Liverpool City Council

HL Deb 11 December 1985 vol 469 cc229-51

4.11 p.m.

Debate resumed.

Lord Graham of Edmonton

My Lords, I rise to declare my interest. I am a former leader of a London borough council. I am president of the association of London authorities and a vice-president of the AMA. My best qualification to comment on the debate is having been leader of a London authority. I am certain that your Lordships listen more respectfully to those with local government experience when we are discussing such matters than to others who of course are entitled to be listened to with great respect too.

We arc grateful to the noble Lord, Lord Harris, for the opportunity to debate this matter. He said that there were few parallels in history with the situation in Liverpool. He can say that again! He not merely dealt with his main purpose of an attack on Militant Tendency, but he sought to serve the House well by describing the circumstances and background which have in part led to the emergence of Militant Tendency and to the enormous problems that Liverpool council has faced over many years. He told us of wards in Liverpool with over 90 per cent. youth unemployment. No noble Lords, and few people in the country apart from the unemployed youths and their families, can conceive of what it means to live in such conditions.

We have had the enormous benefit of the observations of the noble Lord, Lord Crawshaw. We have yet to hear from the former leader of the council, the noble Lord, Lord Sefton. The noble Lord, Lord Harris, also served the House well by pointing not merely to the past dereliction but also to what he believed were the prospects for the future. Despair is rife and inner-city dereliction is seen nowhere more than in Liverpool.

I listened carefully when the noble Lord, Lord Beloff, was attempting to assist the House. He raised queries not merely about what is happening, but about the raison d'être of councillors being able to do what those in Liverpool have done, which has caused so much offence. I remind him that only today the four local authority associations, collectively and without equivocation, have said that the manner in which the Government are attempting to lay down guidelines and legislate on how local authorities shall conduct their business is opposed.

It is not easy for either central or local people to decide what is right or wrong. But I have a strong faith—stronger, I believe than some noble Lords who have already spoken—not merely in the people of Liverpool at the next election and the Labour Party at the present time, but also in people throughout the country to recognise danger of the sort that has been pointed out this afternoon.

Reference has been made to the deliberate tactics of the Liverpool council. The noble Lord, Lord Harris, said that the city was run by Militant Tendency. It is not; it is run by an elected council, and the elected council is Labour. It is heavily influenced by some of its members, but by no stretch of the imagination by a majority, who subscribe to the tenets and doctrines of Militant Tendency. They have chosen the adversarial road; if there is a way to avoid confrontation and a head-on clash with the Government, they have decided not to take it.

That would not have been my style. Thank goodness there was no necessity for that when I was involved in local government 20 years ago. But I tell your Lordships this for nothing. Many councils, both Labour controlled and non-Labour controlled, in attempting to persuade this Government to carry out their responsibilities so that they can serve their people, at the end of the day do not know what they can do to make them see the reality of the situation, with 90 per cent. unemployed and all the rest of it. I can have no truck with the tactics of the recent actions in Liverpool and ultimately the enormous damage to the city and the prospects for a return of a Labour council, but I readily understand the feelings of good people who have been elected when they are faced with the impossibility of persuading the Government, when they get the opportunity to talk to them from time to time, to come to their rescue.

The noble Lord, Lord Harris, talked of the unsavoury practice of some councils putting on the payroll councillors who serve in other places. If we are considering patronage, privilege and placemen, we can go beyond local government and look at central government; we can look at Whitehall as well as the city hall. If noble Lords are genuinely interested in rooting out every vestige of such matters, they should look not merely at local councils, be they Labour or otherwise, at this time.

I am grateful to the noble Lord, Lord Harris, and, frankly, to the noble Lord, Lord Beloff, who told us about the record of "Jones the Vote." The phrase on the Order Paper is: the actions of the City Council", and so we are entitled to look at a little bit of history. I cannot begin to compete with the noble Lord, lord Crawshaw. He has always had my respect not least for the manner in which he has fought his corner on this issue in Liverpool over many years. Some of the history needs to be given in this debate. I draw upon a document that the House, I believe, should accept as authoritative. It is the report that was produced by G. J. Folwell, J. A. Marlow, M. G. Pilgrim and M. F. Stonefrost, known as the Stonefrost Report. It was a report given to the chief executive of Liverpool and to the general secretaries of the major trade unions. The report begins: In discussions with the Department of the Environment in 1984, Liverpool City Council presented a case which considered Liverpool's treatment under the various Rate Support Grant regimes since 1965/66". I stress this: The Government did not dispute the factual basis of any of the following arguments put forward by Liverpool:—

1. (1) Since 1981/82 (the first year for which comparisons can accurately be made) Liverpool's share of the national total grant has fallen from 1.35 per cent. to 1.07 per cent. In 1983/84;
2. (2) The 'needs' of Liverpool measured by the system of Grant Related Expenditure Assessments have declined from 1.1 per cent. of the national share of 'need to spend' in 1981/82 to 1 per cent. in 1984/85".

It adds: (4) From 1975/76 to 1978/79, the City Council reduced its expenditure by 6 per cent. in real terms". That was not a Labour-controlled period. This resulted in expenditure being 10 per cent. less than it would have been had the City Council increased its spending in line with other local authorities; (5) The relatively low spending position of Liverpool in 1978/79 formed the basis of its spending target for 1981/82. Liverpool further reduced its spending towards that target". Finally, my Lords, comes the crunch: (6) The reaction to 1981/82 spending targets formed the basis of targets for later years". That is the basis, not the excuse, for the actions. I listened carefully to the noble Lords, Lord Harris and Lord Crawshaw, who instanced events, happenings and actions that I would certainly not wish to be party to. Those are the proper subject of investigation by the Labour Party. I have more confidence than some noble Lords who have already spoken in the ability of the inquiry committee not only to come to the right conclusions and to recommend the right action but also to see that such action is taken.

Apart from that, I wish quickly to ask the House to take careful note of an article, The Real Crisis in Liverpool, by Michael Parkinson, that appeared in New Society. It is of recent vintage. Michael Parkinson describes the manner in which the demographic and economic decline took place. He talks of the financial restrictions, of the reserves built up by some authorities, then adds: But Liverpool, which under the Liberals had incurred budget deficits in six years out of ten, could not follow suit". I would not myself have sought this debate but it would not be complete without acknowledging that situation. I am glad that my noble friend Lord Dean of Beswick reminded the Government that they have a heavy responsibility, not for the actions the details of which have been given, but for the fact that it is impossible for councils like Liverpool and others to meet demands. In 1980–81, the rate support grant received by Liverpool was £141 million. By 1984–85 it had declined to £112 million. In each of the years between, if all that Liverpool had received had been the 1980 level up-rated by inflation, there would have been an increase of almost £400 million. I recognise that in the Liverpool context figures are bandied about. I simply make the point that the Liverpool councillors have had an enormously difficult job in trying to do what this Government say they are committed to do—that is, to carry out manifesto commitments and to deliver to the people what they said they intended to do. The inability to do that lies to a large extent at the door of the Government owing to the manner in which they have assisted the council.

I was rather sad to hear the noble Lord, Lord Crawshaw, describe the current intentions of the Labour leadership as hypocritical in the light of what they have said and what they intend to do. The noble Lord, Lord Crawshaw, who, as I say, had a long-standing battle, has left the Labour Party. There are those of us who intend to stay in it and to fight for the kind of stance that we want to see. I have every confidence not only that the leader of the Labour Party, Neil Kinnock, intends to do his duty by the party, by the city of Liverpool and by Labour voters, but also that the Labour leadership collectively throughout the country recognises that there is a situation that we do not like, that this can be electorally damaging and that we intend to try to put it right. The noble Lord, Lord Harris, has served the House on this occasion, as on others, by seeking to concentrate upon a very narrow point, wholly, in my view, for electoral advantage. I do not believe that it will come off.

4.25 p.m.

Lord Sefton of Garston

My Lords, it is customary to thank the intitiators of a debate in this House. I do not intend to do so. I regret very much that the debate is taking place because the infantile mentality that infects some parts of the city of Liverpool thrives on publicity. The Labour Party did not make Mr. Hatton; the Liverpool people did not make Mr. Hatton; the Daily Mirror, sometimes the Daily Telegraph, and other newspapers, and the media generally, made Mr. Hatton. When one examines the political attitudes of that crowd of people in Liverpool, one sees that there is no sense in it at all. How on earth anyone trying to get by under the description of socialist can stand in public and still claim to be socialist, after borrowing money off Swiss financiers and after selling the mortgages of people to the money lenders, is beyond me. I just do not understand it. If it was not for the fact that this country is served by juvenile media experts, it would never have gained credence at all.

I do not therefore thank the noble Lord, Lord Harris, for introducing the debate. I regret it. But it has been introduced, and as someone who was once the leader of Liverpool City Council and who can boast of the almost total support of the noble Lord, Lord Crawshaw—Councillor Crawshaw as he then was—and two of his other colleagues who then went over to the SDP, I suppose that I should say something. My noble friend Lord Graham has quoted from the Stonefrost report. I do not intend to duplicate what he has said, except to pull out one item. It has to be seen against a background that will be recognised by everyone in the House and anyone with any political intelligence—that Liverpool, because of its history, is a special case. It has difficulties that no other city has experienced. That has been so for 50 years.

We had double the rate of unemployment in this country in 1945. What the South-East considered a hardship was normal living in Merseyside. They squealed when unemployment got up to 4, 5 and 6 per cent. We had lived with it. So no one will deny that Liverpool was a special case. But this Government put on record to the Stonefrost Commission in justification of the money—the so-called money that they gave to Liverpool but which, in fact, they did not—that Liverpool had been treated no differently from other authorities. That is the kernel of it. Of course, it had not been treated differently. But its needs, measured by any method at all, were much greater. They were tremendous. The Government said that they were treating it the same as all the rest.

I shall not go back as far as 1864, as the noble Lord, Lord Crawshaw, did. I shall go back to 1945. Liverpool had the second greatest problem in respect of shortage of housing and slums in this country next to London. London got assistance. They got a ring of new towns. What did Merseyside get? Nothing. We had to go out and arrange our own overspill. We had to go out and build Kirkby. We built Kirkby without any high-rise flats at all, you might remember. Of course when we were building those houses we made mistakes. Some were high-rise; and they were badly constructed. Do you blame Liverpool Corporation for that? If you do, you are blaming a Tory corporation—but that does not matter. Those creations of social injustice were the fault of private enterprise. Theirs was the bad design; theirs was the had construction. It is an ironic fact that in Liverpool alone the one block that was created by the direct labour department has no faults at all. All the faults in the high-rise flats were found in the privately-built tower blocks.

In 1945 everybody agreed that Liverpool should concentrate on the problem of housing. This we did. By the mid-1960s we were beginning to get housing queues down; we were even talking about phasing down the speed of the housing programme because we had solved the shortage of houses.

Then we turned our eye to the question that the noble Lords, Lord Harris and Lord Crawshaw, raised—the question of attracting private development to the city of Liverpool. So we produced some of the best planners. Professor Halford came down. Like Professor Beloff, they were talking about Liverpool from a distance. To some extent that reminds me of the description of an expert: a man who is a long way away from home. They came to Liverpool and told us what to do. We agreed with them. We produced a city centre plan. We produced a plan to release 48 sites in the city of Liverpool so that the private developers could move in—because money was awash then—and to leave offices ready for the other sectors of the private enterprise to fill in. We were going to concentrate the activities of the city council into one block and release 48 to 50 sites.

We produced a development plan for Liverpool. I am very glad indeed to see the noble Lord, Lord Crawshaw, agreeing with me, because he was one of my greatest supporters. Then we were stopped by a certain man in Liverpool who found that a crummy factory which he had on the dock road right in the front of Liverpool was going to be affected by Liverpool's development plan; and he therefore organised the Liverpool Development Association, as he called it. How ironic it is that we now see the noble Lord, Lord Crawshaw, sitting on the same Benches as those which back the Liberal party—because that man was "Jones the Vote". Who was it who framed the name for the block of flats in Liverpool that was causing us some trouble?—the Liberals. Who was it who left when this present administration took office in Liverpool? Who was it who had kept the rates down and spent 10 per cent. less than the average all over the country?—the Liberals. That is the position that we have arrived at.

The amazing thing is that all the debate that has taken place here today has been only within the context of local government. That is not the problem of Merseyside. The problem is that we were prevented from bringing the private sector into Liverpool. We are still being prevented from bringing the private sector into Liverpool.

Let me give your Lordships an example. I read on the tape machine outside this Chamber today that Tate and Lyle have just recorded a profit of £74 million for last year. Tate and Lyle were requested by me to assist an organisation in Liverpool called the Eldonian Association. This was an association of good Liverpool Labour supporters on the dockland in Liverpool who had suffered grievously from the run down of labour in Liverpool's dockland. They then received a smack in the face from Tate and Lyle who closed the factory after 100 years of excellent working relations. They were slapped in the face; but they did not lie down. They set up the Eldonian Association and now have planning permission—thanks to the Government—and intend to build 147 houses on a housing association site. Good luck to them.

That is a measure of how Liverpool people can respond. They are not all the kind of people we have been hearing about today. Liverpool people built, manned and ran a garden festival which achieved international recognition. They achieved international repute for being courteous, kind, warm hearted and efficient. Liverpool people have just told the motor industry on Merseyside, "You are importing too many cars and if you continue in that line, we are not going to help you." We now have a new investment in Vauxhall. And there are 101 examples of where Liverpool people deserve much better than this country is serving out to them.

The real truth is that central government cannot do it on their own: local government cannot do it on their own. We have had all the penny lectures from the Church and others. We have no Church members here at the moment, I am sorry to say. The Bishop of Liverpool was closely associated with me. He is not present. I should have liked to say this in the presence of those right reverend Prelates of the Church. If they really want to help Liverpool, why do they not shift some of their investment out of London to Merseyside and then try to persuade the Government to fill it with civil servants who are so congesting London that life in London is impossible?

London Dockland has been mentioned. Through the courtesy of the noble Lord, Lord Mellish, I have been astounded by the progress that London has made. As I told him when I left the bus, I am not only astounded and amazed at the progress that they have made in London Dockland; I am also frightened to death. While I was there I said to one of the senior officers this. "Tell me, what steps did London Dockland Development Corporation take to assess the consequences on the City of London of building in London Dockland?" They did not take steps; after all, I say, that was not their job. I shudder to think what Fleet Street will look like after London Dockland takes out of the City of London all the activity that goes on in Fleet Street. All the small cafes will fold up, and all the cleaners will go. That is the consequence that London Dockland will have upon the City of London. There is no thought, no attempt at a plan. When southerners down here begin to realise how that kind of decision can affect their own lives perhaps they will spare a thought for the northern parts of this country which have been suffering from that for two generations.

The answer is that somehow or other we have to get into Liverpool investment of which there is already too much down here, in order to stop these militants. And they are militants. I have said before that they cannot be socialists, acting the way they do. They say that they are going to save jobs—and then they issue redundancies.

When we last debated this matter on a Question from the noble Lord, Lord Harris, I said that the Labour movement in Liverpool will take care of them, given a chance. But it is a difficult job because the militants can point out the history of central government, Labour and Tory, in neglecting the city. It is then easy to get control. On the first occasion that this happened I said that an illegal budget would not get through Liverpool City Council; it did not. Six Labour councillors stopped it. They have paid the price since, but never mind. It is being stopped this time again by Labour councillors. So there is hope and I am fairly confident that the National Executive of the Labour Party will take care of that.

As for the other wild allegations which are being made against certain individuals in Liverpool regarding bribery, corruption and all the rest of it, I hope that the people who are mouthing those things will proceed right to the police and tell them. Then I am quite certain that the law of this land will get working and that in time any wrong-doers will be brought to justice. This is not the place to talk about it. If anybody has any evidence, they should submit it to the right people.

Where do we go from here? I have two minutes left. It is not much time. I should like to go on for 40 minutes, because I have an awful lot on this piece of paper. Let me pay tribute to the Daily Telegraph of this week. It carried a columnful of tributes to people in Liverpool who were going out and helping themselves. These included members of the Eldonian Association—and there are hundreds of people doing this. If we were really worried about the problems of Liverpool, we should have been telling people that Liverpool is a good place. The whole of the city centre has been revived. The Cavern shopping precinct is an example to the rest of the country. If you are a long distance away from Liverpool, just take a day off and go and see it. You may then develop an entirely different attitude towards Liverpool.

It is terrible the way I have to turn over these pages without inflicting all my thoughts upon your Lordships. But let us see how public and industrial relations are in Liverpool. It houses the headquarters of the biggest insurance group in the world, the Royal. It refused to move to London. It houses the headquarters of the biggest friendly society in the world. I am close on 70—in fact, I am being optimistic; I have turned 70. I cannot remember one dispute in either of those offices, and they employ thousands of people.

The people in Liverpool are resilient. They will get over this. It is not that which worries me. Nobody has mentioned the real issue which is being posed to this country in the battle of Liverpool. It is not a question about Government finance. It is a question of whether or not the people Lord Crawshaw referred to can bring down our type of government. Of course they will always go to the weakest link in the chain, so they go to local government, which is beset by tremendous problems and is not being helped in the way it should be by the capital city; and I say "capital city" deliberately.

Tate and Lyle cannot get away with it. They have no social conscience, but there was no trouble at Tate and Lyle's factory. There was hardly any trouble at Dunlop, but they closed down. GEC had a good working relationship, and they closed down. They all went. Somebody mentioned Leyland's factory. That was closed. Was it because it had a bad record? Leyland's factory in Speke was turned over to producing the TR7. Some clever designer in the Midlands decided to design a car with a fixed top for the American market. Have you ever heard of anything so stupid as that? It was a flop. The truth was that it was a fault in design which led to the TR7 being abandoned. Once the TR7 was abandoned there was no reason for the factory at Speke to stay there.

My Whip is now telling me that my time is up. Somebody told me that he had worked it out before that I have another minute. However, I shall conclude by saying that the real threat to this country from the militants does not spring from the militants. It springs from that festering sore that is being left in the body politic upon which they can batten, and they can persuade moderate people that they are not being treated rightly. It is an old story. Hitler was able to suborn democracy in Germany because there were 3 million or 4 million unemployed, and in certain parts of the cities those sores were still festering and never being cured. Just as he did in Germany, so it can happen here. Therefore, if in any other city the militants can gain control and gain power, do not blame them; blame yourselves.

4.43 p.m.

Lord Monkswell

My Lords, following such a magnificent contribution from the previous speaker, I shall curtail the remarks I was going to make and make just one point. If one looks at the difference in the way that the leader of the Labour Party, Neil Kinnock, has handled the Liverpool situation compared with the way that the Prime Minister tends to handle the problems which face her, it is a revelation to us.

Neil Kinnock, faced with the situation developing in Liverpool—the redundancy notices to all the council staff; the possibility of the complete disintegration of council services—did not say, "I am going to abolish the city council. I am going to deny power to the local Labour Party. I am going to curtail the democracy of the trade unions". What he did was encourage the people of Liverpool and their trade unions to take control of the situation themselves and to say to their leaders on the city council, "That is not an acceptable tactic to employ, because it will not work. You are trying to take on a Government which does not care if the services for the people of Liverpool collapse, if 30,000 people are made redundant or thrown out of a job for three months. The Government of this country do not care. They will do nothing until there is such a state of chaos that they might move in then".

There were no moves, and there still are no moves, by the Government of this country to try to resolve the underlying dilemmas, problems, and the agony of people in our inner urban areas. The people of Liverpool are suffering, and the noble Lord, Lord Sefton, has explained that Liverpool is a special case for a number of reasons. But where Liverpool is a special case this year, the cities and the people of Manchester, Glasgow, Sheffield, Edinburgh, Bristol, Birmingham and London will be a special case next year. Surely it is time for this Government to recognise the agony of the people in our urban areas.

4.46 p.m.

Lord Winstanley

My Lords, I really must begin, as the first speaker below the line, as it were, in two ways: first, by thanking the noble Lord, Lord Monkswell, for his remarkable and welcome brevity in view of the time which has already been expended. But I should like to begin, as did my noble friend Lord Harris of Greenwich, by regretting deeply the enforced absence from this debate of the right reverend Prelate the Bishop of Liverpool, whose advice would have been invaluable on this particular occasion. Perhaps I could add to that a word of regret that our constitutional arrangements do not allow of Archbishop Worlock being present with us. His advice too would have been invaluable, as indeed the work that he has done in that great city of Liverpool has been invaluable in these hard days.

My task in winding up this debate, a debate initiated by the Social Democratic Party—I am winding up as a Liberal—is something of an ordeal in three separate ways. First, I clearly have a duty to do what I can to preserve the integrity of the Alliance. That, if I may say so in passing, is something which we did not do very successfully in Liverpool during the last general election. It may be that the lack of integrity of the Alliance during that election in Liverpool possibly is not totally unrelated to the present chaos in that city.

However, like everything else, all clouds have a silver lining, and the silver lining in that case is that what happened in the Alliance on that occasion led to the presence in your Lordships' House of my noble friend Lord Crawshaw of Aintree. That is a silver lining for which I am grateful; and I am quite sure we all are, having heard him today.

Secondly, I must say nothing whatsoever in my speech today to impair the close relationship I have with members and officers of two of the metropolitan boroughs of Merseyside in my capacity as chairman of Operation Groundwork. Noble Lords will know that this is a trust which, in partnership with the Department of the Environment, with the Countryside Commission, with local authorities and local business and commercial interests, is doing a great deal to improve the environment in which Liverpool people live. Both those authorities, with which I work closely, are Labour controlled. I have no idea what kind of Labour, and, frankly, I do not much care. What I do know is that the support given by the members of those authorities to the trust is total and is uncompromising, and for that I am grateful. I have no wish whatsoever to do anything to jeopardise that support in the remarks that I make at the end of this debate.

Those are two reasons for this being an ordeal, and the third is that I am required in this debate to poke what is a Mancunian nose (I having spent most of my life in Manchester) into Liverpool affairs. That frankly is not always a popular activity. Perhaps I am justified, because I spend at least two days every month in Liverpool working on environmental matters and working with Liverpool councillors and others. Therefore, at the moment I have personal knowledge of that city on a continuing basis.

Also, perhaps I am justified in poking my Mancunian nose into Liverpool matters because I also have heard hints of what the noble Earl, Lord Stockton, might in another context have described as the Labour Party's "little local difficulty" in Liverpool. It seems to me to be a little local difficulty which might later arise in my own city of Manchester. I should deeply regret that but not because of the Labour Party's interest for whatever difficulties they may have, I would warmly welcome, but do not particularly want them in my own city of Manchester. Therefore, I welcome this debate in the hope that we in Manchester can learn some lessons from what has already happened in Liverpool. Some noble Lords will recollect that Bernard Shaw once said that the only thing we learn from experience is that we never learn anything from experience. Surely we must try, my Lords.

What are the lessons we can learn? First, it is folly, it is morally wrong and, in my view, politically inept to make people suffer to prove a point. That is what has been happening in Liverpool recently. When rate-capping was first introduced and when cuts were first announced in local government expenditure. I predicted at that time that some unscrupulous authorities would take the opportunity of applying those cuts precisely where they hurt most; in other words, so as to reinforce the message that the policies of the present Government were misguided and needed changing.

That message needed no reinforcement. It is a message of which all in urban areas in Britain are well aware. But it was a little unscrupulous to try to apply the cuts in the places where they hurt the people most. That is what has been happening. We have heard this referred to already. The noble Lord, Lord Dean of Beswick, referred to other cities, including Manchester and Sheffield. But the fact remains—and this was referred to also by the noble Lord, Lord Sefton of Garston—that other authorities have had the same kind of difficulties, but they somehow have done their very best to apply the cuts in a way that is the least harmful to their own populations. That is obviously the way in which local authorities should conduct themselves rather than trying to make the deepest hurt to reinforce a message about something totally different; namely, a message about what central Government are doing.

The noble Lord, Lord Sefton, also said other things. He said that Liverpool has been treated no differently from other authorities, but he went on to say that their needs were greater. Perhaps their needs are greater; I confirm that their needs are very great indeed and have been so for a long time. But the principal difference has not been the difference in the needs, but the difference in the response. The response in Liverpool to this situation has been to carry out policies which injure the people of Liverpool as much as possible, to make a political point. I regard it as morally wrong and politically inept to make people suffer to underline a point, particularly when that point needs no underlining.

The second lesson I would draw is that all of us have to guard against confusion. We are frequently told in your Lordships' House that we must guard against confusion between capital and revenue expenditure. That is a message hammered home very often by my noble friend Lord Diamond, by the noble Earl, Lord Stockton and by others; and it has been referred to perhaps obliquely by the noble Lord, Lord Beloff, today. Here we have examples of that. Liverpool and its councillors have stated over and over again that they must defend their house-building programme. I am always in favour of house-building programmes and building houses to rent. I have supported the Government in their various policies to sell council houses because I believe it is helpful for people to own their own houses, but I do not believe it is helpful to encourage people to buy houses that they cannot afford to buy, which is what has been happening in many urban areas.

In many of these areas the real overwhelming need is for houses to rent. But what is the precise situation in Liverpool? The council feels it is necessary to take draconian steps to protect its house-building programme. To the best of my knowledge at present in Liverpool there are 6,000 unoccupied council houses. Why? Perhaps some of them need repair; but repair and maintenance, guarding against vandalism and other things is revenue expenditure and not a matter of capital expenditure, which is from where some of these difficulties have arisen.

The third lesson which arises from all this is the political lesson, and we have heard a lot of politics today. I was rather sorry that the noble Lord, Lord Sefton of Garston, felt it necessary somehow to try to manufacture spurious points of dire disagreement with the Liberals in Liverpool City Council. I know from my personal experience of him and many of those Liverpool city councillors in both parties that they worked very closely together in what they genuinely believed were the best possible interests of the local people. Does the noble Lord wish to intervene?

Lord Sefton of Garston

My Lords, is the noble Lord suggesting it was not true that Trevor Jones set up an association in Liverpool in the deliberate attempt to stop the city centre plan?

Lord Winstanley

My Lords, I think perhaps I should use the device so often used by Ministers and say that I will write to the noble Lord.

Lord Sefton of Garston

It is not a joking matter, my Lords.

Lord Winstanley

My Lords, I genuinely believe that some of the things the noble Lord has said in this debate today are in marked contrast to some of the things he has said publicly in Merseyside on other occasions about his colleagues in other parties in Liverpool City Council. I regarded him as a very wise leader of that council and he did an excellent job. In particular, he did an excellent job by trying to harmonise the activities and the work of people in different parties. That is something which we must all try to do when a city is in great difficulties; and the noble Lord, Lord Sefton, tried to do that. I am sorry that he now appears to be departing from that course.

The political lesson we must learn is that we should guard against our parties, in whichever party we sit, being used by individuals, not to promote the ends of the party itself but to promote their own individual ends. I have seen that happen in all parties. I have seen attempts by members of the National Front to use the Conservative Party for their own ends. I should always do what I could to support the Conservative Party in trying to defeat efforts of that kind. I have also seen it in the Labour Party, and perhaps in my own.

I am bound to say that some of the troublemakers who have been referred to correctly by the noble Lord, Lord Sefton, as immature people now in the Labour Party were once in my own party. They came into my party at the time the Labour Party abolished the Young Socialist Group, presumably on the same kind of theory and principle that they now object to black sections. They abolished the young socialists and the young socialists, in pursuit of a platform, joined my party. I am very happy indeed to say that they have now left; they have joined the Labour Party, and I dearly hope that they stay there.

I must move on and draw to an end, but I should like to comment on one or two of the remarks made by the noble Lord, Lord Beloff, who asked some crucial questions. He referred to the ports of Liverpool, Glasgow and Bristol, but perhaps overlooked the fact that for many years Manchester was a larger port in tonnage terms than Liverpool. Manchester's port has been hit almost totally. But Manchester also lost another industry earlier, the cotton trade, and Manchester rather earlier than Liverpool took steps to bring in other industry. It perhaps did not have quite the same acute needs that Liverpool now has. There is a slight difference.

In addition, the noble Lord, Lord Beloff, took up the business about Sir Trevor Jones—"Jones the Vote"—having somehow piled up the debt. I do not wholly accept that accusation. I say it is water under the bridge now, but once again I should be delighted to write to the noble Lord. I hope that when I do write to him he will take the trouble to read what I write. The noble Lord, Lord Beloff, pointed to the crucial question; that is: who backs the loan? I hope very shortly that we shall hear an answer to that question.

I want to end with two specific questions to the noble Lord who is shortly to reply to the debate. As a simple person who has spent his life, as I have, unconfused by a very deep knowledge of financial matters, I ask the noble Lord to explain this to me. How is an illegal budget turned into a legal budget by Swiss bankers? I do not know the answer to that question. If the noble Lord knows the answer I should be very glad if he would shortly give it to me.

The second question I should like to ask the noble Lord is this. For a very long time now, I have been given to understand that the Government have, at the end of the day, control over local government expenditure. Do the Government have control over local government expenditure or do they not? It seems to me that what has now happened in the city of Liverpool has driven a coach and horses through any controls over local government expenditure which the Government claim to have. Thus, when the noble Lord, Lord Elton, comes to reply, I hope he will tell us whether the Government control local government expenditure or whether in point of fact they do not.

5.1 p.m.

Baroness David

My Lords, Liverpool has been a proud city and a great international port. It has now become one of the most deprived communities in the land, with the fifth worst unemployment rate of any authority and with appalling problems of overcrowding, bad housing and population loss. Merseyside is the fifth most deprived region in Europe.

The difficulties of the urban priority areas have been highlighted this week by the publication of the report of the Archbishops' Commision: Faith in the City. One might have thought that because of this one would altogether welcome this debate. I know it is customary to express gratitude to the mover of the debate, but this time I am afraid that, like my noble friend Lord Sefton, I am not sure that I am altogether enthusiastic because I think that publicity through the media is what the people who are on Liverpool council at the moment really want. I thought I should have been more ungrateful, because I thought that the noble Lord, Lord Harris, would probably be using this debate to wield the big stick on the Labour Party, but he was really quite gentle in that respect.

I want to make the official Labour Party position clear beyond doubt. The Labour Party totally condems any council if it acts illegally, and it greatly regrets the obstinacy and folly of the council in postponing and postponing the production of a balanced budget, when the Stonefrost report has shown that it was within its power to balance its books without serious loss of jobs or change in the housing programme, the need for which no one could deny. This could have been done months ago.

Stonefrost provided a number of options in its report of 29th October, only eight days after it was commissioned. Any of those options, if followed, would have restored the council's financial credibility and would have made maximum use of Government grant and avoidance of penalties. The Association of Metropolitan Authorities lent its support. It is incomprehensible that it was not until 25th November that the Liverpool Finance and Strategy Committee had, at last, the meeting which enabled it to reconcile its income and expenditure and to state its intention to act in a lawful manner. It has now done that and, even if some of us might think that one or other of the options suggested by Stonefrost would have been preferable, we now have to await events, not the least of which will be the case before the court in January. If the present Local Government Bill goes through Parliament, there will then be a legal requirement to set a rate by 1st April.

In fairness to my colleagues in another place, I should like to stress how much they have tried to influence and help Liverpool council over the past 18 months, in the interests of the people of Liverpool. A number of meetings took place in the spring of 1984. The rate increase of 17 per cent. announced on 11th July 1984 followed a successful outcome to negotiations initiated by Dr. Cunningham and his colleagues, together with city council leaders, with the then Secretary of State for the Environment, Mr. Patrick Jenkin. I think perhaps the noble Lord, Lord Harris, was a little unkind in the way he referred to all this and did not give credit to some of the people who took part in those negotiations.

In return for a balanced budget, Mr. Jenkin offered a package worth about £6 million which, taking into account penalties, meant an effective gain of the order of £14¼ million. In addition, the Secretary of State indicated, in a letter dated 29th June 1984, that more housing capital would be available for 1985–86. No figure was put on this but he promised—and I quote from his letter: to do his very best to ensure that allocations to Liverpool next year under the housing investment programme and the urban programme taken together will enable the council to make positive progress in dealing with the city's severe needs, having regard to the scale of your capital commitments and the resources available to you". However, the HIP allocation for 1985–86 was down to £31½ million, compared with £38 million for 1984–85. Maybe now that the council has produced a balanced budget the present Secretary of State will be willing to reconsider that allocation.

Throughout this year, my honourable friend Dr. Cunningham has had a number of meetings with the leaders of Liverpool. It is regrettable that his common sense did not prevail and that his advice was not followed. The chairman of Labour's National Executive Committee, Local Government Commitee, David Blunkett, made proposals at the party conference which resulted in the NEC agreeing a resolution which recognised: the immediate need to take every possible step to balance the city council budget for the current financial year, whilst protecting services and jobs and maintaining the housebuilding programme". The Stonefrost Committee got to work and produced its report on 29th October, but by 21st November the council had not acted. Dr. Cunningham wrote a letter on that date to his parliamentary colleagues, explaining what had been happening. I should like to refer to that letter and quote a little from it. He had arranged meetings with the AMA and the parliamentary leadership. He says: At the meeting on 11th November Liverpool agreed that they would produce a balanced budget in line with the NEC resolution. John Hamilton, Leader of Liverpool, confirmed this in a letter of 11th November to Jack Layden, AMA Chairman". The AMA had agreed to try to find some capital to tide Liverpool over. A deadline of Tuesday 19th November was set for marshalling the transferred allocations. £3 million in total has been forthcoming. The AMA Labour Group met John Hamilton and Tony Mulhearn today"— that was the 21st— to hear of Liverpool's proposals for a balanced budget in conformity with the NEC Resolution and John Hamilton's letter. But no proposals were forthcoming, despite … suggestions … by David Blunkett based on the Stonefrost Report, balancing the budget with a 5 per cent. rate rise". That did not happen. The AMA of course took no further steps; and John Cunningham wrote: Liverpool could, without loss of jobs and services, settle its financial problems. Its unwillingness to do so is, in David Blunkett's words not only 'insane' but also 'an act of sabotage of the Labour Movement'.". We know there was the last-minute retreat on 25th November. Whatever one may think of the council, one can only be relieved that the unfortunate Liverpudlians were to have their services and that the council staff were not to lose their jobs.

I must also emphasise that the Government bear a significant share of the responsibility for the position that Liverpool, together with the other programme and partnership areas, are in today. I have no doubt the Minister will today, as he did last week, list the schemes, the urban development, derelict land schemes, etc., etc., which the Government have started. But Liverpool's urban programme allocations at 1985–86 prices have steadily declined from £28.4 million in 1982–83 to £24.1 million in 1985–86. Liverpool, in common with other inner city areas, has lost very large sums in rate support grant since 1981. I refer to an Answer in the House of Commons Hansard on 28th October this year. According to 1985–86 prices, the rate support grant in 1981 was £147 million; in 1985–86, £34 million, nearly £35 million, a lost of £112 million, and a change in percentage terms of minus 76.4 per cent.—the biggest loss of any metropolitan authority either inside or outside London. And, of course, the urban programme money nowhere makes up for that.

The Church report, Faith in the City, rightly points out that although the urban programme has made an important contribution to stemming the tide of urban decline there is a long way to go if regeneration is the objective. Expansion is necessary because the urban programme is static. An increasing number of projects is being squeezed out. Instead of being a vehicle for innovation, it has increasingly to fill the gap caused by cuts in the main expenditure programme. No allowance is made in the RSG allocations for the funding of successive UP projects to be transferred to the main programmes or for the current expenditure consequences of capital expenditure under the urban programme.

My noble friends Lord Graham and Lord Sefton have described how Liverpool City Council arrived at this present financial position. Like the noble Lord, Lord Beloff, I must refer to the actions of the Liberal council which preceded this one and has a good deal of responsibility for what happened later. It is not often that I can agree so wholeheartedly with the noble Lord and I am delighted to do so on this occasion. He also referred to PR. I was rather surprised that the noble Lord, Lord Harris, so recommended PR for Liverpool because I think that part of the disasters at Liverpool over the last 10 years or so have come about because they had a hung council and there has been no overall majority for a number of years. I think that a hung council is what is very likely to result if PR happens.

The expenditure by the last council—and I am coming back to that—by the Liberal council, was reduced by 6 per cent. in real terms between 1975–76 and 1978–79 and the relatively low spending position of Liverpool in 1978–79 formed the basis of its spending target for 1981–82. Liverpool further reduced its spending towards that target and the reaction to the 1981–82 spending targets form the basis of targets for later years. The behaviour of that Liberal council during those years led to the unfortunate position that the present council inherited.

The present council's case against the Government is, first, that a major contribution to Liverpool's present financial position is the system of targets and penalties; and, secondly, that the spending levels of Liverpool City Council in the years up to and including 1981–82 disadvantaged the council because of the way targets have been constructed. So they started from a bad base. What is more, the Liberal budget of 1983–84 was dishonest in the extreme. Balances were cut to the bone and £7 million worth of cuts were assumed without decisions about how or where these could be made. All these factors led the Labour council to hope that the Government could look on them with some sympathy and offer some extra help, particularly in their housing regeneration programme which impartial observers have praised.

At this moment, the Labour Party is carrying out an investigation into the Liverpool district party. I was rather surprised that the noble Lord, Lord Beloff, criticised this. I am sure that the Labour Party would have been criticised even more firmly if it had taken no action against the Liverpool militants. He described it as a red herring. I do not accept that. Papers have been sent to the Director of Public Prosecutions with a view to prosecutions for corruption. The district auditor has issued a certificate and some councillors are to appear in court in January faced with surcharge.

The timing of this debate is not exactly satisfactory, but if it has served to open your Lordships eyes to the appallingly difficult situation in which the people of Liverpool find themselves it may have done some good and may have been worthwhile. I hope that the Government are grasping the point that if a city and its inhabitants are being harshly and unfairly treated and that life is hardly worth living, that may result in a situation where extreme and dangerous people can take over. My noble friend Lord Dean of Beswick has told us of his fears for Manchester in this context. Do the Government understand this? Are they going to continue tinkering with the problem; or are they really going to take some proper action?

5.15 p.m.

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

My Lords, the Motion of the noble Lord, Lord Harris of Greenwich, for which I, by tradition, thank him for bringing to your Lordships' House is, in one sense, entirely superfluous. No one needs to draw your Lordships' attention to Liverpool, because the city council has devoted such huge and self-centred energy to drawing attention to itself that we are all aware of it already. But there are lessons to he learnt from the shambles that it has created and I am grateful to the noble Lord for the chance to dwell on them. The lessons for the country, I believe, are important. For the Labour Party, though, they are clearly momentous. I will try not to draw them too starkly myself because it must already be as clear to noble Lords opposite as it is to the rest of us that something must have gone dreadfully wrong in its system in Liverpool and that, if it does not fairly quickly put it right, it will be either a very sick or an unrecognisably different party everywhere else in the country until it does.

That is for it. It is not the health of the Labour Party but the health of local government in Liverpool that is the concern of the Government in this afternoon's debate. Your Lordships will be familiar with the background; and if you were not so before we started then you certainly are now. Your Lordships will realise that one cannot describe or even refer to it without bringing in the Labour Party, because, as the noble Lord, Lord Graham of Edmonton, helpfully pointed out, it was the 49 elected Labour members of Liverpool City Council who delayed, up to the point when the auditor issued certificates of surcharge, the setting of the rate and who, even after that point, voted for an inadequate rate.

One can sympathise with noble Lords opposite in any wish that they may have to disown these people. But the fact is that although they were very free with their criticisms and even with a series of delegations, interventions and correspondence, as the noble Baroness, Lady David, has just listed for us, they did not disown them at any point from the moment when they moved into the local wards and branches to the moment when they took over the whole apparatus, first of the party and then of local government. The point at which they disowned them was marked by the admirably robust statement made by Neil Kinnock on 21st last month. But the timing of that statement fits, as the noble Lord, Lord Crawshaw of Aintree, pointed out—

Baroness David

My Lords, may I intervene for a moment? Mr. Kinnock denounced the Liverpool militants at the Labour Party Conference on 2nd October.

Lord Elton

My Lords, as far as it was discernable to the general public, the moment at which—noble Lords opposite are entitled to shake their heads. I am happy to stand corrected. If the light was seen sooner after the first invasion—was it 1955 that the noble Lord, Lord Crawshaw, said?—than 21st November this year, by a few months, so be it. But the committee of inquiry was not appointed until very recently. The conference itself did not take place in the summer. There had been no rejection in May when the city council was still refusing to set a rate; nor in June when it proposed one that was inadequate and hence potentially illegal; nor in September when it sent redundancy notices to all its staff. It was not until after that that eventually the thunder was called forth. We cannot look at the difficulties of local government in Liverpool as something entirely apart from the Labour Party; although we can acknowledge and welcome the distaste which the national party is now expressing for what has gone on there.

What has gone on there is this. The council resolved its 1984 budget very late without the massive concessions from government which its propaganda claimed. We warned the council then that its problems were not over. We urged it to look at all available sources of finance to help solve Liverpool's economic and social problems—to the private sector, to the local communities, to housing associations. It ignored this advice. It clung to its dogmatic approach, apparently in the entirely mistaken belief that if it threatened to take the city into chaos the Government would give it taxpayers' money with which to buy its way out of trouble.

This year, the council again refused to set a rate at the start of the financial year. When it eventually got round to doing so, it set a rate far too low to cover a highly inflated budget of £265 million. It ignored its duty to set a balanced buget and instead left a gap of about £100 million between income and expenditure. It is common knowledge that the council leaders considered setting a rate with an increase of 20 per cent. and balancing the books, and that they decided not to do so. They decided instead to defy the law and to force a confrontation.

At this point I suppose I should mention the way that Liverpool had been managing, or in some senses failing to manage, its affairs. It was already a very battered ship. If I apply a yardstick, your Lordships will see what I am after. The simplest one is to see what Liverpool pays per head of population for its services, and compare that with what the average metropolitan district pays. If you make that comparison, my Lords, you find that overall they pay 35 per cent. per head more over the whole range of services than do similar authorities. Liverpool pays 40 per cent. more for planning and 51 per cent. more for collecting rubbish. Even allowing for all the special difficulties of Liverpool, we calculate that simple efficiency in management could have saved them £34 million this year. Had the council tackled that problem—had it even started to tackle the problem—that would have been a useful contribution towards balancing their budget.

However, when in September the council decided to balance their books, they claimed to do so by the quite extraordinary tactic of making the entire workforce redundant and planning to run services down to the barest minimum. This amazing decision was as though the captain of a ship, already damaged by his misuse of it, was throwing the crew overboard instead of the cargo. I say "the captain" but I follow the noble Lord, Lord Crawshaw of Aintree, in wondering whether that is the right term. The captain, at least in name, is Mr. John Hamilton; but Mr. John Hamilton was quoted in New Society on the 29th November as saying that he is pushed into the background by Militant, that his office is bugged and that there is a TV monitor on Mr. Hatton's desk, showing him everyone who goes in and everyone who goes out of the "skipper's cabin". I hope the Labour Party's committee of inquiry has a chance to verify that statement and to draw from it several very important conclusions. Control, as the noble Lord, Lord Harris, suggested, is an interesting commodity in Liverpool City Council and its staff; and no doubt the inquiry will be looking closely into the static security force and so on, as well.

Having deliberately engineered a crisis and having refused to be rescued from it, the council was, by choice, on its own. It then staked the livelihood of all its 31,000 employees, and the welfare of the entire City of Liverpool on a final gamble to get large amounts of other people's money to pay for its own mismanagement and excesses. That is something, I can assure my noble friend Lord Beloff, to which we have no intention of giving our consent.

The Government were not going to be blackmailed on that occasion, either. My right honourable friend stood firm on the ground we had occupied throughout: that the council could and should itself sort out the financial mess that it had itself deliberately created. Once they were convinced that my right honourable friend meant business, it suddenly became clear to them that they could after all avert the crisis and insolvency by transferring some of the costs of the housing revenue account to their capital account, and by entering into a deferred purchase arrangement with foreign banks—arranged, oddly enough, by the very people Militant are used to calling "the gnomes of Zurich". It was they who hauled them out of the pit that they had dug for themselves, and it was this arrangement which enabled the council to balance its budget and maintain its capital programme.

The noble Lord, Lord Winstanley, asked me about that. I ought to tell him that deferred purchase is not borrowing. If it were borrowing, the security would be the ratepayer. Local government borrowing is not only secured against assets like parks or the town hall—somebody was rather hoping that the Liverpool Town Hall might be managed by the Swiss, but there is no prospect of that—if anything, it is secured against income.

That arrangement could have been entered into by the bankers, had they been asked to do so, long before the redundancy notices were issued and long before council services and support for the voluntary sector began to crumble. I understand that the deal was actually there for the taking in August. It is interesting, however, to note that deferred purchase does cost more than conventional finance and will use up more of the city's capital spending permissions. If, as they threaten, the council sign up for the second tranche of £30 million next year, making a total of £60 million in all, they could be committed to finding an amount equivalent to over half their entire housing allocation for 1985–86 of £31 million every year, from April 1987 to March 1994. When that money is spent in a blaze of publicity and self-congratulation, let us not forget that they are quite literally mortgaging the city's future. I can reassure my noble friend Lord Beloff that, as we have told the city council and the commercial organisations involved, deferred purchase arrangements do not require government approval or carry a government guarantee. It is the council, its advisers and its bankers who have to satisfy themselves that this is a prudent arrangement.

The noble Lord, Lord Dean of Beswick, drew your Lordships' attention, as did many others, to the real and unavoidable difficulties in Liverpool, that underlie the unreal and avoidable difficulties superimposed upon them by the present council. Her Majesty's Government acknowledge these. We acknowledge the long history of economic decline, started by the move away from heavy industry and ocean-borne transport and trade that existed in Liverpool before the process was accelerated, as the noble Lord. Lord Crawshaw of Aintree—I am sorry to refer to him so often but it was an excellent and revealing speech—so dramatically illustrated, by a dedicated corps of political operators.

The council's claim that the Government do not care about these problems or about regeneration is simply not true. I would remind the noble Lord, Lord Monkswell, in thanking him for a courteously brief intervention, and the city council of a number of things. Merseyside is the only area in the country with its own task force. That was set up by a Conservative Government in 1981 to work with local authorities, government agencies and the private sector. My own department in this year is helping the city through the urban programme, the urban development grant—and here comes the list the noble Baroness has been patiently waiting for, but I think it is longer than she expects—through the Merseyside Development Corporation, through derelict land grant, through the Council for Sport and Recreation, through the housing investment programme and through the housing corporation.

The noble Lord, Lord Dean of Beswick, suggested that we had started the policy of reducing Exchequer support for local government expenditure in all areas. The noble Lord, Lord Graham of Edmonton, seemed to think this policy was directed against inner cities and specifically against Liverpool. I have to tell the noble Lord, Lord Dean of Beswick, that I can find no substance to justify the figure he quoted and that the policy was in fact introduced by his own party in 1976. I shall give way to the noble Lord.

Lord Dean of Beswick

My Lords, very briefly, the point I was making was that they shifted resources out of the city to hinterland where their voters are; and that is established beyond doubt.

Lord Elton

My Lords, I shall not cross swords with the noble Lord on the detail of that: he will no doubt remind me of it in another debate and I shall then count on his persistence and actually have the figures at my finger tips. That will enable me to dispose of the point. This year, as in the past four, over £1,000 million of Government money is going to Merseyside. That is about £700 in grant for every single person in Merseyside this year—not every household and not every adult, but every single human being living in Merseyside. Divide that into the total and you get £700. Since 1979–80, we have spent a total of around £7,000 million. The grant distribution system recognises Liverpool's need. Liverpool has the second highest GRE per head of population of all the metropolitan districts. In rate support grant, it received about £1,150 per head of population in total between 1981 and 1985. Compare that, my Lords, with Birmingham which in the same period received only £830. Now that the council has brought its spending to the level of its target this year, it will be entitled to about £119 million in rate support grant. All this is money that was wilfully set aside by the present leadership.

I can assure the noble Lord, Lord Harris of Greenwich, that the whole battery of Government-assisted programmes will continue to be available to Liverpool when there is a change of leadership there, and that GRE calculations will continue to take the real levels of need of Liverpool into account. I have already illustrated the way in which they have actually brought Liverpool up from, I think, fourth in the table three years ago to second in the table now.

It is not we who are keeping the council at arms' length. It is they who decided to go it alone. By insisting, as the noble Lord, Lord Harris, made clear, on a purely municipal approach to the city's housing problems, the council has refused full use of other resources available. When my right honourable friend the Secretary of State recently decided to support the refurbishment of houses by the Eldonian Co-operative, he had to do so, as the noble Lord, Lord Sefton, was kind enough to recognise, against council opposition.

The leadership of Liverpool City Council have used their office, they have used the machinery of their local authority, they have used their workers and they have used the citizens of Liverpool. They have used them all cynically, coldly and without pity in a calculated attempt to break the system of local government finance and hence of local government in this country. Their clear political aim, to which they subordinated every other, was that of breaking a system of government set up by a democratic Parliament. That is a threat too serious to ignore or to forget.

It failed because my two right honourable friends, Patrick Jenkin and Kenneth Baker, stood resolute and firm in defence of democracy. They were supported by Her Majesty's Government and, in the end, by Her Majesty's Opposition. Whether or not Liverpool City Council now decide to abide by the rules, we can none of us afford to forget what it was that they tried to do.

The lessons do not apply only in Liverpool. In Liverpool, the infiltration of Militant personnel through the roots has infested the whole plant until it bears a grotesque fruit which has brought the attention of the nation to what is going on. I hope that the noble Lords and Baronesses opposite, and their friends in another place, will look at other plants to see whether similar things are going on before they come to fruition.

But the debate is about Liverpool and if the national body politic is protected and redeemed, Liverpool can have a brighter future despite the problems. There are already signs that this is possible. Last year 3¼ million visitors went there to see the Garden Festival totally regardless of all the political developments going on there. It was the country's top tourist attraction bar none. The country's largest group of Grade I listed buildings at the Albert Dock is being brought back to a new and thriving life. It already houses the maritime museum, and in 1988 the Tate Gallery will open there. Wavertree technology park holds out the hope, and already the reality, of new jobs in high technology industries. The development of the Anglican cathedral precinct and the continued momentum of the co-operative movement, despite council opposition, show what can be done in the housing field when all work together.

All these have one thing in common. They result from co-operation between all concerned—government, local authorities, private and voluntary sectors. It is, as the noble Lord, Lord Sefton of Garston, sagely told us, this kind of partnership making the fullest use of all resources that can bring forth a better future for Liverpool to which we will contribute. But it cannot be done by central Government alone. It involves everybody—the Churches, the opposition, the local authorities, the voluntary movements, the co-operatives. Everybody. That is what proper politics are about, and I hope that the effect of this debate will be to remind everybody concerned with Liverpool, both those with responsibilities there and nationally, that we have a great prize for the taking in the future.

5.35 p.m.

Lord Harris of Greenwich

My Lords, I begin by thanking all those who have participated in the debate, including the noble Lord, Lord Elton, with whose peroration I agreed entirely, as did, I am sure, the overwhelming majority if not all Members of your Lordships' House.

I was not totally surprised by the lack of enthusiasm of the Opposition Front Bench for this debate. Indeed, I would have been mildly astonished if the noble Baroness, Lady David, had got up and said how delighted she was to participate in this discussion today, because what we have been debating today is one of the great local government scandals in England, where a majority party has misused its power, as Mr. Hatton and his colleagues have done, and until the past few months nothing at all was done by the national party leadership to deal with that situation. That is the reality of the situation that we have been debating today.

The only other point that I would briefly make is this. The noble Baroness, Lady David, said that at one stage it was a problem facing Mr. Hatton and his colleagues when they took office that they were left with the Liberal budget, as I think she described it. She implied that, without that none of these appalling problems would have arisen, and I do not think she knows very much about Militant Tendency if she really believes that—

Baroness David

My Lords, may I say—

Lord Harris of Greenwich

My Lords, with great respect, I think the House heard the noble Baroness and it must draw its own conclusions from what she said. The fact of the matter is that at one stage the noble Baroness referred to the Liberal council. At another moment she referred to the hung council and said that one of the problems of Liverpool was that there had been a hung council. With great respect, she had better make sure which of the two arguments she wants to adopt.

The last point that I would make on this aspect of the debate is this. This is not an internal quarrel within the Labour Party. The fact of the matter is that Liverpool does not belong to the Labour Party. I repeat the fact that 54 per cent. of the people of Liverpool voted against Mr. Hatton and his colleagues. Indeed, there certainly were wise people who decided to vote in that way, given the state to which Mr. Hatton and his colleagues have brought this great city.

I would end with the point that I made at the conclusion of my own speech. What is needed now, particularly with, I hope, the forthcoming departure of Mr. Hatton and his distinguished colleagues from the positions of power which they at the moment hold, is a climate of collaboration between all people, all democratic councillors in Liverpool, be they Labour, Alliance or Conservative. That is what is most urgently necessary and to have a sensible relationship with central Government, so that the immense problems facing the working people of Liverpool can at last be properly addressed. With that, I beg leave to withdraw my Motion.

Motion for Papers, by leave, withdrawn.