HL Deb 02 December 1985 vol 468 cc1076-9

3.52 p.m.

The Minister of State, Department of the Environment (Lord Elton)

My Lords, with the leave of the House, I will now repeat, in the form of a Statement, the Answer which is being given by my right honourable friend the Secretary of State for the Environment to a Private Notice Question in another place on the current discussion on the financial situation of Liverpool City Council. The Statement is as follows:

"I have had no discussions with Liverpool City Council. My officials have informed the city council and the commercial organisations concerned that deferred purchase arrangements undertaken by local authorities do not require Government approval and that such arrangements carry no Government guarantee".

Baroness David

My Lords, I thank the Minister for repeating the Answer to the Private Notice Question. I take it that the Secretary of State is satisfied with affairs as far as they go. May I ask whether, owing to Liverpool's very difficult situation as an inner city, he will now have some discussions. Liverpool has suffered very much indeed from loss of rate support grant—to the extent of £393 million since 1979? May I ask whether discussions will go on within the next few months to discover whether anything can be done to help that city?

Lord Harris of Greenwich

My Lords, while thanking the noble Lord for repeating the Answer made by his right honourable friend, perhaps I may say that I will not put a number of questions to him now, given the fact that we shall be debating this matter next week. However, perhaps I may ask him two questions. First, is he aware that the situation mentioned in the Statement he has made is caused by the grossly irresponsible behaviour of the present majority on Liverpool City Council? Is he aware that in the last few days the deputy leader of Her Majesty's Opposition has indicated that he has evidence of corruption as far as Liverpool City Council is concerned? In the light of that statement, may I ask him whether arrangements are being made by the Merseyside police to ensure that they obtain such evidence as soon as possible?

Secondly, may I ask the Minister whether he is aware of the grave situation affecting many voluntary organisations in the City of Liverpool because of the present problems facing that city? Is he aware that many of them, working among the most deprived sections of the community, are having to lay off staff and run down the level of their activities? In the light of that situation, will he ensure that his department does what it can to assist those organisations over the next few months until the whole situation in Liverpool is clarified?

Lord Mellish

My Lords——

Lord Elton

My Lords, I think the custom of the House is that I reply to the first two Front Bench interventions first. In reply to the noble Baroness, Lady David, I cannot say that my right honourable friend is satisfied with the state of affairs, but he is less dissatisfied than he was. If I were to say that he was satisfied, it would imply satisfaction with general conditions of the way in which the City of Liverpool is being run, which fall outside the question I am being asked. As to whether my right honourable friend will now discuss matters with the leadership of Liverpool City Council, I have to say that since they have now set a legal rate they are free to come and see him in the normal course of business, just like any other local authority.

As to the question of help which the central Government can give, throughout we have made it clear that we believe that all local authorities should be run within the law on recognised lines. It is not the Government's policy to give assistance to those who wish to go outside those recognised lines. The noble Lord, Lord Harris of Greenwich, will readily recognise that this would be to assist the irresponsibility of the city council majority in Liverpool in a way which would be unacceptable, I think, to all parties represented in this House. As to whether there are matters of corruption to pursue, that will be a matter for the chief officer of police in Liverpool Metropolitan County District, and possibly for the Director of Public Prosecutions, but I can make no comment.

As to the difficulties of voluntary organisations, I greatly regret that this turmoil should have come at the difficult time of transition from the metropolitan to the district council system. I can only point to the funds which we have already made available to all voluntary organisations during that difficult period.

Lord Harmar-Nicholls

My Lords, my noble friend has made it clear that this Government would not, either now or in the future, step in to deal with the financial arrangements that have been entered into by those in Liverpool. However, is my noble friend aware that one of those who entered into these financial arrangements has very clearly implied that, if there were a change of Government, a new Government would step in and relieve them of the problems which will arise from their settlement? In order that the nation may know that we as a nation are going to keep rigidly to what is a sensible course, whoever are the Government, is there any way by which the "Opposition" (which obviously is the party indicated by the speaker who said that a future Government would deal with it) can state that they, too, would not be prepared to enter into an arrangement which would justify the kind of intransigence that has been taking place over the last 12 months?

Lord Elton

My Lords, my noble friend has devised an elegant way of inviting the Opposition to make an official statement from the Dispatch Box, as a kind of government in exile. That would be to anticipate a return in the near future which personally I do not anticipate.

Lord Mellish

My Lords, are we not living in an absolute Alice in Wonderland situation? Here is a council in Liverpool that is (I think the term is) Left-wing and militant. In fact, they are only now able to produce what is called a legal rate because they have borrowed from the "gnomes of Zurich". I understood, in that jargon, that the "gnomes of Zurich" were the enemies of society and had to be destroyed at all costs. Can the Minister explain to me how it is possible to go to enemies of that kind and to borrow money to get out of debt?

Lord Elton

My Lords, the way it is done is to get some financial institution to pay your way for the next year or two and to start charging you only the year after that. The current interlude of sunshine on the beach on which Liverpool Council is asking its ratepayers to bask is, of couse, threatened by a tidal wave about two-and-a-half years off.

Lord Paget of Northampton

My Lords, is the Minister right when he says that the only security that the "gnomes" have is Mr. Hatton? If they have parted with some scores of millions on the credit of Mr. Hatton, is that not admirable news for all of us?

Lord Elton

My Lords, I presume it depends upon what they do with their security.

Lord Dean of Beswick

My Lords, is the Minister not aware that, as an ex-leader of a major city council, I, along with all my colleagues, deplore the tactics that have been pursued in Liverpool by militants? But will the Minister answer in more detail the question put to him by my noble friend on the Front Bench, the noble Baroness, Lady David? The Minister talks about the amount of assistance being given by the Government, but is it not a hard fact that, through Government grants, all the major cities and the major conurbations have lost £1½ million for every week that this Government have been in office? Will he stop shedding crocodile tears and give them some funds to get on with the job?

Lord Elton

My Lords, I am not going to be drawn into a general debate on the funding of metropolitan or other authorities, because that would be outwith the terms of the Order Paper. I reject absolutely that the funding to Liverpool City has been inadequate or that it has been used properly. The limitation on the amount of money available to Liverpool to spend on its citizens' behalf has been principally determined by their manipulation of their financing to a point where their employees were led to suppose that they would all be on the dole within a matter of weeks. I am very glad that they have withdrawn from that position. I merely wish to point out that they have bought a temporary security against future heavy repayments.

Lord Tordoff

My Lords, in relation to that last remark by the noble Lord the Minister, is it not the case that there have been discussions between Messrs. Phillips and Drew and the Department of the Environment? May I ask the Minister whether, arising out of those discussions they have been able to ascertain what assurances have been given by Liverpool Council that they will not repeat the same performance next year, particularly in the light of what Mr. Mulhearn has recently said in a statement in which he made it quite clear that they were going to go through the same cycle next year? While on that subject, can the Government give the House any assurance that the same sort of thing is not going to happen in Lambeth, Hackney and, indeed, in the City of Manchester in the coming year?

Lord Elton

My Lords, it is obvious that a Government spokesman can give no undertaking about the tactics of local authorities, particularly when they are controlled by opposition parties. That said, it remains to be seen whether either the market or the electorate will take being put through the same proceedings twice.

Lord Underhill

My Lords, would not the Minister agree that it is very difficult to debate this sort of subject by question and answer? As there is to be a full debate next week, would it not be best if it were left there so that all aspects of the case may be properly dealt with and the many speakers in the other debate today can proceed?

Lord Elton

My Lords, I think that, not for the first time, I find myself greatly in agreement with the noble Lord opposite. There will be an opportunity to debate this matter at length later on. I think that your Lordships are a good deal more interested—I am sure that those in lawn sleeves are more interested—in another matter.