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towards housing expenditure through the rate support grant. We will be consulting the local authority associations, but the main elements of the new system will be an assessment of what each authority needs to spend on management, repairs and debt service ; and an assumption, as at present, about the amount of each authority's rent income. The subsidy, from the taxpayers, will be paid to meet the difference between the assessed need to spend and the notional rental income. Efficient authorities will be able to balance the ring-fenced account and provide a good standard of service at a reasonable rent. But inefficiency, rent arrears and waste will not be subsidised by the national taxpayer or the community charge payer. In answer to the hon. Member for the City of Durham (Mr. Steinberg), where the rent income exceeds the costs, the subsidy will be reduced by a corresponding amount. Therefore, there will be no gainers and no losers. Where there is a loss on the housing revenue account, the taxpayers will make up the difference ; where there is a surplus, the taxpayers will take the credit. It is perfectly fair and balanced. Like its predecessors, the new subsidy must contain a mechanism for affecting rents. Therefore, I propose to say a few words about rents, if only to stop the Opposition claiming that we are about to double or treble council house rents. If people believed that, the result would be a doubling or trebling of right-to-buy sales. I am sure that the hon. Gentleman would want to avoid anything as democratic as that. However, it is not true.

Mr. Tony Marlow (Northampton, North) : My right hon. Friend is well aware of the fact that some councils have a very bad reputation for collecting rents. If they do not collect those rents, they have to get the money from somewhere. My right hon. Friend says that it will not come from the general taxpayer. I presume that it will not come from the general community charge payer, so is it going to come from the other rent payers within that local authority area?

Mr. Ridley : Yes.

Mr. John Fraser (Norwood) : People complain that some local authorities have very large rent arrears. Does the Secretary of State appreciate that some local authorities have huge rent arrears which are probably irrecoverable? One of the difficulties of rate capping and penalties is that, if local authorities write off irrecoverable rent arrears, as any commercial business would do, that counts as expenditure. If the Secretary of State presses ahead with his reforms, would it not be right to have an amnesty for irrecoverable rent arrears and to start with a clean slate?

Mr. Ridley : The hon. Gentleman's point hardly arises from the Bill, but some Labour authorities in very difficult parts of London have remarkably good records in avoiding rent arrears, while others have equally bad records. It is a question of management and councils could make great improvements up to the level of the best. The way in which the power in the Bill is designed gives them an incentive to do so. As for the allowances made for

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irretrievable rent arrears in the process of rate limitation, the hon. Gentleman should await the final details of our decision on that.

Mr. Nicholas Bennett : Does my right hon. Friend agree that the councillors' code of conduct should include recommendations about councillors who owe very large sums in rent and rates arrears? The vice- chairman of the Lambeth borough housing committee--the hon. Member for Norwood's own borough--owes more than £2,000 in rent and rate arrears, having collected £28,000 in council allowance.

Mr. Ridley : Such things are most regrettable, but I have to remind my hon. Friend that hon. Members have owed similar amounts of money to the Refreshment Department.

The present pattern of council house rents has no logical justification. In the first place, much council stock was built many years ago, when costs were low. Under present practice, councils carry their properties on their books only at the cost of servicing their historic debts. Those whose rents cover only historic debt charges plus maintenance are keeping rents unrealistically low. Rents also differ between councils according to their political prejudices, with differing subsidies paid from the rates. Rents ought to have some regard to the size and quality of a house or flat, to the local environment and so on. Some authorities already allow for that in setting rents between dwellings, but others pay far too little attention to it.

Mr. Tony Banks (Newham, North-West) : Will the Secretary of State give way?

Mr. Ridley : I shall give way to the hon. Gentleman when I have finished this point.

The results of those muddled arrangements are no longer acceptable. People cannot make sensible judgments about where to live, or in what tenure sector. Where the resultant rents are low, they have been yielding insufficient resources to provide for repairs, replacement and improvement.

The Bill will take the anomalies out of the present arrangements. For example, since we published our proposals last summer, we have consistently said that in setting council rents more account should be taken of what a property is worth.

Mr. Banks rose--

Mr. Ridley : We are not talking about sudden massive rent increases ; we are talking about rents which progressively reflect more closely the relative worth of different council houses, without hidden subsidies from the rates or from a system of accounting which bears no relationship to the real world. My proposals would mean that, over time, there would be a gradual elimination of the wide variation in rents between neighbouring authorities, which has more to do with history or political opportunism than with the efficient provision of a housing service. Rents will begin to move towards a reflection of the varying costs of housing--in terms of size and quality, and of amenity.

Those authorities which have already followed sensible rent policies will not be greatly affected by these arrangements. The result will be wider choice, fairer competition and a better, more accountable service to council tenants.

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Mr. Tony Banks rose--

Mr. Ridley : I said that I would give way to the hon. Gentleman.

Mr. Banks : I thought that the Secretary of State was going to plunge on to the end of his speech. May I bring him back to the point that people have lived on certain estates for so many years that they have covered the historic costs of those estates? Will they now be able to live there free, since they have already paid for the places in which they live? The Secretary of State said that there will be a move to market rents over a period of time. What period of time is he talking about?

Mr. Ridley : First, I hope that the hon. Gentleman has advised such people that they should have exercised the right to buy and that they can still do so, thereby avoiding the trap of paying rent for a lifetime and ending up owning nothing.

Secondly--what was the hon. Gentleman's second point?

Mr. Banks : How long does the Secretary of State envisage it will be before we move towards market rents?

Mr. Ridley : I never said that we were moving towards market rents. I said that we were moving towards a closer relationship with a property's value. That is a very different matter, as I made quite clear. If the hon. Gentleman had listened instead of jumping up and down, he would have heard that I carefully avoided any reference to market rents.

The last major reform in the Bill is the reform of the system of help that is provided for private owners and tenants in poor-condition property. This occurs in parts VII and VIII, together with the clauses in part IX and schedule 8.

I am delighted that we have increased home ownership to more than two thirds of all households. We now need to concentrate our efforts and the sizeable sums involved on owners who cannot afford to put their properties right. It is a bad use of scarce resources to assist people who can improve their houses without assistance. Resources should be targeted on the properties that are unfit and on the people who cannot afford the cost of essential work.

The Bill provides for a new basic standard of fitness. If a property falls below that standard on any single item, it will be considered unfit and a local authority have have a duty to act on it either by renovation or clearance. We intend to amend the Bill so that, where clearance is the reasonable course, market value compensation will be available to those displaced. Where renovation is preferred, local authorities will be required to see that the property is brought up to standard, often with grant aid but sometimes without it, if the owner or tenant can afford to do so. The Bill provides for help with a range of other types of work designed to prevent a slide into serious disrepair or to make conditions more comfortable for the occupant. That help will be discretionary, and grant will again be subject to a test of the owner's resources.

This will enable us to give more generous help to those least able to afford the costs of necessary work--not just people on income support or housing benefit, but those on higher incomes too. Local authorities will also be empowered to provide and subsidise agency services that assist elderly and lower income households.

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Mr. John Hannam (Exeter) : Will my right hon. Friend confirm that he has reversed the proposition in the 1987 consultation document, which was that owners of properties being adapted for disabled people should not be subject to a resource test? He now proposes that they should. Will he reconsider the matter? I hope that he will accept that adapting houses for disabled people does not necessarily increase their value, as ordinary adaptations might. If the owners of such properties were subjected to a means test, that would run counter to the general care-in-the-community and independent living proposals and adversely affect disabled people.

Mr. Ridley : I should not like to misinform my hon. Friend, and I would prefer to ask my right hon. Friend the Minister for Local Government to answer that point properly in his wind-up speech. I should hate to give the wrong answer.

We intend to introduce amendments at an early stage to enable authorities to provide three other important variants on the renovation grants provided in part VIII. They will provide for mandatory and discretionary grants to assist people who are disabled with adaptations to their homes ; an entirely new minor works grant that will enable local authorities to fund insulation work and other minor works of repair and improvement that might enable an elderly person to remain in his or her home ; and support for owners of houses in multiple occupation and the common parts of mansion blocks.

A more concerted effort is needed to improve housing where whole areas are run down. Part VII of the Bill rationalises the existing machinery for promoting area improvements. We shall introduce, again on amendment, measures to enable authorities to repair and improve whole groups or terraces of houses, based on the enveloping and block repair schemes that have had such a beneficial effect in many areas. The rest of the Bill contains miscellaneous provisions--none of great significance. That also goes for clause 124, which is the enabling power for my right hon. Friend the Minister for the Arts to authorise library authorities to charge for certain facilities, while protecting the free lending of books. We do not intend to let local authorities extend the use of charges to other than a few minor services, so Opposition Members can relax.

Mr. Marlow : Will my right hon. Friend give way?

Mr. Ridley : For the last time.

Mr. Marlow : My right hon. Friend is aware of a significant problem in local government. He also said that this was the last Bill that he would bring forward. He will be aware that the RSPCA has highlighted the problem of stray dogs and the increasing problems of filth and disease that they cause in our environment. Will my right hon. Friend give the House an undertaking that he will bring forward measures--if not in the Bill, by another means--to enable local authorities to tackle this seething pestilence now affecting our urban areas in particular?

Mr. Ridley : I did not say that this was the last Bill ever. I said that it completes the reforms that we set out at the beginning of this Parliament. I note what my hon. Friend says about the menace of stray and dirty dogs and I share his extreme concern. However, I do not think that the matter can be included in the Bill, nor am I clear what

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legislative measure is required. The question is what to do about the menace--there is no difference between us as to its existence. Mr. Fraser rose --

Mr. Ridley : I said that I had given way for the last time. I must continue.

The Bill completes the framework for local government into the 1990s and beyond. Accountability will be enhanced, efficiency improved and the available public sector resources targeted where they can be of greatest benefit. Already, there are encouraging signs that local authorities are responding to the new competitive era, tackling restrictive practices and bringing their services into line with what their customers and electors want. The Bill will give further encouragement to the progressive elements in local government that are reforming and regenerating it from within. I commend it to the House.

5.7 pm

Dr. John Cunningham (Copeland) : At least I can begin by agreeing with the Secretary of State on one point--that this is the 50th local government Bill in a decade of Conservative Government. That in itself is an admission of the Government's failure to get their local government policies right. Presumably, the Bill comes to the House on the principle, "If at first you don't succeed, try, try again." In presenting those 50 Bills, Conservative Secretaries of State have presented at least 50 different views--not only to Parliament but to the people of this country-- on how to tackle some of the most deep-seated problems in our urban communities and rural areas. The fact that, after a decade of Conservative Government, we still have those problems shows the slow learning abilities of successive Conservative Ministers. The Bill has all the hallmarks of its successors, or rather predecessors-- [Interruption.] --and its successors too, no doubt. It contains the flawed, partial and dogmatic judgments of the Secretary of State. The Government have reached their half century of local government Bills without any sense of celebration in local government--in fact, quite the reverse. These measures are the latest in a major series of attacks on the freedom, the flexibility and the democratic accountability of local government.

The Bill is a ragbag of bureaucratic, nitpicking, central controls, the principle theme of which is, yet again, to give the Secretary of State further powers to impose his flawed judgments on local communities and their elected councils. The Bill incorporates a series of disgraceful attacks on specific groups in the community--on council tenants, whom it proposes to tax, on first-time home buyers and on users of community services. The proposals are intended to force up rents and end schemes for assistance to first-time home buyers at a time when they are at their most vulnerable. The Bill gives the Secretary of State wide-ranging powers, despite what he has said today, to impose charges for local authority services. It even contains an attack on the democratic rights of thousands of local government staff. Council house tenants will be forced to subsidise the poll tax and housing benefit. That is the implication of the ring-fencing of housing revenue

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accounts. The Government intend to force the less well-off in society to subsidise the least well-off, and to subsidise the very well-off, too.

The height of a housing and homelessness crisis is not the time to announce restrictions on the availability of home improvement grants. Many families hoping or planning to modernise and improve their homes will have their hopes crushed by these proposals. The promises and assurances of four successive Secretaries of State about the freedom of councils to use capital receipts from the sales of their own assets are reneged on by these proposals. The enforced repayment of councils' borrowing will mean a major loss of capital investment opportunities to provide housing, economic development, and recreational and leisure facilities.

There are further proposals to restrict the freedom of councils to promote local investment and economic development. The skills and ingenuity of the City of London are to be denied to local government, although they are freely used for the rationalisation of industry and commerce with consequent job losses. They are allowed in that application but not to help local authorities to be more effective in tackling local problems.

There is even a proposal in this legislation to allow the Secretary of State to create a political vetting office in Whitehall in respect of the activities of local government officers. The message to local electors in county council elections is : "Don't vote for a Conservative party intent on undermining and destroying local democracy and creating further financial burdens for those people who can least afford them."

Mr. David Nicholson (Taunton) : Would the hon. Gentleman describe the Widdicombe report, which the Bill principally implements, as undermining local democracy?

Dr. Cunningham : I am coming to that very point, and I hope the hon. Gentleman will listen carefully.

The Secretary of State began by trying to sell the Bill as a solution to, and indeed an attack on, so-called twin-tracking and other alleged abuses at town halls, and as an effort to make local government more accountable to local people, but in most of its provisions the Bill does exactly the opposite. It increases Government control and gives the Secretary of State wide powers to use regulations not in the Bill, rather than primary legislation, to make local government toe central Government lines regardless of local people's preferences. Those are the principles running through the Bill.

The Secretary of State says that the legislation will stop what he and others have described as "jobs for the boys". Let us examine what the Widdicombe inquiry, which the Opposition welcomed when it was established, actually had to say about these matters. That is the only hard evidence on which to base any conclusion. The Widdicombe committee said :

"Local authority employees therefore are not significantly over-represented among councillors."

In fact, it is an attack on the civil liberties of thousands of council employees to support the proposals in this Bill. Not only will they be banned from serving as councillors on any local authority, but they will be banned from involvement in a range of political activities to be decided by the Secretary of State by regulation.

It is not just a matter of saying that people cannot stand for office. They may also be prevented from holding office in political parties, commenting publicly on matters of

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party political controversy, canvassing in local elections, and other activities. Moreover, the politically restricted posts will not stop at chief executives, chief officers and their deputies, for which there is a case--anyone earning £13,500 or more per year will be caught by the proposals.

Mr. Skinner : Does my hon. Friend agree that double standards are being operated by the Tory Government and their supporters, who will undoubtedly file into the Lobby tonight to support this Bill although more than 150 Tory Back Benchers have moonlighting jobs as well as being Members of Parliament earning £24,000 per year? The right hon. Member for Chingford (Mr. Tebbit), with four extra jobs, comes readily to mind.

Mr. Tony Banks : Though not regularly to the House.

Mr. Skinner : It is a scandal that people who are making money on the side are telling those in local government that they cannot democratically serve the electors in their area because they have a job with another local authority? If the Government want that to apply to people in local government, why do they not apply it to their own Back Benchers?

Dr. Cunningham : My hon. Friend the Member for Bolsover (Mr. Skinner) is right. The Bill is replete with proposals which show the two- faced nature of the Government in these matters. The Government will say that people can apply to be exempted from these restrictions and the Bill says that the Secretary of State may appoint a person to consider such applications and appeals, but it is not mandatory for him to do so. As drafted, the Bill will give one person--the Secretary of State--power to remove the civil liberties and democratic rights of a wide range of local government workers. It diminishes rather than enhances local democracy.

Mr. John Maples (Lewisham, West) : The hon. Member is being somewhat disingenuous. What happens is not that someone who is a local government officer decides to get elected to a council somewhere else and the Bill stops him what happens is that people are elected to one council and then given jobs by another council to enable them to conduct their politics for free.

Dr. Cunningham : That is not what the evidence in the Widdicombe report showed. It is obvious, I hope, that people employed in local government will bring their experience to bear on matters of local government policy in their work as councillors, but that is equally true for other people who are allowed to be councillors. Farmers bring their experience and interests to bear, as do builders, industrialists, architects, lawyers and estate agents, to name just some of the people with working backgrounds which might be thought, like local government itself, to raise conflicts of interest. In the Labour party's evidence to Widdicombe, we recognised that there was a level at which inescapable conflicts would arise. We accepted that that was so, and we said that we thought it inadvisable for people at the level of chief officer and above to be councillors in neighbouring authorities. The proposals in the Bill go way beyond that and way beyond the conclusions that Widdicombe reached.

The Minister for Local Government (Mr. John Selwyn Gummer) : I will put a very simple case. If the hon. Gentleman, like me, had children at school in the state

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and wanted to ask advice from a local government officer about the education of his children, would he be entirely happy if that local government officer was a well-known, Right-wing, Conservative memberof another local council whose views on education were deeply offensive to the hon. Gentleman? Surely any ratepayer has the right to believe that when he consults a local government officer he consults an independent person and not somebody actively involved inpolitics. Dr. Cunningham : I have had the experience that the Minister described, but it was on the other side of the political spectrum. I did not object to the fact that I was advised about education by someone who was a prominent member of another political party. Why should I? We are supposed to be living in a plural, democratic society.

The Widdicombe report was published in June 1986. Paragraph 6.29 on page 111 says :

"Local authority employees therefore are not significantly over-represented among councillors."

Paragraph 6.33 says :

"We believe that senior officers should not be politically active, and as a consequence should not be councillors. Accordingly we shall be recommending that senior officers should be statutorily disqualified from being councillors".

The proposals, however, do not apply to senior officers. A local government employee who is earning as little as £13,500 cannot be described these days as a senior officer. The proposals apply to the middle and junior ranks of local government administration. Ministers know that very well indeed.

Mr. Tony Banks : As my hon. Friend was asked for an example by the Minister, I will remind him of one not a million miles from the House. When the hon. Member for Hayes and Harlington (Mr. Dicks) was a senior officer of the Greater London council, he was also the chair of a committee of his own council. He was also a Member of Parliament for a time as well as a senior officer of the Greater London council. The Labour party did not make a fuss about that and the Labour Government certainly did not consider introducing legislation to prevent it.

Dr. Cunningham : My hon. Friend is right.

The Government's response, to the Widdicombe report was published in July 1988. In paragraph 5.20 of their response the Government said :

"The Government share, however, the almost universal doubts expressed about the Committee's proposal that the relevant group should be defined as Principal Officer' and above. This level is generally criticised as being too low for a blanket ban on political activity. It would affect some 70,000 staff many of whom, especially those in technical posts, may have little or no contact with members."

That was the Government's response to the Widdicombe report less than a year ago. They said that such a blanket ban was unacceptable, yet they have written exactly that ban into the Bill. What has changed since the Widdicombe committee investigated these matters and reported? In line with that, there were many more critical comments in the Government's response to the Widdicombe report.

Mr. Nicholas Bennett : Will the hon. Gentleman give way?

Dr. Cunningham : No, not for the moment.

I will give a practical example to illustrate what will happen to people. Councillor Simon Oelman is a 28-year-old councillor in Greenwich. He has been a councillor for about three years and he is the

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vice-chairman of the health and environmental services committee. He is an estates officer with Southwark borough council and earns just over £12,000 a year. He is in the £12,000 to £14,000 per year group. His pay rises by approximately four annual increments, so he is not yet paid more than the lower limit in the Bill--but in a couple of years he will be. If he were doing the same job outside London, his pay would come nowhere near that ceiling. That is also nonsense. The Bill will apply differently to officers doing the same work in different authorities, depending on location.

Councillor Oelman is allowed by Southwark 12 days' paid leave per year for council duties. Nine months ago he was a Civil Service executive officer in the Ministry of Agriculture, Fisheries and Food where he was allowed 18 days paid leave and 18 days unpaid leave for his council duties, so he was given better treatment as a Government employee than as a local government employee.

Mr Nicholas Bennett : Will the hon. Gentleman give way?

Dr. Cunningham : No, not at the moment.

What kind of justice is that? What kind of rationale can possibly explain that kind of nonsense? The Secretary of State says that the Bill is necessary. If it is necessary for councillors and local government officials, why was it not necessary when Councillor Oelman worked in the Ministry of Agriculture, Fisheries and Food?

Mr. Richard Holt (Langbaurgh) : I take the hon. Gentleman's argument. Does he therefore disagree with Middlesbrough borough council, whose personnel officer was elected a county councillor and immediately given complete sabbatical leave indefinitely?

Dr. Cunningham : On balance, on most occasions I would far sooner agree with the Labour-controlled Middlesbrough council than with the hon. Gentleman.

Mr. Nicholas Bennett rose

Dr. Cunningham : The Secretary of State's proposals are nonsensical, discriminatory and perverse in their application. The Government are aiming at the wrong target. They should be introducing legislation to encourage more people to offer themselves as candidates for local government service. They should not be discouraging them, as these proposals do.

Mr. Nicholas Bennett : Will the hon. Gentleman give way?

Dr. Cunningham : No.

Hon. Members : Give way.

Dr. Cunningham : No.

Part III deals with economic development. The Bill introduces a specific power to prevent local government from becoming involved in some of the economic development work that it now does in a bid to boost jobs locally, especially in the inner cites and urban areas. The powers outlined in clause 25 seem reasonable at first sight, but again the detail will be left to regulations imposed by the Secretary of State so Parliament will have little, if any, proper time in which to debate and scrutinise the proposals. The Bill treats economic development and local

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authority companies as totally separate issues, despite the efforts of local authority associations of all political convictions to convince the Government otherwise. Desperately needed local jobs often depend on both, and a serious of unanswered questions remain about those aspects of the Bill--as they do about the Secretary of State's proposals regarding capital receipts.

Local authorities are likely to have less than six months to plan for the radical new system to control their capital finance that part IV of the Bill foreshadows. Under the current control system, local authorities are free to spend all their capital receipts, over time, to finance capital expenditure on new building repairs. The only restriction is on the pace at which their capital receipts are spent. Under the new system, however, councils will be forced to use their capital receipts--75 per cent. of housing capital receipts and 50 per cent. of other receipts--to repay loans.

That means that the Government have reneged on the promise given by a previous Secretary of State, that receipts would be available in full, over time, to finance additional capital expenditure. He said :

"The receipts are and will remain the property of local authorities. They can spend them in future years".--[ Official Report, 19 December 1984 ; Vol. 70, c. 308.]

That is what Lord Patrick Jenkin said in December 1984 to the House. That was the commitment that he gave and the promise that he made to local authorities when the controls were introduced. That promise about accumulated receipts was recognised in the Government's 1986 Green Paper "Paying for Local Government". Paragraph 6.40 says :

"Local authorities have been given the assurance that this amount will be available in full over time to justify additional capital expenditure."

That is the kind of promise and commitment that has been given to this House and then ratted on time and again by Conservative Secretaries of State for the Environment.

We even have the bizarre proposal in clause 5 requiring local authorities to appoint a "monitoring officer"--what the Secretary of State, in his press release, called a whistleblower. The press release said :

"The Bill will stop councils appointing political henchmen to key officer posts, whose independence is vital. It also enables Chief Executives to blow the whistle on suspect decisions."

So there is to be a kind of statutory sneak--no doubt a hangover from the Secretary of State's experiences as a fag at Eton.

Mr. Ridley : The hon. Member for Linlithgow (Mr. Dalyell) was my fag at Eton.

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