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6.32 pm
Mr. Tony Baldry (Banbury): I congratulate the hon. Member for Bolton, North-East (Mr. Crausby) on a first-class maiden speech. I am sure that we shall hear him again on many future occasions and he spoke clearly and eloquently. Obviously, Conservative Members were sorry to see Tom Sackville go. Many of us were close friends with Peter Thurnham and were sorry to see him go, but, as far as we were concerned, he went rather earlier than the general election.
I have many happy memories of visiting Bolton when I was a Minister in the Department of the Environment. I was most impressed by Bolton council and I was pleased to be the Minister who gave planning permission for Bolton Wanderers to build its present stadium. The other day, when I was in Bolton, I was delighted to see what a wonderful edifice it turned out to be. I hope that the hon. Gentleman will consider inviting a few Opposition Members to watch some of its matches.
I hope that the hon. Gentleman will also invite the Minister for London and Construction to see the work that Atkins is doing in Bolton, building the wonderful millennium structure that will be in the hon. Gentleman's constituency very soon. However, I shall be in trouble if I talk about Bolton for too long. As I am the first hon. Member to talk about Oxfordshire, let me refer in some detail to the order.
I have some sympathy with the Minister for Local Government and Housing. I fully appreciate that as local government takes up a quarter of all public spending, one has to be reasonable in these matters. Clearly, the hon. Lady has a broader duty to governance, and those of us who have had to deal with these matters have some understanding of that.
One has to look at the past to understand why Oxfordshire has got itself into its present financial pickle. Until the mid-1980s, Oxfordshire had a Conservative administration. From 1982-83 to 1985-86, the average growth in the county council's budget was 3.4 per cent., while the average growth in inflation was nearly 5 per cent. Oxfordshire then became a hung council and in the next four years, under a Labour-Liberal Democrat coalition, it went on a spending bonanza. The average growth in the council budget was nearly 12 per cent. when the increase in inflation was about 6 per cent. That spending bonanza continued until 1992-93, when Oxfordshire county council's budget increased by nearly 7 per cent. and inflation increased by only 2 per cent. There was a considerable increase in spending until the early 1990s.
Eventually, that level of expenditure became unsustainable and the county started to run into its present difficulties. In order to maintain its spending, Oxfordshire
spent all its reserves and began to get into difficulties with the capping regime, with all the financial gearing that that involves. Oxfordshire is in the rather unique position of being the only local authority that has sought to break the cap last year and this year. As we have heard, the then Secretary of State listened to the representations that Oxfordshire county council made last year and enabled it to find a way through.
This year, Oxfordshire again set a budget above cap. Between November 1996 and 1 May, my hon. Friend the Member for Wantage (Mr. Jackson) and other hon. Members representing Oxfordshire constituencies, including myself, and Oxfordshire county council had numerous discussions with the then Minister of State for local government, my right hon. Friend the Member for Skipton and Ripon (Mr. Curry).
We put our case on the basis that Oxfordshire had got itself into a pickle and somehow had to get out of it. The position was made worse because Oxfordshire had no reserves to fall back on and no means of finding resources elsewhere. It is fair to say that my right hon. Friend the Member for Skipton and Ripon, in so far as he was able--one recognises that Ministers are always bound by the danger of being taken to judicial review if they are too incautious in what they say--suggested that if a Conservative Government had been elected on 1 May, they would have been sympathetic to Oxfordshire setting a budget above cap.
The Minister for Local Government and Housing may smile, but we also need to know what the Labour party said to Labour councillors before the general election. This year's budget in Oxfordshire was rather curious in that it was set by a combination of Labour and Conservative county councillors. One can only assume that, in the run-up to the general election, Labour county councillors in Oxfordshire would take some advice from their party as to their position if Labour won the general election. One can only assume that they, too, were given some comfort; otherwise, they would not have set a budget above cap.
Indeed, the Labour group on Oxfordshire county council cannot see any way forward other than the Government allowing Oxfordshire to continue at the budget that it has set. Only yesterday, the leader of the Labour group of Oxfordshire county council wrote to hon. Members representing Oxfordshire stating that
Mr. Robert Jackson:
Did my hon. Friend note that, when I asked the Minister to give a categorical assurance that she had not entered into undertakings with Labour councils before the election, she refused to do so and dismissed the suggestion as an idle rumour?
Mr. Baldry:
That clearly needs to be addressed at some stage because there had to be--and were--discussions between the Labour group on the county council and the
Dr. Harris:
Will the hon. Gentleman give way?
Mr. Baldry:
No, I shall not because I am very conscious that time is pressing on. I suspect that the hon. Gentleman will want to speak, as do other hon. Members.
Oxfordshire county council now finds that it will have to make some very substantial cuts over the next few weeks--against the background of being the lowest- spending county in the country. The proposed cap allows Oxfordshire to spend just 1.3 per cent. above its standard spending assessment, compared with an average of 2.4 per cent. for all other county councils. At the moment, the local authority is not spending profligately.
I find the position of Ministers somewhat curious, as others have said. During the debate this time last year, the Minister, who then led for the Opposition, congratulated Oxfordshire on its spending and said:
The situation this year is almost exactly identical, so I am at a loss to understand--I think that people in Oxfordshire will be at a loss to understand--why the Labour party is doing a volte-face and imposing a cap on Oxfordshire, which will inevitably lead to redundancies among teachers, the closing of libraries and the deterioration of personal social services, such as home helps, meals on wheels, and so on. I could understand if the hon. Lady had displayed financial rigour last year, but, given her comments, which are clearly recorded in Hansard, and given the voting record of Labour Members last year, I cannot.
What has changed since last year that has caused the Labour party to do a complete turnaround on this issue? The people in Oxfordshire will want to know, especially as they recognise that a substantial part of the reason why Oxfordshire is in a financial pickle is that Labour and Liberal Democrat councillors drove up spending in the late 1980s and early 1990s without, sometimes, any great benefit from the increased spending. Now that we have got into difficulties, the Labour party is doing a runner.
Mr. John McDonnell (Hayes and Harlington):
The genesis of this debate goes back 13 years to the introduction of rate capping under the Thatcher Government. It was introduced to cut public expenditure under monetarist economic theory and in an attempt, for short-term political expediency, to deliver tax cuts as a bribe before the election.
The Labour party, the Liberal Democrats and all progressives opposed the capping legislation, basically for two reasons. First, we opposed it because we concretely believed that central Government limitation of local expenditure would result in cuts in services to local communities. Secondly, we opposed it because it was the first time in this country that central Government were to take control of local government expenditure, thus weakening the concept of local democracy. We felt that that was a loss of basic civil liberty.
We have been proved right; such arguments were proved right throughout the 13-year period--even from the earliest stage. Year on year, capping has resulted in the forcing downwards of local public investment. It has meant the rundown of local services--cuts in education, environmental health and social services. It is a major contributory factor to the loss of teachers, the lack of investment in equipment, the inability to care for those most in need and the ability to maintain decent modern services on which all our communities rely.
The effects on our communities are self-evident. A generation ill taught is educationally lagging behind our European and international competitors. On estates in urban areas, Thatcher's children are coming out to play, with increased crime, drugs, violence and incivility. There has been a deterioration of basic municipal facilities which were established by previous generations of local councillors. That is why the Labour party consistently for 13 years held a clear and firm position in opposition to capping.
I was enthused by the Labour party's record and speeches of Labour party spokespeople during those 13 years, as they outlined the iniquities of capping and the commitment to abolish it once Labour was elected. Let us run through some of the forensic evidence of those commitments--just in recent years.
In 1993 in a statement to the party conference, the speaker from the national executive committee said:
In 1995, the conference carried overwhelmingly a resolution which said:
For more than a decade, we have been preparing for power and, in that preparation, we have been clearly committed to scrapping the capping regime. Therefore, it is with extreme concern that I say that, with the first order on local government revenue, we are about to enforce capping--unreformed, unreconstructed and unrelenting.
The same arguments that led us to make the speeches, applaud the leadership statements and vote for the resolutions over the past 13 years apply today. I was convinced then by what the party said and I remain convinced. In all honesty, with all integrity, I cannot support the Government in the Lobby to cap councils. I do not do so lightly. I come from a tradition of democratic centralism and I believe that when a democratic decision is made in a party, the members and representatives should adhere to it. That is what I am doing. I am adhering to the policies determined democratically by the majority of the party. Why is that so important for us? It is because it strikes at the heart of internal party democracy in the Labour party and also at our concept of socialism.
In 1996, we adopted a statement of Labour's values, entitled "Socialist Values in the Modern World". It said:
"this council needs a clear medium-term financial plan . . . if it has any chance of steering itself away from imminent bankruptcy."
We also heard from the hon. Member for Warwick and Leamington (Mr. Plaskitt), who used to lead the Labour group on the county council until 1 May. In his view, Oxfordshire had set a responsible budget this year, having regard to all the circumstances.
"Oxfordshire comes 45th out of 47 counties for total expenditure per head. It spends £560 per head . . . The county average is £629 . . . The Government are acting against the wishes of the people of Oxfordshire . . . The people want the opportunity to fund their schools and their social services properly, but they know that the Government will manipulate the figures to ensure that they cannot do that. That is not good enough."--[Official Report, 22 May 1996; Vol. 278, c. 358-59.]
It was unclear from the hon. Lady's speech today that, last year, she and her colleagues on the Labour Benches supported Oxfordshire in its claim to be allowed to spend moderately above its cap.
"How can the Tories justify laying new responsibilities on local authorities . . . and at the same time cap their attempts to ensure proper funding for the task?"
In 1994, the shadow spokesperson for the environment said at the Labour party conference:
"Along with our plans for elected regional councils, my friends, we shall be giving back responsibility to local communities as well. We are going to take the shackles off local government. We are going to end capping and compulsory competitive tendering."
The comments go on.
"Conference recognises the constraints on local authorities placed by the current system of local government finance."
It said that the conference
"notes and reaffirms the existing policies to remove the cap".
17 Jul 1997 : Column 576
Also in 1995, we issued our policy statement on local government, in which we said:
I was especially enthused by the speech of my right hon. Friend the leader of the Labour party at our conference in 1995, in which he said:
"Under the Tories, the government hasn't just taken increasing control over the money which councils need to raise. It has also taken detailed control of the amount that councils can spend.
But the present capping arrangements suggest that some civil servant or minister in Whitehall knows better than local people and local councillors about the depth, degree and urgency of the needs of each and every local community and its capacity to pay for what it needs. This can't be right--in principle or in practice."
"A young country shouldn't be frightened of such change. It will strengthen Britain. The only thing that threatens the Union is a government that refuses year on year to listen to the people. We will rebuild local government and end the muddled system of rate capping."
In 1996, we published "New Labour New Life for Britain" and, in 1997, we published our election manifesto--both of which included a commitment to end capping.
"This core belief in the power of community to liberate the individual is the oldest and most enduring basis of socialism. Even before Keir Hardie led the Independent Labour Party in the 1890s, people in Britain and abroad came together to argue for the use of collective power--through political parties, trade unions, local authorities . . . to attack privilege and domination and advance the individual interests of the majority of people."
Those are the values we adopted then. Capping is an element, no matter how small, in undermining that power of the community and, therefore, cannot be supported.
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