Merseyside (Hansard, 26 May 1994)

§ Mr. Robert N. Wareing (Liverpool, West Derby)

I had no intention of raising the matter of Merseyside and Government expenditure on Merseyside on the Adjournment of the House until the exchange that occurred between me and the Minister for Local Government and Planning on 18 May. The origins of this debate lie in the Minister's reply to a question that I asked, and it is worth quoting the exchange in full.

I asked the Minister: Does the Minister realise that millions of people, of all parties and of none, deplore the fact that local authorities have been denuded of so many of their powers and functions since the Conservative Government came to power? Local self-government has been replaced by a vast quangocracy stuffed with Tory placemen and placewomen who are accountable to no one other than the most highly centralising Government in all Europe. Does that not amount to disfranchisement of the electors at the local level? The Minister replied: I never quite understand why the hon. Gentleman is so attached to the impenetrable bureaucracy of Whitehall, county hall and town hall. What we are concerned about is the delivery of services closer to the people. It is the people who count—not the bureaucrats or, for that matter, the councils. I emphasise that the point that the Minister made next is the one which has brought me to my feet this morning. He said: The hon. Gentleman will know that, for example, in Merseyside there is an urban development corporation, on the board of which there are three councillors, spending £156 million; a city challenge programme with provision of £131 million; a task force; and an objective 1 programme of £354 million. If he"— meaning me—

takes such exception to all of those, I am sure that we can arrange to cancel the funding."—[Official Report, 18 May 1994; Vol. 243, c. 804.] That part of the Minister's reply was an affront to the right of elected representatives in this House to raise matters that are of concern to people generally and to our constituents in particular. It was as if a threat was being mounted against me in case I continued to raise complaints about Government policy. That was the action of an arrogant Minister and a Government who have gone beyond their sell-by date. I am astonished that the Minister for Local Government and Planning is not present today. However, I shall of course welcome the comments of the Under-Secretary of State for the Environment, the hon. Member for Banbury (Mr. Baldry), who is here to represent the Government.

In considering the subject of expenditure on Merseyside, we have to ask ourselves what has been lost. Above all else, the principle of real partnership between central and local government has been lost. In the days before the Government came to office, there was a fair rate support grant allocated to the city of Liverpool and, indeed, to the other metropolitan districts on Merseyside. We had a district health authority on which there was local council representation. When the Minister for Local Government and Planning talks about Labour Members being concerned with bureaucrats rather than with people, I refer the Government to the bureaucrats who now sit on the hospital trusts and who are precisely the kind of placemen and placewomen to whom I referred in my question.

In those days, of course, we had a Merseyside county council. I remember being elected to that council when it 431 was still possible for local, elected representatives to use their own initiative to introduce programmes, which had been placed before the electors in a democratic way, and when those councillors were at least allowed to try to get on with those programmes and to prove that they were achievable. As I have said, there was partnership at that time.

During those years, I was elected as the chairman of the economic development committee of Merseyside county council and I helped to promote a scheme to help small businesses known as CHASE—county help for active small enterprises. That scheme was able to generate 9,000 jobs on Merseyside—not small beer when one considers the economic background against which it was done. Also, it was cost effective in the creation of those jobs—even more cost effective than the regional aids which were then available to local authorities and to the regions. We helped to create 30 worker co-operatives. In other words, the partnership was not only between central and local government but between local government and the people in the areas that we represented.

We created a Merseyside enterprise board and a training board. We helped to promote the interests of Liverpool airport. We stretched out a hand to all parts of the communities in our area, including the churches. The Archbishop of Liverpool and the Bishop of Liverpool, who have done so much to promote the positive image of the area that I represent, were members of the Merseyside enterprise forum, along with trade unionists and representatives of the business community. We were the greatest promoters of the arts of all local authorities outside the area covered by the Greater London council. We were the originators of the maritime museum and, in a sense, of the Albert dock development, which has been much discussed and is an attraction to tourists throughout the world. In my constituency, we promoted the development of Croxteth hall and country park. As I have said, in those days we were allowed to use our initiative in creating, in that case, an enterprise, which became 20th in the league of attractions for tourists entering this country.

Since those days, the county council has gone, many of the services for which it was responsible have disappeared and the expenditure of that county council has fallen in large part to Liverpool city council. However, there has not been any considerable additional funding and the city council finds it difficult to fund the programmes to which the Minister referred, such as the urban development corporation. The Merseyside urban development corporation has been moderately successful, but in the area for which the corporation was responsible there were 1,000 fewer jobs after its first six years than there were before. Indeed, a report was discussed in the House which emanated from the National Audit Office some years ago.

The Minister also mentioned the city challenge programme. In fact, the urban programme, the urban partnership fund, estate action, the expenditure of the UDC and city challenge are to be integrated into one budget, which is referred to as the single regeneration budget. The total Government expenditure for that budget for 1995–96 is set at £1.5 billion, but the only new money—money over and above that which would have been available under the separate schemes and which is now to be covered by the single regeneration budget—is some £100 million. Liverpool will receive between £4 million and £5 million from that sum, whereas under the previous schemes, which include those mentioned by the Minister for Local 432 Government and Planning in his reply, Liverpool would have expected £25 million. So under the single regeneration budget there is less emphasis on areas of real need such as the city of Liverpool or, indeed, Merseyside generally.

In earlier times, the rate support grant was fair to the people in my area. Under the present Government, there have been increases in the revenue support grant, but they have been due more to changes in legislation and the way in which local government is funded by the introduction of new taxes and different funding formulas than to any compassion by the Government for an area which should be regarded as a priority in our country. With the abolition of the county council, much of the expenditure for the police, the fire services, passenger transport, waste disposal and trading standards fell on the city of Liverpool and on other districts of Merseyside.

In 1991–92, the revenue support grant included a one-off grant to keep the poll tax down, while in 1992–93 the increase was to offset the council tax. In other words, those grants were to offset the policy failures of the Conservative Government. They were to cover for the poll tax, which was such an utter disaster for the people of this country and which led to the demise of the dreadful predecessor of today's Prime Minister. The only function for which Liverpool has gained control since 1979 has been in the area of care in the community and nobody in Liverpool would suggest that that has been properly funded to meet the needs of the area.

Government controls over local authorities have meant that Liverpool, like other cities, has been placed very much in a centralised straitjacket. The standard spending assessment, which was introduced by the Government, is fundamental to determining the level of central Government revenue funding available to the city council. It has a major impact on the level of council tax which is raised by the city. Under the rating system, the poll tax system and now the council tax system, there has always been the possibility of the local authority's being capped. So levels of expenditure are controlled by the Government. But if the council wishes to raise the money to improve the conditions of people in Liverpool, it can meet possible Government action at another level.

Changes in the methodology for working out the SSA for 1994–95 will have severe consequences on many of the services provided by the city of Liverpool, not least on children's social services. The Government talk about a feeling for the family and care in the community, yet in the year following a tragic happening in Liverpool which affected children, they have reduced the SSA for children's services—what Liverpool city council is allowed to spend on such services—by £11.6 million. Indeed, the total reduction in Liverpool's SSA for next year is £16.8 million. Of course, it is the children who will suffer.

The national total that the Government allow for children's services under their SSA formula is to be increased by 3.3 per cent., but Liverpool, in the year after the tragedy to which I referred, is to receive 30 per cent. less. That is despite all the often publicised social and economic difficulties that face my city.

Ethnicity is used as a factor in the formula for calculating SSA. That has meant that Birmingham, for example, will receive for children's personal social services £4,954 per child at risk. Yet because Liverpool does not have a large ethnic minority or the problems that sometimes arise in an area with large ethnic minorities, it 433 will receive only £807 per child at risk. Birmingham £4,954, Liverpool £807—the difference cannot be justified by ethnic background. I ask the Government to examine that when they review the SSA formula. In total, Birmingham received £5.8 million more than Liverpool for children's services. Next year, Liverpool will receive £16.1 million less than Birmingham to support children.

However, the SSA changes also have an impact elsewhere. There has been a reduction in the SSA for the provision of education for the under-fives. Liverpool has a proud record in nursery school provision despite the difficulties and obstacles that have been created by the Government. The SSA for education for the under-fives next year for Liverpool will be reduced by £400,000. The SSA for highways maintenance will also fall by £400,000. For other county services, there will be a reduction of £2.1 million. The SSA to cover land drainage will be reduced by £100,000 and that for capital financing will be reduced by £3.2 million.

Liverpool city council recently sent a deputation to the Minister. It acted in a very responsible way. Its submission, which asked for a review of Liverpool's SSA, was supported by all the parties on Liverpool city council, including the Conservative party. All the members of the delegations were absolutely astonished when, instead of reviewing the SSA upwards, the Minister rebuked the deputation and the SSA moved downwards.

One of the replies that I tend to receive from Ministers is that Liverpool has a rather shaky record. During the 1980s, I and others, including the present leader of the city council, opposed the highly centralised tactics of Militant Tendency. In my view, the power of Militant Tendency in Liverpool was the other side of the same coin to the restrictionist, highly centralised activities of the Thatcher Government. Thatcher was on one side and Militant Tendency on the other.

There can be no doubt that Liverpool city council has acted in a responsible way in recent years. That responsibility has sometimes been recognised even in the speeches of Ministers. Harry Rimmer, the leader of the city council, is a responsible leader of the people of Liverpool. Liverpool undoubtedly has not been given the priority that it deserves.

I refer to a report of the Minister's own Department entitled "Index of local conditions". It was highlighted in a report in the Liverpool Echo on 19 May, the day after I was greeted by the tirade from the Minister for Local Government and Planning when I raised the issue in the House. The headline of the article was: City is second in the poll of poverty". The Liverpool Echo correspondent Mark Davies said: Liverpool is the second most deprived city in England according to a new Government poverty league. Birmingham tops the table but the figures show that Liverpool has the worst unemployment in the country and the highest number of families without a car. Only four London boroughs and Birmingham are more run down according to the Department of the Environment survey. Only Manchester has more children living in low-earning households and more people on income support. Knowsley"— another part of the Merseyside metropolis— is 12th in the league table of the country's most deprived areas. The article is based on the Government's own statistics.

Every constituency in Liverpool has a male unemployment rate of more than 18 per cent. In my constituency of West Derby, 23.6 per cent.—almost a quarter of the male 434 population—is unemployed. It is no use the Government saying that the unemployment is caused by the recession. It may be partly caused by the recession, but unemployment has been endemic in my constituency throughout the period of office of the Government. Indeed, on the Croxteth estate in the mid-1980s, youth unemployment was no less than 94 per cent. No wonder there has been an increase in juvenile criminal activity and a drug problem on an estate that never suffered from that before. On the Norris Green estate, where I was brought up, drugs were unknown. People were never well off, but crime, despondency, poverty and dereliction were never known in days gone by.

In Liverpool, the Riverside constituency has the highest male unemployment—indeed, the highest unemployment —on mainland Britain, at 33 per cent. That fact has come about after the "economic miracle" which the former Prime Minister told us that we had all enjoyed. How often have we heard Ministers in the House say that we are all better off now than we were 10, 20 or 30 years ago? They should ask the people of Riverside or those who live on the Norris Green and Croxteth housing estates in Liverpool.

There are people who recognise the needs of my area. The European Union has recognised them by designating Merseyside as the only area in England eligible for objective 1 status. The great fear is that the money from the European Union will be regarded by the Government as an indirect means of financing the Exchequer. Grants from the European Union have often simply been used to cover what was previously provided by central Government. We also fear that the elected representatives of Liverpool and the other districts will not be consulted about how objective 1 funds will be used, but the bureaucrats, placemen and other people in my area who are not elected will be consulted.

One can contrast the way in which Liverpool has been treated over the years with the way in which, Westminster city council, that flagship—I suppose that I should put the word "flagship" in inverted commas now—of Tory local fiefdom is treated. The rogue Westminster city council featured on the "Panorama" programme not long ago. In Westminster, for every £100 spent by the council, only £4 comes from the council's tax payers. Many of us in the House, including myself, know that that means that council tax in the city of Westminster is quite low. The rest of the £100 comes from central Government grant and other external supports such as the business rate, which is set by central Government. In Liverpool, for every £100 spent by the city council, the council taxpayers of the city pay £20 —so it is £20 in Liverpool, but only £4 in Westminster, which has some of the richest people in the country living within its boundaries.

Westminster does not qualify for objective 1 status. It can even afford to sell its cemeteries cheaply at 15p a time. But it is the flagship and, despite the roguery for which it is now well known, the Conservative party's local election campaign earlier this month was started by the Chief Secretary to the Treasury, the right hon. Member for Enfield, Southgate (Mr. Portillo), in Westminster. Apparently, he thought that it was a worthy council to project the intentions of the Conservative Government towards local authorities.

In the social index produced by the Government, Liverpool has been ranked 85th in the country and Westminster fourth. Is it possible to believe that Liverpool is richer than the city of Westminster? Nobody but a fool 435 would suggest that. According to the Government's social index, it falls below Salisbury, Bath, Hereford and Hove in terms of deprivation. That is scandalous and the Government cannot be seen to have been fair. The Tories have said that the system is fair. The Minister should search his heart and ask himself how he can argue the case for the present system.

The Minister might ask himself why the Conservative party does so badly in Liverpool. It may not be readily known that between 1845 and 1955, with the exception of one year in the 1890s when the Liberals were in charge of the city council, Liverpool was ruled by the Conservatives. Now there are but two Conservative representatives on the city council, one of whom survived by seven votes in the recent local elections. There are just two Conservative representatives out of 99. The Liberal Democrats have taken the place of the Tories. I must admit that some of them have done the job well. The Liberal Democrats who were on the council before 1979 outdid Thatcher before Thatcherism. The Conservatives are not the main opposition to the Labour party in the city of Liverpool; it is the Liberals.

When we consider the history of Liverpool and the importance in the early part of this century of Liverpool's Conservative working men's clubs, we see that the Conservative party has to ask itself why the change has come about. That change is largely due to the attitude and arrogance that I encountered in the answer to the question that I asked the other day in the House of Commons.

I say to the Minister and to the Government that we who represent Liverpool have a great pride in our city, which was the second city of the empire at the beginning of the century. Its greatness is still there to be seen, not just in things from the past—its regal architecture is testimony to its great past and some of its new structures are testimony to its future. When one looks at the work of the two universities one sees that Liverpool is a city which qualifies for the title of city of learning. One must also consider its music, arts and its profitable port. Its achievements are not the result of Government policy but of the hard work of the people of Liverpool—those achievements have been gained despite the Government, not because of them.

I pity those who stand for local councils these days. What can they do when they are elected? They are reduced to the pawns of central Government, albeit the unwilling pawns of autocratic central Government. The draconian measures that have been employed by the Government since 1979 have all but ended local self-government in this country. Only in this Chamber, of all elected chambers throughout the European Union, would it be possible for a Minister to threaten to cap local elected representatives. Only in this Chamber would it be possible for Ministers to refer to the surcharging and disqualification of councils. Locally elected people are, therefore, thwarted by the Government.

The people of Merseyside are angry at the way in which so much has been inflicted on them and at the unfairness of local councillors being surcharged—not, in the majority of cases, for lining their own pockets or gerrymandering as in the case of Westminster—and they compare the lot of elected representatives in Liverpool to that of the rogues who still rule Westminster city council.

Irrespective of party, Liverpool councillors are willing to put a hand out to Government and to welcome partnership on an equal basis, based on an acceptance that in this country plural democracy is the essence, not the 436 natural centralisers in the Government who have ruled so long. We would be willing to work with any Government who have the priorities of ordinary people at heart and not simply the interests of their own party elite.