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Mr. Burstow: There are two or three points there. First, the introduction of the uniform business rate has done considerable harm to the interests of small businesses in many areas. That remains a concern of the various organisations that represent small businesses. Secondly, research that was published even during the passage of the legislation to introduce the uniform business rate showed that there was little evidence of the adverse effects on businesses that were claimed to be the result of the level of the business rate. Thirdly, the Government suggested in the Green Paper ways in which there could be linkage between business rates and the council tax so that councils could not shift the burden unfairly onto the business rates, as the hon. Lady claims that they used to do.
For all those reasons, we do not accept the hon. Lady's argument. We hold to our view that the business rates should be returned to local control. That would make for a more buoyant local tax base and a fairer distribution of funding between that which is raised centrally and that which is raised locally. That is the first step back to greater financial independence for local authorities and more accountability to their local communities. That is why we strongly commend the idea to the House again today.
Best value and sophisticated capping are the products of pre-election promises made by the Labour party. Capping and compulsory competitive tendering are now effectively to be changed, but they are not to be brought to an end. The Bill strengthens ministerial control and further weakens local accountability. The Bill fails to strengthen local accountability. It is prescriptive. It turns councils into service delivery arms of Whitehall.
Ms Jenny Jones (Wolverhampton, South-West):
Like many other hon. Members who are contributing to the debate, I used to be a councillor. I served for six years on a metropolitan district council in the west midlands. As people know, metropolitan district councils have an obligation to deliver many services. My party was in control for four of those six years and in opposition for two. We were put into opposition by a coalition of Conservatives and Liberal Democrats. We hear a lot of talk these days about coalitions with the Liberal Democrats. I thought that the House might like to know that coalitions can be fairly flexible. I have watched closely local Liberal Democrats and Conservatives in power and they have an interesting interpretation of democracy and accountability. I will leave it at that.
My hon. Friend the Member for Denton and Reddish (Mr. Bennett) eloquently summed up all the disadvantages of compulsory competitive tendering and what was wrong with it. It is certainly high time that it was got rid of. There is one disadvantage that no one has pointed out and that I would like to throw into the pot.
In the six years that I was a councillor, I was able to watch at first hand the implementation of white-collar CCT. One of its major effects was to set departments against departments, officers against officers and members against members. An enormous blame culture got going in the local authority. That was not peculiar to my authority; it happened in local authorities across the land. The hon. Member for Salisbury (Mr. Key) said that CCT led to joined-up local government. It did nothing of the sort. It achieved the opposite. That is one of the biggest reasons why it is about time that it was gone.
Earlier this morning, I was fortunate enough to listen to a couple of representatives from local councils that have been best value pilots. They said that one of the advantages of best value was that it encouraged inter-departmental working. Members and officers had to work much more closely together to ensure that they met local needs and delivered the services that people wanted. I am willing to keep an open mind on best value. If it achieves a better working culture within most councils, it will be something to be welcomed.
However, I have two major reservations about the Bill. The first is about the standards and performance indicators for best value. If I read the Bill correctly, it does not contain any mechanism for asking councils what performance indicators they would like. My hon. Friends on the Front Bench will have to allow councils to shape the standards against which they are to be judged. Not all councils are the same. Populations have different needs. We will need to build in some flexibility and allow councils to have a say about how their performance is measured. I have a fair degree of scepticism about leaving it to central Government Departments to set the
performance indicators. If we do that, we shall simply replace prescriptive, top-down CCT with prescriptive, top-down best value.
When we won the general election, most councils thought that the days of edicts handed down from central Government Departments and of being told, "This is the way you are going to do it--like it or lump it," had gone. I urge my hon. Friends the Ministers to consider ways in which councils can be consulted in setting the performance indicators.
The Parliamentary Under-Secretary of State for Wales (Mr. Jon Owen Jones):
I think that my hon. Friend misunderstands the intention of the Bill. Yes, targets will be set nationally. It is important that local authorities can be compared easily against the same standards, but local authorities will be required to devise their own performance indicators as well.
Ms Jones:
If I have misunderstood the Bill, I stand corrected, but the Bill is in its early stages. I shall monitor its progress closely as it goes through Committee, into the other House, and comes back again. I need reassuring on that point.
My second reservation is about capping. Universal capping is going, and I am pleased about that. It was a crude instrument--a sledgehammer of an instrument. It was anti-local democracy. However, the Bill should spell out what the Secretary of State's reserve powers are, what will trigger them and how they will be implemented. We hear a lot about transparency and accountability, but councils also need transparency. They need to know not only where but what the goalposts are. They need to know what they are aiming at. The Bill is not clear about what the reserve powers are and what will trigger them.
My hon. Friend the Member for Birmingham, Selly Oak (Dr. Jones) was right about accountability. I was always led to believe that the ballot box was the ultimate accountability. My former council, like many others, has elections every three years out of four. It may be worth while the House remembering the reason why we do not have elections in the fourth year. In the 1980s, the Conservative Government's relationship with local authorities got so bad that they abolished a tier of local government because they did not like the fact that councils insisted on thinking for themselves.
Many councils have annual elections. As an ex-councillor, I assure the House that nothing concentrates one's mind more than the knowledge that one must go to the electorate each year to discover whether the people like what one has done. We should not get too carried away with rhetoric about the unaccountability of councils. I think that they know more about accountability than do some central Government departments or regional offices of Government.
For more than 100 years, most councils have delivered services to the best of their ability. Many councils and councillors work extremely hard. Earlier in the debate, the hon. Member for North Essex (Mr. Jenkin) read out the usual list of councils that have not been as competent as they should. However, to be honest, they are in the minority. I believe that councils--whatever their political control--and councillors work extremely hard to deliver the services that they think the electors want. For many years, they have done so in a very hostile climate.
Mr. Robert Jackson (Wantage):
I agree with the hon. Member for Denton and Reddish (Mr. Bennett) that local government in Britain today is in the grip of a malaise. With great respect to my very good friend, the right hon. Member for Skipton and Ripon (Mr. Curry), I do not share his apparent complacency about the situation. He may have been a better colonial governor than the present one, but the empire simply must be dismantled.
The reason for the malaise is a fundamental ambiguity in our understanding in Britain of the basis of local authority. That ambiguity is increasingly disabling, and I suggest to the Government and to my party that it must be resolved--not least because, until it is, the constitutional reconstruction which is under way, and which I think everyone now accepts is irreversible, will not be complete. The ambiguity to which I refer goes back a long way and is neatly encapsulated in the title of an academic book on mediaeval English local government: "Self-Government by the King's Command". In other words, local communities must govern themselves but their authority comes from the top downwards and not from local communities upwards. The Minister paid lip service to the idea of self-governing local communities, but her answer to my intervention about my county of Oxfordshire demonstrated that she is as much trapped in this ambiguity as any one of her predecessors.
To understand the problem that we face, we must first understand the three great forces that have reinforced the top-down nature of our system of local government over the past century. Those forces have operated under Governments of all three parties.
The first force is the increasing cost of the widening range of services provided by the state. In 1900, local government spent roughly half of total Government spending of £19 billion--that is the figure in today's money; in 1900, it was only £272 million. About half of that amount was raised in local taxation--that is to say, local government raised one quarter of all public spending. Today, at the end of the century, Government spending amounts to some £333 billion, of which local revenues yield no more than one sixteenth.
The second force making for centralisation is the idea that government services must operate to uniform national standards and by nationally standardised procedures. The hon. Member for Sutton and Cheam (Mr. Burstow)--who is just leaving the Chamber--referred to the history of this question. He might like to note that the first big step towards centralisation was taken by a Liberal Government in 1906--admittedly a long time ago--with a national system of labour exchanges run by Whitehall. The next great step came after 1945 when the Labour Government decided to create a national health service rather than allocating new duties to the existing system of local government. That was a fateful step, which created
a system of local administration parallel to local government but with different boundaries and without the benefit of local election. Since 1945, such parallel systems have been elaborated in a host of new areas almost exclusively by transfers out of local government and hardly at all by transfers downward from central Government. As result, nowadays more people appointed by Ministers are holding office in local bodies than are elected by local people.
I think it is fair to describe this as an obsession with national uniformity. One of the most disastrous consequences of that obsession is the fact that the perfectly proper principle of equity between different regions of the country has been used to justify a set of mechanisms that has reduced local financial discretion to the almost marginal. The Bill continues that mistaken approach. In the name of equity, business taxation has been centralised and all local spending, including the capping regime, is determined by formulae devised in Whitehall. If the gentleman in Whitehall does not know best, it is only because his computer knows better.
The third great force making for centralisation is concern for efficiency. The Minister laid great stress on that in her speech today. Especially under the previous Conservative Government, local government was distrusted as it was seen to be too liable to producer capture and political manipulation. I sense that that distrust persists in the Bill and its concept of best value. Over the past 20 years, a raft of functions has been transferred from local government to the new parallel structures in the fields of housing, education, career services, waste regulation, the provision of homes for the elderly, highways and so on.
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