Local Government Services

HC Deb 21 June 1991 vol 193 cc615-55

Question again proposed.

11.34 am

Mr. Harry Barnes

The motion relates to the delivery of local government services and the inadequacy of those services. The point that I was making was that we cannot discuss those issues unless we discuss local government finance—the grant system, the formulas used in determining those grants and the problems that local authorities face in raising money, due to the poll tax which has seriously affected their revenue.

The poll tax is still with us. Legislation is going through Parliament to deal with its latest consequence, which will be to poll-tax-cap the smaller authorities—those with budgets of under £15 million. The poll tax was, and is, the unfairest taxation system that has ever been introduced into any western democratic system at any time. It is a flat-rate tax, apart from the exemption of certain people, but no decent principle has been devised to decide who should and who should not be exempt. Apart from the rebate system, everybody pays the same, which leads to massive savings for the wealthier people in our society. That bill has to be picked up by others, including many of those who have rebates. That was bound to have a devastating effect on local government in terms of the services that it is able to provide.

The Office of Population Censuses and Surveys has just published statistics showing that one of the consequences of the poll tax as it affects local authorities is the collapse, by about 1 million, in the number of people on the electoral register. The impact of that collapse has nowhere been more serious than in Liverpool. At one period, 10 per cent. of Liverpool's electorate disappeared from the electoral register. Only slowly, through the operation of the poll tax and the interlinking of the two registers, have some of those people reappeared on the register during the last two years, but there is still a collapse of 6 or 7 per cent. in Liverpool's electorate.

That also means a collapse in the number of potential poll tax payers. Apart from its problems over collecting the poll tax, because many people cannot pay it, Liverpool does not have, as a result of the Government's legislation, correct information about the number of people to whom it ought to send poll tax demands. That problem is repeated throughout the country.

Mrs. Currie

The hon. Gentleman is one of my neighbours in Derbyshire. Bearing in mind what he says about people who cannot pay and also what he says about people who have removed themselves from the register, does he think that it was wise to encourage and set an example to people who could pay the poll tax by not paying it himself?

Mr. Barnes

I am happy to discuss why, for a period, I did not pay my poll tax bill. As a Member of Parliament, I believed that I had a duty not to pay it because of the points that I have just made about it being a contitutionally odd measure that attacks the operation of the electoral system—something that the House seems not to be concerned about. I never asked other people not to pay the poll tax. I said that however poor or desperate people were, they could be put to an even worse position by the draconian measures included in the Bill.

Mr. Jacques Arnold

rose—

Mr. Barnes

I shall give way in a moment.

I wanted first to go to the magistrates court to use the argument of constitutional oddity in the operation of the poll tax. Unfortunately, it was so long before the case was brought before the court that we moved into the new financial year. I was then not subject—as I could have been —to the criticism that other people would then pay poll tax moneys on my behalf. I was in a genuine dilemma about the problem of electoral registration. [Laughter.] It is a disgrace that the hon. Member for Derbyshire, South (Mrs. Currie) finds the matter humorous, as she is one of the people who has helped to inflict the problem on the nation and on the people of Derbyshire, when she is a massive gainer from each measure that is passed on the poll tax.

Mr. Arnold

What amount are the charge payers of Derbyshire, North-East having to pay this year because people such as the hon. Gentleman did not pay their charge last year, let alone this year?

Mr. Barnes

That does not relate to me because I paid the money to prevent that from happening. However, some people face that situation, through no fault of their own. Masses of people simply found themselves in great difficulty.

Reasonable estimates were made for nort-east Derbyshire about the number of people who would be able to pay. One hundred and two per cent.—the highest in the area—have paid. North-east Derbyshire is a decent, honest—[Laughter.] Hon. Members should listen. The estimates were of people who were going to pay, and those estimates were exceeded. In such circumstances, it is possible to have 102 per cent. The fact that Conservative Members are statistically ignorant does not mean that those figures are impossible.

Mr. Dennis Skinner (Bolsover)

It is worth noting that the Labour party does not need lectures from Tory Members, 250 of whom moonlight in other jobs and who, because of the effects of the people at Lloyd's and elsewhere, come to this place only to feather their nests. Does my hon. Friend accept that thousands and millions of people wanted the poll tax killed, and it was killed because millions of people did not pay? The Conservatives passed an Act that provided them with a massive reduction in rates, but the British people would not wear it.

As a result of the efforts of those who refused to pay, poll tax mark 1 has been killed. Why are Tories now condemning people outside the House who refused to pay, when the Act for which they voted is now dead on the ground? The millions of people who refused to pay performed a public service in getting rid of a vile piece of legislation.

Mr. Barnes

The poll tax will have been defeated and removed by the massive opposition to it around the country. That opposition includes people who organised "don't pay" activities, the masses of people who would have paid if they could have done so, the people who demonstrated, marched and organised, and hon. Members who outlined an alternative position in the House.

That was reflected in the electoral system, despite the fact that the poll tax had been deliberately used to interfere with electoral registration. A million people have disappeared from the electoral register, but the trick has not worked: people rumbled it. That has been shown in by-election results and in the action that has been taken throughout the country. Therefore, pressure activities and the processes of democracy have led to change, and that change has left devastation in its wake.

The Government must now face the problem of electoral registration. Are we to have an election next year with a million people missing from the electoral register? Does that not bother Members of the House which passed the great Reform Acts of the 19th century, and which extended the franchise and ensured that it should be the birthright of everyone over the age of 18 and not dependent upon one's position in society and upon one's wealth?

The franchise was undermined by the poll tax, which was constitutionally peculiar. Had I been given the opportunity in court, I should have used Dicey to prove that. The reason I did not was that, in politics, different issues must be balanced. One was the fact that the poll tax was on its way out and was beginning to be removed by the processes to which I referred.

Another issue was people's perceptions of the fact that their Member of Parliament would have had to have his poll tax paid by others who had been driven to pay it. That was a genuine consideration. The fact that one knuckles under does not mean that one accepts the measure. I was involved in the campaign to highlight the issues and to make changes. I am proud of the role I played, which contrasts sharply with that of the hon. Member for Derbyshire, South, who has done nothing but feather her own nest through the operation of the different measures.

It is not only the tax that is important, but the amount of money that must be raised by local authorities. That meant that the poll tax became far higher than people had estimated. During debates on the poll tax in the House and in Committee, we were told that we should have a nice system under which 50 per cent. of the grant would come from central Government, that only 25 per cent. would have to be raised by local authorities and that 25 per cent. would come from the new national business rate. That system did not operate at any time, apart from in one or two luxurious authorities which managed to get that 50 per cent. Level—authorities such as Wandsworth and the city of Westminster, which had 57.8 per cent. before the £140 was knocked off some people's bills.

What is the position elsewhere? There is information in the Library, based on the answer to my written question of 5 December. It breaks down the percentages of different authorities into the money that came from revenue support grant and from the business rate and the amount of poll tax that was expected to be raised under the standard spending assessment. That was before people went above that level because they were driven by circumstances.

This is relevant to the Local Government Finance and Valuation Bill which is currently going through Parliament and on which the hon. Member for Derbyshire, South spoke on Second Reading. However, she managed not to mention the plight of South Derbyshire, which, under the standard spending assessment—based on the revenue support grant before the £140 is taken into account—receives only 13.5 per cent., not the supposed 50 per cent. Most authorities in Derbyshire are in the same difficult position.

The areas in north-east Derbyshire which I and my hon. Friend the Member for Bolsover represent receive merely 11.3 per cent. Only 20 authorities receive less money. I know that somebody has to be bottom of the league table. However in my area, the social deprivation, the loss of jobs and the services that need to be provided by the local authority to compensate for that and to provide growth and stimulation make that figure ridiculous.

The standard spending assessment per poll tax payer in North-East Derbyshire makes that authority the second worst-off out of 336 authorities in England and Wales. The worst-off authority is East Dorset. It is a solid Tory area and has all the middle-class characteristics that go with that. It has less need of funds than various areas in Derbyshire, such as Chesterfield borough. Together with my right hon. Friend the Member for Chesterfield (Mr. Benn), I cover part of that area. Other areas in Derbyshire that need funds are Bolsover and North-East Derbyshire. All those authorities are at the bottom of the list.

The reason for the position of those authorities is the fiddled formula. The Government are brilliant in the way in which they have managed to get through a nonsense formula—the standard spending assessment. There should be a public inquiry into that, before the amount of money that people are allowed to spend next year is worked out and before legislation goes through Parliament.

Early-day motion 1000 which has been tabled by me and some of my hon. Friends, points out the need for such an inquiry. It stresses the need for us to know quickly what the SSAs will be so that authorities can take action and the need for the removal of the poll tax. If the matter is investigated, the fiddle involved will be revealed.

How are district authorities such as South Derbyshire, North-East Derbyshire and Bolsover affected by the operation of the SSA? Three major items determine the money available. The first is the effective population. North-East Derbyshire and Bolsover are areas from which people have to move for employment. North-East Derbyshire is a C-shape around Chesterfield. People work in Chesterfield, move into the pits in the Bolsover and Chesterfield areas or go to Sheffield for work. The authorities in the area lose grant because of that. The shape and position of an authority determines the level of grant.

The density and sparsity of population comprise the second factor. A densely or sparsely populated authority may receive more grant if the grant is assessed ward by ward. North-East Derbyshire is a massive area the size of Malta and it has differing areas within it. When the areas are combined, they are not judged to be densely or sparsely populated. However, the area is difficult to get round. The district authority operates in Chesterfield at the centre of the C-shape, but outside the authority area, and many services have to be directed through Chesterfield and from one end of the authority to the other. Yet the authority loses grant when it should be gaining it. Bolsover is affected in a similar way because of the shape of the area and because of its closeness to other county boundaries.

Social characteristics also affect the money given. North-East Derbyshire fails to score on that criterion, because in rough and ready terms, the eastern section is solid working-class territory with some social deprivation, whereas the western part contains large elements of the middle class—rural and other. When the figures are combined, the area fails to score.

If the Minister has listened, he will understand the story, especially as I have put this argument to the House before. The matter must be investigated. In North-East Derbyshire, we have a great deal of expertise about the operation of the standard spending assessment and about the problems that it causes for local government finance. I hope that we can meet at some stage to discuss that and that we can at least influence the Government to make a minimum of decent provision while we plough ahead with the vast injustices of the poll tax.

Liverpool has been discussed a great deal this morning. I mentioned that I visited Liverpool in the early 1980s and had the privilege to attend a meeting organised by the Labour Co-ordinating Committee, at which Eric Heller spoke. We were aware then of the assault of Thatcherism, how it would create further unemployment and devastation, and how local government especially would be hit. The issue of the time was not the poll tax but the cutting of grants. Something had to be done to fight that.

The Labour movement had a problem about how to engage in the fight. Some people adopted an adventurist position and wanted to get into the struggle immediately. I believed that they were in danger of being solidly defeated. Another group was more collaborationist. They believed that they should do the best they could and that they had not reached the stage when they should fight. I thought that a third position, which realised the strengths and weaknesses of the Labour movement, should be adopted. I believed that people should be willing to ask the adventurists to pull back and to say that those who favoured collaboration should push forward. If a threat had been made and a line of defence established, there would have been a chance of uniting the whole Labour movement, local authorities and others in defence against the assault.

The Government were clever. They advanced in monetarist areas in which they found it easy to advance, and they were careful in other areas. It was not until the mid-1980s that the major clash with the miners took place. On one occasion, I was in the House with a group of Yorkshire miners who had come to the House at the time of a pit closure programme. By the time that they got home, the pit closure programme had been dropped because the Government were not ready to tackle the miners, although they were ready to do so later.

It is only recently, although there has been some preparation, that the health service has been at the forefront of the struggle against the Government because of their trusts policy. The Government have engaged in a clever policy of going quickly when they can and for the rest of the time building up to a time when they can strike —or at least that was true until a couple of years ago when the tide began to turn. The tide is turning—

Mr. John Marshall (Hendon, South)

On a point of order, Madam Deputy Speaker. This debate concerns local government services. We seem to be moving rather wide of the motion.

Madam Deputy Speaker (Miss Betty Boothroyd)

That is a genuine point of order, although I must make the point that the hon. Member for Hendon, South (Mr. Marshall) has only just come into the Chamber and has not listened to what has gone before. Perhaps the hon. Member for Derbyshire, North-East (Mr. Barnes) will oblige me by returning to the motion.

Mr. Barnes

All the factors with which I have dealt and the whole programme in which the Government have engaged—their monetarism, their general economic policies and the privatisation programme—are directed to undermining working-class people. Part of their tactic was to hit local authorities and those who have struggled to defend working-class people—the trade union movement and the Labour party, including the Labour party in local authorities. People have now understood that. That is why the Government are on the way out and why we can now start the slow process of correcting mistakes made on local government finance and introducing a decent system of raising money based on people's ability to pay and on property.

We shall also be able to move to put right the devastation that the Government have inflicted on democracy by causing the removal of masses of people's names from the electoral register. It is astonishing that there is no movement in the Conservative party that is worried about the fact that 1 million people have disappeared from the register. If that had happened in the 19th century, there would at least have been one or two Tory radicals at the forefront of a movement to defend democracy. I have been defending democracy but the hon. Member for Derbyshire, South as not—nor has she defended South Derbyshire or said what grant it needs.

12 noon

Mr. Patrick Nicholls (Teignbridge)

I found that a most enjoyable and engaging speech. I hope that it receives wide circulation and receives as much attention as possible. I have to say to the hon. Member for Derbyshire, North-East (Mr. Barnes), speaking as one experienced politician to another, that I have rarely heard such bare-faced brazen check. It is quite extraordinary for someone who receives an income of more than £29,000 a year to stand up in the House and say with a straight face that he was justified in hanging on to his poll tax money for just a little longer. A Bill has gone through both Houses of Parliament and received Royal Assent—it is a law of the land. I regard it as quite extraordinary that the hon. Gentleman can say, "The charge is a constitutional oddity so if you don't mind I'll hang on to my superior earnings for just a little longer."

Mrs. Currie

Is my hon. Friend aware that the poll tax in Derbyshire last year was more than £450, which means that if the hon. Member for Derbyshire, North-East (Mr. Barnes) kept the money and put it in the bank or building society he will have ended the year about 50 quid better off?

Mr. Nicholls

My hon. Friend makes a valuable point. The problem with being a socialist is that one has to earn at least £29,000 a year if one is to be able to afford to enjoy the luxury.

Mr. Harry Barnes

I should like to point out that, when I got round to paying my poll tax, Derbyshire county council had been poll tax capped, and there was a reduction of £52. I paid that extra £52 so any money that I may have earned in interest in the meantime was more than compensated for. I asked the district authority to transfer that money to the much-maligned Derbyshire county council. It was a minor amount, but it meant that there was nothing dishonourable in what I did.

Mr. Nicholls

The poor and huddled masses—the down-trodden and horny-handed proletariat—of the hon. Gentleman's constituency must have been delighted to hear that he could spare an extra £50 out of his £29,000 income to contribute to local government services. His was a most extraordinary performance. As I said, I hope that we shall he hearing a great deal more from the hon. Gentleman in future.

Mr. John Marshall

Does my hon. Friend agree that the extra £52 that the hon. Member for Derbyshire, North-East (M r. Barnes) paid over for the year will be as nothing compared with the £50 that someone on his income will have to pay over weekly if there is ever a Labour Government?

Mr. Nicholls

Yes, but we can give the hon. Gentleman some comfort. It may be a little while yet before he has to contemplate that idea. When the hon. Members for Derbyshire, North-East and for Bolsover (Mr. Skinner) pretend to champion the rights of the working classes, I sometimes wonder whether those so-called working classes realise just how well those hon. Members are paid in comparison.

Having allowed myself to be seduced for a moment by what the hon. Member for Derbyshire, North-East said, let me explain that I propose to deal principally with the question of local government finance. I am grateful to my hon. Friend the Member for Stroud (Mr. Knapman) for framing his motion in such wide terms to enable us to discuss these matters. I have no doubt that, as we lead up to a general election, whenever that may be, the people of Britain will want to think more about local government matters and local government finance. The House owes it to them to give them every opportunity to consider the full range of options available. I know that the Minister will be seeking to catch your eye, Madam Deputy Speaker. I have written to him at some length suggesting one or two ways in which the banding arrangements for the council tax might be dealt with and about the discount. I do not want to go on at great length about those matters today and I certainly do not expect an especially detailed reply from my hon. Friend. I see that he is nodding. I am grateful that he has been thinking about the suggestions that I have made to him.

There is no ideal way of raising local government finance—or national finance, for that matter. No one likes parting with his money, especially the hon. Member for Derbyshire, North-East. But in an imperfect world we have to find a mechanism. Having had experience of these matters both inside and outside government, I have no doubt that the council tax is the best available way of raising the money that has to be raised locally. It will be even better if the Minister takes on board the points that I have made to him, but it is pretty good as it stands.

Ignoring all the details that might be put in place, the essential point about the council tax is that it acknowledges the fact that the share of finance that was expected to be raised locally was too large. It is when one strikes the right balance between central Government's contribution and what should be raised by local electors that a proper system begins to emerge. For the reasons that I have given, I have no doubt that the council tax achieves that balance.

I could go on at length about Labour's proposals. It seems that it is not only Labour Members who do not take their policies on local government finance seriously. It is fairly clear to me from my postbag and from those whom I meet in my constituency that many people do not take them seriously either. That is hardly surprising given that we are talking about a pledge to return to the rating system, with rolling yearly valuations based on what would appear to be four sometimes contradictory methods of assessment. Even the Leader of the Opposition has described the rates as the most unfair of all taxes. To suggest a return to the rating system is simply not a credible alternative. I do not feel that I am doing the policy an injustice by merely mentioning it and dismissing it.

One of the other ideas about the way in which local government finance could be raised which receives a fair degree of attention and prominence is the idea of a local income tax. I waited in vain to hear from the Liberal Democrats—I see that the hon. Member for Southport (Mr. Fearn) has now left us—about their local income tax proposals. One does not like to be unpleasant to colleagues on either side of the House, but I must say that if the hon. Gentleman's speech had ever managed to ascend the heights of grinding mediocrity it would have been an improvement. No matter how preposterous one's pretensions to office may be, one owes it to the House to advance a coherent argument and, even if it has been scripted for one by someone else, to read it with a degree of panache or aplomb. I was absolutely staggered—given the comments made nationally by the Liberal Democrats about how the local income tax is a solution to all our local government ills—to hear a speech that was so banal and pathetic. I should like to think that it is mere embarrassment that has driven the Liberal Democrat spokesman from the Chamber. I suspect that he just popped in and then had a train to catch. The House deserves more than that.

Although we do not have the benefit of the intellectual rigours and powers of analysis of the hon. Member for Southport, I have brought with me a document called "Local Income Tax—The Best Way—How it Works" produced by the Liberal Democrats. It contains the sparkling headline "Shaping Tomorrow—Starting Today". I shall quote just one or two sentences from the publication. Those hon. Members who, like me, do the football pools will recognise that the copywriter for the publication must have been the same person who writes for Littlewoods, and sends letters saying, "Would you like to own a nice house and a nice car and be able to go on holidays?". One's name is inserted by typewriter, slightly askew. Such letters are not written by the most inspired of script writers, but we still open them just in case that elusive cheque is in the envelope.

The Liberal Democrats have obviously employed just such a copywriter to produce a marvellous document called Local Income Tax—The Best Way—How it Works". To encourage us, it begins by saying that some countries have moved successfully from a poll tax to a local income tax—and it mentions the country that has done so. I hope that I do not cause my right hon. and hon. Friends in the Foreign and Commonwealth Office any difficulties by saying that, when the Liberal Democrats draw attention to the fact that Papua New Guinea has made the transition successfully, I do not find that to be the most persuasive authority. [AN HON. MEMBER: "And a head tax."] My hon. Friend may be right to suggest that that country also has a head tax.

Mr. Harry Barnes

rose—

Mr. Nicholls

I shall give way to the hon. Gentleman as I am anxious that he has maximum exposure.

Mr. Barnes

Why did the hon. Gentleman support the Government when they introduced the poll tax, which was the system in Papua New Guinea at that time? I find it amazing that the hon. Gentleman should make such a point in an attempt to attack another party. He was guilty because he supported the Government.

Mr. Nicholls

I am not the slightest bit surprised that the hon. Gentleman should rally to the defence of an SLD document. It is worth remembering that every time that the Liberal Democrats have had an opportunity to enter into an alliance with another party they have always chosen the Labour party. It is interesting to note that the seeds of the next alliance are being sown.

I can tell the hon. Gentleman why, having been in favour of the community charge, I am now in favour of the council tax. As a politician, I have never found it embarrassing—although it is sometimes uncomfortable —to admit that I am wrong and that I have not carried the argument. The arguments in favour of the community charge were powerful. However, I have to admit that, in the end, we could not convince sufficient numbers of people of the case. For what it is worth, I suspect that that was because the whole structure of the community charge depended on local government raising too high a proportion of the money that would have to be spent. Once we had that wrong, there was no way that it would be accepted as being fair. If the Labour party were able to show the same contrition for the appalling way that the so-called moderates have run Liverpool for the past three years in the way that the Government have shown contrition with the community charge, there might he a little more hope for the Labour party.

The interesting Liberal Democrat document about a local income tax continues in the same chirpy style when explaining how it will work. It says: Collection happens like this: everyone, wherever they live, pays a uniform rate of LIT—for example, 4 per cent. At the end of the year, each taxpayer's actual liability is assessed, depending on where they live and their overall taxable income. Those living in areas where the LIT is below 4 per cent. get a refund; those living in areas with higher LIT rates pay the difference. In practice, 70 to 80 per cent. of people get a rebate. Nothing could be simpler than operating a system for local government revenue on that basis.

Just a moment's thought—and even a moment's thought by the SLD spokesman today, the hon. Member for Southport—would make us realise just how barmy that proposition is. Is Britain really to have a system of local government finance where a local authority can set any income tax rate that it wants, people then send their money to the authority in advance, and perhaps at the end of the year the authority returns some of it? We have heard about the bureaucracy created to run the community charge—just imagine the bureaucracy that would be involved with cheques coming in and out.

Since when has it been a sensible proposition that people should pay tax in advance of knowing what their tax computations might be? Why should either national or local government be entitled to sit on people's money for a year until it works out how much it intends to charge? What would happen in areas such as Eastbourne, which is represented by the Liberal Democrat spokesman on local government—the hon. Member for Eastbourne (Mr. Bellotti)? I imagine salaries are relatively high in Eastbourne, but no doubt housing costs and mortgages are also high. How will those people feel if, suddenly, a local income tax rate is set at a high level, but they are told, "Don't worry about it—at the end of the day we might return some of your money."

I try to work out my budget for the year so that I can meet my commitments and aspirations and those of my family. I can usually estimate what my tax will be. I would be appalled if I thought that I would have to pay a sum of money in advance and that, perhaps, one day some of it might be sent back. It is a ridiculous and ludicrous idea. The fact that Papua New Guinea has followed that route is not something that I find especially encouraging.

Mr. Holt

My hon. Friend has emphasised the 4 per cent. mystical figure, which might result in a rebate at the end of a year. Of course, it could be that, having paid one's 4 per cent., the council is profligate, uncapped, and spends 6 per cent.—and so retrospectively one has to pay another 2 per cent. How would people cope with that?

Mr. Nicholls

My hon. Friend makes a good point. I think that people would be very miserable. It is impossible to budget our family finances in such circumstances.

There might be a case to be made—and I say this in my usual spirit of fairness—in favour of local income tax if there were to be some form of capping as well. However, the hon. Member for Southport had clearly been briefed —in so far as he was briefed at all—to confirm that the SLD is not in favour of capping. I am reminded of a debate in the House a couple of weeks ago when the hon. Member for Eastbourne was in his place, and I mentioned that his party was committed to not having any form of capping. I asked whether it was true. The hon. Gentleman nodded, and Hansard recorded it as "indicated assent". Anyone who saw him would realise that that did not for a moment do justice to the hon Gentleman's enthusiasm for the idea of no capping. He was positively bouncing. Indeed, he looked like a whippet on steroids. He was obviously trying to put across the message that there would be no capping under an SLD Administration.

Today, the hon. Member for Southport justified that by saying that people should be entitled to vote to pay that sort of money. That appears marvellous until we pause and think about it. We must face a central point about local government, and that is that it is the creation and creature of this House. It is this House which has set up structures for local government; it is this House which has the ultimate responsibility for it; it is this House which, in the end, has to change the arrangements. I do not discharge my constitutional duty by saying to someone in a constituency where the local government levy is wrong and unreasonable, "I am sorry, but it has nothing to do with me. If you want to, you can move out of the area." That would be monstrous. This House has an ultimate obligation to protect charge payers, ratepayers, council tax payers and so on.

Even if the hon. Gentleman was correct in saying that it should be a matter just for local government, imagine what the consequences would be. Better still, let us remember what the consequences were when left-wing authorities were able to levy rates without any capping. It drove out those who might have been able to afford to pay them. It drove out businesses and left those remaining in a vortex of despair. That is what happens when we say that it is no part of national government if local government chooses to act irresponsibly. The idea that Britain could have a system of local income tax but no capping is monstrous.

As with all Liberal Democrat ideas, the local income tax is intended to appeal to the nice people's society. Their ideas are always squeaky clean. The late Lord Stockton said that the trouble with the Liberal Democrats was that they always produced sound and original ideas, but none of the sound ideas was original, and none of the original ideas was sound. That is true about local income tax.

It was interesting to note that when the SLD's shadow Chancellor—the hon. Member for Berwick-upon-Tweed (Mr. Beith)—gave a press conference to launch the publication of their bizarre document, he came under some pressure from The Independent, a very good newspaper. It is probably common knowledge that that newspaper is not wholly uncritical of the Government. In an article headed Liberal Democrats promise 'fair' local tax", Nicholas Timmins said that households with incomes above £20,000 a year, whether with one earner or two, would pay more. Mr. Timmins stated: Mr. Beith said, 'We do not attempt to hide that. Those on higher income will pay more; that is the principle of fair taxation.' Indeed it is. I wonder how many people who were beguiled by the prospect of a local income tax realise that a husband and wife who earn £10,000 a year each and who are assessed for local income tax will be among the wealthy of the land. Although in some places £10,000 a year will be above average income, as many hon. Members know, that is not a lot of money in the south-east or the south-west, although it is certainly better than not having that amount. The idea that it is so much money that it qualifies people to pay more is bizarre.

Yesterday, we found from costings of the Labour party's policies that its proposals will mean an extra 15 per cent. on income tax for someone in that bracket–£20 a week more.

Mr. Paul Boateng (Brent, South)

That is bunkum.

Mr. Nicholls

The hon. Gentleman who speaks for Lloyd's for the Labour party thinks that that is bunkum. He knows as well as I do that those proposals have been properly costed. That will be the effect. The hon. Gentleman can shake his head as much as he likes, but he knows that those proposals have been costed.

The Liberal Democrats have identified people with a joint income of £20,000 a year as ready to be soaked. Is it not interesting that the figures tie in neatly with the Labour party's proposals?

Under questioning, the hon. Member for Berwick-upon-Tweed admitted that his proposals could lead to a local income tax of 17.3p in the pound. His justification was that national income tax might fall to 11 per cent. —perhaps it might. He then misread his figures. In working out what the average local income tax rate would be for the time being, he forgot that he was taking advantage of the transfer back to central Government in the £140 reduction which was made possible by an increase in VAT. Having voted against the Government's proposals, he then took advantage of them. Taken together, we are talking about a standard income tax rate of more than 30 per cent., just to implement the proposals and have a standard tax rate. The local income tax does not bear examination.

I do not suggest that there is an ideal way of raising of tax locally. If anyone has any illusions about what a crazy, barmy, nightmarish system the Liberal Democrat proposals would provide, he could do a lot worse than read "Local Income Tax—The Best Way—How It Works". Its best point is probably the Papua New Guinea example. After that, it is downhill all the way.

12.23 pm

Mr. William O'Brien (Normanton)

This is a significant motion. People who have served on local government are best able to contribute to a debate on local government services. The hon. Member for Teignbridge (Mr. Nicholls) has experience in local government, so one must give credence to some of his points. I support some of his comments on why a local income tax would not be an acceptable way of funding local government. I wish that I could say the same about the hon. Member for Stroud (Mr. Knapman), who moved the motion. I cannot find much information about his local government experience. It is sad that such people criticise local government without having served in it and without having helped to provide the services upon which many people rely.

The hon. Member for Stroud asked why local authorities should provide recreation facilities. A couple of years ago, the hon. Member for Teignbridge and I shared a platform, when we discussed sport and recreation with a national association. We were at one in our belief that local authorities need to provide such services. Many schoolchildren and elderly people rely on local authorities to provide those facilities.

The hon. Member for Stroud said that the provision of local government services had not been considered in detail. He wanted to have a productive debate, but the outcome of his speech was less than productive. The hon. Member for Wirral, South (Mr. Porter) made a more productive contribution than the hon. Gentleman.

During the past 12 years, the House has passed a substantial number of Bills targeted at local government. The way in which the subject was introduced today was not in the interests of local government services; it was a further attack on local government. After 12 years of ruling this country, the Conservative party appears to have nothing constructive to offer people in terms of local government services. More than 52 Acts of Parliament have been directed at local government. There have been reviews and consultations. There has been no request for the views of elected representatives, although we are told that that will be the subject of a review in due course. I hope that there will be consultation on the role in local government of elected representatives.

Over the past 12 years, there has been greater centralisation of local government services as they have been pulled into the centre. In 1979, the Government campaigned for more freedom for local communities. Departmental committees and quangos costing more than £11 billion to administer were set up. However, it costs less than £42 million across the country for local councillors to run our local authorities. We should compare the cost to the country of the elected members who serve in local government and who are responsible to their electorate with the costs of the quangos that have been appointed by the Government.

In addition to those 52 Acts of Parliament, the review of local government services, greater centralisation and all the quangos, we now face capping. We also have a Minister who is responsible for our cities. Furthermore, the Secretary of State for the Environment comes to the Dispatch Box to appeal for consultation because the Government have no idea how local government should be administered. In addition to those impositions and to increased centralisation, the Government now control 80 per cent. of local government revenue spending. That is what has happened under the past 12 years of the Tory Administration.

Mr. Knapman

I have been following the hon. Gentleman's argument with some interest. Are there any circumstances in which the Labour party would support the capping of local authorities?

Mr. O'Brien

Our document, "Fair Rates", states exactly how we would approach the financing of local government. The Labour party has also made it clear that we believe that choice belongs with the electorate. If there is to be capping, that should be the electorate's choice. It should not be imposed by faceless Ministers—[HoN. MEMBERS: "Faceless?"] They are faceless to many of my constituents who have no idea of the identity of the Minister or the Secretary of State who says to them, "You will have X, Y and Z services." However, they know who their councillor is, because they see him or her regularly in connection with the services and facilities that are provided by the local authority.

As I have said, although 80 per cent. of local government revenue spending and 100 per cent. of its capital expenditure is now controlled by central Government—by the Tory party—Conservative Members criticise local authorities that are struggling to provide services for local people.

The hon. Member for Stroud said that local government monopolies were a bad thing in a strong party system—

Mr. Knapman

indicated assent.

Mr. O'Brien

I notice that the hon. Gentleman is nodding in agreement. Does he agree that the private monopolies, such as the water companies, are also a bad thing? As a result of the monopoly in Yorkshire, water customers face a 13 per cent. increase on last year's charges, although inflation is now running at about 6 per cent. Does the hon. Gentleman believe that that kind of monopoly is fair and that faceless people should be able to tell Yorkshire Water's customers that the charges this year will be 13 per cent. greater than last year? British Gas and British Telecom are both monopolies, but the hon. Gentleman did not refer to either.

The hon. Gentleman also forgot to mention the continual reduction in the rate support grant given to local authorities during the 12 years since 1979. That reduction is a further reason for the increased charges that local authorities have had to impose on their rate and poll tax payers. If services are to be maintained, they must be paid for. If the Government withdraw their support for the provision of those services, the local people invariably have to make up the shortfall. The Government cannot have it both ways: if they want to cut their revenue contributions for local services, the maintenance of those services will depend on the local community paying for them. That is what has happened in many local authorities.

After all the Government intervention—after those 52 Acts of Parliament, all the reviews, the greater centralisation, the quangos, the capping, the Ministers who are responsible for our cities, the appeals for consultation and Government control of expenditure—Conservative Members still have not found any satisfaction in the Government's control of the provision of local authority services. In my opinion, that is because the Conservative party and the Government do not believe in local government. There is no genuine approach from Conservative Members who believe in local government. That has been demonstrated more than once.

The hon. Member for Southport (Mr. Fearn), who is not in his place—

Mr. Fearn

Yes, I am.

Mr. O'Brien

I apologise.

The hon. Member for Southport referred to the poll tax. There is a great deal to be said about the dissatisfaction with the poll tax that poll tax payers have shown over the past 12 months. The poll tax was in force for less than 12 months in England and Wales before the Government decided to do a U-turn and scrap it. If there is one subject that the Government do not want to discuss, it is the poll tax, because it has cost a great deal of money, a great deal of hardship and has caused the greatest U-turn by any Government and especially the greatest U-turn by this Government in this decade.

A few months ago, the hon. Member for Stroud and many other Conservative Members were proving how good the poll tax was, both in their constituencies and in the House, and saying how important it was for local government. How they followed through the Lobby to ensure that it would be in place. How they told us, both in the House and throughout the country, that councillors would now be accountable because everyone would have to contribute to the cost of local services—that was the argument for the poll tax.

The right hon. Member for Finchley (Mrs. Thatcher) insisted that the poll tax should be on the statute book, and that local government finance should be raised by the tax. If the right hon. Member for Finchley were here today, she would still be insisting that the poll tax should be in place.

I remind the House that the right hon. Member for Finchley has gone and that the poll tax is due to follow her. We have been told that the poll tax is dead, but no one can say that until it is taken off the statute book completely. Labour Members of Parliament offered to support the Government to introduce a Bill to abolish the poll tax forthwith. There would have been no opposition whatsoever if the Government had wanted to abolish the tax. However, that offer was not taken up.

A few months ago, the hon. Member for Stroud and other Tory Members of Parliament were arguing how fair the poll tax would be and how important and necessary it was for the financing of local government. Now the hon. Member for Stroud and his colleagues are telling their constituents how unfair, undemocratic, unworkable and costly the poll tax is. That is the sort of U-turn that members of the Government have to face because they got it wrong in the first instance and because they have not got the guts to say, "Sorry" to the people of this country for the hardship that has been created.

How wrong it is that people on income support still have to pay 20 per cent. of their poll tax and will have to continue to do so until after 1993. The Secretary of State and the Prime Minister have admitted that a fair system of financing local government should be based on a person's ability to pay, but not until after 1993.

Why should people who are facing and witnessing hardship have to continue to face it until 1993 or 1994? I ask Conservative Members, and especially the hon. Member for Stroud, whose motion refers to "value for money", whether it is value for money to spend £15 to collect £5 from people on income support? That happens in many authority areas. The cost of collecting the 20 per cent. from people on income support is more than the value of the money realised. Is that value for money?

Mr. Knapman

Value for money is indeed important, and I am glad that the hon. Gentleman is coming to that part of his speech. I hope that he will deal with the matter in some detail. My position is the same as that of M r. Keva Coombes, the former leader of Liverpool city council, who said: In that particular case, the council's problems are not down to resources, but rather that it costs four times more to pick up a piece of litter in Liverpool than it does in other areas. Perhaps that has to do with value for money.

Mr. O'Brien

Again I ask the hon. Gentleman: does he believe that paying £15 to collect £5 from people on income support is value for money?

Mr. Boateng

Answer.

Mr. O'Brien

Obviously, the hon. Gentleman declines to answer.

The hon. Gentleman referred to Liverpool. I shall refer to the city of Westminster—that well-run Tory authority. In 1991, it cost Westminster £42 per head to collect the poll tax—

Mrs. Currie

Which was how much?

Mr. O'Brien

It cost £42 per head to collect the poll tax. In Westminster, 20 per cent. of the 1991 poll tax was £39, so for every person on income support who qualified under the Government's terms to pay 20 per cent. of the poll tax, Westminster was losing £3 per head for collecting it. Is that value for money? That happened not in Liverpool, but in Westminster.

Mr. Knapman

Which would the hon. Gentleman prefer?

Mr. O'Brien

I would say that such people should not have to make a payment. It causes them hardship and problems, and it is administratively uneconomic. There is no justification for charging people when it costs the authority money to collect the payments.

A sum of £300 million would exempt the poorest from the 20 per cent. poll tax payment. Not only would that help those in need who are on income support, but it would relieve the administrative burden on local authorities that find that collecting the 20 per cent. costs more than the money realised. Therefore, there are substantial benefits from abolishing the 20 per cent. payment for those on income support and low incomes.

I remind the House that, in answer to a question on 6 February, which is printed in Hansard at column 153, we were told that rebates were costing £1£99 billion. A significant number of people are eligible for rebates, including Tory Members who earn their £29,000 a year. That money should go to the people who need it most. It is not impossible for the Government even now to abolish the 20 per cent. payment that people on income support must make.

In the Budget, the Chancellor of the Exchequer announced that value added tax was to increase from 15 to 17.5 per cent. to help pay for local government services and rebates to poll tax payers. That 16 per cent. increase in VAT means that a further £4.3 billion will be added to poll tax rebates.

The Government are giving money to people who can afford to pay but are taking no action to ease the hardship of the very poor who suffer most from the payment of poll tax. Had the 20 per cent. payment by those on income support been abolished, the outstanding poll tax, as mentioned in the motion, would have been much less.

The motion also refers to delay in collecting the poll tax. Had the Chancellor of the Exchequer announced the Cabinet plans to reduce poll tax bills a fortnight earlier, he could have saved the nation's taxpayers over £200 million. Local authorities, being efficient, had all the poll tax bills printed and ready to be redistributed, and then the Chancellor said that they should be scrapped and the exercise done again. Was that value for money? Did the Chancellor's action secure value for the country? Some Government Departments could learn a lesson in achieving value for money by examining the way in which efficient local authority departments go about their tasks.

The motion refers to "rigorous controls on overspending". Let us be clear that that applies not only to city authorities. A recent announcement stated that poll tax capping would apply to all authorities—with the exception of parish and town councils—providing budgets. So all district authorities are now subject to poll tax capping.

The SSA for Stroud district authority for the current year is £7.68 million, not an excessive amount. Providing services for the community that the hon. Member for Stroud represents would involve expenditure by the district authority of £9.5 million, representing a 30 per cent. increase. Were that amount to be spent, that authority would be capped under the Government's procedures.

Does the hon. Member for Stroud consider that his authority should be poll-tax-capped on the basis of those figures? It is clear from his silence that he is not in a position to reply. Surely it is not exorbitant for Stroud district authority to want to spend less than £10 million on providing services. Before launching motions such as the one before the House today, the hon. Member for Stroud should discover what is happening on his own patch.

The Parliamentary Under-Secretary of State for the Environment (Mr. Robert Key)

The hon. Gentleman is being a little unfair to my hon. Friend the Member for Stroud (Mr. Knapman), who has the good sense not to fall for his ploy. My hon. Friend could not possibly answer his question until the Secretary of State had let local authorites know what capping criteria he would apply for next year.

I know from the frequent correspondence I receive from my hon. Friend how assiduous he is. He has pointed out to me that Stroud has an SSA of £7.7 million, which is £1.8 million, or 19.3 per cent., below the 1990–91 income. However, the community charge is 20 per cent. less than in 1990–91. The hon. Gentleman is right to draw attention to Stroud's tendency to wish to achieve more than is realistic, and my hon. Friend the Member for Stroud is right to be cautious.

Mr. O'Brien

The hon. Member for Stroud tabled the motion. In opening the debate, he criticised local government, but when I ask about the position facing his constituents through his local authority, the Minister says that I am being unfair. Is the Minister implying that the Secretary of State will look favourably upon Stroud, and will allow a 30 per cent. increase in its standard spending assessment? If so, we have much to look forward to. The hon. Member for Stroud should tell his district authority that, if it does not reduce its planned expenditure and the services it provides, it will be poll-tax-capped.

Mr. Knapman

If Stroud district council overspends, bearing in mind the fact that we do not yet have all the information, Stroud, like every other district council in the country, should be capped. That is why I asked the hon. Gentleman whether there were any circumstances in which the Labour party would support capping. His answer carried no conviction one way or the other. The hon. Gentleman should read the motion, because his remarks suggest that he has not done so. It states: That this House notes the widespread discontent with the inadequacies of local government services in parts of Britain, particularly in many inner city areas". Why does the hon. Gentleman not mention Liverpool and so many parts of London represented by Labour councils, which are now attracting the attention of newspapers?

Mr. O'Brien

I am discussing local government services, which is the title of the motion. The motion is framed To call attention to policies on…the delivery of local Government services". The delivery of local government services, depends on central Government saying exactly how 80 per cent. of local government income will be presented. If any reference should be made to the provision of local government services, it should be not to local authorities but to the Government, who provide 80 per cent. of their revenue.

I am pleased that the hon. Member for Stroud says that, if his district authority wants to spend £9.95 million on services for his constituents, whether for recreation, for bus shelters or for housing and services connected with housing, he will support capping. If those services then cannot be provided because of capping, I hope that the hon. Gentleman will make it clear to his constituents that it is because his supports such a principle.

Mr. Knapman

The hon. Gentleman may be aware that, in Stroud last year, the direct labour organisation lost several million pounds.

Mr. O'Brien

I shall come to that later. The hon. Gentleman's motion refers to competitive tendering and value for money. Stroud is not the only Tory authority to be suffering as a result of capping. Services will be cut because the Government are now applying poll tax capping to district authorities.

Mr. Harry Barnes

I thank my hon. Friend for giving way, and I do not think that we should move beyond Stroud at present. The figures produced in the answer of 5 December, to which I referred earlier, show that, before the £140 element was introduced, Stroud received only 12.9 per cent. support from the revenue support grants, which puts it at the bottom of the league. It does not receive anything like the 50 per cent. that the Government promised. If it sticks to the standard spending assessment provisions, it increasingly has to find money from the poll tax funds. The Opposition should seek to defend and assist Stroud, even if the hon. Gentleman who represents that constituency does not.

Mr. O'Brien

I thought that we had made it clear, that, if there was a case for providing services to Stroud and other district authorities that are subject to Government capping, it was being made by Opposition, not Conservative, Members.

Stroud has a budget of less than £10 million to provide services. Local authority members in Stroud will provide their services free or for very little. Reference was made to Government quangos. The urban development corporation in Leeds spends a similar amount to that which the Stroud authority wants to spend. The chairman of that corporation will receive more than £16,000 for administering that budget, but the councillors of Stroud will receive nothing like that amount. However, the hon. Member for Stroud attacks his local authority and supports urban development corporations, the chairmen of which are handsomely paid and which provide local government services. It is disappointing and sad that the hon. Member for Stroud does not defend his own local authority and the services it provides.

Mr. Holt

I do not expect to hear too much common sense in this debate from either side of the Chamber, but I have just heard the most nonsensical contribution of all. The hon. Member for Normanton (Mr. O'Brien) does not understand what an urban development corporation does or how it is run. The Tees urban development corporation has done an excellent job of regenerating the Teesside district so that the region is not suffering as badly as other parts of the country at present. He tried to equate the job of a councillor with that of a chairman of a development corporation. Has the hon. Gentleman never heard of a chief executive of a local authority receiving more money than the chairman of a development corporation?

Mr. O'Brien

I value the services of members who are elected to local authorities to defend the interests and services of their community, and I am comparing those members with the appointments made by Government Departments and quangos. I referred to urban development corporations, but there are 15,000 Government committees that cost more than £11 billion—that is a separate subject, which I am prepared to debate with any Conservative Member. The Three Rivers authority has a budget of £5.6 million for its standard spending assessment and wants to spend £7.45 million to provide services, which means that it would be 33 per cent. above its SSA. Therefore, it will have to reduce the services that it provides through its authority.

A press release was issued by the chairman of the Association of District Councils. He was a Conservative councillor, not a Liverpool or a Labour councillor. The press release states: A furious Roy Thomason, ADC Chairman, declared: `We appear to have a Government that is being run by the Treasury for the sake of Treasury convenience. I am shocked that the Government should be threatening small-spending district councils with these centralist controls. The budgets involved are trivial sums in terms of overall public expenditure. I am shocked that the Government should so attack many of its own supporters in local government, particularly district councils which have raided their balances to keep charge levels down this year and maintain services. It is also shocking that the Secretary of State for the Environment should completely ignore all the assurances previous ministers gave when the capping provisions were introduced that low-spending authorities would be excluded from the controls…I am greatly saddened by this move.' That is dated 21 May 1991. It shows what Tories outside the House—the people of Stroud and other Tory-controlled authorities—are thinking. The leader of the Association of District Councils has made it clear that he will have no truck with hon. Members who plan to cap local authorities. What the chairman of the ADC says speaks volumes.

Strong reference is made in the motion to inner city areas. The Government have failed local government. They have done nothing to try to resolve inner city problems, particularly in London. The hon. Member for Stroud referred to housing.

Mr. John Marshall

On a point of order, Mr. Deputy Speaker. First, I congratulate you on the very happy announcement that was made last Saturday. It gave pleasure to every hon. Member. Secondly, have you received any request from the hon. Member for Derby, South (Mrs. Beckett) to make a statement to the House about her public expenditure programme that was so well publicised yesterday?

Mr. Deputy Speaker (Sir Paul Dean)

I am grateful to the hon. Gentleman for his kind comment. There has been no request for a statement.

Mr. O'Brien

I hope that Conservative Members will not make a request for short speeches. If there are interventions like that, the proceedings will be delayed. I was dealing with inner-city problems. The hon. Member for Stroud referred to housing but not to the problems that are facing those on housing lists. He said that, in the past, a good standard of housing was provided. He referred to the Parker Morris standards. Housing is the major problem in many cities. Homelessness is greater now than it ever was. There is a shortage of affordable housing either to buy or to rent. Nowhere does the motion refer to homelessness or to the housing provision that is required, not just in cities and urban areas but in rural areas. There is a shortage of housing. The Government have done nothing to improve the position during the last 12 years.

Mr. John Marshall

The hon. Gentleman talks about a shortage of housing. Is he aware that there are 20,000 empty council houses in London, almost all of them in Labour-controlled local authorities?

Mr. O'Brien

I draw attention to a statement by the Public Accounts Committee, which expressed concern that the Government own 31,000 empty properties that could house the homeless. If the point is made that local authorities own empty houses it is only fair and just to draw attention to the 31,000 properties, according to the Public Accounts Committee's report, that are owned by the Government which could be used to house homeless people and reduce the waiting lists in many of the areas that Conservative Members of Parliament represent. I am pleased that the hon. Member for Hendon, South (Mr. Marshall) has allowed me to make that point.

The Public Accounts Committee called on the Secretary of State for the Environment to act now with "due urgency", setting targets and time scales and pumping more cash into London councils with the worst problems. It is not the London Boroughs Association or the Association of London Authorities which make that plea but the Public Accounts Committee of this House—that the Secretary of State should make provision for the homeless.

Mr. Tony Banks

I want to add a few facts to what my hon. Friend has said about homelessness in London. In London, 2.8 per cent. of local authorities' housing stock is vacant. The hon. Member for Hendon, South (Mr. Marshall) said that there were 20,000 empty properties in London, but many of them are not fit to be inhabited. One of the reasons is that the Government are preventing local authorities from making them fit for habitation so that people can move in. There may be 20,000 vacant public sector houses in London, but there are also 97,000 empty private houses in London.

Mr. O'Brien

My hon. Friend's statement is borne out by the report published by the Public Accounts Committee. It states that officials from the Department of the Environment had admitted that they did not know enough about the underlying causes of homelessness". One of the underlying causes of homelessness is the fact that local authorities are denied the resources to make houses fit to live in. I hope that the Secretary of State for the Environment will take note of and act on the Public Accounts Committee report.

I remind the hon. Member for Hendon, South that the Government own 31,000 empty houses which could be used.

Mr. Key

I am rather worried that I might not be able to speak this afternoon, because the hon. Member for Normanton (Mr. O'Brien) has already spoken for 45 minutes. In case I do not get to speak, I must say that, yes, there are 20,700 empty local authority properties in London, but there is also £360 million of uncollected rent in London. What an enormous contribution it would make to housing people if the hon. Gentleman told the Labour party in the London boroughs to collect the rents.

Mr. O'Brien

What income could be realised in rent if the 31,000 houses owned by the Government were let? What income would that put in the Government's coffers?

I accept that the Minister wishes to speak in the debate, but his hon. Friend the Member for Stroud took the best part of an hour to move the motion. [HON. MEMBERS:"It is his debate."] And I am entitled to reply, which is what I am doing.

Over the past 12 years, the Government have also failed the towns and inner cities because there is no co-ordinated transport programme. Transport is not included in the motion, but cities come to a standstill at peak times because there is no co-ordinated transport system.

Mr. Holt

On a point of order, Mr. Deputy Speaker. This is the third time on which the hon. Gentleman has referred to something that is not in the motion, and has then spoken about it for five or 10 minutes. Is it not right and proper that you should ask him—as other occupants of the Chair would do—to stick to what is on the Order Paper and to discuss Liverpool, gay advice centres and other such issues?

Mr. Deputy Speaker

It is a very wide motion, and I have not yet heard anything that is out of order. However, I am sure the hon. Member for Normanton (Mr. O'Brien) wil bear it in mind that many other hon. Members are still hoping to speak.

Mr. O'Brien

I said that local government services include transport, but they also include law and order, which are not dealt with in the motion although they are significant problems for local communities and for local authorities. One of the evils of capping is that police authorities—especially that in my area of West Yorkshire —have been threatened with capping and have therefore had to reduce the number of policemen and the number of those on the beat. There has been a reduction in law and order services which should be provided for local authorities.

The motion refers to compulsory competitive tendering. Of all tenders, 80 per cent. have been won by local authorities. It is significant that the Department of the Environment has commissioned research into the impact of compulsory competitive tendering over the past two years. The report has not yet been published, and the survey cost £100,000.

Mr. Key

It is published.

Mr. O'Brien

The survey cost £100,000 to produce, and covered 40 English local authorities. It was intended to reveal substantial savings, but the opposite proved to be the case. The researchers point out that there have been fewer savings than the Government expected.

Mr. Jacques Arnold

Will the hon. Gentleman give way?

Mr. O'Brien

Yes, I am prepared to give way, but Conservative Members and the Minister must not then complain about not being able to participate in the debate.

Mr. Arnold

The hon. Gentleman took great pride in the number of contracts allocated to direct labour organisations within Labour councils. What would he say to the former Labour leader of Liverpool city council, in view of the specific example of how the council fiddled the system to enable it to get the contract, despite the fact that the alternative private bid was £1 million cheaper?

Mr. O'Brien

Sections 13 and 14 of the Local Government Act 1988 exist for the purpose that the hon. Gentleman has suggested. If Ministers are not applying the Act, the hon. Gentleman should direct his questions to them.

The report was intended to discredit the delivery of services by local authorities and to favour the private contractors, but that did not work. There is evidence from the people who are subject to tendering. After the privatisation of its refuse collecting service last year, Kensington and Chelsea received 400 complaints a day in the first month of operation by the successful private contractor. The Prime Minister wants to introduce a charter for residents, but people who are not yet covered by the charter complain about the services provided by the private operator in Kensington and Chelsea.

Tayside received so many complaints after the first six weeks of a school cleaning contract that the contract went back to to the direct services organisation to ensure that the school was cleaned. One head of a junior school took the unprecedented step of writing to parents saying that he intended to close his school on health and hygiene grounds because of poor work by private contractors. That is the value we get from private contractors. The headmaster described the cleaning services as at best a shambles, at worst non-existent". In some schools in Essex, the pupils do the cleaning.

The Minister of State, Department of Education and Science, said: I am generally in favour of privatisation but with school services I take a pragmatic view. I am aware of the ups and downs of privatisation. The motion does not address the reality of providing local services to the community. If we discuss local government services, we should discuss the principles of local government. If we do, we find that the hon. Member for Stroud has no idea about the services and principles of local government.

1.14 pm

The Parliamentary Under-Secretary of State for the Environment (Mr. Robert Key)

I congratulate my hon. Friend the Member for Stroud (Mr. Knapman) on his good fortune in being able to initiate this debate, which has proved both important and constructive. Hon. Members on both sides of the House have addressed us with some passion. Although I may not be quite as passionate as the hon. Member for Derbyshire, North-East (Mr. Barnes), I shall illustrate my arguments as graphically as I can.

First, however, the whole House will wish to record the deep shock that we felt at the death yesterday of Harry Collinson, the principal planning officer of Derwentside, and to express our sympathy and great sorrow to his widow Anne and their children, Katy and Robert. The incident illustrates the danger in which public servants often find themselves and also the strong tradition of public service that we are privileged to enjoy both in the civil service as a whole and among local government officers. I pay an unreserved tribute to them.

There are other groups of people who make a great deal of time available and who are unpaid, although they sometimes receive expenses. The largest single group in local government is made up of the councillors themselves. I have no hesitation in thanking councillors of whatever party for the work that they do, because it involves great sacrifices of time, effort and energy to serve in local government. I do not think that they would wish comparisons to be made between the voluntary role of the public services and paid posts such as chairmanships of urban development corporations.

There are other groups that we may not think of so readily. I refer first to the valuations and community charge tribunals. The members and officers of the tribunals service play a crucial role throughout the country. They do so every day, they have done so for many years, and they will continue to do so. It is a very difficult role, as appeals for community charges, appeals on business rates and so on are very demanding. In addition to the local members of those tribunals, I wish to thank all the officers and staff who put in a great deal of work on behalf of the community.

I could cite many more groups, but there is one in particular which we should thank. The bailiffs do a difficult and sometimes an unpleasant and dangerous job. On the whole, they work in a professional and regulated way. The Certificated Bailiffs Association operates professionally and should be congratulated on seeking always to maintain standards. It is an ancient organisation. When I addressed its annual general meeting recently, I met a bailiff from Darlington who had been doing the job since 1934. He was a very experienced and professional gentleman indeed.

We understand that the Institute of Revenues, Rating and Valuation is aiming to establish a national code of practice to cover bailiffs working on collecting the community charge. The IRRV aims to have the code agreed between the local authority associations, consumer groups and the Certificated Bailiffs Association. I understand that the National Consumer Council is involved. We should seek to encourage the professionalism of the groups of citizens on whom so many of us depend.

It is not for me to wind up the debate, which was initiated by my hon. Friend the Member for Stroud, but I must pick up one or two of the points that have been made. I have nothing to say about the conspiracy theories held by the hon. Member for Derbyshire, North-East, but I have something to say about facts which he may or may not have got right. In referring to SSAs, he claimed that North-East Derbyshire did not score on density or sparsity of population. That is not correct. The total SSA is £76 per adult, and North-East Derbyshire receives £8 per adult for ward-weighted density and £9 for sparsity.

My hon. Friend the Member for Teignbridge (Mr. Nicholls) spoke of the correspondence that he had had with me on banding and discounts, and I am considering his representations carefully. I admired the strength with which he argued the case against local income tax: he put it exceptionally well. I would only add that the same argument could be applied to those who wish the universal business rate to be handed back to local authorities. One of the strongest reasons for resisting that suggestion is that for many years in some areas authorities that charged very high business rates were responsible for driving businesses out of our inner-city areas. I can think of nothing more foolish than giving back to those same authorities the power once again to drive out initiative, people and businesses.

The hon. Member for Normanton (Mr. O'Brien) ran over ground that we had debated previously, so I shall not seek to answer his points at length. However, on his point about the police, I have to tell him that we expect police authorities to seek maximum economy and value for money. We have made clear the importance of maintaining manpower at the approved levels. It is disappointing that some police authority budgets assume manpower reductions that we regard as unnecessary. Neither the West Yorkshire police authority nor any other single-service police authority was designated for capping.

If we do not trust local government—as the hon. Gentleman sought to argue—we would hardly have delegated so much responsibility to it over the years. The House sets the tone for local government. We explain what we think should be done in the interests of the community, and we trust local government to carry out that policy.

Perhaps we need to ask ourselves what is local government about? I can tell the House what it is not about. It is certainly not for the convenience of political parties; it is not for the preservation of vested interests in local government jobs. Local government has an inertia all its own, and too often the local government machine runs for its own sake. That is not desirable. Our citizens do not mind how a service is provided, as long as it is provided. That is the responsibility which local government must meet.

I disagree with the hon. Member for Normanton about the standing of some local councillors. I have the honour to serve as a local government Minister, and my job takes me to many local authority areas. When I meet the public in their community centres and consult them about Government policies, I ask, "How well do you know your councillors?" I am glad to say that, very often, not only do they know them, but they are present at the meetings. However, sometimes the city councils and the councilors—and this is prevalent in our urban areas—are loathed by the communities that they seek to serve. That is a problem in responsible government. If we seek to improve local government and its services, we cannot ignore the fact that too many people do not know, and do not care, who their councillors are—they just know that they are not being consulted about or involved in any policy making. They do not have a vision for the future that is expressed by the policies in the town hall. That is bad news.

The hon. Gentleman claimed that the Government had done nothing about inner cities. I remind him that inner-city areas have been represented by the Labour party for many, many years—and that is one of the main reasons why there have been such poor services.

During the past week, I have spoken to local authorities and communities in Wolverhampton, Birmingham, Bradford, Manchester, Salford, and, yesterday, Bristol. There is an interesting variety of approaches to local government. Many councillors are of extremely high calibre and it is wonderful that they are doing the job in the way that they are. However, there are others about whom one is rather less enthusiastic—and I am not making a party point.

Mr. Tony Banks

They are rather like Members of Parliament.

Mr. Key

The hon. Gentleman is right, which is why I do not draw any conclusions. It is a fact of life. It is also true of council officers. Often they are motivated, dedicated, efficient, incredibly hard-working and burn the midnight oil on behalf of the councillors whom they serve. However, all is not yet right in local government, and it is no good pretending that it is.

I wish to explain the Government's view of the role of local government in our society, while reaffirming our commitment to and support for local government. Local government exists to ensure that the community gets certain essential day-to-day services provided at a local level. Our policy is entirely dictated by our wish to ensure, and our responsibility for ensuring, that those services are provided as efficiently and effectively as possible. We are about quality, and we are about value for money.

Value for money means value for people. The better one spends every pound in local government, as elsewhere, the more value for money one gets for the people who are paying it. In our experience, the two go closely together. We have a responsibility to the citizen—to ensure that he or she gets the quality of service that he or she has a right to expect. We have a responsibility to the national taxpayer, the local charge payer and the business ratepayer—to ensure that their hard-earned money is spent efficiently and effectively.

Most local authorities share those objectives. It is a great pity that the dogma, idiocy and incompetence of a relatively small number of largely Labour authorities have done so much to sully the reputation of local government in this country. I sometimes despair when I see headlines in our national newspapers with nothing to say about anything except Liverpool and Lambeth. I think about the good work that is being done by so many local authorities. A great shadow has been cast over local government by this vocal and vicious minority, more interested in acting out revolutionary fantasies than in providing decent people with decent services.

The prime example must be Liverpool, as many hon. Members said—once a great city and still a great city. It has been brought to its knees by successive Labour councils dominated by Militant. There is no doubt about that. It has become almost a joke, and not one of a nice variety. It has become a parody. Television enthusiasts will have been watching "GBH.", which protrays the scandal of Liverpool-type politics—of course, grievous bodily harm is what is being done to this city.

What is the Labour party's reaction? What can we expect from the Labour party? In July last year, the Leader of the Opposition said to The Times: I have talked many times with ordinary people in Liverpool and their constant desire is for decent services…they are sick and tired of people who constantly flout their responsibilities and obligations. We will have no more of that, starting right now. Not much happened for a long time.

A few days ago, Ian Lowes, one of the principal architects of the chaos in Liverpool, said: Oh, yes…never mind what happened in the winter of 1979, this is going to be Liverpool's Summer of Discontent." Is that the way to convince people of the value of local government? I think not. The admission by Keva Coombes that the council was obsessed with the interests of our employees and not enough with the interests of our ratepayers has been graphically illustrated in the past few weeks.

All this is happening not just in Liverpool. Yesterday I spoke to a parent with children in schools in Lambeth. The head of a Lambeth school has been told that he can telephone the Department of Education and Science only between 10 o'clock and 12 noon on Tuesdays and Thursdays. What an attitude to take towards teachers. What a disgrace. That attitude is taken even by other more gentle authorities. I have met representatives of Stoke-on-Trent council several times and have a good deal of sympathy with them, but even the council's officers are disillusioned and are not highly motivated. I have read the following: The police are investigating allegations which include bribes for contracts, overspending without authority, misuse of public funds for the benefit of council officials and friends, intimidation of witnesses and destruction of evidence. That is happening in Stoke-on-Trent, for goodness sake. What is going on?

Then there are the problems of Derbyshire. I wonder whether my hon. Friend the Member for Derbyshire, South (Mrs. Currie) would tell us what advice she would give to Opposition Members invited by the leader of Derbyshire county council to contribute to a whip-round of 100 a head to pay his legal fees when he lost his case in the High Court. I imagine that the hon. Member for Derbyshire, North-East is not enthusiastic about it and has something to say—

Mrs. Currie

I understand that my right hon. Friend the Member for Chingford (Mr. Tebbit) was advised by the Labour Member who received the letter that if Labour Members had been on the jury Mr. Bookbinder would have gone down for even more.

Mr. Key

As usual, my hon. Friend makes her own point tellingly.

Mr. Harry Barnes

rose—

Mr. Key

I must give way to the hon. Gentleman as a matter of courtesy.

Mr. Barnes

If any money is left over after the whip-round for Councillor Bookbinder, could it not usefully be provided to those hon. Members who are Lloyd's underwriters for running soup kitchens in Westminster hall?

Mr. Key

The hon. Gentleman knows the Government's attitude to the suggestion that Lloyd's underwriters should be given special treatment. Has the hon. Gentleman paid his £100 to Derbyshire county council?

Mr. Barnes

What I said earlier shows that I am sometimes slow paying my bill. I have however, been contributing towards the fund, but how much I have paid is a matter for me.

Mr. Key

I respect the privacy of the hon. Gentleman's financial affairs.

The effect of what has happened in Liverpool spills out beyond the city's boundaries. It has been said that Liverpool has been losing 10,000 people a year for 20 years. Where have they gone, and what sort of people are they? I fear that they are not only the sort of people who are fed up with the Labour council, who want to make a success of their lives and who wish to take full advantage of the opportunities that the Government have provided during the past 12 years, although it is a tregedy that those people leave Liverpool.

One of the prime reasons behind my right hon. Friend's initiative, City Challenge, is to reverse the trend of people leaving our inner cities as soon as they are vaguely successful. We want to encourage people not only to stay in the inner cities, but to return to them. That is why we must concentrate on jobs, training and the quality of life of all those people. However, as I said, it is not only the winners who wish to leave Liverpool. My hon. Friend the Member for Bournemouth, West (Mr. Butterfill) was distressed when he came to see me the day before yesterday. He said that he had hoped to participate in the debate but that he would be busy in his constituency today. He told me that Bournemouth has a severe overspill problem as a result of the problems in Liverpool. Apparently, about 7,000 Liverpudlians are now in Bournemouth, most of whom, according to my hon. Friend, are on the "Costa del Dole" and are contributing to the squatting problem in Bournemouth. I am also told that those people have contributed disproportionately to the problems of drugs, crime and prostitution in my hon. Friend's constituency. I do not know whether that is true, but I have no reason to doubt that allegation.

Mr. Tony Banks

As the Minister knows, Bournemouth is a pleasant town which is well run by its Conservative council. One of the reasons that it is so well run is that the council is into municipal enterprise in a big way. It does not sell off its services. It wants to run its own buses. It has its own conference centre and runs its own car parks and shopping malls—all the things that the hon. Member for Stroud (Mr. Knapman) criticised.

Mr. Key

What the hon. Gentleman does not say is that those services demand very little from the national purse because they are so very well run. The point is that Bournemouth is largely self-financing as an authority.

We cannot get away from the issue, which is the face of Labour government as we see it operating in our great cities. We have been told for too long that the Labour party is getting things under control. Last July the Leader of the Opposition said that, starting from that date, the problems would all be over. More recently—on 3 March—a Walworth road spokesman was quoted in The Sunday Times as saying: We have sorted out Liverpool. Oh yes?

Mr. Tony Banks

The Minister seems to think that Liverpool is a badly run city—no doubt that has something to do with the Walton by-election. However, as we have been talking £100, will the hon. Gentleman publicly bet me £100 that the Conservatives will win that by-election?

Mr. Key

I have a confession to make—I am not a betting man. When I was about 15 years old I occasionally had a flutter on the point-to-point. My fingers were so badly burned with losing my pocket money that I have not put money on horses or anything else ever since. However, it has not made me rich.

Mr. Harry Cohen (Leyton)

At the conclusion of his remarks about Bournemouth the Minister quickly mentioned the financial problems of local authorities. The underlying financial problem was made much worse by the Government's poll tax and their cuts in grants to local authorities—especially Labour-controlled authorities. The central problem is that richer people live in areas where there are fewer problems and they pay less, and poorer people live in areas with most problems and have to pay more. That is the scandal of this Government.

Mr. Key

It is extraordinary to hear Labour Members yet again perpetuating the myth that there have been cuts in local government spending and resourcing from central Government. Nothing can be further from the truth, and the hon. Gentleman knows it. In the past two years there has been a 25 per cent. increase in central Government funding of local authorities. What matters is the quality of services provided by that money.

Mr. Robert G. Hughes

Does my hon. Friend agree that, if the Labour party running Liverpool cares so much about services for the people of Liverpool, it would help them by claiming the Government grant available? Millions of pounds are available in grants which they have not even bothered to claim.

Mr. Key

I confirm that there are indeed councils that do not claim what they may claim. It is often because they are so incredibly inefficient that they miss deadlines and often do not even know how to apply for grants. The largest single source of revenue lost to Labour authorities is not merely uncollected community charge but uncollected rates from before the charge was introduced and uncollected business rates from before the introduction of the uniform business rate. It is quite absurd that some authorities are so poor that they cannot even do that.

Mr. Knapman

Is my hon. Friend aware that in the Walton district of Liverpool one person has not paid any rent since 1982 and the amount outstanding was in the order of £9,000? The reason that the money has not been paid was that no one had asked him for rent for that number of years. Due to the by-election in that area, he has miraculously been asked for the rent and has paid it with a cheque.

Mr. Key

I am grateful for that contribution from my hon. Friend. I am afraid that it is rather typical. One can quote examples of Labour authorities from all over the country that are in a similar mess.

We recognise the face of Labour government when we see it. However loudly the Leader of the Opposition and his friends may proclaim that they have purged the party of militants, they always resurface, like ghouls from the grave, to haunt him. We were told in an article in The Guardian recently: The GMB, union of the contentious gravediggers, reminded people that it was better to die on your feet than live on your knees…their celebrated convenor…Ian Lowes, explained how he coped with the abuse of the bereaved. `When people are going through that period of their lives…they are not thinking rationally.' There was much genuine resentment at the way decent strikers could be cast as cold-hearted villains. 'Do they think that union members are immune from bereavement?' asked…one of Liverpool's 47 surcharged councillors. 'During the Winter of Discontent, we had to put our loved ones in storage too.' When the trouble was over,…GMB men volunteered to dig the backlog of graves by candlelight. What a pity that they got themselves into that position in the first place.

Opposing the lunacy, ineptitude and squalor of the Liverpools and Lambeths does not make this Government "anti-local government". On the contrary, our whole approach over the past few years has been to strengthen the capacity of local government to deliver. We have looked at the practices and methods of the best local authorities and sought to extend them to all authorities. We created the Audit Commission to monitor the performance and quality of local government and provide it with immensely valuable constructive advice. Anybody who does not realise that we already have a "quality commission" simply has not been paying attention.

In the past local government has often seemed concerned more with the providers than the receivers of services. It is central Government's role to see things from a wider perspective. Our concern has been to help make local government more responsive to people's needs—to ensure the provision of effective services to the citizen. We should not allow dogma or vested interest to prevent us from achieving that goal.

Our policy is to enable local authorities to survive and grow. Local authorities should be, above all, user-friendly. So our ideal is the enabling authority—local authorities concentrating on the quality and efficiency of local services, rather than the day-to-day difficulties of their organisation and delivery, which is the proper role of council officers.

Competitive tendering has been central to the movement towards enabling authorities. There is widespread recognition in local government that the private sector has much to offer in the delivery of a wide range of services, from rubbish collection to computer management, and individual authorities have been keen to grasp the opportunities for greater efficiency which using private contractors can offer. Their example has been important in helping us to develop our thinking.

With the Local Government, Planning and Land Act 1980 and the Local Government Act 1988, we have made it compulsory to seek competitive tenders for major manual services, such as construction, building cleaning and refuse collection. For authorities that are enthusiasts for market-testing, compulsory competitive tendering has been a valuable validation of good practice. But for authorities whose ideas of service provision are determined by the demands of the trade unions, not the needs of the community, CCT has come as a rude shock—rude, but healthy!

We have looked at the impact of CCT across local authorities through research carried out by the Institute of Local Government Studies in Birmingham. The message is clear. Competition has produced real productivity improvements, certainly where contracts have been won by private companies, but also where local authorities' work forces have been successful—because they have had to increase their efficiency and trim their costs to compete. At the same time, standards of service have been maintained or improved.

We have made it clear that we are seeking to extend the benefits of competition more widely across local government, in particular by considering how best to bring professional services within a framework of CCT.

Mr. O'Brien

This is an important matter. Does the Minister accept that there is need to write into contracts, whether with private companies or direct labour organisations, that quality must be achieved? We are receiving reports that the quality of service is not being maintained. Does the hon. Gentleman agree that it is important to include in any contract a provision about quality?

Mr. Key

The hon. Gentleman's remark is timely. Apart from the fact that, of course, quality is implicit in the process, we have commissioned a study that is under way and which will draw on local authorities' experiences of moving services, particularly professional services, towards commercial operation, if not wholly into the private sector. In due course, we shall introduce specific proposals so that local government and other interests can make their views known.

Together with CCT and the quality and efficiency work of the Audit Commission, we are bringing about a steady improvement in local government services. Much more needs to be done. We need to give attention to the quality of services for which local authorities are responsible but which individual citizens experience at first hand. They may know or care little about how a service is organised or exactly who provides it, but they care very much about how that service affects them personally—whether their bins are emptied, for instance, at the time they are supposed to be emptied or whether they find some of the contents in their front gardens when they come home from work. These are small things in themselves, but are what matter a great deal to the householder and in practice are the measure of whether a service is judged good value.

This is where our citizens' charter will bite. It will involve ordinary citizens in the process of improving local services, by giving them the power to insist on value for money. Already the Government's measures under the Environmental Protection Act 1990 empowering citizens to take to court councils which fail in their litter collection duties, are in place. As the House will know, that has happened in Liverpool. The citizens' charter will extend this principle of empowerment to provide ways of encouraging an emphasis on quality in many other areas of local government. Standards of service will be set and checks put into the system to ensure that they are met. Information on service targets and achievements will be freely available to the councils' customers so that they know what they are getting for their money.

Local authorities are already responding to the challenge. Some imaginative schemes are afloat and others are in the pipeline. We recognise where progress is being made and wish to encourage those initiatives. The Government are open to ideas and are considering a whole range of possible measures that will help to improve local services. We will announce our proposals in a White Paper shortly. I am sure that they will be widely welcomed.

Mr. O'Brien

I appreciate the Minister's response to my question about the need to include in contracts provisions about quality. He said that citizens could complain if they felt that standards had not been maintained, but he did not answer my precise question, which was to the effect that there should in contracts be assurances to the effect that quality will be paramount. That is as significant as a citizen's charter.

Mr. Key

I noticed that, while I was answering the hon. Gentleman's earlier intervention, he was interrupted by a note being brought into the Chamber for him. I invite him to read the Official Report, and if he is not satisfied with my answer, perhaps he will write to me.

When my right hon. Friend the Secretary of State returned to the Department of the Environment, he sought initially to evaluate what progress we had made from the point of view of inner cities and urban areas since he was last Secretary of State. He was pleased to discover that many of the targets that had been set in the early 1980s had been achieved. A great deal of inner-city regeneration was going on by urban development corporations, in enterprise zones and through the efforts of local authorities. But something was still missing, and that was vision. There was a lack of vision among councillors, communities, the business community, voluntary organisations and so on, and he sought to find a way to encourage that vision.

My right hon. Friend found something else missing after that decade and more. He found that there was still no co-ordinated approach to inner-city regeneration. He realised that local and central government could not be expected to do it all, any more than one could expect individual firms, enterprises or communities to do it all. Accordingly, he set about trying to devise a scheme for competition which would bring in the authorities, with their partners, to achieve a real vision for regenerating quite small areas of their cities. The City Challenge initiative has proved to be exceptionally popular. The Secretary of State, the Minister of State and I are currently visiting cities and talking to local authorities.

It is staggering to discover the enthusiasm and commitment that is being put in by Labour authorities throughout the country. What a pity it is not the norm. What a pity it has taken a Conservative Secretary of State to bring it about. But it will work, and local authorities are bringing together the business community, private sector investors and others, some of whom have not talked to each other for years.

For example, we were in Bristol yesterday. Representatives of Bristol city council, Avon county council, the chamber of commerce, the Bristol initiative scheme, the civic society, churches and others from local communities were all present with me sitting in a room discussing their vision for parts of Bristol. What a pity that did not happen earlier. It is happening now as a result of the commitment of the Government to our inner cities.

Mr. Fearn

Does the Minister intend to visit Liverpool?

Mr. Key

My hon. Friend the Minister of State, as the Minister for Liverpool, is indeed concerned about Liverpool and will be going there, and to the Wirral, both of which have put in bids under the City Challenge procedure. By 5 July, all the 15 selected authorities will have put in their bids and then we, as Ministers, will have the difficult task of judging which 10 should be the winners. Though that will be difficult, in view of the level of commitment shown, it shows the way forward for the future.

Returning to the more mundane issue of the structure of local government, our objective is to maximise local government's capacity to deliver. This has also been a key factor in our approach to the vexed question of structure. What structure will best enable local government to provide effective and efficient services and, at the same time, reflect the sense of identity that people feel with their locality? We aim to produce a local government structure that is in tune with the wishes of the people of an area—the people local government exists to serve. This is clearly a question that interests a great many people. We invited responses to our consultation paper by last Friday. By the end of that day, some 1,500 responses had been received, and they are still coming in.

We intend to introduce legislation establishing the new local government commission, which will assess the most appropriate form of local government area by area, taking into account the wishes of local people. They are best placed to tell us which councils provide the best and most efficient services. They are best placed to explain to central Government how they identify as geographical areas. Subject to parliamentary approval, the commission should be formally established by summer 1992 and we hope to see the first new unitary authorities set up on 1 April 1994.

What does the Labour party want to do? It pays lip service to government close to the people and says that it wants to impose a tier of regional government with 10 assemblies. It will take power from local people and from this Parliament.

Too often, the relationship between central and local government is seen as a battle. Too much is heard of the cries of vested interest disguised as "defenders of local democracy". We have been through a difficult time in the past 10 years, but it is now clear to most people in local government that the Government have been steering them in the right direction.

More and more authorities are grasping the opportunities for efficiency and value for money that we have given them. More and more have recognised that the enabling authority, and not the creaking old paternalistic ways of pre-1990 eastern Europe, is the model for the future. Exceptions such as Liverpool and Lambeth just serve to illustrate the point.

Respect has to be earned and is easily lost. People in local government want to be respected for the work that they do. Most of them now realise that the only way for local government to earn the public's respect is to provide quality services efficiently. This Government will continue to do all they can to help them.

1.52 pm

Mr. Tony Banks (Newham, North-West)

It would be peevish of me not to welcome the opportunity to speak in this debate and congratulate the hon. Member for Stroud (Mr. Knapman) on his motion. My speech will be somewhat shorter than the one that I should like to have made, given the number of issues that have been raised so far, but I do not wish to be selfish and other hon. Members also wish to speak before half-past two.

I regret the knockabout nature of the debate until the Government Front Bench became involved. I have some regard for the Under-Secretary of State, the hon. Member for Salisbury (Mr. Key), and I welcome his comment about councillors in local government, whether Tory or Labour, and the service that they provide. They do not receive the same salaries and fringe benefits as Members of Parliament, and in many cases, they get abuse, vilification and very little gratitude, even when they are doing a good job. The Minister's words contrasted starkly with those of the hon. Member for Stroud, who could have made a much better speech.

Mr. Knapman

The hon. Gentleman did not attend the debate until rather a later hour, so he cannot possibly know what I said in my speech.

Mr. Banks

I appeared in the Chamber at about 10 minutes to ten, when the hon. Gentleman had been speaking for about 11 minutes. He continued to speak for what seemed like an age but was probably about another 25 or 30 minutes, so I had a good idea of his drift. I certainly heard enough to make me feel fully justified in saying that such a sneering, carping, miserable, pathetic speech was not worthy of him or of the House on such an important subject. I am glad that that is now also on the record.

Many Conservative Members take the simplistic approach that if a council is Labour controlled it is bad, and if it is Tory controlled it is good. That is fatuous, and it is impossible to have a properly structured, rational debate when people take that attitude. Anyone who knows anything about local government—I purport to know a little, having been involved in it for some years—will know that there are good Conservative local authorities, such as the one I spoke about earlier, Bournemouth, and there are bad ones. There are bad Labour authorites and good ones. But to take exceptions and use them as a way of attacking all Labour authorities or all local government is unworthy of Conservative Members and certainly not justified in relation to those who work so hard in local authorities.

The continual debates, Bills and orders on local authority matters that we now have in the House show how low grade and petty we have become in recent years. Part of the problem has arisen from the obsessive desire of recent Conservative Governments to decide everything centrally. The great helmswoman, during her period of office, could not resist interfering in everything, whether the opinions and affairs of her hon. Friends or the conduct of local government. As the Minister said, the notion that local government has become a battlefield is a true one, but it became a battlefield because of the enormous hostility of the right hon. Member for Finchley (Mrs. Thatcher) towards local government. London in particular became a battlefield, to the point where she decided that she was not prepared to tolerate what was going on in county hall in the Greater London council, so she abolished it, along with the metropolitan county councils. That is no way for parliamentary sovereignty to be used. It is not true democracy if someone decides that she does not like what is going on in a particular town or county hall and so uses the parliamentary majority to abolish it.

It still rankles with me that someone can approach structures of local government in London and elsewhere by deciding, with a flourish of the pen, that the whole structure is to be abolished. We have heard much talk from Conservative Members, particularly Ministers, about devolution and accountability in local government, but the process used by them has always been to centralise and remove from scrutiny. More and more local government fuctions are moving into the hands of quangos, indirectly elected organisations and Government Departments, where Members of the House cannot scrutinise them. The desire to centralise and the hostility towards local government mean that we have many debates about a section of political activity that we should leave to the people involved, so that they are accountable only to those whom they represent through the ballot box.

Another part of the problem of local authority debates and matters in this House is that we have seen the absolute and relative decline of the whole country. There was a time when local government rarely came up as an issue in the House, apart from the rate support grant and the annual debate. For the rest of the time, central Government allowed local authorities to go their own way and to carry out the functions for which they were elected.

The country has been turned into a bit player among the family of nations, particularly in Europe. That fact is reflected in the House and how we conduct our business today. We are turning into a low-grade, provincial Parliament on the edge of Europe, working ever harder on matters of ever-diminishing importance.

There have been many tumultous events in eastern Europe, in Africa and in Latin America. Around the world, in places such as Africa, people are starving. People are in turmoil and are reaching out for new democratic structures that they have not experienced. The hon. Member for Stroud could have tabled a motion so that we could discuss significant matters affecting the world, and particularly this country, but because there is a by-election in Walton, a party-political knockabout was introduced to try to stir up a bit of nastiness so that the Labour party would lose a few votes in the Liverpool, Walton constituency. I am happy to give all hon. Members their opportunity for knockabout, but I bet any Conservative Member present whatever amount—they are all far wealthier than me—that the Conservative party will not win the by-election in Liverpool, Walton. Indeed, the Conservative candidate will be lucky to hold on to his deposit. All the puff and wind on the Conservative Benches will not win them any votes in Liverpool.

As for local government provision of housing in London, there is a housing crisis in the capital. There are 20,000 empty council properties in London, but there are also 97,000 empty private sector houses in London. The Select Committee reported only yesterday that the Government are responsible for the fact that there are 31,000 empty properties that could be used to house the homeless. Throwing statistics backwards and forwards is an insult to the homeless. It is disgusting and nauseous that the homeless have been turned into a political football. Conservative Members are not prepared to sit down with us and try to solve the homelessness problem in London, which has reached crisis proportions. We are trying to find a consensual way out. The hon. Member for Gravesham (Mr. Arnold) laughs—

Mr. Jacques Arnold

I was not laughing.

Mr. Banks

I will give way to the hon. Gentleman in a moment. The idea of a Labour local authority sitting down with central Government, or Labour politicians sitting down with Conservative politicians, to find an agreed way out of what we all accept is a scandal in this capital city —80,000 people in bed and breakfast accommodation and perhaps 10,000 people sleeping on the streets—is apparently something that he regards as funny. That is absolutely staggering.

Mr. Arnold

I am amazed at the hypocrisy of it all. The council with the largest number of unoccupied council flats in Greater London is the hon. Gentleman's own Labour-controlled council in Newham. He should not be sitting down with us discussing it—the Labour council in Newham should get on with solving the problem.

Mr. Banks

The hon. Gentleman is misinformed to the point of being a fool. If he knew anything about the London borough of Newham, he would realise that the fact that there are so many vacant properties is due to the council having to move people out of unsafe tower blocks, built by Taylor Walker Anglian. Ronan Point was so unsafe that part of it fell down and people were killed. We have had to move hundreds of families out of tower blocks because they were unsafe to live in. For a Conservative Member to say that there is something wrong with us in Newham as we have so many vacant properties—because we have moved people out of properties that were in danger of falling down and taking people with them—seems to me not hypocrisy but stupidity developed into an art form, something in which the hon. Gentleman specialises.

As for empty properties in London in either Conservative or Labour-controlled local authorities, when Conservative authorities want to do something about housing the homeless in their boroughs—I exclude Westminster from the list—they find that they cannot get the money to rehouse people in those empty dwellings. For example, in the past year the withdrawal of Government subsidies forced London boroughs to increase council rents by 22.9 per cent., compared with 13.8 per cent. in the country as a whole. The reason for so many rent arrears in London is the simple fact that people cannot afford to pay the rent. That is a major problem, but Conservative Members do not seem to think that it exists.

There have also been Government cuts in local authority capital spending on council housing in London. That has hit London far harder than anywhere else. In real terms, there has been an estimated 74 per cent. fall in London between 1979 and 1991, compared with a 64 per cent. fall nationally. That is the reason for so many empty properties and why rent arrears are so high. One does not need to have a PhD in housing administration to work out why there is a housing crisis in London. For example, London councils had 170,000 fewer homes for rent at the end of the 1980s than they had at the beginning of the decade because they had been sold off and were no longer available to rent.

There has been an 80 per cent. cut in the housing investment programme allocation by central Government. Local authorities cannot afford to build houses now. In the 1970s, London local authorities built 25,000 units of accommodation per year. Now they are building 1,500 per year. Some local authorities are building none. Is it surprising, therefore, that there are 80,000 people in bed and breakfast and temporary accommodation in central London? Conservative Members throw out cheap, silly sneers about vacant properties and the level of rent arrears, but they are not interested in solving the housing problem or in the homeless people in London. Many of the homeless, by definition, do not have the vote, so they are not part of Conservative Members' political considerations, but the homeless do exist and they are a real problem in Labour-held boroughs. My hon. Friend the Member for Leyton (Mr. Cohen) was absolutely right to say that Labour authorities have so many problems because they cover the poorest areas, where the problems are legion.

It is no good saying that it is all about value for money. I understand the principle, but we need the money to start with. Since 1979 money has been taken away from local authorities which have then been told that they are somehow not managing to deal with their problems. Someone who is now departed—although not far enough for me—said, "You don't solve problems by throwing money at them", but nor does one solve them by taking money away, which is what has been happening in local government since 1979. It has been robbed blind by the Government.

I am conscious of the time. There are still many points that I should like to make, but I am not selfish and I intend to give way to an hon. Member with whom I shall disagree entirely. However, anyone who arrives at the beginning of a private Member's debate on a Friday morning is entitled to his four pennyworth, and I have already had three and a half pennyworth.

The Minister mentioned the paper on the reform of the structure of local government. Why should we not have another look at local government? We seem to be spending all our time looking at and interfering with local government structure. I resent the fact that the one area that has been excluded from any consideration for structural change has been the capital city. That has been deliberate. There are one or two sensible Tories—none of them in the House at the moment, except the Minister—who come to me and say that it makes sense to have a strategic authority for London because it needs one.

When Londoners have a Labour Government after the next general election, they will have a strategic authority which will be called the Greater London authority. I hope that it will be based at county hall and will provide Londoners with something that they are unique in not having. London is the only capital city that does not have a citywide local government structure. That is appalling, and it is an indictment of the Government—and especially of the right hon. Member for Finchley (Mrs. Thatcher), who still looms large enough for even the sensible Tories not to vote as they would like and restore strategic government for London.

About 50 per cent. of Londoners would quit the capital city if they could—for a variety of reasons, of which transport is the primary one. Other reasons include the filthy streets, the potholed roads and the general poor quality of life, all of which make London a pretty nasty, unco-ordinated and unpleasant place to live. The transport system is overcrowded and the provision of many services is bad. One thing is clear: two thirds of Londoners say that London needs a strategic authority. Conservative Members should listen carefully as we are approaching a general election. I do not expect this Government to provide us with such a strategic authority, but London will have one as soon as the Labour Government are elected.

2.8 pm

Mr. Jacques Arnold (Gravesham)

The hon. Member for Newham, North-West (Mr. Banks) ended with the comment, "as soon as the Labour Government are elected." That is an abstraction. How can we know what the Labour Government would do when we have to rely on the peppering of pledges that we have heard in the House time and again? The Chief Secretary to the Treasury has done the House a great service by costing those pledges and showing that an abstract Labour Government would mean an extra 15p in the £1 on the standard rate of income tax.

We need not consider abstractions or look into the crystal ball; we can look at the book of Labour government in action, and that is where this debate is so useful. In the New Statesman and Society—the Labour party's house magazine—Sarah Baxter put it clearly when she said: Local authorities have provided the sole model of Labour in power in the past decade (and many have given the electorate a good fright)". How right she is. Whichever way one looks at the Labour party in government, one sees high taxation.

Which councils have the highest community charge this year? The five top chargers are Labour councils. Lambeth charged £450 and Haringey charged £420—what one might call the loonie left of London. Bristol is in third place, Islington is fourth and Oxford, of all places, is fifth. They are all Labour councils. Liverpool, which we have discussed today, is ripping off from its community charge payers the 10th highest charge.

I am grateful to my hon. Friend the Member for Stroud (Mr. Knapman) for raising the specific matter of the delivery of local government services. Let us have a quick look at how local councils deliver those services. Education is the largest service. Let us consider the councils that spend the most on education and then let us consider what they deliver in terms of the examination results of the youngsters about whom we should be concerned.

Let us look back two years ago to the unlamented Inner London education authority which had the highest spending on each child. Out of the 96 education authorities, its youngsters came 88th in terms of examination results. That hardly served those youngsters and was hardly value for money in giving them education. The second highest spender was Labour-controlled Waltham Forest, but its examination results were 95th out of 96 as a result of the education given under that authority. The third highest spender was Brent, which was then Labour, but in its examinations it was 75th out of 96. Newham, which is dear to the heart of the hon. Member for Newham, North-West, was the fourth highest spender, yet managed to clock in at 93rd out of 96 in the examination performance of its youngsters. That is hardly value for money and is hardly good education for the children concerned. Why is that occurring?

Let us consider which authorities spend the most of their employment money within the education service on teachers in the classroom—the teachers who teach the children. In Newcastle upon Tyne, which is Labour controlled, fewer than half the staff in the education department are teaching the children. Some 54 per cent. are non-teachers—bureaucrats, administrators and good- ness knows what else. In Coventry, the second on the list, fewer than half the staff in the education department are teachers of children. The third worst is Cleveland, which is Labour controlled, and it is followed by Sheffield, which is Labour controlled, and Northumberland, which is Labour controlled, where 49 per cent. of the education department staff are not teachers. What is education all about if money is not put up front where the children are to be educated?

Mr. Cohen

Will the hon. Gentleman give way?

Mr. Arnold

If I am quick, the hon. Gentleman will have a chance to speak later.

The Government have given great encouragement to our councils to put money up front in our schools under local financial management. Which councils put the least money up front in the schools for spending directly on teachers and on provision for our children? Which councils hold back the most for the central bureaucracy? Again, we find that it is Labour councils. Cumbria, under Labour and Liberal Democrat control, retains almost 29 per cent. of the money at the centre rather than spending it on schools. Haringey, which is Labour controlled, retains 28.6 per cent. Newcastle, which is Labour controlled, retains 28.2 per cent. It would rather spend the money on the central bureaucracy than on the schools in which our children are taught.

The other great local government service is housing. Housing is provided for people in need to live in, as was said by Labour Members. Which are the 10 authorities with the highest number of vacant properties? All are Labour controlled and include Manchester, Liverpool, Salford, Sheffield, Birmingham, Newcastle upon Tyne, Newham of which we spoke, Leeds and Sunderland. They are Labour councils that cannot administer their housing stock properly. Why not? One reason is that they do not have the money; but why is that? It is because they are incompetent and do not collect their rents properly.

I wonder how many people know that when Brent was controlled by the Labour party 44 per cent. of its annual rents were not collected; it had arrears on the roll. In Lambeth, 32 per cent. of the rents were not collected. In Southwark—Labour-controlled again—31.9 per cent. were not collected. We can go all the way down the list of Labour councils—Hackney, Islington, Ealing, Liverpool, Haringey, Waltham Forest, and Newham. none of them collect their full rents and they therefore do not have the money for instance to reconstruct tower blocks that were built under Labour councils in the first place.

Those are all cases of incompetence, but there is worse to come. Look at the waste. Why did Birmingham's Labour council see fit to spend ratepayers' money on 149 trips to 31 countries, including Puerto Rico, the Gambia, Hong Kong, Japan, Australia, the United States and Pakistan? The most popular destination was France, with 29 trips. What does that have to do with local councils delivering services to local people? We have heard about Derbyshire, and the hon. Member for Derbyshire, North-East (Mr. Barnes) condescendingly said that he had returned £52 to Derbyshire county council. Perhaps that defrayed some of the expense of the county council's party to celebrate the release of Nelson Mandela, which cost local charge payers £2,000. Can that be described as money going into local services?

Labour-controlled Bradford voted to spend £10,000 to commemorate a strike that had taken place in the city 100 years ago. Is that a priority for funds? That is Labour local government in action.

The examples that I have given are of incompetence and misdirected services—

Mr. Robert G. Hughes

Let me give my hon. Friend an example on a larger scale. During five years of Labour control, with the hon. Member for Newham, North-West Mr. Banks) as a committee chairman and then as chairman of the council, the GLC spent £8,870,000,000. Can my hon. Friend think of anything that improved during that time?

Mr. Arnold

No, I cannot—nor has any Labour Member given any evidence today of improvements taking place.

We are told, "Never mind the incompetence and the failure to deliver services; at least we have got rid of the loonie left." But have we really? Did we know that, during the Gulf war, Lambeth and Lewisham Labour councils both ordered drivers to remove union jacks from council vans and minibuses? Did we know that Harlow Labour council has prohibited the playing of the national anthem at council functions? Did we know that Labour-controlled Manchester spent £47,440 on a gay village and £33,000 on a lesbian link counselling project? Are they the local services delivered by Labour government in action? And Camden spent £17,000 a year on a lesbian day centre. What kind of councils are these?

Mr. Knapman

My hon. Friend is being unfair to Hackney, which has organised a six-week course of counselling sessions for grieving black lesbians. Despite a considerable amount spent on publicity, it has not yet found a single grieving black lesbian. Will my hon. Friend comment on that matter?

Mr. Arnold

Yes. Labour councils are obsessed with such shibboleths when they should be getting down to brass tacks and delivering services to local residents.

Let us look at what some leading Labour council leaders and commentators have to say about their performance. The current leader of Labour-controlled Liverpool city council, Councillor Harry Rimmer, said: We know we are overstaffed, we know we are inefficient Well, what are they doing about it? In Labour-controlled Bristol, Jim Williams, Bristol's first black lord mayor, was dropped by Labour as a candidate in this year's council election. He said: I have been told they decided to get rid of me because I wasn't green enough and I wasn't left-wing enough. That is the modern sanitised Labour party. The former Labour leader of Liverpool city council, Keva Coombs, said: There just isn't any proper management and we should have worked harder to ensure there was. What are they waiting for?

Joan Twelves, the Labour leader of Lambeth borough council, said: It is hard to find the right word to describe the state of Lambeth's finances—`dire' is close. On the question of the former Greater London council, so beloved of the hon. Member for Newham, North-West, Ben Jones, a commentator in Labour Briefing, said: A campaign to re-establish the GLC could be very popular but unfortunately the dire record of Labour local government undermines the enthusiasm that exists." He could not have put it better.

2.20 pm

Mr. Harry Cohen (Leyton)

As time is short, I shall not follow Conservative Members' anecdotal attacks on Labour local authorities. They did not once mention Westminster council, with its selling of cemeteries for 15p and its wish to sell its homeless people to other boroughs, despite the fact that it has plenty of empty houses. Conservative Members conveniently forget Tory examples. Such anecdotes are part of their overall attack on Labour authorities. They cite all the anecdotal evidence because they want to cover the fact that the Government have cut grants to Labour local authorities. Billions of pounds of central Government grant have been taken away from Labour authorities so that they can no longer provide the services that their areas need.

I welcome the debate on local government services because I want to raise the important issue of the housing crisis, both in my borough and in London generally. It is a desperate crisis. Some 33,400 households—more than 80,000 people—are living in temporary accommodation awaiting a permanent home. That is a tenfold increase over the past year. If I had brought to the House all those people in my housing file, I could have filled the Benches on both sides of the House. I will cite the first case that I picked up this morning. A Mr. Raja wrote to me saying: I have been living at …for the last 13 years with my wife and six children ranging from 1 to 12 years …in appalling conditions as I am occupying only one room. I intend to raise his case with the council. He and his family would have had a much greater chance of being rehoused a decade ago. Now, he has little chance because of the housing crisis. I suspect that, after I have raised his case with the council, yet another sorry reply will be sent to him.

My housing authority in Waltham Forest is relatively good, especially in the circumstance of various options being closed by the Government. It has avoided bed and breakfast. It has fewer empty properties than most other authorities—certainly fewer than the private sector and fewer than central Government, who preside over 31,000 empty houses, often for a long time.

I wish to refer to the report of the director of housing for Waltham Forest. It is a microcosm of the crisis faced by London local authorities. It points out that there has been a massive increase of 58 per cent. in homelessness during the first few months of 1991, compared with the same period in 1990. There has been no increase in staff to cope with that because of the pressure caused by the poll tax. Casework is falling behind, with ever more cases needing investigation. The homeless are having to wait for up to nine months before they are offered accommodation. More than 500 cases are waiting to be investigated.

The director says that there is no one reason for the increase in homelessness, but he says that the number of people with mortgage difficulties is now twice as high, and the number of applications from refugees is two and a half times as high. No money comes from the Government, to help. The director points out that the number of applications from people who have lost private rented accommodation is one and a half times as high. If friends and relatives are not willing to accommodate an applicant, he is pushed further down the queue and told to make his own arrangements.

On the other side of the coin, the housing director points out that the supply of accommodation has been significantly reduced. The number of houses available in November, December and January fell from 195 in 1989–90 to 158 in 1990–91. Nominations to housing associations are much lower. The number of properties that an authority can lease for homeless people has dried up because the Government revised the subsidy reviews in October 1990. The effects trickle through because it takes time to negotiate leases.

The housing director points out that many families have to go into one-bedroom accommodation because that is all that is available. Even with families in such unsuitable accommodation, this year there will be a shortfall of 370 properties. Only 209 urgent cases out of a waiting list of thousands will be rehoused.

Many people are told to make their own temporary arrangements for an indefinite period and many are in grossly inadequate accommodation. People in category A special management transfers—for example, victims of domestic violence or racial harassment—cannot get rehoused. Even the useful transfers list—whereby people in family-sized accommodation move to smaller, more suitable accommodation, making their houses available for families—is clogged up because of the enormous pressure.

The housing director concludes by pointing out the impact on staff. He says: The rise in homeless has obviously created severe pressures on staff. Not only the increased work in investigating applications, but also the additional work involved in advising and counselling people turned away who would otherwise be rehoused and who may refuse to leave the office, have not been matched by more staff and have contributed to the high levels of stress and poor morale amongst officers in the Homeless Persons and Housing Advice Units. We all extend our condolences to the family of the planning officer who was shot. It was a shocking incident. I am amazed that more people in housing departments —[Interruption.] Many people fall victim or are put at risk in a similar way. As well as extending condolences, the Minister should institute a review of security for local officers who face such risks.

I welcome the debate. I checked with the Library and found that the last debate on housing and homelessness was on 3 July 1990. It is a scandal that the House has put off discussing a problem of such magnitude. The Conservative party has been in power for the past 12 years. The Government have created this crisis. They sold the best houses and did not make all the money available to the councils that owned them. The houses were sold at big discounts, and because of Treasury regulations the councils were not allowed to spend even amounts that they received from those sales on improving existing homes or building new ones.

Mr. Tony Banks

The councils have faced huge cuts.

Mr. Cohen

As my hon. Friend says, there have been huge cuts in the housing investment allocation, amounting to 80 per cent. in real terms. The consequence has been enormous personal misery for Mr. Raja and his family, and for all the others I have encountered in my caseload or at my advice surgery. The papers that I have received about this matter would fill these Benches—and I am talking only about my caseload, let alone those of other hon. Members. That damage will take years and years—

It being half past Two o'clock, the debate stood adjourned.