HC Deb 02 July 1980 vol 987 cc1500-4
3. Mr. Jim Marshall

asked the Secretary of State for the Environment what action he proposes to take against local authorities which fail to re-examine their expenditure plans and do not make fresh returns to his Department by 1 August as requested in his circular letter of 13 June.

9. Mr. Anderson

asked the Secretary of State for the Environment what sanctions he is considering against those local authorities which do not comply with his circular of Friday 13 June calling for further expenditure cuts.

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

The relationship between central and local government depends on voluntary cooperation. I have no evidence as yet to suggest that any local authority wishes to change that basis.

Mr. Marshall

I am sure that the Secretary of State will agree that that reply is just a reiteration of the circular letter which he sent to local authorities some weeks ago. Surely he is aware that, if local government is to be able to plan ahead, it needs to know what the Government's intentions are. Therefore, can I ask the right hon. Gentleman to cast aside his crusading inertia and tell local authorities whether he intends, first, to reduce the capital allocation available to local authorities; secondly, reduce the rate support grant settlement for this year; or, thirdly, reduce the rate support grant settlement for next year if they refuse to comply with his exhortations?

Mr. Heseltine

I take the hon. Gentleman's point about the need for local government to plan ahead. But the central Government also need to plan ahead. It is because the returns which have been submitted by the local authorities are so far in excess of the targets which they have been asked to achieve that I have asked individual authorities to resubmit their budgets. It would seem to me quite wrong to anticipate the judgment which each authority is now making by saying what I intend to do in a range of hypothetical circumstances. It is much more responsible to wait until the local authorities themselves have given me the facts upon which to make judgments.

Mr. Neubert

Will my right hon. Friend consider using the powers in the Local Government, Planning and Land (No. 2) Bill to bring into line those local authorities which refuse to revise their excess spending budgets? Is it not intolerable that an authority such as Manchester should employ another 1,000 full-time or part-time staff during the past 12 months, in defiance not just of Govern- ment policy but of the national economic interest?

Mr. Heseltine

It seemed to me that it was taking a reckless gamble with the livelihood of the 1,000 people to use them as pawns in a political game in this way. I agree with my hon. Friend. I cannot understand how, when the Government are asking for reductions in public expenditure, an individual authority could recruit an additional 1,000 people. I think that my hon. Friend is pursuing the right line of inquiry. But it still remains my view that we should now wait until local authorities have produced their revised budgets so that we can make a decision based upon the facts.

Mr. Allan Roberts

Will the right hon. Gentleman state categorically that he has ruled out the possibility of imposing a moratorium on capital programmes if local authorities fail to respond? If he is not willing categorically to rule that out, is he not admitting that that is one of the things with which he is threatening local authorities? Does he not realise that if he imposes a moratorium on, say, council house building, he will no longer be able to blame local government for stopping house building in the way that he is doing at present?

Mr. Heseltine

I looked at what the Secretary of State for the Environment did in 1976 in order to secure reductions in local authority spending. Of course, a capital moratorium was part of the proposals of the then Labour Government. It would be quite irresponsible of me to rule out that possible weapon, however undesirable I might think it to be.

Mr. Chapman

I am sure that my right hon. Friend recognises that the imposition of a moratorium on local authority capital expenditure plans would be yet another grievous blow to the construction industry. Will he confirm that this would be used as a last resort? If he is minded to do it as a last resort, will he consider putting a longer moratorium on the profligate offending authorities rather than a shorter moratorium on all local authorities?

Mr. Heseltine

My hon. Friend is absolutely right. The weapon of a capital moratorium is an extremely undesirable one to use. What the Government clearly believe, and what they gave a year's notice of their intention of achieving, is that we must reduce the levels of current public consumption. Our failure to do that prejudices our ability to get the economy under control and will worsen the burdens faced by the construction industry along with the economy at large. Therefore, the responsibility now is for local authorities to respond, as they have traditionally, to the guidelines set down by the national Government.

Mr. Eastham

May I refer to the uninformed point made by the hon. Member for Romford (Mr. Neubert) about the additional 1,000 workers employed by the Manchester local authority? Can I assure the Minister that that is not the case? Therefore, will he assure the House that in future, before Conservative Members respect statements which appear in the newspapers, they will check them?

Mr. Heseltine

One of the reasons why I have asked local authorities to publish the details of their manpower figures is that there can then be an informed and factual debate about what is going on in each individual authority. I think that my reading of the local newspapers in the area represented by the hon. Gentleman clearly indicates that a wide public debate is taking place in that area on this matter.

Mr. Budgen

Does my right hon. Friend agree that the ultimate sanction of the refusal of capital for major items ought to be exercised against those local authorities such as Wolverhampton which have increased their expenditure specifically to go against central Government policies, and have thereby imposed a massive increase of 56 per cent. in their rates this year?

Mr. Heseltine

My hon. Friend is right to draw attention to the harm which flows from rate increases of the sort that he mentioned. I shall have to consider what I recommend to my colleagues, and put before the House by way of action, when we see the revised budgets of individual local authorities. The judgment that we shall have to make—the House should understand it now—is whether one expects all local authority organisations, including those which have responded and behaved in a responsible way, to bear any excess expenditure that there may be, or whether we look for methods which indicate a more selective approach. In what I have said so far I have made it clear that the Government's views on this matter have not yet been finally determined. Obviously, a selective approach is desirable in logic. However, the weapons needed to secure a selective approach are Draconian.

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