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Department address the problem of how to reduce the pressure on SSAs as a result of using them in the capping process and that it considers and evaluates alternative approaches."

The SSA system is literally a zero sum gain, to use the jargon. One council's improvement is another council's loss : a reform made here will lead to a perceived injustice there.

However fair Ministers may claim to be in making judgments about the system, some of the conclusions defy human experience and understanding. Under the new social index, Hove in Sussex ranks as a region of greater social need than Liverpool ; Runnymede ranks as more deprived than Wolverhampton. Ministers must understand that those absurdities would matter far less if councils had the freedom and flexibility in their revenue base to set their own tax levels and were not the subject of the most monstrous gearing penalties, under which, for every £1 change in their grant, there is typically a £4 change in the level of their council tax.

The third objection to universal capping is that it does not work on its own terms--it lacks utility. Of course many councils, particularly those in high-stress urban regions, have had their budgets forced down well below the levels necessary to maintain a decent level of service year after year. Many authorities have been forced to cut out discretionary but important sectors of spending. There are also councils, however, whose budgets have been forced up by the capping process and are above the levels that the local electorate and councillors thought appropriate.

In January 1993, Ernest Mallet, the Conservative leader of Elmbridge district council in Surrey, described the capping system as a joke. He said that, in his view, it encouraged councils to "spend up". He added :

"if there were no capping, our spending would probably be about £1 million--[or 8 per cent.] lower".

The Minister for Local Government and Planning (Mr. David Curry) : The hon. Gentleman has chosen the worst example that he could give. The spending of the council to which he referred is 49 per cent. above its SSA. It is about the only place in the country where his thesis is unsustainable. Capping is pulling down that expenditure and ought to pull it down. That irresponsible council needs to be taught a lesson.

Mr. Straw : I am talking about a Conservative council and about what happened in 1993. The Minister should listen rather than quote silly figures. I have used the argument on that council before and it has never been contradicted by Ministers in the past. Mr. Ernest Mallet said that if there were no capping, the council's spending would be about £1 million lower.

Ministers have played their part in the process. While Environment Ministers, as we have seen, have attacked local authorities for spending too much, education Ministers have attacked the same local authorities for allegedly spending too little. That was precisely the position that Birmingham council was in year after year. It was caught in a vice of Ministers' making. Environment Ministers said that it was spending too much, but education Ministers, year after year, complained that it was spending too little.

Mr. Curry : The hon. Member for Birmingham, Perry Barr (Mr. Rooker) said that Birmingham had seen the error of its ways and was trying to make a virtue out of spending

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more on education. It set a budget that plans for the maintenance of services, but the budget speech did not once refer to the loss of a single job in Birmingham. If the hon. Gentleman's thesis were correct, Elmbridge district council's spending could not be 49 per cent. above its SSA because it would have been capped. He cannot say that its spending would be £1 million lower if it were not for the system. Its spending is 49 per cent. above the SSA. It is one of the councils about which the truth is very clear, but capping is reducing that expenditure.

Mr. Straw : The hon. Gentleman will have to take that matter up with the Conservative leader of Elmbridge council. I was referring to what that gentleman said in January 1993. His figures were correct. There is plenty of evidence to show that capping authorities that were spending under their standard spending assessments--that applies to some small districts and to other authorities--put political pressure on them to spend up to their SSAs, thus using the assessments as a control figure for which they were never intended. The Minister of State mentioned Birmingham. He may not realise--this is also incontrovertible--that having spent years complaining about the fact that Birmingham was spending too little on education, this year he and his colleagues at the Department for Education have cut the amount that it can spend on education by £18 million, so this year Birmingham is spending above its SSA. On this occasion, will he condemn or congratulate Birmingham for doing what last year Education Ministers called for but Environment Ministers damned--spending more on education?

Mr. Curry : The answer is plain. We have always made it clear that spending is not hypothecated. That is one of the firmest principles of the SSA system and it was sustained by the Select Committee on the Environment. Spending on education is therefore a matter for Birmingham. Of course we must distribute grant according to some sort of methodology and education is one of the elements, but once the grant arrives in Birmingham the council can spend it on what it wants. It may not be wise, but it is legal and that is the essence of the matter.

Mr. Straw : I am glad to have that on the record and I support the principle. Perhaps the Minister and the Secretary of State--who also takes that view, I think--will talk to their colleagues and especially to the Secretary of State for Education and stop him from saying something wholly different from the message that we just heard from the Minister.

The problem is that the system ends with something reminiscent of the 1970s incomes policies so despised by the Conservative party. In place of local discretion and negotiations with electors there is a national going rate, regardless of local circumstances. On a normal distribution curve, the pattern of spending before capping is translated into a single vertical line.

As a delegate to the Conservative party conference last autumn, Miss Sarah Whitehouse, put it

"under rate capping"--

meaning the system of capping that we have now--

"you can't tell the difference between Labour and Tory." I think that one can, but her remarks contain an essential truth, as there is no longer any discretion at a local level enabling people to enter into a bargain with their electors about what they should spend.

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What is more, the effect on public spending is perverse. I am not aware that the Treasury and the Department of the Environment have undertaken any studies on the utility of capping. No doubt they are frightened of what they might discover. Several times in his speech the Secretary of State quoted with approval the views of Mr. Tony Travers--a man whom he described as

"an independent expert on local government finance".

A study by that same Mr. Travers--from the London School of Economics-- which was published in July 1992 found that capping had "led to higher spending by councils, the opposite result to that intended".

During the debate on housing last week I warned Conservative Members, with my customary concern for their welfare, about the dangers of relying on the briefs produced by Conservative central office. When such giants as Iain Macleod, Rab Butler and Enoch Powell worked there, Conservative central office research department had the enviable reputation that, however disputatious the arguments advanced, its assertion of fact would be beyond question. As standards have plummeted as much inside the Tory party as they have within the Conservative Government, much of that department's material is now tendentious, inaccurate or downright mendacious in the extreme. Ten days ago central office, panic-stricken by the effects of Labour's exposure of the Conservatives' tax fraud at the last election, produced the so- called list of Labour spokespeople's alleged spending commitments that I have here. In it, central office alleged that the cost of ending capping and compulsory competitive tendering--as I made clear in a speech in Brighton on 1 October 1993--would be £800 million. Were the Secretary of State or his political advisers or officials consulted about that figure? Where did it come from? If not, was the statement a straightforward invention--like so many statements from Conservative central office? [Hon. Members :-- "Answer."] I am happy to give way to the Secretary of State at any moment.

When will he and central office wake up to the truth that the policy that we intend to adopt on local government finance is, with one important additional safeguard, precisely that policy outlined by the Prime Minister, in the White Paper that I have here, when he was Chief Secretary to the Treasury in July 1988? When the White Paper was produced the Secretary of State was a local government Minister, so I assume that he had something to do with it and approved of what it said.

In the White Paper the Government announced that they would "in future exclude expenditure from the public expenditure planning total which local authorities finance or determine for themselves." It went on to explain why they intended to do so, saying : "The present procedures lump together expenditure for which the Government has different degrees of responsibility. This blurs the status of the various aggregates--grant on the one hand and locally raised finance on the other. A further disadvantage is that by counting the total expenditure of local authorities in the planning total insufficient attention is paid to the grants that central government provide to local authorities."

It went on to say :

"Very few other industrial countries plan public spending in this way. For federal states, such as Germany, the United States or Canada, this would conflict with their federal constitutions but even in other unitary states such as France or the Netherlands the Government generally makes budgetary plans only for central government expenditure the new process of public expenditure control would be enhanced by redefining the

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planning total so that it distinguishes expenditure which was the responsibility of central Government from that which is the responsibility of local government",

which would be excluded from that planning total.

I am not surprised that the Secretary of State is burying himself in his notes on the Bench. The crucial question is, if that policy was right then and he endorsed it, what--apart from the monumental mismanagement of the Secretary of State and his colleagues in the Cabinet, which has brought the economy to such a low point--has changed since? That policy was sensible and is the one that we shall adopt.

As the hon. Member for Stratford-on-Avon said in his excellent article in The Guardian last week :

"We should end capping, re-establish local government and allow it to resume its traditional right to act on behalf of local communities, answerable to them through the electoral process."

Mr. Tracey : While the hon. Gentleman is on the question of policy, will he say what is the Labour party's policy on councils that do not collect council tax in such great measure?

Mr. Straw : Our policy on Labour, Tory, Liberal or any other council that does not collect council tax is that it must do so. We have only one policy ; it is the same for the collection of local and central Government taxes. The hon. Member for Surbiton (Mr. Tracey) should devote as much attention--proportionately more, given the weight of the problem--to the collection of Inland Revenue taxes by the Government as he devotes to the minor problems associated with collection of the council tax. It is a scandal that £1.7 billion of income tax and other central taxes are uncollected. When will the hon. Gentleman start to condemn his hon. Friends for that? On top of that, I hope that the hon. Member for Surbiton will look at the appropriation accounts for 1992-93, which spell out the extent to which Ministers are complicit in tax dodging in the black economy--that is in addition to the £1.7 billion of tax that has been levied but not collected. The Inland Revenue and the Public Accounts Committee say that there may be an annual tax loss in the black economy of several thousand million pounds per annum. That is in paragraph 171, vol. 12 of the appropriation accounts. The hon. Gentleman needs to spend more time doing that instead of nit-picking at the excellent record of most Labour authorities.

Mr. Gummer : May I bring the hon. Gentleman back to local government? If the London borough of Southwark is not collecting its council tax, it cannot spend it. Does the hon. Gentleman support the proposals of the London borough of Southwark to put council tax collection out to tender?

Mr. Straw : I support the right of democratically elected councillors of Southwark to make their own decisions. The Secretary of State is a centralist and believes that he should make the decisions for every single council in the land.

Mr. Curry rose--

Mr. Straw : The Ministers are now doing a Mutt and Jeff act. I will give way to Jeff.

Mr. Curry : In an article this morning, the hon. Gentleman said that part of his formula for local government was a universal system of election by thirds. Is that telling local government what to do or leaving it the choice?

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Mr. Straw : That is an absurd proposition.

Mr. Curry : Well, the hon. Gentleman suggested it.

Mr. Straw : The Minister is making the utterly absurd proposition that local government should entirely write its own rules. Of course it should not do that. [Interruption.] Local government is part of the national democratic framework, or should be-- [Interruption.] The Secretary of State--

Madam Deputy Speaker : Order. There are too many sedentary interruptions. I am also concerned that instead of debating local government finance, we are now discussing other matters which may be related but are not the heart of the matter we are debating now.

Mr. Straw : I say parenthetically that the Secretary of State does not even know what the rules are.

By law, without discretion, in every metropolitan borough there are elections by thirds, except in one year when there is a bye. In London boroughs, there are elections every four years. In the shire districts, there are either elections by thirds or all-outs every four years. In the shire counties they are once every four years. That is a rag-bag of a system. Democratic accountability could be improved by elections by thirds everywhere and by changing the financial year so that the local elections each year could genuinely be a test of the local authorities' financial proposals to their electorate.

Mr. Rooker : Does my hon. Friend accept that it is a fundamental principle that there is a direct and specific connection between local government finance and accountability at the ballot box? The House is the Parliament of the nation--it is our duty to write the rules. One of the rules that we should like to write would provide for annual elections. I have repeatedly asked the Government to restore annual elections, even in Birmingham, to give us back the missing year from the abolition of the county council. It is wrong that one year in four should be missing and that London should have the chance to vote only once every four years.

Mr. Straw : My hon. Friend is exactly right. Our proposal of annual elections is very popular with the electorate. They want the chance to choose ; why is the Secretary of State denying it? I am astonished that it has become a partisan issue. We should all be agreed on it as it extends accountability.

Mr. Gummer : Let me bring the hon. Gentleman back to the collection of council tax. I am not asking him whether he would insist that Southwark does that, but the public would like to know, as he has been extremely diffident in his advice. Is he or is he not in favour of contracting out, and would he or would he not support the London borough of Southwark? It is perfectly reasonable to ask whether he would or would not support it--or does he not know?

Mr. Straw : Although I am not in favour of compulsory competitive tendering, as I believe in local democracy, I believe that local authorities have a right to decide whether their services should be directly delivered or put out to contractors. If Southwark decides that that is the most appropriate way to collect the council tax, I will support Southwark's right to make that decision. It could not be clearer.

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I am sorry that the Secretary of State has turned accountability into a partisan issue as we support greater accountability. If the financial year for local government were changed, as we are proposing, each year's local elections would not only be a test of local government policy but could act as a referendum on the budgetary proposals of local councils.

The Secretary of State had much to say by way of

self-congratulation about how well he had done in the public expenditure round. He seemed not to recollect the embarrassing table on page 97 of the Red Book, which shows that his Department suffered the largest cut by far in planned expenditure of any single Department--three times that proposed for the Ministry of Defence which suffered the next highest cut. He also referred to claims made last year about job losses. I notice he could not produce any claim that I had made which turned out to be inaccurate because the claims made by the Opposition turned out to be all too accurate. We did a proper study of the likely effects of last year's settlement upon job losses.

The previous Secretary of State said that there would be no job losses. As the recent study from the Local Government Management Board made clear--a study in which Department of the Environment statisticians take part--there has been a reduction of 50,000 local government staff in the year to September. At least 30,000 of those were reductions in staff as a direct result of the local authority financial settlement last year and not because of transfers to compulsory competitive tendering or of transfers of staff to grant-maintained schools.

It is too early to predict the overall consequences of the settlement, but we know two things. First, there will not be sufficient money to pay teachers and other public servants. What I object to about the Secretary of State's statement and the Government's stance is the pretence. They promise to make the pay award of 2.9 per cent. recommended for teachers, and seek to curry favour with a particular section of the electorate by doing so, but fail to follow that through by providing the necessary resources. As local authorities' administrative expenses as a proportion of the total are now tiny, many local authorities will have to pay for teachers' pay awards increases with the jobs of other teachers. The settlement will have a severe effect on some local authorities. Liverpool is one example. Under the ludicrous ranking of the new social index, Liverpool is only the 85th most deprived area of the country, below Salisbury, Bath, Hereford and other green and pleasant cathedral towns. In the real world, however, simple observation shows that Liverpool has one of the worst concentrations of social and economic problems, not just in the United Kingdom but in the whole of western Europe.

The Government know that that is true. That is why they supported Merseyside's successful argument for objective 1 status, which revealed that the average income of households in the region was only 79 per cent. of the EC average. That great city, responsibly led by Harry Rimmer and his colleagues, now for its pain faces a gratuitous cut of £4.5 million in its SSA. Most of that is explained by an absurd cut--not offset by other improvements--of £11.5 million in its SSA for children.

Mr. Peter Kilfoyle (Liverpool, Walton) : The Secretary of State made several references to the fact that the Government were accommodating, flexible, ready to meet local authorities and hear their objections. We have faced capping and cuts. The city council then decided to

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commission Miss Rita Hale as a consultant and took its case to the Minister of State. Is my hon. Friend aware that it went away with another cut of £100,000 in its grant? That is another gratuitous kick in the teeth for the city council.

Mr. Straw : Yes, I am aware of that. I was saddened by reports of the meeting, and I hope that the Minister will consider Liverpool's problems again.

As we know--not least from the harrowing James Bulger trial last year-- Liverpool's problems in relation to children at risk are no less severe than those of other areas. Where is the rationale in earmarking a 30 per cent. cut in Liverpool's spending on children at risk and on other children's services? That is irrational and is bound to be harmful. The vice in which Liverpool is now caught is a direct result of the total central control that Whitehall--200 miles away--now exercises over Liverpool city council's ability to solve its problems.

Mr. Wareing : My hon. Friend mentioned that the European Commission had granted objective 1 status to Merseyside : it recognised the area's problems. Liverpool fears, however, that not much money will be available to meet objective 1 aims. All other programmes have been cut, and the Merseyside development corporation is likely to be phased out by 1997. We are told that the European objective is to create employment and services for the people of Merseyside--contrary to the aims of the gauleiters who reign from Marsham street. If the gauleiters are to review Liverpool's programme, they should consider the need to match the objective 1 funds.

Mr. Straw : My hon. Friend is entirely right : he has illustrated the extent of Liverpool's financial problems.

Within living memory, the Conservative party and its allies the progressives held sway in Liverpool, as they did in many other great towns and cities. Now, the Conservatives have been reduced to a rump in local government. That may explain why so few Conservative Members are present for this debate, why so few were present for the debate on housing, and two weeks ago, in the debate on the flagship policy of the national business rate, why for hours on end not one was in the Chamber to support Ministers.

The Conservatives now control just 10 London boroughs, one metropolitan borough and one shire county. In contrast, Labour has never been stronger in local government, with good reason : people know that Labour provides a higher level of service and better value for money than either of the other main parties.

Of the 10 councils with the best record on nursery education, seven are Labour-controlled ; none is controlled by the Tories. In Labour areas, 40 per cent. of three and four-year-olds have the chance of a nursery education ; in Conservative areas, the figure is only a third of that--just 13 per cent. Of the five local education authorities with the best record on class sizes, three are Labour, while four of the five worst LEAs are Conservative-controlled. Contrary to what was said by the Secretary of State, class sizes have risen as a result of the intense squeeze on LEAs.

Of the 16 most efficient councils named last year by the Local Government Chronicle, eight are Labour, while just two are Conservative. Of the 25 most efficient housing authorities named before Christmas by the Minister for

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Housing, Inner Cities and Construction, 11 are Labour-controlled, three are Labour-dominated, and only four are Conservative. Collection rates have been mentioned. Far the worst council in regard to rent arrears is Conservative Brent. It is owed £16.8 million--a third of its rent roll. The Conservatives have been in power for four years, and they cannot even collect the rent. If we consult the Department of the Environment's computer to find out which authority has the highest proportion of homes that are available for rent but empty, which authority emerges at the top of the list? I almost hesitate to name it. This authority has only 40 council houses, although 1,463 people are on the waiting list ; of those 40 houses, 13--30 per cent.--are empty. I refer to the district council in the Secretary of State's constituency.

Conservative Ealing has the highest council rents by far : £66.06, twice the national average.

Mr. Tracey rose --

Mr. Straw : The hon. Member for Surbiton (Mr. Tracey) clearly wants another fact to take around his local estates. Every one of the five councils with the highest rents is a Conservative-controlled London borough.

Mr. Corbyn : One of the strategies adopted by Westminster council was to leave homes empty, so that the homeless remained on the streets, in hostels or in bed-and-breakfast accommodation, and then sell them to the highest bidder, thus depriving the poor of somewhere to live. Is not the Secretary of State's local authority likely to adopt the same strategy?

Mr. Straw : Yes--and we look forward to hearing some condemnation of what has happened in Westminster. I shall return to that later. As I think the whole country now knows, average household council tax bills are £14 higher in Conservative areas than in Labour areas, although they generally provide worse services. The Secretary of State said that it was up to councils to set the level of their taxes, but that is not so. The total revenue of councils is set by the Secretary of State in the capping orders and notional amounts : it follows as night follows day that council tax levels all over the country are also effectively being set by the Secretary of State. Let me warn the Secretary of State and the country that, if his decisions about the relation between capping and SSAs cause average bills to be higher in Labour areas than in Tory areas--contrary to this year's position--that will serve only to confirm our claim that Conservative Ministers tend to favour Conservative rather than Labour authorities. The absolute power of Tory Governments over councils must be accompanied by corresponding responsibilities for council tax levels.

For all the fancy words of the Prime Minister--who said last year that he wanted a "renaissance of local government"--or the Minister's frequent mention of the need for a new consensus, Ministers can rarely bring themselves to praise local government. Instead we are fed a diet of low- grade, mendacious abuse, especially by Conservative central office.

Two weeks ago, it published a dossier on the London borough of Haringey : it is a tissue of fabrications, inaccuracies and downright lies. According to one of its sections, after the demolition of Wood Green and Hornsey

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town halls, a secret report to the Labour group had recommended the sale of a grade 2 town hall for about £5 million.

We can argue about statistics, and we sometimes do ; we can argue about political philosophies. It is difficult, however, to argue about whether a building is standing or has been demolished. For the benefit of the Secretary of State, here is a photograph of Hornsey town hall. It is still standing, as is Wood Green town hall.

Mr. Tony Banks : Will my hon. Friend refresh my memory? Was it not Conservative-controlled Kensington and Chelsea council that knocked down a town hall overnight when the preservation order was about to be served?

Mr. Straw rose --

Madam Deputy Speaker : Order. Perhaps I should point out that this is not a general survey of council properties. We must return to the main thrust of the debate, which concerns local government finance.

Mr. Straw : I entirely accept what you say, Madam Deputy Speaker. The point is that, had those town halls been demolished and had Haringey council lost the money--as Conservative central office alleged--serious spending cuts or a council tax increase would have been necessary. This is not just an aberration in an otherwise impeccable statement about Haringey's record ; it is symptomatic of the lack of care and the tissue of innuendos and lies that emanate from Conservative central office.

Mr. Gummer : I am happy to accept that Wood Green and Hornsey town halls are still standing, but can the hon. Gentleman explain why Haringey's long-term debt is double that of Romania?

Mr. Straw : My answer is that, until I see further and better particulars from Conservative central office, I should not dream of accepting that what the Secretary of State said was remotely accurate.

Mr. Eric Pickles (Brentwood and Ongar) : If the hon. Gentleman is not happy with the documents produced by Conservative central office, I commend to him a document called "Haringey Council" written by the council's deputy leader. It describes the council as having a legacy of waste, inefficiency and centralism and says that it suffered from a crisis of management which still infests the council's culture. Does the hon. Gentleman agree with his own side?

Mr. Straw : No, I do not. Haringey has a very fine record and produced an extremely good rebuttal document which deals with the town hall and the rest of the lies. I recommend it to the hon. Gentleman.

I am glad that he intervened because I understand that he is the chairman of the local government committee of Conservative central office--a part- time post if ever there was one. He racketed from Bradford to Brentwood with failure in his wake. It was he who, as leader of Bradford council, diverted £13 million of housing capital allocation to fund the inner- city ring road, cut £13 million from the education budget in a single year and increased rents by £8, thus losing £8 million in subsidy from the housing revenue

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account--no wonder Bradford Conservatives lost control as quickly as they had gained it. Now he is in Brentwood and cannot gain the support of his senior party officials.

The Brentwood Weekly News of 20 January 1994 states that Mr. Dashwood- Quick, the chairman of West Horndon Conservatives, went on air to say that the Government

"had a clear lack of responsibility, poor leadership and disregards the views of grass roots Tories who helped get us elected". He is also reporting as saying :

"all decisions seem to be governed by a need for expediency rather than what is right."

Mr. Dashwood-Quick was right.

The Secretary of State for the Environment mentioned Birmingham, Britain's second city. Under Labour control, the economy and environment of that great city has been transformed for the better. The programme of public buildings in the centre of the city, from the international convention centre, the symphony hall, the council house and down to New street, makes the area one of the finest cities not only in the United Kingdom but in Europe. It is so fine that the Prime Minister was all too happy to share in the reflected glory for the Birmingham summit in October 1992.

Of course, such programmes of inner-city and urban renewal require vision and cash. Of course, they were bound to cause controversy, but Birmingham Labour leaders and Birmingham Labour party had the courage to see their vision through. No one can gainsay their achievement, except the small- minded partisans among the Conservatives and their lickspittles in the Conservative press.

Last Friday, the Under-Secretary of State for the Environment with responsibility for housing, the hon. Member for Banbury (Mr. Baldry), issued a tacky, two-page attack on Birmingham, under the heading "Birmingham the Barmiest". However, not even he could bring himself to make his assertions with absolute confidence. He said that Birmingham was coming up on the inside as the new loony left authority but added the important qualification

"if you believe last week's Mail on Sunday."

My advice to the hon. Gentleman is that it would be dangerous to believe The Mail on Sunday last week or any week, as he clearly realised.

In the same disreputable handout, the Minister relies on the Birmingham Evening Mail. Virtually every adverse story about Birmingham which appears in the national papers begins life in the Birmingham Evening Mail or its sister paper The Birmingham Post. The headline "20 Barmy Ways Labour Waste Cash in Brum" which appeared in The Sun was a direct lift from the list of 50 such charges in The Birmingham Post last November. There is, of course, a reason for that. The Birmingham Post and the Birmingham Evening Mail are owned by Midland Independent Newspapers. One of the few surviving Tory Members of Parliament for Birmingham is the right hon. Member for Sutton Coldfield (Sir N. Fowler). He is not only chairman of the Conservative party but chairman of Midland Independent Newspapers. The man who is allowing Conservative central office to peddle whoppers about town halls in Haringey and even bigger untruths about tax is the man who heads the two monopoly papers in Birmingham which tell lies about Birmingham city council. Instead of acting as the mouthpiece of Tory central office and denigrating it, those two papers should be speaking up for that great city. If

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there is any meaning in the word "independent", the group could begin to show it by inviting someone other than the right hon. Gentleman to act as its head and appoint as chairman someone who does not have such a patent and vested interest in shoring up the fortunes of a Tory party on the slide in that great city as elsewhere.

Mr. Roy Thomason (Bromsgrove) : If Birmingham city council is the paragon of virtue that the hon. Gentleman describes, will he explain why the current leader only recently took control in a left-wing coup, dispossessing the Labour group's chosen leader?

Mr. Straw : I am almost tempted not to allow any more interventions from Conservative Members for fear of their humiliating themselves. In case the hon. Gentleman had not spotted it, the truth is that, when my good friend and great colleague Sir Richard Knowles retired as leader of Birmingham city council, there was an election. In the Labour party we honour our elders and allow them to go in their own time--not for us the backstairs coup for which the Tory party is even today sharpening its knives.

Mr. Gummer : Hardly had Sir Richard Knowles left office than the new leader attacked his polices, said that they were wrong for Birmingham and wanted new ones. The hon. Gentleman must decide which Birmingham he is talking about--the Birmingham of Councillor Stewart or that of Sir Richard Knowles--because Councillor Stewart said that she would have preferred to use the money very differently.

Mr. Straw : I happen to know both people rather better than the Secretary of State, and one cannot put a sheet of paper between them. I have here the budget statement of the new leader of Birmingham city council who went out of her way to praise her predecessor's record. As for the charge of inconsistency, the Secretary of State should be careful. We have heard him pontificate about the merits of the council tax but I have here the 27-paragraph speech--called "The Morality of the Community Charge"-- which he made in Blakeney in Norfolk in 1988 and which I suspect that he wants to forget. In it, he castigated the idea of any tax based on property. It contains the fantastic sentence :

"As a moral traditionalist, I have grave misgivings about situational ethics"--

whatever they may be. He then described the iniquities of domestic rates. He ended by saying that the community charge was indeed "a morally superior alternative"--

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