HC Deb 18 November 1985 vol 87 cc114-20

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

10.13 pm
Mr. Eddie Loyden (Liverpool, Garston)

A moment ago, I saw the Secretary of State for the Environment in the Chamber. I would have thought that he would have stayed to hear what I consider to be an important and urgent debate. I hope that he will return to hear it, because I wished to present my case to him. No doubt he will read with great interest much of what has been said today by my hon. Friends. I hope that, at the meeting tomorrow, he will begin to recognise the problems of Merseyside, and especially those of Liverpool.

The problems of Liverpool in particular and Merseyside in general did not begin with the election of a Labour council in 1983. I was born in Liverpool in 1923 in the heart of the slums of that city. During all my life there I experienced, worked and lived with and went to school in abject poverty and misery. Throughout that period, Liverpool city council was in the hands of the Tories, and that remained the position until the late post-war period.

The wealth of the city was built on the ports—on commerce, shipbuilding and ship repairing—and the merchant princes and shipowners built massive monuments to the prosperity that accrued to them. Those monuments are still to be seen in the form of Liverpool pierhead, William Brown street, the Walker art gallery and George's hall. There are many monuments to the prosperity that was brought about by the working classes of Liverpool. Those buildings and monuments, beautiful though some of them are, overlooked—as they still overlook—some of the worst slums in western Europe.

The people lived in the slums, in rat-infested properties, in cellars and in basements. Anybody who wants to learn the history of Liverpool need only read the reports of the medical officers of health for those years, with details of the infantile mortality rates, at one time the highest in the nation. One reads of the number of deaths between birth and fifteen, of the disease-ridden areas where children who survived had to be strong indeed. The weak went under. The hearse was a daily visitor through the cobbled streets of Liverpool taking away children who died from malnutrition and the diseases that were rampant in the city at that time.

They were the worst possible conditions that human beings ever suffered, yet that was at the heart of great prosperity in a great port. The working class of Merseyside and Liverpool did not benefit from that greatness. There were large armies of unskilled casual labour in the docks, with 20,000–plus men going out every day trying to earn a living, working one day and being unemployed the next. In shipbuilding and ship repairing, the same state of affairs existed, with men working part-time, trying to feed their families on the pittance that they were paid.

I was part of that. My first job on leaving school was in a boot warehouse in Scotland road. I received the princely sum of 6s 6d a week, which went towards the budget of my family. I was one of the many thousands of kids in Liverpool who were in the same position. When I went to sea at the age of 14½, I found an even worse world among the seamen. They were living in absolutely dreadful conditions, yet many Liverpool people had to find their living by going to sea.

That is the backcloth to the city of Liverpool. Remember, I am talking not of a thousand years ago or even of the Victorian era. The slums were there long after the war. I recall the misery of the courts, with 12 people to a court, with one tap and one lavatory at the end of each court for that number of people. That was the extent of disregard that the Tory council and Tory Government had for the working class of that and many other cities.

After the war, Liverpool had high hopes for the future as the slums began to be cleared and industries came to Liverpool and Merseyside. A new dawn had broken, in the view of the people of the city. But over the years, running into the 1970s, we saw the role played by the Liberal party, with an era of hung councils, Tory-Liberal administrations and one financial cut after another, all against a backcloth of poverty, misery and rising unemployment. They, too, have a clear responsibility for the situation in Merseyside, especially in Liverpool. Their targets, pitched so low were at fault. Not a single public sector house was built in the four years when the Liberal party was in office. The Liberal council had no regard for the misery and poverty of the people. It was rightly kicked out, to bring in a council that was prepared to do something.

I am not suggesting that the whole post-war housing development was the fault of the Liberals. There were faults long before then. People were condemned to live in the misery of high-rise flats and houses unfit for families to be reared in. The then Government contributed to those conditions. In the 1970s, the Liberals saw even more clearly than the Tories that it was a case of cutting the rates in a city that needed more public and private investment. They disregarded that, and they paid the penalty.

In 1983, the Labour party came to power. It was prepared to tackle those problems, many of them for the first time. Labour councillors began to tackle the problems of the housing estates and high-rise flats. They began to put parks in working-class areas where they were needed and where they had not been before. They built sports centres in working class areas where people had never seen such centres. Those acts are now judged criminal. The retention in work of people who are not prepared to be added to the lengthening dole queues in Liverpool is regarded as a criminal act.

The leader of Liverpool city council, who is a Quaker and who would not offend the law under any circumstances, has been pressed by the Government's actions into a position where he is called a criminal in the technical sense of the word. It is a scandal and a shame that honest and decent men in Liverpool fighting against the ongoing decline of the city and trying to push back the barriers of poverty and misery are condemned as criminals by the Government.

The final push that moved Liverpool to the brink was made by the Government. They have the main responsibility. This country is still wealthy. The 500,000 people who live in Liverpool are British citizens—they are not an alien force. They are part of the United Kingdom and are therefore the Government's responsibility. The Secretary of State and the Government cannot stand aside and see Liverpool swinging in the air waiting for someone to cut the rope so that it can drop. Neither can Liverpool be seen in isolation. The city is a microcosm of what is happening in all our major cities, especially the old industrial cities in the northern regions. If no immediate action is taken, this country will reap a whirlwind that we have not seen in this or in previous centuries.

Recent statements have been made in the Stonefrost report and by the Secretary of State. Usually, the Secretary of State conducts his dialogue about 240 miles away from Liverpool. He has never attempted to meet councillors around the table to discuss the problems. He has not attempted to recognise the enormity and seriousness of the crisis in the city.

No Government have the right to disregard the plight of a major city and its population as this Government are doing. Whatever the council does—if it fiddles around with its budget and increases rates by 15 per cent. or, in reality 24 per cent.— commerce and industry are threatening that they will fold up their tents and go if rents rise in Liverpool. On numerous occasions they have said that the margin upon which they work will become intolerable and they will go away.

Do the Government want to conduct a vendetta against the people on Liverpool city council, the majority of whom are not members of Militant Tendency but Labour party members? They are youthful and dynamic and want to tackle the city's problems. Are the Government waiting for the city to surrender to them and to the Secretary of State because they do not like the faces or the behaviour of some of the people? That is infantile behaviour, which is not expected of a Secretary of State—even a Tory Secretary of State.

The Secretary of State must recognise that the problem will not go away. The crisis will be there tomorrow and the next day unless the Government intervene and say that they will have discussions with the Labour-controlled city council to enable the city to continue the good work that it has been doing to ease tension where tension has been growing. It has done everything it can to relieve those tensions. We all say that we are worried about inner cities and about what we have seen over the past two years or longer. Tension arises from the conditions in which people live.

The city has remained the same throughout two world wars. It has always had double the level of national unemployment. That is the story of Liverpool to which the Government and the Secretary of State must listen. No Government can disregard the need for intervention to put the city on its feet and enable the council to do its necessary job.

10.26 pm
The Parliamentary Under-Secretary of State for the Environment (Mrs. Angela Rumbold)

I welcome the opportunity provided by the hon. Member for Liverpool, Garston (Mr. Loyden) to discuss the grim situation now facing the people of Liverpool. I listened this afternoon to the speeches of the hon. Members for Liverpool, Broadgreen (Mr. Fields) and for Liverpool, Walton (Mr. Heffer). There can be no doubt of the sincerity and the passion felt by those hon. Members. I only wish that the object of their fury and passion was better defined.

For the first time in this country, a city has been deliberately brought to the edge of collapse by those who run it—the very people who should have its best interests at heart. A council's tactics of confrontation threaten to put at risk the elderly and handicapped, to close schools and allow rubbish to pile up in the streets. The slogan of those councillors is: No cuts in jobs, services and housing programmes. The result of their campaign will be no services, 31,000 employees out of work and the housing programme, by which the councillors set so much store, in jeopardy. Any right-minded person must be appalled at the idiotic abuse of the trust placed by the people of Liverpool in their councillors.

Throughout, the Government have urged the council to resolve the crisis. The council has always been able to do so and it still can now. The keynote of my speech is that the council can still draw back from the brink. It must pull back now.

The hon. Member for Garston is one of those who wrote to my right hon. Friend the Secretary of State last Thursday asking him to meet the city council to discuss the position. My right hon. Friend made it clear, as he has done on many previous occasions, that he is not prepared to meet the city council until it behaves responsibly and legally. The hon. Member for Walton has said that he wished it were possible for us to have rational and civilised discussion. The council could, if it was prepared to set a proper rate.

Mr. Allan Roberts (Bootle)

Is the hon. Lady advocating a rate increase? If she is, that is strange phenomenon for a Conservative Minister.

Mrs. Rumbold

The hon. Member will find out exactly what I am advocating as I progress with my speech. My right hon. Friend has agreed to meet the hon. Members from Liverpool later this week, and in the light of what I say this evening, I hope that hon. Members will not come in the expectation that the Government will bail out the city council.

It is worth reminding the House how today's situation arose. Since the time of its election in May 1983, the Militant-dominated council in Liverpool has deliberately sought confrontation with the Government. Of that there can be no shadow of doubt, and hon. Members need not take my word for it.

Mr. Eric S. Heffer (Liverpool, Walton)

The hon. Lady, like her hon. Friends and others—unfortunately, sometimes in my own party—consistently talks about a Militant-dominated city council. It is not true, it never has been true, and it is time people stopped telling lies about it.

Mrs. Rumbold

I know that the hon. Member for Walton believes that there are only a few Militant members on Liverpool city council. If that were the case, if the majority of the councillors are moderate, as he claims they are, why do they not prevail upon their colleagues to behave in a responsible manner?

In an open letter to the people of Liverpool, the right hon. Gentleman the Leader of the Opposition talked of the attack on the city of Liverpool and its people being perpetrated by

A political grouping which, by its dogma and by its deliberate refusal to adopt the common Labour course of setting realistic rates, has added a new level of crisis; an extra layer of anxiety to the problems already endured by the people of this deprived city. Last year, similar confrontations took the form of months of political posturing, leading to a long-delayed rate within a balanced budget. It was merely a preview of this year's events, the only difference being that the council withdrew from the brink in July. Moreover, there were no massive concessions from the Government as the propaganda from Liverpool city council claimed at that time.

Mr. Robert N. Wareing (Liverpool, West Derby)

The hon. Lady is talking about what happened last year. Will she reflect on the letter from the previous Secretary of State for the Environment to the leader of the city council, Councillor John Hamilton, in which the Secretary of State said he would endeavour to see that there would be better investment in housing and that the housing investment programme would be improved? Will the hon. Lady tell the House the figures for the Government's housing investment programme in Liverpool last year and also tell us what it is this year? Has her right hon. Friend kept his word?

Mrs. Rumbold

The hon. Member will see that my right hon. Friend has indeed kept his word.

The Government warned the council last year that its problems were not over. We urged it to look at all available sources to help solve Liverpool's social and economic problems—the private sector, the local communities and the housing associations. The council ignored that advice, and clung to its dogmatic approach, apparently in the entirely mistaken belief that the Government would respond to blackmail if the council threatened to take its city into chaos.

This year, the council again refused to set a rate at the start of the financial year. When it eventually got around to setting a rate, it was set far too low to cover a grossly inflated budget of £265 million. By adopting this budget, the council, by its own choice, reduced its grant entitlement for the year by nearly £90 million. It left a gap of over £100 million between income and expenditure. Just as we had done last year, the Government urged the council to put its finances in order by reducing expenditure and tackling inefficiency and waste, but because of the way in which the grant system works, the council can gain roughly an extra £2 million in grant for every £1 million by which it reduces expenditure.

At the end of July, the council made its first tentative moves towards a lower budget, showing that it could do it. It reduced its planned spending by £10 million and immediately became entitled to a further £22.6 million in grant. That was a start, but it was not enough. It was up to the council to reduce expenditure further to a credible level. The council did so in September and this time claimed to have balanced the books, but only by the extraordinary tactic of making the entire work force redundant. That was from a Labour council claiming to care for its employees.

Mr. Terry Fields (Liverpool, Broad Green)

The Minister says that we have to create economies in the expenditure of Liverpool city council. The only way to do that is to cut services and jobs. The terms of carrying out the Government's diktat have been worked out by the Liverpool city treasurer. Can the Minister explain the logic and the mathematics of it? Were the Government prepared to give us £67 million in grants for sacking 10.000 workers, plus £60 million in unemployment benefit, plus £10 million in redundancy payments for sacking those same workers? That is the only way in which it can be done.

Mrs. Rumbold

Anyone who knows anything about local government finance knows that it is possible to make savings without reducing jobs and cutting services. It is possible for a council to make such reductions if it has the will to do it. No such will has been demonstrated by the Liverpool city council.

Immediately after the Liverpool city council's decision to make the work force redundant, the NUT challenged the decision in court and the court ruled that the teachers' notices were invalid. Subsequently the council has repeatedly promised to withdraw all redundancy notices but has not yet done so. Now the NUT has applied to the court to have the rate quashed, opening the way for the council to make a new one at a proper level. We shall have to wait and see what happens.

It is not only the Government who are urging the council to put its house in order. With the co-operation of the council, the Labour party and the national unions gave four local government finance experts a remit to investigate the finances of the authority, but the council's support ended as soon as it became known that the treasurers' report did not go the council's way because it showed that Liverpool could still sort out its own finances.

The report has been welcomed by almost everyone except the council. All the council has done is tell its work force that they will not be paid after Thursday, and to continue with the totally unrealistic assertion that the crisis is the Government's fault and that the Government should step in to help it out.

By failing to act on the conclusions of the Stonefrost report, the council has exhausted the patience even of those who were trying to help it—the unions, the Labour party and other local authorities. Today, just three days before many of the city's 31,000 employees are set to receive their last pay packets, the TGWU workers called on the council to compromise and to set a 15 per cent. rate increase to balance its books. The TGWU has 1,000 members working for the council, and with the second biggest union, NALGO, and the teachers' unions all having rejected the Labour group's tactics, today's vote must be seen by all to be a major setback.

The only way to win the battle for money from central Government was by a united campaign by city workers, and that has clearly not developed. They have called on the council to balance its books through the Stonefrost report recommendations. If only the council would do that, there could be some salvation. The Leader of the Opposition said: the report demonstrates conclusively that there was never any justification for seeking to sack or lay off 31,000 workers, or for claiming that in order to balance its budget, Liverpool city council would have to lay off thousands of workers, cut services and devastate its housing programme. Playing politics with people's jobs must cease and political dogma must give way to realism. I am glad to be able to record complete agreement with the Labour party. That is just what the Government have been saying all along. The hon. Member for Copeland (Dr. Cunningham) has also said: The report shows clearly that it is within the competence and discretion of the City Council to resolve this crisis now". I can easily understand the exasperation underlying his statement: The options were there all the time for people who really wanted to find them". The council's unhappy officials have known and stated clearly the options all along, but council leaders do not want to listen. For pure political dogma, Liverpool council leaders refuse to accept reality. They have shrugged off all attempts to help them. They are on their own because they have chosen to be so.

In all this, it is the people of Liverpool and the council's employees for whom we must feel most concern. The bishops in Liverpool recognise the suffering which may be caused as a result of the militant policies of confrontation, in October they wrote:

"Militant's intransigence and unwillingness to engage in serious dialogue creates divisiveness and uncertainty in which the most vulnerable elements of the community suffer, usually schoolchildren and elderly people unable to cope with a reduction of services … We deplore the confrontation that has to a great extent been manufactured by the Militant Leadership of the City Council".

While we all agree that Liverpool has very serious economic and social problems, the council's claim that it is under-funded just does not stand up. More than £1 billion of Government money was put into Merseyside last year. In rate support grant and urban programme, Liverpool has received £1,800 per head of population since 1979. In contrast, Birmingham has received only £1,400. The council could have had more Government support, which it has deliberately decided to forgo. By spending way over target, it has forfeited rate support grant, and some of the £2.5 million extra urban programme money found for the council last year remains unspent.

The Government continue their efforts to help Liverpool in a whole range of different ways. The Merseyside Development Corporation has spent £79 million in Liverpool on the regeneration of derelict docklands. In 1981, the special Merseyside task force was set up to work with local authorities, government agencies, and the private sector. We want to co-operate with the city council in the task of regenerating Liverpool—it is the council which has taken the decision to go it alone.

There is no change in the Government's policy towards Liverpool city council. Of course, we are watching the situation closely, but like the Labour party, like the unions, like the churches and like the authors of the Stonefrost report, we believe that the council can and must take action itself. The city council knows that it is within its competence to put its city on a sound financial footing, to prevent hardship and to maintain jobs and services. I urge the city most strongly to do so.

Question put and agreed to.

Adjourned accordingly at Seventeen minutes to Eleven o'clock.