Skip to main content

Basildon (District Council Finance)

Volume 115: debated on Friday 1 May 1987

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. Garel-Jones]

2.46 pm

Throughout the four years that I have represented Basildon in this House I have been pleased to see the town grow, develop and blossom into what it is today — quite the finest town in the country. I pay tribute to all those, who have worked to make it so, particularly the original new town pioneers. So successful is Basildon today that I have recently suggested that it, rather than Chelmsford, should be the county town of Essex. That in no way reflects upon the wonderful representation that my right hon. Friend the Member for Chelmsford (Mr. St. John-Stevas) has given to that constituency. Instead it reflects on the muck-up that the Liberals have made of the town, in particular of the road system. Furthermore, its population makes Basildon the natural county town.

Ever since I have been a Member of Parliament I have interested myself in local government legislation and finance. I served as a Redbridge councillor. Redbridge is an excellently run local authority. Furthermore, my hon. Friend the Under-Secretary of State for the Environment, who is to reply to the debate, led Wandsworth with great distinction. The financial policy and political posturing of Basildon district council therefore came as a great shock to me initially. Redbridge was always concerned with the provision of cost-effective and efficient services. Unfortunately, Basildon district council has consistently wasted ratepayers' money on propaganda and political indoctrination instead of concentrating on its specific duties as a district council.

All hon. Members are concerned about the difficulties involved in providing sufficient jobs for all those who wish to work. High rates unquestionably destroy jobs, and particularly small businesses. Indeed, high rates stunt the growth of all businesses. In 1983 my council imposed high rates, and I believed it to be my duty to seek relief for my constituents. It was for that reason that I decided to make my maiden speech on the Rates Bill 1984. I certainly do not regret that decision.

Locally, the Opposition roundly condemned me for my support of rate capping and launched a vicious and offensive campaign against me. Everything I said at that time has been subsequently vindicated by quite extraordinary events within the local Labour party. Two Labour councillors last year resigned from the party in disgust at what had been going on within their ranks and there is now a hung council in Basildon. One of these two councillors, in his resignation statement said:
"I will now vote in line with my conscience. The Labour party I knew and believed in is not the Labour party of today. Militant is on the rise, even in places such as Basildon."
Both councillors spoke of intimidation and of the party spending money in wards not in line with need but rather in line with enhancing the electoral chances of the party retaining seats in those wards. The Government were right to cap Basildon rates in 1984, just as they are right to cap them today. My constituents and I welcome the relief to ratepayers that that action has brought.

Through rate capping the Government have protected ratepayers from what would otherwise have been an enormous rate increase such as those imposed in councils such as Waltham Forest and Ealing. It is because the rates were capped that the district council rate increase is so small this year. I congratulate the Government on that. All the allegations about services being decimated as a result have been proved to be completely without foundation.

I draw the attention of the House to a number of areas of expense locally that I believe should be of concern to us all. The first area is that of so-called public relations. The council spends an enormous amount of ratepayers' money each year on propaganda. If it is as good a council as it claims to be, I cannot understand why it needs such a large PR department to tell people how good it is. How could anyone justify a small district council spending over £344,000 on PR and employing a PR department with 12 staff? All hon. Members are only too well aware of the double standards of the Liberal party. There are many examples we can draw on, but the example I wish to draw attention to is that of the Bill to outlaw political propaganda, on which the Liberal party voted in favour of the Second Reading but hypocritically voted against on the Third Reading.

All the time locally we have to put up with the nonsense of the Liberals claiming credit for things that they have had absolutely no hand in, trying to please everyone and adopting their traditional policy, replacing paving stones and having dog mess cleaned up, while they never admit to being what they are—Socialists who smile. We have heard quite clearly from the mouth of the leader of the Liberal party that, while they would never support a Conservative Government, they cannot wait to jump into bed with the Labour party.

The Under-Secretary of State will be well aware of the discussions that have taken place in Basildon over the transfer of New Towns Commission properties. Over the past few months people have been subjected to a barrage of Labour party propaganda, all at the ratepayers' expense, that culminated in the so-called referendum to determine the wishes of the people of Basildon. An expensive video was made in which an EastEnders star appeared. Some of the participants have subsequently reported that they had no idea how biased the video would be. The referendum turned out to be a farce, as the council could hardly offer any alternatives when the Government were not in possession of what those alternatives might be. In all the publicity, the impression was given that the choice lay between either a wicked, grasping, heartless private landlord or the kindly, caring, paternal council. I find it utterly contemptible that during the course of the campaign elderly people were frightened by being told that bodies other than the council would put their rents up, not carry out repairs and even evict them. Of course, what people were not told is that Basildon ratepayers had to contribute some £907,000 to the housing revenue account last year and it is planned to take some £1,285,000 from us this year just to balance the books.

People were not told that, whereas the cost for administration for each of the New Towns Commission 16,000 houses is under £100 per year, the figure for the council is £380 a year. Therefore, rents would have to rise by at least £5·40 per week. People were not told that in 1976, when there was a Labour Government, the council turned down the chance to take over the commission housing. As well as that refusal, it has had the chance, by giving six months' notice to the Government, to assist in the handover. The speed with which the so-called referendum was mounted had nothing to do with housing need but everything to do with trying to influence the outcome of the local election on 7 May.

There are further examples of expenditure that should be closely examined. For example, there is a theatre grant of £85,000, a publicity grant for £65,000, a CNT housing transfer grant of £135,000, consultancies costing £70,000, a peace festival costing £2,000, the Essex and Herts study on the effects of war costing £5,000, a women's committee costing £20,000 — that does not include the cost of a women's officer post — a public relations consultancy costing £16,000—occupied by someone who apparently advises Brent on education matters Seeds—a Labour party group of councillors—costing £11,000 and an ex-Greater London Council councillor who set up GLEI3 is paid approximately £17,500. The new theatre will cost the ratepayer approximately £1·5 million a year.

All that spending is taking place against a background of deception of the ratepayers by suggesting that somehow there will be no cost to them. Massive loans have been taken out by the council, in the guise of private companies, on deferred payment terms, the first payment for which will fall due in 1988. The council hopes that before then a Labour Government will be in power to bail it out. As we all know, and as the right hon. Member for Bristol, South (Mr. Cocks) has said, there will not be a Labour Government. Even if there were to be a Labour Government, they would certainly not bail out Basildon district council.

Assuming that rate limitation keeps expenditure to £13·9 million the following deficits would result: in 1988–89 £7·6 million, 1989–90 £11·1 million and in 1990 £13·1 million. By so-called creative accountancy the council has set up companies to manage various projects. It is the height of hypocrisy for the Socialist council to use City institutions to finance grandiose schemes while thinking that we are daft enough to believe that all that can be done without any cost to the ratepayer. With such heavy expenditure already projected, it begs the question of how the council can possibly justify taking on an even larger debt of £17 million to acquire the town centre?

If there really is all that spare money lying around it is a pity that it could not be used to do something about the housing waiting lists or council properties that are in urgent need of repair. The council has spent extraordinary amounts of money on a system it called "going local", an attempt to bring the council closer to the people. The reaction I have had from people at my surgeries has been negative. Anything that requires a decision has to be put off until the central administration has been contacted. The result is delay and frustration. I can conclude only that that expensive venture has served to add another tier to an already bloated bureaucracy. Far from bringing the council closer to the people, it has moved the decision-making power even further away from them.

If the council wants to know whether the money is needed, I have many filing cabinets in my office full of genuine pleas for assistance. The money spent on the housing referendum was a shameless abuse of its position and a betrayal of its duties to the people of Basildon.

This is not the first time that that has happened. Not long ago, the council held a similar survey on education, a matter for which it has no responsibility. The concern was not genuine, rather a cynical attempt to stir up discontent. As if that was not bad enough, it is now seeking to pump out its propaganda on a new local radio station and television network over which the council hopes to have considerable influence.

If a hung council were effective, all that nonsense could be stopped, but even the nuclear free-zone signs are still up as the Liberals, in their guise of disarmers, still support them. Only this week a glossy booklet dropped through evey single door in Basildon, having been posted, printed and published at the ratepayers' expense. It is entitled "Pledge to Homeowners" and is designed to influence the outcome of the local elections. It contains utter drivel and gives the impression of being in favour of home ownership when everyone in the House knows that the local council in Basildon cannot wait to get its hands on the council and New Towns Commission properties that have been sold.

For my part, I hope that we can have more shared ownership schemes in Basilclon, small units for single people and low-cost housing, particularly to attract more teachers to the area. I also hope that people living in Felmores and Langdon Hills will be relieved of the burden of the district heating system and have individual gas-fired central heating.

Central Government policy towards Basildon district council finance has correctly protected my constituents from the worst excesses of socialism. Rate-capping as an interim measure has proved effective. We all welcome and look forward to the introduction of the community charge.

3.1 pm

The Parliamentary Under-Secretary of State for the Environment
(Mr. Christopher Chope)

I congratulate my hon. Friend the Member for Basildon (Mr. Amess) on once again drawing to the attention of the House the horror story that is Basildon district council. I remember well his maiden speech on that subject and serving with him on Committees on the Rates Bill and on the Local Government Bill. It is with some dismay that I hear today that things have gone from bad to worse, although, with the local elections coming up, there is the prospect that the people of Basildon will take a hold on events and bring the council back to its senses.

If the control of the council is not changed, the prospects are serious, My hon. Friend referred to Basildon council's document entitled "Pledge to Homeowners". I am amazed that any responsible local authority can think it reasonable, during a local election campaign, to send out a glossy brochure. I have no idea how much it cost to produce, but it runs to 16 pages and is in full colour. It sets out that council's objectives. It is being distributed to every house in the council area during the election campaign. Obviously, it is designed to influence the outcome of the election. I notice that it does not have an imprint on it, but I should have thought that it was one of the most amazing documents that we have had a chance to see being distributed by a Labour council to try to influence the electorate.

I wonder what people would think if, during a general election campaign — as there must be in the next 15 months or so—the Government decided to distribute leaflets like that document to every house in the country, at enormous expense, on the basis that it was just information. People would say that it did not wash. No responsible Government would be allowed to do it. If Basildon council can do that within the law—I have my doubts whether it is lawful—the law should be changed.

The finances of Basildon district council are an horrific story. Its current spending has gone up an incredible 44 per cent. in real terms since 1979 despite having been selected for rate limitation in 1985–86, 1986–87 and 1987–88. I am pleased to say, however, that rate limitation is protecting ratepayers to some extent. Basildon's rate limit in 1987–88 was only 0·2 per cent. up on last year—well below what it would have been otherwise. Indeed, the local rate was only 5 per cent. above the level of two years ago—half the shire district average increase over the same period and well below inflation.

At 52·84p in the pound the local rate is, however, still far too high—double the average rate for shire districts. The 1987–88 budget of £16·911 million is more than £3 million above the expenditure level set by the Government and a massive 112 per cent. over its grant related expenditure assessment. The enormous financing gap has been met by raiding balances. My hon. Friend also mentioned the setting up of bogus companies to defer the cost of current spending into the future.

I have seen the figures produced by the council setting out the implications. If the council, on a neutral basis, were going to inform the residents of the issues in a local election campaign, it should say that on present policies it will spend £17 million in 1987–88 and, without any new spending plans, because of the commitment decisions already taken, in three years' time that will go up to £27 million. How can the people of Basildon afford to pay that?

For the time being rate limitation will continue, and for the future we have set our plans for comprehensive rates reform. On that score my hon. Friend may like to be aware that had the community charge been in operation last year bills per adult in Basildon would have been £240 compared with the £300 average that was actually charged in domestic rates.

Even with high spending there will be some relief when the community charge is introduced after the next general election. Businesses could also have been benefited from an average 8 per cent. reduction in rate bills as a result of the introduction of the national non-domestic rate.

My hon. Friend has raised the question of the new town housing at Basildon. I very much regret tht the council saw fit to spend the ratepayers' money on a misconceived "referendum" of the new town tenants. My noble Friend the Under-Secretary of State made it plain to the council before it embarked on this, that its referendum would not be treated by the Government as a worthwhile demonstration of the wishes of new town tenants on the future of their houses. I regret that this did not prevent the council from going ahead with its referendum, and with a grossly tendentious video in support of its case for a transfer of new town houses into its own ownership.

The leader of the council has written to my right hon. Friend reporting the results of the referendum held in late March. The results show that a high percentage of respondents want a vote before a decision is taken on the houses. We have been saying for over a year that we will consult on the options of the transfer to the council and a detailed, practical alternative. The exact arrangements for that consultation are something which the Department will wish to discuss with the council, and the Commission for New Towns in due course.

The results also show that a high percentage of respondents want to see transfer to the council as one of the alternatives put forward in the consultation. We have never suggested otherwise.

Finally, the results show that, on the basis of what they have "learnt so far", the great majority of respondents favour transfer to the council. Any other result would be extremely surprising, given that no alternative has so far been put forward for the tenants to consider. All that tenants have had to go on is council propaganda typified by a highly misleading video portraying housing associations as incompetent and uncaring landlords.

My hon. Friend referred to the time when I was leader of Wandsworth council. When we took over from the Socialists in 1978, the Labour council had been hostile towards the housing association movement. The same basic antipathy towards housing associations is now exhibited by the Socialists in Basildon. We often hear suggestions that the Conservative party is not as friendly as it could be to housing associations, but the truth is the reverse. We support the voluntary sector in housing, but the Labour party, which in some areas has come round to supporting housing associations, in the most hardened areas, such as Basildon, still regards the voluntary housing movement as something which should not be trusted.

We want to make arrangements, as soon as possible, for a proper consultation of the new town tenants at Basildon. The council will have a major part to play in that process. The main concern for all prospective landlords, as well as for the commission and the Government, should be to ensure that the tenants have good, objective information on which to judge which landlord would be best for them. For our part, we will respect the wishes of the tenants expressed in a properly organised consultation process.

My hon. Friend also mentioned the location of Essex county hall. I must tell him that this is a matter for the county council. He also drew attention to the Felmores district heating system. I can assure him that my noble Friend the Under-Secretary of State will be writing to my hon. Friend on this matter shortly.

I also note my hon. Friend's concern about low-cost housing. The effects of the initiatives which my hon. Friend the Minister for Housing, Urban Affairs and Construction mentioned in reply to my hon. Friend's Adjournment debate on 4 November will in due course be felt in the London region, where it is so difficult for young people to find homes.

I am concerned that my hon. Friend's speech will not be as widely circulated to the people of Basildon as this leaflet. His speech deserves to be widely circulated to them and I hope that between now and polling day his remarks will be drawn to the attention of Basildon's electorate.

One matter is certain. Without the diligence of my hon. Friend in representing the people of Basildon, their lot would be even more sorry than it is at the moment. My hon. Friend has referred to his important role in the enactment of the rate-capping legislation, which was opposed by the Opposition parties, and he has also drawn attention to the fact that it was only the Conservatives who were in favour of banning propoganda on the rates.

Question put and agreed to.

Adjourned accordingly at Eleven minutes past Three o'clock till Tuesday 5 May, pursuant to the resolution of the House of 2 April.