House of Commons Hansard Debates for 3 Dec 1990

Mr. Sainsbury : I hope that I made it clear to the House that the meeting was not to discuss any specific licence application but was held with the trade association to discuss the application of the guidelines in relation to the export of machine tools to Iraq. We seem to be talking about two entirely different issues.

Mr. Beaumont-Dark : Does my hon. Friend accept that, in the cut and thrust of politics, we are all used to saying things about each other as a matter of course, but for Opposition Members to suggest that for some sordid reason, my hon. Friend the Minister for Defence Procurement would be willing to put British lives at risk for his personal interest is unworthy of them? Right from the word go, the Labour case has been that this will not satisfy readers of The Sunday Times. Nothing will satisfy The Sunday Times short of seeing blood on the sword.

This House needs to state clearly that we do not believe that any member of Her Majesty's Government, Labour or Conservative, would ever sell the people down the river. I would not-- [Interruption.] --I would not believe that of a Labour Minister or of a colleague. Surely none of us should laugh at the honour of our people. Accusing the Minister of knowingly selling arms to an enemy of this country is something of which the Opposition should be thoroughly ashamed.

Mr. Sainsbury : I am grateful for my hon. Friend's remarks and for his reminder that in the heat of the moment things may be said about hon. Members which perhaps should not be said. In the Department of Trade and Industry we endeavour both to promote exports and to stay strictly within the clear guidelines controlling defence exports.

Mr. Martin Flannery (Sheffield, Hillsborough) : It ill becomes the Conservative party to engage in self-righteous indignation merely because hon. Members are honourably questioning certain events and want to know the truth. We know from long experience that war is terrible but also that it is terribly profitable to some people. If we admitted that we supported Saddam Hussein throughout the war against Iran, that might clear the air a bit.

The Minister above all people should understand this : he comes of a family that understands trading. I do not impute any ill motives to him. Only recently we were found to be clearly guilty, and I told the Prime Minister that she did not seem to understand the difference between a gun

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barrel and an oil pipe. We were found to be exporting gun barrels to Iraq, so why do Conservative members quibble about our honourable anxiety about what is going on?

Mr. Sainsbury : The hon. Gentleman was slightly short on specific questions, but he seemed to suggest that we had exported lethal equipment and supported Iraq by so doing. I assure him that we have not been exporting lethal equipment. I remind him that it is the responsibility of the exporter to fill in the export licence application form, and to state, under C5, the

"nature of the ultimate user's business",

and, under C6, the

"precise purpose for which the goods are to be used".

If that information is not accurate, wrong decisions can be reached.

Mr. Peter Viggers (Gosport) : Does my hon. Friend share my confusion about the message that seems to be coming from the Opposition? Does he agree that, like it or not, the manufacture and export of military equipment and of equipment that could have some military application are important to this country? Does he recall that, in a constituency manifestation and in a previous manifestation as a Minister, I have received vigorous representations from trade union leaders who are anxious that the scrupulous attention paid by the Government to the purpose of exports should come down on the side of the workers and their unions? Does my hon. Friend therefore agree that scrupulous tests are applied and that there does not seem to have been any impropriety in this matter?

Mr. Sainsbury : I entirely agree. It is incumbent on any country with defence exports to ensure that there are strict controls and that they are well enforced. As my hon. Friend well knows, all countries have the right to self defence. Under article 51 of the United Nations charter, they are free to acquire defence equipment, and in many cases it would be a gross waste of resources if they tried to provide their own. The defence export industry is important and provides employment for at least 100,000 people. We should be careful in criticising it as if any defence export were wrong. Several Hon. Members rose --

Mr. Speaker : Order. I remind the House that this is a fairly heavy day, with two Second Reading debates. I shall call four more hon. Members and then we must move to the next business.

Mr. Greville Janner (Leicester, West) : Does the Minister recall that there was almost precisely the same row at the time of Idi Amin over the export of telephonic equipment? Have the Government learnt nothing from this? Is it not true that licenses were granted when they should not have been, that this was either deliberate or negligent, and that either way the Minister of State for Defence Procurement should resign?

Mr. Sainsbury : I do not recall the export of what the hon. and learned Gentleman called telephonic equipment at the time of Idi Amin. I assure him that we continually review our procedures for controlling defence exports. The procedures are applied most scrupulously and carefully. As he will see from recent events, we have further reviewed

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and improved those procedures, and we are open to further suggestions about anything that can be done to make them even better than they are.

Mr. Richard Caborn (Sheffield, Central) : Will the Minister please answer three questions? First, when was his Department informed about Project Babylon, which was in 1988? Secondly, when was his Department informed about Project 839, which has been referred to a number of times through the supergun affair? That concerned an order not for the supergun but for 75 major field guns. I understand that the intelligence service believes that three of those guns have been installed. Thirdly, will there be a change in the procedures for applying for export licences by saying that no licence will be granted unless the end use of all components and manufactured goods is contained in the export licence form that the Minister read to the House?

Mr. Sainsbury : As I have said, it is for the exporter to provide the information that is necessary for the Department to determine whether a licence is required and whether it will be granted. Sometimes it is necessary to ask for additional information, more details of specifications and other matters connected with the application. If the exporter fails to provide accurate information, that part of the form which draws attention to the fact that misleading or wrong information may give rise to proceedings comes into effect. That warning is given on many Government forms.

Mr. Dennis Canavan (Falkirk, West) : As the Minister of State for Defence Procurement insists on denying the Sunday Times allegations, which if true would surely be a resignation issue, may we assume that he will take legal action against the Sunday Times ?

Mr. Sainsbury : As I said in my statement, my hon. Friend strongly denies the interpretation put on the remarks alleged to have been made by him in the Sunday Times article.

Mr. Harry Barnes (Derbyshire, North-East) : I am probably the only Member who at one time had a job filling in forms in Iraq. That was during my national service. What has happened to Britain's so-called arms embargo in connection with trade fairs in Iraq which we have supported and which have been held since the embargo? How has Britain been involved in those trade fairs? Have we been attempting to sell dual purpose machine tools?

Mr. Sainsbury : The hon. Gentleman speaks about the "so-called" embargo. I assure him that it is an embargo

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and that, under the terms of the United Nations mandatory sanctions order no civilian or military exports, apart from medicines, are being made to Iraq and Kuwait. He asked about trade fairs since the embargo came into effect. If there have been any such trade fairs, I assure him that there have been no British exhibitors and no support from my Department.

Mr. O'Neill : Does the Minister not realise that no Opposition Member objects to the production of machine tools or to the Machine Tool Technologies Association meeting the Minister? We object to Ministers conniving with exporters to bend the rules to afford trading with Iraq. Until we get a clear indication of where the Minister's minute deviates from that of the trades association, we will continue to push this matter. We will not be satisfied by the use, or abuse, of the sub judice rule. We recognise that legal action may well be brought, but that threat cannot hang indefinitely. As we come nearer to 15 January, right hon. and hon. Members will become more and more anxious about what has or has not been exported to Iraq, and for what purpose.

We give notice that we shall seek clarification in the light of any legal proceedings that have or have not been instituted. If legal proceedings have not been brought, we shall be anxious for the Minister to clarify the matters on which at present he feels incapable of enlightening the House.

Mr. Sainsbury : Perhaps I could clarify the point about the sub judice rule. I did not at any time refer to anything being sub judice. [Interruption.] I chose my words carefully, and I shall repeat them. I pointed out that the exports carried out by Matrix Churchill to Iraq and some of the licences granted were now the subject of investigation by Customs and Excise, and it would therefore be improper for me to comment on those matters or say anything that might prejudice any proceedings. That is not the same as the matter being sub judice. I hope that the hon. Gentleman agrees--presumably this would be in conformity with his views--that, if anything improper had occurred and it was decided that there should be proceedings, we should not say anything that might prejudice those proceedings.

The hon. Gentleman asked about the note of the meeting. As he well knows--I think that he should well know--it is not the custom to disclose such working papers. I note the words that he said in support of the machine tool industry, and I am sure that it was glad to hear them. I was certainly glad to hear them. We continue to hope that it will be successful in exporting machine tools for civilian use to all parts of the world where such exports are permitted.

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Points of Order

4.32 pm

Mr. Tam Dalyell (Linlithgow) : On a point of order, Mr. Speaker. During the statement by the Foreign Secretary on Wednesday 28 November, in column 871 of Hansard, I suggested that the right hon. Gentleman might not have done his national service. The right hon. Gentleman has written me a courteous letter to point out that he had done his national service with the Royal Artillery from July 1948 to September 1949. I hope that he will accept my apologies for any suggestion to the contrary.

Mr. Harry Ewing (Falkirk, East) : On a point of order, Mr. Speaker. I wish to clarify the old point about the sub judice rule before the House gets itself into some difficulty. Is it the case, Mr. Speaker, that it is for you to rule when a matter is sub judice, and that in the past you have always ruled that matters become sub judice only when a date has been set for the proceedings to begin? Is it right that it is not for Ministers or any other right hon. or hon. Member to decide that a matter is sub judice? Surely it is a matter that is entirely for the Chair.

Mr. Dave Nellist (Coventry, South-East) : Further to that point of order, Mr. Speaker.

Mr. Speaker : Order.

Mr. Nellist : It is on the point that my hon. Friend has raised.

Mr. Speaker : Order. I do not need a further point of order, because I can deal with the matter that the hon. Minister for Falkirk, East (Mr. Ewing) has raised.

The hon. Gentleman is absolutely right. I said that the matter under discussion was not sub judice. I think that the Minister made that clear in his final comment.

Mr. Nellist : On a point of order, Mr. Speaker. I wondered whether you would take the opportunity, perhaps through one of the channels that are available to you, to remind Ministers for the future that, if investigations are taking place, as the Minister for Trade

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said in his statement, that is entirely different from the point raised by my hon. Friend the Member for Falkirk, East (Mr. Ewing) about court dates or court actions. In this instance, no charges have been laid against anyone. It was wrong for the Minister carefully to choose his words and effectively to produce a smoke screen to stop hon. Members asking questions which otherwise he would be obliged to answer.

Mr. Jeremy Corbyn (Islington, North) : On a point of order, Mr. Speaker. The statement on arms sales raised serious and important questions. Have you had any request either for a debate or a statement on the principle of selling lethal weapons to repressive regimes, which leads to the death of many innocent people?

Mr. Speaker : I have not had such a request, but that is exactly the sort of subject that hon. Members might well choose to debate on a private Member's motion day, or even in an Adjournment debate.

Mr. D. N. Campbell-Savours (Workington) : On a point of order, Mr. Speaker. Will you condemn the hon. Member for Coventry, South-West (Mr. Butcher) for alleging today on radio in the west midlands that I had irresponsibly tabled questions last year linking Matrix Churchill to Iraqi intelligence? I understand that some concern about that is being expressed in the west midlands.

Mr. Speaker : I did not hear that radio broadcast, and I do not know anything about the matter.

Mr. David Winnick (Walsall, North) : Did you not listen to west midlands radio news?

Mr. Speaker : That was not possible.

STATUTORY INSTRUMENTS, &c.

Ordered ,

That the Police and Criminal Evidence Act 1984 (Codes of Practice) (No. 2) Order 1990 be referred to a Standing Committee on Statutory Instruments, &c.-- [Mr. Chapman.]

OVERSEA SUPERANNUATION BILL

Ordered ,

That the Oversea Superannuation Bill be referred to a Second Reading Committee.-- [Mr. Chapman.]

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Orders of the Day

Community Charges (Substitute Setting) Bill

Order for Second Reading read.

Mr. Speaker : I have not selected the amendment in the name of the leader of the Liberal Democrats.

I remind the House that the Bill is very narrow. The wider implications of the community charge can be debated during the debate on an Opposition motion on Wednesday.

4.35 pm

The Minister for Local Government and Inner Cities (Mr. Michael Portillo) : I beg to move, That the Bill be now read a Second time

Mr. Jeremy Corbyn (Islington, North) : On a point of order, Mr. Speaker. I am amazed, as I am sure you are, that the Secretary of State is not introducing the Bill, which is the earliest opportunity for him to explain what he plans to do about the poll tax.

Mr. Speaker : The choice of Minister to introduce a Bill is not a matter for me. On this occasion, it is the hon. Member for Enfield, Southgate (Mr. Portillo), and that is quite in order.

Mr. Portillo : It may be helpful if I reiterate that, on Wednesday of this week, the House will have the opportunity to discuss the community charge on an Opposition motion. I look forward to that. Today, I bring before the House a short technical Bill. It is not about the community charge in general. It is not even about the capping of local authority spending in general. It is about ensuring that, when a local authority has been capped, the reduction in spending that is required is passed on in full to the community charge payer.

I should have thought that such a proposal would command general support in the House. Even those who are opposed to the community charge, even those who are opposed to capping, should not, I would think, want to oppose passing on reductions in spending to the people. Once the reductions in spending have been required and made, it is mere cussedness to wish that the local people nonetheless should be denied the full benefit in the form of lower charges.

Mr. John Fraser (Norwood) : Last year I asked the then Secretary of State whether capping expenditure equated with capping the poll tax charge, and I was given the wrong answer. The effect of the Bill will be that, if the rate of collection of the poll tax is less than the Minister anticipates, there will be a further cut in services based on low collection levels. Will the Minister have his mind on the budget, or will he have it on the level of the poll tax charge? They are two separate matters.

Mr. Portillo : As the hon. Gentleman rightly said, my right hon. Friend the Secretary of State can bring the cap to bear only on the budget. Non-collection and the estimate of the rates are matters that a local authority must bear in mind when it sets its budget. A local authority cannot, in the middle of a year, alter its estimate of what

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the collection should be and ask for more money. The Bill will put right a loophole in the process, in a way that I shall explain later.

Mr. Dave Nellist (Coventry, South-East) : I have asked the Minister's Department very many questions during the past three years, in an attempt to ascertain what estimates the Department was using for the non -collection or the non-payment of the poll tax. During all that time, I was told that it was impossible to make such estimates. However, on 26 November, the Department at last gave me the figures, albeit missing out Birmingham, Leeds, Manchester, and half a dozen of the London boroughs where non-payment is highest.

The figures show that, as of 30 September, Lambeth had collected only 41.5 per cent. of its poll tax--in other words, almost 60 per cent. had not been collected. Is not the whole essence of the Bill based on the fact that the Department said that non-payment should be at about 5 per cent.--that is the capping criterion--while Lambeth said that it expected it to be about 15 per cent.? That is why it went to court. On the figures that I have at last been given, is not Lambeth much nearer than the Department to the true position?

Mr. Portillo : The Department believes that community charge collection should be 100 per cent., and makes no allowance for non- collection. It is open to individual local authorities to make estimates of non-collection at the beginning of each year. Once a local authority has done that, it will not be able to change its mind halfway through the year, come back to the Department and ask for more money. But if, at the end of a year, the local authority finds that its collection fund is in deficit, it will be open to it the following year to make an estimate not only of the non-recovered amount but the collection rate in the second year, in the light of its experience the first year.

Mr. Andrew Mitchell (Gedling) : Before any right hon. or hon. Member is seduced by the eloquent words of the hon. Member for Coventry, South- East (Mr. Nellist) on the difficulties that Lambeth faces with non- collection, will my hon. Friend the Minister remind the House whether that council encountered any difficulty collecting rates? How is Lambeth getting on with the job of collecting last year's rates?

Mr. Portillo : As my hon. Friend implies, there has really been no change. Lambeth had extraordinary difficulty collecting rates, and I believe that years of back payments are still due to it. Its relatively poor performance in collecting the community charge is nothing new, but appears to be a continuation of the council's incompetence in the days of rating.

Mr. Nellist : I cannot allow that remark to go by. How does the Minister explain the situation in Tory Bath, whose Member of Parliament is the former Secretary of State for the Environment? Bath's collection rate so far this year is only 77.1 per cent. Is it not the poll tax, and the fact that millions of people have been made poorer by it, that makes collection so difficult, rather than the inherent inability of local councils to manage their own affairs?

Mr. Portillo : As I understand the hon. Gentleman, Bath is doing 30 per cent. better than Lambeth--which, six months into the year, marks a significant improvement in performance. No doubt Bath will ensure by the end of the

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year that it issues demand notices and takes to court people who have not paid--and in that way gets the collection level as close to 100 per cent. as it possibly can.

Mrs. Alice Mahon (Halifax) : What was the collection level in other Tory boroughs under the old rating system? The problem is not one that affects just Labour authorities, as the Minister well knows. Perhaps the Minister will give the House comparative figures for collection levels under the old rating system and the poll tax.

Mr. Portillo : Most authorities managed to achieve collection levels of as high as 98, 99 or even nearly 100 per cent. under the old rating system, and that should be their ambition with the community charge. I am sure that many councils will achieve collection rates in the 90 to 100 per cent. range. However, Lambeth's collection record was pretty poor even under the old rates system, and the borough is still chasing those arrears.

Mr. Peter Bottomley (Eltham) : Are we not being slightly distracted? Labour Members appear to be suggesting that, if people who can afford to pay do not do so, the burden should be carried by those who do pay.

Mr. Nellist : That is not what we said.

Mr. Bottomley : The hon. Gentleman appears to prefer shouting about the issue to debating it. He says, "That is not so." Perhaps he will try telling that to Labour councillors in Greenwich, who could pay the community charge but do not pay, and who lead anti-poll tax demonstrations.

Are Labour Members seriously arguing that each rating authority, as it was, and each community charge authority, as it is now, ought to be allowed to change its estimate of community charge income between the time that it sets its budget and at some subsequent point in the same year? If that is what Labour financing is about, the longer we can put it off nationally, the better.

Mr. Portillo : I cannot say whether that is what Labour Members believe, but perhaps they will clarify that aspect when they make their speeches.

As to non-collection, it is not clear to me whether Labour is gleeful about non-collection--which is what one might think, given that 28 Labour Members are refusing to pay the community charge--or upset because non-collection reduces the services that local authorities can provide. That is an extraordinary dilemma in Labour policy between members of the party's Front Bench and Back Benches.

Mr. Kenneth Hind (Lancashire, West) : Does my hon. Friend recall the 1986 Comptroller and Auditor General's report, which examined the efficiency of a number of Labour-controlled inner London boroughs--

Mr. Deputy Speaker (Mr. Harold Walker) : Order. Mr. Speaker has already pointed out that the Bill addresses itself to a very narrow issue, and right hon. and hon. Members must not allow the proceedings to develop into a general debate about the community charge.

Mr. Hind : I am obliged to you, Mr. Deputy Speaker. I shall keep to the point. The efficiency displayed by Labour London boroughs in both rates collection and management was questioned in 1986, so that problem has existed

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in those councils for many years. Does my hon. Friend agree that Labour authorities throughout the country have long faced that difficulty?

Mr. Portillo : I will certainly re-read that report. Where the leader or councillors of a Labour-controlled authority refuse to pay, it is hardly surprising that the collection rate is lower than elsewhere.

It is unclear whether or not Labour will oppose the Bill. It would surprise me if it did, because Labour says that the charge is too high and claims to speak for the people who find it difficult to pay--yet Labour also defends to the last ditch a council's right to deny the community charge payer a reduction in his bill.

I described the narrow scope of the Bill, yet I realise that the House may want to broaden the debate to the extent that you, Mr. Deputy Speaker, allow that to happen. The house may want to know of the community charge review. On that I have nothing to add to what my right hon. Friend the Prime Minister has said. Whether my right hon. Friend the Secretary of State feels able to say more on Wednesday, we shall have to want to see.

The House may also want to discuss the theory and practice of capping. I hope that the whole House can agree on the need to contain public spending, of which local authority spending constitutes one quarter. On that, the Labour party is confused. Officially, it recognises, in general terms, the need for restraint, in general--but of course, never in particular. It has no word of complaint about the enormous increases in local authority spending--up by one quarter in just two years. Indeed, authorities are saying that, next year, they need to spend almost 50 per cent. more than they did only three years ago, yet the incomes of those who have to pay for local services have not risen by anything like that amount.

Mr. A. J. Beith (Berwick-upon-Tweed) : What has gone wrong to bring about the state of affairs that the Minister describes? The community charge system was meant to ensure that everyone would know what they were paying, and that they would not elect authorities that were likely to charge too much. Is there something wrong with the community charge system, or is there something wrong with the electoral system?

Mr. Portillo : I shall refer later to how accountability has shown itself so far, and how it will show itself in the future. The Government have proposed paying an extra £3 billion to local government next year. The Labour party says that is not enough. That is its knee-jerk reaction. If we had proposed £13 billion or £30 billion, it would also have said that it was not enough. The fact is Labour will never commit itself to saying how much more the Government should pay. Still less does it say where the money would come from, or whether it would come from borrowing or some other form of taxation.

Labour has consistently opposed the Government's policy of increasing the accountability of local government to the electors. The Government believe that local authority spending--as a part of public expenditure--must be contained. Anyone who doubts that is living in fantasy. The more responsible parts of the Labour party know that perfectly well. Our approach to that need to limit spending operates through controls, improving accountability, and capping.

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Dame Elaine Kellett-Bowman (Lancaster) : I am sure that my hon. Friend is well aware of the appalling burden on the ratepayers of Lancashire because of its profligate council. Does he recall that a delegation came to see him about that and other matters? Also, is he aware that, when considering the Bill and other matters, the all-ages social index operates unfairly towards cities such as my own? Will he also bear it in mind--especially for Wednesday--that, if we were to alter the all-ages social index, and to propose that cities such as Lancaster should be able to opt out of the system and become county boroughs, we should all escape the scourge of councils like Lancashire county council?

Mr. Portillo : I received the delegation headed by my hon. Friend the Member for Lancaster (Dame E. Kellett-Bowman) with pleasure the other day, and I am considering the points that she put to me, which will form part of the outcome of the settlement that the Government will announce in due course. The broader question takes us a little beyond the scope of the Bill, but both I and, I am sure, my right hon. Friend the Secretary of State, have heard what my hon. Friend has to say.

In an ideal world, capping would not be necessary. The community charge has undoubtedly greatly increased the pressure of accountability, as we saw last May in Brent, Harrow, Hillingdon, Ealing, Wandsworth, Westminster, Trafford, Derby and Southend. In all those places, Conservative councillors, who promised lower community charges and more efficient government, were returned.

However, in many places, accountability is still obscured. Transitional payments both to the individual and to local authorities will, for some years yet, distort the picture by reducing the charges that people have to pay. Many councils have yet to come up for election since the community charge was introduced, so that people have had no chance as yet to vote for or against particular levels of spending. The counties, for example, face no elections until 1993. In those places where there are two tiers of local government, people have not yet had time to become accustomed to the split between the spending accounted for by the county and that attributable to the district.

For all those reasons, accountability is for the time being blurred. The Government are therefore prepared to cap, both because of the need to control public spending, and as a means of providing a degree of protection for the hapless community charge payer against unscrupulous, wasteful and irresponsible local councils.

Mr. Allen McKay (Barnsley, West and Penistone) : The hon. Gentleman is talking about accountability, but does he not agree that it has been taken away? Local authorities, which are elected each year, are accountable each year for their policies but if accountability is moved to the centre, how can the local authority be accountable? Also, is it not a fact that, because of poll tax capping, the problems that people come to complain about in my surgery are not a result of the fact that the local authority is accountable but a result of the services that the authority is unable to provide because of its low standard spending assessment?

Mr. Portillo : As I was explaining, the question of accountability is distorted by heavy payments made to individuals and to local authorities. Constituents in Barnsley, in the hon. Gentleman's constituency, received considerable payments this year, by way of the safety net

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and the low rateable value grant, which reduced the community charge in his area. Nonetheless, I am sure that his constituents are more than pleased to find that their community charge has fallen from £330, as proposed by the local authority, to £271, which is the substitute amount set after the cap.

Labour's environment team does not seem to believe that councils should be inhibited in any way in what level of tax they themselves raise. The hon. Member for Dagenham (Mr. Gould) once departed ever so slightly from this line, when he said that capping should be allowed "in extremis". But he has subsequently proved that that was a moment of absent-mindedness, and he is now firmly back in the "let it rip" camp. Labour's team oppose capping, and they are proud of it. They refuse to acknowledge the misery and financial hardship that the spend, spend, spend, tax, tax, tax policy implies for community charge payers. They show that they fail to grasp that local authority spending is part of public spending. I despair of being able to educate them myself, but I have hopes that the hon. Member for Derby, South (Mrs. Beckett) may yet make some headway.

In the Local Government Finance Act 1988, Parliament has given the Secretary of State powers to cap authorities whose budgets are in his opinion excessive, or which represent an excessive increase over the previous year. We used those powers this year to cap 21 councils. The legality of our use of those powers is not in doubt. Twenty authorities mounted challenges to what we had done ; 16 of them pressed their challenges to the House of Lords, but at each stage the challenge to the legality of our actions were dismissed--in all by a total of 11 judges.

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