§ 'This Act shall be inoperative in a financial year if, over the period of the previous five financial years, the rate of growth in the total of local authority spending has not exceeded the rate of inflation in local authority costs, or the rate of growth of total expenditure by Her Majesty's government, whichever is the greater.'.—[Mr. Straw.]
§ Brought up, and read the First time.
§ Mr. StrawI beg to move, That the clause be read a Second time.
In view of other debates which must take place before the guillotine falls at 8 o'clock, I shall be brief. The rhetoric of the Government and their supporters suggests that a large number of Labour authorities have been wholly, to use the hurrah word, "profligate" in their expenditure, and the Under-Secretary often adds the adjective "irresponsible".
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The London borough of Lewisham has been the subject of vulgar abuse from Conservative Members representing Lewisham constituencies, and from others. I am sorry that the hon. Member for Lewisham, West (Mr. Maples) is not 184 here, because I gave him notice that I intended to refer to him. I gave similar notice to the hon. Member for Derbyshire, South (Mrs. Currie).
In the debate on 14 December 1983 the hon. Gentleman asked the Secretary of State whether he was aware that his authority—
One of the bad 16" — [Official Report, 14 December 1983; Vol. 50, c. 1015.]not only employed a borough artist but spent £130,000 a year on sexism awareness training. On 21 December 1983 the hon. Member for Derbyshire, South asked the Secretary of State to:study the accounts of the London borough of Lewisham, which invested £100,000 of ratepayers' money in a commercial pantomime and then censored the text".—[Official Report, 21 December 1983; Vol. 51, c. 422.]In answer to those questions the Secretary of State described Lewisham as a loony Left council and as a high-spending authority such as those which hadbeen widely condemned by many, even by those who call themselves Labour supporters." — [Official Report, 14 December 1983; Vol. 50, c. 1015.]
§ Mr. Chris SmithOn 1 March, in Standing Committee, the hon. Member for Lewisham, West (Mr. Maples) regaled us with tales of supposed overspending by the Inner London Education Authority on what he called a record-player. I checked on the matter and found that his facts were completely incorrect. His remarks were a gross slur on the authority.
§ Mr. StrawI believe that my hon. Friend is referring to the hon. Member for Lewisham, East (Mr. Moynihan). He is the smaller of the two hon. Gentlemen, but they share a common standard of vulgar abuse based on total untruths about the borough of Lewisham. The remarks of the hon. Member for Derbyshire, South are what one would expect.
The assertions are without foundations. Lewisham did not invest £100,000 in a commercial pantomime. It put some money into a pantomime which, before taking its publicity costs into account, broke even. After those costs had been taken into account, the pantomime lost £8,000 — a very different figure from £100,000. The pantomime was enjoyed by 37,888 people, and there was no censorship of the script.
I am glad that the Secretary of State for the Environment is here. It is simply untrue that £130,000 is spent on sexism awareness training. There is no budget for sexism awareness training in the London borough of Lewisham. Lewisham spends £20,000 on management training for women. That is a somewhat different figure and a totally different concept. The borough artist is not employed by the borough—he is self-employed. I hope that when he finally appears in the Chamber the hon. Member for Lewisham, West will withdraw his gross slurs on Lewisham council.
Lewisham is not an overspender. It is an underspender. Since 1981–82, when the allegedly loony Left council took control, Lewisham's expenditure has risen only by 8.9 per cent. Local authority inflation has risen by 13.8 per cent. and the general retail price index by 13 per cent. The loony Left council, castigated as an overspender by the Secretary of State, has in fact underspent. It has cut its services.
§ The Secretary of State for the Environment (Mr. Patrick Jenkin)Ask the ratepayers.
§ Mr. StrawThe figures are in the tables. I hope that people will ask the ratepayers. The ratepayers know that if rates have gone up in Lewisham, they have gone up not because of any increase in expenditure in the past two years — in real terms, the Secretary of State's own figures show that expenditure has gone down — but because of the cuts in rate support grant imposed by the Secretary of State. We will ensure that the Secretary of State's remark goes through the letter-box of every household in Lewisham.
The Secretary of State may have lost the Lilley table, but I looked it up today. As I have said, for 1981–82 to 1983–84 the figure is 8.91 per cent., compared with increases in pay and prices for all local authorities of 13 per cent. and an increase of 13.8 per cent. in the RPI.
§ Mr. Patrick JenkinOn the latest information available to us, Lewisham is now budgeting 7 per cent. ahead of its target and, not surprisingly, is to have a 32 per cent. rate increase. That is what the hapless ratepayers of Lewisham will have to face in the ensuing year. The hon. Gentleman may believe that that is a proper way to treat the ratepayers, but I differ from him.
§ Mr. StrawThe improper way to treat ratepayers is to impose penalties on local authorities, including Conservative authorities, and targets which they cannot meet without savaging their services. The proof of whether an authority is overspending or underspending—as the Secretary of State himself has admitted in other debates —is not the level of its rate increases, which are very much dependent on changes in rate support grant, but the level of its expenditure increases. On the Secretary of State's own figures, Lewisham's expenditure has been reduced in the last two years in real terms.
Lewisham has been castigated as a high spender, but, if its rates have gone up, that is a direct result of the cuts in the Government's rate support grant, which the Conservative-controlled ACC has said was wholly responsible for the excess of rate increases above the level of inflation.
The expenditure of a whole range of authorities which are due for rate-capping is either less than the RPI over the past four years or less than the increase in central Government expenditure. We believe that, on the Government's own definition, those authorities which have spent less than the increase in central Government expenditure, or less than the increase in inflation, should not be subject to this vicious rate-capping.
§ Sir George YoungThe hon. Member for Blackburn (Mr. Straw) has used the new clause to settle some personal scores with two of my hon. Friends. I do not carry details about pantomimes in Lewisham in my head, and I do not therefore propose to comment on that matter. However, knowing my hon. Friends, I do not believe that they would have made those statements without carefully researching them.
The hon. Gentleman spoke somewhat briefly to the new clause. It seeks to prevent the Bill from operating by setting up criteria which the authors of the new clause expect will not be met. I will not bore the House with the technical reasons why the new clause is unacceptable, but I should like to deal briefly with the issue of principle.
It is not realistic to compare central Government expenditure with local government expenditure. A substantial proportion of Government spending is in the 186 form of transfer payments, the size of which is determined by the depth of the recession, by world markets, and by international interest rates. Their size is also determined by demographic factors, such as the ageing of the population. To some extent, elderly people also make demands on local services, but the most significant demand on local government is education. In that sphere numbers are falling quite substantially, and that presents a real opportunity for savings. Because responsibilities are different and are dictated by totally different factors, it is not realistic to put the two types of expenditure on a par and to say that they should both be increased at the same rate.
§ Mr. MeadowcroftDoes the Under-Secretary accept that local authorities have a proper role in endeavouring to counter the effects of recession by, for instance, underpinning local industry, considering the local infrastructure and trying to attract new companies to the area? That perfectly proper expenditure will vary in exactly the same way as public money spent centrally.
§ Sir George YoungThe hon. Gentleman tempts me to a broader debate on the question whether local government has the power to take macro-economic decisions which conflict with those of central Government. My understanding is that they should not do that and that it is up to central Government to dictate the broad economic parameters which govern the country. It is not up to local councillors to introduce counter-inflationary or reflationary policies which conflict with the Government's economic policy.
There is another reason why it is perfectly legitimate for central spending to rise faster than spending by local authorities. Central spending may be provided for in public expenditure plans. It may be devoted to policies which the Government outlined in their manifesto and on which they were returned to office.
We made it clear that defence and the police were priorities. They are Government responsibilities. Defence is probably the case to take here. It is realistic for a Government to make it clear that they want higher spending in some areas and to provide for it. That is another reason why we cannot realistically compare the two.
§ Mr. Peter Hardy (Wentworth)Will the Under-Secretary of State note that, in addition to the opportunities afforded to local government because of a reduction in school rolls, as a result of the effects of the recession to which he referred many parts of the country face the appalling problem of vast numbers of young people who are unemployed or will become unemployed later this year. The Minister's Department, with the Home Office, produced a circular earlier this year which suggested that local authorities should give much higher priority to provision for leisure to do all manner of things, such as diminish crime. While suggesting that local authorities do that, the Government have said that they should do it without increasing expenditure. The Government can take that unrealistic stance, but local authorities cannot. That should be considered now.
§ Sir George YoungI understand the hon. Gentleman's point, but it reinforces my case as the cost of youth unemployment is borne principally by the DHSS or the Manpower Services Commission. They are Government 187 responsibilities. That explains why the spending of such bodies increased more quickly than that of local government, which did not have responsibilities to quite the same extent.
I sense that the Opposition do not wish to press the new clause too hard. I have explained why it is unrealistic, and I hope that the House will reject it.
§ Question put and negatived.