HC Deb 07 July 1980 vol 988 cc198-210

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Cope.]

10.51 pm
Mr. Mike Thomas (Newcastle upon Tyne, East)

I sometimes wonder whether the Government have any idea of what life is like in the city that I and my hon. Friends who have been kind enough to join me tonight represent. At present, there are 14,000 people unemployed in Newcastle. In some of the wards that we represent, male unemployment exceeds 20 per cent. One out of every five men who are able to work cannot get a job. One in three experiences unemployment at some time during each year.

Because of the lack of job opportunities, even these horrific and tragic figures understate the problem, for so demoralised are some, particularly women, that they now do not even seek a job and thus do not get into the statistics. That is not surprising when it is realised that for every vacancy there are, on average, 20 unemployed people.

For some traditional skills the position is almost hopeless. In March, for example, there were 597 unemployed platers chasing just three jobs. For the 460 riggers seeking work there were no vacancies whatever. If we add to that the torrent of redundancies in the area, which are now running at about 8,000 a year and threaten to engulf the region, the position for the city's unemployed can only be said to be very bleak indeed.

The economic circumstances of the people of Newcastle are not of their making and are reflected in their quality of life. In England as a whole, about 60 per cent. of households—six in 10—have access to a car. In inner urban Newcastle, only one in four has such access. Almost half of all council tenants in Newcastle receive a rent rebate or supplementary benefit, whereas for Great Britain as a whole the figure is under 40 per cent.

In the city of Newcastle, 38 per cent. of schoolchildren are entitled to free meals. That compares with only about a quarter in all other metropolitan districts. Compared with the rest of the country, Newcastle has substantially higher proportions of elderly people, of registered disabled, of children in care—indeed, of every kind of deprivation and poverty that this country knows.

What the Government cannot seem to grasp is that all this makes the well-being of the people of Newcastle dependent upon public spending to a major degree —indeed, more dependent than almost any other major city in the country. "Cut public spending" may be a cosy slogan if someone lives in the stockbroker belt and sends his children to a private school, but for the people in Newcastle public spending is the difference between having a job and being on the dole, between living in a decent environment and living in a slum, between an inside toilet and a privy in the back yard.

Four in 10 jobs in the Newcastle area are in the public service—the National Health Service, local government, the Civil Service, the DHSS office in my constituency and elsewhere. Even in private manufacturing industry about 38 per cent. of the jobs depend upon public spending. Whether they are in shipyards in my constituency—the Walker yard and the Neptune yard—C. A. Parsons, the power plant company, the heavy engineering plants or in the defence industries that are based in my hon. Friends' constituencies, those jobs—38 per cent. of the manufacturing work force —depend upon public spending.

The Government have accepted that Newcastle has special problems of deprivation and disadvantage by giving a partnership to the city—the inner city partnership scheme. For years, long before the partnership scheme, the special problems of the city—that depressing vicious spiral of low educational attainment, unemployment, poor living conditions, family stress—had been dealt with by the city council, and not without success. In education, the expansion of the polytechnic and the college of arts and technology has dramatically expanded educational opportunity in the city.

In the social services, delivery of services directly to individuals and families in need has substantially alleviated the problems of inner city poverty. In housing, over the last 10 years the figure of one in five Newcastle households that lacked the basic amenities—a bath in the house, a hot water supply and an inside toilet—has been cut to only nine in 100 households—thank God. That at last puts Newcastle within reaching distance of the national average.

The reason for my speaking about this subject tonight is the Government's response to these problems. High interest rates and economic recession are making these services even more necessary than in the past—and what are the Government doing about them? They are telling the city council in Newcastle to cut its budget, and despicably—I use the word advisedly—in briefings to the press, because they dare not say it openly, they are saying that if the city council does not cut its services they will take away the inner city partnership money. That is a disgrace, and the Minister should have no part in it.

On one estimate—the manoeuvrings and the briefings make it difficult to discern what is being said—the Government want to cut £11 million from the city's budget. We may ask why. Is it because Newcastle is a profligate spender and is trying to grow too fast in a time of economic difficulty? No, the facts do not support that. Newcastle's budget has grown by only 6 per cent. per annum in real terms during the last six or seven years since 1974–75, in a period during which the expenditure of local authorities has grown 7½ per cent. Is it because Newcastle has some sort of overweening bureaucracy that is running out of control? No, it cannot be that either.

When we look at the pattern of spending in the city, we see to its credit that the council has consistently made sure that spending has been concentrated on direct services to individuals and families rather than on administrative growth. An example of that is that if the whole central administration were wiped out tomorrow it would save only £7 million of the £11 million that the Government apparently seek in cuts from the city's budget. Is it because the city is excessively overstaffed? That cannot be. Newcastle employs 500 fewer people than it did a year ago—and that in a city that is under tremendous pressure to increase public service employment because of the benefit that it brings to the community as a whole.

The truth is that the Government have got themselves entwined in the old national numbers game. Their slogan is "Get the algebra right, get the formulae right, but forget about the problems and the people. Never mind that Newcastle has a different and bigger problem than, say, Nantwich or Newbury; just tell it to get its figures in line." That is what the Government say.

People in my constituency, in places such as Walker, the community by the riverside and the shipyards, rightly believe that their councillors are better judges of their needs than are the civil servants in Marsham Street. They would like to ask them some elementary questions.

Why will Newcastle's support from the Government through the needs element of the rate support grant, which is supposed to help and discriminate in favour of inner city areas such as Newcastle, have risen by only 90 per cent., on the Department's own figures, between 1974–75 and 1980–81 when the average for all metropolitan districts will be 117 per cent. and the surrounding districts—for example, South Tyneside—will be 170 per cent., which is almost twice as much?

I am told—I find this hard to believe, but I have it on good authority—that the formula works on the basis of how many single-parent families the city had in the 1971 census and that if we had a few more single-parent families each would be worth £4,500 to the city in rate support grant. I wonder whether my constituents are to draw the conclusion that the only way to get adequate help for the city from the Government is for there to be a major rise in its divorce rate before the 1981 census or for a number of single young ladies to get into a state which I assume they would prefer to avoid. If this is the result that the formulae, the algebra, the magic figures produce in Marsham Street, the sooner it is abandoned the better. If the rate support grant were fairly calculated, support for Newcastle from central Government funds would be at least £5½ million more than it is—the equivalent of an 11p rate.

In putting the city's housing to rights, the council has incurred debt charges. Why should my constituents be penalised when Government policy on inflation and interest rates has raised the cost of servicing that debt by one-third since the Government came to office—the equivalent of an 8p rate—and why, in addition, should the council be made to raise an extra 40p in the pound rate for contin- gencies for inflation and interest payments still to come? My constituents ask why the Government, having got them into this kind of mess, are now clobbering them as they try to get out of it.

Let us look at the potential effects if the Government insist on their pound of flesh. A reduction of the magnitude asked for could be achieved only by a general cutback in services to the public —home helps, teachers, meals on wheels, social work support, whatever one cares to name. If we were to cut education to this degree pro rata, it would mean an end to nursery education, youth services, the whole of the adult education programme and the loss of 300 teachers. In social services, it would mean 35 fewer social workers, 120 fewer workers in residential homes, 160 fewer home helps, and equivalent numbers in other areas would have to go as well.

Even that draconian programme would not achieve the Government's objectives. As a direct result of pursuing that policy, public spending would rise on unemployment benefit, social security payments, health services and no doubt law and order as youngsters on the dole became more and more frustrated, and, of course, the Government would lose the tax and national insurance payments of those who are out of work.

I hope that the Minister will have some answers to the questions that I have posed. I speak not with any sense of special pleading but to reflect the anger of the people of a great city at the way in which they are being treated and the determination of all those elected to look after their interests, whether they be Members of Parliament, councillors or in whatever capacity, to ensure that their needs and local democratic rights are not ignored.

As the nation plunges deeper and deeper into recession, and as we see more problems of unemployment and family problems as a result, the needs of people in places such as Newcastle will become greater, not decrease. I wish that I could believe that the Government understand that. Now is the time for the Government's rhetoric of compassion to be judged against their action. Newcastle has spent a quarter of a century trying to redress the legacy of the Industrial Revolution. It will take more than the Government or the Minister to make us start to set the clock back once again.

11.5 pm

Mr. Robert C. Brown (Newcastle upon Tyne, West)

First, I compliment my hon. Friend the Member for Newcastle upon Tyne, East (Mr. Thomas) on initiating the debate and making an excellent speech. He has far from overstated the case. In parts of my constituency—for example, in Scotswood and Blakelaw—the picture is one of almost complete despair. I say "almost" advisedly, because but for the help and support of dedicated people employed by the city council who have worked so hard in the inner city partnership area to give support, the despair, especially among youngsters who have never known the pleasure of gainful employment since leaving school, would have been complete.

A month ago, as my hon. Friend said, Newcastle had 14,000 unemployed. Within that month what prospect, what future, faced another 1,000 or so school leavers? In addition, there is the certainty that many more adults will be made redundant as the policy of this despicable Government bites harder into what is left of the city's industry and their spending cuts savage still further the 40 per cent. of all jobs in the public services.

If Madam Flintstone Heart, the Prime Minister, carries out her promise to reduce the number of civil servants by 15 per cent., that reduction in Newcastle alone will mean another 2,000 jobs lost. Surely the Government must realise—if they do not realise it now, the sooner they do so the better—that to limit spending in this financial year on employment and training to last year's level, as they propose, with 21 per cent. inflation and galloping unemployment, and to cut spending next year, is, to put it mildly, indecent and heartless.

If there were an increase in spending in the next five years of 28 per cent. on regional development grants, selective assistance to industry of 150 per cent., section 8 selective assistance of 85 per cent. and a 40 per cent. increase in industrial training, the Northern region strategy team could create 63,000 new jobs by 1991. However, even that would leave the region with 79,000 unemployed on the basis of the present figure of 142,000 without work in the North.

The Secretary of State and his minions at Marsham Street must have gone completely bananas. It cannot be heatstroke that is the cause. It is probably water on the brain. The Secretary of State is asking for the city to reduce its spending by '£11 million. Surely, with his extremely privileged background he must realise that it is not possible to turn off public spending like water from a tap.

Any major cuts in public spending must, of necessity, hurt those who are already suffering most deprivation—the sick, the disabled, the long-term unemployed and old people. If we are to experience famine for two years, those who are grossly overweight because of rich living can live off their fat, but the undernourished will starve. It is as simple as that.

The personal social services are needed more than ever in Newcastle. The Government's own advisory body, the Personal Social Services Council, recently said: Cuts of the order envisaged by the Government cannot be achieved, in the Council's view, without a serious deterioration in the quality and range of social services…The prospects of those who rely on such services will be diminished to an extent that should be unacceptable in a just society. For God's sake, let the Government stop digging the pit any deeper lest they dig so deep that we can never again climb out.

[11.9 pm

Mr. Harry Conans (Newcastle upon Tyne. Central)

I rise to support my hon. Friends the Members for Newcastle upon Tyne, East (Mr. Thomas) and for Newcastle upon Tyne, West (Mr. Brown), and I thank them for this opportunity to speak. They have both ably put the case. In the short time left to us I should like to say that I see the purpose of this debate as trying to get some answers to the innuendoes that regularly come from the Government.

During the last 15 years, 10 of which I have spent on local authorities on Tyneside—I understand that the Minister shares a bit of this background—and for six years of which I chaired a major committee, I have found that one of the things that bedevil local authorities is that the circulars that come constantly from the central Government are gobbledegook. Time and again local authorities want to do something, and the central Government put the other side of the coin.

In the Northern region—the rate support grant general needs element is supposed to support this; this was the reason for the needs element—we have, overall, a 9 per cent. unemployment rate. But statistics are wont to disguise the actual effect. In two wards of my constituency, the figures are 15 and 20 per cent. This in itself causes a strain on local government finance which the RSG needs element was supposed to take care of. My hon. Friend the Member for Newcastle upon Tyne, East has amplified that point.

I want to ask the Minister some pertinent questions. Circulars from the central Government normally set a norm rate levy of 199p in the pound. As 150 local authorities have already broken that norm, one can only assume that the norm has now risen beyond that. If the alteration is to 155p, 20 local authorities, including that of Newcastle, have broken that. Perhaps the Minister will say tonight what is the present norm. Will he say whether that will be static, so that local authorities that try to implement Government policy, even with the best will in the world, will have something to go by?

I should like to mention the immoral blackmail of local authorities. Governments of all colours have honoured the inner city partnership agreement. That reflected the spending allocation from the Government. In Newcastle's case, the total sum is about £2.8 million in the current year. That is £0.7 million from the local authorities and the balance is made up by the Government. We then read a speech—again an innuendo with no facts—delivered by the Secretary of State to the Association of District Councils on 27 June, in which he said: I am also considering the support of central Government to inner city authorities under the programme and partnership arrangements. Perhaps the Minister would like to tell us what that means.

I should like to remind the Minister of some of the priorities of the partnership agreement which the Government honoured. One was to encourage industry and commerce. For Newcastle, where unemployment is high, that is a good thing. Another was to improve living conditions.

This is immoral blackmail of, and the imposition of a penalty on, an authority that is already badly off and is trying to do its best. Perhaps the Minister will give us some answers that will last not just for today but for the next month or so. Will he reflect on the fact that we are not begging? We are placing facts before him. Perhaps he will reflect on those facts and give us some concrete answers.

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

In eight minutes it is impossible to answer the barrage of statements by Opposition Members the like of which I have seldom heard in an Adjournment debate in the 10 years that I have been in this House. Coming from the hon. Member for Newcastle upon Tyne, West (Mr. Brown), who was a member of the previous Government who, at the diktat of the International Monetary Fund, had to make the most abject crawling to reduce public expenditure, I regard that as sheer nonsense.

Let me say a few things which indicate that Newcastle has done virtually nothing to help itself. [HON. MEMBERS: "Oh!"] Virtually nothing to help itself.

Mr. Mike Thomas

Disgraceful!

Mr. Finsberg

First, we need to look at the manpower situation. The Government have asked for manpower reductions that will be met by natural wastage. The joint manpower watch figures show that although Newcastle employed 2.1 per cent. fewer full-time staff in March 1980 compared with the March 1979 figure, it has since increased its part-time staff by 5.3 per cent. On the face of it, it does not look as though a serious effort is needed to comply with the Government's overall spending targets for local government. We have always operated on the basis of a voluntary relationship between central and local government. The Government value that relationship. Local authorities have always recognised the Government's right to determine the overall level of local government spending. They should be in no doubt that they will threaten that traditional voluntary relationship if they persist, by their plans, in challenging the Government's overall spending plans which are crucial to our economic survival.

Let us consider Newcastle. The impact of the cuts depends very much on the decisions of the city council. We have asked for overall reductions, but individual authorities must decide where savings can be made. It has been alleged that Newcastle's high rates are due to the lack of rate support grant. That is rubbish. Newcastle has consistently levied substantially higher rates than the average for metropolitan districts in every year since 1974–75. That reflects high levels of expenditure, not a drying up of RSG.

In response to the Government's spending targets, Newcastle has referred to the need to tackle the special problems of poor housing in its area. Newcastle's housing investment programme was allocated £18.5 million. Its allocation was enhanced to take account of the special need in the inner area of the city through the concentration of the needs element. This is distributed to partnership and programme, authorities and is part of the Government's policy of bending main programmes in favour of inner city areas.

Reference has been made to the city's status as a partnership authority. Hon. Members have suggested that it is inconsistent for the Government to give resources in recognition of that status and then to call for reductions in spending by the city. Hon. Members should ask the city authorities whether their actions, in attempting to justify such a high level of spending, may not call into question whether the Government can continue to accept such inconsistency, and whether a flouting of Government policy might not call into question the city council's commitment to partnership.

Hon. Members might ask the city council a few other questions. The document produced in response to public expenditure cuts states that the fundamental weakness of the local economy is recognised by the city council to be the root cause of many of the problems faced by the people of Newcastle. It is said that economic development has a high priority. Has the city council considered that its actions—in having almost the highest rate levels in the country—may be a deterrent to business and may actively work against that priority?

I went to Newcastle once a fortnight for 20 years before I became a Minister, and I know something of the problems of Newcastle and of its industry. May it not be that industry and commerce, which will provide the productive jobs that hon. Members say are desperately needed, will set up elsewhere? [HON. MEMBERS: "Name one."] The city's base will be weakened and it will become more difficult to provide the jobs and services that those in Newcastle need. How is such a high priority reflected in the city council's contribution to partnership activities? It puts only 13 per cent. of its partnership allocation into them. Hon. Members would be well advised to tell the city council that it would do better to translate its high intentions into practical actions.

I shall leave hon. Members with some thoughts. If they believe that it is right to create jobs, the city council should provide a stronger rate base to pay for the services that hon. Members say are needed. It should do so at a lower cost to the hard-pressed ratepayers of the area. (HON. MEMBERS: "Come on" Newcastle is not alone in arguing that special circumstances mean that the reductions are not realistic. In virtually every case that I have come across, the consequences of the cuts have been greatly exaggerated.

The particular problems of Newcastle and of other cities with severe inner area problems have been taken into account in the Governments allocations. Its problems do not exempt it from the reductions for which we have called. Neither Newcastle nor any other local authority can opt out of the problems facing the country. We sink or swim together.

What was done by Labour Members—particularly the hon. Member for Newcastle upon Tyne, West during the years that he decorated the Government Front Bench—was to print money, believing that that would solve every problem. It is precisely because this Government are having to rescue the country from the profligate expenditure that the hon. Members encouraged with their votes for 10 years that we have to put matters right.

I said at the beginning that the tone adopted by those Labour Members present was one that I had not heard in an Adjournment debate for 10 years. When the Conservatives were in Opposition, we tried to look at such matters constructively, realising that there was no way of isolating a particular city from the problems of the rest of the nation.

Newcastle, of course, has its problems. That is precisely why in the HIP allocation we put in a special amount for the needs of the inner city area there. We believe that it is only upon the backs of profitable private enterprise that fresh employment can be created. Shuffling around bits of paper does not create fresh employment.

I have said that the manpower reductions that the Government are calling for can be met by natural wastage. I advise Newcastle city council to examine that matter most seriously. If it does not, it will have only itself to blame.

Mr. Robert C. Brown

What the hon. Gentleman is talking about means the dole.

Mr. Finsberg

Natural wastage does not mean the dole, as the hon. Gentleman knows perfectly well in his usual more rational moments.

Hon. Members have not done justice to the hard work being done by the industrialists in Newcastle who are trying to provide jobs but whose difficulty is that growing high rates are forcing them away. Hon. Members should learn that fact of life—

The Question having been proposed after Ten o'clock and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at twenty-one minutes past Eleven o'clock.