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Ambulance Service (Pay Dispute)

3.30 pm

Mr. Nigel Spearing (Newham, South) (by private notice) : To ask the Secretary of State for Health if he will make a statement on the policy of Her Majesty's Government concerning the use of additional personnel and vehicles during the ambulance dispute.

The Secretary of State for Health (Mr. Kenneth Clarke) : The Government's overriding duty in the industrial dispute affecting the National Health Service ambulance service is to maintain an adequate accident and emergency service for the general public.

If action is taken that threatens the adequacy of that service in any part of the country, the NHS will call upon the services of the voluntary bodies, private ambulances and police. If the threat to accident and emergency services is sustained for any length of time, the Government will be obliged to use military ambulances and personnel wherever necessary to maintain those essential services to the public.

The sole intention of the Government in asking police and military personnel to prepare themselves and their vehicles for ambulance duties if necessary is to protect injured or seriously ill members of the public. I hope that common sense will prevail and that NHS ambulance staff will not take action that threatens the emergency services.

It is entirely a matter for NHS management to decide whether, and to what extent, to use voluntary or private sector personnel and vehicles to provide non-emergency services for patients affected by industrial action. I expect the management to take all reasonable steps to ensure that the NHS provides as full a service as possible to all its patients for as long as industrial action persists. I hope that the staff sides will quickly decide to take up the management side's offer to resume negotiations in the relevant Whitley councils to settle the outstanding issues between them.

Mr. Spearing : That is not a reassuring answer. Does the Secretary of State recall the trauma in London exactly a fortnight ago today and tomorrow, when the ambulance management diverted all 999 calls from ambulance personnel who were standing by with vehicles to respond to them? Is the right hon. and learned Gentleman aware that as a consequence, in Canning Town a Mrs. Lander of Berwick road and a Mr. Lambert of Fox close waited more than one hour for an ambulance and that Mrs. Lander has since died? Will he assure the House that wherever ambulance crews in the United Kingdom are ready and willing, and are standing by, to respond to emergency calls, their services will not be dispensed with, and neither will calls be diverted? Will he also assure the House that any additional personnel and vehicles that he may have assembled will be used in such a way that the services of ambulance crews will not be dispensed with?

Mr. Clarke : The hon. Gentleman will recall that the problems in London were discussed in the House about 10 days ago. I pointed out then that the unions had drawn up 14 points of their own, which were designed to damage the ambulance service. Some of them were put into effect in such a way that it was impossible to guarantee an accident and emergency service. As a result, for 36 hours or thereabouts the police and voluntary bodies had to

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provide the service. Fortunately, on that occasion the unions also withdrew some of their points--in particular, their refusal to use radio telephones and to crew up emergency vehicles, with the result that the accident and emergency service could be restored. As the unions continue to say that they have no intention of threatening or withdrawing accident and emergency services, I hope that they will stick to that intention in all parts of the country.

Dame Jill Knight (Birmingham, Edgbaston) : May I assure my right hon. and learned Friend that his action in making certain that our emergency ambulance services continue to function has strong public backing? Will he do all that he can to pursue the ideal that those who hold the lives of others in their hands do not go on strike?

Mr. Clarke : I am grateful to my hon. Friend. Obviously, no one wants to use the police, the Army or any other unsuitable service to carry patients to hospital, but it is plain common sense that when industrial action threatens to go too far and puts the services at risk it is necessary to ask the police--or, in extremis, even the Army--to step in.

I certainly dislike the whole concept of industrial action in the Health Service. We all feel great respect for what the ambulance men do, and I think that it is high time that the action was stopped and the dispute returned to the Whitley council, where I am sure that it can be negotiated. So far, the management has made offers--including a two-year deal bringing forward some of next year's money--to try to help to resolve the dispute. As yet, however, the unions remain intransigent, and are taking action against patients in support of a double-figure percentage pay claim.

Mr. Stanley Orme (Salford, East) : Is it not about time that the Secretary of State took positive action to resolve the dispute? It is no good his telling the House that it should go back to the Whitley council, when he is preventing the council from meeting the demands that the amulance men are quite rightly making. They say that they want to go to arbitration. Why will the Secretary of State not allow that?

Mr. Clarke : About 95 per cent. of Health Service staff have settled this year, and all those whose pay is negotiated in the Whitley council have reached agreement, with the exception of the ambulance men and a few other small groups.

The ambulance men are asking to be allowed either special arrangements by way of arbitration or a much higher settlement figure than other groups, and in support of that claim are pressing their industrial action, mainly against patients. I entirely understand why the management does not find such action in pursuit of a double-figure pay claim acceptable, when the rest of the staff settled for much less at the relevant time--last April. I see no reason why a settlement should not be negotiated sensibly, if only the union would settle down to talks and stop believing that threatening the well-being of patients will somehow gain them an advantage.

Mr. Michael Shersby (Uxbridge) : Will my right hon. and learned Friend encourage the negotiators to regard the ambulance men and women of London as providers of an emergency service for which they should be properly renumerated if account is to be taken of the often dangerous job for which they undergo substantial

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training? Will he use his influence not only to bring about an acceptable solution to the problem, but to incorporate in it a no-strike agreement?

Mr. Clarke : The ambulance men of London are at present turning down a 9.3 per cent. pay offer. That was part of the April 1989 offer and is a higher percentage increase than the police received in the relevant settlement, and a much higher increase than those granted to most other NHS staff--including nurses, who received 6.8 per cent. I therefore feel that it is not an unreasonable basis on which those who represent the ambulance men might consent to continue to negotiate a way out of the dispute.

Unfortunately, at a time when the management did not regard the negotiations as being at an end, the National Union of Public Employees decided to turn the whole thing into industrial action. The sooner the union decides against continuing such action and goes back to holding sensible talks in which it takes a flexible line, the sooner the whole worrying problem can be resolved.

Mr. Charles Kennedy (Ross, Cromarty and Skye) : Surely the Secretary of State must recognise that progress will not be made if he keeps talking about NHS management as though holding it at arm's length, and adopts a Pontius Pilate role in his office of Secretary of State. Is not the central question--which follows from what was said by the hon. Member for Uxbridge (Mr. Shersby)--that of resources being made available by central Government to enable a fair settlement to be achieved? How can it be fair to say--and how can any hon. Member avoid skating on thin ice if he says it--that the figures being suggested are justifiable, especially in the light of the firemen's settlement? How can we say that, when we enjoy comparability with the Civil Service--and, indeed, when we read in the newspapers that we are to be awarded a pay settlement above the rate of inflation? How can that be justified when the Secretary of State will not talk positively about the ambulance dispute?

Mr. Clarke : The Government make the resources available, but in any sensible world it must then be for the Health Service management, through the Whitley councils, to decide how to distribute those resources between the various groups and also how to distribute the resources between pay increases on the one hand and the development of patient services on the other. It is wrong to claim that a Minister should be answerable to the House for the pay of nurses, clerical staff, electricians and ambulance men and should negotiate each pay claim in detail. A sum of money has been given to the Health Service, out of which it is meeting perfectly reasonable pay settlements for all its groups of staff. This attempt to politicise the dispute will undermine the mangement and the proper adminstration of the Health Service. It will also threaten patient services if people take industrial action, turn it into a political issue and get money that had been regarded as being for patients.

Comparisons are now being made with firemen. To make a proper comparison, one has to compare the pay of ambulance men with the pay of firemen after the two pay settlements that the ambulance men will get. They have to be counted before that comparison can be made. We are talking about the April 1989 settlement. If one wants to compare ambulance men's pay with the relevant fireman's pay, it is no good counting the current settlement. One has to look back to what the firemen got last year. Ambulance

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men compare quite reasonably with firemen. The reason that comparisons are made with fifth-year fire fighters is because they are paid a higher hourly income than third and fourth-year fire fighters.

As for the pay of Members of Parliament, again we are looking at this year's proposed settlement for the House of Commons, which is tied to civil servants with London weighting. What we are talking about is last year's ambulance men's settlement of 9.3 per cent. I must admit that I cannot remember what on earth Members of Parliament were given last year, but London ambulance men have been given 9.3 per cent. That is not a particularly unfavourable comparison to draw with Members of Parliament, either. All these matters should be resolved by discussions. They cannot be resolved by strikes.

Mr. Edward Leigh (Gainsborough and Horncastle) : Would it not be reassuring for the future of our country if just once, if on just one occasion, one Labour Member of Parliament could be found to support the public against outrageous pay demands and restrictive practices? What does this say for the grim reality behind the facade of the new model Socialism? Labour Members of Parliament are still in the pockets of the trade unions. When will they start to stand up for the public?

Mr. Clarke : If any group of staff in the National Health Service decided to take industrial action tomorrow in support of any pay claim, the Labour party would give them its wholehearted support. That has been its consistent policy for years. The Labour party has no regard for patients or for the safety of the public. It has no responsibility on the subject at all.

Mr. Jeremy Corbyn (Islington, North) : Is the Minister aware that there is overwhelming public support for the ambulance workers in their pursuit of decent pay and that there is a full understanding that at no stage have any ambulance workers refused to answer radios in respect of 999 calls or to respond to 999 calls? Instead of this awful gap of £60 a week between firemen and ambulance workers and instead of heaping abuse on ambulance workers, the right hon. and learned Gentleman should ensure that they are properly paid and properly staffed and that there are sufficient vehicles to maintain a proper ambulance service rather than threatening to bring in the Army to try to destroy the dispute in that brutal way.

Mr. Clarke : I know of no member of the public who has yet approached me in support of an increase of over 11 per cent. for ambulance men, which is the claim that is being pressed by the unions and from which they do not appear to me to be prepared to resile. Most members of the public would prefer the dispute to be settled by negotiations, not by industrial action. It is not true that the unions did not threaten the accident and emergency services in London. They did. They drew up 14 points that were designed to do damage to the service. Some of those points made it impossible to guarantee a reliable accident and emergency service. There is no question whatever of using the Army or the police to break any industrial action, but if the unions are so irresponsible as to take action that puts the safety of the public at risk, the Government must obviously put the police and the Army in a state of preparedness so that injured or desperately ill people are not left without the help that they need.

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Mr. Tony Favell (Stockport) : Is it not clear that a lot of skilled ambulance men's time is being wasted? Is it not time, therefore, for us to start to contract-out the service?

Mr. Clarke : The managements of ambulance services up and down the country are having to make other arrangements to carry non-emergency patients. They are using taxis, hire cars and private ambulances and there is no reason why they should not do so. In some parts of the country unions are refusing to take non-emergency patients unless they satisfy some fancy criteria drawn up by the unions. It is no good for individual patients to be told by the union convener that their appointments are not necessary or urgent for their health, and it is quite right that managements are looking for alternative methods of getting the patients the treatment they need.

Several Hon. Members rose --

Mr. Speaker : Order. This is a private notice question, which is an extension of Question Time. I shall take two more questions from each side and then I shall call the Secretary of State for the Environment to read his statement.

Mr. Merlyn Rees (Morley and Leeds, South) : Does the Secretary of State recall that when I was Home Secretary the last Labour Government were faced with problems concerning police pay which resulted in Edmund-Davies recommendations designed to make them a special case, and equally big problems with the firemen which resulted in their being treated as a special case and their pay being tied to the upper quarter of manufacturing wages? Is there not a case for the ambulance service to be treated as a special case, and if there is, whose job is it to see to it?

Mr. Clarke : That was a long time ago. My first recollection is that the then Government treated everyone who went on strike as a special case, turn by turn. But it was not quite so straightforward. It is not true that the last Labour Government recognised the claims by the police. They rejected the Edmund-Davies recommendations which were implemented by the present Government. The Edmund-Davies recommendations went out of their way to distinguish between the police and other emergency services and said that they were not comparable. We implemented the Edmund-Davies recommendations on that basis.

It is certainly true that the last Labour Government gave the firemen a special formula ; they backed down in the face of industrial action by the firemen, and we shall not go back on those long-standing arrangements. The last Labour Government refused claims from the ambulance men to tie their wages to those of either the police or the firemen or any other emergency services and allowed their pay to go down compared with inflation in three of Labour's last four years. The last Labour Government let the ambulance men's claim go to the Clegg commission which reported that there was no comparison between police, firemen and ambulance men and that they all had some emergency duties, but in each case the emergency duties took a comparatively small proportion of their total time. I certainly would not wish to emulate the record of the last Labour Government in regard to any of those groups. It gives no foundation to the right hon. Gentleman saying

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that he has now suddenly decided that ambulance men should be treated in a special way because they are taking industrial action.

Mr. Richard Holt (Langbaurgh) : Does my right hon. and learned Friend accept that although many ambulance men in the north of England are just as upset by the Government's position as those in London, perhaps an offer of 9.3 per cent. outside London might settle the dispute? Are not the Government and those negotiating missing the opportunity being offered by the ambulance men of solving the present dispute and entering a long-term agreement for no strikes in the ambulance service in future?

Mr. Clarke : I agree with my hon. Friend that it is an irony that the most militant ambulance men appear to be those in London who have already secured a 9.3 per cent. pay offer. Ambulance men throughout the country are being offered the possibility of a two-year settlement with some of next year's money being brought forward ; discussions on local flexibility on pay, which might help local ambulance services ; a re- examination of the deal with the unions entered into in 1986, because they are now discontented with the way that affects overtime ; and generally an invitation to talk. We all wish to avoid strikes in the ambulance service. To the best of my knowledge and belief, NUPE and the other unions concerned will make promises but will not enter into no-strike agreements with any credibility. More to the point, they are demanding a double figure pay settlement this year.

Mr. David Young (Bolton, South-East) : The Minister's excursions into history may be interesting, but they are hardly constructive. We require a just settlement that will not only resolve the present dispute but will ensure that we have a service in years to come. That requires examining the situation impartially. Why is the Minister afraid of submitting the claim to ACAS? He may wish to see himself as Pontius Pilate, but the public is beginning to see him as Lady Macbeth.

Mr. Clarke : I know that I am not famed for my sartorial elegance, but I am not accustomed to appearing in drag. On the serious parts of the question, Duncan Nichol and his management team held discussions at ACAS, and made various propositions but were faced with total intransigence by the trade unions. I have already said that I have every desire to see the dispute settled. Health Service pay will not sensibly be resolved by getting a third person from outside to make a ruling on the pay of groups that have taken industrial action against patients. Countless Whitley councils determine the pay and conditions of different grades of staff. It is not fair to the staff if one group is given special treatment by a chap who is called in to split the difference because that group has been prepared to take action against patients when other staff have not.

Mr. Harry Greenway (Ealing, North) : Will my right hon. and learned Friend confirm that he has effectively given a guarantee that 999 calls will be answered whatever happens in the dispute or under any other circumstances? Will he use the present position to try to improve the London ambulance service so that patients are not kept waiting hours to be collected for treatment or left for hours

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at hospital before being returned home after treatment, which has happened all too often as a result of bad management?

Mr. Clarke : The steps that we have taken should enable us to maintain an adequate emergency service should ambulance men be so misguided as to take action that threatens it. Obviously, I hope that they will continue to provide a 999 service. I agree that the sooner that the service returns to normal the better. "Normal" includes continuing efforts to improve the quality of the service given by the London ambulance service and others.

Dr. John Cunningham (Copeland) : May I apologise for the unavoidable absence of my hon. Friend the Member for Livingston (Mr. Cook), who has a long-standing engagement elsewhere? Are we to see another premedi-tated management escalation of the dispute with the connivance of Ministers? Is that what the right hon. and learned Gentleman is asking the House to accept? Is not the obvious lesson of this long-running dispute the fire crews' acceptance last Friday of a deal of 8.6 per cent. after only two hours of talks and negotiations? Should not ambulance crews be given the same treatment?

As the Secretary of State gave us an excursion into history, does he recall that when the Prime Minister was the Leader of the Opposition in 1978 she was sending letters from her office recommending that the pay of ambulance crews should be treated exactly the same as fire crews? I have a copy of the letter here. If she believed that in 1978, why does she not believe it now, or has she done another U-turn over the past few days?

Why are the Government persisting with their mulish obstinacy when all reason and common sense point to comparable treatment with fire crews for ambulance workers or independent arbitration to resolve the deadlock? The Secretary of State has made some unpleasant comments about ambulance crews. If he is so convinced of his case, why is he terrified of independent arbitration, which ambulance crews are perfectly willing to accept?

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Mr. Clarke : In 1978, the letter was written by my right hon. Friend the Prime Minister to a Government who were maintaining that there was no case.

Dr. Cunningham : No, it was not. It was written to members of the public.

Mr. Clarke : It was written to two members of the Association of Professional Ambulance Personnel, but at the time the Government were resisting any such arrangements. We have fought three general elections in which neither our manifesto nor that of the Labour party has returned to a formula for linking ambulance men's pay with the pay of anyone else. The only reason why the hon. Gentleman is arguing for it is that he believes that we should give in to a strike. I have dealt several times with comparisons with firemen's pay. This Government, the last Labour Government and the Clegg commission have all said that the job of a fireman is not exactly comparable. However, the comparison that is being made by the ambulance men's union is with fifth-year firemen. The hourly rates for ambulance men are better than those for first, second, third and fourth- year firemen. An arbitrary selection is being made.

I resent the hon. Gentleman's allegation that I have said anything against ambulance crews. I have not done so, today or at any time during the dispute. We have no desire to have a dispute with the ambulance men. We wish to see them resume their good normal service as quickly as possible.

On escalation, it is obvious when we look back over the past six or seven weeks that NUPE and the other trade unions have found their action ineffective. They keep finding fresh ways of trying to tighten the screw on the public in order to hype up the Labour party to give them more support, or to gain an advantage for their union. Every change in the dispute has come about because NUPE has decided on some new and dangerous action at the expense of the patients. I wish that it would stop that and return to the negotiating table.

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Local Government Finance

3.55 pm

The Secretary of State for the Environment (Mr. Chris Patten) : With permission, Mr. Speaker, I should like to make a statement about the local authority grant settlement for England for 1990-91. I am today sending a consultation paper to the local authority associations setting out my proposals. Copies are being sent to each local authority, and are available in the Vote Office. The consultation paper summarises the various reports which will be made later this year. Drafts of two of the reports, dealing with the distribution of grant and the calculation of relevant population, have also been circulated. There are also exemplifications showing the amount of grant and the community charges which, on certain spending assumptions, would result for each area. In this first year of the new system a number of basic definitions and principles have to be set out, and that accounts for the large amount of material. It may help the House if I outline the main features of the proposals. My right hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) proposed in July that the total of external support, known as aggregate external finance, for local government services next year should be £23.1 billion, an increase of 8.5 per cent. over the figure for this year on a comparable basis. That support comprises three elements : the yield from business rates, specific grants, and revenue support grant.

To calculate the yield from non-domestic rates, I have now made a firmer estimate of the national non-domestic rate multiplier for 1990-91. On the basis of the most up-to-date information available about the effects of the 1990 rating revaluation, I estimate that the multiplier for 1990-91 will be 36p for England. That figure will be provisional until I have final information about the effects of the revaluation, which will be available before the revenue support grant report is laid before the House ; but I would expect it to vary only very slightly, if at all. It also includes a small allowance for reductions in rateable values in cases where the initial valuations turn out to be high.

Using that multiplier, I estimate the yield from non-domestic rates in 1990 -91, and hence the amount to be distributed to local authorities, will be £10,428.5 million. That estimate represents the total amount which I expect charging authorities to receive in respect of rates paid by private businesses, by the nationalised industries, and by local authorities themselves, together with a contribution in aid in respect of Crown property. I have made allowance for a number of factors, such as rate income forgone as a result of empty properties and of charitable or discretionary relief, and for losses in and costs of collection. The amount estimated to be collected from private businesses and the nationalised industries is in line with the Government's commitment that the yield from these sectors will be broadly the same in real terms as in the current year, 1989-90.

I anticipate that specific grants and transitional grants will amount to £3,182 million. Further details will be available at the time of the Autumn Statement.

I am proposing that revenue support grant should be £9,490 million. Our principal objective in distributing grant is to ensure that, in general, if each authority spends so as to provide a common standard of service, the

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community charge could then be set at the same level in every area before allowing for the transition arrangements. My right hon. Friend announced in July that the Government consider that it would be appropriate for local authorities to spend £32.8 billion in total in providing services, an increase of 11 per cent. over the amount which, on a comparable basis, we thought it appropriate to spend this year. In order to distribute grant, we shall need to calculate an assessment for each authority of what it would cost to provide services locally to a common standard, consistent with that total. The proposed method for making these assessments, known as the standard spending assessments or SSAs, is set out in the documents published today. SSAs replace grant-related expenditure assessments in the present system. In summary, the SSA for each authority will be based on an assessment for each of the main services for which it is responsible. It will be calculated using information for each authority about factors which lead to differences in the costs of providing services to a common standard. In this way, we can take account of variations between authorities in the costs they face. These proposals take account of recent research, extensive discussions between officials over the last year and the views of the local authority associations.

SSAs are central to the new grant system. Apart from the transitional arrangements, the relationship between an authority's budget and its SSA determines the community charge for that area. If spending is higher than the SSA, the community charge will be higher than the national community charge for standard spending, and vice versa. It is therefore important that the methods used to calculate these assessments should be fair and right.

If authorities were each to spend at the level of their SSA, the community charge in each area would be about £278. The final figure will not be known until we know the number of people on community charge registers. This figure, the community charge for standard spending, will be the benchmark for accountability. It will appear on the bill which each chargepayer will receive and will help chargepayers to assess the policies and performances of their authorities. In this way, councils will be made accountable to those who must pay for their activities.

The existing system of grant-related expenditure assessments had become over-complex and difficult to explain. We have therefore introduced a simpler, more understandable method. [Interruption.] I appreciate the fact that all these things are relative. As now, the method is applied to each authority, using objective measures of the cost of providing services such as the number of pupils to be educated and the number of miles of road to be maintained. There has been discussion about the factors to be taken into account and the weight to be attached to each, and the associations have put forward a range of alternative suggestions. In my view, the proposals that I have made represent the fairest judgment between the various viewpoints. I believe that they provide the best basis that can be devised for distributing grant.

In place of the 63 separate assessments in the present GRE system there will be 13 components : 11 covering the five major services--education, social services, fire and civil defence, police and highway maintenance-- another covering all other services and one reflecting the financial costs of capital expenditure. In general, the method proposed involves fixing a unit cost of providing each service and multiplying this by the number of clients for

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that service. Our original proposals were placed in the Library last December. For some services we have amended these proposals after discussion. In particular, in response to representations, we are proposing to include an allowance for overnight visitors--to reflect the demands that tourists make on local services--and to recognise separately the costs of flood defence and coast protection work. I know that these matters are of particular concern to hon. Members from the areas affected.

The consultation paper also describes the transitional arrangements. As my noble Friend Lord Hesketh announced on 11 October, it is intended that the area safety net will be for one year only. For the following three years the Exchequer will pay for protection for areas that lose as a result of introducing the community charge and related changes. In 1990-91 chargepayers in these areas will be expected to find the first £25 of any loss to their area, but above that there is full protection. Gaining areas will receive about half their gains in the first year, and the full gain in the second year. It is right that the new system should be phased in, but gainers will still see substantial gain from the start.

My right hon. Friend proposed in July two transitional grants to provide extra help for chargepayers for inner London boroughs, and in areas with very low domestic rateable values. These grants will significantly reduce community charges in some areas.

I have included with the consultation paper exemplifications showing the amounts that each area would receive under these proposals. I stress, however, that figures for authorities are provisional at this stage, and will change, though in most cases only marginally, when local authorities notify me in December of the number of adults that they have included in their community charge registers.

The exemplifications also show what the community charge will be in each area if local authorities spend at the same level as their income from rates and grant in 1989-90, adjusted for changes in function, and increased to be consistent with spending of £32.8 billion in total. It is these charge levels which it is intended should form the basis of the transitional relief scheme announced last month to help principally those former ratepayers, pensioners and the disabled who would otherwise face increases of more than £3 a week. This relief scheme will cost about £300 million in 1990-91. In addition 9.5 million people will receive help through community charge benefits. Many individuals will, therefore, see their bills substantially reduced.

I have asked the local authority associations to respond to these proposals by 4 December. I hope to lay the formal documents before the House in early January for debate later that month. The proposals amount to a substantial package of support for local authorities. The amount of external support has increased by 8.5 per cent. If authorities budget sensibly and spend in line with the Government's assumptions, the average community charge next year should be about £278. If they can do better, charges will be lower. But if their spending increases faster, charges will be higher. Local authorities are now answerable to their chargepayers for their decisions.

Mr. Bryan Gould (Dagenham) : The Secretary of State knows that we and many others have long attacked the poll tax proposals as being inherently complicated and

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unworkable, and fundamentally unfair. He and his predecessors have tried to deflect that attack by taking refuge in misleading generalisations, and false and unrealistic assumptions. I am sorry to say that we have heard no improvement today. The mixture is much as before and the more additions that the right hon. Gentleman makes to the whole ramshackle structure, the more unconvincing and unstable it becomes.

At the heart of the illusions that the Government have sought to create is the fairy tale that the poll tax average is or could be £278. That figure is a hopeless mirage. It has increased with remarkable rapidity. The Government's estimate in 1986-87 began at £170. By 19 July it had risen to £275. Will the right hon. Gentleman confirm that, even in the interim, it has risen by a further £9 from £269--the true figure on 19 July because of the £200 million transitional specific grant--to £278? Does he agree that there is plenty of room yet for growth? Will he confirm that even if the figure were halfway accurate, local authorities could not be expected--indeed, he does not expect this of them--to meet that figure immediately or even in the foreseeable future? If that were the case, scores of Tory authorities would be pilloried by him as overspenders.

Will the Secretary of State confirm--and this is the most fundamental point --that the figure is an invention because it is based on an invention? He estimates a level of local government spending of £32.8 billion, but that figure is based on an assumed level of spending this year rather than the actual level of spending. Does he acknowledge that all the local authority associations, irrespective of political control or allegiance, agree that that basic error leaves local authorities £1.6 billion adrift?

Will the right hon. Gentleman accept that the basic error is compounded by a further error on inflation? One assumes that the inflation rate has been calculated at the forecast of the Chancellor of the Exchequer of 4.5 per cent., rather than the actual retail prices index figure. When that is taken into account as well, it leaves a shortfall of £2.5 billion. Will the Secretary of State further agree that every last penny of that shortfall will have to be financed out of poll tax, as it is not covered by grant or aggregate external financing, and that means that the figure of £278 is hopelessly out of touch with the reality, which is far in excess of that figure?

Does the Secretary of State also recognise that his basic errors on the side of optimism are added to by the view that he and his officials have taken in making their calculations? They believed that they could safely assume 100 per cent. registration and collection. Will he confirm that everybody who has studied the issue knows and understands that that is hopelessly optimistic? Those errors invalidate the figure of £278 which the Secretary of State described as the "benchmark for accountability".

The consequences of those errors are serious. Does the Secretary of State acknowledge that for local authorities, with their obligation to deliver services, the errors mean that they are faced with Government-sanctioned pay increases to teachers, firemen and policemen far in excess of the actual inflation figure, let alone the Chancellor's fairy tale, and that they will have no option, therefore, but to cut services further? In view of that shortfall, will he tell local authorities this afternoon where he expects those cuts to be made? Should local authorities employ fewer teachers, social workers or home helps? Will he concede that, if his benchmark is so hopelessly wrong, so too are all the other calculations that flow from it?

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It can already be seen that the transitional relief scheme, for example, will fail to help most single people, those who will be liable to pay for the first time or those who do not own or rent their homes and who will most need help. However, it will miss its target by an even wider margin because it proceeds on the basis of a ludicrously low notional poll tax figure. Many who believe that they qualify for transitional relief will find that they are paying far more than an additional £3 a week and many of those who will pay more than £3 a week will not qualify for transitional relief.

Is the statement not typically uninformative about the needs formula used, and is not the formula itself, in so far as we know what it is, open to detailed objections? Why, for example, are overseas visitors excluded from the overnight visit figure that is included in the formula? Does not the statement keep up the long and unfortunate tradition of telling us nothing we need to know about the business rate? Is not the 36p figure useless and wholly uninformative for individual business men until they know the effects of revaluation? Is it not equally clear that the Confederation of British Industry has been rebuffed in its request for a £2 billion reduction in total business rate? Will the Secretary of State confirm that in saying that the business rate will be kept at the same level in real terms he is using a figure for the RPI different from that used to calculate local government spending? Is it not an astonishing inconsistency to use two different inflation rates in the same statement?

Is it not sad to see the Secretary of State so bogged down in a morass not of his creation and from which he cannot extricate himself, but is it not even sadder to contemplate the future of local government and the services for which it is responsible and the future of those millions who depend upon and pay for those services when they, too, become the victims of this Government's obsession?

Mr. Patten : First, I welcome the hon. Member for Dagenham (Mr. Gould) to his new responsibilities. I can say without qualification that I hope that he enjoys his new job for as long as the hon. Member for Copeland (Dr. Cunningham) who we hope has enjoyed doing it for the past six years.

The hon. Gentleman seemed to base his questions on the principle that, whatever the level of local authority overspending this year, we should validate it. That is not remotely the Government's position, and nor, I imagine, would it be the position adopted in the new-look Monklands, East financial policy that the Opposition are pursuing. We are allowing for an increase of 11 per cent. in spending by local authorities next year--over what we believe they should have spent this year. The Audit Commission has suggested savings of £900 million that local authorities could make. The authorities have made about £350 million of those savings, so they still have some way to go. Our central support for local authorities will increase next year by 8 per cent., and I think that that is a fair settlement. It is a challenging settlement. If all Government Departments received equivalent settlements, I think that they would be quite pleased. The hon. Member referred to the standard community charge figure. That figure represents what local authorities

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would have to charge if they were spending at a reasonable level. The figure has increased from £275 to £278 since July because of the increase in the number of exemptions. The hon. Gentleman is netting off the grant for the Inner London education authority and for low rateable value areas and so is not comparing like with like. I repeat that the community charge of £278 represents the figure that local authorities should have to charge to provide a reasonable service. The hon. Gentleman referred to registration. So far registrations are going very well. I cannot guarantee that they will go quite as well as in one local authority area in Scotland where the registration figure was 106 per cent., although we can aim for that and we hope that registrations will be as successful as they have been in Scotland.

The hon. Member referred to the needs formula. As he knows, we have set out in considerable detail in the distribution report the basis on which the new needs formula is based. It is a simpler and better formula than the last one, taking into account, as it does, the cost of providing a service to the client and the number of clients. It is based on substantial research and lengthy discussions with local authorities, but perhaps in the next few weeks the hon. Gentleman will have suggestions to make about how we could modify it. He may, for example, think that we have been wrong to provide so well for the education needs of young children in Birmingham, Liverpool, Manchester and inner London, although I rather doubt it. If the hon. Gentleman has any suggestions about how we can improve the needs formula, we shall look forward to hearing from him in due course. The hon. Gentleman's main argument was that we were wrong to replace domestic rates, or, to put it more correctly, wrong to introduce the community charge. There is at least one thing on which hon. Members on both sides of the House agree : the domestic rating system is inequitable and it should go. The difference between us is that the Government have advanced proposals for replacing the domestic rating system, whereas the Labour party, I am afraid, has not. The Opposition periodically make a proposal and then take it away again. I am sure that the hon. Gentleman will have read the motion tabled by the Dagenham constituency Labour party at the Labour party conference, which called the party's proposals "unacceptable electorally and administratively". I assume that those proposals have now been dumped. However, we look forward to a time when the Opposition will be prepared to make the change from domestic rates and also meet the challenge of suggesting an alternative.

Several Hon. Members rose--

Mr. Speaker : Order. I know that this is a very complicated statement, but we have a busy day before us. The Front-Bench spokesmen have taken about 30 minutes, I will give a comparable time to Back Benchers. May we have brief questions please?

Sir Hugh Rossi (Hornsey and Wood Green) : Is my right hon. Friend aware that the London borough of Haringey is still at the top of the league, with a community charge of £554? In the poorer areas of my constituency where rateable values are low, the £3 threshold will be insignificant for my constituents. It is absurd that

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community chargepayers must still make a contribution to the safety net. Is there nothing more that my right hon. Friend can do to help my constituents?

Mr. Patten : I suggest that my hon. Friend's constituents should press their local authority to spend more sensibly. I believe that my hon. Friend will agree that the main reason for the impact of local authority spending on his constituents is the level at which that spending is pitched by the council. I believe that our interim relief scheme, the transitional relief scheme, should assist many people who would otherwise be paying more than £3 a week in additional charges. However, there is another way in which we may be obliged to help individual chargepayers. If local authorities insist on budgeting in a ludicrous way, and if they insist on budgeting at far too high a level, we will have no alternative but to cap them.

Mr. Ronnie Fearn (Southport) : May I first point out to the Minister that he promised me a copy of the statement at 2 pm and I did not receive it from his Department until 3.10 pm, in spite of a telephone call. The seventh paragraph of the statement refers to common standards to which every local authority must adhere. The statement contains something new, based on the common standard. What is the common standard of service?

Mr. Patten : I apologise unreservedly to the hon. Gentleman for the fact that he did not receive a copy of the statement at the time that it was promised. I hope that other statements on local government finance--who knows, there may be some--will arrive with the hon. Gentleman on time.

The common standard is set out very clearly service for service. For example, we establish for education what the costs should be for each child and what particular factors should be taken into account. Similar considerations apply to personal social services and to other local authority services. The basis of those different assessments is included in the distribution report which I hope the hon. Gentleman will find helpful. Although we have reduced the number of individual assessments, I hope that we have not lost any of the necessary sophistication in order to produce a comprehensive and fair settlement.

Mr. Robin Squire (Hornchurch) : Is my right hon. Friend aware that in the few months since the previous statement was made by my right hon. Friend's predecessor my constituency has moved from being a contributor to the safety net to a recipient? In the short-term, my constituents will undoubtedly be grateful for that, as indeed is their Member of Parliament.

Will my right hon. Friend not hesitate to use the reserve powers that he has in law should we find at the end of the first year that there are such big rises in the uniform business rate, particularly in London, that many businesses would be threatened if they had to face similar increases in the second year?

Mr. Patten : On my hon. Friend's first point, there are several reasons for the differences between the figures that my hon. Friend saw in July and those that he sees now. The most obvious change is that the figures that he saw in July were based on this year's spending rather than on next year's assumed spending. There are several other reasons for the change, including the movement from the grant-related expenditure assessment formula to standard

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spending assessments, and the decision to ring-fence the housing revenue account. Those and other factors have a bearing on the figures for hon. Members' constituencies.

On the uniform business rate, we have introduced reasonable transitional arrangements. They include particularly generous treatment for smaller businesses, and we have doubled the threshold definition for smaller businesses. I hope that we will be able to ensure that the UBR is introduced smoothly and without some of the dislocation which my hon. Friend understandably fears.

Mr. Max Madden (Bradford, West) : As some Bradford schoolchildren are being sent home because their temporary classrooms are considered to be too dangerous for them to use, and as the Conservative chairman of the city's education committee says that £100 million is needed to put schools into a good state of repair, does the Secretary of State think that the spending limits for Bradford set out in his statement are realistic?

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