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Mr. Nigel Griffiths (Edinburgh, South) : Does the Secretary of State realise that, after the poll tax fiasco, no one believes any figures that he gives? Does he realise that when the Tories talk about savings they mean cuts--cuts in services for the elderly, cuts for people requiring education, cuts in housing and cuts in our local government services?

Will the right hon. Gentleman answer a specific point put to me by the Scottish Association for the Deaf? One centre dealing with hearing impaired children and others has been set up in Edinburgh but services the whole of Lothian. The association knows that that service, with high-tech equipment and high training, simply cannot be dispersed to a number of smaller authorities. How does he answer the charge that there will be no service in many of the new authorities because he will not make it statutory?

Mr. Lang : The hon. Gentleman indulges in his usual policy of scaremongering and alarming those who are aged or infirm. I point out again that the figure on which I have based what I said is the one from the Labour party's position paper.

For completeness, I should say that there is a slight time lag between the transitional costs and the savings. There must be an initial investment to secure the savings. But once the investment is made--and central Government will provide for almost all of it--it is recovered very soon and the savings go on year after year for council taxpayers.

I make an offer to Labour Members--I am a reasonable man. In the interests of harmony and enlightenment, I will accept their estimate of transitional costs of £200 million--although I believe that it is on the high side- -if they in turn acknowledge what that actually means. It means, first, there will be almost no extra burden for council tax payers ; secondly, it will be spread over several years ; and, thirdly, it will be recovered and then substantially exceeded by the savings that flow from the costs. So I invite the hon. Member for Hamilton to ratify that agreement and we can then move on to other more productive and relevant issues.

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Mr. George Robertson (Hamilton) : Does the Secretary of State know that all the reports of the Local Government Commission in England include the following statement :

"the experience of successive reorganisations in local government and the national health service suggests that transitional costs tend to be higher in practice than had been expected" ?

Does he accept that?

Mr. Lang : If transitional costs are higher, it will be because redundancies and early retirements are greater and, therefore, savings subsequently will be greater still.

Mr. Roy Hughes (Newport, East) : Will the right hon. Gentleman give way?

Mr. Lang : I will not give way. I have given way many times and I do not wish to detain the House much longer. [Interruption.] In that case, I hope that the hon. Gentleman

Madam Speaker : Order. The Secretary of State is not giving way. Only one hon. Member at a time can have the floor.

Mr. Lang : I have given way many times and I must press on to allow other hon. Members to take part in the debate.

I have another question for the hon. Member for Hamilton : where does he stand on COSLA's policy of non-co-operation? As he knows, his predecessor and his party are strongly committed to it. Indeed, it was they who caused the Convention of Scottish Local Authorities so unwisely to abandon the sensible policy of co-operation that it pursued up to the end of July. We had just had a productive meeting with it and we had agreed to a further one and to the setting up of a working party on finance.

Then, alas, COSLA's president, Charles Gray, was suddenly prevailed upon to stand on his head. Proclaiming the non-co-operation policy, as reported in The Scotsman on 31 July, he said :

"It is ludicrous to think that we should co-operate on the implementation of these disgraceful proposals and I have no doubt that councils throughout Scotland will take a similar stance." From standing on his head, he was soon turning cartwheels because, sadly for him, within one week one of the most senior conveners, Mr. Duncan Macpherson of Highland region, said :

"COSLA has been down this road before and this a course of action that would inevitably have to be abandoned sooner or later." Sadder still, Sir Robert Calderwood, the retired chief executive of president Gray's own council of Strathclyde, intervened with an open letter to the hon. Member for Monklands, West (Mr. Clarke) in which he said :

"I would praise you for changing your mind and if you are going to do it, as I believe you inevitably will, it will be so much better if you do so sooner rather than later."

At the end of August, COSLA and the Opposition parties convened a meeting to redefine what non-co-operation meant. A letter of clarification was issued, which prompted The Scotsman to report : "Disarrary remains over the bid to boycott council reforms." Councillor Peter Peacock, the secretary of the non-aligned group of councils, was prompted to say :

"I am afraid the letter does not take matters much further forward and disguises the fact that COSLA is split down the middle on this issue."

Even COSLA's vice-president, Andrew Tulley, said :

"To continue to use the word non-co-operation is pointless."

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As tensions rose, 20 Labour council groups met at the beginning of September and the president tried another redefinition. Further guidelines were agreed. "The real test," said Mr. Gray,

"is not how many councils have publicly declared policies of non-co- operation, but how many are actually co-operating with the Secretary of State."

Six days later, The Scotsman reported that half of Scotland's local authorities opposed the non-co-operation policy. There was another COSLA meeting on 17 September and another definition from the president. Councils should express their opposition

"clearly and unequivocally in whatever ways suit their own circumstances and which they feel will be most effective." So in a last-ditch attempt to save their non-co-operation policy--

Mr. Henry McLeish (Fife, Central) : How exciting.

Mr. Lang : It does not excite me, but it seems to excite COSLA. In a last-ditch attempt to save their non-co-operation policy, the hon. Member for Fife, Central pitched in on 6 October, urging councils to respond to a Government request for reform costings, saying :

"They must write in, operating the non-co-operation policy to the letter and spirit of what was decided."

By the end of that month, half the authorities in Scotland were co- operating with the Government.

What a pitiful and humiliating episode for the convention and for the Scottish Labour party. That sorry saga of short-sighted posturing has done nothing to help local government in Scotland. COSLA exists to speak for local government to central Government and to do so with one voice. Driven by the Labour party, it has failed to fulfil that function and it has split its members down the middle. A policy of non-co-operation by COSLA will do nothing to slow or impede the progress of our reforms to the statute book, but I hope that the hon. Member for Hamilton will be big enough to admit, when he speaks, that his party's policy on non-co-operation was wrong and has failed. Let him admit defeat now, before more damage is done, and let him urge COSLA to come to its senses.

Mr. George Robertson rose --

Mr. Lang : No. I will allow the hon. Gentleman to recant at length in a few moments.

It is striking, as one examines the Welsh and Scottish proposals, how far two separate exercises have arrived at similar solutions. In each case, we are proposing a pattern of authorities that range significantly in size, population and character, reflecting different characteristics, geography and local loyalties in each country. In each case, we have decided, where appropriate, to return to historic county names and areas and in both countries we have recognised the potential for a co-operative and enabling approach to service delivery, rather than an assumption of the exclusive provision of services by each individual authority. We have both recognised that authorities should have a much more flexible legal framework, enabling them more readily to purchase services and expertise from each other, and our respective Bills will provide for that. Progress in the debate and progress in the reform of local government will be helped enormously if we have answers to the questions that I have raised today with the hon. Member for Hamilton. I shall remind him of what those questions are. First, does he share the view of his party leader that only Scottish Members should vote on

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Scottish matters? [ Hon. Members :-- "Answer."] Secondly, does he agree with his hon. Friend the Member for Fife, Central that the cost of local government reform will be £200 million? If so, we can all agree on that figure and on what it implies, and put the issue behind us. Thirdly, does he agree that his party and COSLA made a terrible mistake in their policy of non-co-operation, and that they should now admit failure and abandon it? The House will listen closely to his answers, and he will be judged by what he says, or fails to say, today.

The proposals that my right hon. Friend and I will shortly introduce will unlock the unrealised potential in local government--the potential powerfully to represent the people in their areas, organise co-ordinated and effective services and provide real value for money for local taxpayers. Those are goals worth striving for, and they should be supported by all people with a genuine concern for local government.

3.20 pm

Mr. George Robertson (Hamilton) : When welcoming me to the debate, the Secretary of State for Scotland was unwise enough to mention Maastricht. One cannot find a braver man than one who dares to say that Maastricht was a success for the Government ; the House and the nation know that the Government got Maastricht through without the social chapter only by using the confidence vote, which the Prime Minister had to resort to, so I am not unhappy if he wishes to remind us of that.

Nothing that the Secretary of State said today makes either relevant or necessary the commitment in the Queen's Speech to legislate for the reorganisation of local government in Scotland and Wales. Although the burden of my remarks will deal with the Scottish legislation, my hon. Friend the Member for Caerphilly (Mr. Davies) will tackle the details in Wales, should he catch your eye, Madam Speaker.

This exercise is an extremely costly, completely unwanted, totally unnecessary and cynical exercise in Tory political protectionism. Simply to try to tie up a few safe havens for that dying breed of Conservative council bosses, Scotland is to be thrown into the expensive turmoil of a wholly irrational butchery of the existing 16-year-old council set-up.

That the legislation should be the centrepiece--indeed, in Scotland, the only piece--of the Government's legislative programme is a remarkable display of wrong priorities. They call it "back to basics" and endlessly parrot sound money and family values to us. When the national finances have been impoverished by ministerial incompetence--to the extent that millions of ordinary families throughout the land will face the burden of value added tax on their fuel bills from April next year--and Scotland's child care laws are crying out for the urgent improvements that were completed in England in 1989, what on earth are we doing in this 1993-94 Session of Parliament with a Queen's Speech that promises us more tax, more disruption and more upheaval, simply to put Scottish and Welsh councils through the mincer? What for? Reform, they say. The definition of reform is an improvement--something that will take us further forward. That is not what we are talking about in the case of Scottish local government.

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The hon. Member for Eastwood (Mr. Stewart) is the Minister responsible for Scottish local government, which reminds me of the old eastern European joke in which an Hungarian politician said, "We're about to create the post of Minister for the Navy." When someone pointed out that Hungary was a land-locked country, the politician replied, "After all, the Soviet Union has a Minister for Justice, and Bulgaria has a Minister for Culture, so why can't we have a Minister for the Navy?" So the Scottish Conservatives have a Minister for local government.

In The Scotsman last Wednesday, he said :

"Our fundamental aim is to establish a strong network of local councils which are both sensitive and accountable to the needs of the people they serve."

Apparently, that is the Government's objective in this exercise. Well, that is not the view of Councillor Brian Meek, the eloquent, pen-pushing journalist and a Conservative member of Edinburgh district council, who wrote in The Herald in July of this year : "So let's get on with the gerrymandering argument. Did Mr. Lang and his Ministers seek to give their party the best possible chance under the new set-up? Of course they did. Why shouldn't they?"

There we have it, that is plain enough language--blunt, stark and brutally honest. It is a sight more honest than the Government have been up to now by dressing up gerrymandering as public interest. I do not know whether Councillor Meek was one of those mentioned by Sir Michael Hirst in that letter to the Secretary of State for Defence which was uncovered in yesterday's edition of Scotland on Sunday. Sir Michael Hirst, a former Member of the House, said : "Sadly, grandness and support of the Party seem in inverse proportion and I never cease to be amazed at how many fair weather friends the Party has."

Frankly, I never cease to be amazed that the Scottish Conservative party has any friends at all. With such openly honest friends as Brian Meek, the Secretary of State for Scotland does not need many enemies.

The Government show absolutely no shame about dressing up an assault on local democracy as a drive for efficiency and accountability. They abuse words such as "cost effective" and "local services" when they are engaged in naked political manoeuvring. As they embark on yet another pick- pocketing exercise on the Scottish public, the party which is currently polling in Scotland at below the level of Kim Campbell's annihilated Canadian Tories, is exposed by one of its own top supporters as simply giving

"their party the best possible chance."

Let me come to the issue raised by my right hon. and learned Friend the Leader of the Opposition last week. I would issue a public warning to Conservative Members from England, whose votes will be required to get the Scottish and Welsh Bills through the House against the majority votes of hon. Members representing both countries. We all have equal votes in the United Kingdom Parliament, but the warning still stands.

Not very long ago the same wonderful, silk-tongued people in the Scottish Office sold another idea as being an efficient, accountable, cost-effective change in local government--a change that required blind obedience from English Members to get it through the House, against all the warnings that we deployed against it : that idea was the poll tax, the community charge, the memory of which should send a shiver down the spine of every Tory Member who values his seat.

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The poll tax was born in Scotland out of panic and ideology ; it also was reared on fraudulent, implausible claims about its fairness and effectiveness ; and it was to be visited on Scotland first. Then, even in the face of its incandescently spectacular failure in Scotland, it was to be transplanted on to the rest of the country. History tells us the rest of the tale.

I warn Conservative Members to be wary--to be scared stiff--about providing the Lobby fodder for the suicidally bright ideas that they are asked to support by the bewhiskered, funny-money men and smooth ex-bankers camping out in the Scottish Office.

Mr. Rod Richards (Clwyd, North-West) : The hon. Gentleman seems to be implying that the Conservative party does not have a mandate to govern in Scotland and Wales [Hon. Members :-- "It does not."] I am delighted that Opposition Members agree with that. Is the hon. Gentleman aware that, apart from the general election of 1945, the Labour party has never had a majority of seats in England? Is the hon. Gentleman saying that the Callaghan and Wilson Administrations did not have a mandate to govern England?

Mr. Robertson : The hon. Gentleman's hearing is almost as bad as his political judgment, because I did not suggest that Conservative Members have no right to vote. I simply issued a warning, based on experience, of what will happen to them if they do not listen carefully to the opinion expressed in Scotland and Wales by the majority parties for which people have voted.

Conservative Members have a free right to vote, as they did for the poll tax ; as a consequence, they paid a rich price in all parts of the United Kingdom. English Conservative Members should remember that those guys on the Government Front Bench gave them the poll tax, with all the misery and political fall-out that came with it. Today, the Government are offering those same hon. Members the gerrymander tax, which will be just as lethal to them.

Who will pay for the gerrymandering extravaganza that we are about to embark on? Last week, the Minister with responsibility for local government in Scotland said in The Scotsman :

"Cutting costs is not, however, the main objective of the reform." Too true it is not. He went on :

"What is abundantly clear is that the reform will pay for itself within about five years and will thereafter save money."

Not a single person in Scotland believes in the sort of accountancy fiddling that is going on.

In the same article, the Minister said that he would "further refine the figures". However, the figures change every time a Minister speaks. Today, the Secretary of State told us that we should accept the figure he gave of £200 million. My hon. Friend the Member for Fife, Central (Mr. McLeish) was using Government figures when he proved that, even on the basis of the Government's wildly optimistic figures, the cost to the council tax payer will be substantial. The Minister, however, has now informed us that he has refined the figures yet again. New figures were quoted in The Scotsman last week and new optimism was expressed. Not a jot of new evidence was provided, however, to back up those figures.

It is not surprising to discover that not a single expert agrees with Ministers' rose-tinted expectations. Even the Government's own supporters do not take the figures at face value. Mr. Arthur Bell is a prominent Scottish

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Conservative. He is no fair weather friend-- one is not a Tory in Lanarkshire and called a fair weather friend of the Tory party for very long. Last week, he addressed a meeting at the Strathclyde business school in Glasgow and said of the Government's range of possible savings :

"If anyone came to me with a gap as wide as this I would be amazed. I would not wish to make major changes in my business without being more accurate."

In this case, Mr. Bell is spot on ; he is absolutely right. The apparently precise savings figures are bogus. The Secretary of State confessed that in a letter to my predecessor, my hon. Friend the Member for Monklands, West (Mr. Clarke), in which he was a lot franker than he has been so far in public. He wrote :

"the eventual costs and savings arising from reorganisation will depend to a large extent on the activities of local authorities themselves. Most of the decisions on matters such as staffing levels and accommodation requirements will be a matter for individual councils, not central Government. Consequently, it will be for local government to determine the exact level of savings accruing from reorganisation."

What that actually means is that the Secretary of State does not know ; he has not got a clue ; all he says is that it is up to local government to determine the costing. If that is the case, he should listen to what local government representatives are unanimously telling him about what the reforms will cost them, the country and the individual council tax payer.

Mr. Lang : It is plain that the hon. Gentleman did not listen closely to what I said. I explained that the gap in the estimate of costings is so wide because it will depend on the decisions of 28 separate local authorities.

The hon. Gentleman asked me whether I will listen to local government. According to the views of local authorities to which I am listening, if Tayside became a single-tier authority, it estimates that it would make a saving of £8 million. Angus district estimates that it would make a saving of £5 million. If Dundee were to become one of three authorities in Tayside it estimates it would make a saving of £2 million and Fife estimates that it would make a saving of £5 million should it become a single-tier authority.

Mr. Robertson : I shall deal with local government figures later. It is worth underlining the bogus and spurious figures. The Minister responsible for Scottish local government said that, having looked carefully at all the evidence and refined their original estimates to reflect input from local authority interests and others,

"our conclusions are that one-off transitional costs of between £120 million and £186 million are quickly offset by ongoing annual savings of between £22 million and £66 million".

Those are precise estimates for something that will lie purely and simply in the hands of local government.

However, I base my figures not on that optimistic crystal ball gazing in which the Secretary of State for Scotland indulges, but on the views of the Scottish branch of the Chartered Institute of Public Finance and Accountancy, which puts forward solid, detailed arguments to show that the Scottish council tax payer and taxpayers in general will pay heftily.

The Government still will not say who will pay and the Secretary of State has come out part, half, two thirds, three

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quarters, 90 per cent? As the Government do not even know what it is, they cannot be in a position to tell us. We must guess who will pay.

Will the Treasury pay? Will the Chancellor of the Exchequer pay for the cost of Scottish local government reorganisation when the Government have a £50 million deficit and, according to leaks from every Department, must even consider cutting dole payments and invalidity benefits? Will they pay for the extravaganza of producing a Tory-redrawn map for Scotland? That is hardly likely. Are Scottish Office and Welsh Office budgets now sufficiently expandable to take account of the money? That, too, is hardly likely. The answer that everybody in Scotland and Wales expects, is "you pay", the taxpayer pays. "Tax today, jam tomorrow"--the usual Tory slogan.

The figures in CIPFA's document are based not on the Government's fantasies but on the concrete example and experience of the reorganisation of the metropolitan counties, which took place in England and Wales not so many years ago. The most respected body in its field, it produced in March a devastating indictment of the Government's Touche Ross calculations. It said that savings had been overstated and potential costs understated. It said that the margin of error was considerable and that the report did not properly assess the likely cost of reforms. It backed up all its claims with the facts and figures that the Government so glaringly have not produced for Parliament or the people.

I offer two examples from CIPFA's report. First, on retirement and redundancy costs, CIPFA says that Touche Ross

"seriously understates the potential costs associated with this item."

It uses the actual, not the imaginary, experience of the much less complex reorganisation in the metropolitan counties, Greater Manchester, South Yorkshire and Avon and shows that the figures range between 1.7 to 2.7 per cent. of expenditure. In Scotland, the equivalent is between £125 million and £200 million on that item of expenditure alone.

The second heading is on winding up existing authorities. The White Paper says that Touche Ross calculates that that would cost £88 million in Scotland--only 2 per cent. of local authority expenditure. But it does not even bother to try to prove it. For a much less complicated reorganisation in Greater Manchester, the cost over five years totalled £13.5 million. The equivalent in Scotland would be £275 million.

So for those two items alone--many more items have been catalogued--the one -off transitional cost would be between £400 million and £675 million. That is about a half a billion pounds on two items alone. That is on the recent calculation of the very local government experts, who the Secretary of State for Scotland says will determine the costs and savings.

The shambles has one message for the people of Scotland and of Wales : very soon, there will be more taxes, bigger burdens, more waste. It is all to pay for a sordid exercise in gerrymandering in the Borders. The gerrymandering was casually and openly admitted by Brian Meek and is scarcely a secret in Scotland, but it is a scandal nonetheless. It will appear all the more so when the

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outside dispassionate world considers the redrawn Tory map of Scotland, which was described in the editorial of The Scotsman newspaper on 21 August as :

"A map drawn to no higher democratic principle, no deeper logic, than the electoral advancement of the Conservative Party in Scotland".

That put it bluntly and accurately.

In the Borders, Berwickshire is gouged out and joined up with a part of East Lothian. The regional convener of Borders regional council, that well- known radical and left-leaning figure the Earl of Minto, said :

"The decision to amputate Berwickshire from the Borders is in my opinion the worst decision of any kind that I have encountered in my life".

In Lothian, gerrymandering descends to pure farce. Even our unfair weather friend Brian Meek found it difficult to swallow what was happening in Lothian. He said :

"I have to say that I found the proposal to gouge out a slice of East Lothian and send it, via the Balerno corridor, to join up with Mid and West Lothian a little on the contrived side."

He goes on to say--this is really getting back to basics : "Nor does there seem to be a strong political case for it"-- as if that would justify the policy in some way.

In Tayside, despite the changes announced by the Secretary of State today, Dundee city has still lost some of its major commuter communities in Monifieth and in Invergowrie. That leaves the city to pay the hefty bills for services provided to those people who are now taken out of the city boundaries.

In Central region, the obsession with keeping an 81,000 people-strong Stirling safe haven means that a forced marriage will occur between Clackmannan and Falkirk, two distinct and different communities separated by a river estuary and joined only by a bridge that happens to be in Fife region. That bridge, the one connecting point between those two joined-up counties, is scheduled to close for six months in the year that the new council is expected to come into existence.

In Strathclyde, the Alice in Wonderland redrawing goes on apace. Ayrshire is artificially split in two, with South Ayrshire just happening to be Tory -controlled--for the moment. Kyle and Carrick district council has 113,000 people, while North Ayrshire will have a council representing 263,000 people. East Renfrewshire, the home, redoubt and last resting place of the Minister with responsibility for Scottish local government, has a mere 88,000 people. That basic building block in the contrived structure will sit beside West Renfrewshire with 265,000 people and South Lanarkshire with 317,000 people. Helensburgh has been wrenched out of Dumbartonshire. King's Park and Toryglen have been rescued from the original plan to put them in South Lanarkshire and out of Glasgow. The Minister responsible for local government was quoted at the Scottish Tory conference as saying that councils were to be more visible and more accountable to their electorates.

I think that it was again Mr. Arthur Bell who said :

"We have got to get it right this time because this will be local government into the next century. What is proposed is crazy." Last week, Lothian regional Tory councillor Mr. Ian Buchanan said :

"The problem is not that the reforms do not go far enough, but that they are going in the wrong direction completely. The White Paper is a backward looking document, a plan for the last century not for the next century".

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One statistic says it all. The average population base for the 25 unitary authorities would be 204,000 people, but for the five Tory safe havens it will be 95,800. That tells us everything.

There is one measure that was to be in the legislation for Scotland but is not--full-scale English and Welsh-style privatisation of water. That was the Secretary of State's ambition. All along, that has been the Government's ambition and, although Ministers shake their heads and feign innocence, we all remember that day in March when the Prime Minister told us :

"I have no reason to doubt that water privatisation in Scotland will be effective and efficient, as elsewhere."-- [Official Report, 9 March 1993 ; Vol. 220, c. 783.]

That was what the Prime Minister said, but the Government were warned off by united and decisive Scottish public opinion and the message finally got through : the Scottish people want water in public hands. The Systems 3 opinion poll, which was commissioned by COSLA in the past couple of weeks and published this morning, shows beyond any shadow of doubt that 95 per cent. of all Scots want Scottish water in Scottish local government hands. Of those interviewed who said that they would vote Conservative at a general election tomorrow--perhaps a very small sample--86 per cent. said that they wanted to keep water in Scottish local authority hands. I appreciate that the danger of water privatisation has not gone away. We will stay alert to the Government's plans and their intentions. The Government now know that their own political annihilation would be the price to pay at the next election if they were to dare to tamper with Scotland's water and the way in which it is controlled. The new quangos for water are a paving measure, but they are a climbdown in the face of a public opinion scalding that even this Government have never experienced before.

What is the agenda for the turmoil and upheaval that this reorganisation will cause in Scotland? Who will pay the price, the real cost of the confusion that will be created? Scottish industry has already expressed serious reservations. The Institution of Civil Engineers wrote to the Government earlier this year, making this point :

"the case for reorganisation has not been made and an independent committee of inquiry should be set up to fully investigate the present system before further changes are made."

Other business people have expressed serious concerns about the fragmentation of a system that they know and understand and, on transport infrastructure, that they have come to value, especially in regard to what has happened in Strathclyde.

What is in this reorganisation for the thousands of Scots who use concessionary travelcards all over the country--the 340,000 elderly people who benefit from that provision? What is in it for school pupils and parents in localities where catchment areas are being scythed to pieces by new boundaries? What will be the future for special education in the tiny council areas? What will happen to voluntary organisations?

It is a recipe for chaos and waste--chaos in the name of efficiency, disruption in the name of cost-effectiveness and quangos in the name of democracy. George Orwell should have been writing about 1994, not 1984.

Democracy is in question. This reorganisation, if it gets through Parliament, will be the paving measure for yet another lurch to the non- elected state, with more quangos taking decisions but being accountable to no one and more joint boards meeting away from the public searchlight, offering less accessibility but more bureaucracy.

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