Local Government Bill (Hansard, 18 February 1987)

§ The Secretary of State for the Environment (Mr. Nicholas Ridley)
With permission, Mr. Speaker, I would like to make a statement about the Local Government Bill.
As the House will be aware, the Government had announced that the Bill would include powers to control advanced and deferred purchase arrangements; new powers for local authorities to grant aid housing associations; improvements to the land register system; measures to secure greater competition for council services; measures to stop political abuses of the contractual process; and amendments to the publicity provisions in last Session's Local Government Act.
Due to the time taken to prepare the Local Government Finance Bill, work on parts of the Local Government Bill is running very late. If we were to wait until the last three measures mentioned were completed the Bill could not be introduced for another month or even more. The Government consider that to wait until then to introduce the Bill would make it virtually impossible to secure Royal Assent during this Session.
We have therefore decided, extremely reluctantly, to proceed only with the first three items — deferred purchase controls, local authority grants to housing associations and land register improvements together with minor amendments needed to the legislation governing advanced further education pooling arrangements. The Bill incorporating these items is being introduced this afternoon.
I much regret postponing our proposals for securing greater competition in the provision of local authorities services, for stopping abuses of the contractual processes which many Socialist councils practise, and for improving the legislation preventing political propaganda on the rates. I want to assure the many people who want these proposals enacted that we shall certainly press on with them at the first opportunity, either before, or after, the general election.

§ Dr. John Cunningham (Copeland)
Is this not the third local government Bill in six weeks to be introduced by the right hon. Gentleman? We welcome the fact that he has just announced the abandonment of three major Tory political promises. He has abandoned enforced privatisation of local authority services. He has abandoned legislation to end contract compliance in local government contracts and he has abandoned promises to prevent the use of advertising in the media by local authorities which wish to explain their policies and services to their communities.
Is it not true that a much larger Bill exists in draft form in the Secretary of State's Department? Does he recall authorising the speech by his hapless Parliamentary Under-Secretary of State, the hon. Member for Southampton, Itchen (Mr. Chope), on 4 February which the Department described as "a keynote speech'', which the Under-Secretary of State promised that these very measures which have now been abandoned were soon to be introduced in legislation in the House? What has changed in the two weeks since the Secretary of State's unfortunate ministerial colleague had his speech approved by the right hon. Gentleman?
Is it not a novel technique of Government to blame the administrative incompetence for which the Secretary of 917 State is now notorious as a cover for the right hon. Gentleman's political misjudgments on these issues? Are not these rather lame and pathetic excuses for the abandonment of major items of Tory policy which the right hon. Gentleman promised to the Conservative party conference? Does the right hon. Gentleman recall saying at the conference: Our 'next move forward' is to make local authorities put about eight more services out to competitive tender…We will introduce legislation very soon.
Does he recall that these matters were promised to the House in the Queen's Speech? Does he also recall saying in the debate on the Loyal Address that it was his firm intention to legislate on these issues? What has happened to those and many other promises that he made both inside and outside the House to assuage the Right-wing of the Conservative party? Is not the real reason for this major political climb-down the fact that he and his right hon. Friends on the Treasury Bench are running scared of the electoral consequences of undermining thousands of jobs in local government by implementing policies that many of us, and even his Tory colleagues in local authorities, including councillor John Morgan, the Conservative leader of the Association of District Councils, have condemned? Has the right hon. Gentleman been forced to abandon these cherished Right-wing Tory ideas by his right hon. Friends the Patronage Secretary and the Leader of the House, who do not want the business of the House clogged up with contentious legislation?
Is this a recognition of errors of political judgment in local government policy? Is this a principled decision on the right hon. Gentleman's part or is it merely an election expedient?

§ Mr. Ridley
That long speech would have more sense if the hon. Member for Copeland (Dr. Cunningham) were right in his main assertion that we have abandoned these measures. I made it clear in my statement that they are merely delayed or postponed. I do not want to intrude in the public gloom of the Labour party about its chances at the general election. We shall return to these measures either before the next general election or after it and, as I have said, we shall enact them. The speech of my hon. Friend the Member for Southampton, Itchen, (Mr. Chope), the Under-Secretary of State for the Environment, and my own speech at the Conservative party conference, quite rightly presaged the fact that the measures will be on the statute hook either before or after the election.

§ Mr. John Heddle (Mid-Staffordshire)
Will my right hon. Friend accept that, following his statement, there will be widespread disappointment among many ratepayers because of the actions of local authorities that abuse their interests and their money by not putting out services to private competitive tender and waste their money in political advertising?
Has my right hon. Friend considered introducing the clauses in another place? In the meantime, will he ensure that direct labour organisations become more efficient and do not trade at a loss? Will he ensure that every encouragement and incentive is given to local authorities to sell their surplus assets and to enable the realisation of them, to benefit the ratepayers?

§ Mr. Ridley
I thank my hon. Friend for saying what many millions believe. I wish to assure them through him 918 that the clauses will be brought forward. I think that my hon. Friend will agree with me that to have brought forward a Bill at the end of March that included all the measures that I have referred to with virtually no chance of it reaching the statute book by the end of the Session would have been to disappoint ratepayers even more. There will be widespread disappointment, but those who are disappointed that these measures will not be introduced immediately can have the consolation that supporting the Government will ensure that they come forward after a general election.

§ Mr. Michael Meadowcroft (Leeds, West)
Will the Secretary of State rectify the one omission in his statement and give us the date of the general election? Will he take it from me that the Bill's housing provisions will be supported in many parts of the House if they do not put further constraints on local authorities by requiring the consent of the Secretary of State for further cash to come into housing? We shall wish to judge the housing provisions by the possible alleviation of homelessness. Are the Government not showing a lack of competence by being prepared to promise what will be in Bills that they cannot deliver at the end of the day?

§ Mr. Ridley
The hon. Gentleman has asked me the date of the general election. According to the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), an election is imminent because Britain is on the verge of economic collapse. During the week in which he said that, the stock exchange rose 65 points, and since then it has risen a great deal higher. I think that later today my right hon. Friend the Chief Secretary to the Treasury will be demonstrating that perhaps the economy can limp on for another few days, weeks, months, or maybe into next year. The hon. Gentleman must ask the right hon. Member for Sparkbrook when he thinks that the economy will collapse.
The hon. Gentleman will see the Bill when it is published this afternoon, and we shall be able to debate the detail of the housing clauses in Committee. I can assure him that the clauses will be favourable in bringing more houses into being for rent within the private sector.

§ Mr. Robin Squire (Hornchurch)
Is my right hon. Friend aware that he will have the sympathy of most Conservative Members for the position in which he finds himself, which is largely not his own responsibility or fault? Is it not fair to say in the meantime to authorities that have not privatised or even tendered out for any service that that option is still open to them and that it would save some money? Secondly, will he confirm, in contrast to a statement made by an Opposition Member from a sedentary position, that far from the Government's policy being deemed unpopular, it is so popular that even NALGO was told recently by MORI that it should not campaign against privatisation because the public were too supportive of it and believed it to be good?

§ Mr. Ridley
I am grateful to my hon. Friend. I confirm that local authorities can pre-empt the legislation by going ahead and putting their services out to competitive tender right now. If they do so, they will meet one of the other problems about which they have been coming to me a great deal. They have told me that they cannot live within their means without large rate increases, despite the high level of grant that has been paid this year. They will he able 919 to square both problems by going out to competitive tender voluntarily. My hon. Friend is right when he says that NALGO has been advised to drop its campaign against these policies because it was becoming extremely unpopular. For my part, I rather hope that NALGO will continue its campaign.

§ Mr. Allan Roberts (Bootle)
How can the Secretary of State justify dropping proposals for controlling local authority publicity on the ground that the necessary legislation is not sufficiently well advanced in preparation? The same proposals were introduced in a Bill in the previous Session only to be altered and defeated in another place and in this place. Cannot he reintroduce that legislation?
Is not the real reason for taking the course that the right hon. Gentleman has outlined his awareness that interference with freedom of speech in the way that was proposed after the BBC and New Statesman fiasco would be unpopular? Is he not clearing the decks to sacrifice Tory councillors for an election on 7 May? A differential turnout in a general election campaign that day would sacrifice Tory local government. It would seem that the Government have written off local government, including Tory councillors.

§ Mr. Ridley
The previous Bill dealing with political propaganda on the rates was weakened in scope by another place, and the Government undertook to set that right in further amendments. As I have said, those are the amendments that are not yet ready, but we shall proceed to publish the code of practice. It will be available for all local authorities to read and for ratepayers to consider from the point of view of putting pressure on their local authorities to abide by it.

§ Mr. Ian Gow (Eastbourne)
Is my right hon. Friend aware that his statement is as unwelcome to those on the Benches behind him as it is to himself? Bearing in mind his passion for free enterprise, will he look favourably upon the future efforts of those who sit behind him, who may seek to repair the omissions of the parliamentary draftsmen by bringing forward their own clauses that would give effect to his own first intentions?

§ Mr. Ridley
My admiration of my hon. Friend goes very far. If he can surpass even the skill of the parliamentary draftsmen on this occasion, I am sure that that will be extremely welcome.

§ Mr. Reg Freeson (Brent, East)
Will the Secretary of State please tell us whether he intends to take powers to control and stop local authorities from guaranteeing that private finance will go to housing association schemes? It is a simple question; could we have an answer?

§ Mr. Ridley
We intend to take powers in the Bill to enable local authorities to make contributions to housing associations for projects based on private sector money where they wish to provide houses but cannot afford to do so without grant or at rents that tenants could afford. The right hon. Gentleman will see the details of this legislation in the Bill. He will find it a most valuable way of increasing private rented accommodation without increasing the public sector.

§ Mr. Patrick McLoughlin (Derbyshire, West)
Does my right hon. Friend agree that unions should not oppose this 920 measure, but should welcome it? The measure he has said that he will bring forward to the House in time, if not straight away—and that disappoints many Conservative Members—will lead to lower rates for the ratepayer and a better service throughout our communities. Will he condemn, along with many of my colleagues on the Government Benches, Derbyshire county council's scheme to fight these proposals — which will improve local services—when they come before the House?

§ Mr. Ridley
I agree with my hon. Friend about the disappointment and about the savings which can be made from competitive tendering. Between 17 and 22 per cent. has been saved in the cost of refuse collection in the areas where councils have taken that action. We have had to stiffen up on the operation of direct labour organisations, which are losing money. We are considering what action to take following a special report on Hackney. My hon. Friend announced today that further requests have been made for special reports from Lambeth and Burnley, and that in future we shall consider action after two consecutive financial failures instead of three. We must insist on higher standards of efficiency from local government, as the hon. Member for Blackburn (Mr. Straw) insisted in an article in a newspaper the other day.

§ Mr. Nigel Spearing (Newham, South)
Will the right hon. Gentleman answer the question asked by my hon. Friend the Member for Bootle (Mr. Roberts)? Are these clauses in draft or are they not? If they are, and the right hon. Gentleman thinks that they are so popular, why cannot they be published to enable the electors to make up their mind in the election of which he speaks?

§ Mr. Ridley
As I said in my original statement, the parts of the Bill that we are not proceeding with are not yet drafted and that is why we are not proceeding with them and that is why they are not in the Bill. They will not be drafted until a month from now. The only reason why we are not including them in the Bill is that they are not drafted. If they were, they would be in the Bill this afternoon.

§ Mr. Jerry Hayes (Harlow)
Does my right hon. Friend agree that if any heads should be put on spikes they belong to the parliamentary draftsmen? Conservative Member are becoming increasingly alarmed at their degree of incompetence, which knows no bounds. When we finally have the legislation, will my right hon. Friend give an undertaking that there will be a clause putting parliamentary draftsmen out to competitive tender?

§ Mr. Ridley
My hon. Friend is unfair; I take full ministerial responsibility. I said in the statement, and I repeat, that we did not know at the time of the Gracious Speech that we would have the problem of total expenditure which, as the House will acknowledge, proved to be an exceptionally complex and complicated matter. The truth is—I am not disguising it or blaming anybody —that preparation of the Bill took so much of the time of the skilled draftsmen that the clauses that we are talking about slipped, and that is the reason for our problem. It is not fair to blame the draftsmen.

§ Mr. Peter Pike (Burnley)
Will the Secretary of State admit that the measures that he is deferring are not in the best interests of local government? His Department is more interested in attacking local government. It is the politics of local government with which the Government 921 are concerned, rather than its efficiency. The efficiency of local government is in serving the people that it represents, and it is far better at that than the Government. Is it not time that the Secretary of State changed direction in his Department, or took the honourable course of action and resigned?

§ Mr. Ridley
I cannot accept that local government performs efficiently in all cases. There are some extremely efficient councils, but some councils' performances are so grievously inefficient that the House is right to intervene and make them better on behalf of the ratepayers. I should have thought that the hon. Gentleman would share that view, like his hon. Friend the Member for Blackburn. His attitude that it does not matter how inefficient local councils are is extraordinary. The evidence of that inefficiency is in many reports published by the Audit Commission.

§ Dr. Keith Hampson (Leeds, North-West)
Does my right hon. Friend recognise that if he proceeded with clauses to stop propaganda on the rates, he would assuage the feelings, not just of the Right-wing of the Conservative party, but many of us who have to live with that propaganda in places such as Leeds? Ratepayers have been wanting this for a long time. We find it hard to understand why, if there is the will, there is not the way to provide civil servants to draft clauses which my right hon. Friend can bring forward — the necessary clauses, the mere amendments—and which satisfy the requirements that most of us placed on him when we considered the Bill last year.

§ Mr. Ridley
Those clauses will be brought forward. I say to the many millions of people who would like to see this abuse ended that the return of another Tory Government will secure the matter once and for all.

§ Mr. Allen McKay (Barnsley, West and Penistone)
Will the Secretary of State now answer the question that was put to him? Does he or does he not intend to take powers to stop local authorities from moving private finance into housing associations? Has he not proved, once again, that the only fault with local government is central Government and the Department of the Environment?

§ Mr. Ridley
If the hon. Gentleman studies the Bill, he will discover that no authority is stopped from doing anything that it has done hitherto. In future, consent will be given, subject to certain conditions, for schemes where local authorities seek to assist housing associations or other bodies to provide further private rented housing. What will not be allowed is straight borrowing by local authorities to circumvent the capital controls.

§ Mr. Spencer Batiste (Elmet)
Is my right hon. Friend aware that, although there is considerable disappointment among Conservative Members that the legislation to control the abuses of Left-wing local authorities is not to be introduced immediately, there is, nevertheless, recognition that these councils have in the past left no stone unturned in trying to find loopholes in the legislation? Therefore, it is particularly important that the legislation should be developed carefully and in as watertight a fashion as possible. Can my right hon. Friend confirm that the drafting will continue on these clauses, that they will form a centre point in our manifesto at the next election and that they will be introduced in our first legislative Session in the new Parliament?

§ Mr. Ridley
I confirm all that my hon. Friend rightly asks me to confirm. That will be done. The Bill contains some carefully drafted means of stopping authorities from borrowing money to maintain a profligate style of life—often at the expense of other authorities and to the detriment of their ratepayers. These measures wilt do much to contain the extreme Labour councils that are becoming such a menace in our society.

§ Mr. Dennis Skinner (Bolsover)
Is it not becoming clear, as a result of the exchanges in the past few minutes, that what this measure is about is stopping the work of local authorities, which somehow or other have managed to build a few houses in the public sector during the past few years — despite the Government's attacks, the cuts in rate support grant and all the other efforts that they have made to stop local authorities building bungalows for pensioners and disabled people? This action will prevent local authorities from doing the job that they have been doing on a minimal basis because of Government interference. They will be able to do less than before. Instead of being able to build to about the figure of 20 per cent. in the public sector—as opposed to 100 per cent. in 1979—it will be down even further.

§ Mr. Ridley
On the contrary, what matters is the total number of houses. The measures in the Bill will enable local authorities to contribute to more houses being built by using private capital for the community.

§ Mr. Edward Leigh (Gainsborough and Horncastle)
Does my right hon. Friend agree that many Conservative-controlled authorities — notably Lincolnshire — have made considerable savings by contracting out? Does not this unfortunate slippage make it even more important for voters and ratepayers in Labour-controlled areas to work for a Conservative victory to ensure that the creative accountancy carried out by Labour authorities is not copied by a Labour Government intent on national bankruptcy`?

§ Mr. Ridley
My hon. Friend is entirely right. I hate to put it this way, but the enactment of these measures would remove a major incentive for people to vote for another Conservative Government. We shall enact them as soon as Parliament resumes.

§ Mr. Jack Straw (Blackburn)
A few moments ago, the Secretary of State sought to justify his incompetence and misjudgments in leaving these three major Conservative promises out of the Bill. Does he recall saying that he did not know at the time of the Gracious Speech of the problems of total expenditure? Does the right hon. Gentleman not recall that the Gracious Speech was on 12 November? He admitted to the House on 16 December and 12 January that he knew by the end of September of the problems of total expenditure and of the need for a local government finance Bill and that he had received the Attorney-General's advice on the matter by the end of October—a good fortnight before the Gracious Speech. In those circumstances, has not the Secretary of State just misled the House? Should he not withdraw what he said?

§ Mr. Ridley
The hon. Gentleman is trying to make a great deal out of that. May I just take him through what happened? My right hon. and learned Friend the Attorney-General gave us his advice at the end of October 923 that we would need to legislate. That is right. The process of drafting the Local Government Finance Bill took until the middle of December.

§ Mr. Straw
The right hon. Gentleman knew that.

§ Mr. Ridley
If the hon. Gentleman would let me reply, he would have better manners. It took six weeks to master the intricacies of what had to be done on the Local Government Finance Bill. The hon. Member for Blackburn and his hon. Friends will know how complicated the legislation was and how difficult they found it to understand the legislation. If I may pass Labour Members a compliment, I do not think that they understand it now. This shows how difficult the matter was.
At the time of the Gracious Speech, the sheer effort and complications involved in introducing the Bill, which, after all, was for the benefit of local authorities in the sense that they could not have received rate support grant without it, caused a delay—I admitted that in my statement—in the preparation of part of the Local Government Bill, with the consequent results which I have put before the House.

Several Hon. Members
rose—

§ Mr. Speaker
Order. I shall call the three hon. Members who have been rising regularly. I ask them to be brief.

§ Mr. Michael Fallon (Darlington)
Will my right hon. Friend complete this exhilarating, forward-looking and visionary statement by saying exactly how much might have been saved for ratepayers and taxpayers in a full year by the ending of a monopoly in these eight areas of local government? Can my right hon. Friend say when this legislation will be introduced?

§ Mr. Ridley
It is difficult to put a figure on the amount saved. The Audit Commission is to publish a paper soon which will give an estimate of the savings. In one service alone—refuse collection—there could be between 20 per cent. and 30 per cent. savings. Any local authority that wishes to make savings of that order can do so now, but many do not wish to do so. I cannot forecast when we shall be able to come forward with the other measures, but it will be as soon as there is a clear opportunity for them to proceed on to the statute book.

§ Mr. John Mark Taylor (Solihull)
Does my right hon. Friend agree that the most important improvement required for the local government land register is that registration should be compulsory? Does he agree that the register will not work properly until it is?

§ Mr. Ridley
My hon. Friend will see in a schedule to the Bill the powers which are taken. I think that he will find that these will greatly assist my officials to ensure that land that is not used by local and public authorities is quickly brought on to the market.

§ Mr. Tony Favell (Stockport)
It will not have escaped my right hon. Friend's notice that the Labour party wants the country to believe that he is conducting a vendetta against the whole of local government. Will he confirm that he is after the crackpot councils, not the responsible ones, such as Stockport, which spend about half as much per head of population as neighbouring Manchester?

§ Mr. Ridley
I confirm that many local authorities are extremely well run. It is when the Labour party gets control of local authorities that the trouble starts. That is another reason why Labour will never win control and form the Government.