it all out of his system by inciting Labour authorities to rate increases that could reach 40 per cent. or 50 per cent. I cannot understand why he does it. He convinces no one, let alone the extremists in his own party. One of them, the Labour leader of Lambeth, in a rare and wholly uncharacteristic flash of insight, described the right hon. Gentleman's policies this weekend as a recipe for disaster for the Labour movement". Who are we to argue?

4.26 pm
Mr. Roy. Hattersley (Birmingham, Sparkbrook)

I begin by thanking the Secretary of State for enabling me to win my bet with Councillor Ted Knight that the comment he made on Sunday would be the peroration of the right hon. Gentleman's speech. The right hon. Gentleman is nothing if not predictable, as is his Bill.

I want to make it clear at the beginning that the Opposition's objections to the contents of the Bill are reinforced by what I can only describe as our resentment at the form in which it has been presented to us.

Our resentment is the result of four specific facts. First, this is not a single Bill but a number of disparate proposals, each one justifying a Bill of its own, which have been pulled together under a self-contradicting long title which talks simultaneously about extending and reducing controls over local authorities. Because there are so many major issues within one binding, it is almost impossible for my right hon. and hon. Friends to make the sort of Second Reading speeches that are appropriate. It probably also means that the Government, on their present record, will introduce a guillotine into the Committee stage before we have reached the contentious proposals that are towards the back of the Bill.

Secondly, this is a simple enabling Bill which is more dependent on secondary legislation than any Bill has a right to be. Clause after clause amounts to asking the House to provide the Secretary of State with a power to do what he wants, when he wants and as he wants. Usually the powers that he is given are limited by no more than the most general statement of principle. In some cases—especially the calculations surrounding the unitary grant—the Secretary of State asks for enabling powers to introduce a system which he cannot or will not yet describe to us.

The Secretary of State talked about the operating details, but the operating details are what matters when calculations of rents and services are dealt with, as well as rates and all the other matters for which local authorities are responsible. What the right hon. Gentleman asks us to do is to give him the power to set the scheme of his choice, yet he blandly tells us that it may not be so bad because the power is so wide that if anybody else invents another power which conforms to his prejudices, or another scheme which abides by the rules he sets down, he will introduce that instead. The idea that the House should be asked to give any Secretary of State, let alone the present one, such wide discretion in clause after clause is intolerable.

Thirdly, the Bill contains proposals which, by any normal understanding of the words or any sensible use of English, are retrospective. I want to return to the point later in my speech, but, since the right hon. Gentleman was specific in saying that no retrospection was involved, let me put it to him in the simplest possible terms. Councillors all over the country are entitled under the law today to fix their local rates according to their judgment as to the necessities of the area that they represent. Yet if they exercise that legal right in a way that does not conform with the right hon. Gentleman's opinion, a Bill is to be passed which, in November, punishes them for exercising a right which was legal when they exercised it.

Does not that come under the definition of "retrospective"? I think that no one who understands these matters can believe that the right hon. Gentleman's analysis of the problem is anything like accurate.

Fourthly, and what is perhaps in a sense the most fundamental objection of all to the Bill's form, the Bill is described fraudulently. The Association of District Councils—Tory-controlled—says: We cannot accept the claim of the Secretary of State for the Environment that this package of financial and other measures offers a new deal to local government and…is a major advance in local freedom and local responsibility. No one else can accept it, either.

The Association of County Councils—not Tory-controlled but Tory-dominated—says that it believes that the Bill must inevitably result in greater control by central Government notwithstanding the stated intention of the Long Title to relax controls. I admit that in part there are certainly some relaxations of the onerous burdens placed on local authorities. For instance, if the Bill is passed, an urban authority will in future be allowed the right to fix such reasonable rates as it thinks proper for the hire of pleasure boats on water-ways and other places. I am sure that there will be much rejoicing in town halls that that is to come about, but that hardly compensates for what the Association of Metropolitan Authorities—Tory-controlled—says would be the major effects of the Bill. Sir Godfrey Taylor, who was knighted for his services to local government—not to the Conservative Party, because it was not a political honour—and is a member of the Conservative Party of long standing, was here in the House of Commons yesterday drumming up opposition to the Bill at a meeting upstairs. His association described the major effects of the Bill in this way: It would in effect mean that the Government specified the amount of expenditure and rate to be levied for every authority in the country. The Opposition take the view that a Bill of this importance should be given a great deal more scrutiny than the present parliamentary timetable permits. It was certainly the view of some of my right hon. and hon. Friends that the entire Bill should be committed to a Committee of the whole House for proper discussion. I take the rather more modest view that clause 6, which concerns the change of functions, powers and roles between local authorities and national Government, should have a Committee stage on the Floor of the House. But, because we are reasonable people, we suggested yesterday, through the usual channels, simply that three clauses, the three retrospective clauses, which provide punishments for councillors who may today do things which are legal but be punished for them later, should be properly considered by the House in Committee of the whole House. The Government were not prepared to accede to even that limited request, and the Opposition are not empowered under the Standing Orders to move that a limited amount of the Bill be considered by the whole House in Committee.

Therefore, if the Bill gets a Second Reading this evening, we propose to move that the entire Bill be committed to a Committee of the whole House. I have no doubt that those guardians of our freedom who these days sit on the Tory Benches will walk slavishly into the Lobby with their party leaders and the Secretary of State not only to vote for a retrospective Bill, an enabling Bill and a Bill which changes the balance of power between local authorities and national Government, but also to make sure that it does not get proper discussion on the Floor of the House.

We at least make our position clear. Part of the Bill has such important constitutional consideration and so much constitutional effect that we believe that it ought to get much better consideration than the present programme allows. I have talked about constitutional consideration because much of the Bill, perhaps the whole of the Bill, is concerned with local authority autonomy. I want to make my own position on that subject absolutely clear.

Of course, I accept that local government does not, cannot and should not possess powers which are intrinsic to itself. The local government authorities of this country, urban and county authorities, possess what powers they are given by Government; and those powers that the Government give, the Government can take away. But if the powers that exist are suddenly subject to an arbitrary shift and an arbitrary change, if the balance is suddenly swung dramatically away from town and county halls, if they lose their rights and Whitehall steadily increases its controls, I believe that democracy is deeply damaged by that process.

I know that very many Conservative Members believe that, too They have been part of the discussions with the Association of County Councils and with the local authority associations in general, in which it has been generally agreed that it is a bad thing for local authorities to have powers snatched away from them in a way which undermines local democracy, as many people of this country believe it works best for the people of individual regions.

Mr. Michael Latham: (Melton)

Did the right hon. Gentleman believe in that principle when he was a member of the Government who took away local authorities' powers to determine their own education structures?

Mr. Hattersley

That question is asked during every such debate. I give exactly the same answer. No doubt the hon. Gentleman will remember it for next time. Since 1870 it has been established that education is a national service locally administered. That was Mr. Forster's view of education. It was Lord Butler's view of education. It was written into the preamble to the Education Act 1944. That distinguishes the education service form other local government services. That is the traditional, historic and generally accepted difference between the two things.

But I want to talk about the operation of the Bill in relation to local autonomy and the powers of the local community, particularly in respect of part XVI, which will enable the Secretary of State to set up urban development corporations and urban development areas.

The Secretary of State—in, I am sure, one of those slips of the tongue which he corrects from time to time—said that this part of the Bill was about dock-lands. It is not about docklands. It is about lands in general. It may be that the Secretary of State for the time chooses to use the Bill simply for two specific areas, but the powers that he gives to himself and his successors can be applied anywhere in the country.

Clause 108 will enable the Secretary of State of the day to designate any area of land as an urban development area. It gives him the most wide powers of designation. It says: If the Secretary of State is of opinion that It is expedient in the national interest to do so, he may by order…designate any area of land for that purpose. When he does so designate the area of land, he removes from the local, democratically elected public representatives their rights over housing, over land and over planning, and he appoints in their place nominees of his own who are given the most extraordinary arbitrary powers.

Clause 110 describes what those powers are and what the nominees are entitled to do, which includes anything necessary or expedient for the purposes of the object or for purposes incidental to those purposes. It means, in fact, that the Secretary of State can set up such an area, remove democratic control, place control in the hands of his nominees and give them the most extraordinary discretions—certainly discretions to ignore the normal town planning—

Mr. Heseltine

I can do none of those things under the Bill. Only Parliament can do them.

Mr. Hattersley

Parliament's opportunity comes after a 90-minute debate and a single vote in this House and in the other place. That is the opportunity that Parliament possesses before it gives to a body of unelected men the power to do anything necessary or expedient for the purposes of the object or for purposes incidental to those purposes.

Mr. Nigel Spearing (Newham, South)

Will my right hon. Friend give way?

Mr. Hattersley

Perhaps my hon. Friend will allow me to finish this point, with which I think he will probably not disagree.

It think that it is possible to argue about the economic merits of the Secretary of State's proposals. My hon. Friends will argue—and I shall agree with them—that the interests of the area, the rights and possibilities of developing the area and the prospects of getting dockland moving again are being inhibited by this new proposal, which is holding up developments which would take place were it not for the uncertainty that the Secretary of State has caused by saying that he insists on starting again from scratch.

Whilst I concede at once that there are two economic arguments, can there be two democratic arguments about this? If right hon. and hon. Gentlemen opposite have any doubts about the propriety of giving the Secretary of State such powers, let me remind them that under this Bill a future Labour Secretary of State could actually set up the urban development corporation of Lewisham, Bromley, or Wandsworth and Merton, or Solihull and Sutton Coldfield, or South Birmingham and Solihull, and give remarkable powers to nominees in those areas. My right hon. Friend might even become the actual chairman of ours. We might have Mr. Ted Knight as the deputy chairman, since he figures so largely in the Secretary of State's mind. We might actually get some houses that Lewisham needs to have built in Bromley; some of the houses that South Birmingham needs to have built in Solihull; and some of the development necessary for Wandsworth in Merton.

I am not suggesting that we should use any of these arbitrary powers, but are the guardians of our liberty on the Conservative Benches going to vote future Secretaries of State the right to do such a thing?

Mr. Guy Barnett (Greenwich)

The point my right hon. Friend is making is, I believe, very apposite, because the Greater London Council is now divesting itself of its strategic housing role, I believe, and I would have thought that the temptation to a future Labour Secretary of State to set up urban development corporations in all the outer London boroughs to provide homes for the overcrowded inner London boroughs would be very great.

Mr. Hattersley

I hope my hon. Friend will not tempt me to commit the Opposition to such a policy, although I see its attractions.

The point I am trying to make is related not to its development merits but to its constitutional demerits and whether any Government should be given such powers by Parliament. I hope that hon. Members opposite, including the few of them who have actually read the Bill, will consider that point very carefully.

Mr. Spearing rose

Mr. Hattersley

If my hon. Friend will allow me, I must take refuge in the point made by the Secretary of State. This is a long debate and a complicated subject. Many people want to make speeches, and I think I should proceed to the end so that speeches may be made from my own and opposite Back Benches rather than prolong my own speech.

I move on by referring to the points made by the Secretary of State about his proposals for capital control. He spoke of them so warmly that I almost forgot that they were not his own idea. He spoke of them as if this were something that he had been wanting to do all his life. They are, of course, quite different from his original capital control proposals. This is the one area in relation to local government in which he was persuaded to change his mind. However, the conversion was so complete that he spoke of them today as if there had never been a better possible idea in the world. I do not think that the present ideas, now that the Secretary of State has been persuaded to change his mind, are all that bad. I believe in some ways they offer an extra freedom, which I am glad to see local authorities possess.

What disturbs me and local authorities too about them is the discretionary right possessed by the Secretary of State to announce that one or another local authority is not conforming to the rules and therefore is to be subject to a much more stringent safeguard. As the rules now stand, the blocks are allocated and there is a 10 per cent. discretion on each one, which I take it is intended to allow for the inevitable overlap between one year and another when contracts take longer than was intended. But if there is constant overspending, the Secretary of State may remove the 10 per cent. discretion and may require authorities to make specific application for individual capital projects.

I also understand—no doubt the Minister of State will correct me if I am wrong—that, if that new imposition is made, the local authorities which still go over the figures stipulated by the Government will be behaving in a way that is ultra vires and will be subject to legal penal- ties. I think it is quite intolerable that the Secretary of State should be able to put local authorities in that position, particularly when, by his own admission, they may face a situation in which a contract, through no fault of theirs, moves from year to year.

Mr. Heseltine

No, no.

Mr. Hattersley

I knew the Secretary of State would say that, because in his opening speech he said "I will exercise these extra onerous arbitrary powers only if the behaviour of the council has been to flout deliberately the 10 per cent. ceiling." But what is wholly intolerable in a democratic society is that rules governing councils are determined by the Secretary of State's personal judgment about their motives. Time and time again—and it will appear even more forcibly when we talk of revenue control—the Bill gives the Secretary of State not only the right to make his own decisions about the performance of local authorities, but their performance is judged by his opinion of their intentions, which seems to me to be fundamentally bad law. [An HON. MEMBER: "He said so."] The right hon. Gentleman said that, but as I heard him speak and as I wrote it down, although I know that Hansard traditionally has trouble in writing down the contentious parts of the right hon. Gentleman's speech, I believe that the word "deliberately" will appear. That is what he said and that is, of course, what he meant.

I turn from that to the second area of extended control—that is, the extended control over revenue. Does the Minister for Housing and Construction wish to say anything?

Mr. Heseltine

On a point of order, Mr. Deputy Speaker. My colleague the Minister for Housing and Construction was originally making this interruption, because inadvertently—I hope it was inadvertently—it was his feeling that the right hon. Gentleman was casting aspersions upon the technical competence of Hansard. [Interruption.] I know that the right hon. Member would not have intended to do that and that he would want to make quite clear that he was not doing so.

Mr. Hattersley

No. I make it absolutely clear that what I said about the error in Hansard last week was in no way intended to reflect on the Hansard authorities. [HON. MEMBERS "Hear, hear."]

I return now to the revenue aspects of the Bill. They have four essential features. The first is that the Government will assess each authority's spending need. That assessment of need is euphemistically called "standard expenditure", and it is to be calculated in a way which the Secretary of State has not yet thought fit to reveal to us. Secondly, there will be a calculation of standard rate poundage calculated not for each individual authority but for each class of authority, and then there will be a computation of the amount of rate receipts likely to be obtained by each authority, according to the standard rate poundage. Then the standard rate poundage will be deducted from the standard need and the Government will meet the balance of the two. If the authority spends more than the balance, the Government may meet some of the cost of the excess, but, as I understand it—andI am glad to see that the Secretary of State is nodding his head in agreement—to a diminishing degree, in order that there should be a deterrent.

I know no one outside the Department of the Environment—and the Secretary of State will know better than I that it is not even a unanimous view within the Department of the Environment—who believes in the Government's ability to assess the spending needs of individual local authorities. I ask the Secretary of State whether he has any idea how the assessment is to be made. We all know that he rejects regression analysis as a method. He never speaks on these subjects without dealing with what he regards as the inefficiency and unsuitability of that scheme. How is he going to calculate the needs of the various authorities? May I ask him or the Minister of State when he winds up the debate to be very clear in answering a question related to that point? Will he impose a method of calculating the needs of authorities if he cannot obtain the agreement of the local authority associations for a scheme that they regard as equitable, rational and fair?

There is a very great fear in the local authority associations amongst Conservative as well as Labour members, based partly on previous actions and previous statements of the Secretary of State, that the formula will simply represent his arbitrary prejudices of how local authorities ought to spend their money. The Association of County Councils is a body on which there is one Labour council. I do not deny the ability of the councillors of Durham to sway colleagues in bodies in which they take membership, but I think that the Association of County Councils, with 21 Conservative members to the one Labour representative, ought to be taken seriously on the Tory Benches. The Association of County Councils says that it fears that the new scheme will enable the Government to adopt any grant distribution pattern that they please. I had hoped that some Tory Members would agree that it is intolerable for the Secretary of State to say that he wants the power to adopt any grant mechanism that he pleases but cannot say what it is today. He says that he is interested to hear other people's ideas about what it may be, but he wants the power to do exactly what he wants and that is what he asks the House to provide.

It is impossible to calculate the needs of individual authorities in a way that is both efficient and honest. The Secretary of State puts himself into an appalling dilemma in committing himself to construct such a formula when no one has the faintest idea of how that formula can be made up.

The other half of the calculation can be made more honestly, but it can hardly be made more sensibly. Irrespective of our mutual failings in dealing with rate revaluation—and I include my party—if there is a system of rate distribution and of grant distribution which is in part dependent upon rateable values it is nonsensical to base it on rateable values which are 10 or more years old. It is nonsensical to say to the boroughs that the Government will share out the money according to rateable values when the rateable values might have been appropriate in 1973 but certainly are not appropriate in 1981.

The Minister for Local Government and Environmental Services (Mr. Tom King)

Why did not the Labour Government do something about it?

Mr. Hattersley

The Minister should know better. We did not do anything because we were not running the proposed scheme. That may have escaped the Minister's attention. In addition, we said that a Labour Secretary of State should have the power not only to have a review when he chose instead of once every five years but to have a partial review. If the Bill is passed, the Secretary of State will be able to order a rate revaluation whenever he wants one. It will not have to be a complete rate revaluation. He can choose any group or class of hereditament. That is a wholly arbitrary power. The Secretary of State can decide to revalue domestic properties but not houses. He can decide to revalue a particular class of building but not another.

I agree with the three local authority associations which say in unison that if revaluation is constructed in a way which allows the Secretary of State to pick and choose those parts which are revalued and those which are not, the honesty, the objectivity and the visible impartiality of the rate valuation system will be damaged crucially and perhaps totally destroyed.

Bad as the actions are to be taken in the name of the block grant, the proposals for the transitional measures are worse still and the worst of all. The Secretary of State, in his normal bland manner, said that the object of the unitary grant is to allow local authorities to determine the rates which they think to be right for their area, even if they receive less Government assistance. The object of the transitional measures is to coerce certain local authorities into holding down their rates to a figure stipulated by the Secretary of State. For reasons which the Secretary of State has thought it right not to reveal to us, he has decided that outside London the appropriate rate this year is 119p.

Mr. King

That is not right.

Mr. Hattersley

Perhaps the Minister will explain what the 119p is, how it was arrived at and whether the rumours passed from his Department to certain local authorities that it is soon to be revised are true or false. The Secretary of State has said that any local authority which charges a rate above that figure may be in trouble. The trouble will be that they will receive a smaller share of the increase order and the rate support grant than otherwise.

The Secretary of State said something else. He said that he will allow a margin of error. He will not say what that margin of error is—another example of his arbitrary power. He says that when withholding money he will judge according to a number of criteria. London is not subject to the 119p rule. In the operation of the rules of simplicity in which the Secretary of State believes so strongly, the standard uniform rate for London, according to the Department of the Environment, is: ES-N-B / NS X P Apparently it is essential that local authorities in London do not exceed that rate poundage.

The transitional arrangements will result in certain councils being penalised if they go beyond the margin which the Secretary of State stipulates as being appropriately above 119p. How will he judge whether they are to be penalised? I asked the Secretary of State that question during the rate support grant debate. The House will know that two Hansards have to be consulted because the first was corrected. The first Hansard of 16 January 1980 stated that he would judge according to their spending and to their rates. The correction, which appeared on 17 January, which the Secretary of State was kind enough to confirm, was that he would judge according to their rate poundage, their spending and "speeches". If the right hon. Gentleman meant "spending and rate poundage" and "speeches" was a slip of the tongue, he has only to say so. I make more slips of the tongue than most and I shall forget about it if it was a slip of the tongue. If it was not a slip of the tongue, it is a matter of great importance. In this country we have not reached a time when councils and councillors are penalised not because of what they do but because of what they say.

It is extraordinary for a Secretary of State to announce that men and women are to be penalised for their opinions. That great guardian of our public liberties, Lord Denning, has nothing to say on this subject. However, local Labour authorities in Leicester on Saturday were unanimous that we should give Lord Denning an opportunity to adjudicate on this issue. I assure the Secretary of State that if there is the slightest suspicion that the increase order is being withheld from councils because of councillors' speeches, all the necessary and proper legal processes will be used. Since I am in a benevolent mood, I say to the right hon. Gentleman again that if he wants to say that the word "speeches" was an error nobody will be more pleased than my right hon. and hon. Friends and the matter can be forgotten.

Mr. Heseltine

I am grateful to the right hon. Gentleman, but the House has covered this ground. There was a question about whether the original Hansard report of my reply to a question was accurate. As the House will remember, I said that in my view the original report left out the word "speeches". We established our position clearly. I used the word "speeches" and I said that I used it. In the context of the decisions and the speeches, I meant it.

Mr. Hattersley

I have done my best for the Secretary of State. He must not expect me to bring in the meat pie with the file inside when the time comes.

I turn to several other matters which require a moment of the House's attention. They deserve more than that, but because of the nature of the Bill they cannot be given more time. In all quarters of local government there is unanimous opposition to the Bill's major provisions. However, all quarters of local government will want to thank the Secretary of State for implementing the major proposals of the Robinson committee. We did not do that. It is ironic that a Bill which severely diminishes the powers of local government should acknowledge that many councillors may make a considerable sacrifice by spending time in county and town halls. I am glad that that is provided for.

I am particularly glad that the services of major chairmen are to be assisted under the terms of the Bill. There are other important parts of the Bill—although in the context of other issues they may seem minor—on which my hon. Friends and I would like to comment, such as the charges to be levied for planning applications and the repeal of section 8 of the Allotments Act 1925, which appears in schedule 5. We shall be forced to raise those matters in Committee because the Bill prevents us from raising them on the Floor of the House.

There are two remaining issues to which I should like to refer. The first is direct labour. I say to the Secretary of State, who anticipated my opinion on the subject—rather rashly, as is his wont—that I have no doubt about the necessity for direct labour organisations to be run efficiently. Equally, I have no doubt that most of them are run efficiently. Most local authority direct building organisations obtain their major contracts through open competition with private builders. They obtain those contracts despite the extra costs incurred in providing security for their employees, in providing safety measures, and in training young craftsmen. Those extra costs are rarely borne by private contractors.

Twenty years ago I was privileged to be the chairman of a direct labour organisation. We constantly competed in the open market against Wimpey, Terson, Laing and Gleeson. We obtained the contracts because we offered the lowest price, and when we completed the work below our contract figure we gave back the money to the local authority rather than keep the profits. Most local authorities' direct labour departments will be able to compete adequately under the terms of the Bill.

I share the view that since we want direct labour departments to compete with private builders, we must make sure that they do so properly. I vividly remember that they were highly successful in Sheffield in obtaining private contracts in open tender, against private companies. We regretted that we could not just move our equipment across the road to build a private store or any other sort of private building. We had to take cranes and machinery to the other end of the city. I want the competition to be fair and genuine. I want private and public companies to compete, but I believe that more often than not the public sector will win, which will be a credit to it.

It is expensive nonsense to expect public works departments' direct labour organisations to go through the long bureaucratic process of controlling repairs and maintenance. I fear that the right hon. Gentleman has deep prejudices about the building industry and that he believes that the public sector is usually inefficient and that the private sector is the paragon of all commercial values. I should like him to visit Birmingham—ideally before May, when there will no longer be a Conservative majority—and see what is happening to private builders in my constituency who are asked to carry out repairs and maintenance work. They are leaving the work half done while they move on to more remunerative jobs, to the enormous inconvenience and sometimes to the danger of the inhabitants.

We shall press for the sensible use of direct labour, and we have no doubt that many authorities will be able to demonstrate how sensibly it is used already.

I should like to comment on the Community Land Act. This is the fourth occasion this century that Conservative Governments have repealed Acts which provide that the community receives some of the profits that accrue to private landlords as a result of community activities. The Liberals attempted to do so 50 years ago. The Conservatives repealed that legislation. This is our third attempt, and the third repeal. I am delighted that the Land Authority for Wales remains—a fact which the Secretary of State could not even bring himself to tell the House.

Mr. Heseltine

I must help the right hon. Gentleman in case Hansard does not record the situation. I said specifically that the Land Authority for Wales will continue. I am not too worried that the right hon. Gentleman did not hear that. He has not listened to any other part of my speech either.

Mr. Hattersley

If it will make the right hon. Gentleman look any happier than he has looked for most of the afternoon, I shall beg his pardon for the fourth time. I am delighted that he referred to the success of the Land Authority for Wales. That is a credit to his open-mindedness and his objectivity. When the Labour Party is returned to power, we propose to extend the success of the Land Authority for Wales into England and beyond.

If a private landlord, through no industry, effort or activity of his own, suddenly discovers that the community has changed the use to which his land is put, it is palpably wrong that he should receive the enormous benefit and bonus rather than that the community should enjoy the fruits of its own decision. We must find a way in which the betterment of land will be to the credit and advantage of the whole community rather than to the person who temporarily and fortuitously has the good luck to own that land.

That is best achieved by substantial sectors of land being taken into public ownership. That would make it appreciably more difficult for a future Conservative Government to repeal such an Act. Some method of recognising and representing the community's interest must be found—and found it will be. I do not expect it to be found by the right hon. Gentleman. His entire Bill is a manifestation of the fact that he is not concerned with the community's interests. He is concerned with two interests, the commercial interest and his obsession with centralism—government run from Whitehall, at the discretion of the Secretary of State, according to his judgment and his rules. For that reason above all others, we shall vote against the Bill.

Mr. Deputy Speaker

Before I call the first speaker from the Back Benches, I remind the House that a great number of right hon. and hon. Members wish to speak in this important debate. The 10minute limit on speeches will operate from 7 pm until 8.50 pm, and I hope that it will perhaps operate before then.

5.8 pm

Mr. Geoffrey Rippon (Hexham)

I offered some critical observations on the first version of the Bill during the debate on the executive and public bodies on 10 December 1979. This revised version shows a welcome reduction from 288 pages to 210 pages, including no fewer than 105 pages of schedules. It still compares unfavourably in length with the 146 pages of legislation, including the Finance Act, with which the reforming Parliament of 1912 was content. In those days Parliament had shorter Sessions and fewer Committees, but it spent twice as much time debating public expenditure.

It is a happy chance that the Bill was mistakenly introduced into the House of Lords in the first instance. However, the fact that this revised version contains some worthwhile modifications only serves. to fortify me in the opinion that there should be some form of pre-legislation procedure, which would enable the House to express a view on the general principles before Second Reading, which offers no chance of exploring amendments before the Committee stage. As I said in the procedure debate on 2 February 1976, if the Community Land Act had been introduced as a draft Bill we should at least have got rid of the incredible and replaced it by the unacceptable. At least some of the absurdities would have been removed. I also advocated during that debate that when the House considered major policy changes in relation to a matter such as London's docklands, there should be a preliminary consideration of what was involved.

In spite of the slimming process that it has undergone, the Bill contains too many Bills rolled up into one measure. There is far too much reliance on enabling provisions, and there is certainly too much for anyone—especially in 10 minutes—tocover in any way the matters raised in the Bill. I am very much concerned about the planning provisions, for example, but there will be no time to speak about that subject.

Those of us who read the Local Government Chronicle will know that it is by no means a vehicle for extreme expressions of opinion, but what it has to say this week is this: The revised local government Bill is a curate's egg of which the edible parts are spoilt by provisions which, to correctly pursue the metaphor, can only be described as stinking. I warmly welcome the abolition of the Community Land Act 1975, which has proved, as many of us forecast, a costly and futile exercise. I also warmly welcome the possibility of creating new corporations to regenerate urban areas, but I incline to the view that, as drafted, the Bill is too wide in its provisions. I am not impressed, from long experience, by reliance upon the so-called affirmative resolution procedure.

I am much more doubtful about the wisdom of the financial provisions of the Bill as they stand. I refer particularly to the new unitary grant system and the capital spending controls. If these are not substantially changed, I fear that the Secretary of State will find that he has opened a can of worms—and a can of rather fat and costly worms at that.

This is a Bill that is intended, according to the first sentence of the preamble, to Relax controls over local government". No doubt there is considerable merit in what the Secretary of State has had to say about that. The proposals in part I and the first batch of schedules are very good—as far as they go. I am glad to see the relaxation of Whitehall control over such matters as mortuaries and slaughterhouses and fees for tests under the Rag Flock and Other Filling Materials Act 1951. But these provisions pale into insignificance beside the new financial controls that are now envisaged.

No one, I am sure, will dispute the need for Government control over the totality of national public expenditure—including, necessarily, that of local authorities. So I do not quarrel with the Government's general objective, bearing in mind, for example, that the total contribution by national taxpayers to local government in the London area alone in 1977–78 was £1,609 million. But I share very strongly the anxieties which have been expressed by all the local authority associations—and I have never known them to be in such a measure of agreement—about the way in which the Government propose to exercise their control.

Like the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), I am glad that the Government have modified the original proposals to omit the system whereby an authority would, in effect, have been prevented from making any payment in respect of capital expenditure without the consent of the Secretary of State.

Equally welcome is the decision not to make expenditure by parish or community councils count against the expenditure allocation of district and county councils. It is a good thing that there has been this little pause between the first Bill and the second. There has been some improvement, but the Bill still contains proposals which are not merely objectionable but will, I submit, prove to be unworkable.

With regard to the central Government we know that there has never been any distinction, regrettably, between capital and revenue spending. Because it all comes out of the Consolidated Fund, it is all treated as though it were revenue. It has always been one of my complaints about the Treasury that it cannot tell the difference between above and below the line; it cannot tell the difference between capital and revenue; and it cannot tell the difference between investment and consumption. It budgets only in terms of annual packages.

Trying to reconcile the pattern of local government expenditure, extending over more than one year, with an annual allocation, as my own Northumberland county council has pointed out, will be "a nightmare".

I hope that the Government will heed the advice that they have received from the local authority associations and either exclude direct financing from the rates from control under the new system or, perhaps preferably, use a mechanism to control the amount which can be borrowed. That would be just as effective and much more in line with present practice.

I turn now to the new rate support grant, which involves replacement of the needs and resources element of the present grant by a single block grant, adjustable at the discretion of the Secretary of State. I think that it is too wide a discretion in any circumstances. I know from my experience that the present system is far from ideal. It is very complex. I used to say that to sort out all the factors that we were feeding into the administrative machine required a computer so sophisticated that it would demand, when we put the question to it, "First sacrifice a goat."

I am not defending all the aspects of the present system. It is complex but not as complex, as the right hon. Gentleman has pointed out, as the basic proposal in the Bill. As the Association of County Councils has said, the criticism of the present system is concerned with fairness, not with the ability or otherwise to influence the national total of local spending.

As to fairness, it will probably never be possible to satisfy everyone. When I settled the rate support grant, I was criticised by the cities for giving them too little and by the county councils for giving the cities too much. Since then, the Labour Government in every year tilted the balance against the rural areas, so that the rural deprivation is perhaps now the most serious social problem that we face.

But all that is a matter of judgment. It can be settled within the framework of the existing system. I agree with my right hon. Friend the Secretary of State that the weakness of the present method of assessment of the needs of local areas is that, because it relates retrospectively to expenditure actually incurred, it tends to reward extravagant authorities at the expense of thrifty ones.

My authority, the Northumberland county council, is a thrifty authority. One would have thought, therefore, that it would welcome the Bill, but it does not. The effect of the new Bill is to use a sledgehammer to crack a nut and to penalise everyone in order to deal with a problem which, although we know it exists, could be dealt with in some other way.

I well understand the Government's desire to ease the present links between a local authority's spending demands and its rate support grant. But I share the grave doubts which have been expressed whether the new block grant will achieve its objectives. I think that it will be even more complex than the present system. It involves an unnecessary and, to my mind, undesirable degree of Government intervention.

I should like to quote once again that very moderate organ of opinion, the Local Government Chronicle. On 7 December 1979 it said this: Even if a team of Department of the Environment officials is permanently installed in every local authority, it will still be impossible to make unitary grants work in an efficient or fair way. That is very strong criticism, and the Government must take into account that that is a view shared by many people with long experience of local government—Conservatives, Socialists and Liberals. The Government must take note of the anxieties which have been expressed by local authorities and local councillors everywhere in the country.

In Northumberland, an all-party plea not to proceed to shackle local government in this way has been made by the county council, with the support of all the six district councils in the county. I hope that the Secretary of State will recognise the validity of their concern and agree to hold further discussions with the local authority associations about their alternative proposals. There are alternative proposals; they ought to be considered. Indeed, I for one, without a firm assurance that these further discussions are to take place, would find it difficult to support the Bill, in spite of my approval of its intentions and many of its provisions.

By all means control the taxpayers' total contribution to local government, by all means seek as fair a distribution as possible between the various parts of the country and the various types of authority, between cities and rural areas, but do not reduce the effectiveness of locally elected members of councils.

I shall quote a typical reaction to the Bill that came from Councillor David Adams, mayor of Castle Morpeth. He chaired the joint meeting of the seven councils in Northumberland. That area is one of the most disadvantaged under the existing system, yet it still prefers that system. He said: Do not rob the local electorate of their democratic right to run their affairs through the ballot box. One of our great constitutional lawyers, F. W. Maitland, said during the last century: The local authorities must be left to flounder and blunder towards better things…There is no good in half trusting men; they should be trusted fully or not at all…give the local authorities a large room in which, if they can do no better, they can at least make fools of themselves upon a very considerable scale. No doubt in the nineteenth century Professor Maitland could not foresee the extravagances of modern local authorities. However, the truth remains. If local electors are dissatisfied with the running of local affairs, they have a remedy in their hands They must be encouraged to use it.

The alternative is further erosion of local democracy. There will be even greater difficulty in finding people who are willing to serve on local councils. Conservative Members have often said that there is nothing wrong with Britain that a little less legislation and a little less Government interference would not improve. In so far as the Bill flies in the face of that belief, it will require a great deal of further thought and discussion before it deserves to reach the statute book.

5.21 pm
Mr. Robert Mellish (Bermondsey)

As requested, I shall make a brief speech, and I shall concentrate on that part of the Bill that personally affects me—London's docklands. When the area became derelict in the early 1970s, I made a speech in the House to the effect that this was the greatest chance that London had had since the fire of London. It provides an opportunity for the use of imagination, great plans and great finance and an opportunity to build something for the future of which we could all be proud.

At that time I declared my support for a development corporation. I recognised that it was the only machinery that could achieve that. Anyone who doubts that need only look at the record of development corporations. They have built new towns that are the pride and joy of Britain. Those new towns were built under different Governments. I wanted a development corporation 10 years ago. However, I wrote to the previous Prime Minister, now the right hon. Member for Sidcup (Mr. Heath), and I received a good reply. The present Minister of Agriculture, Fisheries and Food stalled democracy by one of the oldest methods—he set up committees of inquiry. For several years we had nothing but committees of inquiry. They produced three reports. One report suggested that the whole area should become woodland.

The most democratic gentleman, the right hon. and learned Member for Hex-ham (Mr. Rippon), then set up the dock-lands joint committee, men of great integrity. Within the limits prescribed, they did a good job. However, they do not have the powers of a development corporation. It may be said that such powers should now be given to them. However, the very concept of a development corporation is as right today as it was then.

When the Secretary of State asked me two weeks ago to become vice-chairman, I accepted the invitation in the spirit of challenge in which it was made. I may add that I would have loved to have been chairman. I have always been one who wanted to be a boss.

Over the years I have argued in favour of a development corporation and I now have the opportunity of becoming involved. I know that I shall be criticised, but I have asked everyone what purpose I should serve by not being a member. What purpose would I serve if I refused on the basis that contrary critical views might be expressed? What purpose would I serve if I walked away? Whatever I may be, I have never been gutless, and I therefore accept the challenge.

It is imperative that there should be local government representatives on a development corporation.

Mr. Ogden rose

Mr. Mellish

I know that my hon. Friend will say that it is an office of profit. I shall come to that point. I have asked the Secretary of State whether local representatives are to be included on the development corporation. I cannot state his final reply—[Interruption.] My right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) appears agitated, but I have no hesitation in saying that local authorities will be represented on that development corporation if they so wish. The Secretary of State will invite them.

The powers embodied in the proposed legislation offer a great chance to the development corporation. I accept the challenge on the basis that it gives me a chance to be inside and to protect those whom I represent.

Mr. Ogden rose

Mr. Mellish

I shall give way as my bon. Friend appears to be agitated. His question must be very important.

Mr. Ogden

My question has nothing to do with any office of profit. I wish the chairman well when he has my right hon. Friend as vice-chairman. Does he agree that the key to success of any urban development corporation is the dowry that it brings to the area? How much cash will urban district corporations have?

Mr. Mellish

Of course, that is right. If I had known that my hon. Friend wished to ask that question I would have given way ages ago. A development corporation that has just been set up would be worse than no committee if no money were available. What a joke! I cannot imagine what entertaining business might be under discussion. I wish to put it on record that the Docklands Joint Committee—within the limitations of its authority, power and finance—has done a first-class job. I shall not walk away from that but rather build on it. I hope that within the next decade we shall be inspired to regenerate that land and that it will become a credit to all.

Of course, there is a salary attached to the job. However, as I said to the Secretary of State, I shall not take the salary. Therefore, the job is not an office of profit under the Crown. I shall not leave the House. If I do not take a salary, I can stay here. I have been a Member of Parliament for 34 years—

Mr. Hattersley rose

Mr. Mellish

My right hon. Friend appears to be agitated. Does he wish to say something?

Mr. Hattersley

I was anxious for someone to take this green card out for me. As my right hon. Friend is doing jobs, perhaps he will do that one as well.

Mr. Mellish

Let that be recorded. I am not taking any salary for the job and, therefore, the job cannot be regarded as an office of profit under the Crown. In those circumstances, I shall continue as a Member of Parliament.

I know that my remarks will be read by others outside the House. I have represented my constituency for 34 years, and I think that I have given it fair service. I think that my constituents trust me. My constituents will understand why I am taking part in the development corporation. I want to continue that work. I cannot continue it if I do not join the development corporation and so protect the interests of my constituents as well as those of others. I care about the social needs and outlook of that area as much as any hon. Member. Against that background, I accepted the job.

My parliamentary career is coming to an end. I wish to be certain that I can continue the same type of work for which I came into the House. I believe that the development corporation will allow me to do that. I shall go in with enthusiasm and with guts. I shall do what I can to make this great London of ours something to be proud of.

5.28 pm
Mr. Charles Morrison (Devizes)

I hope that the right hon. Member for Bermondsey (Mr. Mellish) will forgive me if I do not continue along the lines that he followed. However, I shall be the first Back Bencher to offer the congratulations of the House on his appointment. Few people can know more about dock-lands than the right hon. Gentleman. He has lived and worked in that area for a long time. It will give pleasure to the vast majority of hon. Members that the right hon. Gentleman is to remain with us, at least for some time.

The foremost objective of local government reorganisation was to create a system in which it is possible to stop the steady erosion by Whitehall of local authority powers and responsibilities and return many of them to town and county halls, where they can be best exercised to take full account of local needs and circumstances. I welcome the relaxation of ministerial control, which is set out in clause 1 and elsewhere, for the greater discretion that it will give local authorities and the manpower saving that it implies for the Department of the Environment by removing from it those responsibilities and powers.

My right hon. and learned Friend the Member for Hexham (Mr. Rippon) said that the Secretary of State must accept that, taking the Bill as a whole, the balance sheet of increased powers, in the opinion of local authority associations, is not as advantageous to local government as they would wish. The right hon. Member for Birmingham, Spark-brook (Mr. Hattersley) pointed out that the Association of District Councils stated that it cannot accept the claim that the Bill is a major advance in local freedom and responsibility. In particular, there is considerable opposition to the block grant. That opposition comes from all the local authority associations, and it is not often that they all agree about anything.

I have considerable sympathy with the Government over the block grant. Undoubtedly the rate support grant and the regression analysis method have been abused by prodigal and selfish authorities. People in and out of local government have been crying out for a change in the system. The Government now produce their block grant proposals to stop the abuse, only to find that local government says that it was not so bad after all and that the powers that the Government propose to take are out of all proportion to the limited problems with which they aim to deal.

Mr. Allen McKay (Penistone)

Does the hon. Gentleman agree that some of the spending authorities have been the progressive ones? He cannot make a broad statement that covers all authorities. Environment makes a difference. Before reorganisation, my own small local authority, almost from a tip, created a complex of roads and sewers on which to build factories. If that project had not been successful, it would have been counted as an extravagance, but it was successful. Such factors should be taken into consideration.

Mr. Morrison

It does not necessarily follow that the councils that spend the most money are the best councils. The best councils are those that produce the the best value for money. In the past, we have only too often seen Labour-controlled councils throwing ratepayers' and taxpayers' money down the drain. That is why the Government bring forward the proposal.

There is an implied backhanded compliment to the Secretary of State in the criticisms of the block grant. Memories are short. Distribution of the rate support grant, as practised by the previous Government, was unfair and biased, but that is already beginning to fade from memory. The new distribution introduced by my right hon. Friend is satisfactory to local authorities, and therefore many now feel that these proposals are not necessary.

Nevertheless, if I may proffer a little advice to the Government, they must do one of three things, They must either find an acceptable alternative to the block grant in conjunction with local authority associations, as they are trying to do—and I congratulate my right hon. Friend on his open-mindedness—or they must persuade local authority associations of the benefits of the block grant system. Clearly, they are dissatisfied at present. The final option is to drop the proposal and leave the system as it is until such time as local authority associations come forward with an acceptable solution. After all, we are arguing not about the total amount of money available for local government but whether a few selfish authorities should benefit at the expense of the majority of responsible authorities.

Finally, I am concerned about one important aspect of the planning proposals in part IX of the Bill. Although perhaps it is arguable, it may not be unreasonable to place more decision-making in regard to development control in the hands of district councils. However, it is unacceptable to create a situation in which district councils may ignore the structure plan. If they do, it may be imposible for the county, within the new capital control system, to provide the required infrastructure. Alternatively, if the county provides that infrastructure, it may well be only at the expense of development in other districts within its area. That point must be given serious consideration. I hope that in Committee the Government will be sympathetic to the need for ensuring that structure plans can be upheld. The Secretary of State tried to reassure us. Nevertheless, doubts exist and will continue unless there is further reassurance in the Bill.

My right hon. Friend and I both served on the Committee on the Local Government Bill in 1972 when he was Under-Secretary of State for the Environment. He will remember the problem of trying to create the right balance of planning powers between the types of local authority. He is now making a further attempt to right what some thought was an injustice. If he is to right an apparent wrong, he should do so on the basis that the solution is satisfactory to county and district councils.

The Bill is full of good intentions, but it has given rise to considerable fears, which can no doubt be removed in debate or by amendment in Committee. I look forward to an even better Bill when it returns to the House.

5.38 pm
Mr. J. D. Concannon (Mansfield)

I have taken note, Mr. Deputy Speaker, of the request that hon. Members make short speeches; and, in deference to the House, I shall endeavour to limit my speech to 10 minutes, although it is not yet 7 o'clock.

There are many ex-councillors in the House tonight who have been through the mill of local government. The right hon. and learned Member for Hexham (Mr. Rippon) made a thoughtful speech. I believe that the debate augurs well for an interesting Committee stage, of which the Government will have to take careful note.

I am in a unique position today. My county council has a Conservative majority of three to one, and for the first time in my life I have been given a brief by that council to attack the Conservative Government's proposals. It is unusual to ask a Labour Member to do that.

I wish to speak of the relationship between central Government and local authorities and to say a few words about the direct labour organisation.

The Conservative-controlled Nottinghamshire county council generally welcomes the format of the Bill. In a report it states: The main platform of the Government's approach was against a back-cloth of giving greater freedom to local authorities by in the first place reducing central controls and then by giving greater freedom to local authorities in local decision making and the ways in which it spends its money. The report goes on to say: certain of the Government's proposals and in particular the provisions of the Local Government Planning and Land Bill presently before Parliament, do in fact take us in an opposite direction by increasing central control and by adding to rather than diminishing bureaucracy". On the subject of block grants, the document states: The proposal is the same as was suggested by the last Government following the recommendation of the Layfield Committee for the introduction of 'unitary grants', which were opposed at that time by some members of the present Government. The 'block grant' will in fact severely prejudice local democracy and will vest substantial additional powers in the hands of central Government to influence the decisions of individual local authorities. The Government's main intention appears to be to prevent a relatively small number of local authorities who overspend from obtaining additional grant at the expense of other authorities. Such limited intentions could be achieved, it is contended, by an adjustment in the existing rate support grant system without the need to introduce a complex set of proposals which strike at the roots of local democracy. Opposition to the proposals has been voiced from all sides of the County Council. I find it unique that I am speaking on behalf of a Conservative-controlled county council in opposition to its Government's proposals. I asked the council "Why do you not go and see the Minister yourself? He will say that I am politically prejudiced." I was amazed at the disappointing reply that I received. If Ministers in the previous Labour Government had flatly refused, or not received or welcomed leaders of our county councils, I am sure that our Prime Minister of the day would have rapped the Ministers' fingers and told them to listen to the county councils.

Whether he likes it or not, the Secretary of State is now fervently believed to be taking over certain functions of local authorities. When the Labour Party is returned to office, our Front Bench must refuse to pick up the powers. It must repeal them as soon as possible. All county councils and associations are picking faults in the Bill.

It is rather odd that another Secretary of State is trying his level best to give more power to local authorities when the Secretary of State for the Environment is seemingly taking powers away.

I was a Minister for some years in Northern Ireland, where local authorities had very little power. The saying in Northern Ireland was that the only thing that local authorities could do was bury the dead and empty the dustbins. Because I was a Minister for five years, I know of the difficulties and problems that arise when Ministers usurp the powers of local authorities. I know that it happened when I was a Minister, and I am sure that it happens now.

The local authorities and various groups such as the Alliance Party and the SDLP did not have any decision-making powers. It is the fear of local authorities that they will follow Northern Ireland on that matter. Local councillors and other bodies become professional critics. They have no powers of decision-making but become passers-on of complaints to the Minister in charge on the hill. Planning, house building, lettings and repairs—what I would term the blood and guts of local democracy—are in the hands of the Minister.

If old Mrs. Jones stops a councillor in Londonderry and talks about something that might need repairing in her council house, or why she has not got a council house, the councillor—if he is on the majority side—does not have to explain the policy of the council, which he would have to do if he were stopped in, say, Mansfield or Nottingham. He would not have to explain the priorities but would say that he would take the complaint to the Minister on the hill who would try to sort it out.

When I was a Minister in Northern Ireland, I found that my desk was full of complaints of that nature, not only from councillors but from the Members of Parliament who represented that area. They also became arbiters of complaints that should have been dealt with not by Members of Parliament but by locally elected councillors. If the powers are usurped by the Government, there is nothing left for them to do.

The right hon. Member for Down, South (Mr. Powell) can also talk of the time that he and I spent on one case about a ball cock that had become stuck. That is what happens when Ministers usurp the powers of local authorities and take over decision-making. I am pointing out the dangers of taking too much power out of the hands of local government.

I know that it does not apply to this Bill, but I see a danger in the sale of council houses. I am against legislation enforcing the sale of council houses. I am opposed equally to legislation that stops the sale of council houses. During my five-year stint in Northern Ireland, I brought in a scheme for selling council houses, but those houses were about 100 years old and were in a special category.

Decisions are better left to those at local level. I can remember some decisions that I made at local level on local schemes which, if the Bill had been in force, would not have got off the ground.

If I had had to fill in a pro forma, questionnaire or return and send it to the Minister, he would have thought that it was frivolous spending. I remember being carpeted by my local press when the local hippodrome closed and the local council decided to buy it and turn it into a theatre. People said that it would be the biggest white elephant in Mansfield. I have no doubt that if the Bill had been in force the Minister would have said that it was frivolous spending. It turned out to be anything but a white elephant. It was one of the best decisions that we made.

Another example is the local sauna baths in Mansfield. Again the local press and others criticised us, and it would have been a case where the Minister would have said that it was frivolous spending. There again, it is a moneymaking project and one that everybody appreciates.

The danger of the Secretary of State's proposals and his relations with local government is that he will go down a slope that will give rise to a situation developing between councillors and central Government such as we faced in Northern Ireland.

I hold a clinic morning in Mansfield on Saturdays. It is a good clinic, attended by councillors and myself. County councillors from both sides attend on a rot a basis and sit in one room while I sit in another room. When people come into my clinic, it is easy for me to refer them to the councillors. Any good local councillor will tell me to mind my own business and that I have enough to do looking after my affairs at Westminster if I try to poke my nose in. However, that does not stop people from asking me to pull a few strings or to put pressure on so that they can see a councillor.

Up until this Bill, I have always been able to tell people that such matters as policy are for local councillors. With the spate of takeovers and legislation that will be forced on local authorities, as was pointed out to me by a group of councillors on Saturday morning, certain problems will become national and not local if the Bill goes through unamended. If I start hearing about problems with housing and repairs after the Bill goes through, let me say to the Minister that he will have to sort out my housing problems. The Minister is coming dangerously close to upsetting the balance between central and local government, and he should think hard and long before doing so. [Interruption.] I have nearly finished my speech. I should like to make a point about district labour organisations.

In Nottinghamshire, the county council has written to me saying that, if the DLOs go through, in Nottinghamshire, on maintenance and roads alone, the council will require an additional 30 staff at a cost of £130,000 to operate the new arrangements. I often hear the phrase from local councillors, more than anybody else, "using a sledgehammer to crack a nut." That is what is happen- ing. My district council of Mansfield has had a district labour organisation for over 50 years. One often thinks that local councillors do all they can to usurp the powers of and override other organisations. My district council has had a building management board for the past two years which has put out a report showing that the district labour organisation in the council has saved the ratepayers of Mansfield over £350,000 in the last two years. The district council has no illusions that the Bill will bring it out of the wood. What it will find hard will be the extra administrative and bureaucratic costs.

The Committee stage of the Bill will be interesting. I am sure that the Bill will be considerably changed by the time of Third Reading. If it is not, the local authorities will come back to the Minister, and deservedly so. My advice to the Minister is that he should forget his prejudices. This is not a fight between himself and my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley), although at times it appears to be. It is a fight with the local authorities—a heck of a lot of us have worked on local authorities—and my advice to the Secretary of State is that he should get off their backs before it is too late.

5.53 pm
Mr. Den Dover (Chorley)

First, I declare an interest as a parliamentary consultant to the George Wimpey group. However, my views this evening will be based on three years' experience at the National Building Agency, where I was chief executive, and two and a quarter years—prior to entering the House—when I was director of housing construction with the GLC. In the GLC, I had a work force of 3,000 and a turnover of £30 million before I realised that the forward building programme of the GLC was reducing from about 5,000 new houses a year to only 1,000 a year.

It became apparent that the size of the organisation had to be reduced drastically. Over that two and a quarter years I reduced the work force by 1,000 direct blue collar employees, 200 white collar office workers and several hundred subcontractors. It was essential, because the work load was reducing. That contrasts markedly with many Labour-controlled councils up and down the country which, when the work load in the construction industry reduced, did not tailor their work force accordingly, but sometimes increased it. That is not sound economics in a business sense.

The right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) mentioned in his speech that 20 years ago the authority that he was in charge of won jobs in competition with major contractors. I submit that over the past 20 years the rules of the game have changed dramatically. The legislation has required only a reasonable percentage of jobs to go out to competition. The front page of the Bill states that in certain circumstances local authorities are obliged to invite tenders. In many cases only 15 or 20 per cent. of the work has been gained in competition by the direct works organisations. That is not good enough. It should be remembered that private contractors outside obtain virtually all their work in direct competition and that little work is obtained from negotiation.

The right hon. Gentleman also referred to the number of apprentices and to the safety and security aspects of direct works organisations. Certainly, some of them have done well. Private contractors have to try to give their employees as much security as is possible in this difficult time for the construction industry. They also have to pay particular attention to safety on the sites, in the workplaces and in the offices. That is of paramount importance. The training has to be tailored to the needs and the economic circumstances of the future flow of tradesmen.

Some major contractors have an enviable record with apprentice training and tradesmen training. The Bill concentrates, rightly, on the need to produce proper accounts. That relates to maintenance work as well as to new work and modernisation and it does not need a vast organisation. Indeed, if the organisations had been allegedly showing a profit or gain in the past, surely, by changing to part I and part II of the Chartered Institute of Public Finance and Accountancy proposals, the same accountants or cost clerks could give the results in the format that the Government expect from the direct works organisations.

I look forward to the day when direct works and private enterprise compete on like terms. With my two and a quarter years at the GLC and 13 years dealing with national contractors, I do not doubt which sector will produce the goods and which will show that it can produce value for money. After all, that is what we are trying to achieve from the Government and from the local authorities.

I turn briefly to Part XVI of the Bill, which relates to urban development corporations. I welcome the proposals for an urban development corporation here in London and I am sure that they will be welcomed in terms of jobs in the respective areas. I am not sure about the need for an urban development corporation in Liverpool, where I have worked and lived. My constituency is part of the central Lancashire development corporation. In the past, I had a great deal to do with new towns as chief executive at the National Building Agency. The lesson has always been to buildhouses, along with the development and creation of jobs. The two must go in tandem. Unfortunately, in central Lancashire that golden rule has been broken. We are left with vast acreages of rented housing in an area where there was 65 per cent. owner-occupation before the advent of the new town. That is a lesson that the urban development corporations in London and Liverpool should learn.

Mr. Straw

Is the hon. Gentleman suggesting that the central Lancashire new town should be wound up?

Mr. Dover

I have made it clear on many occasions that we should work towards the reduction and eventual closure of the new town by January 1985. So far we have had far too many rented houses, which were a big drain on capital expenditure locally and nationally and a drain on the ongoing debt because none of the rents were fair economic rents.

What better than to have private enterprise housing built at the expense of the developers and paid for by the buyers who have an investment in the area or who might be moving up the housing market? Such people buy because they have a stake in the area, whereas in the rented sector we are attracting people into an area which is experiencing a net loss of jobs. My main point is that we must create employment in the two new development corporations. By all means let there be some housing in the rented sector, but in the main we should concentrate on the provision of jobs in the area.

6 pm

Mr. David Alton (Liverpool, Edge Hill)

The miscarriage suffered by the Bill in the House of Lords was but the beginning of a series of mistimed and misplaced manoeuvres which have damaged the credibility of the Government and the Secretary of State in the eyes of local government. Some of the original intentions of the Bill were doubtless sincere and might even have commended themselves to both sides of the House.

However, hopes for any such co-operation were dashed by the high-handed action of the Secretary of State. First, he tried to introduce the Bill surreptitiously through the House of Lords. Then he rode roughshod over the wishes of local authorities. Now he introduces a Bill that is so lengthy and full of detail that almost certainly the guillotine will be used, thus making nonsense of democratic processes.

For many of us still involved in local government, it appears that the Secretary of State and his Ministers know nothing of the workings of local government. Despite their lack of practical experience, however, some elementary common sense might have avoided the greatest catastrophe which has befallen local government since the equally disastrous reorganisation of local government in 1972. It is the same old Tory shifting of power from local authorities to central Government, ignoring the wishes of the local authority associations and introducing new procedures which are both cumbersome and more costly.

Part I of the Bill deals with the relaxation of controls on local authorities. The principle behind that relaxation is that local government autonomy should be increased. If the Bill achieved this, my reservations would be reduced. The partnership that should exist between local and national Government is being abolished over a number of simple matters such as the maintenance of allotments, planning and pollution control. These are precisely the areas where minimum standards are necessary and where everything should not be left to the discretion of local government. Local government accepts that it must work with the national Government, as it also accepts the need for basic minimum national standards.

Part I of the Bill removes from local authorities the obligation to comply with a long list of minor and fiddling requirements. They include such matters as whether the local council should transmit a copy of a report by the public analyst to the Minister under section 99(2) of the Food and Drugs Act 1955 or whether local authorities should be obliged to keep records under the provisions of the Prevention of Damage by Pests Act 1949. Such issues are neither here nor there.

In part III there are far more serious implications for every local council in England and Wales as the Secretary of State proceeds to place the dead hand of central Goverment upon local government. In part III, clause 7(2), the Secretary of State blandly asserts: A local authority or development body may not undertake functional work unless they have first made a written estimate of the cost of carrying out the work. This provision replaces the long list of fiddling constraints with a new range of controls. More pen-pushers will be needed to fill in even more forms before the most basic work can be carried out.

What happens if a council tenant rings up the direct labour office to report a burst water pipe and water is gushing out of a loft, damaging belongings and endangering the electric supply? No doubt the Secretary of State would reply "Sorry, Madam, you will have to wait until a form has been filled in and an estimate has been made." What is the woman supposed to do in the meantime? What happens if a sewer collapses or a wall caves in? What happens to a local authority if it completes the work and fails to make out a written estimate or work out the cost of carrying out the work? Perhaps that is the most sinister part of the Bill.

If a local authority overspends, the chief executive, his officers and local councillors can be surcharged. There is need for greater control over maintenance departments. I am certain that we do not get value from DLOs, but the House should accept that the Government are misguided in their attempts to tackle the problem. Instead of bashing DLOs, the House should accept that they fulfil some functions which it would not be appropriate for private builders to undertake. For instance, the emergency call-out service could not be mounted nearly so effectively on a 24-hour basis by private contractors.

Mr. Gordon Oakes (Widnes)

They would not be prepared to do it.

Mr. Alton

As the right hon. Member for Widnes (Mr. Oakes) says, private contractors would not be prepared to do it. Nor are all DLOs more costly than private builders. They give good training, provide for decasualisation and can be used for emergency work. There is certainly a need for a tough audit on DLOs, and, where new building or rehabilitation is being undertaken, the Liberal Party favours the use of competitive tenders against private enterprise.

Part VI deals with the punitive measures that might be exacted against local councils that fail to comply with the wishes of the Secretary of State. In principle, I can see some advantages in the new block grant system. It works quite effectively in some parts of Scotland. Nevertheless, to have entered into this arrangement and to abolish the rate support grant settlement in the arbitrary way that the Secretary of State has done damages the relationship between central and local government. The association of local authority chief executives pointed out last week: The Bill states its intention to relax controls over local government. In practice it does the reverse. Minor relaxations are compounded by major new proposals for new controls. Where local authorities overspend, the Secretary of State will cut their block grant, and he says that he will be monitoring their speeches and their actions. Then he will strike. Perhaps he intends to install a tinkerbell in every municipal building in the land and, having heard the clandestine conversations of council chiefs, no doubt the Secretary of State will swoop like a bird of prey. Understandably, the local authorities are up in arms about this vindictive new system of controls, especially in view of their good record in complying with the financial guidelines of successive Governments, whoever has been in power.

Similarly, as the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) said, the new transitional arrangements for the next financial year are close to retrospective legislation. We will know what those arrangements are only when we are two or three months into the financial year. The Secretary of State has announced that the threshold for the year will be 119p in the pound. Some authorities already levy poundages of 130p or more. Perhaps the Secretary of State will explain how local authority Houdinis in treasury departments are expected to turn 130p into 119p.

I turn now to the new capital expenditure system, where once again local authorities will be penalised if they fail to comply with the parameters laid down by the Secretary of State. Although I welcome the decision to allow capital receipts against the capital expenditure of local authorities, I am not certain that the 10 per cent. tolerance level is realistic. Chief executives and their councils will probably be caught between breaches of the law and breaches of contract on capital projects to which councils are already committed. When I met the chief executive of Liverpool city council yesterday and discussed these matters, I found that it was a problem that certainly concerned him.

Equally, as the right hon. Gentleman implied, just because this Government will use this new system to hit council spending what is to prevent the system from being used by a future Socialist Government adopting, say, a "money grows on trees" approach and penalising councils that they decide do not spend enough?

The Liberal Party would repeal this legislation, although the Opposition spokesman made no public statement about whether he would be prepared to do that.

Part II of the Bill deals with the publication of information by local authorities, and we welcome that provision, However, I feel that it is hypocritical of central Government to say one thing and to expect local government to practise more open government when central Government is not prepared to live by those standards. I would like to see that principle applying to national Government as well.

In the matter of councillors' allowances, I welcome the measures that are being introduced, but I think that they should apply not only to committee chairmen but to opposition leaders as well.

As regards rating revaluation, inevitably the whole basis for evaluating rates is suspect. I hope that it will not be too long before the Secretary of State brings forward proposals for abolishing the preent rating system and introducing a new system based on the ability to pay rather than the current arbitrary values.

Mr. Ogden

They would not get much from Liverpool.

Mr. Alton

The Community Land Act was a flawed piece of legislation. I point out to the Secretary of State that my hon. Friend the Member for Isle of Wight (Mr. Ross), who was present when that measure was going through Committee, suggested that we needed regional landlords. I was pleased that the right hon. Member for Sparkbrook seemed to have been converted to that cause today. I notice that there have been more converts today than there were on the road to Damascus.

Mr. Ian Mikardo (Bethnal Green and Bow)

There was only one on that road.

Mr. Alton

Turning to urban development corporations, I add my congratulations to those of other hon. Members to the right hon. Member for Bermondsey (Mr.Mellish) on his appointment to the London urban development corporation. The Conservative leader of the Merseyside county council, who has long been the most vociferous critic of the principle of urban development corporations, has today been appointed vice-chairman of the Merseyside urban development corporation. Many might say that that is suitable as he comes from a long-established firm of funeral directors.

I am suspicious of the sudden conversion of the Secretary of State for the Environment, because in Liverpool in March of last year he said that the election of a Labour Government would mean that yet another body would be established to tackle the problems of Merseyside's dockland. How right he was. There are probably no fewer than 11 different bodies now trying to tackle the problems of Liverpool's dockland. I hope that new resources will be brought to bear on the problems of the sad, rundown area of the Liverpool docks. Nevertheless, I am concerned about the lack of autonomy of the urban development corporations. It reeks of the irresponsibility about which the Secretary of State frequently talks when castigating local government to establish bodies that do not have budgets for their first year of operation. Again, it is distinctive of the figure mentality of the Secretary of State when he cannot even say what it will cost to run the urban development corporations in the first year.

Mr. Steen

Does the hon. Gentleman agree that the London and Merseyside docks have been a public disgrace for a decade or more and that something needs to be done about them? Does he further agree that today is a great day for Merseyside, because there is to be an injection of £200 million which will help to regenerate the area?

Mr. Alton

I should be delighted if the Minister were to tell us that £200 million was to be injected into Merseyside in the first year of operation of the urban development corporation. I suspect that this again is an hon. Member—this time the hon. Member for Liverpool, Waver-tree (Mr. Steen)—taking a figure from the top of his head. I should like to know precisely what money will be made available before I give any firm commitment to a body which is not to be accountable to local people; and of the members who are to serve on it we know only the chairman and deputy chairman.

The Bill seeks to abolish the Clean Air Council, and the Government wish to abandon their supervisory role over clean air matters. It appears that the Government do not wish to pursue further the improvement of standards of air quality. They offer no justification for that. The Secretary of State barely referred to it in his speech. The Government simply say that 1.2 man-years per annum will be saved—a trivial saving compared with the pollution of the atmosphere which will result. The Bill undermines rather than strengthens local government; it divides rather than unites central and local government; and it will cause as much additional bureaucracy as it abolishes.

6.14 pm
Mr. Ian Mikardo (Bethnal Green and Bow)

Since the Secretary of State sat down, not one hon. Member on either side of the House has offered unequivocal, let alone enthusiastic, support for this measure. The Minister of State, when he replies to the debate, will have to take account of that factor. Indeed, he and his colleagues will have to take still more account of that factor during the later stages of the Bill.

I cannot hope to match the expertise in and knowledge of local government that have been exhibited by several hon. Members. I shall confine my observations to the one small area covered by the Bill of which I can claim to have a little special, direct and detailed knowledge—London dockland. I want to refer to their problems and the best way to deal with them.

One of the few matters referred to by the Secretary of State with which I agreed was his description of the damage suffered by London's dockland over many years. Many parts of the country have suffered blight of one kind or another. London's dockland is unique, because it has suffered four separate successive causes of blight.

First, there was the bomb blight. Dockland was damaged more than any other part of London—perhaps more than any other part of Great Britain—during the war.

Secondly, there was what might be called technological blight, because of changes in the handling of freight containers, packaged freight, roll-on/roll-off, and larger vessels with deeper draughts. Therefore, there was a tendency for dock traffic to move from the upper river docks towards the estuary, and that created a great deal of havoc in dockland.

Thirdly, there was de-industrialisation blight, partly because of the docks traffic moving out and with it all the industries associated with the docks, and partly because of the attractions offered by successive Governments to industry to move out to new towns, development areas and special development areas. For all those reasons, there was a great deal of de-industrialisation in dockland.

Fourthly, there was planning blight—making the perfect the enemy of the good: making a plan, making another plan because the first one was not liked and then making yet another plan. More than two and a half years and £250,000 were wasted in the Travers Morgan study of dockland. We had all the airy-flights of fancy of Sir Horace Cutler and such chaps about shoving into dockland Olympic villages, a golf course, a safari park and so on, as though it was an empty space. But thousands of people live there and they want to go on living there. All that created delay after delay.

Mr. Steen rose

Mr. Mikardo

The hon. Member for Liverpool, Wavertree (Mr. Steen) may know about the problems of Merseyside, but he obviously does not know much about London's dockland. He should look at the problem before pontificating upon it.

Mr. Steen rose

Mr. Speaker

Order. I understand that the hon. Gentleman is hoping to be called later in the debate. Surely he can keep his interventions until he is called, if he is.

Mr. Steen

On a point of order, Mr. Speaker. It is only right to correct the impression given by the hon. Member for Bethnal Green and Bow (Mr. Mikardo) that I have not visited the London docks. I have just completed a three-hour coach trip of the docks.

Mr. Speaker

Order. I get concerned for those hon. Members who cannot be called. If there are more interruptions of that kind, fewer hon. Members will be called. The hon. Gentleman should be patient. Those words ought to mean a great deal to him.

Mr. Mikardo

First, that was not a point of order. Secondly, I did not say that the hon. Gentleman had not been to see the docks. I said that he did not know about the problems of London's dockland. He has been to see the docks, but he still does not know about their problems. We have had these problems in London's dockland for the reasons that I have given.

The second matter about which I agree with the Secretary of State is that there must be no loss of momentum in dealing with these problems. Considerable momentum is now being developed in the provision of jobs, housing and amenities. There has been an economic resurgence in the past two or three years and almost miraculous things have been done.

I am worried that there will now be a loss of momentum precisely through the introduction of the urban development corporation. The right hon. Gentleman said that everybody who has studied the matter is in favour of the scheme. He was careful not to give any list. All the people I know—all the local authorities in the area, all the community associations, all the representative bodies, all the industrialists and the trades councils—are against it. The only exceptions are those hoping to make a fast buck out of it. They are in favour of it.

I fear that there will be a stoppage. With the best will in the world, and even though the Secretary of State has been quick to appoint the chairmen and deputy chairmen of the two corporations and intends to get the operation going as quickly as possible, there are stillmembers of the corporations to be appointed. Staff will have to be appointed and offices found. Things have to be started up and there will be a need for consultations with all sorts of bodies. A study will have to be made of what is now being done to see whether any changes are necessary. I estimate that two years, possibly longer, will elapse before any firm decisions are taken. The Secretary of State is achieving exactly the objective he says that he wants to avoid—the objective of slowing up momentum.

The urban development corporation will be no more than a spanner in the works. The Docklands Joint Committee set up in 1974 took two years—that is understandable for a big job—to produce its strategic plan. The urban development corporation will have to go through that process all over again. The strategic plan is pretty good. It provides for 33,000 new jobs, for 23,000 new dwellings and for all the services that go with them. Every single bit of that strategic plan is on schedule, except for two things—[Interruption.]—that are being held up by the Government.

If the hon. Member for Plymouth, Sutton (Mr. Clark) wishes to talk, I wish that he would stand up. He is sitting there, muttering non-stop. If he cannot be intelligent, he should at least not be discourteous.

Mr. Alan Clark(Plymouth, Sutton): rose

Mr. Speaker

Order. I think that what is disturbing the hon. Member for Plymouth, Sutton (Mr. Clark) is that the hon. Member for Bethnal Green and Bow (Mr. Mikardo) is speaking, it would appear, from the aisle rather than from his place. Mr. Mikardo.

Mr. Mikardo

Mr. Speaker—

Hon. Members

The hon. Gentleman is still standing there.

Mr. Speaker

Order. The hon. Gentleman and I entered this House together, only I have been here a little longer. At the same time, we all try to observe the old customs. That is what I think was agitating hon. Members.

Mr. Mikardo

I am sorry, Mr. Speaker. I was making a speech that I thought highly germane to the subject.

Mr. Alan Clark

The hon. Gentleman was in the wrong place.

Mr. Mikardo

I was being distracted by constant comments from a sedentary position.

The strategic plan of the Docklands Joint Committee is on schedule except for what is being held up by the Government. That puts paid to the myth that there has been some indecision or even bickering, as I have heard some Conservative Members say, in the Docklands Joint Committee. In the six years that the joint committee has been operating, there has been only one disagreement of any substance. That concerns a difficult and complex matter about which anyone could disagree—the line of the southern relief road. Apart from that issue, things have gone very well.

I should like to refer to the place I know about—the borough of Tower Hamlets. The right hon. Gentleman spoke about the need for getting jobs. News International is building premises along the Highway at the moment. That project will provide 4,000 jobs. There has been reference to slowness in the granting of planning permission. The project, covering many acres and running into millions of pounds, was granted planning permission in 20 days by the borough council from the time that the application was lodged. Some other publishers down the road are starting to look with envy at that project. Before long, the Highway may have to be christened New Fleet Street because it will be full of newspaper publishers.

Three other major private companies are building there. Billingsgate is moving into shed 36 in the West India Dock. Shed 35 has been converted into 14 small enterprise units for smaller businesses, all of which were let within a few months and are now functioning. The Tower Hamlets Centre for Small Businesses, in which I am personally involved, with great help from the National Westminster Bank—for which we are grateful—is building a new enterprise centre on the site of a derelict warehouse. It is an excellent site where new starters in business will be given decent premises and some help. All this makes nonsense of the argument that the Docklands Joint Committee has some prejudice against private enterprise.

We are trying to move the City of London polytechnic into the docklands. It is now housed in short-lease premises and will soon be facing problems of space. That is held up only by the right hon. Gentleman's Department. Everyone else has agreed. This week, the first houses with gardens to be built in Wapping for 200 years will become occupied. Before long, they will be surrounded by Wapping wood, the first time that a wood has been planted in an inner city area in this country for 200 years. All this will be set back by a new organisation. That is the trouble. People will have to stop and think again.

One would have imagined, listening to the part of the debate that concerns London dockland, that we were talking about a piece of empty space with no one living in it. One of the main differences between the Merseyside problem and the London problem is that not many people, I understand, live in the Merseyside dockland area whereas an awful lot live in the London dockland area.

The total area covered by the London dockland scheme contains a population of about 60,000. Half of those 60,000 live in Tower Hamlets, which is a minor part of the acreage, crammed into the narrow strip between Tower bridge and Canning Town bridge. Much the biggest part of the acreage is in Newham. One cannot walk in and do what one wants without taking notice of how those people want to live. They have their own ideas. They will express those ideas. They will be tough about the issue.

I do not envy the urban development corporation if it cannot carry the cooperation of those people. If the UDC sets up its office in Cable Street—a logical, central place forit—Mr Broackes and my right hon. Friend might have as much difficulty getting down Cable Street to their office as Sir Oswald Mosley experienced getting down Cable Street some 40 years ago. The Secretary of State's appointment of a Labour man to one of the two jobs, to team up with the toughest asset-stripper in the City, is not a partnership between St. George and the dragon. It is a partnership between the dragon and the virgin. if he thinks that by appointing a Labour man as one of the two chiefbods, he will assuage local feeling, he must be more naive than I imagine him to be.

The people in that area have views of their own. More than half a century ago, when a Minister tried to impose on the people of Poplar something which they did not like, the Poplar councillors defied the Establishment. They were charged, they went to court behind a band with banners flying, they went to gaol and they were re-elected from gaol. Their point was eventually conceded by the Establishment. The Establishment could not do what it liked without taking the views of those people into account, and the Establishment today has to take into account the views of the grandsons of those people.

I would not have the job of the chairman of the UDC for all the tea in China. There are 30,000 people in that small area, and the Secretary of State had better stop thinking that he can decide what is best for them. They have their own views about that.

6.30 pm
Mr. Michael Latham (Melton)

I would dearly like to pursue the speech made by the hon. Member for Bethnal Green and Bow (Mr. Mikardo), because in 1974 and 1975 I served on the Select Committee of the House which investigated London's dock-lands and was doing so again in 1979 at the time of the general election. There were mixed views both on the Committee and in the report about the future structure of dockland. I remember cross-examining the hon. Member for Newham, South (Mr. Spearing) and the hon. Member for Bethnal Green and Bow in the Select Committee, and it was obvious that there were many wide-ranging views on this subject.

I want, instead, to take up another matter raised by the hon. Member for Bethnal Green and Bow when he said that no Conservative Members supported the Bill. I support the Bill very strongly and warmly welcome it. Without a shadow of doubt, it is one of the most important pieces of local government legislation this century. I wish it was shorter and its scope narrower, but, given the Government's desire to do everything simultaneously, on the whole it is well and clearly drafted and surprisingly easy to read.

On direct labour building, in which I immediately declare my direct financial interest as a builder, we must ensure that the rules of the game are clearly defined. Far too much is left to regulations under the Bill, and. I hope that my right hon. Friend will consider publishing his draft regulations before the Bill comes back for Report. There are precedents for that. It is vital to ensure that the best accounting practice is followed, in the hope that all the details of the CIPFA report will become operative within local government.

I want now to speak on the clauses dealing with the Community Land Act, including the Land Authority for Wales, and the related clause 67. The basis of the Community Land Act was quite simple. It was to be what the late Tony Crosland called "the permanent scheme". Land for building would increasingly be bought by the State and resold, perhaps, by the State, with the development controlled by the State and the builders selected by the State. The ultimate intention was that virtually all land should be nationalised in this way and, what was more, that it should be confiscated as well, as the intention was to take it at a 100 per cent. level of tax.

What did the permanent scheme in England achieve? In 1976–77 local authorities bought 1,570 acres of land and resold 53.3 acres. There was a deficit of £11.61 million, and administrative costs were £3.5 million. In 1977–78 they bought743 acres and resold 132 acres; staffing costs were £3.1 million and the deficit was £6.6 million. In 1978–79—which Labour Ministers said would be a better year—local authorities bought 1,156 acres. I do not know how many acres were resold, because the figures have not been given, but they cannot have been very impressive, because only five local authorities out of 377 which had submitted accounts by last November managed to make a profit.

When all the administrative and other charges are taken into account, the period 1975–76 to 1978–79 showed a collective deficit in England of £52.5 million, and that is a deplorable waste of public money.

For Scotland the position was equally atrocious. In 1976–77 Scottish local authorities bought 66.42 acres and resold none. In 1977–78 they bought 114.42 acres and sold just under 1 acre. In 1978–79 they bought nearly 860 acres and managed to sell 26 acres from the purchases of 1976 and 2.8 acres from the purchases of 1977, making a grand total by November 1979 of 30 acres resold out of just over 1,000 acres bought. Of that 1,000 acres, 788 acres were on one or more sites in the Shetland Islands.

Meanwhile, the ministerial paper poured remorselessly out. By the day of the general election there had been 151 pieces of bumf issued to local authorities. By November 1979 the Conservative Government had already issued 26 more pieces, mostly concerned with winding up the whole exercise. Never was there a better example of futile and bureaucratic administration than this dismal scheme.

The scheme could never work. We warned in 1972, when Mr. Crosland and others first floated ideas about it, that it could not work. It made three assumptions about land purchase and local government, all of them wrong. It assumed that there were up-to-date structure plans allowing for the speedy identification and release of land; but that was not true. It assumed that local authorities could act speedily and in an entrepreneurial way to buy land for development; but they are congenitally incapable of doing that. Indeed, their whole training is against it. It assumed also that people would willingly part with their land at below its market price, but they will not. Such land has to be taken compulsorily, slowly, expensively and bureaucratically.

Only in Wales did the scheme work quite well. Once this became plain, I argued in early 1978 that the Welsh Land Authority should be kept. I was not popular with some of my hon. Friends for saying that at the time, but I am glad that the matter has been dealt with in this non-ideological way.

The basis of a sensible land policy is fairly simple and it is fourfold. First, the basic assumption should be that building land should be found by builders and brought forward by them for development. It should be the job of local government to make the plans and to approve the applications, but not to find the land. The Bill achieves that and scraps all the absurd assumptions of the Community Land Act.

Secondly, it should be the job of the Government to ensure that structure plans are approved speedily. Ministers should have the power to require local authorities to publish registers of land and to disgorge surplus land. The Bill does that. It should have been done years ago.

Thirdly, there should be voluntary back-up powers for local authorities to help in the assembly of land where the private sector cannot cope on its own or where good planning requires this. Clause 67 amply achieves that.

Fourthly, there should be a proper tax on planning gains which should be set at a realistic but not confiscatory level. The 60 per cent. rate contained in the most recent Finance Act is the correct rate, and I have long argued for it in the House, although the builders would obviously wish it to be lower.

Parliament has a dreadful record on the land issue. Since the war, it has changed its mind 10 times. The Town and Country Planning Act 1947 sought a 100 per cent. level of land tax, subject to the £100 million compensation fund. In 1953 and 1954 we returned to a two-tier system by which land in the public sector was confiscated at 100 per cent. tax but private sector land exchanged hands at market price. That system caused Mr. Pilgrim's suicide. In 1959 we returned to full market value all round. In 1962 we had a short-term capital gains tax. In 1965 we had a full capital gains tax. In 1967 we had a Land Commission and a 40 per cent. levy. In 1971 we had no Land Commission but capital gains tax again. In 1973 and 1974 we had a development gains tax of up to 83 per cent. and a first lettings charge. In 1975 and 1976 we had the Community Land Act and a land tax up to 80 per cent. with the threat of 100 percent. in the future. Now, in 1979–80 we have a 60 per cent. tax rate and no Community Land Act.

I hope that the House will agree that we simply cannot go on like that. It is no wonder that the land situation is so bad in this country and that there are so many grumbles about bureaucracy, high prices and delays.

The Bill contains a sensible and non-ideological response to an issue that has troubled Parliament since Lloyd George's day and which Parliament never got right. I hope that the Opposition will think so, too. In the light of the atrocious experience of the 1947 Silkin Act, the Land Commission Act 1967, which Richard Crossman himself described as a total failure, and now the pathetic performance of the Community Land Act 1975, the time has come to bury this dreary issue. I trust that on the issue of land the Bill will be, as Robert Peel said in 1835 about parliamentary reform, the final and irrevocable settlement of a great constitutional question.

6.41 pm
Mr. Guy Barnett (Greenwich)

I should dearly like to follow in detail the speech to which the House has just listened. The hon. Member for Melton (Mr. Latham) and I have frequently debated this subject informally in the House and in other places. I was responsible for administering the Community Land Act in the latter part of the term of office of the previous Government.

There are two points on which I agree with the hon. Member. First, I agree with what he said in general about the appalling record of Parliament since the war in handling the land situation. Although he and I may disagree about the way in which the matter should be handled, there is little doubt that a great deal of damage was done to the environment and to the whole issue of land use generally as a consequence of not settling on a final solution to the problem. I wish that the Bill did that. I do not believe that it does. I cannot believe that the hon. Gentleman thinks that it does, either, as the Land Authority for Wales, which he champions, is so obviously the kind of solution, as my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) said, that might well be applied elsewhere.

I agree with the hon. Gentleman that the Bill is extremely important. I listened with great interest, and, indeed, the House listened with great respect, to the speech of the right hon. and learned Member for Hexham (Mr. Rippon), who once was Secretary of State for the Environment. He and many others on the Government Benches expressed grave disquiet about the Bill, and perhaps also about the way in which the House is treating it. Unquestionably it is an important Bill. It is not just one Bill. It is three or four Bills. It is a fat Bill—although, admittedly, it is slightly thinner than it was previously—and I discover that it costs 25p more than the earlier, fat Bill.

The fact that this is a fat Bill does not necessarily mean that it demands special treatment from the House. When I was on the Government Front Bench, I was responsible for the passage of the Local Government (Miscellaneous Provisions) Bill. That was carried through without much difficulty in Committee and on Report as it was largely, if not wholly, non-contentious.

I maintain that this is a major constitutional Bill, for reasons that were advanced by hon. Members on both sides of the House. On the previous occasion when a local government Bill of this magnitude was presented to the House, in 1972, it was given two days on the Floor of the House on Second Reading. It had many days on Report. That was quite right. If it was right in that case, it is even more right for this Bill because of its deep constitutional implications. I go further than my right hon. Friend and suggest that several parts of this Bill should be considered on the Floor of the House because of their constitutional implications. I refer to part III, about direct labour organisations; unquestionably, part VI, which covers the whole issue of the rate support grant; part VIII, which covers capital expenditure; and part XVI, about urban development corporations, which was of concern to several hon. Members who have already addressed the House.

In its title, the Bill refers to the fact that it will relax cotrols on local government. Let me be amongst those hon. Members who welcome the relaxations that are being made. But let us also recognise that in the main these are minor proposals. Although they are very welcome, they have had the effect of misleading some people into believing that that is the main purpose of the Bill. It is not. This is one of the biggest attacks made on the freedom and autonomy of local government that has taken place this century. It will inevitably result in a fundamental shift of power from local to central government. That is very surprising coming from a Secretary of State who on 18 July 1979 at the annual conference of SOLACE, said: I believe that an efficient local democracy can monitor the activities of local councils far better than civil servants in Marsham Street. I wish that those words had been reflected in the Bill. I do not believe that that is the case.

Some time ago, I was addressing a conference of CIPFA. I should like to quote the words I used on that occasion. These words better illustrate the relationship that should exist between central and local government. At the CIPFA conference in 1977, I uttered these words quite deliberately as a challenge to the right hon. Gentleman on the issue of whether rates should be abolished as an independent form of revenue for local government. I said: I believe in the right of a Labour council to defy within the law the will of a Conservative Government, as I accept the right of a Conservative council to do the same when we are in power. I doubt, as a consequence of the Bill, if it becomes law, whether it will be possible for a Labour council to defy the Conservative Government within the law or, when a Labour Government come to power, whether it will be possible for a Conservative council to defy the will of that Labour Government.

I want to illustrate my point with two aspects of the Bill, although there are many and I refer to them as issues that should be debated on the Floor of the House. The first is the provisions in part VI.

I want to draw the attention of the House to the fact that for the first time in history the Secretary of State will be laying down what he believes to be the standard expenditure for each local authority. I accept that he will not be able to do that in an arbitrary fashion and that he will do it, using the words of clause 38(1), in accordance with the principles to be applied to all local authorities. I think that the House should reflect on what this innovation actually means. It means that the Secretary of State, whoever he may be, will be defining a figure that he thinks a local authority should spend. He will do that for the first time in history. For that reason, it will be difficult for him to avoid answering questions put to him by the local authority or on the Floor of the House about where he thinks cuts should be made, if the local authority is spending more than the standard figure, or where he thinks more expenditure should take place on the occasions when a local authority spends less. One may adduce that argument, whichever Government are in power and whatever political control the local authority may have at the time. It will be difficult.

In effect, the Secretary of State will make a judgment about the actual level of expenditure of each local authority. By setting a standard figure he would, in effect, be saying "This local authority is spending too much" or "This local authority is spending too little." The Government may reply by suggesting that the standard expenditure is an objective assessment of need which was carefully worked out and tested in the computer. However, as many hon. Members know—especially those who have been on rate support grant deputations to the Department of the Environment or who have raised on the Floor of the House the issue of their authority's needs element—an objective assessment of need is very difficult.

Both parties have been accused in the past of using the needs element for political purposes. Indeed, the Secretary of State did just that this afternoon. During the debate on the rate support grant, he used these words to describe what had happened under the previous Government. He said that the intention of his settlement this year was to halt the unjustified —I emphasise the word "unjustified"— drift of the needs element from the shire counties which has taken place every year in the last six".—[Official Report, 16 January 1980; Vol. 976, c. 1677.] The Secretary of State is entitled to that point of view and I am entitled to mine. What I am trying to point out is that an objective assessment of need is a difficult thing to arrive at.

The difference between the situation that we are talking about under the Bill and that which existed hitherto is that previously when we talked about the needs element of the rate support grant settlement we discussed in the House what sort of contribution we thought central Government should make towards local authorities and on what basis it should be made.

But we will be talking about a completely different matter once the Bill becomes law. We shall be talking about the needs for expenditure throughout the whole area of a local authority, which means that that subject now becomes a legitimate subject for discussion in the House and answer by the Minister who happens to be sitting on the Government Front Bench representing the Department of the Environment. These are the things that make me deeply concerned about the Bill.

Of course I accept—as did the right hon. and learned Member for Hexham—the necessity for central Government to express opinions and have at their command powers to control the level and totality of local government expenditure. But once we get into the issue of local government individual authority expenditure and begin to express opinions and to incorporate into legislation penal sanctions to back up the opinions or decisions of central Government, one is entering into a serious area.

I want to refer to the proposal for urban development corporations, though not in the same detail as my hon. Friend the Member for Bethnal Green and Bow (Mr. Mikardo). I want to refer to the general principle. There is a significant difference between the provisions in the Bill and the provisions in the New Towns Act 1965, which has already been quoted in the House.

The Bill says: If the Secretary of State is of the opinion that it is expedient in the national interest to do so, he may by order made by statutory instrument designate any area of land as an urban development area. The 1965 Act contains these words: If the Minister is satisfied, after consultation with any local authorities who appear to him to be concerned, that it is expedient in the national interest to do so"— and the words that follow are roughly comparable with those in the Bill.

In the 1965 Act there is a requirement that the Minister shall consult the local authorities which will be concerned, whereas in the Bill there is no such requirement.

In the schedule to the 1965 Act there are these words: If any objection is duly made to the proposed order and is not withdrawn, the Minister shall"— I emphasise the word "shall"— before making the order, cause a public local inquiry to be held So far as I can make out, there is no reference in this legislation to the necessity for a public local enquiry. That deprives local authorities and local interests of the right to make an objection and have it heard at a properly constituted public inquiry.

I believe that those are serious omissions. My reasons for believing that are that in present circumstances it is vitally important. If we are building Stevenage or Harlow new towns in green fields, there will inevitably be some people who will be directly affected and who will have reason to object. If we are building a new town in Warrington, central Lancashire or some other part of the country where there is an established urban community, it is all the more important to have a public inquiry and to consult local authorities and obtain their agreement and co-operation about what is to be done.

If one is building a new town slap in the middle of the docklands area of Greater London, it is imperative that one has the co-operation of the GLC and the borough councils that are involved. If one does not, the proposal will fail. It will fail because of lack of co-operation and because local community groups and local authorities will not be able or willing to co-operate with the work of a development corporation. For that reason alone, the whole proposal is bound to lead to chaos, confusion and delay in an area where we can little afford them.

In conclusion, if the Bill becomes law it is likely to destroy much of the independence and autonomy of local government. It will place weapons in the hands of the Secretary of State—and, indeed, future Secretaries of State—which will enable central Government virtually to set the rate, as has been said by the Association of Metropolitan Authorities, to control expenditure within fairly narrow limits and to exercise considerable control over capital expenditure.

If all else fails, it is open to the Secretary of State, when faced with defiance by a local authority, to set up an urban development corporation in the area and take away housing, planning and building control powers. Defiance of central Government by a local authority—which I believe to be an integral and necessary part of the devolution of power to an active local government—will become impossible. These are the issues upon which the House must vote tonight and why the Bill is of such fundamental importance.

6.56 pm
Mr. Anthony Steen (Liverpool, Wavertree)

The hon. Member for Greenwich (Mr. Barnett) made some important points which no doubt my right hon. Friend the Minister will answer when he winds up. I should like to concentrate on one particular point which the hon. Gentleman raised and about which he spoke at great length with feeling and obvious concern—urban development corporations. This matter is contained in clause 129.

It is a novel concept. I have recommended it in speeches and proposals in my part of the country for some years. However, the point that I made was that we should go slightly further than urban development corporations and set up old town corporations. That would mean that in ailing city areas where the local council had not proceeded with the job of recreating wealth and rejuvenating the area, the old town corporation, like the new town corporation, would carry out those tasks.

The proposal for UDCs does not go far enough and confines itself to a small part of the country in two principal cities. My main concern when I proposed the concept of an old town corporation, and my concern about the new proposals for UDCs, is connected with derelict land. As the House knows, many thousands of acres of derelict, vacant and dormant land are now in public ownership. It has been suggested by one national organisation that as many as 250,000 acres are contained within our major city areas and that there are 1,600 acres in the Merseyside area—Liverpool in particular—some 900 acres of which are in the hands of public authorities and nationalised industries. Will the proposal for UDCs deal with this problem? The answer is that it will not.

What will happen is that other parts of the Bill that compel local authorities to keep a register of derelict land will start the process that I myself have sought to start through two Bills, and that is to compel authoirties to auction off derelict, dormant and vacant land and get market forces to work so that those who want to buy such land can do something with it. I suspect that the proposals in the Bill are the first step in that process. I hoped to do that in the Bills that I sought to introduce in one step. Perhaps, in looking at this matter in detail, it is necessary to take two bites at the cherry.

That, however, is clearly an important issue, because so long as there is dormant and derelict land in the hands of public authorities it is forcing up the prices of the remaining pieces of land because of scarcity. It is also making rents higher, because the remaining buildings are fewer than could be available if the land were sold and developed.

Although the urban development corporation is not dealing with the total problem of urban renewal in terms of vacant and dormant land, there is another provision in the Bill which, if pushed to its logical conclusion, will start the process by which dormant land is used for some purpose. It does not really matter what purpose, provided that it is used for something. At present, that is not happening.

We should not presume that the UDC will solve the total city problems. It will not do so. It is dealing with only one small part of London and one small part of the docks in Liverpool.

If I have a criticism of the Bill, it is that it does not declare the Government's policy on urban renewal. That is what we need. What we need in the Bill is a commitment by the Government to a total programme of urban renewal. The Bill is a step in the right direction, but I wish that it went a little further. In itself, it will not bring back small firms to the inner areas, it will not rehabilitate older housing, and it will not recreate the wealth which the cities have lost. What the Bill will mean is the revitalisation of two abandoned areas. One of them is right in the centre of London, and whatever has been done—and it has been very commendably done—has not been done fast enough. The UDC will speed up the process.

Mr. Spearing

Rubbish! Absolute nonsense!

Mr. Steen

It is the same with the Liverpool docks, where land has been lying dormant for far too long. The purpose of the UDC is to get something happening. What we are talking about is that purpose and not a total urban programme.

The concern, however, is whether the UDCs are relevant to the overall problems facing the total cities. I have mentioned derelict land. Perhaps I should also mention the massive demolition which has taken place in the inner areas and the way in which the bulldozer has destroyed homes and firms. This is still going on. In Liverpool, we still have cases, week by week, of small firms being bulldozed out of existence and public housing being built on the sites.

There is, therefore, no point in having a UDC set up on the docks in the hope of creating new wealth there if, at the same time, the Government's programme does not halt the progress of the bulldozer and call in every attempt by local authorities compulsorily to purchase small firms which are the wealth creators in urban areas.

I am told that, in spite of enormous investment in St. Katharine's Dock, in London's dockland, there has been a very poor return on the capital invested. That is why, even more so if the Government wish to recreate wealth and to bring in new firms, they must take these powers.

A further point which needs examination is population drift. According to paragraph 74 of the White Paper of 1977, "Policy for the Inner Cities", Glasgow lost 21 per cent. of its population over the 10 preceding years, Liverpool lost 22 per cent., Manchester lost 18 per cent. of its central population, London lost 16 per cent., and Birmingham lost 8 per cent. All the principal cities in Britain have shown an outflow of population from the inner areas to the outer areas and new towns. One of my concerns about building the new factories, industrial complexes and housing on the docks, particularly in my city, is whether there is the population to provide the wealth creation to sustain that operation.

I hope that the Minister will tell us this evening whether he will be relaxing planning controls in the UDC areas. One of the problems in the major urban areas is the planner. In my view, the planners have a lot to answer for as regards the destruction of inner city firms and homes. They have destroyed not only homes but communities. Is the Minister proposing that the planning regulations will be relaxed in these two UDC areas? If they are not relaxed, the speed of the process could be fouled up by local authority planners. Does my right hon. Frend also agree that the architects' departments should not be allowed, as often happens, to design all that is to go in through the UDC?

Mr. Alton

I know that the hon. Member is a great enthusiast for the UDCs. He has made that point again today. I understand that an announcement was made today in Liverpool about the chairman of Bibby's becoming the chairman of the UDC. At the press conference, he said that he had in mind an involvement of two days a week. He said that he would be shedding one or two of his existing activities to make room for his work as chairman of the UDC. I understand that he is also chairman of NORWIDA, a council member of the CBI in the North-West, a member of the Merseyside chamber of commerce, a member of the Merseyside Enterprise Forum, a director of Granada, and a director of the Mersey Docks and Harbour Board. On top of that, he is on the northern regional board of the National Westminster Bank.

All that considered, and knowing that the hon. Member is such an enthusiast for this concept, may I ask whether he would care to indicate whether a person such as this gentleman will have sufficient time to do the kind of work that will be necessary, and whether he is convinced—[HoN. MEMBERS: "Too long."]—that this is more than just a half-baked, half-crazed scheme?

Mr. Steen

What the hon. Member has said has clearly indicated what an ideal choice this man is. I am also delighted that the deputy chairman of this body is to be the chairman of Merseyside county council. He is a man of great experience. I am sure that between the two of them they will rejuvenate that area.

I must move on, because many other hon. Members wish to speak. I was saying that the architects' departments in many of the principal cities are cornering the market and not allowing private architects to have a go and get involved in the urban regeneration plan. Will the Minister assure the House that private architects will be given an equal chance to compete by tender for contracts in the urban development areas and that local authority architects' departments will not be allowed to corner the markets?

I have dealt with the problem that the Government face concerning small firms going to green field sites on the edges of cities. They moved in droves from the inner city areas because the Government's regional programme encouraged them to leave inner areas and move to the green field sites on the peripheries of cities. The Government did this by a whole range of grants and incentives. In special development areas, I think that it cost the Government over £14,000 to create a job in the outer area in place of one in the inner area.

Again, the UDC will not be relevant if it does not at the same time have an answer to the problems of the continuance of firms moving from inner to outer areas. It is no good having a small area of wealth creation on the docks. If the move is from the inner area to the outer area, the population drifts from the inner to the outer area and the green field site drift makes the town longer and larger. What we must do by declaring UDCs is to strengthen the inner areas.

I should like the Minister to deal with the question of how the Government will strengthen the inner areas. One of the problems we have faced with urban regeneration is that of creating wealth. One of the points that needs to be discussed in relation to UDCs is whether they will have tax-free zones within them. Shall we have free ports? Shall we have enterprise zones that will be free of planning laws, with rates rebated and Customs and Excise duties relaxed? Here there are two development corporations on the docks, the ideal place for that sort of movement, but, unless wealth creation is obtained along those lines, it may well be that the UDCs will not have the effect that we should be looking to them for.

I invite hon. Members to take a cursory look over the Government's programme since 1968 on urban rejuvenation. In 1968 we had the speech by the then Prime Minister, the right hon. Member for Huyton (Mr. Wilson), saying that the urban crisis would be solved by the provision of £20 million. Then there followed the "pockets of deprivation" speeches, to the effect that there was nothing wrong with the urban areas but that there were little cankers in the urban areas which could be cured if extra funds were made available to those areas. Therefore, teams of community and social workers went to those pockets of deprivation with a view to trying to improve the communities there.

Then the urban aid programme switched the burden of the rate support grant from the shire counties to the urban areas, but that did not last long. Soon after the pockets of deprivation theory was exhausted, there then came into being a new approach, which was that the problems of the cities would be resolved only if the towns were looked at as a whole. Then we had the quality of life studies, the six town studies, the neighbourhood projects, aimed at trying to understand—

Mr. Ogden

Mr. Deputy Speaker, are we or are we not under a 10-minute rule from 7 o'clock?

Mr. Deputy Speaker (Mr. Richard Crawshaw)

The hon. Gentleman was fortunate enough to be called just before 7 o'clock. The rule does not apply to anybody called before that time, I hope that the hon. Gentleman will draw his remarks to a conclusion.

Mr. Steen

Of course I will do so, Mr. Deputy Speaker. I was just outlining the fact that the policies of successive Governments since 1968 had failed to cure the problems of the cities, and I was dealing with the number of schemes that had been introduced by successive Governments and which had failed. I was talking about the way in which the pockets of deprivation had been replaced by the total approach to the urban areas. We had an urban deprivation unit in 1970; then a comprehensive community programme; and last but not least we had the partnerships of the previous Administration. Yet, in spite of all those urban programmes, the cities are as deprived and as depressed as they have ever been. The number of people who are homeless, who are living in had housing and who are unemployed is as great as ever.

Therefore, I think that the House has a right to ask whether the urban development corporation is just another scheme along the line of previous schemes and whether it will have any major impact on the environment and on the the improvement in wealth in urban areas, or whether it is another project that will join the list of projects which will be marked up in some book and which are, in the main, gloriously irrelevant to the difficulties faced in the inner urban areas.

Therefore, my concern and that of my constituency is to give the urban development corporation a good try and as much support as we can. It raises new issues and creates new challenges. Just how far it will succeed will depend upon the support of the community, the support of the local authority and, above all, on how much private enterprise can generate fresh money, fresh employment and new jobs.

Where the urban development corporation will fail will be if it relies entirely on public funds and does not manage to create new wealth and new private incentive and initiative.

All I can say is that we on this side of the House welcome the Bill. We think that the urban development corporations will give the areas of London and Liverpool a chance to revive. The extent to which they do so will depend upon the confidence that private enterprise will have in recreating new jobs and new wealth.

Mr. Deputy Speaker

Order. Before I call the next hon. Gentleman, may I say that we shall be operating the 10-minute rule until 9 o'clock. I hope that hon. Gentlemen will ration themselves, to save the Chair from having to intervene.

7.13 pm
Mr. Eric Ogden (Liverpool, West Derby)

Thank you, Mr. Deputy Speaker. I shall certainly obey your injunctions, in spite of provocation by the hon. Member for Liverpool, Wavertree (Mr. Steen). He is the last of the great romantics and a dedicated individualist. I can think of many terms in which to describe him, but I would never suggest that he is thin-skinned. I am still amazed that, having spent the past six to eight weeks charging round Merseyside damning every suggestion that the urban development corporation might solve the needs of Merseyside, he has made tonight exactly the same U-turn as Sir Kenneth Thompson, the chairman of the county council, has made. I am lost in admiration for Ministers in the way that they have twisted arms, or used gentle persuasion over these last weeks or used reasoned arguments. If the Government have not started making U-turns, my goodness their county council supporters in Merseyside have.

The Secretary of State and his colleagues will know that on 26 July the right hon. Gentleman met a deputation from the North-West Economic Planning Council—the day that those councils were abolished. He was most courteous. Actually, he was wearing the same shirt; it does not come from Marks and Spencer. It was a most friendly meeting. We asked for many things and got nothing. The right hon. Gentleman suggested that he could help by removing any procedural blockages in the Department and getting speedy decisions. I told him of the Hebden Road "fiat tops", Ministry of Defence houses in West Derby, which the local authority wished to sell to a housing area so that they might be modernised and improved.

I left a note for the Secretary of State. Three weeks later I received a reply saying "The Secretary of State has read your note"—he is a fast talker but a slow reader—"and things are going to be done about it." In July I reminded him again. Apparently, the matter was very complicated; he was going to make a decision. Another note came, and in January it was said "We are expecting an announcement soon". May I ask him to chase up this matter, make a decision or telephone 01–876 2224, which is the Dyno-Rod Limited telephone number in London, to clear the blockages in his own Department, without worrying about the Bill? I admire the right hon. Gentleman's enthusiasm, the triumph of amateur theory over practical experience, though it was noticeable that the response from his colleagues was in inverse proportion to their practical experience of local government.

The Bill promises much but in fact will do little. It will take the "local" out of local government, will take the "plan" out of planning and will knock the "I" out of land. The right hon. Gentleman may want local government to be more independent. Certainly he is entitled to want local government to do what he wants it to do. We are all guilty of that. Local government is great as long as it does what we want.

I was amazed to hear my right hon. Friend the Member for Mansfield (Mr. Concannon) mention the separation between the powers of the local council, the county council and the Government, with everybody sitting round in the same place. My councillors send me housing cases, and this applies to most Members on Merseyside. We need a gauleiter or a housing commissioner to sort out housing problems on Merseyside, but the boundary is between one and the other. The key to the whole Bill must be this, and surely the right hon. Gentleman will recognise it.

In parts VI, VII and VIII, the Secretary of State is to increase the control on central Government funds provided for local government. He will control the money supply of Government funds. He will also control the amount of local money that authorities can raise from rates unless it is raised in a particular way for a particular purpose, and if they do not do that he will control them. He is the Henry Ford of politics. One can have any kind of freedom one likes locally, just as Ford said that one could have any colour motor car as long as it was black. That is the sum of it.

I do not blame the right hon. Gentleman for wanting that as long as he does not dress it up as freedom. It is a misuse of the English language. Of course, he is a Welshman, as Nye Bevan used to point out when he was heckled by him from time to time. It is true that the Secretary of State is to relax some of his controls. That sounds fine. What is he to relax?—weights and measures, trade, amenities, clean water, all very important but nothing compared with rates, roads, housing and industrial development. Those are the real needs of local development; but the Bill will not help local government at all.

Mr. King

The hon. Member for Liverpool, West Derby (Mr. Ogden) has glided glibly over the issue. He said that nothing is being done about housing. The Bill contains the most fundamental relaxation of housing controls ever announced in the House.

Mr. Ogden

The real needs involve rates, roads, education, housing and industrial development. The Minister seems to be talking about a different Bill. The Government say that they will allow a reduction in Parker Morris standards and that if there is extravagance local authorities will be clobbered. If standards are reduced, how can there be extravagance? The Secretary of State and his colleagues—hawks in the Cabinet—are committed to a reduction in Government controls, a reduction in taxation and a reduction in Government expenditure. No one should blame them, because they told us before the general election what they intended to do. The Secretary of State for Industry is doing that in relation to the British Steel Corporation.

However, the Secretary of State for the Environment intends to direct the mode of operation of all direct works departments. Is that not intervention? Is that not a contradiction and a misuse of the English language? The Secretary of State proposes to extend responsibility allowances for councillors. We must face the fact that there are full-time paid politicians in local government just as there are in national government. The hon. Member for Liverpool, Edge Hill (Mr. Alton) was a full-time politician before he came to the House. There is no harm in that. He declared his interest honestly. We must accept that we shall, at some time, move on to elect city managers. We should act deliberately and not allow ourselves to drift by chance into such a situation.

I wish to deal quickly with the urban development corporations. Merseyside Members from all parties have asked for a Merseyside industrial development agency. We called for that particularly at the time when the Scottish and Welsh Development Agencies were established. We never asked that Liverpool, Bootle or Birkenhead be made free ports. We never asked for a speculators' paradise.

Mr. Steen

Why not?

Mr. Ogden

At least that is honest. Perhaps that was why my former Conservative opponent in West Derby, now the hon. Member for Melton (Mr. Latham), declared his interest in land and building. Much money can be made out of UDCs. Since the Secretary of State's announcement, the Conservative-controlled county council has opposed everything that the right hon. Gentleman proposed. The former Member of the House, the leader of the Conservative county council, Sir Kenneth Thompson—a doughty character—has since changed his mind.

The Liverpool city council, in one of its daftest pieces of maladministration, said that it was in favour of an urban development council. It could not wait to see how much money would be available before it gave the idea its blessing. All its cards were on the table. There was nothing left to bargain with. Next May there will be local elections and in Liverpool a local government mini-general election, and, although I am not a betting man, I believe that the Liverpool city council will be controlled by the Labour Party, which is opposed to UDCs. No development corporation can succeed unless it is able to work with local authorities. That is the key to new town development.

We do not know how much money is available. I tell the Secretary of State frankly that if he sends this new bride to Merseyside without a dowry there will be no support. If it is to be a speculator's paradise and the profits go out of Merseyside, it will be of no use to us, to Lancashire or anywhere else. If there is more money, there is a very slight possibility of support. The Secretary of State must spell out how much is in the dowry. He must show us the colour of his money and tell us what he intends to do. Then we may go along with him.

The Government say that the cancellation of the general rating revaluation in England and Wales will save nearly 1,000 permanent posts and 400 short-term appointments in the Inland Revenue. On Merseyside, when we talk of saving jobs, we mean keeping jobs. I presume that the Government's proposal means unemployment—

Mr. Deputy Speaker

Order The hon. Member has had his 10 minutes.

Mr. Ogden

I think that I have made it reasonably clear that I do not like the Bill.

7.25 p.m.

Mr. Robin Squire (Hornchurch)

I speak as a London borough councillor and a former leader of that authority. I shall not deal with the florid comments by the hon. Member for Liverpool, West Derby (Mr. Ogden). However, he may detect an element of sympathy during my enforced 10-minute speech.

I congratulate my right hon. Friend the Secretary of State on much that is in the Bill. I say that with sincerity, although time forces me to concentrate on the areas with less appeal to me. I particularly welcome the details of councillors' reimbursement, which is long overdue. I welcome the tidying-up of planning laws and the abolition of the Community Land Act. I do not expect that to find favour on the Opposition Benches.

I wish to examine three specific areas. First, I shall deal with capital expenditure controls. I welcome the change that has taken place in the Bill since its first appearance in the House of Lords. A major improvement is incorporated. It should be recognised by all sides. It removes many legitimate objections by local authorities. I have a small quibble. I hope that the Government will examine again in Committee the necessity for detailed control over repairs and renewals, repairs to roads, maintenance, and replacement of equipment which is done by local authorities on an annual basis and which previously it has not been thought necessary to control. The Government might be over-egging the pudding on that issue.

The Secretary of State is taking power to bring in an ultra vires order against an authority in certain circumstances. I hope that that power will be used only when issues of supreme importance are involved. At times local authorities face major building programmes. It would make local government even more im- possible if a Secretary of State, of whatever party, were able to step in at a critical moment when the budget was over-running.

I regret the other major changes since the Bill was first published. I refer to a subject which has not yet been dealt with—the question of gipsies. Hon. Members will represent constituencies either where the word "gipsy" conjures up visions of horror or where the word is greeted with some amusement. The problem is no laughing matter. I hope that some of the proposals contained in the original Bill will be reinserted in Committee. I hope that at long last councils will have the power to take action following the provision of sites under the 1968 Act. That power has long been denied them under successive Governments.

The main part of my speech deals with the block grant and the transitional arrangements, I make no apology for referring to this because it is one of the most important aspects of the Bill. It is unfair to base rate poundages on 1973 values, particularly since there will be no revaluation in 1982. That could make a substantial difference to local authorities, and it does nothing to improve the standard of public appreciation of rates and rateable values generally—which in many areas is fairly low. As regards the substance, I can do little better than to quote briefly from the AMA editorial in January's issue of Municipal Review: The rate poundage is no way to compare the spending performance of individual authorities. Figures produced by the AMA show that there is not necessarily any correlation between unit costs and rate poundage. For example, the metropolitan authority with a rate poundage of 88.28p has a unit cost for secondary education of £597.12 per pupil, while in another metropolitan district with a rate poundage of 117.51p, the unit cost for secondary education is £520.43 per pupil. I seek to show that there is a considerable element of uncertainty about the proposal. Indeed, as the local authorities have pointed out on the question of the 1980–81 transitional arrangements, there is a further problem in that they will not know the final position until after they have been required to make their pound-ages for 1980–81. I accept the assurances given by my right hon. Friends that that is comparable in some respects with other problems. However, it increases uncertainty at a time when local authorities do not need that uncertainty.

I turn now to the heart of the matter—the main proposals on block grant. I have some sympathy with the speech made by my right hon. and learned Friend the Member for Hexham (Mr. Rippon). He highlighted the problems that we face. In 1977 the Labour Government suggested in their Green Paper a unitary grant proposal. After strong representations by local authorities, coupled with an element of inertia, nothing happened to that proposal and it disappeared. It has now surfaced in a slightly different form but bearing a number of the same characteristics. That is to be regretted. My right hon. Friend the Secretary of State said during the debate on the rate support grant on 16 January: Standard rate poundages will be determined based on the relationship between actual expenditure and an assessment of standard expenditure—that is, the expenditure which authorities with similar characteristics and circumstances would, on average, be likely to incur in providing a normal standard of services. Standard expenditure will therefore be a figure based on facts."—[Official Report, 16 January 1980; Vol. 976, c. 1681.] With great respect, that is still not a fact of expenditure. It is based on an actual expenditure and a collection of a number of individual units, which are, correctly, a part of the rate support grant and valuation. When all those factors are put together, particularly with a variety of multipliers, which have also been taken into account, there will ultimately be an assessment. It is no worse for being an assessment. One is tempted to think that the measurement of need has been the golden fleece of successive Governments who have adopted the policy of "searched for by all, and found by none". I do not criticise that. But at the end of the day it is still an assessment. It has to be an asssessment because there is no other way of calculating that sort of measurement.

I am surprised that we continue to give support to authorities which propose to spend above the assessed need, plus the 10 per cent. tolerance. That is at variance with the Government's main proposal to control expenditure. If we are to have a form of block grant system, I would prefer a system whereby above a certain level there is no assistance from central Government and whereby, above that level, the money must be provided by ratepayers. That is the way in which to make local authorities truly accountable. I do not believe that we shall make authorities more accountable by taking from them greater control over their decisions.

I have served in local government for a number of years—even if it does not yet show—and I have no illusions. I do not believe that all authorities are good. Manifestly, they are not. A few local authorities are determined to set themselves up as independent kingdoms of one sort or another. That is to be deeply regretted. It is to be regretted even more if they do so at the expense of the taxpayer. We must ensure that that element more than anything else is removed. If we did that, I should be prepared to accept the broad canvas of local authorities and accept that they will sometimes disagree with the Government. That is why they are there. If they never disagreed with the Government, there would be no need for separate local authorities. We must live with the irritations. I hope that in Committee we shall be able to make such changes as are necessary to leave local authorities with some control over their own affairs, and leave national Government to control the extent to which taxpayers' money is spent in local authorities.

7.37 pm
Mr. R. B. Cant (Stoke-on-Trent, Central)

As I listened to the hon. Member for Hornchurch (Mr. Squire), I felt quite an old man. He said that he had served in local government for a number of years. I am just completing my twenty-eighth year. Therefore, inevitably, I have a built-in admiration for the status quo. Unfortunately, not enough emphasis is being given to the matter.

The reason why the Bill has been produced, particularly the financial parts, is that we have a crisis. Undoubtedly, local authorities are enthusiastic spenders. The desperation of Ministers stems to some extent from the fact that it is difficult to curb expenditure once it has reached a certain level. Civil Service expenditure cannot be curbed, and, therefore, local government often becomes the whipping boy. Following from that, it is difficult to control or cut local government expenditure. The headquarters staff always remain intact and high profile cuts take place, followed by the dramatic closure of old people's homes, and so on.

My objections to the Bill—I shall deal only with the financial aspects—are similar, to some extent, to those which have already been raised. Regarding capital expenditure, the points which have been raised—the difficulties of the relationship from one year to another, a five-year plan, the problem of revenue expenditure for capital purposes, and the possibility of the use of outside funds with joint partnerships between local government and private development—pose serious problems.

The present Secretary of State knows nothing about local government, and his predecessor who reformed local government knew even less. The Secretary of State must know that without a great deal of Government supervision there will not be a rational allocation of the blocks of resources which he is putting at the disposal of local authorities, bearing in mind the parts played by different personalities. If the right hon. Gentleman is still in office, he will wake up. I agree that the real departure is the application of the doctrine of ultra vires to expenditure which is not really defined but which is connected with persistent overspending.

I do not know how one defines the spending needs. I do not know how authorities of the same characteristics are to be grouped together. It is extremely difficult.

It is interesting to note that the county councils' brief says that presumably what will happen is that the Government will have to fall back on a modification not only of the rate support grant but of the multiple regression analysis which was the foundation of it. Many people who have been in local government even longer than I have are mystified by the concept of multiple regression analysis. I am mystified by it.

I am reminded, in this context, of Palmerston talking about the Schleswig-Holstein question in the nineteenth century. He said that only three people had ever understood it—one was dead, one was in a mental home, and he himself had forgotten it.

If the county councils are right, the Government will be driven back to the previous basis or something like it.

Then there is the important matter of revaluation. There is a letter in the Estates Times this week which draws attention to the stupidity of trying to devise a grant based upon rateable value when we have not revalued for so long. It points out that we are faced with a situation in which some valuation officers have valuation dates of 1972 whereas some other areas, more typically, have valuation dates of 1969 and 1970.

In order to tame the thing that we call money supply and the public sector borrowing requirement, we are introducing the block grant as a substitution for the rate support grant, and it will have quite dramatic consequences for local authorities.

I believe that we can deal with the problem and keep faith with local government. In all my experience in local government, we have never yet had a consensus, not only between the different political parties but between all sorts of different types of council, opposed to the Government. But now they speak with one voice. If we can get a consensus about a redefinition of the rate support grant in order to make it a little less silly, a little less subject to political whims, that is the direction in which we should go.

I believe that that can be done. It can be done by looking again at standard prices. It can be done by reassessing the importance of the education factor. With the same unit costs, there can be very different costs per head of population between counties. In Staffordshire, the cost per head of population is 34 per cent. higher in rate terms than the average, simply because there are so many more children.

There are also social factors. An important variable in the rate support grant is the one-parent family. The fact that only 1971 figures are available makes nonsense of the position, quite apart from the factor of population. I repeat that it can be done within the existing framework.

What worries me is that the democratic price that we shall have to pay for the introduction of this new financial approach to the solution of problems will be a very high one. We have a very nice medium place in between the dirigiste system in France and the system in the United States and Western Germany, where state government has very well-defined statutory powers. I hope that we shall keep what we have. I hope that the Secretary of State will not introduce something that will transform local government in the wrong way, moving us along the road to centralised bureaucratic control. If the Secretary of State is using the Bill and his new financial techniques for that purpose, we should be discussing a different Bill relating to the political reform of local government and he should show us more clearly the map that he is following.

7.45 pm
Mr. Sydney Chapman (Chipping Barnet)

This is an important Bill, making some radical changes. I hope that the hon. Member for Stoke-on-Trent, Central (Mr. Cant) will forgive me if, time being short, I do not take up the points that he mentioned.

I should begin by saying that I am a chartered town and country planner and a fellow of the Royal Town Planning Institute. I should like to refer to those parts of the Bill that are related specifically to planning and to development control and promotion.

I very much welcome the transfer of some functions from the county level to the district level. Of the 31 functions that Parliament has given to local planning authorities under the Town and Country Planning Acts, I calculate that at the present moment at least 20 are in some way split between the county and district levels. The result of this has been significant, although I do not want to exaggerate. There have been demarcation disputes, leading to substantial delays in determining some planning applications. Anything that concentrates the power in one quarter or the other is a good thing. This is proposed in the Bill without in any way compromising sound planning principles.

There is one thing that I should like to mention as a Member who has the privilege of representing a seat just inside Greater London. It is that the Bill does not refer to the powers vis-à-vis the Greater London Council and the London boroughs. I should like an assurance that my right hon. Friend the Minister intends to transfer some of the present GLC powers to the London boroughs, on the lines of the counties-to-districts proposals in the Bill.

I also welcome the provision for local plans to be adopted or amended before the structure plans are in operation. The structure plans replaced the old development plans under the Town and Country Planning Act 1968. Two years ago—that is to say 10 years after the Act came into being—more than half of the more than 80 structure plans that were expected had not been submitted to the Secretary of State. I know that progress has been made since then, but it is the time factor that has led to the necessity for my right hon. Friend to propose in the Bill that local plans can, in effect, go ahead before the structure plans are implemented.

I welcome the Secretary of State's intention to bring forward a General Development (Amendment) Order which would exclude, as he said, about 20 per cent. of the total of 500,000 planning applications. I ask him also to look carefully at the overwhelming need to make modifications and amendments at the same time to the use classes order.

I have mixed feelings about the proposed introduction of fee charges for planning applications and planning appeals. I have no ideological point to express. My own view is that development control is for the benefit of the community as a whole and in the public interest, and should therefore be met out of taxation or rates. There are good precedents for this—the weights and measures legislation, the factory inspectorate, the inspection of food and the building regulations, although I understand that the Secretary of State is also minded to introduce fee charges for the submission of building regulations.

I ask my right hon. Friend to look at the problems that the introduction of fee charges for planning applications might bring about. A local planning authority, for good or not so good reasons, may reject an application because of one part of it and encourage the application to come back slightly revised. Would the applicant have to pay another fee charge to put in the application again, slightly amended? My own opinion—it may not be accepted by either the House or the Minister—is that the fee should be charged only when the planning application is approved. Even then, I strongly suggest that it should be payable only when the application is approved within the statutory period laid down by Parliament, namely, two months.

I shall give one other instance that illustrates the difficulties that may arise. Why should an applicant, who then becomes an appellant, have to pay a fee charge for appealing when a decision has not been given by the local planning authority? One can appeal if the local authority does not determine any application within the statutory period. The aspects that I have pointed out will lead to problems. I ask my right hon. Friend to consider those points.

I welcome the repeal of the Community Land Act. My hon. Friend the Member for Melton (Mr. Latham) has already demolished that Act in this debate. It has two particular faults that concern me from a planning point of view. First, under the Community Land Act virtually all land suitable for development had to pass through the hands of local authorities. At best, that was an irrelevant waste of time and provided yet another layer of bureaucracy. At worst, it gave a dangerous and unnecessary power to local planning authorities as those authorities could then decide who should develop what land and when.

Secondly, the Community Land Act tempted local authorities to put financial gain before sound planning policies when selecting land for development. The Act was therefore totally unnecessary. It was objectionable because of the sweeping powers that it gave to local authorities and to the Secretary of State. It led also to the loss of individual rights. I hope that individual rights will now return to the position that existed before the passing of the Community Land Act.

The question of urban development corporations raises deep controversy. I listened with care to the expert points that were raised by the hon. Member for Greenwich (Mr. Barnett). We may disagree, but I believe that too many acres of prime land in the centre of cities have remained derelict for too long. Redevelopment is needed on a massive scale. The main cause of that dereliction has been that the five London boroughs have squabbled between themselves or with the GLC.

Mr. Spearing

That is not true.

Mr. Chapman

The hon. Gentleman and I disagree. However, I can supply cases that will prove my point.

I do not like the name "urban development corporation". It smacks of a past era of municipality. I suggest the name "special priority areas"—or "SPAS"—to my right hon. Friend. I welcome and support the concept. A valid case has been raised by many hon. Members. They have pointed out that the difference between a new town development corporation and an urban development corporation is that new towns are generally built on green field sites, although that does not apply to Peterborough, Northampton, Skelmersdale and a few other new towns. The argument continues that many thousands of people live in designated urban development corporation areas.

Perhaps my right hon. Friend the Secretary of State should consider some slight redesignation of London dockland—I am not qualified to speak about Merseyside. Before he sets up the urban development corporation, he might be able to exclude more people without prejudice to the need to develop the site.

This is an important and large Bill. I have reservations about one or two points, and perhaps they can be explored later. On the whole, I welcome the Bill and I give it my support on Second Reading.

7.53 pm
Mr. Harry Lamborn (Peckham)

I have represented the inner London borough of Southwark as a local councillor, as a member of the London County Council and as a member of the GLC. I have also represented that area as a Member of Parliament.

I shall confine my remarks to the proposal to establish an urban development corporation in dockland. That corporation is to be established without any consultation with the London boroughs and without any public inquiry. If ever there was a case of flagrant disregard for local democracy, it exists in the proposals for the urban development corporation.

The areas that compromise dockland are not isolated areas of vacant land that can properly be placed within the control of an urban development corporation. They are an integral part of existing London boroughs. Vast sums of money have already been invested by local ratepayers to revitalise those areas and to bring industry back to inner London.

The Secretary of State stated that dockland boroughs cannot handle the development. The hon. Member for Chipping Barnet (Mr. Chapman) spoke of squabbling among the five boroughs. Such total misconceptions on the part of those who have not taken the trouble to understand events in dockland, have led to the present situation. The Secretary of State said that dockland boroughs could not handle the development of those areas because they had broader responsibilities. However, it is that very concern for those broader responsibilities that provides the best reason for retaining redevelopment within local government control.

The dockland areas cannot be redeveloped independently of the boroughs of which they are an integral part. At the same time, an awareness has developed of the need to balance the independence of those boroughs with the need for an overall strategy. Within that strategy, the London Dockland Joint Committee has been developed. Despite remarks to the contrary, that committee brings together five boroughs and the GLC, as well as independent members—including Government nominees. The arrangement preserves local democracy and ensures that the development of dockland proceeds in harmony with development in all the boroughs. The urban development corporation cannot do that.

I can speak only as an authority on events in Southwark. I shall do so in order to refute the suggestion that nothing has been going on in those areas and that it is therefore necessary to establish a quango because the boroughs are not acting fast enough. In Southwark, the council's main objective has been to get the proposals off the ground as quickly as possible. Another objective has been to get as quickly as possible the increase of £10 million in the borough's rate base that such a development would give. Already, £13.7 million has been spent on the preparation of the Surrey docks area for redevelopment. A further £8 million has been spent on buying land. Projects to the value of £28 million are now in hand.

To reach that stage, the council has overcome the problems of drainage, soil contamination and methane gas. The former dockland areas have gradually been filled in since 1970. The planning of the basic sewerage and drainage services for the new development began in 1975. The main trunk sewer is now ready to serve the first housing and industrial areas. There may not be a lot on the ground, but much of the basic groundwork has been started by the London boroughs. We are on the threshold of major development that will revitalise the area.

I fear that the appointment of an urban development corporation can only put back the clock. A new staff on a new UDC will want to start redesigning schemes from scratch. We have already suffered too many delays in the dockland areas, most of them from Government interference. In Southwark it took us from July 1974 to February 1979 finally to get a refusal for our imaginative Trademark proposition in the Surrey docks.

I urge the Secretary of State to think again. The establishment of an urban development corporation may be necessary for Liverpool—and I leave hon. Members for that area to speak for themselves—but it is not necessary for the London docklands. It can only delay redevelopment plans for which much groundwork has been accomplished.

The plans for the London dockland represent an agreed strategy between the five local authorities and the GLC, with a workable timetable and an organised staff to implement them. The London joint committee retains the advantages of democratic control while co-ordinating the activities of the borough and the GLC. That is a fine demonstration of making democracy work. It does not need to be replaced by a corporation.

Finally, if the Government use their majority to force the dockland corporation on inner London, I welcome the appointment of my right hon. Friend the Member for Bermondsey (Mr. Mellish) as deputy chairman, and I congratulate him on his courage in accepting that appointment. If the corporation is forced on us, we need a voice at the highest level who understands the needs of inner London and who has lived with the problems of the dockland area since the days when he was a dockers' Member of Parliament —although he now has not a single docker. My right hon. Friend has an important role to play if we have to have that corporation. With his aptitude for expressing his views in a forthright way, he might cut through some of the red tape that we are bound to encounter and ensure that some of the projects that the boroughs have in the pipeline are not long delayed.

Nevertheless, I am convinced that local democracy can solve the problems of London's dockland. Great progdess has been made. I hope that in Committee the Secretary of State will consider withdrawing the proposals that affect inner London.

8.4 pm

Mr. Dafydd Wigley (Caernarvon)

The Bill has achieved a rare result in uniting Labour, Tory and independent-controlled councils in opposition to it. It can fairly be described as a Trojan horse in lamb's clothing. Despite relaxation of 300 detailed controls, its most significant feature is the centralisation of power. The councils fear that the Bill provides the framework for rigid and dictatorial central control. It could well be a milestone in centre-local relations in the United Kingdom.

Mr. Ioan Bowen Rees, the chief executive of Gwynedd county council, is the author of a highly regarded book, "Government by Community", which I recommend to all hon. Members. He described the Bill as possibly heralding the end of true local government as we know it. It is worth recalling that one of Hitler's first actions in Germany was to emasculate local government. We could be opening the door here to the same process.

Over many years we have seen the gradual erosion of local government powers. Trunk roads, hospitals, personal health, school health, ambulances, electricity, gas and the rivers have been taken away from the powers of local authorities. In some ways the urban development corporation moves further in that direction. I hope that we shall not see such a corporation in Wales. I should like to see us moving in the other direction. I should like to see the abolition of the ultra vires rule, although in the present climate that is unlikely.

Parts of the Bill are welcome. I welcome the retention of the Land Authority for Wales, which is generally acknowledged to have done good work. We also welcome the structure of a separate block grant for Wales, which was foreseen in the Wales Act in the previous Parliament. Sadly, we shall not have democratic control over that grant, and there is the question of how the total size of the block grant will be determined. It will also be interesting to know whether there will be provisions for Scotland similar to those in parts VI and VIII, which do not apply to Scotland.

We welcome the provision to make local authorities publish more information, and hope that that message will get home to central Government. By and large, local government is better than central Government at publishing information. Officers send reports to all councillors well in advance of meetings, which can be contrasted with the lack of information given to hon. Members, particularly on the Opposition Benches, from the Civil Service. We also welcome the relaxation of controls, though many are trivial, such as the Prevention of Damage by Pests Act, appeals on the height of chimneys and regulations concerning density meters.

We give a limited welcome to the planning provisions. The case to have planning functions under one roof at county or district level is overwhelming. There is no case for a split. I prefer to see planning as a district level function, but, whichever tier has responsibility, it should be under one roof. I fear that in clause 62 of the Bill provision still exists that districts will have to consult the county on certain matters but that there will be no sanction with the county. However, the counties will retain their planning staff and in Wales they will have to report to the Welsh Office when things are out of line. No doubt that will involve more bureaucrats in the Welsh Office to give the final authority. Thus, there will be a centralisation and not decentralization in the planning functions.

We should like to see an amendment in Committee or on Report regarding the vexed question of second homes in Wales. The Welsh Office advises us that the planning clauses in the Bill are suitable for such an amendment.

I profoundly disagree with parts of the Bill. There is a real erosion of local authorities' powers implicit in the Bill. I speak as a convinced devolutionist in all senses. I quote what the Secretary of State said on 19 July: Together with responsibility goes accountability. Freedom for individuals cannot be achieved only by abolishing restrictions.…I believe that an effectively functioning local democracy can monitor the activities of local councils far better than civil servants in Marsha Street. I agree with that, but it is not the direction in which the Bill takes us.

The Society of Local Authority Chief Executives stated: In the Bill at each critical point the Government have chosen central control and influence rather than local accountability. That body is not notoriously Labour-controlled or Opposition-controlled and might be expected to have sympathy with the Government in other matters.

I contend that the capital controls are totally unnecessary. Over each of the past five years the local authorities have been within 5 per cent. of public expenditure White Paper projections. The restriction on funding capital projects from the rates is a grave imposition and one that could kill off a vital project in my constituency, namely, a sports centre that is due to be provided at Caernarvon by that means.

The relaxation of other controls such as the Parker Morris standards—which was the point made by the Secretary of State in an earlier intervention—in no way requires this new straitjacket on the total capital expenditure of local authorities.

Equally, local authority revenue expenditure has not been grossly out of line over the past five years. It has fluctuated by plus or minus 2 per cent. against target in each of those years. That is not a reason for introducing the sort of controls that are contained in the Bill.

The central question that arises is, how will central Government assess the varying needs from one area to another? What will be the criteria, who will be assessing them and how? Are we to have what could develop into a perfect system such as that in France? The bureaucratic cost for central Government of having a real measuring rod and real sensitivity to the needs of each area far outweigh the benefits that could come from the steps that the Government are taking.

I return to the comments of the local authority chief executives in summing up the Bill:

  1. "(a) To lay down for each and every authority the level of expenditure it should undertake.
  2. (b) To take powers to penalise local authorities whose level of expenditure differs from standard expenditure.
  3. (c) To extend its control over capital to all expenditure on capital however financed.
  4. (d) To take powers to compel local authorities to disband direct labour organisations, when a specified rate of return on capital has not been achieved.
  5. (e) To take powers to compel a local authority to dispose of land it holds, judged by the Secretary of State not to be required."
All these are centralising features, so that despite the good parts of the Bill—and there are some good parts—we must vote against it because we regard the essential features of the Bill as being anti-freedom, centralising and bureaucratic in nature.

8.12 pm
Mr. John Heddle (Lichfield and Tamworth)

I am grateful to you, Mr. Deputy Speaker, for allowing me to catch your eye at this late hour, and I shall be brief.

One of the disadvantages of speaking at this time, with all due respect to my hon. Friend the Minister who has left the Front Bench, is that most of one's foxes have been shot by previous speakers.

I wish to concentrate on two issues that other hon. Members have not concentrated on, and I declare three interests. One interest is as a consultant surveyor and director of a building and contracting company. I would consider my remarks on the Community Land Act 1975 and the abolition thereof to be made with the benefit of some inside knowledge of the working of that Act, and, as I wish to dwell also on the cancellation of rating revaluation in 1982, I should inform the House that I am a fellow of the Rating and Valuation Association.

I was especially impressed by the contribution of my right hon. and learned Friend the Member for Hexham (Mr. Rippon). Clearly, if a Bill achieves the almost impossible task of uniting the Association of Municipal Authorities, the Association of County Councils and the Association of District Councils in opposition to one part of the Bill, all may not be well in the State of Denmark.

A Bill that is designed to encourage local government to be more efficient, more effective, more cost-conscious and more mindful of the needs of ratepayers and others must, in essence, be good. I wish, first, to describe the two reservations that I have about the Bill and then to touch briefly on the Community Land Act 1975.

I start with my reservation about schedule 5, which relates to the proposed repeal of parts of the Small Holdings and Allotments Act 1908 and the Allotments Act 1925. For 600,000 council allotment holders there are 300 square yards of England's green and pleasant land, which represent an escape from the boredom of the high-rise block. It represents a breath of fresh air amidst the concrete jungle of anonymous urban life and an opportunity to out price the supermarkets. It represents a chance to return to the soil, to grow vegetables to supplement the shopping basket and to tend flowers to adorn homes.

I fear that the provisions of the Bill, if they remain unamended in Committee, will reduce substantially the number of allotments available in the future. The provisions for the repeal of parts of these two Acts deal with the proceeds arising from the sale of allotment land, which shall be used in the first instance for allotment purposes, the keeping of allotment accounts and the consent of my hon. Friend the Secretary of State to the disposal of allotment land.

If the repeal survives the Committee stage, it will enable local authorities, where they may be so minded, to conceal receipts from the sale of allotments from their ratepayers and not use such moneys for the benefit of allotments. These vital safeguards should continue to be vested in central Government so that the Court of Appeal continues to be available to allotment holders as an appeal of last resort against any action by the local authority.

I ask the House to bear in mind that allotment holders are, in the main, the elderly of our community, many of whom live in flats and other types of accom- modation lacking what some of us have begun to take for granted—namely, our back gardens. There are thousands upon thousands of acres of derelict and despoiled urban land crying out for redevelopment, without the temptation to encroach upon fertile land which once played so vital a part in the "Dig for Victory" campaign.

I turn to my reservations about the cancellation of the Rating Revaluation Act 1892. If indeed the cancellation is the primogenitor of a complete and absolute review of our rating system, I welcome it. I invite my right hon. Friend when he replies to consider the anomalies that the cancellation of that Act might produce. It would produce a clamour for amendments to the laws of compensation. I refer especially to compensation for site value brought about by compulsory purchase orders and compensation based upon gross value assessment when the effect of section 32 of the Landlord and Tenant Act 1954 is taken into account.

One further point that has not been touched upon so far is contained in part V of the Bill. I welcome that wholeheartedly. It seeks to extend domestic rate relief to more mixed hereditaments, and by that I presume is meant shops with maisonettes or flats above, and to extend the right to pay rates by instalment to the occupiers of non-domestic hereditaments. I presume that that also means commercial and small industrial premises. Surely that must be welcomed by the small business sector, shopkeepers and small industrialists throughout the length and breadth of the land.

I shall contain my final remarks to endorsing the breathtaking assassination of the Community Land Act 1975, so cleverly carried out by my hon. Friend the Member for Melton (Mr. Latham). That Act has, over the past five years of its inactive life, been the dead hand of the building industry. The Act was born out of ideological dogma by the previous Labour Administration. In its brief appearance on the building sites of this country it has proved to be a major contributor to the present high rate of unemployment in the skilled sector of the industry. The Act was at once too complex, too cumbersome and too expensive. It was an Act which gave local authorities entrepreneurial powers that they were ill equipped to put into practice. It is an Act which, in its pathetic lifetime, did not build one new home or create one new estate.

The right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) reminded us that in 1947 they tried it—and it failed. In 1967 they tried it—and it failed. In 1975 they tried it—and it failed. I am referring to land nationalisation. In the words of the famous songstress, When will they ever learn? I challenge the right hon. Gentleman to return to the House and confirm that his party will never again attempt to reintroduce a Bill that has so patently proved to be a costly failure three times in the past 30 years.

With respect to the right hon. Gentleman in his absence, I was surprised by his contribution. Dedicated as he was to a future Labour Administration re-enacting a Bill designed to achieve the total nationalisation of our building land and, no doubt, subsequently in its wake, the nationalisation of agricultural land—that will inevitably follow as the night does the day—hefailed to realise that that will stultify the development and creation of new homes. While he waxed eloquent about the need for the community to have a benefit from betterment, he failed totally to realise that the Development Land Tax Act, which was produced in parallel and as a tandem to the Community Land Act by his Government, provides to the community, by way of 60 per cent. of the betterment, the gain that is rightfully the community's.

I welcome the reservation in the Bill. While we assassinate the Community Land Act, the power remains to reserve to local authorities the right to assemble land which will enable them to create small factory estates and help small business men to start up on their own. It will help to solve our still enormous but inherited unemployment problem.

8.20 pm
Mr. George Foulkes (South Ayrshire)

I am grateful to be called to speak at this time in order to add a Scottish voice to the debate, not just for oral variety but because there is a substantial Scottish interest in the Bill. This is a United Kingdom measure and I am sorry that more Scottish Members have not been present to participate in the debate. I am glad to see the hon. Member for Perth and East Perthshire (Mr. Walker) here today. Five of the 16 substantive parts of the Bill apply totally to Scotland and six apply in part to Scotland. Perhaps others should apply to Scotland as well. I shall return to that point later.

It is difficult to analyse the effect that the Bill will have on local government in Scotland. It is an untidy and bad Bill. We have a different system of local government in Scotland and I should have preferred to see a separate Bill, as in the case of education, to deal with that separate system. I examined the Bill in detail and my first reaction was to give thanks to the Lord—or at least to the right hon. Lady the Prime Minister or whoever is responsible ultimately for the inclusions or exclusions in the Bill—that sections 6 and 8 do not apply to Scotland. The hon. Member for Caernarvon (Mr. Wigley) raised that point.

However, on examining the Bill more carefully, it occurred to me that what is being proposed is similar to the system that currently exists in Scotland. Let people be warned. The Secretary of State for Scotland is currently waving a large favour at the Lothian region council which is not doing what it is told by this Right-wing reactionary Government. The council is being told that there will be dreadful penalties—its capital allocations will be cut and its revenue expenditure will be adjusted—if it does not do what it is told. Let friends from England and Wales beware. The existing system in Scotland is about to overtake them.

There are bad examples of the current system in England and Wales as well as in Scotland. For example, I was recently examining the position where a person employed in local government—say, a teacher or a social worker—becomes unemployed. I am talking about the economic effect—let us forget the social and other effects. I asked a question of the Chancellor of the Exchequer about the matter. An interesting fact that has not been widely publicised became clear. Someone earning about £5,000, which is a typical salary for a social worker or a teacher, after 10 years, with two children aged 6 years and 4 years and a mortgage of £10,000 over 25 years, will cost, in terms of his redundancy in lost revenue, over £1,500. In additional benefits payable to him and his family he will cost over £3,300. That makes a total of £4,880 in extra public expenditure—a net gain of only £120.

There will be a loss to the community and to society of a valuable teacher, keeping class sizes down and keeping up the literacy standard or the loss of a social worker dealing with social problems. It is ridiculous even in economic terms, let alone in social terms, to put a man on the scrapheap. The theory is that these men will find jobs in the private sector. That is manifestly ridiculous, because jobs in the private sector are not available. They are being destroyed by the policy of Conservative Members.

I should like to deal with two specific points and ask why they do not apply to Scotland. Perhaps when the Minister winds up the debate he will answer my point. Why does not part II apply to Scotland? I believe that it is right that there should be a duty on local authorities to publish reports of their activities. I do not think it is an undue restriction, although it may be presently covered in Scotland. However, having been a member of a local authority for nine years, I do not believe that it is. I believe that there is no duty to publish reports.

Why does not part VII apply to Scotland? It deals with rebates under the Rating (Disabled Persons) (Scotland) Act and caravan sites for gipsies. Both are welcome provisions which should apply equally north of the border. It may be that they are both covered by existing provisions. The Birsay committee made representations concerning gipsies. If the provisions only apply by custom and normal habit, I wonder whether we should consider making them statutory in Scotland as well.

I move to a major issue in the Bill—the question of new town corporations. The Bill gives the corporations more power. I should have liked to see a Bill which included the abolition of new town corporations. I do not like non-elected authorities. I believe that new town corporations have an adverse effect on surrounding areas. When I was chairman of the education committee of the Lothian region, we spent more than two-thirds of our capital expenditure on education in the new town of Livingston, causing problems in the city of Edinburgh. Because they are an extra tier over and above regional and district councils, they mean extra expenditure on officials and members of the authority. If we are to dance a few quangos out of our lives, we should have got rid of those rather than the important ones, such as the clean air quango, which, unfortunately, is got rid of by the Bill. New town corporations are a negation of democracy. They clash with the local authorities and create tremendous problems. Indeed, their existence has resulted in inner city deprivation in Glasgow and Edinburgh.

I come to part XVI of the Bill. Urban generation is vital because of the dead centres in the inner cities. However, it is ironic that proposals in Merseyside and docklands are modelled on the new town corporations that created the problems. I would support any sort of activity to encourage and develop the centres of our city, but I would question strongly whether that should be done by non-elected bodies. If the Government gave resources to the existing local authorities, if money was being pumped into them instead of being withdrawn, those democratically elected authorities could get on with their job.

I am suspicious of part X of the Bill, which suggests a public register of land. The idea is to force local authorities to sell off land. There are allegations of hoarding. I suggest that local authorities need land in reserve. With the ups and downs of the economy—the stop-go—it is important to have a reserve of land so that when a local authority receives an injection of finance it can get on with the building programme. It can then build the old people's homes and new schools on the sites it has reserved instead of having to wait for the necessary compulsory purchase of the land. It is not unused land; it is land in reserve. That is proper planning.

The Tories are keen to sell land off to private developers anxious to make a quick buck. We have seen that in Scotland recently where the Robroyson hospital—the case was mentioned by my hon. Friend the Member for Glasgow, Spring-burn (Mr. Martin)—was sold for a mere £400,000.Already the developer who bought it has sold part of the site for £1½ million. That is what the Tories want to see. That is why they wish to sell off public authority land.

I believe in our democracy. It is an important part of our lives that is not just exercised every five years at a general election. It is not merely a matter of the period in between elections where a Prime Minister says that a Government have received a mandate and they will get on with the job. That is an elected dictatorship.

Democracy is a subtle balance of all the forces in our society. It is made up of central Government, which is an important force, pressure groups, industry, the unions and the voluntary organisations; and, in this context above all, our democracy embraces local government. Local councillors were elected, too, and they have a mandate to get on with the job. They are an important part of the local democracy that the Bill will stifle by taking away their powers. The Bill will destroy local government.

That fact has been mentioned by many Conservative councillors and the majority of hon. Members have acknowledged that fact in this debate. I hope—though I fear vainly—that they will express their feelings by coming through the Lobby with is. If they do not do that, I hope that major changes will be made in the Bill as it goes through Committee.

8.30 pm
Mr. David Atkinson (Bournemouth, East)

As a former member of a county council and of a county borough council, I give the Bill a cautious welcome. I say "cautious" because I believe that many present and past members of local authorities, including those in the House, feel that successive national Governments in recent years have succeeded in reducing much of the best of local government, either through reorganisation or intervention. That has happened instead of local government being allowed to evolve naturally as it had done successfully for nearly a century.

I opposed the reorganisation of local government in 1972. I particularly regretted the abolition of the county borough councils, which, I believe, were probably among the finest units of local government administration anywhere in the Western world. It cannot be said that local government functions, as they apply to former county boroughs such as Bournemouth—which includes my con- stituency—are being managed more efficiently today because their former functions are now divided between district and county. Nor do I believe that the previous Government's proposals for organic change would have improved matters.

I welcome the principle of clause 2(4), which will allow a ready comparison of unit costs between like authorities. The sole object of such comparison should be that the ratepayer is made aware of how efficient or expensive his local council is. The danger, however, is that the wrong conclusion can be jumped at too readily. No two local authorities are exactly alike. It is not possible to compare directly, for example, the unit costs of a borough such as Bournemouth—a coastal resort with a high proportion of elderly people and extremely dear housing compared with housing in the rest of the South-Western region—with the unit costs for social services and housing in a new town of similar size or an industrial borough. I believe that every set of statistics published for comparison of performance should make that plain.

It will, of course, be up to local councillors to explain that to their electorates. Too many councillors do not communicate as well as they might with their electors. The intention of the Bill to relax, or remove, certain controls or constraints on local government functions has, I have found, provoked a universal reaction among councillors that they are glad to know that they are free of such controls, though some of them say that they never appreciated that many of those controls had been imposed on them in the first place.

These proposals in the Bill will, I think, be regarded as only a start along the road to freeing local government of many of the statutory regulations that it must satisfy, often at great cost to the taxpayer. Many of those regulations, on analysis, will be found to be out of date and totally unnecessary and should have been scrapped a long time ago.

I hope that, in establishing comparisons of performance between local authorities and in reviewing statutory functions and responsibilities, my right hon. Friend will also compare the practices of local government in this country with practices abroad, especially in Europe. There may be many ways in which other countries organise their local government better than we do. Many provide fewer services at less cost to their taxpayers. I believe that we can learn a great deal from them.

I welcome the better allowances for councillors, especially those with special responsibilities. However, I appreciate that doubts remain whether local councillors should be paid at all and that some people may be wrongly motivated if they are. In some instances these doubts are justified. Nevertheless, councillors should not be out of pocket for serving the community in such a time-consuming and costly way. Local authority service must not be the prerogative of the rich or the retired. They must include the widest possible cross-section of the local community, including younger people in tune with modern management techniques and the attitudes of their generation. The financial compensation for the loss of income and career prospects which election to a local authority undoubtedly encourages must be adequate. Up to now, it has not been adequate. It will not be adequate even as a result of the provisions in the Bill.

The proposed control of the capital expenditure of local authorities and the new block grant system is causing most concern because of the implied loss of local freedom. The Government were elected to control and ultimately to reduce public expenditure. They are imposing strict cash limits on themselves. If they are to succeed in this aim, I accept that they must apply similar controls to local government expenditure. Only the most extravagant councils should fear these controls—and rightly so. However, I hope that the Government will continue genuinely to listen to local authorities, to take note of their alternative proposals and, if necessary, to amend the Bill in Committee to achieve the right balance between central bureaucracy and local freedom.

I hope that in the not too distant future such measures will no longer be necessary because they will be superseded by a new system of financing local government and a reformed rating system based on the ability to pay.

Recent press reports indicate that the Government have effectively abandoned their pledge to abolish domestic rates. I hope that my right hon. Friend will con- firm that the Government remain committed to that pledge in principle and that they will produce detailed proposals for consultation with local authorities, ready to be implemented as soon as the economy allows. If not, the long-suffering taxpayer, who is also the ratepayer, will lose all hope and will feel that he has been abandoned by the Government that he helped to elect.

This is an important Bill. It is aimed, amongst other things, at keeping local government expenditure under control. As such, it will be welcomed by the ratepayer.

8.38 pm
Mr. J. W. Rooker (Birmingham, Perry Barr)

I shall follow the example of the hon. Member for Bournemouth, East (Mr. Atkinson) and try to be extremely brief so that another hon. Member may he squeezed in before the Front Bench spokesmen wind up the debate.

Unlike most hon. Members who have spoken, I have not been a member of a local authority. I have often said that it has been an advantage for me to represent part of Birmingham not having been a member of the Birmingham city council.

I have had some harsh words to say about local authorities. But, as has been made clear by hon. Members on both sides of the House, many sincerely believe that our system of local government is the cornerstone of our democracy. The Government are perpetrating an act of vandalism on our democracy. If the provisions in the Bill are carried out to the extent that we fear, local government electors will rise up in their wrath because of what will happen to the local authorities. They will see that there is no redress for their grievances. Curtailment of the redress of individual citizens will be brought about by this "freedom-loving" Tory Government. It will not take long for the electorate to see through it.

Listening to some hon. Members, especially the hon. Member for Liverpool, Edge Hill (Mr. Alton), who spoke for the Liberal Party, one would think that clause 2 had something to do with open government. I do not see that the publication of information laid down in the Bill has anything to do with open government. The phrasing means that the information given out is under the control of the central Government. The central Government will dictate what is published and how. It may be published on the back of the rate demand. That happens now in Birmingham. But council tenants do not get a rate demand. They do not see the breakdown of the information. This point is not covered in the Bill.

The first action of the present Tory leadership in Birmingham, on taking control of the city, a few years ago was to abolish publication of the "Brum Bugle", introduced by the Labour council. That went to every house in the city and explained how the city council worked and how money was raised and spent. It was claimed that the move saved public expenditure, but it curtailed local democracy.

The Government are not interested in open government. I hope that I am not doing an injustice to the Library. The briefs that they produce for hon. Members are first-class. But a sentence in the brief on clause 2 says: The publishing of details of service costs will give ratepayers the opportunity to judge the workings of local government and to curb the power of pressure groups to dictate Government policy, according to the Secretary of State. If the Secretary of State has said that the reason behind the publication of information in a form that he lays down is to curtail the action of pressure groups that are vital to our democracy, he has some questions to answer. The fact that someone somewhere will have to monitor the speeches of councillors in committees and council chambers up and down the country is a serious erosion of our civil liberties and one more step down the road to the corporate State.

I hope that the Minister will reply to the points raised from the Opposition Front Bench. Who will report to the Secretary of State on the content, the manner and the context of speeches made by councillors so that the Secretary of State can determine whether they are naughty boys and deserve to be subpoena'd and surcharged and to have their electorate damaged and vandalised because of the money they have spent and because their motives may have been misunderstood? There is no Hansard in local government. Will they rely on the Press Association? They will not be able to rely on the local press.

My second point relates to direct labour organisations. My right hon Friend the Member for Birmingham Sparkbrook (Mr. Hattersley) referred to the position in his consituency, but the matter affects the whole of Birmingham. Since the present Tory-controlled council abolished the direct building department, there have been catastrophic problems in Birmingham regarding the use of private contractors. In one example, scaffolding put up round a block of four houses by a private contractor fell down. The firm has been prosecuted by the Health and Safety Executive. Such examples of the rip-off under the urban renewal scheme are legion. This has happened because private contractors, in the small way they operate—unlike large firms such as Wimpey—are not geared to servicing areas such as Birmingham. We were able to do the job on our own more efficiently, more cost-effectively and with some sort of surveillance.

The great advantage of direct labour departments, in terms of saving, is that they do not need a Christmas gifts list. Hon Members know of the case of the building company, Bryants from which hon. Members on both sides of the House were in receipt of gifts. There is no secret about that. It came out in the court case. I have not heard of a case of a local authority direct works department needing a Christmas gifts list with crates of whisky and such like. It does not operate like that. It does not need to operate in that way when it is under the control of democratically elected councillors open to the surveillance, of ratepayers and the local press. I can speak only for Birmingham, which has suffered greatly since the abandonment of the direct works department.

I shall vote against the Bill with a glad heart, knowing what I am doing. I have campaigned for the policy contained in clause 88 for five years. That is not Government policy. It is the result of a recommendation by the Parliamentary Commissioner for Administration and the Select Committee—namely, to remove from the Land Compensation Act 1973 the closing date of July 1975 for the making of claims.

More than 200 families in my constituency who live alongside the M6 did not claim in time. Throughout the country there are 10,000 citizens affected by road schemes who did not claim within the time limit. The main reason for that is the lack of publicity. One of my constituents who was building the motorway had moved on to build the next bit of motorway by the expiry date. There was a lack of publicity and no forms were put out. I took a case to the Ombudsman, but it was thrown out.

Another case in connection with the M2 opened up the whole question 18 months ago. The previous Government were in the process of reviewing the Select Committee's report and I understand that they were about to make a similar decision to that which the Government have made.

I wholeheartedly welcome clause 88, although it seems to rely on the whim of the Minister. He has to be satisfied that the publicity given is not sufficient. However, we can argue about that later. I will take no truck from any Tory who says that I am voting against the interest of my constituents because I oppose the Second Reading of the Bill, having campaigned for clause 88 for five years.

The Bill sounds the death knell of local democracy. I hope that there will be many amendments in Committee. If only a few Conservative Members who have spoken today would follow their voices into the Lobby, the Bill would not get a Second Reading.

8.47 pm
Mr. Bill Walker (Perth and East Perthshire)

I am glad to have the opportunity to put the Scottish voice from the Conservative Benches. I welcome the Bill because the broad objective of part I is sensible devolution, which relaxes central Government control and allows local authorities to provide services with the minimum of central Government interference. As a Scot, I believe in devolution which strengthens the relationship between local authorities and their local communities and allows local authorities, ratepayers and electors to have a more meaningful say in the kind of services which are provided. The Bill goes a long way towards doing that. It will also improve the general level of information available to councillors and ratepayers, which in turn will help them to play a full and constructive role in their local authorities. I believe that councillors have a key role to play in our democracy.

I have some reservations. The Bill does not relax enough of central Government's control. However, it is a step in the right direction. Reference has been made to the sale of hospital land. That sale was carried out under the Labour Administration.

I am delighted to see that the Bill tackles the problem of direct labour organisations. For far too long, British taxpayers and ratepayers have been sustaining ineffective and inefficient direct labour organisations which have been protected from the real world. They have, in the main, been operating on the economics of the bottomless bag of gold, that is to say, the public purse—the open drain down which all the losses have gone.

The public purse is not bottomless. The bag of gold does not exist. The Bill will ensure that direct labour organisations become more accountable. In future they will be run as separate and accountable trading bodies and must tender and operate in fair competition with the private sector. The sensible and efficient direct labour managers and work-people will welcome this opportunity to show that they can compete. Those who do not have faith in their ability to compete will make a lot of noise, but the ratepayers and taxpayers will not be fooled. They will recognise that it is just another attempt by individuals and groups of individuals to protect out-of-date work practices.

Clause 63 allows the Secretary of State, as he thinks fit, to make provision for the payment of a fee for planning permission. That will be acceptable only if the delays and other areas of aggravation are removed. The delays and the aggravation are the real planning problem.

I wish to draw attention to the glaring anomaly that exists in Scottish rating law. Owner-occupied shoots are rated, whereas they are not under English law. This difference in the laws of the two countries creates acrimony and a sense of injustice and is seen to be absurd. It is all the more absurd when we realise that many of the assessments made are for farm land which is quite unsuitable for shooting and where no shooting takes place. I should declare a non-interest here. I have never been shooting in my life. What is more, I have no intention of going shooting.

I also suggest that the rights and duties of the water authorities should be updated—especially those of the water authorities in Scotland—to bring them into line with the other statutory bodies. Could not an amendment have been made to the Water (Scotand) Act? In particular, water authorities do not enter into way leave agreements or make way leave payments. Farmers in Scotland cannot understand way there should be a difference between water pipes and other pipes which cross their land.

Finally, I suggest that the Government should consider water authorities' liability for compensation for burst pipes and their failure to pay interest on damages or compensation for drainage after a specific period. These are aspects of the Bill that apply to Scotland. I hope that the Minister will consider them.

8.53 pm
Mr. Robert Litherland (Manchester, Central)

The Bill is a slimmer version of, but only a slight variation on, the original. What is abundantly clear is that the objectionable clauses remain. That indicates that the Government have taken no notice of the vigorous protests, advice and suggestions from local authorities and their associations. The consultation document was a sheer waste of time. It was a fallacy.

The Government's proposed intention to give local authorities more responsibility with less bureaucratic control from central Government is far removed from reality. The Bill gives powers to the Secretary of State for the Environment on many vital issues but at the same time erodes the rights of local government. That is happening in face of the overwhelming objections from councillors, officers and local authority associations. There is a fundamental shift from local government to central Government that is neither healthy nor desirable.

In this wide-ranging debate, and in the short time that I have, I should like to consider part II and the attack made on direct labour organisations. All parties are agreed that DLOs should justify their existence and be seen to give value for money. However, that issue should not be confused by considering them to be merely profit-making organisations.

The one basic element that is overlooked in these arguments is the standard of service provided by direct labour organisations, which is immeasurable in financial terms. Direct labour is there to provide a service and not a profit. It has to meet obligations as a model employer. The Bill disregards the social benefits of a decasualised labour force which provides apprenticeship training, employment for the disabled, superannuation and welfare benefits, safety and health, all of which are accountable costs and have to be included in competitive tendering. How can direct labour organisations provide these standards of service, meet their obligations, give secure employment and all the social benefits I have mentioned, and compete with contractors who do not?

In Manchester, direct work on new construction has provided the labour which has built 21,000 houses, 60 schools and massive recreational projects. It has also built police stations and fire stations. Most of that work has been won through competitive tendering, and the treasurer's figures show a vast saving to the ratepayers of the city.

We employ about 5,000 and provide training for over 500 apprentices. Apprentices, under the supervision of craftsmen, have built sheltered accommodation for the elderly in the city of Manchester. Where would one get that in the private sector? We provide jobs for the disabled. It is not featherbedding but horses for courses. Where would one get that in the private sector? The performance in the private sector has been abysmal. Direct labour gives us all the benefits of a model employer and it is all at risk because of the restrictions of the Bill.

The Bill makes the mistake of assuming that we are comparing like with like. How can comparisons be made with the private sector when it works under different rules and disciplines? Direct labour organisations cannot hire and fire men or negotiate new bonus schemes on every contract. They are limited to working within their own boundaries. They cannot invest moneys in lucrative ventures or switch resources and finance. They cannot buy work in an economic depression in the building industry, nor can they enter into suicidal tendering.

If we are to compare like with like, will the Government insist that there should be no lump labour? Will every firm competing with direct labour have to train apprentices, take its quota of disabled people and give the same welfare benefits as are given by direct labour organisations? Will direct labour organisations be allowed to compete outside their own boundaries?

Before reorganisation, we could build complete fire stations and police stations. After reorganisation, if the education authority had gone to the county with a request for buildings we would not have been able to build schools within our own city through our own works department. Will direct labour be allowed to carry out speculative building and tender for such buildings as Centre Point? Will the Bill mean that work now negotiated with the private sector will have to be tendered for in open competition?

The Bill's proposals to force direct labour organisations to tender for every contract valued at over £50,000, a figure that has not been updated since 1975, will mean increased overheads, extra staff to work the system and additional administration and staff requirements to assess costs, raise accounts and settle them.

At the same time, are turn of 5 per cent. on capital employed is insisted upon even when the rate required in the private sector may be much lower. How can DLOs remain economically viable with all the restraints that are to be imposed? They cannot, and the Secretary of State then has the power to close them down completely.

Do the Government realise that a considerable amount of maintenance work has already gone to the private sector? Will that work be included in the one-third that will go out to tender? Where specialist work is required or where there is difficulty in recruiting, will that work go out to tender? Perhaps the Minister will make that clear when he winds up.

Manchester's maintenance section attends to over half a million day-to-day repairs, provides emergency services 365 days a year and meets special situations such as storm damage. When the IRA bombed the law courts, direct labour was on the scene, and over the weekend the law courts were made habitable for Monday morning.

We have an emergency flying squad which can be called out at all hours in all weathers. Sometimes it has to work in appalling conditions doing disgusting work in an emergency. Will this work go out to competitive tender?

This Bill will eventually close down many direct labour organisations. We have about 300,000 building workers already unemployed. With the Bill there will be another massive dose of redundancies. This is while 1 million people wait on council house waiting lists.

A top local government official who has spent all his life in local government has said: I cannot emphasise too strongly the damage to local government in the financial provisions of this Bill. It will affect the whole fabric of local government as we have known it. If local government as a democratic institution is worth preserving as part of the English heritage, then the financial provisions of this Bill must be resisted. So it is under the guise of giving local government more freedom and making it more accountable that the Bill will enable the Government to achieve their economic targets. These claims are demonstrably false and bear no resemblance to the reality, and it should be—I emphasise this—the Government's obligation to show the need for the controls that are enshrined in the Bill.

9 pm

Mr. Gordon Oakes (Widnes)

We have had a full and varied discussion of this monster Bill. I use the word "monster" in every sense. It is monstrous in size and monstrous in its provisions. It is a Bill whose main provisions are bitterly and vigorously opposed by all three local government associations, all of them completely Conservative-controlled. It is opposed by individual authorities, of varied political complexions, as so many hon. Members on both sides of the House have pointed out. It is opposed by trade unions, by individual pressure groups, by the Liberal Party and by the Welsh National Party—[HON. MEMBERS: "Where are they?"]—as well as by the Labour Benches.

I suggest to the right hon. Gentleman the Secretary of State that from what we have heard in this debate it is a Bill with very few friends indeed, even on the Conservative Benches. Apart from the hon. Member for Melton (Mr. Latham), who confined his remarks to the repeal of the Community Land Act, and the hon. Member for Liverpool, Wavertree (Mr. Steen), who was mainly concerned with the provision relating to the urban development corporation in Liverpool, the other speeches were varied and mixed in their reception. Some were speeches of almost outright hostility from the Conservative Benches, especially those of some Conservative Members who have experience in local government. That was the link of the attacks—those Conservative Members who have experience in some form with local government, and particularly with its grass roots.

I listened with great care to the excellent speech of the right hon. and learned Member for Hexham (Mr. Rippon). He has not only experience as a Secretary of State for the Environment but considerable experience as a county councillor and a local authority member. That is why he was so critical of so many of the Bill's provisions. And it was not only him. The hon. Member for Devizes (Mr. Morrison), who has a distinguished record in county council work and administration, and the hon. Members for Hornchurch (Mr. Squire) and Bournemouth, East (Mr. Atkinson), both of whom have served on local authorities in one way or another, were all highly critical of the Bill's main provisions. I hope that the Secretary of State will take good note of the lack of any measure of support for the Bill even from his own side of the House.

One of the things that has struck me during the debate, especially when listening, to the right hon. Gentleman's speech, is that every clause of the Bill takes a sledgehammer to crack a nut. If what the right hon. Gentleman was saying in his honeyed words in moving the Second Reading was true—that there are a few overspending authorities and that, therefore, he must take powers to curb them; that some authorities do not give sufficient information, and, therefore, he must take powers; and that he will be setting up two development corporations, one in London and one in Liverpool—why do we have this huge Bill whose provisions go far wider than that? I think the reason is—and I regret to say this—that there are sinister provisions behind the Bill, and my view has been reinforced. The right hon. Gentleman was given every opportunity by my right hon. Friend, the Member for Birmingham, Sparkbrook (Mr. Hattersley) to correct or at least to explain what he meant when he talked about judging a local authority by speeches, and he insisted that that should go into Hansard. Indeed, he repeated that he meant "speeches".

Are we to reach the position where a chief executive or a leader of a party in a council will tell a young councillor to curb his speech because the Secretary of State might get to know and the authority might be fined and penalised? The right hon. Gentleman is laughing. Why did not the right hon. Gentleman withdraw the word "speeches"? I think it is an absolutely disgraceful provision in any Bill in a democratic country, particularly in this country, where curbs of that nature can be put forward by the Secretary of State so that councillors are frightened of expressing a true opinion because, if they express that opinion, the ratepayers of the area may suffer at the whim of the Secretary of State.

There are some provisions, but very few, in the Bill with which the Opposition can agree. My right hon. Friend mentioned the provision for the payment of councillors with special responsibilities. I hope that it will apply not only on the "government" side of the council, as it were, because oppositions, whether Labour or Conservative, have a considerable amount of work to do. I hope that that fact is taken into account when the decision is made over these extra payments. We can go along with that.

I agree with some of the provisions for compensation. The point has been made with regard to the cut-off date in 1975. I agree with that. Those are just crumbs in the Bill when one considers the enormity of other provisions in it.

I shall start with some of the things with which we mildly disagree before I go on to those on which we have a major disagreement with the Government—even clause 1, which, in the words of the right hon. Gentleman, relieves local authorities of some of their obligations and duties. Incidentally, in normal language, if one is told that one is relieved of one's duty, it means that one is being sacked. In effect, in the Bill that is what the Secretary of State is doing to the local authorities in relieving them of their responsibilities.

I agree with the hon. Member for Liverpool, Edge Hill (Mr. Alton) and the hon. Member for Lichfield and Tamworth (Mr. Heddle) in what they said with regard to allotments. What is proposed goes completely counter to the trend of leisure, a trend that helps the nation, whereby people who have no land of their own can take unused, derelict land, grow good, useful food on that land and enjoy themselves in the process. Clearly, what will happen in many authorities is that those allotments will be sold off for development.

The Bill does not go back 40 or 50 years; it goes back over 150 years. One of the repeals proposed in the Bill is that of a protection given to allotment holders in 1830 under the Enclosures Act. In this first part, also, I would not object to some of the duties of local authorities that are to be removed. I object very much to the removal of the provision of the Secretary of State's overall direction on pollution and clean air.

I do that because these are two issues which clearly go well beyond the boundaries of the local authority concerned. Other local authorities are affected. If a local authority does not carry out its duty, its next-door neighbour will suffer from its smoke and pollution. That is why the power is given to the Secretary of State. Some may think that there could be agreement about clause 1, but we cannot agree to it.

Clause 2 deals with the provision of information. We accept the need to provide information. It is useful for local councils to detail their manpower and how long a planning application takes for instance. Is it beyond the wit of a councillor, whether Labour or Conservative, to ask for that information and to get it? We do not need clause 2. Any councillor can ask for such information and receive it. Can the Minister say which authorities do not supply information? Some Conservatives have said that by setting up public relations departments and distributing information to ratepayers local authorities are wasting money. Information can be provided without the rigmarole of clause 2. The local authorities could have their own codes of practice or the Secretary of State could state that he wants specific information to be given.

Instead of that, the Bill sets out a series of regulations to provide information. Regulations to provide information and the form in which the information should be given mean mumbo-jumbo jargon. One does not receive free information in ordinary language but jargon, not because the local authority tries to prevent information being given to the public but because the local authority must comply with the Secretary of State's regulations and cannot move an inch away from them. Such a system will lead to a reduction in the amount of information given to the public.

Clause 3 deals with direct works—an issue which is of interest to hon. Members on both sides of the House. I agree that local authorities should be more accountable for direct works. My Government made proposals that were similar in some respects but they were not draconian. There should be accountability. However, are the Government wise to include maintenance in addition to ordinary building in their proposals? They include maintenance not only by building departments but by highways departments, for example. As the hon. Member for Edge Hill said, builders want the big contracts. They do not want to mend old Mrs. Jones's door hinge or to put a washer on her tap. They will not do that type of job. In many authorities council houses are in a deplorable state. This applies to houses in areas which are both Labour and Conservative controlled. That deplorable state will become even worse if forms have to be filled in and competitive tenders obtained to complete simple maintenance work.

Mr. Latham

May we be reminded why the Labour Government did not introduce the proposals mentioned by the right hon. Member for Widnes (Mr. Oakes)?

Mr. Oakes

We were overtaken by the election. We were anxious to allow direct works departments to compete properly. We did not want to tie their hands behind their backs in the way in which the Secretary of State proposes in clause 3. Maintenance should be excluded. We shall press that view in Committee. Apart from that, does the Secretary of State stick to the £50,000 figure without provision for inflation? That figure was fixed five years ago. Surely there is need for an amendment. Far from reducing the number of staff of local authorities, there will be a massive increase in nonproductive staff merely to administer clause 3. Instead of money being spent on repairs, on improvements and on building, the money will be spent in the offices in order to provide returns to the Secretary of State so that he cannot exercise his draconian power under clause 14 and close down the direct building works departments of local authorities, regardless of the wishes of the inhabitants. That is the sort of power that the Secretary of State is adopting.

I, too, have mixed feelings on the planning provisions. We must look philosophically at the question whether we impose a charge on a citizen for carrying out his duty and submitting a plan. I am concerned—the Government are right to tackle the problem—that the large development corporations submit plans with only slight variations year after year to local authorities, which cost an enormous amount of manpower. That is a different case from that of the man who wishes to erect a garage or who wishes to change his front door. I hope that the Government will agree that there should be some cut-off point before charges are applied.

Those are some of the less contentious points. I now turn to some of the more contentious issues, in clauses 6 and 8, but especially clause 6. I shall not deal with these at any length because many hon. Members have already spoken about them.

Local councillors are elected on almost the same franchise as that of hon. Members. They are democratically elected. We share in government and we have always shared in government with local councillors. The provision contained in clause 6 totally and fundamentally upsets the balance between national and local government.

Many hon. Members have asked the Government—I implore the Minister of State to reply to this point—how the Department of the Environment will assess need. The Government cannot bring this sort of provision before the House without any explanation of how that need is to be assessed. It will be assessed not by councillors but by an official in the Department of the Environment, perhaps by means of a scale or a points scheme. One does not know how he will make an assessment of what is happening in Manchester, Liverpool, Cornwall or elsewhere.

The local authority associations are bitterly concerned about this attack upon them and about the provisions for a unitary grant. We put the question of a unitary grant before local authorities because the Layfield inquiry recommended it. The local authorities were as opposed to it when the Labour Government were in power as they are now when the Conservative Government are in power. The Labour Government wisely dropped that provision. We agree with Conservative Members that the rate support grant in its present make-up has many faults, but the provision contained in clause 6 has many more faults. Its main fault is that it takes away democracy from local councils. Local authority assoctiations and individual local authorities will fight it bitterly.

The language of the Bill leaves a lot to be desired. The provisions on new towns are merely provisions to force new towns to sell off land they have acquired.

This is the language that we find in clause 101(1) of the Bill: The Secretary of State may direct a development corporation or the Commssion to pay to him, on the date specified in the direction, such sum as is so specified. That is in a Bill introduced by a British Government. These are more like the peremptory demands of a godfather of the mafia.

Clause 105(5) talks about the Secretary of State's powers and it states: Before giving a direction under subsection (4) above, the Secretary of State shall consult the corporation,"— I am glad of that— unless he is satisfied that because of urgency consultation is impracticable. That is the sort of power that the Secretary of State is seeking to take upon himself in the Bill. He is asking the House to give him that sort of power.

I now come to part XVI of the Bill, which to my mind is as bad as part VI, although for some reason the local government associations do not seem to have paid sufficient regard to the draconian powers taken under part XVI, which relates to the setting up of urban development corporations.

The Secretary of State told the House that he intends to set up two such corporations, one in London Dockland and the other in my own area of Merseyside, in Liverpool. If that is all he intends to do, why did he not put the provisions in the Bill? Instead, under part XVI, he takes upon himself the power to set up an urban development corporation wherever he wishes. Clause 108(1) states: If the Secretary of State is of opinion that it is expedient in the national interest to do so, he may by order made by statutory instrument designate any area of land as an urban development area. Why should he seek to take such wide powers throughout the length and breadth of the country to deal with this matter if all he has in mind is the setting up of development corporations in London and in Liverpool, which could be provided for specifically in the Bill?

The words that I find bizarre in a local government Bill are the words that it is expedient in the national interest to do so". They are peculiar words to find in a local government Bill. One could understand such words being used in a Bill dealing with security, terrorism, or something of that nature, but surely in a local government Bill the primary concern is with the interest of the local people in the area.

Why, then, have these unusual, bizarre words been imported into the Bill? Could it be that what the Secretary of State has in mind is something far worse? Could it be that, where there is a recalcitrant authority, he wishes to have the power to set up, in the national interest, a development corporation—a creature of his own making, under his own control?

The Secretary of State loves to laugh at these matters, but why is he asking for these powers? Hon. Members in all parts of the House—not merely on the Opposition Benches—are entitled to challenge those powers because they are most dangerous powers to give to any Secretary of State.

My hon. Friends from Liverpool and from London are concerned about the setting of these urban development corporations. We should be extremely grateful to the Secretary of State for the way in which he proposes to do it. He has implied that he intends to set up urban development corporations for London and for Liverpool. But he has no need to do that. He can use his powers under clause 113 to make one urban development corporation responsible for another area, if he so wishes. He can tack on another area to an existing urban development corporation.

My hon. Friend the Member for Liverpool, West Derby (Mr. Ogden) should be grateful that there will be a Liverpool development corporation for Liverpool, and that it will not be administered by the London boys. My hon. Friends in London are also interested, both London and Liverpool having docklands. It might, indeed, be expedient, in the interests of economy, to run them both together. The Secretary of State has not done it and we are grateful for that, but in which area will he strike next? In which area will he seek to take away democratic rights? I assure him that he will have a great many problems on his hands if he conies to Widnes. He will take away the democratic rights of local councillors who have been elected by local people and he will impose on them a development corporation.

An announcement was made that affects London. The Secretary of State should listen to those Opposition Members who represent London constituencies. They have all told him of the problems involved. I endorse their feelings as those problems are equally true of Merseyside. They have all said that the problem is not lack of co-ordination between local authorities but lack of money. Local authorities, whether in London or Liverpool, could get on with the job if they had the resources and the money.

The only good news that I heard today was the appointment of my right hon. Friend the Member for Bermondsey (Mr. Mellish) as vice-chairman of the corporation. That is a good appointment. I know my right hon. Friend very well. If the Secretary of State thinks that his appointment will provide a soft option, he has another thing coming. My right hon. Friend will fight to the death for Londoners. If the development corporation acts in the interests of big business and against those of the people, he will be the first to stand on the Secretary of State's doorstep vociferously and bitterly to complain.

The balance between local democracy and national democracy will be sadly upset if the Bill goes through. I hope that there will be adequate and proper discussion of the Bill. I assure the Government that neither my right hon. Friend the Member for Sparkbrook nor I will waste time in Committee. We shall not make spurious points of order. We shall not make long speeches. We want debate and discussion. However, we want to debate the whole Bill. It is a pity that the Secretary of State did not take up the offer to debate the main constitutional provisions of the Bill on the Floor of the House. The Bill might then have been properly debated by all hon. Members.

The other provisions in this monster of a Bill will involve a considerable amount of time. The Government tried to conceal this important piece of legislation by having it debated in the House of Lords. They failed. I implore the Government not to use the guillotine. If the Secretary of State imposes a guillotine, local authorities will react. They are already completely opposed to the provisions. If the House and the Committee do not have the opportunity fully to debate such important provisions, it will be a disgrace to democracy.

With the support of the Conservative-controlled local authority associations, individual local authorities and many hon. Members who feel uneasy about the Bill and who respect local government, we shall save local government. Those who are true democrats and who respect true democracy will support us. A distinguished Conservative, Sir Gervas Walker, made an announcement earlier today. We may have some peculiar allies, but we are fighting together to save local government. I assure the Government that we shall fight dictatorial diktats to the bitter end.

9.28 pm
The Minister for Local Government and Environmental Services (Mr. Tom King)

I shall begin with a point that will be generally accepted. No one would dispute that this is an important Bill and that several very important issues have been raised.

It has been suggested that the Bill is too long, but that has not prevented hon. Members from wishing to add their interests to it. The Bill does not cover everything. My hon. Friend the Member for Bournemouth, East (Mr. Atkinson) asked about the abolition of domestic rates, provision for which is not in the Bill. We made it clear during our election campaign, and my right hon. Friend emphasised the point, that reduction in direct taxation must take priority. However, I confirm that a review is in hand in my Department of the options to pursue that objective.

I believe that it will be helpful if I make clear the Government's objectives in the Bill.

Mr. Joel Barnett (Heywood and Royton)

Will the right hon. Gentleman give way?

Mr. Speaker

Order. It appears that the Minister is not giving way.

Mr. King

With great respect to the right hon. Gentleman, a considerable number of right hon. and hon. Members have raised points. The right hon. Gentleman has just walked in to the debate and will understand if I do not give way to him at the expense of replying to some of those points.

Mr. Barnett

Will the right hon. Gentleman give way?

Mr. King

I am not giving way. The right hon. Gentleman has just walked in, and it would be an abuse of the House not to reply to the debate.

Our aim is to clarify what we consider to be a proper balance and relationship between central Government and local government. But it is not only that. We also wish to clarify the relationship between central Government and local government and the local elector—the ratepayer, the citizen and the taxpayer—and the accountability of local government and central Government to him. I hope that all hon. Members will bear that important qualification in mind.

It has been suggested that certain provisions contain a basic challenge to the autonomy of local government. I entirely reject that suggestion and shall seek to explain why that is a misrepresentation of the situation.

We have made clear, as any responsible Government must, that there must be financial ceilings. There must be an overall financial umbrella within which central Government must control the economy. The scale of local government makes that inevitable. Within that limit we are determined to ensure the maximum freedom for local authorities to determine their priorities as they are best able to do. We do not assume, as a certain right hon. Gentleman once said, that Whitehall knows best. However, we are responsible for funds that are centrally distributed, and we must discharge that responsibility.

Among non-contentious issues raised was our response to the Robinson committee. We thought that it was right to respond, but it is a limited response. Some hon. Members felt that we should have gone further. It was a difficult judgment to make, but we grasped the nettle.

Another non-contentious matter concerns capital controls. The original proposals in the consultation document were the subject of vigorous representations. We have succeeded in considerably modifying those. It is fair to say that, on balance, the proposals are now reasonably welcome to local government. Although it might prefer to stay exactly as it is, it accepts that there are considerable freedoms contained in the proposals. The allocations are as before. Local authorities will have total freedom on capital receipts. Although allocations will come to them under five separate blocks, in their hands they will become one block—in other words, 100 per cent. virement. They will have discretion to allocate priorities.

The right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) and my hon. Friend the Member for Hornchurch (Mr. Squire) raised the question of the ultimate fallback position of ultra vires. There is a fallback safeguard. A criticism of the previous proposals is that there would be an automatic situation of ultra vires even if an accidental or marginal overspend occurred. We accepted representations on that, and under the present proposals there are considerable safeguards.

Only an authority that is quite determined flagrantly to disregard the rules and the allocation will find itself at risk of being alleged to be acting ultra vires. It is a three-stage procedure so that there is no question of an accidental or mar- ginal overspend being affected by that. It is a last resort only.

Mr. Hattersley rose

Mr. King

I do not know how many times the right hon. Gentleman wishes to intervene. He may wish to intervene later on other points. I shall let him intervene now.

Mr. Hattersley

The right hon. Gentleman may well be right. I wish to ask a question in the unemotional and un-polarised manner in which he has described the situation. He says that it is a fall-back position that will be operated only when councils are in flagrant abuse of the rules. That worries many Members on both sides of the House. How can a judgment be made on what constitutes a flagrant abuse? If it were a figure, a judgment could be made. If it were objective, that is understandable. If it is subjective, such as "flagrant", it worries many people that a Secretary of State has the right to judge. Will the right hon. Gentleman give any indication of how the decision will be made?

Mr. King

Allocations will be made, and together with those allocations there will be total freedom on capital receipts, and freedom, for the first time, for an additional 50 per cent. of the sale of council houses to be attributed to it. There will also be a 10 per cent. under-spend-overspend carry-over or carry-under from the previous year.

If an authority overspent by some 5, 6 or 7 per cent., that would normally be deducted from its next year's allocation. That would be standard procedure. If it went way beyond that, we would draw the authority's attention to the fact that it was way beyond the allocation and the margin of allowance over and above the allocation. If the authority failed to respond to such representations, we would have to consider the position. If we took action, we would have to bring such action before the House. I hope that the matter is now clear.

I turn to a more contentious item, namely, block grant. There has been much misrepresentation in the debates that we have had on the matter. It has been represented as the end of autonomy for local government. I know that the previous Labour Administration considered the possibility of imposing individual cash limits on individual local authorities. They considered also fixing the rate increases of individual local authorities. There are those who advocate such action. That would certainly be the end of the autonomy of local government. It would mean that central Government would fix the expenditure of individual local authorities.

Our proposals do no such thing. Our proposals are concerned with the allocation of public money that is given to local authorities. It is not an argument between individual local authorities and the Government. It is an argument in which the Government are standing in the middle, having to determine how a certain finite pool of public money should be most fairly distributed between individual authorities. If one authority is to receive more, it will not get it from the Government. It will get it from another authority. Our responsibility is to ensure fairness in the allocation between authorities. That is an important procedure.

Our proposals leave with local authorities the full freedom to fix their own levels of expenditure and to determine their own rates. What we are concerned to do is to prevent, as happens under the present position, high spenders pre-empting resources away from the more prudent authorities. That practice, which exists at present, must surely be rejected by any hon. Member who considers the matter in a sensible manner.

Mr. Douglas-Mann

Does the Minister agree that in the past the high-spending authorities have been those with the greatest needs in their areas, and that the consequence of his proposals is that he will be taking money away from the areas of greatest need and contributing it to areas where there is much less need?

Mr. King

The previous system has equated need with expenditure. We do not accept that total correlation, although many hon. Members have observed that our proposal makes allowance for that because of the difficulties of making an absolutely accurate assessment of need. We do not accent the generalisation that automatically, high-spending authorities are spending money because they desperately need to do so and that there is not extravagance in some of those authorities.

We all respect the views and experience of my right hon. and learned Friend the Member for Hexham (Mr. Rippon). I feel that it would be fair to say, having listened carefully to his speech, that there is no difference between us on the objective that we seek. What concerns him is the method that we are employing. He suggested that the main legislation that we are proposing is too general and not specific enough. With great respect, I suggest that it is more specific than the 1974 Act.

Many hon. Members may wonder whether the present system is too rigid and cannot be manipulated, but they have only to look at what the previous Government did to the rate support grant distribution. There is no control over the allocation between resources and needs elements. That is a crucial factor which affects distribution between authorities greatly. There is no control over the London claw-back. That can have a substantially damaging effect, and that was the thing that damaged the shire counties in the previous Government's term of office. If the domestic element is changed that, too, has considerable effect on the distribution.

Mr. Rippon rose

Mr. King

I should like to complete my remarks, if my right hon. and learned Friend will allow me.

I know that my right hon. and learned Friend is concerned about our proposals. He is anxious, as is my hon. Friend the Member for Devizes (Mr. Morrison), about the consultation with local authority associations. He was anxious to have an assurance of further discussions with the associations. I repeat what my right hon. Friend said in opening the debate: that the local authority associations have suggested that there may be other means which they would prefer to use to meet the objectives of the block grant. In other words, they accept the objectives but they feel that there may be other ways of achieving them. They have not yet put forward any alternatives that are agreed among themselves which would meet those objectives. If they are able to put forward an alternative, we shall consider it carefully and discuss it with them.

Mr. Rippon

I am grateful to my right hon. Friend for that assurance. I am glad that there will be further discussions with local authorities. May I add that I did not complain that the proposals were not specific enough? I said that they were unworkable.

Mr. King

I shall address myself to that matter now. My right hon. and learned Friend talked about the problems of needs assessment, as did my hon. Friend the Member for Hornchurch. The right hon. Member for Sparkbrook also discussed the problem of needs assessment and asked why we had not brought the full, final package to the House so that it could be fully evaluated. He knows the way in which needs assessments are calculated. Every year it is an extensive process which lasts throughout the year, culminating in the final announcement by the Secretary of State of the rate support grant allocations.

This year we are changing the formula, and we have made clear to the local authority associations that we wish to develop this with them. We are already starting work on that. On the one hand, the right hon. Gentleman criticises us for not consulting the local authority associations. He cannot have it both ways and say that we should have brought an agreed package to the House in advance. It will take considerable time to develop. He asked whether we could impose a formula if we failed to get agreement.

The procedure every year is by way of consultation in working groups, with study and discussion. I am not sure in which years there has been agreement though on a number of occasions there has been disagreement between the Government and some of the associations. Sometimes one association has differed from another. In each case it may be necessary, ultimately, for the Secretary of State to determine the final formula. We might be forced finally to take that decision.

This is a complicated matter. The hon. Member for Stoke-on-Trent, Central (Mr. Cant), whose knowledge of financial matters we respect, was frank enough to say that he did not understand it. The House should appreciate that. My hon. Friend the Member for Hornchurch spoke of close-ending the resources element. That was a very technical point and hon. Members on the Opposition Benches who had read their briefs said "Hear, hear". They thought it was a splendid idea. I hope that they have worked out what it means, because that is much more draconian than anything we are suggesting under the block grant mechanism. It is a very savage instrument indeed, which places anabsolute requirement on the accuracy of the needs assessment. It is an absolute cut-off, which takes no account of the point made by the hon. Member for Mitcham and Morden (Mr. Douglas-Mann), which was that expenditure should equal need. It is an extremely draconian action. However, if that is what hon. Gentlemen want—we did not dream that we could possibly go that far—we would like to hear from them. Otherwise, I suggest that, on a complicated matter such as this, they consider carefully what is put before them and make sure that they want to support it.

The right hon. Member for Spark-brook raised the issue of the transitional arrangements. He made the point that it was unfair on councillors if they did not know at the beginning of the year exactly what the allocation for their councils would be. He seems quite unaware that, under the present resource claw-back system, late in each year the more prudent authorities have had money clawed back from them without their having any opportunity to raise the matter, even through their representatives in Parliament. That claw back has been effected not by Parliament and not even by the Minister. It has been done by an administrative mathematical calculation in my Department.

I would have thought that our proposals to put a clear proposition before the House by giving clear warning, putting it into the Bill, seeking parliamentary approval as the Bill progresses towards Royal Assent and then laying an order was a much more satisfactory method of dealing with this process.

The right hon. Gentleman raised the question of the 119p. That notional uniform rate is effectively the average expectation for rating. The fact that some authorities are above it should not come as a blinding surprise to any amateur mathematicians here. If that figure is the average, it means that at least half of the authorities will have a rate above that figure. That is why we said that the figure would be substantially above that. There will be clearly published rules under which any question of tapering of grant will fall.

Mr Hattersley rose

Mr. King

Perhaps the right hon. Gentleman will allow me to deal with one further specific point. He asked me a number of questions. He must take the answers. He asked whether this figure would be revised. The answer is "No".

Mr. Hattersley

I am grateful to the right hon. Gentleman for giving me the opportunity to get this clear. Is he saying that a council which imposes—if that is the right word—a rate of more than 119p in the pound ought not to assume that it is in jeopardy and ought not to assume that there will be a reduction in its rate support grant supplementary award in September? Is the right hon. Gentleman now saying that a rate of 119p in the pound or a figure in excess of that does not put a council in jeopardy?

Mr. King

The right hon. Member for Sparkbrook asks a naive question. In the last rate support grant debate he waved at us a circular that set out the rules quite clearly. He will remember that the figure was substantially in excess of 119p and that there would be a power of waiver for those who had traditionally higher rates but who had clearly made an effort to make economies in expenditure.

The reason why this cannot be determined is exactly why it cannot be determined for resource clawback. Resource clawback cannot be determined until every authority has set its rates. That is the present situation. It would help in our discussion of these matters if right hon. and hon. Members who chose to criticise our proposals understood the present system better. Their arguments might then have more validity.

Accountability is an important part of the Bill. The publication of information will be of great value, not only to councils and councillors but to electors. It is meaningful not only on the absolute figures which are published but on the comparability of information that is put forward. Nothing on its own makes absolute sense. Perhaps I may give one example on planning. One of the statistics on planning is that 70 per cent. of authorities processed 90 per cent. of planning applications within eight weeks. Another 10 per cent. of authorities processed only 10 per cent. of applications within eight weeks. I suggest that that one comparative statistic invites questions as to whether the 10 per cent. of authorities are providing the services that the others manage to provide.

Mr. Guy Barnett

The question is: who ought to be asking the questions—the electorate of the local authority or the right hon. Gentleman?

Mr. King

We hope that the electorate and councillors will ask the questions. Our role is to try to ensure that the information is on a comparable basis.

Mr. Chapman

Does my right hon. Friend agree that, as Parliament has laid down a statutory period of two months for determining planning applications, Parliament has a right to ask these questions?

Mr. King

I entirely agree with my hon. Friend. We hope in this way to help performance in a number of ways.

Several hon. Members, including my hon. Friend the Member for Chorley (Mr. Dover) and the hon. Members for Liverpool, Edge Hill (Mr. Alton) and Manchester, Central (Mr. Lither land), referred to direct labour organisations. Some said that direct labour organisations were carrying excessive burdens, whereas others said that they were creating unfair competition for the private sector. Both arguments strengthen our case for saying that there should be better accountability and more clarity about the operations of direct labour organisations. We hope that there will be general support for CIPFA's proposals based on the recommendations that the previous Labour Government warmly endorsed but did nothing about. We intend to deliver on this point.

My hon. Friend the Member for Melton (Mr. Latham) asked whether we could publish the regulations in advance of Report. We are having close discussions with the local authority associations. If we can do that in time, we shall do so.

We hope that our proposals will help to simplify and clarify the planning procedure. We propose to end the overlap of district and county councils. I say to my hon. Friend the Member for Devizes that we hope and believe that there are adequate safeguards for the county to protect the structure plans. We are to modify the general development order that we shall put before the House. We hope that that will help to take the more minor developments out of the planning system.

Urban development corporations have attracted considerable attention in the debate. The hon. Member for Greenwich (Mr. Barnett) suggested that they were not an exact parallel with the new towns because there was a different procedure for setting them up. He suggested that the procedure of laying an order before the House would cause chaos and delay. I suggest that the new towns procedure would cause infinitely more delay. As we were attacked by his hon. Friend the Member for Bethnal Green and Bow (Mr. Mikardo) on the risk of a hiatus in setting them up, I hope that he will feel that on balance we have chosen the right proposal.

I was pleased to have the support of my hon. Friend the Member for Liverpool, Wavertree (Mr. Steen). We hope that private architects and others will have a full opportunity in the urban development corporations to play their part. We believe that the UDCs must attract private as well as public capital.

Of all the speeches on the urban development corporations, the one that moved me most was made by the right hon. Member for Bermondsey (Mr. Mellish), who, as my right hon. Friend announced, has accepted appointment as deputy chairman of the docklands UDC.

I think the whole House respects the fact that the right hon. Gentleman has served that area in the House for 34 years. He has made speeches in the House saying that he believed that UDCs were the right answer for the Docklands and his constituents. The House can only respect a man who has spoken on that subject against his own Government from the Back Benches in the past, and now, when he has a real opportunity to to continue, in a practical way, to serve his constituents, he is prepared to under- take this responsibility. We should express our appreciation to all those who have accepted appointments.

I wish to say a word about our repeal of controls. We have said that we want the Bill to extend—

Mr. Alton rose

Mr. Ogden rose

Mr. King

We have said that we wish to extend the maximum freedom for local government, and while I would accept—

Mr. Ogden rose

Mr. King

I am sorry, I am not giving way. While I accept that in the controls that we are repealing—

Mr. Ogden rose

Mr. King

I apologise to the hon. Gentleman. I am afraid we are up against the clock. I accept that, in our repeal of controls, perhaps the Rag Flock & Other Filling Materials Act 1951 is not exactly the stuff of which our manifesto was made. There are otherwise in these proposals a number of significant relaxations. Nobody can deny that the changes that my right hon. Friend has announced for Parker Morris and the housing cost yardstick is the most significant abolition of detailed control in housing ever seen in this House.

It is galling to have to listen to Opposition Members chipping away at the 300 controls that we are abolishing and saying that this is not very much. It just happens to be 300 more than they have ever done.

One of the most significant aspects of this debate, if we are talking about the chipping away of controls, has been the total absence of grief from any hon. Member about the departure of the Community Land Act. It was perhaps excessive cruelty on the part of my hon. Friends the Members for Melton and for Lichfield and Tamworth (Mr. Heddle), who fairly assassinated the remaining pieces of the Community Land Act—a total disaster in the best tradition of all socialist land planning. Richard Crossman buried the Land Commission. We are now burying the Community Land Act—an Act that gave rise to 200 circulars, guidance and statutory instruments, cost £15 million in administration, cost £52 million deficit on the local authorities and produced precisely 600 acres of land as a result of its whole activity. It is totally unlamented. We are delighted that the Bill will finally bury it.

We have had to listen during the debate to some pretty righteous speeches from the Opposition Benches, from the great lovers of local government independence and freedom—those who always stood back and never sought to interfere in any decisions of local authorities and those who guaranteed close and detailed knowledge for local government, at the start of the financial year, of their financial situation, burying the fact that as late as August 1976 they issued a circular retrospectively, without any authority from Parliament, clawing back £50 million from local authorities. They represent the party that does not interfere in local government. Yet in the last year of the previous Government 222 circulars were sent from my Department alone to local authorities telling them what to do.

I am happy to say that we have already reduced that figure to 39. The previous Government unscrupulously manipulated the transport supplementary grant. There was the business of judging between individual authorities. I should like to refer to what the Financial Times said in 1978: County councils that have refused to back Government policy are punished by cuts in the grants made to them. The worst offenders, Oxford and Northamptonshire, must make do with only £100,000. Dorset regarded as a model county gets its full grant. How is that for non-interference?

We are determined to get the right balance in local government. We stand for its freedom and independence within the overall ceilings. We believe that the Bill is an important step along that road, and I commend it to the House.

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

The House divided: Ayes 315, Noes 260.

Division No. 153] AYES [10 pm
Adley, Robert Farr, John Lloyd, Ian (Havant & Waterloo)
Altken, Jonathan Fell, Anthony Lloyd, Peter (Fareham)
Alexander, Richard Fenner, Mrs Peggy Loveridge, John
Alison, Michael Finsberg, Geoffrey Luce, Richard
Amery, Rt Hon Julian Fisher, Sir Nigel Lyell, Nicholas
Ancram, Michael Fletcher, Alexander (Edinburgh N) McCrindle, Robert
Arnold, Tom Fletcher-Cooke, Charles Macfarlane, Neil
Aspinwall, Jack Fookes, Miss Janet MacGregor, John
Atkins, Robert (Preston North) Forman, Nigel MacKay, John (Argyll)
Atkinson, David (B'mouth, East) Fowler, Rt Hon Norman McNair-Wilson, Michael (Newbury)
Baker, Kenneth (St. Marylebone) Fox, Marcus McNair-Wilson, Patrick (New Forest)
Baker, Nicholas (North Dorset) Fraser, Rt Hon H. (Stafford & St) McQuarrle, Albert
Bell, Sir Ronald Fraser, Peter (South Angus) Madel, David
Bendall, Vivian Fry, Peter Major, John
Benyon, Thomas (Abingdon) Galbraith, Hon T. G. D. Marland, Paul
Benyon, W. (Buckingham) Gardiner, George (Reigate) Marlow, Antony
Best, Keith Gardner, Edward (South Fylde) Marshall, Michael (Arundel)
Bevan, David Gilroy Garel-Jones, Tristan Marten, Neil (Banbury)
Biffen, Rt Hon John Gilmour, Rt Hon Sir Ian Mates, Michael
Biggs-Davison, John Glyn, Dr Alan Mather, Carol
Blackburn, John Goodhart, Philip Maude, Rt Hon Angus
Blaker, Peter Goodhew, Victor Mawby, Ray
Body, Richard Gorst, John Mawhinney, Dr Brian
Bonsor, Sir Nicholas Gow, Ian Maxwell-Hyslop, Robin
Boscawen, Hon Robert Gower, Sir Raymond Mayhew, Patrick
Bottomley, Peter (Woolwich West) Gray, Ham[...]sh Mellor, David
Bowden, Andrew Greenway, Harry Meyer, Sir Anthony
Boyson, Dr Rhodes Grieve, Percy Miller, Hal (Bromsgrove & Redditch)
Braine, Sir Bernard Griffiths, Eldon (Bury St Edmunds) Mills, Iain (Meriden)
Bright, Graham Griffiths, Peter (Portsmouth N) Mills, Peter (West Devon)
Brinton, Tim Grist, Ian Miscampbell, Norman
Brittan, Leon Grylls, Michael Mitchell, David (Basingstoke)
Brocklebank-Fowler, Christopher Gummer, John Selwyn Moate, Roger
Brooke, Hon Peter Hamilton, Hon Archie (Eps'm&Ew'll) Monro, Hector
Brotherton, Michael Hamilton, Michael (Salisbury) Montgomery, Fergus
Brown, Michael (Brigg & Sc'thorpe) Hampson, Dr Keith Moore, John
Browne, John (Winchester) Hannam, John Morgan, Geraint
Bruce-Gardyne, John Haselhurst, Alan Morris, Michael (Northampton, Sth)
Bryan, Sir Paul Hastings, Stephen Morrison, Hon Charles (Devizes)
Buchanan-Smith, Hon Alick Havers, Rt Hon Sir Michael Morrison, Hon Peter (City of Chester)
Buck, Antony Hawksley, Warren Mudd, David
Budgen, Nick Hayhoe, Barney Murphy, Christopher
Bulmer, Esmond Heddle, John Myles, David
Burden, F. A. Henderson, Barry Neale, Gerrard
Butcher, John Heseltine, Rt Hon Michael Needham, Richard
Butler, Hon Adam Hicks, Robert Nelson, Anthony
Cadbury, Jocelyn Higgins, Rt Hon Terence L. Neubert, Michael
Carlisle, John (Luton West) Hill, James Newton, Tony
Carlisle, Kenneth (Linco[...]n) Hogg, Hon Douglas (Grantham) Normanton, Tom
Carlisle, Rt Hon Mark (Runcorn) Holland, Philip (Carlton) Nott, Rt Hon John
Chalker, Mrs. Lynda Hooson, Tom Onslow, Cranley
Channon, Paul Hordern, Peter Osborn, John
Chapman, Sydney Howe, Rt Hon Sir Geoffrey Page, John (Harrow, West)
Clark, Hon Alan (Plymouth, Sutton) Howell, Rt Hon David (Guildford) Page, Rt Hon Sir R. Graham
Clark, Sir William (Croydon South) Howell, Ralph (North Norfolk) Page, Richard (SW Hertfordshire)
Clarke, Kenneth (Rushcliffe) Hunt, David (Wirral) Parris, Matthew
Cockeram, Eric Hunt, John (Ravensbourne) Patten, Christopher (Bath)
Colvin, Michael Hurd, Hon Douglas Patten, John (Oxford)
Cope, John Irving, Charles (Cheltenham) Pattie, Geoffrey
Cormack, Patrick Jenkin, Rt Hon Patrick Pawsey, James
Corrie, John Jessel, Toby Percival, Sir Ian
Costain, A. P. Johnson Smith, Geoffrey Peyton, Rt Hon John
Cranborne, Viscount Jopling, Rt Hon Michael Pink, R. Bonner
Critchley, Julian Joseph, Rt Hon Sir Keith Pollock, Alexander
Crouch, David Kaberry, Sir Donald Porter, George
Dean, Paul (North Somerset) Kellett-Bowman, Mrs Elaine Prentice, Rt Hon Reg
Dickens, Geoffrey Kershaw, Anthony Price, David (Eastleigh)
Dorrell, Stephen Kimball, Marcus Prior, Rt Hon James
Douglas-Hamilton, Lord James King, Rt Hon Tom Proctor, K. Harvey
Dover, Denshore Kitson, Sir Timothy Pym, Rt Hon Francis
du Cann, Rt Hon Edward Knight, Mrs Jill Raison, Timothy
Dunn, Robert (Dartford) Knox, David Rathbone, Tim
Durant, Tony Lang, Ian Rees, Peter (Dover and Deal)
Eden, Rt Hon Sir John Langford-Holt, Sir John Rees-Davles, W. R.
Edwards, Rt Hon N. (Pembroke) Latham, Michael Renton, Tim
Eggar, Timothy Lawrence, Ivan Rhodes James, Robert
Emery, Peter Lawson, Nigel Rhys Williams, Sir Brandon
Eyre, Reginald Lee, John Ridley, Hon Nicholas
Fairbairn, Nicholas Lennox-Boyd, Hon Mark Ridsdale, Julian
Fairgrieve, Russell Lester, Jim (Beeslon) Rifkind, Malcolm
Faith, Mrs Sheila Lewis, Kenneth (Rutland) Rippon, Rt Hon Geoffrey
Roberts, Wyn (Conway) Steen, Anthony Walker, Bill (Perth & E Perthshire)
Rossi, Hugh Stevens, Martin Walker-Smith, Rt Hon Sir Derek
Rost, Peter Stewart, Ian (Hitchin) Wall, Patrick
Royle, Sir Anthony Stewart, John (East Renfrewshire) Waller, Gary
Sainsbury, Hon Timothy Stokes, John Walters, Dennis
St. John-Stevas, Rt Hon Norman Stradling Thomas, J. Ward, John
Scott, Nicholas Tapsell, Peter Warren, Kenneth
Shaw, Michael (Scarborough) Taylor, Robert (Croydon NW) Watson, John
Shelton, William (Streatham) Tebbit, Norman Wells, John (Maidstone)
Shepherd, Colin (Hereford) Temple-Morris, Peter Wells, Bowen (Hert'rd & Stev'nage)
Shepherd, Richard) Aldridge-Br'hills) Thatcher, Rt Hon Mrs Margaret Wheeler, John
Shersby, Michael Thomas, Rt Hon Peter (Hendon S) Whitelaw, Rt Hon William
Silvester, Fred Thompson, Donald Whitney, Raymond
Sims, Roger Thorne, Neil (Ilford South) Wickenden, Keith
Skeet, T. H. H. Thornton, George Wiggin, Jerry
Smith, Dudley (War. and Leam'ton) Townend, John (Bridlington) Wilkinson, John
Speed, Keith Townsend, Cyril D. (Bexleyheath) Williams, Delwyn (Montgomery)
Speller, Tony Trippier, David Winterton, Nicholas
Spence, John Trotter, Neville Wolfson, Mark
Spicer, Jim (West Dorset) van Straubenzee, W. R. Young, Sir George (Acton)
Spicer, Michael (S Worcestershire) Viggers, Peter Younger, Rt Hon George
Sproat, Iain Waddington, David
Squire, Robin Wakeham, John TELLERS FOR THE AYES:
Stainton, Keith Waldegrave, Hon William Mr. Spencer Le Marchant and
Stanbrook, Ivor Walker, Rt Hon Peter (Worcester) Mr. Anthony Berry.
Stanley, John
Abse, Leo Dobson, Frank Howells, Geraint
Adams, Allan Dormand, Jack Huckfield, Les
Allaun, Frank Douglas, Dick Hudson Davies, Gwilym Ednyfed
Alton, David Douglas-Mann, Bruce Hughes, Mark (Durham)
Anderson, Donald Dubs, Alfred Hughes, Robert (Aberdeen North)
Archer, Rt Hon Peter Duffy, A. E. P. Hughes, Roy (Newport)
Armstrong, Rt Hon Ernest Dunn, James A. (Liverpool, Kirkdale) Janner, Hon Greville
Ashley, Rt Hon Jack Dunnett, Jack Jay, Rt Hon Douglas
Ashton, Joe Dunwoody, Mrs. Gwyneth John, Brynmor
Bagler, Gordon A. T. Eadie, Alex Johnson, Walter (Derby South)
Barnett, Guy (Greenwich) Eastham, Ken Jones, Rt Hon Alec (Rhondda)
Barnett, Rt Hon Joel (Heywood) Edwards, Robert (Wolv SE) Jones, Barry (East Flint)
Beith, A. J. Ellis, Raymond (NE Derbyshire) Jones, Dan (Burnley)
Bennett, Andrew (Stockport N) Ellis, Tom (Wrexham) Kaufman, Rt Hon Gerald
Bidwell, Sydney English, Michael Kerr, Russell
Booth, Rt Hon Albert Ennals, Rt Hon David Kilroy-Silk, Robert
Boothroyd, Miss Betty Evans, Ioan (Aberdare) Kinnock, Neil
Bottomley, Rt Hon Arthur (M'brough) Evans, John (Newton) Lambie, David
Bradley, Tom Ewing, Harry Lamborn, Harry
Bray, Dr Jeremy Field, Frank Lamond, James
Brown, Hugh D. (Provan) Fitch, Alan Leadbitter, Ted
Brown, Robert C. (Newcastle W) Flannery, Martin Leighton, Ronald
Brown, Ronald W. (Hackney S) Fletcher, L. R. (Ilkeston) Lewis, Arthur (Newham North West)
Brown, Ron (Edinburgh, Leith) Fletcher, Ted (Darlington) Lewis, Ron (Carlisle)
Buchan, Norman Foot, Rt Hon Michael Litherland, Robert
Callaghan, Jim (Middleton & P) Ford, Ben Lofthouse, Geoffrey
Campbell, Ian Forrester, John Lyon, Alexander (York)
Campbell-Savours, Dale Foster, Derek Lyons, Edward (Bradford West)
Canavan, Dennis Foulkes, George Mabon, Rt Hon Dr J. Dickson
Cant, R. B. Fraser, John (Lambeth, Norwood) McCusker, H.
Carmichael, Neil Freeson, Rt Hon Reginald McDonald, Dr Oonagh
Carter-Jones, Lewis Garrett, John (Norwich S) McElhone, Frank
Cartwright, John Garrett, W. E. (Wallsend) McGuire, Michael (Ince)
Clark, Dr David (South Shields) George, Bruce McKay, Allen (Penistone)
Cocks, Rt Hon Michael (Bristol S) Gilbert, Rt Hon Dr John McKelvey, William
Cohen, Stanley Ginsburg, David MacKenzie, Rt Hon Gregor
Concannon, Rt Hon J. D. Golding, John Maclennan, Robert
Conlan, Bernard Gourlay, Harry McMahon, Andrew
Cook, Robin F. Graham, Ted McNally, Thomas
Cowans, Harry Grant, George (Morpeth) McNamara, Kevin
Cox, Tom (Wandsworth, Tooting) Grant, John (Islington C) McWilliam, John
Craigen, J. M. (Glasgow, Maryhill) Hamilton, James (Bothwell) Magee, Bryan
Crowther, J. S. Hamilton, W. W. (Central Fife) Marks, Kenneth
Cryer, Bob Hardy, Peter Marshall, David (GI'sgow,Shettles'n)
Cunliffe, Lawrence Harrison, Rt Hon Walter Marshall, Dr Edmund (Goole)
Cunningham, George (Islington S) Hart, Rt Hon Dame Judith Marshall, Jim (Leicester South)
Dalyell, Tam Hattersley, Rt Hon Roy Martin, Michael (Gl'gow, Springb'rn)
Davidson, Arthur Haynes, Frank Mason, Rt Hon Roy
Davies, Rt Hon Denzil (L[...]anelli) Healey, Rt Hon Denis Maxton, John
Davies, Ifor (Gower) Heffer, Eric S. Maynard, Miss Joan
Davis, Clinton (Hackney Central) Hogg, Norman (E Dunbartonshire) Meacher, Michael
Davis, Terry (B'rm'ham, Stechford) Holland, Stuart (L'beth, Vauxhall) Mellish, Rt Hon Robert
Deakins, Eric Home Robertson, John Mikardo, Ian
Dean, Joseph (Leeds West) Homewood, William Millan, Rt Hon Bruce
Dempsey, James Hooley, Frank Miller, Dr M. S. (East Kilbride)
Dewar, Donald Horam, John Mitchell, Austin (Grimsby)
Dixon, Donald Howell, Rt Hon Denis (B'ham, Sm H) Mitchell, R. C. (Soton, Itchen)
Molyneaux, James Robertson, George Thomas, Dr Roger (Carmarthen)
Morris, Rt Hon Alfred (Wythenshawe) Rodgers, Rt Hon William Thorne, Stan (Preston South)
Morris, Rt Hon Charles (Openshaw) Rooker, J. W. Tilley, John
Morris, Rt Hon John (Aberavon) Ross, Ernest (Dundee West) Tinn, James
Morton, George Ross, Stephen (Isle of Wight) Torney, Tom
Moyle, Rt Hon Roland Ross, Wm. (Londonderry) Varley, Rt Hon Eric G.
Mulley, Rt Hon Frederick Ryman, John Wainwright, Edwin (Dearne Valley)
Newens, Stanley Sandelson, Neville Wainwright, Richard (Colne Valley)
Oakes, Rt Hon Gordon Sever, John Walker, Rt Hon Harold (Doncaster)
Ogden, Eric Sheerman, Barry Watkins, David
O'Halloran, Michael Sheldon, Rt Hon Robert (A'ton-u-L) Weetch, Ken
O'Neill, Martin Shore, Rt Hon Peter (Step and Pop) Wellbeloved, James
Orme, Rt Hon Stanley Short, Mrs. Renée Welsh, Michael
Owen, Rt Hon Dr David Silkin, Rt Hon John (Deptford) White, Frank R. (Bury & Radcliffe)
Palmer, Arthur Silkin, Rt Hon S. C. (Dulwich) White, James (Glasgow, Pollock)
Park, George Silverman, Julius Whitlock, William
Parker, John Smith, Rt Hon J. (North Lanarkshire) Wigley, Dafydd
Parry, Robert Snape, Peter Willey, Rt Hon Frederick
Pavitt, Laurie Soley, Clive Williams, Rt Hon Alan (Swansea W)
Pendry, Tom Spearing, Nigel Williams, Sir Thomas (Warrington)
Penhaligon, David Spriggs, Leslie Wilson, Gordon (Dundee East)
Powell, Rt Hon J. Enoch (S Down) Stallard, A. W. Wilson, William (Coventry SE)
Powell, Raymond (Ogmore) Steel, Rt Hon David Winnick, David
Prescott, John Stewart, Rt Hon Donald (W Isles) Woodall, Alec
Price, Christopher (Lewisham West) Stoddart, David Woolmer, Kenneth
Race, Reg Stott, Roger Wrigglesworth, Ian
Rees, Rt Hon Merlyn (Leeds South) Strang, Gavin Young, David (Bolton East)
Richardson, Jo Straw, Jack
Roberts, Allan (Bootle) Taylor, Mrs Ann (Bolton West) TELLERS FOR THE NOES:
Roberts, Ernest (Hackney North) Thomas, Jeffrey (Abertillery) Mr. Donald Coleman and
Roberts, Gwilym (Cannock) Thomas, Mike (Newcastle East) Mr. Hugh McCartney.

Question accordingly agreed to.

Bill read a Second time.

Motion made, and Question put, That the Bill be committed to a Committee of the whole House.—[Mr. Joseph Dean.]

The House divided: Ayes 258, Noes. 314.

Division No. 154] AYES [10.15 pm
Abse, Leo Craigen, J. M. (Glasgow, Maryhill) Forrester, John
Adams, Allen Crowther, J. S. Foster, Derek
Allaun, Frank Cryer, Bob Foulkes, George
Alton, David Cunliffe, Lawrence Fraser, John (Lambeth, Norwood)
Anderson, Donald Cunningham, George (Islington S) Freeson, Rt Hon Reginald
Archer, Rt Hon Peter Dalyell, Tam Garrett, John (Norwich S)
Armstrong, Rt Hon Ernest Davidson, Arthur Garrett, W. E. (Wallsend)
Ashley, Rt Hon Jack Davies, Rt Hon Denzil (Llanelli) George, Bruce
Ashton, Joe Davies, Ifor (Gower) Gilbert, Rt Hon Dr John
Bagler, Gordon A. T. Davis, Clinton (Hackney Central) Ginsburg, David
Barnett, Guy (Greenwich) Davis, Terry (B'rm'ham, Stechford) Golding, John
Barnett, Rt Hon Joel (Heywood) Deakins, Eric Gourlay, Harry
Beith, A. J. Dean, Joseph (Leeds West) Grant, George (Morpeth)
Bennett, Andrew (Stockport N) Dempsey, James Grant, John (Islington C)
Bidwell. Sydney Dewar, Donald Hamilton, James (Bothwell)
Booth, Rt Hon Albert Dixon, Donald Hamilton, W. W. (Central Fife)
Boothroyd, Miss Betty Dobson, Frank Hardy, Peter
Bottomley, Rt Hon Arthur (M'brough) Dormand, Jack Harrison, Rt Hon Walter
Bradley, Tom Douglas, Dick Hart, Rt Hon Dame Judith
Bray, Dr Jeremy Douglas-Mann, Bruce Hattersley, Rt Hon Roy
Brown, Hugh D. (Provan) Dubs, Alfred Haynes, Frank
Brown, Robert C. (Newcastle W) Duffy, A. E. P. Healey, Rt Hon Denis
Brown, Ronald W. (Hackney S) Dunn, James A. (Liverpool, Kirkdale) Heffer, Eric S.
Brown, Ron (Edinburgh, Leith) Dunnett, Jack Hogg, Norman (E Dunbartonshire)
Buchan, Norman Dunwoody, Mrs. Gwyneth Holland, Stuart (L'beth, Vauxhall)
Callaghan, Jim (Middleton & P) Eadie, Alex Home Robertson, John
Campbell, Ian Eastham, Ken Homewood, William
Campbell-Savours, Dale Edwards, Robert (Wolv SE) Hooley, Frank
Canavan, Dennis Ellis, Raymond (NE Derbyshire) Horam, John
Cant, R. B. Ellis, Tom (Wrexham) Howell, Rt Hon Denis (B'ham, Sm H)
Carmichael, Neil English, Michael Howells, Geraint
Carter-Jones, Lewis Ennals, Rt Hon David Huckfield, Les
Cartwright, John Evans, Ioan (Aberdare) Hudson Davies, Gwilym Ednyfed
Clark, Dr David (South Shields) Evans, John (Newton) Hughes, Mark (Durham)
Cocks, Rt Hon Michael (Bristol S) Ewing, Harry Hughes, Robert (Aberdeen North)
Cohen, Stanley Field, Frank Hughes, Roy (Newport)
Coleman, Donald Fitch, Alan Janner, Hon Greville
Concannon, Rt Hon J. D. Flannery, Martin Jay, Rt Hon Douglas
Conlan, Bernard Fletcher, L. R. (Ilkeston) John, Brynmor
Cook, Robin F. Fletcher, Ted (Darlington) Johnson, Walter (Derby South)
Cowans, Harry Foot, Rt Hon Michael Jones, Rt Hon Alec (Rhondda)
Cox, Tom (Wandsworth, Tooting) Ford, Ben Jones, Barry (East Flint)
Jones, Dan (Burnley) Molyneaux, James Silverman, Julius
Kaufman, Rt Hon Gerald Morris, Rt Hon Alfred (Wythenthawe) Smith, Rt Hon J. (North Lanarkshire)
Kerr, Russell Morris, Rt Hon Charles (Openshaw) Snape, Peter
Kilroy-Silk, Robert Morris, Rt Hon John (Aberavon) Soley, Clive
Kinnock, Neil Morton, George Spearing, Nigel
Lambie, David Moyle, Rt Hon Roland Spriggs, Leslie
Lamborn, Harry Mulley, Rt Hon Frederick Stallard, A. W.
Lamond, James Newens, Stanley Steel, Rt Hon David
Leadbitter, Ted Oakes, Rt Hon Gordon Stoddart, David
Leighton, Ronald Ogden, Eric Stott, Roger
Lewis, Arthur (Newham North West) O'Halloran, Michael Strang, Gavin
Lewis, Ron (Carlisle) O'Neill, Martin Straw, Jack
Litherland, Robert Orme, Rt Hon Stanley Taylor, Mrs Ann (Bolton West)
Lofthouse, Geoffrey Owen, Rt Hon Dr David Thomas, Jeffrey (Abertillery)
Lyon, Alexander (York) Park, George Thomas, Mike (Newcastle East)
Lyons, Edward (Bradlord West) Parker, John Thomas, Dr Roger (Carmarthen)
Mabon, Rt Hon Dr J. Dickson Parry, Robert Thorne, Stan (Preston South)
McCartney, Hugh Pavitt, Laurie Tilley, John
McCusker, H. Pendry, Tom Torney, Tom
McDonald, Dr Oonagh Penhaligon, David Varley, Rt Hon Eric G.
McElhone, Frank Powell, Rt Hon J. Enoch (S Down) Wainwright, Edwin (Dearne Valley)
McGuire, Michael (Ince) Powell, Raymond (Ogmore) Wainwright, Richard (Colne Valley)
McKay, Allen (Penistone) Prescott, John Walker, Rt Hon Harold (Doncaster)
McKelvey, William Price, Christopher (Lewisham West) Watkins, David
MacKenzie, Rt Hon Gregor Race, Reg Weetch, Ken
Maclennan, Robert Rees, Rt Hon Merlyn (Leeds South) Wellbeloved, James
McMahon, Andrew Richardson, Jo Welsh, Michael
McNally, Thomas Roberts, Allan (Bootle) White, Frank R. (Bury & Radcliffe)
McNamara, Kevin Roberts, Ernest (Hackney North) White, James (Glasgow. Pollock)
McWilliam, John Roberts, Gwilym (Cannock) Whitlock, William
Magee, Bryan Robertson, George Wigley, Dafydd
Marks, Kenneth Rodgers, Rt Hon William Willey, Rt Hon Frederick
Marshall, David (Gl'sgow, Shetlles'n) Rooker, J. W. Williams, Rt Hon Alan (Swansea W)
Marshall, Dr Edmund (Goole) Ross, Ernest (Dundee West) Williams, Sir Thomas (Warrington)
Marshall, Jim (Leicester South) Ross, Stephen (Isle of Wight) Wilson, Gordon (Dundee East)
Martin, Michael (Gl'gow, Springb'rn) Rose, Wm. (Londonderry) Wilson, William (Coventry SE)
Mason, Rt Hon Roy Ryman, John Winnick, David
Maxton, John Sandelson, Neville Woodall, Alec
Maynard, Miss Joan Sever, John Woolmer, Kenneth
Meacher, Michael Sheerman, Barry Wrigglesworth, Ian
Mellish, Rt Hon Robert Sheldon, Rt Hon Robert (A'ton-u-L) Young, David (Bolton East)
Mikardo, Ian Shore, Rt Hon Peter (Step and Pop)
Millan, Rt Hon Bruce Short, Mrs. Renée TELLERS FOR THE AYES:
Miller, Dr M. S. (East Kilbride) Silkln, Rt Hon John (Deptford) Mr. James Tinn and Mr. Ted Graham.
Mitchell, Austin (Grimsby) Silkln, Rt Hon S. C. (Dulwich)
Mitchell, R. C. (Soton, Itchen)
Adley, Robert Bryan, Sir Paul Eggar, Timothy
Aitken, Jonathan Buchanan-Smith, Hon Alick Emery, Peter
Alexander, Richard Buck, Antony Eyre, Reginald
Alison, Michael Budgen, Nick Fairbairn, Nicholas
Amery, Rt Hon Julian Bulmer, Esmond Fairgrieve, Russell
Ancram, Michael Burden, F. A. Faith, Mrs Sheila
Arnold, Tom Butcher, John Farr, John
Aspinwall, Jack Butler, Hon Adam Fell, Anthony
Atkins, Robert (Preston North) Cadbury, Jocelyn Fermer, Mrs Peggy
Atkinson, David (B'mouth, East) Carlisle, John (Luton West) Finsberg, Geoffrey
Baker, Kenneth (St. Marylebone) Carlisle, Kenneth (Lincoin) Fisher, Sir Nigel
Baker, Nicholas (North Dorset) Carlisle, Rt Hon Mark (Runcorn) Fletcher, Alexander (Edinburgh N)
Bell, Sir Ronald Chalker, Mrs. Lynda Fletcher-Cooke, Charles
Bendall, Vivian Channon, Paul Fookes, Miss Janet
Benyon, Thomas (Abingdon) Chapman, Sydney Forman, Nigel
Benyon, W. (Buckingham) Clark, Hon Alan (Plymouth, Sutton) Fowler, Rt Hon Norman
Best, Keith Clark, Sir William (Croydon South) Fox, Marcus
Bevan, David Gilroy Clarke, Kenneth (Rushcliffe) Fraser, Rt Hon H. (Stafford & St)
Biffen, Rt Hon John Cockeram, Eric Fraser, Peter (South Angus)
Biggs-Davison, John Colvin, Michael Fry, Peter
Blackburn, John Cope, John Galbraith, Hon T. G. D.
Blaker, Peter Cormack, Patrick Gardiner George (Reigate)
Bonsor, Sir Nicholas Corrie, John Gardner, Edward (South Fytde)
Boscawen, Hon Robert Costain, A. P. Garel-Jones, Tristan
Bottomley, Peter (Woolwich West) Cranborne, Viscount Gilmour, Rt Hon Sir Ian
Bowden, Andrew Critchley, Julian Glyn, Dr Alan
Boyson, Dr Rhodes Crouch, David Goodhart, Philip
Braine, Sir Bernard Dean, Paul (North Somerset) Goodhew, Victor
Bright, Graham Dickens, Geoffrey Gorst, John
Brinton, Tim Dorrell, Stephen Gow, Ian
Brittan, Leon Douglas-Hamilton, Lord James Gower, Sir Raymond
Brocklebank-Fowler, Christopher Dover, Denshore Gray, Hamish
Brooke, Hon Peter du Cann, Rt Hon Edward Greenway, Harry
Brotherton, Michael Dunn, Robert (Dartford) Grieve, Percy
Brown, Michael (Brigg & Sc'thorpe) Durant, Tony Griffiths, Eldon (Bury St Edmunds)
Browne, John (Winchester) Eden, Rt Hon Sir John Griffiths, Peter (Portsmouth N)
Bruce-Gardyne, John Edwards, Rt Hon N. (Pembroke) Grist, Ian
Grylls, Michael Mather, Carol Shelton, William (Streatham)
Gummer, John Selwyn Maude, Rt Hon Angus Shepherd, Colin (Hereford)
Hamilton, Hon Archie (Eps'm &Ew'll) Mawby, Ray Shepherd, Richard (Aldridge-Br'hills)
Hamilton, Michael (Salisbury) Mawhinney, Dr Brian Shersby, Michael
Hampson, Dr Keith Maxwell-Hyslop, Robin Silvester, Fred
Hannam, John Mayhew, Patrick Sims, Roger
Haselhurst, Alan Mellor, David Skeet, T. H. H.
Hastings, Stephen Meyer, Sir Anthony Smith, Dudley (War. and Leam'ton)
Havers, Rt Hon Sir Michael Miller, Hal (Bromsgrove & Redditch) Speed, Keith
Hawksley, Warren Mills, Iain (Meriden) Speller, Tony
Hayhoe, Barney Mills, Peter (West Devon) Spence, John
Heddle, John Miscampbell, Norman Spicer, Jim (West Dorset)
Henderson, Barry Mitchell, David (Basingstoke) Spicer, Michael (S Worcestershire)
Heseltine, Rt Hon Michael Moate, Roger Sproat, Iain
Hicks, Robert Monro, Hector Squire, Robin
Higgins, Rt Hon Terence L. Montgomery, Fergus Stainton, Keith
Hill, James Moore, John Stanbrook, Ivor
Hogg, Hon Douglas (Grantham) Morgan, Geraint Stanley, John
Holland, Philip (Carlton) Morris, Michael (Northampton, Sth) Steen, Anthony
Hooson, Tom Morrison, Hon Charles (Devizes) Stevens, Martin
Hordern, Peter Morrison, Hon Peter (City of Chester) Stewart, Ian (Hitchin)
Howe, Rt Hon Sir Geoffrey Mudd, David Stewart, John (East Renfrewshire)
Howell, Rt Hon David (Guildford) Murphy, Christopher Stokes, John
Howell, Ralph (North Norfolk) Neale, Gerrard Stradling Thomas, J.
Hunt, David (Wirral) Needham, Richard Tapsell, Peter
Hunt, John (Ravensbourne) Nelson, Anthony Taylor, Robert (Croydon NW)
Hurd, Hon Douglas Neubert, Michael Tebbit, Norman
Irving, Charles (Cheltenham) Newton, Tony Temple-Morris, Peter
Jenkin, Rt Hon Patrick Normanton, Tom Thatcher, Rt Hon Mrs Margaret
Jessel, Toby Nott, Rt Hon John Thomas, Rt Hon Peter (Hendon S)
Johnson Smith, Geoffrey Onslow, Cranley Thompson, Donald
Jopling, Rt Hon Michael Osborn, John Thorne, Neil (Ilford South)
Joseph, Rt Hon Sir Keith Page, John (Harrow, West) Thornton, George
Kaberry, Sir Donald Page, Rt Hon Sir R. Graham Townend, John (Bridlington)
Kellett-Bowman, Mrs Elaine Page, Richard (SW Hertfordshire) Townsend, Cyril D. (Bexleyheath)
Kershaw, Anthony Parris, Matthew Trippier, David
Kimball, Marcus Patten, Christopher (Bath) Trotter, Neville
King, Rt Hon Tom Patten, John (Oxford) van Straubenzee, W. R.
Kitson, Sir Timothy Pattie, Geoffrey Viggers, Peter
Knight, Mrs Jill Pawsey, James Waddington, David
Knox, David Percival, Sir Ian Wakeham, John
Lang, Ian Peyton, Rt Hon John Waldegrove, Hon William
Langford-Holt, Sir John Pink, R. Bonner Walker, Rt Hon Peter (Worcester)
Latham, Michael Pollock, Alexander Walker, Bill (Perth & E Perthshire)
Lawrence, Ivan Porter, George Walker-Smith, Rt Hon Sir Derek
Lawson, Nigel Prentice, Rt Hon Reg Wall, Patrick
Lee, John Price, David (Eastleigh) Waller, Gary
Lennox-Boyd, Hon Mark Prior, Rt Hon James Walters, Dennis
Lester, Jim (Beeston) Proctor, K. Harvey Ward, John
Lewis, Kenneth (Rutland) Pym, Rt Hon Francis Warren, Kenneth
Lloyd, Ian (Havant & Waterloo) Raison, Timothy Watson, John
Lloyd, Peter (Fareham) Rathbone, Tim Wells, Bowen (Hert'rd & Stev'nage)
Loveridge, John Rees, Peter (Dover and Deal) Wells, John (Maidstone)
Luce, Richard Rees-Davies, W. R. Wheeler, John
Lyell, Nicholas Renton, Tim Whitelaw, Rt Hon William
McCrindle, Robert Rhodes James, Robert Whitney, Raymond
Macfarlane, Neil Rhys Williams, Sir Brandon Wickenden, Keith
MacGregor, John Ridley, Hon Nicholas Wiggin, Jerry
MacKay, John (Argyll) Ridsdale, Julian Wilkinson, John
McNair-Wilson, Michael (Newbury) Rifkind, Malcolm Williams, Delwyn (Montgomery)
McNair-Wilson, Patrick (New Forest) Rippon, Rt Hon Geoffrey Winterton, Nicholas
McQuarrie, Albert Roberts, Wyn (Conway) Wolfson, Mark
Madel, David Rossi, Hugh Young, Sir George (Acton)
Major, John Rost, Peter Younger, Rt Hon George
Marland, Paul Royle, Sir Anthony
Marlow, Antony Sainsbury, Hon Timothy TELLERS FOR THE NOES:
Marshall, Michael (Arundel) St. John-Stevas, Rt Hon Norman Mr. Spencer Le Marchant and
Marten, Neil (Banbury) Scott, Nicholas Mr. Anthony Berry.
Mates, Michael Shaw, Michael (Scarborough)
Question accordingly negatived.
Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).