Commons Sitting of 9 December 1987

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
Oral Answers to Questions
  SCOTLAND

    Urban Development Corporations
    Mr. Steen: To ask the Secretary of State for Scotland if he will take powers to establish urban development corporations in areas of dereliction in major conurbations in Scotland; and if he will make a statement.
    The Minister of State, Scottish Office (Mr. Ian Lang): The powers to establish urban development corporations contained in the Local Government, Planning and Land Act 1980 apply equally in Scotland.
    Mr Steen: The fact that one represents a constituency a few miles south does not mean that one has not had the opportunity—
    Mr. Foulkes: Get on with it.
    Mr. Steen: —to appreciate the excellent work done in some of the Scottish urban areas, particularly in Glasgow—
    Mr. Foulkes: Ask a question.
    Mr. Speaker: Order. I hope that we shall be able to conduct this Question Time in good humour and in good order.
    Mr. Steen: I have not started to ask my question. I said that the fact that one represented a constituency a few miles south did not mean that one could not appreciate the wonders of Scottish urban redevelopment. Does my hon. Friend agree that one of the most important things in urban regeneration is to encourage vacant public land to be privatised and to get some of the dead land moving in private enterprise?
    Mr. Lang: I was most interested in what my hon. Friend had to say, given his well-known expertise in this subject. I entirely agree with him. We believe that the private sector has a very important role to play in the initiatives that we are proposing in urban areas in Scotland.
    Mrs. Fyfe: Has the Minister considered the fact that Strathclyde regional council and Glasgow district council are doing their desperate best to help decaying urban areas such as my constituency? If the private sector is dying to invest in Maryhill, where is that money? Why do we not see some of it?
    Mr. Lang: I hope that in due course, as we bring forward our proposals, the private sector will become
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    increasingly interested in them. We certainly look forward to working with Strathclyde regional council and Glasgow district council in pursuing this worthwhile initiative.

    Shop Premises (Amusements)
    Mr. David Marshall: To ask the Secretary of State for Scotland if he will introduce legislation to regulate the growth of fruit machines, slot machines and video machines in shop premises and the number of amusement arcades in Scotland; and if he will make a statement.
    The Parliamentary Under-Secretary of State for Scotland (Lord James Douglas-Hamilton): Local authorities have power to control the number of fruit machines and slot machines in shops and the number of amusement arcades in their areas. Reports on these facilities, commissioned by my right hon. Friend the Home Secretary, are expected shortly. We will then consider whether the law requires to be amended.
    Mr. Marshall: I welcome part of the Ministers reply, but it does not go far enough. He greatly underestimates the problem and the strength of feeling in communities in which amusement arcades are located. Furthermore, it seems that every appeal to the Secretary of State by an applicant is upheld, despite local objections and opposition. Why will he not give local authorities every necessary power to control and monitor the situation and take the necessary action when and where it is needed?
    Lord James Douglas-Hamilton: The hon. Gentleman raises an important point, and I should mention that my right hon. Friend the Home Secretary announced in May that he had set up a research project to examine the use that young people make of machines in amusement arcades. In addition, he asked the Gaming Board for Great Britain to prepare a report on amusement arcades and a further announcement can be expected when the work has been completed— it is hoped to be before Christmas. I would mention one brief point concerning children. The Civic Government (Scotland) Act 1982 gives local authorities wide discretion to attach conditions to licences, and there is no reason why they should not impose an age restriction.
    Mr. Canavan: Has all this emphasis on fruit and gaming machines anything to do with the so-called enterprise culture that that bumptious balloon in 11 Downing street is trying to foist on the people of Scotland?
    Mr. Speaker: Order. That sort of comment does not help at Question Time.
    Lord James Douglas-Hamilton: The hon. Gentleman has raised a valid and serious point. It will be considered seriously, as he wishes.
    Mr. Harris: Does my hon. Friend agree that there is considerable anxiety about this issue, whether it relates to Glasgow, Shettleston or to the far west of the United Kingdom in my constituency of St. Ives? While I greatly welcome my hon. Friend's reference to the Home Secretary's comment, will he and all other Ministers take account of the widespread feeling on this issue?
    Lord James Douglas-Hamilton: Most certainly. One important point is that a fruit machine involves a game of chance, whereas a video games machine can involve a test of skill. Many matters require close examination, and that is being given.

    Maternity Services (Grampian Region)
    Mr. Malcolm Bruce: To ask the Secretary of State for Scotland what representations he has received about the future of maternity services in the rural areas of Grampian region.
    The Parliamentary Under-Secretary of State for Scotland (Mr. Michael Forsyth): None recently.
    Mr. Bruce: May I assure the Minister that he will receive some representations in the near future? In the light of Grampian health board's proposals to close no fewer than six maternity units in the rural areas of Grampian, thus leaving no provision outside the city of Aberdeen and the town of Elgin, does the Minister accept that the position is unacceptable? These proposals have been out for consultation several times previously and public opinion has been clearly stated, but the health board is effectively ignoring it. Would it not be better if the Minister got on with the business of having elected health boards as a matter of urgency, rather than school boards which people do not want?
    Mr. Forsyth: The health board has not even issued its consultative paper, so it is premature for the hon. Gentleman to say that people have not had a chance to make representations. There is no proposal for a closure at Elgin. The pressure on maternity facilities is at Aberdeen maternity hospital, where the board proposes to build a new 56-bed unit. I should have thought that the hon. Gentleman would welcome that, instead of pleading the case for facilities which have had occupancy rates of between 16 and 33 per cent.
    Mr. Buchanan-Smith: Does my hon. Friend recognise that there is genuine anxiety on this issue, that we are dealing with people, not just numbers, and that those in rural areas deserve as much consideration as those in urban areas? Will he recognise that it is not just a question of the number of babies delivered in these areas, but of the useful post-natal and other gynaecological services required? If submissions are made to him, will he please think about the matter constructively, sensitively and sympathetically?
    Mr. Forsyth: I am grateful to my right hon. Friend and I assure him that the health board will consider all representations before any decisions are taken. My right hon. and learned Friend the Secretary of State will consider carefully any submission that my right hon. Friend makes. It cannot make sense to maintain units that are so underutilised that the quality of health care for my right hon. Friend's constituents and others who are expecting babies in the Aberdeen areas is prejudiced.
    Mr. Harry Ewing: As the maternity services in Grampian region and throughout Scotland depend largely on nurses, does the Minister think it fair that he will pay only £300 in poll tax from his £40,000 a year income, while nurses must pay £300 from their small salary?
    Mr. Forsyth: I do not think that we can take any lectures from the hon. Gentleman or his party on nurses' pay. The Labour Government cut nurses' pay by 20 per cent. and this Government have increased it by 30 per cent. in real terms. We have also increased take-home pay by cutting taxes, which he and the Labour party have opposed at every opportunity.

    Nuclear Waste
    Mr. Welsh: To ask the Secretary of State for Scotland what consultations he has had and proposes to have with Nirex regarding nuclear waste disposal.
    The Secretary of State for Scotland (Mr. Malcolm Rifkind): I have met Nirex representatives from time to time to be briefed on their work. I have at present no plans for a further meeting.
    Mr. Welsh: Does the Secretary of State expect that if Nirex goes ahead with any preliminary investigations it will follow exactly the procedures adopted in England, without any short cuts? Will he ensure that the Scottish public will be informed if any on-site investigations take place? Does he accept that the Scottish public have an absolute right to be informed of any such activities?
    Mr. Rifkind: Nirex's present investigations are concerned with determining what type of site is geologically suitable, whether underground, under the sea, or tunnelled out from the land. It will be a considerable time before it thinks in terms of any individual location in any part of the United Kingdom.
    Mr. Bill Walker: When my right hon. and learned Friend meets and consults Nirex, will he draw its attention to the fact that there is great anxiety in parts of Scotland as a result of the mis-statements and misinformation that have come from the Scottish National party? I draw his attention to the fact that Schiehallion in my constituency was named as an area where nuclear waste would be dumped. There is no substance to the story, which came from the SNP.
    Mr. Rifkind: My hon. Friend should take some comfort from the fact that no constituency in Scotland has not been told by the SNP that it has been chosen as the location for nuclear waste.
    Mr. Doran: Will the Secretary of State advise the House in simple terms what steps he will take to stop Scotland becoming the nuclear dumping ground for the rest of the United Kingdom?
    Mr. Rifkind: The hon. Gentleman should realise that all parts of the United Kingdom use nuclear power and are responsible for the production of nuclear waste. The location for the deposit of nuclear waste should be chosen on geological grounds that are consistent with the requirements of public safety.

    Rail Services (Strathclyde)
    Mr. McKelvey: To ask the Secretary of State for Scotland what representations he has received from Strathclyde regional council on the effect on Strathclyde's economy of the proposed reduction in rail services.
    Lord James Douglas-Hamilton: My right hon. and learned Friend has received no such representations.
    Mr. McKelvey: Then it is just as well that I asked the question. You will recall, Mr. Speaker, that there was a debate on the matter in the early hours of this morning as the snowflakes were falling outside. Has the Secretary of State received information from his surrogate, who was present to hear a debate opened admirably by my colleague, friend and ally — on this issue — the hon. Member for Dumfries (Sir H. Monro)? There is increasing

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    anxiety and alarm about the proposed cuts on the Kilmarnock-Carlisle-Dumfries railway line and the effects that they will have on the social and economic life of the area. Scottish Members are increasingly worried that decisions on cuts in British Rail services in Scotland are being taken in London and are then foisted upon Scottish managers, although they are willing to accept the role of lackey.
    Lord James Douglas-Hamilton: The Government have agreed with British Rail performance objectives designed to achieve a significant increase in efficiency and requiring an overall improvement in services. It is for British Rail to determine how to achieve those objectives, but I understand that some extra InterCity services will be laid on.
    Sir Hector Monro: We are all grateful to my hon. Friend for coming to the House early this morning and listening to the debate. Did he appreciate from the debate the strength of feeling in south-west Scotland about the economic problems that will result if the railway service is downgraded to the extent proposed by British Rail? Does he accept that the Government must bring home to British Rail the fact that their overall policy of bringing jobs to south-west Scotland will be adversely affected? He cannot leave it to British Rail to make such a decision.
    Lord James Douglas-Hamilton: I have met the manager of ScotRail and made it clear to him that many hon. Members believe that we need a high standard of service. I understand that British Rail will provide services connecting Dumfries with a sleeper service at Carlisle.
    Mr. Foulkes: Does the Minister accept that his response is entirely inadequate? On Monday my hon. Friends and I met the Minister for Public Transport and put our case very strongly. In my constituency, which, with that of the Minister of State, the hon. Member for Galloway and Upper Nithsdale (Mr. Lang), has the highest unemployment in the country, a railway station has just been opened at Auchinleck. Now British Rail is cutting services from that station. Strathclyde region wants to reopen New Cumnock station, but there will be no services for it if British Rail continues in this way. Should not the Scottish Office take some action to force British Rail to reconsider the matter?
    Lord James Douglas-Hamilton: I should say that the introduction of sprinter trains to the line next year will improve services by offering more trains and shorter journey times. I stress to the hon. Gentleman that there are no current plans to stop running passenger services on the line.
    Mr. Kirkwood: Will the Under-Secretary examine carefully the rates of return and capital that InterCity especially is expected to produce in the Government's current programme? Will he undertake to reconsider the matter with Ministers at the Department of Transport? The east coast route is of special concern to me. Services will inevitably be prejudiced by the penal rates of return which British Rail and ScotRail are expected to achieve on their InterCity services.
    Lord James Douglas Hamilton: I shall draw the attention of the Secretary of State for Transport to the matters mentioned by the hon. Gentleman.
    Mr. John Marshall: Does my hon. Friend agree that a major influence on economic development in the
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    Strathclyde region is the incompetent and high-cost policy of Strathclyde regional council, under which 25 per cent. of pupils leave school with no qualifications, and council house repairs are 35 per cent. more expensive than anywhere else?
    Lord James Douglas Hamilton: We are in favour of both high standards of efficiency and high standards of service.

    Rating Reform
    Mr. Douglas: To ask the Secretary of State for Scotland if he will make a statement on consultations that have taken place between his Department and local authorities with regard to the appropriate training programme for canvassers engaged on the preparation of the register for the poll tax.
    Mr. Lang: The training of canvassers is a matter for community charges registration officers.
    Mr. Douglas: Will the Minister accept that what we are embarking on in Scotland is the compilation of a national register, which will detail every individual from birth to death? In addition, will he give some information and guidance to local authorities about the dangers of disclosing information, obtained for poll tax purposes, for other purposes, put a prohibition or restrictions on those gathering that information, and introduce appropriate penalties for disclosure for purposes other than the community charge?
    Mr. Lang: The hon. Gentleman is incorrect. We are not contemplating the compilation of a national register or one that would last from birth to death. The regulation on the registration process is out to consultation and local authorities have an opportunity to give us their views on that. We shall take full account of the consultation process before making the regulation.
    Mr. Allan Stewart: Does my hon. Friend agree that, in these matters, helpful advice might come from apparently unlikely quarters? May I refer him to column 198 of Standing Committee A on the Local Government Bill, when the hon. Member for East Lothian (Mr. Home Robertson), speaking from the Opposition Front Bench, recommended that the administrative arrangements for the community charge in Scotland should be privatisecl? Will my hon. Friend therefore, at all times, pay appropriate attention to recommendations from Opposition Members?
    Mr. Lang: My hon. Friend makes an interesting suggestion. It is important that the register be compiled as efficiently as possible.
    Mr. Nigel Griffiths: Will the Minister explain why a leaflet and publicity campaign costing £130,000 and more has been launched in Scotland on the community charge, saying that people on and below the poverty line will pay 20 per cent., when in a written answer to me he revealed that in some parts of Scotland those on basic incomes will have to pay 41 per cent. of the community charge, including the community water charge?
    Mr. Lang: The hon. Gentleman is giving a misleading picture. The leaflet was published as an information document. Its need is justified not least by the fact that so much misinformation is being put about by the Labour party.
    Mr. Maxton: Does the Minister agree that if the canvass for the register is to be done in sufficient time to allow the tax to be brought in on 1 April 1989, as is proposed, it must start on 1 April 1988, or soon thereafter? If that is so, how many regulations will have to be laid before the House for that process to start? How many canvassers will have to be advertised for and appointed, and what training will have to be carried out? Does the hon. Gentleman have any hope that the process of making regulations, and advertising for, appointing and training staff, can be completed by 1 April 1988?
    Mr. Lang: We intend that the process should start on 1 April 1988. Three or four regulations will need to be tabled by that date, and we expect that that will happen. The other points raised by the hon. Gentleman are matters for the registration officer.

    Nuclear Waste
    Mr. Salmond: To ask the Secretary of State for Scotland when officials of his Department will next meet Nirex to discuss plans for nuclear waste disposal in Scotland.
    Lord James Douglas-Hamilton: Scottish Office officials have no specific plans to meet Nirex, but they will attend the Nirex seminar for local authorities to be held in Edinburgh on 14 December.
    Mr. Salmond: Is the Under-Secretary aware, even if the Secretary of State is not, that the Nirex document "The Way Forward" makes it clear that Scotland is a No. 1 target for nuclear waste disposal? Furthermore, will the hon. Gentleman give us a guarantee that any such proposal for waste disposal will face the rigour of a full public inquiry, and that such an inquiry will not be limited in scope in the way that the Dounreay inquiry was rigged?
    Lord James Douglas-Hamilton: I certainly can give that assurance. A planning application will be required before any site investigations on land. Subsequent procedures have yet to be determined. My right hon. and learned Friend the Secretary of State has made it clear that if there were a proposal to build a repository in Scotland a public inquiry should be held. The purpose behind the document is to look at geologically suitable areas in Britain.
    Mr. Buchanan-Smith: Does my hon. Friend recognise that many of us welcome the publication of that document and the opportunity that it gives for informed debate? Has he noticed that the Scottish National party shies away from any form of informed debate? Will he point out to the SNP that much of the low-level and medium-level waste comes from medical sources? Why does it not support the use of nuclear materials for those good purposes?
    Lord James Douglas-Hamilton: I am grateful to my right hon. Friend for setting the matter in perspective. We are concerned about the safe storage of intermediate and low-level nuclear waste. We believe that the Nirex document is a useful step forward in that process.
    Mr. McAllion: Does the Minister agree with the decision taken by Nirex in advance of the consultation process to opt for a single national disposal facility? Is it credible to have one such facility, given the present level of radioactive waste, and the future level because of the Government's commitment to a massively accelerated
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    nuclear programme? Scottish Labour Members will not tolerate Scotland being used as a dumping ground for the nuclear waste of England, Wales and Northern Ireland.
    Lord James Douglas-Hamilton: I should like to set the facts straight. Sellafield is to be investigated by British Nuclear Fuels plc as part of the Nirex programme. It has been made clear that no decision has been taken on sites for investigation other than Sellafield. That is the present position.
    Mr. Kennedy: I echo the plea of the right hon. Member for Kincardine and Deeside (Mr. Buchanan-Smith) for informed public debate. Will the Minister instruct his officials, when they attend the 14 December seminar, to echo to Nirex the plea for informed debate? That would involve making maps available to hon. Members representing constituencies such as mine. We believe that drilling has taken place on the isles of Raasay and Rona. Like the Isle of Skye, neither island appears on the map of Britain that Nirex published in the report.
    Lord James Douglas-Hamilton: I shall refer the hon. Gentleman's point to Nirex.
    Mr. Harris: Does my hon. Friend agree that those of us who were in the House in the early hours of the morning and who listened to a debate on this subject, prompted by the Welsh nationalists, now realise the sheer hypocrisy of the nationalist parties in Wales and Scotland? Today the Scottish nationalists say that Scotland is the prime target for a nuclear dump, whereas last night the Welsh nationalists said that Anglesey was the prime target for a nuclear dump. We completely reject this scaremongering by the nationalist parties in Scotland and Wales.
    Lord James Douglas-Hamilton: I thank my hon. Friend for making that point. I am sure that there is potential opposition to any proposed investigation of a site. Nirex seeks public comment on its approach to site selection and will publish a report on comments received.
    Mr. Dewar: I wish to reinforce the plea for an assurance that there will be no question of slipping through vital decisions about sites without full consultation and discussion in the localities concerned. Does the Minister accept that there is a strong case against dumping intermediate waste in the way suggested in the Nirex report? Does he agree that the identification of possible sites can lead only to uncertainty and understandable fears? Is not a more sensible management strategy on-site storage in stable conditions, which can allow constant monitoring?
    Lord James Douglas-Hamilton: Our experts and international experts strongly believe that on safety grounds it is much wiser to store intermediate and low-level waste in this way. I can give the hon. Gentleman an assurance about there being the fullest possible public information and consultation on this subject.

    European Regional Development Fund
    Mr. Knox: To ask the Secretary of State for Scotland what is the total value of grants Scotland has received from the European regional development fund in each of the past three years.
    Mr. Lang: Scotland has received grant commitment from the European regional development fund of £103 million in 1984, £69 million in 1985, and £84 million in 1986.
    Mr. Knox: Does my hon. Friend think that those grants have been sufficiently well publicised? If not, what steps is he taking to ensure that their size, scale and nature are properly publicised in Scotland and that the benefits that accrue to Scotland are made known to the people?
    Mr. Lang: As my hon. Friend will know, it is always difficult to obtain publicity for good news. However, his question enables me to publicise the fact that, among national programmes of Community interest, in 1985 Glasgow received £68 million, and we hope that this year West Lothian will be successful with a bid of £27 million. We are also hoping to succeed with a bid for Strathclyde, as an integrated operation, that will be worth £300 million over the next five years.
    Mr. Steel: Is the Minister not well aware that areas of Scotland such as Galloway and the Borders do not qualify for assistance under the European regional development fund because they are not defined as assisted areas by the national Government? As the European Community is reconsidering the guidelines for that fund, with a view to opening it to rural development, irrespective of assisted area status, will the Minister assure us that the Scottish Office will support such a change?
    Mr. Lang: As the right hon. Gentleman will know, the arrival of Spain and Portugal in the Community has made pressure on funds that much greater. Therefore, we cannot be sure that we will receive as large a proportion in future as we have in the past. However, the Scottish Office will do its best to ensure that Scottish interests are well advanced within the Community.
    Sir Hector Monro: Is my hon. Friend aware that we welcome the tremendous help for the infrastructure of Scotland from that fund? Will he consider the issue of forest roads used in the extraction of timber, especially for those areas that do not have assisted area status? Will he discuss with other Departments and within the European Community the possibility of including that sort of development?
    Mr. Lang: I shall certainly consider that point. As my hon. Friend knows, any regional authority that approaches the Government for capital allocation in that context can rely on having the matter sympathetically considered.
    Mr. Buchan: Is the Minister aware that during the last year for which figures are available, 1986, we had a net loss in the Common Market of £1·7 billion—the equivalent of about 20 days of the regional fund? Would it not be better if that £1 billion were spent on development in Britain, rather it being poured into the food mountains of Europe?
    Mr. Lang: That is a perfectly worthwhile negotiating stance. However, it would be wrong to analyse each individual fund and try to ensure that this country made a profit from each and all of them. That is not what the Common Market is about.

    Secondary School Pupils
    Mr. Allan Stewart: To ask the Secretary of State for Scotland what estimates he has made of the number of pupils in secondary schools in Scotland for each of the next five years.
    Mr. Rifkind: The estimated numbers in each of the years 1988 to 1992 are 328,000; 313,000; 306,000; 305,000; and 308,000 respectively.
    Mr. Stewart: I am grateful to my right hon. and learned Friend for giving those figures, which I am sure he agrees point to the need for rationalisation of secondary schools in Scotland. No one suggests that rationalisation is ever easy, but is he aware of the concern of a number of my constituents who exercised their right under the parents' charter to send their children to Paisley grammar school, which is now targeted for closure, apparently precisely because it is popular with parents?
    Has my right hon. and learned Friend received a report from the Parliamentary Under-Secretary following his visit to that school? Does he agree that the wider implications of the threat to Paisley grammer school point to the need for opting out provisions to be included in the forthcoming Scottish Education Bill so that Scottish parents can have the same rights as English parents?
    Mr. Rifkind: Given the high degree of overcapacity in schools in the Strathclyde region, we all understand that it is appropriate for Strathclyde regional council to reduce the number of schools commensurate with the total school population. We hope that in pursuing that policy it will take into account the views of the parents and the academic achievements of individual schools. I have no doubt that if it does apply such criteria there will be a powerful case for the continuation of Paisley grammer school, which clearly meets that criteria in an impressive fashion.
    Dr. Reid: Does the right hon. and learned Gentleman agree that it is the height of hypocrisy that, when he is pursuing policies that force cuts in education in Scotland, his henchman turns up here to ask a question under the pretence of fighting for the preservation of school places?
    Mr. Rifkind: The hon. Gentleman should realise that the rationalisation of schools has little to do with the size of resources and everything to do with the size of pupil populations. In case he is not aware of the fact, Strathclyde regional council estimated that, out of a total capacity of 590,000 pupil places, over 200,000 places were surplus to requirements in 1985. That will be true, irrespective of the level of resources. It would be absurd to suggest that there is not a need in Strathclyde, as in other regions throughout Scotland, to reduce overcapacity. The point at issue is not the need to close some schools but, in making that choice, whether the schools with a proven academic record of great achievement should be put on such a list.
    Mr. Michael J. Martin: The Minister will know that parents in my constituency are going through a worrying period. Some have children at primary and secondary schools that could be under the axe. Does he not consider that if his colleague the Minister is to go on television and single out one school, he should be evenhanded and look at every school in Strathclyde? Paisley grammar school is important to some hon. Members and to the parents in the region, but other schools are just as important.
    Mr. Rifkind: I have no doubt that all schools are important to the parents whose children attend them. That is why I have stated that I believe that the relevant criteria are parents' wishes and the proven achievements of the school in question. It seems sensible to take into account whether a particular school has a remarkable record of achievement with regard to the academic qualifications of those who attend it in determining whether it would be sensible to close such an establishment at such a time.
    Mr. Nicholas Bennett: As the money that is spent on surplus places could be better spent on children in schools, will my right hon. and learned Friend say how much is presently being wasted on empty places?
    Mr. Rifkind: I cannot give a precise figure, but it goes without saying that if only about two thirds of the accommodation presently available for schoolchildren in Strathclyde is utilised, enormous savings are clearly available to the regional council to be used on the education of children in a way that is more useful to them than the heating of half-empty buildings or the maintenance of unused buildings.
    Mr. Norman Hogg: Will the Secretary of State give an assurance that he will prevail upon the Under-Secretary of State, the hon. Member for Stirling (Mr. Forsyth), to desist from meddling in matters that are not his direct responsibility? Does he agree that the Under-Secretary's visit to Our Lady and St. Francis' high school in Glasgow was mischievous and that his visit to Paisley grammar school was calculated to make life difficult for the education authority which is seeking to fulfil its statutory requirements? Such irresponsible actions serve only to use and abuse parents who are genuinely concerned for their children's future education.
    Mr. Rifkind: My hon. Friend was perfectly entitled to respond to parents' invitations to visit the school and to see it for himself. Given that the Scottish Office provides the resources that are used, which cover a substantial proportion of the costs of maintaining such schools, it is absolutely appropriate that my hon. Friend should have visited them. I cannot help but notice the hon. Gentleman's embarrassment at the fact that the high quality of certain schools is brought to the forefront of public attention.
    Mrs. Fyfe: On a point of order, Mr. Speaker.
    Mr. Speaker: Order. I cannot take a point of order now. The hon. Lady may wish to raise the matter on the Adjournment.
    Mr. Buchan: On a point of order, Mr. Speaker. In view of that unsatisfactory reply I beg to give notice that I shall seek to raise this matter on the Adjournment.

    Schools Management
    Mr. Wallace: To ask the Secretary of State for Scotland what extra resources will be made available for the implementation of the schools management proposals.
    Mr. Michael Forsyth: My right hon. and learned Friend takes account of changes in local authorities statutory responsibilities in determining the provision for local authority current expenditure each year. I do not expect, however, that these proposals will give rise to significant additional costs.
    Mr. Wallace: The Minister is bound to be aware that COSLA estimates that it will cost at least £15 million a year to set up and administer the school boards that are envisaged under his proposals. Does he not agree that that would be an enormous and wasteful drain on scarce resources that could better be used in classrooms rather than on financing his ideological white elephant?
    Mr. Forsyth: I was interested to see the COSLA estimates, which started at £12 million and after a few days increased to £15 million. Those estimates were based upon an assumption that costs that will be incurred by local authorities in bringing new systems for financial control into effect will be part of this process. Even if we take the COSLA approach of "think of a number and double it", relative to the total education budget that is broadly equivalent to an extra two or at most three pupils at an average secondary school.
    Mr. Galbraith: I have asked the Under-Secretary of State three questions on schools boards, none of which he has answered satisfactorily. In particular, he will never say how much support exists for the ceiling proposals. Will he admit to the House that he will not answer me because there is no support for the ceiling proposals whatsoever, and in view of that will he remove them from the legislation?
    Mr. Forsyth: I say to the hon. Gentleman in the House that we have embarked upon the biggest consultation exercise ever undertaken by a Government Department. We have had a marvellous response, which we are now analysing. Most people have been sufficiently thoughtful in their response as to preclude us from being able to carry out the kind of crude for and against analysis for which the hon. Gentleman asks.
    Mr. Douglas: That is the height of deceit.
    Mr. Speaker: Order. I heard "deceit". I do not know who said it, but it is not a parliamentary word. Withdraw, please.
    Mr. Douglas: In view of your stricture, Mr. Speaker, I withdraw, but the information concerned—
    Mr. Speaker: I thank the hon. Member.
    Mr. Bill Walker: Will my hon. Friend, when he is considering resources for school boards, bear in mind that some of us support the ceiling proposals, myself included? Will he also bear in mind that many of the comments made about parents being unsuitable and untrained to take part in school boards could just as easily be made about unsuitable or untrained councillors or Members of Parliament? That is the kind of nonsense that we have been getting from the Opposition Benches.
    Mr. Forsyth: I am grateful for my hon. Friend's support. I assure him that while there are differences of view about the extent to which the ceiling powers should be available to school boards, it is important to remember that the proposals in the consultation paper made it clear that school boards could get ceiling powers only if they are requested and are able to persuade the local authority to give the powers to them.
    Mr. Maxton: No.
    Mr. Forsyth: The hon. Gentleman says "No". There was provision for the Secretary of State to have a general power to raise from floor to ceiling, and we have made it

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    clear throughout the consultations that we envisage using that in the circumstances where many schools had opted for ceilings.

    Housing Associations (Rents)
    Mr. Worthington: To ask the Secretary of State for Scotland if he will estimate the increase in rents for housing association dwellings arising from immediate enactment of the proposals in the Scottish housing White Paper.
    Lord James Douglas-Hamilton: Our White Paper proposals would make tenancy arrangements more flexible for new lettings and enable housing associations to set appropriate levels of rent, depending on the funding arrangements agreed. Our proposals envisage that subsidy arrangements for new developments would be geared to rent levels which average working households in a particular area could pay.
    Mr. Worthington: That reply is at some distance from frankness. In my constituency the rents on a rehabilitated, typical 16-unit tenement, at the 30 per cent. housing action grant level, would go up by 225 per cent., and at the 70 per cent. housing action grant level would go up by over 100 per cent. Is the Minister aware that that is typical of the rent increase that will occur in the west of Scotland? Does the Minister agree with that statement?
    Lord James Douglas-Hamilton: No, Sir. What I would say is that there are some housing associations where private sector funding is, not likely; for example, certain kinds of housing for disabled associations and special interest groups. It is tremendously important that traditional clients should continue to be catered for. I envisage that 100 per cent. public funding could come from a combination of housing association grants and loans, but we envisage the private sector coming in in other circumstances.
    Mr. Forth: What can my hon. Friend tell the House about the historic level of rents in Scotland, compared to that in England, bearing in mind that the average income in Scotland is now the second highest in the United Kingdom, second only to London?
    Lord James Douglas-Hamilton: Average rent levels in Scotland are lower than those in England; there is no question about that.
    Mr. Home Robertson: Since housing association rents are already 30 per cent. higher than council rents in Scotland, what possible justification can there be for a formula which is likely to double the rents of housing association tenants in Scotland? Since housing benefit will not protect all the tenants who are the hardest hit by the new mechanism, is it not yet another example of ministerial weasel words for such a mechanism to be described as affordable rents?
    Lord James Douglas-Hamilton: It most certainly is Government policy that rents should be affordable and within the reach of tenants. I reject the figures that the hon. Gentleman gave. I cannot speculate about the rent levels for individual lettings, but under the new arrangements rents will relate to the cost of providing and maintaining property, taking account of the assistance available. Housing associations will continue to meet the needs of their traditional clients.

    Further Education (Funding)
    Mrs. Margaret Ewing: To ask the Secretary of State for Scotland when he next expects to meet representatives of regional authorities to discuss the funding of further education.
    Mr. Michael Forsyth: My right hon. and learned Friend meets representatives of the Convention of Scottish Local Authorities regularly to discuss local authority expenditure. The most recent meeting was on 4 December, when the rate support grant settlement for 1988–89 was discussed.
    Mrs. Ewing: Will the Minister advise the House whether he intends to meet representatives from Grampian regional council in view of the urgent need to assure that area of Scotland that there is a long-term future for the college of commerce, which was recently closed because of structural problems? Does he accept that the 8,000 students, most of whom are represented by hon. Members from the Grampian region, want to be assured that there is a long-term future for them? Will he advise us whether he is considering a special grant to ensure that the college of commerce is rebuilt speedily?
    Mr. Forsyth: The question of the Aberdeen college of commerce is a matter for the Grampian region. Students are able to continue to attend their classes in different locations, and for those students who are taking advanced courses I have ensured that grants continue to be paid from the Scottish Education Department. It is for local authorities to determine their own priorities within the capital programme. [Interruption] If the hon. Gentleman will be patient, my right hon. and learned Friend will take account of the special problems that have occurred in the Grampian region when deciding upon allocations. It is not possible at this stage to anticipate them.

    Unemployment and Health
    Dr. Moonie: To ask the Secretary of State for Scotland if he will commission a study on the effects of long-term unemployment on health in Scotland.
    Mr. Michael Forsyth: My right hon. and learned Friend has no plans to do so. To date, research has not identified any clear relationship between long-term unemployment and health.
    Dr. Moonie: I am amazed at the Minister's response, considering that a report published by the DHSS in 1981 on unemployment and families cited no fewer than 47 references which underline the relationship between longterm unemployment and poverty. Perhaps ex-Tory Members of Parliament in Scotland would be a suitable case study.
    Mr. Forsyth: I am surprised that the hon. Gentleman does not read the British Medical Journal. If he did, he would know that in January and April there were a couple of articles about the research commissioned by the Medical Research Council on that matter. None of that research provided evidence to support his theory. Experts agree that people can help themselves and their families to stay healthy by making simple changes to their life styles. [HON. MEMBERS: "Like getting a job."] A healthy life style does not depend on a high income. I am disappointed that Opposition Members seem to think that the matter of health in Scotland is so amusing.

    Earnings
    Mr. Irvine: To ask the Secretary of State for Scotland what recent figures he has available for average weekly earnings in Scotland; and if he will make a statement.
    Mr. Rifkind: The average gross weekly earnings of full-time employees on adult rates in Scotland in April 1987 were estimated at £187·90. Only those in the south-east and the north-west of England had higher gross earnings.
    Mr. Irvine: Will my right hon. and learned Friend confirm that those highly satisfactory figures reflect the success of the Scottish economy in moving away from the excessive reliance on the declining industries of past years towards the industries and services of the future?
    Mr. Rifkind: My hon. Friend is quite correct. It never ceases to amaze me how Opposition Members cannot decide whether to be upset or disbelieving when such information is provided for them.
    Mr. Tom Clarke: Will the Secretary of State accept that the low wages that contribute to the average are reprehensible, whether they are paid in Ipswich or Inverness? Will he also accept that there is an individual Scottish life style—including the need to accept climatic conditions—which means that, for example, it costs 20 per cent. more to heat the average house in Glasgow than it does in Ipswich? When will the Secretary of State bat for Scotland?
    Mr. Rifkind: Of course, with regard to low wages, everyone looks forward to the day when wages and salaries can continue to increase to improve the real standard of living of the population as a whole. I am sure the hon. Gentleman will be the first to appreciate that it would be counter-productive to the interests of the unemployed to insist on wage levels that meant that they could not be employed in the first place.

    State Security
    Mr. Dalyell: To ask the Secretary of State for Scotland if the Lord Advocate will now authorise Strathclyde police and the procurator fiscal of Glasgow to return to BBC Scotland all tapes, recordings, documents and other material seized from BBC Scotland on Sunday 15 February in relation to the Zircon programme; and if he will make a statement.
    Lord James Douglas-Hamilton: No material relating to the programme concerning project Zircon was removed by Strathclyde police from the premises of BBC Scotland, Glasgow, on Sunday 15 February.
    Mr. Dalyell: What, then, were the supposed reasonable grounds for suspicion that allowed the Special Branch to go into Queen Margaret drive and eject from their beds, at 3 am, senior executives of the BBC? What is the explanation for that now?
    Lord James Douglas-Hamilton: The hon. Gentleman must be quite clear that I have to answer on behalf of the Lord Advocate and ensure that the law is properly carried out, enforced and that the correct procedures are involved. I believe that the hon. Gentleman's question goes beyond my sphere of responsibility—[HON. MEMBERS: "Oh!"]—and I believe that it goes to the root of intelligence matters that are the responsibility of others.
    Mr. Galloway: Mr. Brian Barr, the programme maker of distinction who made the Zircon programme, is one of my constituents. For nearly one year he has had a cloud of suspicion hanging over him that he might have been party to undermining the security of our country. He has been harassed by unwilling and embarrassed policemen acting on Government instructions. Legal edicts flew across the Atlantic to harass his colleague, Duncan Campbell, as far away as San Francisco—
    Mr. Oppenheim: What is the question?
    Mr. Galloway: The question is, will the Minister have the grace to apologise to Brian Barr, Duncan Campbell and their colleagues for the besmirching of their reputations that this investigation has caused? Now that the Prime Minister—[Interruption.] Now, Mr. Speaker, that the Prime Minister—
    Mr. Speaker: Order. I am not answering this question. It is for the Front Bench to answer.
    Mr. Galloway: Now that Mrs. Thatcher — [HON. MEMBERS: "Oh."]
    Mr. Speaker: Order. The Prime Minister.
    Mr. Galloway: Will the Minister accept that we need a bit of glasnost in this country in relation to official secrecy and do something about that soon?
    Lord James Douglas-Hamilton: I should make it clear that on 27 November the Lord Advocate announced that, having considered a number of reports from the procurator fiscal in Glasgow, he had instructed —following consultation with the Attorney-General and having regard in particular to public interest— that no criminal proceedings would be instituted in Scotland—[Interruption]
    Mr. Speaker: Order.
    Lord James Douglas-Hamilton: I believe that that is the information that the hon. Gentleman asks me to confirm this afternoon. I do not consider that any action taken by the Law Officers or the police in this connection has had the effect suggested by the hon. Gentleman.
    Mr. John M. Taylor: Does my hon. Friend agree that if security is compromised most people in this country would say that no one is above the law, not even the BBC?
    Lord James Douglas-Hamilton: It is obviously the duty of the Lord Advocate to see that the law is properly enforced as it now stands.
    Mr. Home Robertson: Have the Government learnt any lessons from this rather squalid episode? As the Minister either cannot or will not respond to the question put by my hon. Friend the Member for Linlithgow (Mr. Dalyell), will he tell the House which Minister is responsible for this aspect of policy and who will answer the fair question put by my hon. Friend?
    Lord James Douglas-Hamilton: This matter has been fully debated and the Lord Advocate is satisfied that the proper procedure for obtaining the search warrant was followed, and that the involvement of the procurator fiscal and the sheriff was in accordance with the established law of Scotland.
    Mr. Dalyell: On a point of order, Mr. Speaker. In view of the totally unsatisfactory nature of that reply, I give notice that I shall seek to raise this matter on the Adjournment at the earliest opportunity.

    Foreshore Pollution
    Mr. Ron Brown: To ask the Secretary of State for Scotland if he has received representations from Edinburgh district council about his policy towards controlling pollution of the foreshore; and if he will make a statement.
    Lord James Douglas-Hamilton: My right hon. and learned Friend has received no such representations from the council.
    Mr. Brown: Although I recognise that the capitalist system stinks, why does the pong linger along Granton foreshore, an area which the Minister knows well? Is it the fault of the Lothian chemical works, or does the responsibility lie elsewhere? I remind the Minister that it is a serious matter and not to be sniffed at. We want an answer quickly.
    Lord James Douglas-Hamilton: The prime responsibility lies with the Forth river purification board and the district council. The industrial pollution inspectorate is undertaking monitoring as part of its enforcement role. Measurements have been made around the Lothian chemical company and the results were satisfactory, but, obviously, a close watch is being kept on these matters.

    Regional Aid
    Mr. McLeish: To ask the Secretary of State for Scotland if he will make a statement on current regional aid to industry in Scotland.
    Mr. Lang: The net provision for regional assistance by the Scottish Office in 1987–88 is £120 million.
    Mr. McLeish: A recent opinion poll in Scotland suggested that 70 per cent. of Scots do not believe that the Government care, especially about jobs in industry. Does the Minister acknowledge that there has been a dramatic cut in regional development grant over the last few years from a peak of £339 million in 1982–83? Is he also aware of the chronic problems facing some sectors of the Scottish economy and some areas because of the need to restructure their industrial base over the next two or three years? Will he take seriously the problems of industry in Scotland, have discussions with Lord Young of Graffham, the Secretary of State for Trade and Industry, and come up with an effective regional policy that will start to reduce in number the 330,000 Scots who still languish on the dole queues eight years after the Government were elected?
    Mr. Lang: I hope that the hon. Gentleman welcomes the dramatic success of the Government's economic policy in reducing unemployment in Scotland by some 55,000 this year. So far as regional assistance is concerned, this party needs no lessons from the Labour party, which slashed the regional assistance budget for Scotland in one year by 46 per cent. when it abolished the regional employment premium.
    Mr. Millan: Will the Minister confirm that it is part of regional policy to attract the head offices of major corporations to Scotland and to maintain in Scotland the
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    head offices of major corporations that are already there? In view of the Government fiasco over Guinness and Distillers, may we have an assurance that the same thing will not happen over Britoil? Is he aware that just a year ago the chief executive of Britoil told Glasgow Members that the company would not welcome a takeover, that it wanted the protection of the so-called golden share for at least five years, and that it was committed to staying in Glasgow? If the BP takeover succeeds, all that will be prejudiced. May we have an assurance that the Government, who can stop this takeover, will stop it?
    Mr. Lang: I was not aware that BP had made a takeover bid for Britoil. It is desirable for company headquarters to remain in Scotland. Sadly, the nationalisation of many fine old Scottish companies took the headquarters of those companies forth of Scotland to the south of England. However, we are now developing the enterprise culture, as a result of which the number of companies in Scotland is expanding rapidly, and those companies will have large headquarters in Scotland in the future.
    Mr. Oppenheim: Is my hon. Friend aware that, despite the fact that the standards of living of the Scots are far higher than those of people living in the east midlands, taxpayers in the east midlands, including my constituents, have to pay a huge subsidy to the Scots in the form of regional aid, which is not available to my constituents? Is it not time that Opposition Members stopped whingeing and wrote letters of thanks to my constituents, who are subsidising them?
    Mr. Lang: It is certainly the case that the share of regional assistance going to Scotland has risen from 21 per cent. in 1979 to 31 per cent. of the total, but that reflects the special Scottish circumstances that have made it necessary. We are concerned to achieve value for money for United Kingdom taxpayers—and there, I am sure, I am at one with my hon. Friend.
    Mr. Lambie: When will the Minister carry out an investigation into abuses of regional aid in view of the correspondence that I recently sent him on two firms in the Cunninghame district?
    Mr. Lang: As the hon. Gentleman knows, that is a matter that is being closely considered at the moment. I hope to be able to write to him about it shortly.

    School Boards
    Mr. Galbraith: To ask the Secretary of State for Scotland how many officials in his Department are currently engaged in assessing the merits of the response to his consultative document on school boards; and if he will make a statement.
    Mr. Michael Forsyth: It is for Ministers to make judgments about the merits of the arguments put to them.
    Mr. Galbraith: Once again the Under-Secretary of State avoids the question. Will he say what criteria he uses to assess these responses and when he is likely to tell us the result? Will he once again confirm that in the responses there is no support whatever for the ceiling proposals and that these will be left out of the later legislation?
    Mr. Forsyth: I can do better than that. I can direct the hon. Gentleman and anyone else who is interested to the

    437
    House of Commons Library or to St. Andrew's House, where I have arranged for copies of all the submissions, other than those marked "confidential", to be available. There is no secret, and I think that the hon. Gentleman will find, after he has spent some days examining these responses, how impossible it is for us to make the kind of crude analysis that he requests.
    Mrs. Margaret Ewing: On a point of order, Mr Speaker.
    Mr. Speaker: No. I will take points of order after the statement.

Public Expenditure (Scotland)
3.31 pm
The Secretary of State for Scotland (Mr. Malcolm Rifkind): With permission, Mr. Speaker, I will make a statement about the allocation of my public expenditure provision in the next three years.
I plan to raise net expenditure on the services for which I am responsible to £8,505 million in 1988–89. This is some 6·9 per cent. more than planned expenditure for the current year, and nearly 5 per cent. more than was planned for 1988–89 in the last public expenditure White Paper. In each of the following two years expenditure provision is to grow by over £100 million.
Within the total figures, the provision made for the services within the Scottish block has been enhanced in the normal way by the consequences of applying the territorial formula to changes agreed in the survey for comparable English programmes. An annotated table giving the allocations for each service is available in the Vote Office, and I am arranging for it to be published in the Official Report.
Provision for industry next year will be increased by £25 million, or over 10 per cent. compared with the plans published in January. Within this, £10 million will be allocated to the Scottish Development Agency and £5 million to the Highlands and Islands Development Board, which should allow increases in gross expenditure in real terms, and £7 million to direct grants to industry. I have also decided to increase the funds available for tourism in Scotland by £1 million.
My planned provision for housing continues to concentrate resources on capital investment in improving public sector housing rather than indiscriminate subsidies. It will also continue to deal with the backlog of payments of private sector improvement grants. The total planned resources for the Scottish Special Housing Association and the Housing Corporation in Scotland will be increased, allowing the SSHA to plan on the basis of some £55 million in total expenditure, and similarly £132 million for the HCIS, for projects including housing co-operatives. Further provision will be available later for suitable new urban regeneration housing projects. Extra provision is included for the establishment of Scottish Homes and its build-up in the later years. Subject to final decisions on the level of subsidies, the planned increase in resources for housing investment in 1988–89 will be about £30 million. This will be the third successive year in which investment has increased.
Expenditure on agriculture and fisheries will increase by £11 million, £16·5 million and £13·7 million over the three years of the survey period. In particular, provision is made to encourage developments under the agricultural development programme.
Planned spending on education will rise to £2,186 million next year, or 9 per cent. more than this year, reflecting the priority that I attach to this service. This will provide principally for current and capital expenditure by local authorities. I look to them to make the most effective possible use of this money in delivering the education service, especially the introduction of standard grade, for which central support will continue to be available.
I intend to increase spending on the health programme by about £130 million next year to £2,393 million, and by over £100 million in each of the following two years.
440
Within this increased provision, there will be over £1,660 million for hospitals and community health services next year, £85 million more than this year's level of funding. Health boards will also be able to retain the resources released through their economy and efficiency programmes, which should amount to over £20 million next year. This should enable them to meet pay and price inflation, develop in new directions for breast cancer screening and treating AIDS sufferers, and to improve their services in line with national policies and priorities.
Provision for family practitioner services is to be increased by almost £35 million to £475 million next year and to £540 million by 1990–91. This takes account of expected growth in public demand for these services, and of the proposals set out in the Government's White Paper "Promoting Better Health".
I am conscious of real pressures on social work resources from demography and new demands, so I have increased provision by just over 12 per cent.
My plans provide £680 million in 1988–89 — an increase of 9·5 per cent. over this year's provision—to meet the needs of law and order services. This should be sufficient for an increase over present police establishments and for the cost of the new working practices under the fresh start agreement, which have just been introduced in the prison service. Capital expenditure over the three years will be £154 million, which is intended to provide for a continuing programme of refurbishment of the prison estate, for new or improved court houses and the needs of police and fire services.
Planned provision for transport will he £12 million above that planned for 1987–88, which followed several years of high relative levels of provision. Provision for 1988–89 will, however, necessarily be £8 million below the level forecast in the last White Paper because of the need to transfer resources within the block to local authority current expenditure. Nevertheless, the resources available will enable investment in trunk roads to be maintained broadly at current levels, with important bypasses being given priority. A start will he made on the upgrading of the A74 in the later years, but my provision will still leave room for other worthwhile projects.
I have been able to increase provision for the other environmental services programme, which maintains essential public services and functions, mainly by local authorities. It includes an increase of £6 million for the urban programme, which is a prime means of directing Government funding into the regeneration of our inner cities. The development of industrial infrastructure in the new towns, which contributed to over 4,000 new jobs in 1986–87, will also be able to increase significantly.
Provision for expenditure on the arts within the Scotland programme will rise by just under 6 per cent. This should enable local authorities to respond constructively to the Miles report on museums in Scotland, and will support Scottish national institutions in making further improvements in their infrastructure. It will also allow planning of the second phase of the new Causewayside building for the National Library of Scotland to proceed.
The increase that we are entitled to under the formula for local authority current expenditure in 1988–89, is less than the extra cost of the generous rate support grant settlement that I announced to the House in July. This is because of the higher level of local authority spending in Scotland compared to England and Wales. I have therefore made up the balance from the rest of my block,

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so the amount available for local authority capital expenditure and central Government expenditure in 1988–89 is lower than it would otherwise have been. I have no plans for a similar transfer in the later years, in the hope that local authorities will control their current expenditure and thus avoid diverting resources from their capital programmes and other important services within the block.

1987–88

1988–89

1989–90

1990–91

1Cm56-II

1Cm56-II Provision

2Revised Provision

1Cm56-II Provision

2Revised Provision

Net

3Gross

Net

3Gross

Net

3Gross

Net

3Gross

Agriculture

186

187

187

200

200

190

210

210

210

210

Industry

257

295

241

266

297

250

260

290

260

290

Tourism

13

13

13

14

15

10

20

20

20

20

Transport

601

602

621

613

614

630

660

660

680

680

Housing

695

868

702

639

882

730

700

910

720

920

Other environmental services

610

684

633

693

773

650

710

790

740

820

Law, order and protective services

621

624

642

680

683

660

690

690

710

720

Education

1,956

1,961

2,041

2,186

2,190

2,090

2,230

2,230

2,290

2,290

Arts and libraries

82

82

84

87

87

90

90

90

100

100

Health and social work

2,605

2,658

2,714

2,829

2,837

2,830

2,950

2,950

3,070

3,080

Other public services

118

118

122

125

125

120

130

130

130

130

LA current expenditure not allocated to services

124

124

127

40

40

130

40

40

40

40

Nationalised Industries external financing

87

87

-20

134

134

-170

-70

-70

-190

-190

47,954

8,301

8,108

8,505

8,875

8,220

8,610

8,950

8,770

9,090

Note: Figures for 1989–90 and 1990–91 are rounded to the nearest £10 million.

1 White Paper (Cm56-II) figures adjusted for pre-Survey changes.

2 Figures reflect Survey changes and changes since the Autumn Statement. Some figures may be subject to detailed technical amendment.

3 Gross provision consists of total net provision plus capital receipts.

4 The figure differs from the net outturn figure of £8,220 million shown in the Chancellor's Autumn Statement for 1987–88; the main differences are continued spending by local authorities above the level provided for; NHS pay settlements; and higher than expected Electricity Board costs.

AGRICULTURE
The expenditure plans will permit development of the Government's agriculture and fishing policies, with particular regard to the environment and the rural economy.
INDUSTRY
Overall provision has been increased by £25m — 10·4% — in 1988–89 compared with last year's White Paper. Provision remains broadly constant over the forward years. The increased provision will allow increased spending by the SDA and HIDB both of which will have increased spending power, in real terms, in 1988–89 compared with 1987–88 and on direct grants to industry.
TOURISM
Total provision for 1988–89 has been increased by about 10% compared to the level in last year's plans and is planned to increase by about a further 20% over the forward years. The major part of tourism expenditure is undertaken by the Scottish Tourist Board which will be enabled to increase both its marketing effort and the grants it makes for tourist facilities.
TRANSPORT
Provision planned for (excluding grants to transport nationalised industries) will be £12m more than planned for 1987–88 albeit £8m less than planned provision for 1988–89 set out in last year's White Paper. This level of provision will enable investment in the trunk roads programme to be maintained at broadly current levels, with important bypasses given priority. Substantial increases have been made in provision for current expenditure by local authorities, although this constrained the amount available for capital
The allocation that I have announced today reflects the priority that I attach to the needs of the different services in Scotland in exercising my discretion within the Scottish block. The increases that I have announced demonstrate the Government's continued commitment to meeting Scotland's needs. We have been able to do this because of our successful management of the economy, which has allowed public expenditure to be increased substantially at the same time as its share of national income has been reduced.
Following is the information—
expenditure by local authorities. The Government remain committed to subsidising shipping services and civil aviation facilities in the Highlands and Islands. Provision for the later years has been increased over the levels provided for in Cm 56. A start will be made on the promised upgrading of the A74 in the later years, but the programme will still permit other worthwhile projects to proceed.
HOUSING
The increased provision for Housing is concentrated on capital investment which is planned to increase by £30m and deal with the backlog of private sector improvement grants; and provide the SSHA and Housing Corporation in Scotland with the resources for their mainstream and urban information work.
OTHER ENVIRONMENTAL SERVICES
The Other Environmental Services programme maintains essential public services (mainly by local authorities) concerned with health and safety, and environmental crimes. Increased provision has been made in the total programme including in particular £6 million for the Urban Programme to direct funding into the re-generation of inner cities; and £15 million extra capital provision to assist local authorities in implementation of the Community Charge in 1988–89 (in addition to extra current expenditure for this programme which the Secretary of State announced in July). The development of new industrial expenditure and jobs in the New Towns will also increase significantly. (Over 4,000 new jobs were created in the Scottish New Towns in 1986–87).
EDUCATION
Provision has been increased by £180·1 million or 9 per

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cent. Within this figure local authority provision has been increased by £164·1 million, including £90 million which is unallocated to particular services pending the review of staffing standards. Central support for education reforms has been maintained (Standard Grade) or established (£0·8 million for curricular development, assessment and management planning). Increased provision for higher education (£8·5 million) will significantly ease the running cost pressures on the centrally funded sector.
LAW, ORDER AND PROTECTIVE SERVICES
Plans for the prison service give full cover for the cost in staff and supplies of the expected inmate population; provide for the costs of keeping Low Moss Prison open until 1989 and for the cost of introducing new working arrangements for prison officers in accordance with the Fresh Start agreement. For the police, provision will meet fully the expected cost of the service with a modest annual increase in manpower and will maintain central support for the Scottish Crime Squad and its Drugs Wing and to the Scottish Criminal Records Office. There will be continuing support for crime prevention measures. The plans also allow for higher levels of demand for legal aid services and for increased running costs in the Courts. £154 million of capital spending is planned over the next three years, on new or improved court and prison buildings including the replacement of Peterhead Prison, and on the needs of the police and fire services.
ARTS AND LIBRARIES
Provision for local authority expenditure on Arts and Libraries has been increased by £6·1 million (or over 10 per cent.) compared with 1987–88. Central government provision reflects completion of phase 1 of the National Library of Scotland and planning for phase 2.
HEALTH
Expenditure on the National Health Service in Scotland will be increased by about £130 million next year, which is about 5·8 per cent. above this year's level of spending, and by over £100 million in each of the two following years. The provision for hospitals and community health services will be increased by £85 million, or 5·5 per cent., to over £1,660 million. Health Boards will also be able to retain the resources released through their efficiency programmes, which should amount to over £20 million next year. Plans for the Family Practitioner Services allow for expected increase in public demand and for the proposals for improving the services set out in the Government's White Paper "Promoting Better Health". Capital spending on the health service will total about £370 million over the next three years.
SOCIAL WORK
Total provision for Social Work is planned to rise by some £47 million primarily for local authority current and capital expenditure. The figures reflect the transfer of responsibility from the Secretary of State to local authorities for certain court disposals of children.
OTHER PUBLIC SERVICES
The expenditure covered by this programme is to provide for the administrative costs of the Scottish Office, including the Royal Commission on the Ancient and Historical Monuments of Scotland, and of three smaller Scottish departments: the General Register Office (Scotland), the Scottish Record Office and the Department of the Registers of Scotland.
Mr. Donald Dewar: I note that the right hon. and learned Gentleman's press department has been hard at work in anticipation of today's events. One result was an item in the latest issue of the Sunday Times, which talked of a significant boost to Scotland's share of Government spending and produced a most tempting list of goodies.
Does the Secretary of State accept that the final product that has been unveiled today does not live up to the
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advertisement, and that this kind of creative journalism does nothing for his credibility or for the standing of politics in Scotland?
The right hon. and learned Gentleman states that he intends to raise expenditure to £8,505 million. The House will be somewhat underwhelmed, as the Autumn Statement announced a figure of £8,510 million. The difference is no doubt accounted for by the fact that in the Autumn Statement we tend to even up the figures. The truth is that the figure is the same as was announced in the Autumn Statement. If we take that figure, allow for inflation and compare it with the expected outturn for 1987–88, one finds that there is a cut in real terms of between £80 million and £85 million, and not the increase that was so enthusiastically trailed by the Secretary of State.
It is a complicated set of figures, presented in a slightly different way this year. I should like to ask the Secretary of State about some of the specific totals. Is it not true that, on housing, taking the net figure for 1987–88 against the net provision for 1988–89 produces a cut in cash terms of £56 million and in real terms of £87 million? If we take the gross figure for 1987–88 and compare it with that for 1988–89, including the expected capital receipts from the sale of public sector housing, the cut still remains at £25 million in real terms. Is that not an abdication of responsibility, given the scale of the housing crisis in Scotland? The Secretary of State talks about the concentration of resources. Is that not a cruel euphemism for another significant cut in the already savaged housing budget?
Will the Secretary of State admit that, although he spent more than £300 million on industry last year, £206 million on regional aid, and just under £100 million on the Scottish Development Agency, he is planning to spend in net terms only £266 million next year and £260 million in the two years to follow? To put into perspective the rather extravagant claims that he has been making, is it not true that he spent in current terms just over £330 million as recently as 1985–86? Why does the Secretary of State boast so shamelessly of success in negotiating on Scotland's behalf in the Cabinet when he will spend less next year than he did in the current year? Will he give us a specific guarantee that Scotland will not be affected by any alterations in regional aid policy dreamed up by his noble Friend Lord Young?
I shall now deal with the health and social work budget. In net terms for 1987–88, the budget was £2,605 million. It is now rising in net terms for 1988–89 to £2,829 million. I concede that that is an increase in real terms of £107 million. Does the Secretary of State really think that that is adequate? Is there not an element of sleight of hand, as in the real terms increase of £107 million we have to accommodate the £130 million increase in cash terms in the health budget to which he referred and the 12 per cent. increase in the social work budget that he is also parading in his statement?
Whatever happens to the figures, does he not admit that they simply do not deal with the major problems facing the Health Service in Scotland and certainly will not face up to the problems referred to by the president of the Royal College of Physicians in Edinburgh? Professor Michael Oliver said that Ministers "won't or can't hear" and that it will take a "few deaths, a few scandals" to move them. Will that view not be confirmed by today's announcement?

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The figures seem to be totally inadequate and no amount of juggling with the totals can disguise the fact that this is a disappointing performance by the Secretary of State. I repeat that, if one takes the outturn figures given by the Government in the Autumn Statement for this year and the expected expenditure figures for the Scottish Office, the total budget for next year is cut in real terms by over £80 million and that cannot be good news by any standards.
The Secretary of State has made minor adjustments to individual spending totals within a budget that has declined overall in real terms. Much though he may try to make of it, I wish that he would pay more attention to the problems facing Scotland — the problems that will continue to trouble the people of Scotland—and less to the sort of political sleight of hand and packaging that has been a mark of the Secretary of State's performance in recent weeks.
Mr. Rifkind: I hope that the hon. Gentleman will forgive me saying that, if the worst that he can say about my statement today is that it was disappointing, that shows its worth in terms of the real benefits that it will bring the people of Scotland.
The hon. Gentleman confirmed that the amount referred to today was the same as in the Autumn Statement. Therefore, perhaps he should attach more importance to these matters than to speculative items in newspapers, which he seemed to assume to be holy writ.
The hon. Gentleman said that there was a reduction in the net amount available for housing. He will be aware that what matters to people in Scotland is how much is to be invested in the housing stock of local authorities, the Scottish Special Housing Association and the Housing Corporation. Whatever the hon. Gentleman says, he cannot avoid the fact that, as I said in my statement, £30 million more will be available for investment in the public sector housing stock in Scotland, which will be highly beneficial. [Interruption.] It is the gross figure that shows how much will be spent on the improvement of the housing stock and on building new sheltered or special needs housing, and that represents a substantial increase which will be available to the various recipients.
The hon. Gentleman will be content to know that the Scottish Development Agency will receive resources higher than it has received at any time in its history, enabling it to carry out more excellent work on urban regeneration.
On regional policy changes, I must ask the hon. Gentleman to keep his patience for a while. I can assure him that any policy developments in regional aid will have been come to in the full consideration of how we can best boost employment and economic development in the various regions of the United Kingdom.
I am grateful to the hon. Gentleman for conceding that my announcement today represents an increase in real terms in health expenditure. [Interruption.]That is exactly what the hon. Gentleman said. I listened to him, even if his hon. Friends did not. I am grateful to the hon. Gentleman for conceding that.
I must also point out to the hon. Gentleman, and, indeed, to others in Scotland who point to the continuing needs of the Health Service in Scotland, that their views will carry more weight if represented in a more balanced fashion. For example, if they pointed to the fact that since
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1979 new capital investment in the NHS in Scotland has resulted in the completion of 51 major new hospital developments, providing over 5,770 beds and some 481 day places, and to the fact that 32 major developments are now under construction or in planning, that would represent a balanced view of the situation affecting the Health Service in Scotland at present.
Sir Hector Monro: Does my right hon. and learned Friend agree that, with the excellent announcement last week on Ravenscraig, today's financial statement is more good news for Scotland? Is he aware that the continued high expenditure on trunk roads is most welcome, and will that include the Dumfries bypass? Finally, does he further agree that the 9 per cent. increase in education is excellent news towards increasing the quality of education and the facilities required to that end?
Mr. Rifkind: I am grateful to my hon. Friend. Yes, I can confirm that the proposed construction of the Dumfries bypass will be going ahead. I am also grateful to my hon. Friend for his remarks about the important extra help that we are giving to the development of education, particularly standard grade, in Scotland.
Mr. Archy Kirkwood: Does the Secretary of State accept that there is no real news in this statement? Of course, it adds flesh to the bones of the Autumn Statement, but it takes us no further. Does he accept that he led the House to expect that there would be advances beyond the Autumn Statement? Is there not a real need for a rural development agency within the SDA, or however erected, particularly having regard to the troubles of Scottish agriculture, since that will enable some stability and long-term planning in that sector?
On prison and hospital services, does the Secretary of State really think that the figures that he has announced this afternoon will adequately measure up to the real and acute problems that these important sectors face? Does he accept that there is the whiff of an underlying theme in the statement that the Government are moving directly away from the local authorities and the provision of services through the local authorities in Scotland? Surely, if that is the Government's policy, the right hon. and learned Gentleman should have the courage to say so openly and not in this underhand fashion.
Mr. Rifkind: I am surprised to hear the hon. Gentleman say that no further information has been provided that did not appear in the Autumn Statement. The global amount available to the Scottish Office was announced in the Autumn Statement and as in previous years this announcement deals with the distribution of that sum to the various functional responsibilities of the Department. Therefore, the hon. Gentleman now has the exact details that he requires. He knows how much will be available for health, housing, education and the various other aspects of Scottish expenditure. Had the hon. Gentleman been listening to the statement, he would be aware of that fact.
Rural development is a matter to which I attach very considerable importance. The Scottish Development Agency has a responsibility for the whole of Scotland, and I believe that the extra resources available to the agency will help it to carry out activities in rural areas. In addition, the extra resources being provided for the Scottish tourist board will be of particular importance in rural areas because tourism is clearly one major source of potential further employment and growth.

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I have indicated the resources that will be made available for prisons and hospitals. As the hon. Member for Glasgow, Garscadden (Mr. Dewar) conceded, the figures represent increases in real terms in both categories. I should have thought that the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) would have acknowledged that.
Mr. Alick Buchanan-Smith: Do not the opposition parties' questions show a total inability to recognise what is good news for Scotland? Conservative Members recognise the achievements of my right hon. and learned Friend the Secretary of State on behalf of Scotland, which will also be recognised in Scotland. Will my right hon. and learned Friend assure me that the improvement of the A94 Perth-to-Aberdeen road to dual carriageway standard will go ahead as planned?
Mr. Rifkind: Yes, I can confirm to my right hon. Friend that most of the trunk road developments currently envisaged will be going ahead because the overall resources for the trunk programme are being maintained. The particular projects and allocations will be announced in due course, but I would not expect any significant changes in the trunk road programme. I am grateful to my right hon. Friend for his earlier comments.
Mr. Bruce Millan: Why does not the Secretary of State answer the question of my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) about totals? The figures that my hon. Friend cited were absolutely accurate and were taken from the Government's own document. The outturn for the current year is expected to be £8,220 million. The figure announced for next year is £8,505 million—an increase of only 3·5 per cent. in cash terms, which is less than the rate of inflation. The figures announced in today's statement represent a cut in expenditure in real terms in the next year.
Mr. Rifkind: The right hon. Gentleman is incorrect. The figures that I announced represent an increase of 6·9 per cent. over planned expenditure for the current year and an increase of nearly 5 per cent. over what was planned for 1988–89 in the last public expenditure White Paper. I realise that Opposition Members are desperate to find grounds to criticise the statement, but they will find it very difficult.
Mr. Allan Stewart: I congratulate my right hon. and learned Friend, especially on his last reply, which confirmed that, while public expenditure is increasing in real terms it is falling as a proportion of gross domestic product — in Scotland as in the rest of the United Kingdom — as a result of the success of the Government's economic policy.
Can my right hon. and learned Friend say anything about new towns industrial infrastructure? I am not sure whether I missed that part of his statement. On trunk roads, I take it that I am correct in assuming that it goes without saying that major route improvements will go ahead in the trunk road programme, but can my right hon. and learned Friend say anything about the structural maintenance of trunk roads?
Mr. Rifkind: The development of the industrial infrastructure in the new towns can be increased significantly and the road maintenance programme can be maintained at a high level. There will be a reduction in the
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local authority capital programme on roads, but that will not affect the maintenance programme, particularly with regard to road safety matters.
Mr. Dick Douglas: Will the Secretary of State help the House by telling us whether he has resolved the dilemma in the Cabinet? If the enterprise culture is indeed coming to Scotland, should he not announce dramatic decreases in public expenditure? On the other hand, if, as we suspect, the enterprise culture is there, but needs dramatic subventions from the Treasury, these subventions, particularly those on urban aid, are inadequate. A £6 million increase in urban aid is wholly inadequate, not just to deal with the burdens of a central city, but to deal with areas such as the mining communities, which have been decimated for many years. We need a re-assessment of the amount and the criteria for urban aid, so that those areas come within its orbit.
Mr. Rifkind: The figures that I have announced do not represent some dramatic increase in expenditure purely for Scotland; this year we have had an announcement of increases in Government expenditure in the United Kingdom as a whole. The figures that I have announced today are figures to which Scotland is entitled on the basis of the formula which has been used for several years to determine appropriate levels of provision.
Mr. Bill Walker: Does my right hon. and learned Friend agree that the enterprise culture is found significantly in Scotland in areas of tourism? Does he agree that the Government recognise that, which is a reason why they have increased the funding to assist the pump-priming of tourism which will create many new jobs in rural areas? Can he confirm that the Scottish Office has spent about £670 million on trunk roads on major routes throughout Scotland since 1979? Will he confirm that the expenditure on education announced today will make it possible for the schemes that his hon. Friend the Minister is introducing to come to pass?
Mr. Rifkind: Yes, I can confirm those points. An additional £1 million is being made available for tourism, primarily for the Scottish tourist board, and I can confirm the substantial road infrastructure improvements, to which he referred.
Mr. Jimmy Hood: May I remind the Secretary of State that, during the general election campaign, he called a press conference and declared that part of his party's manifesto was to upgrade the A74 to M74 status? Today we hear that that has again been postponed for later years. I have 32 miles of this inadequate A74 running through my constituency. How many men, women and children will be slaughtered on this unsafe road before the Secretary of State carries out his manifesto commitment?
Mr. Rifkind: Obviously, the hon. Gentleman knows little about road construction. He should appreciate that one cannot simply start the construction of a new motorway within weeks of announcing one's intention to do so. The planning and design work is already in preparation and we intend to upgrade the A74 to motorway status in order to connect the motorway network of Scotland with that of England and Wales. The announcements that I have made today will enable us to continue to make good progress towards achieving that objective.
Mr. Alex Salmond: Does the Secretary of State accept that he is better at news management than at winning budget increases for Scotland? It has already been pointed out that the totals announced today are exactly the same as those in the Autumn Statement. We are only hearing about a rejigging of the programmes within that.
If we examine the details of provision for 1990–91, the picture becomes even worse. In 1990–91, £8,770 million will be provided, but at 1986–87 prices that is £7,550 million and compares with £7,577 million in 1979–80. Can the Secretary of State explain how, with a succession of apparent triumphs in Cabinet, Scottish public expenditure will be less in real terms in 1990–91 than it was in 1979–80?
Mr. Rifkind: I am somewhat amused and disconcerted by the great surprise among Opposition Members that the grand total of the announcements that I have made today is exactly the same as the grand total contained in the Autumn Statement a couple of months ago. As the purpose of today's statement is to announce how that money is to be distributed, it should have come as no great surprise. In each of the years during which the Government have been in office, expenditure in Scotland has remained at the same proportion of comparable expenditure in England. The fluctuation from year to year has been very small.
Mr. Eric Forth: My right hon. and learned Friend is to be congratulated on continuing, in his usual excellent way, the privileged position of the Scots in the United Kingdom. Will he confirm that public expenditure per capita in Scotland is still 20 per cent. or more above that in England? Will he confirm that public expenditure as a percentage of gross national product is 48 per cent. in Scotland as opposed to 41 per cent. nationally? Does he believe that, in future, the Conservative party will obtain a response and gratitude from Scottish people as it has in the past?
Mr. Rifkind: My hon. Friend is correct to highlight public expenditure. He will be aware that, not just as between Scotland and England but within Scotland and within England, we must vary expenditure according to need. Just as public expenditure varies in different parts of England, so it does in parts of Scotland. It is not always entirely helpful to use all-Scottish and all-English figures other than as a method of statistical presentation.
Mr. Alistair Darling: The Secretary of State will appreciate that the distribution of funds is important. May I test his good news? Will he assure the House that the health authorities that have been required to cut expenditure this year will have those cuts restored in the next financial year? Although Lothian health board has £18 million-worth of capital expenditure this year, will the Secretary of State assure the House that the board will receive additional funds to rebuild the Royal infirmary so that it need not rely on Victorian endowments simply to patch and mend?
Mr. Rifkind: As the hon. Member for Garscadden conceded, I have announced today real increases in the provision for the Health Service in Scotland. The provision of individual health boards will be determined in due course and I cannot comment now on the amount that will be available to Lothian health board.
Mr. Nicholas Budgen: On a point of order, Mr. Speaker.
Mr. Speaker: Not during questions on a statement.
Mr. David Harris: Will my right hon. and learned Friend continue to reject the whining, whingeing and synthetic indignation from the Opposition to which we have become accustomed? Does he accept that many hon. Members who represent English constituencies —mine is in the far south-west—have gained the distinct impression that Scotland is almost being force-fed with public expenditure? In support of that, may I point out that we do not even have a development agency, whereas the budget of the Scottish Development Agency has just been increased by 10 per cent? Despite what Opposition Members say, expenditure on tourism is expected to increase by more than 20 per cent. in Scotland. May we have similar treatment for England?
Mr. Rifkind: Similar industrial and environmental work to that of the SDA is carried out in the areas of England, albeit in different ways. Although there is no development agency for England, the work of industrial assistance and environmental improvement is carried out by organisations such as English Estates. The main advantage of having an SDA is not the amount of resources that it attracts, but the opportunity that it provides to co-ordinate the responsibilities of several Departments, which in Scotland are all the responsibility of the Scottish Office.
Mr. David Lambie: Now that the Secretary of State is providing money to upgrade the A74—which I welcome, since it is the main road from Scotland to England—is it not time that he considered other roads, including the main A737 through the Garnock valley connecting Irvine new town and Hunterston with the main motorway system in the Glasgow area? The construction by the Finnish company, Caledonian Paper, of a new pulp paper mill will cause a tremendous increase in traffic. The Clyde port authority has published new plans for further development at Hunterston. Is it not time for the Secretary of State to stop blaming Strathclyde regional council, and instead give it the money to upgrade this road, which will be necessary in the development of all of north Ayrshire?
Mr. Rifkind: I thank the hon. Gentleman for welcoming our proposals for the A74. Strathclyde regional council must determine its priorities for non-trunk roads.
Mr. Tony Marlow: May I be the first to represent the interests of the taxpayer in discussion of this boondoggle? Will my right hon. and learned Friend tell the House why this slush fund has been welcomed with so little gratitude by the recipients on the Benches opposite? Can he tell the House why, when we have a Conservative Government, those who are most Socialist receive the most public money? Will he also tell my constituents how much subsidy, on average, they pay per capita to each constituent represented by hon. Members opposite?
Mr. Rifkind: My hon. Friend will appreciate that the response of the Opposition is almost exactly the same as the response to the statements of my right hon. Friend the Secretary of State for the Environment and others who represent Departments involved in such matters. The

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expenditure is not paid for solely by my hon. Friend's constituents: it is paid for by taxpayers throughout the United Kingdom, including my constituents.
Mr. Michael J. Martin: The Minister mentioned urban renewal. A project in my constituency — the conversion of Spiers wharf warehouses into houses—has the support of Strathclyde region, Glasgow district and the SDA. Those houses are on the bank of the Forth and Clyde canal. It appears that the British Waterways Board is receiving no support from the Department of the Environment in cleaning that canal. Since the project depends on the renewal of the 12 miles of canal from my constituency to Kirkintilloch, will the Secretary of State meet his opposite number in the Department of the Environment to see what can be done to improve matters?
Mr. Rifkind: The most appropriate action that the hon. Gentleman could take would be to raise those matters directly with the relevant Minister at the Department of the Environment. If it has responsibility for such matters, that would be the sensible way of pursuing his constituency interest.
Mr. Neil Hamilton: I was surprised to hear my right hon. and learned Friend say that the point made by my hon. Friend the Member for Mid-Worcestershire (Mr. Forth) was unhelpful. In my experience, my hon. Friend is one of the most helpful Members of the House, and I thought that he made a good point on behalf of the taxpayers of England.
Will my right hon. and learned Friend confirm that, in 1986–87, public spending per head in England was £1,968 and public spending per head in Scotland was nearly one third greater, at £2,519? Will his statement today improve that disparity? Will public spending per head in Scotland be brought down towards the level in England? Does not this annual rattling of the begging bowl in Scotland tend to give the Scots a sense of inferiority?
Mr. Rifkind: My hon. Friend will be the first to appreciate that expenditure should take into account need. That factor has long been recognised as justifying different expenditure in different areas of the United Kingdom. Many parts of England receive higher expenditure than do parts of the south-east. Conservative Governments have always attached great importance to such matters, because it is crucial to ensure that our provision takes into account the requirements of an area. I believe it to be entirely justified.
Mr. Norman Buchan: The right hon. and learned Gentleman seems to drift from net to gross, and from gross to net, according to which matters he is dealing with. Will he turn his attention to what he said were the preferable figures — the gross figures? When one looks at them, one sees an immediate collapse in direct spending on industry in Scotland. Is that not disgraceful, given the level of unemployment that we have?
Mr. Rifkind: What I announced today was an extra £25 million for industry in Scotland. If the hon. Gentleman does not see that as an improvement, it is difficult to know what would impress him.
Mr. Harry Ewing: In view of the insults thrown at the people of Scotland by the hon. Member for St. Ives (Mr. Harris), will the Secretary of State advise the Scottish tourist board to spend some of the additional
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money that it has—the £1 million—on telling the people of Scotland not to go to St. Ives for their holidays? The hon. Gentleman's constituency could not survive without the thousands of Scots like myself who spend their holidays there. Does the Secretary of State agree that the hon. Gentleman's constituents who run hotels and boarding houses will not be happy tomorrow when they read what the hon. Gentleman has said about the holidaymakers who go to St. Ives?
Mr. Rifkind: I look forward to many thousands of Scots continuing to visit St. Ives, and I also look forward to many residents of St. Ives continuing to visit Falkirk.
Mrs. Maria Fyfe: Does the Secretary of State accept that the answers that he gave to his four hon. Friends — the foolish foursome —about public spending in Scotland were too difficult for them to understand because there were too many big words? Perhaps he should give a clearer explanation in a writ ten answer. The reason why there is more public expenditure in Scotland is that there is more unmet need and higher unemployment than in the south. One has only to look at the constituencies with the highest unemployment and the lowest pay to see that. Conservative Members should look at the figures. The Secretary of State has an educational job to carry out. Conservative Members should think about that and not spend their time tiresomely insulting Scotland.
Mr. Rifkind: The hon. Lady might appreciate that there might be less irritation, perhaps misunderstanding, about the requirements of her constituents, if occasionally she was willing to recognise that, far from her constituents being deprived as a consequence of the Government's decisions, they have benefited from a recognition of the differential levels of need.
The hon. Lady should realise that the constant refusal to acknowledge that her constituents receive differential levels of expenditure, and that that has continued under the Government, means that perhaps she has herself and her colleagues to blame, when there is evidence of such frustration among hon. Members from other constituencies. I must say to the hon. Lady that it is not lust hon. Members from constituencies south of the border, but hon. Members with constituencies elsewhere in Scotland, who sometimes feel concerned at what they see as the differential levels of expenditure in constituencies such as that represented by the hon. Lady. If there is a refusal to recognise support when it is being provided, that may be part of the explanation for the concern.
Mr. John McAllion: The Secretary of State has shown today that he is incapable of distinguishing between levels of planned expenditure and outturn expenditure in terms of public expenditure in Scotland. However, I hope that he is capable of recognising that, in Tayside, the efforts to provide proper community care services have been hamstrung by the inability of Tayside health board or Tayside regional council to find sufficient resources from within their present budgets, which are under the continual pressure of cuts. Is the right hon. and learned Gentleman satisfied that the level of spending on health and social services that he announced today will be sufficient to enable both those bodies to provide the funding that they are seeking? If he receives future representations from those two bodies for extra funding, will he grant those extra funds?
Mr. Rifkind: The hon. Gentleman knows perfectly well that in most years — virtually every year — outturn expenditure tends to be higher than planned expenditure. Therefore, if one is trying to make any attempt at a valid comparison between Governments proposals this year and proposals in previous years, it makes sense to compare planned provision with a planned provision announcement at a comparable time in a previous year.
Mr. Henry McLeish: Will the Secretary of State reflect—[Hon. Members: "Reading."]
Mr. Speaker: Order. The hon. Gentleman is perfectly entitled to hold a note in his hand if he wishes, as long as he does not read it.
Mr. McLeish: The behaviour of certain Conservative Members is eloquent testimony as to why the Tories have done so badly in Scotland.
Will the right hon. and learned Gentleman talk about the real economy in Scotland, not the one that he would like us to believe exists? His statement on the industry increases is slightly misleading because our calculations suggest that there is a £2·6 million reduction in the budget. Indeed, if one takes the juggling of figures between the SDA and the HIDB in direct grant, it may well be that some parts of the industry budget are suffering to accommodate an increase in other parts.
The Secretary of State should also reflect on this. We hear about whingeing. What about the 320,000 Scots who are whingeing on the dole queue? What about the 100,000 Scots who are whingeing on Government special programmes? Will not the right hon. and learned Gentleman take seriously the fact that investment in industry, jobs and the economy in Scotland does not measure up to the problems that we face?
Finally, will the right hon. and learned Gentleman reflect on one other development, which the Secretary of State for Employment may or may not have told him about? We shall have an extra 40,000 places next year on the Government's new adult programme. Will the right hon. and learned Gentleman provide resources in the statement so that those concerned can embark on projects that are worth while and provide effective training—or is that to be a workfare scheme on the cheap?
Mr. Rifkind: With regard to unemployment, the hon. Gentleman should recognise that there is unemployment
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in Scotland, as there is elsewhere in the United Kingdom, but he might have referred to the fact that unemployment in Scotland has fallen by some 55,000 since January this year. If that decline in unemployment continues at that rate, we can look forward to unemployment ceasing to be the serious problem that it continues to be at present.
Mr. Sam Galbraith: Does the Secretary of State agree that when one looks at Health Service expenditure and applies the National Health Service prices and wages deflator, which is the correct deflator, one sees that the increase is under 1 per cent? One needs 1 per cent. to stand still, but we have an increase of under 1 per cent. As we are already budgeting for an increase in primary care, that means that there will be effective cuts in the hospital service. Where will those cuts be in the hospital service?
Mr. Rifkind: I do not concede for one moment that there is to be a cut in health expenditure in Scotland. I refer the hon. Gentleman to the views expressed by his hon. Friend the Member for Garscadden.
Mr. Tony Worthington: Does the Secretary of State agree, looking at the housing figures, that the capital allocation for next year remains below the level, in real terms, of the capital allocation for 1979–80? Does he further agree that the way in which the increase on last year's figures has been achieved in the capital allocation comes about by including the total cost of covenanting schemes within one year's allocation instead of, as is more appropriate, spreading it over the life of those covenanting schemes?
Mr. Rifkind: I remind the hon. Gentleman, if he is going back to 1978–79—[Interruption.] I can see why the hon. Gentleman does not want to go back to 1978. As he will recall, it was the previous Labour Government who were responsible for a massive cut in capital expenditure on housing in Scotland. That is a fact that we shall not let the hon. Gentleman and his hon. Friends forget. Capital expenditure on housing in Scotland has gone up over the past few years. Today I have announced further provision, which will mean extra investment in capital expenditure on housing in Scotland of some £30 million. That can be only for the benefit of those who depend on that north of the border.

State Security
4.18 pm
Mr. Tam Dalyell: On a point of order, Mr. Speaker. I refer to question No. 16, on the Zircon affair. I contend that it was an orderly question, otherwise the Table Office would not have allowed it. There was no attempt by Ministers to transfer it. Indeed, on the rota, the Secretary of State answers on behalf of the Lord Advocate. It will be within your recollection, Mr. Speaker, that I asked a careful and orderly supplementary question which, incidentally, I discussed with Professor Anthony Bradley, professor of constitutional law, and Professor Robert Black, professor of Scots law, at the university of Edinburgh. I think that the supplementary question was equally in order. Therefore, how can the Minister answering say that it was not within his sphere of responsibility? In whose sphere of responsibility would it be?
Mr. Speaker: I am not responsible for answers in this place, provided they are in order. The hon. Member for Linlithgow (Mr. Dalyell) has made a pertinent point and his best course is to take up the matter with the Minister concerned.
Mr. Donald Dewar: Further to the point of order, Mr. Speaker. I recognise your difficulties, but I want to support my hon. Friend the Member for Linlithgow (Mr. Dalyell). There is no Law Officer in the House—I make no complaint about that; it is the chance of electoral fortune. It was specifically arranged that the Secretary of State would answer for the Lord Advocate. When a direct and proper question is put, it is an abuse to say that the Parliamentary Under-Secretary of State, who speaks for his lord and master, is not responsible for answering for the Lord Advocate's actions. He must be responsible. The matter must be satisfactorily resolved.
The Secretary of State for Scotland (Mr. Malcolm Rifkind): Further to the point of order, Mr. Speaker. At no time was there any suggestion that the question originally tabled by the hon. Member for Linlithgow (Mr. Dalyell) was not an appropriate or proper question. My hon. Friend the Under-Secretary of State correctly pointed out that the hon. Gentleman's supplementary question drew attention to matters that were not the responsibility of myself as Secretary of State for Scotland or of the Lord Advocate, and he therefore properly declined to comment on it.
Mr. Dalyell: Further to the point of order, Mr. Speaker. If what the Secretary of State says is right, the matter can be the responsibility, as I have suspected for many weeks, only of the Prime Minister and Mr. Ingham. They were the only people who could then take responsibility for the Zircon affair and for what happened in the raid on the BBC in Glasgow, when executives were thrown out of their beds at 3 o'clock on a Sunday morning. We all know now that no charge of substance has been laid. This is a great attack on liberty by the Government. If the Lord Advocate and the Secretary of State for Scotland are not responsible, the Prime Minister must be.
Mr. Speaker: I am sure that the hon. Member does not expect me to adjudicate on such matters. One point about which I am totally clear is that this is not my responsibility.
Mr. Dewar: Further to the point of order, Mr. Speaker. I raise a serious point. The supplementary question was specifically about the criteria applied by the Lord Advocate in making an important and controversial decision. It must be right that the House can question the Lord Advocate's actions. If you cannot help us as to who is responsible, perhaps you can help by advising us of the proper machinery, because the Government seem reluctant to answer these questions.
Mr. Speaker: The best way out of the problem would be to direct this to the Government Front Bench which will have time to consider it, before business questions tomorrow.

Local Government Bill
4.23 pm
Mr. Nicholas Budgen: On a point of order, Mr. Speaker. I wonder whether you can give the House some guidance. The Local Government Bill, as amended by Standing Committee A, was printed today. I understand that it is to come before the House on Report on Monday. There are a number of important issues of principle in the Bill. We hear that the Government intend to amend the Bill to give effect to the demands of the Commission for Racial Equality.
The Bill proposes that certain services, at present given exclusively by local government, should be subject to tender. It is proposed that the conditions upon which outside bodies may tender should be governed by the Bill. Clause 18 (10) proposes that a concession should be made in respect of section 71 of the Race Relations Act 1976.
Important issues of principle arise, but those of us who wish to table amendments will not have time to do so. I hope that you will think that this is an occasion on which you can state in advance through the usual channels that some delay would be appropriate. A personal matter is involved as well. The Secretary of State may wish to have more time to prepare his speech, because he was one of the six Tories who voted against the Second Reading of the Race Relations Bill on 4 March 1976. He has a proud position of being opposed to all this nonsense. I am sure that he would wish to have more time to reconcile his position on 4 March 1976 with what may be proposed on Monday next week.
Mr. Simon Hughes: Further to that point of order, Mr. Speaker. The Government revealed that they might wish to bring forward amendments on Report in respect of matters— including provisions transferring the control of stray dogs from the police to local authorities—on which they were not then in a position to finalise their view. It would be helpful if Government amendments on these matters and on others with which the hon. Member for Wolverhampton, South-West (Mr. Budgen) dealt — although I may take a different view—were introduced on Report in this House rather than be seen by this place only after their introduction in the other place. It seems that there is likely to be a substantial amount of local government business in the House next week — by all reports, at least two days on the Local Government Finance Bill. It would be appropriate, therefore, in order to allow hon. Members the opportunity to consider these

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matters, to postpone the Report and Third Reading of the Local Government Bill at least until the first week after the new year.
Mr. Tony Marlow: Further to that point of order, Mr. Speaker. I believe that it is usual in a Bill of this significance and magnitude, as my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) said, to have at least a week between the Bill finishing Committee and coming back to the House on Report. This is a significant matter, as my hon. Friend said, especially since some of us believe that it is possible that the Government have been rolled over by the Commission for Racial Equality. The nature of the proposed amendment is, through the tendering process,
"to promote equality of opportunity and good relations between persons of different racial groups."
If that authority is given to local government, it will negate the vast purpose of the Bill. Many Conservative Members would be most uneasy about that. A period should be allowed to elapse so that not only the usual channels can operate but the Government can obtain feedback from their supporters as to how unsatisfactory such a measure would be.
Several Hon. Members rose—
Mr. Speaker: Order. There is a great deal of business before the House. If the proceedings are delayed, those hon. Members who wish to be called will not be called.
Mr. Archy Kirkwood: Further to that point of order, Mr. Speaker. I make a brief plea on behalf of Scottish Members. The Leader of the House will know that the Bill has ramifications for Scottish legislation. Scottish Members were not able to get on the Standing Committee—[Interruption.] We were not able to get as many as we would have liked on the Standing Committee. We should like the opportunity to consider the matter properly on Report and Third Reading.
Mr. Speaker: Order. The timing of business in the House is not a matter for the Chair. The Leader of the House is on the Government Front Bench. There is a business statement tomorrow, and I am sure that he has heard what has been said and will carefully consider it.

BBC (Injunction)
4.28 pm
Mr. John Morris: On a point of order, Mr. Speaker. May I inquire whether there has been an application from the Prime Minister or the Attorney-General to make a statement on the Government's litigation in the courts against the BBC?
Mr. Speaker: I have had no indication of any statement of that kind.
Mr. Morris: Further to that point of order, Mr. Speaker. Are you aware of the matter which I raised on Monday, when I asked specifically whether, if I mentioned the name of Mr. Peter Day, the media might be in difficulty in reporting that name? You replied that it was a hypothetical matter. I am informed that on Monday evening, when "Today in Parliament" was reported, part of my observations dealing with the name of Peter Day was excluded on legal advice. That, therefore, is the reason why the Government returned to the High Court today to ask for a variation in the order that they obtained on Friday. Even this Government realised that they had encroached far too much on the liberties of this House. What happened on Monday exemplified exactly what I surmised might happen—that it would put the BBC in fear of being in contempt if it reported that name.
Does the Government's right hand know what the left hand is doing? The Government obtained an injunction on Friday regardless of the injunction that had been changed in the House of Lords on 30 July, when a proviso was allowed so that proceedings in Parliament could and would be reported. Is that an indication of the way that the Government are, either deliberately or in ignorance, muzzling this House?
The Lord Privy Seal and Leader of the House of Commons (Mr. John Wakeham): Further to that point of order, Mr. Speaker. I can confirm that in the High Court this morning judgment was reserved, but a proviso was added by consent in these terms:
"Provided that this Order shall not prohibit—

(a) fair and accurate reporting of proceedings in open court in England and Wales;

(b) fair and accurate reporting of proceedings in either House of Parliament whose publication is not prohibited by that House;

(c) publication of any facts concerning the Security and Intelligence Services, including the identities of present or former members, already made public with the authority of the Crown.

Until further Order."
Mr. David Winnick: Further to that point of order, Mr. Speaker. You may remember that on Monday, when these points were raised with you, you said that it was for the broadcasting authorities to decide what they reported. Clearly, they were acting under legal advice —hence the variation order. Surely the points that were raised on Monday by my hon. Friends and myself are of crucial importance in the preservation of parliamentary reporting and, indeed, parliamentary democracy.
Now that the Government have been forced to retreat, will you, Mr. Speaker, use your good offices to ensure that on no future occasion will the BBC again be placed in the position—as it was today when reporting "Yesterday in Parliament" — of not being able, on legal advice, to report the remarks of a Conservative Member of Parliament? At a time of growing Government censorship

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of the media, it is absolutely essential that what is stated in this House can be reported in the media, including the BBC. Clearly, that was not the position until the variation order was obtained in the High Court. It is a disgrace.
Mr. D. N. Campbell-Savours: Further to that point of order, Mr. Speaker. May I inform you that it was I who, last night, tabled a parliamentary question asking for the injunction to be varied in the way that it then was in the application made by the Government this morning? In part, that derives from a difficulty that I raised with you a week and a half ago, when I asked for a public ruling on a point of order. You very kindly wrote a reply —
Mr. Speaker: Order. The hon. Gentleman must not refer to a matter of privilege about which I have written to him.
Mr. Campbell-Savours: I had not intended to do so, Mr. Speaker, but only to refer to a date that you gave in your reply of 30 July. I followed that through, and in the injunction that the Government took out against The Observer and The Guardian at the end of July I found a proviso under paragraph 3. I then examined the injunction taken out last Friday and found that that proviso was missing. It was on that basis that I tabled a question asking for the inclusion of that proviso.
Had it been possible for your ruling to have been public, Mr. Speaker, I believe that much embarrassment could have been avoided because we would earlier have been able to identify the fact that the proviso was missing. It was because of that that the BBC felt embarrassed and could not publish freely in the way that perhaps you, Sir, thought that it should.
Mr. Speaker: The hon. Gentleman wrote to me on a matter of privilege and I replied to him in terms that he well understands.
Mr. Bob Cryer: Further to that point of order, Mr. Speaker. I should be grateful if you could confirm that under the terms of the altered judgment—which, as the Leader of the House made plain, was a judgment by consent—the position of the House has not changed by consent between the Attorney-General and a judge—or, indeed, any member or all of the judiciary. The statement by the Leader of the House implied that the consent was an agreement to restore the position of absolute privilege for hon. Members of this House and qualified privilege for the newspapers and broadcasting media to report the terms of our debates, which may contain the use of our absolute privilege. It would be a tragedy—as I am sure you would agree, Mr. Speaker—if it was thought by anyone that the terms of this House could be agreed by consent between the Attorney-General and a judge in an attempt to give some sort of legal status to a power that they do not have to change our position in this House. Our position is that we have absolute privilege to speak as we like, without fear of libel actions against us, and that the media has qualified privilege to report those terms.
I seek your support, Mr. Speaker, in confirming that position, and to stop the Government attempting to erode, by legal means, the powers of this House. We represent an important bulwark against any Executive trampling on the rights of this House and, through it, the people outside.
Mr. Max Madden: Further to that point of order, Mr. Speaker. As matters develop, it is becoming increasingly clear that there is widespread concern about the consistency of public policy on confidence in the security services. There is also increasing concern about attempts, through applications for writs, to impose censorship on the newspaper and broadcasting media.
As you know, Mr. Speaker, on Monday I applied for a debate under Standing Order No. 20, together with my right hon. and learned Friend the Member for Aberavon (Mr. Morris), whose application was heard. You indicated that if applications were made later this week, you would listen to them with concern and interest. Following the statement by the Leader of the House, will you accept from me an application under Standing Order No. 20 to discuss a matter that is specific and important, and which should have urgent consideration, namely,
"the applications for writs that stop the media giving the public information about the organisation and activities of the security services"
Mr. Speaker: Order. No, I would not accept such an application at this juncture.
Mr. Tony Banks: Further to that point of order, Mr. Speaker. We are dealing not only with an attempt at censorship, but with incompetent censorship. Had the point made by my hon. Friend the Member for Workington (Mr. Campbell-Savours) been taken up, the Government's embarrassment now would not be such as it clearly is.
When I originally raised this matter with you, Mr. Speaker, on Monday, and asked whether the BBC would be absolutely free to broadcast in its programmes "Yesterday in Parliament" and "Today in Parliament" anything appertaining to the matters surrounding the injunction and the programme "My Country, Right or Wrong", you said that it was hypothetical and that, therefore, you could not give a ruling. Notwithstanding what we have heard from the Leader of the House, will you either make a ruling today—or consider giving such a ruling·that makes it absolutely clear that the BBC is at complete liberty to broadcast anything said in this House if it so chooses, and that the only determination bearing on its choice should be that of editorial discrimination and freedom and not the terms of an injunction awarded by a court to the Government?
Mr. Speaker: We can deal with the matter. I confirm what the hon. Gentleman has said. The privileges of the House are absolute. There should be no doubt about that. I fully accept the concern that was expressed earlier this week about this matter. The media do not have absolute privilege, as the hon. Gentleman correctly said. They have to consider what they put out or publish. That is riot a matter for me.
Mr. Dennis Skinner: Further to that point of order, Mr. Speaker. A new point is developing in this mini-saga. We have absolute privilege, and we would turn to you, Mr. Speaker, if any attempt were made for that privilege to be qualified in any way. If the Government are to trample on democracy in the way that they have done in relation to this case, it seems that they have some responsibility to report to Mr. Speaker when they take steps that may lead to that privilege being qualified.
It is one thing for the Government to try to qualify that privilege, but they have other interests in the matter. They

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just want to get their own way. I should have thought that Mr. Speaker has the responsibility to ensure that, at all times, that privilege is unqualified. Therefore, it would be within the bounds of decency for a Government spokesperson to go to Mr. Speaker and say, "By the way, we are taking action in the courts today or tomorrow. The result may be that we shall qualify privilege in the House of Commons. Since we are decent chaps, we thought we should let you know."
This business has shown that those on the Treasury Bench, including the Prime Minister and the Leader of the House, do not give two hoots about democracy and are not interested in Mr. Speaker, either.
Mr. Speaker: Order. If the hypothetical matter that the hon. Gentleman has mentioned were to occur, I should be the first to come back to the House and report it. It has not occurred. I assure the hon. Gentleman that it will never occur as far as I am concerned. It is my duty to ensure that the absolute privileges of the House are always maintained.
Mr. John Morris: On a point of order, Mr. Speaker. Will the Leader of the House now respond and further consult with either the Prime Minister or the Attorney-General so that we may have a proper explanation before the House rises and so that we may know why there has been a variation and what the Government's general position on censorship is?
Mr. Speaker: Order. Such matters can properly be canvassed tomorrow.

Companies (Political Donations)
4.42 pm
Mr. Derek Fatchett: I beg to move,
That leave be given to bring in a Bill to ensure that shareholders in public companies are balloted before a company assumes political objects.
In the first six months of 1987, companies donated more than £2 million to the Conservative party and Right-wing front organisations for the Conservative party. When end-of-year figures are produced, that amount will be considerably greater than £2 million, because 1987 was an election year. British industry does not donate simply to the Conservative party; it also donates a little to the alliance. That is a sign that British industry does not always back winners and has a soft spot for those who will inevitably be losers.
The top 10 donors in 1987 are United Biscuits, British and Commonwealth Holdings, Trusthouse Forte, Kleinwort Benson, Lonsdale, George Weston Holdings, Hanson Trust, Northern Engineering Industries, Newarthill, Willis Faber and Trafalgar House. They have two characteristics in common. First, not one company consulted its work force before it decided to donate to the Conservative party. Yet their work forces create the wealth that allows such companies to make political donations. The very party to which such companies donate often acts against the interests of their employees. Secondly, not one of the companies balloted its shareholders before a decision was taken. So much for the rhetoric of company democracy and popular capitalism.
I mentioned that the alliance parties have also benefited. Alliance Members tell us that the alliance is particularly keen on ballots of employees and shareholders before companies make political donations. Consistent with the alliance, they are inconsistent with principle on the matter.
Of 23 political donations made by companies to the alliance parties, 21 were made without any reference to democracy or ballots. Again, in practice, alliance rhetoric is found to be threadbare and vacuous. Principles are not applied in practice. In ony two cases out of 23 did the companies hold ballots before they donated money to the alliance parties and, more important, before the alliance parties accepted the donations.
We have a record of no democracy in British companies. In addition, there has been a new and much more sinister development in British politics, and that is the development of bought influence in the House of Commons. It is a development of the past few years, but it has become very deep in that time. It shows itself in consultancies and directorships on the Government Benches. Many Conservative Members now find themselves bought by companies to a great extent. My constituents have a right to know why Conservative Members vote in a certain way and what influence is upon them when they cast their votes.
In addition—you will recall it with some feeling, Mr. Deputy Speaker — there was the naked exercise of bought political influence in the House only three weeks ago, when the P and O company offered to take Tory Back Benchers to various hotels to put on various parties and to offer various video shows. The only matter of concern was which video was to be shown to hon. Members and their partners before they were asked to vote for that company and that company's interests.

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Hon. Members should contrast that with the treatment of trade unions. What do trade unions have to do if they are to make political donations? They have been bound by law and by statute since 1913. In the Trade Union Act 1984 they were forced to ballot their members every two years so that they could decide whether their trade union should continue to have political objects. There is no such right for shareholders or employees. In addition, individual trade unionists have the right to opt out of paying a political contribution. I do not have the right to opt out of paying a political contribution when I buy a pint of beer from the firm that subsidises the Conservative party. Why do similar rights not apply in relation to shareholders, consumers and employees?
The Educational Institute of Scotland recently balloted its members about setting up a political fund. Would it not be nice to see companies being bound by the same sort of rules before they give their money to the Conservative party?
We hear a great deal from Conservative Members about the language of popular capitalism and shareholder democracy. If that is the way ahead, why are Conservative Members not consistent? Why do they not provide shareholders with the right to hold ballots—to have a voice — before their companies decide to donate politically? What justification can there be for not consulting shareholders about such a crucial decision? In the Financial Weekly of July this year, a PR spokesman for Distillers gave the reason why the company did not bother to ballot before it donated to the Conservative party. That anonymous PR spokesman said:
"The company made its first political contribution last year. But this is a subject that we don't talk about."
It is wonderful to have public relations people who do not talk about particular issues. Then we have the paternalism and arrogance of the chairman and chief executive of Hill Samuel, Mr. Christopher Castleman, who said:
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"Whatever we do we consider to be in the best interests of Hill Samuel's shareholders. But we do not think that they should be balloted."
That is somewhat different from the language that applies to trade unions, which are required by law to ballot their members, and have done so for many years. Why cannot the shareholders of Hill Samuel and other companies be similarly balloted?
The Bill is modest. I am not trying to stop companies from donating to the Conservative party or alliance parties, however many parties there are now in the alliance. I am trying to make donations by companies to political parties legitimate, because at the moment they are made without democratic support, and in my eyes and the eyes of the public that is illegitimate.
If the Bill is not opposed by Conservative Members, they will agree with shareholders' charters and shareholders' democracy. If they are silent and do not oppose the Bill, I hope that they will make every effort to ensure that it has an easy passage through the House next year, so that shareholders will be able to control the political objects and activities of their companies.
Question put and agreed to.
Bill ordered to be brought in by Mr. Derek Fatchett, Mr. Terry Davis, Mr. Doug Hoyle, Ms. Jo Richardson, Mr. Chris Smith, Mr. Martin Flannery, Mr. John Battle, Ms. Hilary Armstrong, Dr. Lewis Moonie, Mr. Joseph Ashton and Mr. Ernie Ross.

Companies (Political Donations)
  COMPANIES (POLITICAL DONATIONS)
  Mr. Derek Fatchett accordingly presented a Bill to ensure that shareholders in public companies are balloted before a company assumes political objects: And the same was read the First time; and ordered to be read a Second time upon Friday 15 April 1988 and to be printed. [Bill 68.]
Orders of the Day

  Rate Support Grant (England)
  4.51 pm
  The Secretary of State for the Environment (Mr. Nicholas Ridley): I beg to move,
  That the Rate Support Grant Report (England) 1988–89 (House of Commons Paper No. 163), a copy of which was laid before this House on 30th November, be approved.
  I announced to the House in November, following consultation, my decisions on next year's rate support grant settlement. Hon. Members will therefore be familiar with the report's contents.
  However, I must remind the House that we have provided a generous settlement for local authorities. The aggregate Exchequer grant of £13,775 million is an increase of £750 million and 5·75 per cent. more than for 1987–88. Provision for local authority current expenditure, at £27,538 million, is 7 per cent. more than this year.
  No doubt Opposition Members will complain about those figures. They go on about the £18 billion that they say we stole from local authorities. Let me nail that figure once and for all. In 1979–80, the last rate support grant settlement of the Labour Government, grant totalled £8,101 million. At 1988–89 prices, that is equivalent to £14,691 million, whereas in this settlement we are providing £13,775 million, which is £916 million less— not the £18 billion we so often hear about.
  Dr. John Cunningham: How does the Secretary of State reconcile what he has just said with the parliamentary answer he gave me, using his Government's figures, which pointed out that the accumulated reduction in rate support grant since 1978–79 in England, at 1987–88 prices, is £3,896·2 million? He then listed all the figures and gave the cumulative total of £21,573 million.
  Mr. Ridley: Because the hon. Gentleman asked what would be the difference if the rate support grant percentage had been maintained, despite the vast increase in local authority spending, so of course he gets a figure like that. I am giving him the true figures, not the ones he asked for. It is just as important to get the question right as the answer.
  The settlement will allow non-rate-capped authorities to hold their spending broadly steady in real terms. Education authorities are enabled to increase their spending by rather more because of the additional allowance we have made for schoolteachers' pay.
  Our expenditure plans make realistic provision for local authority expenditure. There is, of course, plenty of scope for authorities to make savings—for example, by taking advantage of the savings brought by competition, and implementing the efficiency savings identified by the Audit Commission. Authorities continue to spend more than I believe they should: the settlement therefore provides for a margin between the total of grant-related expenditure — authorities' need to spend — and the level of expenditure provision.
  Mr. Peter Thurnham: Will my right hon. Friend undertake to amend the figures on the education component of the rate support grant for Bolton council and check his other calculations?
  Mr. Ridley: I understand that there has been a miscounting of the number of schoolchildren in Bolton. Those figures are in the report, and at the first supplementary opportunity the figures will be put right and money can be adjusted immediately afterwards.
  Mr. Dennis Skinner: Does the Minister believe—
  Mr. Ridley: I have not given way.
  Mr. Skinner: The right hon. Gentleman could give way now, if he wants to.
  Mr. Ridley: I do not know that I do want to.
  In making the settlement I have borne in mind the need for stability. The mechanisms for distributing grant and the methodology for calculating grant-related expenditure are therefore broadly the same as in the current year. This has been widely welcomed.
  The 5p safety net at ratepayer level provides an important protection against grant losses and the lop cap at authority level on grant gains prevents what would otherwise be an unreasonable effect on the distribution of block grant. How much rates will rise will of course depend upon how much local authorities decide to spend. But ratepayers in areas where local authorities choose to budget sensibly should on average receive rate bills which increase by around the rate of inflation.
  I refer to the storm damage which occurred last October. I have now completed my consultation with local authorities and the associations about my proposal to exclude from total expenditure — in effect, to relieve from grant losses—that 25 per cent. of an authority's spending on clearing up after the storms in October above the Bellwin threshold but not met by special assistance. I announced my conclusions in a written answer yesterday to my hon. Friend the Member for Eastleigh (Sir D. Price). It may help the House if I explain them in more detail now.
  Authorities have pressed three points about the proposed exclusion. First, there are substantial costs which fall outside the Bellwin scheme. I had expected authorities to treat those costs as capital expenditure, but some do not believe it would be right to do so, although in some cases it must be cheaper for them to do so. If they treated it as revenue spending, they would lose grant as things stand at present. Secondly, if they decide to go down the capital route, they do not believe it is right that they should lose grant on the servicing costs. Thirdly, they cannot complete the emergency repair work required by the October storms by the deadline of 31 January.
  They have argued that, despite the special assistance we have made under the Bellwin scheme, and the total expenditure exclusion I had proposed, the Exchequer would stand to make a profit from the storm. Whilst they were content to meet their own costs, subject to the special financial assistance, they believed it was wrong that they should lose grant on such exceptional, emergency expenditure.
  Throughout, it has been the Government's intention to assist local authorities to meet the costs of the quite exceptional storm on 16 October. It has been no part of our policy that the Treasury should somehow make a profit as a result of expenditure which authorities could not have allowed for. In the light of local government's comments, I have decided to propose a wider expenditure

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  exclusion which will remove any possibility of such a profit occurring as a result of authorities spending above the Bellwin threshold.
  I propose to exclude from total expenditure not just the authorities' share of expenditure eligible for special financial assistance, but all revenue spending above the Bellwin threshold on clearing up the storm, and, in addition, the costs of servicing capital expenditure. It does not mean that authorities will be left with no burden to shoulder. They will be required to meet the full costs and grant consequences of their spending up to the Bellwin threshold, plus the 25 per cent. above the threshold not met by special assistance and any spending which is ineligible for Bellwin.
  Dr. Cunningham: Does what the Secretary of State has just said mean that he is being less than candid with the House? If local authorities still have to bear the consequences of a I p rate, they will still be liable to pay grant penalties on that expenditure, and many of them will have to do just that.
  Mr. Ridley: On 21 October, I explained that we assumed that authorities had made some provision for contingencies, including grant losses, which might occur. Over and above those contingencies assistance has always been available, to which I have constantly referred.
  That is my revised proposal, on which I will be consulting local government. I have also been asked to extend beyond 31 January 1988 the time during which authorities may undertake Bellwin-type eligible work, or to dispense with a deadline altogether.
  We are bound to impose some deadline if extra Exchequer assistance is to be granted prudently and correctly for works carried out in response to what is an emergency on a particular date. I am anxious, however, to respond, as flexibly as I can, to the comments of the authorities affected and to hon. Friends who have approached me on this matter. Accordingly, I am proposing a new date of 1 March 1988. I have also been asked to provide additional GRE against the costs of servicing capital expenditure on storm damage. My proposal to exclude servicing costs from total expenditure would make such an addition to GRE inappropriate.
  Following my announcement, local authorities will have a clear idea of how the Government are prepared to help in the work of putting right storm damage. To make it absolutely clear, we are providing 75 per cent. grant on eligible spending above the threshold. This is cumulative, so that if another Bellwin emergency occurs this year, or later this winter, eligible expenditure on that emergency can be added together to claim grant. We are proposing to exclude all revenue expenditure above the threshold, whether eligible or not, on the clearing up operation for the calculation of grant loss. We are proposing to exclude all debt charges incurred as a result of storm. We are allowing an extra month for authorities to complete the necessary emergency work for which grant can be claimed. We have also offered extra capital allocations.
  It is, I believe, a generous package, which meets the legitimate demands of local government. The next step is for local authorities to make their claims, whether for special assistance or for capital allocations, and my Department will deal with them as quickly as possible. Today's debate is principally about the settlement for 1988–89. However, I am today also sending authorities our
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  proposals for supplementary reports for earlier years. I am planning to make three supplementary reports shortly after Christmas. These will he the reports for 1983–84 and 1984–85, based on audited figures, and a further interim report for 1986–87. The main purpose of those reports is to adjust grant entitlements in the light of the latest information about authorities' expenditure in each of ,:he years concerned. If the House approves them, they will be implemented in April.
  As the House will be aware, in each of those years there was grant recycling. That means that, if one authority gains grant because it has reduced its expenditure, then other authorities which have not reduced expenditure will lose grant. The amounts involved in recycling can be quite large. That is particularly so for 1986–87, because for that year the slopes used in the formula for calculating entitlements were steepened to provide greater pressure against high spending. That was to compensate for the removal of targets and holdback. In aggregate, authorities' returns now show their estimated expenditure in 1986–87 to be some £208 million less than they returned last June. If that represents the true picture, it is welcome news.
  A few authorities have increased their expenditure, and will lose grant. Those authorities which have reduced expenditure by proportionately more than average will gain grant. But those authorities which have reduced their expenditure, but by less than the average, will find that they also will lose grant. This is an unsatisfactory feature of grant recycling, and indeed is one of the reasons why we decided to scrap it for the current financial year and the next two years. However, the law requires the system to operate for earlier years as was intended. The House will have an opportunity to debate those reports in January. If they are approved, they will be implemented in April.
  Four other reports will be made in 1988–89. Among other things, we will use these reports to correct an error made in the 1986–87 settlement concerning the Greater London council's expenditure on highways, known as the "Bromley error". The Local Government Finance Bill published last Friday includes a clause which will amend my powers so that the error can be corrected. In order to do that, I will need to determine new multipliers for authorities in supplementary reports for 1986–87, 1987–88 and 1988–89.
  Grant changes resulting from correction of the Bromley error for 1987–88 and 1988–89 will be implemented as soon as possible after the supplementary reports are made. The implementation of the 1986–87 report will be held over to 1989–90. Ratepayers in Bromley, Kingston and the other boroughs affected can be sure that, in due course, they will receive their correct grant entitlement.
  On the related matter of rate limitation, the House will also wish to know that I have reached decisions on the applications from the only two authorities—the London boroughs of Southwark and Tower Hamlets — which asked for their expenditure levels for 1988–89 to be redetermined at a higher figure. In the case of Southwark, I have decided not to increase the expenditure level but to confirm it at the original figure of £134·193 million, which I determined in July this year. In the case of Tower Hamlets, I have decided that a small increase of £2 million would be appropriate — bringing its expenditure level next year to £126·033 million. Associated with 'hat increase for Tower Hamlets is a requirement that the authority reports to me at intervals about the steps it is taking to improve its efficiency in certain areas identified

  469
  in its application. The other 15 authorities selected for rate limitation in 1988–89 chose not to apply for a redetermination, so their expenditure levels remain as originally determined in July.
  Mr. Simon Hughes: I welcome the Secretary of State's acceptance of the case put by Tower Hamlets when it asked for redetermination, although he will not be surprised that I regret that he could not do the same for my borough of Southwark. What was his view on the application for redetermination of ILEA and those of the joint boards which also asked him to set a higher limit?
  Mr. Ridley: It is typical of the hon. Member for Southwark and Bermondsey (Mr. Hughes) that he welcomed the increase in the limit for Tower Hamlets without mentioning his regret that the ratepayers of that borough will have to pay more money, but I shall let that pass. My right hon. Friends the Secretaries of State for Education and for Transport and the Home Secretary will make their final decisions and publish them to the House on the services for which they are responsible.
  Indeed, I am announcing today, in a written answer, the proposed rate limits being notified to all 17 of the authorities designated for 1988–89. Those limits are based on the expenditure level for each authority and take account of the amount of block grant it is estimated to receive and, where appropriate, the position of its financial reserves. I should emphasise that, under the terms of the Rates Act 1984, the limits are still provisional at this stage. I hope that most of the 17 authorities will agree the proposed limits. If not, they will be able to make representations and I will consider the matter further. Finally, if there is still no agreement on the limit, an order will be laid before the House for it to determine the matter in the new year.
  The effect of the proposed rate limits varies at individual authority level from an implied increase of 11–5 per cent. in the local rate in Tower Hamlets to a reduction of 43·5 per cent. in Ealing. The overall effect of the limits is an average reduction across the 17 authorities of just over 9 per cent. in local rate levels—equivalent to some £140 million less in rate bills when compared to those faced by ratepayers in those areas in the current year. Overall, therefore, this represents very good news for domestic and business ratepayers in those areas of high local authority spending.
  In addition to the 17 authorities subject to rate limitation, the Inner London education authority and the 19 joint authorities in London and metropolitan areas are also subject to precept limitation in 1988–89. As I said to the hon. Member for Southwark and Bermondsey (Mr. Hughes), details of the expenditure levels and proposed precept limits for those authorities will, as usual, be announced in due course by my right hon. Friends, when they are ready to do so.
  I recognise that this is not very exciting stuff. Indeed, I fear the heyday of RSG debates has probably passed already and there is likely to be only one more such debate. Domestic rates and RSG have become endangered species. This is the last but one settlement of this kind. Few if any will regret their passing—not even the hon. Member for
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  Copeland (Dr. Cunningham) who said last week that he was not interested in defending the status quo. I am grateful to the hon. Gentleman for that.
  Next week we will start to consider the new system—hon. Members may regard today either as the lull before the storm, or the hour before the dawn, as they wish—subject to a three,line Whip. Under the new system, we will get away from slopes, thresholds, nets and caps, holdback, targets and grant forfeit. We say farewell to them with few regrets.
  There will be two major simplifications. First, grant entitlement will not be related to actual expenditure. Grant will be allocated at the beginning of each year, and will not subsequently change. We shall no longer need supplementary reports going back three, four or five years to make final adjustments.
  Secondly, there will no longer be resource equalisation based on rateable values. It is equalisation that moves large amounts of grant around the country, and produces results that are often impossible to explain to hon. Members, let alone for them to explain to their constituents. In future, need will be the only factor which influences the distribution of grant. That will not only be simpler, but it will also be fairer. Next week I will invite the whole House to support those proposals. In the meantime, I commend these proposals to the House as the right ones at this time.
  5.12 pm
  Dr. John Cunningham: It is the Government's assertion that the British economy is strong, that the country is prospering and that we are doing rather well. Yet today we are asked to approve the same mean and aggressive Government proposals for financial support to enable local authorities to maintain public services as we had to do in recent, more difficult years. Apparently, our asserted prosperity makes no difference to the Government's judgment about how they should support ratepayers.
  I had to smile at the intervention of the hon. Member for Bolton, North-East (Mr. Thurnham) and the Secretary of State's reply, which more or less summed up the Government's attitude. The Secretary of State often gets his sums wrong when he is giving grant away, but he always seems to get them right when he is taking money away from local authorities.
  No attempt has been made to ease the burden on ratepayers. That burden has been increasing consistently, often dramatically, and always deliberately in every year since the Conservative Government came to office in 1979. Instead of masquerading as the friend of the ratepayer, the right hon. Gentleman should bear in mind — he must know this—that the average, rebated domestic rate bill in 1979–80 was £155; in 1987–88 it will be £428. That represents an absolutely staggering increase since the Government came to power. Since 1980, domestic rates have, on average, increased by no less than 13·6 per cent. every year. That is the effect of the rate increases. When I intervened earlier the Secretary of State rather disarmingly said that he was giving me the right figures — I assume that all the figures are the right figures because they all come from parliamentary answers given to my questions. From the Government's figures it is clear the average rates increase each year over the past eight years has been 13·6 per cent.

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  Those increases have occurred because the Government have deliberately, dramatically and consistently reduced their support to local authorities and to ratepayers. That is the most obvious and important reason why rates have become a significant problem for those on small incomes, those with fixed incomes and people livimg in inner city or rural areas.
  The proposals before the House make no attempt to tackle the problems of the inner cities. In spite of the complexities and deficiencies of the rate support grant, it remains a good way of providing extra cash to help in the necessary, but under this Government neglected, attack on poverty, unemployment, discrimination and dereliction in our urban areas. Again, we see that the authoritarian, central powers of the Rates Act 1984 are used to enforce legally the Government's political judgments on local authorities and that is in direct conflict with the decisions of the local people in local elections. Today we have witnessed the Secretary of State's continuing attempt to mislead people about the Government's inadequate response to the unavoidable costs faced by ratepayers following the extraordinary storms in October. I shall deal with each of those aspects in turn.
  The Government's proposals for rate support grant for 1988–89 have the familiar features and purposes of Government policy — a failure to meet the established spending needs of local councils to maintain decent and effective levels of service and the Government's decision to impose again a Treasury clawback tax when councils spend above the Government's arbitrarily-imposed expenditure limits.
  The system will work to increase grant when services are reduced in quality and range and when expenditure is cut. Against that well-established background, it is not surprising that various local authority associations—the Association of County Councils, the Association of London Authorities and the Association of Metropolitan Authorities — have serious objections to the Government's proposals. The Secretary of State has talked about the huge sums involved, but it is worth reflecting on the fact that the block grant figure of £9,482 million works out as little as £201 per head of the population in England. It is not true that this vast sum, which it is difficult for people to imagine, means huge financial support for the population. These are relatively modest amounts based on the sum per head of the population.
  Mr. Max Madden: Will my hon. Friend tell us what reduction has taken place since the Government were elected in 1979 in the proportion of local government expenditure covered by central Government? Will he draw attention to the problems of Bradford which emphasise what he is saying? Uniquely, Bradford has an increasing population, yet it is being penalised by loss of grant and has seen a reduction in rate support grant since 1979 of more than £70 million.
  Dr. Cunningham: My hon. Friend is referring to the question that I asked the Secretary of State this afternoon. In 1979 the Labour Government provided rate support grant at a level of 61 per cent. of relevant expenditure. That figure has been systematically reduced to 46 per cent. under the Conservative Government since 1979. Although I do not have the figures for the city of Bradford in my head, I know that, as a result of those reductions, the accumulated national loss of grant is £21,573.6 million,
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  using the figures provided by the Secretary of State. In spite of what the Secretary of State said, I assume that those, too, are real figures.
  The provision for local authority current expenditure—the measure of expenditure which determines the level of services provided—represents an increase of less than 4 per cent. over the current year's budgets. That is a more meaningful measure than the 7 per cent. increase in the provision for 1987–88, quoted by the Secretary of State. That provision was an unrealistic assessment of what authorities were likely to spend in the current year. The 4 per cent. increase is less than the Government's latest estimate of general inflation in the year 1988–89 and fails to reflect authorities' likely year-on-year increases in costs.
  The expenditure groups—the bodies made up of civil servants and local authority administrators—forecast that local authorities will need to spend slightly in excess of £29 billion in the coming financial year simply to maintain current service levels. There is, therefore, a £1·47 billion current expenditure shortfall in what the Secretary of State is asking the House to accept. Those are the best available figures and they have been arrived at by civil servants in the Department of the Environment and by officers of the local authority associations. The Secretary of State knows what those figures are, yet he insists that what he is recommending is fair and generous. Of course, it is not. It is a serious shortfall in maintaining the status quo.
  Mr. John Maples: The hon. Gentleman suggests that the only way that local authorities can reduce their spending is by cutting services, but that is palpably untrue. Does he agree that rate-capped authorities have enormous scope for making savings by cutting waste and increasing efficiency?
  Dr. Cunningham: I was not making that assertion. I was making a different point: that the Secretary of State's recommendation falls a long way short — £1·47 billion short — of what is needed just to maintain current programmes.
  Mr. Ridley: I am a little astonished by this point. If, by some misfortune, the hon. Gentleman ever finds himself in my shoes, doing the job of Secretary of State, will he give an undertaking to let local authorities have, both in provision and grant, as much as they ask for on every occasion?
  Dr. Cunningham: No, I shall not give such an undertaking. It is Labour policy to allow grant to grow at the rate of growth in the economy and so bring additional support to local authorities for services and to ratepayers. That is a reasonable and practicable proposition, but we could not guarantee that every year local authorities would get exactly what they asked for. However, that system would be far more likely to meet their legitimate needs and demands than has the system operated by the Government for the last eight years.
  Mr. Thurnham: Does the hon. Gentleman agree that his party was thoroughly defeated at the general election because the electorate would not accept the way the Labour party accepted profligate and illegal spending by extremist Left-wing councils?
  Dr. Cunningham: No, I do not accept that. There were many reasons why the Labour party was not successful in the election. The hon. Gentleman is entitled to his opinion.

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  The reason that he gives may have been a factor, but it was not the only reason. However, this is not the occasion to go into the reasons. If the hon. Gentleman wishes to attend some of our listening conferences, we could debate those issues then.
  Mr. Simon Hughes: Does the hon. Gentleman agree that the Government's response to local authorities' demands is to say that this year there must be a cut in the current committed expenditure of 5 per cent., or £1·5 billion, and that there will be a cut in the areas of greatest deprivation, including the inner cities which they claim to be helping? They will suffer most. They will get the smallest slice of the cake and they will be most heavily penalised.
  Dr. Cunningham: The hon. Gentleman is right. That is indicative of the internal conflict within the Government in this respect. The Prime Minister said, virtually on the day of victory, that the Government would give priority to helping communities in the inner cities, but they continue to deny local authorities the necessary resources to tackle the job more effectively.
  I want to support my comments, as the Secretary of State disingenuously expresses some surprise about them. He knew those figures before we did. That view is endorsed by the Association of County Councils and is shared by all local authority associations. In a recent letter to me, the ACC said:
  "To the extent that shire counties seek to protect services and to implement much needed service developments, they will suffer severe block grant losses. Present indications are that over £200 million of shire counties' block grant will be returned to the Treasury; this alone will cost the equivalent of a 5p rate and will necessitate precept increases which, on average, will exceed 10 per cent. The AAC would accept the Government's right to form a global judgement on what the economy can afford by way of aggregate local authority expenditure. However, if, as on this occasion, that global view falls well short of the 'present policies' forecast of the Expenditure Steering Groups, Ministers must recognise the practical implications of this at local authority service level."
  That is an emphatic answer to the point raised by the hon. Member for Southwark and Bermondsey (Mr. Hughes). The Association of County Councils' comments are exactly in accord with the views of all the other local authority associations.
  The 1988–89 settlement represents little change, and little change in methodology, compared with the current year, but the Government are maintaining their severe grant regime designed to increase grant when services are cut and penalise authorities which increase expenditure. The Government are, in effect, planning a 5 per cent. cut in local authority expenditure, and it could be even worse than that.
  I come again to the point made by the hon. Member for Southwark and Bermondsey, that it makes nonsense of Government claims that they want to bring additional resources and more help and support to the people of the inner cities, when all that they are doing is making the problems of those local authorities and communities even harder to resolve. It would have been quite within the power of the Secretary of State to recalculate grant-related expenditure assessments and thus bring more resources to the inner cities. It would have been one of the quickest
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  ways in which the Government could respond to the challenge posed by the problems of the inner cities. Yet the right hon. Gentleman has deliberately chosen not to do it.
  Mr. Richard Holt: Will the hon. Member care to comment on the fact that the urban development corporations have already brought in money from the private sector, which the local government sector simply would not have done? In Teesside this already amounts to £100 million worth of private money.
  Dr. Cunningham: Yes, of course. It is incontestible that urban development corporations have brought extra resources to inner cities—and a lot of it is in the form of public expenditure. But we are not in favour of this creeping corporate state approach to our towns and cities. We have just seen an announcement this week. Disgracefully, it was not made in the House, so no hon. Member was able to question the Secretary of State about his decision — a quite cowardly way to announce Government policy. The Secretary of State laughs. If he had the guts and the courage to believe that the House would support what he was doing, he would announce his decision here and hon. Members would have an opportunity to discuss and ask questions about it. He seemed not to want to do that or to subject himself to the judgment of the House.
  I can tell the right hon. Gentleman that, in respect of that announcement, in at least one case—that of Leeds —the Government's decision on policy is likely to result in less investment, because existing plans already in train are threatened by that decision. Much more by way of investment, including private sector investment, already in the pipeline will be completely blocked by the Government's decision, which seems to have been taken without any proper consultation, any thought or any understanding of the situation.
  Of course, it is true that urban development corporations will attract private sector investment and involvement, not least because of the public expenditure commitment—the servicing, the availability of the land and the freedom from planning controls. All those benefits are bound to attract investment. I would just caution the hon. Member for Langbaurgh (Mr. Holt), however, to read the words of the director general of the Confederation of British Industry. He has warned the Government publicly against by-passing local authorities in the inner cities, because, he says, that sort of approach will not solve the problems.
  There is, therefore, much room for argument about the Government's approach, but I certainly do not applaud either the nature of the recent decisions about urban development corporations or the manner in which the right hon. Gentleman announced them in a written reply on Monday.
  The Government's policy on grant distribution is objectionable. The Government's main aim still appears to be a reduction in the level of local authority services, despite the growing needs of the communities that those authorities serve. Unemployment may be falling generally, but it is still very high among people living in the inner cities in particular, despite the growth of jobs for people who commute into London. Many people in inner London are still subject to very high unemployment. There is still discrimination against people in black and ethnic minority communities and, what is more, the Local Government

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  Bill—in spite of our amendments, which have all been rejected—will not help that situation and could, in some respects, make it even worse.
  I am astonished by some of the implications of what the Government are doing. I want to make a particular point about the precise meaning of the Government's proposals on housing benefits. Representations have sought to clarify exactly what is suggested and what is meant by the Government's proposals.
  It seems to us that local authorities will be required to pay increased housing benefit, yet the increased expenditure that they incur as a result and that they cannot avoid may itself be subject to penalty. It is a preposterous state of affairs. I cannot understand why, in the consultation process, the Secretary of State has refused to clarify the situation.
  Let me illustrate what I am trying to make clear to the House. The Government suggest that they will make certain amounts available to local authorities for the statutory cost of their share of housing benefit. In 1986–87 they made available £237·5 million, in 1987–88 it was £250 million and they propose £289 million in 1988–89. But the actual cost to local authorities in 1986–87 was £252 million and it is estimated to be £262 million in 1987–88. There is no estimate available yet for the current financial year, but the trend is obvious. There is a gap between what the Government are making available and what local authorities are required by law to pay. If they incur that additional expenditure, they are likely in many cases to incur penalty on top of that. No one seems to have taken any account of that. I hope that we will be given some explanation from the Minister for Local Government when he replies.
  The Government have also consistently underestimated the provision required for the administration of housing benefit. A similar comparison demonstrates that point well. In 1984–85 they made available £82 million; the actual cost was £120 million. In the coming financial year, 1988–89, it is suggested that they will make available £187 million; the best available estimate is that the cost will be in excess of £190 million. I hope that we can have some explanation of the Government's position in that regard as well. It is quite intolerable for the Government to impose these legal requirements on local authorities, then not properly fund what they require the authorities to do, then penalise them for making the expenditure that they cannot avoid making—and then still claim that they are interested in protecting the ratepayers. It just does not add up.
  I turn briefly to what the Secretary of State had to say about the Rates Act 1984, because, here again, some important questions are unanswered. Will Ealing be rate-capped with an expenditure limit that is actually below its grant-related expenditure assessment? What can possibly be the justification for that? The grant-related expenditure assessment was introduced by this Government. It is supposed to denote what local authorities are required to spend to support an adequate level of service. The expenditure limit in Ealing is below that level. —[Interruption.] If the right hon. Gentleman is going to contest the figures, I will give way, but he seems to indicate that there is nothing wrong with that.
  Mr. Ridley: I am trying to help.
  Dr. Cunningham: The right hon. Gentleman is certainly not helping the ratepayers of Ealing in taking the view that he does about the state of affairs in that borough.
  Will the right hon. Gentleman carefully and, I hope, properly discuss with the rate-capped authorities—in a way that he did not do on expenditure limits—the full implications of his announcement today? I should also like to repeat the question put to him by my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) when he made his statement on the rate support grant a few days ago. Why does the right hon. Gentleman not announce the criteria that he will use with regard to the Rates Act 1984? Why should the House and, more important, local authorities not be told exactly what criteria he will use? I suspect that it is for the same reason that we have always heard from the Secretaries of State of this Government —the Government want to rig the criteria and to fit them up to get the local authorities that they want for political and other purposes that suit their political ends. There are no legitimate or objective criteria in the right hon. Gentleman's mind.
  With regard to what the right hon. Gentleman said about rate limitation—I am grateful to him for giving me a copy of the written reply that he is making today —why has he set a rate limit for Camden that does riot allow the authority to raise the revenue to reach the expenditure limit that he set? There seems to be at least a 5p shortfall in what will be required. Similarly, for Hackney there seems to be an even larger shortfall of 11p between the expenditure limit that the right hon. Gentleman is imposing and the rate limit that he is announcing today. What is the explanation of those differences? How does the Secretary of State expect those two boroughs, which are already financially hard pressed, to make up the shortfall? Will the Minister explain that when he replies to the debate?
  The right hon. Gentleman's comments about storm damage were far from frank and do not produce the result that he said that he intended. Local authorities will still pay over the odds for reparations that they must make because of the extraordinary storms in October; they will still pay penalty on expenditure. Before explaining the reasons for that, I should remind the House of what the Secretary of State said to the House:
  "I would be horrified and astonished if either my Department or the Treasury were to make a profit from any authority as a result of that night."—[Official Report, 30 November 1987; Vol. 123, c. 611.]
  Despite all the right hon. Gentleman's blandishments, that is exactly what will happen. The Treasury will make a profit out of ratepayers, whose local authorities will have to foot the bills for clearing up and making good damage to buildings, roads and parks. I can quote no better authority than the Conservative-controlled London borough of Barnet. I should like to know what the right hon. Member for Finchley (Mrs. Thatcher). who represents Barnet, has to say about the matter. It would be interesting to know whether the right hon. Lady supports the view of her Secretary of State for the Environment or the Tory leaders of the London borough of Brent, who worked to get her re-elected in her constituency. In a letter dated 23 November 1987—the right hon. Gentleman has this letter—the chief executive and town clerk of Barnet says:
  "For Barnet the scheme requires a local contribution equal to the product of a penny rate, after which the Government will contribute 75 per cent. The effect is that the council will

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  have to finance the first £612,500 of the costs of rectifying the storm damage, together with 25 per cent. of the balance if the ultimate bill is above that figure. As the council's budget is in excess of its grant-related expenditure assessment, all additional expenditure will bring a grant loss of £70,000 for each further £100,000 spent. Thus, even at a 1p rate level, the effective cost to the council could exceed £1 million."
  Of that £1 million, six times the amount of that grant loss — £420,000 — will go to the Treasury in grant penalty. Of course the Treasury will make a profit out of the storm. That is the state of affairs even after the right hon. Gentleman's statement to the House today. They are the facts of the matter. It is true not only in Barnet but in a swathe of Tory-controlled local authorities and in some Labour-controlled London boroughs in inner and outer areas. Nothing that the right hon. Gentleman has said today will change that. The right hon. Gentleman said that he would be horrified if that were to happen, but it will happen. What will he do about it, apart from being horrified? Being horrified will not help the ratepayers of Barnet, Kent, Sussex or Surrey. Being horrified will not help anybody; it will not even help the right hon. Gentleman. I am not sure that we want to help him, but we want to help ratepayers and local authorities.
  The right hon. Gentleman's statement—even at the third attempt today—is not candid and honest about Government policy. It is quite the reverse. He is seeking to pull the wool over the eyes of his Back Benchers, which is not too difficult, but I do not know how he has the nerve or gall to try to get away with it. We shall obviously write to the right hon. Member for Finchley, ask her view and see whether she supports him. However, the right hon. Gentleman must do a lot better than his statement today to convince Labour Members that he is horrified about the implications of Government policies. We simply do not believe him.
  The miserable Conservative record of misleading ratepayers—this is only the latest example—for reasons of political dogma, to undermine collective provision of public services, to push people into paying more, to push them into opting out and accepting private solutions to their problems, is deplorable. It is a miserable prospect. Local government will be less fair and less accountable and will provide less adequate services if the poll tax and uniform business rate are introduced.
  I agree that the right hon. Gentleman was quoting me accurately. We hold no brief for the present ramshackle, contradictory and inefficient system. It is his and the Government's system; it is not ours. We denounce it, just as we denounce the proposed alternative of the poll tax.
  5.47 pm
  Sir Rhodes Boyson: One of the benefits of not holding office is that one can fully support one's constituents. My constituency is being unfairly treated by the Government at the present time. Brent was rate-capped in 1987–88, but it is not being rate-capped for 1988–89. According to the figures that I have been given, Brent's expenditure for this year is £183·6 million. Thus, it is not 12·5 per cent. but 11·7 per cent. over grant-related expenditure. If that budget had been more than £183·6 million and had been 12·5 per cent. over GRE, Brent would have been rate-capped. The real expenditure figure in Brent·I have been considering them with my council group and council leader—is £223·6 million, which is
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  well over 12·5 per cent. over GRE. That is £40 million more than the council intended to spend. Of that £40 million, £16 million has already been covered by creative accountancy, funny money or whatever the phrase may be, and £24 million was intended to be covered by the sale of the town hall and the schools. However, the banks that had been thinking of buying those properties and leasing them began to think twice about what they were doing. Therefore, that £24 million was not raised.
  There have been some cuts made by the hard Left Labour-controlled authority of Brent.
  Mr. Tony Banks: The right hon. Gentleman wants some more.
  Sir Rhodes Boyson: The hon. Gentleman is right, I do want some more. I am glad that the hon. Gentleman agrees with me. Perhaps that is the beginning of salvation on the Opposition Benches. The sensible Opposition Members would also like some more cuts.
  That intervention has forced me to mention the fact that there are now two Labour parties in Brent. There is the old Labour party and the new Labour party and there are two leaders. They fight one another when they meet in the council chamber. I would be glad to arrange a party to go and see them at some time.
  Mr. Tony Banks: That sounds rather like a description of what takes place in the House between Conservative Members when the ex-Leader of the Conservative party and ex-Prime Minister starts knocking seven bells out of the present Leader of the Conservative party. Why should the right hon. Gentleman be so surprised?
  Sir Rhodes Boyson: The difference is that Conservative Members listen to one another. The right hon. Member for Old Bexley and Sidcup has never had his seat in the Chamber taken over. When he spoke in the House last week he spoke from his usual seat.
  I did not intend to mention what has happened in Brent but Opposition Members desire to know. There was a vote and a new leader was elected for the Labour party in Brent.
  Mr. Elliot Morley: That is democracy.
  Sir Rhodes Boyson: Yes, that is democracy. There are glimmers of advancement on the Labour Benches. Well done. Perhaps Opposition Members are learning something.
  I believe that the vote was 18 to 17, so the new, moderate leader was elected by only one vote. However, at the next council meeting, before the moderates could arrive, the hard Left had arrived along with thousands of others imported along with a man called Ted Knight. I do not know where he comes from but I have seen his name in the newspapers. They arrived with megaphones and took over the bench of the elected Labour leader. The mayor had to adjourn the meeting because it ended in uproar. There is no comparison between that and the cheerful agreements and disagreements among Conservative Members when they are seeking the truth. All Conservative Members, whether on the Left or Right of the party, are seekers of the truth. I may belong to the Left-wing of the party but hon. Gentlemen belong to the Right-wing. We discuss issues.
  I must not be distracted because I do not like that sort of thing being published in the newspapers. It does the Labour party no good.
  Mr. Morley: The hon. Gentleman is talking about the Government rate support grant, which is putting councils such as Brent all over the country into situations in which they are forced to make a choice. They have to decide whether to increase the burden on ratepayers by increasing the rates to make up for the shortfall in grants or whether to make cuts in services. That is the difficult choice that many councils are facing. If the hon. Gentleman is arguing for cuts and rate-capping, he has a duty to say where he thinks the cuts should fall.
  Sir Rhodes Boyson: I have no doubt that if Brent was sensibly run it could work within its budget. I can give examples in the House of some of the expenditure that has taken place. Every committee chairman has a full-time political assistant at a cost of £15,000. I could cover the length and breadth of the expenditure in Brent at present.
  Before I was misled by the heartiness of Opposition Members, I was saying that Brent has spent £40 million in excess of the £183·6 million. That expenditure is well over the 12–5 per cent. GRE, which would bring it into the category for rate-capping if the right figures were used.
  Without rate-capping, the situation in Brent next year will be a nightmare. That has been the case this year in the borough covered by the constituency of my hon. Friend the Member for Ealing, North (Mr. Greenway). After cuts the budget will be £240 million. That is £50 million over the £190 million settlement expenditure assumption. A total of £16 million of that £50 million will be covered by creative accounting, or funny money, but that will still leave £34 million to be raised from the ratepayers. I believe that the Government grant is £90 million and if the expenditure continues at its present rate Brent will lose £47 million of Government grant. In order to balance its finances, it will need a rate of 420p in the pound for 1988–89. That will mean a rate increase of 60 per cent. That is why I rise to ask my hon. and learned Friend the Minister at this late hour to rate-cap Brent for the sake of businesses and people in the area.
  Brent is already the fourth highest rated authority in London with a level of 256·8p in the pound. It is higher than Ealing, which will be rate-capped next year and it is higher than seven other London boroughs which will also be rate-capped next year, including Camden, Greenwich, Hackney, Lambeth, Lewisham, Southwark and Tower Hamlets. There are Conservative voters, Labour voters and even some Liberal voters who have been found in odd places from time to time. Those people do not talk about grant-related expenditure. I have never heard the figure of 12·5 per cent over GRE mentioned in the church halls or pubs. They compare the rates they are paying with those being paid next door. There are seven boroughs, eight, including Ealing, which will be rate-capped and they have rates lower than those in Brent. No man or woman in the street will believe that Brent is being given a fair deal. It is a nightmare.
  For the sake of the continuance of business in Brent and for the contentment of ratepayers there, whatever their political view, I ask my hon. and learned Friend the Minister to rate-cap Brent. We have produced petitions for the rate-capping of Brent and they have been signed by Labour voters on the doorsteps as well as other voters. They do not want to see the rates rise any more than do Conservatives.
  The Secretary of State referred to the lull before the storm, the break in the clouds or whatever imagery was
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  used. He was referring to the coming of the community charge. The search for something with which to replace rates has been like the search for the Holy Grail. King Arthur and his knights are still riding looking for a better form of rating system. In fact, the way in which it drops through grant-related expenditure suggests that it is a "holey" system.
  I do not believe that the community charge by itself, which is now being proffered as the new Holy Grail, will solve all the problems of the boroughs in London and elsewhere. We need other things as well. I know that my right hon. and hon. Friends and Opposition Members will have ideas as to what they believe should be done. We should look at the whole question of financing local government in this country and the responsibility of local government. It is time we set up a Royal Commission to study that. For example, responsibility for education is being taken away from local government through the opting out scheme and in certain cases the responsibility for housing and planning is being taken away from local government. The commission could look at the duties of local government and how its money should be used.
  Mr. Tim Rathbone: I should like to remind my right hon. Friend of the excellent report on local government produced by Lord Redcliffe-Maud. Unfortunately, when a Conservative Government enacted legislation to reform local government they did not go the whole way envisaged in that report. The recommendations in the report might provide a short cut and make unnecessary the Royal Commission, which otherwise my right hon. Friend is right to advocate.
  Sir Rhodes Boyson: I welcome my hon. Friend's intervention. I have that report at home.
  I disagree strongly with the size of local authorities. With the reduction in the responsibilities of local authorities we can bring down their size. Compared with France, with its 37,400 communes, we have almost semi-regional government. The local government reorganisations in 1964 and 1972 were disastrous for Britain. I said so at the time and I still hold that view.
  During the war, we took away the names of railway stations in case there was a German invasion. I think that we destroyed the names of places during the reorganisation of local government because we thought that we might be invaded from outer space and we did not want people to know where we lived. If anybody in Brent is asked where he lives, he says Kingsbury, Wembley or Willesden—not Brent.
  That local government reorganisation took people away from their organic units, within which they knew people and where they belonged. Both Conservative and Labour Governments were responsible for that. Independents within the parties had less chance when they had to depend upon the party machine to be elected. In many cases, the people elected were not local people.
  Those local government reorganisations took place at a time when we worshipped size. The tower blocks were going up along with the big comprehensive schools and the industrial conglomerates. The big tower blocks are now coming down and the big comprehensive schools and conglomerates are being broken up.
  We need an enabling Bill, although not for further Government-organised local government reorganisation. The Government always make a mess of whatever they reorganise. They only do something properly by accident.
  Mr. Tony Banks: The right hon. Gentleman has changed his mind.
  Sir Rhodes Boyson: I have always said that. I can recommend a book of mine to the hon. Gentleman. I shall send it to him tomorrow. I welcome disciples from anywhere, even from the east end of London, where I once taught.
  Mr. Bowen Wells: I want to help my right hon. Friend on the matter of the rates that Brent ratepayers are likely to pay as a result of the current settlement. Although my right hon. Friend the Secretary of State has allocated some grant under the settlement because of its overspend, the Social Democratic and Labour-controlled council in Hertfordshire will probably receive no grant. At present that money will go straight back to the Treasury. I suggest that my hon. Friend asks for that money to go to Brent.
  Sir Rhodes Boyson: I am always delighted to have my hon. Friends helping me. I am sure that my hon. and learned Friend the Minister has heard what was said and that by the end of the debate he will have found a way to make that possible. When I go back to Brent, the people will be waiting in the streets and I shall ride through the streets in a chariot with my hon. Friend the Member for Hertford and Stortford (Mr. Wells). —[Interruption.] I must not disagree with my hon. and learned Friend the Minister because he must have time to think. He is obviously in full agreement; he simply has to find the mechanism to make that possible, and I am sure that he will find one in the Department of the Environment in the next three hours.
  A commission is needed to look at all the responsibilities of local government. An enabling Bill should then allow those areas that feel that they have a unity of their own to decide for themselves how to organise their local government. As far back as the time of Chadwick and the Poor Law Reform Bill of 1834, when Britain was carved up into poor law unions, which took 34 years because people did not accept it, central reorganisation has been resented.
  However, in 1835 the Municipal Corporations Bill allowed areas with a certain population to petition Parliament to define their own boundaries in order to become municipal corporations. The communities decided on their own size. Indeed, at present there is a petition in my part of Brent, in Wembley, for a separation from Brent. I trust that when the boundary commissioners get to work on this, they will not just be the handservants of the Departments or bureaucracy, but that they will recognise people's needs. If they want to know what public opinion is, they should ask the people by means of a referendum. Already, 10,000 people have asked for their own authority. If 95 per cent. of people say in a referendum that they want a particular area, they should be allowed to have it so that the monstrosities that have been created can be broken up.
  Mr. Holt: My hon. Friend will remember that I was elected as an inaugural member of Brent council in 1964. At that time, we fought against amalgamation with Willesden. The strength of the petition then was even greater than the petition to which my hon. Friend has just referred. The Government did not have ears to listen then; I hope that they have ears to listen to what is said today.
  Sir Rhodes Boyson: If the Minister has not been stirred by my words, he will doubtless be stirred by those of my hon. Friend, whose knowledge of Brent goes back further than mine.
  In conclusion, I am asking for three things. First, I should like Brent to be rate-capped and I would prefer that to be announced today rather than tomorrow—the sooner the better. Secondly, a commission on local government should be set up to consider what local government is doing and how. Thirdly, as soon as possible there should be a move towards smaller units in which people genuinely believe and with which they would be involved.
  Dr. Cunningham: Since the right hon. Gentleman is putting forward such profound and far-reaching proposals, is he telling the Government that they should set aside the Second Reading of the poll tax legislation until the matters that he raises have been dealt with?
  Sir Rhodes Boyson: I would not say that, but it should be set aside until Brent has been rate-capped. When it has been rate-capped I shall settle for the continuance of the poll tax legislation. If that is not done, I shall have to agitate. It would be much more peaceful for Ministers if Brent were rate-capped so that we could settle down to a peaceful future.
  6.6 pm
  Mr. Simon Hughes: After hearing the speech of the right hon. Member for Brent, North (Sir R. Boyson), perhaps we should expect an Order Paper with a new instruction to the appropriate Committee to consider a special procedure for the poll tax legislation next week. There is already one instruction on the Order Paper. Perhaps the right hon. Member for Brent, North will add another.
  It was rather paradoxical to listen to comments about disputes between former and present Prime Ministers and former and present leaders of Brent council when there is clearly a large difference of opinion between the former and present Ministers for Local Government.
  May I remind the right hon. Gentleman that he and others have an opportunity to begin to argue, as I would with him, for a return to a smaller local government, because the boundary commissioners have asked for submissions by the end of December on the redrawing of boundaries within Greater London. They have extended the deadline. Therefore, there is an opportunity to raise that issue within their consultations and I hope that the hon. Gentleman will make his submissions, together with others, by the end of the year, perhaps on Boxing day or some other equally under-occupied occasion.
  I tried to table a new clause to the Local Government Bill that has just come out of Committee to permit the setting up of urban parishes in London, but it was ruled to be outside the Bill's long title. Therefore, sadly, this change apparently cannot be debated in the context of that Bill which is shortly to return to the House. However, it is an important question which raises issues that go to the heart of local government accountability.
  There is another paradox about the substance of today's debate on the rate support grant settlement. Only last week we were debating the Urban Development Corporations (Financial Limits) Bill. The Government were moving, through the House, to abolish the

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  parliamentary procedure which controls the upper limit of grant expenditure of urban development corporations. Literally, within a few days, the Government took away Parliament's power to control urban development corporations and continued parliamentary control of a whole range of aspects of local government, including specific controls over the levying of money by rate-capped authorities. It should be the other way round. If anything, controls on democratically elected local government should be reduced and controls on unelected corporations, all appointed by the Secretary of State, should be increased.
  The Secretary of State, who is no longer in his place, pretended that today was another generous handout day for local government. There is, in a sense, more money, because things cost more than they did last year. The Minister and the House know well that in reality the Government propose a further real cut in local government funds and services. If the Government carry the day tonight, local government services will be reduced. The Government believe that local authority expenditure next year can be reduced to about £26 billion, even though the assessment of current expenditure is more than £1·5 billion more than that.
  The Government say that local authorities next year can cut out £1·5 billion— 5 per cent.—of waste. That does not even include the additional £1·5 billion that civil servants and local authority officials agree is needed to retain services at their present level. Therefore, on the smallest estimate, the Government's own, there is at least £1·5 billion difference between what the Government are allowing and what the local authorities will have at their disposal, and on the other estimate there is a difference of about £3 billion. That difference means cuts. Services will be cut and local government will suffer.
  Mr. Ian McCartney: The hon. Gentleman has not touched on the cuts in the London fire service. Is he aware of the dispute between the Home Secretary, who sets the maximum expenditure limits for the fire service in London and elsewhere, and the Department of the Environment, which makes grant-related expenditure assessments? Because of the dispute over the Departments' calculations, the fire authority in London will receive no grant whatever. The largest municipal fire authority in the world will receive no Government assistance. Unless the matter is resolved in time for next year's financial contribution, London could be 800 firefighters short. Since July, I have been asking for a meeting to be attended by the Departments' representatives of the area fire services committee and myself. That meeting has been cancelled once and has still not been held, despite promises from both Departments. That is scandalous.
  Mr. Hughes: I agree with the hon. Gentleman. If present arrangements continue, the London fire service, like the Inner London education authority and other authorities, may receive no money from the taxpayer. The emergency services in London—the fire and ambulance services and the police force—are all underfunded. They are under great pressure and can only do their job—often well beyond the call of duty—because of their commitment. Unless they get more money, we shall be putting at risk the lives and well-being of the capital city. That is especially true of the ambulance service, as we were reminded in the debate in the early hours of this morning.
  Mr. Tony Banks: Does the hon. Gentleman agree that it is disgraceful — it could be bordering on the hypocritical if one might use that word in the House—for the Prime Minister to go along with the television cameras and be seen walking up the scarred escalator at King's Cross when she is in charge of a Government who have made savage cuts in the very emergency services to which she pays tribute?
  Mr. Hughes: I share that view. While it is quite proper for the Prime Minister to pay such visits, they are barely acceptable when one considers that those who have been doing the hard work and going in to try to save lives know that they are being substantially starved of funds. Those in the emergency services are quite clear that they are being asked to do a job with horribly small resources. That should not continue, and a caring, concerned and responsible Government would not allow it to continue. I am afraid that those attributes have long been missing from the Government Front Bench.
  The settlement today means cuts and it has not fooled anyone in the know. The county councils — the shire authorities—and the urban councils all say that they are gravely unhappy. If one wants evidence on the suitability or otherwise of the settlement, one should perhaps look to those who will receive—or not receive—the money. Let me deal with them in turn. The Association of County Councils, speaking for the shire authorities, says that it is
  "particularly disturbed by ministerial comments which suggest that a 4 per cent. increase proposed for the shire counties represented a standstill in real terms. Quite apart from overwhelming evidence to the contrary from the Expenditure Steering Groups, the Government has itself claimed credit for making special provision, over and above general inflation, for teachers' pay and the police. If these commitments are to be accommodated within the overall figure of 4 per cent., then real reductions elsewhere are inevitable, particularly as the Government's own estimate of inflation for next year now stands at 4·5 per cent.;"
  and
  "Being labour-intensive, local authorities face higher inflation than the Government's figure, despite the fact that public sector pay awards generally are currently below those in the private sector."
  The shire counties are getting the best deal of all, so their comments are very important. They go on:
  "Present indications are that over £200 million of shire counties' block grant will be returned to the Treasury. This alone will cost the equivalent of a 5p rate and will necessitate precept increases which, on average, will exceed 10 per cent."
  Ministers must recognise that services will be reduced. Ministers should admit it because that is the reality and those are the figures. The Government's so-called extra revenue expenditure represents a shortfall, or a cut —however one likes to term it — of nothing less than billions of pounds.
  The hon. Member for Hertford and Stortford (Mr. Wells), who has just left the Chamber, also alluded to some ludicrous anomalies. Hertfordshire county council, which happens to be a balanced council, will not be the only county council to lose out. Surrey county council, which is controlled by the Tories, will lose out substantially, as will Oxfordshire, because of the caps and nets—because of the Government's curbs and restrictions. Such restrictions will not disappear under the poll tax system. They will remain, and they are entirely unsatisfactory and unhelpful.
  The urban areas have an even worse deal than the shire counties. Overall, the practical effect of the margin of

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  reduction of expenditure is to assist the lower-spending authorities rather than the higher-spending authorities. And it is the urban authorities which spend most because the need and disadvantage are greatest in their areas. I echo in different words the hon. Member for Copeland (Dr. Cunningham) who said that the rate support grant is the most powerful individual tool that the Government have, in any year, to redress disadvantage. The Government could allocate money in such a way to help remedy disadvantage in our community. They do not do it, and they have not done it again this year. The pretence that they are helping the inner cities and the disadvantaged —even adding in other moneys—is a misrepresentation of the real position. The Government have been taking money out of the inner cities. They have capped rates and prevented local authorities from raising more money, which has meant a reduction in services to the deprived and disadvantaged. I have the figures. The Government want spending next year to be only 4 per cent. above this year's budget for the counties and less for other authorities. The figure for the districts is 2–32 per cent., for metropolitan districts it is 3·49 per cent., for outer London boroughs it is 1·89 per cent. and for inner London boroughs it represents a cut of 2·78 per cent.
  I know that the Secretary of State has made one concession and I expressed gratitude for that. Tower Hamlets, which is controlled by my colleagues and desperately needs money, has had its expenditure limit raised—not nearly enough, but we must be grateful for small mercies. However, my borough of Southwark desperately needs resources too. Its social services are strained to breaking point, but it is to get no more money at all. To other authorities in an equivalent position, suffering repeated crises in housing and social services, no extra money is forthcoming either.
  Although housing is not dealt with specifically in the allocation, it is a local authority prime service, particularly where most people live in local authority accommodation. The Government announced an extra £25 million capital allocation for dealing with the homeless this year. That, too, is welcome. However, housing capital allocations overall are to be cut by 14 per cent. next year, and many deprived boroughs will receive no extra money—even from the small extra allocation for homelessness. In addition, coming over the horizon is the new dawn that the Secretary of State told us about—the poll tax. The poll tax will mean that the local authorities will need many more staff. The administrative costs will be enormous. My borough, for example, estimates that in the first year it will have a bill for an additional £8 million and thereafter a bill for £5 million annually. I invite the Minister to disprove that.
  A non-party political body, the Rating and Valuation Association, together with the Association of District Council Treasurers — officers, not members — have produced a booklet entitled "Community charge—Poll Tax: The Facts", in which they state:
  "Poll tax will require four times as many transactions between the public and town halls as at present. About 300 million additional receipts will have to be issued. Jobs will have to be created for cashiers, typists, rent collectors … housing benefit staff and bailiffs."
  We are talking about a requirement for massive extra staffing, yet local government Ministers say that local authorities must reduce expenditure above all by cutting
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  staff, and that that is the key. That is completely inconsistent and ludicrous. I should welcome an explanation.
  The Minister for Local Government (Mr. Michael Howard): Has the hon. Gentleman asked the London borough of Southwark for its estimate of the costs of administering a local income tax, which is his party's policy on these matters?
  Mr. Hughes: I have not, but I am willing to do so. A local income tax could be incorporated completely with the national income tax system. The computers exist. The difference is that the Minister's poll tax requires a different register and is differently compiled by different staff. It will require additional systems to those at present run by local or national Government. I am happy to take on the Minister on that issue because his Department's recent press release distorted and misrepresented the position. We shall undoubtedly come to this in our debates on the poll tax.
  Although this may be the penultimate year for rate support grant statements in their present form, yet again the Government are screwing local government and clamping it in their stranglehold, which after seven years is growing no weaker. Local government is meant to provide local services. This year's rate support grant settlement means that local government will be less able to do what it is meant to do, even according to this Government, which is to serve local people by providing the services which they require. Local government will be less able to do that next year and in many aspects it will not be its fault; it is the Government's fault. The Government insist on running the country according to an economic theory administered by Ministers who do not understand what deprivation is. It means that local authorities are prevented from doing adequately what they are historically, constitutionally and socially required to do, which is to provide services, meet needs and work to serve their local communities. This is an unacceptable settlement and it should be rejected by both sides of the House.
  6.22 pm
  Mr. Harry Greenway: First, I ask the indulgence of the House if I leave shortly after speaking. There is to be a special mass for a distinguished deputy head of Our Lady of the Visitation school in Greenford who is retiring after 41 years and it is important for me to be present.
  When my hon. and learned Friend the Minister replies, will he let me know whether the notification of the proposed rate limit set for Ealing for 1988–89 at 125·6p is consistent with the original determination?
  Rates are unquestionably an unsatisfactory tax. One matter is certain and that is that the Labour party's proposal to base rates on the current valuation of houses would be extremely damaging to the people of Ealing and the south-east generally, where house prices have risen enormously. That would present them with much higher local taxation than any community charge or any other charge that can be envisaged. The policies of Opposition parties, including the Liberal party's policy of a local income tax, are unsatisfactory.
  Mr. John Heddle: My hon. Friend has touched on an interesting point which needs to be

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  broadcast wider than it is at present and that is the policy of the official Opposition. Does he agree that to base a form of local revenue on capital valuation amounts to nothing less than a wealth tax?
  Mr. Greenway: I wholly share my hon. Friend's view that that would be a universal wealth tax. The point being made by my hon. Friend, with his background, is further reinforcement.
  My constituents in Ealing have suffered a 65 per cent. domestic rate increase this year which has caused, and continues to cause, immense suffering. In particular, many elderly people are going without food to pay for the increase. Let nobody, whether a Labour supporter or a hard Left Labour supporter, minimise the suffering or be in any doubt about the suffering that that rate increase has caused.
  The 58 per cent. industrial increase has also affected my constituents seriously. Factories have closed and jobs have been lost. People who were interested in coming to the borough to set up in business have not come. We have lost jobs because of that appalling, sudden increase. The fact that the borough council did not go through the legal consultation processes required of it with industry makes the position worse. That would have been the burden of the case which my constituents wished to put in the High Court against this excessive rate increase, had it been possible to raise sufficient money to do so. New jobs have not come to the borough and others have been lost on account of this high rate increase.
  Mr. Tony Banks rose—
  Mr. Greenway: I have given way once and the hon. Gentleman knows that I am in a hurry to get to my constituency, so I ask him to understand if I do not give way.
  The high rate increase also took purchasing power away from the community, so there is less business for the shops which were also faced with high rate increases. Factories, such as the Lyons group, faced a rate increase of £750,000, so prices on porridge, tea, coffee and other products had to he increased to meet the sum required by the council. Some jobs were lost. Therefore, there was a combination of high prices and lost jobs.
  Mr. Banks: Will the hon. Gentleman give way?
  Mr. Greenway: In addition, my constituents faced higher prices for smaller items, such as hair-cuts which increased by 50p. That is a large sum for pensioners, especially on top of increased rates, and their suffering cannot be imagined.
  Mr. Banks: Will the hon. Gentleman give way.
  Madam Deputy Speaker (Miss Betty Boothroyd): Order. The hon. Member for Ealing, North (Mr. Greenway) has made it clear that he will not give way and the hon. Member for Newham, North-West (Mr. Banks) should desist.
  Mr. Greenway: Thank you, Madam Deputy Speaker.
  My constituents welcome rate-capping for Ealing and note that Ealing council did not seek redetermination of the rate-capping announced by the Secretary of State in July. What are Ealing's rates likely to be under rate-capping in 1988–89? Can my hon. and learned Friend the Minister give me the estimated reduction in rates from their present level in the coming year, so that my
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  constituents know where they stand? Does he see the need to cap not only rates, but expenditure by councils, such as Ealing and Brent, as a means of stopping their tricks with creative accounting and so on? Will he meet that need?
  Already my constituents have on their backs for years to come a negotiated deferred loan of £100,000 million, as well as much more through tricks by which leases have been arranged which will involve future repayments of a high order. We do not want any more of that. By capping council rates the Government are demanding a certain level of expenditure, but are not achieving it because expenditure is not capped. Councils get away with spending more than they are officially allowed to spend by the devices that I have described.
  High rates have brought excessive suffering to the elderly and few benefits to Ealing. The council has 143 committees now compared with about 40 under the Conservative administration. I cannot imagine what they all do. A couple were abolished this week: the antiapartheid committee has been rolled into another race committee, so we shall never again see direct evidence of £12,000 being spent on anti-apartheid activities, as we saw in July this year. But no doubt the new all-purpose race committee that has been set up will find a way to spend the money. The council has also abolished the police committee, which has existed for 18 months, despite the fact that the council is obliged by statute to have a consultative police committee. The committee in Ealing was anti-police, but even it has gone. The council has not had the courage to abolish the gay and lesbian working party, but we shall keep trying to get rid of it.
  I understand that the council has doubled allowances to councillors to £16 a time. With 143 committees, some of whose meetings will last for only 30 seconds, councillors could make a great deal of money. Some councillors are making 400 per cent. more than they were. Indeed, I understand that some are making as much as £6,000 a year in expenses, which represents a great deal of money to my constituents.
  Cleaning in the borough has been deprivatised, at a cost of £1 million a year to ratepayers, and complaints have increased enormously. People are always writing to me saying, "Our road has not been swept since deprivatisation." Since 15 October, the council has been able to say that it had to divert all labour to deal with the effects of the hurricane. But it is time that that excuse was put aside. It is nearly two months since the hurricane and, in any case, street cleaning must continue whatever happens.
  Five Ealing Labour councillors are employed by other Labour-controlled boroughs. In its turn, Ealing council employs five Labour councillors from other boroughs. It seems to be new form of mutual aid. It is pretty deplorable, and my constituents do not think much of it.
  Ealing, like all councils which have been rate-capped, will try to blame the Government if it has to reduce expenditure. We are sure that it will not reduce expenditure in the proper areas. It will not get rid of the large office block at the Great Western centre, which is more commonly known as the Kremlin, for obvious reasons—
  Mr. Nicholas Soames: Why?
  Mr. Greenway: That expenditure of £5 million a year could be ended tomorrow.
  Mr. Soames: Why is it called that?
  Mr. Greenway: There are good reasons. My hon. Friend must use his imagination. Expenditure could be reduced, although not in sensitive areas such as the provision of home helps. There is no need to reduce home helps or the number of teachers and other staff employed in schools. Rate capping could be met by reductions in areas where so much expenditure is not needed.
  The people of Ealing, who have had to endure sudden enormous increases in rates, are worried because they cannot get information about council expenditure in some areas. When the council stopped libraries stocking The Times and The Sun, it was involved in a legal action which it lost. Costs were awarded against it. The council has spent a large sum of money on that, but, despite my efforts and those of my constituents, we have been unable to discover how much. The council invested £250,000 in the News on Sunday—we believe against legal advice—and that money has been lost because the paper has collapsed. My constituents, especially retired people, who will lose money because of that collapse, have not even had the satisfaction of an explanation from the council.
  The House must consider ways in which ratepayers can take councils to court if they suddenly impose massive, unjustified rate increases. I helped some of my constituents to set up a fund against excessive rates which aimed to take Ealing council to court because of what we believed to be its illegal imposition of such a massive rates increase. We raised £35,000, and we ran our campaign to raise money alongside the ratepayers of Waltham Forest, who wished to take their council to court after a 62 per cent. rate increase. They lost their case on a technicality, and at that point we found it impossible to raise the full £50,000 that we needed. We had to drop our legal action against Ealing council, but we do not drop the charge that that rates increase was excessive and unreasonable. The fact that we cannot take the council to the High Court, although we have been given permission to do so, is a serious defect in our system of local finance and administration.
  Council expenditure as well as rates should be capped. I agree with my right hon. Friend the Member for Brent, North (Sir R. Boyson) that there should be a complete reconsideration of local government expenditure and that teachers' salaries should be taken out of local government expenditure. Sudden sharp increases in rates are unjustified and cause massive hardship to individuals and businesses and they should be prevented.
  6.37 pm
  Mr. Gerry Steinberg: Unlike the hon. Member for Ealing, North (Mr. Greenway), I shall not spend 20 minutes telling fairy stories. I was delighted to see you take the Chair, Madam Deputy Speaker, because it meant that I might be called to speak in the debate. Last week, I sat through the debate on the Education Reform Bill for six hours and was dismayed not to be called. But the last time that I was called to speak, it was by you. I am extremely grateful.
  Council policies are governed by central Government. Local democracy is almost obsolete. Councils must fit their policies into financially restrictive guidelines laid down by central Government. Councils are given target figures for expenditure which are completely unrealistic. For years, most authorities—of all political persuasions —have accepted that the targets were inadequate. But when targets were increased, even at miserly rates which failed to meet inflation, grant was still cut. With targets
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  increasing and grants decreasing, it is no wonder that local authorities must increase rates even to maintain their present services.
  Minister after Minister has blamed local authorities for high spending and condemned rate increases when, in fact, it is the Government who have forced local authorities into impossible positions. It is not local authorities that have forced up the rates, but the Government and their policies. That fact has been substantiated by the Government's own Audit Commission, which clearly stated that it was not councils that were overspending, but that the structure of local government finance was to blame, and was in a shambles.
  Even as far back as 1984 — to be precise, on 17 January—in an interview on the BBC's "World at One", the right hon. Member for Chesham and Amersham (Sir I. Gilmour), an enlightened Tory and a former Tory Minister, said:
  "The reason the rates go up every year is because the central Government rate support grant is cut."
  Sir Robin Day, that well-known interviewer, responded:
  "That is what the Labour Party says."
  The right hon. Gentleman replied:
  "It is not a matter of what the Labour Party says. It is the truth!"
  Rates have risen unnecessarily under the Tories, by billions of pounds.
  I now wish to be parochial. As the ex-chairman of the finance committee of Durham city council, I wish to make a few observations about my constituency and district council. When block grant was introduced in my constituency in 1981, the city of Durham, which is a small district council, received £2·8 million in rate support grant, in other words, about 52 per cent. of its expenditure. The rates collected were £2·08 million, in other words, about 38 per cent. of the total sum that was spent. By 1986, the rate support grant had been changed to £2·051 million, which was less than 38 per cent. of expenditure, and the rates increased to over £3·5 million, in other words, to over 60 per cent. of expenditure. That was a loss of grant from central Government of over £600,000, which is almost a 25 per cent. cut. That was the equivalent of a rate increase of about 8p.
  Furthermore, the cumulative grant loss since 1981 for the city of Durham council is a staggering £2·5 million. I know that it is only a small district council, but when one loses £2·5 million over that time, one cannot take that without increasing the rates.
  I ask hon. Members: who has forced up the rates? Labour councils have won, and win, their elections on the strength of imaginative and caring manifestos, but they find it exceedingly difficult to succeed when grant is reducing and penalties are becoming more punitive over the years. Our crazy grant system works against an authority that spends to its approved target because authorities are rewarded for destroying services and spending less money.
  Durham city council has always attempted to keep exactly to its targets. The councillors have been very good boys, but it has done them no good at all. They have had no rewards. To spend less would have meant spending below what the Government regard as their correct level of expenditure. In the years since 1981 in Durham, if grant had not literally been stolen from us, there would have been few, and small, rate rises.

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  The present grant system has forced up the rates nationally by over 150 per cent. and robbed Durham city of over £2·5 million. The 1988–89 rate support grant for Durham city is a disaster, once again. Durham's GREA has increased by only £50,000 from £4·157 million to £4·202 million. The target has been increased by £163,000, from £6·071 million to £6·234 million. Again, its grant has been reduced by a further £165,000, from £2·051 million to £1·886 million. Of that £1·886 million, £1·178 million is safety-netted, leaving the city council's true grant at a meagre £708,000.
  A comparison between Durham and Hove in east Sussex, which has a similar population, demonstrates the ludicrous state of the rate support grant. For example, Hove's GREA has increased by £429,000 this year, from £7·524 million to £7·953 million. Its target, for some inexplicable reason, has increased by £2·066 million, from £6·209 million to £8·275 million. Its grant has increased by £1·575 million, from £6·025 million to £7·6 million. Hove gets almost a 100 per cent. grant for its expenditure. In fact, it could easily be 100 per cent.
  Hon. Members should not misunderstand me. I do not begrudge Hove what it gets, but how can it be justified? The two district councils have basically the same populations but there is a discrepancy in grant and GREA. How can a grant system be fair and just when a district such as Hove receives such a high percentage of grant through the Minister giving it a favourable multiplier?
  Mr. Heddle: Is not the hon. Gentleman making out a case for root-and-branch rate reform? Before he concludes his speech, will he remind the House of what he said at the beginning, that there was little accountability in local government at present? Will he tell the House how he proposes to improve that accountability? Will he explain, particularly to doubters such as me, how the introduction of a wealth tax, combined with a local income tax, which the Labour party proposes, will increase local accountability and make the system fairer for the ratepayers of Hove as well as those in his constituency of City of Durham?
  Mr. Steinberg: I do not believe that accountability is in question at present. I agree with the hon. Gentleman. The rating and grant systems are absolutely absurd, but the present grant system was introduced in 1981 by the Conservative Government. It is in disarray. If there were a tax on capital values of property, at least that would be a fair distribution of wealth, with regard to those who can pay. It is no good introducing taxation for people who cannot pay. That is what has been happening. We now have an unfair system, which has been clearly proven by two similar district authorities.
  I do not suggest for one moment that, in his allocations, the Minister makes political decisions. Hove council has 22 Conservative councillors, four Labour councillors, three Liberals and one independent. I do not suggest that that has anything to do with or any bearing on the allocation—
  Mr. Ronnie Campbell: And Hove has a Conservative Member of Parliament.
  Mr. Steinberg: I forgot about that. But the system must come into disrepute when power is handed over to one single person—the Minister.
  Mr. Tony Banks: There are some other points about Hove that my hon. Friend might not know about. It has
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  high unemployment and, indeed, some of the worst social service provision in the whole of that part of the country. Despite the favourable treatment that this Tory Government are giving to a bunch of Tory stooges in Hove, the council is still not giving the level of services that hard-pressed London boroughs are giving.
  Mr. Steinberg: I am grateful to my hon. Friend for giving me that information. I did not know that. It is typical and what one would expect.
  Although a decision has not yet been made in Durham city this year, it seems certain that its rates may have to rise next year by about 10 per cent., just to stand still. With that 10 per cent., there will be little increase in the provision of services. The rates rise will be purely to compensate for the loss of grant—the same old story.
  Rates in Durham city have increased from 24p to 43½p since 1981–82, simply because of the loss of grant and the iniquitous way in which GREA is calculated. That is an 81 per cent. increase, yet actual expenditure in Durham is up by only 11 per cent., while the retail price index has increased by only 33 per cent. Grant-related expenditure assessment components are nonsense and, as an example, I shall again compare Hove with Durham city. Hove receives £7 per head of population for private housing whereas Durham receives £1·37 per head. Hove spends £140,000 a year on concessionary bus fares and receives £13·54 per head of population, yet Durham spends £312,000 a year on concessionary fares and receives only £2·50 per head. That is ridiculous and must be regarded as crazy. Why should the GREA be different for authorities that appear so similar? Surely there must be something wrong with the system.
  The Secretary of State recognises that the system is a shambles or he would not have targets, or "expenditure assumptions", as they are now called. The Government have put local government finance in disarray, and the Secretary of State today ridiculed it. Now the Government plan to make it worse by introducing the poll tax. They introduced the block grant, which was a tremendous fiasco. Now the poll tax is to be introduced, which will be an even bigger disaster. It has taken the Government eight years to get local government finance in total chaos, so introducing the poll tax is probably a natural progression for them. The only trouble is that local authorities and residents have been and will continue to be the sufferers — unless, of course, one lives in a £750,000 house in Dulwich or, better still, has two houses, as many Cabinet Ministers have.
  6.52 pm
  Mr. Tim Rathbone: I shall not take up the points made by the hon. Member for City of Durham (Mr. Steinberg), especially his comparisons with Hove, which is well represented by a friend and political neighbour of mine. I hope that the hon. Gentleman informed my hon. Friend the Member for Hove (Mr. Sainsbury) that he would compare the statistics as he did, because that would have been only a courtesy.
  I contest the hon. Gentleman's contention that the Conservative Government have been eroding the amount spent on local government. One need only cast one's mind back to the days of runaway inflation at the end of the last Labour Government to see that the value of money given to local government, as to everything else, was eroded dramatically year by year.

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  I emphatically endorse the idea, put forward yet again and most sensibly by my right hon. Friend the Member for Brent, North (Sir R. Boyson) of a reassessment of the role and functions of local government. New methods of financing, however good they may be, are not the whole story. Local government will not be positioned correctly to do the job that it is meant to do for those whom it represents until there is the sort of reassessment advocated by my right hon. Friend.
  I warmly welcome in a way that no hon. Member has yet done the statement made yesterday, and confirmed today by my right hon. Friend the Secretary of State, in announcing the Government's special help to those parts of the country so devastated by the 15 October storms. Those who have not visited the south of England—the county of my constituency, East Sussex, the neighbouring counties of West Sussex and Kent, north to Surrey and across the waters to Suffolk — cannot appreciate the devastation of that night. Everyone who has visited the area is astounded by the devastation, with trees broken off or blown over and houses damaged. The Government's help is welcome.
  Mr. Tony Banks: I am following the hon. Gentleman's remarks closely. I agree with him entirely. I regularly travel to Hastings, and it is depressing to see, as one drives along the roads or travels by railway, how many trees in Kent and Sussex were uprooted by that storm. Is the hon. Gentleman wholly satisfied that Kent and East Sussex are receiving adequate resources from the Government to deal with the problems arising from the storm?
  Mr. Rathbone: If the hon. Gentleman held his horses for a moment, he would be all the wiser.
  We very much appreciate the ability to charge to revenue building works up to the end of next March without losing grant. I commend my right hon. Friend the Secretary of State because after March the revenue costs of borrowing to repair damage will not incur grant loss for three years and the deadline for Bellwin grants of 75 per cent. has been extended from January to 1 March.
  I should like one small aspect of the extension to be considered. Some of the major repairs that must be made cannot be completed within that time scale. The rebuilding of Tideway school in Newhaven, which was devastated, leading to the whole school being evacuated, has meant considerable extra costs in providing temporary rented accommodation for schooling and extra costs in transporting pupils to the school. That will continue until the end of the summer term. The rebuilding will not be completed until some time in the summer, but the extra Bellwin-type cost will continue until the end of the summer term. The cost is estimated to be about £200,000, so we are not talking about small amounts. I ask my hon. and learned Friend the Minister for Local Government, who is carefully making a note of this point, to reconsider that expenditure, which is important for a county such as East Sussex.
  I should like to correct an impression given by my right hon. Friend the Secretary of State when referring to the first 1p of rate which is paid by councils before the Bellwin formula applies. My right hon. Friend said once again, as he has said before in our positive conversations with him, that that was the amount that a good council would put aside. I wish to cite some figures as background. The 1p
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  rate to be paid by the East Sussex county council produces £1·4 million, and expenditure at that level loses grant of £700,000 even if it is paid for out of a contingency fund. Had that money been notionally spent on such a fund, it would have meant a grant loss when the fund was formed.
  My right hon. Friend the Secretary of State advocated the establishment of a contingency fund, but that would have meant the county council losing grant — mainly because of mistreatment in previous years—of £700,000 from the beginning of the year, whether or not it had spent that fund. The council will now lose grant from the moment that it expends from the contingency fund that must be established. The fact is that at no time since the Bellwin rules were introduced has the East Sussex penalty been lower than it is now, so that setting up such a contingency fund would have been even more costly to the ratepayers. I want to put that point on the record.
  We are talking about huge amounts of money. The total expenditure envisaged by East Sussex is estimated to be £12 million—that is the financial measurement of the devastation caused by the storm. Under the new rules, the council can expect a grant from the Government of £3·5 million, decreasing the amount to be found by the council to £8·5 million. To that, however, must be added the loss of £700,000 grant, so that the total to be found by the council will be £9·2 million. I cite those figures to give the House an idea of the enormous damage in my part of the country.
  I thank my right hon. Friend the Secretary of State for the way that East Sussex is being treated this year, compared with previous years. Nevertheless, it is a low threshold of praise, because I am really thanking him only for no further suffering. Nothing has been done to put right the sufferings of previous years — although following them, even the status quo is a more comfortable state for the council.
  In a year's time, when the last rate support grant is announced, as a grand finale — a form of fireworks, perhaps — some of the moneys owed to East Sussex should be returned as a recognition of its being one of the best-run counties, if not the best run. That would be some recompense for its good housekeeping.
  I fear that yet again this year I must join in what has become an annual bashing of my right hon. Friend the Secretary of State. I must raise the problem of the rate support grant settlement for Lewes district council, the major district council in my constituency. When grant-related expenditure was announced, it showed an increase of 0·83 per cent. compared with 1987–88. That caused enormous concern and I wrote to the Secretary of State about it in the middle of last month. I have not yet received a reply, but I appreciate the burden of work on his Department in recent times.
  When the rate support grant was announced, we found that it was £311,000 below the figure for 1987–88. We were told that the methodology for calculating GRE was to be generally the same as for 1987–88. It is expected that between 1987–88 and 1988–89 the population of Lewes will increase by 2,642, or 3·1 per cent. The estimated increase in net committed expenditure—net of expenditure by towns and parishes — for 1988–89 compared with 1987–88 is £211,000, or 5·4 per cent. That is an interesting comparison with the increase of 5·75 per cent. in rate support grant nationally that was announced by my right hon. Friend.

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  The 5·4 per cent. increase in expenditure is within the suggested rate rise limit, especially if we discount the allowance for a 3·1 per cent. increase in population. However, the loss of £311,000 rate support grant will raise the estimated increase in expenditure from £211,000 to £522,000.
  After allowing for inflation of 4 per cent., the 5·4 per cent. estimated increase means, in fact, only a 1·4 per cent. increase in growth, which is more than accounted for by the expected 3·1 per cent. increase in population. That shows that Lewes is an extremely efficient council, in stark contrast to some of the councils to which my hon. Friends referred earlier.
  I shall write to my hon. and learned Friend the Minister setting out those details, and asking whether he will meet a delegation from the council, when I hope that he and his officials will explain the mathematics. I hope that he will reconsider the grant in view of the extremely efficient way in which the council is run.
  It is, perhaps, almost an historic occasion to be participating in the wake for rate support grant, grant-related expenditure, rate capping and so on. I am somewhat less sanguine than my right hon. Friend the Secretary of State about the planned community charge —a subject which will be tackled in debate next week.
  I thank you, Mr. Deputy Speaker, for giving me the opportunity to raise important, if local, points.
  7.7 pm
  Mr. Harry Barnes: I have some sympathy with the points made by the right hon. Member for Brent, North (Sir R. Boyson) about the halcyon days of local government before the introduction of legislation that rather aptly came into effect on April fool's day in 1974.
  At that time, the system of rate support grant allowed local government to operate on a firm and sensible basis, and it is vital that we return to that position. An excellent urban district council in my constituency was abolished by the Local Government Act 1974. It fought rigorously for the interests of its people in Clay Cross. At that time, there was a "moderate" Government under the right hon. Member for Old Bexley and Sidcup (Mr. Heath). The position in the area has worsened considerably and a strong fighting policy needs to be adopted.
  The Clay Cross urban district council was replaced by the moderate North-East Derbyshire district council. Its modesty has been shown by one of its leaders defecting to the SDP-Liberal alliance, following which there was a Conservative council, and then its last leader defecting to the Union of Democratic Mineworkers and the "moderate" Labour party. He was then soundly defeated at a by-election in Clay Cross.
  A council with that tradition—it now has a collective leadership to avoid such problems—will not be seen to be too excessive. In the Prime Minister's terms, it will be seen to be prudent and reasonable. Yet the prudent and reasonable authority is being dealt with in a most harsh fashion by the rate support grant arrangements and by the Government's failure to respond to the problems that it faces. In their context, its problems are as serious as the gale damage problems that are faced by authorities in the south of England.
  In north-east Derbyshire, there has been an underground fire in C'allywhite lane in Dronfield. It is on a private estate, although the district council has been obliged to take action
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  to rectify it. At the moment, costs amount to £500,000. Various losses, legal and other charges will also be involved. This year, the council will be obliged to instigate a 25 per cent. rate increase to rectify the problem. There has been no movement on the part of the Government, despite repeated requests by the North-East Derbyshire council and hon. Members.
  Furthermore, north-east Derbyshire faces the threatened closure of Renishaw Park pit. The closure of the pit and other businesses within the region will reduce the rateable value of the area. Subsequent job losses will mean that the local economy will suffer and less money will be available for local government purposes.
  When I first came to the House, I tabled an early-day motion to attempt to get the Department of the Environment to meet a delegation about the Dronfield fire. We have heard that the hon. Member for Lewes (Mr. Rathbone) hopes that a delegation from his district council will meet the Minister. It was only after considerable pressure and the signing of early-day motions and other measures and actions that the Minister agreed to meet the Dronfield delegation. We were given tea and sympathy. When the Minister asked what was sought, a delegate told the Minister, "We want sympathy and support." The Minister's reply was, "You have certainly got sympathy." We have always had a smiling face and smiling responses but we have had no support or assistance.
  In my maiden speech to the House, I referred to the details of the fire and the seriousness of the problems involved. Consequently, court action obliged the council, rather than the firms concerned, to take action. Funding has been sought to handle the crisis. That was the subject of an Adjournment debate, and there was a subsequent response from the Under-Secretary of State. We were told that we could not use the derelict land legislation to find funds. However, I suggested other measures to the Minister. He did not respond to them. I have elicited a "no" response from the Minister to a written question. One avenue for funds is the Bellwin scheme. It does not refer only to gales. It states:
  "To provide special financial assistance to local authorities who, as a consequence of an emergency, would otherwise incur an undue financial burden in providing relief and carrying out immediate works to safeguard life or property or prevent suffering or severe inconvenience to affected communities."
  Those provisions apply exactly to this case and other cases that hon. Members could put forward. There have been deputations from Strabane about the floods on Northern Ireland. They were united deputations, involving Ulster Unionists and Sinn Fein members coming to the House to state their position. The Government should respond to that sort of unity and concern. There is a common interest whether there is gale, flood, or fire damage. Such matters should be responded to.
  I also suggested that the Government could set up an emergency fund additional to the Bellwin scheme arrangements so that the entire amounts could be recovered. There could be some alteration to the public health legislation, under which councils are obliged, when there are safety problems, to take action to cause firms to act. Such firms may be driven into bankruptcy because they cannot handle a matter. The council must then take action and carry the costs. Adjustments of that nature must be responded to and seriously considered.

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  I asked a written question of the Secretary of State to find out the situation in respect of funding, since various points were not answered in the Adjournment debate. The Secretary of State replied:
  "As I have told the House, it would not be appropriate to make central Government financial assistance available to help fund the remedial works necessary to put out the fire.
  My right hon. Friend, the Secretary of State, has considered North-East Derbyshire district council's request that unrecovered expenditure it incurs in dealing with the fire should be excluded from the definition of total expenditure, and has decided not to include it."—[Official Report, 2 December 1987; Vol. 1430, c. 629.]
  That means that, apart from using this opportunity, I have now had to present a ten-minute Bill that will refer not only to the underground fire at Dronfield but to other underground fires and disasters to show that there should be funding provided.
  In addition to my constituents having to face a high rate increase to handle the emergency, they also face wider problems that affect the whole of Derbyshire. Derbyshire now faces grant capping, which will seriously affect it. The object of the grant cap is supposed to be to limit grant charges from year to year. In other words, an authority's proper grant entitlement is calculated and then a separate factor is applied to reduce that grant entitlement to an arbitrary limit that is set by the Secretary of State. The benefit of the reduction in grant is then shared out in small measure between all other authorities in the country who are not subject to a cap. By next year, the cap will cost Derbyshire ratepayers almost £70 million. It was introduced as a transitional measure in 1986–87, following the Government's abolition of the targets and grant penalty system. The important point to understand about the grant cap issue is that it is completely unrelated to the council's spending policy and that there is nothing that the council can do to eliminate the cap. No cuts that it may impose, nor other action that it may take, will eliminate the measure.
  Should Derbyshire ratepayers continue to be penalised at a rate of £20 million a year so that a small benefit can then be provided for other authorities? The annual national value of the cap is equivalent to around only 0·5 per cent. of the block grant pool that is available to other authorities. Its continued use can no longer be justified.
  North-east Derbyshire residents are additionally in a difficult position in regard to the fire. The barrier that the council provided at considerable expense seems to have been breached in one area. The fire is extending towards gas supplies in south Yorkshire. The crisis still exists and funding is still required. I ask the Government to look seriously at the position to see whether assistance can be given, and to consider the other points raised on the grant cap in Derbyshire.
  7.19 pm
  Mr. George HowarthUnfortunately, the right hon. Member for Brent, North (Sir R. Boyson) is no longer in the Chamber, but I was interested in his remarks about the past and the possible future of local government, particularly as I served on an urban district council in the early 1970s, which has now gone the way of many of those bodies since the Local Government Act 1974. I look back on those days with rosy and warm feelings, no doubt in the same way as other hon.
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  Members do, but it strikes me that the reduction of the size of local government would be a major undertaking and not quite as simple as the right hon. Member for Brent, North, even with his vast experience, might imagine.
  For example, what would we do with education? Would we move it up or down a level? Other considerations would make the changes somewhat more complicated than the characteristically populist solution described by the right hon. Member. Nevertheless, I am sure that his sentiments were genuine. While I empathise with his looking back to the rosy days before 1974, it is not as simple as that. The time is approaching when we should look at the functions and size of local government, although I am not sure whether now is the right time.
  The rate support grant settlement will affect urban areas, particularly Merseyside and my constituency. The Government, with their much trumpeted initiatives on the inner city and urban areas —I hope that that includes outer areas—have made a small but significant shift in the settlement away from metropolitan districts, where most stress areas are. Those stress areas will have an increase in funding of 7·4 per cent. The Government have taken a slightly meaner approach to metropolitan districts than to the rest of the country, which is somewhat strange when the Government claim to be helping urban and stress areas. It is strange that metropolitan districts should be under attack.
  Currently, about four of the 36 metropolitan districts are spending less than the grant-related expenditure assessments, which means that 32 are spending more. Are the Government saying that those 32 have got it wrong and the four have got it right? If so, that is a strange way of approaching relations with local government, and the matter should be reconciled.
  The rate support grant settlement for Merseyside will be increased by 6·7 per cent., which is significantly less than for the rest of the country, which will receive an increase of 7·5 per cent. Whatever may have taken place in the past to affect the Government's relationship with some constituent authorities in Merseyside may not have had any bearing on the changes, but I think that all hon. Members would concede that Merseyside has major problems caused by the demographic and industrial changes which have taken place over several decades and longer.
  Successive Ministers, including the Prime Minister on one or two occasions, have been to Merseyside to look at the problems. The right hon. Member for Henley (Mr. Heseltine) has taken a great interest in Merseyside. Most people have accepted the evidence of their own eyes. There is considerable decay and many problems.
  I do not go along with the school of thought that we should whinge about everything on Merseyside because everything is so bad. There are many good things on Merseyside. There are some good things in local government and good things caused by local government having allowed the voluntary sector to undertake certain functions. I do not agree that we should always bleat about Merseyside, but anyone looking at the problems would have to concede that the solution must involve the central Government directing resources into stress areas of Merseyside, including parts of Liverpool, Knowsley and Birkenhead. The stark truth is that anyone looking at the problems of urban dereliction and inner cities must concede that point.

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  I concede that local government must sometimes take different and radical approaches to tackle problems. In Knowsley, the settlement is slightly more than 7·9 per cent., which is higher than that for the rest of the country and more than the rate support grant settlement for Merseyside. At first glance, I thought that I should have to congratulate the Secretary of State—until I started to analyse the changes that the Government expect local government to take on board and how those changes will affect the settlement.
  First, the administration of changes to the housing benefit, recently passed with some opposition from Opposition Benches, will cost my local authority some £300,000. That is a considerable sum of money, which is necessary if the changes are to be administered humanely and decently. We are still waiting for the debate on the rights and wrongs of the poll tax, but it is estimated that my local authority will have to employ 90 staff to deal with its introduction, which will cost approximately £1·5 million for additional accommodation, administration and staff.
  The introduction of competition is another factor. As recently as yesterday, the borough of Wirral, which was controlled by the Conservatives, re-let the privatisation of cleaning services. An in-house tender from local authority staff has succeeded in replacing the private contractors who have been doing the work for two or three years. The Minister may say that that is competition and that the Government do not object to local authorities winning tenders, provided they are competing with private enterprise. The Liverpool Daily Post reported this morning that the Conservative leader attributed the success of the in-house tender to the changes in the way in which local authority officers had done their jobs and had prepared the in-house tender so that it would be acceptable.
  That confirms a problem in my constituency. The preparations for the introduction of competition are estimated in next year's budget to cost something like £220,000. The local authorities used consultants to do that. Local authorities will have to cover those additional costs which result from measures that the Government have introduced, and which will not be met by the rate support grant settlement.
  Another problem which is common to all local authorities is that of pay awards. I do not object to the various pay awards—far from it. In my local authority, two thirds of the costs of all services involve salaries and pay. They vary from the administrative and technical grades which were given about 7 per cent. to the pay award to manual workers which was about 10 per cent. In regard to the teachers' pay award, there is a residual amount to be paid from a previous award and the current year's pay award still has to be settled, but it appears that the overall increase in the cost of teachers' pay will be over 10 per cent. That means that there will be a settlement of 7 or 8 per cent. If we add up all those problems, and the cost of pay awards, we see that the Government proposal is likely to be inadequate, even in my borough which does comparatively well compared with others on Merseyside.
  Another of my worries is that the grant at GREA level will be £48·6 million. If we assume that we will spend something like 8 per cent. above GREA, the grant will be reduced to £46·2 million, a loss of £2·4 million. I know that the Government have accepted the inconsistencies and problems, and have promised to change the system, but, having accepted the need for change, why will they not
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  change the system straight away, this year? Why do they not say, "We will make the change now, and we will set the level of expenditure at GREA and we will not penalise those who are on the threshold, or just on one side of it"?
  All those problems, and their financial consequences, do not mean much until we examine the problem on the ground, and what it means to live in an urban area. We have heard some graphic illustrations of the effects of storm damage, with which I have some sympathy. I travelled in south-east England and I was moved by the fact that lots of trees were lying beside the road. I sympathise with hon. Members who have such problems. The truth is that in areas such as Knowsley, urban and industrial decay are facts of life. They were not created by the people who live there. They are the result of structural changes in the economy, the recession, regional policy and the lack of industry being directed into such areas. Industrial and urban decay are common everyday experiences.
  We need to improve education. I do not think that the education system is wonderful. I do not agree with the Government's proposals, but I believe that changes can be made in the education system in Britain and in my constituency, which will not necessarily cost a lot of money. If young people who live in my constituency are to have an equal chance in life, more money needs to be spent on their education. That will not happen under the present proposals.
  We also need extra resources to improve the environment. Nothing is so impoverishing as to drive around some of the housing estates in constituencies such as mine and look at the problems, some of which have been created by local authorities. Those problems involve the design of the estates and the resources that are available to improve and maintain them. It is an impoverishing experience to live in an area where the environment is poor and getting worse. As a result of the RSG settlement there will be no additional resources to deal with those problems.
  I accept that there are many things wrong in the country. However, the malicious attitude that the Secretary of State has adopted towards local government will do more harm than good. I accept that things go wrong in the management of local authorities. I spent 14 years working on a local authority and such organisations employ many people and are involved in the operation of complicated procedures, some of which have been introduced by legislation. It is inevitable that, in those circumstances, local authorities occasionally get things wrong. I believe that there is always scope for increased efficiency within a local authority. I do not believe that there is anything anti-Socialist or anti-citizen in saying that —certainly most of my constituents would agree.
  Things are not improved by the bashing approach that has been adopted by the Secretary of State. Improvements are made as a result of consent and discussion and by respecting the fact that local authorities represent the true, elected voice in their communities. I believe that the Secretary of State is mistakenly — the RSG settlement reflects that — managing the whole national process of local government with a mixture of malice and, on occasions — as demonstrated in this debate — incompetence. I find that breathtaking, but, more to the point, I find it deeply disappointing.
  7.36 pm
  Mr. Barry Field: I make no apology for being parochial because I believe that I am correct in saying that I am the only hon. Member who speaks for an entire county council.
  All the political parties on the Isle of Wight have recognised the problems caused to that island by the rate support grant. That consensus goes back to the days of my predecessor but one, Mark Woodnutt. Certainly, in the days when the constituency was represented by Stephen Ross—yesterday he was ennobled in another place—he did a considerable amount of work in endeavouring to convince the Association of County Councils of the merit of the island's case. Indeed, when my right hon. Friend the Member for Henley (Mr. Heseltine) was Secretary of State for the Environment he agreed to take up the island's case. It is a matter of much sadness to the island that, at that time, the ACC refused to allow adjustments to be made that would have benefited the island.
  The island is unique in a number of instances. Over the years the council has continually made applications for assisted area status, but has failed to convince the Government that the island should be such an area. I believe that the stumbling block may be that the decision is judged on a regional basis. Despite our high unemployment, our infrastructure and local government difficulties, the problem is that the island is judged against the backdrop of one of the most prosperous regions in the United Kingdom.
  As a result of the Council for Small Industries in Rural Areas and the Development Commission, the island enjoys rural development area status. I believe that that is unique for an entire county. The county is also designated as a travel-to-work area by the Department of Employment. I am not an expert, but I venture to suggest that that is rather remarkable when one considers that the island is 60 miles wide. I do not believe that many travel-to-work areas in the country cover such a distance.
  The island suffers considerable difficulties because it is an island. My right hon. Friend the Secretary of State for the Environment should consider that, under the present RSG settlement, the Isles of Scilly are given special treatment. That treatment reflects the consideration given to the finance of those islands, the small population and the dislocation caused by that archipelago. Although we have consistently failed to persuade the Department of the Environment of the merits of our case, we should receive similar treatment to that afforded to the Isles of Scilly and to the Scottish islands.
  Plant and machinery costs a great deal more, as do materials, because they must come across to the island by ferry. Although the island is only 88 miles from London as the crow flies, it has been estimated that that round trip is equivalent to a journey of 300 miles when the time on the ferry is taken into consideration.
  Let me give my right hon. Friend an illustration of the difficulties faced by local government on that island and the increased costs that we must bear as a result. I especially direct my right hon. Friend's attention to a serious fire that occurred last night on the island. Unfortunately, that fire has led to the temporary loss of 60 jobs. I am sure that my right hon. Friend will appreciate that, when such a fire occurs, there is no way in which a fire engine can board a ferry—the journey takes some 40 minutes and that assumes that the fire engine would be
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  waiting for that ferry when the fire broke out. As it is impossible for the island to rely on back-up facilities from other counties, the authority has the extra cost of supplying additional fire appliances.
  There is a well-known joke about being a long-distance lorry driver on the Isle of Wight. We do not have any motorways or trunk roads—it can be argued that our roads lead to nowhere. The island loses out substantially because of our transportation difficulties.
  Hon. Members will be aware that this year the ACC made a representation to my right hon. Friend for the abolition or the safety net. I believe that I am correct in saying that if the net were abolished only three county authorities would lose as a result. Yet again, the Isle of Wight would be one of those authorities. Therefore, we are delighted that my right hon. Friend has decided to keep that safety net. It offers a considerable advantage to the island.
  I received a letter today from my right hon. Friend about a matter that I had previously raised with him regarding the short-sightedness of the Treasury valuer in not asking for a reduction in the rates on an area covered by the prison that is currently unoccupied—in fact, that part of the prison is uninhabitable at the moment—and for those prison officers' houses that have been sold either to the local authority or on the open market. The amount that is required to be repaid to the Treasury dates back to 1982–83. In the normal course of events, when such an amount is discovered on a year-on-year basis, an adjustment is made to the rate support grant. I drew my right hon. Friend's attention to the matter because, if the sum must be repaid in the current year—we very much hope that we may find a way around that—it will be equivalent to a charge of £2 per head of population of the island. It is a substantial sum of money for our local government to find.
  I am anxious about the longer term because the measure may have an effect on the base level of our community charge, although I welcome that charge. The unified business rate in both boroughs will drop substantially, by over 7 per cent. in one borough and by 4 per cent. in the other. We must not incur any extraneous expenditure that might have a detrimental effect on the base level for the community charge.
  We have had the promise of a payment of some £55,000 for the storm damage caused by the hurricane. If we judge this on the sum per head of population, we see that my right hon. Friend the Secretary of State has treated the Isle of Wight generously. I am delighted that he should have done so because our county motto is, "All this beauty is of God" and we are looking forward to restoring that beauty. My right hon. Friend visited Osborne house earlier this year. He will appreciate the devastation caused by the severe weather and he saw the island at its best.
  When we made our annual deputation to my right hon. Friend to discuss our rate support grant, we discussed the storm damage and asked whether a form was available to make application for compensation. We were told that there was not, but that we should write and request additional capital allocation. We did and were told by the Department of the Environment that we should fill in the appropriate form. We received a letter on 20 November, telling us that a form was available. In the reformation of rate support grant, which we all welcome, perhaps the Isle

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  of Wight will have played a tiny part in history as it made the Department of the Environment invent a form to apply for compensation for storm damage.
  7.47 pm
  Mr. William O'Brien: The hon. Member for Isle of Wight (Mr. Field) may represent a whole county, but several hon. Members can speak on behalf of their counties. I can speak about issues affecting the five districts which make up the area of west Yorkshire. He referred to several issues regarding local authority administration on the Isle of Wight. We share his concern, particularly about the fire service.
  The hon. Member said that the Isle of Wight had assisted area status. We wish that we could obtain such assistance for areas of industrial dereliction where unemployment is high, yet Wakefield, which is in my constituency, is denied assisted area status. The hon. Member is fortunate to have such Government assistance. However, I am disappointed that local government has little to look forward to in the rate support grant report presented today by the Secretary of State.
  When I look at the report and the detail of what is quite an extensive document, I see that it is signed by the Secretary of State for the Environment and the Secretary of State for Transport and has the consent of two of the Lords Commissioners to Her Majesty's Treasury. I am disappointed that there is no reference to anyone from the Home Office. When it comes to fire service and civil defence provision, the Home Office has the responsibility for setting standards, as it has for police forces. The Department of Health and Social Security is involved in provision for joint financing between local authorities and health authorities. Then there are community services: a good many people have been transferred from Health Service provision to local authority provision, but there are no extra resources of any significance in this document to assist either community services or joint financing. It means that in many cases the local authority must carry the full burden of schemes which had originally been jointly financed between it and the health authority. The fact that councils now have to make total provision for these jointly financed schemes means a tremendous call on local resources.
  It' the Secretary of State is to judge the worth of those schemes, we must have services that give value for money. To do that, local authorities must be helped. There must be some examination of the level of local authority expenditure which will allow them to provide the services that people demand, in my area as in other areas.
  In my area there is a great demand for the services that the local authority provides. Every weekend I am approached by constituents who have problems arising from social services, and from housing, particularly for the elderly and disabled. People look forward to meeting their local authority representatives so that they can put their case for better services. Yet because of the restrictions applied by the Secretary of State to local authorities, my constituents and those of other hon. Members are denied the services to which they are entitled.
  What gives me the greatest cause for concern is the provision of fire cover in the west Yorkshire area. This area covers five district councils — Leeds, Bradford, Kirklees, Wakefield and Calderdale. Special provision must be made to ensure that we get a proper fire cover to the standard laid down, in the main, by the Home Office.
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  The Home Secretary lays down certain standards of fire cover which are then passed on to the fire services in west Yorkshire and to the joint committee that administers them, yet we have the ridiculous situation in which the Secretary of State for the Environment decides what the level of expenditure must be, thereby making it very difficult for the fire services to provide the necessary cover to the correct standard.
  In February 1985 the Central Fire Brigades Advisory Council published a report entitled "Report of the Joint Committee on Standards of Fire Cover". Among its conclusions and recommendations, the report said:
  "We emphasise the importance of proper categorisation of risk for the operation of meaningful recommended standards of fire cover, and recommend that fire authorities should, on receipt of revised composition guidance from the Home Departments, review the categorisation of risk in their area in the light of it".
  In other words, fire services were requested to examine areas of fire risk and to build up to the recommended cover.
  In west Yorkshire in 1988–89 the amount required to reach the required standard of cover is £39·2 million. The initial expenditure limit announced by the Department of the Environment is £36·4 million, so when it comes to providing the necessary service in west Yorkshire we have a shortfall of £2·8 million. There are areas in west Yorkshire where the fire risk is exceptional and where the resources of the fire service are so stretched that it is difficult to ensure that the necessary standards are achieved and maintained. The fire services' authority is faced with such a dilemma that representations have been made to the Home Office, asking it to approve the maximum possible amount to ensure that proper standards of service are achieved.
  An initial expenditure has been announced at £36·4 million. Yet the amount required just to stand still, taking into account inflation and so on, for the west Yorkshire civil defence and fire authorities is £37·8 million, so we have a shortfall of £1·4 million, even though we are just standing still. This is a devastating situation where, to meet the standards of fire cover laid down by an advisory body which was established to make recommendations and advise authorities, it will cost £39·2 million. Yet the difference between that figure and the initial expenditure limit that has been announced is £2·73 million.
  Mr. Allen McKay: Will my hon. Friend take into account the fact that the south Yorkshire fire service, which also made recommendations to the Home Office and to the Secretary of State, is in a similar position? It is in danger of having to take appliances off the road. The problem is compounded by the fact that the adjacent services in each area cover for one another in the event of a major fire. This means that someone has to decide whether that cover can be given, because, if it is, it tends to dilute the fire cover that it is possible to give in an individual force's area.
  Mr. O'Brien: I am grateful to my hon. Friend the Member for Barnsley, West and Penistone (Mr. McKay) for drawing attention to the fact that south Yorkshire is facing similar problems as those of west Yorkshire on fire cover. My hon. Friend is correct with regard to the cross-boundary service that supplements fire cover on the boundaries.
  If something is not done to help fire authorities in west and south Yorkshire, the service that people are entitled

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  to will deteriorate. When a catastrophe occurs there will be no point in the Prime Minister or any other Minister coming to the area to offer condolences. The Government have a responsibility to ensure that an adequate level of service is maintained.
  The standards of the service are set not by the fire service in west Yorkshire or by the joint committee but by an official, established body, which ensures that in a high fire risk area there is proper cover. We in west Yorkshire are concerned—I am sure that the same applies to south Yorkshire — that there are areas of high fire risk in which there is doubt about the level of cover.
  I hope that the Secretary of State will note the problems facing local fire and civil defence authorities. In west Yorkshire, six special appliances have had to be demanned. A further reduction in financial resources to that extent is equivalent to the demanning of five pumping appliances, 12 specials or a combination of either. If the expenditure levels that are needed to provide proper fire cover are not agreed by the Secretary of State for the Environment and the Home Secretary there will be a further reduction in fire cover in the area.
  For the service to stand still in the coming year it would require an additional £1·3 million, or a 3·8 per cent. increase over and above the announced limit. The base budget for 1987–88—I hope that the Secretary of State is noting these figures; I notice that he is doing some jottings, but I shall supply him with them if he wishes—is £34·6 million. The commitment for increases in pay up until March 1989 will require a further £2·3 million. The services pension commitment will require £274,000. Expenditure over and above the influence of the authority —loan charges—amounts to a further £120,000. Phased recruitment, which will take into consideration wastage, will cost £278,000, and the increment for public holidays will cost £221,000. Total expenditure for the service to stand still is £37·8 million.
  Provision must be made for the appointment of uniformed personnel, in accordance with the establishment scheme. That scheme is reflected in the standard of cover that has been suggested and laid down by the body that I referred to earlier. In accordance with the establishment scheme, the total cost of appointed uniformed personnel is £792,000.
  Loan charges on capital plant are inescapable and will amount to £261,000 for 1988–89. The maintenance of buildings to prevent further deterioration will cost £300,000.
  Taking those figures into consideration, the service requirement to ensure that the standard of cover is adequate to meet the recommendations laid down by the authority is £39·2 million. As I said earlier, there is a shortfall of £2·7 million. A 7·5 per cent. increase is required to maintain the standard of cover to which people are entitled.
  With regard to capital expenditure, there are a number of issues that the fire service cannot ignore, such as fire appliances and equipment, which cost £912,000. Other vehicles must be replaced to ensure that the standard of service is maintained. The authority must undertake major refits of equipment. New pumping stations must be established, because where there is development and an extension of local authority services they are a necessity. North-west Leeds is scheduled for a new pumping station.
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  With regard to the provision of water supply and hydrants, there must be capital expenditure of £60,000 by the west Yorkshire fire authority to maintain these services. I have grave reservations that unless assurances are given in the Public Utility Transfers and Water Charges Bill, which we are considering in Committee, or unless provision is made in that legislation that will give proper and adequate cover for fire services, problems could develop. If the Secretary of State runs true to form, we shall have to pay for water and services for fire cover. If that happens, the West Yorkshire fire service and the joint committee will have burdens placed on them over and above the matters to which I have referred.
  The energy conservation programme for west Yorkshire has cost £100,000. There is a wealth of evidence that the authority is doing all that it possibly can to obtain value for money. The report on the standard of cover makes it clear that a detailed review of fire risk categories must be carried out for the entire area. The west Yorkshire fire authority has undertaken an extensive exercise in that regard. Certain areas in west Yorkshire have been identified as being in an high-risk category. I plead with the Secretary of State to take note of the position and to ensure that we have adequate fire cover to meet the problems that our fire services committee envisaged. This district audit service is supportive of the authority's case. In its report on the accounts of west Yorkshire it concludes:
  "Though the failure to meet Home Office standards and guidelines on attendance at incidents has no direct financial cost to the Authority, there is, nevertheless, potentially a cost to the community if, by such failures, life and property is needlessly and avoidably lost. The Fire Authority should, therefore,

  (a) continue to press the Home Office to approve the proposed established plan, and

  (b) seek redetermination of its expenditure limits based on the approved plan."

  That is the purpose of my appeal to the Secretary of State this evening. When he is dealing with rate support grant he should bear in mind the protection of life and property in west Yorkshire. The standards that are set by the Home Office should be given some serious thought. The Secretary of State and his officials should be considering the representations made by west Yorkshire and should lift the expenditure limit to the £39 million for which it is asking.
  Again in its report, the audit office said:
  "Any reduction from the redetermination bid submitted by the authority means that the recommended standards of service cannot be implemented in West Yorkshire."
  I want to put that on record in the House. If the Secretary of State does not take into consideration some of the important issues that are being reflected by the Home Office, the people who audit the accounts of west Yorkshire fire and civil defence authority and the joint committee, I want to ensure that the responsibility for any failure that may occur in west Yorkshire because of the lack of resources is the clear responsibility of the Secretary of State for the Environment. Everyone involved in fire cover in west Yorkshire believes that there should be some redetermination of the level of expenditure. Anything less than that redetermination is the responsibility of the Secretary of State and the consequences that follow will also be his responsibility.
  I referred earlier to the search for value for money. The authority has been trying to become more efficient and effective. Pumping appliances have been reduced from 94

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  to 79. Special appliances have been reduced from 43 to 38. Control room personnel have been reduced from 90 to 58 and the proposals put forward in the current year to try to obtain value for money suggest a further reduction in pumping appliances from 79 to 77 and in special appliances from 38 to 36.
  Many other initiatives have been pursued vigorously which have resulted in reduced resources employment. The reserve appliances have been reduced from 20 to 16. As my hon. Friend the Member for Barnsley, West and Penistone said, we have reserves so that if there is a call from a neighbouring authority the vehicles and equipment are ready. However, the authority in west Yorkshire has said that a saving of £250,000 can be made by reducing the reserve appliances from 20 to 16.
  There is also the question of increased efficiency. There is a reduction in the premises available. The capital investment in energy conservation is an effort to increase efficiency and obtain better value for money. There is a training school in west Yorkshire which has increased the fees charged to external clients with a view to increasing the income by a further £250,000. Therefore, there is extensive involvement by the people in the west Yorkshire area and those on the joint committee, which, as I have said, comprises representatives from the five authorities I have mentioned.
  Having taken all that into consideration, there is the question of the shortfall of £2·7 million from the requirement to ensure that the standard of cover is maintained. There is also the question of the provision that has been made in the budget we are considering now. If the Secretary of State is not prepared to redetermine the expenditure level of the fire cover in west Yorkshire, I fear for some of the people who depend upon that fire cover.
  There is also the problem of the reduction of the services provided by the health authorities. There has been a reduction in the provision of resources from the regional health authority to the Wakefield and Pontefract area health authorities. As a result, there are now additional calls upon the local community services. Unless there is additional funding for those community services there will be a further fall in the services provided by the Wakefield local authority. I ask the Minister and the Secretary of State to redetermine the expenditure level of local authorities and to redetermine the grants being made available, particularly the rate support grant. Let us have some realism back in local government.
  I served in local government for over 30 years before coming to the House. At no time has morale been as low as it is now. I ask the Minister to realise that. The Government should take into consideration the work being done in providing services more so now than ever before. They should ensure that the resources are provided so that the services can be maintained. I would consider anything less than that to be a criminal act against the people who depend upon the local services.
  I appeal to the Minister and the Secretary of State to give some careful consideration to the provisions in the Local Government Bill. Anything less than that would not be in the best interests of the communities we all serve.
  8.19 pm
  Mr. John Marshall: My right hon. Friend the Secretary of State said when he opened the debate that this would be the penultimate debate on the rate support grant. Everyone who has been in local
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  government will say amen to that. It has been said that the Schleswig-Holstein question was once understood by three people, one of whom was dead, one of whom had gone mad and the third of whom had forgotten all about it. It would be fair to say that the rate support grant is equally well understood.
  I was chairman of a local government finance committee when the rate support grant system was introduced. It seemed to me then, and subsequent events have confirmed, that this system is unfair to different local authorities. It was based on the assumption that expenditure in a particular base year bore the same relationship to need in different local authorities, but that is untrue. Certain local authorities, such as Barnet under the energetic leadership of councillor Leslie Pym, heeded the advice of Socialist Secretaries of State of the Environment that the party was now over. But many other local authorities completely ignored that advice and continued to spend, spend, spend.
  Within London, a number of local authorities, such as Wandsworth, Ealing and Hillingdon, had changed control in 1978, and there was still a substantial amount of fat to be taken out of the system, as my hon. Friend the Under-Secretary of State did with such conspicuous success in Wandsworth. When I was chairman of the finance committee in Ealing, we found that we could make a substantial reduction and still provide adequate services which would give the ratepayers a good deal. The success of our policy is confirmed by the fact that the Leader of the Opposition was happy to live in Ealing during those years, enjoying the services that we provided and paying the rates that we charged.
  As the system has developed, it has become difficult for authorities such as Barnet, which had economised over the years and had got rid of the fat in the late 1970s, while others still had a substantial reservoir of excess cost that could be taken out of the system.
  The grant-related expenditure assessment system is based on many variants and manages to cover its subjective approach by a veneer of precision. To tell local authorities that a figure is going up by 9·1 per cent. rather than 9 per cent. implies a spurious accuracy. However sophisticated computers may be, and however large the variables may be, we cannot be as accurate as that. To Conservatives, it is an alien philosophy that the Government should tell a local authority, of whatever political persuasion, that its expenditure should go up by a certain percentage. That implies a knowledge of the local scene which the bureaucrats in Marsham street will never have.
  We are discussing tonight the rate support grant for 1988–89. Whatever decisions local authorities may take in the light of that grant will have only a limited impact upon expenditure in the financial year 1988–89. If, as a result of these grant decisions, the London borough of Barnet were to recommend the closure of a school, by the time the consultative procedure had been completed, it would make no difference to expenditure in 1988–89. At best, it would make only a limited difference.
  Parents would have to be consulted and the Secretary of State for Education and Science would have to make a decision, and by the time all that procedure had gone through the next year's rates would not be affected. One must remember that decisions taken in local government will have a limited impact in the next financial year and

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  the real benefit will come somewhat later in the local authority's life. The system did not take that into consideration either.
  All Conservative Members will look forward with relish and enthusiasm to the Second Reading of the Local Government Finance Bill next Wednesday and Thursday because that Bill will get rid of much of the nonsense that has affected local government for too long.
  Madam Deputy Speaker (Miss Betty Boothroyd): Order. The hon. Gentleman is rather anticipating what we shall be debating next week. We have not yet had the business statement.
  Mr. Marshall: I am sorry, Madam Deputy Speaker, but certain rumours are going round the House, which may be right or wrong, that we shall be debating that legislation next week. I think that in his opening remarks my right hon. Friend the Secretary of State said that it was likely that we would be debating the subject next week. Therefore, I was merely showing the great care with which I listened to what my right hon. Friend said so brilliantly when he opened the debate.
  Madam Deputy Speaker: I shall listen with great care to what the Leader of the House has to say tomorrow.
  Mr. Marshall: Shall we take a wager about whether I am right or wrong?
  Madam Deputy Speaker: I am not a gambling woman.
  Mr. Marshall: I am glad to hear it, Madam Deputy Speaker.
  Let me deal now with certain factors affecting the London borough of Barnet. My right hon. Friend referred to the Bromley case. That case affects several London boroughs, of which Barnet is one. As a result of the Bromley case, we in Barnet have been deprived of grant which it is, and always was, the Government's intention should come to Barnet. It would be helpful if, when my hon. Friend replies, we could be told what percentage of the Bromley error will be made good before rate fixing in 1988. Clearly that is an important factor in determining the Barnet rate next year.
  Barnet has had an actuarial valuation of its superannuation fund which shows that the fund is already heavily overfunded. We do not see why we should be encouraged to put even more money into that next year. Currently, superannuation funds are subject to quinquennial review. But the stock market, even with the recent downturn, has been so buoyant in recent years that more frequent reviews might well be justified to ensure that funds are not overfunded. I hope that when my hon. Friend replies he will be able to give us an assurance that within the next few months the Government will be able to make a statement on that matter.
  On behalf of the London borough of Barnet, I welcome the comments made about storm damage. We should now suffer less than we might otherwise have done, so we welcome that statement.
  Let me deal now with competitive tendering in local government. I may be anticipating the debate which I now understand will take place next Monday night, of which we have had due notice, but it is fair to say that in looking at the rate support grant report one must consider the way in which local government spends our money. In all my 17
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  years in local government I have always been convinced that competitive tendering between the private and public sector gives the ratepayers a much better bargain than they would otherwise get.
  I well remember being a member of Aberdeen town council at the same time as the hon. Member for Oldham, Central and Royton (Mr. Lamond). At that time, we had a debate about whether the old police station should be knocked down by direct labour or by a firm selected through competitive tendering. I voted for competitive tendering. Needless to say, the hon. Gentleman voted for direct labour. We had a vote in committee, which I won, and we went out to tender. The private contractor offered to do the work for 20 per cent. less than the in-house organisation. However, by then the hon. Gentleman's party had a majority and it voted for the acceptance of the in-house tender.
  I am glad to say that the then Labour Secretary of State for Scotland ordered Aberdeen town council to give the work not to the in-house organisation but to the private contractor. I was glad to see that even a Socialist Secretary of State could opt for a private contractor. Since then, in the London borough of Wandsworth, under the energetic leadership of my hon. Friend the Under-Secretary, we have seen how competitive tendering can work well.
  The experience of the London borough of Ealing was similar. For example, we found that our school meals service could run much more efficiently with an outside contractor, saving hundreds of thousands of pounds. One day my son came home from school and said, "Daddy, why are the meals so much better now?" I said, "My boy, you are learning a basic political truth. The meals are now provided by an outside contractor. It is saving the ratepayers money and you, the consumer, have told me that you are getting better meals." I suspect that a similar story could be told right across the country.
  We know that competitive tendering has saved the Health Service £100 million a year. When the Local Government Bill receives the Royal Assent, we shall save the local authorities just as much. The hon. Member for Knowsley, North (Mr. Howarth) said that it would cost his authority £220,000 to prepare for that Bill becoming law. I suspect that the savings will be out of all proportion to that small additional cost. He told us about the Wirral case, in which the in-house tender had been successful. I listened with interest to what the hon. Gentleman said, and what he did not tell us was whether the in-house tender had been less than it would have been before competitive tendering was introduced. The fact that he did not tell us leads me to suspect that there has been a saving to the ratepayers in the Wirral, which everyone must welcome.
  It is not just by competitive tendering that local government can get better value for money and produce a more cost-effective service. The Audit Commission has produced many examples of savings that local authorities can make—particularly in education. Throughout local authority areas in England and Wales — it was confirmed at Scottish Question Time today that the same applies in Scotland — far more school places are provided than are needed. That is bad both educationally and economically. It means that we have a large number of schools providing an inadequate range of choices. Pupils cannot get the fully comprehensive education that a comprehensive school should offer if the number of children entering the school is very small. It is bad

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  economics to keep open schools in which the ratios tend to be wrong and to heat classrooms that few pupils will use. That is the economics of the madhouse.
  I hope that I have demonstrated that there is scope for local government to save substantial sums and produce better services for ratepayers. I look forward to that process continuing as a result of the Local Government Bill and to reasonable rate increases across the country this year as a result of the rate support grant settlement for 1988–89.
  8.33 pm
  Mr. Pat Wall: I shall address most of my remarks to the difficulties of Bradford metropolitan district council, which I understand are shared by only four other local authorities— Birmingham, Sunderland, Cleveland and a local authority in Derbyshire. Before I deal with that problem, which arises from the Government's use of the so-called multiplier, I should like to take a general look at the background against which this debate is taking place.
  My hon. Friend the Member for Copeland (Dr. Cunningham) estimated that, since 1979, the percentage of local authority expenditure accounted for by rate support grant has fallen from 61 per cent. to 46 per cent. According to an excellent document produced by the local government officers, the figure in London has fallen from 65 per cent. to 40 per cent. The penalty imposed for so-called overspending over that period has now reached a staggering £29 billion.
  All this has taken place at a time of growth in unemployment, hitting urban and inner-city areas in particular. The consequence of the economic facts after eight years of Conservative government has been a massive increase in the problems associated with social deprivation. About 43 per cent. of our population would be classified as poor by any civilised standards. This process has placed increased burdens on many local authorities. While there is a desperate need for increased provision of social services, housing and urban renewal, the Government continue their attack on the rate support grant and thus on local authorities' ability to grapple with the problems.
  The so-called beneficiaries of Thatcherite popular capitalism have not escaped, either. In a desperate attempt to maintain services, councils have resorted to massive increases in rates. The more prosperous 53 per cent. of our community, as well as many of the poorest, have had to make their contribution by finding the money for those increases. Contrary to Conservative Members' propaganda, high rates also represent a reduction in living standards. The Government have forced local authorities into a terrible dilemma. They have to choose between adding to the already appalling unemployment figures and cutting services to desperately needy families, and cutting people's living standards by increasing rates above the cost of living or the average increase in earnings.
  The Government boast of an increase of £750 million for the coming financial year, yet the local authorities estimate that they need £1·2 billion if they are to stand still. That will mean even further reductions in the standard of services over the coming 12 months.
  The debate takes place against the background of attacks on local government arising out of other legislation to be introduced by the Government. Howard Davies, the controller of the Audit Commission, estimates that if all
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  the Government's legislation on education, housing, social services and privatisation goes through, local authority expenditure will drop from around £30 billion to £20·9 billion and that manpower requirements will fall by 37 per cent. That figure represents 500,000 employees.
  When I hear Conservative Members and irate ratepayers say, "Sack some of those idiots at the town hall," I must ask them to consider the problem in human terms. In most areas, the local authority is the largest employer. When one talks about making cuts by reducing the number of staff in local government, one is talking about sacking one's neighbour. A teacher talking in those terms would be talking about sacking fellow teachers. It is like going into a pub and saying to someone employed in the accounts department of a local authority, "Your job should go; otherwise my rates will be increased." If we consider the problem in those human terms, we see what nonsense such remarks are. The report estimates that less than half of those 500,000 employees will find a job in the private sector. That means adding 250,000 people to the unemployment figures.
  Mr. Irvine Patnick: The hon. Gentleman says that people will not get jobs in the private sector. How does he know? On what facts are his remarks based? What report does he have?
  Mr. Wall: I have used the figures cited by Howard Davies, the controller of the Audit Commission. He should have a fairly good insight—certainly more than the hon. Gentleman or me — into local government manpower and the effects on it of privatisation of education and housing as well as direct privatisation in local authorities.
  Mr. John Marshall: Does the hon. Gentleman agree that those figures can be true only if there is substantial overmanning in local government? Why should other industries which have ceased to be overmanned stall pay for the overmanning of certain local authorities?
  Mr. Wall: The hon. Gentleman is assuming that under this process the services will remain as good as they are today, but my hon. Friends and I feel that they will deteriorate enormously, as have services to British Telecom customers, and the cleaning and canteen services in hospitals. The poorest in our society — hospital cleaners and catering workers—were forced to bargain their pitiful wages against the prospect of losing their jobs. If that is the sort of society that the hon. Gentleman wishes to justify in order to cut costs, he can justify it. I want no part of it; nor do my colleagues.
  Mr. John Marshall: Will the hon. Gentleman gibe way?
  Mr. Wall: No, it is getting late and other hon. Members wish to speak. It would be most unfair of me to take up the remaining time that is available to them.
  The whole object of this process, even of those who get a job afterwards, is to drive down the average level of wages.
  Mr. Peter Thurnham rose—
  Mr. Wall: Let me finish.
  The Chartered Institute of Public Finance and Accountancy estimates that, under the Government's housing proposals, rents will increase by between 20 and 30 per cent. The report estimates that rents will increase in the City of London by 125 per cent., in Hackney by 160

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  per cent. and in Camden by 220 per cent. Yet in Hackney, where homelessness has increased 600 per cent. since 1979, Government cuts have meant that the council can employ only two extra members of staff to deal with that growing problem.
  Cuts have had other effects. The average earnings of street sweepers in Southwark have been reduced from £140 to £80 a week because of the abolition of bonuses. In Birmingham, the privatisation of direct labour organisations has reduced the number employed from 715 to 452.
  Earlier I pointed out that, in many areas, the local authority is the largest single employer. Even in the Greater London area, only 500,000 manufacturing jobs are left. The reason why local government has become the biggest employer is not because it has employed additional people, but because manufacturing industry has declined seriously during the past 10 years. In only two Greater London local authorities is the council not the largest employer of labour. That is around Heathrow airport and in Dagenham, where the Ford Motor Company employs the largest number of workers.
  Jack Layden, chairman of the Association of Metropolitan Authorities, said recently:
  "Authorities stand to lose over £600 million in grants as a result of not being able to reach the Government's set figures. This will result in rate increases well above the forecast."
  The preliminaries to the community charge will also be most vicious and will hit the poorest most with the ending of the 100 per cent. rate rebate from April next year.
  I said that I wished to speak about Bradford, as I represent a Bradford constituency. Bradford has its share of the social and structural problems which abound in the north and many other inner-city areas. The European Community Commission in its recent report on the economic position of our area has shown that 35 per cent. of the working population continue to be employed in manufacturing, which is above the national average of 27 per cent. In services, our proportion is the opposite: 56 per cent. compared with the national average of 61 per cent. Even in our traditional manufacturing area, there has been a shift in employment from manufacturing to the service sector. That is due, not to any large increase in job opportunities in services, but to the catastrophic drop in total employment, amounting in the old Yorkshire heavy wool industry, which is part of Bradford and the surrounding area, to 15,000 people in 1979–81, which is 7·9 per cent. of the working population. Over the 10 years to 1981, textiles and engineering lost 17,000 jobs, and mechanical engineering lost 4,600 jobs.
  More than 30 per cent. of Bradford's schools were built before 1906. Forty per cent. of Bradford's sewers are more than 100 years old and we have constant problems of collapsing sewers which require renovation or renewal. Our backlog of housing repairs amounts to some £130 million, representing the sum that we would receive in 10 years from the total housing investment programme for our city. We are saddled with numerous ancient and outdated industrial buildings, mostly on sites now too small for modern development, yet we are one of the worst supported in terms of urban aid grants.
  Unusually, we have an increasing population, and thus increasing needs in education, housing and other areas. We have a large immigrant population, mainly of Asian
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  origin, and we urgently need measures to improve the facilities in which they live. We have 8,000 people on our housing waiting list. That is a formidable list of our needs, yet we are only one of five local authorities which face the maximum reduction under the Government's so-called multiplier, with a factor of 1·1.
  The Government's GRE works on the cosy assumption that rates will be equalised throughout the country if every local authority spends to the grant-related expenditure figure. That makes the broad assumption that all areas have similar problems and all have similar resources to finance the meeting of those needs.
  Mr. Alfred Morris: My hon. Friend has spoken about matters of deep human concern. Is he aware that many local authorities now have to choose, not which of their discretionary powers to use in favour of disabled people, but even which of their legal duties to fulfil?
  Mr. Wall: I am well aware of that. My right hon. Friend will recall that, when he first stood for Parliament, I was a teenage constituency secretary. I think that some of his interest comes from a meeting at that time with my sister, who happens to be handicapped. I know from the number of letters that I receive that people need showers, baths and all sorts of things, and I know of the incredible waiting lists. We are not fulfilling our obligations.
  Government cuts in rate support grants are to force down expenditure on staff and services in local government. The more an authority spends above GRE, the more it loses. The greater its efficiency on GRE, the more grant aid it gains. Because of the unfairness of that system, the Government then introduced the target system, supposedly based on historical spending patterns. For most local authorities, that figure was similar to, or a little above, GRE. For Bradford, it was considerably less. Therefore, the authority spent below GRE and was still penalised.
  We estimate that the authority has lost some £38 million since 1986–87 which has led to high and entirely unfair rate increases. The abolition of the target system last year led to great expectations, but the Government then introduced the multiplier, which meant that last year we received only part of the shortfall, further reduced following the revolt of the shire counties and the sympathetic hearing given to them by the Secretary of State.
  In answer to a question from my hon. Friend the Member for Bradford, West (Mr. Madden) on last week's statement on the rate support grant, the Minister said that Bradford had received £60 million extra. That received some publicity in the local press. I am assured by the local authority finance department that the figure was not £60 million but £16 million. The fact remains that we have lost £38 million over three years and we are still being penalised, even when spending below GRE.
  We are morally entitled to that money, and we are entitled to a fair evaluation of the needs of our metropolitan district. That £38 million is not merely an arithmetical device, or a theoretical nicety; it means that we must set a rate 10 per cent. above that of our neighbours—for example, those in Leeds—to achieve the same level of services. I am certain that my hon. Friends from the Leeds area do not think that they are particularly well treated. An extra £38 million will have

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  been collected from Bradford ratepayers over what would have been the case had we received our full entitlement to rate support grant. That is equivalent to a rate of 87p in the pound.
  It means that, over three years, Bradford ratepayers will have paid the following extra rates: £32 for a terraced house with a rateable value of £37; £146 for a pre-war semi-detached with a rateable value of £168; £174 for a post-war semi-detached house with a rateable value of £200; £348 for a detached house with a rateable value of £400; and £522 for a large detached house with a rateable value of £600.
  That represents an average for all domestic dwellings in the metropolitan district of £110 per ratepayer—this in the West Riding, which is No. 9 in the list of nine industrial areas which have the lowest rates of pay. Those are actual sums paid by ratepayers, so we can quantify the cost of Toryism and the Tory Government to ratepayers in Bradford. There are many more hidden costs in social deprivation, cuts in services and the sacking of people employed in local government. Over the years, more people are beginning to realise that, and more of them will see the need to change the Government.
  8.50 pm
  Mr. Peter Thurnham: I am rather sorry to be following the hon. Member for Bradford, North (Mr. Wall). Had his predecessor been here, he would have been sitting on this side of the House and I would have had to follow someone else. We valued the contribution made by his predecessor, and I hope that he will return to the House before too long.
  If the electorate of Bradford, North stopped to think about some of the things that the hon. Gentleman said, they would be glad to change back to the former Member. His statement that earnings have been driven down because of privatisation does not square with the facts. Average earnings have increased at a record rate under this Government during the process of privatisation, and much faster than they did during the nationalisation from which we suffered when the Labour Government were in power. The hon. Gentleman talked about the catastrophic drop in manufacturing employment, but we must ask how much of that was due to the massive increases in rates that were imposed upon those companies.
  Mr. Stuart Holland: Perhaps the hon. Gentleman would like to know that, in reply to a recent question from me, the Chancellor of the Exchequer said that rates for industrial companies represent less than 1 per cent. of total costs. That must answer his question.
  Mr. Thurnham: That serves to illustrate the complete ignorance of Opposition Members about the importance of costs. The hon. Gentleman talked about 1 per cent., but over 10 years that would represent 10 per cent. of costs. No company could manage that burden year after year.
  Mr. Holland: The hon. Gentleman is talking about taking privatisation in the economy as a whole and the rate of wage increases in the economy as a whole. He should realise — I do not know whether he is a trained economist—that he cannot do that. It is a non sequitur. Even his arithmetic is wrong. He said that 1 per cent. a year over 10 years comes to 10 per cent. But less than 1 per cent. is less than 1 per cent.—that is less than the accounting errors of our best-managed companies. If the
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  hon. Gentleman wishes to give strictures to the Opposition, he should address himself to the arguments of my hon. Friend the Member for Bradford, North (Mr. Wall) and not make such flatulent statements.
  Mr. Thurnham: The hon. Gentleman is driving himself further into a hole. If a company accumulates costs over a period, they become a substantial burden. The point cannot be escaped.
  I am delighted that we can say that this is the penultimate occasion on which we shall work our way through the machinations of rate support grant. It is some years since I was in local government, and I cannot say that I follow the basis of the calculations any more easily now than I did then. It is pleasing to know that the settlement is generous and will allow non rate-capped authorities to hold their spending broadly steady in real terms. The generalisation will allow some authorities to do better than others.
  I thank my right hon. Friend the Secretary of State for his reassurance that the error in relation to students in further education will be adjusted. Perhaps it will go down as the Bolton error. We have heard a great deal about the Bromley error—of which I was previously unaware—but when we have our ultimate debate next year, we may refer to the Bolton error. I suspect that there may be some knock-on recalculations in respect of other authonties.
  It is a great delight to know that the era of capping, netting, holdbacks, targets, grant forefeits, slopes and thresholds will be relegated to the dustbin and that we can move to the much simpler and more beneficial system about which we may hear more next week if we have the debate that we all expect. Today's debate may not be terribly exciting, but the debate next week may provide the excitement that has been lacking today.
  The RSG provision allows for an increase in spending of 7·45 per cent., but my local authority discovered that its allocation was only 6·8 per cent. Even after allowing for the increase in the provision for the further education of students, Bolton's increase will be only about 7·1 per cent., so it will still have a shortfall. The authority believes that the highways budget is short by £470,000. It is admitted that the change in the method of calculating the highways grant has meant a reduction of £257,000, which is still far short of the sum which the local authority sought. Would it be possible to reconsider the provision of a safety net for that item? As my local authority is being penalised, compared with the average rate of increase for all authorities, a safety net may help.
  The authority was also worried that further adjustment may be needed in the calculation of the education component, especially in relation to teachers' wages. I am grateful that the Under-Secretary will meet a delegation from my council next week, when the points will be discussed in more detail.
  I hope that that visit will enable my hon. Friend to point out the great benefits of putting services out to tender. A reduction of more than 10 per cent. on those services could save £300 million a year nationally. On that basis, in my authority, putting services out to competitive tender would mean a saving of about £1 million a year. It has always surprised me that local authorities were not keener to follow the private sector, which has put services out to private tender as much as possible.
  For instance, a company as well known as Marks and Spencer in the high street does not manufacture any of the

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  goods that it sells. All those goods are put out to competitive tender. If ever there was a firm that could say, "Why don't we make all these things ourselves?" it would be a firm such as that. In some cases, it takes the whole of the output of a supplier. If it is wise for Marks and Spencer to put all its products out to competitive tender, surely it is wise for all local authorities to do exactly that. It is extraordinary that so many weird and wonderful arguments are produced about why it should not be necessary. Someone once said that it should not be necessary because these things are necessities. What could be more necessary than food and clothing?
  I thank my hon. Friend the Under-Secretary for giving us the opportunity to come to see him next week, and I hope that at that meeting we shall be able to explore some of the points that I have made.
  8.59 pm
  Mr. Harry Cohen: The hon. Member for Hendon, South (Mr. Marshall) described the rate support grant as being understood by three people—one dead, one mad and one who had forgotten all about it. That sounded like the Department of the Environment team who are responsible for the rate support grant report. One cannot call them the good, the bad and the ugly because there is nothing good about the report, but there is plenty that is bad and ugly that will flow from it. There will be further cuts on a wide scale and at all levels in the public services.
  I have been speaking to my right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris) who is the Labour spokesman for the disabled. He told me that local authorities will be forced to break the law by the Government. They cannot even choose between the discretionary duties that they wish to perform for the disabled. They have to choose between which legal duties they will carry out. Thus the Government are forcing the local authorities to break the law, which is a scandal. Waiting lists for help for the disabled will be made worse under the report.
  Mr. Alfred Morris: Is my hon. Friend aware that the advice given to me as Minister for the Disabled was that waiting lists are illegal? To keep people who are severely disabled waiting for help, is really outside the law if they have been assessed as to their needs. It is a very serious matter if local authorities have to choose not just which of their discretionary powers to use, but even which of their legal duties to fulfil.
  Mr. Cohen: That is exactly the point. I am grateful to my right hon. Friend. It should be the Government who are before the courts when that law is broken, not the local authorities.
  The Association of Metropolitan Authorities described the effect of the report. It stated that the aggregate Exchequer grant
  "will represent just over 46 per cent. of relevant expenditure in 1988–89."
  That compares with 61 per cent. in 1979–80 when the Government came to office. Had that 1979–80 grant percentage been maintained for next year, the aggregate Exchequer grant would have been £4·4 billion higher than is now proposed. Rate bills up and down the country
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  would now be 25 per cent. lower had it not been for the reduction in Government grant to the local authorities. The AMA states further:
  "To meet the Government's target local authorities would be required to reduce the level of services by 5 per cent. or increase rates well above the rate of inflation. Such reductions in service levels are unachievable in one year even if they were desirable."
  In London, the Government are also forcing a downward spiral in public services in borough after borough. The Association of London Authorities says about the report and Government policy:
  "The Government's main aim appears still to be a reduction in the level of local authority services despite the growing needs of the communities they serve."
  That is particularly so for authorities with the greatest deprivation.
  The ALA also talks about the need for decent housing, and comprehensive social services, improving the quality of life, and giving an equal chance in life for the disadvantaged, but it says:
  "The Government consistently underestimates the level of service provision needed, and compounds that with savage grant penalties for any spending above the Government-assumed levels. Some of the most deprived authorities are rate capped as well, and no attempt is made to link the level of spending allowed by such authorities to what is needed to provide decent services for the most oppressed sections of the community."
  With this report and all their previous measures the Government are increasing poverty.
  They talk about rejuvenating the inner cities, where there are the greatest problems and the greatest poverty, but the report will increase the plight of inner cities and areas with inner-city problems in London. My authority has been rate-capped for the first time and the council's budget for next year will be based on a rate set by the Government. It will be limited to £142 million, which is a cut of one sixth. But the services have not diminished by one sixth; the community's need has increased in recent years. The Government have imposed a £30 million cut on Waltham Forest—equivalent to the whole social services budget for the area. Social services—the Government's supposed policy of community care will be a policy of community neglect because of these cuts — will be affected. Every service will be affected, but especially social services and education.
  Last year there was a rates rise of 62 per cent., caused by the neglect of the previous council—which was Tory-controlled, with Liberal support—and the £40 million stolen by the Government including penalties. Ratepayers were charged £1·63 for every £1 spent. That was a scandal. That was a Tory rates rise. It was a deliberate manipulative move to punish all those who had voted out Tory council members in a previous local election. It was made also for party political reasons connected with the general election. I believe that the right hon. Member for Chingford (Mr. Tebbit), who made a big fuss and was a member of the Government who stole the £40 million from my borough, was never asked by the Waltham Forest ratepayers association about that money. If he was asked, his comments have not appeared in the columns of the local press. The right hon. Gentleman should have been made to answer.
  The Waltham Forest ratepayers association has been well financed, the Tories being among its main contributors, for their own manipulative reasons. The ratepayers association's case was thrown out of court. Its

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  lawyer accepted that a rates increase of more than 30 per cent. would be needed simply to stand still. What an indictment of the Tory Government's policy towards Waltham Forest, and what proof that they were responsible for the rates rise.
  Another reason for the Tory rates increase was to pave the way for Tory cuts. That is what the rate-capping robbery is all about. The rates will decrease next year, but so will the value for money for Waltham Forest ratepayers as more money is taken from the borough to be put directly into the hands of the Exchequer.
  I shall give examples to show how the Tories do not care a fig about Waltham Forest ratepayers. There is the poll tax, about which we shall hear much more in the House. Waltham Forest was cited as an exemption which would have to run two systems—rates and poll tax—for four to five years. When I asked who would pay the administrative costs of running two systems, last week the Government said, "The ratepayers of Waltham Forest." That shows that the Government do not care a fig for those ratepayers.
  What is happening about the storm damage? It is estimated that the storm damage will cost £2·1 million, but the Government grant will be only £700,000—a shortfall of £1·4 million to be found by the ratepayers. Even worse, the penalty imposed by the Government of £1·63 for every £1 spent will cost the ratepayers another £880,000.
  Mr. Holland: The Tories say it was an act of God.
  Mr. Cohen: The penalty is not an act of God; it is an act of the Tory Government.
  Rate capping will hammer the voluntary organisations. They have already suffered from the abolition of the GLC, which helped councils with grants. They are also being hammered because the Government have taken away the traditional urban aid. A small amount of money given to voluntary organisations produces enormous value for the community as a whole. It is pump-priming; it is self-help— something that the Government are supposed to want. It is all about providing local services that ease the burden on the National Health Service and the social services. The voluntary organisations help people to cope with the misery in the community. Age Concern, Dial-a-Ride and play groups for the under-fives will be hammered by rate capping. Education and social services will also suffer, but I will not mention those in detail tonight; I shall save that for a future occasion.
  Housing in my area is among the worst 2·5 per cent. in the country. There are enormous waiting lists and a serious homelessness problem. The general state of disrepair needs to be tackled. Yet for every £1 that the council spends on repairs, the Government charge it £1·63. The Government are the Rachmans in housing. There are thousands of jobs at risk, so it is no wonder that nine trade unions held a public protest, which affected every council department, against rate capping. The Government's policy in Waltham Forest is one of private payment for public squalor. I warn them that there will be increased public protest against rate capping, which is a bad and ugly policy that does nothing to help provide essential services.
  9.13 pm
  Mr. Irvine Patnick: The hon. Members for Leyton (Mr. Cohen) and for Bradford, North (Mr. Wall) have explained everything to the House.
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  The hon. Member for Bradford, North pointed out that since 1979 the sewers have collapsed, schools need major repairs — and on and on went his litany. The hon. Member for Leyton offered no alternative policy; he simply wanted more money, but with no improved efficiency, no changes and no value for money. He wants his council to continue with its old ways.
  My right hon. Friend the Secretary of State said that this is the last but one rate support grant debate. When the new system is introduced in 1990 the level of local authority spending will be clearly and directly reflected in the level of community charges.
  Mr. Eric S. Heifer: What about services?
  Mr. Patnick: The hon. Gentleman seems to enjoy making such interventions. We cannot determine services until the system is introduced in 1990. However, I assure him that what happened in Liverpool will not happen in other cities.
  Mr. Heffer: What happened in Liverpool?
  Mr. Patnick: I leave that for the history books.
  The ratepayers in Sheffield want a rate freeze for the next two years and do not understand why the city has not been rate capped for 1988–89.
  Mr. Heffer: The hon. Gentleman referred to Liverpool. The Liverpool district council built 5,000 houses, seven sports centres, a new park, and kept rents down. It kept rates down to 9 per cent. It also provided 4,000 new places for nursery school kids. It did more than any council in the country, and we are proud of it.
  Mr. Patnick: I am grateful to the hon. Gentleman for regaling us with the story of how Liverpool went bankrupt.
  If Sheffield city council decides to put services out to tender before the local government legislation becomes law, it will save ratepayers' cash. It does not need to wait for the enactment of the legislation. It can do it now. The council seems to disregard the fact that more staff equals higher rates. Its payroll increased from 30,000 employees in 1980 to 33,000 in 1985. That was before the abolition of county councils.
  Sheffield council and others should have examined ways of reducing their rates bills. The level of rates will depend on the budget decisions made by each authority. All authorities owe it to ratepayers and to prospective community charge payers to do all that they can to keep spending down. This year, Opposition Members brought out a consultative paper called "Local Government Reform in England and Wales". It can be summed up in a few words. The policy was to end surcharges, disqualification of councillors and rate capping. It added up to more profligacy and extremist behaviour by Left-wing councils.
  The rate support grant will provide Sheffield with a block grant of over £114 million, if it keeps its expenditure broadly constant. It has been estimated that, in real terms, it will enable the council to reduce local rates by at least 80 per cent. next April.
  My right hon. Friend the Secretary of State for the Environment said:
  "if they"—
  that is, local authorities—
  "do not spend more than the realistic provision that I have announced that we propose, the average increase in rate bills

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  for non-rate-capped authorities should be around the rate of inflation, though as always there will inevitably be considerable variations around that average." —[Official Report, 23 July 1987; Vol. 120, c. 498.]
  My right hon. Friend the Secretary of State for the Environment is a much maligned person. When he rate-caps cities such as Sheffield, some people think that he is wonderful. But when he does not do so, they think that he does not care about them.
  It has been obvious for a considerable time that something needs to be done about rates. The rate base needs to be widened so that the burden is not unfairly concentrated on too few shoulders. We must ensure that a substantial proportion of electors have a direct financial interest in their local authority's decisions. There should be a clear link between changes in expenditure and changes in local tax bills. At present, rate bills are a poor indicator of what is happening to local authority spending.
  This is the third time that I have enjoyed listening to a debate in the House. Sadly, for reasons best known to other people, I have not been called upon to speak previously. I have enjoyed listening to the fight. It would appear that everything that the Conservative Government have done is wrong. Opposition Members have rubbished every proposal, but no alternatives have been put forward. No thought has been given to the matter.
  How would Opposition Members cope with the matter except by spending more money? I have heard no alternative to the community charge. No great solution has been offered by any Opposition Member. It has been a yah-boo situation. The party of the hon. Member for Southwark and Bermondsey (Mr. Hughes) has explained no policy on the matter. Opposition Members rubbish the Government, but do not put forward any alternatives because they want to enjoy the debate for sport. I should have loved to hear one solitary suggestion from Opposition Members that would enable a Conservative Member to say, "What a good idea. Why didn't we think of that?"
  9.19 pm
  Mr. Jeff Rooker: The hon. Member for Sheffield, Hallam (Mr. Patnick) would probably disagree with me—
  Mr. Patnick: It is not about Sheffield?
  Mr. Rooker: No, it is not about Sheffield. It was agreed between the Department of the Environment's civil servants and the local authorities associations' civil servants that local government in the next financial year would have to spend not less than £29 billion to maintain services at their present level. The Secretary of State has fixed that expenditure at £27·538 billion. There is a shortfall, which I raised with him when he made his statement about a week ago, of £1·47 billion. Nobody disputes those figures.
  Mr. Ridley: I do.
  Mr. Rooker: The Minister disputes them. That is fine; I will be glad to hear what he says when he winds up the debate.
  The Government will cut by 5 per cent. the amount they should spend to maintain the present local government services for the next financial year. The Secretary of State stated that local government services were spending too
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  much, but central Government will not decide what services should be cut. The Minister offered no examples today of where services should be cut.
  Many of my hon. Friends referred in their excellent speeches to local authority social services, which, unlike the police services, do not receive special treatment in their budgets. The cuts in the National Health Service place a greater burden on local authority social service budgets than on any other sector of local government. The cuts affect people who must be cared for by their family, relatives or neighbours, who require home help services, and tuck-you-in and get-you-up services. People who are unable to have operations and have to stay in their own homes need more services, but they are unavailable because the Government have imposed further cuts on local authority social services. The Secretary of State can say only that it is not very exciting stuff. It is not exciting to Conservative Ministers because they neither understand nor care about the consequences of their policies.
  My hon. Friend the Member for Copeland (Dr. Cunningham) referred to the effect on housing benefit and the penalties imposed by the Government on the provision of housing benefit services by local government. From April 1988, the 100 per cent. rent rebate system will disappear for everyone who currently enjoys it because their income is so low. Questions asked by hon. Members about where the income support will come from for people on the lowest incomes are fobbed off to the DHSS, and the shortfall as from 1 April next year, when the cuts will come in, has not been explained.
  The present rating system—this must be repeated ad nauseam so that there can be no misunderstanding—is not the one inherited by the Government from the Labour Government. It is not the system that operated from 1974 to 1979 — the one that has been wholly discredited by the Government, who seek to rubbish it and make it more complicated at every opportunity so that they can make their alternatives seem more popular. The present system is of the Government's own making. They have made a mess of the present rating system. Any fool, even those fools, have shown that income tax can be cut —[GOVERNMENT MEMBERS: "Fools?"] Yes, the Government are fools. Anyone can cut income tax by placing a burden on the ratepayers.
  The nation is more highly taxed than ever before. The tax burden on the British people has never been higher under any Government that any hon. Member cares to name. One of the reasons for this is the direct effect of trying to cut tax on one section of the community and shifting the burden onto another, the ratepayers. As one of my hon. Friends said, the average rate increase in England since the Tories came to power is 13·6 per cent. per year. The direct effect of central Government withdrawing the rate support grant to local authorities has been, whatever the Secretary of State might argue, £21 billion.
  Mr. John Marshall: Will the hon. Gentleman give way?
  Mr. Rooker: Not at the moment.
  The direct effect this year is that the average rates bill for dwellings in England is £5 a week higher than it need be. That £5 a week is a direct result of the Government rigging the rate support system during their years in power. The Government show that they have no understanding of the issues in larger cities. The inner-city

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  areas and the outer estates of those large conurbations have suffered more than the rest of the country from the withdrawal of central Government support. Ministers boast about getting the private sector to invest by bribing them with public money, but that cannot stand up as a policy. It will not work. The private sector will not invest unless it can see some strategy. It will not invest on a scale that will replace the withdrawal of public money by Government diktat unless there is a strategy for those areas. That strategy can come only from the elected local authorities. No business man in his right mind will invest money, even if he is bribed to do so by Government grants, unless he can see a plan for the area where his investments are to take place—not just for the road or the few acres of his investment.
  The Government have a specific aim — the rate support grant adds to it — to drive local government away from dealing with our larger cities. We know that that is the case. It is the stated position, not necessarily of the Department of the Environment, but of the Department of Trade and Industry. Ministers have said that the Government cannot afford to waste time on Labour-led local authorities. When Cabinet Ministers say that they will not waste their time simply because local authorities are Labour-led, we know that that is re-buttressing the Prime Minister's avowed public pledge to attempt to snuff out of existence a political party which she happens to dislike. In a democracy, the Prime Minister has publicly voiced her intention to snuff out a political party simply because she does not like it. It happens to hold more local power than the party in government.
  When that publicly voiced intention of the Prime Minister is repeated by members of her Cabinet, it is little wonder that bodies such as the CBI, which is led by someone who knows a thing or two about local government, say that we cannot ignore the local authorities. Mr. Banham has often been quoted as saying that the councils were efficient and effective in many respects. He said:
  "The answer is not to bypass councils, but to make them work properly."
  The Government seek simply to ignore them because they are Labour-led.
  We have had many references to the effects of storm damage, first from my hon. Friend the Member for Copeland and repeated by many hon. Members, and to the effect on local authorities. The Secretary of State thinks that he has moved to meet some of the demand. Indeed, the hon. Member for Hendon, South (Mr. Marshall), who sought to intervene, welcomed the Secretary of State's statement today, in so far as it affected the London borough of Barnet. I am not certain whether the hon. Gentleman was in the Chamber when my hon. Friend the Member for Copeland opened the debate. If he was present, he must have been reminded of his own local authority chief executive's letter to the Secretary of State on 23 November.
  That letter made it absolutely clear that the London borough of Barnet was, in effect, going to be fined £420,000 simply because of its efforts to deal with the storm damage. The letter said that the penny rate in Barnet is £612,500. However, that authority does not have a piggy bank. The Secretary of State seems to believe that local authorities should have such a bank of contingencies. He is penalising those authorities that do not have such a piggy bank. He has penalised Barnet and made a profit
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  from that borough of £420,000. The Prime Minister will remain silent about this matter, but why on earth is the hon. Member for Hendon, South welcoming such a statement?
  Mr. John Marshall: Did the hon. Gentleman riot hear my right hon. Friend say that, where storm damage is capitalised— the London borough of Barnet will be able to do that: indeed, the leader of that council confirmed that this morning — no penalty will be charged on the interest relating to that capitalisation? Will the hon. Gentleman tell me how he squares his statement that we are now more heavily taxed than ever before with his oft-repeated statement that we spend far too little money on every social service?
  Mr. Rooker: I will send the hon. Gentleman his own Government's parliamentary answers about the rise in the tax burden. In real terms, the average tax burden on the British people was £30 billion higher this year than it was in the last year of the previous Labour Government—the so-called "high-taxing" Labour Government. I can give the hon. Gentleman chapter and verse on exactly how that figure is made up.
  Mr. Ridley: What about a cut?
  Mr. Rooker: The London borough of Barnet will suffer a cut in expenditure. What the hon. Member for Hendon, South fails to realise is that the product of the penny rate in Barnet must be spent before any assistance is given. The borough must spend £612,500 and the effect of spending that penny rate will result in a penalty of £420,000.
  If the hon. Member for Hendon, South wants any further examples, we only have to turn to east Sussex. In an effective speech, the hon. Member for Lewes (Mr. Rathbone) pointed out that his local authority reckoned that it would have to spend £12 million—the estimated cost of storm damage. The authority would receive assistance, over and above the base set out in the Bellwin rules, of £3·5 million, leaving a sum £8·5 million. The hon. Gentleman said that the consequences of spending the £8·5 million would result in that authority suffering a grant loss of £750,000. That means that the authority must spend £9·2 million. The Secretary of State told his hon. Friend the Member for Eastbourne (Mr. Gow):
  "I would be horrified and astonished if either my Department or the Treasury were to make a profit" —[Official Report, 30 November 1987; Vol. 123, c. 611.]
  But the Treasury will make a profit of £750,000 out of the ratepayers of East Sussex county council as a result of one night's storm damage. That cannot be justified. The hon.Member for Hendon, South may seek to justify that in Barnet, but I do not see how he can seek to justify that in East Sussex. The statement that has been made by the Secretary of State does not meet the claims of local authorities, and amounts to nothing less than deception.
  Many of my hon. Friends made interesting speeches, but before I mention some of them in detail I shall mention a couple of speeches from the Conservative Benches. 'The hon. Member for Ealing North (Mr. Greenway) — he has apologised for his present absence—referred to the problems of the price of a haircut due to the rate increase in Ealing. If he thinks that is a problem now, he should wait until the revaluation of barber shops is carried out as a result of the unified business rate. I am afraid that there will be many long-haired people in Ealing as a result of the unified business rate.

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  The right hon. Member for Brent, North (Sir R. Boyson) made a typical speech—all his speeches are the same whether he is on the Front Bench or the Back Benches—
  Sir Rhodes Boyson: They are all good.
  Mr. Rooker: Yes, indeed — they are always entertaining. I only wish that the right hon. Gentleman had said the same things when he was a Minister. Today he called for smaller units of local government. In many ways that is a valuable suggestion. There is no question but that the units of local government are too big. Let us consider the right hon. Gentleman's borough of Brent. I always work out the size of a borough by the number of Members of Parliament it has and Brent is a three-Member constituency. The city of which I have the honour to represent part is a 12 Member constituency so the right hon. Gentleman will see that I share some of his views.
  My hon. Friend the Member for Derbyshire, North-East (Mr. Barnes) raised the important issue of the Dronfield fire. I ask the Minister to take my hon. Friend's representations more seriously than hitherto. Underground fires are a serious matter and local authorities cannot provide the necessary funding to cope with them.
  My hon. Friend the Member for Knowsley, North (Mr. Howarth) drew attention to the massive sum of money required to start up the poll tax. We shall consider that matter in detail next week and I do not intend to deploy the arguments tonight.
  My hon. Friend the Member for Normanton (Mr. O'Brien) said that insufficient money was provided to give ratepayers in West Yorkshire adequate fire coverage. If Ministers do not take account of these speeches, it will be no good councils queuing up to get back into the black as soon as possible after the next fire, because another fire will surely occur and result in deaths if the fire service is inadequate.
  My hon. Friends the Members for Bradford, North (Mr. Wall) and for Leyton (Mr. Cohen) made excellent speeches. The cuts in social services in Bradford are without parallel.
  We ask Ministers to listen to us. We know that they do not understand. They do not represent these areas, and they do not visit them sufficiently often. We ask them to listen to the voices of the people who represent those areas, to get away from the idea that local authorities are wasting their pot of gold and to consider the need for more money to maintain existing services. None of my hon. Friends has called for more money or for expanded services. They are simply seeking to defend the status quo. This requires £1·4 billion extra public expenditure. We must raise that money before we can spend it. That is why we disagree with the rate support grant settlement, and why we shall vote against it.
  9.37 pm
  The Minister for Local Government (Mr. Michael Howard): This is the last but one debate on the rate support grant settlement. I doubt whether these debates will be much mourned or much missed. They were described by my right hon. Friend the present Secretary of
  526
  State for Education and Science as occasions when the disgruntled speak to the disenchanted in front of the disbelieving.
  The complexity, indeed the incomprehensibility, of the system is accepted on both sides of the House. It is difficult enough for local authorities to understand how their grant entitlement is made up and it is virtually impossible for the ratepayer to arrive at any real understanding of why he pays what he does.
  However, this year, relief is at hand. The days of the present system are numbered. We are seeking to put in place a new system which will get rid of all the worst features that have bedevilled local government finance for so long. We shall put an end to resource equalisation, that bizarre concept which seeks to equalise not what people pay in different parts of the country—that is what the new system will seek to achieve—but the rate poundage levied by local authorities in different parts of the country. We shall put an end to slopes, penalties and all those devices that have made the present system so complicated and the results of which have been described so vividly in some of the contributions to the debate. We shall restore the link between those who vote, those who benefit from the services provided by local authorities and those who pay for those services. Meanwhile, we must make do with what we have and make the best of it. That is what we have done.
  Within the constraints of the present system, the RSG settlement is, as my right hon. Friend the Secretary of State said, a generous one. The aggregate Exchequer grant is increased by £750 million or 5·75 per cent. on 1987–88. It means that rate bills need, on average, to increase by no more than the rate of inflation. The fact that Opposition Members persist in describing the settlement as a cut says more about their use—or misuse — of language than about the facts.
  Mr. Simon Hughes: Why is it then that, whatever their party, the spokespeople for the Association of County Councils and for district councils and metropolitan authorities, through their representative associations, unanimously say that the net result of the settlement is that there is a shortfall or cut—it comes to the same thing—of at least £1 billion and possibly more, even excluding some of the high wage settlements? How can they all agree? If the Minister is right, they must be wrong. Or are they right and the Minister wrong? That is more like it.
  Mr. Howard: It is in the nature of such associations of that kind that they will rarely, if ever, be content with a settlement. To describe this settlement as a cut is accurate only in the sense that my right hon. Friend the Secretary of State defined a cut when he announced the settlement just a few days ago: if someone asks for an increase of 100 per cent. and is given an increase of only 50 per cent. it is described as a cut of 50 per cent.
  Dr. Cunningham: Is it true that the Minister's officials from the Department of the Environment, working with the secretariat of the local authorities' associations, came to a figure necessary to maintain services which is £1·4 billion higher than the settlement announced by the Secretary of State? Is that true or not?
  Mr. Howard: No, it is not true.
  Dr. Cunningham: It is true.
  Mr. Howard: If the hon. Gentleman will listen and wait, instead of expostulating, he will have the answer.
  It is not true. The figure of 1·4 billion, to which both the hon. Member for Copeland (Dr. Cunningham) and the hon. Member for Birmingham, Perry Barr (Mr. Rooker) referred, is not a figure which emerged from that working group. The figure of £1·4 billion emerged from the local authorities' associations themselves.
  Dr. Cunningham: So you agree with them?
  Mr. Howard: No, I do not agree with them. A lower figure emerged from that group. The group considered the matter on the basis that present policies were to be considered. We think that there are many areas in which present policies should not be considered and in which savings can be obtained.
  The hon. Member for Copeland in the course of his remarks—
  Mr. Steinberg rose—
  Mr. Howard: No, I will not give way because I want to deal with the remarks of the hon. Member for Copeland. He has raised a number of points and asked for answers, and I will do my best to provide them. He asked, first, whether Ministers would meet rate-capped authorities to discuss rate limits. It is now for authorities to consider proposed rate limits and to decide whether to accept them. If individual authorities wish to discuss their limits with Ministers, we shall do our best to accommodate them.
  The hon. Member suggested that the rate limits for Camden and Hackney were too low by, I think, 5p in relation to Camden and 11 p in relation to Hackney. We believe that he has used a mistaken calculation to arrive at those figures. We think that our figures are perfectly correct. Perhaps I can write to the hon. Member and tell him where we think he has gone wrong.
  The hon. Member also raised the reform of the housing benefit system which, from next April, will provide local authorities with adequate support for expenditure properly incurred, while giving the greater incentive for prudent administration. The change in the housing benefit grant-related expenditure reflects the change being made in the housing benefit system generally. In general, authorities that lose GRE from the new arrangement will gain from the corresponding increase in subsidy, and those that lose subsidy will gain in GRE.
  About 97 per cent. of housing benefit is financed directly by central Government. Only the residual 3 per cent. and administration fall to be met by local government, and an allowance is made for that expenditure in GREs. This year's settlement makes full allowance for costs expected to fall on local authorities. The change to the GREs this year, discused with the local authority associations, is designed to provide incentives to local authorities to operate the system efficiently.
  The hon. Member for Copeland also mentioned Ealing and its expenditure limit. Ealing had the opportunity, like all other rate-capped authorities, to ask for a redetermination of its expenditure limit. As the hon. Member knows, two authorities made applications for redetermination.
  Mr. Cohen: One authority received nothing. The other authority received some money but strict conditions were imposed and it must report back to the Minister.
  Mr. Howard: Very reasonable conditions were imposed on the redetermination that was granted to the London borough of Tower Hamlets. It is odd that the hon. Gentleman should say that those who applied received nothing, because that is manifestly not the case.
  Dr. Cunningham: I am grateful to the Minister for responding to the questions that I put to him on a number of detailed matters. It is extraordinary that what he said a few moments ago seems to repudiate the basis of the work of the joint working party between his Department's officials and the local authority associations.
  Mr. Ridley: It is a house of cards
  Dr. Cunningham: From a sedentary position, the Secretary of State says that it is a house of cards. What he is saying is that it is a total waste of time for local authorities to bother to talk to the Goverment and their officials.
  My question concerns the Minister's comments about housing benefit. Is he giving the House an assurance—a guarantee—that if local authorities have to spend more on housing benefit than the Government are allowing for, that expenditure will be exempt from penalty?
  Mr. HowardNo, of course, I am not giving that guarantee, and I have not said that such a guarantee would be appropriate. Local authorities will not incur any penalty with regard to spending on housing benefit unless they exceed the GRE, which is specifically provided in the settlement for housing benefit. [Interruption.] The settlement is based on the proposition that reasonable provision is made for those expenses, and that matter was discussed with the local authority associations.
  My right hon. Friend the Member for Brent, North (Sir R. Boyson) raised some interesting matters. I can well understand his passionate views about Brent council. I share his frustration that I must disappoint him about the rate-capping of that council. Following his meeting with my right hon. Friend the Secretary of State, he knows why Brent was not selected in July, and that decision cannot be changed now. All I can say to my right hon. Friend is that Brent will have to watch its step. If it increases its spending to the extent that he has prophesied it may return to the sector for selection in 1989–90, although I cannot speculate on what the criteria might be.
  My right hon. Friend made a number of interesting suggestions. He will understand that, in the light of the legislative burden that faces the Department, his suggestion of an enabling Act was particularly attractive, and I wish that we could readily accede to it.
  My hon. Friend the Member for Ealing, North (Mr. Greenway), who explained why he would be unable to be present during the wind-up speeches, asked specifically about Ealing's rate limit. It is based on the original expenditure level that was proposed in July. The proposed limit means that there will be a 43·5 per cent. reduction on 1987–88, which I am sure will be welcomed by the ratepayers of Ealing.
  I am sorry that I missed the speech of my hon. Friend the Member for Hendon, South (Mr. Marshall). He asked about the Bromley error and whether Barnet would know, before it sets its rate, what percentage of lost grant would be returned during 1988–89. We shall be correcting the effects of the error for 1987–88 and 1988–89 as soon as Parliament has approved the supplementary reports. The

  529
  final year, 1986–87, will be implemented in 1988–89, so Barnet will receive roughly two thirds of what is due next year and my Department will be sending local authorities full details shortly. I have written to my hon. Friend about the revaluation of superannuation funds. We are discussing whether there is a case for changing the existing rules, which require quinquennial revaluation.
  If confirmation was required of the generosity of the settlement, it was provided by the speech of the hon. Member for Perry Barr who waxed eloquent, as is his wont, about a number of matters but devoted a relatively small proportion of his speech to the settlement. I cannot think of a more eloquent testimony to the soundness and generosity of the settlement.
  At the outset I referred to the fact that the new system, which we hope to be debating shortly, will avoid all the worst features of the present system. Under the new system, local authorities will know before the start of the financial year exactly how much money they can expect from central Government. They will be able to plan the amount they propose to spend, secure in the knowledge that the money they receive from central Government will not be affected by their spending decisions and also in the knowledge that they will ultimately be accountable for their spending decisions to those who have to pay the community charge.
  Of course, local authorities do not need to wait until the new system of financing local government is in place in order to increase their efficiency, reduce waste and improve the value for money that they offer their residents. They do not even need to wait for the enactment of the Local Government Bill, which completed its Committee stage yesterday, in order to secure those improvements. A total of £3 billion of expenditure will be subject to competition under the provisions of that Bill. There are other services where large savings are available and other areas that offer great scope for extra efficiency.
  Take, for example, the level of rent arrears. The 20 worst local authorities have together a debt burden of over £100 million arising out of rent arrears. The disparity between authorities with similar problems is enormous. In London, south of the river, Southwark's rent arrears amount to no less than 24 per cent. of its rent roll. Lambeth's are a similar proportion, while in Wandsworth next door the percentage is 6·8 per cent.
  The district auditor for Southwark has identified a number of areas where savings could be obtained. Changes in the way in which its vehicle fleet is managed could, for example, save £1 million a year. Southwark's response to this information was somewhat cautious. Its treasurer has said that with maximum co-operation and agreement with the work force it would probably take two or three years to achieve the majority of the savings. He was no doubt right to be cautious.
  Southwark's record leaves a great deal to be desired. Its leader has said:
  "The Town Hall is on the verge of collapse. Money spent in many areas is wasted. The services are demonstrably poor and give no reason why people in Southwark should trust the Labour Party to run the council".
  It is against that background of Labour local government — "Labour government in practice and action", in the time-honoured phrase of the hon. Member for Sheffield, Brightside (Mr. Blunkett) — that we
  530
  approach the contributions to the debate made by the Opposition Members. They have made several different claims about the additional money they say should be available to local authorities from the taxpayer.
  One of the most beloved statistics, certainly of the hon. Member for Perry Barr, is the £4·4 billion that he said local authorities would have had available to them if the grant percentage had remained at 1978–79 levels. My right hon. Friend the Secretary of State has already made it clear that the difference in cash terms is much more relevant and that is a much smaller sum.
  Let us consider the figure of £4·4 billion used by the hon. Member for Perry Barr. It is a figure which begs many questions. Is the hon. Gentleman saying that the Labour party would have increased grant by that amount had it been in a position to do so? If not, it is difficult to see what relevance there is in that point.
  If, on the other hand, the Labour party would have increased grant by that amount, it is a pity that it did not say so at the time of the general election. That alone would have added an extra 3p to the standard rate of income tax— over and above the doubling of income tax that would have been needed to make good the Labour party's other spending pledges.
  It is no use the Labour party coming to the House day after day, night after night, calling for extra spending for everything under the sun while the right hon. and learned Member for Monklands, East (Mr. Smith) claims at the same time that the Labour party is not a high-tax party.
  Early this year the Labour party produced a discussion document on those matters. It suggested that all controls on local government spending should be removed. Is that the Labour party's policy? Is that what the hon. Member for Copeland would have done if, perish the thought, he had been entrusted with these matters?
  Hon. Members: Answer.
  Dr. Cunningham: I am more than happy to answer that question, not least because we have answered it many times before. I shall try to speak in English, although I understand that gentlemen from public schools in the south have difficulty understanding someone with my origins.
  Of course, a Labour Government would cash-limit its grants to local authorities. We have made no secret of that. But nor have we made a secret of the fact that what local authorities raise on their own account should be free from central control. That is the fundamental difference between us and the Government.
  Mr. Howard: I am delighted to hear that. At its face value, it appears to show that the Labour party has some semblance of a policy for at least that aspect of local authority affairs.
  The hon. Gentleman has been his party's spokesman on these matters for four years. But when the hon. Member for Perry Barr was appointed to his present position in June, he told the newspapers that he had asked what was his party's policy on local government and was told, "We haven't got one." The hon. Gentleman has an engaging turn of phrase. He was reported in The Independent on 24 September as saying:
  "Putting it at its baldest, we haven't got a policy. That is the actual truth."

  531
  That is the truth about the Labour party's condition. That is the basis on which it approaches these matters. That is why the hon. Gentleman, entirely understandably, spent so little time on the settlement.
  Small wonder no one takes the hon. Gentleman or his party seriously on these matters. Small wonder that the Opposition are a sterile Opposition, entirely negative in their contribution to the debate.
  However, I must not do the Opposition an injustice, because the hon. Member for Copeland made one revealing remark. I think that he intended it as a promise to local authorities. He said that he was prepared to promise that, if the Labour party was ever in government, the growth in Government grant to local authorities would keep pace with the growth in the economy. I have a strong suspicion that, given the likely growth in the economy under any future Labour Government, that cannot be taken as much of a promise by local authorities. If that is the best that the hon. Gentleman can do, local authorities will not be very impressed.
  The settlement is far from perfect, but it is the product of a system which is in its death throes and we can look forward with hope to the new system that is appearing over the horizon and that will at long last restore to local government the clarity, fairness and accountability that it has for so long been lacking.
  I commend the settlement to the House.
  Question put:—
  The House divided: Ayes 281, Noes 220.

  Division No. 108]

  [10.00 pm

  AYES

  Aitken, Jonathan

  Bruce, Ian (Dorset South)

  Alison, Rt Hon Michael

  Buchanan-Smith, Rt Hon Alick

  Allason, Rupert

  Budgen, Nicholas

  Amess, David

  Burns, Simon

  Amos, Alan

  Burt, Alistair

  Arbuthnot, James

  Butcher, John

  Arnold, Jacques (Gravesham)

  Butler, Chris

  Arnold, Tom (Hazel Grove)

  Butterfill, John

  Aspinwall Jack

  Carlisle, John, (Luton N)

  Atkins, Robert

  Carlisle, Kenneth (Lincoln)

  Atkinson, David

  Carrington, Matthew

  Baker, Nicholas (Dorset N)

  Carttiss, Michael

  Baldry, Tony

  Chalker, Rt Hon Mrs Lynda

  Banks, Robert (Harrogate)

  Channon, Rt Hon Paul

  Batiste, Spencer

  Chapman, Sydney

  Beaumont-Dark, Anthony

  Chope, Christopher

  Bellingham, Henry

  Churchill, Mr

  Bendall, Vivian

  Clark, Hon Alan (Plym'th S'n)

  Bennett, Nicholas (Pembroke)

  Clark, Dr Michael (Rochford)

  Benyon, W.

  Clark, Sir W. (Croydon S)

  Bevan, David Gilroy

  Clarke, Rt Hon K. (Rushcliffe)

  Biffen, Rt Hon John

  Conway, Derek

  Biggs-Davison, Sir John

  Coombs, Anthony (Wyre F'rest)

  Blackburn, Dr John G.

  Coombs, Simon (Swindon)

  Body, Sir Richard

  Cope, John

  Bonsor, Sir Nicholas

  Cormack, Patrick

  Boscawen, Hon Robert

  Couchman, James

  Boswell, Tim

  Cran, James

  Bottomley, Peter

  Critchley, Julian

  Bottomley, Mrs Virginia

  Currie, Mrs Edwina

  Bowden, A (Brighton K'pto'n)

  Curry, David

  Bowden, Gerald (Dulwich)

  Davies, Q. (Stamf'd & Spald'g)

  Bowis, John

  Davis, David (Boothferry)

  Boyson, Rt Hon Dr Sir Rhodes

  Day, Stephen

  Braine, Rt Hon Sir Bernard

  Devlin, Tim

  Brandon-Bravo, Martin

  Dickens, Geoffrey

  Brazier, Julian

  Dorrell, Stephen

  Bright, Graham

  Douglas-Hamilton, Lord James

  Brittan, Rt Hon Leon

  Dover, Den

  Brown, Michael (Brigg & Cl't's)

  Dunn, Bob

  Browne, John (Winchester)

  Durant, Tony

  532

  Dykes, Hugh

  Lawson, Rt Hon Nigel

  Emery, Sir Peter

  Lee, John (Pendle)

  Evennett, David

  Lennox-Boyd, Hon Mark

  Fallon, Michael

  Lightbown, David

  Fenner, Dame Peggy

  Lloyd, Peter (Fareham)

  Field, Barry (Isle of Wight)

  MacGregor, John

  Fookes, Miss Janet

  McLoughlin, Patrick

  Forman, Nigel

  Maples, John

  Forsyth, Michael (Stirling)

  Marshall, John (Hendon S)

  Forth, Eric

  Marshall, Michael (Arundel)

  Fox, Sir Marcus

  Martin, David (Portsmouth S)

  Freeman, Roger

  Mates, Michael

  French, Douglas

  Maude, Hon Francis

  Gardiner, George

  Maxwell-Hyslop, Robin

  Garel-Jones, Tristan

  Miscampbell, Norman

  Gill, Christopher

  Moate, Roger

  Glyn, Dr Alan

  Morris, M (N'hampton S)

  Goodhart, Sir Philip

  Morrison, Hon P (Chester)

  Goodlad, Alastair

  Moss, Malcolm

  Goodson-Wickes, Dr Charles

  Neale, Gerrard

  Gorman, Mrs Teresa

  Nelson, Anthony

  Gow, Ian

  Neubert, Michael

  Gower, Sir Raymond

  Newton, Tony

  Grant, Sir Anthony (CambsSW)

  Nicholls, Patrick

  Greenway, Harry (Ealing N)

  Nicholson, David (Taunton)

  Greenway, John (Rydale)

  Nicholson, Miss E. (Devon W)

  Gregory, Conal

  Onslow, Cranley

  Griffiths, Sir Eldon (Bury St E")

  Oppenheim, Phillip

  Griffiths, Peter (Portsmouth N)

  Paice, James

  Grist, Ian

  Patnick, Irvine

  Ground, Patrick

  Patten, John (Oxford W)

  Grylls, Michael

  Pattie, Rt Hon Sir Geoffrey

  Gummer, Rt Hon John Selwyn

  Pawsey, James

  Hamilton, Hon A. (Epsom)

  Porter, David (Waveney)

  Hamilton, Neil (Tatton)

  Portillo, Michael

  Hampson, Dr Keith

  Powell, William (Corby)

  Hanley, Jeremy

  Price, Sir David

  Hannam, John

  Raffan, Keith

  Hargreaves, A. (B'ham H'll Gr')

  Raison, Rt Hon Timothy

  Hargreaves, Ken (Hyndburn)

  Redwood, John

  Harris, David

  Rhodes James, Robert

  Haselhurst, Alan

  Rhys Williams, Sir Brandon

  Hawkins, Christopher

  Riddick, Graham

  Hayes, Jerry

  Ridley, Rt Hon Nicholas

  Hayhoe, Rt Hon Sir Barney

  Ridsdale, Sir Julian

  Hayward, Robert

  Roberts, Wyn (Conwy)

  Heathcoat-Amory, David

  Roe, Mrs Marion

  Heddle, John

  Rossi, Sir Hugh

  Hicks, Mrs Maureen (Wolv' NE)

  Rost, Peter

  Hicks, Robert (Cornwall SE)

  Rowe, Andrew

  Higgins, Rt Hon Terence L.

  Ryder, Richard

  Hill, James

  Sackville, Hon Tom

  Hind, Kenneth

  Sainsbury, Hon Tim

  Hogg, Hon Douglas (Gr'th'm)

  Sayeed, Jonathan

  Holt, Richard

  Scott, Nicholas

  Hordern, Sir Peter

  Shaw, David (Dover)

  Howard, Michael

  Shaw, Sir Giles (Pudsey)

  Howarth, G. (Cannock & B'wd)

  Shaw, Sir Michael (Scarb')

  Howe, Rt Hon Sir Geoffrey

  Shephard, Mrs G. (Norfolk SW)

  Howell, Rt Hon David (G'dford)

  Shepherd, Colin (Hereford)

  Howell, Ralph (North Norfolk)

  Shepherd, Richard (Aldridge)

  Hughes, Robert G. (Harrow W)

  Sims, Roger

  Hunt, David (Wirral W)

  Skeet, Sir Trevor

  Hunt, John (Ravensbourne)

  Smith, Sir Dudley (Warwick)

  Irvine, Michael

  Smith, Tim (Beaconsfield)

  Jack, Michael

  Soames, Hon Nicholas

  Jackson, Robert

  Speller, Tony

  Janman, Timothy

  Spicer, Jim (Dorset W)

  Jessel, Toby

  Spicer, Michael (S Worcs)

  Johnson Smith, Sir Geoffrey

  Squire, Robin

  Jones, Gwilym (Cardiff N)

  Stanbrook, Ivor

  Jones, Robert B (Herts W)

  Stanley, Rt Hon John

  Jopling, Rt Hon Michael

  Steen, Anthony

  Kellett-Bowman, Mrs Elaine

  Stern, Michael

  Key, Robert

  Stevens, Lewis

  Kilfedder, James

  Stewart, Allan (Eastwood)

  King, Roger (B'ham N'thfield)

  Stewart, Andrew (Sherwood)

  Knapman, Roger

  Stradling Thomas, Sir John

  Knight, Greg (Derby North)

  Sumberg, David

  Knox, David

  Summerson, Hugo

  533

  Tapsell, Sir Peter

  Walker, Bill (T'side North)

  Taylor, Ian (Esher)

  Waller, Gary

  Taylor, John M (Solihull)

  Walters, Dennis

  Taylor, Teddy (S'end E)

  Ward, John

  Tebbil, Rt Hon Norman

  Wardle, C. (Bexhill)

  Temple-Morris, Peter

  Warren, Kenneth

  Thompson, D. (Calder Valley)

  Wells, Bowen

  Thompson, Patrick (Norwich N)

  Wheeler, John

  Thorne, Neil

  Whitney, Ray

  Thornton, Malcolm

  Widdecombe, Miss Ann

  Thurnham, Peter

  Wilkinson, John

  Townend, John (Bridlington)

  Winterton, Mrs Ann

  Townsend, Cyril D. (B'heath)

  Wolfson, Mark

  Tracey, Richard

  Wood, Timothy

  Tredinnick, David

  Woodcock, Mike

  Trippier, David

  Yeo, Tim

  Trotter, Neville

  Young, Sir George (Acton)

  Vaughan, Sir Gerard

  Viggers, Peter

  Tellers for the Ayes:

  Waddington, Rt Hon David

  Mr. Alan Howarth and

  Waldegrave, Hon William

  Mr. David Maclean.

  Walden, George

  NOES

  Abbott, Ms Diane

  Cummings, J.

  Adams, Allen (Paisley N)

  Cunliffe, Lawrence

  Allen, Graham

  Cunningham, Dr John

  Anderson, Donald

  Darling, Alastair

  Archer, Rt Hon Peter

  Davies, Rt Hon Denzil (Llanelli)

  Armstrong, Ms Hilary

  Davies, Ron (Caerphilly)

  Ashdown, Paddy

  Davis, Terry (B'ham Hodge H'I)

  Ashley, Rt Hon Jack

  Dewar, Donald

  Ashton, Joe

  Dixon, Don

  Banks, Tony (Newham NW)

  Dobson, Frank

  Barnes, Harry (Derbyshire NE)

  Doran, Frank

  Barron, Kevin

  Douglas, Dick

  Battle, John

  Duffy, A. E. P.

  Beckett, Margaret

  Dunnachie, James

  Beith, A. J.

  Eastham, Ken

  Benn, Rt Hon Tony

  Evans, John (St Helens N)

  Bennett, A. F. (D'nt'n & R'dish)

  Ewing, Harry (Falkirk E)

  Bermingham, Gerald

  Farr, Sir John

  Blair, Tony

  Fatchett, Derek

  Boateng, Paul

  Fearn, Ronald

  Boyes, Roland

  Field, Frank (Birkenhead)

  Bradley, Keith

  Fields, Terry (L'pool B G'n)

  Bray, Dr Jeremy

  Fisher, Mark

  Brown, Gordon (D'mlins E)

  Flannery, Martin

  Brown, Nicholas (Newcastle E)

  Flynn, Paul

  Brown, Ron (Edinburgh Leith)

  Foster, Derek

  Bruce, Malcolm (Gordon)

  Foulkes, George

  Buchan, Norman

  Fraser, John

  Buckley, George

  Fyfe, Mrs Maria

  Caborn, Richard

  Galbraith, Samuel

  Callaghan, Jim

  Galloway, George

  Campbell, Ron (Blyth Valley)

  Garrett, John (Norwich South)

  Campbell-Savours, D. N.

  Garrett, Ted (Wallsend)

  Carlile, Alex (Mont'g)

  George, Bruce

  Cartwright, John

  Gilbert, Rt Hon Dr John

  Clark, Dr David (S Shields)

  Godman, Dr Norman A.

  Clarke, Tom (Monklands W)

  Gould, Bryan

  Clay, Bob

  Graham, Thomas

  Clelland, David

  Grant, Bernie (Tottenham)

  Clwyd, Mrs Ann

  Griffiths, Nigel (Edinburgh S)

  Cohen, Harry

  Griffiths, Win (Bridgend)

  Cook, Frank (Stockton N)

  Grocott, Bruce

  Cook, Robin (Livingston)

  Harman, Ms Harriet

  Corbett, Robin

  Hattersley, Rt Hon Roy

  Corbyn, Jeremy

  Healey, Rt Hon Denis

  Cousins, Jim

  Heffer, Eric S.

  Crowther, Stan

  Henderson, Douglas

  Cryer, Bob

  Hinchliffe, David

  534

  Hogg, N. (C'nauld & Kilsyth)

  Mullin, Chris

  Holland, Stuart

  Murphy, Paul

  Home Robertson, John

  Nellist, Dave

  Hood, James

  Oakes, Rt Hon Gordon

  Howarth, George (Knowsley N)

  O'Brien, William

  Howell, Rt Hon D. (S'heath)

  O'Neill, Martin

  Howells, Geraint

  Orme, Rt Hon Stanley

  Hoyle, Doug

  Pendry, Tom

  Hughes, John (Coventry NE)

  Pike, Peter

  Hughes, Robert (Aberdeen N)

  Powell, Ray (Ogmore)

  Hughes, Roy (Newport E)

  Prescott, John

  Hughes, Sean (Knowsley S)

  Primarolo, Ms Dawn

  Hughes, Simon (Southwark)

  Quin, Ms Joyce

  Illsley, Eric

  Radice, Giles

  Janner, Greville

  Randall, Stuart

  John, Brynmor

  Rees, Rt Hon Merlyn

  Jones, Barry (Alyn & Deeside)

  Reid, John

  Jones, Martyn (Clwyd S W)

  Richardson, Ms Jo

  Kaufman, Rt Hon Gerald

  Robertson, George

  Kinnock, Rt Hon Neil

  Robinson, Geoffrey

  Kirkwood, Archy

  Rogers, Allan

  Lambie, David

  Rooker, Jeff

  Lamond, James

  Ross, Ernie (Dundee W)

  Leadbitter, Ted

  Rowlands, Ted

  Leighton, Ron

  Ruddock, Ms Joan

  Lestor, Miss Joan (Eccles)

  Salmond, Alex

  Lewis, Terry

  Sheerman, Barry

  Litherland, Robert

  Sheldon, Rt Hon Robert

  Livsey, Richard

  Shore, Rt Hon Peter

  Lloyd, Tony (Stretford)

  Short, Clare

  Lofthouse, Geoffrey

  Skinner, Dennis

  Loyden, Eddie

  Smith, Andrew (Oxford E)

  McAllion, John

  Smith, C. (Isl'ton & F'bury)

  McAvoy, Tom

  Smith, Rt Hon J. (Monk'ds E)

  McCartney, Ian

  Snape, Peter

  Macdonald, Calum

  Soley, Clive

  McFall, John

  Spearing, Nigel

  McKay, Allen (Penistone)

  Steel, Rt Hon David

  McKelvey, William

  Steinberg, Gerald

  McLeish, Henry

  Stott, Roger

  McNamara, Kevin

  Strang, Gavin

  McTaggart, Bob

  Straw, Jack

  McWilliam, John

  Taylor, Mrs Ann (Dewsbury)

  Madden, Max

  Taylor, Matthew (Truro)

  Mahon, Mrs Alice

  Thompson, Jack (Wansbeck)

  Mallon, Seamus

  Turner, Dennis

  Marek, Dr John

  Vaz, Keith

  Marshall, David (Shettleston)

  Wall, Pat

  Marshall, Jim (Leicester S)

  Wallace, James

  Martin, Michael (Springburn)

  Wardell, Gareth (Gower)

  Martlew, Eric

  Wareing, Robert N.

  Maxton, John

  Welsh, Michael (Doncaster N)

  Meacher, Michael

  Williams, Rt Hon A. J.

  Meale, Alan

  Williams, Alan W. (Carm'then)

  Michael, Alun

  Wilson, Brian

  Michie, Bill (Sheffield Heeley)

  Winnick, David

  Millan, Rt Hon Bruce

  Wise, Mrs Audrey

  Mitchell, Austin (G't Grimsby)

  Worthington, Anthony

  Moonie, Dr Lewis

  Wray, James

  Morgan, Rhodri

  Young, David (Bolton SE)

  Morley, Elliott

  Morris, Rt Hon A (W'shawe)

  Tellers for the Noes:

  Morris, Rt Hon J (Aberavon)

  Mr. Frank Haynes and

  Mowlam, Mrs Marjorie

  Mrs. Llin Goldine.

  Question accordingly agreed to.
  Resolved,
  That the Rate Support Grant Report (England) 1988–89 (House of Commons Paper No. 163), a copy of which was laid before this House on 30th November, be approved.

Fisheries
10.17 pm
The Minister of Agriculture, Fisheries and Food (Mr. John MacGregor): I beg to move,
That this House takes note of the un-numbered Explanatory Memoranda submitted by the Ministry of Agriculture, Fisheries and Food on 30th November and 3rd December 1987 on total allowable catches and quotas for 1988 and on 2nd December 1987 on the European Community — Norway Fisheries Agreement, European Community Documents Nos. 6388/87 on the common organisation of the market in fishery products and 9585/87 on fish guide prices for 1988, and of the Government's intention to negotiate the best possible fishing opportunities for the United Kingdom fishing industry for 1988 consistent with the requirements of conservation of stocks.
I am grateful to the Select Committee on European Legislation both for its recommendation that the House should debate the documents referred to in the motion and for carrying out its scrutiny without access to the full set of Community documents, which has only just become available. That enables us to have a timely debate because it will enable my right hon. Friend and me to take full account of the views of the House when we consider these matters at the Fisheries Council next week.
It is a short debate so I hope that it will be for the convenience of the House if I speak briefly on the key issues, giving sufficient time for hon. Members on both sides of the House to raise their own points in the debate, to which my right hon. Friend will respond in the winding-up speech.
This has been the fifth year of the common fisheries policy and has been an excellent one for the United Kingdom industry. The value of landings for the first three quarters of this year was £55 million up on last year, an increase of 22 per cent. that reflected a 9 per cent. increase in the overall tonnage landed and an average increase in prices of 11 per cent. as a result of the continuing buoyant demand for fish.
Although there have been some problems of management in certain fisheries, fishermen all over the country will have seen a substantial increase in real earnings and, thanks to the common fisheries policy, will be looking forward with confidence to a future of stability and continuing prosperity.
Let me refer first to the proposals relating to the total allowable catches and quotas for 1988, which will determine the level of opportunities available to our fishermen. I recognise that some of the quota management decisions that had to be taken in 1987 created temporary problems for certain sectors of the industry. But the whole purpose of TACs and quotas is to keep catches within safe biological limits and when fisheries have been overexploited, as some of our main fisheries regrettably have, quota restrictions will inevitably bite. It must be in the long-term interests of the industry to recognise this—I think that that is understood by hon. Members—and to manage its affairs so as to operate profitably within the inevitable constraints.
The Government are firmly committed to the conservation and efficient management of all the fish stocks on which our industry depends.
Sir Julian Ridsdale: Will my right hon. Friend give way?
Mr. MacGregor: If my hon. Friend will forgive me, I think that it will be better if I set the scene and give the Government's position on the proposals so that as many hon. Members as possible can contribute. My right hon. Friend the Minister of State will respond to the points made.
We believe that it is right to take the long view of the benefits of a conservation policy and not to sacrifice these for short-term gains. In general, therefore, we welcome the Commission's proposals where these are based on firm scientific advice by the responsible international scientific bodies. But where TACs are set on a precautionary basis only, in the absence of adequate scientific information we believe that it is right to be more flexible and to avoid unduly restrictive quota levels.
The TACs for the main white fish stocks in the North sea have, as usual, been provisionally agreed with Norway by the Commission following the annual consultations. The proposed TAC for North sea cod is 160,000 tonnes. This will be a disappointment to the industry which, following revision of the 1987 TAC from 125,000 tonnes to 175,000 tonnes, had been hoping for a further increase. In 1988 this stock will be heavily dependent on the 1985 year class, which, on the basis of further survey data, the scientists now believe to be less strong than they did earlier this year. The proposed TAC, although within the range of safe biological limits, is none the less somewhat above what the scientists would have liked to see.
Mr. Austin Mitchell: Will the Minister give way?
Mr. MacGregor: It will be better if I do not. If I give way to one hon. Member, I shall have to give way to others.
It is therefore important to note that the Commission has proposed retaining the box in the south-eastern corner of the North sea in which a higher mesh size is required, to protect the young cod. Last year, against a great deal of opposition, the Commission's proposal on this was adopted, largely at our insistence, and we shall be pressing for its continuation, preferably with the increased minimum mesh size of 120 mm now proposed.
Finally, on cod, during 1987 we achieved a mid-year adjustment to the TAC, in the light of revised scientific advice and we shall press for a similar review during 1988 should the latest scientific assessments for this or any other stock of importance to the United Kingdom suggest that an upward revision of the TAC would be appropriate.
On North sea haddock, the prospects are more encouraging with the proposed TAC increased to 185,000 tonnes from 140,000 tonnes this year. The proposed North sea plaice TAC is up to 175,000 tonnes from 150,000 tonnes, reflecting the signs of continued healthy recruitment to the stock. For North sea sole, which is not a stock jointly managed with Norway, the Commission is proposing a further decrease in the TAC to 11,000 tonnes from 14,000 tonnes, in line with the scientific advice I shall be exploring the possibility of increasing our quota through a swap with another member state.
Turning to the west coast of Scotland, area VI, the Commission is proposing no changes in the TACs for haddock, whiting, plaice, megrim and anglerfish, a very welcome increase in the TAC for saithe to 35,000 tonnes from 27,800 tonnes, but a decrease for cod to 18,430 tonnes from 22,000 tonnes. I know that the latter will be

537
a disappointment, especially to Scottish fishermen, but the proposal represents the most favourable interpretation of the scientific advice.
In area VII, covering the Irish sea, the south-west and the English Channel, plaice and sole are of particular concern. For plaice, the total proposed availability of the various stocks for the United Kingdom is 5,430 tonnes, compared with 5,530 tonnes in the 1987 regulation. There may be scope for upward adjustment of some of the figures without damage to stocks. We shall explore that as well as the possibility of increasing our availabilities by swaps, as we have done before.
The position with sole in area VII is rather similar, with the United Kingdom availability proposed for 1988 at 2,130 tonnes, compared with 2,430 tonnes in 1987 before swaps. We shall endeavour to seek some improvement on that.
On area VII cod, the Commission's proposal retains the increased TAC of 19,000 tonnes, which we obtained during the course of 1987. An increase is also proposed for area VII saithe, on which we had problems this year.
The pelagic stocks are of particular, but not exclusive concern to the Scottish industry. The pelagic sector, which has had a particularly successful year in 1987, will face a small measure of restraint in 1988 along with the white fish sector. In the North sea, the TAC for herring agreed with Norway totals 530,000 tonnes. That is a reduction from 600,000 tonnes this year, and reflects scientific advice. I should emphasise that that results from a reassessment by the scientists of the absolute size of the stock. They are still confident that the stock is growing and will continue to grow, given prudent management.
Norway will receive a zonal attachment share of 153,700 tonnes and it is proposed, as in 1987, to transfer an additional 50,000 tonnes to Norway to balance the important transfers of whitefish from Norway. Although the United Kingdom quota will be correspondingly lower than this year, we have some hopes of obtaining additional quantities through swaps.
The Commission is proposing that off the west coast of Scotland, the herring TAC should be reduced to 46,000 tonnes from 49,700 tonnes. The Commission, in agreeing with Norway a slight increase in Norway's availability of herring in that area, seemed to be taking a rather different view of the fishery from that reflected in its proposal for the TAC. We will be exploring that point further at the Council.
For Clyde herring, the proposal is for a TAC of 3,200 tonnes, down from 3,500 tonnes, and the science is quite clear on that. In the Irish sea, the proposed TAC is going up to 8,000 tonnes from 4,500 tonnes. That will be very welcome, especially to fishermen in Northern Ireland.
On the Commission's proposals on western mackerel, many hon. Members will know that the Scottish pelagic fleet has faced difficulty in taking its western mackerel quota in some recent years, mainly because the migratory pattern of the stock has changed and the shoals have been slow to cross the 4 deg line that divides the western area from the North sea. The solution proposed by my noble Friend the Minister of State, Scottish Office was to permit a measure of flexibility to take western mackerel east of the 4 deg W line.
We were therefore pleased to note that the recent agreement between the Commission and Norway for 1988
538
accepted the principle of flexibility around that line. For 1988, the agreement provides that a quantity of 62,000 tonnes of the Community's western mackerel quota could be taken in the northern part of the North sea—that is east of 4 deg W—should the Community decide that it wished to do so. The Government regard that as an important step forward. We therefore regret that the Commission's proposals on western mackerel do not include the exercise of this flexibility.
We shall be pressing hard for such an element of flexibility to be included in any compromise package presented to the Council next week, though this will not be easy, given the strongly held view of some other member states that to tamper with the 4 deg W line amounts to unpicking the 1983 settlement. The Commission's proposals for this stock envisages a TAC of 360,000 tonnes, a reduction from the 1987 level of 400,000 tonnes. However, there is room for a range of view as to the exact biological state of this stock and the Council will be looking at this closely.
I have already referred to the most important aspects of the EC-Norway agreement for 1988. If hon. Members wish to raise other aspects my right hon. Friend will deal with them in his response. But let me add just one general point. I am glad to say that the negotiations under this agreement are now much more satisfactory both in the procedures and the outcome.
I turn now to the Commission's proposals for changes in the guide prices for the 1988 marketing year. The proposals are broadly neutral as far as the United Kingdom species are concerned, suggesting either no change or an increase of only 1 per cent. for cod, haddock and plaice. But there would be reductions for herring and mackerel of 10 per cent. and 5 per cent. respectively to take account of the current market position. After preliminary discussions, the Commission has produced a revised proposal which would involve a 9 per cent. reduction in the herring guide price.
The proposed price changes achieve a reasonable balance between the needs of processors, consumers and producers, and take account of the need for budgetary restraint. They should also be seen in the context of green currency changes, which will take effect on 1 January, under which United Kingdom producers will benefit from an additional 4·7 per cent. increase in guide prices.
I have attempted to be brief in setting the scene and stating the Government's position on the proposals to enable the House to express a view. To summarise. The common fisheries policy continues to serve us well, and, despite problems in one area or another at various times of the year, our industry has had an excellent year. The prospects for next year are for reductions in some quotas and increases in others, with a sizeable number unchanged. We will do our best at the Council next week to improve upon the Commission proposals where it would be safe to do so, but we need to ensure that stocks are conserved in the interest of maintaining the industry's present prosperity. I hope that this approach will have the support of the House.
10.32 pm
Dr. Norman A. Godman: I welcome the Minister's speech. Hon. Members have a jumble of documents, some of which are unnumbered memoranda. I agree with that part of the Government's motion which states that it is the

539
"Government's intention to negotiate the best possible fishing opportunities for the United Kingdom fishing industry for 1988 consistent with the requirements of conservation of stocks."
No hon. Member can disagree with such an object, but I am deeply concerned that we should deal with next year's guide prices, total allowable catches and quotas so late in the year. Similar dissatisfaction was expressed by the Select Committee on European Legislation under the chairmanship of my hon. Friend the Member for Newham, South (Mr. Spearing). Given the importance of the proposals to the United Kingdom fishing industry—I do not say that the blame rests with the Minister—it is a disgraceful state of affairs. Will the Minister be in a position to make a statement on the negotiations to the House next week?
I shall offer a comment on the Government's explanatory memoranda and the EEC documents. With regard to document No. 9585/87, on fish guide prices for 1988, I shall briefly mention the reform of the Community aid system for tuna fishing. I said "briefly" because not many British fishermen catch tuna. The Commissioners and the Community deserve our praise for their insistence upon fisheries agreements vis-a-vis that species with Lomé coastal nations. It is right and proper that the fisheries agreements should stipulate that part of the tuna catch must be landed in the littoral states near where it is caught. The fish, when canned, is often sold to the Community and, as Commissioner Sutherland pointed out in a letter to the President of the Council, the proceeds of the sales form a very important source of export income for those countries along the west African and Caribbean coasts.
It is rare for me to compliment the European Commissioners, but they deserve a word of praise for the establishment of the fisheries agreement. Regrettably, I now move from praise to criticism. I have some questions for the Minister on guide prices. I am concerned about the 10 per cent. reduction in the guide price for herring. I would like to know how this will be affected by the change in the United Kingdom green rate, as mentioned by the Minister. The change in the rate will lead to an automatic increase of 4·75 per cent. in the sterling equivalent of guide prices, but how will it affect the reduction in the guide price for herring? It is desirable for the gaps between the guide price, withdrawal price and the average market price to be kept to a realistic level. I believe that the change in the United Kingdom representative rate is important.
As everyone knows, the over-fishing of herring in the North Sea in the 1970s led to that fishery's closure for about a decade. During that closure, the United Kingdom herring market almost disappeared. However, the Danes continue to fish for herring in the Baltic sea and this, among other things, enabled them to secure a dominant position in supplying the West German market, which is the biggest herring market in the EEC.
The United Kingdom herring producers are placed at a serious disadvantage vis-a-vis the Danes. The geographical location of the major herring ports in the United Kingdom — Fraserburgh and Ullapool — means that the producers have to meet major transport costs to send herring and herring products to the major consumer centres in West Germany, whereas the Danes can transport their herring catches to Germany within 24 hours of the fish being landed in Esbjerg and elsewhere.
The prices structure should provide some compensation for those producers who exist on the periphery of the
540
United Kingdom. We must have regional withdrawal price schemes for herring. The United Kingdom herring industry can be re-established in West German markets only if the current disadvantage of the equal withdrawal price scheme in the European Community is set aside. United Kingdom producers should he allowed this intervention. It is essential that this be achieved, as the United Kingdom herring fishermen are seriously handicapped. That formidable handicap means that our fishermen are almost wholly dependent on Eastern bloc markets to sell their herring. We know that from the experience of Cornwall, Ullapool and Peterhead. Our fishermen must regain access to the Community markets. That can be done if exorbitant transport costs are partially met by implementation of the regional withdrawal price scheme.
The same could perhaps be achieved by a carry-over premium scheme which would enable producers to freeze herring which would otherwise be sold below the minimum price. There is nothing worse than seeing fine herring being sent to fishmeal plants. Such steps would allow our producers to compete more effectively in the frozen product market.
As for mackerel, is it necessary to maintain price differentials between the east and west coasts of Britain? The floating Eastern bloc market — it floats in large ships — follows the fish. The klondikers follow the fishing vessels from coast to coast. Perhaps the time has come to eliminate the regional variations. I ask the Minister to give that proposal serious consideration, although I know that it cannot be achieved next week in Brussels.
Will the Minister give an assurance that imported fish sells at prices which correspond to the appropriate reference price? Reference price schemes must be updated more efficiently and effectively if United Kingdom fishermen are not to suffer. Ideally, the scheme should be replaced by a minimum import price scheme. Is it not the case that such a scheme operates for the majority of imported agricultural products? If so, why should one not apply to fisheries?
The unnumbered explanatory memoranda deal with the division of TACs between the EEC and Norway and the share-out of species among the EEC's fishing nations. I should like to ask for the Minister's help in this respect. It would be helpful if his officials attached to the explanatory memoranda on quotas and the rest lists of figures for the past two or three years. The Minister may think that I am a lazy researcher, but I am sure that it would be much easier, when reading these dreadful documents—if the officials will forgive that description —to check what has happened recently, if the figures were attached. Such a change would surely not be very costly, and it would greatly help lazy researchers such as me.
I accept the need to strike a sensible balance between the amount of fish caught and the retention or conservation of stocks. I come from a fishing family, and I support the Minister in that respect. Moreover, I have just dined with the president of the Scottish Fishermen's Federation, Mr. Willie Hay. I might add that I picked up the bill. He will not mind my saying that.
United Kingdom fishermen have a good record on conservation. They appear to stick to the rules much better than some of their continental colleagues. I am not being chauvinistic. When fishing in Norwegian waters, they have

541
no choice but to obey the rules, as failure to do so leads to harsh penalties. The skipper of a German stern trawler has recently been fined £200,000 by a Norwegian court. Our enforcement policy should be as tough as that of the Norwegians.
Talking of Norway, I am deeply concerned about the proposed EEC-Norway agreement. The North sea herring TAC, as the Minister has pointed out, is to be reduced from 600,000 tonnes to approximately 530,000 tonnes. The United Kingdom share will go down from approximately 78,000 tonnes to 69,000 tonnes, yet the Norwegians, as the Minister pointed out, on a reduced TAC, have contrived to retain the transfer of 50,000 tonnes of herring. In addition, Norway has managed to hold on to the right to harvest the same amount of fish from the EEC sector of the North sea, where the quality is superior, in 1988 as in 1987, approximately 55,000 tonnes. Surely these should have been reduced in line with the overall TAC reductions.
Of considerable concern to many fishermen in England — from ports such as Scarborough, Whitby and Bridlington, and even the Channel fishing ports, as well as Lowestoft, Grimsby and elsewhere—is the reduction in the TAC for North sea cod. That is a matter for regret. The United Kingdom fishermen will be allowed to catch approximately 71,000 tonnes. I know that in the explanatory memorandum there is some comment on the inadequacy of scientific data. Perhaps I can quote from one of the unnumbered memoranda:
"In making its proposals, the Commission has been hampered by the increasing deterioration in the adequacy of the scientific advice resulting from lack of data and inaccurate statistics".
Why is that?
Fishermen, too, are deeply concerned about the scientific advice relating to this stock. I mean by this that the TAC came down, as the Minister said, from 176,000 tonnes in 1986 to 125,000 tonnes at the beginning of 1987; and then the latter figure was increased in the middle of the year to 175,000 tonnes. Not surprisingly, this increase encouraged the hope among fishermen that the TAC for cod would be increased in 1988. It is absolutely essential that much more stability be applied to the fixing of total allowable catches. I told the right hon. Gentleman the Minister of State, who is to reply, some time ago that I look forward to the day when the TACs are set for two or three years: the fishing industry needs that kind of stability.
So, curiously enough, we have a reduction in cod and an increase in haddock; yet fishermen claim that this year the former have been plentiful and the latter scarce. It is a curious business. Many of our small fishing boats on the east coasts of England and Scotland — and North sea cod is more important to England than to Scotland—work close to the land, where only cod is to be found in adequate quantities. Some of these vessels do not have the capability to sail to and fish the haddock grounds; so it is a very important quota change in cod. I am sure that the Minister agrees.
English fishermen this year, right down the coast, from the border to the Channel, found such an abundance of cod that they quickly fished out their quotas. That
542
presented them with a formidable problem, given this lack of capability to go elsewhere. So it is a matter for serious regret that the cod quota is to be reduced.
I wish the Minister well on this matter. He must dismantle any obstacles that are put in the way of the implementation of the west-east flexibile approach on western mackerel.
I support everything that the Minister has said this evening, but I suspect —as I said to him recently with regard to the common agricultural policy — that other member states will seek to wreck these negotiations on precisely this issue. He must be tough and formidable, as I am sure he will be.
I should like to make a plea for two small fisheries in the west of Scotland — the west of Scotland nephrops and the Clyde herring. The TAC for the nephrops is to be reduced. In 1987 the figure was 16,000 tonnes, but in 1988 it will be 4,800 tonnes. That will present a major problem for the fishermen of the Western Isles and elsewhere.
The recommendation for the Clyde herring is for a TAC of 3,200 tonnes, as opposed to this year's TAC of 3,500 tonnes. Will the Minister note that I believe that those TACs should remain at their 1987 levels? The TAC for the nephrops is precautionary — this is where I disagree with the Minister—and not scientifically based. I do not believe that the stock of Clyde herring has been over-fished. I should declare an interest, because I am the honorary president of the Clyde Fishermen's Association, whose members fish for the Clyde herring.
My last words to the Minister are a reminder. The Minister's predecessor gave a commitment in April to undertake discussions with the industry on further licencing proposals. Those discussions were to follow his Department's proposed study of the measurement of catching capacity. If that study has been completed, will the Minister give an assurance—if not this evening, in the near future—that those discussions on licensing will soon resume?
I hope that hon. Members will not think that I am imbued with the Christmas spirit, but I wish the Minister and his officials well in Brussels next week.
10.52 pm
Sir Michael Shaw: I am glad to follow the hon. Member for Greenock and Port Glasgow (Dr. Godman), who made a reasonable and well-considered speech. My sympathy was enhanced when he mentioned the problems of fishermen in my constituency. I am mainly interested in the fishing fleets of Whitby and Scarborough. The hon. Gentleman rightly mentioned cod quotas and their future.
There is no doubt that the two fleets in my constituency have a greater dependence on catching cod than other fleets. They must travel to catch other fish, whereas other fleets can alternate their catches. Therefore they are greatly dependent on this main source of supply of fish.
There is no doubt that we have experienced hardships this year. One of those hardships has been caused by the lateness of the plan. I hope that, whatever plans are made, they will be announced as soon as possible.
The way that we are going places too much emphasis on quotas. It is not the best way of seeking to do what we all want—to preserve the fish in the North sea. The increase in mesh sizes will be, in the long term, the right way to go. I was sorry to hear that the experiment with the

543
bigger net size in the cod box on the Danish-German coast does not appear to be working as well as it could. In other words, it is not properly policed.
That brings us back to the major problem. Some people say that we are responsible for all the trouble because we joined the Common Market. We had to join the Common Market. We had to have an agreement between all the states bordering on the North sea if we were to conserve stock. I believe that policing must go hand in hand with changes such as increased mesh size.
I have talked to both fleets in my constituency and the fishermen are adamant that that is the only way, in the long-term, to obtain a satisfactory conservation arrangement and, at the same time, obtain a proper catch of good-sized fish. I hope that when my right hon. Friend the Minister goes to the meeting next week with his colleagues he will press as hard as he can for the increased mesh sizes. I am glad to hear that he is prepared to have a review—
Sir Julian Ridsdale: Does my hon. Friend agree that the size of the fish landed is important as well as the mesh size?
Sir Michael Shaw: Absolutely. We should catch good-sized fish and let the others go so that they will be there for the future. That must be the right thing to do.
I realise that the debate is short and I shall speak briefly on the size of the TAC. I have been told many times that scientific advice is responsible for the level of the TAC. I can say only that during my many years in Scarborough and Whitby I have never known my fishermen to be wrong in their assessment of what goes on in the coastal waters offshore, whether it is the oil rigs that have been put in the wrong spot or, much more importantly in this case, what is happening to the fish stock. One has only to look at their advice with regard to herring stocks. That advice was resisted for so long by the so-called scientific advisers. In the end, my fishermen were proved right. Therefore, I believe that they are making a strong case when they say that there are more fish in the sea and that the scientific advisers have over-stated the case, causing a greater reduction than ought to have been made. I hope that my right hon. Friend the Minister will take the advice of the scientific advisers with a certain measure of scepticism and will listen also to the voice of the practical fisherman.
I believe that, over the years, our Ministers have defended the cause of the British fishermen very well indeed in Europe and in the agreements that have been reached. I wish them every possible success in their negotiations and for the future of the livelihoods of our fishermen.
10.58 pm
Mr. Austin Mitchell: I will not follow the hon. Member for Scarborough (Sir M. Shaw) in his praise for the Ministers. However, it must be one of their few pleasures in life to attend fisheries debates, which are in such contrast with agriculture debates because the reception is so much warmer, the situation is so much better, and the mood is so much lighter. I do not begrudge them the pleasure of coming to these debates.
Basically, Ministers are telling us that the status quo has been prolonged. For large sections of the industry that status quo has been fairly satisfactory. Grimsby has had a better year, but it has to be emphasised that that is a better year starting from a fairly low level.
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The industry in Grimsby has been depressed to such an extent that its survival is conjectural and it really needs to be built up. It has been a better year but an improvement is still needed. The cod quota is not encouraging. That is a problem for the east coast and a particular problem for Grimsby. We are a cod port and the reduction in cod catches will hit us severely. Haddock cannot be a substitute. Haddock quotas have been increased, but not to the extent that cod quotas have been reduced. In any case, haddock is found further north.
Given the reduction in the cod quota, the industry must be confident that the scientific advice on which it is based is binding and cannot be questioned. The papers do not convince one that that is true. They cast doubt on the scientific advice on which the cut in the cod quota is based. Like the hon. Member for Scarborough, I have had fishermen pointing out that in their view the scientific advice is wrong. They say that cod is doing reasonably well this year and that haddock is down. Yet we find that on the basis of the projections, haddock is increased and cod is cut. That, combined with the explanatory memorandum, which comments on "inadequate scientific advice" and the "unreliability of the data", shows that the case is not convincing to an industry that depends so heavily on cod.
How much confidence does the Minister halve in the scientific advice? Why has that scientific advice become so imperative now, when the industry wants an increase in the cod quota and when in the past allowable catches have taken more account of the social and industrial needs that are so strong in Grimsby? I welcome the Minister's commitment to a mid-year review. If we can adjust the figures upwards mid-year that will be welcome. I hope that he concentrates on that point and redresses the problems that will be caused for Grimsby.
The Minister commented on the improvement in catches and prices this year, but I must emphasise that that is mainly a feature of the Scottish industry, rather than the English industry. The balance of the industry has shifted to Scotland.
I am surprised that my hon. Friend the Member for Greeenock and Port Glasgow (Dr. Godman) should have gone out for a meal with the president of the Scottish Fishermen's Federation and had to pay the bill. Only the Scottish fishermen are in a position to pay bills. Had he gone with the president of the National Federation of Fishermen's Organisation, he would have had to pay the bill.
We need to redress the balance that has shifted so heavily towards Scotland. We are just at, and possibly just below, the size at which the English industry is viable. There is a concentration of facilities at Grimsby which needs bigger catches and more catches. There is ground to be made up in Grimsby and it is time to make a start.
Grimsby faces problems because the fleet is too small and is not producing the return on investment for the new investment. It is difficult to get new funds. We have just had a severe problem with the landing company which I am glad to tell the Minister has today been solved. We now have a new landing company which employs half the labour force, because 30 of them have taken redundancy. On that basis we can be viable, but we must build on that.
We now need some improvement in the quotas and in our ability to attract new vessels, and to get those vessels

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a quota. It has been increasingly difficult to fit new vessels into Grimsby. We are well poised for expansion and we need the ability to improve the situation.
On the long view there is a need for an increase in mesh size. I talk about taking the long view, but I should like an immediate increase in mesh size. As other hon. Members have said, an increase in mesh size represents the best form of conservation — indeed, the only proper conservation. In Grimsby we have always had a bigger mesh size and we should like that to be made universal. It is silly to restrict catches, because that leads to fish being thrown overboard. They are dead and that is a blow to conservation. I am disappointed that Ministers are not pushing for an immediate and substantial increase in mesh size. Why cannot we have the mesh sizes that apply in Icelandic and Norwegian waters?
Why can we not also have the tough policing that applies in Norwegian waters? The one factor that could increase confidence in the common fisheries policy is proper policing. Our fishermen still do not have confidence in that policy because they feel that other industries are not being policed as tightly as ours. If we had adequate overall policing and the confidence that others could not overfish and fiddle the quotas and get away with it, Grimsby would find the situation much easier to accept.
The inadequacy of policing is the fundamental flaw. We need tough policing such as that applying in Norwegian waters, which would certainly be welcomed by the British industry. Every fisherman fiddles to some extent, but our fishermen are far more law-abiding and far better policed than their competitors, who get away with things that we are not allowed to do. Only when we have absolute equality and absolute faith in the system will we be able to accept the measure as an adequate basis for progress.
11.6 pm
Mr. David Harris: I am happy to follow the hon. Member for Great Grimsby (Mr. Mitchell) and to maintain the pleasant pre-Christmas spirit of unity that has pervaded this debate.
I begin by giving my personal thanks to my right hon. Friend the Minister of State, Ministry of Agriculture, Fisheries and Food and my right hon. Friend the Minister of Agriculture, Fisheries and Food because they have championed the cause of British fishermen and have acted with great fairness when conflicts have arisen between, for example, my fishermen and fishermen who come to my part of the world from rather more northern waters.
I entirely agree with what hon. Members from all around our coast have said about cod. The sudden stop on cod in the Channel severely affected fishermen from the south-west, who also say with absolute conviction that they have rarely seen so much cod about. I was pleased to hear my right hon. Friend the Minister's opening remarks, in which I understood him to say that we need to look much more carefully at the precautionary total allowable catches—TACs that are not based on scientific evidence but are intended as a precaution. We can be more flexible with such TACs. I also echo all that the Minister said about the need to make conservation paramount in the fishing industry.
Undoubtedly we have enjoyed much greater prosperity in the past year. Some of my fishermen have even been honest enough—in their weaker moments — to admit
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that they have done pretty well. The port of Newlyn in my constituency is probably flourishing now as never before. It is certainly doing much better than it has done in recent years. However, there is the constant worry, illustrated in a Channel 4 programme on Sunday night, about the danger of overfishing and the pressure on certain types of stock. Only yesterday, a number of boats were preparing to go out of the port of Newlyn—they were provisioned and iced up and just about to sail—when the skippers were told by the Ministry, "Sorry. There is now a complete stop in certain areas on hake, sole and megrim". Can hon. Members imagine the effect that had on those skippers who were ready to sail? Without warning they were informed of the instrument from Brussels. I have already had a word with my right hon. Friend who will reply to the debate and I hope that he will comment on that.
Two matters arise from that incident. First, it cannot make sense for there to be no warning to fishermen. That is unacceptable. Secondly, in so far as I can piece the mystery together, the reason for the sudden stop was once again the ex-Spanish boats which sail on the British register but, in my opinion, remain completely Spanish boats. Over the years we have warned and warned again that those boats record some of their catches when they return to Spain against our quota, to the detriment of our fishermen.
The Ministers, the officials and I, know perfectly well, and I hope one day that the Commission will realise, that it is the easiest thing in the world for Spanish boats arriving in Spain to record some of their landings against our quota when they have been caught by Spanish boats which are not even on our register. How on earth can we check that that is not happening? It is a genuine problem. Again I pay full tribute to our Ministers for ensuring that action will be taken in the Merchant Shipping Bill, now in another place, but which before long will be here, against this wretched business of flag of convenience fishing and quota hopping which has done so much damage to our genuine shipping interests.
I know that the House will do everything that it can to pass that legislation on to the statute book as quickly as possible, and once there it must be enforced. Those bogus boats must be removed from our register so that we never again have boats in the ownership of and working in the interests of another country, fishing in our waters against our quotas to the detriment of our fishermen.
11.12 pm
Mr. Archy Kirkwood: It is music, indeed, to the ears of somebody who looks after the interests of the Scottish fishing fleet to hear the hon. Member for St. Ives (Mr. Harris) so philosophical this evening. In the past, properly defending the fishermen of Newlyn, he has been acerbic, if that is not a euphemism, about some activities of boats from northern parts. That is a measure of the consensus in this debate.
The demersal fishing TACs, especially for cod, and the recent uncertainties about the lists of TACs as a result of scientific advice have been causing genuine uncertainty and anxiety north of the border. I subscribe to the view of the hon. Member for Greenock and Port Glasgow (Dr. Godman) who said that it was time to try to move towards rolling TACs over a two or three-year period. I wonder whether that is on the agenda in Brussels at any of these Fisheries Council meetings. What is the state of play on that? Are some other member states also actively

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considering that? That is the only way to achieve real stability and a long-term framework of prosperity. A great deal of anxiety and uncertainty is caused by the present position.
The fishing industry knows that it is in its best interests to have proper conservation, and no one suggests that the Scottish fleet is interested in a rapacious policy that will destroy stocks. But it is almost unscientific to have the fluctuations that have occurred in the cod TACs, as reflected in the fluctuations in the haddock quotas for 1986, 1987 and 1988. It may be a scientific fact that the biomass fluctuates as widely as the TACs demonstrate, but that is not borne out by the fishermen's experience. Some of them have been in the industry for many years, and their instinct is almost as good a measure as the scientific methods that are used by the Government's advisers.
Balancing all the conflicting interests, we must try to improve management in the future and, as the hon. Member for Greenock and Port Glasgow said, try to give more notice at the beginning of each calendar year of what the TACs will be.
I welcome the possibility of a mid-year adjustment. I do not know whether it should be written in now, but it was a feature of last year's cod TAC. If it has to be written in at the Fisheries Council meeting next week, I hope that the whole House will encourage the Minister to do it.
The hon. Member for Greenock and Port Glasgow spoke eloquently about the mackerel fishery. We must get the Commission to accept the element of flexibility in the western stock east of 4 deg. west. It is a welcome recognition of the practice that has continued for many years. It is a sign of real progress that the Government have accepted that practice and introduced their proposals. They will ease much of the anxiety in the pelagic sector. I urge the Minister to resist Danish, or any other, pretensions to muscle in on that fishery. They have no right to stake a claim. It is a piece of poker-playing which the Government could face down if they played their cards properly.
On herring and guide prices, the proposals are broadly neutral and acceptable to the industry and are, therefore, welcome.
I agree with the hon. Member for Greenock and Port Glasgow about the licensing review. It would be in the interests of the industry to bring forward the review, if it could be done without prejudicing the results, because it has caused some anxiety. I wish the ministerial team good luck. It is basically on the right lines, and I hope that Ministers do not have too many late nights before they get away for their Christmas holidays.
11.18 pm
Mr. John Townend: I do not often agree with everything that the hon. Member for Great Grimsby (Mr. Mitchell) says, but I did tonight, especially with his comment that, under my right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling), the balance had swung too far in favour of the Scots. We look to my right hon. Friend the Minister of Agriculture, Fisheries and Food to make sure that it swings back again.
There is no doubt that the announcement of a reduction in the TAC for North sea cod will be disastrous for my constituency. The boats at Bridlington depend for 90 per cent. of their catch on one species—North sea cod—and if there is none, they can do nothing else. Last April, 1,000 tonnes were removed unilaterally from their quota. This
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year, the cut is from a quota which, despite being managed by the Yorkshire and Anglia Fish Producers Organisation Ltd, was exhausted by September. Indeed, 90 per cent. had been used up by the end of July, and since then the fleet has been able to have merely a by-catch of 5 per cent. of cod.
On numerous occasions, I have brought the problems of the fishermen this year in my constituency to the attention of the Minister and the Ministry. There seems to be something wrong with the way in which quota is organised. Without disrespect to the hon. Member for Great Grimsby, Grimsby fishermen have been able to free-fish all this year without restriction, while the Bridlington fishermen have been restricted, yet they ran out of quota by September.
We in Bridlington believe in conservation, but we do not accept that quotas are the way to deal with it. and to achieve a growth in fish stocks. As has been mentioned, fish caught in excess of quota and thrown back into the sea are nearly always destroyed. The real way to conserve fish is to stop the catching of immature fish. That is done by increasing the mesh sizes. The EEC has moved far too slowly, and we have moved too slowly as well. This year in our area, our fishermen unilaterally increased the mesh size above the EEC level. It would be only fair if areas that do that were given some consideration in the allocation of quota, and given extra quota.
My hon. Friend the Member for Harwich (Sir J. Ridsdale) said that we should have minimum fish landing sizes and prohibition of fishing in areas where there are significant concentrations of spawning or immature fish. Our fishermen were perturbed about the recent meeting with Government scientists about North sea cod. At the meeting, the scientists admitted that the cod box off the Danish, German and Dutch coasts, where the minimum mesh size was increased for six months last year to 100 mm because of immature fish, is not being observed by the continental fleets. That is appalling, at a time when our boats are virtually tied up.
The scientists also admit that the main requirement for a healthy future for North sea cod is to stop catching so many young fish, but their only solution is the cod box. The fishing industry wants closure of the fishing grounds where there is spawning in February and March, so that the fish can shoot their roe before being caught. It is unbelievable that the scientists will not support that suggestion. After all, no good farmer kills his cows while they are in calf.
The EEC proposals could spell disaster for my fishermen in Bridlington. The Government must reassess the basis of allocation of quota in the coming year and bring it in line with what is reasonable and sensible. They should press the EEC for larger mesh sizes. If we have the same situation next year as this year—with the proposed reduction it could be even worse—the Government will have to think about providing some financial help to fishermen whose boats are tied up. We hear that the EEC will increase the size of its social fund. I cannot think of any better use of that fund than to help fishermen who are not allowed to carry on their work.
11.23 pm
Mr. Frank Doran: My constituency is, by any standards, a substantial centre of the fishing industry, whether in its catching capacity, its marketing or its fish processing. The message from my constituents that

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I want to give the Minister is that we expect him to get the best possible deal for them and the rest of the United Kingdom fishing industry, at next week's meeting.
I should like to make three brief points, the first of which has already been made. We want a fair agreement on the North sea shoals between the EEC and Norway, which will allow a fair measure of United Kingdom involvement in those waters. My second point, about better policing, has been made fairly strongly. In discussions with my fisherman, I find that there is a tremendous sense of frustration at the fact that they know that their fishing quota is being used by other European countries.
For example, earlier this year I was approached by some of the processing organisations, which said that the saithe quota had been exhausted. They knew that they had not processed that quota and the fishing boats knew that they had not caught that quota, but the quota was exhausted. There is a sense of frustration. The plea for better policing comes from both sides of the House.
Thirdly, I make a plea for forward planning so that there is stability in the industry. That point has been echoed on both sides of the House. But the comments have been on behalf of fish catchers. I should like to make a plea on behalf of not only fish catchers but fish processors. There is a substantial processing industry in Aberdeen. In some respects it is very advanced, but in others it is fairly primitive. It spans the spectrum from the one-man business to the multi-million pound business.
Investment is needed. Because of the industrial position and the lack of grants, the small fish processor who wants to develop his business faces a greater difficulty than a normal small business man. There are fluctuations in the processing market and one cannot plan on a certain number of fish being available. Forward planning is crucial to the fish processing industry. I make a plea specifically on my constituents' behalf for stability in the market and for forward planning. I support the remarks of my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman).
As a tailpiece, to inject some small controversy into a fairly amicable debate—I am pre-empting the point to be made by the hon. Member for Banff and Buchan (Mr. Salmond)— it must be said that about 75 per cent. of the fish landed in United Kingdom waters is landed in the north-east of Scotland. It is a little mystifying that the Scottish Office is responsible for forests in the United Kingdom yet, despite the high proportion of the fishing industry in Scotland, is not also responsible for the fisheries aspect covered by the Ministry of Agriculture, Fisheries and Food. I ask the Minister to consider the departmental responsibilities.
11.26 pm
Mr. David Porter: Representing the constituency that includes Lowestoft—the premier fish town of England—a port that employs one man at sea for every nine men employed on shore, and a port whose fishing industry was all but decimated a short time ago, I certainly want to associate myself with hon. Members who wish the Government Front-Bench team good luck next week. I shall align my remarks with those of my hon. Friend the Member for Bridlington (Mr. Townend) when I say that the proposed cod quota reduction would be a
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disaster for the port of Lowestoft. Equally, I wish to associate myself, and have it on the record that I have done so, with YAFPO's remarks. The organisation's objections about the cod box and other matters are valid, and I hope the Minister will address them.
The debate has hinged on the scientific argument versus the more anecdotal argument fom the fishermen. Both groups are represented in my constituency. I live just a mile from the Lowestoft fish laboratory, so I have received representations equally from the scientists, with their professionalism and expertise and the fishermen.
There is no doubt that the documents which we are asked to consider cast doubt on the validity of the statistical evidence. I hope that the Government Front-Bench team will bear that very much in mind. If Ministers consider that reduced catch limits are often necessary to protect the future viability of North sea cod, can they not see that they must carry the industry with them, especially in Lowestoft?
The scientists can justify their findings—that is their business—but it is not fair to put them in the firing line. Government must find the median line. It is a matter of judgment, of how far the Government accept what the fishermen report on other matters, such as on what the Belgians, Danes or Dutch did that led to action. The fishermen's reports are surely worth much weight.
Certain parts of the industry may well be prosperous, and with fish prices remaining high and fuel prices low, that can continue. But it does not take much to upset the fine balance—it would not take much to rock the boat. The documents do nothing to push the industry forward; they do nothing to address the transfer of quotas or insufficient by-catches; they leave intact the blatant absurdity of dead fish having to be thrown overboard.
I hope that my hon. Friends on the Front Bench will accept my remarks in the spirit in which they were intended, and also that the Lowestoft fishing industry is looking for something that inspires confidence. It does not want cold comfort — it wants assurance that the Government recognise that a UK fisherman's life is his fishing and that economic fish caught and landed legally in Britain are part of the fabric of our way of life. Next week, Lowestoft will be looking for something that will give its fishermen a merry Christmas and a happy new year.
11.30 pm
Mr. Alex Salmond: I want first to tell the anti-Scottish cross-party alliance, especially the hon. Members for Great Grimsby (Mr. Mitchell) and for Bridlington (Mr. Townend) that the success of the Scottish fishing fleet might well owe something to the courage and skill of Scottish fishermen rather than to Government policy. That may not be the way it is seen south of the border, but the distribution of the UK quota between the Scottish and English fleets is set on a historical rather than a current basis, and is biased towards the English fleet. A cynic might say that current policy is that the Humber fleet, having been paid to decommission, is now being paid to recommission and reinvest I ask hon. Members not to look at the industry from the limited basis of only the English ports — the success of the Scottish fleet is a tribute to the skill of the Scottish fishermen, who contribute to the overall prosperity of the industry.
The Minister was right to identify flexibility around the 4 deg. line as being critical to the negotiations. It would

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be absurd if the Commission cannot be made to realise that mackerel movements have changed. The cod quota is disappointing. It is reasonable for hon. Members to make the point that it is difficult for fishermen to have confidence in these allocations when even the documents before us show a severe question mark over much of the scientific data.
Once again, the Norwegians have obtained a superb deal from the EEC fishery negotiations. I do not know about the transfers of fish between Norway and the EEC, but I would not mind transferring some of the Norwegian negotiators to the EEC. Once again, they have walked away with an excellent deal.
My final point refers to something that has already been raised in the debate — the inherent tendency towards instability in the fishing industry. In a good year, the industry has high investment both in catching and processing. Therefore, if there is a severe shock after that, whether due to quota reductions or lower prices, the effects can be very severe. The common fisheries policy does not provide a framework for medium-term planning in the industry, a point which I think hon. Members on both sides would accept.
I wish to push the Minister on the setting of annual quotas on a single species basis. Annual quotas only encourage and reinforce instability in the industry. Would it not be possible to have a three-year review, so that quotas could be set for three years and provide a framework for planning? Hon. Members would not then have to come to the House, late in the year, with incomplete information, documents from the Select Committee that show a question mark about parliamentary scrutiny, and documents from negotiations between the EEC and Norway that show grave doubts about the adequacy of scientific evidence. With a three-year review, we could consider the needs of industry on a proper basis and provide a reasonable time scale for the industry to plan ahead.
11.35 pm
The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. John Selwyn Gummer): First, I wish to thank the hon. Member for Greenock and Port Glasgow (Dr. Godman) for many of his comments. I support especially his remarks about the need to ensure that the Community's fishery arrangements with other countries, and particularly with Africa, are fair and properly policed. If we do not police them effectively, we shall not gain the opportunities that should be open to us. It is of considerable interest to our fishermen that there should be sufficient opportunities elsewhere should our fishing grounds become overcrowded. I agree with the hon. Member for Greenock and Port Glasgow that there is a strong moral consideration. In addition, there are practical reasons that should cause us to be concerned.
I associate myself with the remarks of the hon. Member for Greenock and Port Glasgow about the need for fairness. It is true that most fishermen are prepared to put up with a great deal if they feel that the system is fair. One of the difficulties that is associated with the fishing industry is that it is thought by those within it that the foreigner does better than the home fisherman. It is felt also that the neighbours of fishermen are doing better than the home fishermen. That applies to neighbouring Scottish
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and English fishermen and to fishermen just down the road. It is felt by fishermen that their neighbours are likely to get something that they will not enjoy.
That is natural in an industry that consists of hunting. There is a feeling of competition and a desire to ensure that one's neighbours do not do better than oneself. I understand that, but it is something that makes it difficult for Governments and Oppositions to be clear about the balance that should be achieved when listening to the anecdotal evidence, as my hon. Friend the Member for Waveney (Mr. Porter) would say, that is presented by fishermen on how we should proceed.
This means that we must depend on scientific evidence on the basis that there is no better evidence available to us. First, however, we must try to improve our scientific evidence. Those who have referred to the passages in the documents about the lack of scientific evidence have drawn attention to the failure of some countries to provide information that they should have made available to others. The provision of information is improving, and it will be unusual, but proper, to say in this place that the personal efforts of Dutch Fisheries Minister, Mr Braks, to ensure considerably better policing of the Dutch fleet and better reporting, are something that we wish to support. We have been extremely rude to Mr. Braks's predecessors and we must recognise that he has made great efforts to improve matters. That is something that we must support because there are others who could follow his good example.
Secondly, there should be updating on the basis of more recent scientific advice. I apologise to the House for the time limit which meant that the documents had to be submitted so quickly. The Commission has not done badly because the meetings of the scientists took place in late November. The evidence on which the documentation is based has to be as recent as possible so that decisions are made in the light of the most recent information. It would be sad if the House felt that the Commission had done other than its best. I hope that the House will accept that I am one of those who are likely to be quite tough with the Commission when things go wrong. On this occasion I must say that it has done as well as could be expected of it. However, if we get further and better evidence in the middle of the season, we should be prepared to use it and to change the quotas.
Thirdly, there is obviously a difference between precautionary quotas or TACs and those that are based on direct scientific evidence. I accept the comments of my hon. Friend the Member for St. Ives (Mr. Harris) on that score. There are many specific issues that the hon. Member for Greenock and Port Glasgow raised, and I hope that he will recognise that there is a shortage of time and accept that I should answer them in detail after the debate. I shall be happy to respond in that way. We are still investigating the way in which the system works and examining ways in which we can improve it. When this work has been completed we shall be talking to representatives of the industry. I understand that the hon. Member for Greenock and Port Glasgow has dined with the Scottish chairman. When I last had lunch with him, the chairman paid for the meal. I understand that that is slightly political. I hope that the hon. Gentleman will accept that we try to enter into discussions with all sections of the fishing industry. That is why it is extremely difficult to make any such decisions in terms that the whole fishing industry wants. That is the difficulty about the problems of mesh sizes. Many parts of

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the fishing industry do not share the view of my hon. Friend the Member for Bridlington (Mr. Townend). —[Interruption.] The hon. Member for Great Grimsby (Mr. Mitchell) may be right, but there are some things about Grimsby that are wrong, such as the national dock labour scheme. It has done more harm to that industry than any other.
Mr. Austin Mitchell rose—
Mr. Gummer: No, I shall not give way. The hon. Gentleman should not shout in such a way from a seated position.
Mr. Mitchell: I am not seated.
Mr. Gummer: The hon. Gentleman must accept that there is disagreement on the matter. When there is a mixed fishery and many different species—
Mr. Mitchell: Will the right hon. Member give way?
Mr. Gummer: No, I shall not give way. I have only a few moments left in which to conclude my remarks. The hon. Gentleman tempted me into making that statement. I would not have done it otherwise, as he knows. I am a mild-mannered person, though I am easily tempted.
I accept that, with a mixed fishery, it is more difficult to get fishermen to agree to a change in mesh sizes. In principle, I agree with my hon. Friends the Members for Bridlington and for Scarborough (Sir M. Shaw). The measure is not a substitution for quotas and TACs. It should be additional and, once seen to be effective, should enable greater flexibility with TACs and quotas in future. I wholly agree with the view that we should have both systems and many other conservation measures, but, unfortunately, in the interim, until we have made them more effective, we shall have to stick to the system of TACs and quotas which, in a real sense is beginning to work. We should not overlook that fact.
The hon. Member for Great Grimsby pointed out his lack of confidence in scientific advice and the problems that arise. I wish that there were better advice but I do not know on what else we should base our decision making. Therefore, we have to take what advice we can. The hon. Gentleman was unfair in regard to policing. The United Kingdom has taken the lead in improving policing.
Mr. Barry Field rose—
Mr. Gummer: I have already refused to give way. I have exactly six minutes left. I wish to answer the question. I promised that I would.
Mr. Field: I shall be extremely brief.
Mr. Gummer: On the basis of fairness, it would be wrong if I were to give way.
We have carried out a tough policing policy. We first got the Commission and the Council to agree to an international policing system. It was violently opposed not only by other countries but by our own fishermen in many areas. Then we got the Council to get the Commission to do a type of league table about how well the policing was done, and pointing out what was wrong. Surprisingly enough, the United Kingdom came top of the list. That was extremely good. It meant that we could point the finger at others. We were also able to put right the things that we had got wrong. We did that so that we could push
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the others. Then we got an increase in the number of police. More important, we got the right for the Community policing system to look at things without a vast plethora of red tape which meant that everybody knew that the authorities were coming before they arrived. All the changes were achieved in the teeth of opposition from many of those who objected. The effect has been significant.
I have travelled around almost every fishing port in the country. I have also been to many fishing ports in Scotland with the Scottish Office Fisheries Minister. He has also given me reports. In every such port fishermen have told me that things are still not right but that they are much better than they were in respect of policing. They specifically mentioned the improvements in Dutch control and the fact that the Danes have also begun to improve on their past performance.
I inform my hon. Friend the Member for St. Ives that I, too, am furious at the wholly unacceptable situation in which foreign boats can masquerade as British boats and gain fish from the quotas that have fairly been given to British fishermen. We are determined to stop that. It is the major undermining factor in the common fisheries policy, and it is the one thing that makes the CFP unacceptable to fishermen—that is, that someone pinches that which is not his.
We have a basic agreement, which we have accepted and which is not unfair to the United Kingdom, but it will become unfair if somebody else cheats; and it is a cheat to pretend that a boat is British when clearly it is not. That is why we are doing something about it and why we are unhappy that the Commission so far has done nothing. It ought to be even more concerned about this than we are, because the system will be acceptable to all nations only if it is fair.
The points made by the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) are understandable. We shall fight as hard as it is humanly possible to do something about the movement of the mackerel fishery. The hon. Member ought not to underestimate those who are opposed to this, because some of the opposition is based upon the principle that they, too, find the current fisheries policy sacrosanct, and they would not want to give others the opportunity to make changes that would undermine the basic agreement that was so hard won. I do not believe that they need be worried, but I understand why they are.
We have to reassure them that it is no use trying to renegotiate that which we have negotiated; it is merely a matter on which they may have a problem in the future because they may find that the fish have not swum exactly as the Commission thought they should. It is not easy, and I hope the hon. Member will support us in trying to understand it as well as in trying to win the battle.
My hon. Friends the Members for Bridlington and for Waveney talked about the quota for YAFPO. The problem is that YAFPO did not manage its quota properly. It got exactly its fair share of the quota, and if the share is changed other people will get less. When YAFPO went to the industry, the industry kindly gave it more than its fair share. We have done everything in our power to help YAFPO, which has assured me that this will not happen next year because it will run its quota better. Even if there are fewer fish than there is an ability to catch, if more fish are taken from one place, some will have to be taken from somewhere else. The Government should

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not be faced with that problem, otherwise the hon. Members for Aberdeen, South (Mr. Doran) and the hon. Member for Banff and Buchan (Mr. Salmond) will say that their fishermen are disadvantaged. There are other points—
It being one and a half hours after the commencement of proceedings on the motion, MR. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 14 (Exempted Business).
Question put and agreed to.
Resolved,
That this House takes note of the un-numbered Explanatory Memoranda submitted by the Ministry of Agriculture, Fisheries and Food on 30th November and 3rd December 1987 on total allowable catches and quotas for 1988 and on 2nd December 1987 on the European Community — Norway Fisheries Agreement, European Community Documents Nos 6388/87 on the common organisation of the market in fishery products and 9585/87 on fish guide prices for 1988, and of the Government's intention to negotiate the best possible fishing opportunities for the United Kingdom's fishing industry for 1988 consistent with the requirements of conservation of stocks.

PETITIONS

  The Arts
  11.48 pm
  Mr. John Bowis: I have pleasure in presenting a petition on the arts, signed by 76,000 men and women. I associate myself with the hon. Member for Newham, North-West (Mr. Banks) and the hon. Member for Orkney and Shetland (Mr. Wallace), who will present similar petitions. The petition shows that the arts in Britain have long been undervalued, and prays that
  the House will bring forward urgent measures to improve the public practice, understanding and support of our theatres and orchestras, dance and opera companies, art centres and cinemas, museums and galleries, artists, writers and performers.
  To lie upon the Table.
  Mr. James Wallace: I wish to present a petition in similar terms to the one enunciated by the hon. Member for Battersea (Mr. Bowis). I n doing so, I indicate the cross-party support for the value of the arts in the quality of life in our society and say we wish the House to give proper support to the many and varied forms of art.
  I beg leave to present the petition to the House.
  To lie upon the Table.

Gillian Smallwood
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Neubert.]
11.49 pm
Mr. Jim Callaghan: I am grateful to you, Mr. Deputy Speaker, and to Mr. Speaker for granting me this debate so quickly after I made my application.
I applied for the debate because I am deeply disturbed about the circumstances surrounding the death of Gillian Smallwood, aged five, while undergoing dental treatment at a clinic in my constituency. The Rochdale community health council is equally worried, as are senior medical staff at the Booth Hall hospital, Blackley, in Manchester. Requests have been made to the Rochdale health authority for an inquiry into the case to find out what went wrong, with a view to preventing similar tragedies in future.
Such requests were turned down locally and, in reply to my letter of 23 July, the Minister of State also turned down my request for a formal inquiry under section 84 of the National Health Service Act 1946. I believe that the Minister and the local health authority are both wrong. I hope that this debate will help to make them reconsider their earlier decision and agree to an inquiry to establish what went wrong in the Gillian Smallwood case and thus help to prevent any other child's death in similar circumstances.
The facts are these. On 21 August 1986, Gillian Smallwood, aged five, attended the Langley clinic, accompanied by her mother, for the extraction of three deciduous molar teeth. Mrs. Smallwood was informed that an additional tooth would need to be removed because it was mobile. Gillian was anaesthetised and had four teeth removed but, during the recovery period, she collapsed. Measures were instituted to resuscitate her. They were not successful and Gillian was transferred to the Booth Hall hospital, Blackley, where she was pronounced dead later that day.
An inquest was held by the Manchester city coroner, Mr. L. Gorodkin on 29 January 1987. He concluded that the cause of death was cardio-respiratory failure, hypoxia, dental anaesthesia, and tracheo-bronchitis, and that Gillian died of the aforesaid, sustained when she was having an anaesthetic for teeth extraction at the dental clinic, Borrowdale road, Langley, Middleton on 21 August 1986, when she had cardiac arrest. She was conveyed by ambulance to Booth Hall hospital, Blackley, where she died shortly after arrival.
Almost one year later, on 17 July 1987, Mr. A. J. Doyle, the district dental officer for Rochdale, wrote a long report defending the staff and the equipment used in the Langley clinic, but he concluded:
"Despite all the enquiries I have made, it has not been demonstrated that anything untoward happened which led to the death of this little girl, and the sad events of that day remain inexplicable."
His findings were submitted to the regional health authority meeting on 28 July 1987 as item No. 2.
I have given only the briefest of facts surrounding Gillian's death. However, the Rochdale community health council was so concerned about all the facts surrounding the death of this child that it wrote to the Rochdale area health authority asking for an inquiry into the events surrounding the case. There was a similar request from the child's parents, made through their solicitor.
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Unfortunately, the Rochdale health authority appears to have treated the receipt of a solicitor's letter as a major reason for discounting holding an inquiry, despite the fact that the letter related to the parents' wishes for a full inquiry and not to any prospect of legal action. This is a great pity, because the purpose of any inquiry is not simply to determine the cause of death. It can enable people to learn from an event and to take steps to try to prevent such tragedies recurring.
It is most regrettable that the health authority and the Minister appear uninterested in learning from this case. While I am aware that the health authority is almost certainly correct to assert that deaths from anaesthetics are rare, it misses the vital point—whether such rarities are preventable.
I have been told by an eminent doctor that such events are, at least in part, preventable. Dr. T. David, senior lecturer in child health and honorary consultant paediatrician at Booth Hall children's hospital, Blackley, Manchester—a man whom I salute as a dedicated and caring doctor—tells me that it is well known that all general anaesthetics, for whatever reason, carry a small risk of disaster and death. Some such events could be due to errors on the part of the medical staff and some represent unexpected adverse reactions to agents used in anaesthesia. In the latter context, it should be pointed out that Gillian had had several general anaesthetics previously, suggesting that her death was not for this reason.
Despite the smallness of the risk, it is a basic principle that one should plan for disasters and assume that the worst will happen. Yet general anaesthetics in dental surgeries outside hospitals are used not on this basis but on the premise that things rarely go wrong, and, when they do, it is bad luck.
Hospitals are geared up for emergencies such as cardiac arrest. To give an example, at Booth Hall children's hospital, as in any other hospital, cardiac arrests are an everyday event, with the result that all the medical and nursing staff have become well practised in all the procedures. Furthermore, plenty of staff are available.
At a cardiac arrest, the following staff are always called: the medical senior house officer on call, the two surgical SHOs on call, and the medical registrar on call. In addition to these six doctors, extra nursing staff are summoned, as is a porter. Not all these staff are required for efficient treatment, but one will usually need a couple of doctors for a cardiac massage, a doctor to intubate the patient and provide manual ventilation, a doctor to set up an intravenous line, and at least two nurses to assist with the intravenous line and drugs.
The situation in a dental surgery is quite different: a dentist, a dental nurse and an anaesthetist are there. The former may have had some training in resuscitation at some time in the past, but neither is likely ever to have dealt with such events. So there is little comparison with a trained, experienced and practised team.
Thus, there are two aspects of this case. One is the competence of the staff involved, but far more important is the principle whether it is any longer acceptable for children to have treatment under a general anaesthetic in a dental surgery. It is not easy for me to see the justification for such risky procedures in a dental surgery when proper facilities are available in hospitals.
This same Dr. T. J. David wrote to me about these matters, and also about the specific case of Gillian

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Smallwood on 17 July 1987. He told me that he first saw Gillian soon after her birth at the North Manchester general hospital because of the instability of her hip joint, and that he followed her up at Booth Hall hospital, where she subsequently required surgery to the hip and where she was also treated, under his care, for recurrent respiratory infections. By chance, he was the consultant paediatrician on call the day she died, and, with a consultant anaesthetist at Booth Hall, he supervised an unsuccessful attempt to revive her.
Dr. David told me:
"I think it is most regrettable that a request for an inquiry has been resisted by the Rochdale Health Authority. Their grounds appear to be twofold, that the Coroner has already examined the matter fully, and that deaths from dental general anaesthetics are rare."
He went on to say:
"It is questionable as to how detailed the Coroner's inquiries were. I submitted a short report, in the anticipation that as the Consultant in charge I would be called upon to give evidence, but I was never asked to attend".
On 3 December 1987 Dr. David also sent me a copy of a letter that he had sent to the hon. Lady, the Under-Secretary of State for Health and Social Security, in which he expressed his concern that the Minister had told me in her recent letter:
"You can be sure that the case was carefully studied to see if new lessons could be learned".
Dr. David's concern about the Gillian Smallwood case is precisely that it has never been carefully studied, and that he thinks it likely that there will be further, similar deaths unless it is studied.
Remembering that Dr. David was the consultant paediatrician looking after Gillian Smallwood from her birth and that he was the consultant in charge of the unsuccessful attempt to revive Gillian when she was brought from the dental surgery to Booth Hall hospital on the day of her death, I quote what he said:
"The fact is that at no time has anyone from Rochdale Health Authority or the Regional Health Authority, carefully studying Gillian's death, ever contacted me about her preexisting medical or surgical condition, her previous operations and anaesthetics or to obtain details of her final demise."
The consultant anaesthetist at Booth Hall hospital, who was assisting our attempts, has similarly never been contacted. The only people whom I have heard from are the Rochdale community health council, which has expressed its concern, and the parents' solicitors who, on behalf of the parents, have been pressing unsuccessfully for a full investigation. Thus, the suggestion that "careful inquiries" have been made is incorrect. The lack of desire to prevent a similar tragedy is the most depressing aspect of the case.
Having listened to Dr. David, I believe that any anaesthetic carries the risk of a serious adverse event, and possibly death.
It is self-evident that, if a disaster occurs and somebody sustains a cardiac arrest during anaesthetic, the facilities and staff are likely to be better in a hospital than in a dentist's surgery or in a community dental clinic, and if cardiac arrest occurs the patient stands a better chance of survival if the procedure is undertaken in hospital.
I draw attention to an editorial in Anaesthesia in 1979 —volume 34, pages 523–525—which makes it clear that anaesthetics in dental premises should be urgently phased out, and certainly should not be taking place in 1987.
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I believe that Gillian's death was potentially avoidable, and I should like steps to be taken to bring about a rapid halt to general anaesthetics performed for dentistry on children outside hospitals.
I am sure that it will be appreciated that I am deeply concerned about the tragic death of Gillian Smallwood and am anxious to do all that can be done to establish, as quickly as possible, what happened to her and what measures need to be taken to prevent a similar tragedy.
I call on the Minister, and I am supported by Dr. David, the Rochdale community health council and Gillian's parents, to set up an inquiry into this sad and tragic case to see what lessons can be learned from it.
12.1 am
The Parliamentary Under-Secretary of State for Health and Social Security (Mrs. Edwina Currie): I congratulate the hon. Member for Heywood and Middleton (Mr. Callaghan) on his success in the ballot.
I should start with an apology for not responding to the hon. Gentleman's letter of 23 July 1987, which has never turned up. The delays since he wrote to me on 17 September were unsatisfactory, and I have expressed my dissatisfaction to officials. I expect that the muddle was in part due to confusing him with his illustrious and noble Friend, who had left the House at the time that my officials were trying to contact him. At the time, the office was dealing with about 1,000 letters a week. However, the hon. Gentleman drew attention to the non-reply on 26 November and received an answer the next day. He has my unreserved apology for the delay.
Mr. Callaghan: I thank the Minister for those comments.
Mrs. Currie: On 21 August 1986, Gillian Smallwood, a little girl of five and a half years, attended the Langley clinic at Middleton in Rochdale for the extraction of three teeth under general anaesthesia. She had previously attended the clinic in February 1986, when five deciduous teeth were extracted under general anaesthesia.
Gillian was generally well, but had suffered from a congenital dislocation of the hip and had been an inpatient at Booth Hall children's hospital during July 1986 for the removal of pins.
The anaesthetic history was that Gillian came into the surgery at approximately 2.25 pm, accompanied by her mother, who stayed during the induction. It was agreed that a mobile deciduous incisor would be extracted in addition to the three already designated. The anaesthetic was administered by Dr. Padmanabhan, who holds a consultant appointment with the Rochdale health authority. One hundred per cent. oxygen was administered for between one and two minutes before nitrous oxide at 6 litres per minute was turned on. The oxygen flow was reduced to 2·5 litres a minute and Halothane 0·5·1 per cent. added. A prop was inserted by the anaesthetist, the mouth packed by the dental officer, Miss Arnold, arid three of the teeth were extracted.
During the transfer of the prop to the left side, the child became restless and it was then noticed that the flow of nitrous oxide had ceased. This was re-established by the anaesthetist opening the valve further, the child settled and the remaining extraction was effected.
The extractions were described as uncomplicated and, at this stage, the child's colour was said to he good. The

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nitrous oxide and Halothane were turned off, but oxygenation was continued. It was then noticed that the child had urinated, that she was pale and had stopped breathing. Positive pressure ventilation was commenced using the rebreathing bag, an endotracheal tube, which first had to be shortened, was passed and connected to the anaesthetic machine and 2 to 3 ml of adrenaline 1:1,000 administered directly into the heart. The child was then moved on to the floor so that cardiac massage could be commenced and an ambulance and crash team were requested. Help was also summoned from the health centre. Dr. Philip Rowlands, a general medical practitioner attending a vaccination clinic, and three district nurses responded. Dr. Rowlands, acting under the direction of the anaesthetist, administered further adrenaline and commenced external cardiac massage. The child was transferred to hospital, where she was declared dead. At the inquest, Dr. Rowlands gave a clear indication that the child was already dead by the time he arrived.
The post mortem examination was conducted by Dr. Lindon, the consultant pathologist at Booth Hall children's hospital. She gave evidence that Gillian was well cared for and well nourished and confirmed the presence of an operational scar over her left hip. No evidence of any other congenital defect was found, nor evidence of any disease except for an upper respiratory tract infection of moderate severity. Dr. Lindon was unable to comment on the effect of the disruption in the flow of nitrous oxide, but when questioned on the effect of the administration of Halothane on three separate occasions in relatively quick succession, she stated that she found no evidence of Halothane toxicity.
Mr. Callaghan: I have all those details from the coroner's report.
Mrs. Currie: I am glad that the hon. Gentleman has confirmed that.
The coroner concluded that there were four causes of death: cardio-respiratory failure, hypoxia — lack of oxygen—dental anaesthesia and tracheo-bronchitis. The finding was misadventure.
Therefore, we appear to have a child with a cold receiving general anaesthesia which appeared to have been less than sufficient at some point during the operation. The child collapsed soon afterwards.
I express my deepest sympathy for the parents in what was a totally unexpected death. I should like to draw attention to the excellent facilities and expert staff at the Langley clinic. That clinic is specially equipped to administer general anaesthetic. There are only three such clinics in Rochdale. Most of the general dental practitioners, at whom the hon. Member for Heywood and Middleton or Dr. David might be directing many of their criticisms, do not do general anaesthetics now in Rochdale. It is done in the special clinics.
The anaesthetic equipment was well maintained and in good working order. The anaesthetic was administered by a consultant anaesthetist, not a registrar or a senior house officer, who was employed precisely for that purpose. A full range of emergency equipment was available—and indeed, it is not unusual to have to shorten a tube as has been described. The staff were fully trained in the
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emergency treatment of a cardiac arrest and had recently attended a refresher course. Therefore, I reject all the criticisms that have been made.
I should comment on the response of the clinic staff to the child's condition. The consultant anaesthetist led the attempt to help the child. The drug adrenaline, recommended for use in such situations, was available and was used. The mother was not present while resuscitation was attempted and she has complained about that. However, that was because the staff were concentrating on treating the child. An ambulance was called and during the journey to hospital the child was still being treated by the consultant anaesthetist. The crash team was not included because the ambulance by itself was quicker. I know that the consultant concerned should have all the skills necessary for resuscitation if such resuscitation turned out to be possible.
Gillian died on 21 August. The matter was reported to the health authority on 26 August and it was agreed that if the inquest indicated a need, an inquiry would be held. In the light of the inquest, which, as the hon. Gentleman rightly says, set out clearly all the facts of the case, the health authority felt that a further inquiry would not be necessary. It published its own report on the events with commendable speed, and I know that the hon. Gentleman has a copy. Since then, there has been an exchange of correspondence with the Smallwoods' solicitor, the community health council and Dr. David, all requesting an inquiry. I can do no better than quote my reply to the hon. Gentleman of 27 November, in which I said:
"Having studied the report and taken advice, I have concluded that the report"—
I am referring to the report of the health authority—
"has adequately covered the sad events of this particular case, and that the case itself does not give rise to any general issues concerning the safety of dental anaesthesia. I have therefore decided that a further formal inquiry under section 84 of the NHS Act would not be justified."
That is the section of the law that we have used recently, for example, in the investigation of the outbreak of salmonella at Stanley Royd hospital and of Legionnaire's disease at Stafford hospital. We do not consider that it is appropriate or justified to hold an inquiry in the terms that have been requested.
Once Gillian collapsed, everybody acted with commendable speed and everything that could have been done was done. All the correct equipment was in use and working. All the correct guidelines were followed. All the facts are known.
I have received a letter from Dr. David from the department of child health at Manchester university. He was the consultant paediatrician who attended Gillian soon after she was born and subsequently because of her congenital hip problem. He says that he was never interviewed, but in all honesty I doubt whether he could throw any more light on the events in the clinic that surrounded her death, since he was not there.
Mr. Callaghan: He has never been asked.
Mrs. Currie: Those events seem clear to me.
Mr. Callaghan: What about Dr. David?
Mrs. Currie: I am sorry, I am responding to the hon. Gentleman, not to Dr. David, which I shall do in due course.
At the time, the child was under the care of a consultant anaesthetist who was well qualified for the job and who

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had been appointed precisely for that purpose. The family have taken legal advice and they also have the hon. Gentleman to advise them. I believe that they have access to all the papers from the authority that I have seen. They must decide how to proceed, but I am satisfied that the health authority has done everything that it can and should have done, and I see no reason for calling another inquiry.
I want specifically to reject Dr. David's assertion that all general anaesthesia on children should be done in hospital. That is not necessary or desirable. I draw the hon. Gentleman's attention to the rules of the General Dental Council as set out in its paper of April 1983, particularly to paragraph 5. That sets out rules that have been accepted throughout Britain and which have been a considerable improvement on the previous arrangements, which were the subject of some criticism.
Paragraph 5 says:
"A dentist who carried out treatment under general anaesthesia or sedation without fulfilling these conditions"—
which were set out in great detail in the notes for guidance—
"would almost certainly be considered to have acted in a manner which constitutes infamous or disgraceful conduct in a professional respect."
No such complaint has been made at any time, and I strongly believe that no such complaint could possibly be sustained.
As I read through the papers I found the case upsetting. I have two daughters of my own. I found myself wondering why Gillian was having her teeth out in the first place. She had lost five on a previous visit, also under general anaesthesia, and was about to lose four on this occasion. I have taken advice on that.
I understand that Gillian's dental extractions were necessary because of rampant caries of her deciduous dentition. A photograph of Gillian published in the Manchester Evening News on 29 January 1987 and 17 March 1987 showed her with very broken-down teeth.
The incidence of dental caries in young children in Rochdale has not fallen since 1980 and is much higher than the national average. A typical five-year-old in 1985 in Rochdale had 1·7 decayed teeth, 0·7 missing teeth and 0·8 filled teeth. The equivalent in England in 1983—the most recent figures that I have which are reasonable for comparison purposes—show 1·1 decayed teeth and 0·5 filled teeth. That is a big difference. The mean number of teeth extracted per child treated in Rochdale in 1985—I am talking about children aged between five and nine—
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was 0·74 and in England it was 0·45. One could put that rather crudely by saying that three-quarters of the children of that age treated at the dentist lost a tooth in Rochdale, whereas it was less than half in England as a whole. Rochdale's children have some of the worst teeth in the country. The record is not one to be proud of.
I also asked whether we had lost any other children like this. I am sad to say that the answer was yes. In 1986, there were two deaths of children associated with general anaesthesia for dental treatment. The other child was four years and four months old, and came from Halifax.
It is normal for children to eat sweets. I reflected on this little girl who had had nine teeth extracted before her sixth birthday through caries and on my younger daughter who loves sweet things and has now reached ten and a half without ever having a single filling or losing a single tooth from dental caries. She is typical of children in Birmingham, where she grew up. The difference is that one child lives in an area with fluoride in its water and the other lived in an area without fluoride. Furthermore, there is no fluoride in the water in Halifax, where the other death occurred.
I am aware that these comments are not entirely fair, because there have been deaths under general dental anaesthesia in Birmingham, too. However, it is possible to cut the risk of such terrible tragedies happening. It is possible to reduce the number of children who need general anaesthesia for necessary and painful dental treatment for bad teeth. I hope that, when the regional and district health authorities in the hon. Gentleman's area move to introduce fluoride — a move that we support and which we shall finance—he will give due thought to this terrible case. I know that some people resent being given what they consider to be unethical medication, but we should not pay for our principles with the death of a child. When the hon. Gentleman is given the opportunity to raise this issue, I hope that he will bear in mind that, had this child lived in a fluoridated area, she might not have died. I know that that does not help the family, but I have to put it on record.
I hope that I have answered the hon. Gentleman's points. The facts are all there and are available for further inspection. I suggest that the hon. Gentleman discusses the matter further with the Smallwood family and lets them decide whether they would like to take the matter further, and in what form.
Question put and agreed to.
Adjourned accordingly at sixteen minutes past Midnight.