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10.25 pm

The Minister for Local Government (Mr. John Selwyn Gummer) : I beg to move,

That the draft Rate Limitation (Councils in England) (Prescribed Maximum) (Rates) Order 1989, which was laid before this House on 14th February, be approved.

Mr. Bob Cryer (Bradford, South) : On a point of order, Mr. Speaker. May I draw your attention to the fact that the Order Paper notes :

"The Instrument has not yet been considered by the Select Committee on Statutory Instruments"?

I am happy to tell you that the instrument has been considered by the Committee and that there is nothing in the instrument to which we wish to draw the attention of the House. However, may I draw it to your attention that if there had been, the Committee would not have had time to ask for a memorandum or to take evidence and report to the House? Opposition and Government members of the Committee wanted me to express our deprecation that the order was being taken on the same day that it was being considered by the Committee. Such an arrangement should not be repeated because it hampers the work of the Committee.

Mr. Speaker : Although I understand the hon. Gentleman's concern, I am pleased to hear that the Committee made no objection to the instrument. However, I am sure that members of the Government Front Bench have noted the hon. Gentleman's comments.

Mr. Gummer : Further to that point of order, Mr. Speaker. I apologise to the hon. Gentleman that that was the case. As he knows, this is the last time that this particular format will be used. There are specific legal problems about timing that make this extremely difficult, but I apologise to all members of the Committee that this has happened.

The order specifies rate limits for four of the seven authorities subject to rate capping in 1989-90. It marks the end of the rate-capping process, not only for the recent round, but for ever, for rate capping, of course, is not part of the new system of local government finance we are introducing from April 1990 and the system of charge capping, which we have provided in the new system, is rather different from rate capping both as regards its purpose and its operation.

We introduced rate capping to protect ratepayers of those relatively few authorities which, due to their extravagances and incompetence, had a history of excessive spending--and rate capping has done its job. Gradually, the spending of the worst offenders has been brought down, so that this year we have been faced only with a hard core of seven authorities. We have lost some of our old favourites such as Liverpool and Lambeth, whose spending this year is now only modestly above their grant- related expenditure, or GRE--our needs assessment--although I would certainly not pretend that all is well in those authorities as regards the management of their finances and services.

Even in the case of the seven authorities capped this year, we have made real progress in bringing down their spending. In 1984-85, Greenwich spent at nearly 60 per cent. over GRE. That compares with around 30 per cent. if it spends next year at the level implied by the limit we are

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proposing in the draft order. Camden in 1984 -85 was 85 per cent. over GRE compared with some 19 per cent. for next year, Lewisham nearly 53 per cent. in 1984-85 compared with 15 per cent. next year and Thamesdown 90 per cent. over GRE in 1984-85 compared with 37 per cent. next year. The average overspending of those authorities in 1984- 85 was 69 per cent. Next year it will be a little over 20 per cent. That shows that rate capping has not only benefited ratepayers, but that it has enabled the more moderate and sensible of those authorities to bring their spending under control.

Of course, I accept that some authorities have used creative accounting to camouflage for a time their true level of spending and to put off the day when real reductions have to be made. This, of course, made the reductions all the more painful when they had to be made.

Mr. Peter Shore (Bethnal Green and Stepney) : Simply as a point of information, may I say that I believe that three other local authorities are subjected to rate limitation but are not included in the order because agreement had already been reached with them. Can the Minister give the equivalent figures for their alleged over expenditure of GRE in 1984-85 or for whatever base year he was using, and what that figure is today?

Mr. Gummer : I shall be happy to do so. Although I cannot give those figures now, I shall give them to the right hon. Gentleman later. In all cases, including those that have agreed with the final figures, we have gone into these matters in great detail. I pay tribute to all the authorities that have given information to us, especially the three that have reached agreement with us. Over the last couple of years we have been seeing authorities making real strides in reducing their excessive spending. As to rates, over the years there have been substantial reductions amounting to several hundred million pounds. Next year alone, ratepayers in those seven authorities will be contributing £40 million less than this year, with rate reductions of up to nearly 50 per cent., averaging 11 per cent. overall. I believe the position today is a tribute to the success of the rate capping system over the past five years. Turning to the current round, my right hon. Friend announced last July that he had designated seven authorities for rate limitation. They were budgeting to spend from 13 per cent. to 69 per cent. over their grant-related expenditure. He also informed the seven rate-capped authorities of the expenditure levels that he had determined for them using general principles as required by the statute, and they were given until 14 October to apply for redetermination of their expenditure levels--that is, to seek an increase.

We received five applications and, as ever, examined them carefully. We looked at the individual circumstances of each authority and it was in the light of those circumstances that I took my decisions, which I announced to the House on 19 December. Those decisions had been delegated to me because of my right hon. Friend's visit to China. As hon. Members will recall, I decided in four cases--Greenwich, Hackney, Southwark and Tower Hamlets-- that it would be appropriate to redetermine their expenditure levels at a higher figure. I also decided, as I told the House in December, that given its particular circumstances it would not be appropriate to

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grant Camden any increase in its expenditure level. In each case where I granted some redetermination, I imposed conditions as I am empowered to do under the statute.

I emphasise that the purpose of the conditions is to encourage the authorities concerned to focus on their areas of greatest inefficiency. The problem facing us is not necessarily a party political argument. It is a question of efficiency in the attempt to use the ratepayers' money and the grant in the best possible way. It was against that background that I took my redetermination decisions. These conditions are to help those authorities which, for a variety of historical reasons, have real management problems. In many cases, if there has been poor management over a long period, it is extremely difficult to put the management right. I wanted the authorities to continue the process of putting their house in order and getting their management into shape. Sound management is a prerequisite of any political debate by those authorities about the level of the services that they wish to provide for their communities--[ Hon. Members-- : "What about Westminster?"] Well, if we are talking about Westminster, we are not talking about rate capping because it is a well-run authority that does not charge high rates. What do Opposition Members want to do about Westminster? Do they want to refuse employed people their statutory rights? I am sure they do not.

I see every sign that authorities are viewing the conditions positively. The rigorous self-examination that the conditions necessarily require of the authorities will be to the benefit of all concerned, leading to greater value for money for the ratepayers. We all want that.

Mr. Clive Soley (Hammersmith) : Talking of greater efficiency and better management of ratepayers' money, let us return to Westminster. If ever there was a case for a Minister to step in, it was there. We know that the money was not just what was legally due to the man, but that the council bought silence by an agreement--that is public.

Mr. Gummer : When the hon. Gentleman is willing to say that outside the privilege of the House, I shall listen to him. He knows perfectly well that what he said is not true.

I must return to my narrative of the events behind the order. On 19 December, all seven authorities-- [Interruption.] These are important matters for the authorities concerned. If they want to debate Westminster, no doubt Opposition Members can table a motion to enable them to do so ; however, I am discussing important decisions taken over a long period. Some of us care about them strongly, which is why we redetermined the grant and gave the authorities more money when we thought that that was right. If Opposition Members do not care about Camden, Hackney, Lewisham, Greenwich, Southwark, Tower Hamlets and Thamesdown and prefer to make party -political points, that will be noticed in all those places.

On 19 December all seven authorities were also informed of the rate limits that I proposed for 1989-90. They were given the opportunity, as statute allows, to accept their proposed limit within a specified deadline--by 20 January. In passing, I may tell the hon. Member for Bradford, South, who so courteously raised the point about the Select Committee, that the deadlines make it difficult to offer the Select Committee the courtesy that it deserves. I apologise again to him for that.

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When councils did not accept their proposed limit, it was open to them to make representations for a higher limit. As hon. Members who have been following these matters closely will know, Tower Hamlets accepted the rate limit I had proposed, but the other six authorities did not. They made representations for a higher rate limit. We received a large amount of material from most of these authorities seeking to persuade us that in their particular circumstances we should allow some relaxation of the rate limits.

I had meetings with representatives of Camden, Greenwich and Lewisham ; I had also met Thamesdown and Greenwich councillors earlier in the rate limitation round. Officers from Hackney, Lewisham and Southwark met my officials. All these meetings were frank, but courteous, and my right hon. Friend and I found them of help to us. Indeed, the contact we had with authorities was a measure of the progress we have made in the past few years in tackling extravagance, waste and inefficiency in local government. All the capped authorities-- [Interruption.] It is a little difficult to discuss these councils if Opposition Members want to talk only about Westminster. I should be happy to do that, except that, as the council is not rate capped, I should be out of order if I did. None of the authorities was seeking a confrontation and their dealings with us were restrained and, as I have said, courteous. With Hackney and Southwark we were able to reach agreement on higher limits. So we were left with the four authorities in the draft order--by far the fewest we have had in the five years of rate capping and, as I said earlier, a vindication of its success. But I must not, even on the occasion of such felicitations from both sides, paint too rosy a picture.

These four authorities, and indeed the three authorities with whom we have agreed limits, still have much to do to get themselves on a sound footing. As well as keeping expenditure down, they could do more to get income up. Their council house rents are still generally low compared to those charged by other councils. There are often problems in completing right-to-buy sales. Camden and Lewisham had a backlog of almost 5,000 cases between them at the end of December last year. That means that those who want to buy their homes have not been able to do so, and also that the receipts from those sales are not available to the authorities concerned.

Some authorities continue to maintain considerable and valuable portfolios of surplus land. Opposition Members say that this is unacceptable, but many of them represent areas where Labour councils would be ashamed to have such large backlogs. There is an embarrassment where authorities are not competent in dealing with these matters when compared with other authorities, such as Barking and Dagenham and the way in which it is able to deal with its rent and rates arrears. It is a Labour authority with more than 30,000 houses, yet is able to deal efficiently with the collection of rents and rates. It is difficult to understand why, if that authority can do it, some other authorities seem unable to do so. It cannot be that there is something wrong with it politically or because it is in London ; the reason must be, in the case of many of the rate-capped authorities, that an authority is not running its organisation efficiently enough.

Mr. Bernie Grant (Tottenham) : Does the Minister accept that there is a difference on the question of poverty

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between an outer London borough such as Barking and Dagenham and an inner London borough such as Hackney, because the Minister's own index of deprivation puts Hackney at the very top, whereas Barking and Dagenham is a lot lower than Hackney?

Mr. Gummer : The hon. Gentleman puts that argument, but a comparison between, say, Wandsworth and Southwark shows that the hon. Gentleman would be wrong. Those are both inner London boroughs, one having a reasonably good record in rent and rate arrears and the other a very poor one.

But let me compare Brent with the London borough of Barking and Dagenham, two outer London boroughs. I am speaking from memory, but I recall that Barking and Dagenham has rent arrears in the range of 5 to 6 per cent. whereas Brent has rent and rate arrears amounting to 100 per cent. of each rent roll, or certainly very nearly that. The reason in such cases must be very often that the council officers do not get support from the elected members in dealing with these matters whereas in other authorities they do. This is not a party political matter. Labour-controlled Brent is bad at doing it, and Labour Barking and Dagenham is good at doing it. They ought both to be good at it for the benefit of the ratepayers and those who rent their houses.

Mr. Dennis Skinner (Bolsover) : There is another way of looking at the question of arrears. Does the Minister accept that in 1988 the Chancellor of the Exchequer said that there would be arrears on the balance of payments in Britain of about £4 billion, but at the end of the year they were more than three times higher, at £14 billion?

Mr. Gummer : That does not have much to do with the fact that in Barking and Dagenham the council collects the rents whereas in Brent it does not. It is easier to collect the rents if an example is set by the elected councillors, and the officers know that the councillors will support them in their actions.

Southwark, for example, told us that it was owed about £53 million in total in rent and rates. Hackney has rent and rate arrears of £19 million. The conditions that I have imposed on both of those authorities are designed to address that situation. The remedy is one of more effective collection arrangements, coupled with more realistic accounting should the debts appear no longer likely to be collectable. Such measures would do much to improve the financial position of these authorities.

When authorities in deprived areas--whether they be Labour or Conservative- -despite difficulties, manage to do this properly, it is reasonable for them to ask why others find it impossible. It is necessary to say that it is a matter of competence and not of party politics.

We looked very carefully indeed at the material we received from the four authorities to which the draft order refers, but I have to say that my right hon. Friend remains convinced that the rate limits for these authorities that were proposed in December are reasonable and appropriate in their circumstances. All four authorities are planning to live within their means. Also--and this is truer of some authorities than of others-- they have plans afoot to cut costs in an organised, rather than an ad hoc, way.

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We believe that the best way to ensure that this trend continues is by not allowing any relaxation of the rate limits.

As I have indicated previously, there is an air of realism pervading local government today, and with these limits I am confident that the authorities will continue along the sensible path, on which they have all embarked, of seeking to provide the services their communities need at a cost their communities can afford. But I am afraid that there are still some silly things going on which, although not often significant in financial terms, show that authorities have still not completely learnt the lesson that it is their ratepayers' interests that count--not ideological nit-picking. Lewisham, with all its much-trumpeted cost-cutting and staff reductions-- which I accept it has made--still thought it a priority to appoint an arts adviser at £11,000 a year to advise on locations for municipal sculpture. Greenwich found time to discuss in one meeting having a street named after Ms Deirdre Wood.

As for Camden, its ventures in lesbian propaganda amongst its caretakers may have given many people a good deal of innocent amusement. Less amusing have been Camden's advertisements for a director, direct services, at £40,000 a year, and an assistant director, business management, at £28,000 a year--both dedicated to keeping services in Camden in-house, among them refuse collection and street sweeping, for which Camden council's incompetence is now a byword.

People are being taken on at that price to try to keep services within the local authority when, if ever there were local authorities that needed to seek advice from professionals outside, for the benefit not only of their ratepayers but of everyone else, this is one. After all, bad street sweeping and bad refuse collection affect especially those who are least able to look after themselves. That is why this is a matter of very considerable concern to many of us. Of the assistant director, business management, we learn that "ensuring that essential public services are provided in house is one of the more demanding and rewarding activities in local government today."

It does not seem to me a rewarding and demanding activity to try, for ideological reasons, to retain a particular series of services which, as is obvious to anyone who knows the borough, are not very well run in-house. Would it not be well to see if others could provide them better and more cheaply, giving better value for money? I am sure that that would result in savings and that the money saved could be spent on all sorts of things that most of us realise the ratepayers of Camden would like to have.

Mr. Frank Dobson (Holborn and St. Pancras) : Can the right hon. Gentleman confirm that there are officials employed by his Department and the Department of Health whose task is to further the privatising of services? What is the difference?

Mr. Gummer : I cannot answer for the Department of Health. The purpose of the officials in my Department is to try to ensure that people in local government have a choice. They go out to tender and decide what is best. No, the choice lies in the local authority deciding what is best for the ratepayer. What we are talking about here is the appointment of officials to decide what is best for the

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ratepayer but to make sure, for ideological reasons, that the ratepayer is not getting the choice, because services are provided in-house.

I have to say to the hon. Gentleman, who represents part of Camden, that I hope he will go back and ask people there whether they are entirely satisfied with the street cleaning and the refuse collection. If the first 10 people asked at random agree, I shall be extremely surprised, and I shall certainly withdraw my comments about that matter.

To be completely fair to Camden, I want to point this out : both advertisements emphasise the need for quality services, competitiveness and even entrepreneurial skill--three requirements which are somewhat new in Camden's vocabulary. But the way to give Camden's ratepayers a better deal is simply to put its services out to competition and try to find the best way to deal with them.

Mr. Dobson : Can the Minister tell us the last time the district auditor commended Camden's refuse collection services?

Mr. Gummer : I think that the hon. Gentleman knows that in the decisions about these matters I have to consider as a whole the various information which I receive about Camden. I will tell the hon. Gentleman much more directly. I know very well that if Camden runs a good service it has nothing to fear from going out to competition. It has something to fear only if it runs a bad service. Why does Camden want to employ somebody to make sure that it does not lose the contract? We want competition to ensure that the people of Camden and of all the other boroughs-- [Interruption.] The hon. Member for Bootle (Mr. Roberts) and his views about religion are well known. He is an expert on the subject. [Interruption.] From a seated position, he continues about it.

Mr. Allan Roberts (Bootle) rose --

Mr. Gummer : The hon. Gentleman has been spouting his views on religion from a seated position for some time. The hon. Gentleman must listen to this--

Mr. Allan Roberts rose --

Mr. Gummer : I am not giving way. [Interruption.] There is nothing abusive about that. I am sure that he has very good views about religion.

The three authorities--Camden, Greenwich and Lewisham--have in total budgeted to spend over £2 million on lesbian and gay, women's and race committees in 1988-89. The Government are committed to equal opportunities, but I doubt whether highlighting matters by having a women's committee or a gay and lesbian committee is anything other than expensive and counterproductive. That £2 million could be better spent, even on the very subjects that are supposed to be covered, than on such committees.

Last, but by no means least, I would not want hon. Members to think that I had forgotten Thamesdown. Indeed, one cannot easily forget the Thamesdown councillors after the riveting account in the rate support grant debate on 19 January by my hon. Friend the Member for Swindon (Mr. Coombs) of their "naughty but nice" activities. There was, he said, "money for everything". Rather than cut back on its extravagances, Thamesdown resorted to creative accounting, selling the largest park in the centre of Swindon. All this was to finance every kind of extravagance, including grandiose

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twinning schemes with central American countries. I wonder whether the people of Thamesdown would prefer to own their own park rather than find themselves twinned with parts of Nicaragua.

I return to the draft order. At an individual authority level, the changes in the rates of these four authorities range from a reduction of 16 per cent. in Lewisham to an increase of 11 per cent. in Greenwich. Taken together with the rate limits already accepted by Hackney, Southwark and Tower Hamlets, the rate reduction is equivalent to £40 million.

I believe the rate limits specified in the order to be reasonable and appropriate to the individual authorities concerned in all their circumstances. I believe, too, that the overall result for local ratepayers is good. There is every sign that authorities are buckling down to the task of living within these rate limits. I ask the House to have regard to ratepayers' interests in this final year of rate limitation. I remind hon. Members that many of those who are asked to pay rates are less well off than many for whom the services are provided. We have to remember that many ratepayers find it difficult to pay the very high rates which have been levied in many parts of London. I say that with some feeling, coming from the London borough of Ealing, but the coming of rate limitation has brought down the rates in many authorities. Many authorities have learnt to live within those rate limitations, and many of them have found that it is perfectly possible to provide the necessary services without hitting the ratepayer in an unacceptable way. I commend the order to the House.

10.55 pm

Mr. David Blunkett (Sheffield, Brightside) : I feel a sense of nostalgia this evening, on the fifth occasion of rate orders being laid against authorities. If it were not so late, there would be a great deal that I could say, but I want to put on record that I do not think that this House should sit, except in very unique circumstances, after 10 pm, and, given that the weight of numbers overrides the weight of reason on these occasions, there is little point in trying to persuade Government Members that the rate capping that they have imposed over the last five years has been both futile and unsuccessful.

It has been futile because each action that they have taken has led them inexorably into another turn of the screw and another piece of legislation, and there is no question whatsoever that what has been imposed through rate capping has distorted the making of budgets, the planning of the financial management of authorities, the use of capital resources, and the stretching of ingenuity in a quite unhelpful way in terms of delivering services and improving the lot of those whom we seek to serve.

If I might just go over the history of rate capping, with which I am all too familiar, it was, of course, way back in the early 1980s that the suggestion was made that local authorities' expenditure and rates should be fixed from the centre, a suggestion which is unmatched anywhere else in the world, and which is unjustified financially and politically. We went through with the right hon. Member for Henley (Mr. Heseltine) the performance of putting forward proposals for a referendum, which were then withdrawn on the ground that the electorate might actually vote to spend money and provide services rather than agree with the Government.

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We then came to the rate capping issues of 1984-85 and promises that authorities, if they behaved responsibly and responded to Government demands that services should be reduced and the rates lowered, would actually be treated in a responsible fashion. Tonight we see the results of that : five years of rate capping. The four authorities that we are dealing with tonight find that each Government budget and rate set for them determine that they will be rate capped the following year, because the Government set the criteria. The Government have set the rate for five years, rigged the criteria in the first place, then adjusted it. That is what they did. That resulted in the inevitable. The authorities being debated tonight could not escape from rate capping, whatever they did. Their spending and their rate levels were fixed by the Government and they could not free themselves from that yoke.

Ironically, those authorities which used ingenuity in the first year of rate capping and used means that have since been condemned and outlawed by the Government actually escaped from the second and subsequent years of rate capping. For instance, deferred purchase deals, which have been abused so roundly by the Government, not only ensured that the accepted spending levels were lower because of the recognition of income for that criteria to be applied, and that those authorities which used it effectively escaped from rate capping, but maximised their grant income. A more stupid system one could never have imagined.

Of course, when we changed Secretaries of State, and the present Secretary of State for Education temporarily assumed the mantle of the Department of the Environment, he pronounced, in May 1986, that he found rate capping intellectually indefensible. He did not last more than two months after that. He was moved on to pastures new where he could perform more readily in relation to his prospects. None of us could intellectually accept, justify or defend rate capping, because it cannot be defended. Only the authorities whose budgets were already above a certain level were eligible for rate capping anyway--a neat way of ensuring that very high-rating authorities with a lower spending level would automatically escape. That is why the authority in the Minister's constituency has not been rate capped. Since 1981 Suffolk, Coastal has increased its rate by 218 per cent. and its budget by 132 per cent. Small authorities such as Selby have almost equalled it. Selby has increased its rate by 177 per cent. The City of London, of course, has exceeded the expectations of everyone except those who would have a vote in the area, but do not, with a rate increase of 79 per cent. but an expenditure increase of 180 per cent. Brentwood's expenditure has risen by 322 per cent., which I do not think can be matched anywhere.

Hon. Members may say, "It is not the expenditure level but the amount over grant-related expenditure assessment that determines the rate cap." The present Secretary of State for Northern Ireland had something to say about that when he was Minister of State at the Department of the Environment. On 1 April 1980--a very appropriate date to pronounce on the matter--he said that it was not suggested that grant-related assessment prescribed a specific level of spending for any particular authority. He said that he wanted to make it clear that that was not the intention and that he was seeking to find the fairest way to

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distribute public money to local authorities. It did not take four years to denounce that. In July 1984 the Secretary of State--now Lord Jenkin--summed it up by saying that that was then, and that now was now. In other words, whatever Conservative Members may say, it may not last 24 hours if they feel that the circumstances have changed sufficiently.

Now that we have reached the fifth year, let us examine what is happening to local authorities. Let us take the district of Thamesdown, which has been so roundly abused by the Minister tonight. If its expenditure had been slightly lower in 1984 it would never have been rate capped in the first place, and could have joined the authorities that can spend as much as they like above grant-related expenditure because they do not already fall within the criteria. It could join authorities such as the City of London which have constantly exceeded grant-related expenditure levels--in the case of Brentwood by the enormous figure of 276.7 per cent. The City of London has done so by 99.6 per cent.

I got on to the wrong train on Friday. Instead of going to Southampton I made my way towards Guildford. Luckily I got off at the wonderful junction of Surbiton, but had I gone to Guildford I would have found that its expenditure over GREA was 98 per cent. That seems a peculiar justification for treating certain Labour authorities in hard-pressed urban areas in the way in which they have been treated. When Thamesdown councillors met the Minister on 24 November they put a reasonable case to him, suggesting that the amount allowed to them for poll tax preparation--£164,000--had fallen short by £500,000, their real expenditure for next year being £658,000 on

implementation. The Minister listened carefully and acknowledged that that was a reasonable point. He also acknowledged that it was reasonable to take into account the historic debt of a town that had developed rapidly in the 1960s and 1970s, but when the rate-capping order was laid the case of Thamesdown was ignored.

I do not consider that any of the authorities had a fair and reasonable hearing because they were condemned to rate capping from the beginning as they were unable to avoid meeting the criteria. Given their existing expenditure, the extent of their problems and the fact that those in London have to cope with the preparations for the transfer of ILEA and taking over education, and taking into account the fact that, using the GDP deflator, there has been a cut of more than 17 per cent. in their expenditure, it would not have been unreasonable for the Government to have lifted rate capping completely in the final year before the poll tax and to have allowed local authorities to budget sensibly.

Poll tax was suggested as the antidote to rate capping. The Green Paper "Paying for Local Government" contained no suggestion that there would be poll tax capping. Only when the hon. Member for Sheffield, Hallam (Mr. Patnick) asked a planted question on 28 October 1987 did the Government reveal that they had changed their mind, that the poll tax was not so accountable, responsive and democratic after all and that poll tax capping would have to be introduced.

The hon. Member for Hallam is not here tonight because he has one of the occasional days off that Conservative Members get under their rota system.

Mr. Skinner : Bisques.

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Mr. Blunkett : I would call them beasts rather than bisques, if that is not an unparliamentary term.

The hon. Member for Hallam knows all about rate capping because just after Sheffield was rate capped in 1985, and a tremendous debate took place in the city, just two months after the rate was set there were two local government by-elections. The other two Tories who contested the Broom Hill ward in Sheffield decided to bail out, given the political climate. Both seats fell to the Labour party for the first time in history and in 1988 so did the seat held by the hon. Member for Hallam. That was the democratic verdict of the people of Sheffield on the introduction of rate capping. They will reach the same verdict on the poll tax and poll tax capping.

The Minister should make absolutely clear what criteria will be applied for poll tax capping. How will authorities know whether their expenditure levels and poll tax levels will subject them to the poll tax regime? If they do not know, they cannot plan and will be condemned after the event. They will not have a chance to plan sensibly with financial management that assists the people of their areas, as all the treasurers and members of the Chartered Institute of Public Finance and Accountancy have said for many years. Those are important questions, because we are involved not in a game, but in issues affecting the lives of people who need home helps, want decent education, care about what happens to the under-fives, want to invest in the future of their children and want to live in a decent environment. Everyone wants those things and steps need to be taken to ensure that expenditure is handled fairly, reasonably and competently. Of course, housing rents need to be collected and no one could justify the Minister's figures. But when we compare those figures with the activities in which some Conservative authorities are indulging, the matter is brought into perspective.

It is not just the sale of cemeteries for 15p, or the £1 million handout to the chief executive of Westminster city council ; it is the contempt that authorities such as Westminster show towards the people whom they are supposed to serve. Some Conservatives in local government--for example, Philip Merridale in Hampshire--have bailed out because they have had enough of the abuse, intimidation and degradation that is handed out to them.

A number of local authorities were taken before the district auditor over rate capping. Lambeth and Liverpool were surcharged. Islington still awaits the district auditor's decision. Lambeth--in my view, quite outrageously-- is threatened again, four years later, with a return visit of that kind. If anybody deserved to be taken in front of the district auditor and to be accused of wilful misconduct and the threat of surcharge, it is Lady Porter and her colleagues on Westminster city council.

Mr. Deputy Speaker (Mr. Harold Walker) : Order. I hope that the hon. Gentleman will not stray too far from the terms of the order.

Mr. Blunkett : I accept your judgment, Mr. Deputy Speaker. The sums of money that were allegedly lost because of delayed rate making under the rate-capping regime and the action that was taken by those councillors to defend services bear no comparison with the millions of pounds to which I have just referred.

Let us look to the future. After the turning of the screw, capping, abolition, the Local Government Bill, the poll tax

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and the Local Government and Housing Bill, the Government may now realise that enough is enough. They have introduced 50 Bills that affect local government in one way or another--and if they do not realise that, the electorate will make their views clear. They want to be free to decide for themselves. They want the dead hand of the state to be removed. They want to be able to enjoy diversity, to take advantage of pluralism and to raise money and spend it on services that will benefit them. Those issues will be so important that they will form a major plank in ensuring that once and for all we get rid of the Minister and his colleagues.

11.3 pm

Mr. John Maples (Lewisham, West) : The hon. Member for Sheffield, Brightside (Mr. Blunkett) chose to defend rate-capped authorities in reasonable terms, but he has completely failed to come to grips with what so outrages my hon. Friends and me. It is not that these authorities are choosing to levy high rates to help poor people in their boroughs ; it is the outrageous waste, inefficiency and extraordinarily distorted sense of priorities that they have demonstrated. If the hon. Gentleman cannot come to grips with that fact, it is an amazing reflection on his party's attitude to local government--that it condones some of the matters to which the Minister referred and some of the matters that affect Lewisham.

The best thing about the order for my constituents and me is that it still contains a rate limitation on the London borough of Lewisham. That will be welcomed by the borough's residents. They are intelligent and perceptive people. At least, they were in 1970 and 1983, although they had a lapse in between. It was during the time that they had that lapse that they found that in every year when there was no council election their rates increased by 20 per cent. That happened four or five years in a row, until the rates reached almost astronomical proportions. If they had continued to increase at that rate, rates for the average householder in Lewisham would now be about £1,200 a year. Rate capping has meant that during the last five years rates in Lewisham have remained fairly constant. There is to be a 9 per cent. cut this year, which will be worth between £50 and £60 for each household in the borough.

The Labour party petitioned for a redetermination. It wanted the rates to be increased by 19 per cent., which would have resulted in an additional £100 rates burden on each household. The difference between rate capping and what the council wanted to do is well over £3 a week for the average ratepayer in Lewisham.

We have discovered during the last five years in Lewisham that, despite the prediction that the world would come to an end, the borough has managed to survive within its rate-capped limit and that at last it is beginning to take some of the tough decisions which, if they had been taken some time ago, would have made their financial position now much easier.

I will give some examples of the waste and inefficiency to which I referred and of some of the distorted priorities that we find in rate-capped councils such as Lewisham. In the housing department, a basic function of local government, the rent arrears in Lewisham are £7.5 million, what I thought was an astronomical figure until the Minister mentioned the level of rent arrears in other boroughs such as Brent and Southwark.

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The rate arrears of non-council tenants in Lewisham are also £7.5 million. We have 80 tenants who owe over £3,000 each and one tenant, who has not paid any rent for seven years, now owes £8,500 to the council. We have 132 overseas students each of whom owes over £600. Nobody can suggest that this policy is helping poor, deprived and disadvantaged people in Lewisham.

To continue this saga of horror stories from the housing department, we have plenty of empty properties, but one house has been empty and totally unoccupied for 14 years, since December 1975, even though we have a homeless family problem in Lewisham. We spend £30 million subsidising the rents out of the rates, which is an average of £15 per house. Labour Members know this because we had a public meeting about it and they were surprised to learn that that was the level. The level of subsidy is running at £750 per house.

This is evidence of rank bad management. It is not evidence of an attempt to move resources from the better-off in society to the less well-off. It is no wonder, with that record of bad management, that, even with the money that is spent by the housing department, the tenants are unhappy. They cannot get repairs done, they can never get a transfer and there is a mass of empty houses and a long waiting list of homeless families who want them.

The council is not short of money. It is short of the ability to direct that money in a sensible way. There are many other stories of inefficiency and an extraordinary sense of priorities in Lewisham. We have a children's home containing two children and 11 staff. We spent £500,000 on a construction industry training programme sponsored by the council to train 30 people, which managed to lose £500,000, so it cost us £17,000 for each person trained over the course of a year. Staff sickness in the transport department of the council is running at an average of two months per employee per year and, unsurprisingly, the level of sickness went up when the employees discovered that they could still collect their bonuses regardless of whether they went sick. Early last year we had 1,500 more staff than we had in 1979, yet we are supposed to have been subjected to the most awful cuts. We have a council propaganda sheet on which the council spends £80,000 a year, a fraction of the budget that its PR department manages to spend.

It also has an extraordinarily warped sense of priorities because at the same time as it is threatening to cut basic social services the council has taken on 10 staff from the London strategic policy unit at a cost of £150,000 a year. We have a mobile creche with a £74,000 grant which works out at a unit cost of £1,000 an hour. During a council committee meeting at which Conservative councillors asked for that grant to be examined for its efficiency and effectiveness, the council refused to do that, but at the same time froze the grant for disabled people's holidays at £25,000. That is Lewisham council's sense of priorities. It is prepared to spend £150,000 on a political propaganda unit and freeze the budget for disabled people's holidays at £25,000.

A few months ago it looked as though the council was going to abolish its rates and sex equality units, a piece of news which was greeted with joy by my constituents and the other voters of Lewisham. But that joy was premature

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because they found that they were not being abolished. A new equality unit, which would cost more--£250,000 a year --was being set up in their place.

My right hon. Friend mentioned our borough artist. We had one a few years ago who cost £10,000 and who produced a bit of art. The present one is getting £11,000 and his only task is to advise on whether there is scope for putting art in public places. Lewisham is also spending £12 million on a new town hall. All that comes at a time when my constituents are being told how short of money is the council, that vital services are being theatened, that repairs to council property cannot be effected, and so on.

A report that the council itself commissioned shows that it cannot keep the borough's streets clean. Pensioners in lunch clubs are made to do their own washing up to save money--and, I repeat, the grant for disabled people's holidays has been frozen. But there is plenty of money available for the pet political projects of Lewisham council's Labour group.

One of the good points about rate capping is that it forces down the level of the community charge. The first exemplifications suggested that, after the safety net expired, Lewisham's community charge might be nearly £700. Simply as a result of rate capping in the last two years, the figure is now below £600. The council's Conservative group believes, as I do, that a community charge of £300 is attainable, but to achieve that there must be a safety net reduction over four years of £300. That is £54 million--

Mr. Deputy Speaker : Order. I hope that the hon. Gentleman will not go too far down that road. The order makes no mention of the community charge.

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