§ Motion made, and Question proposed, That this House do now Adjourn.—[Mr. Lightbown.]9.59 pm
§ Mr. David Alton (Liverpool, Mossley Hill)
I thank the House for the opportunity to raise on the Adjournment the problems of the city of Liverpool. It is not my intention to rake over the entrails or to try to rewrite an Agatha Christie whodunnit. There is no real point in using this debate to apportion blame for the serious problems that Liverpool faces. All I wish to do in the context of the judgment made in the other place last week concerning the disqualification of 47 Liverpool councillors is to offer the view, which, I think, is shared by other hon. Members, that many of the councillors were highly motivated people, some of whom I had the privilege to serve alongside for eight years when, 15 years ago, I was elected to Liverpool city council. The motives of people such as John Hamilton are certainly beyond question. If there is anything that the Government are able to do to prevent the personal bankruptcy of such individuals, I sincerely hope that they will do it. No further useful purpose will be served by vindictive actions being taken against the councillors.
The other point that I wish to make at the outset of my remarks—which also echoes comments that have been made by the Bishop and the Archbishop of Liverpool and the Moderator of the Free Churches—is that this is not a moment for recriminations or for people to indulge in yet more confrontation. It is a time when partnership is required to try to redress the serious and deepseated problems of Liverpool. In a statement at the weekend, these remarkable churchmen said:Electors should keep in mind the need to choose Councillors who, whilst persevering in their long-term party political aspirations, may be willing in the difficult years ahead to cooperate across party barriers for the good of the City as a whole. Only with a majority of such Councillors can the City achieve sufficient stability to secure the confident partnership and collaboration of central government.I am certain that the partnership and collaboration that they talked about should be the theme and the key of the comments heard in the Chamber tonight.
The significance of the debate is not that it will solve problems but that it will demonstrate that a partnership and a willingness to co-operate exist. Certainly that willingness exists on the Opposition Benches. I know that the hon. Member for Blackburn (Mr. Straw), with whom I have talked before the debate, will make many comments with which I can certainly associate myself, and in turn, I hope that he will be able to endorse my comments. Together, we can find common ground whereby we can pursue objectives that will be for the good of the people of the city of Liverpool. I am sure also that if the Government are prepared to listen with an open mind and to show a more flexible and pragmatic approach, it will be possible to find co-operation across the Floor of the House as well as on Opposition Benches.
Politics is a risk-taking business. The hon. Member for Blackburn and I will no doubt be criticised for seeking to co-operate. There are always people who will say that there can be no room in politics for trying to find common ground. Yet, given the scale of the problems in the city of Liverpool, nothing other than co-operation will find solutions to the problems of our city. People will expect an appropriate response from the Government. The situation is serious.
1016 In the next fiscal year, there is a gap of about £50 million between the expected revenue that the city will receive by way of rates and the expenditure that has already been budgeted. The corporate debt of the city, which goes back over many years, has now reached an accumulated total of around £800 million—a staggering figure. This year, the debt charges, before subsidies are taken into account, will cost £97 million to service. Of course, they will go up further next year when the £60 million that was borrowed in the past 12 months from Swiss and Japanese bankers comes to maturity. Therefore, the debt, in relation to the population of the city of Liverpool, is considerable.
The decline in population has been phenomenal. About a third of the city's population has left Liverpool in the last 20 years. That has compounded the problem in many respects. Every time that people leave, the city loses rates and the rate support grant that goes with rates. Every time people leave, the city communities are fractured and families are split up. They leave a legacy of empty properties. There are more than 8,000 empty municipally owned properties in the city of Liverpool.
There are other factors, too. There is an increasingly elderly population. One in four are over retirement age, the fastest growing group being the over80s. One in five are unemployed. That, too, has compounded the problem, because fewer people are in a position to contribute to the running of the city. The problem of collecting revenue has been exacerbated as companies have gone out of business and as shops have been closed. In the last 12 months £1.4 million was lost in uncollected rates because of liquidations and bankruptcies. Of the 36 metropolitan districts, the city of Liverpool has the third highest business rate, partly because there has been no rating revaluation since 1972.
These are serious problems. Paradoxically, they are further compounded by useful Government initiatives that were taken several years ago. For instance, the inner city partnership schemes, such as nurseries, which are now being funded by the city council, were set up with Government funds. Worthwhile initiatives are being placed in jeopardy because there are insufficient funds to keep them in existence.
What can be done? First, I should like the district auditor to come to Liverpool in a different capacity. I believe that many councillors would like him to conduct an efficiency audit survey. If he were to examine line by line the services of the city and if he were to consider whether value for money could be improved, or whether savings might be made, or whether more resources are genuinely required, I am sure that it would be welcomed. I hope that the Government would take seriously the independent findings of the district auditor and that they would respond positively to any suggestions that he might make.
Secondly, perhaps the Government would consider the rescheduling of loans so that debt charges could be pushed forward to later years. That would help, too. Similarly the Government should look at the way in which the rate support grant formula works, especially in areas where there has been massive depopulation. If there were a bigger response by the Housing Corporation to housing cooperatives and housing associations, useful resources could be provided for the city without the rate support grant having to be increased, which the Government might find politically difficult.
1017 The Government could take other measures to respond positively to the city's needs. We are constantly being told that there should be a partnership between the private and the public sectors. Private enterprise has come forward with the Mersey barrage initiative. Up to £220 million of private investment has been offered. That would create jobs, which in turn would create electricity and new deep sea water facilities in the mouth of the Mersey. If such a project were to go ahead what a symbol of hope that would be to the people of Merseyside. However, Government commitment is needed. There has been some help to date, especially from the Under-Secretary of State for Energy, the hon. Member for Wirral, West (Mr. Hunt). I hope that the Government will pursue that commitment, in partnership with the local authority and with all the political parties, so that that dream may become a reality.
Similarly, the free port has been a great success. Of the six free ports that were established by the Government, the Liverpool free port has been the biggest success, but it could be an even greater success and could create more jobs, especially in manufacturing, if the VAT restrictions were to be removed. Perhaps the Government would consider that point, too.
As for Liverpool airport, the five authorities have been unable to provide for it in the next fiscal year. That means that the airport will face closure, with the loss of jobs and the loss of prestige in the area, unless there is a positive Government response.
These are not easy issues to resolve, but invective and abuse will get us nowhere. We must turn around the city's image. Glasgow did it very successfully, especially with the help of the Scottish Development Agency, but partly through genuine political partnership. A key player in that partnership must be central Government. In the city of Liverpool 500,000 people will be looking to the Government and to all hon. Members for a positive response.
Like other opposition Members, I have great confidence in the future of Liverpool. That confidence can now best be served by forgetting the past, laying aside past bitterness and working together for a future that is based on justice and fairness.
§ Mr. Jack Straw (Blackburn)
The House will be grateful to the Member for Liverpool, Mossley Hill (Mr. Alton) for seeking the debate, as well as to yourself, Mr. Speaker, for choosing it. I am also grateful to the hon. Gentleman for allowing me time to speak in it. I am glad that I am joined in the Chamber by my hon. Friends the Members for Liverpool, West Derby (Mr. Wareing) and for Liverpool, Broadgreen (Mr. Fields).
The hon. Member for Mossley Hill, in an eloquent speech, referred to the statement by Bishop David Sheppard, Archbishop Derek Worlock and the Moderator of the Free Churches, John Williamson, which was issued at the weekend. In that statement, which dealt with the future of the city, the three leading Churchmen recorded that the cash penalties imposed on the 47 rebels by the Law Lords were "without parallel" in the Government system. The three Churchmen also paid tribute to the fact that among the 47 disqualified from office for at least five years were some "very fine public servants." That is so.
Liverpool faces some most serious economic and social conditions not of the city's making. There has been the decline in traditional manufacturing. There has been the 1018 change in the nature of shipping, from loose cargoes to containers. There has been our entry to the Common market. On whatever side of the argument one stands on that, it has had the effect of shifting trade from the west to the east coast. It has led to the closure of associated factories such as Tate and Lyle. If one goes up the dock road from Liverpool to Bootle, one sees that what was once a thriving industrial dockland area is now derelict, with only three factories working. The unemployment rate is among the highest in the country. Tackling the problems of Liverpool must be at the top of the agenda of any political party. Certainly it is at the top of ours, and I know that it is at the top of the Liberal party's agenda, too.
We must look to the future, not to the past. For all its problems, Liverpool is still a vibrant community. Half a million people live there. They are not to be written off. Liverpool is the fifth largest city in the United Kingdom. There are many successful firms and enterprises in the city. Nothing annoys or depresses people more than the idea that the area has only problems and has no future to offer. As it has shown over past years, Liverpool has done a great deal to help itself and will do a great deal to help itself in future, but just as Liverpool helped to create billions of pounds of wealth in the past for the rest of the country, now is the time when it needs some help from the wealth that it created in the past to restore it and deal with its problems.
I hope very much that, when the Minister replies, he will deal with the debate in tine spirit in which it has been introduced. I hope that we shall not have a catalogue of what happened in the past or of recrimination. I hope that the Minister will show understanding. The rate support grant system has penalised Liverpool more than other places because of the base line that was set in 1981 and the way in which the system of grant-related expenditure assessments does not take proper account of the unemployment in Liverpool or the problem of depopulation, to which the hon. Member for Mossley Hill referred.
We do not talk up the financial problems— £800 million of debt is a very large sum. So is the size of my mortgage, if I ever think about it. But those debts do not have to be repaid immediately. Let me put the problem into perspective. The national debt is £170,000 million, and the Liverpool population's share of it is £1,500 million. Those are large sums, but it does nobody any service, least of all Liverpool, if we suggest, wrongly, that the city is near financial collapse or bankruptcy. The city faces financial problems, and it needs Government help to deal with them.
Liverpool has always played its politics hard and no doubt that will be the case in future, not least in the local elections that are shortly to take place in which voters will have to make choices between the parties. It is right that there should now be the maximum co-operation between the parties in seeking solutions to Liverpool's pressing problems. In the past decade, Liverpool has seen the politics born of desperation. For the next decade, we want to see the politics born of hope. In creating that hope, the Government have an important role to play.
§ The Parliamentary Under-Secretary of State for the Environment (Mr. Christopher Chope)
I congratulate the hon. Member for Liverpool, Mossley Hill (Mr. Alton) on securing this debate. It is timely in view of the change in political control of the council since this time last week.
1019 The importance of the debate is reflected in the fact that there are many right hon. and hon. Members present now who would not normally be present for such a debate. I am glad that the hon. Member for Blackburn (Mr. Straw) made an intervention. I can understand why he wants to look to the future and not to the past and why he pleaded with me not to indulge in recriminations.
I will try to set out the Government's view about the problems faced by Liverpool and say what the Government can do to help and what we have tried to do in the past but encountered total intransigence on the part of the elected members of the council. It is relevant to take into account the political context in which many of these problems have been created. We should also take into account what may or may not happen in a few weeks, because the local elections in May will be a crucial test for the future of Liverpool. It is a pity that the hon. Member for Blackburn did not address his remarks to where the Labour party stands vis-a-vis the Militant influence in Liverpool.
The Government acknowledge that considerable problems face any elected representatives in administering the city of Liverpool. The city is characterised by significant economic and social deprivation. That is why it is a partnership authority for the purpose of the urban programme and it deservedly has the second highest grant-related expenditure assessment of all metropolitan district councils—over £530 per head.
However, the council is spending considerably more on services than it needs to spend. The latest year for which figures are available show that Liverpool was spending 35 per cent. more per head than the metropolitan district average. I do not think that the people of the city believe that their services are 35 per cent. better than the average. I am told that most residents regard, for example, the refuse collection service as a joke and that it is not unusual to wait six weeks between collections, despite the fact that the council employs the same number of men and dust carts for a population of 500,000 now as were employed when the population was more than 700,000.
There are areas in which an in-coming administration is able to take reasonably quick action. For example, since 1983 council house rents in Liverpool have been frozen. If in the period since then the council had increased them in line with the Government's guidelines, the council would have had an extra £8.7 million in income in the current year. The total rent income forgone since 1983 is £22.8 million.
In December 1986 the city council employed more than 31,000 staff—63 per 1,000 of the population. That is the fourth highest figure for all metropolitan district councils. The average is 53.4 per 1,000.
§ Mr. Robert N. Wareing (Liverpool, West Derby)
If the local authority had increased the rents by the amount that the Government wished, how much would that have cost the DHSS in benefits to the huge number of the population of Liverpool who have their rents paid by Government funding through the DHSS?
§ Mr. Chope
The hon. Gentleman makes my point, showing what folly it is for a council to think that it is attesting its political prowess by keeping rents down when many people pay nothing towards their rents, which are 1020 met from central taxation. By forgoing those rent increases, the city council has deprived itself of a great deal of income that it might otherwise have had.
I will outline the Government's approach to the situation now. We are ready to meet city council representatives. Indeed, we were willing to meet the Labour-controlled council. My right hon. Friend the Member for Mole Valley (Mr. Baker), when he was Secretary of State for the Environment, met a deputation from Liverpool in January last year. In August, the council wrote to my right hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley), the present Secretary of State, to ask for a further meeting. In his reply of early September, my right hon. Friend not unreasonably invited the council to provide an agenda for discussion, but such was the state of administrative chaos that characterised the running of Liverpool city council that it took five months for an agenda to be prepared. The agenda reached my right hon. Friend in mid-February, by which time the city council was on the point of making a rate for 1987–88.
As hon. Members know, the city rate is to go up no less than 14 per cent. Thanks to the Government's far-sighted control of the precepts of the joint authorities for police, fire and transport, the increase at ratepayer level is 5 per cent., but that did not prevent the erstwhile leaders of the city council from presenting it as a modest 5 per cent. increase for which they were responsible. Nevertheless, the Government are prepared to meet city council representatives. Sir Trevor Jones, now leader of the council, wrote to my right hon. Friend the Secretary of State on 12 March seeking a meeting. My right hon. Friend replied on 16 March and a meeting has been arranged for 24 March. The city council should not expect exceptional treatment, but there may well be scope for increasing Liverpool's share of urban programme resources as a result of having a more co-operative council.
As the hon. Member for Blackburn made clear, Liverpool is not alone in having a large accumulated debt. My right hon. Friend the Secretary of State made it clear in a written answer on 19 February that the Government do not stand behind local authority debt. Local councillors are elected to a responsible office and most of them do not expect the Government to be available to stand behind them or to bail them out. Liverpool's debt is also by no means exceptional. Its loan debt of £680 million compares with Manchester's £817 million and Sheffield's £575 million and is dwarfed by Birmingham's £1.3 billion. Indeed, when the Liberals left office in 1983 Liverpool's loan debt was £557 million.
I remind the House that the Government put considerable public resources into Liverpool and other inner city areas every year. Central Government assistance to Merseyside is running at well over £1 billion per year—the equivalent of 1p on income tax for the entire taxpaying population of this kingdom. Metropolitan areas as a whole stand to receive £240 million more rate support grant next year and London authorities £100 million more than in the current year. Those authorities with the greatest inner urban area problems stand to receive 24 per cent. of England's block grant next year, compared with a steady 20 per cent. per year between 1981–82 and 1985–86. Liverpool city council stands to receive some £129 million rate support grant next year—an increase of more than £6 million on its current year's entitlement.
The House should note that in 1986–87 Liverpool received in rate support grant, housing subsidy, housing 1021 benefits, specific grants and capital grants £550 per head of population compared with £320 in Newcastle, £365 in Sheffield and £223 in Leeds. Let no one say that the Government have ignored the problems of Liverpool—or are Opposition Members saying that we should take money from other areas and give it to Liverpool when there has been so much waste of resources hitherto? The figures illustrate clearly the Government's acknowledgment of the problems of inner urban areas and our commitment to sensible levels of support to help cope with their difficulties.
There is a tendency to present Liverpool as in every way an exceptional case, and it certainly has social and economic problems. The Government recognise that the city council faces a substantial financial problem, but the problem was created in large measure by the preceding Labour administration. I hope that the new administration in Liverpool will take urgent steps to relieve the situation. There is massive scope for greater efficiency and more cost-effective administration of services.
§ Mr. Alton
The hon. Gentleman will recall that I suggested that if the district auditor were to conduct an efficiency audit survey highlighting areas in which savings could be made we would he prepared to abide by his findings. I also suggested that we might find areas in which more resources were required. Will the Government give the same commitment that they would be prepared to abide by the findings of the district auditor if such a survey were conducted?
§ Mr. Chope
The district audit service is independent of Government. It is an excellent idea that the hon. Gentleman has had to invite the district audit service to look at the services in Liverpool and find out where savings can be made. He will know that when the city council is under the control of the Liberal party or, as I hope, after May under the control of the Conservative party, if it takes the view that it needs special assistance, all it has to do is to make a submission to the Government and we will consider it.
I am sure that the Liberal councillors who now form a majority on the council are ready and anxious to demonstrate their ability and responsibility to tackle the city's problems. The Government are ready to discuss the position with them. However, I am not persuaded that there will be any public benefit in pumping yet more taxpayers' money into Liverpool as a matter of principle. The city council's problems will be resolved only by sensible local government facing up to the real world.
§ Mr. David Steel (Tweeddale, Ettrick and Lauderdale)
Will the hon. Gentleman undertake to look seriously at the report from the church and business leaders about the changes in Government finance in the city of Liverpool? Will he look sympathically at the distortions that have unwittingly occurred over a long period?
§ Mr. Chope
The leaders concerned have already met the Secretary of State. I have read a copy of the report which, as yet, has not been published. It contains some points that we are carefully considering.
1022 I do not think that I can leave this debate without commenting on the future, because the leaders of the Labour party have desperately tried to side-line Liverpool, no doubt because it is embarrassing to the Labour party when its mask is removed and its true nature exposed.
One understands from the press that there is every prospect that the Labour party will again field Militant candidates in the May elections. Much as Opposition Members may say that one should not get involved in that aspect of the debate this evening, I think that this issue is absolutely fundamental. If Liverpool finds itself with Militant Labour councillors again after the May elections, its problems will go from bad to worse.
What will the hon. Member for Blackburn do about that? Will he condemn the Militant influence in Liverpool and make sure that anybody who belongs to Militant and who is selected will he deselected, and that ordinary members of the Labour party will be able to stand in their stead? Or will he try to hide behind the veil and say that the problems in Liverpool are an isolated occurrence? I can tell him that the Militant influence is far and widespread across the country. Indeed, we are told that Liverpool's present problems resulted from a mere 15 Militant councillors; the rest were non Militants. It is sad that people who were non-Militants should have been carried away like that. Press reports suggest that the Militants are boasting of fielding 30 candidates under the Labour banner at the next local elections—[Interruption.] The hon. Member for Liverpool, West Derby (Mr. Wareing) is intervening from a sedentary position, but it is important that we remind ourselves of early-day motion 738 which shows the extent to which several Labour Members take the view that the previous Labour administration in that council was absolutely marvellous. Indeed, the hon. Member for Liverpool, Walton (Mr. Heffer) has said as much—that it was the best council that Liverpool ever had.
§ Mr. Chope
The hon. Member for Liverpool, Broadgreen (Mr. Fields) agrees with that comment. When will the national Labour leadership distance itself from that behaviour? Until it does, and until it ensures that the people who stand for the Labour party are not standing in Militant colours, we shall not be sure that Liverpool's problems will be resolved.
I am all in favour of constructive dialogue towards the problems of Liverpool. However, we should not lose sight of why Liverpool is in the mess that it is, and we should not allow the Labour party to hide behind the situation and to suggest that it is not like that in other places. People in Liverpool said that that could not happen there. However, they found out that it could. Citizens in other Labour-controlled cities will have to take that into account. I hope that that message will get across to the electorate in Liverpool and that they will have a much more responsible council after the elections in May.
§ Question put and agreed to.
§ Adjourned accordingly at half-past Ten o'clock.