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House of Commons
Friday 16 April 1993
The House met at half-past Nine o'clock
PRAYERS
[Madam Speaker-- in the Chair ]
Local Government Services
Motion made, and Question proposed, That this House do now adjourn.-- [Mr. Chapman.]
9.33 am
The Minister for Local Government and Inner Cities (Mr. John Redwood) : It is a pleasure to introduce a full day's debate on locagovernment. Local government matters a great deal. Good councils and good councillors can make a lot of difference to their counties, towns and districts. The Government are interested in promoting the best in local government and in leaving many vital issues to be settled democratically in the council chamber.
In recent months and years, the difference between the best-run and the worst-run councils has become marked. Successful Conservative councils get out of debt, collect their money efficiently, contract out and provide excellent value for money. Councils such as Wellingborough, Hambleton and Huntingdon are offering their taxpayers refunds in the current year because they have been so successful at managing. Hampshire county council has succeeded in setting the lowest county council tax, while at the same time recruiting more carers and teachers.
Some Labour councils, in contrast, set high council taxes, pile high the debts and fail to provide value for money. Those are the issues which electors will shortly be able to judge in the county campaigns.
The public sector that we wish to advance is there to organise services for those in need whom the market has passed by, to regulate the market so that it remains open and competitive, and to provide leadership and representation for communities. Good local government provides, or sees to it that there is provision for, care for the elderly and disabled. It plans our physical and built environment--for example, to prevent the noisy sawmill being located next to the old people's home. It acts as leader for the local community, creating a place in which people are prepared to invest, to create jobs and to enjoy their leisure time.
In the current year, local government will receive financial support from Government grant and business rates of more than £33,000 million. My first message today is that plenty of choice and diversity is possible within that large sum of money. The House should remember that the money goes to local government in the form of a block grant, and councillors and councils are left to make the important decisions about how to spend that money, what the priorities should be and how efficiently it delivers the services. The private sector is there to supply wants. It is there to make money, as profits are the lifeblood of new enterprise and the means of remunerating savers, and to provide the funds to invest in new plant and equipment. Without profits, businesses cannot innovate or adapt to changing
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customer needs, and they soon fall behind with the provision of opportunity and employment in their local communities.Throughout my business and political life, I have found things of excellence in both the public and private sectors. As a one-time chairman of an industrial company, as a former director of a merchant bank, as a previous director of small companies, I learned a great deal about the best that the private sector can offer. I learned to admire its flexibility, its speed of reaction, its preparedness to take calculated risks, its ability to make decisions in an uncertain world with imperfect information, its attention to detail, its ability to put the customer first, second and third, its interest in quality and its enthusiasm for new ideas and for innovation. As a senior civil servant, as a Government adviser and, more recently, as a Minister, I admire the public sector at its best, when it is judicious, fair-minded and open, and prepared, before acting, to debate the issues before the people, capable of helping those most in need and giving hope to those whom the competitive market leaves to one side.
Sometimes, in both sectors, life does not work out for the best. In the private sector, there is the Labour party's caricature, where speed leads to sloppiness and the pursuit of profit can lead to spivvery. In the public sector, things can degenerate into bumf and bureacracy, where nothing happens for interminable months or years, where letters go unanswered, problems are unresolved, and instructions, regulations and counter- instructions are issued, as if half translated from Latin into a kind of official double-Dutch. At its worst, the language of the private sector is costive or monosyllabic. At its worst, the prose of the public sector is shambolic, confused and inchoate. Language without cadence and clarity is good neither for governing nor for doing business. The Conservative agenda followed over several years aims to make government work better. One of the biggest breakthroughs, in our approach to government came with the introduction of the idea of the enabling council. Such a council decides how much service the community requires, but does not necessarily itself employ all the people providing it. This idea, despite its somewhat ungainly name, has been adopted across the country by councils of differing political persuasions.
Many have come to recognise that business is better at organising service provision through a competitive market ; only government can decide how much service and how many public goods to buy on behalf of people who lack the income to compete in the marketplace. So we believe that councils should make the best use of what the marketplace has to offer.
An increasing number of councils are pioneering putting services out to tender voluntarily before statute and regulation require them to do so. The London borough of Bromley has already market tested more than a third of its revenue costs. Lincolnshire county council is planning market testing of property surveying, project management and building maintenance. The London borough of Brent is entering on a vigorous programme of market testing. That usually results in better quality and in lower costs.
In the United States of America, part of President Clinton's new agenda have been christened "reinventing Government". The titles may be different from those that we are using, but it looks rather similar to what we are
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doing here. His Administration, according to the proponents of the new agenda, want government to concentrate on steering rather than rowing ; on leading societies instead of providing services themselves.We are told that President Clinton wants government to provide competition between service providers and to empower citizens by pushing control away from bureaucracy into the community. The United States Administration wish to measure the performance of their agencies by not the amount of money that the agencies spend but the achievements that they record. The Administration wish government to be mission-driven rather than ruled by regulations. They wish to concentrate on preventing problems as much as on providing solutions ; they wish to put energies into decentralising authority. Above all, they prefer market mechanisms to bureaucratic ones.
I therefore hope that, in responding to the debate, the hon. Member for Newcastle upon Tyne, North (Mr. Henderson) will tell us whether he and his party welcome those Democratic party initiatives in America. It is time we knew whether the Labour party is full of Clintonite reformers at its top or not. Are they now in favour of the market and what it can offer, or do they continue to pursue their vendetta against it?
Labour councillors in council chambers throughout England need to know the answer. They need to know where they are being led by the Labour party here in the House of Commons. Are they, like the President of America, to welcome competitive tendering and private partnership, or have they to resist doggedly and unsuccessfully our proposals for reform and improvement?
Public-private partnership in Britain has a long and successful history. It is not even something entirely dreamed up by successive Conservative Administrations since 1979, good though the ideas of those Administrations were. Its provenance goes back much further and its acceptability spans the political spectrum.
Although, in the 1980s, the Labour party nationally in the House fought tooth and nail against the idea of contracting out, around the country in practice some more sensible Labour-led councils were doing it, as they had been for many years. So we need to know whether the national party has caught up with that strand of thinking. In a Municipal Journal piece, the hon. Member for Newcastle upon Tyne, North implied that the Labour party was catching up. He said, or was reported as saying :
"In principle, there is nothing wrong with local authorities deciding to what extent they are providers of services and to what extent they buy in the service to provide for their local residents".
Indeed, even the hon. Member for Blackburn (Mr. Straw), who is sharper of tongue in such matters, seemed to announce his conversion to the advantages of contracting out in a recent interview in Tribune. I believe that there was some dispute about whether it accurately reflected his views, but the House might like to be reminded what Tribune thought he had said. I can understand the difficulties between a Labour Member and Tribune, but there we are. Tribune reported the hon. Member for Blackburn as believing : "There is wide acceptance that the division between contractor and provider that compulsory competitive tendering has produced has been sensible".
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That is praise indeed from the hon. Member for Blackburn. Many members of the Labour party have recognised for a long time that contracting out and using the market can be sensible. It has rarely made sense for councils to employ top-rate barristers in case the council should be called into serious litigation ; they have always relied on the marketplace when they need those skills. It has rarely made sense for councils to employ their own financial and investment specialists. They have often called upon advisers in the City when and where they need them. Seeking provision from the marketplace is not simply a way of cutting costs or even dealing with the problem of peaks and troughs. It can also be a way of improving service quality. Management of a service is usually strengthened, whether or not an outside group wins the contract, by the very process of competitive tendering.This was well known in the 19th century, when the Government had a problem with the unreliability of their international mail service. The Government's solution then was to let mail contracts to private sector shipping companies. By so doing, they built incentives into the system to deliver the post. Many more letters were subsequently delivered rather than allegedly being "lost at sea", as had happened under the public sector monopoly.
Similarly, under modern contracting out, service quality has often been better specified for everything from dustbin collection through to the running of the local swimming pool. This service revolution, based on quality and the use of the market, will continue in the next few years. Central Government are now pitching in. They are contracting out many of their functions and grouping many of their staff into executive agencies and trading funds.
The problem in a large amorphous civil service can be that individual branches or divisions lack esprit de corps or a clear sense of purpose, swallowed as they are by a greater whole. Market testing allows the Minister to answer more precisely to Parliament for the policy and allows some responsibility to be clearly delegated to managers for the day-to-day running of the service.
Large organisations need delegated responsibility, as well as the buck resting on the desk of the most senior person for the big issues. The idea that the Minister is directly responsible for every facet and every action, every letter written, every benefit administered by local government is Labour nonsense that we often hear from the Opposition.
Of course the Minister in Parliament should be responsible for the general policy on local government, for the amount of money voted and for the framework of law. Parliament should expect to debate those matters vigorously and to criticise the Minister if it feels that he has failed to respond. But should the Minister be responsible for every benefit cheque that goes missing, every piece of litter in the local park or every poor school result?
Mr. Doug Henderson (Newcastle upon Tyne, North) : The Minister's last few sentences implied that local government should be given more opportunity to make its own decisions. Does he feel that they run counter to the Government's policy on capping and their view that local government is not able or sufficiently responsible to make those decisions?
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Mr. Redwood : The hon. Gentleman cannot have followed my earlier argument, in which I said that £33,000 million gave enormous choice, scope and discretion. I wish to strengthen the choice and scope of local councils in administering that money by encouraging responsibility in councils and reminding the Labour party that many of the issues should properly be debated in the council chamber and not brought to the House of Commons. Ministers should not be blamed for matters that are clearly within the competence and responsibility of the local authority.
In the many layers of management between the park attendant failing to pick up the litter and the Secretary of State for the Environment, responsibility is held by people elected or appointed, who can and should often be held to blame. In a vigorous democracy, an Opposition will naturally wish to blame the Minister for everything. In their view, everything can be related to the amount of money available and the Minister can always be blamed for the total amount of money. The Opposition in this Parliament, as the hon. Member for Newcastle upon Tyne, North has just shown, delight in arguing two entirely contradictory propositions. They argue that local government should be independent, but, at the same time, they bring every shortcoming to local government to the House, claiming that it has happened only because the revenue support grant was not large enough. They should learn that the obverse of the coin of local autonomy is local responsibility.
Many councils throughout the country are managing well within the large block grants allocated to them. The question is, why cannot the others do so and what will the Labour party do to encourage better management of some of the Labour-controlled councils that claim that they cannot manage so well?
Within budgets of £70,000 million this year, local government has considerable scope to do good and great opportunity to make mistakes. Believing in local freedom underlines that. The adoption of more businesslike practices can make partnership between public and private sectors easier. The partnership must extend, especially in the inner cities, to creating a climate in which business can invest and prosperity can return. Exciting new developments are now under way, with the provision of private sector roads, railway lines and other transportation systems, through the development of joint venture projects and private sector projects in their entirety. The link of the world's busiest international airport, Heathrow, to one of the world's largest cities went unmade by the nationalised industry over 45 years. Private capital will put that right. Even the shadow Secretary of State for Transport, the hon. Member for Kingston upon Hull, East (Mr. Prescott), welcomes the principle behind that development--
Mr. John Denham (Southampton, Itchen) : My hon. Friend proposed it.
Mr. Redwood : That comment is a bit rich. The Labour party spent the whole of the early 1980s claiming that the private sector was full of rogues and villains and had no role to play in such developments. The hon. Member for Kingston upon Hull, East and his hon. Friends have learnt from what we have been saying over the past 10 or 20 years--that the private sector has a role and that private capital can be most important.
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The public sector's task is to handle the community's aspirations and fears and to provide the necessary permits and rights. Some of the projects may well need some public financial assistance. The public sector may need to be involved in acquiring the land, granting planning permission, debating with local communities on the best routes and deciding on the correct mixture of facilities that can be provided as a result of a regeneration scheme. Such thinking lay behind the Government's launch, earlier this year, of the capital partnership and housing partnership funds. Those funds have been very successful in attracting three-way money--a three-waypartnership--between central Government, local government and the private sector.
The capital partnership scheme for the inner cities, through £20 million of promised Government grant, promises £33 million of local authority receipts money and £130 million of private capital. It is a big boost for the winning areas in deprived inner cities. The housing partnership fund, with £30 million of promised Government grant, promises £29 million of local authority receipts money and £37 million of private investment. Those partnership schemes show how private and public sectors can work together in the best interests of urban regeneration.
In the Foleshill area of Coventry, £2.6 million of urban partnership grant will be used alongside other central Government grants and almost £17 million of private sector investment to redevelop a former warehouse, textile factory and other sites, to provide workshops, light industrial units, new private and housing association dwellings and training opportunities. More than 2,000 new jobs have been promised from that scheme alone.
In Southwark, the local authority is using £5 million of its capital receipts, alongside £1 million urban partnership funding, to bring in an estimated further £5 million of private sector money to regenerate central Peckham. That project is a good example of private-public sector partnership which will increase retain space and improve leisure facilities and the environment for the benefit of local residents and businesses.
In Huddersfield, slightly more than £1 million urban partnership resources are expected to attract more than £23 million from the private sector, which, together with more than £3 million of local authority capital receipts, will provide a major retail and leisure park. That ambitious and imaginative project will develop sports facilities with regional, national and international potential. The present state of the property market presents enormous opportunities. I asked property specialists when they thought that they would next be able to buy properties and undertake developments at current high yield levels and current low interest rates. Why did so many clamour to buy land at £1 million or more an acre in 1988, which they would now turn down at £250,000 an acre? Is not it time for them to think again and recognise the opportunities? There has rarely been a better conjunction of rental yields and borrowing costs.
The economy is growing again and, as we approach the middle 1990s, there will be demand from tenants for commercial space and industrial property in our major cities. There will be more demand for affordable homes from a new generation of potential home owners. Central Government, urban development corporations, councils and city challenge partnerships can sketch
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the ideas and point the direction. The private sector can respond by recognising the opportunities and by working in tandem with public bodies. We now have some experience of our city challenge rounds. Taking the two rounds together, and adding up the promises, we recognise that they can make a huge difference to the inner city areas that they are targeting.The 31 city challenge winners are forecasting, over five years, 70, 000 new or improved dwellings ; 91,000 new jobs being created ; the improvement and reclamation of 2,831 hectares of land ; more than 3 million sq m of new and improved business and commercial space and 7, 000 new business start-ups. They anticipate bringing in more than £3, 000 million of private sector investment. That is a huge task and those projects alone will make a very big difference to large areas of our inner cities. I am sure that that will be as welcome to the Opposition as it is to me.
Great cities are not built on public grants alone. The period of urban expansion in the Victorian era saw the erection of some great municipal buildings, but mostly the architectural and commercial fabric of the city came from vigorous and competitive private enterprise. The era of maximum expansion of the railroads came in a period of private capital provision. All the canals, all the main railway lines and many of the original turnpikes were built using private money. The comely inheritance of red brick warehouses, private quays and Victorian suburban villas showed the vigour of the private sector, organised within a planning and public utility framework set out by central and municipal government.
Partnership unleashes a variety of decision makers and a variety of tastes, styles and approaches. Variety is important to the architectural, cultural and street life of urban England. Just how drab Government and local government patronage in London can be is seen in the construction of the concrete festival hall, the Marsham street towers and the tower blocks of the east end. In contrast, how lively are the colours, shapes and forms of many of the new docklands developments on the Isle of Dogs and in Surrey Quays and Wapping, as the private sector has unleashed new architectural talent. Two weeks ago, a new UDC began its life in Plymouth. The public sector brings organisational skills, planning, former Ministry of Defence land and the fine collection of buildings of the Royal William yard. Today, I announced two further appointments to the UDC board, making a total so far of nine directors--five from the local authorities and four representing industry, commerce and other interests. The chief executive post has been advertised and the chairman will be making the appointment shortly.
I want the private sector to bring forward the money and the ideas to create cafes, restaurants, pubs, hotels, small business workshops and offices, where before the Royal Navy victualled her ships. In the dying days of naval occupation, the Royal William yard lost some of its lustre. It was closed off from the people of Plymouth and it became a sad outrider overlooking the Sound. With the right partnership of Government, the city council and the private sector, this decade will see the renaissance of the Royal William yard, its return to the people of Plymouth for their use and the creation of a new centre of enterprise,
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jobs and prosperity. Plymouth is most definitely open for business. I now want the private sector to come forward with its ideas and its money.Such partnerships are already working in many other parts of the country. In Manchester, public-private partnership is redeveloping Victoria station, and £35 million of Government money in the form of city grant will provide the Olympic arena. It will generate almost £200 million of private sector capital in the associated commercial, retail and leisure development, offering a five-star hotel, cinema, substantial office accommodation and other facilities.
Mr. Henderson : I understand that the Minister is proud of some developments in certain parts of the country, but does he accept that the way in which the Canary Wharf project in the east end of London was put together, and the Government's action in ignoring the advice of the local authorities and local people, made a major contribution to that scheme's failure? That failure is reflected in the fact that only 15 per cent. of Canary Wharf is occupied.
Mr. Redwood : Sometimes, risks are run that take time to come right. If the hon. Gentleman and I were to return to Canary Wharf in five or 10 years, we should see a flourishing and successful development, with many more tenants and businesses. I hope that the hon. Gentleman joins me in wishing those involved every success in letting that space and in developing more businesses to fill it. That will mean an even more flourishing and enterprising London and City of London economy.
Under the partnership envisaged for the Manchester concert hall site, public money could build the concert hall if the private sector could construct the offices and other facilities to complete the scheme.
At the heart of the Manchester Olympic bid is a further bold regeneration project. Many facilities will be constructed on the Eastlands site--an old industrial area in need of attention. The private sector will be harnessed to provide hotel spaces, car parks and much of the housing. There will be a lasting monument to the Olympics and facilities for the continued enjoyment of Manchester and her people.
Of more immediate interest to the hon. Member for Newcastle upon Tyne, North, the partnership on Teesside and Tyneside has taken off through the work of the urban development corporations. They successfully transformed the Tees and Tyne from rundown, derelict areas into serious locations attracting new businesses from England and around the world. The waterfront by the Tyne bridge is being completely reconstructed and the new business park has several leading companies as its tenants. New houses, new waterside facilities and a new university are all rising from the old mudflats and rundown land alongside the two great rivers of the north-east. For partnership to flourish, local and national government need to be more responsive and alert to opportunities. The private sector needs more courage and confidence after a bruising recession, and a willingness to respond to the new climate. To the private business I say, now get ready to run the risks. To the Government I say, let us make sure that nothing that we do locally or nationally impedes enterprise, success and regeneration-- for the wind is at last set fair for prosperity.
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10.2 amMr. Doug Henderson (Newcastle upon Tyne, North) : I welcome this debate, initiated by the Government, on the provision of public services, which Opposition Members believe is a crucial part of our way of life throughout the country.
The Government claim that changing the balance between the public and private provision of local authority services is all about the delivery of those services. They have systematically made that point over a long time, and it was repeated by the Minister this morning. The Government claim that their approach to further education, schools, economic development systems, residential provision and contracted services is all about the delivery of efficient services. The Government do not need me to remind them that their actions over the past 14 years have not been about the delivery of local government services.
I suggest that it has been the Government's motive all along, contrary to the Minister's statements this morning, to dismantle local government service, curtail local democracy and undermine public confidence in local government. The Government know that changing the balance is not about delivery but about centralising power in Whitehall. They know that removing local authority responsibility for further education and handing it over to self-perpetuating boards with funding controlled by a central Government quango is not about the delivery of service.
The Government know that taking economic development and planning powers from local authorities and handing them to unelected boards with funding controlled by central Government is not about the delivery of service. They know also that changing social security rules to give an unfair advantage to private residential homes, which has led to the closure of local authority homes, is not about the delivery of service. The Government know that forcing local authorities to dismantle essential services and to hand them over to private contractors, who often then cut staff pay and conditions, is not about the delivery of service. They know that their latest idea of taking away the limited responsibility that local authorities have in respect of police facilities is not about the delivery of police facilities.
Mr. Redwood : Can the hon. Gentleman explain why senior Labour councillors come every year to see the holder of my office or the Secretary of State for the Environment to say that in the ensuing year they need considerably more money to deal with all the extra responsibilities that Parliament and the Government have asked them to adopt? How does that square with care in the community, environmental and other measures that the Government have added to local government responsibilities in the past? If the hon. Gentleman's thesis is correct and local authorities have fewer responsibilities, why do councillors argue that they need more money to meet extra responsibilities?
Mr. Henderson : The Minister does not need me to answer that question because he knows the answer himself. If there is any economic growth over a period of time--and even under a Conservative Government there has been some, though not as much as in the 1970s--there must also be growth in public sector expenditure. Local authority leaders such as Jeremy Beecham, on my own council, have
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been knocking on the Minister's door because the damage done--as in Tyneside and Newcastle--by Conservative policies over the past 10 years has produced many more calls on local government to ameliorae with the remark made by Jeremy Beecham in the Municipal Journal in May 1992 that"compulsory competitive tendering has brought some cost effectiveness and genuine saving which might not otherwise have been achieved"?
Mr. Henderson : It will be better for the debate if I deal with the hon. Gentleman's question at the appropriate point in my speech. If I fail to do so, perhaps he will remind me of his question. Government actions in taking power away from local authorities related to the provision of services and not to their delivery. I ask the hon. Gentleman to join me in expressing concern at the proliferation of quangos that have been established throughout the country to administer public services. In a democracy, the people best placed to judge the needs of a community and whether those needs are met are those elected by the community and who are accountable to it, yet democracy has been offended by an avalanche of public sector appointments.
In my district of Tyneside, it is well known that the same unelected people are often given four of five quango appointments on non-elected public boards. It is often said that many local Tory worthies on Tyneside have more appointments on unelected boards than there are air ticket promises in a Hoover salesman's pocket. The Government know that few of their actions, whether establishing unelected public boards or contracting out public services, are ultimately about delivery. If the Government are honest, they should admit that all such moves challenge the concept that community provision has validity and local people have a right and ability to determine the level and nature of the services that they want. If the Government have any honesty, they will admit that those measures during the past 14 years of Tory government have been a cynical and systematic strategy to break up the power of, and services provided by, local authorities.
Will not the Government admit that the reason that they begrudge community provision is that, in many cases, it means more money for the ordinary, vast mass of people in this country than for the very rich? The Government find that inconsistent with the philosophy of "Put yourself first" in Tory Britain. Are not the Conservatives frightened of local democracy? They believe that it is a highly dangerous counterforce to central Government control, as it allows local people to be responsible for the policies in their communities. That policy often poses a direct challenge to both the position and views of Tory central Government.
The Minister said that he now felt more sympathetic towards local government. He recently issued a press release from his Department--on 25 March--containing the following welcome comment :
"Local Government is not just in the business of providing services. It should also be a natural leader of local communities." Opposition Members would have no difficulty in supporting those sentiments.
Earlier this morning, the Minister said that he liked to refer to the 1970s and drew some comparisons between
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now and the 1970s, when his writings about local authorities and local authority provision were prolific. I am pleased to remind the House of what the Minister said about local authorities when he was a councillor in Oxfordshire in 1977, and pleased that the Government welcome further references to the 1970s. Writing in the "National Westminster Bank Review" in February 1977, he said :"It would be quite possible to repeal community land legislation, to put an end to structure planning, to cease providing public recreational facilities, to cease policing trading standards and to abolish a whole range of local authority services Radical reform"-- The Minister has a reputation as a radical--
"would include the cessation of all public housing and a return to market place decisions."
Mr. Piers Merchant (Beckenham) indicated assent.
Mr. Henderson : I see that those comments have the approval of some of the Minister's Conservative colleagues. The Minister was not content with those remarks, because the review continued : "the welter of corn- dolly making courses and swimming pools"-- contrary to what he said this morning--
"are no longer feasible in the new financial climate."
Like me, the House may find it interesting to compare those views with those that the Minister now expresses. It may be helpful for the Minister to clarify his position. Is he now saying that he was right in 1977 when he said that it was possible to repeal community land legislation, end structure planning, cease providing recreational facilities, cease trading standards, cut out vocational evening classes, close swimming pools and abolish public housing? Is he saying that he was right then and is wrong now?
Mr. Redwood : Some of my words were prophetic because when the Conservative Government came into office they scrapped community land legislation, which was a tax on success and regeneration. The Conservative Government got rid of two-tier planning in London, which was an unnecessary and burdensome cost. In the conditions of 1976-77, when the article was written, the country was bankrupt thanks to the Labour Government, which meant pulling in our horns over some desirable schemes. Now that we have had many years of Conservative prosperity, we can take a more relaxed view of some of those matters.
Mr. Henderson : I do not know how the Minister has the gall to say that the country was bankrupt--
Mr. Tony Banks (Newham, North-West) : We paid it all back.
Madam Deputy Speaker (Dame Janet Fookes) : Order. Sedentary observations, particularly from the Front Bench, are to be deplored.
Mr. Henderson : I do not know how the Minister has the gall to say that the country was bankrupt in 1977 when unemployment was a third of what it is today, there was growth and the social fabric of our country was in much better health than it is today.
Is the Minister saying that he was right then and is wrong now, or is he saying that everything that he said then was wrong and the action that flowed from it,
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providing the philosophical base of Tory policy in the 1980s, was wrong? Is he saying that he now believes in local government and that the policies of the Conservative Government of the 1980s were at best inappropriate and, more likely, damaging to our British way of life? What is his real view of and honest position on local government and the provision of local government services? I am happy to give way to the Minister if he wishes to reply.On the issue of the provision of resources for local authority demands in the current year, the Secretary of State for the Environment said on 26 November 1992 that
"provided that local authorities manage their resources efficiently, they should be able to maintain the full range of services they provide."--[ Official Report, 26 November 1992 ; Vol. 214, c. 1011.] There are now clearly cuts in services and jobs in many parts of the country as a result of the restrictions in the budget settlement. There are also cuts in services and job losses in many
Conservative-controlled authorities.
Does the Minister agree with his boss, the Secretary of State? If he does, what is he saying to those Conservative-controlled authorities? What will he say to his hon. Friend the Parliamentary Under-Secretary of State for the Environment about Barnet council, which faces a £7 million cut, and where a residential home has been closed and a day nursery has been threatened with closure? Is the Minister saying that what is happening in Barnet has everything to do with delivery? Is he saying that Barnet council is inefficient? What is he saying to Enfield council, a Tory-controlled authority in north London, in which his hon. Friend the Member for Chipping Barnet (Mr. Chapman) may be interested? That council faces a £10.7 million cut, 400 jobs have gone, the discretionary award scheme for students is being threatened, and the youth service is being threatened with cuts. Is the Minister saying that Enfield council is inefficient and that that is why it finds itself in difficulties? What is the Minister saying to Conservative-controlled Castle Point council, which has been capped? Is he saying that it has been capped because it is inefficient? If he is not saying that, does he accept that his right hon. and learned Friend the Secretary of State misled the House when he made his statement last November?
What would the Minister say to Bill Dixon-Smith, the Conservative leader of the Association of County Councils, who said on the BBC television programme, "On the Record", on a Sunday a few weeks ago : "Because of the capping regime, local government no longer has any room to manoeuvre. In effect, even the level of the Council Tax is also set by the centre. As I believe in independent local government, that is wrong. So in an absolute sense it must and always will be wrong and personally I will always fight against it.
The man who pays the piper calls the tune. The Government is paying up all the money, they say we have an absolute right to say what should happen'.
Now I find that obnoxious. The purpose of local government is to judge what is necessary locally and do it. But at the moment we don't have the independence I think we ought to have."
Does the Minister agree that, because of the capping regime, local government no longer has any room to manoeuvre, as Mr. Dixon-Smith, the Conservative leader of the Association of County Councils, says? Does he agree that local councillors are better placed to judge what is necessary locally? Does he understand why Mr. Dixon-Smith finds it obnoxious that central Government believe that they have the absolute right to say what should happen?
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The Prime Minister said at the Tory local government conference that an end must be put to wrangling between central and local government and that local government should be left to get on with the job. The Minister has made similar comments in recent weeks. Does he recognise that those who face cuts in services in communities throughout the country and those who are either threatened with the loss of, or who have already lost, their jobs in councils throughout the country--perhaps people in Barnet and Enfield--are aware, as Mr. Dixon-Smith seems to be aware, that there is a huge gap between the Government's rhetoric, the Prime Minister's rhetoric, the Secretary of State for the Environment's rhetoric and the Minister's own rhetoric and what is actually happening in councils throughout the country? Does the Minister agree that if that gap is to be narrowed, and that if conciliation is to be genuine, a major review of local government financial structures is necessary?Mr. Redwood : If the hon. Gentleman had an increase of 3.7 per cent. in the current year, would he be plausible if he went round saying that he had had a cut? Local government has had a 3.7 per cent. increase in respect of business rates and grants from the centre.
Mr. Henderson : The Minister and I have had this argument before.
Mr. John Sykes (Scarborough) : The hon. Gentleman has lost the argument.
Mr. Henderson : No ; the Minister has lost the argument. It has been shown clearly that the figure of 3.7 per cent. is an accountancy figure, a notional figure. The real increase in cash resources between what local government spent last year, based on capping regulations imposed by a Conservative Government, and what local government needs to spend this year to stay within the law is very much lower than 3.7 per cent. Independent sources have estimated it to be a 1 per cent. increase in cash resources at a time when inflation is about 3 per cent. That is clearly a reduction in real resources.
Does the Minister agree that a fundamental review of the standard spending assessment system is urgently needed if any sense of equity among the competing claims for resources is to be restored, so that we do not end up in the ridiculous position whereby Huntingdon--the Prime Minister's area-- is considered to be more socially deprived than Chester-le-Street? Anybody who took a walk from the railway station to the local hotel in those two places would immediately observe that that is not the case.
Does the Minister also agree that capping regulations should be changed now in order to give more democracy to local authorities and that there would then be a need to remove those capping regulations completely in the next financial round of financial settlements in the autumn statement?
I am not here this morning just to outline where I think that the Government have got things wrong in recent months and during the past 14 years. Conservative Members will be pleased to hear that I am also here to outline Labour's position on a number of these issues. I shall return to the point that was raised earlier by the hon. Member for Teignbridge (Mr. Nicholls).
The Opposition believe that if local democracy means anything--as the Minister is beginning to suggest he is
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