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6.12 pm
Mr. Eric Pickles (Brentwood and Ongar): It is a great pleasure to follow my right hon. Friend the Member for Selby (Mr. Alison). He gave us a lesson in how to charm the Government. As many of us have thought for some time, he is an old smoothie.
It is also a great pleasure to follow the hon. Member for Wentworth (Mr. Hardy). I read his speeches in Hansard before I came to the House. I wish him well in his future retirement. I am sure that it was a slip of the tongue, but the hon. Gentleman said that under Lady Thatcher the proportion of grant raised locally was increased. In fact, it was decreased. Perhaps he was confused by the fact that the gearing was changed.
It is wrong of Labour Members to say that the standard spending assessment figures have been fiddled. No one seriously believes that. They have been examined by the Audit Commission and by such luminaries as Tony Travers from the London School of Economics. All the reports say that the way the methodology works is satisfactory and fair. No one can point to another system in the world that is more fair.
Mr. Barry Field (Isle of Wight):
My hon. Friend's long list did not include the Environment Select Committee, which also found the system to be entirely objective.
Mr. Pickles:
I am grateful to my hon. Friend for that additional information.
Labour Members have drawn comparisons between Wandsworth and Westminster. If Wandsworth received the same grant as Tower Hamlets, it could give back £1,000 to each council tax payer. Unless my geography is terribly wrong, Tower Hamlets is not exactly a safe Conservative borough. It is certainly not part of some supposed Tory plot. Sooner or later, Labour Members will have to produce reasoned arguments.
The reason why Labour Members say that the SSA figures are fiddled is that they do not want to answer two basic questions. First, if the grant is inadequate, how much extra would Labour be prepared to provide? Secondly, what proportion would be raised locally?
Mr. Betts:
The hon. Gentleman said that the Audit Commission had accepted the methodology. Is he aware that the Audit Commission commissioned a report by Price Waterhouse on the issue of capital financing, which
Mr. Pickles:
The hon. Gentleman knows that in April the way in which local authorities can deal with capital financing will change because of the private finance initiative. That will give them many opportunities, in partnership with private enterprise, to renovate schools, libraries and leisure centres.
There is a certain carnival atmosphere about the debate. The Evening Standard last night said that it was like a ritualised dance. The Opposition come and say that the grant is inadequate and that the world as we know it will come to an end. The Government come and say that the grant is generous and reasonable. The Opposition say that there will be many redundancies among teachers and council staff and that it will be the end of services as we know them.
This year, the Opposition say, "We are not crying wolf. There will be deep cuts in local government services." Of course, that never happens--and why not? Let us take one standard assessment. The largest part of any local authority budget is staffing. Local authorities have to deliver education and social services, which tend to be reliant on high numbers of staff. Compared with last year, there has been a reduction of 1.5 per cent. in the staffing level. However, if we deduct from that all those employees who have transferred to private companies through compulsory competitive tendering or who now come under the arrangements for grant-maintained schools, the figure shrinks considerably.
Hon. Members may say that that is just one year, but comparisons with 10 years ago show that about the same number of people are employed in local authorities now as they were then--despite compulsory competitive tendering and the various new functions that have been introduced. It is simply not true to say that vicious cuts are being imposed.
At the time of our debate last year, one authority screamed loudly about the number of teachers and other staff that it said it would have to make redundant. I am referring to the late, but not very lamented, Avon county council. When it was finally wound up and its reserves were examined, there was an unexpected balance of£54 million. That is enough to absorb the total budgets of five or six district councils. The spokesman for the council said that the balance was larger than had been anticipated. That is a bit like the late Emperor Hirohito saying that the second world war had not gone entirely to his satisfaction.
Mention was made of Westminster city council and other Tory authorities. The hon. Member for Holborn and St. Pancras (Mr. Dobson) is no longer in his place--he is a busy man and no doubt has other things to do. It was a bit rich of the hon. Gentleman to lecture Tory authorities when Camden council ended the 1994-95 financial year with £180 million of uncollected debts. For many years, the majority of that council's staff enjoyed terms and conditions of employment that were described by their chief executive as reflecting unique generosity to the point
of illegality. That council spent £1.5 million on computer equipment, then failed to use it. That council lost £300,000 worth of computer equipment for four years. That council was described as having no coherent children in care policy. It was more than a bit rich of the hon. Member for Holborn and St. Pancras to shroud-wave about education cuts, saying that children would miss out, when his own council in Camden took more than£4 million from its education budget in 1994-95 to cover bad debt and interest rate swaps, which had nothing to do with education.
The hon. Member for Holborn and St. Pancras questioned the mix, and expressed concerned that the amount of money that would have to be raised locally will increase. As I pointed out, a Labour document suggests that that will happen. The hon. Gentleman said that he wrote every word of it. On page 18 of "Renewing Democracy, Rebuilding Communities" the hon. Gentleman stated:
The hon. Gentleman said that he did not mean that exactly but that the business rate should be repatriated. That would increase the amount of money raised locally. If that is what Labour Members mean, why not say so? Why use obscure wording when it would be simpler to say, "We will ensure the return of the uniform business rate." Then everyone would understand. This is a clear example of Labour running from a policy that it now perceives to be unpopular.
Ms Hilary Armstrong (North-West Durham):
I am sure that the hon. Gentleman has read the whole document--in fact, his copy is annotated. He will be familiar with its statement that the first thing that Labour wants to do in terms of denationalising Tory policies is to restore the uniform business rate, but Labour is consulting businesses and other interested parties on how to achieve that effectively. We want to make sure that those other interests are involved. That is why we are not prepared at this stage to fling numbers about. If Mrs. Thatcher had behaved that way, the Conservative party would not have wasted £4 billion.
Mr. Pickles:
I have read the full document, and very enjoyable it is too. I did not miss out any sentences. I did not fiddle the words to mean something different. It is clear that the document is referring to the uniform business rate, but it says something extra. It says that the proportion should be increased. When Labour consults, it will no doubt be told by business men, "We remember a time when people took roofs off factories, to avoid paying exorbitant business rate." The hon. Member for Sheffield, Attercliffe (Mr. Betts) will no doubt remember, because that occurred in his own metropolitan district council. The hon. Lady is not on a winner. If this is the only denationalisation--[Laughter]. I mean, renationalisation. Those words are so old that we tend to forget them. It is like a journey into the past. If this is the only renationalisation that the Opposition propose, it is not even old Labour.
Mr. Robert G. Hughes (Harrow, West):
Does my hon. Friend recall that Labour members of Labour-controlled authorities were on to what they believed was an electoral
Mr. Pickles:
My hon. Friend said that the voters did not appear to pay, but rightly pointed out that they did. They lost jobs, investments and opportunities. That was the price paid by people when they decided for narrow, sectional interests to impose ideological policies on local councils.
"We believe that it would be better for local people to make a healthier democracy if councils were responsible for raising locally a much higher proportion of the money they invest and spend."
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