House of Commons Hansard Debates for 4 Feb 1992

Mr. Allen McKay (Barnsley, West and Penistone) : It is time that the House, the Government and the Secretary of State stopped denigrating local government. It is time that we acted like grown-up people and recognised local government for what it is and for what it does. It is time that we recognised the work, the time and the service of local councillors, and it is time that we recognised everything that has been and is done by local government. It does the House no credit wholly to denigrate local government.

I ask myself why local government is denigrated. I do not say that the Government have been allowed to carry out the principle that I am about to explain, but I must give some examples. Salazar of Portugal had to do two things to move power from local authorities to the centre : get rid of trade unions and get rid of local government. Franco in Spain had to do two things to move power to the centre : get rid of the trade unions and get rid of local government. Hitler in Germany had to do two things to move power to the centre : get rid of trade unions and denigrate local government. I do not wish to compare anything in my country with those examples, but I believe that the principle is the same. To move power to the centre, one has to make the trade unions impotent, and one starts gradually to move the power from local authorities to central Government.

Since 1979, the Government have pursued a vendetta against local government. Why? I have always said and always will say that it is central Government's duty to decide how much to give local authorities. After that, it is

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local government's duty, in consultation with the citizens whom it represents, to decide how much it can go above that to provide proper services. In 1979, the Government set out to cut central Government grant to local government. They thought about all the power in the Labour authorities, which they despised, and they wanted people to turn against the local authorities. That did not work, so the Government gradually brought down the revenue support grant, which meant that the local authorities put up the rates to provide the same level of services--never mind an improvement in the services. Central Government decided that they must do something else, so they dissolved the counties because they were providing bus services which were next to none. Everybody loved the bus services, but they were being subsidised and the Conservative Government did not like that. They got rid of the counties.

The Government considered what to do next, and that is how rate capping came about. The Government realised that, although they had caused the problem for local authorities of having to ask the people for extra money, people accepted that, so they put a cap on. That meant not only that local authorities could not get money, but that they could not provide services. The Government are looking for ways in which to draw attention away from their own centralised policies, so they ask people to make local government the whipping boy. That is where we start.

My local authority has more or less managed in that period, but the Government are treating local government like the proverbial donkey, whose owner decided, in the interests of economy, not to feed it. He was very disappointed when it died just when he had got it going without giving it anything to eat. That is what central Government are doing to local government : they are trying to make it manage without anything to eat and, if they are not careful, it will die. Given all the sacrifices that local councillors have made, I do not know how they can take what is happening-- all the brickbats that have been thrown at them both by those they represent and by central Government. I shall not go into the facts and figures, because my hon. Friend the Member for Barnsley, Central (Mr. Illsley) has already done so. Suffice it to say that, as a result of this year's SSA, my authority will lose £5 million. We need £150 million to break even, and there is no way that we can find that money. Not only will every poll tax payer in my area have to pay a lot more ; they will get fewer services.

That money can only come from what hon. Members on both sides of the House have always recognised as the two largest spending areas--social services and education. In 1974, the authority decided to embark on a rolling programme to provide nursery education throughout its area. In 1979-80, that programme had to stop : the authority had to find the money to meet its statutory obligations, so non-statutory obligations had to go. As a result, half of those living in my constituency are saying, "Hey, wait a minute ; you've provided nursery education for that half of the area, so why not for this half ?" My concern is that the half of my constituency that does enjoy nursery provision may find it gradually eroded because, as a non-statutory duty of the authority, its funding may have to be reconsidered.

Those are some of the problems that local government faces. In addition, further responsibilities are being placed

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on local government by central Government. Where is the funding to be found for child care, care in the community and extra education ? If this Government or any future Government, of whatever political persuasion, do not get down to examining what has happened to local government over the past few years and attempt to put it right, the problems will remain. I honestly believe that the Secretary of State recognises the problem. The problem facing him, however, is how to extricate himself from his present difficulties and save face at the same time. The time for saving face has gone. It is time to co-operate to put local government back on the pedestal where it belongs, and for the Government along with local government and local people, to find funds once again to provide services that have been lost.

The local authorities provided employment. All the little construction firms that depended on local government contracts for their survival have died because of central Government's action. Local government also provided enterprise and industrial estates. Firms have come from Japan as a result of local government enterprise. I am the first to admit that they would not have come without central Government help and that we have received central Government grant for regeneration. Having provided that assistance, the Government should not kill the area.

As the Secretary of State is here, I want to make a plea about RECHAR. The Secretary of State smiles, but let him answer my question. The unified business rate will bring to my authority an increase not of 7 per cent. but of 1.6 per cent. The poll tax will bring to it an increase of 4.6 per cent., not 7.8 per cent. The police and the teachers are to receive an increase of about 10 per cent. Where will the money come from for that? All those items of expenditure will have to be looked after. If the Secretary of State can say that RECHAR will come in, under present Government rules, in addition to the 4.6 per cent. and the 1.6 per cent., I will start to believe him. If he cannot, I shall believe the others, who say that RECHAR money will be dissipated in a way that was not intended. It is time that the matter was looked at.

8.4 pm

Mr. Andrew Mitchell (Gedling) : The hon. Member for Barnsley, West and Penistone (Mr. McKay) mentioned RECHAR. My right hon. Friend the Secretary of State knows that all of us on both sides of the House are determined that the money should be made available to the areas that we represent. My right hon. Friend and his colleagues know that I succeeded in persuading the British Government to include my constituency in the RECHAR proposal. It was with great dismay, therefore, that I learned that the Commission had removed my constituecy from the list of those seeking RECHAR help. In adition to seeking to secure RECHAR money, I hope that we shall ensure that it goes to those constituencies that need it. I place on record my dismay that the Community has removed my constituency from the proposal.

At the beginning of his speech, the hon. Member for Barnsley, West and Penistone said that he thought that the Government and the Secretary of State should stop knocking local government. It is pretty hard to sustain the

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view that the present Secretary of State has knocked local government. He has consistently sought to bolster the pillars of local government and enhance its role.

It is important to recognise that there is a strongly held view that it is the Labour party that has undermined the local government establishment. That is why many of us welcomed the strong emphasis that my right hon. Friend the Secretary of State placed on the fact that there would be no amnesty for non-payers of the community charge. Like it or not, Labour Members must accept that it was the campaign by 30 or so of their number against payment that made it so much more difficult for local authorities to collect the money. The fact that non-payers have had the apparent sanction of members of the Labour party has made it that much more difficult for authorities to collect the sums.

Mr. Tony Banks : Is the hon. Gentleman really suggesting that non- payment is attributable entirely to the actions of a mere handful of Labour Members of Parliament who decided that they would not pay? If so, the hon. Gentleman is giving those hon. Members powers that none of them ever believed they had. Their rejoinder would be, "Oh, that we had."

Mr. Mitchell : That is not quite what I said. I am not saying that those hon. Members were pivotal. I am saying that the campaign for non- payment by 30 or so Labour Members sent a material message to the country. It is all very well for the hon. Gentleman to say that they were a mere handful ; they made up more than 10 per cent. of the parliamentary Labour party. That is a large number, and they sent a clear message to the country.

Mr. Brandon-Bravo : Lest it should be thought that we are referring only to Labour Members of Parliament setting a bad example, will my hon. Friend confirm that, in our own county of Nottinghamshire, senior Labour members of county hall--the very people who were setting the charge--did not pay until they were the subject of court orders? That was the kind of example being set by Labour councillors throughout the country as well as by Labour Members.

Mr. Mitchell : My hon. Friend has eloquently demonstrated the truth of my remarks.

The position was even worse than that. The authorities which are determined to collect, which challenge the concept of non-payment by the use of the courts and which are successful in collecting are Conservative councils, whose record of collection is infinitely better than that of Labour councils. As my hon. Friend the Member for Nottingham, South (Mr. Brandon- Bravo) said, the Conservative councils in Nottinghamshire have been successful and determined in collecting the community charge. It is the Labour councils which levy the highest charges and which are the least successful in collecting.

Mr. Allen McKay : It is a pity that we do not have time to go into the way in which charges are made. The hon. Gentleman is doing himself a disservice both on that subject and by talking as he does about non- payment. He has not got down to the nitty-gritty of why non-payment has occurred. I should like to tell the hon. Gentleman about the people in my constituency who have had to pay the 20 per cent., but I hope that we have now got rid of that

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rule. Others who have not paid the poll tax are those who cannot pay. They are counselled, and the payment comes late.

Then we come to the small core of those who will not pay, and the problem is getting those people into court. The police will not serve warrants. The police have received an increase in their allocation to pay for 17 civilians because the chief police officer does not believe that his officers should waste their time serving such warrants. The increase for the police this year will simply pay for civilians to serve warrants on those who will not pay the poll tax. It is ironic that that increase will be paid for by those who have paid their poll tax.

Mr. Mitchell : The hon. Gentleman is talking about the difficulties associated with collecting the community charge. Conservative Members would not disagree that it is difficult. However, like several of my hon. Friends, I am talking about something else--about the signals that the hon. Gentleman's colleagues have given the country about non-payment.

I turn now to the level of the settlement and to the way in which the spending assessments are determined. The settlement that has been obtained by the Department of the Environment this year seems fair and just, all in all. Of course each of us would like our own local authorities to have more money, but taking the constraints on Government into account, this seems a fair and defensible settlement.

On this as on other occasions, I have noted the points that have been made about the SSAs. When the new system was introduced, I looked hard at the SSA for my constituency of Gedling and at those for other local district councils in Nottinghamshire. I had to conclude that, by and large, the way in which the SSA was constructed was fair. I emphasise that I should like my right hon. Friend the Secretary of State to find more money for Gedling. We can and will spend well every penny that he provides for us.

Having considered Broxtowe, Rushcliffe, the city of Nottingham and neighbouring borough councils, I recognise that, broadly speaking, the settlement is fair. I wonder how easy it would be to start uprooting the system again. It is clear that there is logic and sense in the way in which the SSAs have been calculated around the country. I am sure that my right hon. Friend does not need me to tell him that it could be dangerous and difficult to uproot the system at this point.

It is immensely frustrating that, although local government receives funding through its own community charge precepts and from central Government allocation and grant, it for ever complains about and lays at the feet of the Government any shortfall between what it would like to do and what it can deliver because of cost constraints.

Local government must face up to the fact that it has its own revenue- raising powers and grant from central Government, from which it must meet the needs that it seeks to meet and was elected to meet. It must justify its allocation and its spending priorities. Schools in my constituency badly need capital spending. I am relatively happy that the Government have massively increased the amount of money available for capital spending on schools this year in Nottingham, but I now look to the county council to live up to its responsibilities and to spend on those schools the amount

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that is required by the children who are educated in them. Some county councils continually shuffle off responsibility for their decisions and difficulties on to central Government, but in doing so they undermine local government.

We have heard today the litany that we hear in all local government debates --that the bad decisions that have been made by local government have come almost entirely from councils that are controlled by the Opposition parties. I say "parties" because I am referring also to the Liberal Democrat party which, sadly, is not at the moment represented in the Chamber. Hansard is littered with such examples and, in a positively brilliant speech, my hon. Friend the Member for Harrow, West (Mr. Hughes) listed many of them. All our local government debates have contained examples of Labour's spending in Hackney, Lambeth and Liverpool and around the country. My hon. Friends and I are driven to the irresistible conclusion that, if that is what the Labour party is like when it is in power, we have many lessons to learn about what it would be like if it were ever to form the Government at Westminster.

The hon. Member for Barnsley, West and Penistone (Mr. McKay) has said that the Government have undermined local government but, quite apart from what I said earlier about non-payment, I put it to him that the extraordinary behaviour of some of those bizarre councils has done more to undermine local government and the respect in which central Government and local people hold local government--

Mr. Allen McKay : Again, the hon. Gentleman is wrong. His attitude to local government is set, narrow and shallow. If he thinks that the conduct of one local authority affects other local government thinking, he is wrong. Local government is an entity on its own. Its affairs never spill over its own border. That has been one of the problems of local government, not what the hon. Gentleman has referred to.

Mr. Mitchell : With respect, I do not agree with the hon. Gentleman. The chapter of the way in which some Labour councils have behaved is well documented. That is what has done so much damage to local government.

My final point relates to the important work of the Audit Commission. All hon. Members are consumed by analysing how much money has been spent and whether more money will be made available for particular services, but we do not spend anything like enough time considering whether that money is well spent. I pay tribute to the work of the Audit Commission. It has saved billions of pounds by writing reports that are always respected and independent, and which suggest ways in which local government--and, now, the health service--can get better value for money.

The Audit Commission has examined achieving value for money in areas such as the management of the council housing stock, and has produced reports on absenteeism through sickness, on the police, on refuse collection and on schools. It has performed an outstanding service to local government and to local and national taxpayers by seeking to get more from each pound that is spent in public service. Although the citizens charter and the charter mark are an excellent extension of the other reforms that we have introduced to make local government more efficient and

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responsive to the people it represents, the work and commitment of the Audit Commission are our best guarantee that that money will be well spent.

I very much regret that it appears that the Labour party's plans for the Audit Commission may water down its effectiveness by handing control to the Labour party's chums in the unions and local government. If the Audit Commission is to continue to do the work that it does so successfully for local government, and to achieve better value for money, it must be independent and impartial, and its reports and work must be respected. I very much hope that the work of the commission can be significantly extended after the general election. It could do much more work on housing associations and housing management. We must ensure that we can further benefit from the work that it performs so well.

8.18 pm

Mr. Tony Banks (Newham, North-West) : The feelings of the young hon. Member for Gedling (Mr. Mitchell) about the way in which local government has broken up were expressed subjectively and I suspect that he will not agree with me when I say that they seemed to date from about 1979--and we know what happened in 1979 when the hon. Member for Finchley (Mrs. Thatcher) was first elected. She was elected, in part, on a manifesto which said that it was her intention to take Whitehall off the backs of the town halls. That was her claim, but what followed was a complete lie in terms of the manifesto pledge.

The relationship between central and local government has deteriorated partly because a series of Conservative Administrations have continually attacked and deprived the local authorities of resources, and subsequently because of the poll tax.

Mr. Brandon-Bravo rose --

Mr. Banks : I shall warm to my theme and then give way to the hon. Gentleman.

When the hon. Member for Gedling mentioned the Secretary of State being a great supporter of the pillars of local government, I could not avoid a little chuckle. That reference immediately brought to mind Samson, who pulled the pillars down. The Secretary of State has indeed pulled those pillars down. I then went on to think about who had clipped Secretary of State Samson's golden locks and, once again, I realised that it was the right hon. Member for Finchley. However, he is still with us, and his contribution from the Dispatch Box was in his usual style, as if this House was not made up of Members of Parliament, but delegates, all with their blue rinses and red necks, applauding to the rafters when he makes one of his roustabout speeches to the Conservative party conference.

Mr. Brandon-Bravo : The hon. Gentleman is right that there was a change in 1979, but for different reasons from those he advanced. However, I do not believe that I will be able to disabuse him of his beliefs.

Prior to 1979, most local authorities were Conservative-controlled and they considered themselves to be local authorities, not Governments. When the Labour Government asked those of us in local government to exercise restraint on spending, we did it because they were the Government, and we were the local authority. After 1979 there was a marked increase in Labour- controlled

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local authorities and that understanding went out of the window. Consensus went out of the window, and those authorities decided locally that they were the Government and to hell with what was said in this place. That is why the Conservative party had to legislate to get done those things which were done by agreement prior to 1979.

Mr. Banks : I should like to consider that argument in some detail, but time does not permit it. However, I cannot let the hon. Gentleman get away with it altogether.

Everyone in local government would accept that central Government set the broad parameters for overall spending, which is perfectly legitimate. The hon. Gentleman spoke about a Labour Government asking for cuts to be made. It is important to remember that, then, central Government gave a rate support grant equivalent to about 60 per cent. of all local government spending. We are now talking about a rate support grant of about 42 per cent.--considerably lower. When the Labour Government called for cuts, local government spent a great deal more. The hon. Gentleman has not made his case.

The interference in local government by central Government is not just financial, but political. However, we should interfere in local government with some trepidation because local democracy and local accountability underpin parliamentary democracy and accountability. Many hon. Members on both sides of the House have cut their political teeth in local government and one would expect such Conservative Members to show more loyalty towards it.

I accept that one can make some criticisms about Labour local authorities, but what I dislike about the Secretary of State's usual contribution is that it is so cliche d, simplistic and grotesque. He seems to say that Tory councils equal good, Labour councils equal bad. That does not bear any analysis. If one seeks to understand the way in which politics is gradually dragged into the gutter, it is because hon. Members come out with such a simplistic approach. [Interruption.] The hon. Member for Southampton, Test (Mr. Hill) has only just ambled into the Chamber. If he would like to sit there for a while and learn something, I will then cheerfully give way to him. Mr. James Hill (Southampton, Test) rose --

Mr. Banks : I do not normally give way to someone who has just ambled into the Chamber, but I shall make an exception on this occasion, because I rather like the hon. Gentleman's florid looks.

Mr. Hill : The hon. Gentleman cannot separate his several lives. He is unable to separate his contribution to what should be a well-informed debate from a satellite television knockabout. If the hon. Gentleman is as clever about local government as he is trying to impress us, perhaps we could hear something about local government. We know that he was a member of the Greater London council, and there are plenty of things that he could talk about. However, he is just offering us a knockabout contribution, and I do not believe that that will get the debate any further.

Mr. Banks : I am glad that I did not miss that intervention, because it has contributed so much to the debate. The hon. Gentleman, who has only just wandered in, should realise that I am responding to points raised earlier by his hon. Friends. Although he may not agree with what I have said, and what I am about to say, he

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should at least extend to all of us the courtesy of sitting quietly in his seat, especially if he joins us at such a late time. There are times when I do not believe that the Secretary of State understands what is happening in local government. I know that the right hon. Gentleman gets around the country, but does he realise that it is almost impossible to maintain services in many of our local authorities ? I have never known a time when central Government have interfered so much in the day-to-day running of the town halls. We should allow them to get on with their business and we should not interfere so regularly in what they do.

My hon. Friends the Members for Newham, South (Mr. Spearing) and for Newham, North-East (Mr. Leighton) have already mentioned the particular problems that we face in our borough. We are the second most deprived local authority area in the country according to the Department of the Environment's own indices. We have a raft of problems with which to deal and the Secretary of State should understand some of them by now.

The particular problem to which my hon. Friends have referred has arisen because we will have to pay back about £6 million, which was awarded by the rates valuation courts because of previous overpayment of rates. As my hon. Friends have said, the original calculations were made by the Inland Revenue and had nothing to do with the borough of Newham. We had a stable rate base for a long time and we saw no reason to doubt that there was anything untoward in the ratings that had been made within our borough. We now find ourselves confronting a massive pay-back.

I do not intend to say any more about this issue, which has already been referred to by my hon. Friends. However, we were received promptly and courteously by the Minister for Local Government and Inner Cities yesterday when we explained the situation to him. I would not want to pre-empt any joyous, or even hopeful, news that he might tell us tonight. I would even say something nice about his new-fangled haircut if he were to say something hopeful to the London borough of Newham.

It is important to consider the wider implications of the revenue support grant settlement as it applies to all London. It appears that London is well represented tonight, but we are all from one particular borough. As chair of the London group of Labour Members of Parliament, I should like to consider the difficulties being experienced by other London boroughs.

It is the opinion of the Association of London Authorities that the level of revenue support grant does not reflect the wide diversity of problems that are faced by ALA Labour boroughs. Considerable evidence has been collected about the additional costs arising from refugees. It is known that more than 80 per cent. of refugees admitted to this country make their way to London, for many good reasons. However, the Government have effectively wiped their hands of any responsibility and have left London boroughs, essentially Labour ones such as Haringey, Newham and Islington--I accept that there are also refugees in Kensington and Chelsea--with the responsibility for those refugees and all the problems that they bring with them. Camden has calculated that the additional spending required on unaccompanied refugee children in 1992-93 will be just short of £1 million. Similar figures apply to other ALA member authorities.

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London is also experiencing a great problem with homelessness. Any hon. Member who wants to go round with his eyes open will become aware of that problem quickly. An analysis conducted by the London Housing Unit has suggested that, by March 1992, and on present trends, nearly 50,000 households in London could be in temporary accommodation. The net cost of providing such temporary accommodation will be about £265 million. There is no adequate recognition of such costs in the revenue support settlement.

The Secretary of State really must address the unique problems of London. I realise that many of my hon. Friends do not have much sympathy with Members who say that, but they at least work in London and appreciate that the capital city has a series of unique problems. We do not want an unfair share of what is being handed out by the Government ; we want a share that reflects the peculiar circumstances in the capital city. The changes in standard spending assessment methodology have upset a number of Labour councillors. That methodology is not fully understood. Indeed, I suppose that very few people understand it.

I want to put to the Minister of State a question about foreign visitor nights. The Association of Local Authorities is simply opposed to the inclusion of foreign visitor nights in the measure of enhanced population in respect of SSAs for other services. The rationale of using visitor nights, rather than where visitors spend their time during the day, is very questionable. Secondly, the data source is completely inadequate, being based on 1981 census data. Thirdly, the financial effect of the inclusion of foreign visitor nights is totally unfair.

I do not want to point an accusing finger at the Secretary of State. Actually, I do point an accusing finger at the Secretary of State, but not at the Minister of State, who is a decent, honourable person. I hope that, when he winds up the debate, he will say something nice about Newham. [Interruption.] If the Minister, having induced me to say something nice about him, betrays me at the Dispatch Box I shall take horrible revenge. However, that will come at a later debate.

When one looks at the inclusion of foreign visitor nights, one sees that Westminster, which has a Conservative authority, gains £5.3 million and that Tory Kensington and Chelsea gains £4.5 million, but that Labour Hackney loses £600,000, Islington loses £700,000, and Newham loses £700,000. One wants to know a little more about this question of overseas visitors.

The Minister for Local Government and Inner Cities (Mr. Michael Portillo) : Camden

Mr. Banks : Perhaps Camden, too, has gained--I hope so--but I shall want to know whether it has gained as much as Westminster and Kensington and Chelsea.

Then there is the matter of the Inner London education authority transitional grant. ILEA is concerned about the rapid rate of withdrawal of that grant. The reduction for 1992-93 represents more than 28 per cent. in cash terms, or one third in real terms. The authority believes that the profile of the grant should be reconsidered and that the grant for 1992-93 should be increased by at least £60 million to prevent further deterioration in education in inner London. I hope that the Minister will address that problem.

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I come now to the elements of spending that the ALA says should be disregarded for capping purposes. Again, I put a perfectly reasonable question to the Minister. Why should not all expenditure on council tax preparation, which is not met by specific grant, be excluded? The poll tax will be very difficult to collect in 1992-93, as every hon. Member acknowledges. Many authorities face a stark choice between allocating resources to poll tax collection and enforcement and allocating resources to front-line services such as education and social services. Poll tax administration costs must be placed outside the capping level.

That seems to be a perfectly reasonable proposition. The hon. Member for Gedling referred to Members of Parliament and councillors who are not paying their poll tax. Everyone has a civic right--a civic duty, some would argue--to refuse to pay a tax that they think is peculiarly unfair. Those people must take the consequences, of course, and for many of them the consequences are dire. My hon. Friend the Member for Liverpool, Broadgreen (Mr. Fields)--perhaps I cannot now refer to him and others as my hon. Friends, as they are no longer in the party--

Mr. Andrew Mitchell : They have been sacked.

Mr. Banks : Exactly. They have been sacked from the Labour party, and I expect that they will have to leave Parliament. They have paid a very high price for taking their stand. I disagree with them, as, no doubt, do most other hon. Members. However, the hon. Member for Gedling should never disparage a person who puts his job and his reputation on the line when he sees a tax or a law as grotesquely unfair. We all know that the poll tax was grotesquely unfair. That is why the Conservative Government got rid of it.

Mr. Mitchell : The hon. Gentleman makes a point about the civic duty of citizens. He should accept that there is a very different point to be made in respect of a Member of Parliament. Members of Parliament, having taken part in the process of making laws, cannot then break them. Two of the hon. Gentleman's hon. Friends may have forfeited their seats in this House. What about the other 28, who still have the sanction of the Labour party?

Mr. Banks : I have made the point that I do not agree with the stand that has been taken. I am merely trying to emphasise that those people have paid a very high price. In those circumstances, hon. Members should not be so critical of them. Indeed, the price that has been paid is one which I suspect very few other hon. Members, on either side, would be prepared to pay for a principle. That ought to be recognised.

There is much about the rest of the situation in London that I should like to comment on, but I see that many hon. Members are eager to speak, and there is no audience so unreceptive as a bunch of people waiting for someone else to sit down so that they can get up. I have great affection for local authorities. I cut my political teeth in a local authority ; I went to a local authority school ; I lived in a local authority house ; and I learned music in a local authority concert hall. In those circumstances I have great reverence for local authorities, which are grotesquely attacked by Conservative Members.

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We want to see local authority services in this country improved, but that will not be achieved by hon. Members who constantly attack and denigrate decent officers and councillors who give up their time, their jobs and all sorts of other things. Those people want to provide services, and we should make sure that they are able to do so. However, I am afraid that they will all have to wait for the election of a Labour Government before local democracy can be put back on the road.

8.37 pm

Mr. James Paice (Cambridgeshire, South-East) : Like the hon. Member for Newham, North-West (Mr. Banks), many Conservative Members cut their political teeth in local government. I should hate anybody to get the impression that affection for local government is the preserve of the Opposition. It is not. Many Conservative Members have spent many years in local government. One of our advantages is that we were in local government at a time when there was a Labour Government and recall how things were in those days. That is something to which I shall return in a moment.

I want to associate myself very closely with the comments of my hon. Friend the Member for Cambridgeshire, South-West (Sir A. Grant) about the settlement for Cambridgeshire. There was some concern that Cambridgeshire, as a very fast-growing county, would not receive the SSA that it felt it needed. Needless to say, it still has not received what it feels is needed, but that is beside the point, as it never will. The SSA that the Government has awarded to Cambridgeshire under the formula is substantially higher than those of many other areas, and we believe that the county has been treated extremely well.

The Minister of State will recall that my colleagues and I met him to discuss the situation in Cambridgeshire, as did hon. Members from other counties. The points that were put to the Minister have already been enumerated, so I shall not repeat them. I should like, however, to make a brief comment on the additional area cost adjustment. It is nonsense that, on one hand, the civil service recognises the extra costs of living and working in Cambridgeshire by awarding premiums, whereas the Department of the Environment does not recognise those costs when it comes to settling grants. I very much welcome the changes in the recognition of notional interest from capital receipts. That important point was made by Cambridgeshire, and the Government have recognised and acted upon it. In the end, we have had a very good settlement.

Concern will always arise from what is known as data lag. In any fast- growing county such as Cambridgeshire, data lag is bound to be of some significance, although not as much so as some of my Cambridgeshire colleagues believe. Inevitably, any population statistics will become out of date in a growing county.

When considering that problem, one comes to the fundamental fact that any formula to distribute a central grant is bound to create problems. For one to gain from an adjustment of the formula means others losing. So, in the Government's efforts to ensure that any changes to the formula meet with the general approval of the local authority associations--a worthy desire-- any change which means that the majority might lose will be

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vigorously opposed. Hence, any measure which tries to overcome the data lag means that those who represent areas with falling populations will oppose it.

Almost all areas in which there have been population reductions in recent years have been urban areas, often or usually represented by Labour authorities. So my constituents are still losing because urban local authorities are gaining more grant than they would be getting if the population statistics were right up to date. It will be difficult to overcome that problem. Perhaps, as a Lambeth poll tax payer, I should welcome the fact that Lambeth is getting a bit more grant than it would have got if the population statistics were absolutely up to date, but I would rather sympathise with my constituents, who to some extent still lose from the system. That problem is not unique to SSAs : it applies to any formula used to distribute any sort of central grant. There will always be authorities which take the view that they are being ill treated by whatever formula or system is adopted, and that is exacerbated the higher the level of central grant as a proportion of total expenditure. So Labour Members who pretend that they could increase the grant--suggesting that somehow the problem would go away--are fooling themselves and the public.

I look forward to the day when education ceases to be a local authority function. I should like every school in Britain to be grant-maintained, given total responsibility for managing its own affairs. If one took away, say, 70 per cent. of expenditure, one would be left with a remnant of local authority expenditure, which would mean that the impact of whatever national formula was used for the central distribution of grant would be rapidly and considerably diminished. That would get over the annual event in which we are participating today and in which many of us--I am as guilty as any--fight our corners because of the way in which the formula has worked.

I referred to some of us cutting our teeth in local government in the 1970s. I remember, even in those days, the right hon. Member for Bethnal Green and Stepney (Mr. Shore), when Secretary of State, exhorting local authorities to curtail their expenditure. I recall the glorious mess that the Government of the day made in the 1970s. If they understood, even then, that we must curtail local government expenditure--that it could not just be let rip--goodness knows what the Labour party today is thinking if it believes, as it appears to believe, that we can get rid of capping, increase government grant and allow local authorities full vent to all their ambitions for expenditure.

Understandably, the hon. Member for Dagenham (Mr. Gould) declined to answer an intervention of mine when he had clearly said, in answer to an earlier intervention, that a Labour Government would abolish the community charge forthwith. The implication was that it would be abolished during the next financial year, before its demise, already decided, on 31 March 1993. If that would be his intention, he must say how local government would be funded in the remaining 10, 11 or however many months remained of the following municipal year. That would involve another £6 billion to £8 billion having to be paid by way of public expenditure, perhaps out of borrowing. That would be paid for not by us but by our children and their children paying back, as always, the debts incurred by Labour Governments. One might describe it as a case of the mice playing while the cat is

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away, in that the shadow Treasury team is not in the country just now, able to keep an eye on promises being made on behalf of the Labour party.

I largely welcome the settlement. I recognise the limitations of SSAs. The problems involved are not unique to the SSA system. They will be with us whatever mechanism is used to distribute the money that the Government of the day decide is appropriate for local authorities to have from the centre. We cannot get round that feature of the system, but the sooner the totality of local government expenditure is reduced dramatically by taking education out of it, the sooner the effect of problems in the formula will be diminished. I shall support the Government in the Lobby tonight.

8.46 pm

Mr. Harry Barnes (Derbyshire, North-East) : The standard spending assessment is one of two great evils of the poll tax. The first was the poll tax itself, based on a flat rate, the worst form of taxation ever introduced in a democratic society. It has not been fully removed but merely sidestepped with the introduction of the council tax.

The second evil was the method used for arriving at the standard spending assessment, meaning that in many cases the poll tax was pushed up to very high levels. That SSA remains in place as part of the council tax. So we still have with us one of the major problems that the poll tax introduced.

Much has been said about the methodology that has been used in constructing the SSA. That methodology affects no district council worse than that of North-East Derbyshire, which covers much of the constituency that I represent. Other authorities in Derbyshire are also badly affected by the operation of the SSA, as is Derbyshire county council.

It is often said that when league tables are produced somebody must finish at the bottom. North-East Derbyshire, with its areas of serious unemployment and former mining areas that are now in decline--places such as Clay Cross, which at one stage had quite a reputation in the House, Renishaw and Holmewood--has great problems requiring various types of assistance. Those areas come within North-East Derbyshire, which manages to finish in 365th position out of 366 district councils in England, with only east Dorset below it from the point of view of SSA per head of poll tax payers. I have just received a written answer from the Department of the Environment listing the statistics ; it will be in the Library. It shows North-East Derbyshire's SSA as £81 per head, with many authorities above it receiving two or three times more because of the problems in their areas. That is a vast and almost unbelievable disparity for an area such as North-East Derbyshire. An examination of the breakdown of the figures leading to the area's SSA reveals many of the difficulties.

There is another table in the Library in another answer from the Department of the Environment. It is about the distribution of the SSA : the percentage that is expected to be collected through poll tax, the percentage that comes from the business rate and the percentage that comes from the revenue support grant. Again, North-East Derbyshire is near the bottom of that league in terms of revenue support grant, but high up in terms of the amount that has to be raised in poll tax moneys in order to meet that SSA.

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It is 13th from the top, or 13th from the bottom, whichever way one wishes to look at the list. This means that, when the two sets of figures are related, the SSA for the poll tax payers in North-East Derbyshire in terms of the grant that they receive is abysmal. The Audit Commission has produced sets of comparative statistics for similar types of authority. North-East Derbyshire finishes at the bottom of those lists, as it finishes bottom of the lists for all the authorities in Derbyshire, although those other authorities are themselves often badly placed. This is the position for a district authority because of the four main items used in assessing the SSA. There is the enhanced population. North-East Derbyshire loses in this connection because many people move into Sheffield or Chesterfield, or for the pits to places such as Markham, for their employment and are not there during the day. That has a knock-on effect, because that figure is then used and is multiplied into other figures which are used later. A considerable loss occurs there, because the moneys that North-East Derbyshire had to provide in no way relate to the loss of those amounts. I could go through those items one by one and there are very few that have amounts associated with them that could be said to be of relevance. They are often matters of relevance to county councils but not to district authorities.

Then there are the characteristics of ward density and ward sparsity. When those two figures are added together, North-East Derbyshire manages to finish up with a smaller grant than any other authority.

The shape of North-East Derbyshire has to be looked at, along with the services that it has to provide. It defies logic that it is seen to be an ideally shaped area, the best type of make-up that could possibly be found, therefore requiring the lowest possible SSA. In terms of the all-age social index, North-East Derbyshire falls down because it has a social mix whereby the eastern part of the district is very much a traditional working-class area and the western part is a middle-class area. That middle-class element reduces considerably the grant that is available. It is as if working-class people have to carry middle-class people on their backs.

There are other problems for North-East Derbyshire, and these have been stressed by other hon. Members. There is the problem of the RECHAR money which is not being provided. The pit closure programme continues and workshops are now to close, which affects the level of the business rate.

All this takes place in the context of Derbyshire itself. If its figures are compared, those of the last GRE with its current SSA, Derbyshire finishes at the bottom of increases for the shire counties. Yet it also has characteristics which mean that these policies should not be directed towards it. I am saying, not that a fiddle has taken place after the methodology has been established, but that the methodology produces this sort of nonsense and should be replaced.

The fraud squad has visited the council offices in North-East Derbyshire. Instead, the fraud squad should be investigating what has been done in local government finance. An ordinary, decent authority is attempting to manage on wholly inadequate resources, and if it goes only slightly beyond the SSA, it moves into the capping area. That is an unbelievable situation for the people of

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