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Adjustments Of Distribution Of Block Grant

Volume 21: debated on Monday 5 April 1982

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I beg to move amendment No. 1, in page 3, line 44, at end insert—

"(d) shall not be exercised for the purpose specified in paragraph (cc)of that subsection so as to decrease the amount of block grant payable to a local authority where the local authority notify the Secretary of State that any such decreases will not enable them to maintain at an acceptable level the services which the local authority are by statute required to provide".
The hon. Member for Hornchurch (Mr. Squire) referred to the Minister's response as a concession. I think that he was stretching the English language. I hope that this amendment will not be met with a similar concession.

The Minister was not using "concession" in the normal way. He was using the definition on the Anglo-Heseltinese dictionary.

However the word was used, the hon. Member for Hornchurch had to ask to withdraw his new clause because the Minister would not accept it.

At one stage new clause 4 and the amendment were to be linked. However, for technical reasons which I fully understand it has not been possible to link the clause and the amendment. That is unfortunate, because the clause sought to put responsibility at the door of the Secretary of State, where it should properly lie. The amendment goes some way in that direction.

It is recognised that central Government must have some control over local authorities. There is no argument about that. However, there is a limit and if we go beyond it, the aim of central Government becomes self-defeating. Year in and year out the House places statutory duties on local authorities. The Bill takes a somewhat different approach because it will remove a financial tool from local authorities. I refer to their ability to raise a supplementary rate. The Bill replaces that tool with a piece of nonsense that states that the Secretary of State may or may not allow an authority to borrow if an approach is made to him. That is a fundamental change.

The Bill would have been more important if Labour Members had not forced the Government to rethink their approach. At one stage the Bill would have made it possible for the Government to cut finances at any time during the financial year. That would have been much worse. It was the pressure that was mounted on the Opposition Benches that caused the Government to think again.

On 18 January, when the Bill was given a Second Reading, I intervened in the Secretary of State's speech to tell him that he was taking away the right of local authorities to levy supplementary rates and was conferring upon himself or other Secretaries of State the right to alter grants during the financial year. At the same time, Parliament is imposing statutory duties on local authorities. It is unfortunate that the Secretary of State has not graced the Chamber with his presence today. We have been told that the Bill is vital. Surely we should have seen the right hon. Gentleman at some stage during the day.

It seems that we have reached the stage where the Secretary of State could make it impossible, through financial restrictions, for local authorities to carry out statutory duties imposed by this Parliament or any other Parliament. It also seems that local authorities, through no fault of their own, find themselves in conflict with laws and Acts that this Parliament seeks to impose on them. One could read out a list as long as one's arm, both arms or the arms of every hon. Member, of the many duties imposed on local authorities. They include standards of social services, housing provisions, educational standards and provisions, provision of efficient and adequate transport, local highways maintenance provisions and provision for children, police, planning and fire services. The list is endless. All those provisions are placed upon a local authority by statute of the House of Commons. No one complains about that.

I am the first to agree that certain elements of grant contribute towards carrying out those statutory undertakings. I hope, however, that the Minister recognises that a burden is imposed on local authorities by Parliament in carrying out those statutory undertakings. The dead hand of a dictatorial Secretary of State seeks to cut back in such a manner that even the statutory duties placed upon local authorities are put at risk. I referred in Committee to some of the afflictions forced upon Newcastle city council by hidden costs. This translates into effects on the statutory duties that the council must carry out. There can be no other term than "cutback" for the actions of the Secretary of State. Again, in the case of the Tyne and Wear county council, these statutory duties are at risk.

It was interesting during the debate on new clause 5 to discover the number of hon. Members who seemed to agree on certain matters. One issue germane to the amendment now under discussion was mentioned by the right hon. Member for Taunton (Mr. du Cann), other Conservative Members and a number of Opposition Members. Most agreed that there was inadequate central Government funding to carry out statutory duties placed upon local authorities by the House. There was a call for an exercise to be conducted to see how matters worked out. I submit that the Minister does not need to wait for the exercise. The wording of the amendment now before the House is precise. It is not an open cheque. The words proposed to be inserted are that the powers
"shall not be exercised for the purpose specified in paragraph (cc) of that subsection so as to decrease the amount of block grant payable to a local authority"—
and this is the nub—
"where the local authority notify the Secretary of State that any such decreases will not enable them to maintain at an acceptable level the services which the local authority are by statute required to provide".
The amendment is by no means an open cheque. It insists that local authorities notify the Secretary of State—rightly—when they cannot carry out the duties that the House has laid upon them. There can be nothing fairer than that. It seems nonsense and grossly unfair that the House should place a statutory duty on local authorities to perform functions but then withdraw funds to such an extent that that duty becomes at risk. The Secretary of State should have in the Bill a clause that allows a local authority to come to him and say that it cannot carry out his will if he carries on with decreased public expenditure at that level. That is fair, square, honest and open-handed.

9.45 pm

In Committee I heard one thing said many times—as I am sure did my hon. Friends—particularly from the Government Back Benches. I am drawing to a close so that I can give the Minister a chance to leap to his feet and accept the amendment, as I am sure that he will in a spirit of fairness and open-handedness. I think he is waiting to do so. In Committee Conservative Members will remember that they frequently used the phrase "He who pays the piper calls the tune." I am sure my hon. Friend will recall this vividly because it was like an everlasting gramophone record—we heard it morning, noon and night at every Committee meeting. I will not argue against that, but the converse is equally true—he who calls the tune pays the piper. This is what the amendment is asking the Government to do.

Where a statutory duty is placed on local authorities but the wherewithal to carry it out is taken away, it should at least, in all honesty and fairness, be open to a local authority to come to the Government and say that it can no longer carry out that statutory duty if the level of expenditure is decreased to that extent. To help local government to carry out duties imposed on it by the House, the Minister should accept the amendment.

The essence of the amendment is law and order. The Government talk about law and order, but there are other sorts of laws such as those passed by the House in a social context that we ask the local authorities to guarantee to implement. The Government, if they refuse to accept the amendment, are saying that monetarism comes before the law and that monetarism is more important than law and order. The Opposition are saying in the amendment that law and order is more important than the monetarist policies of the Government. That is what it boils down to.

As my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cowans) said, many statutes simply are not being adequately implemented by local authorities because there is not the money for them to do so. Some of the duties that are being overlooked are small but I am sure that as they build up scandals will develop. An example is trading standards legislation, which was passed by the House because we wanted to protect the consumer. It is falling into disuse in local authority after local authority because the authorities do not have the money to enforce it. As so often happens the House will wake up to this only when some tragedy occurs. We shall discover that we have passed laws but have not provided local government with the money to make them effective.

I am concerned especially about education legislation. In many local authority areas, education takes up more than half the expenditure of the authority. As was shown by the report of Her Majesty's inspector which was issued today by the Department of Education and Science, the standards which have been normal in the past and which have been assumed to exist under section 8 of the Education Act 1944 are not being kept up adequately, and we need some provision in the law to prevent ministerial interference to depress standards even further than they are at present.

I say that only because I want to warn the House. I know that this is not a matter affecting the Department of the Environment. However, the Department of Education and Science is deep in discussion about so-called methods of reforming the rating system which will involve taking 80 per cent. of education expenditure clean out of the rate support grant and into some sort of direct grant of the kind foreshadowed in one of the appendices to the Government's Green Paper on the future of the rates.

There are differences between the two sides of the House about this proposal. If it were put forward seriously, I should oppose it with all the power in me, because I am sure that it will not do any good and that it could do a great deal of harm. In my view, local authorities can run education a great deal better than the right hon. Member fo Leeds, North-East (Sir K. Joseph) can from Whitehall. In principle, that must be true.

I say that to emphasise that traditionally the way that we have upheld standards in local government services is by passing legislation laying down minimum standards, with the Government providing local authorities with the money to make it possible to maintain those standards. Under this Government, during the past few years we have seen that the money is no longer being provided and that the Government are conniving at the law being broken. They know it. The Department of the Environment is more and more ashamed about it but, because it is not specifically its responsibility as each block of legislation may be in some other Department, if feels able to connive at these breaches of the law.

The amendment is essential if further breaches of the law are not to take place. I commend it to the House.

In many ways, this is the most important amendment to come before the House. It is not about audit. It is not about local government accounts. It is about the will of Parliament.

As my hon. Friends the Members for Lewisham, West (Mr. Price) and Newcastle upon Tyne, Central (Mr. Cowans) reminded us, the will of Parliament has been expressed in a great many statutes, some of which are systematically and callously being ignored.

Assuredly this Bill will pass into law. The Government have made it clear that they are not willing to listen to reason. They respond only to brute force. They have resisted all our amendments. They see them as getting in the way of the overriding financial responsibility which they seem to regard as their first priority.

This amendment involves a deeply held principle. It provides that the law of the land will be implemented by local authorities, despite the prejudices and predilections of any given Secretary of State. It says no more than that. It says that a Secretary of State, simply because he cannot argue sufficiently strongly with the Treasury, will be able to say to local authorities "We will give you this amount of money and if you have to break the law, you do so, but you do so at your own peril, and in my view you can manage without breaking the law". That is only his view as an individual, and ratepayers may take issue with it at some time in the future.

Far more fundamental is the fact that, instead of the Government coming to the House with amending legislation on education, social services and housing measures—the measures that affect people in local government—they are saying "They are all very well, but we shall set them on one side, and we shall decide whether they are to be implemented. That decision will be the sole property of the Secretary of State, as advised by his civil servants". The amendment is the only way to save this legislation from becoming an unconstitutional nonsense. If the Government had the guts to say that they wanted to amend education legislation because it was too generous, or that the social services legislation needed amending because it was too generous, or that the housing legislation should be amended because it was too generous, that would be entirely acceptable. It is their right, because they are the democratically elected Government. However, they should also take the public odium for what they do. Instead of that, they hide behind this tawdry legislation—as it was accurately described by my hon. Friend the Member for Lewisham, West (Mr. Price).

Far worse than that, in constitutional terms, is the fact that a sweeping measure of this nature, in which vast powers are taken by an individual, the Secretary of State, is surely alien to the concept of the way in which we try to run the affairs of this country. It is alien to the democratic principles of which we say we are proud. It is utterly alien and against the wishes, freely expressed, of the House of Commons on many occasions in the passage of many Acts of Parliament.

If the House does not accept this amendment, the Government are saying "We are quite prepared to put up an illusion of what we would like to do, but with these reserve powers we can take it all back again". Thus, what they say about providing services for people is not worth the paper that the Bill is written on.

I do not know about following the speech of the hon. Member for Blaydon (Mr. Mc William), but I certainly have the guts to ask the House to reject the amendment.

Clause 4 is concerned with a situation which has arisen from time to time under both Labour and Conservative Governments when, for overriding reasons of national economy, the Government have found it necessary to seek expenditure reductions or restraints.

I was reminded by the way in which the amendment was moved by the hon. Member for Newcastle upon Tyne, Central (Mr. Cowans) of the debate in Committee on amendment No. 102. We had a fairly long joust on this matter of principle. The House is certainly familiar with the arguments that have been deployed on this subject in the past.

How best can reductions be secured? The Government's best instrument is the best rate support grant. That is why we propose hold-back schemes for 1981–82 and for 1982–83. We have told each authority what expenditure reductions we expect. We propose to reduce the grants to authorities that overspend. The amendment would prevent hold-back applying to authorities that claim that they will not be able to provide an acceptable level of service. What in any circumstances would be an acceptable definition of "an acceptable level of service"? It is the length of a piece of string, and it is incapable of simple definition.

I do not say that the Government are deaf to representations. We shall listen to local authorities that feel that there are good reasons why they cannot meet targets——

It being Ten o'clock, the debate stood adjourned.