Skip to main content

Local Authority Contracts

Volume 77: debated on Thursday 18 April 1985

The text on this page has been created from Hansard archive content, it may contain typographical errors.

Motion made, and Question proposed, That this House do now adjourn.— [Mr. Lang.]

10.7 pm

I am grateful for the opportunity to raise this matter tonight. Historically there has always been a substantial degree of co-operation between central and local government, each respecting the contribution which the other has had to make. My hon. Friend knows better than most that that historic cooperation has broken down in recent years. In fact, he and his right hon. and hon. Friends in the Department have had to spend a disproportionate amount of their time trying to combat the influence of the political Left-wing in the country who have, apparently without compunction. been willing to undermine that historic co-operation for their own political ends.

Even more important, such people have showed a willingness to put their political ideology before the common law fiduciary duty which English courts have established that councillors have to their ratepayers and the recipients of their services. We all know that the Greater London Council has been one of the main offenders in this regard. That, or course, was one of the reasons for the Government introducing a measure to ensure the GLC's abolition.

So far, that Left-wing influence has been generally perceived to be confined to the large metropolitan areas. One reason for this debate is that I wish to make the House aware of the fact that that influence is now spreading to provincial cities, such as the one that I have the honour to represent, Peterborough. I assure the House that in the comments that I make tonight I have the strong and explicit support not only of my hon. Friend the Member for Huntingdon (Mr. Major), who represents part of the city, but of my hon. Friend the Member for Cambridgeshire, South-West (Sir A. Grant). The reasons for that will soon become apparent.

Another reason for this debate is to ask my hon. Friend the Minister to take some action. Peterborough used to be a mecca of moderation. Indeed, it was just such a mecca until relatively recently, or more precisely, until the Left-wing of the Labour party obtained a majority in the Labour council group. That happened at the same time as a number of Left-wing so-called libertarians were elected as Liberal councillors.

We first noticed the change at the time of the miners' strike. A motion was presented to Peterborough city council congratulating the Cambridgeshire constabulary on its moderate, sensible and restrained behaviour. When the motion as put forward for debate, the mayor of the council, Councillor Palmer, a Socialist, got up and walked out of the council chamber taking the whole Labour group with him. That slur will long be remembered by my constituents. The Liberals, stressing their commitment to free speech, stayed and then voted against the motion. That slur will also be long remembered by my constituents.

Then some weeks ago, setting aside all the regular procedures, the Labour group made it possible for CND to acquire a headquarters for rent in my constituency so that it could advise those who wished to demonstrate at Molesworth on how to evade and break the law. Again, that was done to the great dismay of the majority of my moderate constituents.

But the most serious decision took place at the council meeting held on 6 March. A Liberal councillor, Mrs. Day, not only on her own behalf but on behalf of the Labour group, introduced a motion that had the effect of instructing the council's general purposes committee to amend standing orders in order to permit the council
"to delete from the approved list of contractors"
any firm that had been, or intended to be, involved in preparatory or other work for the deployment of cruise missiles at Molesworth
"provided that the list thereafter includes a sufficient number of firms willing and able to carry out the type of work required by that section of the list."
Secondly, the motion had the effect of not adding to the approved contractors list any company known to be so involved.

Needless to say, that motion was opposed by the Conservative councillors but was carried by a combination of Labour and Liberal votes. In the motion it was made clear that that absurd and damaging decision would be purportedly taken in order to reduce the threat of nuclear war to Peterborough. That is so manifestly absurd that I am not at all surprised that my hon. Friend should laugh. Most people would laugh, if the matter was not so serious. It is quite clear that the motion's intent is to break the council's fiduciary duty to provide the most cost-effective service to my constituents. I do not treat that lightly. Thirdly, its effect will be to threaten the existence of firms and consequently the jobs of those who are employed by firms that depend upon council work for their existence. Fourthly, it quite clearly opens the door to any other extreme Left wing threat which the Labour sub-group which meets in secret, apart from the rest of the Labour group and before any meeting of that group, may even, as we speak, be dreaming up.

Having taken this foolish step, one might have expected the council to decide to rest on the gesture, but not so. It has written to 174 firms, and understand that the firms which have received letters are greatly outraged. Complaints from such firms and, indeed, from colleagues have been made to me. Until a few days ago, only one firm had replied. The electricity board made it clear that it intended to supply electricity to Molesworth. It said effectively, "So what?" I suspect that even my council cannot face the prospect of 10,000 council houses without electricity. But the fact remains that we do not know what pressure the council will bring to bear on these firms and businesses in order to seek to force them, without any legal basis, to conform to the political prejudices of a few councillors.

As I have demonstrated that this insidious effect is spreading from the metropolitan to the provincial areas, I therefore ask my hon. Friend the Minister what the Government intend to do about it. I have received a letter from the Chief Executive of the city council in which he says:
"I know that my council is most unlikely to change its position until it is compelled to do so."
May I refer my hon. Friend to the consultative paper, with which undoubtedly he is familiar, entitled "Competition in the Provision of Local Authority Services." Paragraph 16 says:
"The Government therefore proposes to include in legislation provision the effect of which would a. in relation to any local authority contract or invitation to tender for the supply of goods or services declare void any term or condition which is not directly related to the required performance by the contractor, his sub-contractors, or suppliers, in respect of the quality, timing or cost of the specified goods or services …

b. in relation to activities which are subject to statutory competition requirements enable the Secretary of State to take action against authorities which, in his view, unreasonably either set aside or negate the results of competition or act in such a way as is intended or likely to limit competition. This provision would apply both to activities covered by the existing DLO legislation and to the new proposals contained in this paper."
As I understand it, that paragraph covers precisely the point I am pressing on my hon. Friend. Therefore I welcome the consultative paper. Rather than write to my hon. Friend, let me tell him here and now that I am in favour of those proposals.

Secondly, I affirm the need for those proposals. It is the only way to stop this pernicious political cancer from spreading. I object not on political grounds, because we can win the political battle easily against such opponents, but on the ground that the ratepayers and constituents whom I represent need legal protection.

Thirdly, I welcome the proposal on behalf of moderate Labour and Liberal supporters in my constituency, and indeed a few councillors. I know that some Labour councillors, especially, are embarrassed and perhaps even ashamed at having voted for that motion. We understand why they did it. They were whipped into supporting it with the threat of deselection, as we see every day in the behaviour of Labour Members in this Chamber. The threat of deselection overcame their basic decent instincts.

I pay tribute to my hon. Friend the Minister. He and his colleagues have worked tirelessly with skill and imagination to combat the problems posed by the political Left wing in local authorities throughout the land. My hon. Friend will speak for himself, but I suspect that he shares my distaste for what has happened in my constituency. The consultative paper makes clear his determination to tackle the problem at its roots.

I wish to make two simple requests to my hon. Friend the Minister. First, I ask him to condemn the decision of Peterborough city council and those Labour and Liberal councillors who, by passing it, displayed contempt for their constituents. Secondly, I ask him to commit the Government to introducing legislation based entirely on the paragraphs that I have quoted from his own consultative paper and to give a commitment that that legislation will be introduced in the next Session of Parliament.

I am grateful to my hon. Friend the Minister for the courteous and intense consideration that he has given to my comments.

10.21 pm

The Parliamentary Under-Secretary of State for the Environment
(Mr. William Waldegrave)

My hon. Friend the Member for Peterborough (Dr. Mawhinney), with his customary force and eloquence, to which I have listened with respect on a number of occasions, has brought before us today a very telling example of what a recent pamphlet produced under the aegis of a number of people working in local government described as "The New Corruption" in local government.

The history of local government in this country does not go so far back into the mists of time as is claimed whenever we make any change. Modern local government in this country really dates from the early decades of the 19th century. The situation in the 1830s and 1840s, though different, was in some ways comparable with the situation today. In those days there was the turtle soup scandal. The old municipal boroughs—non-elected, or at any rate self-elected from small self-selecting bands—were accused, not without justice, of spending borough revenues on turtle soup which the councillors consumed for their own benefit. Today we have a perhaps even less attractive form of that scandal—what might be described as turtle soup ideological politics, the creation and consumption of private caucus-based extremist politics using the leverage and the all too weak accountability of local government, a fundamendal problem which my right hon. Friend the Secretary of State and his colleagues have been trying to reach. Using those all too weak mechanisms of accountability, gangs of people can succeed in foisting on their electorates policies which I do not believe that the electors want for one moment.

The kind of practice to which my hon. Friend the Member for Peterborough has rightly drawn attention is becoming all too common. He used the phrase "a cancer" and talked of it spreading from some of the metropolitan areas to places which all of us hoped and believed were immune from such things.

I know my hon. Friend's fine constituency town quite well, because I have to visit it on account of my other responsibilities, and I do so with great pleasure. Looking at the sensible citizens there, as I did recently when walking through the city on a fine day, I did not believe that they are behind such action. They are going about their ordinary daily business and cannot be expected, with the mechanisms available to them at the moment, to be full time on the qui vive to see that their councillors are not up to some nonsense. They trust in the system that Parliament provides for them and, in these matters, we have not provided enough protection.

In the 1830s and 1840s, Parliament had to invent the doctrine of ultra vires expenditure to put an end to the scandals of turtle soup and to tell those municipalities, "Look here, your ancient statutes might give you the right to spend money on turtle soup, but you have a greater duty, of which we are reminding you, to look to the benefits of your citizenry as a whole." We are now right to say that some of the mechanisms of accountability have become so weakened that we should step in from time to time to correct them.

Local authorities are a vital and ancient part of the plurality of decision-taking and we need them. Nobody is more committed to a decentralised and pluralistic system of decision-taking than I am, but local authorities are the creations of the statutes of Parliament and, if they have run a little out of control, it is right for Parliament to intervene.

The misuse of contractual power such as my hon. Friend described is becoming one of the standard ploys of these student-type —well, I shall not insult student politics by speaking about it in that way. Not all that long ago I was a student myself, and my hon. Friend the Member for Welwyn Hatfield (Mr. Murphy) was involved in such matters with me. I think that we conducted ourselves in a rather more dignified way. We certainly won our elections with a great deal of decision. Some of these caucuses are involved in juvenile politics. The London Labour party is the worst offender, but it is spreading. We have seen what has happened in Liverpool. The misuse of contractual power is one of the worst aspects of such politics.

The British people would be relatively grateful to local authorities if they ran their affairs with the commitment and efficiency which the best of them employ and did not take it upon themselves to stick their noses into all sorts of other organisations which might be serving the country rather better.

There is an arrogance in the type of performance that my hon. Friend described. It is unfortunate that Peterborough city council has said that it will lay down the law about the morality of defence policy. I suspect that that council was elected to keep the streets of Peterborough in good order, to provide decent housing aid to provide the services that it is empowered and required to provide. It has quite enough to do in those respects without wasting money and causing unnecessary inconvenience to the inhabitants of Peterborough. That inconvenience will be much diminished if we can return a proper council under proper Conservative control, as I am sure we shall do in due course.

We have had some absurd examples from London. The recent Kit Kat snub is a good example. Greenwich council has produced lists of absurd requirements from all those who seek contracts with it. I shall not weary the House by reading it, but the list enables the council to call for all manner of papers and information concerning matters that are nothing to do with it. In today's The Times there was a wonderfully absurd example concerning an unfortunate supplier of sandwiches to a council who had been forever blacklisted by the council because he provided sandwiches to what was described as the occupying army of the police during the miners' strike.

I am grateful to my hon. Friend for reminding me. As my hon. Friend said when I laughed when he gave an account of Peterborough's behaviour, it would be funny if it was not sad. It is not funny for that small business man if he is prevented from providing a perfectly good catering service and, as a result of a childish decision, might be put out of business.

My hon. Friend asked me for some assurances, and I am happy to give them to him. He correctly quoted from the consultative paper. I assure him that the Government fully intend to take action, through legislation, to put a stop to the sort of action that he has brought to the attention of the House. The consultative paper contains two relevant proposals. This is against the background of a further drive to introduce into the provision of local authority services as a whole a further degree of competition, which I strongly believe is right. Other countries in Europe, even Socialist countries, do not assume that all services must be provided by local authorities, but that the duty of local authorities is to ensure that the services are provided at the best cost and efficiency. They must not all be done in-house. That is the drive of the Government's policy.

Within that consultative process we have made two proposals. The first is that we should include a provision to declare void any term or condition of a contract that is not directly related to the required performance by the contractor, his subcontractors or suppliers in respect of the quality, timing or cost of the specified goods or services. This is, of course, very widely drawn. However, it is not intended to undermine the contractor's duty to comply with any statutory requirements, for example, on health and safety or other employment legislation. However, it is certainly intended to cover what I call the Peterborough condition. Our intention is that that provision would apply to all local authority contracts, whether or not they were subject to the existing compulsory tendering provisions of the 1980 Act or the extended provisions that we are now proposing.

We also propose to take action to prevent, as far as we are able, action by local authorities that is quite clearly designed to distort or negate the results of fair competition under the 1980 Act. That is not directly relevant to what my hon. Friend ?aid, but it is important because we know that they can make it impossible for competition to work properly if they bend the rules and do not give reasonable time for tenders.

On timing, my right hon. Friend has already indicated —and I confirm this tonight—in his reply to a question from my hon. Friend on 3 April that we propose to legislate in the next session. Subject to the will of this House and another place, we hope to have legislation on the statute book within the next 12 or 15 months.

I hope that what I have said tonight will demonstrate to my hon. Friend that we take these matters exceedingly seriously. It is a misuse —and corruption is not too strong a word—of the proper functions of local authorities. It is not a laughing matter—it is serious. Jobs are being lost unnecessarily and services are not as good as they should be and are more expensive because of that sort of behaviour. It would be quite wrong of the Government in 1985 to stand back from this, just as it would have been wrong for Governments in the 1840s to stand back from the turtle soup scandals.

I am very pleased to thank my hon. Friend for bringing this matter to the attention of the House and also pleased to give him the reassurances that he desires.

Question put and agreed to.

Adjourned accordingly at twenty-seven minutes to Eleven o'clock.