HC Deb 11 November 1980 vol 992 cc285-99

Lords amendment: No. 42, in page 38, line 11, leave out "any year" and insert the year 1980–81 and any subsequent year before the commencing year".

Mr. King

I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker

With this we may take Lords amendment No. 43.

Mr. King

The purpose of the amendment is to clarify the terminology on the introduction of the transitional arrangements. The transitional arrangements are, of course, terminated by clause 46(3) when the new grant proposals are introduced.

Amendment No. 43 is technical and makes it clear that the term "notional uniform rate" has the value assigned to it for the year 1980–81 in the report on the Rate Support Grant Order 1979.

I ask the House to agree to it.

Mr. John Tilley (Lambeth, Central)

It is worth while for the House to spend a little time in considering these two amendments. They are the first amendments that bring us into the area of the rate support grant, which is in many ways the guts of the legislation. The first amendment shifts, although only slightly, the balance between the degree to which the Bill destroys local democracy and the way in which the Government, in bringing forward the Bill and implementing it before all its stages were completed, have to some degree detracted from parliamentary democracy.

This is also the first time that the House has had the opportunity to consider the transitional arrangements since they have been put into operation. When the House and, indeed, the Committee were considering these classes on the transitional arrangements of trying to penalise authorities which did not meet the Government expenditure guidelines in this year, we were only looking forward to what might be happening. We can now say that our worst fears have been realised. Although the clauses to which the first amendment refers are only a part of the general derogation from local democracy, in that they are Government attempts to control the way in which local authorities spend their finances, it is clear, from the way that the Government have operated, that it has been a very serious insult to the House. I believe that these clauses were put into operation before the amendment or other amendments could be considered.

With regard to the question of lack of local democracy, it is very sad that the Conservative-controlled authorities—largely the ACC and the GLC—have agreed to go along with these provisions in general. I do not know what price they got for it; it would be wrong of me to speculate. All I know is that it is the last chance that they have to exact a price for acquiescence with Government on this issue, because from now on, when the Act goes on to the statute book, they will have very few powers of local determination.

But the specific aspect that is contained in the clause and is affected by the amendment is that of parliamentary democracy. I do not think that Ministers can disagree with the fact that they have used these powers and that they have specified the councils against which they will use them more than a month before tonight, when this House is considering the detail of the legislation. The Bill could still go back to the Lords and come back to the House before the end of the sitting on Thursday.

Whether or not the Government will accept that the legislation is retrospective, in that it applies to decisions taken by local authorities several months ago, there is no doubt that they were anticipating the legislation in their pronouncements of a few weeks ago on what became known as their hit list of the councils that they had decided to penalise.

In discussing the matter, perhaps the first point is that no councils have really been penalised, and no councillors have lost anything out of this. In no sense has any individual member of a local authority been surcharged or penalised. What has happened is that it is people living in those local authority areas such as my constituency of Lambeth who will suffer because the Government intend to deny the resources necessary for the services those people need.

The amendment is relevant because it deals with the period during which this transitional power might remain with the Government. The House should look at how the Government went through the operation of implementing this clause. Time and again in Committee hon. Members said that this gave arbitrary powers to the Secretary of State, and that he was making, if not subjective judgments about what levels of spending should be in a particular council, certainly judgments for which he was not accountable to any authority, be it this House or a court of law.

The hit list of councils was originally 14. It included the London borough of Hammersmith. Because that borough is under a Tory-Liberal alliance control, it was possible for the Government to say that they were not attacking merely Labour-controlled councils. Following that decision, however, Hammersmith and some of the other boroughs involved have been able to get off the list and avoid the penalties by making representations to the Minister. From the accounts that I have seen in the press and the information that I have been able to gather otherwise, in some cases they have been reprieved, not because they have said that they would mend their ways because of the threat of this penalty but because they have been able to show to the Minister that the information on which the Minister took his decisions and the projections of spending of that local authority were incorrect.

Mr. Graham

Does my hon. Friend agree that this is the first instance of what Opposition Members said would happen? We said that, dependent upon the Minister's whim and the kind of yardsticks, measuring rods and criteria he wishes to apply, in effect, whether it is sinister, malicious or merely argumentative, under these transitional arrangements and other parts of the Bill it is now possible for any Minister to determine the kind of punishments, hit lists and penalties that he wishes to dish out, according, at his own suggestion, to whatever line of policy he wishes to pursue from year to year.

Mr. Tilley

I could not have put it better. I thank my hon. Friend for amplifying the point. He served on the Committee; I did not. I am glad that his predictions—although it is unfortunate for the councils involved—have proved to be only too true.

Now that we have a Star Chamber approach in Marsham Street, either the criteria on which the initial decisions were taken for the 14 on the hit list were wrong, or the information on which those decisions were based was wrong. But this House cannot judge either question because we have not been told by any Minister—let us hope that we shall be told tonight—what the criteria were or what the information was.

Therefore, it seems that this clause, whether or not amended in the way suggested, gives Ministers the absolute power to decide quite arbitrarily whether to put the heads of local authorities on the block—perhaps that is the origin of the phrase "block grant" in the Bill—and then simply wait to see whether they get executed or are reprieved at the last moment.

I want to talk briefly of the sort of effect that we are experiencing in Lambeth, which is one of the local authorities affected. We are talking of a total package of cuts of £2.1 million because Lambeth was on the hit list of 14 boroughs, £1.4 million because of the Secretary of State's equally arbitrary cut in the overall level of rate support grant in the increase order this year, and—I shall return to this matter—a £7.5 million cut in the inner city partnership money for the Lambeth area over the next few years.

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That is a massive scale of cuts imposed in this quite arbitrary way by the Government. It seems to many of us to coincide with ensuring that the Secretary of State got his traditional cheers at the Tory Party conference. I am afraid that the result is not that any councillors have been penalised in any direct way or that any chief executives have been humbled, surcharged or anything else. It is that services for the old, which are desperately needed in Lambeth—such as home helps and meals on wheels—cannot now be funded at present levels, which are widely recognised as inadequate; that services for children, and day nurseries for the under-fives cannot be maintained as they are now even though there is a need for much more; and that there is now no chance of providing the desperately needed services for the sick and the disabled in an area of inner city deprivation.

That is the situation that results from this clause and from Ministers acting before this House gives them the authority to do so. It is a serious constitutional point as well as a serious point in terms of my constituents' problems.

My last general point on this subject is the issue of the inner city partnership which has been affected in Lambeth. This has exposed the Government's hypocrisy. When they came into office, they paid lip service to the need to maintain a bipartisan approach to tackling the problems of the inner city. I am quite happy to pay tribute to the fact that these problems were first pinpointed by the former Conservative Secretary of State for the Environment, the right hon. Member for Worcester (Mr. Walker). There had been a bipartisan approach. It was recognised that areas of special need require special help, yet the paradoxical situation is that the present Government, using this clause, are attacking those areas of special need, not only in terms of taking away the extra inner city partnership funds which had been allocated but also of cutting into their main RSG allocation.

That is the lesson that must be drawn from the Government's action and their anticipation of this legislation. If that is how the clause is to be used before it reaches the statute book, surely that is a very strong argument for the House to reject not only the Lords amendment but the clause and the Bill as a whole.

A final example of the arbitrary nature of the cuts is the Brixton recreation centre, on which £7 million has been spent. The centre requires another £2 million to be spent to make it at least weatherproof. It is an area of great recreational deprivation as well as all the other forms of deprivation, yet the Government have chopped the money that would have finished that centre.

Mr. King

That is quite untrue.

Mr. Tilley

The centre will merely stand empty, as £7 million worth of public investment has been lost because the Government, for some trivial reason, to make a political point, have refused to provide the remainder of the money needed for it.

Tonight the economic activities committee of Lambeth borough council is meeting to hear that the employment projects at Dive Road, Hamilton Road and Coronation Buildings, projects that would have provided factory space for new firms coming into the borough, have had to be scrapped, because there is no longer public money available for them, even though the Government were saying earlier this year that the money would be available.

I have taken a lot of the time of the House on this Lords amendment, but those are just a few of the examples of how the Government, anticipating the use of this legislation before its approval by the House, have misused their powers and have proved that all the dire predictions of my right hon. and hon. Friends in Committee were only too true.

Mr. Ronald W. Brown

I support the protestations of my hon. Friend the Member for Lambeth, Central (Mr. Tilley) on behalf of my authority, which is also on the Secretary of State's "hit" list. It is on the hit list for one reason only—namely, the confrontation between the deputy leader of the council and the Under-Secretary of State for the Environment, the hon. Member for Hampstead (Mr. Finsberg). Government and local government are suffering because the Minister apparently finds it impossible to be civil to the deputy leader of the council and the deputy leader finds it impossible to deal with the uncivil Minister. As a result, people in Hackney are suffering badly. It is a scandalous state of affairs. A new word has been coined in Hackney. When someone wants to vacillate, to lie or to cheat, it is said "Do not do a Finsberg".

I pay tribute to Lord Bellwin, the Under-Secretary of State for the Environment, who was kind enough to see me and to engage in long discussions. I found him understanding. He wanted to be helpful. I thought that he was understanding of the problems in every way. I described to him the difficulties in Hackney. Hackney is at the top of the list for all criteria of deprivation. However, the Secretary of State decides to take action against Hackney because, for the base year that he has chosen—he did so without consultation—Hackney borough council overspent on a notional sum. I have explained to the Minister and to Lord Bellwin why it was wrong to select the base year chosen by the Minister. There was not over-expenditure. Certain expenditure was taking place because the council was overcoming the industrial disputes that had taken place earlier which resulted in under-spending in 1978/79 the base year chosen.

The Secretary of State argued that he had selected an average year and that there was evidence that the council had been deliberately profligate and had been spending money willy-nilly. That argument does not stand up to examination. It is not true. I put my argument to Lord Bellwin and he could not fault it. However, the Government have gone ahead.

The Government say that local authority representatives in Hackney must go to them cap in hand and plead for special facilities. I have told them that the people of Hackney will never do that. They are too proud to do so. They will not go cap in hand to any Government of any persuasion. In the first place, they do not believe that they are wrong. I ask the Minister to check on the year that has been chosen. If he does so, he will find that it is an unusual year. It was unfair to select that year because of the circumstances of that year. They were specific to Hackney. If he checks on previous years and subsequent years, he will find that the allegation of overspending is not true.

Hackney has done as much as it can to ensure that it makes the best use possible of the money that is spent. Nobody has charged Hackney until now with not doing its work properly. On the contrary, there have been many letters from Ministers in both Labour and Conservative Governments, congratulating those in Hackney for the remarkable job that has been done and how they are pleased with it. Many Ministers have visited Hackney to observe the way in which the work has been done. There has been a partnership scheme and both the Ministers concerned have paid tribute to the authority for the work that it has done. They have agreed that it would be impossible to charge Hackney with profligacy.

Both the right hon. Gentleman's ministerial colleagues have commended Hackney and have set out their commendations in writing. It cannot be argued that Hackney has been a bad authority. Indeed, I do not believe that it is for the Government to argue that case. It is for the people of Hackney to decide whether the borough council is being run properly and efficiently and in the way that they expect. In any event, the Government cannot indicate that Hackney has been profligate.

Tomorrow Prince Philip will open one of the complexes that has been built as a result of the partnership scheme. The area in which the complex has been built was derelict for many years. In 1971 the House transferred the open spaces from the control of the GLC to that of the boroughs. The GLC had not done its job. I said on that occasion that I thought it would be years before the open spaces would be properly developed. The then Minister, the right hon. Member for Crosby, (Mr. Page) sent me a four-page letter after the debate assuring me that I was wrong. He told me that he had received assurances that the development would take place quickly. Ten years have passed. The derelict land has been developed only because it was agreed during the term of the previous Labour Government that Hackney should become a partnership area.

The development that has taken place cannot be finished because of the many millions of pounds that the Government have taken away from Hackney. Further facilities cannot be provided. If there were any truth in the allegation that Hackney had been profligate, I should not support the council. If the allegations were true, I should inform the House. I urge the Minister to reconsider the decision that has been made. I will see him at any time to explain once again the council's case. Lord Bellwin wrote to me only three days ago to inform me of the results of my interview with him. It seems that he clings to a sentence that has been coined in the Department to the effect that the Government agree that partnership is partnership and that it means partnership between the Government and the local authority. It is argued that there can be no partnership unless the local authority is of the same political persuasion as that of the Government of the day.

That is a dangerous precept to argue. It is one that will destroy local government. Is there to be a fight every time there is a change of Government? On the regional health authority on which I serve three Labour members have been sacked for no reason. They were perfectly good guys who did a perfectly good job. I have always fought against that type of political intervention. It will be sad for local government if we are to witness further examples of this type of behaviour in future.

I urge the Minister to review the decision on Hackney. The borough council has acted in conformity with all the standards that are laid down for good local government. It is doing its best in the most desperate circumstances. It is not wasting money. Ministers have approved the expenditures that have taken place. The base year that has been selected cannot be argued to be a year in which normal expenditure took place. I invite the Minister to meet me tomorrow or at any time so that I can once again place before him the facts about Hackney. If he checks the facts that I have presented he will realise that they are true. If he does so, the people of Hackney will not be subjected to further harassment and additional expenditure will not fall unfairly and unreasonably on their backs.

Mr. King

The hon. Members for Lambeth, Central (Mr. Tilley) and Hackney, South and Shoreditch (Mr. Brown) have taken the opportunity on a narrow amendment to debate the wider issues of transition. I make no objection. It is their privilege to do so.

The hon. Member for Lambeth, Central seems to be under the impression that he can vote against the clause. The clause has been approved by the House and the only matter for discussion is the narrow and technical amendment that is before us, with which the House will either agree or disagree. The hon. Member made another gallant attempt to try to get a bird to fly. His right hon. and hon. Friends have often tried to get the bird to fly, but it has remained resolutely and firmly on the ground.

It is rubbish to suggest that we have put something into operation that has not been sanctioned by Parliament, or that there is some arbitrary power in the hands of Ministers that is outside Parliament's control. Nothing will happen under the transitional arrangements unless the Bill becomes an Act. Only when an order has been laid before this House and has been approved separately by this House under the rate support grant arrangements will anything happen. The House always debates the increase order and has an opportunity to vote, if it so wishes.

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When he has reflected, I hope that the hon. Member for Lambeth, Central will not seek to sustain his suggestion that some arbitrary power is involved that is outside Parliament's remit. The hon. Gentleman might say that it is outrageous to give advance information on how the powers are likely to work. His right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) will tell him that he has spent most of the past six months asking me to give him the earliest possible indication of the way in which the powers are likely to be used. The complaint might be that we should have made this announcement earlier. We were anxious to respond to the right hon. Gentleman's request, and that is why we announced at the earliest possible moment how the arrangements would operate.

May I tell the hon. Member for Hackney, South and Shoreditch that the first criteria have nothing to do with base years. The first criteria were laid down last December, nearly a year ago. We gave local authorities advance warning about the way in which we envisaged that the transitional arrangements would operate. It involved the rate level in individual boroughs. The hon. Gentleman will be aware that, in theory, the rating system was geared to providing an equivalent level of service for an equivalent rate poundage. We based that round the notional uniform rate. That was the advance warning that was given to Hackney, Lambeth and to other authorities.

Mr. Hattersley

I do not wish to correct every error. Let us take an example. The right hon. Gentleman said that he gave notice in December that councils were likely to be penalised if they exceeded the notional uniform rate. Since the notional uniform rate that he stipulated excluded virtually 50 per cent. of the councils, does he not agree with every local authority association that that did not constitute a warning? There was a wide criterion within which the Secretary of State made a narrow, arbitrary, biased and politically orientated judgment.

Mr. King

I am interested to hear that. The right hon. Gentleman will recall that the rate set was substantially in excess of the notional uniform rate. We envisaged that not fewer than 10 and not more than 20 local authorities would be affected. It was possible for certain outside pundits to make an early prediction about who would be affected by such criteria. The idea that the Secretary of State made a narrow judgment at the last minute is nonsense. It was the logical result of the scheme that we had outlined. It will not come into effect unless the House approves it.

We have published a provisional list. It is only provisional because until those orders are passed it will not come into effect. There is no question of inviting authorities to come on bended knee to us. Some authorities said that they made errors in the figures that had been submitted. There was some suggestion that we should not be anxious about receiving the correct figures. If we were to make a decision that was based on the wrong figures, it would be intolerable. If authorities have made errors, they should let us know. We are ready to take account of that.

If authorities wish to do so, they can consider their position and their budget and decide whether to make economies. They can still decide whether it remains possible for them to qualify. Nothing would give my right hon. Friend or I greater pleasure than that nobody should be on the transitional list. I shall consider the points raised by the hon. Member for Hackney, South and Shoreditch and I shall discuss them with my noble Friend the Minister. I am sure that he will consider them carefully.

It has been suggested that the authorities do not know what the criteria are on which they have been judged. That was made clear last month, when we announced the initial provisional list. The criteria were stated clearly. As the hon. Member for Lambeth, Central raised this question, he will have to take my reply as it comes. The account that he gave of the Brixton recreation centre was a travesty of the truth. I shall give him the benefit of the doubt. I trust that that account was based on ignorance and not on any attempt to distort the truth about Brixton recreation centre.

The hon. Gentleman will be aware that that centre was a project of Lambeth council. It has nothing to do with the urban programme or with Government funds. It was budgeted to cost £3.4 million. I may be wrong about that figure, but when it was launched it was within the £3 million bracket. So far, it has cost over £7.5 million. Contrary to the sum that the hon. Gentleman mentioned of £2 million, the latest information is that it will cost in excess of a further £7 million to complete it. I do not place all the blame on Lambeth council, because there were inter-union disputes on the site which led to problems. The disputes caused considerable delay and cost inflation. The project has nothing to do with the urban programme.

As a result of Lambeth council's financial difficulties, it approached the urban programme and the partnership. Certain other authorities in the partnership and, not least, the voluntary bodies in Lambeth realised that possible sources of revenue from the urban partnership would be swallowed up by a Quatermass that was growing and that could swallow all the funds. Contrary to their views, we agreed to make some contribution from the urban programme in order to help Lambeth.

I am sure that the hon. Gentleman respects the truth because he is an hon. Member. If he does, he will ensure that that correction is understood in the borough. He will not allow the canard to spread. He will not allow it to be said that this is a Government project that we have stopped, and that the Government are responsible for that. He knows that what I have said is true.

Mr. Tilley

The Minister has started a canard of his own, which will not fly. He cannot have it both ways. In this year's inner city partnership programme there is £800,000 of Government money, which will enable Lambeth to continue the project. As a result of the decision that the right hon. Gentleman took last month about penalties, £800,000 has been taken out. As a result 140 building workers are out of work and £7 million of public investment will be wasted. The building will be left open to the wind and rain for the foreseeable future. His arbitrary and recent decision has led to that. In addition, the right hon. Gentleman exaggerated slightly when he said that it will cost another £7 million.

Mr. King

I am worried by the hon. Gentleman's last comment. I suggest that he keeps in closer touch with his borough. I think that I understated the figure. He should check up. The council got into trouble and came to the Government to ask them to contribute a further sum to help with this year's bills. Now that the Government have decided against that, we have been accused of sabotaging the project. No other hon. Member who has listened to the story would consider that, against that background, the Government have to take full responsibility for what has happened.

I draw the hon Gentleman's attention to the recent remarks of the director of housing in Camden, who, he may have noticed, has tendered his resignation. I believe that the observation may be applicable to other London boroughs. If we are to protect services, it is necessary for economies to be made at a time of straitened circumstances. Boroughs that have set their hearts and minds against any economies anywhere are the biggest threat to services in their boroughs—far greater than may sometimes be indicated by their public statements.

I agree with the comment of the hon. Member for Hackney, South and Shore-ditch about partnership. It would be a sad day if there had to be the same political persuasion at each tier of government for there to be successful partnership. I am proud to say that that is not the case in the majority of our partnerships, which are proceeding satisfactorily. Unfortunately, in one or two cases it is not so. I say this out of the top of my head, but I believe that all the other partnerships are with Labour authorities and the Conservative Government, and are proceeding with co-operation and good sense on both sides. That demonstrates that there is no political vindictiveness on our part in partnerships. I endorse the comment that, at a time when there need to be economies right across local government, partnership means partnership. If certain authorities are not prepared to take one step in the direction of economy throughout local government, it is difficult for the Government to undertake yet further to subsidise what by any standards could be considered further substantial expenditure.

Mr. Hattersley

I do not want to follow the two examples of the Secretary of State's behaviour that my hon. Friends gave. However, I very much sympathise with the authorities in their dilemma and applaud the defence of their position by their Members of Parliament.

Lest there should be some who read only one page of Hansard, I rise to say one thing now. I hope to have an opportunity in an hour or so to discuss and describe the way in which the Secretary of State has operated the transitional provisions. I have tabled an amendment to limit his discretion in another area, in an attempt to demonstrate that he is not fit to be given the discretion that the Bill constantly provides.

The Minister's speech should not pass without my saying that his description of the Secretary of State's behaviour in applying the transitional arrangements is not understood or recognised by me; nor will it be acknowledged or recognised by any local authority association. His description was of how the Secretary of State might have behaved had he been a reasonable man. It was not, in fact, how he behaved.

Question put and agreed to [Special Entry]

Lords amendment No. 43 agreed to. [Special Entry]

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