Commons Sitting of 3 February 1993

Preamble
The House met at half-past Two o'clock
PRAYERS
[MADAM SPEAKER in the Chair]
PRIVATE BUSINESS
  SOUTH YORKSHIRE LIGHT RAIL TRANSIT BILL [Lords]
  Considered; to be read the Third time.
Oral Answers to Questions
  SCOTLAND

    Coal Industry
    Mr. Eric Clarke: To ask the Secretary of State for Scotland if he will make a statement on the numbers employed in the coal industry in Scotland in (a) 1980, (b) 1990 and (c) currently.
    The Parliamentary Under-Secretary of State for Scotland (Mr. Allan Stewart): British Coal has informed my right hon. Friend that in March 1980 and March 1990, its own employees in Scotland numbered 22,000 and 1,600 respectively. The current figure is 1,424. In addition, the opencast industry currently provides employment for more than 1,500 people in Scotland.
    Mr. Clarke: Has the Secretary of State met British Coal in Scotland to establish why it did not tender for the full amount of coal required by Scottish Power? He should bear in mind that Scotland has millions of tonnes of coal stocks. If he has not had such a meeting, will he say when he will have one—because it will have an effect on employment?
    Mr. Stewart: I am, of course, aware of the correspondence that the hon. Gentleman has had with the Minister of State, Department of Trade and Industry and of the reply that came from British Coal on this matter. In that correspondence the hon. Gentleman expressed himself in his customary robust way.
    These are matters for commercial agreement between British Coal and Scottish Power, but I hope that the hon. Gentleman will be reassured by British Coal's success in selling not only 250,000 tonnes under the 1992 tender, to which he referred, but 440,000 tonnes under the negotiated contract ending 31 March 1993. Both those sales are over and above the existing five-year contract between British Coal and Scottish Power.
    Mr. Raymond S. Robertson: While ever mindful of the contribution made by coal to fulfilling Scotland's energy requirements, does my hon. Friend agree that the levels of investment and numbers of jobs involved in the North sea
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    oil and gas industries must be fully taken into consideration when assessing Scotland's future energy requirements?
    Mr. Stewart: My hon. Friend, who is particularly knowledgeable about matters relating to the oil and gas industries, makes a valid point. Coal has an important role, especially in the export of electricity from Scotland, but my hon. Friend is also right to point to the key importance to the Scottish economy of the oil and gas-related industries, which currently employ—from memory—97,400 people, almost 70,000 of whom are onshore. These industries are, therefore, of crucial importance not only to Scotland's energy needs but to the general health of the Scottish economy.
    Mr. Canavan: Does the Minister accept that part of the reason for the decline in mining jobs in Scotland is the Government's complete lack of an integrated energy policy? In support of my hon. Friend the Member for Midlothian (Mr. Clarke), whose point I raised earlier with the President of the Board of Trade and to which I am still awaiting a satisfactory answer, may I ask the Minister to investigate the astonishing claim by the chief executive of Scottish Power to the effect that British Coal did not even bid for a contract to supply 800,000 tonnes of coal to Scottish power stations? Is it not about time that the Government exercised their responsibility to intervene to stop this nonsense and to save Scotland's mining industry?
    Mr. Stewart: British Coal made a bid to supply 250,000 tonnes and in its letter to the hon. Member for Midlothian (Mr. Clarke) it gave Scottish Power's explanation of the change in circumstances that led to increased orders under that tender. I reassure the hon. Gentleman that Scottish Power has said that 80 per cent. of its coal purchases in 1992–93 will be from Scottish sources.

    Local Authority Finance
    Mr. David Shaw: To ask the Secretary of State for Scotland what plans he has to review the finances and value-for-money record of Scottish local authorities.
    The Secretary of State for Scotland (Mr. Ian Lang): The Commission for Local Authority Accounts in Scotland is statutorily responsible for ensuring financial propriety and that value for money is achieved in Scottish local government. I have at present no plans to review that position.
    Mr. Shaw: Would my right hon. Friend consider it appropriate for the commission to investigate the allegations of corruption against Monklands district council? Those allegations relate to serious matters which include nepotism, the employment of perhaps 30 close relatives of councillors, religious discrimination, and political favouritism in the direct works operation and the housing departments. Does not he think that there is real concern about bias in expenditure between the constituencies of Monklands, West and Monklands, East? Is he aware that one councillor who endeavoured to expose all the wrongdoing in that council was wrongly accused of being involved in a criminal act but has now been exonerated and the allegations against him found to be totally false and fraudulent?
    Mr. Lang: I understand that the Comptroller of Audit is presently investigating to see whether there has been any improper use of public funds by Monklands district council. I am not aware of any evidence of any breach of any statutory obligation on the part of the council. Certainly the kind of charges to which my hon. Friend refers are serious. The right hon. and learned Member for Monklands, East (Mr. Smith) said on Thursday:
    "It is a time of growing disillusion and increasing cynicism which if it continues unchecked will eventually corrode public confidence in our whole political system."
    The Labour party is right to set up its own in-depth inquiry, which I understand it has done, into the affairs of Monklands district council.

    BCCI
    Mr. Vaz: To ask the Secretary of State for Scotland if he will make a further statement on proposals to assist the local authorities that lost money in the Bank of Credit and Commerce International.
    Mr. Stewart: I have nothing to add to the reply that I gave to a similar question on local authorities that lost money in BCCI from the hon. Gentleman on 18 November last.
    Mr. Vaz: Will the Minister assure the House that if the Treasury and Civil Service Select Committee report, which is to be published in a fortnight, recommends the payment of compensation to Scottish local authorities and the other victims of BCCI, he will accept the recommendation and the Government will pay the compensation? Does he accept that as long as there is money left in this bank liquidators will be at the door? Will he join me in condemning the huge fees—£700,000 a week—currently being charged by Christopher Morris and Touche Ross to conduct the bank's liquidation? If that money had been given to the Scottish local authorities, every one of them would have been paid in full twice over. Will he draw that matter to the attention of the President of the Board of Trade?
    Mr. Stewart: I am sure that, as always, my right hon. Friend the President of the Board of Trade will read the report of our proceedings very carefully tomorrow morning.
    Let me emphasise again that my right hon. Friend the Secretary of State for Scotland granted Western Isles islands council consent to borrow £24 million, and granted Ross and Cromarty district council consent to borrow £1.8 million, to help the councils to cope with the losses to which the hon. Gentleman refers.
    Our response to any recommendations from the Treasury and Civil Service Select Committee will be a matter for my right hon. Friend the Chancellor of the Exchequer, but no doubt the Government will, as always, take any recommendations from that Committee as seriously as we take recommendations from any Select Committee.
    Mr. Gallie: Does my hon. Friend agree that the drop in interest rates over the past year will be of considerable help to councils such as Western Isles? Does he agree that the interest rate reduction has injected many millions of pounds into the coffers of local authorities throughout
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    Scotland? [Interruption.] Should not those authorities be able to use the money to improve services, and to reduce council tax demands?
    Mr. Stewart: I entirely agree, and I am astonished that Opposition Members should jeer the good news for Scottish local authorities to which my hon. Friend refers. I should have expected them to welcome the news that authorities will now face lower interest rates.
    My right hon. Friend the Chancellor of the Exchequer has announced substantial reductions in interest rates. Our base rate is now the lowest in the European Community, and the lowest since 1977. There is no doubt that those reductions will be of immense benefit to public organisations that have borrowed, to the private sector and to the whole Scottish economy.
    Mr. Macdonald: I thank the Minister for adopting my suggestion last year that an inquiry should be held into the islands special needs allowance and for his decision at Christmas to implement the inquiry's findings. His action will go a considerable way towards meeting the special needs of the islands following the BCCI affair.
    The economic situation in the islands, however, is still difficult. Will the Minister give equivalent financial support to the ferry service across the Sound of Harris proposed by the islands council? Such projects will include the islands' economy, and provide much-needed jobs immediately.
    Mr. Stewart: I am grateful to the hon. Gentleman for his recognition—[Interruption.] I am thanking the hon. Gentleman for his recognition of what we have done in response to his representations on behalf of his constituents.
    Madam Speaker: Order. I do not think that the Minister quite understood the reason for the interruption. A Back Bencher behind him was a reading a newspaper; that is what hon. Members were complaining about—the reading of a newspaper in the Chamber.
    Mr. Stewart: I am grateful to you, Madam Speaker. I cannot, of course, see what goes on behind my back. [Interruption.]
    Madam Speaker: Order. We must make some progress.
    Mr. Stewart: I am grateful to the hon. Member for Western Isles (Mr. Macdonald). I assure him that my right hon. and hon. Friends will consider his point about ferry services very seriously.
    Mr. Charles Kennedy: I refer to the Minister's reply to the hon. Member for Leicester, East (Mr. Vaz). If the Select Committee report mentions compensation, as we hope it will—Ross and Cromarty was one of the afffected councils—will the Minister take a slightly more enlightened view of the word "compensation" than the Treasury might and allow the local authorities involved longer to plan their borrowing and expenditure in order to offset the immediate impact of the losses incurred as a result of the BCCI affair?
    Mr. Stewart: The hon. Gentleman is asking a hypothetical question, although I am sure he will agree that I am one of the most enlightened of Ministers. Ross and Cromarty had £1.8 billion invested in BCCI, but it did not ask us for additional borrowing consent in that regard.

    Hazardous Materials (Emergencies)
    Mr. McAvoy: To ask the Secretary of State for Scotland what assessment he has made of the ability of emergency services under his control to deal with any potential situation involving hazardous materials.
    The Parliamentary Under-Secretary of State for Scotland (Lord James Douglas-Hamilton): The emergency services are not under my right hon. Friend's direct control. In the light of inspection visits to police forces and fire brigades, HM inspectors of constabulary and fire services consider that these services handle incidents involving hazardous materials efficiently and effectively.
    Mr. McAvoy: Is the Minister aware of a recommendation made by the Select Committee on the Environment to ban the transport of radioactive material by air? Is he further aware that in the past 14 months, plutonium has been transported by air from Germany to Wick in containers that can withstand falls of only 27 ft? What action will the Minister and his right hon. Friend take to prevent such flights from passing over Scotland?
    Lord James Douglas-Hamilton: I am grateful to the hon. Gentleman for alerting me to the problem. The Scottish Office has recently issued guidance on composite materials in burning aircraft. The issue was considered seriously at the time of Lockerbie because certain elements of the aircraft involved had radioactive particles. In co-operation with the Department of Transport, I should like to look into the point that the hon. Gentleman raises, and come back to him in due course.
    Mr. Fabricant: Although I agree to some extent with the hon. Member for Glasgow, Rutherglen (Mr. McAvoy), may I urge the Minister not to involve himself in anything that might prevent trade between Scotland and other parts of the European Community?
    Lord James Douglas-Hamilton: My hon. Friend is absolutely right. We have some of the most advanced scientists in the world dealing with the reprocessing of nuclear waste and they are able to use their expertise to make certain that extremely dangerous materials are processed with the maximum safety. People not only in Scotland but elsewhere in the world should benefit from their expertise and we should keep that thought very much in mind.
    Mr. Graham: Is the Minister aware of the deep concern felt by hon. Members who represent the Renfrewshire area over the emergency and ambulance services and how quickly they would be able to respond in the back shift to any serious accident? The people of Renfrewshire await an answer.
    Lord James Douglas-Hamilton: It is for health boards to determine provision for any major emergency in their own area. They of course draw up contingency plans which are tested regularly and have been found to be highly effective. The hon. Gentleman asks how quickly ambulances could respond. I believe, very quickly indeed, although I shall mention the hon. Gentleman's interest to the Minister of State responsible for the health services in Scotland.
    Mr. Allason: Is my hon. Friend aware that following the Braer disaster there was widespread concern, not only
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    north of the border but all along the coastline of the United Kingdom, about the ability of the emergency services to respond to oil pollution? Will he reassure the House that there is no complacency among Ministers in dealing with oil disasters and that there are regular meetings between all the emergency departments and those responsible for dealing with oil pollution?
    Lord James Douglas-Hamilton: My hon. Friend's point is well taken. Exercises are, of course, held periodically, as should be the case. With regard to Shetland, the Department of Transport's marine pollution control unit, the Shetland islands council and the emergency services all have contingency plans ready, and they are to be strongly commended on activating them so promptly. However, there will, of course, be lessons to be learnt from the results of the inquiry and, in due course, I hope to go to Shetland to follow up these matters.
    Mr. Wallace: I certainly endorse the commendation that the Minister has just given. Does he also agree that prevention is always better than cure? Therefore, it was a matter of considerable concern and dismay to read reports that, following the meeting last week of EC Environment and Transport Ministers attended by the Secretary of State, Britain has been described as one of the laggards in relation to taking action. When will the Government announce the interim measures promised by the Secretary of State for Transport in respect of marine surveillance pending the outcome of the Donaldson inquiry?
    Lord James Douglas-Hamilton: The hon. Gentleman's impression of the discussion was not the same as that of my right hon. Friend the Secretary of State. However, the hon. Gentleman is correct to say that prevention is very much better than cure. I will consider the hon. Gentleman's particular point about any interim arrangements that may be necessary.

    Nicotine Patches
    Mr. Wray: To ask the Secretary of State for Scotland for what reasons nicotine patches are not prescribable in Scotland.
    Mr. Stewart: The position on nicotine patches is the same throughout the United Kingdom. One type of patch is not available on prescription under the NHS on the advice of the advisory committee on borderline substances. The product is now available on private prescription or over the counter from registered pharmacists. The committee is liaising with the manufacturers of two similar products so that they can be considered as quickly as possible.
    Mr. Wray: Is the Minister aware that in Scotland 34 per cent. of those aged 16 and over smoke, compared with 29 per cent. in England? Is he also aware that the death rate from lung cancer in Scotland is 28 per cent. higher for males and 36 per cent. higher for females than in England? That causes an horrendous cost in respect of hospitalisation and creates great strains on the health service budget.
    I understand that the nicotine patches cost £186 for a course, or £15 a week. I read in the press last week—
    Madam Speaker: Order. Will the hon. Gentleman ask his question?
    Mr. Wray: I was reading in the press last week that one can obtain those patches for £4 on a prescription south of the border, but they cost us plenty in Scotland.
    Mr. Stewart: I am glad that the hon. Gentleman has raised that point, because some of the press reports have been misleading. The position is exactly the same north and south of the border. Specific advice on the prescribing of nicotine patches has not been issued. The House will agree with the first point raised by the hon. Member for Glasgow, Provan (Mr. Wray) and I am certainly aware of the figures. That is why the Government have a policy of reducing smoking in Scotland in accordance with quite specific targets—to reduce the number of smokers aged 12 to 24 by 30 per cent. and those aged between 25 and 65 by 20 per cent. by the year 2000.
    Mrs. Fyfe: May I welcome the enforcement of the law announced this week against selling tobacco to anyone aged under 16 and the Minister of State's recognition that we need to reduce teenage smoking? Will the Minister therefore support the Bill of my hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) to control smoking in the workplace? Will he take the logical step and support our call for a ban on tobacco advertising? This week marks the 75th anniversary of women getting the vote. Clearly, we still have a long way to go. Women want sensible and effective legislation, not half measures. Will the Minister listen to women, or does he prefer to listen to the tobacco companies?
    Mr. Stewart: I assure the hon. Lady that I very often listen to women. I am grateful for the hon. Lady's first point. In relation to the workplace, I had a very useful meeting with the chief medical officer and employers' organisations to encourage greater attention to health promotion with particular emphasis on reducing smoking in the workplace. The CMO has had similar discussions with the Convention of Scottish Local Authorities and the Scottish Trades Union Congress.
    The hon. Lady will know that the Government have brought in at the United Kingdom level a new, tougher voluntary agreement with the industry on tobacco advertising. That agreement is now in force and it is the sensible way forward.

    Lanarkshire Economy
    Dr. Reid: To ask the Secretary of State for Scotland what representations he has received regarding the Lanarkshire economy; and if he will make a statement.
    Mr. Lang: The coming into operation two days ago of the Lanarkshire enterprise zone has been widely welcomed as the latest step in the Government's extensive programme of special help for Lanarkshire.
    Dr. Reid: I do not need to remind the Secretary of State of the continuing need for investment in Lanarkshire. We welcome the additional resources that were made available to Motherwell district, in particular for 1992–93, but I remind the right hon. Gentleman that that was before the closure of Ravenscraig, and there is a continuing need, particularly for infrastructural projects, especially the M8 upgrading and the M74 link. May I commend to the right hon. Gentleman the five-year plan developed by Motherwell district council for economic and commercial development?
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    I was at the Ravenscraig Burns supper on Friday night. The right hon. Gentleman will be pleased to know that there were 500 people there, although Ravenscraig was closed, but less pleased to know that not one of them sent him their regards.
    Mr. Lang: Perhaps when I answer the hon. Gentleman's question they will wish to do so belatedly. The Government's commitment to upgrading the infrastructure of Lanarkshire is very marked and is readily demonstrated not only by what we have already announced but by what we plan. I am glad to be able to tell the hon. Gentleman that the upgrading plans for the A8 between Baillieston and Newhouse are making good progress, we are increasing the roads budget for Strathclyde regional council, totalling £7.4 million over the next two years, and we have also designated the enterprise zone which, on nine sites covering 500 acres, will provide very welcome attractions for incoming industry to Lanarkshire.
    Mr. Riddick: Does my right hon. Friend agree that the decision by Hoover to concentrate all its European production at Cambuslang will have a beneficial knock-on effect in the economy of Lanarkshire? Does that not wholly vindicate our right hon. Friend the Prime Minister's decision to push for an opt-out of the job-destroying social chapter?
    Mr. Lang: My hon. Friend is absolutely right. Clearly, President Delors was right when he said that Britain, by opting out of the social chapter, was creating a paradise in this country for inward investment. Not only have we won those 400 jobs for Hoover, but we have had the announcement today of Direct Line Insurance creating 200 new jobs in Glasgow and of Escom UK Ltd. creating 140 new jobs in Ayrshire—and, of course, we had the recent announcement of 700 jobs at the Army personnel centre in Glasgow. A lot of good things are happening for jobs in Scotland.
    Dr. Bray: Is the Secretary of State aware that there is continuing confusion in Lanarkshire due to the lack of a strategy embracing the steel site, which is where the problem began and is the biggest area of derelict industrial land in Scotland? Mistakes are being made in planning and in capital programmes because there is no coherent development strategy. Will the Secretary of State make sure that the options are fully spelt out forthwith and taken into account by all the authorities concerned?
    Mr. Lang: The hon. Gentleman is wrong to say that there is no coherent strategy. British Steel and Scottish Enterprise are working closely together on the problems of the steel site. It is not something on which there can be a quick fix; it has to be done gradually over time and at considerable cost. That is one reason why the enterprise zone that we have designated does not include part of that site. The £50 million of anticipated public expenditure costs associated with that site over the next decade can be under way as quickly as possible, with the attraction of new industry into the area.
    Mr. Tom Clarke: On the serious issues in Lanarkshire, does the Secretary of State accept that unemployment has increased by 25 per cent. in that county in the past three years? Nothing that the Government have done on derelict sites, the failure to resuscitate Gartcosh or even the

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    proposals for rail privatisation will help those problems in the least. Given that when Ravenscraig closed, the Prime Minister said that he would not forget Lanarkshire, Lanarkshire still feels very much a forgotten county. What does the Secretary of State for Scotland intend to do about that?
    Mr. Lang: If the hon. Gentleman does not know, he should get out and go around his constituency. He would see on the ground evidence of all the work that the Government are doing. Lanarkshire development agency's budget next year will approach £50 million. The Government have encouraged the development of the Mossend rail terminal, which is of great importance to the future of the hon. Gentleman's constituency. Although unemployment in Lanarkshire has risen by about 2,000 this year, the figure is still more than 15,000 lower than it was at the height of the previous recession in 1987.

    Hill Livestock Compensatory Allowances
    Mr. Davidson: To ask the Secretary of State for Scotland how many farmers eligible for the hill livestock compensatory allowances there are within each district authority in the Strathclyde region.
    The Parliamentary Under-Secretary of State for Scotland (Sir Hector Monro): My Department's records of hill livestock compensation allowance recipients are held by parishes and the former counties. The total for Strathclyde is 2,825 for the 1992 scheme.
    Mr. Davidson: Is the Minister aware that I received a letter from the Secretary of State for Scotland referring to the hill sheep subsidy which tells me, and I quote—
    Madam Speaker: Order. I have to give a little guidance to the hon. Gentleman. Quoting during Question Time is not allowed. It would be helpful if he could simply summarise.
    Mr. Davidson: I received a letter from the Secretary of State saying that there should be rejoicing among the hill sheep farmers of my constituency. Can the Minister tell me how many hill sheep farmers he believes there are in Glasgow, Govan? Can he tell me whether the letter was seen by the Secretary of State or whether a blank piece of paper á la Kynoch was signed by the Minister and submitted by a civil servant, perhaps by one of the guilty people in the clock across there?
    The hill sheep farmers of Govan are the only people in Scotland I am aware of who support water privatisation. Will the Minister confirm that ewe after ewe is searching the hills of Govan—indeed, ewes are searching the whole of Scotland—seeking the green shoots of recovery but they cannot find them anywhere? Will the Minister confirm that sending that letter to me was an insult and that the section of the letter that tells me that larger numbers of people in Scotland on low incomes and no incomes have their incomes going down than have them going up is to be regretted, and will he consider resigning?
    Sir Hector Monro: What a pathetic choice of quote. If the hon. Gentleman cannot do better than that, it is a disgrace to his party. Surely he is glad to know the exact position of hill sheep farmers in Scotland. We all know
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    that it is a difficult place to make substantial profits—and of course there are sheep in Govan: I have seen them on football pitches and rugby pitches.
    Mr. Kynoch: On a more serious note which affects hill farmers in Scotland, will my hon. Friend say what he projects a net farm income in a less-favoured area hill farm with sheep and cattle will be in 1993–94 and how would that compare with the average net farm income in 1988–89? Does he not agree that from such a low level of income the small increase achieved through the HLCAs and sheep annual premium adjustments is only a beginning and a first move in the right direction, upwards?
    Sir Hector Monro: I am grateful for a sensible question from someone who knows something about hill farming. My hon. Friend realises that although we reduced the HLCA for sheep by £2.25, the sheep annual premium increased by £4.05, which represents a net change for the better of £1.80 and is certainly welcomed by hill sheep farmers in Scotland. I explained to the National Farmers Union last week that last year there was a 21 per cent. increase in income for less-favoured areas and 40 per cent. over the 1991 period. I am glad that the trend is in the right direction. I hope that with the substantial increase in the sheep annual premium this year, while maintaining the cattle amount of £63.30, incomes will continue to increase.
    Mr. Foulkes: The Under-Secretary of State knows that there are a great many sheep farmers in Carrick, Cumnock and Doon Valley. He will recall that when David Purdie, the president of the National Farmers Union in Ayrshire, came along with all the hon. Members from Ayrshire to see him, he indicated that there would be no reduction in the hill livestock compensatory allowance. Will the Minister admit that he was overruled by the Minister of Agriculture and that this means that £20 million is coming out of the rural economy of Scotland, which will be devastating for all the rural areas? If he is to be told what to do by the Minister of Agriculture, is it not time the Under-Secretary of State for Scotland gave up and let someone else take over?
    Sir Hector Monro: The hon. Gentleman is always very enthusiastic on behalf of his farmers. He will be glad to know that the sector that is doing best in farming at the present time is dairying. He knows that the figures that I have given relative to the increase in the overall position of the sheep annual premium and the HLCA are very favourable. An amount of £29.50 for each ewe on a hill farm is very significant indeed, and I welcome this trend. I accept that farming started from a relatively low base over the past few years, but things are improving and the hon. Gentleman should welcome that.

    House Conditions Survey
    Mr. Nigel Griffiths: To ask the Secretary of State for Scotland when he expects to publish the results of his house conditions survey.
    Lord James Douglas-Hamilton: Scottish Homes, as the main contractor for the house conditions survey, hopes to complete the survey report before the summer recess. A final publication date has yet to be decided.
    Mr. Griffiths: Does the Minister realise that the further delay in completing the report means an even greater and

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    disgraceful delay in tackling the bad housing problems in Scotland? Has he read the Shelter report, "Broken Dreams", on health and housing in Scotland? Does he realise that 100,000 children in Scotland now live in damp houses, which is affecting their health? Will he announce an emergency programme to tackle the problem?
    Lord James Douglas-Hamilton: In relation to the national house conditions survey, we are considering whether it would be helpful and feasible to release preliminary findings earlier, so that there will be no such delay as the hon. Gentleman suggests. With regard to condensation—[Interruption.] I should say dampness; I appreciate that there is a difference—councils should, as a matter of priority, tackle these matters within their mainstream allocations. I am glad that some 40 councils in Scotland have carried out local house condition surveys, which will enable them to target resources more effectively. Since 1979, some £10 billion has been allocated to public sector housing in Scotland.
    Mr. Dicks: Does my hon. Friend agree that municipal housing in Scotland is absolutely deplorable and that the architects and local government of Scotland have a lot to answer for? I have made many trips to Scotland, which I love. Does he agree with me that he ought to get the message across to local government and architects that good design does not cost any more than bad?
    Lord James Douglas-Hamilton: My hon. Friend has a good point. Some 257,000 houses have been built in Scotland. Of these, a proportion has been built by the public sector. Taking into account housing associations, as well as local authorities, some 66,000 new houses have been built in that time. If local authorities wish to build new houses where there is a perceived need for them to do so, they can put that in their housing plans and go forward, if they treat that as a matter of priority. My hon. Friend's point is valid.

    Water and Sewerage
    Mr. Kirkwood: To ask the Secretary of State for Scotland what consultations were conducted prior to the announcement that he was ring-fencing section 94 capital consents for water and sewerage; and if he will make a statement.
    Mr. Lang: The decision to vary the terms of the consent that I give for local authority water and sewerage capital programmes was taken to ensure that resources continue to be targeted in the most effective way in the run-up to local government reorganisation and restructuring of water and sewerage services. It is consistent with the existing separate accounting arrangements for those services.
    Mr. Kirkwood: Does the Secretary of State accept that Borders regional council, using consent scheme finance, has been able to direct £1.5 million from water and sewerage to other budgets in a way that was in no way detrimental to the water and sewerage scheme? That was permissible under the original rules of the scheme. Bringing in ring fencing nine months into the financial year has left the council in a difficult position by making that transfer of £1.5 million of capital consent illegal under the new rules. That will require the money to be clawed back in the fiscal year 1993–94 in a way which will occasion cuts
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    in capital consents of up to 19 per cent. in some of the budgets in the Borders. Will the Secretary of State look again at the summary introduction of those rules, find some way of easing the difficulties of Borders regional council, and try to make sure that it has some way of managing the problem occasioned by a summary change in the middle of the financial year?
    Mr. Lang: Yes, I am happy to reassure the hon. Gentleman. We made it clear when we introduced the arrangements that we would deal sympathetically with any genuine difficulties, having in mind precisely the kind of situation that the hon. Gentleman has described. My officials have been in touch with officials in Borders regional council. They have provisionally agreed a method of operation in relation to the enhancement or abatement of underspend and overspend which will enable Borders regional council to continue its other programmes without being unnecessarily restricted as a result of this.
    Mr. McAllion: The capital consents for water and sewerage in the current year amount to just over £221 million. Is the Secretary of State aware that if that level of spending were maintained for the next 10 years it would amount to less than half the sum that he himself has identified as necessary to meet European Community targets? Is it not, therefore, obvious that his mind is already made up to find the missing £2.5 billion by privatising Scottish water in one form or another? Will he therefore now give an unambiguous assurance that he will not seek to change the law of Scotland to allow disconnections of domestic consumers from the water and sewerage services? He should understand that if he does not give that commitment it will be he and not those who resist him who will be acting illegally in the eyes of the people of Scotland.
    Mr. Lang: The hon. Gentleman overlooks the fact that capital expenditure on water and sewerage in Scotland has doubled over the past four years. He mentioned a figure for the current year; next year it will be £237 million, rising to £248 million a couple of years after. There is a continuing and developing need to increase capital spending on water and sewerage in Scotland to an estimated £5 billion in the next 10 to 15 years. Part of the consultation exercise that we have just concluded is to find the best way of raising those resources at minimum cost to the consumer.
    Mr. Ian Bruce: My right hon. Friend must believe that it is intolerable that hon. Ladies and Gentlemen in all parts of the House are not getting water and sewerage matters sorted out because of problems of public sector financing. Is not the sensible idea to move quickly towards a privatised water industry so that the investment can be made in water and sewerage services, as is happening in England and Wales?
    Mr. Lang: It is precisely to find the best way forward for water and sewerage in Scotland that I issued a consultation paper, and the consultation period has just ended. The purpose of the section 94 capital consent arrangements that we have announced is to ensure that capital continues to be expended on water and sewerage. There has been an average underspend of £3 million per year in the past few years, and it is plain that the heavy burden imposed by our

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    needs in the water and sewerage industry in the next few years must be met by resources being directed towards them.
    Mr. Welsh: Is the consultation a sham or is it for real? If the majority are opposed, will the minority Government in Scotland start listening to the Scottish people and abandon water privatisation in any shape or form? Or is the Conservative party also making democracy redundant under its current policies?
    Mr. Lang: Is the Scottish National party for real? We have consulted extensively and widely on a range of options for the future of water and sewerage in Scotland. We have received some 3,000 replies. We shall examine them with great care, analysing the recommendations made and the way in which they address the eight specific questions that we asked in the consultation paper, and then agree on a way forward.
    Mr. Tom Clarke: In the light of the Secretary of State's enthusiasm, expressed the other day, for local authorities raising private capital for a new bridge over the Forth, why does he exclude that principle for water and sewerage provision? Above all, will he for once answer the question about disconnections? Will he introduce legislation, or will he accept the overwhelming view of the Scottish people that privatisation of water and sewerage is totally unacceptable to us and ought to be withdrawn?
    Mr. Lang: I have answered the hon. Gentleman's last question many times. As to the question of the relationship between public and private sector expenditure, if the hon. Gentleman had taken the trouble to read our consultation paper, he would have found a range of options of that sort laid out on which advice was requested. It is a great pity that the party that the hon. Gentleman leads in Scotland has behaved so irresponsibly as to ignore the important underlying issues which affect the future of water and sewerage. It has failed to submit positive and sensible forward-looking suggestions and, instead, has indulged in nothing but mindless rhetoric.

    Legal Aid
    Sir Russell Johnston: To ask the Secretary of State for Scotland what representations he has had from lawyers in Scotland with regard to fees charged for legal aid work; and if he will make a statement.
    Sir David Steel: To ask the Secretary of State for Scotland what representations he has received on proposed reductions of legal aid in Scotland.
    Lord James Douglas-Hamilton: The Law Society of Scotland and the Faculty of Advocates have been informed of my right hon. Friend's intention that, to assist in overall control of public expenditure, no increase should be made in legal aid fees in Scotland in 1993. Both organisations have made representations against that proposal.
    My right hon. Friend has received a number of representations about the Government's proposed changes to the eligibility criteria for legal aid in Scotland from the Law Society of Scotland, consumer interests, solicitors firms, Members of Parliament and members of the public. Those representations are being carefully considered.
    Sir Russell Johnston: Is the Minister aware that his reply confirms the deep disquiet about the fact that the Government are proposing that anyone above income support level will be excluded from access to the law? Is it correct that people on invalidity benefit, sickness benefit and unemployment benefit will be excluded and that the sliding contributory scale will be scrapped? If so, who but the rich will be able to afford justice?
    Lord James Douglas-Hamilton: People on income support levels of income will continue to receive free legal aid and advice and assistance. Eligibility will continue to be based on an individual's disposable income. When the issue was discussed in Standing Committee in 1989, I mentioned that the total figure for legal aid at that time was £54 million. The hon. Member for Linlithgow (Mr. Dalyell), with characteristic directness, said:
    "That is a hell of a lot of money."—[Official Report, Second Standing Committee on Statutory Instruments, 19 April 1989, c. 4.]
    The sum has increased enormously since then.
    In 1991–92, the total figure for legal aid was £86 million. This year, it is expected to be about £104 million, and in the planned expenditure we have an anticipated increases in legal aid by a further 40 per cent. over the next three years. I stress to the hon. Gentleman that the purpose of the changes is to maintain free access to justice for the most needy while asking those who can afford it to pay more.
    Sir David Steel: Which of the Minister's figures apply to criminal legal aid and which to civil legal aid? Does he recognise that what the people in Scotland find most offensive about the proposed cuts is that they are being tacked on to the proposed cuts in England and Wales? The legal aid system in Scotland has proved most cost-effective because it is different and more efficient. Does the Minister accept the basic proposition that justice denied to ordinary people through cost is injustice and not justice at all?
    Lord James Douglas-Hamilton: I am grateful to the right hon. Gentleman because these measures do not extend to criminal legal aid in Scotland. It may be within his recollection that it was the late Willie Ross who tightened up the rules relating to criminal legal aid and took action to curb the rise in legal aid unless cases were of exceptional length or complexity. The current measures do not extend to criminal legal aid in Scotland.
    Sir Nicholas Fairbairn: I do not know whether I must declare an interest, but I do so. May I remind my hon. Friend that criminal legal aid was provided for in the 1959 Act and introduced into England, but was not introduced into Scotland until 1964 for absolutely specious reasons. The tort of legal aid is that it deprives all but the poorest and the richest from going to justice at all. These proposals will increase the number of people who cannot afford to go to justice and who will have to pay towards it if they do. Furthermore, in my brief forays into the English courts as counsel I have found that the English legal aid provisions are vast compared with the Scottish equivalent. What does my hon. Friend intend to do about that difference?
    Lord James Douglas-Hamilton: I have to tell my hon. and learned Friend that those measures relate to civil legal aid. In the main he is a criminal lawyer, although on occasion he has dealt with civil cases. I stress that legal aid is estimated to have increased by 50 per cent. this year and

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    the aim is to take action to control the growth in legal aid expenditure, while ensuring the continuation of reasonable access to it for the most needy. The numerous representations that we have received are being carefully considered.
    Mr. Gallie: Does my hon. Friend acknowledge that the finance required for the rise in civil legal aid assistance in no way compares with the rise in criminal legal aid assistance? Does he also acknowledge that the performance of the courts in recycling people due to inefficient and ineffective sentencing policies means that the same people are soaking up legal aid funds time and time again?
    Lord James Douglas-Hamilton: I am glad that legislation reflecting my hon. Friend's question—giving prosecutors a right of appeal against sentences that are too lenient—has gone through Parliament as a result of widespread support. That will help to avoid any need for recycling, as my hon. Friend puts it.
    Mr. McFall: Can the Minister honestly argue that it is consistent with the values of a civilised society that from 1 April no one earning more than £42.50 per week—the basic income support level—will be entitled to free legal advice and assistance? What does the Minister say to James Cowie—a registered blind person from Glasgow—who last year, through that scheme, was able to convince the courts to allow him access to his children in care? Will the Minister agree to meet James and myself to explain why James Cowie and up to a million other Scots will be denied invaluable assistance from 1 April? Does the Minister not agree that if justice means anything it means access to the courts?
    Lord James Douglas-Hamilton: I am seeing the hon. Gentleman at an official meeting in a few minutes, so we can discuss arrangements then. On eligibility, I should make clear to him that we estimate that 45 to 55 per cent. of households would be eligible to civil legal aid, and that 20 to 30 per cent., would be free of contributions, which is a significant figure. A total allocation of about £104 million is to be spent on legal aid this year, which is also a substantial figure.

    Devolution
    Mr. Home Robertson: To ask the Secretary of State for Scotland if he will make it his policy to introduce devolution of decision taking in Scotland to the lowest possible level.
    Mr. Lang: I am glad to say that the policy of devolving decision making in Scotland to the lowest possible level, which the hon. Gentleman advocates, is at the heart of the Government's approach. For example, the creation of local enterprise companies, national health service trusts, school boards and our proposals in the citizens charter and for local government reform are ample evidence of that.
    Mr. Home Robertson: None of those bodies is elected. Scots did not vote to be guinea pigs for rail privatisation, any more than they voted to be guinea pigs for the poll tax. Has the Secretary of State not noticed that what we have
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    been voting for—consistently, and by very large majorities, for 20 years—is control over our own affairs in Scotland? Is it not sheer hypocrisy for Ministers to plead for subsidiarity from Europe while denying Scotland's local and national democratic rights? Finally, will the Secretary of State tell the Prime Minister that any stock-taking exercise that fails to take account of those matters can only be described as fraudulent?
    Mr. Lang: I should have expected the hon. Gentleman to know that article 8b of the proposed new European Communities treaty refers specifically and exclusively to relations between the Community and individual member states and is not concerned with those states? internal affairs. For the past 20 years, and for a very long time before that, the people of this country have been voting for Members of this House and, thereby, electing a Government of the United Kingdom.
    Mr. Salmond: If we are to believe the inspired press leaks about ?taking stock?, the Secretary of State will be styling himself as Scottish prime minister. Does he not believe that a real Prime Minister in a real Parliament should have a real mandate? The Secretary of State clearly has no such mandate. Does he think that the people of Scotland do not know the difference between a prime minister and a Westminster puppet on a string?
    Mr. Lang: The hon. Gentleman's speculation is entirely unfounded. I advise him to wait patiently as, in due course, the outcome of the stock-taking exercise will be made plain even to him.
    Mr. Raymond S. Robertson: Does my right hon. Friend agree that to the people of Scotland it is a matter of grave concern indeed that, while the Labour party chunters on daily about a Scottish assembly sitting in Edinburgh, fewer than half the Scottish members of the parliamentary Labour party bothered to come up to Edinburgh for the meeting of the Scottish Grand Committee on Monday?
    Mr. Lang: My hon. Friend is absolutely right. This says very little for the Labour party's commitment to Scotland.
    Mr. McLeish: Following the Prime Minister's patronising and pathetic remarks in Scotland at the weekend, can the Secretary of State indicate when the so-called stock-taking will end? Will he acknowledge that there can be no real substitute for decision-making powers in Scotland, exercised by a Scottish parliament? We do not want further debating opportunities; we want real decision-making power. Will the Secretary of State acknowledge that the most important stock-taking issue about which we want to hear from him is Rosyth naval dockyard? We want to hear that Rosyth will get the nuclear refit, securing jobs in Scotland and, in particular, in Fife.
    Mr. Lang: Conservative Members believe in devolution, but not devolution from one government to another government in Edinburgh. We believe in devolution from government to people. That is what imbues all our policies, and it is what the hon. Gentleman and his party ought to learn.

Army Manpower
3.31 pm
The Secretary of State for Defence (Mr. Malcolm Rifkind): With permission, Madam Speaker, I should like to make a statement about Army manpower.
My right hon. Friend the Member for Bridgwater (Mr. King) set out our plans for Britain's Army for the 1990s in June and July 1991. Those reflected the United Kingdom's leadership of, and substantial contribution to, the new Allied Command Europe Rapid Reaction Corps, as well as the need to provide for the direct defence of the United Kingdom, our responsibilities in our dependent territories and elsewhere and our continued support of the Royal Ulster Constabulary in Northern Ireland. He envisaged at that time that there would be some 116,000 regular personnel in the Army by the mid-1990s. That figure included some 12,000 personnel under training, giving a total trained strength of around 104,000.
Both he and I have repeatedly emphasised the importance we attach to ensuring that the armed forces are able to respond to the demands we place upon them. The requirement to allow sufficient leeway to deal with the unexpected was one of the major considerations underpinning the original work on ?Options for Change?. My predecessor and I have also made it clear that we shall keep the position under review and that, should we judge it necessary to look again at planned force levels and the balance between capabilities, we shall do so.
The judgments made in ?Options for Change? remain valid. The threat to our national security is much less than it was. Since 1991, however, there have been a number of developments which have added significantly to the commitments that the Army is required to meet at the same time as it is in the process of reorganising. Additional battalions have been deployed to Northern Ireland, and our overall contribution to United Nations peacekeeping tasks—in Cyprus, Cambodia, the former republic of Yugoslavia and elsewhere—has almost trebled.
The effect of these additional commitments, combined with the disruption caused by the restructuring and drawdown, is placing increasing pressure on individual soldiers and their families. This is something about which many hon. Members have understandably expressed concern. As planning for the Rapid Reaction Corps and other elements of the force structure has been taken forward, a number of requirements for additional manpower have also been identified.
Against that background, I have been considering for a number of months, with my military advisers, the need to adjust the force levels set out by my right hon. Friend. I have concluded that there is a case for an adjustment in the planned strength of the Army. I am therefore announcing today measures which, together with initiatives already in train, will make available 5,000 additional men and women for the front line units of the field Army.
First, I am announcing that the planned strength of the Army in the mid-1990s should be increased by 3,000 to 119,000. In determining how to use that additional manpower, I have been influenced by two considerations. The first is that it is desirable to bring up to strength a number of units which would otherwise have to be reinforced in order to undertake their peacetime operational commitments; a significant proportion of the additional manpower will be used for that purpose.
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The second consideration is that the Government attach importance to increasing the emergency tour interval towards the target of 24 months, to which we remain committed. That can best be achieved by revising the number of battalions that will be available in future. I have decided therefore to permit the retention of two further infantry battalions. There will therefore now be a total of 40 battalions—including two Gurkha—in 1998, compared with the 38 previously planned. That will have the effect of increasing the average interval between emergency tours from 15 to 17 months this year and providing an additional margin above 24 months once restructuring is complete, which would make it easier to accommodate any further commitments.
I come now to how the two additional battalions which I have consulted the Chief of the General Staff and my other colleagues on the Army Board of the Defence Council. After considering all the reductions currently under way or planned, it is our unanimous view that the amalgamations of the Cheshire Regiment and the Staffordshire Regiment and of the Royal Scots and the King's Own Scottish Borderers should not now proceed.
The funding for that additional manpower will be met from within the financial provision announced for defence in the November 1992 autumn statement. We are at present considering the consequences for the armed forces of the financial provision available. Today's announcement will make those decisions more difficult, but I am in no doubt that the need to increase Army manpower is the highest priority currently facing my Department.
This leads to the second area where extra manpower will be released. As well as the increase of 3,000 in the total size of the Army, the development of detailed plans for reorganisation, and the implementation of market testing and other initiatives aimed at improving efficiency should release approximately a further 2,000 personnel, mainly from the support area, over the next few years. Some of that manpower will be available for redeployment to field army units.
While it is important that the armed forces should be large enough to carry out the tasks required of them, manpower is a very expensive resource and I do not believe that it is sensible in terms of the overall defence programme and profile to view their size as permanently fixed. I will continue to keep the long-term strength of the Army under close review in the light of changing circumstances. Such circumstances will include any changes to current and foreseeable operational commitments, including the planned withdrawal from Hong Kong.
More generally, they will also include further progress with the Government's market testing and other initiatives, which should help us to reduce our requirement for service and civilian manpower across the programme. It is also important that senior commanders should have the flexibility to decide on the balance of manpower and other resources that they use to meet the objectives placed on them. Finally, following the publication last year of the open Government document on the future use of reserves, we have yet to complete our studies of how best to integrate both regular and volunteer reservists into the post-options force structure. That too will have implications for the long-term strength of the Regular Army.
In ?Options for Change?, we committed ourselves to an Army which is fully manned, properly supported, and well

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equipped. The decisions I have announced today reflect that commitment. I have arrived at those decisions only after several months of consideration with my professional military advisers. It represents a small but sensible adjustment to the planned size of the Army, which will ensure that it has the flexibility and resilience that it needs to meet the challenges of the 1990s and beyond.
Dr. David Clark: I welcome the Secretary of State's statement, as one would the words of any sinner who repenteth. I welcome his admission that the armed forces of this country are over-stretched, but I suggest that this form of crisis management is not really the way to run an army. If the Government have got their sums wrong about the infantry, how can we trust them to have got the figures right overall?
The Secretary of State's announcement, long and complicated as it was, raised many issues of national concern—among them the key question, what is the extra cost of today?s announcement? The right hon. and learned Gentleman failed to give us the precise figure, although he did make it clear that the cost had to come from within the defence budget. He also admitted that the results of these cuts would be ?difficult decisions ahead?. How can he come to the House to announce such cuts and speak of difficult decisions ahead when he has not yet worked out the consequences of the cuts for the other arms of our services? These strike us as panic measures.
Are we to understand that the Navy's budget is to be cut? Does that mean that the vital helicopter landing ship will not be built, in spite of Government reassurances to the contrary only last week? Or is it the turn of the RAF? Will this mean that the mid-term refits of essential aircraft will be delayed?
Will the Minister give the House a categorical guarantee that, as a result of this statement, no one serving under fire in Bosnia or Northern Ireland will be served with his redundancy notice while serving in those theatres?
I have mentioned Northern Ireland. May I press the Secretary of State on that? Will the emergency tours of four months be extended as a result of this statement, or will it be possible to reduce them to the four months originally envisaged? We have a right to know that.
Finally, what is the position of the service personnel due to be made redundant on 25 February?
Given the decision to replace the Army's Bedford trucks with DAF models, has today?s announcement that DAF Trucks is to be placed in the hands of administrators had any effect on the Army?s ability to do its job and move its personnel about?
Is not the Secretary of State?s statement merely an acknowledgement of the Government?s failure to have a national strategy for defence? Will he explain why, in the event of momentous strategic change—the end of the cold war—the Government have refused to implement a full-scale defence review? Will he now follow the advice of Field Marshal Lord Bramall and of the Select Committee on Defence, who have joined the Labour party in calling for such a review?
Does not today's statement merely confirm that ?Options for Change? was merely a response to Treasury diktats, not a policy to defend Britain and the free world?
Mr. Rifkind: The hon. Gentleman's reference to repenting sinners comes well from a former member of the Campaign for Nuclear Disarmament who now projects himself as the champion of the armed forces. Such remarks also come ill from representatives of a party which, at its last conference, once again called for a 25 per cent. reduction in the defence budget but which now seeks to chastise the Government.
Notwithstanding his pedigree, the hon. Gentleman asked a number of perfectly reasonable questions to which I shall now be happy to respond. He asked about the cost of today?s announcement. It will be about £80 million in a full year. That £80 million is a significant sum, but it should be put into perspective. It represents about one third of 1 per cent. of the defence budget. At the moment, we are involved, as we are every year at this stage, in reconciling the resources that have been provided as a result of the public expenditure round with the continuing programme of the Ministry of Defence. That programme has to be assessed annually. Today?s announcement has been included in that review and, in due course, we shall reach conclusions about any adjustments in the programme that will prove necessary.
I am aware of various press reports about individual procurement items and whether they affect one service or another. No decisions have been reached, nor do I anticipate any for some time on any of these matters. As I said in my statement, of course there will be difficult decisions. They would have been necessary irrespective of the statement, and that continues to be the case.
The hon. Gentleman asked about redundancies, and he must also put that in the proper perspective. As a result of ?Options for Change?, the overall size of the Army is coming down substantially from 156,000. That means an overall reduction before today?s announcement of some 40,000. Today's announcement could have some implications, but clearly they will not be profound, because of the factors to which I have referred. It is of course welcome that most of the redundancies that are likely to arise will be voluntary, and that the number of compulsory redundancies will be relatively small.
The hon. Gentleman asked about a defence review. I have said on numerous occasions that ?Option for Change? was itself a comprehensive assessment of the needs facing our armed forces. The assumptions of ?Options for Change? remain valid because of the way in which the international situation has developed. The adjustments that I have announced will make a useful contribution to relieving some of the pressures on our armed forces. They will be warmly welcomed, and I am grateful to the hon. Gentleman for welcoming them.
Sir Nicholas Bonsor: My right hon. and learned Friend will be well aware that the Select Committee on Defence has been conducting a review of ?Options for Change? and that our report is due to be published on Tuesday. He will also be well aware that our conclusions were comprehensively leaked to ?News at Ten? last week and will therefore know that my Committee wished for substantially more than my right hon. and learned Friend has offered. None the less, I wholeheartedly welcome his statement and thank him for showing the flexibility of being prepared to move towards the level of manpower that our armed forces need. There is no doubt that his announcement will help in the critical stage that has been reached in the emergency tour plot and

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will also help to flesh out the inadequate level of manpower in our existing battalions. The 580 strength that we have had until now was inadequate and adding to it will inestimably help the strength of our armed forces.
I have two questions for my right hon. and learned Friend. First, he was good enough to tell the House that he will remain flexible about further changes should the need arise. It is probably the feeling of the House that in future we may need to increase the level further if the requirements imposed upon us by the United Nations and the peacekeeping and intervention roles that we now play increase. Will he confirm that that matter will be kept under constant review?
Secondly, how will my right hon. and learned Friend assist the reprieved regiments to repair the damage that has already been done to their recruiting ability? What can be done to ensure that they can now recruit back up to strength as soon as possible?
Mr. Rifkind: I am grateful to my hon. Friend. Notwithstanding today?s announcement, I look forward to the publication of the Select Committee?s report so that we can study not only its general conclusions, but its detailed analysis of any specific points that it wishes to draw to our attention. I am sure that it will contain much that is worthy of serious consideration. I assure my hon. Friend that, as I said, we must remain flexible.
The whole point about ?Options for Change? is that it did not seek to implement its recommendations overnight. Quite deliberately and quite properly, there was to be a gradual implementation over several years, and that has given us the opportunity to monitor not only the implications for the armed forces, but the changing international scene that has led to my announcement.
Of course we all wish to take into account my hon. Friend's points about recruitment in the regions affected by today's announcement. We seek to ensure that it continues to be of a very high order, as it has traditionally been.
Mr. Menzies Campbell: The right hon. and learned Gentleman is entitled to the good will of the House following today's announcement. He will appreciate that the overstretch to which the Army has been subject has been paid for by serving soldiers themselves; today's announcement will come as some consolation to them.
The financial consequences for the armed forces as a whole, to which the Secretary of State referred in his statement, are rumoured to include the Royal Navy and the Royal Air Force. Is it not now clear that we require a full-scale defence review in which we ascertain what our obligations are, or are likely to be, and then determine what military and financial resources are necessary to meet those obligations properly?
Mr. Rifkind: I am grateful to the hon. and learned Gentleman for his initial comments. As for the wider issues, of course our armed forces will continue to have difficult problems to resolve as between resources and commitments—that is true around the world—but I believe that the fundamental assumption of ?Options for Change? remains unchallenged. It is no coincidence that, around the world, particularly in the western world, major reductions have been and continue to be implemented.
The United Kingdom still spends perhaps a higher proportion of its gross domestic product on defence
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commitments than most countries. I make no apology for that, and a number of reasons could be cited. However, at a time when France, the United States, Germany and other countries—quite apart from the countries of the old Warsaw pact—are making major reductions in their defence budgets, it is right and proper for us to do the same, thereby releasing resources for other requirements. It is important to get the balance right, and I believe that the adjustment in manpower that I have announced will help us to do so.
Several hon. Members rose—
Madam Speaker: Order. The House will be aware of the interest in the statement, which means that I cannot possibly call all the hon. Members who are rising. I appeal to hon. Members to ask the Secretary of State a single direct question, with no accompanying statement or preamble, so that he can reply as speedily as possible—which, with respect, I hope that he will do. There is a great deal of interest in the statement, and I want to call as many hon. Members as possible.
Mr. Tom King: I am grateful to my right hon. and learned Friend for putting his statement in context, and for confirming the undertaking that my right hon. Friend the Minister of State for the Armed Forces and I always gave at the time of the announcement of ?Options for Change?—that we would keep the matter under review and, should circumstances require it, ensure that our forces were adjusted to meet current needs.
I consider the changes announced by my right hon. and learned Friend to be sensible, in the light of the new circumstances. I also recognise that the real extra pressure has resulted not from peacekeeping, but from the additional commitment to Northern Ireland. May I ask my right hon. and learned Friend to continue his discussions with the Secretary of State for Northern Ireland to ensure that the resources applied to essential security work utilise our Army, the other armed forces, the Royal Ulster Constabulary and the Royal Irish Regiment in the most sensible and cost-effective way?
Mr. Rifkind: I pay tribute to the great care that my right hon. Friend devoted to such matters when he was Secretary of State for Defence. He is right: we have a huge commitment in Northern Ireland. It is in the interests of the people of Northern Ireland that we use our highly qualified, expensive military manpower in the best way possible to counter the terrorist threat, and to ensure that they work effectively in support of the civil power.
Mr. James Molyneaux: I support what the right hon. Member for Bridgwater (Mr. King)—a former Secretary of State for Northern Ireland—said about the priority to be attached to the defeat of terrorism. Will the Secretary of State for Defence give an assurance that Her Majesty's forces will be used primarily for the defence of Her Majesty's subjects and the protection of British interests, and not for the recolonisation of territories from which Britain was forced to withdraw prematurely by critics at home and abroad who are now standing on their heads?
Mr. Rifkind: I assure the right hon. Gentleman that the first obligation of Her Majesty's armed forces is the protection of United Kingdom territory and United

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Kingdom citizens. Only when we are satisfied that we have discharged that obligation fully can we consider other commitments in other parts of the world.
Sir Geoffrey Johnson Smith: I also welcome my right hon. and learned Friend's statement. He talked about the difficulties in making certain decisions. Will he reassure the House that he attaches the utmost importance to maintaining the flexibility of our rapid reaction forces stationed in Europe—a flexibility which is so important to his strategy—by ensuring that the rapid reaction forces are kept up to the mark by having the most up-to-date equipment to discharge their responsibilities?
Mr. Rifkind: I agree with my hon. Friend. The rapid reaction force is perhaps the single most important component of the new NATO force structure. It has a United Kingdom commander and, of course, it is important that it has the equipment to fulfil its responsibilities.
Mr. Bruce George: Your warning, Madam Speaker, and my elation at the saving of the Staffordshire and Cheshire Regiments inhibits me from gloating or saying, "I told you so," but I very much welcome the belated decision and thank the Secretary of State and his predecessor for being here to make it. However, does it not reflect badly on how decisions are made? First, there was the stupidity of making the decision in the first place, but the strength of our system is that stupidity can at least be rectified by the House, by a Select Committee and by public opinion. Will the Secretary of State try very hard to ensure that there is a little more far-sightedness in future, because the rationale that he gave for changing the decision was obvious to everyone 18 months ago, even before the decision was made?
Mr. Rifkind: The hon. Gentleman is being unfair and uncharitable. If he thinks back two years, in 40 years the United Nations had agreed a further 14 overseas commitments, but in the past two years it has agreed a further 14. I do not remember the hon. Gentleman predicting that that would happen.
Mr. Nicholas Winterton: Having just had a lunch engagement, quite by chance, with Major General Peter Martin and a senior representative of the Soldiers, Sailors and Airmen's Families Association, may I tell my right hon. and learned Friend that his announcement will be warmly welcomed by the services, not least the Staffordshire and Cheshire Regiments? Will he accept that his announcement will go a long way to putting right the overstretch which has been one of the major problems facing the Army, not only the serving personnel but their families, and which sometimes leads to great distress, separation and divorce? He has given me and the House great reassurance that he listens to informed and constructive advice from colleagues and others on important matters.
Mr. Rifkind: I am grateful to my hon. Friend. It is important to consider not only the political and geo-strategic issues but the human implications for individual soldiers who carry out considerable responsibilities on our behalf and sometimes at considerable risk to themselves. That is an obligation that we recognise.
Mr. John Home Robertson: I welcome the announcement, or tactical retreat, as far as it goes, especially as it will secure the future of the first regiment of foot of the British Army, the Royal Scots. However, as it has taken 51 weeks for the Ministry of Defence to grasp that point set out in the latest Select Committee's report from February last year, would it be fair to say that the Secretary of State could not give a damn about military overstretch in the army but that what concerned him was the prospect of political overstretch when the Select Committee publishes its next report on Tuesday?
Mr. Rifkind: That is a very silly remark. The hon. Gentleman will be well aware that I have said several times in the House that, if I ever became satisfied that there was unreasonable pressure on our service men and women, I would not hesitate to respond. That is what I have done.
Mr. Roger Knapman: May I congratulate my right hon. and learned Friend on his encouraging and realistic statement, but please will he reconsider the proposals to amalgamate the Glorious Gloucesters, who are shortly to celebrate their tercentenary of wonderful service from the Nile to Korea, and especially during the two world wars? If my right hon. and learned Friend is really to be a flexible friend, will he please save the Gloucesters?
Mr. Rifkind: I pay tribute to the remarkable traditions and achievements of the Gloucesters, and my hon. Friend is right to draw attention to them. It is always difficult and painful when the Army Board has to make such judgments. It has taken into account all the proper considerations and reached a unanimous conclusion. However, I appreciate that, inevitably, it cannot please everyone.
Mr. Andrew Miller: I congratulate the Secretary of State on at last agreeing with the view which I have expressed since I became a Member of the House and which was expressed by the Labour party throughout the election campaign and before it. Serving soldiers of the Cheshire Regiment and their families will welcome today's statement, particularly in relation to soldiers serving in Bosnia.
I also welcome the fact that the Secretary of State recognises that issues of family stress are involved in the current structure of the armed forces. Will he therefore continue to ensure that family stress issues are properly addressed? Will he help that process by answering my hon. Friend the Member for South Shields (Dr. Clark) and confirm that there will be no redundancies among the Cheshires serving in Bosnia?
Mr. Rifkind: I have no intention of making an announcement today about that matter. It is a very difficult, sensitive and important issue. I intend to be fair to the armed forces as a whole and not to comment on the implications for any one regiment. While I welcome the congratulations of the hon. Member for Ellesmere Port and Neston (Mr. Miller) in respect of the statement, I am bound to add that, given the apparent unanimity of Labour Members in favour of defence expenditure, it is a pity that they cannot persuade their party conference to agree with them.
Mr. William Cash: Does my right hon. and learned Friend accept that there will be great rejoicing in

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Staffordshire at the reprieve of the Staffordshire Regiment? Will he bear in mind that the Staffordshire Regiment fought a tremendous battle in the Gulf and that the Cheshires are fighting such a battle in Bosnia? Those of us in Staffordshire and Cheshire congratulate my right hon. and learned Friend on his flexibility, and we trust that the resilience that we have shown in the light of adverse circumstances in battling for the Staffordshires and Cheshires will be borne in mind on the other side of the fence.
Mr. Rifkind: I am grateful to my hon. Friend.
Mrs. Margaret Ewing: The statement is welcome as far as it goes, but does the Secretary of State understand that it is very difficult for those of us representing northern seats, in Scotland, to understand why the amalgamation of the Gordons and the Queen's Own Highlanders is to go ahead, particularly when a platoon of the Gordons is being sent to Bosnia? Will the right hon. and learned Gentleman explain very simply what criteria were applied when deciding which amalgamations would proceed and which would not?
Mr. Rifkind: I obviously pay the same tribute to the Gordons and to the Queen's Own Highlanders that I paid to other regiments a few moments ago. The criteria applied by the Army Board were the same criteria that were applied two years ago. The hon. Lady will recall that my predecessor declined—I believe correctly—to comment on the details of the criteria. These are very difficult matters, and I believe that it is appropriate to say simply that the Army Board took into account all the relevant criteria and the considerations that were before the board two years ago and came to what would inevitably be a difficult judgment.
Dr. Charles Goodson-Wickes: I heartily congratulate my right hon. and learned Friend on a statement which was full of thoroughly sound common sense. It goes some way to reassuring those of us who have been long-time critics of the mathematics of "Options for Change".
Will my right hon. and learned Friend assure the House that it makes sense in the next phase of the review of the levels of forces to look to 1997 when we are to withdraw from Hong Kong? Will he also keep the special problems of the Household Division under further and continuing review?
Mr. Rifkind: I thank my hon. Friend. Of course it is important to remain flexible over the next few years. As we have seen over the past few years, unforeseen circumstances inevitably arise—some of which will lead to a reduction in our need for manpower while others may lead to an increase. I appreciate that the Household Division has particular responsibilities because of its ceremonial duties. Clearly, that must be taken into account when determining its manpower requirements.
Mr. Barry Jones: Does the right hon. and learned Gentleman understand that his decision in respect of the Cheshires will be greatly welcomed in my constituency, where recruitment is quite strong? The decision taken by the right hon. and learned Gentleman's predecessor in respect of the Royal Welch Fusiliers was very well received. The Secretary of State might agree that the Royal Welch Fusiliers is one of the finest regiments in Britain.
Mr. Rifkind: I am grateful to the hon. Gentleman.
Mr. Winston Churchill: Is my right hon. and learned Friend aware that his statement is most warmly welcomed, especially his announced reprieve for the Cheshire Regiment, which is very much in people's minds at the moment, being in the front line in Bosnia? His statement will be greatly welcomed by my constituents in Greater Manchester and Cheshire. Furthermore, does he accept that, as he has said, it is but a modest step in the right direction? Significant overstretch will remain in the Army. Will he make a further step should, in his judgment, the situation require it?
Mr. Rifkind: I am grateful to my hon. Friend. Our armed forces will always be under pressure; it is the nature of armed forces and the nature of the work that they do. A judgment constantly has to be made as to what is the unacceptable level of pressure. I believe that the degree to which international events have required the United Kingdom to make a useful and important contribution justify the consideration that we have given to these matters and the decision that we announced today.
Several Hon. Members rose—
Madam Speaker: Order. We must move on.[Interruption.] Order. There will be other opportunities.

Points of Order
4 pm
Mr. Robin Cook: On a point of order, Madam Speaker. I draw your attention to page 119 of ?Erskine May?, which states that deliberately misleading the House may constitute contempt. At column 142 of yesterday's Hansard, the President of the Board of Trade claimed that there was not "one shred of evidence" that the minority of the banking consortium which had asked for delay in the rescue of DAF were British banks. It has today been confirmed, particularly by the Financial Times, that the minority were indeed three British banks—NatWest, Barclays and Lloyds.
I would not wish to believe that the President set out deliberately to mislead the House, and I am willing to accept that he was badly informed. However, the House has been misled about the contribution of British banks to the collapse of DAF. I therefore ask you, Madam Speaker, to confirm that there is precedent for a Minister of the Crown who discovers that he, perhaps in good faith, has misled the House to make a statement to correct the record.
Several Hon. Members rose—
Madam Speaker: Order. Let me deal with one point of order at a time.
As the hon. Member for Livingston (Mr. Cook) and the House will appreciate, that is not a point of order for the Chair. The hon. Gentleman has put a direct question to me. The answer is that, if a Minister wishes to make a further statement to the House, it is up to that Minister to seek an opportunity so to do.
Several Hon. Members rose—
Madam Speaker: Order. There can be no further points of order on that matter; I have dealt with it.
Mr. David Willetts: On a point of order, Madam Speaker. May I draw your attention to yesterday's Hansard and its account of the debate on rail privatisation? No fewer than three Opposition Members—the hon. Member for Kingston upon Hull, East (Mr. Prescott), the right hon. Member for Swansea, West (Mr. Williams) and the hon. Member for Cunninghame, North(Mr.Wilson)—criticised me by name because of a paper that I published on deregulation. They even alleged that I was an intellectual—and if that is not an unparliamentary term, it should be.
None of those three Opposition Members chose to inform me in advance that he intended to criticise me by name and therefore did not give me an opportunity to intervene to correct their caricatures of my argument. Will you explain, Madam Speaker, why the hon. Member for Kingston upon Hull, East, on that one occasion, lacked the courtesy and delicacy for which he is so well known?
Madam Speaker: Perhaps this is an opportunity for me to let the House know that, whenever an hon. Member intends to refer to another hon. Member in terms which call for a response, that hon. Member should of course be informed. But that does not mean that every passing reference or straightforward disagreement, of which there are quite a number in the House, on matters of policy call for notification. It has been left to the good sense of the
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House to maintain the conventional decencies which are the necessary foundation of our sometimes rather robust proceedings.
Mr. Harry Cohen: On a point of order, Madam Speaker. Let me remind you of the debate on sending the task force to the Falklands. A dissenting voice was not heard—it was not called by Mr. Speaker, even though there was dissent in the House, as has subsequently become known. During the statement by the Secretary of state for Defence today, you, Madam Speaker, did not call one dissenting voice. I rose as a dissenting voice, and some of my colleagues did as well. Surely the role of the Speaker is to ensure that all shades of opinion are heard in the House. I ask you, to reflect on that point.
Madam Speaker: Of course I will. I am not to know where the dissenting voices will come from, although I sometimes guess where they might come from. Some hon. Members approach me when they know a statement is to be made, and that is always appreciated. I cannot always accommodate them, and I do not give commitments, but I try my best, and in future I shall certainly remember what the hon. Gentleman has said to me.
Mr. Dennis Skinner: On a point of order, Madam Speaker. Earlier you heard from the hon. Member for Livingston (Mr. Cook) about the President of the Board of Trade. I shall not go over that again, because you have already dealt with it, but would it not be advisable, when Ministers come to make statements to the House, if the Chair could be absolutely sure that they would get the thing right? The President of the Board of Trade got it wrong over the pits, he was not even informed about the lowering of interest rates, and he got caught out on the wireless. Yesterday he came here again without being informed. It is wasting your time, Madam Speaker, and that of the House. Just check with him next time he opens his gills.
Madam Speaker: I spend a lot of my time listening to the hon. Member for Bolsover.
Mr. Alan Williams: May I thank you, Madam Speaker, for the guidance that you have just given the House in answer to the point raised by the hon. Member for Havant (Mr. Willetts)—and let me assure you that there are no circumstances in which I would ever refer to him as an intellectual. It honestly did not occur to me that, in a debate such as yesterday's on the future of railway services, an hon. Member who felt that his constituents should be denied the safety facilities that could be introduced would not be here to defend that argument.
Madam Speaker: Order. I am not having yesterday's debate prolonged.
Mr. Brian Wilson: Further to that point of order, Madam Speaker. May I point out that the hon. Member for Havant (Mr. Willetts) was in the Chamber last night? Will you confirm that it is not the responsibility of hon. Members to check on whether another hon. Member has left before the closing speeches? Will you further confirm—
Madam Speaker: Order. I think that I have got the point. All hon. Members who are interested in a debate and have taken part in it should come back to hear the closing speeches. It is a matter of courtesy.
Mr. Graham Riddick: On a point of order, Madam Speaker. Earlier, during Scottish questions, you reprimanded an hon. Gentleman for reading a newspaper. I am afraid that that was me, and I want to apologise for that. The reason was that I had spotted a headline which said, ?Council in disgrace?, and I wanted to know which council it was—
Madam Speaker: Order. I saw enough of the hon. Gentleman during Question Time. I think that he hoped that the television cameras were on him; I can assure him that they were not.
Mr. Ken Livingstone: On a point of order, Madam Speaker. Would you be prepared to consider adjourning the House so that the Leader of the House might propose a period in which we could debate the defence statement we have just heard so that the position of the Labour party could be put, as that was not mentioned in questions on the statement which announced a further 25 per cent. cut in the military budget?
Madam Speaker: Of course I would not consider adjourning the House, but I remind hon. Members, if they need reminding, that there are business questions on Thursday, when questions can be put to the Leader of the House.
Mr. Nicholas Brown: On a point of order, Madam Speaker. The Secretary of State has, I am sure inadvertently, misled the House, or at least partially misled the House, in the statement that he has just made and I wonder whether you can advise me on how the matter can best be rectified. He said that he intends to spend an extra £80 million from a fixed budget, but he has not told the House from where that money is to come. You will be aware that there is widespread concern, not least on Tyneside where the future of the shipbuilding programme is of vital importance—
Madam Speaker: Order. That was a very good try on the part of the hon. Gentleman, who I know was standing during the statement seeking to be called. He must not try to put that one over on me.
Mr. Barry Jones: Yesterday, in answer to question 7, the Secretary of State for Education made an inaccurate series of references to me and I thought that in subsequent supplementaries he used the words, "I apologise". However, nowhere in my scrutiny of Hansard can I see those words. I wonder whether it is your recollection that he used those words. May I also say, to help progress, that I am sure that the right hon. Gentleman's personal attack on me was made in good faith.
Madam Speaker: I know that the Minister concerned did apologise to the hon. Gentleman, and it has been brought to the attention of the Editor. Perhaps we might now make some progress with the day?s business.

STATUTORY INSTRUMENTS, &c.
Motion made, and Question put forthwith pursuant to Standing Order No. 01(3) (Standing Committees on Statutory Instruments, &c.),
STATUTORY INSTRUMENTS, &c.

  FISH POLLUTION
  That the Food Protection (Emergency Prohibitions) (Oil and Chemical Pollution of Fish) (No. 2) Order 1993 (S.I., 1993, No. 143) be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Patnick.]
  Question agreed to.

WELSH GRAND COMMITTEE
Motion made, and Question put forthwith, pursuant to Standing Order No. 98(5) (Matter relating exclusively to Wales),
WELSH GRAND COMMITTEE

  UNEMPLOYMENT (WALES)
  That the Matter of unemployment in Wales, being a Matter relating exclusively to Wales, be referred to the Welsh Grand Committee for its consideration.—[Mr. Patnick.]
  Question agreed to.
  Motion made, and Question put forthwith, pursuant to Standing Order No. 98(5) (Matter relating exclusively to Wales),

  STRUCTURE OF GOVERNMENT (WALES)
  That the Matter of the structure of government in Wales, being a Matter relating exclusively to Wales, be referred to the Welsh Grand Committee for its consideration.—[Mr. Patnick.]
  Question agreed to.

Widowed Father's Allowance
4.15 pm
Mrs. Judith Chaplin: I beg to move,
That leave be given to bring in a Bill to apply the National Insurance Fund to provide an allowance for widowed fathers with dependent children equal to that provided for widowed mothers with dependent children.
This is a Bill about equality, fairness and the importance of family life. I am sure, therefore, that it will commend itself to all hon. Members on both sides of the House.
When the national insurance system was introduced in 1948, following the Beveridge report of 1942, the majority of married women stayed in their homes. Indeed, the Beveridge report was drawn up on the explicit assumption that wives were financially dependent upon their husbands and should receive benefits based on their husbands' contribution records.
Many women, of course, still choose to stay in their home when their children are young, and I am sure that most hon. Members believe that they have a right to do so. If that is the case, if the husband dies and the principal source of income is lost, it is right that the widow should receive a replacement income based on her husband's contribution to the national insurance fund. Widows with children receive such an allowance—the widowed mother's allowance—£54.15 a week, with additions for each dependent child, based on the husband's contribution.
Fifty years on from the publication of the Beveridge report, we need to look again at whether the assumptions in that report are still appropriate and whether the benefits on which those assumptions are based give an equitable system. Circumstances have changed radically. In those days, fathers were not expected to look after their children and, if the mother died, would obtain paid help or help from family or friends, or the children might be put in care.
Nowadays, many fathers—indeed, I hope many fathers in the House—are perfectly capable of looking after their own children, and play a full role in bringing them up. In some cases, parents have chosen to reverse their roles, with the woman being the main breadwinner and the man staying at home to look after the children. If a wife dies, the man may well wish to stay at home to ensure that one parent, at least, can have a full-time role in bringing up the children.
In these circumstances, however, there is currently no help from the state through the national insurance fund. Despite the fact that it is the man's contribution to national insurance that qualifies his widow to receive widowed mother's allowance, that contribution by him does not secure benefit which would enable him to stay at home. Nor can he receive other contributory benefits, for he is disqualified for unemployment benefit because, by definition, he is not available for work. He may, of course, be eligible for income support if his savings fall below a certain level, but that does not compensate him for not receiving a contributory benefit to which he should be entitled through his contribution record.
I therefore believe that a widowed father's benefit should be introduced to enable widowers to stay at home to look after their young children, if that is what they choose to do.
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In recent years there has been discussion of the need for the equalisation of survivor's benefit. In 1989, the House of Lords European Communities Select Committee recommended that men and women should be provided with survivor's benefit on the same terms, but that a substantial period should be allowed to introduce this. The Committee feared that compulsory equality immediately might deprive widows of benefits they still need because of their different position in society.
I do not believe that there should be total equality of survivor's benefit. A widow can receive a widow's pension if she is aged 45 or more when her husband dies. This is in recognition of the difficulty that she may find in re-establishing herself in the labour market if throughout her married life she has not worked outside the home. Such a benefit would not be necessary for a man, who would be more likely to have been in full-time work previously, and would be able to return to work when his children no longer needed his full-time care.
Nor does it seem necessary to have the same conditions for the widowed father's allowance as currently apply to the widowed mother's allowance. A widowed mother's allowance continues to be paid based on her late husband's contributions, regardless of her own earnings if she returns to work. It is taxable, but it is not withdrawn while she has dependent children. Since the main feature of our social security system is that it is a social insurance against the interruption and destruction of earning power, it is perhaps odd that a widow can both earn and receive this benefit. It is because it is based on her husband's contributions, and perhaps we should look again at the circumstances there.
Certainly any widowed father's allowance should be designated to compensate for loss of earnings while the father is not employed outside the home, and should cease when he returns to full-time work. That would substantially reduce the cost of such an allowance, recently estimated at some £90 million a year. If it was given only to those fathers who chose to stay at home on the death of their wives to look after their children, as is the case with one of my constituents, and ceased when they returned to full-time work, the cost would be relatively small.
Its value to the family, however, would be immense. It would ensure that the best care was available for children who had already suffered a tragic loss and who would benefit greatly from the full-time care of their fathers. The number who choose to do this may not be large, but, in all fairness, they should receive a benefit equal to that of widows in similar circumstances.
Question put and agreed to.
Bill ordered to be brought in by Mrs. Judith Chaplin, Mrs. Angela Browning, Mrs. Edwina Currie, Mrs. Cheryl Gillan, Mrs. Angela Knight, Mrs. Jacqui Lait, Lady Olga Maitland, Mrs. Elizabeth Peacock and Mrs. Marion Roe.

Widowed Father's Allowance
  WIDOWED FATHER'S ALLOWANCE
  Mrs. Judith Chaplin accordingly presented a Bill to apply the National Insurance Fund to provide an allowance for widowed fathers with dependent children equal to that provided for widowed mothers with dependent children: And the same was read the First time; and ordered to be read a Second time upon Friday 19 February, and to be printed. [Bill 126.]

Local Government Finance (England)
4.22 pm
The Secretary of State for the Environment (Mr. Michael Howard): I beg to move,
That the Local Government Finance Report (England) 1993–94 (House of Commons Paper No. 422), which was laid before this House on 28th January, be approved.
Madam Speaker: I understand that with this it will be convenient to discuss at the same time the following motions:
That the Special Grant Report (No. 5) (House of Commons Paper No. 423), which was laid before this House on 28th January, be approved.
That the Limitation of Council Tax and Precepts (Relevant Notional Amounts) Report (England) 1993–94 (House of Commons Paper No. 424), which was laid before this House on 28th January, be approved.
That the Limitation of Council Tax and Precepts (Relevant Notional Amounts) (Amendment) Report (England) 1993–94 (House of Commons Paper No. 443), which was laid before this House on 1st February, be approved.
Mr. Howard: The four reports, taken together, embody the local government finance settlement for the coming year. They represent the culmination of a long process which began a full 12 months ago. During that time, the Government have held extensive discussions with the local authorities and their associations about the cost of local government services. We have examined at length the methodology and formulae for standard spending assessments. We have also developed a method for calculating each authority's tax base for the new council tax.
Last November, in the light of those discussions, I announced my proposals for the coming year. I made proposals for the total provision for spending and grant, and the methodology for SSAs. I also made proposals for the relevant notional amounts which will be used as the basis for determining whether the increases in authorities' budgets should be capped.
Since then, we have gone through a further formal consultation process with local authorities. We have received 400 letters about the settlement and a further 250 about notional amounts. We have also held 90 meetings with local authorities and hon. Members. We have carefully considered everything that we have heard, and my decisions—in the light of all of this—are set out in these reports. My aim has been to satisfy myself that the settlement which I have proposed is appropriate and realistic, and that the legitimate concerns of local government are taken into account.
We are planning for local government to spend a total of £412 billion next year. That is £1.2 billion more—an increase of 3.1 per cent.—over the provision that we made for the current year, after adjusting for changes in local authorities' functions. We are providing £33.5 billion—an increase of £1.2 billion, which is 3.7 per cent. on the same comparative basis—in Government support. Against a background of inflation at 2.6 per cent. and falling, and with a public sector pay policy limiting increases to a range between zero and 1.5 per cent., that is an eminently realistic settlement.
I suspect that we shall hear ritual protests from Opposition Members that the settlement is inadequate. When they make those protests, I hope that they will tell
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us how they would finance the additional amounts which they doubtless say they would make available. Perhaps they would increase income tax. Perhaps it will be another penny on the standard rate to deliver an extra £1.5 billion of spending. Perhaps they would have higher council taxes. Every extra £1 billion of spending would mean another £60 on the band D council tax. I invite the hon. Member for Barnsley, Central (Mr. Illsley) to give us his prescription. Which of the two prescriptions does he recommend?
Mr. Eric Illsley: Does the Secretary of State accept that, within the funding available, the difference between the authorities should be reduced? Why does my authority have 70 per cent. less than Manchester, for example, to provide the same level of service? Surely, within the total amount of funding available, there can be a more equitable distribution.
Mr. Howard: The answer to the hon. Gentleman's question is to be found in the reports which I have referred to and which are available in the Library and the Vote Office. They set out in some detail the methodology which leads to the results which form the basis of the report. If the hon. Gentleman restrains himself for a moment, he will hear even more about how we propose to deal with those matters not only in 1993 but in future.
I give the hon. Gentleman credit at least for saying that he was protesting not about the overall level of the settlement but about the distribution. I hope that no one will participate in any protest against the adequacy of the settlement as a whole without telling us in detail how they would raise the extra money they want.
I have one prescription to offer. All local authorities need to ensure that they make the best possible use of their money. Over the past week or two, we have become all too well aware of just how badly several local authorities are short changing the people whom they were elected to serve. Some of the stories of incompetence and mismanagement are truly dreadful, and time and time again Labour councils are seen to be responsible.
Eighteen of the top 20 community charges this year were set by Labour councils. Seventeen of the 20 councils with the worst community charge collection records are Labour councils. That is little wonder when they have councillors such as the three in Lambeth who owe £3,000 themselves, despite collecting £35,000 in allowances for the year in question.
Examples are legion. For example, Sheffield proposes to spend £54,000 on offices for hon. Members opposite, when it has just lost more than £10 million on the world student games.
Mr. Clive Betts rose—
Mr. Howard: The hon. Gentleman rises to the bait.
Mr. Betts: Has the Secretary of State read in the Local Government Chronicle of the survey carried out on behalf of the Local Government Management Board, which showed that chief executives of all local authorities throughout the country have named Sheffield as one of the 16 best-managed local authorities in the country? Sheffield has shown that it is an efficient local authority. Other authorities such as Birmingham, Bradford and Islington are included, but not Wandsworth or Westminster. Perhaps the Secretary of State will take account of those findings in what he says about Sheffield in the future.
Mr. Howard: I am surprised that the hon. Gentleman, who led Sheffield council when it lost the £10 million on the world student games, has the temerity to rise on such matters. I suppose that the best way to describe the study to which he referred is to say that it is little more than a "straw survey". It is totally unrepresentative.
Mr. Illsley: I apologise for rising on a point of order so early in the debate, Madam Deputy Speaker, but the Secretary of State could have misled the House by saying that Sheffield made available finances for "hon. Members opposite". If he checks, I think that he will find that Sheffield makes available finance for hon. Members from both sides of the House.
Madam Deputy Speaker (Dame Janet Fookes): Whether or not that is correct, it is not a point of order for the Chair.
Mr. Howard: Not only was it not a point of order—it was not accurate. We have canvassed that matter at length, and the hon. Gentleman is a wee bit behind the game.
I was about to mention Monklands, which is represented in this House by the right hon. and learned Member for Monklands, East (Mr. Smith), the Leader of the Opposition, who has maintained a studious silence over the serious allegations about Monklands council contained in the Sunday Times recently.
Mr. Ian McCartney: On a point of order, Madam Deputy Speaker. The Secretary of State is making a statement about the rate support grant settlement for England. He should stick to that and give Opposition Members an opportunity to question him about it.
Madam Deputy Speaker: The Chair normally allows a certain latitude, but that has been considerably extended. Perhaps the Secretary of State would return to the main subject of debate.
Mr. Howard: Of course—that is exactly what I shall do. It is understandable that Opposition Members should be so touchy about such matters; we quite understand.
I do not intend to predict levels of council tax, but I note in passing that others have not been so coy. The Local Government Chronicle conducted an independent survey of local authorities at the start of the year, which predicted an average tax payable of £505—far less than some of the scare stories bandied about by Opposition Members. What is more interesting, it concluded:
"Labour councils cost you more."
It found that an average Labour band D council tax was nearly 20 per cent. higher than the comparative figure for Conservative councils.
Surely it is significant that, on that evidence, Labour-controlled councils will charge on average nearly £100 more council tax than Conservative-controlled councils, and that Liberal Democrat-controlled authorities will charge nearly £50 more. Time and time again, we find that Labour councils cost more and give little but waste and inefficiency in return.
Mr. Betts rose—
Mr. Graham Riddick: Will my right hon. Friend give way?
Mr. Howard: As the hon. Member for Sheffield, Attercliffe (Mr. Betts) has already made one intervention, I give way to my hon. Friend.
Mr. Riddick: Is it not the case that one reason why council tax bills will be higher in Labour authorities this year is that last year many Labour authorities grossly overspent, in the hope and expectation that an incoming Labour Government would bail them out? Is it not the case that the chickens of Labour's incompetence and profligacy are coming home to roost?
Mr. Howard: My hon. Friend is entirely right. That was the attitude taken by many councils controlled by the Labour party. The sadness is that those people whom they were elected to serve are having to pay the cost of their profligacy because of those expectations.
The settlement is designed to ensure that the burden on local tax payers can be held down to fair and reasonable levels. Overall there should be no need for councils to raise any more in real terms in the coming year from their local tax payers than they have budgeted to raise this year, but clearly it will help if one lives in a Conservative-controlled authority.
Of course, the introduction of the council tax will mean some differences in the burden on individual households. I understand the concern which many hon. Members have expressed on that score. We have therefore provided for a scheme of transitional relief to give protection to any household which would otherwise face an excessive increase in its local tax bill. I estimate that the scheme will cost about £340 million in the coming year.
Our grant scheme is designed to ensure that different authorities, however different their circumstances, are able to deliver the same standard of service for broadly the same level of council tax. The function of standard spending assessments is to measure the differences between authorities, so that those differences can be properly reflected in the grant that they receive.
With that system, it is inevitable that many authorities will feel that their particular circumstances are not being properly reflected. In other words, they want a larger share of the cake, and they are not short of good arguments why they deserve more. But there are more than 400 local authorities in England—excluding parishes—from Cornwall to Northumberland, taking in London, the metropolitan boroughs, the districts, the joint police and fire authorities, each with their own individual characteristics and their own, often very divergent, views. When I came to make my proposals for standard spending assessments, last November, I knew in advance that I could not satisfy everyone.
But the world does not stand still. In the coming year, there will be changes in authorities? functions and a change in the method of local taxation. New sources of data, such as the 1991 census, have become available, and other sources of data have also changed. My proposals for the coming year will ensure that all these changes are properly reflected in standing spending assessments.
Sir Anthony Grant: I am very glad to hear that my right hon. and learned Friend will take a flexible view in the forthcoming year. While I support entirely his tight control of local government expenditure, I have to say that the area cost adjustment factor is very unfair. This militates very much against certain counties, to the benefit of others. It is quite ridiculous that Cambridgeshire does not benefit, whereas Bedfordshire, Oxfordshire and Hertfordshire do. This creates great ill feeling. I do not believe that it can be

341
rectified by the Association of County Councils, as all councils have vested interests; the Government themselves will have to do something. Perhaps my right hon. and learned Friend will look at this grievance in the forthcoming year.
Mr. Howard: I understand very well the concern that my hon. Friend expresses. Indeed, it has been expressed to me very often by several of my hon. Friends. I understand the strength of feeling on this issue, and I can give my hon. Friend the undertaking for which he has asked. We shall certainly look very carefully indeed at this matter.
Mr. Anthony Coombs: It appears that, over the past three years, the amount of grant allocated to the area cost adjustment has increased from £837 million to £1,314 million, despite the fact that the differential in cost increases—for instance, between Greater London, where the area cost adjustment has meant the standard spending assessment's having gone up most, and the west midlands, where the increase has been far smaller—has lessened continuously. The spending authority in Hereford and Worcester is very frugal. Indeed, its spending used to be under the standard spending assessment. It is wrong that its assessment should increase by only 2.5 per cent., whereas the figure for East Sussex is 7 per cent., and the one for Hampshire 5 per cent.
Mr. Howard: The point that my hon. Friend has made reinforces one that was made a few moments ago. I shall certainly look at those factors, amongst others, when I come to consider the way in which the standard spending assessments for next year are to be constructed.
Mr. John Wilkinson: I do not want to labour this point, but I have to say that there are other data of particular local significance, which my hon. Friends the Members for Uxbridge (Mr. Shersby) for Hayes and Harlington (Mr. Dicks) and I, as well as local authority representatives, have sought to bring to the Secretary of State's attention. I refer to the data concerning the inflow of refugee children to Heathrow airport, which is in our borough. It has been costing the borough about £1 million a year to look after these children, and the cost will probably be greater in the future. What help can my right hon. and learned Friend give us towards carrying this burden?
Mr. Howard: If my hon. Friend restrains himself for a few minutes, he will find that I have some comfort for him.
Mr. Giles Radice: Will the right hon. and learned Gentleman give way?
Mr. Howard: The hon. Gentleman has just come into the House, so he will have to wait a while.
Many councils have come to me and my colleagues with arguments for further changes. I have considered everything they have said—often, I am bound to say, in direct opposition to one another—but, on balance, I have not been convinced that I should make any further changes for the coming year. Accordingly, the SSA methodology as set out in the local government finance report is unchanged from the proposals I made for consultation.
However, as a result of more recent data becoming available, there have been some changes since the start of consultation on the SSAs for individual authorities. I have placed copies of a set of tables, listing the SSAs far all
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authorities, in the Library and the Vote Office, alongside the settlement reports, and my Department has written to councils individually with full details of all the calculations in each case.
I know—it has been made clear by some of today's interventions—that many hon. Members still regard the standard spending assessments with the deepest suspicion. Of course the formula is complicated—local government is complicated. It performs a wide range of functions against widely differing backgrounds and circumstances. We have to have a system which reflects those differences in the distribution of grant. I hope that all hon. Members will at least agree that some sort of formula-based distribution is inevitable. However, I know that many hon. Members feel keenly on behalf of their local authorities. I know that they will be keenly disappointed that I have decided not to make the changes which they have pressed me to make.
I am acutely aware of their concerns. Over the next year, my Department will be working on the findings of the 1991 census and how best to incorporate them into the SSA formula. I intend to take that opportunity to look again at some of the more fundamental issues that have been raised with us this year, including the area cost adjustment, which was mentioned by some of my hon. Friends. Hon. Members and local authorities who have not been able to persuade me to their point of view this year will, I am sure, want to take advantage of the opportunity which this will give them to exercise their powers of persuasion again next year.
Mr. Robert Ainsworth: Does not the Secretary of State realise that, despite what he has said, the fact that he plans to revisit the formulas next year fills local authorities up and down the land with trepidation? The Government introduced the area cost adjustment in order to doctor the figures. What scheme will the Secretary of State come up with next to doctor the figures again? Does he realise that he has brought the entire system and Government into total disrepute?
Mr. Howard: The hon. Gentleman cannot have it both ways. If he does not want me to revisit those matters next year, it can only be because he is entirely satisfied with the money that Coventry has received this year. If he is prepared to say how thankful he is for the amount of money that we have been able to make available to Coventry this year, I shall be happy to give way to him again. If he is complaining about the amount of money that Coventry has received this year, I should have thought that he would be delighted that I intend to revisit those matters next year.
Mr. Stephen Byers: Will the Secretary of State confirm that, in respect of the SSA and the relative poverty and deprivation of local authority districts, the Government still intend to use the all-ages social index? That index shows Cheltenham as poorer than Rotherham, Tunbridge Wells as poorer than Doncaster, Gloucester as poorer than North Tyneside, and Basildon as poorer than Bolsover. How can there be any confidence in a system of local government finance that is so fundamentally flawed
Mr. Howard: I shall certainly not go into detail on the sort of settlement that we may see next year. The hon. Gentleman knows, from the reports, the basis on which we have reached our conclusions this year.

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I have sought this year to be as helpful as I can to local authorities on another matter. As in previous years, councils may be designated for capping if they increase their budgets by more than certain amounts and in doing so set budgets which exceed their SSAs. However, in a year when local authority functions are changing, and when a new system of local taxation is being introduced, it is not appropriate to use councils' actual budgets for 1992–93 as the starting-point for capping. Those budgets need to be adjusted so that the changes in functions, and in the local government finance system, can be allowed for in the capping calculations. The relevant notional amounts, which are set out in the report, are in effect adjusted budgets for individual councils.
These notional amounts relate directly to the real budgets set by authorities for the current year. Therefore, it is important to ensure that the authorities are fully involved in the process. When I announced my proposals for notional amounts last November, I also made it clear that we would listen carefully to the views of individual authorities on the figures that we had calculated for them, and on the methodology in general.
We have had many representations on both counts. I could not say that we have done exactly what every council wanted us to do. In particular, we have had to remain true to our original purpose, which was to adjust the budgets made by authorities when they set their community charges for the current year, and not to reflect changes that they may have made in the course of the year. But, as a result of our consultations, we have made changes both in the methodology and in the calculation of notional amounts for many individual councils.
As a result, the aggregate of notional amounts is now £250 million higher than we originally proposed, and for many councils the effect will be directly to permit a higher budget in 1993–94 without the fear of capping. I know that councils have welcomed our willingness to listen to them, and I hope that the House will today endorse that welcome.
Notional amounts are a demonstration of my commitment to use my capping powers in a way which is fair both to local authorities and to their local taxpayers. It was for that reason that, in my statement to the House last November, I set out the capping criteria that I had in mind to apply for the coming year.
I reaffirm that those are the criteria which I intend to apply. I shall not detain the House by reading them out in full, but I shall remind hon. Members of the broad principles: first, that budget increases—increases over the notional amount—may be subject to capping if the resulting budget exceeds the authority's standard spending assessment; secondly, that a budget is excessive in absolute terms if it is more than 12.5 per cent. above the SSA; and thirdly, that, notwithstanding the 12.5 per cent. criterion, an authority may not be designated if it sets a budget which represents a cash freeze or, in certain circumstances, a minimum cash reduction on the notional amount.
The significance of my announcement last November was that it gave authorities advance warning of what they had to do in order to avoid being designated for capping. I am pleased to say that the great majority of those who have written to us, or come to meet us, during the
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consultation process have accepted that discipline. I hope that, when they come to set their budgets in the next few weeks, they carry through their intention.
I do not want there to be any doubts on the issue. We want to be fair to councils, so we have listened to their views on notional amounts, but we must also hold faith with the local taxpayers, for whom capping is an important protection. I hope that all councils will act responsibly, and that I will not need to use my capping powers, but I will not hesitate to do so if necessary, in order to restrain excessive spending and hold down council tax levels.
The third of the reports for which I am today seeking the approval of the House is the special grant report. In particular, I wish to draw the attention of the House to two of the items contained in the report: the special grants for population loss, and in respect of displaced persons from the former republic of Yugoslavia.
A few minutes ago, I explained that SSAs this year need to reflect the availability of new data. In particular, we are now able to use population data from the 1991 census. That is a change from previous years, for which we have used 1981 census data, updated, each year by the Office of Population Censuses and Surveys. We are bound to use the more recent data, but for a few authorities, that means a significantly lower SSA—which means less grant—than would have been the case if we had continued on the old basis.
It would be unreasonable to expect them to accommodate this reduction in a single year. I have therefore decided that, for those authorities whose SSA is more than 5 per cent. lower than it would have been if the old basis of estimating had continued, we should provide a special grant to compensate them in full for the excess over 5 per cent. Sixteen authorities will benefit, and a total of £3.5 million will be paid out under that scheme.
The special grant in respect of displaced persons from the former republic of Yugoslavia was announced by my hon. Friend the Minister for Housing and Planning on 16 November. The intention is to compensate authorities which face sudden unexpected additional expenditure as a result of the arrival in their area of the displaced persons. We have modelled the scheme on the more familiar Bellwin scheme, which applies to emergency expenditure following severe storms.
The principles are the same. Authorities can reasonably be expected to hold contingency reserves against minor emergencies, but in exceptional circumstances those reserves will simply not be enough to meet the case. Therefore, under the scheme, expenditure above a threshold qualifies for grant at a high rate—85 per cent. My Department invited authorities to submit estimates of expenditure on displaced persons from the former Yugoslavia. Three authorities have qualified, and will receive a total of £80,000 under the scheme.
Mr. Peter Shore: Personally, I welcome the principle and practice of allocating a special grant to those authorities with a substantial number of displaced persons—as, I am sure, do most hon. Members. We certainly have people from the former Yugoslavia very much in mind. However, has the Secretary of State thought about the case of displaced Somalis, a substantial number of whom have come to the United Kingdom during the past 12 months and more—and people from other communities? Is he prepared to

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consider the extension of the principle to other displaced communities that impose substantial costs, particularly on London?
Mr. Howard: I think that the problems that arose as a result of the entry into this country of displaced persons from the former republic of Yugoslavia related to this year's settlement; but I can certainly give the right hon. Gentleman the assurance for which I think he was asking—that, in the context of our thorough examination next year, in the light of the new information available from the census, we will consider the point that he has raised, among many others.
Mr. Wilkinson: The displaced persons in London are certainly not Yugoslavs: they come from countries such as Eritrea, Somalia, Zaire and other African states. Hillingdon, which contains Heathrow, has had to deal with the problem of displaced African children. Will my right hon. and learned Friend ensure that the Bellwin formula applies to them?
Mr. Howard: My hon. Friend need wait only a matter of seconds before he has the answer to his question.
The scheme in the special grant report to which I have referred relates to expenditure incurred in the current year—1992–93. I am pleased to be able to announce today that we intend to operate a similar scheme for 1993–94. My Department will shortly be writing to local authorities, and I shall be seeking the House's approval for next year's scheme in due course.
I am pleased pleased to announce today—this will be of particular interest to my hon. Friends the Members for Ruislip-Northwood (Mr. Wilkinson), for Uxbridge (Mr. Shersby), for Hayes and Harlington (Mr. Dicks) and other hon. Members—a related scheme to apply for the coming year in respect of another small group who place a disproportionate burden of costs on a small number of authorities. That may also be of interest to the right hon. Member for Bethnal Green and Stepney (Mr. Shore). I refer to the unaccompanied refugee children who arrive from time to time at the major ports of entry into this country and who become an immediate burden, usually on the authority in whose area they arrive.
Over time, the presence of these children in an area is reflected in the SSAs, but those assessments rely on data collected nationally and are therefore subject to inevitable time lags, whereas the costs imposed by these children are at their highest immediately after their arrival.
We therefore think it right to introduce a special grant scheme, also along the lines of the Bellwin scheme, to assist authorities in these circumstances. My Department will be writing to authorities shortly to obtain the information that we need as the basis for the scheme, and I shall bring a special grant report to the House in due course.
These special grants are one more token of the Government's commitment to ensuring that local government is properly—not extravagantly or disproportionately—financed for the coming year. We have provided for overall levels of spending and grant which reflect the constraints on public spending overall, but which should be sufficient to ensure that efficient authorities can continue to provide a good standard of service for their local people. We have gone to great lengths to ensure that the distribution of revenue support grant will be fair. We have listened hard to authorities' views on their notional amounts, and have taken them into
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account whenever we could. We have also borne in mind the impact of the overall settlement on council tax payers. I commend the settlement to the House.
4.52 pm
Mr. Jack Straw: The speech that we have just heard was remarkable for one extraordinary omission: at no stage during the course of a half-hour speech did the Secretary of State refer to the serious loss of public services which will occur across the country or to the thousands of jobs that will unquestionably be lost as a result of this settlement—a matter to which I shall return in a moment.
Central Government in Britain now have more complete control over local government than at any time this century—more than is exercised in almost any other western parliamentary democracy. As other nations seek to draw strength from the diversity of their local communities and go down the path of greater devolution of power, in Britain since 1979 the process has inexorably worked the other way. In thirteen and a half years, 152 Acts of Parliament affecting local government have been introduced by the Conservative Administration. Not only has power over levels of spending been transferred to Whitehall; so, too, have many functions. We are moving, by means of this process, from the elected to the unelected state.
The Conservative party, once committed to cutting down on non-elected quangos, has made them stronger than ever before. Elected councillors have been removed from any role in health authorities, water authorities, further and higher education, most of training and probably soon the police. Instead, we have boards of cronies, appointed by Ministers and usually unaccountable either to Parliament or to local people. A recent survey by the Financial Times showed that
"unelected members of quango boards"
are now responsible for a fifth of all public expenditure—at £42,000 million, more than the total spending of local government, and a figure which has increased three times since 1979.
Ministers themselves know that this process has led to a considerable loss of local democracy. That is why, at each stage of the process, they have tried to play down the full impact of the powers that they have sought. Thus, the Secretary of State when he was a Minister of State had this to say on the capping powers taken in the 1988 Act:
"We have made it clear on more than one occasion that we see the capping power introduced in the clause as a reserve measure".
He added that there was a need for a reserve power, rarely if ever to be used, to protect charge payers in an area against extreme cases of extravagant or irresponsible local authorities, but went on, for good measure:
"The people of an area certainly will be able to vote for a relatively high-spending authority if they so choose."—[Official Report, 25 April 1988; Vol. 132, c. 51.]
Five years on, the capping regime now affects not just a handful of allegedly reckless, extravagant or irresponsible local councils but virtually every council in the land—Conservative, Labour, Liberal Democrat or Independent—the vast majority of whom are responsible, diligent and careful.
Mr. Patrick Nicholls: In the light of the hon. Gentleman's concern, will he, as a resident of Lambeth, take this opportunity to condemn Labour

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councillors who are content to take their attendance allowances but do not get around to paying their community charge?
Mr. Straw: Yes, I condemn any councillor who does not pay the community charge, as I always have done and always will do.
Mr. Roy Thomason: Does the hon. Gentleman agree that the greatest benefit that a local authority can give its constituents is value for money? That is the best possible service. Will he therefore condemn local authorities under Labour control which appear to regard providing value for money as bottom of their list of priorities?
Mr. Straw: The desire for value for money is shared across the political spectrum. As they learned to their cost last Wednesday, Conservative Members should stop trying to remove the mote from other people's eyes and examine the beam in their own. When it comes to inefficiency, lack of services and many other less acceptable practices, the Conservative party in local government—and, above all, in national government—knows no peer.
The Secretary of State quite reasonably asked me what the Opposition would do in the circumstances. I shall set out our case against the position that he has outlined. The consequence of the universal capping regime is a loss of local democracy and discretion, and this year the loss of key services to the public and of the jobs which underpin those services. I shall deal with the effects of the cuts in a moment, but I wish first to ask whether the loss of local democracy and discretion and the high degree of central control are justified in terms of the good management of public spending and the overall conduct of economic policy. The contention that they are so justified, after all, lies at the heart of the Government's case.
What central Government provide to local authorities by way of revenue support plainly has to be cash limited, and should be distributed fairly under a formula which takes proper account of local needs and resources. That is not at issue here. In our view, however, the local tax base should be wider and should include the non-domestic rate, as it did before 1990. Secondly, what each council raises from its local tax base should be a matter between it and its electors, but with greatly improved mechanisms, such as those that we have proposed, for annual elections and for holding councils properly to account before their final budgetary decisions are made.
Three arguments are used against this proposition. The first is one of definition. It is said that what local government spends from its own resources is part of overall public spending. Central Government have a responsibility to control all public spending. Ergo—so the argument goes—central Government must control local authorities? total spending. That is a circular, tautologous argument in which the definition determines the policy. I wish to consider the underlying policy. Is there any need, even in narrow national accounting terms, for local authority self-financed spending to be part of total public spending for control purposes? The answer—not just from the Opposition but from none other than the Prime Minister when he was Chief Secretary to the Treasury just a few years ago—is no.
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In 1988, as part of a reform of public spending, the Prime Minister, then Chief Secretary, published a White Paper quaintly titled, "A New Public Expenditure Planning Total". In that, as a matter of policy, he said that self-financed local authority expenditure was to be excluded from the planning total. The arguments in the White Paper were extremely cogent. The document said that mixing central Government spending with local government self-financed expenditure
?blurs the status of the various aggregates … and leads to insufficient attention being paid to central Government grants.?
Paragraph 9 said that the purpose of this and other changes proposed in the White Paper was to increase local responsibility and accountability.
Paragraph 20 of the White Paper dealt with the issue of what might happen if central Government felt that overall local government expenditure was growing too rapidly. It stated:
?the Government would need to consider whether to take action to moderate the growth of spending within the planning total, whether its own spending or grants to local authorities?.
There was no suggestion in the scheme set out in the White Paper that capping would have any role to play.
The White Paper also gave the lie to the second and more substantial argument in favour of control—that a failure by central Government to exercise control could lead to excessively high local taxes which in turn, to echo the Secretary of State a few years ago, would drive away businesses and jobs through higher rates. That was a familiar argument in the last decade and it led to the fiasco of the poll tax and to the Conservative party almost falling on its sword. There was never any evidence to support it, nor is there such evidence from any of our competitors.
Much of the disparity in the level of rates and council tax has reflected not differential levels of spending, but bias and distortion within the grants system which magnify those differences out of all proportion. Even where higher tax rates accurately reflect higher spending, it does not follow that the higher spending and higher tax rates will have a detrimental effect on the local private economy.
Mr. Howard: The hon. Gentleman is engaging in a completely misinformed tirade against capping. Why was it his party's policy at the last general election that the expenditure voted by the assembly which Labour proposed for Scotland should be capped while spending for local government would not?
Mr. Straw: The answeer is simple. It relates to judgments and the degree of discretion—[Interruption.] We are arguing about the discretion that particular institutions should be allowed. There is no point in the Secretary of State trying to avoid the issue. His Prime Minister put his name to the White Paper from which I have quoted. It objected to any capping and said not only that the amounts should not be collected, but that local authorities? self-financed expenditure should not be subject to central control.
The evidence against the Secretary of State?s case includes a major study conducted by the Department of the Environment in the mid-1980s. The Department objected to our claim that there was no necessary connection between higher rates and jobs, as Conservatives claimed, and spent £50,000 on a major study by the university of Cambridge. It then tried to suppress the study's conclusion that there was no

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connection between the level of rates and job losses and that in manufacturing there was some evidence the other way.
Mr. Riddick: The hon. Gentleman spoke of value for money, but I recognise that he may not want to answer questions about that. Did he see the article in Saturday's issue of The Times, which reported that Hackney council had rejected a bid from Costain plc which would have saved the council £2 million over three years in favour of a bid from its own direct labour organisation? Can the hon. Gentleman possibly justify that?
Mr. Straw: I did not see that issue of The Times or that report. Has the hon. Gentleman seen the well-publicised report about Conservative-controlled Brent, which shows that the district auditor has roundly criticised Brent council for awarding, without proper explanation, a tender for refuse collection which was £1 million above the lowest tender?
Mr. Riddick: Will the hon. Gentleman give way?
Mr. Straw: No.
A large part of local council spending, either directly or indirectly, underpins the local private economy. If one is reduced, the other is reduced—especially at times such as this when there is enormous spare capacity in the economy and when no "crowding-out" arguments can possibly be made.
Contrary to what the Secretary of State thinks, I asked the present Chief Secretary to the Treasury what judgments the Chancellor of the Exchequer made about the effects on employment, prices and the balance of payments of an additional £2 billion of local authority revenue expenditure financed by local taxation or, for example, by additional revenue support grant. If the Treasury's view is the same as that of the Secretary of State—that any increase in spending is bound to undermine the local economy—the Chief Secretary would reflect that view.
However, from the Chief Secretary on 11 of January came a piece of classic gobbledygook. The Treasury has no view on this. He stated:
?The effects on levels of employment, prices and on the balance of payments of the measures mentioned would depend on a number of assumptions about economic behaviour at both national and local level as well as the precise effect of these measures.?—[Official Report, 11 January 1993; Vol. 216, c. 547.]
There was no suggestion whatever that higher spending by local authorities would somehow undermine the local private economy. The Secretary of State and the Treasury know that, in general, higher spending by local authorities, particularly during a recession, supports the private economy and does not undermine it.
Mr. Nigel Spearing: My hon. Friend talks about expenditure by local authorities. On 22 November in replying to an Adjournment debate, the Minister did not deny my charge that a £10 million fraud was perpetrated on the London borough of Newham due to the statutory arrangements for SSAs. The borough has to pay about £30 million in loan charges and the SSA is about £18 million, leaving a deficit of more than £10 million. As education is roughly half the cost of local authority services, we are having to cut the education budget by about £5 million below the standard level of service SSA that even this mingy Government think
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necessary. That £5 million is just money, because the greater part of the capital expenditure was given the okay by the Government, so the £5 million cut is to the detriment of the children and the people of Newham.
Mr. Straw: My hon. Friend makes a cogent case. His example in Newham is one more example of the way in which the SSA system has been stacked against inner-urban and Labour authorities. I shall return to that.
It does not remotely follow that cutting local authority expenditure in the midst of recession will save the Exchequer any money. The Secretary of State was studious in his refusal to mention jobs during his half-hour speech, but we know that thousands of jobs will go as a result of the settlement. For every 10,000 job cuts in local government, which will lead to an equivalent rise in unemployment, the Exchequer cost—not the saving—will be £900 million in benefits and lost taxes, to which must be added additional cost to local government as demand-led services such as free school meals and housing benefit come under further pressure from families whose breadwinners no longer have jobs.
Overseas evidence overwhelmingly supports our case and not the Government's. That was confirmed by the White Paper about which the Secretary of State looks so puzzled. As I have said, the White Paper was issued five years ago, was signed by the present Prime Minister and argues against the Secretary of State's case. Paragraph 8 states:
?Very few other industrial countries plan public spending in this way?—
that is, by including local authority self-financed spending.
?For federal states, such as Germany, the United States or Canada, this would conflict with their federal constitutions. But even in other unitary states such as France or the Netherlands the Government generally makes budgetary plans only for central government expenditure.?
Mr. John Bowis rose—
Mr. Eric Pickles rose—
Mr. Straw: No, I will not give way. I think that I have given way enough for the moment. If they catch my eye later, I will give way to both hon. Gentlemen.
Although the local authority spend of the other countries that I have mentioned is not controlled, there is no evidence that they have done less well in terms of output, growth, exports or employment. How could there be such evidence when, since 1979, virtually every other OECD country has performed better than the United Kingdom according to every indicator that matters?
The third argument against the Secretary of State?s policy of centralisation is that it has not worked in its own terms. In any one year—as in this year—an unrealistic settlement can and will produce severe cuts in jobs and services, and considerable local dislocation. There is little evidence, however, that over time the panoply of controls has kept spending below its trend line—very much the reverse.
In July, the Local Government Chronicle—a paper whose views the Secretary of State is keen to quote when it suits him—published a detailed research study carried out by the London school of economics research unit, which showed that budget capping had
?led to higher spending by councils, the opposite result to that intended?.
It went on to give a number of cogent reasons for that apparently perverse consequence.

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For instance, had the Government left well alone, there would have been a normal, broad distribution of spending patterns, with some councils spending above the norm and others spending well below it. The removal of local discretion has now put pressure on all authorities to spend at least at SSA levels in each service; when they do not, other Ministers—such as the Secretary of State for Education—are often the first to complain, thus adding to the incentives for councils to spend up to the norm even if they do not wish to do so.
I will quote the views of two Conservative councils. In The Independent of 28 January, Ernest Mallett, leader of Elmbridge district council, described the capping system as a ?joke? which encourages councils to ?spend up.? He added:
?If there was no capping our spending would probably be about £1 million lower?.
A curious position exists in Conservative-controlled Northamptonshire. Some county councils have done extremely well out of the SSA system: they are all Conservative-controlled. Northamptonshire is providing for 200 extra jobs and growth of £4 million as it seeks to spend up to SSA level. Central controls have undermined local accountability in two ways: power over budgets has been removed and, with that removal, the responsibility of local councillors to their electors has become "seriously blurred", in the words of the White Paper.
A third Conservative authority, Woking, says:
?Capping has removed the ability of elected councillors to pay for services that local residents want and have voted for.?
We want local accountability to be increased. The amount of grant should be transparent; more important, the budget process should amount to the striking of a bargain with the local electorate in each and every year. For that reason, we want annual elections to be held in every council, on a three-year cycle, with a much-extended budget period. Such a system would restore local democracy, and would be unlikely to lead over time to larger increases in total spending than would otherwise result.
Mr. Bowis: Does the hon. Gentleman accept that local government is there not as a job creation scheme but as a provision of service scheme and that the efficient provision of services comes from efficient spending of resources? Lambeth, the borough in which he lives, receives 50 per cent. more central Government grant than neighbouring boroughs, including my own borough of Wandsworth. Does he accept that he receives lower levels of service in Lambeth because some £10 million has been wasted in fraud, because £185 million has been wasted in the non-collection of rents, rates and charges, and because 40,000 community charge bills have not even been sent out? Does he accept that the rest of us are not prepared to subsidise Lambeth and that that is why Lambeth needs to be capped—so that the charges can be kept down for everyone's benefit?
Mr. Straw: I want to see efficient councils everywhere, whether they are Conservative, Labour, Liberal or independent. We defer to no one in our pursuit of efficiency, and in our endeavours to root out corruption and fraud.
The hon. Gentleman has made an important point. However, we have argued for years—indeed, about four
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years ago my right hon. Friend the Member for Copeland (Dr. Cunningham) and I introduced a Bill to this effect—that capping is not the way to increase accountability. Nor can it be increased by the use of SSAs which, even in a perfect world, are bound to involve a large arbitrary element. I am thinking particularly of London boroughs, which hold all-out elections only every four years, without the intervening elections which used to be held under the old Greater London council. The answer is to hold annual elections on a three-year cycle, which would enable the electors of Lambeth to vote their council out of office if they felt that they were not receiving appropriate services.
I should point out to the hon. Member for Battersea (Mr. Bowis) that in 1990, when Lambeth last held elections, the electors—contrary to all his predictions—voted in favour of Labour's retaining control.
Mr. Pickles: The hon. Gentleman said that we must consider the number of redundancies in local authorities, and talked specifically of tens of thousands. Will he give us his estimate of the number of redundancies that local government will face?
Mr. Straw: I am coming to that.
Mr. Illsley: Recently, we have heard comments about London boroughs subsidising other London boroughs. Why should local authorities such as mine subsidise the Wandsworths and Westminsters, which charge practically no community charge? Never mind Lambeth—what about the Wandsworths and Westminsters that my local authority is subsidising to a far higher tune?
Mr. Straw: My hon. Friend is right. No one who believed in a fair system of grant distribution could possibly justify the outrageous position that has arisen in Wandsworth and Westminster. Wandsworth charges no poll tax at all, and Westminster only a tiny one.
The fact that the current system of centralised control serves no economic utility makes the consequences of the Secretary of State's policy all the more gratuitous, and all the less acceptable. Make no mistake: there will be cuts in services, and many jobs will be lost. Local economies will suffer, and unemployment will rise in the areas affected. This afternoon, the Secretary of State tried to make light of the coming cuts: he referred to ritual protests, in words similar to those that he used on 26 November. I see Secretary of State nodding in agreement.
Fifteen months ago, as Labour's education spokesperson, I said that cuts already taking place in local government resources would lead to larger classes in schools. At the time, Ministers—including the present Home Secretary, who was then Secretary of State for Education—derided my claims. Who was correct? An article in Monday's Financial Times reported that secondary school class sizes had "increased sharply", and that
?in 48 metropolitan local education authorities … the pupil-to-teacher ratio … worsened by 0.5 or more pupils per teacher between January 1989 and January 1992. In only seven metropolitan LEAs has the ratio remained steady. In not one has it improved by more than 0.5. In some inner-city areas?—
in Knowsley, for example—
?the deterioration in the three years completely wiped out the gains of the previous 15 years.?
In Newham, north Tyneside, Rochdale and Walsall, class sizes have worsened as a direct result of the Government's policy.
Mr. Howard: Has the hon. Gentleman noticed that the dates covered by that article are not those covered by his prediction?
Mr. Straw: No. My predictions were based on what was already happening in 1990, as the Secretary of State well knows.[Laughter.] I do riot know why the Secretary of State is laughing; it is not a laughing matter. The situation is becoming worse and worse.
There is a similar picture in the shires, with 14 shire counties showing large increases in class sizes, the largest being in Derbyshire. The author of the research report on which the official figures are based commented:
?Restrictions on local authority spending seem to be the main cause of the sharp deterioration.?
One of the Secretary of State's great weaknesses is his capacity for self-delusion. It has been one of the few consistent characteristics of his political career. When he trumpeted his settlement to the House last November, he may even have believed what he was urging on the rest of us. His message then was that there would be no job losses, and he repeated it in a letter to me dated 17 December. He stated categorically:
?There is certainly no need, as you suggest, for authorities to cut their staff as a result of my proposals for the 1993/94 settlement.?
Nothing could be more categorical. He said that there was no need for cuts, but there will be cuts. They will be worse in Labour areas, but they will also be bad in many Tory areas. The list is endless.
This morning I published a list covering 80 authorities. One thousand redundancies were announced in Birmingham yesterday. Many thousands of jobs are bound to go. So will the Secretary of State retract what he said? Is he now saying that the levels of employment in local authorities will be the same next year, as he said in the letter? In the light of the overwhelming evidence, is it not time for him to admit that what he told me in December was wrong?
Mr. Howard: Will the hon. Gentleman withdraw the statement that he made a moment ago, that 1,000 redundancies were declared in Birmingham yesterday? That is not what happened. It was a prediction by Birmingham city council of what was likely to happen as a result—it said—of the budget that it had set. It made it clear that it was not expecting compulsory redundancies. The prediction falls into exactly the same category as, for example, the county of Avon which began by predicting that the settlement would cost 4,000 council employees their jobs but now says that there might be 170 voluntary redundancies.
Mr. Straw: I notice that the one point that the Secretary of State did not answer was whether he now stands by the declaration that he made in December that there would be no job cuts.
Mr. Pickles: Will the hon. Gentleman give way?
Mr. Straw: No. I have already given way.
The Secretary of State's argument is as absurd as if the Secretary of State for Trade and Industry had told the House that the 31,000 job losses in the mining industry did not matter because most could be implemented through voluntary rather than compulsory redundancy. A job lost is a job lost: it represents one more person on the dole, and the Secretary of State should know that.
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It is no good the Secretary of State trying to pretend that the settlement is sufficient, doing his usual three-card trick with the numbers and telling us that if one compares last year's settlement with this year's there is obviously enough money. It is no good because the base figures have no reality. To decide whether authorities will have to make cuts, one must compare what authorities are spending this year with what they are to be allowed to spend next year. On that basis, authorities are £200 million short in cash compared with this year.
Many are worse off than the figures imply. It is time that the Secretary of State understood that. If he does not want to listen to the Opposition and to Labour authorities, he should at least listen to other Conservatives. For example, he should listen to John Vereker, the Conservative leader of Warwickshire county council, who, when asked on Radio 4 on Monday night whether local authorities should not consider their bureaucracy, said that it was fine for the Government to lecture but that it was
?just a pity that the government itself couldn't do the same. For example in the Department of Education and Science their figures have gone up and up?—
for central Government spend—
?far higher than the rate of inflation. They've been able to move into three huge gold plated office blocks in the most expensive parts of London. at the same time as putting quite unrealistic pressure on the classroom and in schools where money was really intended by the taxpayer or the ratepayer to be spent.?
In complete contradiction of what the Secretary of State has been trying to tell the House, the Conservative-controlled London Boroughs Association said in the opening paragraph of its commentary on the settlement:
"As a result of the government's proposals for the 1993–94 revenue support grant … most Londoners will face the prospect of reduced services and/or higher bills for those services.?
That is the truth of the settlement.
I deal now with the distribution of the standard spending assessment. Labour controls virtually every large city and town in the country, including all the areas of greatest social need. In view of that, we might have expected some even-handedness in the grant distribution but that was not to be.
On average, the 120 Labour-controlled authorities are to receive an increase of only 2.5 per cent. in their SSA while the 115 Conservative-controlled authorities will receive 3.3 per cent. Surprise, surprise—with the county council elections coming up in May, what do we find? Of all the categories of authorities, the disparity between Labour and Conservative county councils is greatest. The eight Labour councils receive only 2.2 per cent. extra. The 19 Conservative-controlled shire councils receive 3.7 per cent. There is not one Labour county council with an SSA increase above the average in the first 18 in the list.
Staffordshire, Northumberland, Derbyshire, Humberside, Lancashire, Cleveland and Durham are all Labour-controlled and all face acute budget difficulties because of discrimination. In none of those areas are the difficulties of their own making. The Secretary of the State has the cheek to suggest that it is those councils' responsibility that the council tax there will be higher. He is the man responsible for the fact that council tax there will be higher, because of the way he has gerrymandered the SSA system.
Mr. Howard: The hon. Gentleman must know that by far the biggest factor in those changes is population change. Is he seriously suggesting that we should not have used the latest population figures from the 1991 census?
Mr. Straw: The Secretary of State was the master of the poll tax, and he was the one who went around the country—
Mr. Howard: Answer.
Mr. Straw: I am, I am. The Secretary of State should know that one of the consequences of the poll tax—the tax that he said would be the fairest and the best—is that the number of people registering for the electoral register and for the census is down. The right hon. and learned Gentleman knows that. There has been massive under-registration for the census. That evidence is known to his Department, but he refused to take it into account.[Interruption.] The Secretary of State says that that is so in counties controlled by the Labour party; it is a matter of record that the problem of under-registration is most acute in larger cities and towns—and we control the larger cities and towns and the counties with the largest urban populations.
Mr. Howard: Will the hon. Gentleman calm down and consider the facts? We are talking about counties, not inner-city areas. Is he seriously suggesting that people have removed themselves from the register in Labour-controlled shire counties but not in other counties? That is an absurd proposition.
Mr. Straw: It is not absurd at all. If the Secretary of State had any knowledge of the geography of this country, he would know that Labour-controlled shire counties are more urban than the Conservative-controlled shire counties. They contain major cities such as Bristol, Hull, Leicester, Derby, Nottingham and Preston. There is a much higher propensity not to register, especially among young people, in those areas than in areas with more stable populations. That is a fact.
The Secretary of State mentioned population loss. There has been an element of population loss but—surprise, surprise—Richmond and Wokingham, which are both Conservative controlled, receive a population loss grant while Islington and Camden which are Labour, do not.
The all ages social index rates Bournemouth as more deprived than Barnsley, Watford as more deprived than Wigan, and suggests that the Prime Minister's Huntingdonshire has poorer social conditions than Chester-le-Street. Is the Secretary of State going to say, on that evidence, that it is a fair system in which there has been no political gerrymandering? Dudley is told that it has £1,722 to spend on each primary age pupil, but Bedfordshire is allowed £250 more. Barnsley is allowed only £1,793 per pupil, but the Secretary of State's Kent—on no basis more deprived or in greater need than Barnsley—is given almost —100 more. I could go on and on. There is scarcely a service area where the data and methodology used are sufficiently robust to run a grant distribution system simply.
What makes matters so much worse is that the convoluted, contrived and politically distorted system is then used as a control on total spending, as the base line for capping and, through gearing, becomes one of the principal factors in the level of the council tax. We do not
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yet know what the level of the council tax will be in each authority, but we can be certain of one thing—it will be far in excess of what the Government pretended that it would be during and before the general election campaign.
In 1991, the right hon. Member for Henley (Mr. Heseltine) predicted the council tax levels for each council area. He said that the average for the country would be £400 for band D. That was the basis of the Government's claims for the council tax before the election. Uprated for inflation, that £400 will be £428 in April of this year. However, as the Secretary of State is aware, since he quoted the Local Government Chronicle survey with great approval, the band D figure will not be £428 or anything like it. According to the Local Government Chronicle, the band D figure will be £550. That is £122 more—nearly a quarter more—than the figure that the right hon. Member for Henley and his right hon. Friends were peddling around the country before the election.
Higher council tax bills will be a consequence of the settlement. A second consequence will be further centralisation of power and a loss of democracy. Thirdly, many thousands of jobs will be lost. Fourthly, and most seriously, there will be a reduction in the public service that councils provide to individuals and communities across the land. That will mean shorter hours of libraries, the closure of residential homes for the elderly, higher charges for meals on wheels and home helps, larger classes and fewer policemen on the beat than what is necessary.
That is a policy without purpose—a policy so wrong-headed that it will increase unemployment and the borrowing requirement, worsen the recession and harm the very services on which the victims of the recession most rely. The policy is partisan and prejudiced, and we oppose it: it will not do.
5.31 pm
Mr. Jerry Hayes: I do not pretend for a moment to be a great expert on local government. In fact, I last made a speech on the subject 10 years ago—[HON. MEMBERS: "Sit down, then."] Hon. Members may say, "Sit down," but I know injustice and unfairness when I see it. I know when my town faces a total catastrophe because of the complete and utter incompetence of Labour-controlled Harlow council.
For years, I, the district auditor and my colleagues on the Government Front Bench have been warning the local authority members that, unless they gained control of their spending and put it on a gradual downward path, there would be job losses, capping and a disaster for the services in my town. Just before the general election, they capitalised £17 million-worth of receipts. Their standard spending assessment is approximately £7 million, but they have been spending a budget of £26 million. Because, for some amazing reason, they believed that the Labour party was going to win the general election, they blew their reserves and spent all the money.
Dr. Roger Berry: Will the hon. Gentleman give way?
Mr. Hayes: No, the hon. Gentleman must be patient. I have some very important points to make, which involve jobs and services that may be lost. If the hon. Gentleman will forgive me, it is my job to try to support the people in

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my town. I do not want to make general party political points. I want to deal specifically with Harlow and how it is being affected by the Labour party there.
It was particularly interesting that the hon. Member for Blackburn (Mr. Straw) spoke about value for money. He and I were born and bred just a few miles from each other. From his knowledge of the history of the area, he knows that Harlow council has been spending year after year.
Dame Elaine Kellett-Bowman: Just like Lancashire.
Mr. Hayes: As my hon. Friend has said, just like Lancashire.
Dame Elaine Kellett-Bowman: In the first eight years of Labour control, Lancashire increased its spending by 176 per cent., and it is still rising.
Mr. Hayes: As usual, my hon. Friend the Member for Lancaster (Dame E. Kellett-Bowman) has made her point eloquently. She always looks after her constituents with great aplomb.
I would like to consider what is actually happening in Harlow. The truth of the matter is that the sky is black with Labour chickens coming home to roost. It might be helpful if I were to paraphrase some of the points made in a report by the Conservative group on 15 December 1992. The report stated:
"The Labour run council have built up a reputation for its quasi welfare state, in that it has to provide everything in the town … The result is that virtually every service in the town has a Council influence. All primary health facilities are provided in designated health centres, now owned by a Council funded trust. Apart from a bingo hall, a night club and the sports centre, all leisure facilities are council owned and run. A high profile Harlow Council for Voluntary Services … has almost nationalised the voluntary sector."
I wholeheartedly support that splendid organisation. I do not want to see it go to the wall because of the incompetence of the Labour party in Harlow. The report continues:
"Most voluntary organisation are Council-funded and have councillors involved in their running, to the extent that many voluntary bodies are reliant on district council funding to pay their salary bills."
I will now deal with the recent financial position. The report continues:
"For the past three years, since the introduction of the Community Charge, the council has funded approximately half of its General Rate Fund expenditure of around £24 million (against an SSA of approximately £7 million) through the use of capital receipts, interests and reserves. By 1993–94, the available reserves will be all but exhausted. The majority party do not have a strategy for dealing with this situation, apart from a very strong belief that Labour were going to win the general election."
Never mind what I and the Tory party say; what did the district auditor say in his most recent report? He said:
"The financial health of the Council continues to be a cause for concern."
If ever there was an understatement, that is one. The district auditor continues:
"In recent years, revenue expenditure has been supported by the use of reserves with the result that the general reserve balance has been reduced to some £12.2 million at 31 March 1992. Use of reserves at the current rate will exhaust the general reserve by 31 March 1993."
That spells total and utter disaster. It means the possibility of hundreds of decent people losing their jobs.
In the face of that, what does the Labour group in Harlow want me to do? The members of that group want me to go to my right hon. and learned Friend the Secretary
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of State and say, "Let's have some more money." They want me to ask for more money, after so much has been squandered over the years. If any money is forthcoming, it will not be money from my right hon. and learned Friend or from the Treasury: it will be money from people in Harlow. The whole point of the cap is to protect the people in Harlow. They will have to pay.
I would love to be able to go to my right hon. and learned Friend the Secretary of State—
Mr. Illsley: Will the hon. Gentleman give way?
Mr. Hayes: I ask the hon. Gentleman to be patient. Although Barnsley may be very close to Harlow, I want to raise some important points that directly affect my constituency.
If the people in Harlow Labour party, who are entrusted with controlling the finances for the people in the area, had not spent their reserves in keeping the community charge down, it would have been £543 per person as opposed to £301. If my right hon. and learned Friend said, ?Right: we won't have a cap—I?ve changed my mind, because of the disaster that might happen,? the community charge this year would be much more than that figure. The council tax for a band D household would be more than £1,300 this year. That would completely crucify people who are on the breadline.
I do not mind going to my right hon. and learned Friend and his Front-Bench colleagues and saying, ?Look, the cap will have a tremendous effect on many of my constituent—on those who have worked hard for the community, on the voluntary and front-line services, and on the playhouse. Many important organisations are at risk. We need some breathing space.? I cannot ask my right hon. and learned Friend for that breathing space unless I have radical proposals from the Labour members who are in control.
Let us bring in the consultants. I asked councillors to do that years ago, but they refused. They said, ?We are one of the finest-run councils in the country. We don't need to bring in consultants.? I said, ?Let us listen to what the district auditor said and let us bring value for money,? but, no, none of that was to happen.
There have been damning reports from the district auditor, and there have been damaging reports from the treasurer who was mysteriously sacked. There were damning reports from the general manager, who said that no one has a grip on management in Harlow town hall. There have been restrictive practices after restrictive practices, and the trade unions have had far greater sway outside than they should have had.
I have been trying to urge Labour, Conservative and Liberal Democrats groups to put aside their party politics and sit round the table.[Laughter.] Opposition Members laugh, but, heavens, I have been trying to do that without much help. Let us have some radical solutions—but, no,all Harlow councillors want is more and more money. If I were a compulsive gambler who had just lost all my winnings on the last horse, it would be like going to my bank manager and asking for an overdraft so that I could put the rest of my money on a horse. How can my right hon. and learned Friend do that? We must get round the table and put forward radical solutions. ?Impossible, absolutely impossible,? they say. It is not impossible.
I shall make one or two suggestions. Of course they are pooh-poohed in the local newspapers every time I make

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them, but the councillors have something called democracy and—what is it called?—decentralisation, which means mini-town hall. Of course that saves lots of money, so we are told, but what does the district auditor say? He says:
?The Council is currently undergoing a period of reorganisation with the proposed creation of the Neighbourhood Committees and Offices. Although the General Manager has assured us that the reorganisation will generate savings, costings have not been produced to show how this will be achieved. Any additional costs will place extra pressure on revenue budgets.?
You bet, Madam Deputy Speaker. It has cost £1.2 million.
We hear that the Labour group is to set a budget which will be well above the cap. We know, although we cannot prejudge anything that happens in court, that there is a very good chance that the cap will remain as it is. It means that people in Harlow will have to be re-billed. It will cost £200,000 to re-bill people because of a hopeless political exercise.
Mr. Illsley: Will the hon. Gentleman give way?
Mr. Hayes: The hon. Gentleman has been most patient. Of course I give way to him.
Mr. Illsley: Does the hon. Gentleman recall that, when the Chancellor reduced community charge bills by £140, every local authority in the country had to re-bill at a similar cost? It seems rather silly the hon. Gentleman complaining about re-billing, when the Government brought about re-billing in every local authority throughout the country.
Mr. Hayes: I knew that I should not have given way to the hon. Gentleman. He is a great expert on local government; he could have done much better than that. The hon. Gentleman knows that there was a great shout of relief in respect of that £140. People did not begrudge it. They were very pleased indeed, and they were certainly very pleased in Harlow.
What makes me so angry is that we have emotive campaigns about Kingsmoor house, a magnificent institution which looks after children who have been abused. It gives excellent support to people who are most in need. We are told that, because of the wicked Tory Government, it will be closed. Do you know, Madam Deputy Speaker, how much it costs to keep Kingsmoor house open? It costs £200,000 a year—precisely the same amount of money that is to be squandered on a silly party political exercise by the Labour party in Harlow. That is the depth that those councillors are sinking to.
Let me deal briefly with the report to which I alluded on the recent financial position. It goes on to state:
?by 1993–94, the available reserves will be all but exhausted.?
We have heard that from the district auditor. It goes on:
?The majority party do not have a strategy for dealing with this situation, apart from a very strong belief that Labour were going to win the general election. Financial reviews by the Council have occurred over the past two years in order to contain spending at £24M, which has only served to prevent inflation from increasing its actual expenditure. Efforts at saving £1.5M (90–91) and £2.0M (91–92) were only partly successful, as a result of additional monies becoming available during the year. There has been no sustained effort to reduce or moderate expenditure.?
The local Labour party is saying that, because my right hon. and learned Friend has quite sensibly introduced the
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unified business rate, money is being stolen by the Government. Of course, business men remember the days when Harlow council used to fleece them. Until the introduction of the community charge UBR, Harlow had the highest poundage rate in the country—91p. That is what it meant to businesses in my constituency.
Let us deal briefly with the capital position. The auditor?s report—it is not disputed by the district auditor—states:
?In 1988–89 and 1989–90 housing maintenance costs were capitalised to the extent of £17M.?
We are talking about a political authority with an SSA of approximately £7 million. The report goes on:
?The overall effect of this was to transfer Right To Buy proceeds from housing capital to revenue reserves, to support revenue spending in future years. With the current financial regulations, this was resulted in £4.2M of debt charges falling to the?
general rate fund
?instead of £0.771M.?
That is the amount of money that we should be paying.
The hon. Member for Blackburn has sensibly left the Chamber and is doing other things. He said that he believed in value for money in local authorities, and that local authorities under Labour control did exactly the same thing. We should hear about what Harlow Labour party has been doing for compulsory competitive tendering. The report states:
?Although a number of Council services have gone out to tender, the Labour Group have ensured that the contracts are unattractive to external bidders. Many bids received have been inflated to cover the cost of monitoring the work carried out, an excess which was not applied to the in-house bid. The use of Council facilities and vehicles have been denied to prospective bidders. Leisure facilities have been block booked to community groups at prime times when they could attract premium rates.?
That is what is going on in Harlow at the moment. The hon. Member for Blackburn talks about value for money. The Labour party in Harlow would not know value for money and decent management if they ran into it and bit it on the leg with a large gin and tonic.
I have suggested time and again that consultants should be brought in, and that there are ways in which savings could be made. We know that the Labour group will have to set up another bidding operation which will cost £200,000. We hear about what is happening with front-line services, we hear about Kingsmoor house and all the great things that the Conservative group and I believe in, but we do not hear about what will happen to the policy unit. Of course the policy unit is party political; it costs only £1 million a year, and the council does not intend to scrap it. That is what is happening.
We must remember the spending that should be going on in Harlow. How much do you, Madam Deputy Speaker, think that Labour councillors spend on information technology? It is £3.5 million a year in Harlow council, with an SSA of about £7 million—just on information technology. [Laughter.] I am sorry that Opposition Members think that that is funny. I suppose that it would be funny if hundreds of people were not going to lose their jobs as a result of that incompetence. The hon. Member for Sheffield, Attercliffe (Mr. Betts) is new to the Chamber, but the squandering that he used to get up to on his local council is well documented. I said that just in case the camera above my head zooms in on the hon. Gentleman laughing—as we can now have reaction

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shots—at the misery that is being caused by members of his party who purport to look after the interests of ordinary people. Well, they do not.
Having dealt with the policy unit, let me briefly deal with the other excesses. For example, Harlow Labour party gives property rent-free to its pet causes, and council members have all sorts of facilities. I cannot complain too much about that, but I object to the trade union resource centre getting free property at the expense of the poor old charge payer. I resent organisations such ds the workers? rights project getting £80,000 a year out of the hard-pressed people of Harlow.
We spend £400,000 a year on the Harlow playhouse, a wonderful institution where I take my children regularly. It is under threat of closure. The board of management has proposed very sensibly, saving nearly £300,000 a year by putting it out to private tender and creating a joint relationship between private and public enterprise, but the council will not consider it. That is the sorry state of Harlow council.
I support the front-line services, the playhouse, Kingsmoor house and the tremendous work that ordinary people are doing to help those who are frail and vulnerable. Of course it is the frail and the vulnerable who will suffer. We do not hear about the old people's homes that are to close, about Kingsmoor house having to close and about those most in need who will suffer, but they will suffer simply because of the complete incompetence of the Labour-controlled council—[Interruption.] Will the hon. Member for Attercliffe please contain himself? He may think that it is all tremendously funny, but many of my constituents will suffer because of some of the policies of his party that he supports.
I hope that members of the Labour party in Harlow will listen to some of the things that I have been saying and to some of the things that the general manager and the district auditor have been saying. If they do not, they will cause widespread misery to ordinary, decent folk in Harlow who are hard pressed enough.
5.53 pm
Mr. David Clelland: The hon. Member for Harlow (Mr. Hayes) asked Opposition Members to contain themselves, but the House will understand their amusement. I was sympathetic with only one point he raised: his suggestion that there should be less party political point scoring at the expense of local government. The fact that he continued at great length with a tirade against his own local authority gave the lie to that remark, but I shall return to that point later.
This year's revenue support grant settlement once again exposes the partisan nature of the Government's local government finance regime. Indeed, it goes further; it exposes the whole nature of the Government's approach to local democracy and the sinister way in which our traditional system of government is being undermined. One instrument which is used for those purposes is the standard spending assessment or SSA, a system which owes more to the prejudices of the Tory party than to any honest attempt properly to assess the needs of individual localities. It is a system which allows the Secretary of State to pick off individual councils and reward others.
Most casual observers would surely conclude that the needs of the people of Tyne and Wear in terms of local government services are likely to be at least as high as
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those living in the heart of the capital. In fact, given the level of unemployment, the decline of industry and the continuing work to remove the scars of our industrial past, most would conclude that our needs are somewhat greater; yet, according to the Government, Tory-controlled Westminster's needs amount to £1,200 per head of population, while the needs of Labour-controlled Tyne and Wear authorities range from just £661 to £750.
A good example of the partisan nature of the system is the fact that, if Labour-controlled Gateshead were allocated the same level of SSA as Tory-controlled Westminster for just one year, Gateshead's council tax could be set at zero for the next three years. It is not a matter of more and more money, as the hon. Member for Harlow suggested earlier. All we want in Gateshead are the same resources that are being applied to Westminster.
The SSA system provides increased help to areas of higher pay and prices, which would appear to conflict with the Government's policy to restrain public sector pay, yet no recognition is made of the need for better public services in areas such as Tyne and Wear, where low incomes and high unemployment are much more prevalent than in Westminster.
If car ownership is low, there is a need for better public transport, and if people cannot afford golf club fees and private health clubs, there is a greater need for public recreation facilities. However, the system turns that logic on its head, so that the Tory party can direct resources to areas in the south to try to prevent the haemorrhage in its support. The comparison with Westminster demonstrates political manipulation of the system; my hon. Friend the Member for Blackburn (Mr.Straw) drew attention to other examples.
There are other anomalies in the system. For instance, how can a Government who have acknowledged the similarity of the problems faced by Newcastle and Gateshead by creating a partnership area covering both, calculate that Gateshead needs £44 per a head, or £9 million less than Newcastle, to deal with the same problems? When one takes into account the fact that the great city of Newcastle is being forced to cut expenditure by £8 million this year and £12 million between 1994–96, the full scale of the effects of the settlement and the system is realised.
That is due to the inadequacy of the SSA and the fact that it has been reduced by £9 million following the removal of further education responsibilities from the city of Newcastle, although expenditure on those facilities last year was only £6 million. All that will mean reductions in services and increases in unemployment as yet more jobs are lost. The settlement means that more job losses are inevitable.
The magnitude of cuts when male unemployment runs at 40 per cent. in the city challenge area makes the so-called additional funds provided by such special measures woefully inadequate. What is the sense in recognising the special needs of an area by awarding city challenge and then forcing huge cuts in expenditure? The Government are about to correct that illogical scenario by scrapping the urban programme, a measure that will force the closure of thousands of voluntary projects throughout the country and reverse any progress which has been made in the attempts to improve the standard and quality of life in our inner cities over the past 20 years.
Mr. Illsley: Is my hon. Friend's authority in the same situation as mine, as a city challenge authority now having to spend money on implementing city challenge, which is a charge against its rate support grant and its budget, and finding it difficult to maintain now that the urban programme money is being withdrawn?
Mr. Clelland: My hon. Friend draws attention to yet more inconsistencies in the system.
A system which gives with one hand and takes with the other is not helping our localities, and the people who live in the inner-city areas recognise that. People who are active in the inner-city challenge areas recognise that the money that is being given to them is being taken away from others who may he just as needy. It is not a fair or just system.
One of the overriding concerns of people in the city challenge area, on Tyneside and in Britain in general, is the high and increasing level of crime, yet the SSA and capping limits placed upon the Northumbrian police authority in this settlement, will put at risk the effect of combating crime in the area.
The 4.5 per cent. increase in SSA, which itself understates the spending needs of Northumbria, is expected to absorb the full effect of the 1992 police pay award approved by the Home Secretary at 6.5 per cent. It is expected to absorb the increase in the cost of police pensions, which is 10 per cent. of the authority's budget, the increase in insurance premiums, and the increases in national insurance from 1 April.
In a letter to the Secretary of State for the Environment, the police authority has said:
?The implications for policing levels in Northumbria of the provisional RSG settlement are dire. It is no understatement that the progress achieved in recent years is at risk.?
Add to this the ending of the urban crime fund and the full scale of the very serious situation now facing our communities is frighteningly obvious.
All this has been pointed out to the Secretary of State, but little or nothing has changed. All the warnings and arguments have fallen on the deaf ears of the right hon. Gentleman, whose Cheshire cat smile perhaps arises from the amusement that he derives from the Chancellor of the Exchequer?s claim in the autumn statement that the RSG settlement should be totally adequate for local government.
The right hon. and learned Gentleman asks where the money would come from to meet the improvements we call for. For a start, he could correct the anomalies to which my hon. Friend the Member for Blackburn and I have drawn attention. Also, he might look at the millions of pounds currently being spent on unelected quangos appointed by him and his right hon. Friends throughout the country.
The inadequacies of the SSA system are now compounded by the anomalies of the council tax system, incidentally. How can it be right that a disabled person living in a property valued at over a quarter of a million pounds can benefit from a reduction in council tax, yet someone else with perhaps even more severe disabilities living in a property valued at only £30,000 gets no reduction? This has serious implications for people living in my constituency, where 65 per cent. of properties are in hand A. It would be the economics of the madhouse if it were just about economics, but of course that is not what it is about, is it?
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The overall effect is staggering, with an estimated 33,000 job losses in local government as a result—equal to those which caused such a public outcry, and justifiably so, when the closure of 31 pits was announced last year. Like the threatened job losses in the mining industry, these 33,000 redundancies will have a knock-on effect, so that the overall impact on localities and the national economy will be severe.
All this is part of the Government's strategy to run down local government replace locally accountable elected councils by quangos accountable only to the Government; the octopus method of government, whereby Whitehall extends its tentacles into every corner of the country, eliminating political opposition and strangling local needs and priorities. It is entirely ideological. There is no case for the kind of strict control of locally raised finances which this Government imposed, other than unbridled dogma.
The attacks on local government finances are accompanied by appeals and incentives to opt out of the local government structure, and by restrictions on the eligibility to stand for election by the introduction of the concept of politically restricted posts, compulsory competitive tendering, and so on. The result is that local authorities can no longer respond to the wishes of the people they are elected to serve, but serve instead central Government and the priorities and prejudices of central office. It is a system more at home in pre-war Russia than in 1990s Britain. No wonder all political parties are finding it difficult to attract candidates in local elections.
There is a deliberate campaign by Tory Members to discredit and denigrate local government at every turn. We saw it again last week, when they leaped so eagerly and gleefully on the news of maladministration in Lambeth, and the Secretary of State has been at it again today.
Never in the history of culinary metaphors have so many frying pans called the kettle black. Tory Members could fake virtue for Europe, but if it is their objective to damage Labour local government, it does not work. All that happens is that some of my hon. Friends are provoked into responding with examples of Tory malpractice. These tit-for-tat exchanges, which rarely rise above the debating level of the school playground, result only in damaging all local democracy by grossly exaggerating the extent of malpractice in local authorities, which is no worse than in any other sector of society, especially the Tory party.
It all suits the purpose of those who would further diminish the role of democracy in this country—the real enemies within, who have done more to undermine the faith of the British people in their system of government than could any sinister, well thought out KGB or CIA plot.
New and unaccountable power bases have been encouraged and asssisted to develop over the past 14 years. They can be seen throughout our towns and cities, planning the lives and futures of millions of our people, without any mandate to do so. I remember well the occasion of the Northumberland Plate at Gosforth park racecourse a few years ago. I asked what the small groups of local gentry were gathered together to discuss, and was told that they were deciding who should be the chairman of the training and enterprise council. And so they did, in between the Brown Ale handicap and the Federation cup. How about that for open government?

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That is but one minor example of the goings on throughout the country, as the only question that needs to be answered satisfactorily for certain people to be appointed to often well-paid sinecures is: ?Is he one of us??
The RSG settlement continues this centralist trend and the opportunities for real corruption are extended yet again as democratic scrutiny is further watered down. It will do nothing to improve and extend the services on which so many of my constituents rely. On the contrary, the further attack on local government which this package represents will further weaken its ability to tackle the problems faced by communities, businesses and individuals on Tyneside and elsewhere.
The system of local government finance now in place in this country is unfair, unjust and deliberately tailored to shackle, rather than free, local priorities and local enterprise. It is discriminatory and prejudiced, and brings no credit to this Government or its architects.
6.6 pm
Sir Rhodes Boyson: On two issues I agree with the hon. Member for Blackburn (Mr. Straw), who opened the debate for the Opposition. The first is his support for Blackburn Rovers, which is highly commendable. The second is that for many years he has said that the solution to the problem of some of the lunatic councils in London is annual elections. I believe that we will have problems in London until we have annual elections. In the gap of four years between elections, those councils can get carried away and the response to the electorate is weakened. I commend to my right hon. and hon. Friends the introduction, at some stage, of annual elections in London. It would be good for all the party systems and for the response to the electorate.
Reference has been made to the £140 that was taken off the community charge and put on VAT. I would have liked the community charge to remain once that £140 had been taken off, because the objection to the community charge was basically its size, not the principle. I realise that that is water under the bridge, but I put it on record.
I am concerned particularly about London and the south-east—the area which includes the constituency that I now represent. The Conservative-controlled London Boroughs Association and other bodies in London considered, when the council tax was brought in, that it would be unfair to London and the south-east. That is because it is a modified property tax and houses in London and the south-east are very expensive, not because they are bigger than houses elsewhere or because people in the area are earning more, but simply because of land shortage. One does not buy a house; one buys a plot of land on which the house is built.
The LBA thinks that London loses about £200 million and the rest of the south-east about £175 million because of this change to a property system. Similarly, it has been calculated that for people in London and the south-east to live at the same standard as people in other parts of the country, they must earn about £6,000 a year more because of travel and housing costs in the area. This is something that I have to remind my right hon. and hon. Friends about in connection with the difficult issue of sharing out the money that is available. That is why the London Boroughs Association—I and other London Members went along with it—pressed for a separate set of bands for London and the south-east, because the house price gap
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between London and the rest of the country was wider than it was between Wales and England and between England and Scotland, where separate bands were inserted.
The recession in London is really a slump. I grew up in Lancashire during the depression when, at one stage, unemployment in the cotton industry in my own town was higher than unemployment in Jarrow. But although Lancashire was in a terrible state in the 1930s, London was prosperous. That is when all the houses were being built. One would have to go back more than a hundred years to encounter anything like the situation that we have now. It means that the depression is greater. Those of us who were born in the north knew that the good times would not last. We invested in the local Co-op, we bought saving certificates, and we put the rent money on one side. We hid our nuts against the bad times that were coming. But in London it had been assumed that the prosperity would continue.
Unemployment is now 10 to 12 per cent. in my constituency and the figure is rising faster than in practically any other constituency in the country. I am not against capping and I recognise the difficulty of sharing the money out, but a high council tax in London will increase the number of repossessions when people who are struggling to pay mortgages find that they have to pay more because of the introduction of council tax.
The greatest losers under the council tax are single people in three or four-bedroomed properties with limited resources, not the rich or those with no resources, but those in between who have saved. People say that they should sell their houses, but a widow who has lived in the house all her life and who wants her children and grandchildren to visit her at Christmas and other times will find her present life style disappearing if she has to sell the house.
I know that there is transitional relief, but it is less overall, from what I have worked out, than it was with the community charge, and one wonders how long it will last. When the Minister replies to the debate, I would welcome a statement that it will be reconsidered each year according to the circumstances prevailing.
There are advantages with the council tax, I know. It is easier to collect. That is the great advantage of any form of property tax: one cannot hide a house when someone comes up the road. The history of window tax and similar taxes shows that people return to a property tax time and again because of ease of identification. Three million people on low incomes will get a rebate, 6 million will get a 25 per cent. discount, and I am glad that 600,000 students will also be exempt. It all helps.
One of the things that sank the community charge was the great increase in expenditure that went with it. On my statistics—and the Department will know them better than I do these days—it went up by about 31 per cent. in one year. But the new tax has been introduced in a way that will not break the bank, and I commend the Department on the way in which it has handled it.
Brent last year had £254 million. This year it had £258 million. Last week it got about £750,000 more, an increase which is still less than 2 per cent. The problem in Brent£and it is not the only London borough which has it—is the accuracy of its registers and of the census on which they are based. People just disappeared. Interestingly enough, there have been so many objections to the registers in Brent that people are now knocking on doors

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to find out who is there, which seems to me the right way to do it rather than sending questions out with junk mail which just disappears. In the past three or four weeks they have discovered many thousands more people. As far as I know, they have not come from outer space; they must have been there for a long time and they have been identified. We know that people came off the registers because of the community charge: they feared a cross-check. There is something of a mystery as to how big a population some London boroughs have.
Reference has been made by Conservative Members to the refugee problem, which is intense in London. I have large numbers of Somali refugees in my constituency, and the numbers increase all the time. It is not a question of small numbers; they arrive in their hundreds.
The Secretary of State has worked hard to get the council tax right, and I pay tribute to him and the Minister of State for that, but it would be very good if Brent could bring them evidence to show that the real population is higher than the number which has been accepted in the past. I believe that there may be as many as 10,000, 20,000 or 30,000 people who live there but who have still not been identified. If we could also get accurate numbers of refugees, and if I could bring my council leader to the Minister to see what can be done—
Mr.Illsley rose—
Sir Rhodes Boyson: Let me finish this point and then I will give way.
I am warned by my council leader in Brent that, as things stand, the cuts will have to be made in education. It means that about 90 teachers will lose their jobs. That is why I am concerned to bridge the gap. I have always worried about education, and the one thing that will upset all families is a threat to their children's education through what they see as a change of system. So I would like to bring my council leader to the Secretary of State or to the Minister of State with more information. The more accurate we get the registers, the better it will be, for possible boundary changes and everything else. All the information is suspect at present.
Mr. Illsley: The point that the right hon. Gentleman makes about registers strikes a chord among Opposition Members. I have read of the work done by Brent to increase the numbers on the register, but will the right hon. Gentleman agree that more resources ought to be given to improve the electoral registers, in view of the shortfall identified not only by the right hon. Gentleman but also by my hon. Friend the Member for Derbyshire, North-East (Mr. Barnes), who is sponsoring a Bill on that point? Surely it would be better for all local authorities to have adequate resources to improve the registers.
Sir Rhodes Boyson: I agree with the hon. Member Registration in Britain is supposed to be compulsory. In the United States it is still voluntary, but in certain parts of Brent registration has become voluntary. I do not know whether they go into the loft when one goes round, whether they have cellars or whether they go on to their allotments. I go out every second Sunday with people on the knocker to see what is happening. I take the registers with me and I find that the discrepancy is about 15 or 16 per cent. A house is supposed to have only two
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inhabitants, but when the door is opened I find a veritable feast going on inside—to which, of course, I am invited, as hon. Members would expect. But I cannot then ask who has registered or who has paid the poll tax. Far be it from me to do so. A little Christian charity is required on such occasions.
Once upon a time registers were reliable, but I do not believe that they are reliable now. Despite my support for the community charge, I believe that if it had one disadvantage it was the fact that it put an end to the accuracy of the registers and encouraged people to stray into error, something that legislation ought not to do, as I am sure all hon. Members would agree. That temptation has now gone, and people are coming back on to the registers. The greater the pressure that the Department can bring to bear to put the registers right, the better, so that we know how many people there arc in this country. It might be interesting to know how many people are living here and whether the whole country is sinking or coming up according to the total population.
Whatever anyone's views might have been at the beginning about the council tax, the council tax must now work. The battle between national Government and local government has done no good to either national Government or local government. I have always believed in the dispersal of power. The centre of power should not be in one area. There is a risk of centralising power, regardless of which party is in Government. Because the Government has the numbers, the Departments and so on, there is always a permanent risk to corrupt Ministers, to put it that way, to the idea that they can run local government better than anyone else.
The battle has run for the past 15 to 20 years. There has been a strong tendency for local government elections to go the other way, whatever the Government's colour. When the Labour party was in Government between 1966 and 1970, it almost disappeared in local town halls. I remember that Islington became Conservative controlled. Hackney came under Conservative control, although it had not had one Conservative councillor before.
As soon as we get a certain party in government—my hon. Friend the Minister of State has good experience of local government—local government goes the other way which tempts the Government to battle with local government. We must get the council tax right because the battle must not be allowed to continue. We must have a spread of power, otherwise it will be dangerous for everybody.
I shall vote with the Government tonight. I have had to wrestle with my conscience on the matter. I admit that I should have the habit of voting with the Government from time to time. After the Maastricht debate and so on, it will be exciting to go into the Aye Lobby. I told my wife that today will be a strange day.
I shall vote with the Government because they have done their best to clear up a difficult matter. At the same time, I remind the Minister that I should like him to help me to force my council to get it right and get the 60 councillors to knock on doors nightly to see who is there. He should then know that there are problems in Brent with under-registration and an increased number of refugees so that I can help the people in my constituency at the same time. The last thing I want is any cut in schools which would damage education in Brent.
6.23 pm
Mr. Nigel Jones: We have had some vintage performances today. I especially enjoyed the performance of the hon. Member for Brent, North (Sir R. Boyson) who raised the important matter of the Government's tendency to centralise everything. I always complain that the Government's policy on local government control is based on the three Cs-centralise, centralise and centralise. That has certainly happened recently.
We had a vintage performance from the hon. Member for Harlow (Mr. Hayes). Madam Deputy Speaker, I am grateful that you did not call me immediately after his speech, because I was laughing so much internally that I got the hiccups, but I have recovered now. We also had a vintage performance from the Secretary of State. Like the hon. Member for Blackburn (Mr. Straw), I was astonished that the Secretary of State did not mention jobs.
What is the settlement all about? It is about jobs and cuts. We have all seen the Local Government Chronicle of 15 January, which reported that the number of non-teaching jobs to be lost is estimated at more than 32,000. I hope that that projection is wrong. I hope that 32,000 non-teaching jobs will not be lost. To get anywhere near the promise made by the Secretary of State in the debate on 26 November, local authorities will need to go through economic contortions to set budgets which are somewhere near the capping level. When the revenue support grant figures were originally announced in the debate on 26 November, the Secretary of State said:
?I am confident that this settlement will provide local authorities with the resources that they need to deliver the wide range of local services of the quality which people expect and deserve?.
When I pressed him about jobs, he replied:
?If local authorities manage their resources sensibly and adhere to the public sector pay policy guidelines … there will be no need for job losses.?—[Official Report, 26 November 1992; Vol. 214, c. 1011, 1015.]
I must declare an interest as an elected councillor in Gloucestershire. We will be setting our budget next week. One of the guidelines that we will be examining is our ability to set a budget without job losses. At this stage, it is unlikely that we will be able to come anywhere near the capping level if we adhere to the Secretary of State's advice.
What are the cuts which we are examining? Four out of five social services directors in England expect a reduction in their budget, despite having new community care responsibilities. The Association of Metropolitan Authorities estimates that the Government are under funding the new community care responsibilities of local authorities by £135 million.
Much of the problem stems from inaccuracies in SSAs. Standard spending assessments are to accuracy what. Evil Knievel is to road safety—not relevant. Standard spending assessments are not a mechanism to calculate the spending requirement or needs of an area; they are a mechanism to divide a predetermined amount among authorities. That means that local councils are assumed to spend a certain amount on a certain service, when the reality is much different.
Standard spending assessments are the consequence of Whitehall bureaucrats pondering inadequate data, bogus statistical analyses and subjective judgments to devise a system which bears little relation to reality. How can the
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system be justified when, according to SSAs, children in Richmond upon Thames are classed as more in need than those in Barnsley? I am pleased that the Secretary of State will review the workings of SSAs. Pending that review, he might like to relieve councils of their caps, so that they can set the budgets which they would like to set this year.
I shall give three examples of cases in which SSAs are causing difficulty. In Warwickshire, the fire and rescue budget for 1992–93 was £2.4 million over SSA. The Department of the Environment said that the amount was excessive, yet the Home Office said that it was insufficient to meet minimum standards.
On the Isle of Wight, the fire service budget for 1993–94 is £1 million over SSA. To get the SSA, the island would have to close stations or reduce staffing. Such factors are controlled by the Home Office, which sets SSAs, but it is saying that the island should spend £1.5 million more on fire.
In my own county of Gloucestershire, the chief constable has been asked what spending at SSA will mean to him. It will mean keeping 40 officer posts and 73 civilian posts vacant. I went out with the Gloucestershire police one Saturday evening a few weeks ago. They have a difficult job to do. They are undermanned and do not have enough facilities. There is a growing crime rate in the county. It is wrong that two Government Departments are saying different things. The Home Office is saying that the chief constable needs so many men and the Department of the Environment is saying that the SSA is the amount which can be spent.
According to the Association of County Councils, 69 out of 108 local education authorities spend above SSA. That is important, because education is a large proportion of the spending of local authorities. It is not merely local education authority schools that want standard spending assessments for education, but also grant-maintained schools. A joint delegation from Gloucestershire met the Minister to press the case for SSAs to be funded at a realistic level.
Even if the SSAs were accurate—I contend that they are not—they would not take into account the problems that the recession is causing local authorities. For instance, Harrogate, where Liberal Democrats recently took majority control, is facing an additional bill of £452,000 for housing benefit. Sutton is facing a loss of £547,000 in reduced income from car parking and increased spending on free school meals, due to the recession.
Bournemouth, like other seaside resorts, has suffered a drastic reduction in income, and has lost £1 million out of a total £19 million budget because of reduced trading income. Cornwall has had to add £750,000 to its free schools meals budget, which is at an all-time high. Richmond is facing a bill of £2.5 million extra because of the costs of homelessness due to repossessions and arrears. None of those costs has been reflected in the settlement, and they will all cause cuts in services and job losses.
The Secretary of State has said that, as long as local councils stick to the 1.5 per cent. pay policy, they will not have to make cuts. However, police and fire service pay are not subject to that limit.
I shall compare central and local government spending. The former is set to rise by 6.6 per cent. during the next financial year. The Secretary of State said today that local government spending is rising by only 3.1 per cent., which is less than half the amount that central Government are allowing themselves. With the latest cuts in interest rates

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and the devaluation of the pound—let alone the knock-on effect in the 1993–94 budget of the 1992–93 pay round—there is every chance that inflation may well be higher than 3.1 per cent.
In a letter to parents dated January 1993, Mr. Gardiner, the head teacher of a school attended by many children in my constituency, said:
?The amount of money that the County Council is allowed to spend is controlled by central government. This year the money that will be available to schools is well below what is required to run schools effectively.
I estimate that since 1991 our budget has been cut by about 10 per cent. in real terms. For the coming financial year the school budget is to be reduced by approximately 6 per cent. and the prediction for 1994–95 is equally gloomy … A cut in our budget of 6 per cent. next year will mean that, in common with other schools in the County, class size, resources and staffing will all be affected.?
He urges parents to write
?to County Councillors, local Members of Parliament and the Secretary of State?.
I know that many of them are doing so.
I do not get letters in my post bag asking me to keep the council tax low, but I receive bucketloads of letters asking me to protect services, education and social services, and to improve policing, in the face of the current crime wave.
Local authority spending should be based on need, and standard spending assessments do not reflect that. The settlements mean that local authorities are bearing the brunt of public spending cuts. Services are set to be hammered, and thousands of jobs will go. The responsibility for that will lie not with local councillors, who are jumping through hoops trying to find savings, but with the Secretary of State and the Government.
Capping is undemocratic. Even the Conservative-controlled London Boroughs Association has opposed universal capping. I repeat what the hon. Member for Blackburn (Mr. Straw) said when he quoted the Secretary of State as saying of capping, in 1988:
?It is not a measure to be used as a matter of course.?
It is important to remember that, as it is being used as such.
?The people of an area will be able to vote for a relatively high-spending authority if they so choose.?—[Official Report, 25 April 1988; Vol. 132, c. 51.]
Many local authorities feel hard done by, including many that do not receive area cost adjustments. I asked the Secretary of State for Education for some figures on average teacher salaries in councils that have area cost adjustments compared with areas that do not. I was surprised to find that Dorset, which does not benefit, has a higher average teacher salary than Hampshire, which does benefit. My county has a higher teacher salary average than Hampshire, the Isle of Wight, West Sussex or the Isles of Scilly, which all receive area cost adjustments. I was pleased to hear the Secretary of State say that he would reconsider area cost adjustments, because they seem unjust.
I am in a difficult position over my local authority's budget. Hon. Members will know that in many cases the notional amount has been adjusted since the original estimate at the end of last year. The notional amount for Gloucestershire has increased by almost £5 million—I am grateful for that—because the Government have admitted that they made a few errors in their original calculations. It therefore came as some surprise last Friday to discover
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that, instead of being increased by £5 million, the Gloucestershire SSA has been reduced by £0.4 million, which will cause severe problems when we set our budget.
Many councils will feel hard done by, and many will wish to appeal against their cap. Will the Secretary of State consider carefully before designating authorities for capping, and be open to persuasion by councils that decide to appeal against their cap?
Liberal Democrats believe that local people have the right to choose whatever local administration they see fit. If they choose an incompetent administration, they have the right to throw them out, and I support the right hon. Member for Brent, North (Sir R. Boyson) and others who have suggested that annual elections are one way to achieve that.
Fortunately, given the way the Government are going, there is every chance that the Conservatives will be thrown out of county halls throughout the country on 6 May, and that they will be thrown out of government in 1996, or perhaps even earlier. Frankly, when that happens, local government will breathe a huge sigh of relief.
6.37 pm
Mr. Eric Pickles: It is a great pleasure to follow the hon. Member for Cheltenham (Mr. Jones). He and I served on the Committee on the Housing and Urban Development Bill, and as he was not a frequent attender it is nice to remind ourselves of exactly what he looks like.
There can be no doubt that the settlement is tight and will challenge some authorities; nor can there be any doubt that some authorities will be in difficulties. But the settlement certainly is not a surprise as it was well flagged in the local government press and is within the area of expectation. The level of settlement is considerably higher than was predicted in many quarters.
Prudent councils which care about their local communities would and should have been taking the necessary reforms already, and starting to reduce their expenditure gradually, to minimise the effects on services and to plan sensibly. After all, reductions in growth taken out over a long time minimise the effects on services.
Over the past few weeks we have seen a number of Labour councillors and Labour councils shroud-waving to the press, predicting thousands upon thousands of redundancies. The hon. Member for Blackburn (Mr. Straw) talked in terms of tens of thousands. The hon. Gentleman kindly allowed me to intervene, and I asked him to give me his estimate, as he said that this was central to the Labour party's programme. Sadly, he failed to give me any figures. I tried again to intervene, but without success. As the hon. Gentleman is a courteous person, he apologised to me outside the Chamber.
I have no doubt that this matter is central to the Labour party's strategy. I see on the Opposition Front Bench the amicable and urbane frame of the hon. Member for Leicester, East (Mr. Vaz) and the hon. Member for Newcastle upon Tyne, North (Mr. Henderson). If either of them cares to tell us what redundancies they anticipate, I shall be happy to give way. After all, these figures are central to the case that they make. I am not surprised that neither hon. Gentleman wishes to intervene. We have already seen the considerable fall-out that Labour authorities have suffered from estimates.

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This morning we heard the figures from Birmingham city council, which has reduced the level of expected redundancies by about 70 per cent., to 1,000, all of which the council says can be taken care of without any compulsion. One does not expect estimates to be precise, but an error of 70 per cent. suggests to me that the council was trying to frighten the trade unions—a practice that I obviously deplore.
Mr. Ainsworth: Does the hon. Gentleman know that between the November statement and the previous one there was a considerable increase in the spending allowance for Birmingham? Did not that increase give rise to the revised estimate?
Mr. Pickles: I am very pleased about the increase. It shows that the Government listen to sensible points put forward by political parties. Perhaps it gives the lie to the suggestion that the Government are conducting a vendetta against Labour councils. One cannot in one breath complain about a vendetta against Labour councils and in the next breath talk about an increase in the Government's notional amounts.
Local government takes care of about 25 per cent. of public expenditure. That being the case, it is not unreasonable that councils should play a part in ensuring that settlements are in line with what the public can afford. Central Government support has increased by about 3.7 per cent., and I am very pleased to say that the notional amounts have been increased by about £150 million.
We are starting to move into a different kind of debate on the revenue support grant. I believe that the quality and spending options will be matters of the greatest concern in future debates, as they are in this one.
I come to what the hon. Member for Blackburn called a question of judgment. Because of the decisions on value added tax and on capping powers, but particularly because of the effects of gearing, the irresponsible rate and community charge increases of the latter part of the 1980s will no longer be possible. The differential will continue to exist.
I am grateful for figures produced recently by Tony Travers, which show that Tory propaganda was right all along: ?Conservative councils cost you less?—nearly £ 100 less. However, because of the trends in the Audit Commission and the introduction of the citizens charter, councils will increasingly look to performance indicators, and electors will increasingly know the cost of refuse collection in one borough as against another and will start to ask difficult questions. Councillors will no longer be able to hide behind the mystique of local government finance; they will be brought to account and will have to justify their spending arrangements.
Let me give an example. There is no doubt that the good people of Hackney will want to know why their council decided to forgo savings of £2 million. I refer to a recent decision of the council to award its own direct labour organisation £2 million more in expenses. I expect that, right at this moment, the whole borough of Hackney is shaking its head in wonder. The awarding of this maintenance contract to the council's own workers goes against all ideas of normality in local government. This is a lot of money to be slushing around. There is no suggestion that Hackney pays its work force competitive rates; I think that there is some suggestion that it pays slightly more.
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I should like to deal with a matter that has arisen in this debate and about which the House has heard before. I refer to corruption in local government. It must be said loudly that the majority of councillors in this country are honest, decent people who work hard for their local communities. That applies right across the political spectrum. Councillors put in long hours for virtually no pay. They put something back into their communities, and I believe that local government service is honourable service. But corruption allegations touch every councillor. They obviously touch the dishonest, but they also hurt and damage the honest. It is not good enough to produce tatty pieces of paper or to make suggestions about meetings at racecourses when, as the hon. Member for Blackburn said, there are people who have their hands in the till and their snouts in the trough.
Mr. Keith Vaz: The hon. Gentleman is talking about the Government.
Mr. Pickles: Cheap remarks from a sedentary position are not good enough. Such comments let down Labour councillors, as well as councillors of all other political parties, throughout the land. We need to stand together to ensure that corruption is wiped out.
Mr. Betts: Will the hon. Gentleman condemn his colleagues who, in this Chamber last week, asked for investigations by the police and the Audit Commission into Labour local authorities in general? Was not that a slur on all the honest Labour members of those authorities who are doing an excellent job on behalf of their constituents?
Mr. Pickles: I understand the hon. Gentleman's remark. I know that he was bruised by the revelations about his office accommodation. However, it seems to me legitimate to have discussions about options—whether it is more desirable to provide offices for Members of Parliament or to provide lollipop ladies. In any case, any allegations of corruption must be investigated with the utmost rigour.
I should like to make a suggestion about how all this might be put behind us. A common thread runs through the incidents and allegations of corruption and maladministration, both of which are equally damaging to local authorities. That thread involves a blurring of the responsibilities of councillors and officers; councillors start to take on responsibilities that properly belong to council officers. That problem has not suddenly occurred. The House was unwise not to heed the warning in the Redcliffe-Maud report many years ago, which referred to the role of the officer and the member.
The report stated that if we were to attract a higher calibre of officer and a better quality of member, there should be a clear demarcation of responsibility between the two. The member should concentrate on devising and monitoring the policy; the officer should concentrate on implementing the policy and on general managerial issues. When one considers all the problems lately, one sees that the councillor has started to assume the role of the officer.
There is currently a working party in the Department of the Environment studying good practice. I hope that the Minister will be able to advise us on how that working party is progressing. It seems sensible that it should look specifically at the role of the officer and the role of the member.

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This country certainly deserves good local government which can respond to, and meet the needs of, the people. The role of the officer and the role of the member deserve serious consideration.
Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): A practice seems to be developing in the Chamber whereby hon. Members from both sides of the House are bringing in communication devices. On two occasions this week when I have been in the Chair, an hon. Member's speech has been disrupted by such a gadget. It would help our debates if people did not bring such gadgets into the Chamber.
6.52 pm
Mr. Eric Illsley: I agree with the right hon. Member for Brent, North (Sir R. Boyson), particularly about under-registration, which is a problem that affects every local authority district, and I am pleased that he has been able to tackle the problem of under-registration in Brent. However, I repeat the call that the Government should consider a nationwide system to improve registration for elections. All three constituencies in my region are well under-represented in the current electoral register.
Having said that, I intend to speak about the standard spending assessments used to formulate revenue support grant, in particular as those assessments apply to my local authority, Barnsley metropolitan borough council. Barnsley's standing spending assessment has been set at a level well below the amount that the authority needs to spend to maintain its services. This is not the first time that I have complained about SSAs and the Government's ridiculous treatment of mining areas, particularly with regard to SSAs and determining grants. Three years ago I complained that Barnsley had been poll-capped—it was one of the 21 authorities to have been capped, one third of which were coal mining districts. That shows where the Government have targeted their cuts in local government expenditure.
When we complained about the cuts that would have to be made in local government expenditure the predecessor of the present Secretary of State spoke of a parade of bleeding stumps. I have listened to the latest version, in which the Secretary of State spoke of ritual protests from the Opposition. The Government simply do not believe that the cuts are being made. I have no reason to believe that the present Secretary of State understands the position any better than his predecessors.
Three years ago the music centre in Barnsley, which taught music to a very high standard, was closed as a result of cuts. Such a high standard of music teaching has never returned to my district. Unfortunately, there are further cuts to come this year. However, it appears that some of the Opposition's arguments are perhaps beginning to register. Recent meetings with the Minister have achieved some results and there are signs that the SSAs will be reorganised in future. Perhaps we can look forward to a new regime. I hope that when the Minister winds up the debate he will say that the new regime will encompass not only new data from the 1991 census returns, but a new formula for SSAs.
I have complained about SSAs on a number of occasions, and before rehearsing the arguments again I
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shall make a few general remarks. In the 1994–95 financial year, a new system using up-to-date data may be introduced, but that still means that my authority will have three to four years on a low revenue support grant. I should hate to think that my authority will have to start from that position when the new regime is implemented. I hope that we shall look at the matter afresh and consider Barnsley?s needs as a whole, rather than using the current financial year?s budget as the starting point for any new system of calculation.
We need a more accurate assessment of need. The Minister said that unemployment could be taken into account as a sign of need in a district. Perhaps he will confirm that in his winding-up speech. In my region, that factor is most apparent as Barnsley has a higher than average level of unemployment. It has been affected by the decision of the President of the Board of Trade to close more collieries. If those closures take place, my district will be badly affected. The Minister has heard from hon. Members on both sides of the House about the number of redundancies throughout the nation which could result from the cuts in local government finance.
This year, my authority will still be capped at an artificially low level. The standard spending assessment does not take account of my district?s needs. Future restructuring will repeat the errors of the past as the lion?s share of the funding will go to large conurbations such as Manchester, Liverpool and Merseyside, once again leaving the metropolitan districts at the bottom of the pile when funds are allocated. Future restrictions will also continue artificially to inflate the Conservative-controlled London areas, such as Wandsworth and Westminster.
For the past three years that I have spoken in these debates, I have asked why Barnsley—my authority—always figures at the bottom of the list for metropolitan districts. I have never received an adequate response. The last time I asked the President of the Board of Trade, who was then the Secretary of State for the Environment, he said that someone had to come bottom of the list. I appreciate that, but why is it my authority rather than anyone else's? The right hon. Gentleman could not see the problem with the formula for calculating SSAs, which counts against medium-sized and mining authorities, classing them as low-need authorities when they should be assessed as authorities with moderate needs, especially after the recent decisions affecting coal mining districts.
Every time I have spoken in these debates I have mentioned the research undertaken into the calculation of SSAs. Initially we commissioned research from Coopers and Lybrand; then we commissioned more from Newcastle university. The latest research comes from Salford university. Each time, the research has been presented to the Department with a request that the Department consider it and its implications for the SSAs. The research shows clearly that the formula discriminates against some authorities. I refer particularly on this occasion to the so-called Webber-Craig authorities—seven authorities of similar size and make-up. I believe that Ministers are well aware of them.
Time and again the Government have ignored this research and have carried on using the same formula for the SSAs. One can only conclude that they are quite happy to discriminate against Labour-controlled mining authorities and quite happy that we should continue to receive levels of grant lower than those to which we feel that we are entitled.

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One of the problems is that the formula uses proxies as indicators of need. Ethnicity, for example, is one such proxy. The incidence of one-parent families is another. These are looked at instead of looking at actual need—at poor health, unemployment and economic need. The ethnicity factor used in the calculation appears in eight different blocks. That means that if a local authority has only a small number of ethnic inhabitants in its area—mine has only a small number—that fact is taken into account eight times over, and the SSA will register correspondingly low— despite the fact that this is a proxy indicator which bears no relation to the real need of an authority.
I believe that the Secretary of State acknowledged my next point following my intervention earlier. I refer to the wide gap between the top authorities and the lower ones. The Secretary of State asked where we would find the extra money. I say that we do not need ?extra? money. Manchester, Liverpool and Birmingham gain far more grant than metropolitan areas such as mine. On average, Manchester receives 70 per cent. more grant than Barnsley, as I have pointed out year after year. The gap is far too wide. Why are Manchester, Birmingham and Merseyside allowed 70 per cent. more money to provide a standard level of service? It is crazy.
Birmingham does not even spend up to its SSA. I understand that it spends £35 million per year on its publicity budget alone. That is equal to a quarter of Barnsley's entire budget. Something must be wrong with the calculations. SSAs should be based on indicators of need, to provide a standard level of service. I remind the Government what the then Secretary of State for Health said on 20 February 1990, when he pointed out that the standard spending assessment is not a target at which local authorities should aim, nor is it a level to which they are obliged to reduce if they want to spend above it: it is for local government to determine what it will spend on its services, and it will be answerable to the electorate for the resulting charges.
Fine words, but they have now been proved rubbish, as the Government will not allow local authorities to be answerable to their electorates for their charges. SSAs have become the method by which the Government cap local authority expenditure. So the Government determine what local authorities spend.
The Salford university research was the latest piece of research that my authority submitted to the Government. I confess that I do not understand it—its statistical language is beyond me—but I am assured by those who do understand it that it is cogent, logical and correct.
Mr. Christopher Gill: I do not think that the hon. Gentleman should be shy or reticent about admitting that he does not understand all the figures. I am sure that many of our colleagues in the House feel exactly the same. I am sure, too, that the sentiment that he has just expressed will be echoed throughout the length and breadth of this country. We must therefore work to make the figures comprehensible. I hope that I may have the chance to say a few words on that subject later in the debate.
Mr. Illsley: If the hon. Gentleman would like a copy of the research from Salford, I should be happy to give him it. If he can find his way through it and understand it, perhaps he will drop me a line to explain it. I agree with him that the information is complicated, and the research
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submitted by Salford university to the Government is even more complicated than the SSA calculations. It is a highly detailed mathematical document which I do not confess to understand, any more than I understand everything about local government finance. I agree with the hon. Gentleman that some of the jargon in these reports should be clarified.
I should like to offer one or two examples of how these calculations are arrived at. The additional needs calculation runs as follows:
?The sum of:

(i) 1.5 multiplied by CHILDREN OF LONE PARENTS (as defined below); and

(ii) 1.5 multiplied by CHILDREN OF CLAIMANTS (as defined below); and

(iii) The proportion of children aged under 18 in private households who were born outside the United Kingdom, Ireland, the USA or the Old Commonwealth, or whose head of household was born outside these areas, calculated using information from the 1981 Census.

CHILDREN OF LONE PARENTS
The proportion of children aged under 18 in private households containing a lone parent family, calculated using information from the 1981 Census.
The children's social index is calculated thus:
CHILDREN'S SOCIAL INDEX
The sum of the following factors (each of which is calculated to 4 decimal places):
(i) CHILDREN OF LONE PARENTS (as defined above for the Education block); minus 0.1305, and then divided by 0.0358; and?—
The Parliamentary Under-Secretary of State for the Environment (Mr. Robin Squire): I am enjoying the hon. Gentleman's speech, but I ask him to bear in mind that these SSAs are less complex than their predecessors. That much, I think, is conceded all round. Secondly, most of an SSA is backed up by independent research which will sometimes produce some fairly complex calculations.
Mr. Illsley: Is that why the Government are thinking of altering the SSAs in 1994–95? Perhaps all the research has not been wasted in that case, and we may look forward to a better system.
Mr. Betts: Does my hon. Friend agree that one of the main findings of the Salford study was that, in changing from the grant-related expenditure assessment system to the standard spending assessment system, the Government sacrificed accuracy for the extra simplicity to which the Minister referred?
Mr. Illsley: My hon. Friend is an expert in local government finance and I defer to his greater knowledge. I am sure that what he says is true. In simplifying the GREAs we have perhaps lost out somewhere along the way. In any case, perhaps the Government will now realise that the indicators used are wrong. They must be more closely targeted on the needs of particular areas.
Mr. Kevin Hughes: Does my hon. Friend agree that the figures are ridiculous, based as they are on information 12 years out of date? That information does not relate to the needs of the present day. Things have moved on a great deal since the 1981 census—one thinks of care for the elderly and care for children. I am sure my hon. Friend agrees that the assessments are nonsense.
Mr. Illsley: I do entirely. I hope that when the Government examine the 1991 census data they will also consider different economic indicators for the SSAs—and that they will not accept 1992–93 as the starting point for

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authorities which have been badly affected by their SSAs in the past three years. My hon. Friend's constituency of Doncaster, North contains one of the authorities which has been the subject of initial capping. We have been pegged low over the past three years because we started low. I hope that when the new formula is introduced we shall not be left at the bottom of the pile.
According to Salford university research, the SSAs are based on information which is narrow, unrealiable and of questionable relevance. They fail to recognise the problems facing coalfield areas: relatively high unemployment and relatively low educational attainment. I do not know why the university uses the word "relatively". Educational attainment in my area is low and I make no apology for saying that. I disagree with the Government's figures because I think that they are poor indicators of educational attainment, but school examination tables and results on the testing of seven-year-olds show that my authority is at the bottom. More help in education should be used as an indicator of need.
My area suffers from industrial dereliction and needs economic regeneration. The problem will be made worse if the collieries close this year. It is a low-income area with relatively high mortality and a high incidence of chronic illness. The Salford university study states:
?A degree of error … consistently disadvantages a number of authorities. The indicators used to characterise need come from a narrow and highly intercorrelated range. There is a strong case for the replacement, removal or downgrading of several indicators.?
I shall give some examples of how variation affects my authority. I stress that there is an enormous variation between the top and bottom ranked authorities in terms of SSA, especially in metropolitan areas. For the first time this year, my local authority has moved from bottom place. I repeat that I am asking not for increased total funding for local government but for a reorganisation of funding.
Surely Manchester does not need 70 per cent. more funding than my area to provide the same services. I will give a concrete example. The implied spending on a 300-pupil primary school in my constituency is £534,000 but in Manchester it is £662,000. The implied cost for an 800-pupil secondary school in my area is £2,082,000 but for Manchester it is £2.5 million. Those are large differences. Does Manchester really need 24 per cent. more than my authority does to fund a 300-pupil primary school? The difference would pay about seven additional teachers.
I have spoken about the Tory-controlled boroughs of Westminster and Wandsworth. The SSA for a primary school pupil in Westminster is £2,741 while in Barnsley it is £1,793. The implied spending on a 300-pupil primary school in Westminster is £822,000 but in Barnsley it is £534,000. For a secondary school in Westminster the amount is £3,193,000, while in Barnsley it is £2,082,000. That shows that the school in Westminster costs £1,111,000 more than the one in Barnsley. Why does Westminster need that much more to fund a similar school? I have been asked for three years why London boroughs have far more funding than mine.
The same disadvantages apply in social services. I shall use as a basis the social services SSA per child at risk. The figure for Manchester is £2,168,000 per annum and for
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Barnsley it is £1,202,000. Why does Manchester need £1 million, or 80 per cent., more than my authority to provide a standard service? The first two pages of the RSG report states that the SSAs are designed to show the funding for a standard level of service.
We have complained time and again about these enormous differences. I spoke about ethnicity being used as an indicator in eight sub-blocks. If a borough is low in one block, it is deemed to be low in all eight. We are at the bottom of the table. Proxies are also used. There has been a fall in employment in my constituency since 1981. We witnessed the 1984–85 miners strike and the run-down in employment has been mainly in mining. Some 20,000 to 25,000 jobs have gone. Data from 1981 are no longer relevant, but we are receiving grant based on the 1981 census.
Research shows that Barnsley is not a low-need authority as the Government tend to believe. It has at least moderate needs. We rank low on ethnicity and on people over the age of 85. Barnsley has a history of mining, which means that the number of people who live to the age of 85 is lower than in other comparable areas. In addition, because of mining, there is a high incidence of respiratory diseases among people between the ages of 50 and 65. However, the SSA takes no account of that. We rank high on standardised mortality rates because there is a high proportion of ill health in the age groups that I have mentioned. In my area, long-term illness and unemployment are well above the national average.
Ethnicity is a component of a number of indicators. The additional educational needs indicator shows that ethnic minorities do better than local people. I mentioned that in the corresponding debate last year. Research has shown that there is no longer a need to overcompensate for ethnic minorities. The all-ages social index leads to a classic finding. That index, which is a measure of social deprivation, gives a lower score to Barnsley than to Hampshire and Oxfordshire, and the children's social index scores Barnsley's needs lower, for example, than Hampshire, Oxfordshire and West Sussex. Who are we kidding? How could anyone be convinced that my authority has less social deprivation than Hampshire, Oxfordshire and West Sussex? That is a classic example of SSAs being completely wrong.
I shall skip the health indicators because many hon. Members are waiting to speak and simply mention standardised mortality rates, limiting long-term illness, and low birth-rate indicators. Much research has been carried out in my constituency and the results are there if the Government wish to consider them. Audit Commission studies have shown that my authority is not a high but a moderate spender, but its needs are simply not covered by the SSA.
I shall now deal with the budget for the fire and civil defence authorities. The Minister nods. I know that he is aware of my concern, because I have made representations to him. He knows that the fire service in my area—and, indeed, throughout South Yorkshire—has again been given an SSA lower than that of any other fire and civil defence authority. It is lower than those of Greater Manchester, Merseyside and Tyne and Wear.
I know that you have an interest in this, Mr. Deputy Speaker. West Yorkshire and South Yorkshire fire authorities have the lowest SSA per head, and that is proving detrimental. We have met the Minister, and representatives from the Home Office; only last week,

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South Yorkshire's chief fire officer visited the Minister to try to convince him of our needs. We are now approaching the levels recommended by the Home Office: we do not want to fall below those levels, and we hope that the Government will take fire authorities into account when setting SSAs.
I am reluctant to talk about cuts. I well remember the Secretary of State?s reference to a parade of bleeding stumps in 1990; I shall never forgive him for that comment, which has remained in my mind ever since. We had to make severe cuts in Barnsley. Now we shall have to cut £11 million from our budget, which will be rather difficult. I have a document listing the authority?s own suggestions for cuts; I will give just two examples.
Every local authority residential home in Barnsley is to close in April, and a complete ending of the school meals service is being considered. In an area of high unemployment such as mine, that is a desperate measure. I am not pleading, or parading bleeding stumps; I am past that stage—I have been here for three years, pleading for better funding for my authority.
These will be serious cuts, which will affect my constituency greatly. I hope that there will be a different SSA calculation for 1994–95; I also hope that we shall receive additional help for 1993–94.
7.22 pm
Mr. Geoffrey Clifton-Brown: Thank you for allowing me to catch your eye at a comparatively early hour, Mr. Deputy Speaker. I am delighted to follow the hon. Member for Barnsley, Central (Mr. Illsley), and to take part in the same debate as the hon. Member for Cheltenham (Mr. Jones), who is a neighbour of mine: I completely surround his constituency. With respect, I am glad that I do, because I hope to contain the spread of the Liberal tendency in the area.
There is no doubt that this is a tight settlement. It needs to be, if we are to contain the alarming rise in PSBR. The settlement, which amounts to £33.45 billion of central Government support, will enable local government to spend some £40 billion this year; that is the largest amount that local government has ever spent in this country. It is roughly a quarter of our total gross domestic product. Any talk of cuts from Opposition Members simply does not ring true.
A week or two ago, in answer to a question, my hon. Friend the Under-Secretary of State told me that the total local authority debt now stood at £54.4 billion. That is a fantastic figure, which has risen at an alarming rate since the 1980s. We shall have to do something about it.
Many hon. Members on both sides of the House have mentioned the way in which SSAs affect various authorities. A number of my constituents have written to me about the problem, which has also been raised by the hon. Member for Cheltenham. As I shall demonstrate, one of the main reasons for it is the indebtedness of those authorities.
I am aware that local authority treasurers can do clever things with debt swaps and swapping money from one account to another and back again, and lending money in one account to another account at a higher rate of interest. Nevertheless, that £54.4 billion must be serviced each year, by each local authority that is in debt. My authority, Gloucestershire county council—which was mentioned by the hon. Member for Cheltenham—is complaining that
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this year's SSA is roughly £10 million short of what it thinks it needs to spend. Having obtained some statistics from my hon. Friend the Minister, I have discovered that Gloucestershire's debt is £124.4 million. Gloucestershire is a comparatively small shire council.
Mr. Ken Purchase: It is all very well to talk about local authorities? debt, and Gloucestershire may be a good case in point. However, the hon. Gentleman really ought to take into account the considerable assets of local authorities. When we draw up a balance sheet on the assets and liabilities of an organisation, we look at the net result—and I opine that the ratio of local authority assets to local authority debt is probably 10 or 20 times the amount that the hon. Gentleman has mentioned. That puts local authorities in a very strong position. The hon. Gentleman must remember that the debt to which he refers was incurred to accumulate capital assets for the benefit of local communities.
Mr. Clifton-Brown: I was coming to that. The £124.4 billion of debt must be serviced. The hon. Gentleman is right: Gloucestershire county council has considerable assets. It has some 7,000 acres of valuable agricultural land.
As the hon. Member for Cheltenham has told us, he was part of a joint delegation that complained to my hon. Friend the Minister about the SSA. I was not there, but I was given a report of what took place. One of the questions that my hon. Friend asked the delegation was what would be the expected savings from capital sales of assets this year. The authority was not able to give a figure, although it had prepared its proposed budget. In his autumn statement, my right hon. Friend the Chancellor of the Exchequer allowed local authorities great flexibility for this financial year in the way in which they spend their capital receipts; yet that authority had not calculated the amount that it would save this year. Debts are an on-cost, which local authorities must service.
From another parliamentary answer that I received the other day, I discovered that some 14 local authorities were debt-free. There was a slight contretemps over the figures: another source said that eight of those authorities were indebted to some extent. However, 14 are listed in the answer. I looked up the authorities, to establish their political complexion. It so happens that 11 are Conservative; the City of London is non-political—[Laughter.] It is non-political as listed. The others are hung councils. The only one that is not Conservative-controlled—even in the overall sense, as a hung council—is Ryedale, which is controlled by members of the SDP, whoever they are. [HON. MEMBERS: ?They are all in the Lords.?] I think that they have disappeared to another place.
In an effort to enlighten the hon. Member for Wolverhampton, Nort-East (Mr. Purchase)— I am glad to see that he is enjoying my speech; he may not enjoy it quite so much in a moment—I decided to try to find out which party was most effective at running local government. I came up with some interesting statistics, which I have not pulled out of mid-air. I discovered that 16 of the 20 authorities with the highest community charge were Labour controlled. I then discovered which were the top 20 worst collectors of the community charge. Not surprisingly, 15 of them—
Mr. Purchase: I bet they will be Labour.
Mr. Clifton-Brown: The hon. Gentleman is very good at anticipating. There is a good long list that he can anticipate. When I give him a category, he can tell me how many of them are Labour.
I decided to discover which were the bottom 20 authorities for rent arrears, and 16 out of the 20 were—
Mr. Purchase: Labour.
Mr. Clifton-Brown: Thank you. I also discovered which of the bottom 20 had the most vacant dwellings.
Mr. Purchase: If I were you, I would take the money and not open the box.
Mr. Clifton-Brown: If I was a betting man, it would be a certainty. I would not have to open the box; there would be no point. Seventeen out of the 20 were—oh, the hon. Gentleman has gone quiet all of a sudden.
I also considered manpower. The hon. Member for Barnsley, Central (Mr. Illsley) is very keen on employing more people. I wanted to see how effectively local authorities are run, and whether that depends on the level of manpower. I discovered that the six authorities employing the most manpower per 1,000 of the population were, needless to say, Labour. Manchester is at the top of the list, employing 52 full-time workers per 1,000 head of the population compared to Wandsworth's mere 17. The message is that Labour is inefficient.
The indebtedness of local authorities is an important factor, so I also looked up the 20 most indebted local authorities; needless to say, I discovered that 18 out of the top 20 were Labour. That includes the city of Birmingham, which was originally going to announce 3,000 redundancies, then 1,000, and now I do not know how many. The Labour city council has a staggering debt of £1.8 billion.
Mr. Purchase: I told you.
Mr. Clifton-Brown: You did, you were very clever at anticipating.
It shows that large city authorities have to spend more than they need to because of years and years of mismanagement. Conservative councils, especially if they are debt-free, are superbly run and offer a high level of efficient local services. However, Labour councils cost you more—they are very liberal with your money.
I listened carefully to the hon. Member for Cheltenham (Mr. Jones). I hope that I shall not misquote him, but I am sure that he will tell me if I do. He said that he would be very reluctant to set a budget which would involve job cuts. Surely, no local authority will set the same budget every year, allow a bit for inflation, add a little and then say that it must implement huge cuts when it cannot get that amount. It must consider the services that it has to provide, decide what it needs to spend and see whether it can provide the services more efficiently.
I use Gloucestershire county council?s figures as an example. The Conservatives lost control of the council in 1985, when it had a debt of £26 million, but, when the Liberals took control in 1985, the debt almost doubled, to £46.5 million in one year.
Mr. Nigel Jones: May I correct the hon. Gentleman who entirely surrounds me? Gloucestershire county council has never been under Liberal Democrat control. It has been a hung council since 1985 and currently operates the rather curious arrangement of a Conservative-Labour alliance.
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I have two questions. First, there is an outstanding school capital programme of £65 million in Gloucestershire. It increases every year, as we are not building the schools and school extensions. What projects in the hon. Gentleman?s constituency does he think we should delete from that capital programme? The quotation that I read to the House was from the headmaster of a school in his division.
Secondly—
Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): Order. Interventions are getting rather lengthy. Bearing in mind the fact that many hon. Members want to catch my eye, it is not fair for hon. Members who have already spoken to take up the time with long interventions.
Mr. Jones: I shall ask a brief second question. What does the hon. Gentleman have to say to the Conservative chairman of the education committee, who says that Gloucestershire?s SSA for education is entirely inadequate?
Mr. Clifton-Brown: I am grateful to the hon. Gentleman for correcting me. Gloucestershire county council is hung, but the Liberals had control between 1985 and 1991, so the increase in the debt occurred entirely under their control. We chucked out the Liberal controlling group in 1991. We now have the absurd situation in which the Conservatives and Labour alternate every six months, but we have been able to start to tackle —[Interruption.] It is absurd, because no one party has control without the other party?s agreement.
In view of what I have said about Gloucestershire county council's indebtedness, I have no doubt that, come May and the next local elections, we shall regain control. It would be much more sensible to have Conservative control of Gloucestershire county council to tackle the problem of indebtedness and offer a realistic level of service to the people of Gloucester, which is what we all want.
Before the hon. Member for Cheltenham intervened, I was saying that he spoke about setting a budget for his authority. I have the indebtedness figures for his authority, which we both represent. It is a very small local authority, but has a debt of a staggering £40 billion—[Interruption.] —£40 million. Even so, it is £40 million on a comparatively small budget. It is no wonder that the hon. Gentleman could not set a budget that would provide the local level of services that he wants.
I suggest that the first thing that the Liberal controlling group on that authority should do is reduce that level of debt, so that it does not have to pay the servicing costs on it and will be able to provide a true level of service to the people of Cheltenham.
Despite what the hon. Member for Wolverhampton, North-East (Mr. Purchase) said, indebtedness is a serious problem which must be tackled. If authorities such as Gloucestershire had the capital receipts that they should have, they would be able to provide a perfectly good—indeed, a superb—level of service within their SSA limit, and there would be no need for the fuss that they are currently generating. Local authority debt is huge, and it means a continuing on-cost to service that level of debt.
7.38 pm
Mr. Colin Pickthall: This has been a curious debate because, although most of us have been rightly concerned to study the figures and the damage being done to our local authorities by the settlement, hints of a wider debate on the nature of local government have emerged from time to time.
The hon. Member for Brentwood and Ongar (Mr. Pickles), the former leader of Bradford council, raised the issue of councillors and officers and the difficulty of maintaining a distinction between them. He suggested that councillors were for ever trying to take over the role of officers. I am sure that other hon. Members with experience of local government will, on occasion, have found exactly the opposite to be the case. Many officers will feel highly insulted by the hon. Gentleman?s remarks. However, the hon. Member for Brentwood and Ongar made an important point in that regard.
The hon. Member for Brentwood and Ongar also made an important point about not allowing the debate to become a slanging match about who has the worst councillors. As he said, all councillors would be tarred in such a debate.
I agreed with about 50 per cent. of the speech made by the right hon. Member for Brent, North (Sir R. Boyson). He made some important wider points about the nature of local government which, at some point, we will have to debate at greater length. I hope that members of the Government Front Bench noted his remarks about centralisation and the great damage that the Government's centralising tendency is causing in what to many people appears to be a systematic attack on the very nature of local government. The right hon. Member for Brent, North also made important points about registration; I am sure that my hon. Friend the Member for Derbyshire. North-East (Mr. Barnes) will wish to take them further.
I want to refer particularly to Lancashire to illustrate what I believe is happening to local government. I accept that some of my colleagues and some Conservative Members have made similar points about their authorities. Fortunately, my hon. Friend the Member for Barnsley, Central (Mr. Illsley) has already made half my speech for me.
Many authorities in the north and west of the country —indeed, all authorities other than London, Bedfordshire, Berkshire, Buckinghamshire, East and West Sussex, Essex, Hampshire, Hertfordshire, the Isle of Wight, Kent, Oxfordshire and Surrey, which benefit from the area cost adjustments—are suffering badly. That issue has already been referred to several times in the debate.
In a reply to a question of mine, the Under-Secretary of State for the Environment, the hon. Member for Hornchurch (Mr. Squire), told me that if the area cost adjustment was redistributed to all authorities in the country, it would amount to £15 per adult. In my case, that would be £15 for every adult in Lancashire. That is a not inconsiderable subsidy from the provinces—if I can call them that—to the south-east. The key point to bear in mind is that that subsidy has continued year after year and has increased each year.
Referring to shire counties for the moment, and trying to compare like with like, if we consider the counties of Essex, Kent, Hampshire and Lancashire, which are more or less the same size—I noted the Secretary of State's
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comment from a sedentary position that it is all about population—in 1989–90, Essex received £3.5 million from the ACA; in 1992–93, it received £64.2 million. In 1989–90, Kent received £3.5 million from the ACA; in 1992–93, it received £64.1 million—not bad going. In 1989–90, Hampshire received nothing from the ACA; in 1992–93, it received £62.6 million. Obviously, at some point it was discovered that Hampshire was being deprived and that was corrected: good for Hampshire.
In 1989–90, Lancashire received nothing from the ACA. In 1992–93 it received nothing from the ACA, and the same will apply in the coming year. The same applies to Nottinghamshire, Cumbria, Durham, Northumberland, Staffordshire and many others.
In 1986–87, the area cost adjustment was 1.5 per cent. of standard spending assessment. By 1992–93, it had grown to 3.5 per cent. We are talking about tremendously large sums of money. Between 1989–90 and 1992–93, the SSA of Essex has increased by 36 per cent., Kent?s by 37 per cent. and Hampshire?s by 31 per cent. Lancashire?s has increased by 24 per cent. The disparity is even greater for other authorities.
That enormous difference has a ratchet effect. It consistently renders shire counties like Lancashire worse off. I noted with some pleasure the Secretary of State?s comments about considering the matter again this year and I hope that that happens. However, concomitantly, councils in the south and east will become better off relatively speaking.
In 1988–89, Essex, Kent, Hampshire and Lancashire received, within about £10 million, the same SSA. Since 1990–91, the gap between the three southern counties and Lancashire has been growing to the point that at the moment Lancashire's SSA is £100 million below Kent's SSA; –80 million below that of Essex and –25 million below Hampshire's. I suppose that that could be called the politics of envy. If it is, I plead guilty: I am envious of those levels.
The Minister for Local Government and Inner Cities (Mr. John Redwood): The point made by my right hon. and learned Friend the Secretary of State about population is that this year and next year population change has a big influence. The hon. Member for Lancashire, West (Mr. Pickthall) must consider SSAs per head. He must explain why Lancashire will receive £615 per head next year while Hampshire's figure is £568. The story is not quite the one that the hon. Gentleman is telling.
Mr. Pickthall: My hon. Friend the Member for Barnsley, Central has already examined the nature of the authorities to which the Minister has referred. He referred to the large urban area in a county like Lancashire which must be considered alongside the ethnicity problem.
In the settlement for shire counties this year, Lancashire?s SSA is increased by 2.1 per cent. In the league table of shire counties, in that respect Lancashire comes 35th of 39. Kent has received a 4.8 per cent. increase and that makes Kent third in the league of 39. Essex has received a 3.9 per cent. increase and is ninth in the league. Hampshire has received a 5.1 per cent. increase and is second in the league.
My hon. Friend the Member for Blackburn (Mr. Straw) has made it clear in figures that he has published in recent

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weeks that, in all shire authorities, Conservative-controlled authorities have received increases averaging 3.7 per cent.; Liberal Democrat-controlled authorities have received increases averaging 3.7 per cent.; authorities with no overall control have received increases averaging 3 per cent. Labour-controlled authorities have received increases averaging 2.2 per cent.
The area cost adjustment is not the whole problem, but it is a substantial part of it. The figures, which are always difficult to extract from the documentation that is being worried over, show a deliberate discrepancy in funding which it is hard not to see as deliberately designed to penalise Labour-controlled authorities and to reward the Tory heartlands. That is corrupt in the same way that pork barrel politics is corrupt in the United States, although the latter is rather better hidden.
The practice signals a Government who are so consumed by vanity and arrogance that they believe that they can shift large amounts of public money away from Labour or non-Tory authorities to Conservative authorities and consistently get away with it. They may be right, because they have got away with it so far.
That practice also signals a fundamental dismemberment of local democracy which is as offensive to many local Conservatives as it is to local and national Labour politicians.
I do not suggest that funding for counties in the south and east should be cut. I believe, as Conservative Members believe—in theory, at least—in levelling up. Obviously, special measures must be taken to take into account the special problems of London. That part of the ACA could be justified, but it should surely come from outside the total SSA settlement. In so far as the ACA allows for supposed extra costs to the south-east shires for items such as police wages, fire service wages and so on, the figure is bogus, as was revealed earlier. In fact, it is a subsidy that is paid by the rest of us to half a dozen Tory shires.
Yesterday, in relation to DAF, the hon. Member for Amber Valley (Mr. Oppenheim) made it clear what Conservative Members think about subsidies. He said that if we give DAF money to save that firm, we will have to take money from other firms and destroy them. That is precisely what is going on in local government. I am sorry that the hon. Gentleman is not here to make the same case tonight.
The ACA is in the front line in the system of bad distribution of public funds, and that system needs to be corrected. Within that system there are many other anomalies. In my county of Lancashire, year after year SSAs for personal social services have been systematically below the average for the country and they become slightly worse each year.
One matter that has niggled me for a considerable time is the funding element in SSAs for under-fives education. It is calculated—I have mentioned this matter in every possible forum—on the basis of the population of under-fives in an authority, not the educational provision for those children. Wild anomalies are apparent. Some of the same counties are involved—is not that strange?
In Lancashire, in 1992–93 21,172 under-fives were provided for in terms of nursery education. Its SSA allowance for that is £22.9 million. In Hampshire, 13,207 under-fives are provided for, and the SSA is £22.7 million,
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almost the same amount as for Lancashire. In Kent, about half as many—11,100—under-fives are provided for. The SSA for Kent is £22.1 million—very little less than Lancashire's. In Essex, 12,900 under-fives are provided for, and the SSA is £21.63 million. If we take Lancashire's SSA per pupil as £100, we see that Hampshire has £159, Kent £184, and Essex £155. Incidentally, West Sussex would have £230 on the same basis.
The problem is that that is active discouragement for local authorities to provide nursery education, which might be part of the plot—I remember what the previous Secretary of State for Education thought of nursery education. It is a disincentive for a bad provider to provide more, and it is a disincentive for a good provider to continue being a good provider if it is to receive the same amount of money anyway, depending on the number of under-fives in its area. If the under-fives element of SSA were funded equally, Lancashire would get £5.6 million more than it presently does. That would go a long way to solving some of the county?s problems. In every authority in Lancashire, education accounts for more than half its expenditure.
On 16 January, my hon. Friend the Member for Hyndburn (Mr. Pope) received an answer from the hon. Member for Hornchurch, comparing expenditure per school pupil in those four counties. Boiled down to its essence, the answer showed that, on the basis of expenditure per pupil aged five to 16 inclusive, Essex receives £110 per pupil more than Lancashire does. If funding were level, that would be £20.97 million more for Lancashire. Hampshire receives £33 per pupil, and Kent receives £119 per pupil. If Lancashire were funded on the same basis as Kent, we would be £22.7 million better off —and; yes, we would like it, please.
Wherever one looks in the miasma, one finds such anomalies. Before I became a Member of the House, I used to believe in the cock-up theory of politics. I no longer believe it. The SSA calculation, which gives off an air of technical neutrality—a system that was invented by robotic accountants, remorseless but pure—is in fact subject to arbitrary judgments and adjustments which all too clearly reflect the Government's attitude to people who have the temerity to elect Labour authorities.
A delegation from Lancashire secured a meeting with the Minister at which we debated the problems and raised several anomalies. To save time, I shall not refer to them, but the anomalies have already been mentioned—for example, in relation to the further education adjustment, nursery provision and other elements of ACA. We were able to lift the capping limit by £6 million. It would have made a difference, had our case been upheld, of £47.3 million for Lancashire, given that we would have had to have made virtually no cuts this year. Unfortunately, at the same time, as the hon. Member for Cheltenham (Mr. Jones) pointed out happened to his authority, our SSA was reduced. The capping limit went up and the SSA went down.
The state of affairs that I have been trying to sketch is not a one-off punishment; it is one stage of a progressive process that is forcing Lancashire to its knees. Cheered on by the hon. Members for Lancaster (Dame E. Kellett-Bowman) and South Ribble (Mr. Atkins), through capping, the Government forced through £40 million-worth of cuts last year and they are forcing close to

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another £60 million-worth of cuts this year. That means many redundancies—of course it does— and cuts in discretionary grants which we had to make last year.
I took part in that decision as a county councillor, and I hated it—we all did. It means cuts in home helps, schools, lollipop ladies—you name it. In particular, it means a cut in essential school build in my constituency, and that causes me great agony.
Yesterday, the hon. Member for Lancaster called Lancashire bureaucratic. I remind her that the central administration costs for Lancashire are much less than they are in most private industry. However efficient, no local authority can withstand for long the steady cutting of its income and of its allowable spend. The Government know that better than anyone. The nub of their strategy is to make local government impossible.
The bureaucracy we fear is not that of counties and town halls but that of Whitehall, and Marsham street in particular, steadily drowning the country in a sea of red tape and formulae in order to centre all power in the Government. The country will wake up in the not-too-distant future, if it is not careful, and find itself in a centralised tyranny— although perhaps a smiling one—worthy of somebody such as Erich Honecker.
7.58 pm
Mr. Barry Field: I thank you most sincerely, Mr. Deputy Speaker, for calling me at such a late hour. I know that you have squeezed me in against all the odds because you recognise the peculiar circumstances that the Isle of Wight faces. I should be remiss in my duty if I did not place on record the undying thanks of all my constituents on the biggest of England's offshore islands for the opportunity that you have afforded me this evening.
I wonder whether I might call upon the hon. Member for Lancashire, West (Mr. Pickthall) to do me the great favour of standing up for a moment and looking at the Liberal Democrats Benches to see whether one of the Liberal Democrats is lying on the floor. I should not like to accuse the Liberal Democrats of being absent. Perhaps the hon. Member for Blackburn (Mr. Straw) will confirm that no Liberal Democrat Members are here this evening.
Mr. Straw: I am saddened to have to confirm that news, which will bring tears to the eyes of Conservative and Labour supporters alike in the Isle of Wight and across the country.
Mr. Field: I shall develop that theme in due course.
The hon. Member for Lancashire, West (Mr. Pickthall) mentioned the Isle of Wight more times than anyone else has this evening. It is the only county council controlled by the Liberal Democrats—and where are they? They are nowhere to be seen. The Labour Front-Bench spokesman, the hon. Member for Blackburn, has confirmed that there is no one on the floor hiding behind the Benches, so they are not present here this evening. That is an extraordinary state of affairs, particularly as the Liberal Democrats are forever telling us that they are the guardians of local government and how they always champion the cause. It is deplorable that none of them is here this evening.
You have heard me say on many occasions in the past, Mr. Lofthouse, that the Isle of Wight is renowned for its dinosaurs and fossils. You may think that I am going back in time, but I have heard a number of hon. Members on
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both sides of the House make various points about local government finance and the way in which SSAs work. My claim is well established that we on the Isle of Wight have probably been longer at this than any other constituency in the United Kingdom. In 1965, the Edwards committee reported to the equivalent of the Department of the Environment in those days—I think that it was the Ministry of Local Government. I see that my hon. Friend the Member for Bromsgrove (Mr. Thomason), a former chairman of the Association of District Councils is here this evening and I am sure that he will correct me if I am wrong.
The Edwards committee concluded that there was a need for an adjustment in local government finance for the Isle of Wight. I have been here for six years and I have mentioned it on every opportunity. I do not apologise to the House for keeping up this tirade because, as we hear so often—and we have heard it again,Mr. Lofthouse —
Mr. Deputy Speaker: Order. I hesitate to intervene in the hon. Gentleman's speech and I recognise that the House has spent a lot of time in Committee recently, but on this occasion I am not addressed as Mr. Lofthouse.
Mr. Field: I apologise, Mr. Deputy Speaker, and in future I shall not refer to you by the name by which your dear lady normally refers to you. I apologise for that apparent discourtesy to the Chair. You know me well enough, Mr. Deputy Speaker, to know precisely how contrite I am.
This is a long-running saga that I have mentioned at every possible opportunity. I make no apology for that, because I disagree with some Opposition Members who say that we are not dealing with a listening Government. The Isle of Wight has been recommended for unitary authority status by the Local Government Commission. It is something that we have been after for many years. It is necessary to reform the structure of local government on the island, particularly when one considers that it is conservatively estimated that it would result in a saving of £1 million to £1.5 million per annum.
Mr. Straw: We are as interested as the hon. Gentleman is in the proposal for a unitary authority for the Isle of Wight. Does he share my concern that the Local Government Commission has proposed that there should be all-out elections once every four years and does he agree with me, with the right hon. Member for Brent, North (Sir R. Boyson) and with many other Conservative Members that accountability on the Isle of Wight and elsewhere will be strengthened if there were a cycle of elections each year with a third of the councillors retiring?
Mr. Field: During the beef scare I was pictured eating the last plate of English roast beef in the House of Commons. When there were particularly poor political comments about the quality of water in the Solent, I took part in a swim and was seen by the BBC drinking the sea water from the Solent. Following those events, there appeared in my local press a short letter which said, ?He eats the beef, he drinks the sea water, now we know what is wrong with him.? Local government needs elections every year like it needs a hole in the head. Controlling parties need a four-year term in order—
Mr. Deputy Speaker: Order. We are talking about local government finance this evening and not elections. Will the hon. Gentleman get back to finance?
Mr. Field: I have got the message, Mr. Deputy Speaker. I wanted to answer that point, and I am sure that you would not want me to neglect to point out who started it.
We are dealing with a listening Government. We have had the interim results from our Local Government Commission suggesting that the Isle of Wight should have a unitary authority. Of course, we do not yet know what is in the Secretary of State's mind or whether he will accept the recommendation, but if it does not happen there will be disappointment in all parts of the political spectrum. It will lead to more user-friendly and efficient local government on the island.
The great bedevilment of local government—I know that hon. Members representing metropolitan authorities do not suffer from it as they are already unitary authorities —is that district councils or borough councils get the money and county councils spend it all. The chap who puts the little cross on the little piece of paper with the little pencil, as Winston Churchill said, cannot understand that. The connection between raising income and expenditure has for too long been disjointed in local government and I hope that a unitary authority will resolve that and produce better accountability.
It is easy in such a debate to make political points. I am as tempted as anyone to give a long list of the misdemeanours, as I see them, of the Liberal-controlled county council on the island and the opportunities that would be afforded by a change of administration. However, I do not intend to do that. [HON. MEMBERS: "Shame."] My hon. Friends may say, "Shame," but I have built my reputation on representing the whole of the island and all its views.
I note that the standard spending assessment has been changed as a result of a change in pupil numbers. We often see the Opposition opposing grant-maintained status and then leaning on the education budget to try to balance the books. I find that quite unacceptable.
We have suffered as a result of the 1991 census. Throughout the 1970s and 1980s there was tremendous population growth on the island. That was interpolated and carried forward, but the 1991 census revealed that the rate of growth had not continued. That caused us some concern. It will come as no surprise whatever that some of my political opponents have tried to blame that on the Government.
I should like to place on record my gratitude and that of the councils on the island for the way in which my hon. Friend the Local Government Minister saw us so promptly just before Christmas, a difficult time of the year for us all. He saw two deputations from the island and we had an extremely good meeting. As a result, I received a letter from my noble Friend the Minister of State, Home Office, who wrote on 27 January confirming that
?Ministers are prepared to consider proposals for changing the distributional arrangements of the SSA, and I know that fire distributional arrangements are on the programme of work for the 1994–95 SSA Working Group. I would urge you to voice your concerns through the Association of County Councils which is represented on the Working Group.?
I have told my hon. Friend in private as well as in public that the Association of County Councils has never supported the Isle of Wight's case and I do not believe that it ever will. Of course the island is something of an anomaly in county council terms, and if the Association of County Councils supports one special case it will set a precedent and have to support many special cases. We
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understand that, but we had hoped that we were quite exceptional and that we might get the association?s support.
Today, Sir John Banham, the Chairman of the Local Government Commission, has journeyed to the Isle of Wight, where he wished to meet His Excellency the Governor of the island, the chairman of the county council, the local borough council representatives, the chief executives and me. I was unable to be there because I wanted to take part in this debate this evening.
I shall not take up the time of the House by going through a long list of anomalies and their peculiar effect in our unique constituency. However, I invite my hon. Friend the Minister, in winding up, to confirm to the House that he and I have had conversations about this, that I have written to him, and that in due course he will be writing to me. It is a subject to which I, like many hon. Members in all parts of the House, will be returning on a number of occasions—I hope, ere long, with a unitary authority on the island. I believe that there is a fundamental mismatch in the way that the formula works, as was highlighted as long ago as 1965.
Thank you so much for squeezing me in, Mr. Deputy Speaker.
8.11 pm
Mr. Paddy Tipping: There are thousands of local councils all over the country which are determined to provide good quality services that meet local needs. They are committed to that task, and it is important that we stick with them and that there is a partnership between local and national government to make that happen. I do not think that talk of corruption within the councils, of whatever type, helps that relationship. We ought to be looking at the positive areas and rewarding and praising the efforts of so many local councillors.
However, there is a bizarre situation in which many of those councillors feel that the Government hold all the cards. It is the Government who decide the SSA, set the cap, decide and define the business rate and decide the amount of revenue support grant.
I was very interested in the Secretary of State?s comment about the SSA, that it was a mechanism for distributing grant. I hope that in winding up the Minister will make it clear that that is the Government?s view of the SSA—a way to distribute grant, not a yardstick, not a seal of approval, to define and defend the amount of Government money to be allocated to councils.
Given the Government?s range of powers, it is not surprising that local councils have very little power to raise their own revenue. In my own county, Nottinghamshire, in the current financial year, only 24 per cent. of revenue is raised locally. Of the remaining 76 per cent., 33 per cent. comes from the business rate and 43 per cent. through the revenue support grant. Given the element available for local discretion, it is not surprising that, if a council wants to provide good quality services or to do something extra, the cost falls on the local taxpayers. The problem is that, given the current small tax base, the smallest tax base of any local council in Europe, the gearing effect, the effect on people who have had to pay the charges, is extremely high.
I have looked with interest at what the Secretary of State has said in the past about capping. He has been keen

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to talk about local accountability. At one time he talked about capping as a mere reserve power, and he went on to say that it was important that we used rarely, and only
?to protect charge payers of an area against extreme cases of extravagant and irresponsible local authorities.?—[Official Report, 25 April 1988; Vol. 132, c. 51.]
What has happened to the Secretary of State?s views over the past five years, because it is quite clear from the announcement that he has made that, in effect, virtually every council in England is now capped? There is not even a very limited element of local discretion.
Given this, it is not surprising that it is very difficult to find people who will become local councillors. The capping powers announced this time are the most stringent powers that have ever been taken. It is quite clear to me that, given the severity of the cap, there will be cuts in services and expenditure by the majority of councils this year.
Those cuts spring directly from the Government. They hold all the strings and they pull all the levers. The revenue support grant is extremely tough. The Secretary of State told us that it was £41.1 billion and that it would be adequate. He told us that it represented 3.1 per cent. growth. We have to compare figures properly. It is quite clear to me and to people working in local councils and local authority associations that there is no growth in this year's spending as against next year's planned spending by the Government. In fact, local authorities face a cash squeeze this year—a cash freeze.
We should contrast that with the Government's plans for themselves. Again, it is absolutely clear that, while councils are having a cash freeze—or, in the Government's eyes, mere growth of 3.1 per cent.—the Government's own expenditure is rising by 6.5 per cent. Why are local authorities being singled out for differential treatment? It is interesting that in every Government Department except Defence the rate of growth next year will be greater than that for local authorities.
I am pleased that the Government have done some work on notional figures. There is a feeling, however, that the notional figures proposed for taking money out of further education and out of highway maintenance are overstated. We are pleased that the Minister has listened to representations from Nottinghamshire and has increased its notional amount for FE spending. This is not extra money; it just raises the cap and allows us more flexibility. I draw attention, too, to highway maintenance, where £170 million is being taken out of the settlement and, according to local authority estimates, only £50 million is being spent. Clearly, if their figures are correct, £67 million has been taken away from local authorities.
There are other problems too. The withdrawal of section 11 is another burden for local authorities. The urban programme has been frozen and local authorities have been picking that up. In the last few weeks cuts have been announced on emergency planning. If local authorities, local councils, want to do that they have to pick up such things. Then there are insurance problems and, perhaps most particularly, the decision to raise superannuation funds back to 100 per cent. funding, albeit over a period of years. It is important to remember that that was cut to 75 per cent. only a few years ago to lessen the impact of the poll tax, but now local authorities are being told to make up those potential deficits, and it is at the cost of the poll tax payers.
Let me now consider the years beginning 1994–95 and thereafter. In the next financial year, new census
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information will be pushed into the settlement. I welcome that. All the new census material will be used in a more basic way in 1994–95. In particular—this point has been made by a number of my hon. Friends—I hope that the area cost adjustment will not just be looked at, but be acted upon. According to my figures, the area cost adjustment has increased from £418 million in 1989–90 to £1.3 billion in 1992–93. That is a rise of 214 per cent.
The work that the Association of County Councils and others have done has highlighted a problem concerning the area cost adjustment. It is clear to me that it overstates the position in London and some south-east counties, and I hope that the Government will listen carefully to representations and try to put it on a better footing next year. I estimate that Nottinghamshire county council is paying £24 million for area cost adjustment. They are keeping down the council tax in London and the south-east; they are raising revenue from their own people to keep council tax bills down elsewhere. That cannot be right, particularly if the basis for the area cost adjustment is so badly wrong. I hope, therefore, that the Minister will not only endeavour to look at this matter but will be prepared to act on it.
Standard spending assessments are to a large extent the root of the problem. I hope that when we get the new census information we will set it against the SSAs so that we can compare, for example, why the SSA per head in Wandsworth is £1,112, in Westminster is £1,200 and in Ashfield—in Hucknall, for example, a mining village which is experiencing real difficulties at present—is only £675. I defy the Minister to tell us that it is because deprivation and real need are greater in Westminster and Wandsworth than in mining communities in Nottinghamshire. Such an analysis will not stand up.
I issue a challenge. We will look closely at the census data, when they are on a small area statistics basis, and we will compare them with SSAs. I hope very much that there will be a move to give authorities in the north and the midlands a fairer chance.
But, given all the levers and all the strings that the Government push and pull, it is not surprising that sometimes things go wrong. They made a prediction some years ago of a council tax of £400 for a band D property. The prediction now is for £494. Given the settlement that has been made, I believe that the figures in Nottinghamshire will be much higher. For a band D property I do not believe that the figure will be £494. It is entirely a matter for councils themselves, but in Nottinghamshire I believe that the figure at the bottom will be about £590 and that it could go up to £660.
That is because we have a system in which the mechanics and the levers are all in the hands of the Government. It is a system that we must change, and we must change it now, because all over the country people will next year face higher bills than were predicted with lower services than were promised. They face a double whammy: paying more and getting less. Nobody will put up with that system. A similar system killed the poll tax, and, if the Government are not careful, this son of poll tax will run into similar problems.
8.23 pm
Mr. Christopher Gill: I am grateful to be called at this juncture in the debate. While I enjoy the reputation of not being entirely uncritical of Government

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policy, may I tell my hon. Friends on the Front Bench that as regards tonight's debate I make no criticism whatever. Unfortunately, for reasons which I hope will become apparent in the course of my speech, I am unable to offer any praise, much as I would like to do so.
I am pleased to see in his place this evening my right hon. Friend the Member for Shropshire, North (Mr. Biffen), a fellow Salopian. I am sure that he will forgive me if I say that we make no special pleas from Shropshire. Shropshire is not a county noted for being narrow-minded or mean-spirited. I remind the House that Shropshire, being the cradle of the industrial revolution, is the county which gave the nation its ability to generate wealth and power previously undreamed of. Right hon. and hon. Members may care to ponder whether the House should spend a little more of its time considering matters of wealth generation, rather than, as tonight, always considering matters of spending.
I support very much the drive for restraint in public spending. As a nation we need to control what we spend publicly. All that we in Shropshire look for is a fair share of whatever is going, and we have arguments about the methodology which creates the revenue support grants that we are discussing today.
One of our two complaints is centred on the sparsity factor. Our county has a relatively small population, albeit a growing one, and it is spread over a very large area. This creates problems for us, particularly in respect of education. We have made the point consistently to Ministers for a number of years that Shropshire's sparsity factor is not adequately recognised.
The other factor to which we take exception is the area cost adjustment which equally prejudices the settlement for Shropshire. I shall not argue with other hon. Members about whose constituency is at the bottom of the league, but because of the methodology, and principally because of the sparsity factor calculation and the area cost adjustment calculation, Shropshire consistently comes very close to the bottom.
When it comes to the philosophy behind the revenue support grant calculations, I question the belief that absolute fairness can be achieved in these calculations. The realisation is beginning to dawn that in an endeavour to be absolutely fair to everybody we are ultimately fair to nobody. There are books full of equations and calculations, all designed to ensure that every county, every constituency, is treated with equity. I know—the Minister must also know from what has been said in the debate—that that view is not generally shared by hon. Members.
What we are trying to do today is to achieve a modicum of thrift in local government expenditure. I make no apology for using that old-fashioned word. It is perhaps not so well understood today as it used to be, and it is perhaps practised less than it was. We also want to see in local government expenditure not just thrift but accountability; and if we are to achieve accountability we must have intelligibility. Whatever we do must be intelligible to the people who elect councillors and, to an extent, to the same people who elect us to the House.
My hon. Friend the Member for Isle of Wight (Mr. Field), in a humorous and thoughtful speech, commented that people are a little confused, because of the structure
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of local government. When they put their little cross in their little box, they are not quite sure where the boundaries of responsibility begin and end. I contend that if the system—both the organisation of local government and, in particular, its financing—is not intelligible, it will not be accountable. If it is not accountable, there will be no thrift. That is the point that I hope that the Government Front Bench will register. If we are to obtain thrift in local government, we must make the system intelligible so that people can, from a position of understanding, take an honest and genuine interest in what is done in their name.
When I was a county borough councillor I felt that perhaps I was the last of a dying breed. At the time, I was a young business man and was prepared to serve my community. I suspect that people with such a background now are less prepared to give of their time to local government. Perhaps they do not have the inclination to cope with what I refer to as the gobbledegook which is included in so many publications to determine the workings of local government and local government finance.
I cannot equal the humour of my hon. Friend the Member for Isle of Wight, but I venture to suggest, at the risk of seeming somewhat facetious, that whoever wrote the equation on page 28 of HC422 could match the sense of humour of my hon. Friend. I crave the indulgence of the House to quote the equation, because I should like to see it in Hansard:
"[Q-R+[0.75(S-T)] + [0.5(U-V)] + [0.75(W-Q-S-U)]] x X/Y"
That is wonderful. It is clear as mud.
Mr. Redwood rose—
Mr. Gill: Does the Minister want to intervene and explain the formula to me?
Mr. Redwood: I was about to encourage my hon. Friend to read on because it becomes extremely clear. The only problem is that the debate is somwhat limited in time.
Mr. Gill: If I read the following two or three pages, I would find what G, R and so on mean.
Mr. John Biffen rose—
Mr. Gill: Is my right hon. Friend seeking to intervene?
Mr. Biffen: Would my hon. Friend reflect on the disposition of the Government constantly to suspend the 10 o'clock rule? One would have thought that the Government would have suspended the 10 o'clock rule on this occasion so that the debate could continue.
Mr. Gill: That is one of the ironies of life. I point out to my right hon. Friend that in the past few weeks I have spent a lot of time trying to ensure that the Government do not suspend the 10 o'clock rule when they have different intentions. Tonight, we are once again on opposite sides of that consideration.
Mr. Redwood: The Government were not planning to move the suspension of the 10 o'clock rule because they thought that all other hon. Members had read the formula and found it straightforward. I am sure that that is true.
Mr. Gill: As I said in an intervention to the hon. Member for Barnsley, Central (Mr. Illsley), I am not shy, and I encouraged him not to be shy in saying that we do

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not understand the matter. I shall tell the House about a lesson I learned in life which perhaps took me longer to learn than it should have done. I was often at the back of the class not understanding anything that had happened. When I picked up courage and asked the simple question—I am, after all, a simple man—the rest of the class erupted because it was the question that they also wanted to ask but were too shy to do so.
Let us ask the simple questions because, at the end of the day, a lot of people are much less intelligent than my hon. Friend the Minister but would like to understand the matter. Such people are deterred by the gobbledegook in the publications. I want to speak a little more about the question of incomprehensibility because such incomprehensibility acts as a deterrent to accountability.
I remind the House of the sensible words of my hon. Friend the Member for Brentwood and Ongar (Mr. Pickles), who instanced the cases of corruption in local government. There is bound to be corruption if those who are supposed to control finances do not understand and find things incomprehensible. Incomprehensibility acts as a deterrent not just to accountability but to attracting talented councillors, and it acts as a deterrent to members of councils in controlling their officers.
My hon. Friend the Member for Brentwood and Ongar also referred to maladministration. One has great sympathy with members of councils who, in controlling the officers of the council, are absolutely dependent on the advice and professional opinion of officers before they make decisions. Hundreds of councilors—I might also add Members of Parliament—will be dependent on the interpretation that borough treasurers and district council treasurers put on the publications that we are debating today. In other words, because of the complexity of the calculations, the initiative is very much with the officers and not with the councillors.
As a Member of Parliament, I feel less informed and authorit- ative on such subjects than I should like to be. In such circumstances, it follows that I am less helpful to the cause that the Government are propounding because of that lack of understanding of the finer points in these papers.
Mr. Redwood: To answer my hon. Friend seriously, the purpose of the formula is to work out the taxable capacity in each different part of the country. The reason why the formula must include halves and three quarters as some of the variables detailed in the document is that some people get discounts and exemptions. Those discounts and exemptions are reflected in the formula. We cannot simply take all the houses and say that that is the tax base. We must adjust the formula to show whether people are chargeable. As a result, we get a fair method of measurement around the country of the taxable capacity in each place.
Mr. Gill: I am grateful to the Minister for his contribution. I hope that Ministers will not be too defensive or over-protective of the status quo because there are other ways of doing this. I suggest that those other ways would be better understood by councillors and those who elected them. If we are to have accountability, it is important that people thoroughly understand what councils are doing. They must not depend on paid officials of the council to tell them what they think the councils are doing.
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I will labour the point about incomprehensibility because at the end of the day it is a deterrent to good local government and, obliquely, it brings national government and national politicians into disrepute. I take the view that one should not criticise anything unless one has something positive to put in its place. I hope that my hon. Friend the Minister will recognise that. In the past, I have often made submissions to the Government in an honest endeavour to make a system more comprehensible, simpler, more straightforward and, above all, understood by all of us, not just in this place but in council chambers and the electorate.
I suggest to the Minister that we should pay more than lip service to the principle of subsidiarity. It would be an enormous boost to the Government's credibility, especially in the context of the Maastricht debate, if we implemented the principle of subsidiarity in the United Kingdom. It would be a boost to the morale of councillors if they felt that they had not just the responsibility for discharging the various functions with which they are charged but total authority to do those things.
My hon. Friend the Minister has been involved in the commercial sector and he knows as well as I that the cardinal rule of good management is to place authority in the same pair of hands in which responsibility is placed. If there is one theme running through all this, it is that we should apply the principle of subsidiarity and ensure that councillors are given not merely the responsibility for functions but the authority to discharge them.
I suggest that the Minister should look hard at the scope for taking district councils out of the revenue support grant equation entirely and making them raise, through the council tax, 100 pennies for every pound that they spend— [Laughter.] The hon. Member for Sherwood (Mr. Tipping) laughs, and I understand why—it is because it is the first time that he has heard that radical proposal and he has not had time to think it through. When he has— hopefully he will read what I have said in tomorrow's Hansard—he may conclude that the Member for Ludlow had a point. I hope that he will give it further consideration. We are all open-minded people in this House and we like to consider new ideas.
In proposing that to the Minister, I must also warn him that there may be some mismatch if district councils are charged with that responsibility; he must try to ensure that the functions that councils are charged with are capable of being sustained by the local tax base.
The present review of local government should put the horse in front of the cart and not vice versa. First, it should decide what it wishes the functions of local authorities to be. Only when that has been decided can the organisational pattern of local government be decided, and thus its financing.
I remind the House of the three important words: let us make finance intelligible, for if it is intelligible we can make it accountable, and if it is accountable it will be thrifty.
8.42 pm
Mr. Gordon Prentice: I thank you, Mr. Deputy Speaker, for giving me the opportunity to follow the speech by the hon. Member for Ludlow (Mr. Gill). I shall not take long, as I am conscious that many of my hon. Friends wish to speak in this debate.
The hon. Member for Ludlow spent a great deal of time regaling the House with his difficulties in understanding

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the documents before us. I hope that I shall be able to shed some light on them and to explain the motives and the politics behind the formula on page 28 that he misquoted.
The hon. Member for Ludlow spoke about fairness, as did the Secretary of State, who said in his opening speech: ?You have got to be fair to local tax payers.? That is from the right hon. and learned Member who was responsible for introducing the poll tax—the man responsible for introducing the council tax. He wanted to get rid of the rates because, as he told The Financial Times:
"A property tax is not fair."
That was the justification for introducing the poll tax. The very same man is getting rid of the poll tax and introducing another council tax.
The hon. Member for Ludlow went on at great length about thrift, but it sticks in my throat to hear anyone from the Conservative Benches talking about thrift after the Government squandered £14 billion on the poll tax. How can they possibly talk about thrift with a straight face?
Fairness is not a characteristic of the new council tax. How can a tax be fair when single people get an automatic 25 per cent. discount on their council tax bills simply because they live alone? They could be millionaires or be living in band G houses, but they get a 25 per cent. discount, while a struggling family which is trying to get by just above income support level has to pay the full whack. That is not fair.
The politics behind the formula is that the Conservatives want to depress public spending. They are open about it. They want to cut public provision, as they do not believe in it—if it can be privatised, then privatise it.
The formula is another ideological attack on local government. Although we hear about efficiency and effectiveness all the time, it is not about efficiency. It is about transferring provision from the public to the private sector wherever possible. It is not merely happening to local government. Post offices and job centres are closing. Public provision is contracting everywhere, because that is the Government's ideological mission.
The tax is also a threat to democracy. My hon. Friend the Member for Blackburn (Mr. Straw) mentioned the erosion of democracy and the fact that councillors now lack controls because of the functions that have been transferred to what has been dubbed the ?new magistracy?—to shadowy characters who have not been elected but now have control of vast amounts of public money.
The revenue support grant settlement will mean major job losses. In my neck of the woods, it is about as welcome as a dose of anthrax. Job losses have spiralled since the right hon. Member for Huntingdon (Mr. Major) became Prime Minister in November 1990. There were 1,708 unemployed people in Pendle then, but the figure has spiralled to more than 3,000, and that was before the 574 job losses announced last week at Smith and Nephew.
On standard spending assessments, I shall not go over the ground that has been adequately covered by my hon. Friends the members for Sherwood (Mr. Tipping) and for Lancashire, West (Mr. Pickthall), who is no longer in the Chamber. The SSAs were supposed to be an objective measurement of need. Because Government grant follows them, they are important.
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The present Secretary of State for the Environment told the Association of District Councils conference on 17 September 1987:
?Our plans for the new grant system?—
the SSA—
?will ensure stability, accountability and a great deal more simplicity.?
He said the same about the poll tax, and he got that wrong. The new stable system that he was describing a few years ago is now under review by his Department and by the Audit Commission.
My hon. Friend the Member for Lancashire, West delivered a powerful critique of the flaws of the SSA system, which does not simply reflect need—whether in Lancashire, West, Barnsley or anywhere in the north of England—but tips resources to the south and the south east. The formula makes no allowances for unemployment or structural change. In my area we have lost 20,000 jobs in the textile industry. My hon. Friend the Member for Barnsley, West and Penistone (Mr. Clapham) mentioned the incredible changes in the mining industry in his area, which are also not reflected in the formula, yet it is supposed to be fair.
The SSA methodology is really suspect when it comes to members of our communities who come from the new Commonwealth and Pakistan. We were told that, wherever possible, information from the 1991 census is being used, but in the case of those members of our community they are using information from 1981. The information there is 12 or 13 years out of date.
What does this mean to an area like mine in north-east Lancashire? In Pendle, in 1981, 6.9 per cent. of the population came from the new Commonwealth and Pakistan. By 1991-these figures are not incorporated in the formula-the proportion had gone up to 9.9 per cent. In other words, there was a difference of a full three percentage points, yet this is not built into the figures.
Earlier, there was a discussion about the census. The Secretary of State or one of his friends tried to argue about the accuracy of the census, but we all know from experience that there has been a haemorrhage of voters from the register because of the poll tax. I am not the only person who says so: the Office of Population Censuses and Surveys itself says the same. That office says that the 1991 census is 500,000 people light. I suspect that many of those people live in inner-city areas-areas that tend to be represented by Labour politicians.
The Secretary of State has said that the new grant system provides accountability. What a joke. I want to quote from my local paper, the excellent Lancashire Evening Telegraph. Many of my hon. Friends know the paper and no doubt agree with me about its excellence. This is what my local paper, on 13 January 1993, said about the accountability that the Secretary of State trumpets:
?This drastic surgery on our local services— police, schools and the rest—has really nothing to do with local government.
The cuts are taking place by government decree—one that insists that, in order to stay below capping levels, the county council has to chop £60 million from its budget.
The only real input our local representives have in this process is to consider the list of horrible options put in front of them—such as fewer police and teachers.?
That says it all. All this talk about democracy—handing power back to the people—is a complete distortion of the truth.
The Secretary of State talked also about simplicity. We all know—the hon. Member for Ludlow (Mr. Gill) will

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appreciate this, as he believes in simplicity—that, the more simple the system, the moire likely it is to contain mistakes. We have got used to rough and ready, back-of-the-envelope stuff from the Government.
My local authority in Pendle had its SSA increased by a miserable £1,000—and that was after my councillor colleagues and I had gone to see the Minister to plead the case. My hon. Friend the Member for Lancashire, West (Mr. Pickthall) spoke at great length and with great eloquence about Lancashire county council. That council's SSA has gone down from the £866.4 million of November to £865.6 million. As I said earlier, these resources are being tipped from the north to the south of England.
I want to move rapidly to the question of gearing, which was touched on by my hon. Friend the Member for Sherwood (Mr. Tipping). A local authority is not a free agent in this respect. Indeed, 85 per cent. of local government spending is determined at the centre, arid only 15 per cent. by the local authority itself. If a council wants to spend rather more than central Government think it should spend, it has to make colossal increases in the council tax. We have heard a great deal about capping, but that is another story. The gearing is designed to hold public spending down—that is the whole object of the exercise.
Connected with this matter is the whole question of valuations. The valuations have been absolutely botched. It costs about £1.76 to value a property in Pendle. In Lancashire as a whole, the figure is about £1.90. There has been no proper valuation at all. We are going to see an avalanche—I have heard a figure of 1.5 million —of appeals in April when people get their council tax bills.
For example, a pensioner came to see me who lives in a farm cottage one third of a mile from the nearest metalled road and one third of a mile from the nearest street light. His rubbish is not collected by the local council. Before the introduction of the poll tax, he paid about £114 in rates. The couple are just above income support level, and, as their property has been tipped into band C, they will now pay £577. The man told me that he did not have that sort of money. He did not understand what was happening. He though that the new council tax would be a fair replacement for the poll tax. But it is not fair. It is not fair to him, and it is unfair to many other people.
To iron out some of the unfairness, the Government introduced a transitional relief scheme. But we know that that scheme has been massively underfunded. Ministers wanted £1 billion from the Treasury, but they managed to squeeze out about £300 million. This has had a horrendous impact in areas, such as Pendle, that are traditionally low-rated.
When, about a month ago, my colleagues and I went to see the Minister for Local Government and Inner Cities, we made it absolutely clear to him that the problem was that, even with increases capped, there were some very big percentage rises. We quoted the example of a two-person household in band A—67 per cent. of the people in my constituency live in houses in that band—with transitional relief. Even after the application of the transitional relief scheme, those people will pay 33.7 per cent. more in council tax than they did under the old system.
As I am conscious of the time, I wish to conclude with a word of warning to Conservative Members. It was the Pendle factor, among others, that sank the poll tax.
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Latterly, my predecessor, Mr. John Lee, was vocal in his opposition to the poll tax. In a low-rated, low-wage, poverty-stricken area, such as mine, the council tax too will have punitive effects.
There is nothing in this financial settlement—nothing in the transitional relief or in the council tax or in the SSAs—to give me, any of my council colleagues or the residents of Pendle any encouragement at all. It is a bad deal for north-east Lancashire and, more importantly, for local government generally.
9 pm
Mr. Roy Thomason: I am grateful to you, Mr. Deputy Speaker, for calling me as I had not intended to speak in the debate until I heard the remarks of the hon. Member for Blackburn (Mr. Straw), who is not now present. It is a pleasure to follow the hon. Member for Pendle (Mr. Prentice) who is, I believe, the gentleman who is alleged to have invented the loan swaps that have caused so much grief and difficulty for many local authorities.
Mr. Gordon Prentice: The member of Hammersmith and Fulham council who introduced it to loan swaps was Mr. Kim Howe, a Conservative leader of the council in 1981–82. If the hon. Gentleman wants to know the history of loan swaps in Hammersmith and Fulham, he should read the independent report, commissioned by the council and written by Mr. Van Veeder QC. It completely exonerates all Labour members of any nefarious dealings.
Mr. Thomason: I am delighted that the answer is given in such a pat manner that it must have been repeated on numerous occasions.
I wish to say a few words in praise of local government, as not enough is said here in support of the men and women who give such valiant service in the councils of England, Wales and Scotland. It is right that we should put down a marker noting what they do. Some 17,000 or 18,000 people serve in that way. It is inevitable that a few of them— whatever their party or political complexion—will prove to be rotten apples in the barrel. However, the country should express gratitude for the way in which the vast majority of them give of their time and service.
Some of those people feel that they have a constitutional role in local government that overrides the views and policies that may be dictated by and originate from the House and the national Government of the country. I say that because I recall the hon. Member for Burnley (Mr. Pike) attacking me vigorously on that issue not many months ago.
Local government is subservient to national, central Government. That has always been my view. However, again and again in the debate it has been argued that there is some divine right in local government to determine national policies that may run contrary to those of central Government. That has rarely been, and never should be, the case.
We do not live in a federal authority. There are plenty of European precedents of local government or inter-state government shaping the form of national policies, but that is not so in our country. The German länder, the Italians and even the French, to a lesser extent, have a history of small states coming together in relatively recent years to create a nation. They consider that their local government

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—in the sense that it is a federal organization— has rights to determine national policy. Such a belief is alien to the history and principles of this country.
Local government in this country does not have the right to demand expenditure levels contrary to the determined policy of the Government, supported by the House and the other place. The decisions must be made here. We should resist the temptation to give local government the right to seek to set expenditure levels in excess of the priorities that have been debated and determined in the Chamber. There seems to be some Opposition Members who believe that local government should embark on social engineering of some form. Such issues should be determined here in the Chamber, as they are matters of national, not local, priority.
The standards of probity that we should expect of local government, and that we so often see, have unfortunately fallen short in a number of authorities. That is true not just of individual members about whom accusations have been made or are being processed, but of some local administrations. That ought to worry Opposition Members, since almost all those local authorities are under Labour control.
Mr. Andrew Mackinlay: The hon. Gentleman may recall that, in a previous incarnation, I used to meet him in my capacity as a National and Local Government Officers Association official at the Association of District Councils, over which he presided. We both had to deal with the gross mismanagement of an organisation called the Local Authorities Management Services and Computer Committee, which cost district councils many thousands of pounds, which is probably still having to be paid over. I still have the files, and I remember that this happened under the stewardship of the hon. Gentleman and other members of the ADC. It is wrong of him to talk about mismanagement by Labour local authorities when there is a whole raft of evidence—he is well aware of it— of wrongdoing in LAMSAC, over which he, Lady Anson and others exercised a considerable degree of control.
Mr. Thomason: Since he has the files, the hon. Gentleman ought to recall the facts a little better. He should remember that LAMSAC, on whose board of management I never served, included among others representatives of an organisation known as the Association of Metropolitan Authorities—those members were prominent in its organisation and they came from the Labour party, as did representatives from other local government organisations. So the body was not stamped with any political mark, contrary to what the hon. Gentleman suggests. I appreciate that he may have lost himself in those files, which he seems to have retained to produce for events like this one, but he really must try to do better next time.
Earlier, I mentioned the high standards of probity in most local government. There has, however, been an appalling lapse of administrative control—not necessarily wrongdoing by individuals—in authorities such as Lambeth, Hackney and Sheffield, not to mention Monklands in Scotland. Those of us who want local government to do well and who want to be able to support it believe it fair to criticise those lapses of administration
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and sort them out. It concerns me that the Labour party seems slow to put its colleagues in local government right even though they have obviously gone wrong.
The hon. Member for Sheffield, Attercliffe (Mr. Betts) said that Sheffield had won the support of some beauty parade that appeared in the Local Government Chronicle, which showed that it was a well managed authority. I seem to recall that the article in question was based on a survey of the views of local government officers, not on external appraisal by a body such as the Audit Commission. Those local government officers were mostly in the employ of local authorities, such as Sheffield city council, controlled by the Labour party.
It follows that Labour Members should check their facts before claiming examples of good management practice. In this case, the hon. Member for Attercliffe cited an authority that had spent £10 million—lost £10 million —on the student games, and which is now spending money on providing offices for Members of this House.
There have been allegations in this debate of rigging the population formulae for assessing revenue support grant. Extraordinarily enough, Opposition Members suggested that the population of certain parts of the country was being under-estimated because their residents were trying to avoid registration for community charge purposes. It is surprising that some hon. Members think that many of their constituents sought to avoid the legitimate processes of community charge registration. Those hon. Members must answer to their electorates for that.
Opposition Members fail to understand the significance of population increases and movements in terms of the estimates and appraisals in the RSG calculations. We all know, and some hon. Members will know to their cost as the parliamentary boundaries are changed, that inner cities are being depopulated, a trend that has continued for many decades. Conversely, some urban fringe and rural areas are seeing a population explosion.
Local government in such areas has to provide a substantial infrastructure to support the increased population. New schools and roads have to be constructed, and even new social services offices have to be built. Therefore, the demands on local government in the expanding parts of the country are very much greater than in areas of declining population.
There is no gerrymandering when revenue support grant properly reflects population changes that are the inevitable product of the movement of people. Such movements have continued throughout this country's history, as jobs change their nature and people seek to follow them. It is wrong to complain about grant following population in that way.
It has been said that there will be substantial job losses. There may be some, and we all regret that, but the Opposition and their colleagues in local government are engaging in much scaremongering. We were told that Birmingham city council would lose 1,000 jobs. Only a few weeks ago, the Labour leaders of that council said that they would lose 3,000 jobs. If that trend continues, they will tell us in a few weeks that they are about to take on employees. A review in the Municipal Journal reveals that 22 per cent. of local authorities will take on extra employees. We must avoid histrionics in talking about employment in local government. The truth may be very different overall when the figures are finally known.
Opposition Members spoke about spending. Many tears have been shed over the difficulties that local

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government will allegedly suffer next year because of the small increase in total standard spending over this year's budgets. The issue is important, because comparisons are being made between this year's budgets and next year's total standard spending. Local government, sometimes for bad reasons and sometimes for good, has spent substantially over its total standard spending in the current year. Is it suggested that that overspend should now be built into the revenue support grant calculations so that it is ratified?
That appears to be the argument, but it is nonsense, because it would mean that every local government overspend in every year would be automatically and retrospectively approved by the Government. That is not on, and the Opposition ought to know it. No Government, whatever their political colour, could possibly ratify past expenditure levels and simply carry them forward as a base for the next year. We must have a level of stability, which must be based on the total spending of the previous year, according to the formula. From that formula, additions are constructed.
Local government needs stability. I entirely support hon. Members' suggestions that area cost adjustments should be examined next year, and I welcome the Secretary of State's announcement that he is looking at the SSA mechanism. I trust, however, that, in considering any amendments, he will remember that violent changes in grant distribution from year to year should be avoided, just as violent changes in the demands on the individual community charge payer, or council tax payer, should be avoided from year to year.
The hon. Member for Pendle suggested that his constituents would suffer as a result of the imposition of the council tax. He seems to have completely forgotten about transitional relief. The same rules should apply to changes in SSAs and the grants that follow from them year by year.
Opposition Members have talked a great deal of nonsense. The truth is that the Government's proposals are eminently fair and reasonable. They will not make life difficult for local government; I know that my council colleagues of a year or two ago would make the same point. Of course it will be a tough settlement, but every year brings a tough settlement. Every year requires local government to investigate its expenditure thoroughly, and this year will be no exception. I am glad that the majority of local authorities will look at their expenditure carefully, and will seek to achieve efficiency and effectiveness in delivering services. I hope that the few that have not done so in the past will change in the future.
9.16 pm
Mr. Doug Henderson: In previous years' debates on the Local Government Finance Report, hon. Members have complained that debate has involved more of the same Tory attacks—more financial restrictions, more cuts in resources, more job cuts and more damage to local authority services.
Today's debate again involves more financial restrictions, more cuts in resources and jobs and more damage to local authority services. However, it differs from the debates of past years. Although such cuts have undoubtedly been made in the past, local authorities in the past have been able to mitigate, at least to some extent, the worst effects of Conservative cuts. They have increased
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local sources of finance to compensate for central Government cuts; sometimes they have dug deep into their reserves, and—as many of my hon. Friends will know—in numerous cases they have virtually emptied those reserves. They have also attempted to borrow on occasion, in an attempt to defend services and protect the local population.
Few such avenues are now open to authorities, because most borrowing schemes have been decreed to be inoperable. Authorities have lost the potential to tap reserves, and central Government—through severe capping regulations—have taken away their remaining powers to raise additional resources locally.
As the Government well know, the difference between this and previous years lies in the depth and severity of cuts—cuts in services, cuts in jobs on a scale unknown before the current round of local government financial announcements, cuts in virtually every part of the country. I warn Conservative Members to make no mistake— there will be pain in many constituencies, not only in those of my hon. Friends. There will be pain for children whose schools are not properly funded, pain for elderly people when home help services are cut, pain for young people when youth clubs are closed or they have to wait much longer to get a start on housing, and pain for most of us—indeed, all of us—who use roads which will be less well lit and less adequately maintained. There will be pain for almost all sections of the community because, whether hon. Members like it or not, virtually all members of our community are in one way or another dependent on local authority services.
The debate is about that difference in severity compared with previous years. It is about the additional pain that the cuts will inflict, but it is also about the negation of democracy, about denying local communities the right to determine their future and denying people the right to have a say in their community. It is no longer local people who decide what services are provided, what education or social services or what level of road maintenance is required. Essentially, central Government decide those matters.
The 152 Tory Acts relating to local government which have been introduced since 1979 mean that local government can no longer function democratically, and democracy cannot function without local government. It is our democracy which maintains our British way of life and which is infringed by repressive legislation. Ours is the only nation in western Europe and among the industrialised countries which has so much central Government control of local government.
Many other interesting issues have also been raised. The right hon. Member for Brent, North (Sir R. Boyson) showed himself capable of making a reasonable contribution, even though he is a Blackburn Rovers supporter—probably a very depressed Blackburn Rovers supporter—by making a plea for the house owners in his constituency who will suffer through being placed in a high band for the council tax. He said that the situation was worse because of the slump that he detected. He was able to distinguish between a slump and a recession because of his northern roots. The House and his constituents will be grateful for his observations. Certainly, his constituents will be grateful that he cares so much about their economic circumstances.
The right hon. Gentleman raised two other useful points on which we can all agree. He spoke about the

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inadequacy of our registration system for voters. I do not believe that we can have a proper democracy unless we know who is able to vote. There should be a debate between the parties to consider how to improve the system.
The right hon. Gentleman also said that the battle in— some ways, the relentless battle—between central and local government did neither party any good. He called for balanced, measured judgment and for local democracy. Unfortunately, he dug a little too deeply into his conscience and did not feel that he would be able to vote with the Opposition today. May I plead that, after hearing the debate, he might not need to dig so deeply as he had thought?
The hon. Member for Cirencester and Tewkesbury (Mr. Clifton-Brown) brought out a box of tricks which he had clearly obtained from Conservative central office. He is in danger of being known in future as the hon. Member for Pandora because even with his box he did not get it right in relation to public sector borrowing requirement problems. The blame does not lie with local authorities, which raise perhaps £10 billion a year, or even with central Government finance for local authorities, which is of the order of £32 billion a year. The real problem lies with the level of unemployment because we now spend £20 billion of virtually wasted resources buying ourselves out of unemployment.
I am glad to see that the hon. Member for Harlow (Mr. Hayes) has returned to the Chamber. He emphasised his duty to make representations on behalf of his constituents, and he certainly did that in a humorous way today. He said that he was not confident that the Minister would necessarily respond to all his representations. However, I believe that he revealed some of his real views when he paid tribute to the important work of a child abuse centre in his constituency, but was not prepared to recognise that there is a clear link between the way in which the SSA is calculated and the amount of resources available to a local authority to spend on that essential duty.
The hon. Member for Harlow also gave himself away when he criticised a community group having access to a public building at peak times. I should have thought that the whole purpose of a public building was that community groups should have access to it and, if they needed access to it at peak times, that was an appropriate use for that building.
Mr. Mackinlay: I am grateful to my hon. Friend for giving way to the authentic voice of Essex which I believe is vested in me. The Labour-controlled council of Harlow is having to grapple with the effects of inheriting a new town with its large infrastructure as well as the reasonable expectations of its residents, but that situation is not matched by appropriate funding from central Government. There is at least a moral commitment for the Government to fund that infrastructure. Is not the hon. Member for Harlow (Mr. Hayes) caught between a rock and a hard place? His Government are letting him down while his constituents are being failed by the same Government financially.
Mr. Henderson: I am grateful to my hon. Friend the Member for Thurrock (Mr. Mackinlay) for raising that point. The hon. Member for Harlow did not inform the
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electorate before the general election that there was a need to rein in public expenditure: the electorate found that out to their cost afterwards.
The hon. Member for Brentwood and Ongar (Mr. Pickles) said that he believed that the country deserved good local government, and I certainly endorse that. I was not sure about his point in respect of the redundancies in Birmingham, whether the figure for job losses is 3,000 or 1,000, but even 1,000 job losses is bad for a city such as Birmingham which has suffered some of the worst effects of the recession.
Mr. Riddick: Does the hon. Gentleman approve of the way in which Sheffield council has used poll tax payers' money to subsidise the constituency offices of five Labour Members to the tune of £55,000?
Mr. Henderson: Whatever else I thought about the hon. Member for Colne Valley (Mr. Riddick), I thought that he intervened in this place sufficiently frequently to have heard the answers to questions. Had he been in the Chamber today, he would already have heard that those facilities are made available to Members of Parliament in Sheffield.
The hon. Member for Cheltenham (Mr. Jones) agreed with my hon. Friend the Member for Blackburn (Mr. Straw) that it was surprising that the Secretary of State did not mention job losses. My hon. Friends the Members for Tyne Bridge (Mr. Clelland), for Barnsley, Central (Mr. Illsley), for Sherwood (Mr. Tipping), for Lancashire, West (Mr. Pickthall) and for Pendle (Mr. Prentice) identified the way in which the calculation of the SSA has been extremely damaging to their constituencies.
My hon. Friend the Member for Tyne Bridge compared the situation in Gateshead with that in Westminster, clearly demonstrating the inequities in the system. My hon. Friend the Member for Barnsley, Central has repeatedly emphasised the way in which the system discriminates against coal areas such as Barnsley. I pay tribute to his persistence and I hope that the Minister will say more about that than his predecessors have in years gone by.
Mr. Redwood: Is the hon. Gentleman associating those on his Front Bench with the idea that money should be taken away from inner London and given to the north? That would affect Camden, Islington, Hackney and Lambeth, as well as Westminster. Is that the Opposition's policy?
Mr. Henderson: I think that I am running out of time— [Laughter.] Hon. Members should wait a moment. I was about to help the Minister by explaining the work that has been done by Dr. Martyn Senior at the university of Salford in examining the criteria in respect of the standard spending assessment. The hon. Gentleman has brought me to that point a little prematurely, but I will answer his question.
At present, the criteria do not allow any significant impact for long-term unemployment, which badly damages certain and specific communities and leads to increased needs in respect of education, social services and economic development. That has nothing to do with comparisons between the north and London boroughs, but everything to do with an equitable system.
My hon. Friend the Member for Blackburn highlighted the failure of the capping system. He showed that cuts in

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local government expenditure have a deflationary effect on our economy. He said also that, when expenditure has been buoyant, so has the private sector, because it has gained much from healthy local authorities. He pointed out contradictions in the Secretary of State's position on capping, jobs and service cuts.
There are occasions in the House when hon. Members regret something that they have said. The Secretary of State has no great reputation for regretting things that he has done, but hon. Members might wonder whether he has any regrets about what he has said about capping. If he has some regrets, he will be able to take some consolation, for his political acrobatics have no doubt impressed Treasury officials well in advance of any leap that he might want to make in future from his Kremlin at No. 2 Marsham street to the bunker at No. 11 Downing street. If he is to square what he said in his November statement about no jobs being lost with what is evidently happening in local authorities, he will need the acrobatic qualities of the gladiators we see on television on Saturday evenings.
I remind the House that the Secretary of State said that local authorities should be able to maintain the full range of services that they provide if they run them efficiently. How does he square that statement with Tory authorities' response to his announcement? How does he square it with the response of Devon, which has announced £21 million in cuts and 145 job losses? How does he square it with the point made by the hon. Member for Cambridgeshire, South-West (Sir A. Grant)? Cambridgeshire's SSA is down from £402 million to £380.6 million, and 330 jobs are at risk. How does he square it with Harrow, where 10 per cent. cuts in services will take place and 200 jobs will go? How does he square it with Enfield, which has emphasised that it has a £21 million gap and that up to £10.5 million could go in its education budget?
Some schools have said that they could lose up to 20 teachers. An education officer has said that it is possible that children will be taught part-time at Enfield. The head of a school tells parents that children might be on a four-day week or a four-and-a-half day week by the time the council has finished its budget. How does the Secretary of State square what he has said with the situation in Barnet, where the chief executive has said that the effect of the Government's policy is to take the arms and legs off the local authority? The chief education officer in Barnet talks about the education system being bankrupt.
Mr. Howard: The hon. Gentleman should in future co-ordinate his speech rather more closely with that of his hon. Friend the Member for Blackburn (Mr. Straw). The thrust of his hon. Friend's speech was that the system was a giant con trick designed to favour Conservative-controlled local authorities at the expense of Labour-controlled local authorities. Now we have from the hon. Gentleman a litany of woe specifically related to Conservative-controlled local authorities. The Opposition cannot have it both ways.
Mr. Henderson: The Secretary of State must acknowledge that the Opposition are not trying to have it both ways. My hon. Friend the Member for Blackburn emphasised the advantage that he believes that shire counties have had, but he also emphasised that the SSA system was so inequitable that not only Labour authorities
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but many Conservative authorities were complaining. What is the Secretary of State's response to those authorities?
Sir Anthony Grant: Will the hon. Gentleman give way?
Mr. Henderson: No, I want to make progress.
Is the Secretary of State saying that those authorities are misrepresenting the true position? Is he saying that they are inefficiently run Tory councils? What is his advice to Barnet council? Is he saying that it should make £8.5 million cuts in education to avoid capping, or is he saying that teachers should be made redundant and class sizes increased? Is he suggesting that there should be part-time education in Barnet and that support staff should be sacked? Is he recommending that there should be cuts in equipment? Is he saying that all those cuts should take place? What is the Secretary of State saying to those Tory authorities?
What is the Secretary of State saying to parents in Barnet, who, in Conservative Britain, in state schools in 1993, are now being told that under local management their schools cannot afford to buy services from the local authority such as music, sport, and other facilities? What is his advice to the Tories on Barnet council? After hearing today's debate, is he still prepared to say that his settlement is an eminently reasonable one, as he stated in his opening remarks?
Clearly, great damage has been caused to our local authority services by the Government cuts and the destruction of local democracy. There is also a sense of grievance throughout the country, which is made worse by the feeling that the calculation of the standard spending assessment is distorted and biased. If we are to have a system of local government which is considered fair and which is honoured at local level by people of all political colours, as many Conservative Members have said today, we need a major review of the SSA system. It is not good enough to say that such a review will take place internally. I believe that there should be an independent review of local government finance. That is the view of Tory and Labour local authorities, the academic world and the Audit Commission. We all look forward to the evidence from the Audit Commission in future.
Contrary to their November statement that cuts would be unnecessary, the Government are asking the House to vote for deep cuts in local authority services. Contrary to that commitment, they are asking the House to vote for thousands of job cuts in local government at a time when 3 million people are unemployed. Contrary to the Secretary of State's commitment that capping should he used only as a reserve power, they are asking the House to vote for an unprecedented regime of Soviet-style central control of local government finance which will totally destroy democracy. Contrary to their claims about subsidiarity at the time of the Maastricht summit, they are asking for the right to deny British people the right to decide their own level of local authority provision, a right which any reasonable interpretation of subsidiarity would grant them.
We believe not only that the financial regime which the Government are set to impose on the British people is flawed and incomprehensible, but that its structure shows bias in the setting of SSAs and notional budgets and in the allocation of grant. Cuts will cause severe pain to those in local communities who depend most on local authority

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services, and job losses will have a further deflationary effect on the economy with a consequential increase in the cost of unemployment benefit. We believe that British people can be trusted at local level to decide the contribution that they make to their own services. We believe that democracy does matter nationally and locally, and we ask the House to reject the Government's proposal today.
9.38 pm
The Minister for Local Government and Inner Cities (Mr. John Redwood): The hon. Member for Newcastle upon Tyne, North (Mr. Henderson) certainly gave us a more powerful rant than the hon. Member for Blackburn (Mr. Straw), but his speech was equally wide of the mark. The charge of the Labour party that the grant system is biased and rigged is simply wrong. It is a disgraceful charge to make, and I intend to disprove it.
We have had a good debate, and I would like to add my praise to all those councillors and people who work in local government who were mentioned by my hon. Friend the Member for Bromsgrove (Mr. Thomason) and several other hon. Members on both sides of the House. Local government does extremely important work. We are often well served by our local councillors, and I add my tribute to them.
Mr. Jimmy Boyce rose—
Mr. Redwood: No, I must press on, because I wish to answer many points from the debate.
The hon. Member for Pendle (Mr. Prentice) dared to attack the idea that the single person should get a discount from the council tax. This is of great importance to 6 million people and it amazes me that the Labour party wants to take that discount from all those single people. I hope that my hon. Friends will be telling their constituents just what the Labour party wants to do in this respect.
The hon. Gentleman complained that the SSAs needed changing and that they were not stable enough. To add even more extraordinary remarks to his speech, he went on to say that the Office of Population Censuses and Surveys had identified that there were people missing from its census, but did not seem to realise that it had adjusted the census and added them back in so that the SSAs would reflect the actual number of people. There are good statistical methods for correcting these things and the work has been done by independent statisticians.
The hon. Member for Cheltenham (Mr. Jones) said that the Liberal party wished to take off all the caps and he did not mind the tax consequences. He told us that he had had no letters from people wishing to keep taxes low and that this did not really matter; we should allow local government in Cheltenham and elsewhere to spend anything it liked. If that were the policy that Parliament had approved, the hon. Gentleman would soon be getting plenty of letters from those living under Liberal councils throughout the country, because they are indeed spendthrift, just like the Labour councils, which spend more and provide less service for the money they are getting. He made no mention of the fact that Cheltenham is getting a 10.9 per cent. increase in its SSA this year—one of the biggest increases in the country.
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I should like to praise my hon. Friend the Member for Brentwood and Ongar (Mr. Pickles) for his excellent speech on the position of local government next year, drawing on his very wide experience of local government. I can reassure my hon. Friend that the internal management working party will look at the role of the officer and of the member in local government. I have much sympathy for his remarks that for good local government there needs to be a clear distinction between those roles; the councillors should be interested in policy and monitoring and should leave officials to get on with the job of executing and running the policies that they have agreed.
To the hon. Member for Barnsley, Central (Mr. Illsley) I can give the assurance that next year, when we review the SSAs, we will look not only at the data that are becoming available, which will be updated and changed, but also at the method. I take his remarks and those of other speakers in the debate as early representations of what they would like to see in those amendments to method. As the House will have heard during the debate today, there are many different views of how they should be changed, and of course different parts of the country want them to be changed in entirely different directions.
I enjoyed the remarks of my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Clifton-Brown). His was both an amusing and a hard-hitting speech. I also enjoyed the pantomime double act with the hon. Member for Wolverhampton, North-East (Mr. Purchase), who played the straight man, or the other end of the pantomime horse, with great aplomb.
My hon. Friend the Member for Cirencester and Tewkesbury attacked the debt mountain of certain local authorities. I echo his remarks that those local authorities that can get themselves out of debt naturally get more financial freedom. They show that they can manage their affairs extremely well and they are not then spending their money on interest charges; they are spending it on real services for their people.
The hon. Member for Lancashire, West (Mr. Pickthall) attacked the whole idea of the area cost adjustment. He seemed unable to grasp the point that, despite the area cost adjustment, because there are many other factors in the formula that help his part of the country at the expense of places like the home counties and London, his part of the country really does quite well. Lancashire's SSA per head is £615, while, of the counties that he eyed enviously, Hampshire has £568 and Oxfordshire £541. I do not think that his council or constituents would like it if we swapped the one for the other. It shows that the points that he made about Lancashire's needs are clearly picked up in the formula for the SSA.
My hon. Friend the Member for Isle of Wight (Mr. Field) was rightly disappointed that members of the Liberal party were not present to hear his contribution. It is strange, as the Liberals have always claimed an interest in the Isle of Wight, but now that it is safely under the control and in the good hands of my hon. Friend perhaps the Liberals have learnt that it is not worth discussing the Isle of Wight any more.
Mr. Nigel Jones: I apologise to the Minister and to the hon. Member for Isle of Wight (Mr. Field) for missing his speech. I had an engagement with the BBC at the time.
Mr. Redwood: The hon. Gentleman obviously knows where his friends are and where his friends are not.
Mr. Clifton-Brown: The hon. Member for Cheltenham (Mr. Jones) was desperate to get to the BBC before I did.
Mr. Redwood: I am grateful to my hon. Friend, who, I am sure, will have made better use of the invitation than did the hon. Member for Cheltenham.
I hope that my hon. Friend the Member for Isle of Wight is pleased that the Isle of Wight has, at 6.1 per cent., the biggest increase in standard spending assessment per head of any of the counties next year, and that it makes budgeting easier. It has picked up some of the points that he mentioned. I give him the assurance that we will look at the issue of the fire services SSA distribution in the working party and in the discussions ahead of next year's settlement. If he or any other hon. Member wishes to make representations on that, we will be happy to receive their letters.
The hon. Member for Sherwood (Mr. Tipping) made no reference to the Newark and Sherwood councils which have increased their budgets by almost 50 per cent., comparing the current year with 1990–91. Despite their having gone up 50 per cent. against inflation of 12 per cent., we were treated to the usual speech about deadly cuts and savage impositions by the Conservative Government. What price, then, the freedom of local government when a council in his own area can increase its budget by almost 50 per cent. if it wishes? It seems to me to show considerable local freedom and autonomy, together with the ability to put the interests of those providing the council services ahead of those of the chargepayer. The SSA is primarily a mechanism to distribute grant—the hon. Member for Sherwood seemed keen that I should say that—but, as he knows, it serves other purposes as well.
The hon. Gentleman also attacked the idea of the area cost adjustment. He seemed unaware that Nottinghamshire and an SSA of £603 per head while Surrey, deep in the area that he covets, has an SSA per head of £513. I hope that he will find that the £90 extra is not only useful but reflects the way in which needs differ between Nottinghamshire and Surrey and are picked up by the formula.
I was delighted to learn that my hon. Friend the Member for Ludlow (Mr. Gill) will give the Government his wholehearted support on this issue. I hear that there have been one or two disagreements recently between him and the Government, but 1 am delighted that he sees fit to support us on this occasion. We will look carefully at the points that he made on sparsity and area cost, but he may like to know that already his council is the second biggest beneficiary from the sparsity factor. That, among other things, will be reviewed. We will also review the weightings, although it would mean putting another fraction into the grant formula, and my hon. Friend, in his amusing speech, was a little critical of the fractions in some of the grant formulae.
I agree with my hon. Friend that we should attempt to make all that we do intelligible and easy to understand. Some of the documents are, by their nature, complicated because they attempt to provide accurate assessments around the country and they form the base for the computer programming and the detailed work of local authorities. There are more accessible ways of learning
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about the system. My Department has sent out leaflets in plain English on, for example, the council tax, so that people can find out how the system is built up without all the complex detail needed to run the computers aria define the SSAs precisely.
Mr. Straw: The Minister will recall that when he was asked on the BBC at lunchtime about whether jobs would be cut, comparing next year with this, he dodged the question. Will he tell the House categorically whether he believes that this time next year there will be fewer, the same or more jobs in local government than there are today?
Mr. Redwood: I will not forecast the number of jobs in local government, because, for example, there may be a good many grant-maintained schools. I do not know how many will decide to become grant-maintained. If that happens, the same number of people will still be employed but they will be employed by the schools, thus reducing the number employed by the local authorities. If a large number of local authorities do more competitive tendering, there could be a transfer of jobs from local authorities to the private sector.
Mr. Straw rose—
Mr. Redwood: The hon. Gentleman should let me answer and then he may have another cockshy if he wishes to. He may be disappointed that he is not getting anywhere on this point. One cannot forecast that sort of thing.
As my right hon. and learned Friend the Secretary of State said, the settlement means that there is no need for compulsory redundancies in any well run authority, given the increases in grant and permitted spending which we are offering. There may be one or two badly run Labour authorities which have budgeted badly, overspent and got into terrible difficulties in the past. Those authorities may have to take awful steps. My hon. Friend the Member for Harlow (Mr. Hayes) said that the fault lay with Labour Members, not Conservative Members, for the way in which such authorities are run.
Mr. Straw: The Secretary of State said that there will be no compulsory redundancies. In fact, in his letter to me dated 17 December he said that there would be no need for any job cuts. The question that I put to the Minister again, which is different, is: taking account of any transfers to the grant-maintained sector and privatised commercial undertakings, can he say that this time next year the overall level of jobs in local government will be the same as or lower than this year?
Mr. Redwood: I agree with my right hon. and learned Friend the Secretary of State that there will be no need for job losses. I refer the hon. Member for Blackburn to the survey in the Municipal Journal, which interviewed the personnel chiefs of all local authorities. Of the local authorities surveyed, 22 per cent. will be making extra jobs in key areas, especially in care in the community; only 10 per cent. are thinking of any job reduction and 68 per cent. are not thinking of making changes. That is one estimate; it is not my estimate. As I told the hon. Member for Blackburn, I will not estimate the number of jobs that there will be in local government in the next 12 to 15 months. Personnel chiefs suggest that more councils will increase staff numbers in key areas rather than make reductions.

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My hon. Friend the Member for Harlow gave the House a riveting account of what can happen in a Labour-controlled council which deliberately overspends. When such councils overspend, not simply by the odd million pounds but by many millions of pounds which they do not have, they must get the money back from the taxpayers.
Mr. Henderson: Is the Minister aware that Wandsworth council announced this week, as it prepared its budget, that it has overspent by £6 million? How does he compare Wandsworth in those circumstances?
Mr. Redwood: Wandsworth council is well known for its good financial management and low taxation. I do not expect to see Wandsworth as a potential applicant for capping, whereas I fear that one or two Labour-run councils may have to be so.
As we heard from my hon. Friend the Member for Harlow, the result of council overspending and bad management is damage to taxpayers and services and the sacking of employees. it is a disgrace that local authorities should be so badly run that councils get to the point of damaging taxpayers and services and sacking employees when the overall settlement is perfectly reasonable.
The hon. Member for Tyne Bridge (Mr. Clelland) contrasted Westminster and Gateshead as an example of alleged political bias. That is one of the kernels of the debate. The matter was first taken up by the hon. Member for Blackburn. The issue is whether there is any bias in the system. Let us examine the facts. On the standard spending assessment—it is right to examine the amount of spending and the grant based on it which councils are given for each individual in a local authority—the councils which do well under the current formula are Lambeth, at £1,241 a head, Hackney, at £1,410 a head, and Tower Hamlets, at £1,435 a head.
I can see a bit of political bias in that, but I fear that the criticism will come from Conservative Members, not from Labour Members. When I compare those figures with the shire areas, I see Surrey at £513 plus £80 or £90 for each district and West Sussex at £551 plus £80 or £90 for a typical district. Those figures are under half the level that large Labour and Liberal authorities in inner London receive.
Let us consider the specific argument of the hon. Member for Blackburn, who said that we had singled out the Labour shires for bad treatment. The eight Labour shires have an average SSA per head of £594, and the average for all shires is £585, so they had £10 per head more than the average.
Consider the averages by types of authority. In the shire areas, where there are more Conservatives, taking county and district together, it is £674 per head. In the metropolitan areas, where there are more Labour councils, it is £814. In London—with the considerable weight given to inner London where many Labour councils are—it is £1,055 per head. So I completely reject the idea that there is any political rigging whatsoever. The hon. Member for Blackburn does not want to intervene now because he knows that that is right. He knows that the formula gives more money to Labour-controlled areas.
Mr. Straw: I am grateful to the Minister; he should not make an invitation like that. He failed to deal with the fact
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that the increase for Labour shire counties, at 2.2 per cent., is well below the increase in SSAs for Conservative shire counties, at 3.7 per cent. The difference in the increases shows the bias of the Conservative Government.
Mr. Redwood: They were getting more before and they will be getting more next year. Their increase is smaller because their populations have been falling, or have not been increasing as much as those in Conservative areas.
In introducing the debate, the hon. Member for Blackburn made a wimp of a speech; a stumble of a speech; a speech that died of intellectual rigor mortis long before he got to the end. I began to wonder whether he was understudying the shadow Chief Secretary to the Treasury, because he certainly lost his hon. Friends and most of mine in his strange arguments about public expenditure. I began to wonder whether he had come to the wrong debate.
The hon. Gentleman went on to make claims about the state of local government based on a survey that had just been conducted—a survey that he thought was independent and rigorous. I see this statement on the inside of that survey:
?The client for the independent budget monitoring project is the Labour party.?
What an independent survey. Labour organised the questions, paid for the results and decided whether to publish them. There is open government in practice.! The Opposition are obviously trying to warm up their ideas.
When we look at the first survey resulting from that expensive piece of consultancy, we find not so much a survey but more a loosely linked group of 80 casual press cuttings. Any press cutting with bad news attached is included and any cutting with good news attached is scrupulously avoided and kept out.
It is like the Opposition's policy on local government: give prominence to the announcement that Birmingham will cut 3,000 jobs and let people believe that they will be sacked and that there will be compulsory redundancies; let the families of all those people squirm; let those employees go home at night worrying whether they will have a job in the morning; and then play it down when they are told a few days later that there will be only 1,000 job losses at maximum, and that no one will be sacked or made redundant. As one of my hon. Friends said, who knows how many job losses they will be predicting in a week or two? I hope that it will be none.
Let us consider what happened in Avon. I had to go on the radio and explain why I thought that there would be 4,000 job losses. I said that I did not think that there should or would be. The ?Today? programme of the BBC was not interested in the story that followed, when Avon climbed down and said it was not 4,000, 2,000 or 1,000 job losses, but that 170 posts might disappear. I hope that it will be none.
Dr. Berry: Will the Minister give way?
Mr. Redwood: No, I shall not give way.
I know that for some local authorities next year will not be easy—
Dr. Berry: On a point of order, Madam Speaker. Is it in order for the Minister to give inaccurate information to the House and refuse to give way when he is challenged?
Madam Speaker: The Minister is responsible for his own comments and statements.
Mr. Redwood: It is obvious that the hon. Gentleman wanted to stop my peroration. He does not like what I am saying.
Dr. Berry rose—
Madam Speaker: Order. The hon. Gentleman must resume his seat.
Mr. Redwood: This is a fair settlement, a good settlement, and I commend it to the House.
Question put:—
The House divided: Ayes 308, Noes 251.

Division No. 140]

[10 pm

AYES

Adley, Robert

Coombs, Simon (Swindon)

Ainsworth, Peter (East Surrey)

Cope, Rt Hon Sir John

Aitken, Jonathan

Couchman, James

Alison, Rt Hon Michael (Selby)

Cran, James

Allason, Rupert (Torbay)

Currie, Mrs Edwina (S D'by'ire)

Amess, David

Curry, David (Skipton & Ripon)

Ancram, Michael

Davies, Quentin (Stamford)

Arbuthnot, James

Davis, David (Boothferry)

Arnold, Jacques (Gravesham)

Day, Stephen

Arnold, Sir Thomas (Hazel Grv)

Deva, Nirj Joseph

Ashby, David

Devlin, Tim

Aspinwall, Jack

Dickens, Geoffrey

Atkinson, Peter (Hexham)

Dorrell, Stephen

Baker, Nicholas (Dorset North)

Douglas-Hamilton, Lord James

Baldry, Tony

Dover, Den

Banks, Matthew (Southport)

Duncan, Alan

Banks, Robert (Harrogate)

Duncan-Smith, Iain

Bates, Michael

Dunn, Bob

Batiste, Spencer

Durant, Sir Anthony

Beggs, Roy

Dykes, Hugh

Bellingham, Henry

Eggar, Tim

Bendall, Vivian

Elletson, Harold

Beresford, Sir Paul

Emery, Rt Hon Sir Peter

Biffen, Rt Hon John

Evans, David (Welwyn Hatfield)

Blackburn, Dr John G.

Evans, Jonathan (Brecon)

Body, Sir Richard

Evans, Nigel (Ribble Valley)

Bonsor, Sir Nicholas

Evans, Roger (Monmouth)

Booth, Hartley

Evennett, David

Boswell, Tim

Faber, David

Bottomley, Peter (Eltham)

Fabricant, Michael

Bottomley, Rt Hon Virginia

Field, Barry (Isle of Wight)

Bowden, Andrew

Fishburn, Dudley

Bowis, John

Forman, Nigel

Boyson, Rt Hon Sir Rhodes

Forsyth, Michael (Stirling)

Brandreth, Gyles

Forth, Eric

Brazier, Julian

Fowler, Rt Hon Sir Norman

Bright, Graham

Fox, Dr Liam (Woodspring)

Brooke, Rt Hon Peter

Fox, Sir Marcus (Shipley)

Brown, M. (Brigg & Cl'thorpes)

Freeman, Roger

Browning, Mrs. Angela

French, Douglas

Bruce, Ian (S Dorset)

Gale, Roger

Burns, Simon

Gallie, Phil

Burt, Alistair

Gardiner, Sir George

Butcher, John

Garel-Jones, Rt Hon Tristan

Butler, Peter

Garnier, Edward

Butterfill, John

Gill, Christopher

Carlisle, John (Luton North)

Gillan, Cheryl

Carlisle, Kenneth (Lincoln)

Goodlad, Rt Hon Alastair

Carrington, Matthew

Goodson-Wickes, Dr Charles

Carttiss, Michael

Gorman, Mrs Teresa

Cash, William

Gorst, John

Channon, Rt Hon Paul

Grant, Sir Anthony (Cambs SW)

Chaplin, Mrs Judith

Greenway, Harry (Ealing N)

Churchill, Mr

Greenway, John (Ryedale)

Clappison, James

Griffiths, Peter (Portsmouth, N)

Clark, Dr Michael (Rochford)

Gummer, Rt Hon John Selwyn

Clarke, Rt Hon Kenneth (Ruclif)

Hague, William

Clifton-Brown, Geoffrey

Hamilton, Rt Hon Archie (Epsom)

Coe, Sebastian

Hamilton, Neil (Tatton)

Colvin, Michael

Hampson, Dr Keith

Congdon, David

Hannam, Sir John

Conway, Derek

Hargreaves, Andrew

Coombs, Anthony (Wyre For'st)

Harris, David

418

Haselhurst, Alan

Needham, Richard

Hawkins, Nick

Nelson, Anthony

Hawksley, Warren

Newton, Rt Hon Tony

Hayes, Jerry

Nicholls, Patrick

Heald, Oliver

Nicholson, David (Taunton)

Heathcoat-Amory, David

Nicholson, Emma (Devon West)

Hendry, Charles

Norris, Steve

Heseltine, Rt Hon Michael

Onslow, Rt Hon Sir Cranley

Hicks, Robert

Oppenheim, Phillip

Higgins, Rt Hon Sir Terence L.

Ottaway, Richard

Hill, James (Southampton Test)

Page, Richard

Hogg, Rt Hon Douglas (G'tham)

Paice, James

Horam, John

Patnick, Irvine

Hordern, Rt Hon Sir Peter

Patten, Rt Hon John

Howard, Rt Hon Michael

Pattie, Rt Hon Sir Geoffrey

Howarth, Alan (Strat'rd-on-A)

Pawsey, James

Howell, Rt Hon David (G'dford)

Peacock, Mrs Elizabeth

Hughes Robert G. (Harrow W)

Pickles, Eric

Hunter, Andrew

Porter, Barry (Wirral S)

Hurd, Rt Hon Douglas

Porter, David (Waveney)

Jack, Michael

Portillo, Rt Hon Michael

Jackson, Robert (Wantage)

Powell, William (Corby)

Jenkin, Bernard

Redwood, John

Jessel, Toby

Renton, Rt Hon Tim

Johnson Smith, Sir Geoffrey

Richards, Rod

Jones, Gwilym (Cardiff N)

Riddick, Graham

Jones, Robert B. (W Hertfdshr)

Rifkind, Rt Hon. Malcolm

Jopling, Rt Hon Michael

Robathan, Andrew

Kellett-Bowman, Dame Elaine

Roberts, Rt Hon Sir Wyn

Key, Robert

Robertson, Raymond (Ab'd'n S)

Kilfedder, Sir James

Robinson, Mark (Somerton)

King, Rt Hon Tom

Roe, Mrs Marion (Broxbourne)

Kirkhope, Timothy

Rowe, Andrew (Mid Kent)

Knapman, Roger

Rumbold, Rt Hon Dame Angela

Knight, Mrs Angela (Erewash)

Ryder, Rt Hon Richard

Knight, Greg (Derby N)

Sackville, Tom

Knight, Dame Jill (Bir'm E'st'n)

Sainsbury, Rt Hon Tim

Knox, David

Scott, Rt Hon Nicholas

Kynoch, George (Kincardine)

Shaw, David (Dover)

Lait, Mrs Jacqui

Shaw, Sir Giles (Pudsey)

Lamont, Rt Hon Norman

Shephard, Rt Hon Gillian

Lang, Rt Hon Ian

Shepherd, Colin (Hereford)

Lawrence, Sir Ivan

Shersby, Michael

Legg, Barry

Sims, Roger

Lennox-Boyd, Mark

Skeet, Sir Trevor

Lester, Jim (Broxtowe)

Smith, Tim (Beaconsfield)

Lidington, David

Smyth, Rev Martin (Belfast S)

Lightbown, David

Soames, Nicholas

Lilley, Rt Hon Peter

Spencer, Sir Derek

Lloyd, Peter (Fareham)

Spicer, Sir James (W Dorset)

Lord, Michael

Spicer, Michael (S Worcs)

Luff, Peter

Spink, Dr Robert

Lyell, Rt Hon Sir Nicholas

Spring, Richard

MacGregor, Rt Hon John

Sproat, Iain

Maclean, David

Squire, Robin (Hornchurch)

McLoughlin, Patrick

Stanley, Rt Hon Sir John

McNair-Wilson, Sir Patrick

Steen, Anthony

Madel, David

Stephen, Michael

Maitland, Lady Olga

Stern, Michael

Major, Rt Hon John

Stewart, Allan

Malone, Gerald

Streeter, Gary

Mans, Keith

Sumberg, David

Marland, Paul

Sweeney, Walter

Marlow, Tony

Sykes, John

Marshall, John (Hendon S)

Tapsell, Sir Peter

Marshall, Sir Michael (Arundel)

Taylor, Ian (Esher)

Martin, David (Portsmouth S)

Taylor, John M. (Solihull)

Mates, Michael

Taylor, Sir Teddy (Southend, E)

Mawhinney, Dr Brian

Temple-Morris, Peter

Mayhew, Rt Hon Sir Patrick

Thomason, Roy

Mellor, Rt Hon David

Thompson, Sir Donald (C'er V)

Merchant, Piers

Thompson, Patrick (Norwich N)

Milligan, Stephen

Thornton, Sir Malcolm

Mills, Iain

Thurnham, Peter

Mitchell, Andrew (Gedling)

Townsend, Cyril D. (Bexl'yh'th)

Moate, Sir Roger

Tracey, Richard

Molyneaux, Rt Hon James

Tredinnick, David

Monro, Sir Hector

Trend, Michael

Montgomery, Sir Fergus

Trotter, Neville

Moss, Malcolm

Twinn, Dr Ian

419

Vaughan, Sir Gerard

Wilkinson, John

Waldegrave, Rt Hon William

Willetts, David

Walden, George

Wilshire, David

Waller, Gary

Winterton, Mrs Ann (Congleton)

Wardle, Charles (Bexhill)

Winterton, Nicholas (Macc'f'ld)

Waterson, Nigel

Wolfson, Mark

Watts, John

Wood, Timothy

Wells, Bowen

Yeo, Tim

Wheeler, Rt Hon Sir John

Young, Sir George (Acton)

Whitney, Ray

Whittingdale, John

Tellers for the Ayes:

Widdecombe, Ann

Mr. Sydney Chapman and

Wiggin, Sir Jerry

Mr. Andrew McKay.

Question accordingly agreed to.
Resolved,
That the Local Government Finance Report (England) 1993–94 (House of Commons Paper No. 422), which was laid before this House on 28th January, be approved.
It being after Ten o'clock, MADAM SPEAKER put the Questions necessary to dispose of proceedings on the other motions relating to local government finance, pursuant to Order [29 January].
Resolved,
That the Special Grant Report (No. 5) (House of Commons Paper No. 423), which was laid before this House on 28th January, be approved.—[Mr. Howard.]
Resolved,
That the Limitation of Council Tax and Precepts (Relevant Notional Amounts) Report (England) 1993–94 (House of Commons Paper No. 424), which was laid before this House on 28th January, be approved.—[Mr. Howard.]
Resolved,
That the Limitation of Council Tax and Precepts (Relevant Notional Amounts) (Amendment) Report (England) 1993–94 (House of Commons Paper No. 443), which was laid before this House on 1st February, be approved. —[Mr. Howard.]

Prisons (Contracting Out)
10.15 pm
The Secretary of State for the Home Department (Mr. Kenneth Clarke): I beg to move,
That the draft Criminal Justice Act 1991 (Contracted Out Prisons) (No. 2) Order 1992, which was laid before this House on 16th December, be approved.
The order extends the powers in the Criminal Justice Act 1991 to allow the management of existing prisons to be contracted out to a private operator. The Criminal Justice Bill as originally drafted provided for the contracting out of only new remand prisons but in February 1991 during its passage through the House the Government accepted an amendment by my hon. Friend the Member for Ryedale (Mr. Greenway) which allowed the powers to be extended by powers made by statutory instrument.
In July last year, the House approved an order which extended contracting out to new prisons generally. As a result, and following a successful competitive tendering exercise, the new prison at Blackenhurst is due to open in the spring under the management of UK Detention Services Ltd. Blakenhurst will hold both sentenced and remand prisoners.
Like Wolds, the first contracted-out prison, Blakenhurst will provide a regime incorporating not only the many good practices of the best of existing prison service establishments, but some valuable new ideas. The performance of the prisons will be closely and continually monitored to ensure compliance with the high standards that we have set out in the agreement with the contractor.
In debating the contracting out of prisons such as Wolds and Blakenhurst to private contractors, we should look at the positive programme that we have put in place by setting out specifications that are in line with the Woolf report on prisons. For example, Blakenhurst will provide a positive programme. Prisoners will be locked in their cells only at normal sleeping times or for specific security needs, and that will usually result in prisoners spending 15 hours per day out of their cells.
A mixture of education provision of at least six hours a week will aim to prepare prisoners for the realities of release and will build into the prison day a constructive and rehabilitative regime. Visiting facilities for prisoners' families will be open in the evening to suit the convenience of the visitor and there will be daily visits for unconvicted prisoners. Basic hygiene provision for prisoners will be good, providing daily showers and changes of socks and underpants, as specified in the contract. [Interruption.]
Dame Elaine Kellett-Bowman: There is so much noise going on below the Gangway, Madam Speaker, that I cannot hear the Minister. [Interruption.]
Madam Speaker: Order. The hon. Lady makes a good point. The House is very noisy immediately after a Division. I should be most grateful if hon. Members would settle down so that we might hear the Secretary of State.
Mr. Clarke: The hon. Gentlemen sitting below the Gangway are firmly against the introduction of private management to prisons, but none of them has the slightest interest in listening to what would actually occur and has occurred in Blakenhurst, where a private regime has been introduced. I have been describing the extremely enlightened regimes— [Interruption.]
Madam Speaker: Order. Hon. Gentlemen below the Gangway should remain silent, at least until we have heard the Secretary of State.
Mr. Bob Cryer: We are being provoked.
Madam Speaker: Order. I am being provoked.
Mr. Clarke: I was describing the extremely enlightened regime that is being provided at Blakenhurst prison. One of the features of the contracts that we have placed so far—apart from specifications relating to the value for money that the taxpayer expects—is our detailed specification for the enlightened regime towards which the Woolf report pointed the way. For example, sex offender therapy treatment will be provided in this positive programme. The whole programme is very much in line not only with the Woolf report, but with suggestions made in a report on prison regimes published only last week by the chief inspector of prisons, Judge Tumim, entitled ?Doing Time, Using Time?.
The order completes the extension of a section of the Criminal Justice Act to allow existing prisons to be managed by private operators. That will enable us to encourage the spread of similar improvements in prison management and regimes, and to make further progress in the way in which prisoners are looked after.
I am presenting the order now because we are currently carrying out a market testing exercise on Her Majesty?s prison Manchester, usually described as Strangeways. We need to pass the order now, because we need to be in a position to enter into a contract should a private operator succeed in winning it. Some half-dozen private-sector companies and an in-house team from the prison service are now working on their bids in competition.
By introducing the order today, I am in no way pre-empting the outcome of the tender evaluation process. I am keeping in touch with it, but we have not begun to evaluate the rival bids from the private bidders and the prison service. It is a case of being prepared for this, and for future market-testing and contracting-out exercises in existing prisons, which we would not be allowed to do without the authority of the House.
Mr. Alfred Morris: What consultation has there been with the Strangeways prison officers, and what has been the outcome?
Mr. Clarke: There has been a good deal of discussion throughout. I am delighted to say that the prison officers, along with the Prison Officers Association, are cooperating actively with management in putting together a bid, and are trying to demonstrate how they can best match up to the demanding specification. Consultations are proceeding now, in line with the TUPE application, with which I shall deal in due course.
Manchester is one of our oldest and largest local prisons. At the time of the disturbances in April 1990, it held 1,647 prisoners, including unconvicted prisoners on remand and those awaiting sentence as well as prisoners serving their sentences. That included prisoners in the highest security category, category A. The House will recall that, as a result of the 1990 riot, the larger part of the prison was left in a condition that required major refurbishment, amounting almost to rebuilding.
It was against that background of rebuilding that we decided to take the opportunity of market-testing
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Manchester before it was fully reopened. We had two main reasons, both of which I consider fairly obvious. First, as a result of being emptied and refurbished, Manchester was virtually a new prison, holding a substantially smaller number of prisoners—currently about 500. The move followed logically from our policy of seeking private-sector tenders for the operation of new prisons. That policy was made clear by my hon. Friend the Minister of State in the debate on the Blakenhurst order. Secondly, it seemed an excellent way of moving to a further stage in our market-testing programme.
That next stage is very significant, and I hope that Opposition Members welcome it as much as I do. We are seeking in-house bids as well as private-sector bids, and considering the two in competition with each other. Although Manchester prison is not fully operational, the prison service already has a nucleus of staff there, well placed to develop an in-house bid.
Mr. Robert Maclennan: On market testing, is it true the Home Office has run into difficulties over a European directive, causing it to have to alter proposed contracts so as not adversely to affect the contracts of employment of people already in Government service?
Mr. Clarke: I was going to deal with that point, and referred to it briefly in response to the right hon. Member for Manchester, Wythenshawe (Mr. Morris). I shall cover the problems arising from the directive and the TUPE regulations based on it. However, I should like first to describe the basis on which we are proceeding at Manchester.
As I said, it is technically an existing prison, although most of it is waiting to be reopened after refurbishment. It is also the first time that we have gone to market testing where there has been a prison service bid being tested alongside private sector contractors. When it reopens, Manchester prison will offer a substantially improved environment for prisoners and staff. Bidding for it will provide the prison service with an ideal opportunity to consider how to implement innovative ideas which will allow it to compete effectively with the private sector.
The tendering exercise for Manchester is taking place at a key time for the prison service. In April, the service will become an executive agency under the leadership of Derek Lewis, whom I appointed recently. He has a wide commercial background in the private sector. I announced earlier this week that his remit as head of the prison service will include responsibility for taking forward Government policy on the involvement of the private sector in managing prisons. I want to see the service take full advantage of the opportunities which competition will provide and to see it reap the benefits which are already becoming apparent as a result of our contracting-out programme at Wolds and Blakenhurst and in the market testing of Manchester.
Agency status for the prison service, market testing and competition all have the same objective. The sole objective is to raise standards and secure better value for money throughout the prison system. I want a system that is a mixed economy, including prisons managed by private operators in addition to those under direct management. To achieve those improvements we need the right balance and mix between public and private sector management of individual prisons within the prison service. I have asked

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Derek Lewis to provide advice to me later this year on the extent, form and time scale for increasing private sector involvement by later this year.
In the meantime, in about April, and again following our policy on new prisons, we shall invite private operators to bid for the management of the new prison at Doncaster. It is the last of the 21 new prisons constructed as part of our most recent prison building programme completed at a total cost of £1,200 million. It is a local prison, with some 720 places and scheduled to open in the early part of 1994. The House will recall that we committed ourselves in the autumn statement to begin work within the next three years on the first two new prisons in a prison building programme that will follow.
In addition to handling the Doncaster project, the agency will identify further existing establishments for market testing or for contracting out. I have twice been asked about the problem that has arisen during the contracting-out process of existing establishments, including Manchester, which is the subject of TUPE. I am sorry to use the acronym. The TUPE regulations should be given their full name—the Transfer of Undertakings (Protection of Employment) Regulations 1981. They are the means by which the European Community acquired rights directive is translated into domestic law. The regulations protect the employment contracts and collective agreements of staff when an undertaking is transferred from one organisation to another.
I think that it is fair to say that, when the EC directive and the TUPE regulations were drawn up, the draftsmen did not have in mind the type of transfer of work from the public to the private sector, which has been one of the achievements of successive Conservative Governments and which we remain committed to continue. The result has been considerable discussion across Whitehall., and outside, about TUPE's effect on a number of contracting-out and market testing exercises, including ours at Manchester. Indeed, when we issued the invitations to tender for Manchester in October last year, our understanding based on our then legal advice was that TUPE would not apply. Shortly before Christmas, we took further legal advice. It is not wholly unusual for legal advice to differ on different occasions.
On the basis of the latest advice, it became apparent that TUPE could apply to Manchester. In any event, to resolve doubt, we have decided that we shall apply the provisions of the regulations, so that the successful tenderer will take over protected employment contracts and collective agreements. We are now carrying out consultations, as that is also a requirement of the regulations. That has resulted in a slight delay to the Manchester tendering exercise while we consider the implications. I hope that we will be able to set a new date for the return of tenders very soon. We have already begun the consultations with the trade unions, and we are providing the further information necessary to allow the bidders to take into account the application of TUPE.
Mr. Alan Williams: Is that a final requirement or simply a contingency requirement? Did not the permanent secretary tell the unions that tendering was taking place on that basis and that there is still legal consideration within the Government as to whether the directive will apply to Government Departments?
Mr. Clarke: For the time being in the prison service, we propose to consider the application of the regulations case by case. With regard to Manchester, we have decided to apply and to follow the regulations. That is the process that we have now embarked upon, and that is why we have extended the date for bids and have issued the further information. As part of that, we are consulting the trade unions as required by the regulations.
I should make it clear that I do not see the application of TUPE to Manchester prison as a barrier to private sector involvement. There are arguably benefits from taking over existing staff as well as difficulties. However, I believe that it is perfectly feasible for new ideas and approaches to be grafted on to the existing expertise and skills, of which there is certainly already a good supply in the prison service.
We are well on the way towards that significant level of private-sector involvement in the prison sector that I want to see. Private-sector involvement is one way forward to a better service for prisoners and the taxpayer. The benefits of bringing private sector management into the prison service alongside the existing public sector prison service are considerable. Competition in striving to achieve the kind of standards that the Government now stipulate based on the recommendations of Lord Justice Woolf and Judge Tumim and others will lead to people finding different ways to speed up the process of raising standards.
It is very important that we have a basis upon which to make a comparison between one approach to managing the regime and another. The background is that I believe that the existing prison service in some places already does a good job often against the odds. Most of the members of the prison service I meet are dedicated officers who joined the service for the right reasons and are struggling to provide fair and humane care in difficult surroundings.
Mrs. Tessa Jowell: Will the Home Secretary describe the ways in which he sees the contracted-out prisons improving the quality of medical services available to prisoners, and particularly of psychiatric provision—which, given the number of people in our prisons who are suffering from mental illness, is of pressing importance?
Mr. Clarke: I believe that there is considerable scope for improving the quality of the medical service throughout the prison service—in both the public sector and private sector prisons. I am very glad to say that I find myself working with the chief medical officer, Sir Donald Acheson, with whom I have worked in the past. He now heads a team advising me on how to develop the prison medical service further.
I have already given fresh directions on the employment of NHS-trained nurses in the service. We need to improve facilities and the problem of those who require psychiatric care in prisons has always been, and remains, serious. However, we are making progress. The system is far from perfect, but the transfer of people from prison to mental hospital when they really need psychiatric care and are not suitably housed inside a prison is better than it was.
However, that is an area where I am anxious to see progress and I would like private sector prisons and operators to contract for their medical care from outside. That is one way of introducing a variety of approaches to the system so that we can raise the medical regimes inside prisons up to the standards that we would like to see. I have always believed that, in every way, the prison medical

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service should be brought closer to the national health service and more in line with mainstream medical provision. Again, the involvement of people such as Sir Donald Acheson will be very helpful to us in moving in that direction.
Mr. Nicholas Winterton: I am very interested in my right hon. and learned Friend's point. Is he aware of the evidence to Select Committees over the years, in particular the Health Select Committee and its predecessor the Social Services Select Committee? an inquiry into the prison medical service found that rather too many people who had originally been patients in psychiatric hospitals and had been put into the community had ended up in prison because the hospital service would not take them back again.
Mr. Clarke: I agree that that is a difficulty, but I am not going to be taken outside my subject, except that that point is relevant, obviously, to the standards that we specify in the contracts that we put out, but there are countless such difficulties. I recall the debates on care in the community and the need to develop proper facilities for those who are no longer treated in mental hospitals. Certainly, in the past people have gone to prison who should not have been there and should have been in hospital. I recall national health service hospitals that had a policy that they would not take people who had been involved with the criminal justice system, so it became very difficult to find a place for them in NHS hospitals.
It is my genuine belief, as I have said before to my hon. Friend, that the situation is improving, but I am no more complacent than he is about the present state of affairs. We need improvements in the prison service and in the national health service, and we are working upon that.
I have described one of the many ways not only in which the prison service is improving but in which, I believe, can speed up the process and use matters such as market testing, contracting out, and the involvement of new management skills from the private sector in order to speed up the process of improvement. It fits, certainly, with the concept of public service. What the Government mean by public service is the provision of facilities that are giving ever better service to the public, who are the consumers of what we are providing. In the past, some have thought that the notion of public service means that everybody who works for it is on the public payrol. That is the wrong way to approach the matter.
Harnessing new ideas, considering different ways of working, allowing in some welcome fresh air seem to be long overdue, particularly in the prison service. The move to agency status, with greater freedom to manage the prison service, along with the extension of private sector involvement should allow us to develop a better prison system and one of which we as a country can be proud. The order will help to achieve that aim, and I therefore commend it to the House.
10.36 pm
Mr. Tony Blair: This is a short debate, but it is important. There is no doubt at all that many features of our present prison system are a disgrace—inhumane, unjust and deeply destructive of any realistic possibility of rehabilitation for offenders. Overcrowding is a continuing
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and serious problem. The psychiatric treatment of prisoners has been referred to by hon. Members. There are problems of persistent and widespread drug abuse. Report after report from Judge Tumim expresses concern at prison conditions, most recently in respect of Longlartin and Spring Hill. He said:
?The existing living accommodation is some of the worst we have ever seen.?
Last year alone, there were 41 suicides in prison institutions. The issue, therefore, is not whether the prison system should be changed—it should be changed, and changed drastically—but whether change is best achieved by reforming the prison service or by privatising it, by building a better public service, as Opposition Members say, or turning it over to private sector companies for profit, as is the Government?s case.
Mr. Rupert Allason: To be fair, does the hon. Gentleman recognise that Judge Tumim also congratulated the prison service on the dramatic improvements that have taken place at Brixton? Indeed, he has said that Longlartin has improved over the past 12 months as well.
Mr. Blair: Judge Tumim has described improvements. Indeed, he paid special tribute to the staff and the role that they have played in bringing about those improvements, but as the hon. Gentleman will accept, there is a very long way to go.
Faced with those critical issues within the prison service, privatisation is not just a diversion from the agenda of prison reform; it is fundamentally flawed in principle and is now being pursued for reasons which have nothing to do with efficiency or prison reform but are simply an obsession with the idea of privatisation itself. Nothing could illustrate that more clearly than the story in The Guardian today. The Home Secretary will deny it if it is wrong, so let us see whether he does. It says that the new contractors for Strangeways in Manchester have already been asked to prepare to load extra costs on to the contract should the prison be filled beyond capacity.
We are debating whether the prison service should be in the public or the private sector when the critical question of overcrowding lies unattended. The Minister says, "Big deal" and it is indeed a big deal—it is the very problem that the Woolf report says we should be acting upon. If the Minister cared about the prison system he would concentrate on it.
Mr. Kenneth Clarke: The hon. Gentleman invited me to deny it, and I firmly deny the hon. Gentleman's interpretation. In the bad old days, Manchester's maximum capacity was 1,800 inmates. If the Opposition had their way and we carried on running it in the old way, no doubt all the old disadvantages would continue. The present capacity that we are aiming for is much lower, but we have to anticipate that from time to time it might go above its maximum capacity, as other prisons do, and we have to make contingency arrangements within the contract to deal with that—but its maximum occupancy will never return to the old overcrowded conditions.
As the hon. Gentleman will know, the prison population is falling and we are opening new prisons. I do not anticipate overcrowding in the near future.
Mr. Blair: That is somewhat less than convincing when we read the contract being considered for Strangeways. It has a heading, "Overcrowding", and asks the contractor to provide details of additional costs which may be incurred

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if overcrowding occurs. The energy, time and man hours of civil servants should be used to attempt to get rid of overcrowding instead of concentrating on privatisation.
No doubt there will be more expense, energy and confusion if difficulties arise out of the transfer of undertakings regulations. Opposition Member see nothing wrong, and indeed a lot right, with the employees' terms and conditions of employment being properly protected if they are transferred.
If substantial parts of the prison service are sold off or contracted out, the multiplicity of contracts with different contractors will make the uniform improvements which lie at the heart of Woolf all the more difficult to achieve.
The urgency of those improvements could not be set out more clearly than in the Woolf report, which calls for better work, education and treatment programmes, enhanced roles for prison officers, a national system of accredited standards, a specific obligation against overcrowding—the very overcrowding now being contemplated for Strangeways—a public commitment from Ministers to improve sanitation facilities, and better prospects for prisoners in relation to prison visits. That is surely the agenda for reform, and at the heart of it lies the recognition that the new and higher standards being demanded for the prison service can be achieved only by a Government commitment to achieve them. They cannot arise through market forces, market testing or private sector initiatives—they have to be imposed by Government.
The Home Secretary lists the benefits of the prison regime at the Wolds and Blakenhurst. He says that prisoners at the Wolds are out of their cells 15 hours a day and have full access to legal assistance, and that at Blakenhurst there are educational assessments with a minimum education entitlement and better medical care. Of course hon. Members on both sides of the House welcome those improvements, but they are not the outcome of privatisation. That is the sham at the heart of it. They are the outcome of the Government specifying the regime at the prison. It has nothing to do with the private sector or the public sector and everything to do with the Government being prepared to implement the very specifications that we have been asking for the whole prison service.
Mr. Kenneth Clarke: The hon. Gentleman's ideology is blinding him to the best means of achieving the Woolf reforms, on which we are both agreed. We set out the Woolf prospectus of the specifications and for the first time we have placed the contract with the undertaking which commits itself to deliver Woolf. At Manchester, the prison service management and the Prison Officers Association are describing how they would meet that specification. Whoever wins it will be bound by contract to deliver it. If we had not had this means of proceeding, it would have taken years to move the old public sector system anywhere near the Woolf reforms to which he and I aspire.
Mr. Blair: With all due respect, what completely blows that argument apart is that in some of the new public sector prisons there are the same specifications; it is nothing to do with the fact that it has been privatized—it is to do with the fact that, for once, the Minister has implemented the Woolf recommendations. The question that any sensible person will ask is surely this: if it is right
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and possible to impose these higher standards on the private sector, why are the same standards not imposed throughout the public sector? If these are the right things to do in relation to Wolds and Blakenhurst, why is it not right to do them throughout the entire system? Why can we not have 15 hours a day out of cells at Frankland, or minimum education standards at Wormwood Scrubs?
If those are the things that the Minister wants to do, why not put the energy and resources of Government into doing them, rather than wasting time with privatisation? In the end, the only possible argument that he can have is that there is a great cost benefit in this, but that, of course, has been somewhat dampened by the TUPE undertakings regulations.
The costs of the Wolds in its first year, so far as there are any comparable figures, are almost identical for public sector prisons. Therefore, what any sensible person must ask is: why waste the Government's time, energy and resources on going down the route of privatisation rather than ensuring that the Woolf report is properly implemented? Indeed, if the right hon. and learned Gentleman reads an article published in The Independent the other day he will see that many of those in the prison system are saying that because of the threat of privatisation they are having to postpone the reform agenda that they want to carry out in order to deal with the problems of contracting out and privatisation.
Then again, with public sector prisons hon. Members do not ask parliamentary questions and get the answer back that the information cannot be given because it is a matter of commercial confidence. It is a scandal that, when hon. Members put down questions asking, for example, how many full-time custody officers are employed at these privatised prisons, we cannot get a proper response. This precisely encapsulates the conflict between privatisation and the public interest.
Mr. Gerald Bermingham: As my hon. Friend will know, I have taken the trouble to go and look at the privatised system in America and elsewhere, and I came to a very simple conclusion, to which I ask the Home Secretary to respond. What advantage is there in a private person making a profit from a public incarceration? When we incarcerate somebody, we are trying to reform that person. Why should a private individual make a profit out of that? What can he offer that the state cannot?
Mr. Blair: My hon. Friend is exactly right. Hon. Members say that they are not making a profit out of it, but of course they are—it is the very thing that they are there for; that is what they do as companies. Of course there are areas of national life where private profit is not suitable. That is what the Conservative party cannot understand. They believe that if something is not run for private profit it is not run properly—that private profit and the public interest are one and the same thing; but they are not.
We say that this is a pointless exercise, because the specifications which are good in respect of privatised prisons or contracted-out management could be applied in the prison service generally. We also say that it is fundamentally wrong in principle that persons sentenced by the state to imprisonment should be deprived of their liberty and kept under lock and key by those who are not accountable solely to the state. Those employed by

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security firms are primarily or solely accountable not to the state but to their shareholders. For the benefit of hon. Gentlemen, I will read a quotation:
"I do not think that there is a case, and I do not believe that the House would accept a case, for auctioning or privatising the prisons or handing over the business of keeping prisoners safe to anyone other than Government servants.—[Official Report, 16 July 1987; Vol. 119, c. 1303.]
Those were the words not of an Opposition Member but of the present Foreign Secretary when he was Home Secretary. Nothing has changed, except that the grip of dogma is rather stronger now than it was then.
Of course the Government may say that they retain the right to enforce the prison contract, but I say that it is a travesty to suppose that the remote possibility of an action for breach of contract by the Home Secretary is in any way a substitute for the character of a proper public service where the only duty is owed to that service. Private companies may well supply services to the state system, but to allow a private security company, whose main motivation must be commercial, the coercive powers of detention, punishment, physical restraint and influence on decisions about parole—powers of a real and harsh nature —is wrong in principle and should not be countenanced by the House.
I do not pretend that one or two private prisons or contracted-out managements will destroy the prison system, although I do not believe that they will do it any good. But if, as the right hon. Gentleman wants and as he indicated today, large parts of our prisons and prison service become privatised, run by private companies for profit, it will be not just a profound error of principle but a massive and tragic waste of an opportunity to get on with the real agenda—the reform of an antiquated and outdated prison system from which this country desperately wishes to escape.
10.51 pm
Sir John Wheeler: I wish to intervene only very briefly, but I claim to do so because in 1986 I visited some private sector prisons in the United States of America and, as a result of that visit, a Home Affairs Committee report recommended that we should consider the consequences of private sector involvement in our prison system.
I have heard the hon. Member for Sedgefield (Mr. Blair) repeatedly use the term "privatisation". He is fundamentally wrong. We are not discussing privatisation. We are not discussing the sale of prisons and prison department estates. We are talking about market testing and the use of the private sector in accountable management contracts, which is an entirely different concept. We are discussing the possibility of the Home Office remaining firmly in control of what happens in an institution but delegating the service to a private contractor which remains accountable to the Home Office for how it manages the institution.
I believe that the order extends the concept of management contracting—
Mr. David Winnick rose—
Sir John Wheeler: No, I shall proceed, if I may, to complete my brief speech.
Mr. Winnick: On a point of order, Mr. Deputy Speaker. The hon. Gentleman may have no current interest to declare, but I have just had a look at the Register of Members' Interests and I notice that he is registered as independent chairman of the board of the National Inspectorate of Security Guard, Patrol and Transport Services from 1982. If there is an interest—
Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): Order. The hon. Gentleman knows full well the procedure for declaring an interest.
Sir John Wheeler: Thank you, Mr. Deputy Speaker. If I had any interest to declare, I should declare it. I have no interest to declare other than my interest in the use of taxpayers' money to benefit the taxpayers' interests, which is quite different from what the hon. Member for Walsall, North (Mr. Winnick) is suggesting.
Central to the Government's objectives is the market testing concept which they have successfully introduced into local government; they are now properly extending the principle into central Government. I can see no reason why an accountable contract should not lead to a better standard of service for the public interest, with better conditions for prison inmates and an improvement in the quality of training and facilities. I also believe that it is essential to allow people who work in the prison system the variety of other experiences.
Such ideas are commonplace in the United States. One of the great benefits of them has been that those who work in the prison service are able to find employment which enables them to achieve greater satisfaction than being tied to the bureaucratic restrictions of the state sector. Many of the objectives which those of us believe are essential to the improvement of the prison system can be found in the challenge of the market-testing process. For that reason, I especially welcome the order.
I am glad to learn that prison management in England and Wales, as well as the Prison Officers Association, wish to take part in the process. That in itself is an achievement.
As to the experiment at the Wolds prison, the hon. Member for Sedgefield suggested that there was less accountability. I believe that the reverse is true. Bureaucratic accountability is difficult to test, whereas market-testing contracts are open to challenge. Those institutions which are subject to management contracts welcome the press and media as well as hon. Members who wish to see the achievements.
The all-party penal affairs group and any hon. Member who wishes to participate may visit Wolds prison to see what is going on and judge whether it is being successfully managed. I welcome what my right hon. Friend said about widening the scope not for privatisation but for market testing and accountable management contracts.
10.57 pm
Mr. Robert Litherland: Repeated references have been made to Strangeways prison, which is sited in my constituency of Manchester, Central. Strangeways prison gained notoriety in 1990 when a riot broke out on 1 April. The riot continued for 25 days. That is a period in the history of Manchester which no one will forget.
I must stress that, long before 1 April 1990, the Prison Officers Association insisted that overcrowding and bad sanitary conditions were the main cause of unrest and that

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one day we would pay the penalty. I can remember a prison officer saying to me, "If conditions do not change, these prisoners will be coming through the wall." I was at Strangeways prison on the fateful Sunday. Like human moles, the prisoners were coming out of the roof of the prison.
Then, as now, the experts went unheeded. Instead of listening and learning, the Government have taken the unknown path—the murky market, as it has been described—to privatise the prisons. Once again, dogma reigns supreme with the Government. Experts tell us that privatisation is unhelpful and irrelevant to running today's prison regimes.
In 1989, in a submission to the Government's Green Paper, the Prison Officers Association outlined the crisis and emphasised that the real cause of the ever-increasing prison population had never been addressed, only the symptoms. Regrettably, only the symptoms are still being considered today.
As the House has heard, the Government know best. Market testing of prisons, which is another name for privatisation, is seen as the panacea for all our prison ills, yet the Government know full well that contracting out will not affect the ever-increasing population. That remains the responsibility of the courts, the judges and magistrates. There is little liaison between judges and magistrates.
I have the tender documents with me, if the Home Secretary wants to see them. Given the details of the contract requirements in the documents, it is envisaged that there will be overcrowding. Today's edition of The Guardian quotes from the document for the operating contract for Her Majesty's prison, Manchester and comes to the same conclusions. The document informs the contractors that they should assume an overall population of 552 prisoners in the five A to E wings of the prison, but the authority may require all cells with a toilet annexe to be occupied by two prisoners, although they may be designed for single-cell occupation. They are contemplating overcrowding and that would provide an additional 134 places, increasing the population in those wings to 686.
Further accommodation could be provided by requiring that some of the cells without a toilet annexe be occupied by two prisoners. The contractor is invited to specify the additional cost in those five wings.
The other wings—G, H, I and K—were built to hold 261 places, when opened. In the contract—as with A to E wings—overcrowding has to be taken into the reckoning and costed accordingly. Even the health centre is included, to provide for 53 patients, but no assurance could be given that they would not be used for non-medical cases.
Compare the requirements in the tender contract to the Home Office letter of 24 April 1991, replying to my inquiry regarding the single-cell policy in prisons. The then Minister of State informed me:
"The present policy of providing for a majority of single cells offers prisoners a degree of privacy, and encourages them to develop a sense of responsibility for the accommodation they occupy. However, we recognise that a mixture of single and shared accommodation is necessary. … At Manchester, in response to local circumstances, management has allowed for a higher proportion of shared accommodation than the standard design in the remand prison. In K wing about 20% of cells are fitted for two prisoners to share, and current plans for G, H and I wings envisage close to 50% of cells being capable of taking two prisoners."
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In other words, overcrowding has been built into the contract. Whatever the Home Secretary says, he cannot get away from that.
The contractors will also have to be aware of the special accommodation for category A prisoners required at the Crown court in Manchester, which they will have to man. All other support facilities will be the responsibility of the private contractor. That aspect of prison work will be an untested area, but the closest liaison with the Greater Manchester police will be necessary to ensure the smooth running of the courts.
Accommodation at the courts, liaison with court users, manning requirements and escorting prisoners to courts or to other prisons, hospitals, funerals and so forth will be undertaken without the in-depth experience gained over many years by the Prison Officers Association.
Strangeways, by its very nature, has always been a transit prison with a quicker population turnover and therefore it requires more labour-intensive activities, such as the duties that I have outlined.
Private prisons, whether based on the ideology of Adam Smith or on the American way of life, are not the answer. Out will go the dedication, the responsibility and accountability. The years of practical experience will have been wasted. Many years before the riot, experienced officers warned about what was to be expected. But Governments paid no heed, and we experienced the biggest riots in prison history. Those of us who visited the prison after 25 days saw the mass destruction. But at least there was optimism that there would be a rebuild and new thinking. Above all, it was unanimously agreed that such a thing must never happen again.
After the results of all the interviews had been taken into consideration, the Woolf report recommended a format for the establishment of new procedures. The report said that there should be a 3 per cent. ceiling on overcrowding and that that figure should not be exceeded without reference to Parliament.
In July 1992, along with my hon. Friend the Member for Manchester, Blackley (Mr. Eastham) and other interested Members, I visited Strangeways and witnessed the refurbishment. We saw the gymnasium and the canteen facilities. It was as if things were starting anew. The Government's attitude, of course, was that the prison was ripe for privatisation. Following our visit we were convinced that the Home Office was drawing up plans to that effect.
The Prison Officers Association was unaware of the policy for the future. At that time there had been no discussions with the association. No one was prepared to inform it of what was going on. The officers were working in limbo, and morale was at a new low. The Home Office was non-committal. It told me that it was anticipated that a decision would be taken later in the summer. With every phone call I made to the Home Office, the mystery deepened.
In late summer—on 4 August, just six days after our visit—the front page of the Manchester Evening News had the story. The cat was out of the bag. The Home Office's privatisation plan had been revealed in a job description memo for a new national post of prison manager. One of the prisons named was Strangeways. [Interruption.] It is all very well for the Home Secretary to laugh. He should have been there at the time. His predecessor never came. The prison officers held, and then evacuated the prison. There was no escape.

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The officers, who, with their families, suffered great mental and physical stress, have been betrayed, sold down the river. They arc the victims of an ill thought out scheme. On a previous occasion the Prison Officers Association stated that the privatisation of prisons was ethically dubious and would lead to lower standards. I, along with the prison officers, maintain that privatisation will not, and cannot, cope with overcrowding.
The findings of Lord Justice Woolf have been ignored. What has happened to the 12 main recommendations? The views of the prison officers too have been ignored. We still have the recipe for riots. The Government have not learnt the lesson of Strangeways 1990. They may once again rue the day. But the Home Secretary will turn a blind eye and a deaf ear, as the then Home Secretary did in April 1990.
11.8 pm
Mr. Robert Maclennan: The Home Secretary's awareness of the condition of prisons in Britain and of the need to implement Lord Justice Woolf's recommendations as soon as possible are not in question. Indeed, among hon. Members there is an almost unanimous view that prisons are one of the darker corners of our society. That does not apply universally, but there are massive problems, which were highlighted in Lord Justice Woolf's report. In setting out, in contractual terms, the objectives for Manchester Strangeways, Lord Justice Woolf properly drew attention to what was needed.
In introducing this order, the Home Secretary is acting with undue precipitousness and without evidence to support his general assertion that the prisons will benefit from extension of private sector management and control.
Arguments of principle were eloquently and effectively made by the hon. Member for Sedgefield (Mr. Blair) about the appropriateness of placing such matters in the hands of private contractors, who run prisons for profit. Prisoners who are causing trouble have to be manhandled—that is not a purely theoretical issue. The exact nature of the job undertaken by the private sector company has already become clear in the management of the Wolds prison. A recent parliamentary answer reported no fewer than 20 incidents, many of which involved assaults on officers, drug smuggling into the prison, racial discrimination and hostility—many of the characteristics of prison life that cause problems throughout the country.
It must be doubted whether it is suitable to put the task of attending to such problems in the hands of a private company operating for profit and without the normal arrangements for accountability that control the response of the prison service.
Mr. Kenneth Clarke: Obviously, the power that is given to one person to restrain another and keep him in custody depends on the authority of the law, which is ultimately derived from the House. That is the only means by which anybody can lawfully lock someone else up or contain him. That is dependent not on whether or not he is on the public payroll, but on whether he is working by the same rules. Even in private prisons, the use of force and coercive powers can be applied only with the authority of the controller, who is based there as a Crown servant to ensure that matters, particularly the use of force, are closely supervised.
Mr. Maclennan: It is open to a private citizen to use force to restrain a member of the public who is committing a crime. The Home Secretary need not teach his grandmother tricks on such a matter. The question whether it is appropriate to place prison guards in a position where they have to use force as a matter of course, day in, day out, without the advantage of the professional training that has gone into the building up of the prison service, is at least debatable. Many people doubt that it is a suitable policy.
The Home Secretary did not allude to the risk of abuse being covered up for reasons of commercial confidentiality. Questions have been asked in the House about Wolds prison and its management, and answers have been refused on the grounds that they would reveal commercially confidential information. The Minister of State, the hon. Member for Fareham (Mr. Lloyd), who is now talking to the Home Secretary, knows that to be true.
He has refused to answer questions, saying that he will not give information to Members of Parliament about the management of that private prison because it is commercially confidential. He has been asked questions about staffing levels and the chaplain, and replied that such matters are commercially confidential. That is a means of taking away from Parliament the right to scrutinise the management and conduct of our prison service. That alone is sufficient reason for being dubious about what is planned.
This is the last opportunity that the House has to prevent, or even discuss, the Home Secretary's decision to award contracts for the management of any prison he chooses. Whatever else the right hon. and learned Gentleman is no one would flatter him by calling him prudent. Tonight he made a prediction about the prison population which many of his predecessors would have thought rather rash. We shall see whether he is proved right, but a prudent Home Secretary would have waited to see how the Wolds experiment worked out and how Blakenhurst worked out before invoking the dogma that competition is best and extending the scope of privatisation to prisons already built and being run as part of the prison service. He did not even wait to allow Her Majesty's chief inspector of prisons the time to conduct a visit to the Wolds prison and issue a report on it.
The Home Secretary accuses the hon. Member for Sedgefield of dogmatism, and of being doctrinaire. The reverse is the truth. The right hon. and learned Gentleman is not interested in a pragmatic evaluation of the experiments on which he has embarked. He is forcing through the House a measure designed to give him untrammelled authority to award commercial contracts to companies that will not disclose to the House how they propose to proceed. I think that that is irresponsible. It is almost inconceivable that any sensible Home Secretary would take such a decision—indeed, his predecessor, now the Foreign Secretary, explicitly repudiated the idea in principle.
The Home Secretary, however, is playing other games. He needs to prove his credentials as a sort of remaining Thatcherite. I dare say he will assume a number of different postures over the next few months in an attempt to further his political ambitions.
The new head of the executive agency, Mr. Derek Lewis, has not been instructed, as the first act of the Secretary of State, to implement the provisions of the

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Woolf report. He has been instructed to carry out the doctrine of the Government, to facilitate the participation of the private sector in prison management.
This is a very odd priority, when there is so much wrong with the prisons and when it is clear that we are far short of fulfilling the recommendations of Lord Justice Woolf in so many prisons around the country. It is also clear from all the reports produced by Mr. Justice Tumim that efforts are being made in the service by prison officers to overcome the difficulties. If the Home Secretary would deal with the problems of the prison service with the commitment that he has shown to extending to another sphere of public service the dogmas of Baroness Thatcher of Kesteven, he would be performing the role that he should be discharging at this time.
I hope that the House will reject this order tonight.
11.18 pm
Sir Ivan Lawrence: I do not know about sucking eggs, but there was a moment in the speech of the hon. Member for Caithness and Sutherland (Mr. Maclennan) when I thought that he was about to lay one. He certainly offered no suggestions as to how the prison service might be improved.
I have only one interest to declare: it is in my interests that none of the unfortunate people whom I have the privilege to defend, though they be innocent, should ever end up in any kind of prison, state maintained or privately contracted.
I have been here for many years and nothing surprises me about the Opposition, but in this debate they have come close to surprising me. For many years they have demanded more humane prison conditions, which they never achieved when they were in power. Every day for years they have demanded better working conditions for prison officers. They have always demanded for prisoners better regimes—no slopping out, daily hot showers, more privacy, better food, rehabilitation, training and education, and fewer wasted hours in prison cells. They have also asked for pilot schemes. They never achieved any of those benefits and now that they are being offered, the Opposition do not want them. What they have said for many years has turned out to be wind.
When Labour was in power from 1974 to 1979 it cut capital spending on the prisons by 20 per cent. although the prison population rose by 15 per cent. Does the hon. Member for Sedgefield (Mr. Blair), who is the Opposition Front-Bench spokesman on these matters, really imagine that statutory minimum standards for prisoners, which the Labour Government never achieved, an independent ombudsman, which they never thought of, more spending, which they could never achieve, are substitutes for better prison management? Are they substitutes for the dynamism that contracting out will bring to our prison service? With that will come funding and proven achievements because of the success of the Wolds prison.
The Government have increased the number of prison officers by 70 per cent., but the prison population has risen by only 3 per cent. They have the largest prison building programme of all time, they appointed Judge Tumim and commissioned the Woolf report. They are committed to improving prison conditions, not just for prisoners but for those who run the prisons—the members of the Prison Officers Association. They made sure, through the Criminal Justice Act 1991, that they will remain
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accountable for standards, for monitoring, adjudication and discipline, and for ensuring that prison officers are properly trained and certified as such before they are let loose on the prison population. The Government deserve the support of the whole House.
The Government want what the Opposition have been demanding, crying for, over all the years that I have been here. As I have said, their pleas have turned out to be mere wind. They are obsessed by party dogma, and for the sake of that dogma they are determined to make sure that the prison system deteriorates, as it always did under them.
11.23 pm
Mr. Rupert Allason: As a member of the all-party penal affairs group, I had not intended to speak in the debate. However, I decided to do so in view of the attack on my right hon. Friend the Member for Westminster, North (Sir J. Wheeler). My right hon. Friend is chairman of the penal affairs group and probably knows more about prisons than any hon. Member. He was also a prison governor, and perhaps modesty prevented him from making known those two facts.
The Wolds has been an outstanding success. If the Opposition want proof of that, they should ask the prisoners, who would rather be sent to the Wolds prison than to any other in the United Kingdom. The appointment of the new director of the prison service is imaginative. Derek Lewis has a fine reputation in his industry and I welcome not just his appointment but the fact that the prison service is to have agency status. That will be good for the staff and management of our prisons, and good for the prisoners.
I believe that a year from now all the prison reform charities, and those who have a direct interest in the prison service and the welfare of prisoners, will also welcome these imaginative moves from a Home Secretary who, I suspect, although I am not one of his greatest fans, will be recognised in a few years' time as one who has done more for our prisons than any other Home Secretary this century.
11.25 pm
Mrs. Barbara Roche: I listened with great interest to the hon. and learned Member for Burton (Sir I. Lawrence). He chairs the Select Committee on Home Affairs, on which I have the honour to serve, so it was in my interest to follow his speech carefully.
I was fascinated by the hon. and learned Gentleman's utopian picture of what the Government have in store for us with tremendously improved conditions for both staff and prisoners. Yet according to an article in The Guardian today, the full prison complement is 971 for Strangeways, but the contractors are to be asked to bid for provision of places for 1,150 prisoners. The Home Office's comment on this overcrowding was:
"Many prisoners like sharing cells, or they feel lonely."
Mr. Kenneth Clarke: The hon. Lady may not have been here earlier, when we dealt with the point about overcrowding. The point keeps being made, but the fact is that every prison has to make some contingency provision for overcrowding, because we have no control over the numbers sent by the courts. If we made no provision at the prison, it would be argued that the private sector was being exempted from making provision that every other prison

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has to make. It is a contingency provision, whereby about 70 cells will be doubled up if the courts ever send an excess of prisoners. Currently, overcrowding in the whole system is lower than it has been for years, and we are determined to keep it at that level.
Mrs. Roche: I am grateful for that information, although I have been present since the beginning of the debate. I note, however, that the copy of the contract for the running of the new prison reveals that the Home Office wants the first phase to accommodate 789 prisoners, 116 more than it was designed to take. That is unacceptable.
When dealing with prison privatisation, Ministers appear to be influenced by the American experience—
Mr. Edward Gamier: I am listening with interest to the hon. Lady's speech. Is she basing her arguments on what The Guardian says, or on the contract that she has in her hand—if she has it in her hand?
Mrs. Roche: I had moved on from that point, but I am willing to answer the hon. Gentleman's question. Yes, I am basing my arguments on the article in The Guardian, but I noted that the Home Secretary did not repudiate the basis of the article, although he was free to do so.
I was talking about the American experience of prisons. An obnoxious example is the involvement in some United States prisons of companies such as Kentucky Fried Chicken, which have been involved in tenders and, indeed, the running of some prisons. Is that not a bizarre and atrocious way to run the system? The American experience also shows evidence of malpractice. In 1989, the state of Texas opened four minimum security prisons; a 1990 audit found that the companies had failed to implement promised educational and job training programmes. I do not know whether the Secretary of State reads The Wall Street Journal but it commented:
"Once hailed as the quick fix for the nations' overcrowded prisons, privatisation is turning into quicksand for the companies and communities involved."
The then Minister with responsibility for prisons, the right hon. Member for Mitcham and Morden (Dame A. Rumbold), promised in February 1991 that further prison privatisation would go ahead if,
"and only if, the contracted-out remand centre proves to be a success."—[Official Report, 25 February 1991; Vol. 186, c. 720.]
Perhaps we should examine that a little more carefully.
Wolds was described as a prison which would provide revolutionary new standards for prisoners and staff. It certainly appears to have been funded at great expense to the taxpayer, although of course we do not know the exact figures because the Government will not reveal them. On 19 December, the Financial Times reported that York crown court had heard that a remand prisoner was tortured and injected with heroin by other inmates at the Wolds. The judge, His Honour Gordon Atkinson, said that he had received a letter outlining what had happened to the man at
"this so-called up-to-date prison."
He commented that the letter disclosed a "deplorable state of affairs".
We hear none of that as the Government laud what is happening in the Wolds. My hon. Friend the Member for Lewisham, Deptford (Ms. Ruddock) asked last week about the incidents and disturbances at the Wolds since 1
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December 1992. The Minister of State listed 20 separate occurrences in that six-week period, including more than one incident in which a prisoner was assaulted by "assailants unknown".
Mr. Kenneth Clarke: The hon. Lady might be interested to know that there have been 62 incidents in the past 12 months. That sounds a lot, but in the prison service everything is recorded as an incident. There have been 17,657 incidents in the prison service as a whole. In 1992, the average number of incidents per week at the Wolds was 1.3. The prison service average is 2.6—precisely double.
Mrs. Roche: Again, I am extremely grateful for the Home Secretary's intervention. It is always good to get information that we have been seeking for some time. Of course, the Home Secretary did not say that the Wolds is a remand prison, where one would perhaps expect a lower rate of such incidents.
It cannot be denied—I should be the last to deny it—that there is a crisis in our prisons. As shown in Lord Justice Woolf's excellent report and proposals, and in Judge Stephen Tumim's 1991 report, much needs to be done. Conditions in many prisons are entirely unacceptable. We should be establishing statutory minimum standards for prisons, in addition to an urgent programme of refurbishment.
However, we do not need the privatisation of prisons. The Secretary of State announced recently in answer to a parliamentary question, on 1 February 1993:
"when the Prison Service becomes an executive agency on 1 April it should assume full responsibility for taking forward Government policy on the involvement of the private sector in the management of prisons."—[Official Report, 1 February 1993; Vol. 218, c. 55.]
There has been no press conference about this. The Government have no desire to come clean about their twin-track approach to prisons.
It will also be instructive to see how the contracts for the management of the prison service are to be handed out and to see which of the Secretary of State's friends—honourable and otherwise—get the plum directorships that will arise from prison privatisation. Just as the privatised utilities have given lucrative directorships to ex-Cabinet Ministers, so the Government seem to intend to hive off the prison service to their friends.
For example, Tarmac, a well known donor of thousands of pounds to the Tory party, is involved in Group 4 which runs the Wolds. It is interesting that the latest Register of Members' Interests lists the right hon. Member for Sutton Coldfield (Sir N. Fowler), the chairman of the Conservative party, as a non-executive director of Group 4 Securitas. Similarly, McAlpine, a stalwart when it comes to donating funds to Tory party coffers, is involved in the private security firm, UK Detention Services Ltd., which completed the design and build contract for the Wolds.
The reputation of the private security firms to which Ministers want to hand over our prisons does not inspire confidence. I note that a senior official of a private security trade association told the Select Committee on Defence in May 1990 that private guards are lucky to have two days' training. That is the situation that we shall have in our prisons.
Surely the commercial interests of private prison bosses run counter to the spirit of Lord Woolf's recommendations and proposals about equipping prisoners with the

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skills and qualifications to increase their chances of re-integrating successfully into society. As Stephen Shaw, director of the Prison Reform Trust said:
"Managers … will be more accountable to shareholders 5,000 miles away than to the British public and the British Parliament."
It is a great pity that the Government did not listen to the previous Home Secretary, who said that there was not a case for prison privatisation. The British public would have felt safer and more secure with a proper accountable system, instead of commercialisation for private profit.
11.36 pm
Mr. Neil Gerrard: At times during the debate, it has seemed to me that people have forgotten what the order is about: it is not about whether a particular prison building is new, modern or efficient, but about the extension of privatisation across the whole of the prison service.
I start from the point of view which I suspect many of my hon. Friends share; that it is mildly repugnant that private contractors should be making profits from keeping people in prison. That is what the order is about. Private contractors do not operate if they are not likely to make a profit. We all agree that standards need to be improved, that we need more enlightened regimes, that we need to cut the number of people in prison and that we need new prison buildings. No one disputes that, but the order is not about building new prisons; it is about privatising the existing prison service.
Let us consider the debate and the order in context. What has been said in previous debates on the topic? In 1987, the then Home Secretary completely ruled out privatisation. The 1988 Green Paper ruled out privatisation except for new remand prisons. The Criminal Justice Act 1991 as originally drafted followed that Green Paper.
It was only as a result of the Government's accepting Back-Bench amendments during our proceedings on the Bill that became that Act that privatisation across the whole service became a possibility. As my hon. Friend the Member for Hornsey and Wood Green (Mrs. Roche) pointed out, the Minister of the time made the following very important statement:
"If, and only if, the contracted-out remand centre proves to be a success might we move towards privatisation of other parts of the prison service."—[Official Report, 25 February 1991; Vol. 186, c. 720.]
What evidence is there that the experiment at the Wolds and that at Blakenhurst, which has hardly started, have been a success? That is the question that the Government should be answering tonight.
At the time of the debate in 1991, senior civil servants said—no doubt with ministerial approval—that it would take three years for a proper assessment of the success of the Wolds to be made. In November last year, I was told in answer to a parliamentary question that Hull university was conducting a two-year survey to assess the success of the Wolds—again, no doubt, with Home Office approval. So where is the evidence? What information is available? I simply do not believe that people who claim that the system is now more accountable have considered what has been happening in the past six months.
For example, we know that the Wolds has not been running at full capacity. There were 233 prisoners in the Wolds in November, when the capacity is 320. At that time, the Government extended the Wolds catchment area
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in an attempt to fill the prison. How do we measure the success of a prison that has never operated at the capac0ity that it was designed to operate at?
We have been told that there are 196 staff at the Wolds. However, when we ask how many staff there are in each category, how many prison custody officers and caterers, we are told that we cannot have that information because it is commercially confidential.
My hon. Friend the Member for Dulwich (Ms. Jowell) referred to health and psychiatric care. Health care at the Wolds is subcontracted by Group 4 to a French-owned medical company, and we cannot be told the costs or details of that contract because it is commercially confidential information.
The Crown controller will examine the service delivery at the Wolds against the contract. However, we will not be able to do that. We will not be allowed to see the Crown controller's report measuring service delivery against the contract because that is commercially confidential information. We know that Group 4 is being paid, but we cannot be told how much, because that is commercially confidential information.
The definition of commercial confidentiality is preventing hon. Members from discovering what is happening in the Wolds. A day visit to the prison will not help. One simply cannot obtain the information.
How much does it cost to keep people in the Wolds or in Blakenhurst? How does that compare with the state sector? What are the manpower costs per inmate? We have a right to answers to those questions. I find it difficult to comprehend how we are supposed to be able to judge value for money without that information.
Exactly the same problems arise in connection with judging standards. We want higher standards, but it is pointless for hon. Members to compare a brand new remand prison like the Wolds with an old overcrowded state sector prison and claim that that proves that the private sector is a success. It proves nothing of the sort. It proves absolutely nothing.
We know that there have been problems at that prison, and that incidents have occurred there that could occur at any prison. The Government's policy is more concerned with dogma than with penal policy or the improvement of prison conditions. The policy seems to be to hive off new prisons; remand-only prisons first and then new prisons for convicted prisoners and refurbished prisons like Strangeways; keep them under-occupied in the first instance and then compare them to an old, overcrowded, under-staffed prison and claim that the former are successful.
The people who stand to benefit are the private contractors. My hon. Friend the Member for Hornsey and Wood Green mentioned UK Detention Services Ltd., which runs Blakenhurst. That company is a conglomerate under Corrections Corporation of America. The chairman of that company was tied in with the Republican party which lobbied the Adam Smith Institute in the 1980s to get privatisation on the agenda. In 1991, that company gave a commitment in writing to its shareholders to spend CCA dollars
"only where they have the greatest chance for financial gain."
Such companies are interested only in financial gain. Other people in that conglomerate are the Mowlems and the McAlpines—well-known people who have run prisons

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for many years. The holding company, Newarthill, and UK Detention Services, McAlpine and Mowlem are all contributors to the Tory party.
It is all about private profit. That is what is going on. It is nothing to do with improving conditions. If we were really interested in improving conditions, we would be making sure that the Woolf report was implemented right throughout the prison sector—not picking out private prisons and making sure that they succeed. The Woolf report was accepted by every one.
Instead, we have privatisation that is opposed by governors, prison officers, prison teachers, prison chaplains and everybody concerned with the prison service. The Government should be making sure that they are directing their energy into implementing the Woolf agenda right through the prison service, uniting the prison service and delivering—
It being one and a half hours after the commencement of proceedings on the motion, MR. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 14 (exempted business):—
The House divided: Ayes 282, Noes 235.

Division No. 140]

[10 pm

AYES

Adley, Robert

Coombs, Simon (Swindon)

Ainsworth, Peter (East Surrey)

Cope, Rt Hon Sir John

Aitken, Jonathan

Couchman, James

Alison, Rt Hon Michael (Selby)

Cran, James

Allason, Rupert (Torbay)

Currie, Mrs Edwina (S D'by'ire)

Amess, David

Curry, David (Skipton & Ripon)

Ancram, Michael

Davies, Quentin (Stamford)

Arbuthnot, James

Davis, David (Boothferry)

Arnold, Jacques (Gravesham)

Day, Stephen

Arnold, Sir Thomas (Hazel Grv)

Deva, Nirj Joseph

Ashby, David

Devlin, Tim

Aspinwall, Jack

Dickens, Geoffrey

Atkinson, Peter (Hexham)

Dorrell, Stephen

Baker, Nicholas (Dorset North)

Douglas-Hamilton, Lord James

Baldry, Tony

Dover, Den

Banks, Matthew (Southport)

Duncan, Alan

Banks, Robert (Harrogate)

Duncan-Smith, Iain

Bates, Michael

Dunn, Bob

Batiste, Spencer

Durant, Sir Anthony

Beggs, Roy

Dykes, Hugh

Bellingham, Henry

Eggar, Tim

Bendall, Vivian

Elletson, Harold

Beresford, Sir Paul

Emery, Rt Hon Sir Peter

Biffen, Rt Hon John

Evans, David (Welwyn Hatfield)

Blackburn, Dr John G.

Evans, Jonathan (Brecon)

Body, Sir Richard

Evans, Nigel (Ribble Valley)

Bonsor, Sir Nicholas

Evans, Roger (Monmouth)

Booth, Hartley

Evennett, David

Boswell, Tim

Faber, David

Bottomley, Peter (Eltham)

Fabricant, Michael

Bottomley, Rt Hon Virginia

Field, Barry (Isle of Wight)

Bowden, Andrew

Fishburn, Dudley

Bowis, John

Forman, Nigel

Boyson, Rt Hon Sir Rhodes

Forsyth, Michael (Stirling)

Brandreth, Gyles

Forth, Eric

Brazier, Julian

Fowler, Rt Hon Sir Norman

Bright, Graham

Fox, Dr Liam (Woodspring)

Brooke, Rt Hon Peter

Fox, Sir Marcus (Shipley)

Brown, M. (Brigg & Cl'thorpes)

Freeman, Roger

Browning, Mrs. Angela

French, Douglas

Bruce, Ian (S Dorset)

Gale, Roger

Burns, Simon

Gallie, Phil

Burt, Alistair

Gardiner, Sir George

Butcher, John

Garel-Jones, Rt Hon Tristan

Butler, Peter

Garnier, Edward

Butterfill, John

Gill, Christopher

Carlisle, John (Luton North)

Gillan, Cheryl

Carlisle, Kenneth (Lincoln)

Goodlad, Rt Hon Alastair

Carrington, Matthew

Goodson-Wickes, Dr Charles

Carttiss, Michael

Gorman, Mrs Teresa

Cash, William

Gorst, John

Channon, Rt Hon Paul

Grant, Sir Anthony (Cambs SW)

Chaplin, Mrs Judith

Greenway, Harry (Ealing N)

Churchill, Mr

Greenway, John (Ryedale)

Clappison, James

Griffiths, Peter (Portsmouth, N)

Clark, Dr Michael (Rochford)

Gummer, Rt Hon John Selwyn

Clarke, Rt Hon Kenneth (Ruclif)

Hague, William

Clifton-Brown, Geoffrey

Hamilton, Rt Hon Archie (Epsom)

Coe, Sebastian

Hamilton, Neil (Tatton)

Colvin, Michael

Hampson, Dr Keith

Congdon, David

Hannam, Sir John

Conway, Derek

Hargreaves, Andrew

Coombs, Anthony (Wyre For'st)

Harris, David

418

Haselhurst, Alan

Needham, Richard

Hawkins, Nick

Nelson, Anthony

Hawksley, Warren

Newton, Rt Hon Tony

Hayes, Jerry

Nicholls, Patrick

Heald, Oliver

Nicholson, David (Taunton)

Heathcoat-Amory, David

Nicholson, Emma (Devon West)

Hendry, Charles

Norris, Steve

Heseltine, Rt Hon Michael

Onslow, Rt Hon Sir Cranley

Hicks, Robert

Oppenheim, Phillip

Higgins, Rt Hon Sir Terence L.

Ottaway, Richard

Hill, James (Southampton Test)

Page, Richard

Hogg, Rt Hon Douglas (G'tham)

Paice, James

Horam, John

Patnick, Irvine

Hordern, Rt Hon Sir Peter

Patten, Rt Hon John

Howard, Rt Hon Michael

Pattie, Rt Hon Sir Geoffrey

Howarth, Alan (Strat'rd-on-A)

Pawsey, James

Howell, Rt Hon David (G'dford)

Peacock, Mrs Elizabeth

Hughes Robert G. (Harrow W)

Pickles, Eric

Hunter, Andrew

Porter, Barry (Wirral S)

Hurd, Rt Hon Douglas

Porter, David (Waveney)

Jack, Michael

Portillo, Rt Hon Michael

Jackson, Robert (Wantage)

Powell, William (Corby)

Jenkin, Bernard

Redwood, John

Jessel, Toby

Renton, Rt Hon Tim

Johnson Smith, Sir Geoffrey

Richards, Rod

Jones, Gwilym (Cardiff N)

Riddick, Graham

Jones, Robert B. (W Hertfdshr)

Rifkind, Rt Hon. Malcolm

Jopling, Rt Hon Michael

Robathan, Andrew

Kellett-Bowman, Dame Elaine

Roberts, Rt Hon Sir Wyn

Key, Robert

Robertson, Raymond (Ab'd'n S)

Kilfedder, Sir James

Robinson, Mark (Somerton)

King, Rt Hon Tom

Roe, Mrs Marion (Broxbourne)

Kirkhope, Timothy

Rowe, Andrew (Mid Kent)

Knapman, Roger

Rumbold, Rt Hon Dame Angela

Knight, Mrs Angela (Erewash)

Ryder, Rt Hon Richard

Knight, Greg (Derby N)

Sackville, Tom

Knight, Dame Jill (Bir'm E'st'n)

Sainsbury, Rt Hon Tim

Knox, David

Scott, Rt Hon Nicholas

Kynoch, George (Kincardine)

Shaw, David (Dover)

Lait, Mrs Jacqui

Shaw, Sir Giles (Pudsey)

Lamont, Rt Hon Norman

Shephard, Rt Hon Gillian

Lang, Rt Hon Ian

Shepherd, Colin (Hereford)

Lawrence, Sir Ivan

Shersby, Michael

Legg, Barry

Sims, Roger

Lennox-Boyd, Mark

Skeet, Sir Trevor

Lester, Jim (Broxtowe)

Smith, Tim (Beaconsfield)

Lidington, David

Smyth, Rev Martin (Belfast S)

Lightbown, David

Soames, Nicholas

Lilley, Rt Hon Peter

Spencer, Sir Derek

Lloyd, Peter (Fareham)

Spicer, Sir James (W Dorset)

Lord, Michael

Spicer, Michael (S Worcs)

Luff, Peter

Spink, Dr Robert

Lyell, Rt Hon Sir Nicholas

Spring, Richard

MacGregor, Rt Hon John

Sproat, Iain

Maclean, David

Squire, Robin (Hornchurch)

McLoughlin, Patrick

Stanley, Rt Hon Sir John

McNair-Wilson, Sir Patrick

Steen, Anthony

Madel, David

Stephen, Michael

Maitland, Lady Olga

Stern, Michael

Major, Rt Hon John

Stewart, Allan

Malone, Gerald

Streeter, Gary

Mans, Keith

Sumberg, David

Marland, Paul

Sweeney, Walter

Marlow, Tony

Sykes, John

Marshall, John (Hendon S)

Tapsell, Sir Peter

Marshall, Sir Michael (Arundel)

Taylor, Ian (Esher)

Martin, David (Portsmouth S)

Taylor, John M. (Solihull)

Mates, Michael

Taylor, Sir Teddy (Southend, E)

Mawhinney, Dr Brian

Temple-Morris, Peter

Mayhew, Rt Hon Sir Patrick

Thomason, Roy

Mellor, Rt Hon David

Thompson, Sir Donald (C'er V)

Merchant, Piers

Thompson, Patrick (Norwich N)

Milligan, Stephen

Thornton, Sir Malcolm

Mills, Iain

Thurnham, Peter

Mitchell, Andrew (Gedling)

Townsend, Cyril D. (Bexl'yh'th)

Moate, Sir Roger

Tracey, Richard

Molyneaux, Rt Hon James

Tredinnick, David

Monro, Sir Hector

Trend, Michael

Montgomery, Sir Fergus

Trotter, Neville

Moss, Malcolm

Twinn, Dr Ian

419

Vaughan, Sir Gerard

Wilkinson, John

Waldegrave, Rt Hon William

Willetts, David

Walden, George

Wilshire, David

Waller, Gary

Winterton, Mrs Ann (Congleton)

Wardle, Charles (Bexhill)

Winterton, Nicholas (Macc'f'ld)

Waterson, Nigel

Wolfson, Mark

Watts, John

Wood, Timothy

Wells, Bowen

Yeo, Tim

Wheeler, Rt Hon Sir John

Young, Sir George (Acton)

Whitney, Ray

Whittingdale, John

Tellers for the Ayes:

Widdecombe, Ann

Mr. Sydney Chapman and

Wiggin, Sir Jerry

Mr. Andrew McKay.

NOES

Abbott, Ms Diane

Davies, Rt Hon Denzil (Llanelli)

Adams, Mrs Irene

Davies, Ron (Caerphilly)

Ainger, Nick

Davis, Terry (B'ham, H'dge H'l)

Ainsworth, Robert (Cov'try NE)

Denham, John

Allen, Graham

Dewar, Donald

Alton, David

Dixon, Don

Anderson, Donald (Swansea E)

Dobson, Frank

Anderson, Ms Janet (Ros'dale)

Donohoe, Brian H.

Armstrong, Hilary

Dowd, Jim

Ashdown, Rt Hon Paddy

Dunwoody, Mrs Gwyneth

Ashton, Joe

Eastham, Ken

Austin-Walker, John

Enright, Derek

Barnes, Harry

Etherington, Bill

Battle, John

Evans, John (St Helens N)

Bayley, Hugh

Fatchett, Derek

Beckett, Margaret

Fisher, Mark

Beith, Rt Hon A. J.

Flynn, Paul

Bell, Stuart

Foster, Derek (B'p Auckland)

Benn, Rt Hon Tony

Foster, Don (Bath)

Bennett, Andrew F.

Foulkes, George

Benton, Joe

Fraser, John

Bermingham, Gerald

Fyfe, Maria

Berry, Dr. Roger

Galbraith, Sam

Betts, Clive

Galloway, George

Blair, Tony

Gapes, Mike

Blunkett, David

Garrett, John

Boateng, Paul

George, Bruce

Boyce, Jimmy

Gerrard, Neil

Boyes, Roland

Gilbert, Rt Hon Dr John

Bradley, Keith

Godsiff, Roger

Bray, Dr Jeremy

Golding, Mrs Llin

Brown, Gordon (Dunfermline E)

Gordon, Mildred

Brown, N. (N'c'tle upon Tyne E)

Gould, Bryan

Burden, Richard

Graham, Thomas

Byers, Stephen

Grant, Bernie (Tottenham)

Caborn, Richard

Griffiths, Nigel (Edinburgh S)

Callaghan, Jim

Griffiths, Win (Bridgend)

Campbell, Mrs Anne (C'bridge)

Grocott, Bruce

Campbell, Menzies (Fife NE)

Gunnell, John

Campbell, Ronnie (Blyth V)

Hain, Peter

Campbell-Savours, D. N.

Hall, Mike

Canavan, Dennis

Hanson, David

Cann, Jamie

Harman, Ms Harriet

Chisholm, Malcolm

Harvey, Nick

Clapham, Michael

Hattersley, Rt Hon Roy

Clark, Dr David (South Shields)

Henderson, Doug

Clarke, Eric (Midlothian)

Heppell, John

Clelland, David

Hill, Keith (Streatham)

Clwyd, Mrs Ann

Hinchliffe, David

Coffey, Ann

Hoey, Kate

Cohen, Harry

Home Robertson, John

Connarty, Michael

Hoon, Geoffrey

Cook, Frank (Stockton N)

Howarth, George (Knowsley N)

Cook, Robin (Livingston)

Howells, Dr. Kim (Pontypridd)

Corbett, Robin

Hoyle, Doug

Corbyn, Jeremy

Hughes, Kevin (Doncaster N)

Corston, Ms Jean

Hughes, Robert (Aberdeen N)

Cousins, Jim

Hughes, Simon (Southwark)

Cryer, Bob

Hutton, John

Cunningham, Jim (Covy SE)

Illsley, Eric

Cunningham, Dr John (C'p'l'nd)

Ingram, Adam

Dalyell, Tam

Jackson, Glenda (H'stead)

Darling, Alistair

Jackson, Helen (Shef'ld, H)

Davidson, Ian

Jamieson, David

Davies, Bryan (Oldham C'tral)

Janner, Greville

420

Jones, Barry (Alyn and D'side)

Prentice, Ms Bridget (Lew'm E)

Jones, Jon Owen (Cardiff C)

Prentice, Gordon (Pendle)

Jones, Lynne (B'ham S O)

Prescott, John

Jones, Martyn (Clwyd, SW)

Primarolo, Dawn

Jones, Nigel (Cheltenham)

Purchase, Ken

Jowell, Tessa

Quin, Ms Joyce

Keen, Alan

Radice, Giles

Kennedy, Jane (Lpool Brdgn)

Randall, Stuart

Khabra, Piara S.

Raynsford, Nick

Kilfoyle, Peter

Reid, Dr John

Kinnock, Rt Hon Neil (Islwyn)

Robertson, George (Hamilton)

Kirkwood, Archy

Robinson, Geoffrey (Co'try NW)

Leighton, Ron

Roche, Mrs. Barbara

Lestor, Joan (Eccles)

Rogers, Allan

Litherland, Robert

Rooker, Jeff

Livingstone, Ken

Rooney, Terry

Lloyd, Tony (Stretford)

Ross, Ernie (Dundee W)

Llwyd, Elfyn

Rowlands, Ted

Lynne, Ms Liz

Ruddock, Joan

McAllion, John

Sedgemore, Brian

McAvoy, Thomas

Sheerman, Barry

McCartney, Ian

Shore, Rt Hon Peter

Macdonald, Calum

Short, Clare

McFall, John

Simpson, Alan

McKelvey, William

Skinner, Dennis

Mackinlay, Andrew

Smith, Andrew (Oxford E)

Maclennan, Robert

Smith, Llew (Blaenau Gwent)

McMaster, Gordon

Snape, Peter

McNamara, Kevin

Soley, Clive

McWilliam, John

Spearing, Nigel

Madden, Max

Squire, Rachel (Dunfermline W)

Mandelson, Peter

Steel, Rt Hon Sir David

Marek, Dr John

Steinberg, Gerry

Marshall, David (Shettleston)

Stevenson, George

Marshall, Jim (Leicester, S)

Stott, Roger

Martin, Michael J. (Springburn)

Strang, Dr. Gavin

Martlew, Eric

Straw, Jack

Meacher, Michael

Taylor, Mrs Ann (Dewsbury)

Michael, Alun

Tipping, Paddy

Michie, Bill (Sheffield Heeley)

Turner, Dennis

Milburn, Alan

Tyler, Paul

Miller, Andrew

Vaz, Keith

Mitchell, Austin (Gt Grimsby)

Walker, Rt Hon Sir Harold

Moonie, Dr Lewis

Wallace, James

Morgan, Rhodri

Walley, Joan

Morley, Elliot

Wardell, Gareth (Gower)

Morris, Rt Hon A. (Wy'nshawe)

Wareing, Robert N

Morris, Estelle (B'ham Yardley)

Watson, Mike

Morris, Rt Hon J. (Aberavon)

Wicks, Malcolm

Mowlam, Marjorie

Williams, Rt Hon Alan (Sw'n W)

Mudie, George

Williams, Alan W (Carmarthen)

Mullin, Chris

Wilson, Brian

Murphy, Paul

Winnick, David

Oakes, Rt Hon Gordon

Wise, Audrey

O'Brien, Michael (N W'kshire)

Worthington, Tony

O'Hara, Edward

Wray, Jimmy

Olner, William

Wright, Dr Tony

Orme, Rt Hon Stanley

Young, David (Bolton SE)

Pendry, Tom

Pickthall, Colin

Tellers for the Noes:

Pike, Peter L.

Mr. Alan Meale and

Pope, Greg

Mr. John Spellar.

Powell, Ray (Ogmore)

Division No. 141]

[11.45 pm

AYES

Adley, Robert

Channon, Rt Hon Paul

Ainsworth, Peter (East Surrey)

Chaplin, Mrs Judith

Aitken, Jonathan

Churchill, Mr

Alison, Rt Hon Michael (Selby)

Clappison, James

Allason, Rupert (Torbay)

Clark, Dr Michael (Rochford)

Amess, David

Clarke, Rt Hon Kenneth (Ruclif)

Ancram, Michael

Clifton-Brown, Geoffrey

Arbuthnot, James

Coe, Sebastian

Arnold, Jacques (Gravesham)

Colvin, Michael

Arnold, Sir Thomas (Hazel Grv)

Congdon, David

Ashby, David

Conway, Derek

Aspinwall, Jack

Coombs, Anthony (Wyre For'st)

Atkinson, Peter (Hexham)

Coombs, Simon (Swindon)

Baker, Nicholas (Dorset North)

Cope, Rt Hon Sir John

Baldry, Tony

Couchman, James

Banks, Matthew (Southport)

Cran, James

Banks, Robert (Harrogate)

Curry, David (Skipton & Ripon)

Bates, Michael

Davies, Quentin (Stamford)

Batiste, Spencer

Davis, David (Boothferry)

Bellingham, Henry

Day, Stephen

Bendall, Vivian

Deva, Nirj Joseph

Beresford, Sir Paul

Devlin, Tim

Biffen, Rt Hon John

Dorrell, Stephen

Blackburn, Dr John G.

Douglas-Hamilton, Lord James

Body, Sir Richard

Dover, Den

Bonsor, Sir Nicholas

Duncan, Alan

Booth, Hartley

Duncan-Smith, Iain

Boswell, Tim

Dunn, Bob

Bottomley, Peter (Eltham)

Durant, Sir Anthony

Bottomley, Rt Hon Virginia

Eggar, Tim

Bowden, Andrew

Elletson, Harold

Bowis, John

Emery, Rt Hon Sir Peter

Brandreth, Gyles

Evans, David (Welwyn Hatfield)

Brazier, Julian

Evans, Jonathan (Brecon)

Bright, Graham

Evans, Nigel (Ribble Valley)

Brooke, Rt Hon Peter

Evans, Roger (Monmouth)

Brown, M. (Brigg & Cl'thorpes)

Evennett, David

Browning, Mrs. Angela

Faber, David

Bruce, Ian (S Dorset)

Fabricant, Michael

Burns, Simon

Field, Barry (Isle of Wight)

Burt, Alistair

Fishburn, Dudley

Butler, Peter

Forman, Nigel

Butterfill, John

Forsyth, Michael (Stirling)

Carlisle, John (Luton North)

Fox, Dr Liam (Woodspring)

Carlisle, Kenneth (Lincoln)

Fox, Sir Marcus (Shipley)

Carrington, Matthew

Freeman, Roger

Carttiss, Michael

French, Douglas

Cash, William

Gale, Roger

444

Gallie, Phil

Martin, David (Portsmouth S)

Gardiner, Sir George

Mawhinney, Dr Brian

Garel-Jones, Rt Hon Tristan

Mayhew, Rt Hon Sir Patrick

Garnier, Edward

Mellor, Rt Hon David

Gill, Christopher

Merchant, Piers

Gillan, Cheryl

Milligan, Stephen

Goodlad, Rt Hon Alastair

Mills, Iain

Goodson-Wickes, Dr Charles

Mitchell, Andrew (Gedling)

Gorman, Mrs Teresa

Moate, Sir Roger

Gorst, John

Monro, Sir Hector

Grant, Sir Anthony (Cambs SW)

Montgomery, Sir Fergus

Greenway, Harry (Ealing N)

Moss, Malcolm

Greenway, John (Ryedale)

Needham, Richard

Griffiths, Peter (Portsmouth, N)

Nelson, Anthony

Gummer, Rt Hon John Selwyn

Newton, Rt Hon Tony

Hague, William

Nicholls, Patrick

Hamilton, Rt Hon Archie (Epsom)

Nicholson, David (Taunton)

Hamilton, Neil (Tatton)

Nicholson, Emma (Devon West)

Hampson, Dr Keith

Norris, Steve

Hannam, Sir John

Onslow, Rt Hon Sir Cranley

Hargreaves, Andrew

Oppenheim, Phillip

Harris, David

Ottaway, Richard

Haselhurst, Alan

Page, Richard

Hawkins, Nick

Paice, James

Hawksley, Warren

Patnick, Irvine

Hayes, Jerry

Pattie, Rt Hon Sir Geoffrey

Heald, Oliver

Pawsey, James

Heathcoat-Amory, David

Peacock, Mrs Elizabeth

Hendry, Charles

Pickles, Eric

Higgins, Rt Hon Sir Terence L.

Porter, Barry (Wirral S)

Hill, James (Southampton Test)

Porter, David (Waveney)

Hogg, Rt Hon Douglas (G'tham)

Portillo, Rt Hon Michael

Horam, John

Powell, William (Corby)

Hordern, Rt Hon Sir Peter

Redwood, John

Howarth, Alan (Strat'rd-on-A)

Renton, Rt Hon Tim

Howell, Rt Hon David (G'dford)

Richards, Rod

Hunter, Andrew

Riddick, Graham

Hurd, Rt Hon Douglas

Robathan, Andrew

Jack, Michael

Roberts, Rt Hon Sir Wyn

Jenkin, Bernard

Robertson, Raymond (Ab'd'n S)

Jessel, Toby

Robinson, Mark (Somerton)

Johnson Smith, Sir Geoffrey

Roe, Mrs Marion (Broxbourne)

Jones, Gwilym (Cardiff N)

Rowe, Andrew (Mid Kent)

Jones, Robert B. (W Hertfdshr)

Rumbold, Rt Hon Dame Angela

Jopling, Rt Hon Michael

Ryder, Rt Hon Richard

Kellett-Bowman, Dame Elaine

Sackville, Tom

Key, Robert

Sainsbury, Rt Hon Tim

Kilfedder, Sir James

Scott, Rt Hon Nicholas

King, Rt Hon Tom

Shaw, David (Dover)

Kirkhope, Timothy

Shaw, Sir Giles (Pudsey)

Knapman, Roger

Shephard, Rt Hon Gillian

Knight, Mrs Angela (Erewash)

Shepherd, Colin (Hereford)

Knight, Greg (Derby N)

Shersby, Michael

Knight, Dame Jill (Bir'm E'st'n)

Sims, Roger

Knox, David

Skeet, Sir Trevor

Kynoch, George (Kincardine)

Smith, Tim (Beaconsfield)

Lait, Mrs Jacqui

Spencer, Sir Derek

Lang, Rt Hon Ian

Spicer, Sir James (W Dorset)

Lawrence, Sir Ivan

Spicer, Michael (S Worcs)

Legg, Barry

Spink, Dr Robert

Lennox-Boyd, Mark

Spring, Richard

Lester, Jim (Broxtowe)

Sproat, Iain

Lidington, David

Squire, Robin (Hornchurch)

Lloyd, Peter (Fareham)

Stanley, Rt Hon Sir John

Lord, Michael

Steen, Anthony

Luff, Peter

Stephen, Michael

Lyell, Rt Hon Sir Nicholas

Stern, Michael

MacGregor, Rt Hon John

Stewart, Allan

MacKay, Andrew

Streeter, Gary

Maclean, David

Sumberg, David

McLoughlin, Patrick

Sweeney, Walter

McNair-Wilson, Sir Patrick

Sykes, John

Madel, David

Tapsell, Sir Peter

Maitland, Lady Olga

Taylor, Ian (Esher)

Malone, Gerald

Taylor, John M. (Solihull)

Mans, Keith

Taylor, Sir Teddy (Southend, E)

Marland, Paul

Temple-Morris, Peter

Marlow, Tony

Thomason, Roy

Marshall, John (Hendon S)

Thompson, Patrick (Norwich N)

Marshall, Sir Michael (Arundel)

Thornton, Sir Malcolm

445

Thurnham, Peter

Whittingdale, John

Townsend, Cyril D. (Bexl'yh'th)

Widdecombe, Ann

Tracey, Richard

Wiggin, Sir Jerry

Tredinnick, David

Wilkinson, John

Trend, Michael

Willetts, David

Twinn, Dr Ian

Winterton, Mrs Ann (Congleton)

Vaughan, Sir Gerard

Winterton, Nicholas (Macc'f'ld)

Waldegrave, Rt Hon William

Wolfson, Mark

Walden, George

Wood, Timothy

Wardle, Charles (Bexhill)

Yeo, Tim

Waterson, Nigel

Young, Sir George (Acton)

Watts, John

Wells, Bowen

Tellers for the Ayes:

Wheeler, Rt Hon Sir John

Mr. Sydney Chapman and

Whitney, Ray

Mr. Robert G. Hughes.

NOES

Abbott, Ms Diane

Cunningham, Jim (Covy SE)

Adams, Mrs Irene

Cunningham, Dr John (C'p'l'nd)

Ainger, Nick

Dalyell, Tam

Ainsworth, Robert (Cov'try NE)

Darling, Alistair

Allen, Graham

Davidson, Ian

Anderson, Donald (Swansea E)

Davies, Bryan (Oldham C'tral)

Anderson, Ms Janet (Ros'dale)

Davies, Rt Hon Denzil (Llanelli)

Armstrong, Hilary

Davies, Ron (Caerphilly)

Ashton, Joe

Davis, Terry (B'ham, H'dge H'l)

Austin-Walker, John

Denham, John

Barnes, Harry

Dewar, Donald

Battle, John

Dixon, Don

Bayley, Hugh

Donohoe, Brian H.

Beckett, Margaret

Dowd, Jim

Beith, Rt Hon A. J.

Dunwoody, Mrs Gwyneth

Bell, Stuart

Eastham, Ken

Benn, Rt Hon Tony

Enright, Derek

Bennett, Andrew F

Etherington, Bill

Benton, Joe

Evans, John (St Helens N)

Bermingham, Gerald

Fatchett, Derek

Berry, Dr. Roger

Fisher, Mark

Betts, Clive

Flynn, Paul

Blair, Tony

Foster, Derek (B'p Auckland)

Blunkett, David

Foster, Don (Bath)

Boateng, Paul

Fraser, John

Boyce, Jimmy

Fyfe, Maria

Boyes, Roland

Galloway, George

Bradley, Keith

Gapes, Mike

Bray, Dr Jeremy

Garrett, John

Brown, Gordon (Dunfermline E)

George, Bruce

Brown, N. (N'c'tle upon Tyne E)

Gerrard, Neil

Burden, Richard

Gilbert, Rt Hon Dr John

Byers, Stephen

Godsiff, Roger

Caborn, Richard

Golding, Mrs Llin

Callaghan, Jim

Gordon, Mildred

Campbell, Mrs Anne (C'bridge)

Gould, Bryan

Campbell, Menzies (Fife NE)

Graham, Thomas

Campbell-Savours, D. N.

Grant, Bernie (Tottenham)

Canavan, Dennis

Griffiths, Nigel (Edinburgh S)

Cann, Jamie

Griffiths, Win (Bridgend)

Chisholm, Malcolm

Grocott, Bruce

Clapham, Michael

Gunnell, John

Clark, Dr David (South Shields)

Hain, Peter

Clarke, Eric (Midlothian)

Hall, Mike

Clelland, David

Hanson, David

Clwyd, Mrs Ann

Harman, Ms Harriet

Coffey, Ann

Hattersley, Rt Hon Roy

Cohen, Harry

Henderson, Doug

Connarty, Michael

Heppell, John

Cook, Frank (Stockton N)

Hill, Keith (Streatham)

Cook, Robin (Livingston)

Hinchliffe, David

Corbett, Robin

Hoey, Kate

Corbyn, Jeremy

Home Robertson, John

Cousins, Jim

Hoon, Geoffrey

Cryer, Bob

Howarth, George (Knowsley N)

446

Howells, Dr. Kim (Pontypridd)

Olner, William

Hoyle, Doug

Orme, Rt Hon Stanley

Hughes, Kevin (Doncaster N)

Pendry, Tom

Hughes, Robert (Aberdeen N)

Pickthall, Colin

Hughes, Simon (Southwark)

Pike, Peter L.

Hutton, John

Pope, Greg

Illsley, Eric

Powell, Ray (Ogmore)

Ingram, Adam

Prentice, Ms Bridget (Lew'm E)

Jackson, Glenda (H'stead)

Prentice, Gordon (Pendle)

Jackson, Helen (Shef'ld, H)

Prescott, John

Jamieson, David

Primarolo, Dawn

Janner, Greville

Purchase, Ken

Jones, Barry (Alyn and D'side)

Quin, Ms Joyce

Jones, Jon Owen (Cardiff C)

Radice, Giles

Jones, Martyn (Clwyd, SW)

Randall, Stuart

Jones, Nigel (Cheltenham)

Raynsford, Nick

Jowell, Tessa

Reid, Dr John

Keen, Alan

Robertson, George (Hamilton)

Kennedy, Jane (Lpool Brdgn)

Robinson, Geoffrey (Co'try NW)

Khabra, Piara S.

Roche, Mrs. Barbara

Kilfoyle, Peter

Rogers, Allan

Kinnock, Rt Hon Neil (Islwyn)

Rooney, Terry

Kirkwood, Archy

Ross, Ernie (Dundee W)

Leighton, Ron

Rowlands, Ted

Lestor, Joan (Eccles)

Ruddock, Joan

Lewis, Terry

Sheerman, Barry

Litherland, Robert

Shore, Rt Hon Peter

Livingstone, Ken

Short, Clare

Lloyd, Tony (Stretford)

Simpson, Alan

Llwyd, Elfyn

Skinner, Dennis

Lynne, Ms Liz

Smith, Andrew (Oxford E)

McAllion, John

Smith, Llew (Blaenau Gwent)

McCartney, Ian

Snape, Peter

Macdonald, Calum

Soley, Clive

McFall, John

Spearing, Nigel

McKelvey, William

Spellar, John

Mackinlay, Andrew

Squire, Rachel (Dunfermline W)

Maclennan, Robert

Steel, Rt Hon Sir David

McMaster, Gordon

Steinberg, Gerry

McNamara, Kevin

Stevenson, George

McWilliam, John

Strang, Dr. Gavin

Madden, Max

Taylor, Mrs Ann (Dewsbury)

Mandelson, Peter

Tipping, Paddy

Marek, Dr John

Turner, Dennis

Marshall, David (Shettleston)

Walker, Rt Hon Sir Harold

Marshall, Jim (Leicester, S)

Wallace, James

Martin, Michael J. (Springburn)

Walley, Joan

Martlew, Eric

Wardell Gareth (Gower)

Meacher, Michael

Wareing, Robert N

Michael, Alun

Watson, Mike

Michie, Bill (Sheffield Heeley)

Wicks, Malcolm

Milburn, Alan

Williams, Rt Hon Alan (Sw'n W)

Miller, Andrew

Williams, Alan W (Carmarthen)

Moonie, Dr Lewis

Winnick, David

Morgan, Rhodri

Wise, Audrey

Morley, Elliot

Wolfson, Mark

Morris, Rt Hon A. (Wy'nshawe)

Worthington, Tony

Morris, Estelle (B'ham Yardley)

Wray, Jimmy

Mowlam, Marjorie

Wright, Dr Tony

Mudie, George

Young, David (Bolton SE)

Mullin, Chris

Murphy, Paul

Tellers for the Noes:

Oakes, Rt Hon Gordon

Mr. Thomas McAvoy and

O'Brien, Michael (N W'kshire)

Mr. Alan Meale.

O'Hara, Edward

Question accordingly agreed to.
Resolved,
That the draft Criminal Justice Act 1991 Contracted Out Prisons) (No. 2) Order 1992, which was laid before this House on 16th December, be approved.

WELSH GRAND COMMITTEE
Ordered,
That, during the proceedings on the Matter of unemployment in Wales, the Welsh Grand Committee have leave to sit twice on the first day on which it shall meet, and that, notwithstanding the provisions of Standing Order No. 88 (Meetings of standing committees), the second such sitting shall not commence before Four o'clock nor continue after the Committee has considered the Matter for two hours at that sitting.—[Mr. Patnick.]
Ordered,
That, in the course of its consideration of the Matter of the structure of government in Wales, the Welsh Grand Committee may meet in Cardiff on Monday 8th March at Eleven o'clock and that, notwithstanding the provisions of Standing Order No. 88 (Meetings of standing committees), the Committee shall have leave at that sitting to sit until half-past Three o'clock.—[Mr. Patnick.]

Wheel Clamping
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Patnick.]
11.58 pm
Mr. Bob Cryer: I am very grateful for the opportunity to raise the subject of the problems associated with wheel clamping, and I am very pleased that my hon. Friend the Member for Warley, West (Mr. Spellar) is here, because he initiated a debate last July on this subject, to which I want to refer.
On 26 June last year, the Automobile Association sent a letter to members which read as follows:
"Wheelclamping cars parked on private land and demanding money for their release, recently outlawed in Scotland, is spiralling out of control in England and Wales.
The Automobile Association is currently pursuing an incident in which the extortionate sum of £240 was demanded for the release of a car. This is only one of many such cases of wheelclamping blackmail."
I understand that there are now more than 1,000 wheel-clamping firms in action, affecting every part of the country.
Almost eight months ago, a debate was introduced, as I mentioned initially, by my hon. Friend the Member for Warley, West, who, I trust, will be making a contribution tonight. This is what the Minister said in response to the debate, the self-same Minister who is sitting on the Treasury Bench tonight:
"It struck me that many of the attitudes displayed to the problem are akin to acts of piracy. Perhaps I could add another description: we may be dealing with parking pirates … I cannot offer a firm conclusion on some of the issues this afternoon because they raise untested areas of the law. However, I underline my assurance that the concerns that the hon. Gentleman expressed are being urgently considered."
Later, on the question of the Scottish court decision, the Minister said that it had found
"that private wheel clamping amounts to extortion and theft under Scottish law, and we are currently considering the implications of that judgment for England and Wales."
Lastly, the Minister said,
"I appreciate hon. Members' frustration that the situation is not clearer. Indeed, I share that frustration—I have seen some such situations for myself—but I assure them that we are considering the matter urgently, including the question whether any action is needed to prohibit or to regulate the use of wheel clamps on private property."—[Official Report, 16 July 1992; Vol. 211, c. 1260 and 1262.]
That was eight months ago, and yet the subject has been examined by the Home Office urgently. I wonder how many years it takes when the Home Office looks at a subject at its normal pace. If this is urgent, it must be years before it concludes a routine examination.
I wrote to the Minister on 18 December last year, and I received a reply dated 20 January this year. Again, the Government said that they are
"giving urgent consideration to this issue, as a result of the cases of abuse brought to our attention and the considerable public concern that has been expressed over recent months … In addition, we have sought expert advice as to the extent to which current legal provisions might be sufficient to deal with the problems associated with wheel clamping … We now plan to carry out a public consultation exercise on a range of options that has been identified. We are working as rapidly as possible to agree within Government the text of a detailed paper to form the basis of that wider consultation."
In view of the lapse of time, the Home Office seems blithely unaware or uncaring of the dangers that wheel clamping creates. This is the law-and-order Government who have
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done nothing while a menace to ordinary, decent people grows. I want to quote some examples of these circumstances and situations.
I received a letter from a vicar in my constituency in which he said,
"Recently I discovered the horrors of being clamped. Apart from the total inconvenience, I was very concerned about the implications of it all."
And so say all of us.
"Over a few weeks I had parked on a piece of waste ground for a few hours. About 20 cars used this site, which had the remains of a petrol kiosk and has been used for a long time. Once blocked off, it had a ?by custom? entrance established. My concerns are these. It is obviously in the clamping firm's interest to do their job in such a way that they catch people. I note on their form that I am described as a Customer. I cannot believe that it is proper for policing to be carried out by someone who has an interest in this way. The signs were cleverly placed. Once clamped they were obvious, unchallengeable, but I could also see that they were in places where the driver's eye on entrance would not think of looking. I avoid places where clamping signs are in evidence. A simple chain and padlock would have sufficed, with a sign at the entrance. I was trapped, so that they made their money. They did well—most of the other drivers were caught too. The description of the ticket as a Parking fine also concerns me. Surely the Courts alone have the right to levy fines? Why can a private company do this, without legal process? The size of the 'fine' is in my view very high. Out of all proportion to a Parking Ticket, for instance. Who sets this figure, might it be £75 next month? I really am concerned that we seem to have another force of law and order here that seems to be outside the Courts' jurisdiction."
I have many more letters, but I do not have time to quote the whole range. The letters I am quoting happen to be from Bradford, which is the area I represent, but I have letters from all over the country. The fact that my hon. Friend the Member for Warley, West is in the House demonstrates the widespread nature of this plague which affects so many people.
This letter is from a man who lives at Hipperholme. He visited the Alhambra theatre in Bradford which I should have thought was a fairly harmless occupation. He wrote:
"I, therefore, found an area of what I took to be derelict land near the University, some half a mile away, and parked, along with about ten other vehicles."
It was derelict land. We are not talking about developed land or land on which cars are being used and an obstruction is being created; it is derelict land. The letter goes on:
"Three hours later, at about 10.15 pm we returned to our car to find that it had been 'wheel-clamped'. Had I not first noticed a nearby vehicle had been 'wheel-clamped' I would never have been alerted to the fact that my own vehicle was also 'clamped' and I would have attempted to drive off and presumably damaged my car. There was no notice or sticker on my car window to draw attention to the 'wheel-clamp'.
I eventually found a small faded notice, nailed to a fence, outlining the fact that 'wheel-clamping' took place in that area. I rang the first number on the notice from a nearby phone box to find that it was 'not available'. The second number was a mobile phone number which seemed to gobble up my dwindling supply of change. All they were interested in was how I was going to pay their £50 charge before they would release me.
I had little cash, no cheque book and no bank cards on me. To say I was getting distraught is an understatement. I could only think of getting my wife and children safely home. Fortunately my wife had a bank card but had to go a considerable distance to locate an appropriate Cash Dispenser."
A woman was forced to wander the streets of Bradford late at night. She was close to a spot where an especially

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vicious rape had taken place a month before. It is a frightening prospect for people when faced with clamping late at night. The writer says:
"There was no notice visible anywhere on the land and nothing near the exit to alert me … Surely better signing should be made a legal requirement … Surely if whoever owns the land doesn't want people on it, they should take steps to chain or barrier it off at such times.
3. The obsession of the firm (West Yorkshire Outdoor Security Services) for full payment before releasing me was frightening. They refused to invoice me. The whole approach is surely tantamount to blackmail and extortion. I was made to feel that if I didn't or couldn't pay my children, wife and I would have been left stranded. Also, these firms seem able to make whatever charge they choose … Are they really a legitimate business or cowboys making an easy picking? Are they registered with anyone or outside the law? What role does the landowner play in all this? … Surely, this is a practice that should be highly discouraged."
I emphatically agree.
I have another letter from a woman whose name I am able to give. Betty Sinclair visited Bradford last year. She says
"Theatre-going in Bradford last year, a woman friend and I parked behind Alhambra on a patch of waste-ground which has always served as parking in the evening. When we went back to the car after the performance we found it clamped, a notice on the windscreen, and a number to ring which I recognised as a post-code for Preston, Lancashire. We rang it. The call was transferred and a couple of minutes later, two rough and threatening characters turned up with an alsation in a clapped-out Cortina estate. They refused to unclamp the car unless we paid £50 on the spot, and told us that if we refused the car would be taken away and it would cost £200 to redeem it. The alsation was released and jumped at us, we were frightened (not a nice place for two unescorted women at that time of night) and my friend, who had a cheque book on her, paid up. If I'd been on my own without my cheque-book and not carrying £50 in cash, I would have had to leave the car. I gave the men an earful, they were aggressive and abusive, and told us what they were doing was providing security for the owners of the waste-land! That same evening they clamped six cars on that little patch and raked in £300 in about half an hour! The name on the leaflet was West Yorkshire Outdoor Security Services.
The following day I rang the police in Bradford, who told me that they were aware of this firm's activities, shared my view that it was highway robbery, and told me to carry a hack-saw in the boot of my car next time! However, they were, in fact, acting within the law."
There are numerous other cases. A woman's car was clamped within two minutes of her leaving it. In another case, the car was clamped while the driver stood by. One heavily pregnant woman was forced to pay £50 late at night, and another was forced to seek a bank till in that self-same seedy area.
West Yorkshire Outdoor Security Services leave notices which say either, "Parking Penalty" or "Parking Fine", or give a warning of prosecution if the wheel clamp is damaged.
A private prosecution took place on 22 December last year, when Irving William Crowther was convicted of causing criminal damage to property under the Criminal Damage Act 1971. Mr. Crowther used an angle grinder on the clamp when his car was clamped outside a public house in Queensbury, and he pleaded guilty and was fined £80 plus costs of £35. My entire sympathy is with Mr. Crowther and not with the magistrates, who seemed to endorse the action of that nefarious group of scoundrels called West Yorkshire Outdoor Security Services.
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While Michael Patrick Sadler, the director of West Yorkshire Outdoor Security Services of Penwell Lawn, Leeds can bring a private prosecution, the police sit on their elbows and do nothing. It is no wonder that there is a crime wave, and people are concerned about the standard of operation of the law.
The other director is Mario de Rome, and the office address is 217 Manningham Lane, BD8, although that is also the address of Falcon Business and Mortgage Services. In a short film on ITN recently, one of the directors was seen interviewing a woman, accusing her of falsely using a disabled person's badge. When she pointed out that her father was blind, that the white stick in the car was his, and that she was anxious to get away and meet him, the response of one of the directors was that her father should be driving the car. So much for the standard of conduct and humanity of these rapacious scoundrels of the enterprise culture.
The Home Office should take action now and recommend that the police take action under the Theft Act 1968. If a car is towed away for the purposes of the person taking the car, it is a crime under that legislation and the police should prosecute.
All efforts to establish the law in the civil courts have failed in England because the companies have repaid the £50, or whatever levy was made, before the case came to court and so no decision has been made.
Breach of the peace is also a crime if threats are used. If they are and they are reported to the police, instead of being indolent, they or the Crown prosecution service should prosecute.
The law was used very adventurously and differently during the miners' strike. If the wheel dampers were picketing miners, they would face all sorts of charges. The police did not sit on their elbows then.
While the Home Office makes recommendations, it could simply ensure that the law in Scotland extended to England and Wales. In Scotland, private clamping is illegal, and I very much fear that the consultation process that the Home Office says that it is embarking on will take months to complete. I hope that it will not take a robbery or murder of a man, or possibly a woman, or the rape of a woman, wandering the streets at night to look for a bank till to pay these people, before the Home Office takes such action. The fear of such a tragedy was expressed in many letters. I read some of them and there are many more.
My hon. Friend the Member for Bradford, West (Mr. Madden) has written with similar stories to the Home Office. He asked me to say that he fully shares my concern. If a tragedy occurs, it will be wrapped firmly round the neck of the Home Office, which seems too indolent and slow to take what should be important and urgent action.
12.13 am
Mr. John Spellar: I thank my hon. Friend the Member for Bradford, South (Mr. Cryer) for allowing me to intervene in this debate. I shall be brief because I want the Minister to have time to explain why his Department has been dragging its feet, and hopefully to make a statement about the public consultation that we have been promised for so long.
As my hon. Friend made clear, the issues are fairly stark. On the one hand are the interests of the landowners, some of whom have a genuine problem. Some are trying to deal with a minor inconvenience and some are just plain

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greedy. In addition, there are the clamping companies. Some of them try to operate with standards of some sort, but many—the majority, I suspect—are just cowboys and pirates. It is quite clear that none of the clampers has any interest in or motive for an attempt to solve the problems that are associated with parking. They are dealing with the symptoms rather than with the problems.
On the other side are the millions of motorists, some of whom, we all admit, park carelessly. But many are just in difficult circumstances—often they do not see the signs—yet they are treated as second-class citizens. It is quite clear that, in that balance, we should be on the side of the motorist. Clamping amounts to harassment. It causes inconvenience and, as was graphically pointed out, possibly danger. In addition, the cost is considerable. It seems that the minimum is £50, and the record—held by Hebden Bridge—is still £240. In the Scottish courts, clamping was aptly described as extortion and theft. One could not find a better description. In Scotland it has been banned since the summer, with no ill effects. As the Minister is aware, the ban has given rise to no particular parking or traffic problems. But the motoring organisations and English Members of Parliament are still receiving complaints about the excesses of clampers in our part of the country.
Having looked at the issue, I have come to the conclusion that a simple ban, as in Scotland, is the most effective means of dealing with it. The Home Office may take a different view. It may believe that we should regulate either clampers or sites. If that is what it believes, it should make the situation clear. The matter should be put out to public consultation at an early date. As was outlined very clearly by my hon. Friend, the Home Office has been dragging its feet for months. This has gone on far too long. Public consultation should be started this month. I hope that the Minister will be able tonight to make an announcement to that effect. The Home Office should ask for speedy replies and should take action before the summer is out. The cowboy clampers have had a free ride for too long. It is time to drive them out of town.
12.17 am
The Minister of State, Home Office (Mr. Michael Jack): I should like, first, to pick up on the point that the hon. Member for Warley, West (Mr. Spellar) made in his concluding comments. I can tell the hon. Gentleman that we shall be issuing our consultation document within a month. The reason for my making that point is that I wish to repudiate the charge that both hon. Gentlemen have put before the House—that we have been dragging our feet in this matter.
It is only right that I should pay tribute to the hon. Member for Bradford, South (Mr. Cryer) for securing this important debate and for putting forward, with his usual passion and Yorkshire bluntness—and very properly so—on behalf of his constituents and other Bradford Members, his views about the problems that have been experienced with wheel clamping. I deal with a great deal of correspondence on this subject from hon. Members, members of the public and many organisations. Having read those letters very carefully, I understand the real human fears of individuals arising from some of the actions of so-called clampers. That is why we have been working hard since this matter was last raised in the House to devise a consultation process to deal with these issues.
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In the previous debate, I said that we would look urgently at the matter. I think I am right in saying that at that time we had not concluded what the way forward was. The hon. Member for Warley, West knows from our conversations that I looked at the matter urgently, and I came quickly to the conclusion that a consultation exercise was the right way forward. The hon. Member for Bradford, South is a man of analysis and care in the preparation of his evidence. I think that when he looks at the consultation document he will see that this is not an easy and straightforward matter.
Not unnaturally, hon. Members are driven by the very real human stories put to them by those affected by so-called cowboy clampers, but in the devising of solutions there is a maze of complexity in dealing with the law, particularly in England and Wales. I hope that in the remaining minutes at my disposal I shall be able to point out that, as a first step, we started to seek counsel's advice. We considered carefully how the law in this area was framed.
The hon. Member for Bradford, South mentioned the Automobile Association. That organisation is one of many to which we have listened very carefully in the preparation of our consultation document. We have, as all Governments have, the difficult but proper task of balancing the needs and problems of landowners in protecting their land in respect of parking problems and the difficulties caused by so-called cowboy operators. I do not underestimate the problems that many of our citizens have encountered over such operations. In seeking to encapsulate the problem, we have to decide whether we are dealing with "problems associated with wheel clamping on private land" or with "the problem of wheel clamping on private land". Should we impose a blanket ban or seek to develop good practice? Those are some of the issues that we have been considering. Within the month, we shall produce a consultation paper. Sadly, I realised when composing the consultation paper that there is no easy off-the-shelf answer to the problem. The consultation document presents, in a balanced and carefully argued way, a number of possible ways forward. I look forward to the contributions of both hon. Members when they make their views known for the purpose of the exercise.
The hon. Member for Bradford, South talked about cowboy operators. There are some legitimate companies in the industry which try to work to certain standards and make their terms of business clear. They have contacted us because they realise the difficulties that the cowboy element causes to their industry. I say most sincerely that I appreciate the points that the hon. Gentleman raised, particularly in relation to the vulnerable. He cites the example of a lone woman who may have thought that she had parked her car legitimately, but had actually parked it on private land. She may not have seen the notice, and may be left in a difficult personal position. I take such matters seriously, and they will certainly be to the forefront of my mind when I consider the outcome of the consultation process. The Government agree that we want bad practice to be stamped out.
The Government's first concern was to establish the applicability of the law in this sphere. I repeat the point that I made to the House in the earlier debate: the law on the subject is a maze of possibilities—there are no certainties. It is impossible to say exactly whether an English court would take the view that the activity—or

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parts of it—were legal under English civil or criminal law. That perhaps explains some of the problems mentioned by the hon. Gentleman in relation to police prosecution.
Although the courts have heard a number of cases with some application to the general issue, there has not been a test case which could be compared with last year's judgment in the High Court of Justiciary in Scotland as an examination of the basic legality of wheel clamping on private land. The hon. Gentleman will appreciate that there are different legal codes north and south of the border, which begs the question of the simplicity of the solution that he offered to the House.
As hon. Members have suggested, there are a number of offences and civil wrongs which might be applicable to wheel clamping, depending on the circumstances. They include criminal damage, interference with a vehicle, taking without consent, theft, blackmail, trespass and conversion. It is impossible to predict what the courts might decide in any given case. The hon. Gentleman—I think in correspondence—has accused me of
"condoning criminal activity through inertia".
There was a flavour of that in what he was saying this evening. I repudiate that claim because, if there were a clear criminal activity involved, the police and the courts would be able to ensure that the offending parties were appropriately dealt with. But the position is not so clear cut.
I mentioned that we had sought counsel's advice on the matter because of the lack of clarity. That advice will form part of our consultation document and it shed some light on the problem. I shall not go into all the detail now as it will be included in the consultation paper, but I shall say something which I hope will be helpful to those hon. Members who have participated in the debate.
It appears that legal action against landowners and wheel clampers is more likely to succeed if the consequences for a motorist of parking on a piece of land are not advertised clearly, and the landowner and wheel clamper act unreasonably in the manner of their operation or in relation to the fees demanded for the release of vehicles. That guidance goes to the heart of many of the cases eloquently described by the hon. Gentleman. Although there is no certainty and each case will be decided on its facts, I suggest that some of the more extreme practices of wheel clampers may well be found to be unlawful under present civil and criminal law. It may be
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worth reminding the House that where wheel clamping leads to assaults, intimidation, or a breach of the peace—what might be termed mischiefs on the margin—the law already offers protection.
However, it is also apparent that the present law may not always deal easily or sufficiently rapidly with such abuses as the late night clamping of cars owned by vulnerable motorists.
I have been challenged about what we have been doing about all this. I hope that I have given the House a flavour of the complexity of this issue. It has genuinely taken time to gather legal opinion, without which we could not have framed a consultation document which tried to deal with this problem in a way that offered real solutions. That has been our intention throughout.
We have also had to weigh up the interests of land owners. For some of them, wheel clamping may have been an option that has worked to protect their interests. Chaining off land may not be an option, but they need to think about their responsibilities if the clamping operations that they have employed have gone wrong or caused danger or distress. We have to remember their interests in the matter too.
Equally, we must remember the problems faced by motorists, who should not be unreasonably deprived of the use of their vehicles. Matters of public safety will have to be taken into consideration, too. The consultation document will cover banning the practice, alternatives to clamping, self-regulation of the industry, statutory regulation, and the penalties which might be used. Will controls lead to an outbreak of towing away or blocking? Would solving one problem lead to the creation of another? All this will be included in the paper. I think that within a month hon. Members will have an opportunity to take the matter forward.
Mr. Cryer: How long will the consultation period be? My hon. Friend the Member for Warley, West (Mr. Spellar) and I are anxious that the process should be reasonable but as brief as possible, so that action may be got under way.
Mr. Jack: The total period involved will be four months. I hope that hon. Members will make their contribution to the process, and I look forward to hearing what they will have to say.
Question put and agreed to.
Adjourned accordingly at twenty-seven minutes past Twelve o'clock.