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Mr. Brian White (Milton Keynes, North-East): Does the hon. Lady accept that those of us who set budgets in

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this year's local authority round knew the consequences of going above the cap? Most of us took that into account when setting the budgets.

Mrs. Ballard: All councils knew when they set their budgets that there was an appeal mechanism and that, if they had a strong enough case, they could put their appeal to the Minister and hope that it would be listened to objectively.

This year, only three councils appealed, because they believed that they had a case that the Minister would listen to. Together with my right hon. Friend, sorry, my hon. Friend the Member for Somerton and Frome (Mr. Heath)--he will be right hon. one day--I was one of the councillors who voted to set a budget above the cap limit. That was not an indulgent or wayward political gesture. It was done in the full knowledge that, if an eventual appeal failed, the cost of sending out new council tax bills would add to the cuts needed to reduce the budget to the cap level. It was also done in the full knowledge that local elections would take place within a few weeks of the bills being sent out. I know that some Labour Members voted in the Oxfordshire decision.

Legally and technically, councils are allowed to appeal. The right hon. Member for Bridgwater said that he knew that Somerset's case would fail. How could he know? The Minister had to listen to each case and judge them on their merits. She could not fetter her judgment in advance--that would not be allowed.

Mr. Robert Jackson: I agree with the hon. Lady. The fact that they are merely implementing the previous Government's policies makes nonsense of the Government's case. There is an appeal mechanism. The appeal has been made and has not been heard.

Mrs. Ballard: I find it hard to believe that the Secretary of State thinks that his predecessor was so infallible that he could not have been wrong on Oxfordshire or Somerset. My hon. Friends the Members for Oxford, West and Abingdon and for Somerton and Frome have spoken in detail in Adjournment debates about the cases of the two counties. Neither council is spendthrift or inefficient. Somerset's budget is 1.2 per cent. above its cap limit and the cap was set at 2 per cent. Oxfordshire's budget is 1.7 per cent. above the cap. As we have heard, it is the lowest-spending county in the country.

Somerset county council has an unrivalled record of efficiency and prudence. No aspects of its spending are over the top, except, of course, that it spends £12 million more than its education SSA. Is that spent on costly county hall bureaucracy? Is that where the cuts can be found? No. Somerset has the lowest administrative costs of any authority in the country--£9.29 per child. Some authorities spend more than £120 per child. Somerset devolves the highest proportion of spending to schools. The Minister said that she took account of Warwickshire's actions to remove surplus places yet, although Somerset already has the lowest proportion of surplus places in primary schools, it is to be punished today.

As the Minister admitted in the Adjournment debate on 12 June, Somerset's education SSA is low compared to that of other counties; it is 33rd out of 35 counties. The Minister then said that Somerset was lucky because

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its highways maintenance SSA was in the top 20. She knows, however, that more than 60 per cent. of a county council's total budget is spent on education so, if its education SSA is low, the shortfall cannot be made up from other services. Indeed, any road user in Somerset will tell the Minister about the parlous state of our roads. Perhaps she would like to see them for herself and at the same time visit some of our schools to explain to them why this Government, in common with the previous Government, feel that our children are worth so much less than children in Westminster or Buckinghamshire.

Somerset's social services are equally prudent. It was one of the first counties to externalise its residential care service and it was the first to have externalised domiciliary care. Many Liberal Democrat councillors--I was one of them--were unhappy about being forced down those routes and were also unhappy about the recent decision to externalise the highways service, but those decisions have saved council tax payers money and have protected local jobs.

There is no spare money in Somerset, there are no reserves to dip into and there are no uncommitted rainy-day funds. Confirming the cap will mean larger class sizes in schools, fewer social workers and less care for the elderly. Clearly, this evening's vote is not about protecting services and it is not about protecting local taxpayers from council tax increases. I believe that it is about firing a warning shot at Labour-controlled councils for next year. The Government trust them so little that they are prepared to see teachers sacked and elderly people go without care in order to flex their muscles and to show local government that they will not be a soft touch in future. Far from being a soft touch, they will be as much a bully as the Conservative Government were.

Mrs. Ellman: Does the hon. Lady not recognise that this Government, in the relatively few weeks in which they have been in power, have already made more funding available for schools and for essential house building? They have already made plans to start to get our young people and the long-term unemployed back to work. After 18 years of decay under a Conservative Government, watched over by Liberal Democrats who, in their own patches, have done very little better than the Conservatives, praise should be given to this Labour Government for making a new start on the long road to recovery.

Mrs. Ballard: The Government have done nothing this year for local services and they have given crumbs for next year. We have already heard about the hole in the finances which has been unearthed by the Liberal Democrats, and the Conservatives have now jumped on the bandwagon. Local government will be very little better under this Government than it was under the Tory Government. This year, it will be no better off. Tonight, the hon. Member for Liverpool, Riverside (Mrs. Ellman) has the chance, if she really believes in protecting local services, to vote against the capping order.

This decision will dismay and anger many people across the country who expected better from a Government who were so eager to sign the charter for

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local self-governance and who have such a large local government base. So many Labour Members have local government experience.

Mr. Livingstone: Will the hon. Lady give way?

Mrs. Ballard: I will give way to one such Member.

Mr. Livingstone: There may be some confusion after the intervention by my hon. Friend the Member for Liverpool, Riverside (Mrs. Ellman). Does the hon. Lady agree that this order is not prompted by anyone asking for extra Government money? The authorities concerned are saying, "Please allow us to spend the money we have already collected on services that are vital." The order cannot be part of Government policy unless people think that, by cracking down on the two councils concerned, they will give a warning to councils throughout the country to restrain their spending in the coming year. Labour Members who are offering comfort to this Government policy may be stabbing their own constituents in the back later on.

Mrs. Ballard: I could not have put it better than the hon. Gentleman. People knew that the Conservatives had given up on local government, but they expected better from Labour. Capping is wrong in principle. That is a view that my party has always held and I thought that the Labour party held it too.

After tonight, the young, the old, the weak and the disabled will bear the brunt of the Government's macho muscle flexing. The Liberal Democrats will vote against the order. The hon. Member for Brent, East (Mr. Livingstone) and other Labour Members will be most welcome to follow their conscience and to vote with us. They should ignore the fact that Conservative Members are doing a strange about turn. They, too, are welcome in the Lobby. There can be no doubt that the people taking this decision are the members of this Government. They must carry the can for the damage to services in Somerset and Oxfordshire as a result.

6.24 pm

Mr. David Crausby (Bolton, North-East): I thank you, Mr. Deputy Speaker, for allowing me the opportunity to make my maiden speech in such an important debate. I served and, indeed, suffered, for 13 years as a local councillor under the previous Government, with all that capping meant, so I am pleased now to be able to say that I am the first Labour Member of Parliament for Bolton, North-East. I have been joined, I am delighted to say, by my hon. Friends the Members for Bolton, South-East (Dr. Iddon) and for Bolton, West (Ms Kelly) to make Bolton truly a Labour town.

Some 85 per cent. of my constituency was previously represented by Peter Thurnham and the other 15 per cent. by Tom Sackville, so I am responsible in part for the replacement of two Conservative Members of Parliament. I understand that both were diligent and hard-working Members. Peter Thurnham was a man of independent mind and felt that he had been poorly treated by the Conservatives. In the end, he decided to join the Liberal Democrats so I like to think that I am responsible for replacing a Liberal Democrat as well. I have some sympathy for Peter Thurnham's view that he was badly

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treated by his party because after all, most of the country felt the same way about how they were dealt with by the Conservatives, which is why the previous Government were swept from power.

Peter Thurnham and Tom Sackville were preceded by two excellent Labour Members, David Young and my right hon. Friend the Member for Dewsbury (Mrs. Taylor), as she now is. They represented Bolton well when it was the barometer town which decided general elections, before the boundary commission changed everything.

Bolton, North-East is an ideal mix of town and countryside. There are also some stark economic contrasts in the constituency which so much mirror the divisions that most of us have experienced nationwide over the past 18 years. Bolton was the heartland of the industrial revolution and has suffered more than most, as a result, from the decline of Britain's industrial base. Samuel Crompton was born in Bolton. He cleverly built on the skills and knowledge of local people to make it all happen in Bolton. It could all happen again because we still have a fine tradition of highly skilled tradespeople. Unhappily, too few of them survived the absurd economic experiment of the early 1980s which was perpetrated by the more extreme elements of the previous regime. We witnessed a real crime when we saw the destruction of more of Bolton's industry than had been caused by two world wars. The great challenge that the Government face will be to repair the damage that was done in the 1980s.

We shall be able to repair that damage only if we use the energy and expertise of local people and local politicians. Central Government spent too many years treating local politicians and local government as if they were the enemy. Bolton was represented throughout those difficult years by a Labour council, which delivered, as it continues to deliver, efficient services against the odds.

There is a desperate need to avert the annual round of cuts in services. We clearly need a radical review of funding and, more importantly, a new relationship with our local politicians who do such good and important work. They will be the rock on which we will build a better society and they must be allowed to govern locally.

I was lucky to serve my apprenticeship in the engineering industry in the 1960s. I want today's young people to be offered the same employment opportunities that I had--not just because young people deserve the chance to earn a decent living in order to bring up their families, but because the country needs skilled young people to provide the wealth that our great nation is so capable of achieving.

I am proud to be an engineer and a committed and active trade unionist, having been brought up in that family tradition. I was elected to represent the largest factory in my constituency, where I have been the works convenor for the past 18 years. I spent much of my time trying to persuade that private employer to improve the company pension scheme, despite the fact that there had been many years of contribution holiday. I am not surprised that my right hon. Friend the Chancellor took action on pensions. In my view, there is a great deal of scope to do more. I intend to represent my constituents with the same tenacity that was required in my previous job.

Bolton, North-East and its people have a fine industrial history, and with the right industrial policies intelligently applied together with the active support of local

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government, we shall have an even better industrial future. Not only do we have good prospects and three Labour Members representing Bolton; we have a newly promoted premiership football team, Bolton Wanderers. Thanks to the assistance of the local council, the Wanderers now have a brand new football stadium.

For Bolton, 1997 was truly a great year. All we need now is university status for the Bolton institute of higher Education and our year will be complete. We have much to look forward to in our town because our people are the real strength of our community and I am deeply honoured to represent their cause in Parliament.

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