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First Day's Debate

Volume 176: debated on Wednesday 11 July 1990

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I remind the House that many right hon. and hon. Members of all parties wish to participate in the debate, which will last until midnight. I have decided not to put the 10-minute limit on speeches this evening because that would be unfair to those hon. Members who are called in that two-hour period. I do, however, urge all hon. Members to limit their speeches to 10 minutes whatever time they are called as that will enable most—I hope all —hon. Members to be called in this important debate.

3.50 pm

I beg to move,

That the draft Charge Limitation (England) (Maximum Amount) Order 1990, which was laid before this House on 6th June, be approved.
With this it will perhaps be convenient to consider the following motions:
That the draft Charge Limitation (England) (Maximum Amount) (No. 2) Order 1990, which was laid before this House on 18th June, be approved.
That the draft Charge Limitation (England) (Maximum Amount) (No. 3) Order 1990, which was laid before this House on 2nd July, be approved.
The debate is the culmination of a process that began on 3 April when I announced my decision to designate 20 authorities for charge capping. Subsequently, on 10 April, I added Lambeth to that list. The three draft orders state the caps that I propose should be set, if the House agrees, for 20 of the 21 authorities. Camden accepted the cap that I proposed. I formally set that cap by serving notice on Camden on 26 April. Therefore, Camden does not feature in any of the draft orders—nor need it do so.

The first draft order deals with Hillingdon, to the affairs of which I shall return later. The second draft order refers to those authorities that did not respond to my proposed caps within the statutory 28-day period: Basildon, Bristol and Doncaster. The third draft order deals, under section 104 of the Local Government Finance Act 1988, with the other 16 authorities which responded to my proposals and put forward alternatives of their own. Again, I shall come to that issue later.

If the House approves the draft orders, I shall make them. The statutory notice with the final cap figures will then be served on the designated local authorities as soon as is reasonably practical after that. The local authorities concerned will then have 21 days in which they can set lower budgets which will, in due course, feed through to lower community charges for their citizens.

Many hon. Members will be familiar with such debates, especially those who represent inner-London constituencies. The issues that we are covering today are not novel; we have visited these shores before. The limitation of local authority rates and the debate of that limitation has been a fairly regular feature of the parliamentary calendar in the past few years. The difference on this occasion is that we are acting under different legislation and spending longer debating these matters. In view of the number of hon. Members who wish to speak, I understand why that is the case.

Before the Secretary of State announced the capping, does he recall saying:

"The best place to resolve these issues is in the local government ballot box"?
Does he recall an article in The House Magazine on 18 June in which he said:
"Councils will have to answer to local voters for their performance. That's what accountability is all about"?
Will he explain what he meant by those statements?

I shall certainly come to local accountability and democracy later in my remarks.

I shall make my speech in my own way, and I shall allow interventions as frequently as seems reasonable. If I have not answered the point raised by the hon. Member for Halifax (Mrs. Mahon) by the end of my speech, the hon. Gentleman may intervene and I shall seek to respond then. I am desperately trying to be accommodating to Opposition Members. At this point I shall abandon what was clearly an ill-starred endeavour.

As the matter has been raised, perhaps I should draw my right hon. Friend's attention to the fact that the unlamented Ealing Labour council inherited balances of £28 million. In four years it raised the rates and the community charge by 264 per cent. and left debts of £460 million to the people of Ealing. It is no wonder that the council was thrown out on its ear by the electorate. Was that not a good form of accountability?

It was a good form of accountability. We are delighted that one of the main beneficiaries in the House was the Leader of the Opposition, and that a first-class council has been elected to look after his affairs and those of Ealing.

If this occasion is fairly familiar to the House, so are some of the matters of principle to which I shall come shortly. So, too, are some of the issues that will be raised on the way in which those principles are applied in practice. Before coming to the principle and the application of the principle in practice to the designated authorities, I wish to deal briefly with the law.

Most of us would concede that, for the past three months, questions of legality have featured significantly in discussions of local government affairs. If one is to believe what one reads in the press, those questions of legality have already consumed more than £1 million in legal costs and a good deal of time and effort on the part of officers of the designated authorities which have pursued action through the courts.

Absolutely. The authorities were represented by a galaxy of five senior counsel and eight junior counsel. The number of councils fell from 20 to 19 when Hillingdon withdrew. Twenty authorities applied to the Divisional court, the court of first instance, to have my designation decisions overturned.

The Brent law centre, representing two school governors and the National Union of Teachers—both parties were represented by senior counsel—also joined in the court hearings. In the Divisional court, the applicants' case was dismissed. The applicants then appealed to the Court of Appeal, and again their appeal was dismissed. When I made my initial statement on 3 April, I said that the designation criteria that I had chosen were legally robust. Six judges have arrived at the unanimous decision that my action was lawful. Nevertheless, 16 authorities are still pursuing the matter legally in another place. That raises three issues on which the House would want me to comment.

First, the role of the courts and the concerns of this House are different. The courts are concerned with the law —that is, whether or not I am entitled to take the decisions that I do. The Master of the Rolls made the point extremely clearly in his judgment in the Court of Appeal by using a metaphor. He said that the court's role was similar to that of a referee in ensuring compliance with the rules. I seek to make this point in a non-partisan way, hoping that right hon. and hon. Members in all parts of the House will accept it. The courts are not concerned whether my decisions—that is, if I am entitled to take them—are appropriate. That is a matter for me and for the House, and is the subject of our debate this afternoon. I want to make that distinction clear.

Secondly, the legality of my decisions are the subject of legal proceedings in another place. Obviously it would not be proper for me to comment extensively on them, but while those proceedings cannot and will not be influenced by any debate in this House, there is no impediment to this House now considering fully, in relation to the draft orders, all the matters that are rightly and properly matters for this House.

Setting the caps is a matter of considerable urgency and it is in the interests of all the local authorities and charge payers concerned that that should be done as soon as is practicable, ending uncertainty and bringing relief to about 4 million charge payers. It is right for the House to consider the draft orders now, so that, if it approves them, local authorities will be able to revise their budgets and to set lower community charges.

Thirdly, if the designation were to be deemed unlawful, my decisions and the orders could be quashed. If before such a judgment I had served the statutory notices that set the caps for designated authorities, those caps also could be quashed. I want to make clear the distinction between the issues which have been discussed in the courts and those which we are debating now, because it is no part of my argument that, because the courts found my action to be legal, they necessarily found it to be appropriate. Appropriateness is a matter for this House.

I thank the Secretary of State for spelling out that distinction, but will he confirm, and place on the record for the benefit of the millions of people affected by the action that he is now taking of his own volition, that, although the courts may have taken their time to examine his decision, just as the House will take time today and tomorrow to do so, when the House was considering the legislation, it was never allowed fully to debate the Government's proposals because the Government introduced a guillotine? So although the powers that the Secretary of State is exercising may be lawful, they were never fully debated by this House. That is why the action that the right hon. Gentleman seeks to take today and tomorrow is totally undemocratic.

Although I have not been a Member of Parliament for as long as the hon. Member for Birmingham, Perry Barr (Mr. Rooker), it is within my recollection that a previous Labour Government frequently and enthusiastically used their powers to guillotine legislation. I believe that it was a former leader of the Labour party who, as Leader of the House, broke the record for the number of Bills that he guillotined in a day.

Over the years, we have debated capping powers. In particular, we have debated the designation criteria which I have used on this occasion. Indeed, we debated them a few months ago, and I dare say that we will debate them in future. I hope that nothing the hon. Member for Perry Barr said—I do not think that anything he said would bear this interpretation—would suggest to people outside this place that the amount of time taken to debate issues in the House justified people witholding payment of their community charge. I do not think that the hon. Gentleman or any other hon. Member would sensibly say that.

The Secretary of State appeared to be mildly criticising the local authorities which together have taken the legal action that they are still pursuing. Does he not agree that they may have felt justified—many Opposition Members believe that they were justified—in taking that action? While the Government's decisions may be lawful, the authorities are entitled to point out to the courts and to the country that the decisions of local government finance distribution this year, upon which the Secretary of State's policy is based, owe a great deal to erroneous assumption and outdated fact. If the courts cannot understand what that means, the House must.

In due course it will be for those local authorities which have taken the matter through the courts and spent a good deal of their community charge payers' money in doing so in an attempt to ensure that those same community charge payers have a higher community charge to defend their actions to their local electors. I very much hope that the amount of legal attention that those matters have received this year will ensure in future that we can proceed more expeditiously when we need to do so should I be required in future to exercise the powers that I have from Parliament to cap local authority expenditure.

The more I give way, the more I eat into the time available to hon. Members to make contributions about their local authorities.

It is crystal clear that the orders limit the level of expenditure of specified local authorities. The Secretary of State said that that would feed through to local poll tax or community charges. Is he saying that the effect of the orders is a specific enforceable lower level of poll tax? Because of the delay and uncertainty over the past few months, the income of many of those local authorities, particularly my own, will be much lower over the year and the expenditure, because of the cost of recalculation, will be much higher. Does the Secretary of State appreciate that the irony is that it may be necessary to set a higher poll tax to pay for the even lower expenditure because of the level of non-payment as a result of the long delays and the confusion created by the orders?

The hon. Gentleman is wrong on a matter of politics and on a matter of law. When local authorities set new budgets where a cap has been designated, they will have to apply precisely the same criteria and considerations that they applied when they set their original budgets. They will be determining how the same number of community charge payers should meet a lower level of spending. That will mean a lower community charge for their citizens. The law is perfectly plain about that.

With regard to the matter of politics, it has of course been the choice of those local authorities to pursue their cases through the courts. That choice has not been exercised by every local authority. For example, Camden did not choose to do that. It accepted the cap that I proposed and the statutory notice on 26 April. That is not the case with Hillingdon. I shall return to its affairs in a moment, but I wanted to deal with those legal points at the outset.

The principle that we should debate in the House is whether it is right for central Government to take the power and, having taken that power, to use it to constrain local authority spending and hence constrain local authority tax-raising powers. This is not a new issue, but something of an old chestnut. At the heart of debates in this House for about 15 years has been the relationship between local and central Government.

With great respect to the hon. Lady, that matter has been at the heart of debate for the past 15 years.

I am grateful to my right hon. Friend for giving way; he has been especially generous to Opposition Members, who now dispute what he tells the House. Those in local government before 1979 will recall the action of the then Government when they introduced primary and secondary clawback. Perhaps there was less squealing then from Labour Members who were part of a Government who were trying to curb local government and who said that the party was over.

It is fair to say that, in the late 1970s, local authorities were predominantly controlled by Conservatives. When two successive Secretaries of State for the Environment tried to end the party, they were dealing with local authorities that accepted the role of central Government in establishing national economic priorities and implementing a national economic strategy. I should remind the House that the only cut in current local authority expenditure was made in 1976–77, when local authority expenditure fell by 6 per cent.

I do not believe that anyone on either side of the House has ever made the case, at least theoretically, that local authorities should be treated as independent fiefdoms whose actions and spending are of no concern to the House or central Government. Local authorities were created by Parliament and their powers and duties are laid down by it. We prescribe, for example, in detail how local authorities should regulate tattooing parlours. We prescribe in detail how local authorities monitor the operation of every ear-piercing establishment and the qualifications required for local authority meat inspectors. As we prescribe such detailed matters and many others, it would be illogical if we came to the conclusion that the amount of money that local authorities spend and the amount of taxes that they raise are of no concern to us.

This House has also prescribed local authorities' duties in terms of education. There has been an increase in their duties as a result of the Education Reform Act 1988. The Secretary of State's actions are making it impossible for some local education authorities to carry out their statutory responsibilities.

Ninety education authorities which are not capped are carrying out their statutory responsibilities. I believe that that is an adequate answer to the hon. Lady'sobservation—[Interruption.]

Does the right hon. Gentleman appreciate that what is objected to is not just the simple fact of the cap, although it is bad enough, but the highly selective way in which it has been imposed? My local authority has spent only 4 per cent. over its target, which is closer to its target than 90 per cent. of all other local authorities, including Conservative ones, yet it is Labour authorities that we are discussing. That is not fair, and this action has brought his office into disrepute.

I must disagree with the hon. Gentleman by referring to the facts. His local authority is spending 16·1 per cent., or £178, per adult above its SSA. If he says, "The SSA is jolly unfair"—

Let me finish the point, because I am anxious to help the hon. Gentleman. It is spending 27·3 per cent. above its resealed GRE. It is overspending more under the old grant formula than under the SSA. The hon. Gentleman's argument does not hold up.

Let us consider the figures. Brent's notional poll tax target was £481. It set a poll tax of £498 —4 per cent. higher. The reality is that the average for all councils is 31 per cent. over target, so Brent is closer to its target than 90 per cent. of all local authorities. That is the fact.

I think that the hon. Gentleman is referring to the assumed community charge, not the standard spending assessment. As he is a shadow Treasury spokesman, I am sure that, should he become the real thing in due course, he will want to know the difference between the assumed charge and the SSA.

Will my hon. Friend be kind enough to bear in mind that the spending of several Conservative councils has been 16 to 32 per cent. higher over the past two years? Many Conservative community charge payers wonder why those authorities have not been capped. Will he bear in mind in future the fact that increases in expenditure by local authorities, of whatever political complexion, should be subject to the same capping?

I shall come, with enthusiasm—at least on my part; I do not know whether it will be matched on the part of others—to our ability in law to constrain year-on-year increases in spending.

The total amount of local government expenditure, and therefore the amount spent by local authorities, which in aggregate makes up that total, is and must be a matter of concern to any Government who wish to manage the nation's economic affairs prudently. Equally, the total amount of local authority spending and the spending decisions made by local authorities are certainly of concern to this Government—I hope that they would be of concern to any Government—because of their repercussions for local community charge payers. That is an important argument for the community charge, the principle of which is that virtually everyone should make some—I repeat, some—direct contribution to the cost of local government services, from which everyone benefits.

I have no doubt that the introduction of the community charge is already starting to have an effect on attitudes to local government spending and that the community charge will introduce a more direct translation mechanism between local authority spending and local electors. I very much hope that, as a result, in due course it will be unnecessary for the holder of my office to exercise powers under the Local Government Finance Act 1988 to constrain local authority spending. Unfortunately, that happy state of affairs has not yet arrived. I certainly do not think that it arrived this year, when several local authorities plainly increased spending thinking that they could blame the consequences on the introduction of the community charge.

I used my powers seriously—I did not take my decisions lightly—and I have no doubt that it was right and proper to use them.

My right hon. Friend will no doubt be aware, and the public must be made aware, that the community charge will be used as a political tool in the approach to a general election by parties that wish unscrupulously to advance their parliamentary representation. Therefore, I hope that he will carefully watch Labour-controlled Lancashire county council and other councils, which will have no hesitation in unnecessarily increasing the community charge for political gain during a general election campaign.

I can well understand my hon. Friend's concern. The whole House will want to be assured that, when I make a statement about the local government settlement for next year—I hope that it will be later this month—and about the outcome of our review of the community charge, I shall give the House my intentions in broad terms, about charge capping for the future. I hope that I shall be able to satisfy my hon. Friend on that occasion.

I repeat that this central issue—the relationship between this House, central Government's responsibility for managing the economy, and the totality of local authority spending—is one on which the Government have made their position plain, even if the Opposition do not like it. The Opposition's views on the matter are less than crystal clear.

We begin with the attitude of the Opposition to the principle and practice of community charge capping. The hon. Member for Dagenham (Mr. Gould), the shadow Secretary of State for the Environment, was interviewed by John Humphrys on the "Today" programme on 27 March. The exchange went like this:

Mr. Humphrys asked:
"But if councils are profligate with rate-payers or Charge-payers', money, then what is wrong with Charge capping?"
The hon. Member for Dagenham:
"Well of course there must always be in extremis that reserve power."
Mr. Humphrys:
"Would a Labour Government accept the principle—the very broad principle—of rate-capping, Charge-capping, whatever you want to call it?"
The hon. Member for Dagenham:
"Well, as I have already said, in extremis, there must always be that reserve power, but the Government's going well beyond that reserve power."
Mr. Humphrys:
"You say a Labour Government would have to do it in extremis—any Government would have to do it in extremis —how would you describe 'in extremis'?"
The hon. Member for Dagenham:
"Well, it's not our problem at the moment".
Mr. Humphrys—he did not give up—said:
"It's going to be, if you're in power".
The hon. Member for Dagenham:
"Well, yes, of course … But … it's really just a hypothetical question to ask us to define what would be extreme circumstances. What I am saying to you is—I am not ducking your question in any sense"—
I do not think that belief in that observation will outlast the end of the sentence—
"I am saying in extremis that reserve power would have to be reserved, but it's impossible to say in advance what those circumstances would be."
We have waited four months since the interview to hear a definition of what "in extremis" means, and of when the reserve powers that would be reserved would be used. We have had no clarification from the shadow Cabinet, or from the Leader of the Opposition or—I am working in ascending order—from Mr. Peter Mandelson. Nor have we had any clarification from the hon. Gentleman.

We are waiting for that clarification to be given any second now. As I said when I last debated these matters, we know that the hon. Gentleman believes that such reserve powers should be used in extremis, but not in Lambeth or in Basildon.

The Secretary of State has been speaking for 30 minutes and he has not justified, or sought to justify, the poll tax capping which will have such a devastating effect on the services upon which our constituents depend. Will he address himself to the issues that concern people, instead of this disgraceful political knockabout, which is an insult to the services that we are discussing? It is shameful.

I hope that the hon. Lady will be able to make her own speech in her own time. One reason why I have spoken for such an inordinate time is that I have given way to a large number of hon. Members.

I want—I am sure that it is an important issue for both sides of the House—to deal with the principle behind charge capping and the extent to which the Government should try to constrain the totality of local authority spending and individual spending decisions by local authorities. That must be an issue of great significance and importance to the shadow Chancellor and to his Gladstonian team of shadow Treasury Ministers, one of whom I see on the Back Benches. When I look at what Labour spokesmen have said on the issue, I am aware once again, to quote from the nautical log books, that they are afloat on a high and confused sea.

When we consider what Labour spokesmen have said, it is extremely difficult to find any observation on the matter from the hon. Member for Dagenham, but I have found what I guess is the kernel of the Opposition's case—put not by the hon. Gentleman but by his predecessor, the hon. Member for Copeland (Dr. Cunningham) in the rate limitation debate two years ago. I shall set out the views of the hon. Gentleman and the Opposition reasonably extensively.

What are the Secretary of State's views?

I shall come to my views.

I begin with my hon. Friend the Member for Nottingham, South (Mr. Brandon-Bravo), who is with us today. He is always an incisive and informed contributor to these debates. Intervening in a speech by the hon. Member for Copeland, my hon. Friend said:
"Nobody will dispute the needs of many London boroughs and inner cities throughout Britain, but the theme of the hon. Gentleman's speech so far seems to give a clear message from the Opposition Benches that local authority spending should not be restrained or limited. Is it the Labour party's policy that, in the totality of national spending, the one area which is not the business of the House and should in no way be constrained is local authority spending? That seems to have been the message for the past 10 minutes.

Of course that is not the message. The hon. Gentleman is a regular attender of these debates and often contributes. He knows very well that that is not Labour party policy, because I have had the opportunity to tell him so on several occasions. But since his memory seems to be as defective as his political reasoning, let me put it on the record again.

I took the trouble to re-read the previous two debates on this subject last year and the year before." So did I. The hon. Member for Copeland continued:

"If the hon. Gentleman had taken the trouble to do that, he would have known the answer that I am about to give. It is simply that the Labour party's policy makes it clear that what the Government provide to local authorities would, of necessity, be controlled and limited—

Because the Government and the Chancellor of the Exchequer would come to a decision. That is how, fathead.

The difference between us and the Government is simply that we do not believe that local government's revenue-raising powers should be subject to Government control. Whatever revenue-raising powers local government has, it should be free to determine how to use them."— [Official Report, 18 February 1988; Vol. 127, c. 1217–18.]

Let me finish the point. Let me summarise for fatheads and non-fatheads the Labour party's position.

The Labour party's position is that it is appropriate for the House and central Government to take a view, to consider, and presumably to attempt to constrain the totality of local authority spending—

If the Secretary of State wants to discuss Labour party policy, the Government should call a general election and let the people decide.

The Opposition's position on this central point of principle is that it is reasonable for Parliament and central Government to have a view about the totality of local authority spending, and that to exercise that constraint they will determine—this is good news for all of us—what Government will provide for local authorities; however, at the end of the day local authorities can raise whatever funds they want, and can spend whatever they want.

There is a flaw in that argument. Let me make the obvious point by means of a metaphor. If we are concerned about the level of water in the bath, we must take account of the fact that there are invariably two taps, and that it is not enough to control only one of them. Similarly, if we want to control local authority expenditure, it is important not only to constrain the amount of money that goes from central Government to local authorities, but, if necessary, to constrain the total amount that they raise themselves through rates or through the community charge.

I intervene reluctantly, Mr. Speaker, in view of your comments about time. However, the Secretary or State is abusing the House. The three orders laid by the Government are complex, and he should address them. So far he has given us a basic lecture on constitutional law that could only be described as a painful elaboration of the obvious. We then had a bit of political knockabout. The Secretary of State has not addressed the issues of why and what is involved.

The right hon. Gentleman should bear in mind that the cuts in Wandsworth—according to an independent assessment report—led to the death of a child. That is not something to laugh about. What we are talking about today could lead to similar events in other areas: and that is what not only hon. Members but people outside want to know about. What effect, in the Government's view, will the charges have on services?

I have been attempting to deal with the principle that lies behind any attempt to constrain local authority expenditure. I have pointed out that the Labour party is passing muddled on the issue—

I have already given way to the hon. Gentleman—and twice in an afternoon would be too much.

I do not think that anyone could say airily to local authorities, "Go for it: borrow what you can and tax what you can."

I am afraid that the hon. Gentleman is not accurate. He should listen for a change. That was said not by me but by the hon. Member for Dagenham in an interview in Tribune. I am sorry that the hon. Gentleman no longer reads that publication. He makes comments, but he presents us with no arguments or proposals relating to how local authorities can be stopped from borrowing whatever they can and taxing whatever they can.

Let me now deal with the application of the principle to the designated authorities. The Local Government Finance Act 1988 gives me power to cap authorities on two bases. First, it says that I am entitled to cap authorities on the basis of excessive spending. Secondly, it says that I am entitled to cap authorities if the increase in their spending from one year to the next is excessive. I mentioned that earlier. I have not been able to pursue that second approach in the first year of the community charge, mainly because so many other charges have been taking place in local authority expenditure. For example, the housing revenue account has been ring-fenced and changes have been made in the capital rules.

If I had wished to use the second approach—capping on the basis of excessive increases from year to year—I would have had to construct for all local authorities a notional budget for 1989–90 in order to be able to compare like with like. The view that I was legally advised to take was that that would have led to far too imprecise a foundation for designation criteria this year. I based my criteria on the first approach, and those criteria were debated when I made my statement a few weeks ago. They have also been widely discussed outside the House and in the courts.

My right hon. Friend is talking about the criteria by which he selects authorities for capping. Many authorities have set the charge too high, and even though the majority of our constituents accept the principle of the community charge, they cannot take any action against the amount of the charge if expenditure by the authority is below a certain limit, which from memory is about £15 million. Will my right hon. Friend comment on the excessive charges that my constituents and others have to pay because of that limitation?

As I said in my statement on the local government financial settlement for next year, I hope to be able to make clear in outline my views on charge capping should it be necessary in future. It should be possible to take either of the two approaches that I have mentioned in relation to excessive spending or in relation to excessive increases year on year.

As I have said, we have discussed the criteria in the House and outside. Camden was one of the designated authorities. It concluded that it could accept the cap even though it disagreed with it and I issued a statutory notice for Camden on 26 April. Three authorities—Basildon, Bristol and Doncaster—did not respond to my designation by putting forward an alternative within the statutory 28 days. I assume that if they had thought that my proposals were unachievable they would have responded and put forward other proposals. I would be astonished if any local authority which thought that my proposals were unachievable failed to respond.

Does my right hon. Friend agree that one of the reasons, or perhaps the main reason, for Bristol not responding to the order was that it was scared stiff that if his Department had a look at Bristol's books it would have imposed a larger cap?

I understand why many of my hon. Friend's constituents and others in Bristol take that view. Bristol's spending record of 96·3 per cent. over standard spending assessment, or £108 per adult, speaks volumes.

After dealing with Camden and the three authorities which did not respond, we were left with 17. I shall deal with Hillingdon, which is one of the 17, in a moment. Representatives from the other 16 authorities were seen by my hon. Friends in the Department. As a result of those representations, we adjusted the caps on Brent, Southwark and Wigan, and I have confirmed the cap for the other 13 authorities.

Our proposed budgets are achievable and reasonable. If the House approves the order, it will be for the authorities to decide how to reduce their budgets to conform with the caps. It is for those authorities to set their own spending priorities within those caps; it is not for me.

I have three points to make about the application of this principle and these criteria to those local authorities. First, year after year, we have had debates on rate limitation. In all those debates there has been a lot of theoretical argument about whether the Secretary of State for the Environment is behaving in a reasonable and appropriate way. There have been assertions and counter-assertions. This year, we have something more substantial—we have direct evidence to hand, in the case of Hillingdon.

Hillingdon was one of the local authorities that I designated for capping. It had set a budget of £151 million —20 per cent. above the SSA, or £143 per adult. That led to a community charge of £367. I proposed a cap on Hillingdon, in early April, of £141·7. Hillingdon responded at the end of the month by saying that that budget was inadequate to meet its needs. It said that it needed £151 million and not a penny less.

Three days later, the political control of Hillingdon changed. The new council proposed a new budget, below the level of my cap, which implied a community charge of £290—£77 below the community charge that had been set by its predecessor and £25 below the community charge that would have resulted from my cap. It has set a budget below the level of the cap that still allows for an increase in expenditure on schools. After all the assertions and counter-assertions, it is not unreasonable for me to say that, if it is possible for Hillingdon, it should be possible for others.

I hope that, if I am successful in catching your eye, Mr. Speaker, I shall be able to tell the House exactly how the new Hillingdon council achieved those cuts.

I am sure that, as Labour Members are only too keen to take the good news back to their local authorities, they will be all ears when my hon. Friend speaks.

The Secretary of State is aware that this is a key issue. Is he saying that the new Conservative administration in Hillingdon has cut no services in any department as a result of its new budget? If not, he is conceding the point that capping means cutting. That is the simple implication.

My hon. Friend the Member for Uxbridge (Mr. Shersby) will, I hope, shortly be able to tell the House in detail where Hillingdon is making the cuts. It will be making cuts in administration—for example, in the number of people who administer rather than teach in schools. I will leave the details to my hon. Friend.

Secondly, throughout these debates in the past there has been a roll call of horror stories. Disaster has been advertised as just around the corner. Disaster is about to arrive on the next train, but the next train has drawn into the station and disaster has failed to disembark. That point got through to Opposition Front Bench spokesmen, so that four years ago—

Yes, because we are all agog to hear the Labour party's views on these matters.

Four years ago, the hon. Member for Blackburn (Mr. Straw) said:
"Much has been made of the fact that some of the dire warnings of the rate-capped authorities last year of the effect of rate capping upon jobs and services have not come to pass. My answer to that is, 'not yet'."—[Official Report, 25 February 1986; Vol. 92, c. 894]
We had rate capping in 1987–88, 1988–89 and 1989–90, and the answer of the hon. Gentleman year after year was the same—"not yet". Local authorities had to constrain their growth in manpower and public expenditure, but Armageddon has not so far put in an appearance.

The hon. Gentleman is a world famous expert on that subject.

Thirdly, I accept that it is difficult to run local authorities' affairs prudently. It is not an easy job, it is a challenging job, but it is not an impossible one. When I look at some of the figures that have been presented to us over the past few weeks, I wonder about some of the arguments of Labour Members. I find it difficult to believe that in Derbyshire, where school meal charges have not been raised since 1981, it is impossible to provide better value for money. I heard one of Derbyshire's local authority leaders say the other day that the price of school meals in Derbyshire had not increased over the past nine years. That is not true. The price has increased, but the price is paid by community charge payers and ratepayers, who are subsidising school meals to the tune of £15 million.

It is difficult to believe that there is no room for economy in Basildon, which is spending at 194·3 per cent. above its SSA, or that there is no room for economy or better value for money in Haringey, which increased its rates by 61 per cent. in 1989–90 and which is 30 per cent. above the SSA. I have also the example of my own sweet Avon county council. It is proposing to spend 18·4 per cent., or £117 per head, above SSA. It is proposing a budget for this year that is 20 per cent. greater than last year's budget.

If one compares Avon with the Audit Commission's comparable local authorities—the Audit Commission family—

I shall make my own speech.

Avon is spending 18 per cent. over SSA while a directly comparable authority—Kent—is spending below SSA. With the best will in the world, my constituents do not believe that they are getting 18 per cent. better quality services than people in Kent are getting.

What complaints has the Secretary of State received at his advice surgeries? What do people complain about? What are their problems? Does he have the experience that I have in a so-called high-spending authority? Some 80 per cent. of my cases are about people looking for a decent place in which to live.

I should be only too happy to share the experience of my advice centres with the hon. Gentleman. My constituents have been vociferous about two issues in the past few months. One is the level of the community charge, which is in part a consequence of the spending decisions taken by the Avon county council. The second issue that they have drawn to my attention on a number of occasions relates to the attempts that the county council has made, again and again, to prevent one of the many good schools in my constituency from opting out and taking grant-maintained status. Avon county council spent a large amount of community charge payers' money on trying to stop it opting out. My constituents have raised that issue with me.

Will my right hon. Friend confirm that, after it was told that it was likely to be capped, Avon county council said to all and sundry that capping would mean that all nursery schools would have to be closed? Is it not the case that the Conservatives' budget, which is below the capped level, would preserve nursery education in Avon?

Yes. There is plenty of scope in Avon for better value for money and for the improvement of services. I know that my hon. Friend is one of the Members of Parliament for the county who has pressed continually and vociferously for those objectives.

Before I close my speech, may I point out to the hon. Member for St. Helens, North (Mr. Evans)—who may listen to me now, since he was shouting at me a few moments ago about St. Helens, a subject in which I know he is interested—that, with a budget that is 16·2 per cent. or £130 per adult, above the standard spending assessment, he should not be surprised that St. Helens has been charge capped. However, I very much hope that that will be unnecessary in the future.

The hon. Gentleman hardly listened to my reply. I shall leave him to make his point when he speaks.

Although I realise that these matters have angered and annoyed the Opposition, at least superficially, I have attempted to set out the legal background to the debate. I have set out the principles that lie behind charge capping and the inordinate muddle in the Labour party on the issue. I accept that to run local authorities is difficult. If certain local authorities are represented by hon. Members who think that the job is impossible, I suggest that they should make way for people such as Councillor Mallom in Ealing, who would do the job admirably. I am delighted that for the many years that the Leader of the Opposition will spend in Ealing he will have an extremely good council to look after his affairs.

Since last April I have been accused of acting illegally and have been pursued both in the courts and outside them. The courts have made their view plain. It is now for the House to decide whether I acted rightly and appropriately. Without hesitation, I commend the draft orders to the House.

Order. I ask hon. Members to bear in mind Mr. Speaker's appeal at the outset of the debate, in view of the large number of hon. Members who have a direct interest in these matters, for speeches to be brief. I believe that he intended that request to apply to Front-Bench spokesmen as well as to Back Benchers.

4.53 pm

The Secretary of State has just spoken for over an hour—[Horn. MEMBERS: "With interruptions.]"—in a debate in which many Back-Benchers know already that they are likely to be squeezed out, on a speech in which he had so little confidence in his case that he did not even try to justify the orders for which he is seeking approval. It must have been a speech that he wrote and believed he would never have to make. But he did make it.

As the Secretary of State has supported and embraced the principle of charge capping, that raises the question: why is it that, according to reports which I shall be interested to hear whether he denies, he opposed any extension of that principle when conducting his review of the operation of the poll tax? I suspect that I know the answer. The right hon. Gentleman is at least an honest and intelligent, if somewhat pliant, politician. He knows perfectly well that the speech that he has just made, and his announcement on charge capping, is a confession of failure and the final denial and renunciation of the underlying principle that was claimed for the poll tax.

No, I shall not. I have only just begun my speech. Perhaps I should say that, although I shall not refuse to take interventions, I have no intention of delaying the House to the extent that the Secretary of State delayed it.

With respect, as all lawyers would say to the hon. Gentleman, a major reason for the length of my speech was that I tried to give way to as many Opposition Members as possible. When we last held a similar debate I gave way about 20 times. On this occasion I have given way almost as many times. The hon. Gentleman and other Opposition Members would have criticised me if I had not given way.

We could have borne the length of the Secretary of State's speech if we had thought that it contained any substance and measured up to the seriousness of the issue.

The case for the poll tax was always, and only, that it would encourage and confirm accountability. In 1987 the right hon. and learned Member for Folkestone and Hythe (Mr. Howard), who, like so many other poll tax Ministers, seems to have moved on, said in a speech to the Associaton of District Councils:
"The Government has chosen the path of accountability. I personally believe that accountability is the key to any reform of local government finance. The first priority must be to restore the link between those who vote in local elections, those who use the local services provided and those who pay for those services."
We see there immediately a powerful hint of the true raison d'etre of the poll tax. It was meant to compel local authorities to load any supposedly additional spending on to the poll tax payer, who was then confidently expected to round on the local authority, when confronted with that high bill, and demand, without Government intervention, that local authority services should be cut. That was the theory and the principle. On the basis of that principle, it is hard to see why a power to cap should have been required.

In the early stages of the debate, the power was explained in the Green Paper as a purely transitional measure that was needed while the poll tax was running in parallel with the rates. It was only subsequently, in Committee, that the right hon. and learned Gentleman made it clear that he saw that such a power would be required to deal with local authorities which he described as reckless and irrational and out to prove some sort of distorted political point. It would be interesting to hear during the debate how many or how few authorities are believed to fall within that description.

Because of their confidence in accountability—that the poll tax payer would insist, when bills emerged hugely above the levels that had been promised, on a reduction in services—many members of the Conservative party remained pretty relaxed. There is a suspicion that some of them—I do not know why the right hon. Member for Cirencester and Tewkesbury (Mr. Ridley) comes to mind —welcomed the prospect of very high poll tax bills and saw them as yet another turn of the screw on recalcitrant local government. In their view, local government would again be cut down to size without direct Government intervention.

The script was not, however, followed by everybody. To their eternal credit, many Conservative councillors, as well as councillors of other political parties, refused to play their part. They became alarmed by what they understood to be the significance of the poll tax for local authority services. Conservative Back-Bench Members of Parliament also became alarmed. That is why, in an amazing volte face, accountability was suddenly no longer the name of the game. What was urgently required was a measure to try to salvage something from the political wreckage. That is why accountability was thrown out of the window. There was no more talk of accountability; what was required was a political rescue act.

I shall give way to the hon. Gentleman in a moment.

The Secretary of State, who had always understood the contradiction between capping and accountability, could not even wait for the local elections which, by then, were just one month away. The urgency was so great that he had to find some political culprits; he had to identify them on the basis of political criteria. That is the exercise that we are now debating.

Bearing in mind the hon. Gentleman's clear opposition to capping, will he categorically rule out the possibility of any future Labour Government capping, or in any way limiting, local government spending?

The hon. Gentleman must bear with me. Like the Secretary of State, I intend to make my own speech. I make the hon. Gentleman the same offer that the Secretary of State made to other hon. Members—I shall deal with that point, but if he is dissatisfied with the answer he might try again.

The objective of the poll tax-capping exercise is not to save poll tax payers from large bills. If that were the case, a quite different set of criteria would have been adopted. Indeed, one paradox of the whole episode is the degree to which people resent being faced with high poll tax bills, but because they have Tory-controlled authorities no one appears to be riding to their rescue. If the aim had been to reduce bills, the Government would have had to suffer the political embarrassment of charge-capping Tory local authorities. It would have been impossible to draw up a list on the basis of any sensible criteria, such as the size of the bill or the sharpest increase in expenditure, which did not include Tory authorities.

How was it possible to exclude from the list a Tory authority such as Windsor and Maidenhead, which set a charge of £449; or Kensington and Chelsea, which was £189 per head above the target figure; or Milton Keynes, which was 98 per cent. above the target figure? In drawing up a list that omitted authorities that fell into those categories, the Secretary of State abandoned any pretence that he was trying to help poll tax payers. The exercise became simply an attempt to shift the political blame. The Government wanted to duck out from under. It was essential to round up a group of politically identifiable culprits that could be saddled with the blame. That is what the charge-capping exercise is all about.

Throughout the whole saga of rate capping and poll tax capping, the Opposition have always made clear their objection in principle to the whole business of capping local authorities in their revenue-raising capacity. But we pay more than lip service to the principle of accountability. The proper remedy for a local authority that is overspending, or thought to be overspending, is that it should submit what it has done to the judgment of the local electorate. A further remedy, which we believe is infinitely preferable to the practice of charge capping, is to increase that element of democratic accountability by introducing the requirement of annual elections. That is where we stand.

One of the authorities which in no circumstances would need to be capped is the hon. Gentleman's authority of Barking and Dagenham. If the system of grants and local authority finance that the Government have introduced is so unreasonable, how has the Labour-controlled authority of Barking and Dagenham managed to set its community charge at just £3 above the Government's suggested budget figure?

The hon. Gentleman is correct to point out that my local authority, having fixed a poll tax level within a few pounds of the assumed or target level, naturally felt confident that it would escape any attempt at charge capping. Unfortunately, other local authorities which had, in some senses, performed even better, found that they were not similarly exempt from that attack.

All question of principle, including the principle that is said to underlie the poll tax, has been swept out of the window. We now confront a cynical exercise in finding political scapegoats. That is why, in drawing up his list of charge-capped authorities, the Secretary of State refused to tell local authorities in advance what criteria he would apply. What a stupid and ludicrous way to run a country. The Government warn of penalties if certain rules are broken, but refuse to reveal to those who may be subject to the penalties what rules will be set. There is an important difference between the old rate-capping power—which was objectionable enough, but at least applied to the forthcoming financial year—and the way in which the charge capping operates, which means that the rules in the football game, to which a learned judge referred, are set after half time.

How much confusion, delay, hardship and cost could have been avoided had the Secretary of State simply told local authorities—local authorities that were keen to apply the rules—in advance what they should do? Had he done so, the vast majority of charge-capped authorities would have had no difficulty avoiding the disruption with which they are now faced.

The Secretary of State wanted to reap the political advantage, as he saw it, of some vague and ill-defined threat which he hoped would bring down the level of poll tax bills in general. He was not concerned about the disruption and confusion that he eventually caused to authorities that have been charge-capped.

The hon. Gentleman keeps urging my right hon. Friend the Secretary of State to explain his criteria. Could he explain his criteria and tell us what "in extremis" is?

As anyone who understands local government knows, the phrase "in extremis" applies to cases of illegality and fraud. On the occasion that I used that phrase, I was explaining that local authorities were not free from legal constraints.

I want to be clear about that, because the hon. Gentleman appears to be stretching words a little generously. Is he saying that when he used that phrase, all that he meant was that local authorities should be capped only if they were guilty of fraud? Is that what the power that should be reserved is all about? It is an astonishing reinterpretation of what the hon. Gentleman said.

On a point of order, Mr. Deputy Speaker. The Secretary of State took more than an hour to make his speech, yet he still seeks to intervene. If he had spent that hour explaining why he wishes to impose charge capping, he would have done a better job.

The obligation of local authorities to comply with the law must always be supported by the power to intervene. I shall restate the points of principle that I made clear a moment ago. We have always opposed in principle rate capping and charge capping. We believe that the right remedy for any supposed overspending is for authorities to submit what they have done to the judgment of the local electorate.

It is because this is a political exercise that the list ignored all the obvious criteria: which authorities presented the highest bills which showed the sharpest increases, and which most departed from target. Instead, the list relies on tortuously selected criteria that can be explained only in terms of producing that precise list. Of course, it does not include a single Conservative authority.

When it comes to targets, the Secretary of State sweeps away those criteria as though they were of no relevance. There is a paradox, which was described by the right hon. Member for Wirral, West (Mr. Hunt), who has now departed to the Welsh Office, at the last Conservative conference as defining the sensible level of spending. The assumed or target level of poll tax bills was to be the sensible level of spending on the basis of which transitional relief would be calculated. I suspect that many thousands of people now understand all too well that transitional relief was a confidence trick.

They will also understand why the Secretary of State is so keen to sweep it aside as of no consequence. Although it was regarded as irrelevant to excessive spending, it might have been thought that a council which met its target—very few did—might be safe from charge capping. Not a bit. The list includes Haringey, which set a poll tax level lower than its target figure. It includes four further authorities—Brent, Calderdale, Hammersmith and Hillingdon—which have been charge-capped to a level that brings their poll tax lower than the assumed or targeted level.

Because it is a political list, it does not even take into account what was spent. It is a list that ignores spending from the reserves; it conveniently overlooks Tory-controlled authorities, such as Wandsworth and Merton, which have dipped heavily into their reserves. All that is disregarded. If Merton had been forced to count the spending that it has financed from the reserve, its bill would not have been £279; it would have been £457·32.

Because it is a political list, it includes boroughs which are major contributors to the safety net and which are deemed to have overspent by less than the amount that they are required to contribute to the safety net. Camden is told that it must contribute £75 to the safety net and, at the same time, that it has overspent by £41 per head. We are told that Islington has overspent by £30 per head and it has been forced to contribute £41 per head to the safety net. Basildon is forced to contribute £38 per head to the safety net and is regarded as overspending by £35 per head.

Because it is a political list, it includes Calderdale, one of the lowest-spending authorities in the country. Even before it was charge-capped, Calderdale ranked as the 47th lowest spender out of more than 400 local authorities. After charge capping, Calderdale will be the fourth lowest spender in the country.

Because it is a political list, it includes authorities such as Wigan, Doncaster, Rotherham, St. Helens and Barnsley. Does anyone seriously argue that those authorities are extravagant or that they are anything other than prudent managers of their budgets?

Because it is a political list, it includes Brent, whose budget would have meant, had the rates system continued, a lower rate than it had previously charged.

Because it is a political list, it includes Greenwich. I was impressed by the work that Greenwich had done in preparing such a careful and detailed explanation of its circumstances. That authority has been recognised by Ministers and by the Audit Commission as an efficient authority that manages its affairs well.

Because it is a political list, it includes authorities such as Basildon, which has already lost £4·9 million as a consequence of the business rate—it has earned 8 per cent. less in revenue from the business rate than in the previous year, and that is without taking into account inflation.

The list is based on the convenient criterion that it excludes all authorities that have budgets below £15 million. That is included in the Act because it means that all the high-spending Tory districts are exempt from charge capping. It also means that only 20 out of nearly 300 districts can be brought within the net.

In other words, the list is a political fix. The only defence that the Secretary of State could make was that he had so far persuaded the courts that he had provided himself with the legal power to do as he did. That is scarcely surprising. But that is rather different—as I think the right hon. Gentleman conceded—from the issue of fairness and common sense. In the court of informed opinion, and on the test of fairness and common sense, the Secretary of State must be found guilty.

At the risk of incurring the hon. Gentleman's wrath, I invite him to name a single class of authorities—metropolitan districts, county councils or shire districts—in which Conservative local authorities are spending more and setting higher charges than Labour local authorities.

That is a red herring, given that we are talking about charge capping. But let me put on record the fact that in the shire districts, the poll tax bills fixed by Labour-controlled district authorities are lower than those set by Tory-controlled authorities. That is true whether the county is controlled by the Tories or by the Labour party. If the Secretary of State wants to contest that, let him produce figures to show that it is wrong.

One of the further embarrassments to emerge from the charge-capping exercise is the spotlight that it casts on standard spending assessments—the criteria chosen by the Secretary of State. We have the testimony of the former Minister for Housing and Planning, now the Secretary of State for Employment. In the speech to which I referred, he said:
"From 1990 we wish to have a presumption against annual changes to the distribution formula. To assist that, we propose that there should be no requirement for these matters to be considered every year. But although the method of assessing need may not change, we shall of course use up-to-date statistics each year, when making the calculations. Our plans will ensure stability, accountability and a great deal more simplicity."
The right hon. and learned Gentleman was speaking in the earlier halcyon days before we saw the full horror of the poll tax.

By the beginning of this year, the Secretary of State was singing a rather different tune. On 18 January, he said:
"I want to make it clear to my right hon. and hon. Friends … that the SSA methodology is not cast in stone … If my hon. Friends, the local authorities in their constituencies or the local authority associations wish to come to us with fresh evidence in support of a new methodology for SSAs, we shall be quite prepared to consider changes that we can put in place for next year."—[Official Report, 18 January 1990; Vol. 165, c. 435.]
It is not surprising that the Secretary of State should so rapidly have moved his ground. It is not surprising, either, that, having recognised the fallibility of the SSAs that he had put in place, he nevertheless insisted that that was the criterion on which he would base his charge capping. Notwithstanding the powerful arguments put to him about the errors made in the calculations of those SSAs, he was not to be deterred. It must be said that those powerful arguments came not just from charge-capped authorities but from a large range of authorities throughout the country—authorities which were, and remain, under Tory control, as well as authorities controlled by Labour and other political groups.

The Secretary of State insisted on using those SSAs as the basis of his criterion for charge capping, notwithstanding the powerful arguments of Brent that it had been wrongly treated and notwithstanding the persuasive evidence that charge capping of a group of similar authorities, Barnsley, Doncaster, Rotherham, St. Helens and Wigan, which are by no means extravagant, suggested that something was wrong with their SSAs.

The Secretary of State insisted, notwithstanding the fact that Basildon was fixed with an SSA that gave it a lower spending level than it had enjoyed 10 years earlier, and notwithstanding the cuts that the SSA had meant in the case of Haringey, for example. The Secretary of State looked forward to those cuts, which he described so charmingly as a "parade of bleeding stumps".

The Secretary of State insisted, notwithstanding the problems that he created for the Secretary of State for Education and Science—for example, when Avon wanted to reorganise its education arrangements to save money but was prevented from doing so—and in the local management of schools.

The Secretary of State insisted, notwithstanding the evidence from Islington that it was charge-capped because two minor changes were made in the "other services" block of the SSA. Those changes were made between November and January and were made up by the introduction of a visitors' right criterion and by the reduction of the days of snow lying on London. On account of those two minor changes, Islington was charge-capped but, at the same time, it was prejudiced by a mistake in the number of children in education—a mistake that involved 3,670 children, at an average cost of £2,000 each.

I shall not seek to intervene again, but I would like to come back on something that the hon. Gentleman said. He said that Labour shire districts were spending less than Conservative shire districts. I have the figures. Conservative shire districts have spent, on average, 9 per cent. over SSA; Labour shire districts have spent, on average, 45 per cent. above SSA. Conservative shire districts have spent £8 per head over SSA; Labour shire districts, £47 per head over SSA. Conservative districts hve spent about one third above the average rate bills per adult with their community charge bill this year. The hon. Gentleman should not believe everything that the hon. Member for Sheffield, Brightside (Mr. Blunkett) tells him.

I am grateful to the Secretary of State for that intervention. He has illustrated just how difficult he finds it to follow such matters. His answer is not relevant to my contention, which was that Labour-controlled shire districts had set lower poll tax bills than Tory-controlled shire districts. That is and will remain the fact until the Secretary of State can produce more relevant information than he has just produced.

I intend to make progress with my speech and to bring it to a close shortly. However, I cannot leave this issue without asking one question. Given the nature of that list, and the cynicism behind this whole political exercise, did it achieve anything, even in terms of the Government's stated objectives? Politically, it has been a failure. The people of this country well understand that the poll tax is the Government's responsibility. Paradoxically, charge capping has reinforced that impression because people now know that every element of local government finance is under the direct control of central Government. More predictably, the exercise has brought precious little benefit to poll tax payers, even in the authorities that were led to believe that they might face lower bills and gain some advantage.

The truth is that many people's bills will remain high —they will be reduced by very little—but, in addition, those people will have to bear the extra burden of seeing their services cut and their facilities reduced so that the authority can fund the extra costs of lower collection and the administrative costs of imposing the charge capping. That is because the costs of capping have proved much higher than was envisaged. I am not talking about the direct administrative costs which, of course, the local authorities have to bear, although cuts must be made to meet those administrative costs; the real impact is in terms of collection, which is already frighteningly lower than was forecast, but which is even lower in prospect because of the delays and confusions that have been engendered by charge capping.

The unpreparedness of the right hon. Gentleman's Department in terms of those issues is well demonstrated in the report made to the Association of Metropolitan Authorities by a local authority treasurer after a discussion with civil servants. The report states:
"When 'capping' was mentioned the D.O.E representative was shocked when informed that replacement bills would take three months to issue with no cash coming in in the meantime. He obviously didn't realise that paper needs to be ordered, stationery designed, software amended, rebates and transition re-calculated, bills printed, folded, collated and enveloped. I'm sure he thought that some magician would appear overnight to resolve these problems."
Local authorities are now having those problems. They have cash flow problems, with the additional borrowing requirements. They also face lower collection levels.

That is why, as I have been informed, every one of the capped authorities will be forced to rebill its local charge payers at levels higher than those suggested by the Secretary of State. In other words, the price that they pay is not only in that parade of bleeding stumps; it is in bills that are still much higher than he promised. Where the cap has been put in place and because those cuts have been necessary, the local electors will get the worst possible deal. They will not get any real reduction in their poll tax bills; but they must take a substantial cut in services and facilities.

The orders are the latest instalment in a sorry saga. In introducing the poll tax, the Government have created a monster that attacks and damages everything that it touches. It has damaged local government finance and autonomy and the level of local government services. It has damaged family budets and the prosperity of millions of people. It has damaged the electoral prospects of the Conservative party and the reputation and political prospects of the Secretary of State himself. It has ended by destroying the very reason for its own existence. The Government have been compelled to take responsibility for a measure that they thought would improve accountability, but the accountability of local government to the electors has now disappeared from the scene.

Some limit must be placed on the destructive progress of the poll tax. We intend to do what we can in Opposition to stop its progress. That is why we shall vote against the orders, and we cannot wait for the day when we can sweep away the poll tax.

5·24 pm

All hon. Members should congratulate the Government on providing two days for this debate, instead of trying to get the provisions through secretly. It is not often that we are given two days to debate a local government issue, and if Opposition Members have any generosity left at all, I shall expect them to agree with me on that point, if not with anything else that I shall say.

I shall speak particularly about what is happening in Brent. The Labour authority decided on a community charge of £498, when the Conservatives believed that they could provide good services with a charge of £470. My right hon. Friend the Secretary of State then capped it at £459. A delegation from Brent went to see my right hon. Friend and we saw how reasonable my right hon. Friend is when he increased the charge allowed to £472. He listened to the arguments and decided that that was the amount of money that was required.

As the Member of Parliament for Brent, North over the past years, I have received hundreds if not thousands of letters objecting to the massive expenditure of the Labour republic of Brent. Many people have put their houses up for sale. At times, some roads looked like refugee camps with people leaving because they could not afford to stay. Many people were brought into penury by the heavy rates and community charge levied in Brent. Some people have gained considerably from the introduction of the community charge, but before its introduction, I can remember people—especially old ladies—having to sell up and leave although they wanted to keep their own houses and to have their children and grandchildren visit them there from time to time.

I do not need to go into the Maureen McGoldrick case or nuclear-free zones. For many years, Brent has been a reason-free zone. I have no doubt that many people welcomed the introduction of the community charge. Of course, I am speaking only for the people of Brent, North. Other hon. Members from Brent may agree with me in the secrecy of their hearts, but cannot do so in public, when I say that there was every sort of trendy expenditure in Brent.

Having said that, it is with some reservations that I support the Government. I do not want the destruction of local government. I am sure that my right hon. Friend the Secretary of State will agree that we do not want so much power to pass to central Government—whether Labour or Conservative—that the balance with local government is destroyed. No Government should give themselves more power than they would be prepared to give to an alternative party if it was to come to power. No Government must ever forget that—even one who have been in power for as long as our Conservative Government.

The question is, therefore, what should we do in both the short term and the long term? In the short term, I believe that we should reintroduce annual elections. That is the one point on which I agree with the hon. Member for Dagenham (Mr. Gould). For a long time, London has suffered from four-year elections. When councillors are elected, they think they are there for ever and get carried away with what they are doing. Nothing is more salutary to councillors than to know that one quarter of them face election every year. I should like to see that return—

My right hon. Friend is making an important point. Does he recall that the extension to four years was made by the late Anthony Crosland when he was Secretary of State for the Environment under the powers then available to him? Parliament had decided that elections should take place triennially instead of annually but the late Anthony Crosland extended that to once every four years. My right hon. Friend is right to raise this matter in a non-partisan way. The House should consider it.

I am grateful for my hon. Friend's intervention because I had forgotten that point. It was fortuitous that my hon. Friend was sitting next to me and could remind me of it. This is a non-party issue. I am talking about annual elections for a quarter of the council. That would mean that we could have both continuity and change. Until that is introduced, there should be annual referendums.

Fortunately, we have had a referendum in Brent. The four-yearly election came round this year and we gained nine seats. There was a swing of 6·4 per cent. to the Conservatives in Brent, North. The electorate in Brent said, "We do not want the community charge set by the Labour party. It is too much." If Opposition Members are democrats—I do not doubt that they are—they should be in favour of annual referendums. The Government would not be saying that local authorities' policies are nonsense. They would give the local electorate a chance to have second thoughts. The Government could say, "Do you really want to do that?" The Government would not destroy local power but would ask people whether the Government or the council was right.

I share the right hon. Gentleman's views. My local authority has always had a third of its councillors re-elected each year. That provides a balance and influences the direction in which the council moves. This year Labour increased its majority and its number of seats.

I had better go and speak in that constituency some time, although I have great respect for the hon. Gentleman.

Let us consider the long-term issues. We would prefer it if charge capping was unnecessary. I approve of the orders, and I shall certainly vote for them tomorrow. My enthusiasm is such that I wished to vote for them tonight. The problem with local government is that in most cases local elections are a referendum on the popularity of the Government—Brent, North was an exception, as was Hillingdon and other parts of London. In 1968 when the Labour party was in government, one council—it may have been Hackney or Islington—which previously had had no Conservative councillor, passed into the control of the Conservatives. It was the biggest-ever swing in a local government election. Local elections have ceased to be an opportunity to vote on local issues and have become a referendum on whether the Government are popular.

The only way in which we can return to true local elections is by separating national and local government powers and finance. If they overlap, national and local government will continually wrestle with each other. Conservative Governments will wrestle with Labour authorities and Labour Governments will wrestle with Conservative authorities. Housing is no longer mainly a local government responsibility. By creating grant-maintained schools—I would prefer a voucher system—education could be taken away from local government entirely. The police have been mentioned. Then there is planning and social services.

If we could take all those responsibilities away from local government, in local elections we could vote on local matters such as parks, libraries and other services which are traditionally controlled by the local authority. Expenditure on such services could be covered totally by the community charge. In that way we could separate local and national government. In Scandinavia and West Germany, where the two are separate, there are no battles between central and local government.

There should also be smaller units of local government. The Conservative party destroyed the small boroughs in London in 1964. I opposed that then and I oppose it now. The small councils throughout the country were destroyed in 1972. With no disrespect to the hon. Members for Brent, East (Mr. Livingstone) and for Brent, South (Mr. Boateng), if one draws a map of Brent it looks like a single unit. But it is cut in two by the North Circular road. The North Circular road is as effective as the Berlin wall. One cannot cross it. If one attempted to do so, one would not make a habit of it. Only at 3 or 4 o'clock in the morning can one try to cross. The two areas have little in common.

Many people in Brent cannot serve local government: it is too large. They can give one or two evenings a week at most. Most people cannot give four or five nights. That causes the politicisation of local government. If local government was made truly local again, the community charge could be fixed locally without any bother from national Government. We could have one third annual elections to determine whether people agreed with the level set by the council.

In the 19th century, what was called permissive legislation was introduced. It was not intended for certain activities that we call permissive legislation now. It was adoptive in legislation. One could take it or not. In 1834, when the Poor Law Reform Act was passed, commissioners divided up the country, just as the local government reorganisation did. It did not work. In 1871 the arrangements had to be changed. In 1835, they learned their lesson. I hope that we have learnt our lessons from 1964 and 1972.

Under the Municipal Corporations Act 1835, local authorities were allowed to opt in. If an authority had a population of 50,000 it could say, "This is our area and this is what we want to do." If we return to smaller units of local government, we should not divide areas up here in Westminster or in Whitehall. We should let people sort it out themselves, according to the natural alignments. It may be untidy, but freedom is untidy. I prefer freedom and untidiness to tidiness and disaster, which occurs so often now.

We gained nine seats on the council in Brent this year. In Brent we need help, advice and careful thought from the Department of the Environment from time to time. The electoral balance in Brent is now 31 Conservative, 29 Labour and 6 Liberal councillors. There is a mayor and a deputy mayor but no chairmen of committees. We play musical chairs. Those who arrive first elect the chair. It is the nearest thing to amateur dramatic anarchy that I have ever seen. Brent is always on the map and it has managed to put itself on the map again.

I accept that there are political differences in local areas. When an election creates a hung council there should be a method of appeal. When the Labour Government won in 1964 with a small majority, they held another election in January 1966. In 1974, when I was privileged to become a Member of Parliament, we had a fresh election in the autumn.

In Brent no one is in charge. The council should he able to turn to someone such as you, Mr. Deputy Speaker. You are an ideal candidate. You have great wisdom and experience. The council should be allowed to ask for a fresh election in Brent because it does not have a majority. Perhaps we could persuade the Labour and Conservative leaders on the council to ask Mr. Deputy Speaker for a new election.

As it is disastrous to seek any decision from the council—nothing has been decided since the election—I will urge the Labour councillors to resign if the Conservative councillors will also resign so that we can have another election. After the disaster of having no overall control, both sides could appeal for a new election in Brent.

That is an interesting suggestion. I am sure that it will be noted in Brent council chamber with great delight. With the sense of self-sacrifice that all local councillors have, the councillors will immediately take up the hon. Gentleman's suggestion.

The Conservative party is the majority party on the council in Brent. It has resolved not to cut front-line services, to sell land, property and houses and to collect the rent and rate arrears. Brent has the largest rent and rate arrears per head in the United Kingdom. It is £55 million —[Interruption.] It seems that another council has even greater arrears. We are reading the Guinness Book of Records.

Both Lambeth arid Southwark surpass those rent and rate arrears. They have arrears of over £60 million. Yet Labour councillors in Lambeth and Southwark plead that they can control their authorities properly.

My hon. Friend has taken the words out of my mouth. In Brent, under the reasonable cap proposed by my right hon. Friend the Secretary of State, we shall have to cut only £5·1 million. That could be made up by collecting one tenth of the rate and rent debt. I do not see how any member of the Labour or Liberal party can complain. That saving could be made. The council should be sensible.

Brent has difficulties because it is a hung council, with the Conservatives as the largest party. The first difficulty, which was referred to by my right hon. Friend the Secretary of State, is the appeal against charge capping. The appeal went ahead with the support of the Labour and Liberal members on the council, but the Conservatives voted against it. The other 19 councils have already spent £2 million, and thus £100,000 more was wasted by Brent. If the council goes on to appeal further, more money will be wasted.

The Conservatives on the council are trying to control the budget, but they have had to pay for legal proceedings out of that budget even though they voted against taking legal action. Before the May elections, the previous Labour council budgeted to save £0·5 million by putting services out to tender. The Conservative group wanted to put domestic waste collection out to tender. The Labour and Liberal councillors would not agree to that, saying that only the labour involved could be put out to tender, not the necessary machinery. Therefore, the £500,000 budgeted saving by the Labour councillors cannot be used, and the nine contractors willing to tender withdrew when they found that they could do so only in respect of labour. Those are two illustrations of the difficulties confronting Conservative councillors in Brent.

I will vote for the orders tomorrow, knowing that people in other areas as well as Brent who have suffered as a consequence of excessive Labour expenditure will be dancing in the streets tomorrow night when they learn that the orders have been passed. I also say this to my right hon. Friend the Secretary of State. From what I hear, he has some influence on the contents of the Queen's Speech, and I should like the next one to include a short Bill to provide for a referendum to be held if a council is to be capped.

I am informed that there is likely to be a general election during the next two years. I hope that our manifesto will include an undertaking to reassess local government structure with a view to separating national and local government powers and finance, so that we do not have continual all-in wrestling. Local government can then get on with its job of spending money raised locally, and national Government can similarly get on with their job. There should also be smaller units so that more people can be involved, there can be a return to real local government, and there will be less politicisation in the council chambers of this country.

I remind right hon. and hon. Members of Mr. Speaker's earlier appeal for short speeches.

5.41 pm

When the Government decided to abolish domestic rates in favour of a poll tax, we were told that it would be fairer and easier to understand, and, even more importantly, would increase the democratic accountability of local councils. After the cynical bribery in Wandsworth and Westminster, no one can pretend that the poll tax is fairer. Given the differences in Government grant to broadly similar local authorities, it is no easier to understand than the rating system.

The Secretary of State killed stone dead the proposition that the poll tax will increase accountability when, on 3 April, he capped 20 authorities whose poll tax demands outstripped the misleadingly named standard spending assessment. There is nothing standard or consistent about the rules that the right hon. Gentleman applies to local authority finance. The Secretary of State for the Environment also introduced spending restrictions without discussing with local authorities how he arrived at his figures.

If accountability means anything at all, a local council should be permitted to fix its poll tax on the basis of the services that it wants to offer the community. It would then await the verdict of the tax payers at the polls.

On 2 March, St Helens council set a poll tax rate of £410. The Secretary of State did not wait for the electorate to pass its verdict, but on 3 April said that that demand was too high and capped it. The people of St. Helens went to the polls with the Secretary of State's message ringing in their ears. What happened? Not only did they return a Labour council but the Tories lost two of the three seats that they were defending.

When one examines the standard spending assessment in any detail, the tawdry nature of the Government's whole exercise and their political motivation are exposed. If every council had been assessed on a level playing field for grant purposes, St. Helens would not have been capped. There could be only two reasons for any council, if all councils were treated equally, exceeding the SSA—inefficiency or an excessive level of services. I can demonstrate that St. Helens council is both efficient and prudent.

I will quote first Mr. J.F. Milstead, the district auditor, who, in his council audit for 1988–89, said:
"In conclusion, based on evidence seen during the audit, I should like to take this opportunity to commend the Council on the action it has taken to try to improve service delivery and on the difficult decisions it has taken to meet the challenges posed by new legislation. This bodes well for the future."
I emphasise that those were the words of the Government's own auditor.

My next witness is Mr. John Banham, director-general of the Confederation of British Industry. Mr. Banham was quoted by the St. Helens Reporter on 2 February as saying during a visit to the area that the difference in the town since his last visit in 1985 was "striking". He added:
"So much has changed since I was last here and all of it for the better … Everyone is looking to St. Helens."
Those two comments clearly demonstrate that St. Helens has an efficient council which enjoys the esteem and co-operation of the private sector.

I also pray in aid the Secretary of State himself and the awarding of two city grants. The first, in 1989, was for reclamation and redevelopment in what is know as the Green Bank project. That £6·3 million award was the largest city grant ever made by the Department of the Environment. The second grant, of £3·05 million, was made in April this year for the Pilkington hotel project. The Secretary of State visited St. Helens on 2 April to see that project, and he praised the work being done—yet the following day he capped the local authority. St. Helens would surely not have received those substantial grants if the Department had not regarded the council as efficient and responsible.

As the council is well run, one must examine the logic behind the SSA to understand the extraordinary gap between that figure and the council's original poll tax demand. In 1985–86, St. Helens had the second highest rate on Merseyside. As a result of considerable efforts to streamline and improve the efficiency of the council's performance, by 1989–90 the rate had dropped to the second lowest on Merseyside. Nevertheless, as a result of the Secretary of State's poll tax regime, St. Helens's demand had to be set at £410—the second highest on Merseyside.

Much of St. Helens's expenditure funds spending bodies over which the council has virtually no control—such as the police, fire brigade, waste disposal, and the passenger transport authority in particular. Merseyside transport authority receives a massive £9·9 million from St. Helens, which is one of the biggest charges placed on the council. According to the Secretary of State, £2·4 million of that £9·9 million is overspent. That represents almost 65 per cent. of St. Helens total overspending, yet it has no control over the way that the transport authority allocates the money available to it.

In addition, St. Helens poll tax payers have to shell out £1·08 million—or £9 per head—to pay off the loan debts of the Mersey tunnels. Official figures show that the people of St. Helens enjoy just 1 per cent. of the economic benefit of those tunnels. If tunnel usage was the basis of its payments, the council would have to budget for just £83,000 in 1990–91. Charging the people of St. Helens for the Mersey tunnels to such an extent is an outrage, and the Secretary of State and the Department of Transport should do something about that situation.

St. Helens council budgeted for only a 7·7 per cent. increase in spending for 1990–91, which is less than the rate of inflation. It was not rate-capped last year, and indeed has never been remotely at risk of being capped. Despite that record and St. Helens' below-inflation budget, the council is to be charge-capped for 1990–91. It appears that someone has moved the goal posts.

If St. Helens' SSA had been increased by the national average grant-related expenditure assessment increase of 11 per cent., the council would have £6·5 million more to spend on services and would not have been capped. The SSA increased allowable spending by just 7·7 per cent.—half the general rate of inflation. If the Secretary of State had allowed St. Helens just to keep pace with price rises, it would have £3·4 million more to devote to services and, again, would not have been capped. By comparison with both inflation and the GREA, St. Helens has been badly mistreated.

Clearly, the goal posts were not only moved, they were placed on the field next door. The Secretary of State cannot deny that, because his figures show it to be true. Nor can he deny that a new basis was drawn up to restrict council spending decisions in comparison to previous years. The effect of high unemployment and other economic factors, which are so important to St. Helens, have been dropped from those decisions. That is unfortunate for my council and other northern metropolitan capped authorities because they score poorly on some of the new factors such as ethnic minorities and density of population.

If St. Helens had received the same level of grant per head as Wandsworth, a borough in which I have a flat and which is demonstrably more affluent than St. Helens, the poll tax in St. Helens would have been £165 to £245 less than it is. If St. Helens had received the same grant per head as Westminster, an infinitely more affluent borough than anywhere on Merseyside, it would have been able to send every poll tax payer a cheque for £138. Tory Westminster has the same population as Labour St. Helens. Its high level of grant reflects the fact that it scores highly on all the factors used to distribute SSAs while economically depressed St. Helens and the other northern metropolitan capped authorities do not. Is the formula that was set just before the council elections coincidence or political corruption?

According to the Secretary of State's SSAs, St. Helens is overspending on education and social services. The council apparently cares too much for its children and its elderly. Presumably, those are the areas in which the Secretary of State expects the council to reduce its expenditure by about £4 million. If the council were forced to accept either of the alternative budgets, which would have avoided capping placed before it in March by the Conservative and the SLD groups, there would be substantial cuts in education and social services. Under those budgets between 500 and 700 jobs would be lost, including teaching and carer posts.

It would be a bit rich for a member of the Cabinet who might spend £3,400 a year educating a child on an assisted place in a private school—most of the Cabinet send their children to private schools—to tell a council like St. Helens which spends just £2,000 a year to educate a secondary school child that it is spending too much on education.

Another option facing St. Helens council is not to open its brand new day centre for the mentally handicapped. is that what the country is being reduced to? Should we make the mentally handicapped and their families suffer by allowing a desperately needed amenity to stand empty?

St. Helens is a caring, efficient and well-run council which will stand comparison with any authority in the country. I challenge the Secretary of State to examine the books of all the Merseyside metropolitan authorities and justify and explain to the bewildered council and people of St. Helens why only St. Helens of the five authorities has been capped.

5.52 pm

I support the Government's determination to cap the county authority in my constituency—Derbyshire county council—where my family and I live. In other words, I support the efforts of my right hon. Friend the Secretary of State to bring some of the last of the left-wing loonies in Great Britain to their senses.

To use the words of the hon. Member for Dagenham (Mr. Gould) who has now left the Chamber, the sparing use of these reserve powers seems to me to be wise and helpful. When Stoke-on-Trent next door has a community charge of £313 and when Burton on Trent, which is a little closer, has a community charge of £335, there is no reason why residents in my district should pay a community charge of £438 and those in Derby pay £458. The latter is the 10th highest community charge in the country. The proposed capping will be of enormous assistance to my constituents and will knock £112 off the bill for most households. That will be a 13 per cent. reduction, and I support it.

Strictly speaking, Derbyshire should not need capping. It is a lovely county and those of us who live there feel fortunate. We have a high level of home ownership and we have low and falling unemployment. We are successfully coping with major economic change from the traditional industries such as coal mining to high-tech modern manufacturing with companies such as Toyota. If Derbyshire county council had had its way—and it continues to back Mr. Scargill—our pits would still be open. However, the south Derbyshire miners voted and decided to work and they now have a chance to participate in modern industries in the 21st century. [ Interruption.] There are many red faces in Matlock among those who supported Arthur Scargill. We are glad to see him brought down to the level at which he should be.

We should have one of the lowest community charges in the country, not one of the highest. Why is the charge so high? Either Derbyshire's Labour councillors are fools or they are knaves.

As my hon. Friend the Member for Amber Valley (Mr. Oppenheim) has just hinted, there is evidence that they are both.

It is foolish to hold parties and party political activities on the rates. It is foolish to lobby hon. Members at the House on every kind of loony left-wing Labour activity and to charge the expenses to the council. For example, a conference was held a couple of weeks ago on community care. That conference was held at public expense even before the National Health Service and Community Care Bill had passed through both Houses of Parliament. The conference was held on the day that we debated the Human Fertilisation and Embryology Bill in the House. The Labour council issued a press release demanding to know why my hon. Friend the Minister for Health could not attend its little activity in Derbyshire. Obviously she could not do that because she was in the House doing something more important. The Labour council then had the nerve to complain that up in Derbyshire they did not know enough about the National Health Service and Community Care Bill and that not enough information had been issued and they could not take any decisions about it.

Will the hon. Lady explain why that terrible council always defeats the Tories in elections?

With all due respect, if the hon. Gentleman had visited Derby in May, he would have discovered that we held on to control in Derby quite easily. The main issue was the community charge and involved the issues that I am raising today.

As my right hon. Friend the Secretary of State said, the council was foolish to peg prices for school meals at 1981 levels. That does not help the poorest children whose families are on income support, because they get their meals free anyway. By pegging the price of school meals at that level, the children of the better-off families get subsidised food. It is as if those idiots up in Matlock thought that none of my constituents would ever feed their children unless they received help from the community charge.

It is extravagant to have a completely free home help service. Nottinghamshire county council next door, which is also Labour controlled, does not have a completely free home help service. In Nottinghamshire it is free for people on income support. That is a good idea, and it has a test for people on higher income levels. That prevents abuse. In Derbyshire, one of the results of the free service is that my poorest constituents who pay their community charge, as many are determined to do, are subsidising Derbyshire county council services for some of my richest constituents. That is what is happening in that socialist authority.

My county is the fifth highest spending authority out of 39 for spending per head on secondary school children. It is 36th out of the 39 in terms of results at 0-level, GCSE and A-level. As a result, fewer than half the young constituents in areas like mine obtain a GCSE in English; three quarters of them have no mathematics and nine tenths of them have no modern languages. That is the result of spending the money in the way that my council spends it; but we have subsidised chips and baked beans for lunch. That is the way in which Derbyshire education committee chooses to spend its money.

Since Labour got control of Derbyshire and introduced free school meals, we have had this argument many times. Those free meals were later scrapped, but the council kept the price at the 1981 level. The hon. Lady and fellow Tory Members are constantly talking about the money spent, the rates and the level of the poll tax. They have been challenged several times about where the cuts would be made. We have challenged them to say whether they would sack 8,000 teachers, double the price of school meals or reduce the meals-on-wheels service, and which areas of the social services they would be prepared to cut. On every occasion they have gone running, but the electorate have not. They have returned Labour twice, with increased majorities.

The hon. Gentleman is well aware that I am not running. I have just given him two examples where I believe money has been mispent.

Earlier I suggested that Derbyshire Labour councillors are not just foolish, that perhaps they are also knaves, but that implies that they have more brains up at county hall in Matlock than may well be the case.

Why does the council advertise its services through programmes that cost hundreds of thousands of pounds when it says that it cannot meet the level of demand that it faces? Why does it ask for more money at the drop of a hat when the level of capital reserves has gone up in three years from £10 million to £25 million? Why does the council need a huge publicity department? What is it trying to publicise? Why does it need an enormous budget for legal services? Perhaps that is some reflection on the county council leader who has boasted that he has issued 21 writs. That smacks to me either of increased sensitivity or an attempt to intimidate his opponents. It is all paid for out of the county council's budget.

Is the hon. Lady aware of the letter of apology sent by the leader of the Conservatives on Derbyshire county council to the leader of the council? 1t touched on how much is spent on publicity and whether it was valuable. In that letter Councillor Wilson spelt out his apology for the incorrect public allegations he had made. He also applauded the work of Derbyshire county council in its transactions to attract Toyota and on the amount spent on publicity. Councillor Wilson acknowledged that that was something which the council should do in partnership.

I shall not bore the House by reading out exactly what Councillor Norman Wilson said in that letter, but I can tell the hon. Gentleman that I had words with him about it.

When Derbyshire county council is capped, a lot of the nonsense I have described will have to stop. Some of Derbyshire county council's activities can be put down tosome of the personalities in Derbyshire who want to play on a wider stage. They want to lead the world from the county headquarters in Matlock. That is why by far the most famous Derbyshire resident, Mr. Nelson Mandela, was invited to Derby following his release from 27 years imprisonment in South Africa. He could not, of course, accept, but the council still had a party to celebrate his release, at a reported cost of more than £2,000 to the charge payer.

As the nations of eastern Europe, even the Soviet Union, abandon May day as a celebration of socialism —that failed and fatuous philosophy—Derbyshire county council still has an open day at the American adventure theme park. The invitation was open to anyone who wanted to go along, at a reported cost of £39,000. That is why Derbyshire county council has set such a wildly high community charge. It has taken the legal challenge on the Secretary of State to the bitter end in the House of Lords instead of seeing sense early on.

The county's leader has said:
"We are spending more than we need to, but I believe that is what people want."
I have news for him—that is not what people in Derbyshire want. In my area most people would say that they understand the community charge. They agree that everybody uses local services and everybody wants those services, so everybody should pay for them, with a rebate system for those who cannot pay as much as the rest of us. They would say that they believe that the new system is fair, but that the charge in Derbyshire is too high. It will now be lower by £56 per head. The capping will help everyone in my constituency, and I am delighted to welcome it.

6.4 pm

I should like to quote from that excellent publication The House Magazine of 18 June 1990. The Secretary of State for the Environment concluded an article he had written on local government, entitled "Accountability to the People" by saying:

"A strong, responsive and healthy local democracy is good for local communities and good for Britain. I will do everything I can do to ensure we get it".
I whole-heartedly agree with such sentiments, but, unfortunately, when they are uttered by a Minister of a Government who, in the past 10 years, have determinedly and systematically eroded the powers of local authorities and, therefore, the right of local people to self-determination, they are less than convincing. Such sentiments are merely empty rhetoric, characteristic of a Government who have presided over a policy of increasing central control never before seen. That policy has been pursued in the interests of a Prime Minister who has no truck with local government of whatever shade. That policy of undermining local government has not been pursued in the interests of local people, despite the many words to the contrary uttered by Ministers.

When the iniquitous poll tax system was first brought before the House, it was justified on the ground that it would make local authorities more accountable. Where is the accountability in a system in which 75 per cent. of local expenditure is provided from the centre with strings attached? The remaining 25 per cent. is raised directly from the pockets of local residents, but that money is now subject to further control from central Government despite the fact that local people have had an opportunity to vote on their authority's poll tax level.

I know that Ministers argue that people were aware of the capping proposals before the elections in May, but I am afraid that that will not wash. Most campaigns were run on the actual budgets and tax amounts set by the authorities and the alternative budgets set by other parties. Local people voted for their respective councillors on that basis.

I do not pretend that our present electoral system is fair or gives the majority of people in Britain the national and local government that they seek. However, until we have a fairer system, it is difficult to see how the Government can ignore the ballot box. They are only too happy to call it into being when claiming that they have a mandate to carry out their increasingly unpopular policies. They should therefore have the guts to stand by their promises and claims.

The Government should let the people decide whether their poll tax is too high for the services they receive. It appears that that is how the right hon. Member for Worcester (Mr. Walker), when Secretary of State for Wales, understood that the system should work. In a press notice issued from his office on 3 April, he said that it was up to Welsh charge payers to ask for explanations from
"Councils which have imposed unnecessarily high charges … to judge whether the explanations they are given are acceptable".
Unfortunately, we know only too well how such eminently sensible pronouncements from the right hon. Gentleman often brought him into conflict with his boss.

There is much argument about whether reserved powers to cap are ever justified and, although I am in danger of contradicting myself, I suppose I must come down in favour of such powers. My contradiction is not as great as the Secretary of State's, because I have never claimed that the poll tax system is the way in which to make local government accountable. It is only when we have a system of proportional representation and true local democracy that councils will be accountable. Until we have such a system, reserved powers may be necessary to curb the excesses of a very few—it is important to stress that—authoritarian regimes elected by a minority of people, the likes of which we experienced in the 1970s.

Capping powers should not be used, as they are today, under a formula that appears to all concerned to be arbitrary figures plucked out of the air or, as the cynics may say, carefully selected for political purposes. Nor should they be used to take effect in the same financial year that the budget is set, particularly as local councils are not informed of the magic formula that puts them over the top and ripe for capping.

I sincerely hope that the rumours and predictions about the extent of next year's capping do not materialise and that the Government will have come to their senses by then. It is wrong for them to introduce capping this year, when on their own admission the standard spending assessments are not right. The Government's ability to assess the needs of a local authority or community is abysmal. I am surprised that, in those circumstances, they have the gall to introduce capping. Until the standard spending assessments are correct and the many anomalies of the system ironed out, no form of capping can be justified.

I am aware that a few councils have set budgets way in excess of their requirements. In St. Helens, about which we have already heard, the local Liberal Democrats group, which, in principle, rejects poll tax capping, cannot but help welcoming the cap for its area as it sets the poll tax at the amount almost to the penny that it suggested in its alternative budget. Basildon is another of the capped councils where Liberal Democrats put forward a lower, alternative and realistic budget that would have reduced the poll tax by £12. Under the Government's formula, that would still have attracted a cap, but it was a far more realistic amount than the demands of the Conservative group on the council, which wanted to defer the decision on the budget until ways could be found to set the poll tax at £415. That figure is even more austere than the £443 that the proposed cap sets.

I mention that case because it highlights the differing views on how much expenditure an area requires. Surely the best people to decide are local residents. On 3 May, the Liberal Democrats gained seats in St. Helens and held them in Basildon, where the outlook for gains is promising. The electorate are not fools; they know what they want and vote for it.

I see that the hon. Member for Enfield, Southgate (Mr. Portillo) believes that too, because in his recent speech to the Association of District Councils he condemned small shire districts for setting too high budgets. He said:
"I can only say that in due course the electorate will find them out."
That is the key, but it is what the Government are frightened of.

The chaos created by the Government's handling of the poll tax is a disgrace. It smacks of incompetence, inefficiency and waste—attributes of which they accuse local government when justifying the poll tax capping exercise. It smells of panic and short-termism in the face of local and national elections. They cannot wait for their claim of accountability to bear fruit because they know that they are on a downturn.

To introduce capping in the first year, when local councils are struggling to implement a system that is already administratively top-heavy, does not make sense. There were bound to be difficulties and teething problems with a major system change such as this, but no allowance was made for them, nor for the effects of non-payment, which has multiplied in the capped authorities. A report in this week's Municipal Journal estimates that the capped councils have already lost £327 million in only the first quarter, which is far more than the £216·7 million that the Secretary of State requires. Cash flow problems in those areas result in higher debts and much more expense.

Councils that are threatened with capping are in a state of limbo while they pursue their cases through the higher courts. I know that my party's group in St. Helens would like to see the ruling group accept the decision and get on with the business of providing services. It believes that it can provide the same level of service for the lower amount. This issue may not be so clear cut in Basildon and other areas, but I await with much interest the outcome of the legal challenge on constitutional grounds.

Many of the areas that are capped are where community services needs are the highest, and cuts are likely to be made in education and social services. As those two sectors account for the highest spending, it tends to make sense that that should be so, particularly for councils that must make the largest savings.

The hon. Member for Southgate seems to think that all councils suffer from what he calls "leisure-centre-itis", and that it is a bad thing. I do not want to comment on the specific case to which he was referring, but as I was a guest speaker at the Institute of Leisure and Amenity Management conference in Brighton yesterday I feel obliged to point out to the Minister his total misunderstanding of the advantages that leisure activities can bring to an area. Properly handled, they can generate jobs, attract income to the area and contribute to the general health and well-being of the community.

A few capped councils will make a political point from the current shambles and will cut services where they hurt most, even when savings could be made elsewhere. I understand from my colleagues in St. Helens that that is expected to happen there. If so, it is irresponsible and should not be condoned. I know that Liberal Democrats will fight such cuts all the way.

Poll tax capping, in the year that many councils are planning to be ready to meet their obligations under legislation passed by the House such as the Children Act 1989 and the National Health Service and Community Care Act 1990, is not necessarily justified. It is even more difficult to justify when council services are already over-stretched trying to cope with the effects of Thatcher's Britain. If, as we now read, community care plans are to be delayed, I can say only that that is highly irresponsible and will be a false economy.

There must be a limit on how much the system can take before reaching breaking point and grinding to a halt. I should not be surprised if many authorities are close to that breaking point. The capping exercise will add to that burden. In its present form, and given the way that it is being applied, it will create inefficiency and waste. Residents' poll tax bills may be reduced this year together with the reductions in services, but in the long term they will pay for the consequences. They will foot the bill or do without. The Government would be better employed finding ways of relieving the burden of this most unfair tax on people who are suffering the most from its preliminary implementation. They should leave the local electorate to deal with local authorities, giving local people a full part in the decision making process.

Order. Despite my repeated appeals, only one speech has lasted less than 10 minutes.

6.17 pm

Thank you, Mr. Deputy Speaker, for giving me the opportunity to speak in this charge-capping debate. I am in the possibly unique position of living in Southwark, which is charge-capped, and in my constituency in Bristol, which is charge-capped, under a a county council that is charge-capped. I have some expertise therefore of three of the charge-capped authorities.

I do not want to make any detailed comments on Southwark, other than to echo the comment by my right hon. Friend the Member for Brent, North (Sir R. Boyson). I intervened and pointed out that Southwark has a rent debt of more than £60 million, whereas its capping figure is only £14 million—one fifth of its rent debt. If it is pleading that it can administer the council extremely well, why on earth is its rent debt so high?

Much has been made of the length of the speech of my right hon. Friend the Secretary of State and of the political decision taken on the authorities that were chosen for capping. As far as I can calculate, my right hon. Friend gave way to 14 Labour Members and many Conservative Members, which is why he spoke for so long. He was generous in giving way.

I would not have minded if some Conservative authorities had been capped, and I think that most of my right hon. and hon. Friends agree with that. I have a photocopy of an article by the public administration correspondent of The Times; I apologise to hon. Members for being unable to provide the date because I did not make a note of it when I photocopied it. Before the announcememt of charge capping, he listed the four different options that the Government could pursue, and the authorities most likely to be caught by them. He listed 40 councils—10 in each option. Of the 40, only one is Conservative-controlled. The other 39 authorities are either Labour controlled or have no overall control. Therefore, I echo my right hon. Friend's view that, whichever formula had been adopted, it is certain that the overwhelming majority of charge-capped authorities would have been Labour-controlled. In Bristol we understand that, because we have two authorities—Bristol and Avon—which are profligate beyond belief.

My hon. Friend the Member for Derbyshire, South (Mrs. Currie) said that Derbyshire is an attractive county with falling unemployment rates, but it is positively impoverished compared with Avon, which has unemployment way below that of Derbyshire. In Avon, there is no need to provide the type of services needed in some other parts of the country, where I recognise that the unemployment argument could apply.

Avon is a potentially wealthy authority, but it is also the second highest spending shire county in the country after Derbyshire. No one has yet explained to me why that is so. Every time I challenge the leader of the Labour group on Avon county council, I am told that capping will mean cuts and that there are reasons for Labour's figures and for employment levels. There are all sorts of excuses, but that is precisely what they are—a series of excuses.

Councillor Roger Berry, the leader of the Labour group, fails to realise that the charge-capping proposals that we are debating would result in the average married couple in Bristol benefiting by £126 a year—more than £2 a week. That is a substantial benefit which the overwhelming majority of Bristolians would welcome. The first discussions that hon. Members had with various leaders and officials from Avon county about the community charge took place on 7 February. Four Conservative Members had a meeting with them—the hon. Member for Bristol, South (Ms. Primarolo) met them separately, so I am not criticising her. What did Avon do? It sent 10 people to London for the meeting at the charge payers' expense; all I believe, travelling first class, all with reserved seats and all on attendance allowance. That attitude of mind runs from top to bottom in Avon county council.

Is my hon. Friend aware that the Labour leader of Derbyshire county council has said that he would resign if charge capping meant that he had to cut any essential services? We reckon that he is perfectly safe as he knows perfectly well that all he has to cut are such outings.

I thank my hon. Friend for that comment. I wish that we were so lucky, and that our Labour councillors were willing to resign under those circumstances and would stick to their promises. I echo the view of the hon. Member for Southport (Mr. Fearn): we know that the targets of cuts will be areas where the cuts will hurt most. We know that that is what the Labour party intends.

At the meeting on 7 February, I identified a series of costings that I found excessive. For example, I do not understand why 34 education authorities have better pupil/teacher ratios than Avon, yet we have the 14th most expensive secondary school education.

No. Mr. Deputy Speaker has appealed regularly for brief speeches, and I accept that ruling.

I have already identified that we are one of the wealthiest counties in the country. The Audit Commission figures for group 5—the category within which Avon falls —show that we have the highest expenditure of any county council. The county treasurer, the Labour group leader and the Liberal Democratic group leader have tried to explain those figures, but they have not explained why Avon does not get value for money.

At the meeting on 7 February, they asked whether was not unjust for them to have to wait for the charge-capping announcement until some time in March. I had sympathy with that view, as the minutes of the meeting record. Since then there has been prevarication after prevarication—building up legal costs, which will ultimately cost people's jobs, just to prove that Avon county council is right. It has gone all the way to the House of Lords, while some other authorities never even started legal action; that is unacceptable to the charge payers of Avon.

The important issue relating to Avon's budget is that, when the original council meeting took place, the budget proposals from the Conservative group were, as my right hon. Friend said, below the charge-capped level. So it is not responsible to say that the figures were unachievable. They were easily achievable—there was headroom of £2 million between the Conservative budget and the capped level of charge.

Over and over again, I have identified that, when the council was threatened with charge capping, it was guilty of scaremongering of the worst order, suggesting cuts in nursery and other schools. When I was in industry and redundancies were threatened, we cancelled advertisements for vacancies immediately. That is standard industrial policy—advertisements are cancelled and the people who are threatened with redundancy are given the first choice of applying for alternative jobs.

What do we find in Avon? Page after page of job vacancies. I have here the Bristol Evening Post for last week and it contains page after page of vacancies. That is absolutely disgraceful. Most trade union officials would be furious with any company that adopted a policy of continuing to advertise for vacancies while redundancies were threatened.

It is also interesting that when I looked into the problem of job vacancies, I found that there were 762 in Avon as of 1 May 1990, excluding schools, colleges, cleaning and catering, and 215 of the posts had been vacant for more than 12 months. What organisation would allow a vacancy to remain unfilled for more than 12 months, and would not realise that the departments involved could clearly cope without the posts being filled? It is absolute kidology, and it is costing the charge payers a lot of money.

I also pointed out the Audit Commission figures to the county authorities, and I received a detailed response outlining some of the contradictions which might apply. However, the total number of jobs that are in excess of need within the county, as identified by the district auditor, is about 3,000. I wrote back relatively recently, and I await a reply explaining why Avon is unable to operate at the same level as other similar counties. I believe that I am a reasonable man, so perhaps I should accept that the answers that come back from the councils are right—but I do not.

This week I received the Gazette. from the Association of County Councils, which contains its breakdown and analysis of support services: it lists a total of 998 jobs in Avon. How does Avon compare on those figures? Per 100,000 people, Avon employs just under 105 people. The English average is 93, and the audit family average is 90–98, which means that 140 jobs out of Avon's 998 are in excess of what one would expect in a similar audit family county. Every time one considers the position in Avon, it compares badly. Avon compares badly when it comes to providing value for money and in its excessive expenditure. I and the vast majority of community charge payers in Avon welcome these orders.

6.29 pm

A number of hon. Members spend many years in local government before entering Parliament. Some of us held senior positions and some had roles that were equal in importance and stature to the present-day leaders and deputy leaders of the various poll tax-capped authorities.

I represent north Tyneside, along with the hon. Member for Tynemouth (Mr. Trotter). I am rather disappointed that he is not here tonight, because I am sure that, given the opportunity, he would have contributed to the debate. My council refutes any suggestion, as do the people of north Tyneside, that it is a loony council. It is not. The leader and the deputy leader are responsible people.

My hon. Friend is tempting me to talk about the GLC, but I will not. I have strong views on that, so it would be better if I were to remain silent.

The council's record on education equals that of any authority in the country. We are among the top 10 education authorities. Bearing in mind the industrial and economic legacy of the past two centuries, that is no mean achievement. Authorities such as mine still have to bear the burden of mine closures, shipyard closures and steel closures and the consequent long-term ill health of those who once worked in them, often in the most obnoxious conditions. Those people look to the local authority for some alleviation of the distress that they suffer from time to time.

I am completely saturated with statistics on this issue. The House is exhausted by them and so is the public, so I shall not talk about them tonight. We think that we have a responsibility for providing technical education in our region. We still have manufacturing bases which we want to be provided with the right skills. However, I regret that the cuts are beginning to affect the provision of that type of education.

History would have been different if coal had been found in Sussex, Surrey and Dorset, but it was found in the north-east. Our coal reserves have now been exhausted but we still have to live with the consequences.

It is not uncommon to have 10 per cent. unemployment in the north. In some areas, it is higher than 10 per cent. Again, the local authority feels that it is under an obligation to provide some of the fringe activities that the unemployed need to stop them going insane with the effects of long-term unemployment. Those are the issues that are not dealt with in the statistics that are bandied around.

The only statistics I want to quote relate to the collection of the poll tax. I am indebted to the director of finance of North Tyneside council for telling me:
"It is roughly estimated that in order to provide poll tax bills, instalment booklets, benefit letters and direct debit information, seven tonnes of paper is required which, when stacked, would be approximately 450 feet high. This is equal to approximately 250 miles of paper, almost sufficient to stretch from North Tyneside to Marsham Street"—
the Secretary of State's office. That is a simple statistic which means something to the ordinary people; I regret that the rest are often above their heads.

If I misquote the Minister, I apologise, but I think that he said that we are now going beyond the principles of the tax. I submit that those principles have not yet been argued. They must be argued now, not in deputations to the Minister's office or, in my case, his predecessor's office. The House might be interested to know that we had two cups of tea that morning, which I found flattering.

The Minister must now tell us how he will put into effect the latter part of the court's judgment, which says:
"The answer is that the consequences flow from the legislation. Our role has been to interpret it. In operating the statutory process of charge-capping the Secretary of State has not acted unlawfully and so warranted the intervention of the court."
That is well established; we cannot challenge that. The judgment continues:
"That local authorities which have been designated will be adversely affected by the requirement to reduce budgets in-year is a consequence inherent in the statutory process."
The next sentence is the key one:
"It is still open to the Secretary of State, or in default the House of Commons, to relieve against any apprehended hardship or unfairness."
That is the next stage which we must argue. It is no good getting involved in sterile statistics; we—Ministers and Members—should be applying our minds to how the Minister—should define what is fair.

When the Minister replies tomorrow, I hope that he will say how he intends to make the system fair and to recognise the regional differences. Each borough has its own problems arising from its constitution and its boundaries. The human factor must be introduced. If the Secretary of State can do that, he will be doing a service not only to the Conservative party but to the nation.

6.37 pm

Thank you, Mr. Speaker, for calling me now.

I strongly support the orders. The community charge in Lambeth is outrageously high—£548 per adult. When capped, it will, unhappily, only drop to £497 per adult. All the letters that I have received about capping have asked why the Government cannot help by further capping.

I am conscious of the difficulties that many of my constituents face. I was talking the other day to a postman whose wife does not work. He earns about £10,000 a year. His rates were about £370, but the community charge that he and his wife have to pay is more than £1,000—10 per cent. of their gross wage. Thank heavens the capping willreducethat—

I have only 10 minutes. Why does not the hon. Member for Normanton (Mr. O'Brien) wait until I deal with Wandsworth next door, where the "poll tax"—to use his expression—is £148? If the hon. Gentleman lived in Lambeth, with Wandsworth next door, he would not be sitting there shouting at me; he would be shouting at the members of Lambeth council. The problem is not the poll tax, but the level of the poll tax in Lambeth.

Although its poll tax is only £148, Wandsworth receives less from central Government than does Lambeth.

If the hon. Gentleman does not wish to hear, will he leave the Chamber, rather than shouting?

Lambeth receives £324 more—31 per cent.—per adult from central Government than does Wandsworth.

Lambeth has the highest level of Government finance in south London, but the second highest community charge in the country. There are reasons for that. Lambeth has rate arrears of £40 million—equivalent to a loss of interest of nearly £5 million a year; it has rent arrears of more than £26 million—equivalent to a loss of interest of more than £3 million; over the past two years it has incurred creative accounting debts of £27 million, which must be repaid over the next two years—equivalent to a loss of interest of more than £3 million; it has more than 2,000 void properties, including more than 1,000 squatted properties, and has incurred a rent loss of nearly £2·5 million; sickness and absenteeism among council workers is four to five times the national average, at a cost of about £10 million or £11 million. The distress of my constituents is made still greater by the fact that the council is not only loony but incredibly inefficient. Many poll tax bills—to use the expression of the hon. Member for Normanton—have still not even been sent out.

It is no good saying that they cannot be; that is the case. Some of my constituents have received bills with the payment book, but most have received them without it. Some have received the payment book without the bills. Many have been granted rebates that were not included in the bill or in the payment book; some had the rebate in the bill, but not the payment book. There is a community charge hotline to ring, but there is no answer. Therefore, my constituents have come to me.

They are desperate—desperate with Lambeth council—and I feel desperate on their behalf.

We find ourselves on the wilder shores of the council's inefficient lunacy. I have a list of 20 or 30 outrageous things that are going on there, and if I had time I would read them all out to the House. Lambeth has 118 children on the "at risk" register, without a social worker; one of the councillors claimed £50,000 in expenses over three years. An ex-Labour Member of Parliament was fortunate enough to be paid more than £50,000 to review town hall bureaucracy—and was honest enough to put in a damning report. The Lambeth town hall social club banned ploughman's lunches until they were renamed "ploughperson's lunches".

In 1988, the council received the second highest number of findings ofmaladministration with injustice from the local government ombudsman. In January 1990, the district auditor found, in a sample of council repair jobs, that 40 per cent. were unsatisfactory. Lambeth has nearly 300 planning-breach enforcement decisions pending, and a 1987 internal audit report showed that 70 cases of fraud within the council had beeninvestigated. Those are just half a dozen examples: there are 30 or 40 similar instances. My poor constituents!

The House will not be surprised that, in the local elections, the Conservatives were able to pledge without any difficulty to take at least £200 per adult off the Lambeth community charge within a year of taking office —reducing it from £548 to £348 without cutting any essential services. Despite the opinion polls, the result was more or less no change in Lambeth.

The Lambeth reaction to charge capping was typical. Page 2 of the South London Press said, on 19 June:
"as a result of the Court decision to uphold the charge-capping of Lambeth Council, nurseries, under-fives, and youth provision, adult education, meals on wheels and homes for the elderly are all threatened."
On page 5, it continued:
"Lambeth Labour councillors rejected a report of their Finance chiefs and 'refused to agree recommendations to save money byfreezing the recruitment of staff and measures to track down people not paying Poll Tax'."
What hypocrisy it is to seek to damage the most vulnerable sectors of the community for political purposes. the whole House must agree that that is outrageous. Yet the charge capping in question is only £8 million. It would reduce a budget of £294 million to £286 million—a reduction of only 3 per cent. And there will still be accountability, because the Conservatives would have reduced the Lambeth community charge to £150 per adult below the capped level.

This is a sad indictment, and it distresses me on behalf of my constituents. I am grateful for the presence of my right hon. Friend the Secretary of State. Let me make it clear that I am glad that we are to have capping, and glad that we have the community charge. What I am outraged about is the level of the community charge in Lambeth, and the irony that Wandsworth next door has a community charge of £148.

6.46 pm

I apologise if I exceed the time limit, but the case of Haringey is serious.

The unfairness of charge capping falls into three categories: first, the setting of the standard spending assessments; secondly, the way in which local authorities were selected for capping; and, thirdly, the fact that authorities were treated differently. As my hon. Friend the Member for Dagenham (Mr. Gould) pointed out, charge capping defies logic, and acts against the accountability that the Government said that the poll tax was there to ensure. Charge capping takes no account of the need in local authority areas, and I believe that it will destroy inner-city communities. It will bankrupt councils. In my council, only 40 per cent. of the moneys have been collected so far. I believe that the Government will be forced to install commissioners in local authorities, and that they may gain control of authorities as they were unable to do through the ballot box last May.

In the May elections, despite the highest poll tax in the land, the people of Haringey returned a Labour council with an increased majority. The previous figures were as follows: 39 Labour councillors; 19 Tories; one Liberal. Now there are 42 Labour councillors; 17 Tories and no Liberals. Despite offering a bribe—promising to cut the poll tax by £100 if they were elected—the Tories were practically driven out of Tottenham. Out of 29 seats in Tottenham, there is now only a solitary Tory councillor left, and it is just a matter of time before that person goes.

Haringey had to set a standstill budget for 1990–91 because it had no balance. The budget was set at £216·5 million. The Secretary of State decided that the maximum budget for Haringey services should be £206·5 million and as a result of the capping he required a reduction of£10·03 million. Why was the cap set at that level? Haringey set its poll tax at £572·89 which was below the level that was assumed by the Government who thought that Haringey would set a poll tax of £573·17. To meet Government targets Haringey reduced its budget by some £3 million. However, it was still penalised.

Why should a council be penalised for setting a charge that is lower than the Government target? Perhaps the Secretary of State will explain that to the people of Haringey. In this respect, Haringey is unique among charge-capped authorities. It behaved itself and did what it could to play fair according to the rules. It is one of only seven local authorities which have kept within the Government limits, and it is the only one that has been capped.

Local authorities were asked to play a bizarre game in which only the Government knew the rules. It was only after Haringey had made its move that the Government showed their hand. It is shocking that the courts have failed to uphold such a basic principle of natural justice.

The standard assessments set by the Government are so arbitrary that they cannot be related to what is happening on the ground. The Department of the Environment uses only indicative factors, when it should be looking at the real needs of local authorities and what they need to spend. The SSA for capital in Haringey was calculated assuming a non-housing debt of £90 million. The real debt at March this year was £200 million and that arose because of capital allocations by the Government. The council was told for years that it could accumulate money because local authorities can borrow money for capital projects only after the Government have given permission. Haringey borrowed and now has a debt of £200 million, but that is the amount that the Government said it could borrow. They then disregarded that amount and said that Haringey had a debt of only £90 million. If the true debt had been taken into account, the poll tax could have been reduced by £100.

Interest can accrue from money balances. The Government know the precise balance of each local authority. Any reasonable Government would use that figure to calculate the interest for the council. However, the Government did not do that. They made a pro rata calculation based on the SAA, which is the Government's own figure. The Government assumed that Haringey had a balance of £30 million which would give it an interest income of £4 million. The council had no such amount and the interest on its balance was a mere £1 million. Such situations arise when the Government do not listen to local authorities, do not take account of the true figures and work purely on the basis of political dogma.

The Government have played a few tricks. They massaged the education and social services element of the SSA so that any attack would focus on local rather than on central Government. Charge capping defeats its own object. Let us look at some of the information that has been around for a few weeks. Mr. Paul Rowsell is an assistant secretary at the Department of the Environment. He is head of the finance, local authority expenditure and revenue division. He is probably in the Officials' Box and will wave to me if I ask him to do so, but I shall not. He prepared an affidavit which was used by the Government in a recent court case. Writing about the Government's objectives, he stated:
"The Government is concerned that it should … seek powers which would enable it to take rapid action to secure a reduction in … excessive budgets, and to bring rapid relief to those charge-payers burdened with high charges as a result of excessive budgets."
Mr. Rowsell is saying that the Government want to take action to reduce excessive budgets and that they will relieve charge payers "burdened with high charges".

Why are the budgets excessive? It is because the Government's SSA made inadequate provision for what local authorities are expected to do. For example, the Government allowed only 3·8 per cent. for inflation, and inflation is currently running at about 10 per cent. Secondly, the Government say that they want to bring rapid relief to charge payers. Because of the Government's transitional relief system, half Haringey's poll tax payers will get no reduction in their bills and the other half will get a minimal reduction. Of course, all Haringey's people will get a reduction incouncilservices. The real Government target is the excellent service provided by the council.

Mr. Rowsell also wrote about
"a reduction which on the basis on the information available the Secretary of State considered achievable for the authority concerned without disruption to service delivery or causing financial difficulties."
That was the Government's objective in charge capping. That has manifestly not happened because there has been massive disruption of services and charge capping has caused tremendous financial difficulties. I shall mention some of them. In his statement, the Secretary of State talked about horror stories. He should be careful, because he is responsible for such stories. He should remember that one of the people responsible for horror stories in the past was Count Dracula, and he got a stake in his heart.

My hon. Friend is right. Perhaps the Secretary of State does not have a heart. We shall certainly put a political stake in the heart of the Secretary of State and the Government at the next election.

I want the Secretary of State to listen to some of these horror stories and then tell me how the people of Haringey will live with his policies. I shall outline some of the proposed reductions. In community affairs, six libraries, two advice bureaux and an arts and entertainments section are to be closed. Two sports centres and a swimming pool are being closed, and there will be major cuts in park maintenance, including bowling greens. The crematorium charges will be increased. In housing, there will be no advice or private sector work.

Grants for voluntary organisations will be cut from next April by about £2 million. That will affect organisations such as Age Concern, Relate, the Arts Council, Haringey emergency corps, the black people over 60 pensioners group and the Open Door drug counselling service for young people and will result in the closure of community centres.

On the environment, the ability to implement the Government's new regulations on pollution and food safety will be cut to a minimum. There will be about 600 to 700 job losses, with 500 compulsory redundancies.

In education, there will be no new discretionary awards, and clothing grants will be scrapped. These are important to the 6,000 children who receive them because, when their parents have been means-tested, it has been found that they cannot afford to clothe their children properly. Adult education will be cut by 50 per cent. There will be no subsidised lettings. The youth service will be cut by half, in an area where, five years ago, there were disturbances among young people. Since that time, the local authority has tried to ensure that young people can find something to do, but all these schemes will be scrapped because of the way in which the Government are operating.

In social services, one old people's home and one home for children with special needs will have to be closed. For the first time, home help charges will be £.1·50 a week. Day nursery charges for children in an at-risk category will go up from £6 to £10 a week and day nursery charges for other children will go up to £40 a week.

It is clear that the Government are trying to destroy local government. There are no two ways about it. It is just a matter of time before unelectedcommissioners doing the bidding of the Government will come and tell local authorities what to do.

No. The hon. Gentleman has plenty of money. He should save his speeches for the party conference.

In a year's time, when local authorities are unable to collect their poll taxes, the Government will send in commissioners because the council will be bankrupt. The Government will use the commissioners to ensure that he policies on which they cannot win at the ballot box are implemented.

In my maiden speech, I said that in the inner cities we were living on a powder keg. Given what has happened, and what will happen if the Government keep cutting local services and do not allow young people opportunities, there will be an explosion the like of which we have not seen before. This is a further attack on the lives of the poorest people, who are already struggling to manage with poor housing and on disgracefully low incomes. The Government are attacking the fabric of the society of inner cities and are now taking away the few things that local authorities—particularly Haringey—have been able to do to make life tolerable. The Government are causing an alienation that will rebound on them at the next general election. I hope that that comes sooner rather than later.

7.2 pm

The charge capping of Hammersmith and Fulham council has been greatly welcomed by my constituents. They are pleased that they are no longer subjected to the outrageous community charge of £424 that theLabour-controlled Hammersmith and Fulham council tried to impose on them. Their appreciation was shown clearly in the local elections in May, when there was a swing of 7·8 per cent. against the Labour party in my constituency and, in the borough as a whole, a swing of 5 per cent. against the Labour party. We took 13 council seats from Labour and although, regrettably, we did not take control, the Labour party is controlled by an effective Conservative opposition.

I am extremely glad that my right hon. Friend the Secretary of State for the Environment did not mess around with a small reduction. The reduction of £99 made charge capping much more welcome and effective, and my constituents are grateful to my right hon. Friend.

That a small reduction would have been pointless is shown by the numbers that make up the community charge. The Hammersmith and Fulham council received a special grant from the Government of the same amount as Wandsworth council. These are made up of a combination of the safety net and the special grants that are given to inner London authorities to help them to cope with the transition from ILEA to local education. The Hammersmith and Fulham council and Wandsworth council both received £169 a head.

We often hear claims of gerrymandering, and are told that Wandsworth council was given extra grants to enable the Conservatives to retain control, when the Labour council of Hammersmith and Fulham received the same amount. The difference was that the Labour council wanted to impose a community charge of £424 while Wandsworth has a community charge of £148.

The community charge in Hammersmith and Fulham was not £424, because over the four years of the council the special grants will be gradually removed. If there had been no grants this year, the community charge before charge capping would have been £593 a head, and that would be the charge in four years' time, assuming, somewhat improbably, that the Labour council did not increase its expenditure. Therefore, in four years' time, the citizens of Hammersmith and Fulham will be faced not with a charge of £593 but with a monstrous and very high charge which will cause yet more suffering to the poorest in the community who will not have that increased charge reflected in their benefits.

For all the £99 reduction—nearly 25 per cent.—in the community charge, the cap is still only 7 per cent. of the council's budget, 7 per cent. on a budget that has been increased in the four years since 1986 by 80 per cent. in cash terms or 50 per cent. in real terms, after allowing for inflation. That budget was increased in 1989–90 by 30 per cent. alone. This year, it would have been increased by a further 12 per cent. had it not been for charge capping. We are talking about a 7 per cent. reduction on a year-on-year increase of 42 per cent.

It beggars belief that the council should claim that it is not able to make minor reductions, without cuts in services and without major pain and no effect on the front-line services, which we should all wish to maintain. We hear a lot from Labour Members with bleeding hearts about the destruction that capping will cause to front-line services, but for most councils that are being charge-capped, the percentages that they are being asked to cut in their budgets are extremely small.

I have an example of what the Labour council has done over the past four years that has led to increased spending. It has increased staff by 1,000. This has produced an estimated employment cost of £25 million a year. That in itself, given the high cost of office space in London, almost explains the vast bulk of the increased expenditure over and above the generous extra grants that the council has received from the Government to help it to deal with the problems of an inner city area. These extra staff were taken on before the council took over control of education from ILEA, so there is no education element in the increases.

The council has also gone in for all the lunatic things that Labour councils in London go in for—women's committees, police monitoring committees and ethnic minorities committees. None of them has an enormous budget. Each runs a budget of about £1 million, which, in terms of what the council is spending, is not vast. The real cost of the committees is the knock-on cost on other departments.

The hon. Gentleman would not give way to my hon. Friend the Member for Amber Valley (Mr. Oppenheim), so I see no reason to give way to him.

The ethnic minority committee imposes such strains on the time of members of staff in other departments such as the planning department that—

On a point of order, Mr. Deputy Speaker. The hon. Gentleman said that the Hammersmith and Fulham council committees each have a budget of £1 million. That is untrue. He should retract that statement.

That is a matter for debate, not a point of order for the Chair.

I am amused by the fact that the hon. Gentleman is clearly incapable of understanding the Hammersmith and Fulham council budget, if he has taken the trouble to read it, because that is indeed what the committees cost.

The knock-on cost is the time that it takes for people from other departments—the planning department is a case in point—to attend race orientation classes. At one point 40 per cent. of the staff were not available to do their proper job. Their work had to be carried out by someone else. Therefore, other staff had to be employed to do it.

Another major cost that is rapidly mounting up for the Hammersmith and Fulham council is legal bills. The council happily enjoyed running up enormous legal bills in contesting the community charge-capping orders. My right hon. Friend mentioned that all the bills amount to £1 million. My guess, however, is that when we see the final bills for Hammersmith and Fulham council, they alone will amount to nearly £1 million. The costs of its leading counsel amount to £1,000 a day. The council has employed the same leading counsel to defend its swaps business. Hammersmith and Fulham indulged in gambling on the money markets and lost, according to the council's own conservative estimate, £200 million. That means a loss of £2,000 for each community charge payer.

Having lost that money, the council is trying to recover it through the courts. The case has gone through the Divisional court and the Court of Appeal and it is now on its way to the House of Lords. I do not know what the result of that appeal will be and whether Hammersmith and Fulham council will have to pay the full £200 million. It looks as though it will have to pay some of it, at the very least. What I do know is that the council will have to pay its legal bills, which, it is estimated, will come to £2 million. That amounts to nearly £200 for each community charge payer. It is probable, however, that the legal bills will amount not to £2 million but to £4 million, which comes to £400 for each community charge payer.

We can see, therefore, where the money goes and that Hammersmith and Fulham council's tendency to indulge in litigation is leading community charge payers into having to pay far more than they need to pay. The leader of the Labour group on Hammersmith and Fulham council is a failed barrister. Therefore, it is very tempting for him to play out his Walter Mitty fantasies by going to court when he does not have to pay the bills himself.

No, I shall not give way to the hon. Gentleman. My time is nearly up, and I am sure that he wants to make his own speech.

The council's real problem is that it is completely out of control. Recently it received a report from the housing department which showed, to the council's great surprise, that the repair budget has bust through all its budgetary figures, to the tune of £4·4 million. One could make out the case that the council is spending a lot of money on repairs, although most council tenants would deny that it is doing so. The reality is that, whether it was or was not spending that money, it did not know whether it was spending it. Apparently. the council was horrified to learn that both officers and politicians did not know about it. One hears the same story in practically every department; the council does not know what it is doing. It is inefficient and badly run. That is why its finances are out of control and why it has had to impose such a high community charge.

I am grateful to my right hon. Friend for having charge capped Hammersmith and Fulham council. However, the problems for the charge payers will go from bad to worse during the next three years. The council needs to be charge-capped every year for the next four years. The charge capping must become even more severe until such time as the council learns to run itself efficiently, keep within its budget and control its legal expenses.

7.14 pm

I do not intend to refer to the poll tax figures for Doncaster. All that I would say is that more than 15 schools are likely to close as a result of poll tax capping.

I intend to refer to accountability. The Secretary of State has often made it clear that he strongly favours the principle of accountability. He believes that those who elect a council hold, by means of their votes, a weapon with which to punish the controlling party that imposes high poll tax levels and to show their approval of the party that sets or, if in opposition, advocates and promises a low poll tax.

The Opposition are also very much in favour of the principle of accountability. Moreover—here, it seems, we part company with the Secretary of State—we are in favour of the practice of accountability. If accountability is to become a reality and not just some airy-fairy armchair reform group theory, local decision making has to be taken seriously. The most effective way to destroy belief in the value of accountability is to take away the right of decision making from elected councillors and the people who elect them.

We believe that the principle of accountability was at work in the council elections in May. Without going into the dubious reasons why certain Tory councils were able to set their poll tax so low, it is nevertheless clear that the poll tax was a central issue and dominated the thoughts of the electors during the May elections. Apart from the fact that the parties had to make a stand on this issue, although most Conservatives obviously cursed having been stuck with it, the electorate chose to make it the big issue.

As for the elections to Doncaster metropolitan borough council as they relate to accountability, the poll tax and poll tax capping, Doncaster Labour party's election manifesto and the election addresses of the Labour candidates, which went to every house in the borough, made quite clear the budgetary and poll tax implications for Doncaster metropolitan borough council.

If time permitted, I could deal in detail with the election manifesto and the election leaflets that we distributed, but that would not be fair to the many other hon. Members who wish to speak in the debate. However, the election manifesto spelt out clearly the budgetary consequences. The full manifesto also addressed clearly, even at a late stage, the poll tax capping question. Both the manifesto and the election leaflets were produced after Doncaster metropolitan borough council had fixed its budget and set its poll tax at £334·53 at a special meeting of the council on 8 March.

For its part, the Conservative opposition in Doncaster unsuccessfully moved an amendment,
"that the Council net community charge be set at £264."
Hon. Members will be amazed to learn that that figure is very nearly the assumed poll tax set for Doncaster by the Secretary of State. There may have been a leak. However, local Conservatives, to show their zeal and loyalty beyond the call of duty, proposed that that figure should be reduced by a further 6p. Hon. Members will therefore appreciate that for a month, from 8 March, the fact that Doncaster's declared poll tax was more than that proposed by the Conservative group was well aired and widely known about in Doncaster as the local election campaign approached.

If the Doncaster public were in any danger of forgetting or downgrading the poll tax issue, the Secretary of State ensured that that did not happen. On 3 April, Doncaster metropolitan borough council—as one of the 20 councils being capped—had its poll tax on the front page of the local newspapers and it also received widespread local radio and television coverage. There was no doubt that the electorate of Doncaster knew that they could have a reduction of £53 on their poll tax bills if they voted Conservative. There was a clear sign that they wanted that reduction.

The real issue was the reduction in budget, but I will not go into the figures because of lack of time. I stress that again and again, in the run-up to the local elections, the whole issue of poll tax and charge capping was discussed. Leaflets were produced by all political parties and were sent to every household. Hon. Members will appreciate that the party campaigns for the 3 May elections were well under way. The district Labour party made clear where it stood on the issue, but again there is no time to discuss that. Labour candidates put the issues of charge capping and accountability squarely before the electorate, which was already well aware of the position. The Conservative party backed and welcomed the Government's intervention in Doncaster's budget and the prospect of a reduced poll tax. Conservative sources spoke of, but did not. quantify, waste and unnecessary spending. The Conservative group leader was at the forefront of that attack on the Labour-controlled council and its resistance to capping.

The two major parties joined battle on the issue of Doncaster's spending and funding and on the justification for the Secretary of State's poll capping. Both parties invited the electorate to judge favourably or unfavourably. first, the size of Doncaster's poll tax and, secondly, the prospect of a reduced budget and a poll tax reduced by £53. Hon. Members should know that, before the 3 May elections, the state of the parties in Doncaster was 54 seats for Labour and nine for Conservative. The latter nine seats were all held in three of the 21 wards. One Labour seat was unopposed. There was a double election in one ward. Labour was therefore defending 18 seats and the Conservatives three. It was an opportunity for the electorate of Doncaster to make what I shall call the parliamentary by-election response.

What happened on 3 May? When those specific seats were last contested in 1986, the Labour party took 61·9 per cent. of the votes cast, and the Conservatives 22·5 per cent. In the elections on 3 May, with an increased turnout, the Labour share of the vote rose to 67·8 per cent. while the Tory share dropped to 19·4 per cent. In Bessacarr ward, which has returned Conservative councillors at every election since the council was created in 1974, the Conservative candidate lost his seat. It was the leader of the Conservative group, with 16 years' service—the Secretary of State's most vocal ally in Doncaster.

In another traditionally Conservative ward—where, by a whisker, the Labour party gained three seats in 1986, 1987 and 1988, and where there was a double election this year—Labour candidates took 59 per cent. of the vote. That was an improvement of more than 10 per cent. for Labour, and a decline in the Tory vote of 12 per cent. on its 1988 performance. I do not know of a more convincing endorsement of a council's position on poll tax and poll tax capping by the people whom it represents and those who could be reasonably expected to pay.

Reasonable people, assessing the circumstances and the outcome of the May elections, will conclude that the people of Doncaster massively backed the council's opposition to the poll tax and did not rise to the charge-capping bait offered by the Secretary of State. The council's decisions, its budget and the issue of capping were clearly judged by the people of Doncaster. The Secretary of State has now gone against the wishes of the great majority of those people. Through their decision at the ballot box, the Secretary of State's action has been decisively rebuffed. If he is truly committed to accountability, he should leave Doncaster alone. Value for money and quality of service is what the people of Doncaster expect. They have been getting that from their council and they have returned a Labour council to endorse that policy. I ask the Secretary of State to withdraw the order against Doncaster.

7.26 pm

Nothing more symbolises some of the problems of inefficiency at the centre of much of local government in England than the incredible sterile debate that takes place, year in and year out, on the subject of contracting out. Such a debate happens only in England. In France, the socialists and the communists control many of the municipalities and much of local government, but there is no debate about contracting out and whether in-house work forces should run certain services or whether they should be contracted-out to the private sector. French councils do not allow ideology to get in the way of providing a good service. They allow the private sector to provide those services that it can best provide. In those areas where a directly controlled work force can best provide the service, it is allowed to do so.

Local government in Britain appears to be for ever embroiled in this idiotic and sterile argument about whether to contract out services. For example, in Derbyshire recently, the county council, which consistently attempts to avoid contracting out its services, rejected a low-cost tender for one service because it arrived in the wrong-coloured envelope. Another example is that the county council recently structured its school cleaning contract in such a way that no private contractor would bid for it. The only bid was from the in-house team. The contract was drawn up in such an incompetent way that, for example, the county council delivered large cleaning machines to tiny schools that had only one cleaner who could not use the machines because they were too large and not suitable for the schools.

It is crazy to have all those arguments about contracting out. Surely the priority of local government should be the provision of efficient services at a reasonable cost. If those services can be provided better by the private sector, what earthly reason could there be for preventing the private sector from providing them? By the same token, where those services can best be provided by in-house work forces, I should be the last to stand in their way. The priority should be not who provides the service, but that it is provided efficiently, effectively and at a reasonable cost.

Much of the recent press comment on the community charge and on charge capping has concentrated on the possibility of cuts in educational budgets. Indeed, I have not seen a single news item this year that has said anything other than that educational services would have to be cut. That is a great shame. Those reports have pointedly ignored the fact that there are huge areas of waste, profligacy and inefficiency in local government that could be cut long before there is any need to make savings on education. In Derbyshire, huge savings could be made in the budget that would more than account for the charge capping without sacking a teacher or closing a single school.

Let me give the House some examples. The county council's budget for this year includes £34 million for a contingency fund. Why does Derbyshire—in this year of all years—need a £34 million contingency fund, when neighbouring Staffordshire, a county of roughly the same size, can get by with £14 million? Could it be that Derbyshire county council spent most of its contingency fund last year to enable it to cut the rates and ensure that it was re-elected? And could it be that it has now jacked up its contingency fund as high as possible to give it a nice war chest for the next local election, ensuring that the community charge is as painful as possible because it knows that, in the first year of the charge, the Government will get the blame? The county council argues that it needs the contingency fund to budget for pay rises in the next year. What organisation does not include the possibility of pay rises and cost increases in its basic budget? That is not what a contingency fund is for; such extra items should be included in the basic budget.

The county council spends more than £1 million on its bloated information department and its Insight newspaper, which is an insult to most people's intelligence. It spends £600,000 on its equal opportunities and race relations department. It has doubled its subsidy to something called the Northern college in Barnsley to £188,000. Incidentally, the college is extremely dubious, as it specialises in left-wing and trade union causes. It is not even in the county and I do not see why the charge payers of Derbyshire should pay for such nonsense. The council spends £111,000 on giving councillors free trips abroad to sponsor twinning arrangements.

None, actually.

In addition, the council has consistently refused to cost its nuclear-free zone policy. Then there is community education, which is a relatively new policy. Community education in Derbyshire is budgeted at nearly £15 million this year. 1 accept that, in an ideal world, county councils would be able to provide community education, but it is a very costly policy and it strikes me that the council should be concentrating its efforts on general education. Neighbouring Labour-controlled Nottinghamshire has no separate community education section. Many people in Derbyshire feel that the policy is bloated, inefficient and unnecessary, especially as cake decoration and yoga are included among the courses.

It seems extraordinary to me that, at a time when the council is complaining about underfunding, it should be spending so much on its community education programme, which I regard as of limited benefit. Certainly, courses in cake decoration and yoga could be cut and some of the more sensible courses could be financed by charging people who could afford to pay, thus enabling huge savings to be made on the programme.

As my hon. Friend the Member for Derbyshire, South (Mrs. Currie) pointed out, Derbyshire county council has the extraordinary policy of freezing school meal prices at their 1981 level. As my hon. Friend said, that subsidy does not help poor people because less-well-off people already receive income support and free school meals. The county council is asking every charge payer in Derbyshire, regardless of his means, to subsidise school meals, and much of that subsidy goes to parents who are very well off. That is ludicrous, especially as the policy costs about £15 million. The council could cut that spending by half and concentrate the subsidy on those who really need it rather than subsidising everyone, willy-nilly, from the Duke of Devonshire downwards.

It is the county council's policy to provide free home help, regardless of the recipient's means. As a result, the service is 62 per cent. more expensive in Derbyshire than in similar areas. The cost of the subsidy in Derbyshire is £17million—£25 for every charge payer—but it could be halved if those who could afford to pay were asked to contribute towards the cost of home helps.

The county council has increased its staff by no less than 8,000 since it came to power in 1981. That is an increase of 20 per cent. and the largest increase in any county council in England and Wales. As much as £40 million could be saved if the council reduced staffing levels, used employees more efficiently and cut out staff who are not really needed.

When the county council announced its community charge earlier this year, a group of local borough, city and district council leaders got together to produce an alternative budget which cut subsidies in some areas and targeted subsidies in others to those who really needed them, as well as cutting out a lot of wasteful spending. It was found that the county council could easily save about £86 million—the equivalent of £121 per charge payer. That is twice as much as the Government are asking the county council to save under the charge cap.

I assert that there is not a single reason for any school teacher in Derbyshire to be sacked or for any school in Derbyshire to be closed. Savings could be made, and the district and borough council leaders have produced an excellent alternative budget. If the county council goes ahead and cuts services such as education, it will be doing so as a political gesture and to wind up still further its posture of confrontation with the Government. That will show the people of Derbyshire that the county council is interested not in providing reasonable services at a fair cost but in taking on the Government, making political points and handing the bill to the charge payers.

The county council leader and Labour councillors in Derbyshire often claim that they are committed to providing a high quality of service and that that is the core of their policy. They say that their policies of providing cheap school meals and free home helps regardless of people's means are part of their fundamental belief and that there is no way that they will ever throw them over.

When my right hon. Friend the Secretary of State mentioned such policies earlier, the hon. Member for Bolsover (Mr. Skinner) said that they were brilliant. If Labour county councillors and county council chiefs are so happy and so eager to boast about the services and if they say that they are part of their central beliefs. they should at least have the honesty and the guts to admit that theservices are way in excess of those offered by other county councils, and that they cost a great deal. They should have the honesty and the guts to admit their responsibility for the high community charge in Derbyshire.

The problem is that, all too often, socialist councillors fall into the utopian trap of trying to provide a huge range of services. In an ideal world, we should all want to provide some of those services, but unfortunately we live in the real world, in which services have to be paid for and provided efficiently at a cost that the area can afford. I want local government to provide high-quality services but they must be provided at a reasonable cost in line with what the area can afford. Unfortunately, Labour's priorities are often very different. The Labour party's priorities are geared towards keeping its friends in the trade unions sweet, and that is especially so in respect of National Union of Public Employees, which sponsors so many Labour councillors.

The Labour party's priorities are also too often geared to providing jobs for its political friends. An ex-Labour Member of Parliament, Mr. Reg Race was recently appointed chief executive of Derbyshire county council a t a huge salary. It does not strike me that he was necessarily the best man for the job. It has always been a tradition in local government that council officers should be independent, and I do not see how a left-wing former Labour Member of Parliament who previously worked for the GLC can be politically independent.

I will say this for Mr. Race: apparently, he was so disgusted by what he found when he arrived at the county council that he left after six months. At least he had the integrity to do that, even if he did not have the integrity not to accept hush money, in the form of a golden handshake, to keep his mouth shut about what was going on at the county council. [HON. MEMBERS: "How much?"] My hon. Friends ask me how much. The county council, which is supposedly a great believer in freedom of information, unfortunately omitted to reveal how big that golden handshake was.

Let me give some more examples of jobs for the boys. The chairman of Derbyshire Labour party was appointed at a salary of £15,000 as a minder for Japanese business men visiting the county. That same person had been sacked from the council for corruption 11 years previously. He was reinstated by the Labour council in the post that I have described. It just so happened that he was the chairman of Derbyshire Labour party.

My hon. Friend asks me that gentleman's name. For the moment, I forget, but I believe that it was something along the lines of Skinner. I am not sure whether he was related to an hon. Member of the same name.

As I have said, education is one of local government's most important responsibilities. It is a fact that education in Derbyshire costs more per head than in almost any other county in England, yet the education results in Derbyshire are worse than those in almost any other county in England. The reason is—

I shall give way in a moment.

The reason is that educational excellence is not the main priority of Derbyshire county council. Instead, it chases around after the false ideal of egalitarianism. There is too much political interference and too much bureaucracy. As evidence of that bureaucracy, I can tell the House that, under local management of schools, the county council is proposing to keep no less than 26 per cent. of educational spending centrally. That is the highest level—

My hon. Friend corrects me. I had understood that Derbyshire's retention was the highest of any county council, but it may well be the second highest—[Interruption.] I give way to the hon. Member for Wallsend (Mr. Garrett).

I am reluctant to rise on this matter, but I must take the hon. Gentleman back to some of his remarks about certain members of the Labour party. I stress that I do not know those people personally and I do not even know what they look like. But the hon. Gentleman should use his privilege much more carefully. Perhaps he would care to reflect on whether some of his remarks would stand up outside this House in a court of law.

I thank the hon. Gentleman for his intervention. I am sure that he will be delighted to learn that I have made exactly those same comments outside the Chamber, and I stand by them. It is not a question of hiding behind privilege. Everything that I have said in this and previous speeches about Derbyshire county council, I have also said in the local press outside this House—[Interruption.] Does the hon. Member for Halifax (Mrs. Mahon) want to intervene?

The vitriol of the hon. Gentleman and his hon. Friend the Member for Derbyshire, South (Mrs. Currie), who also spoke about Derbyshire county council, has been quite extraordinary, given that the electorate overwhelmingly return that council every time. Somebody does not believe the hon. Gentleman—the majority of the electorate.

I correct the hon. Lady on one point. Derbyshire county council has benefited from council elections being held during the mid-term of the national Government when the Government tend to be somewhat unpopular. Even so—

Perhaps the hon. Lady will let me finish.

Even so, at every election since 1981, the Labour-controlled county council has lost seats—sometimes against the national average. The Labour group on Derbyshire county council has consistently achieved results far worse than the national average. Indeed, on both occasions when the leader of the county council has stood for election in what was supposed to be a safe Labour seat, he has lost by a substantial majority.

I cannot think.

I refer again to education, which I accept is an important responsibility. I am deeply concerned about the state of education in Derbyshire. The county council spends far more per head than most other county councils, yet we get far worse results. Opposition Members should reflect on the fact that, although they often complain about educational standards in Britain and are ready to attack the Government about them, it is the local education authorities, which are run by the county councils—many of which are Labour—which have the primary responsibility for providing education. They have all received more money per head under this Government, allowing for inflation, than ever before. However, in many areas, especially in Labour areas, the results leave a lot to be desired. Opposition Members should accept some of the responsibility for the poor educational standards in some parts of Britain.

So far, the Opposition have been incredibly lucky. They have managed to get away with criticising the Government, but have not come up with any policies of their own on local government finance. Four years ago, they promised that they would come up "very soon" with a policy on local government finance. Three months ago, during a debate on local government finance, they said that they would come up with a policy at the end of May, but we are still waiting. Earlier today, when the hon. Member for Dagenham (Mr. Gould) the Opposition's chief spokesman on this subject, was asked whether there were any circumstances under which any future Labour Government would cap or limit local government spending, he was completely unable—

Order. These matters are outside the scope of the debate.

It was in this debate, Mr. Deputy Speaker. When I challenged the Opposition spokesman—

Order. It does not matter whether it was in this debate. As long as I am in the Chair, I shall seek to ensure that the debate is confined—

Order. I shall seek to ensure that the debate is confined to the motion. I hope that the hon. Gentleman will confine his remarks accordingly.

I had thought that this debate was about charge capping, Mr. Deputy Speaker and I was referring to the fact that, earlier in the debate, the Opposition spokesman refused to say whether a future Labour Government would limit or cap local government spending. It strikes me—

Order. The hon. Gentleman must not seek to debate my ruling. I very much hope that he will have regard to it.

Of course I shall pay regard to it, Mr. Deputy Speaker. I always do.

Finally, local government is not about providing jobs for the friends of the Labour party. It is not primarily about providing jobs at all—[Interruption.] Local government is about providing reasonable services at a reasonable cost. It has become patently clear in recent years that many Labour councillors have completely lost sight of that fundamental and central aim of local government. That is particularly true in Derbyshire. That is why, from the point of view of my constituents, I am pleased that Derbyshire county council has been charge-capped.

7.46 pm

I have the unenviable task of representing an area in which both local authorities were poll tax-capped. The district council—Bristol city council—was poll tax-capped, as was Avon county council.

Although I do not want to rehearse the principles of poll tax capping, it is worth noting that the Government have been two-faced, although they may have taken the precaution of putting the contradictions into the legislation. First, they established an arbitrary formula which paid no regard to the circumstances of individual local authorities and took no account of the unique factors that may affect them. They simply took a mathematical formula for the national cake of expenditure and sought to scale it down. The process of setting the standard spending assessments followed the Government's normal procedure. The Government allow themselves to live in cloud cuckoo land in terms of what they believe that local authorities should spend and pay no regard to their actual expenditure and commitments. We saw that with the grant-related expenditure assessment arrangements and under the previous funding arrangements.

That led the Government to conclude that Avon county, which had set its budget at £533 million, should have a standard spending assessment of £450 million. The Government said that the authority was overspending on education to the tune of £57·8 million, and spending £14 million too much on social services. The county was spending £83 million more than the Government thought it should.

Despite the many criticisms and snipes that have been directed at the county council, every Tory Member—there are nine among the 10 hon. Members who represent the county—has failed to identify where the cuts could be made. Avon is a hung authority. The Conservative group on Avon county council proposed an annual budget of only £5 million less than the final agreed budget of £533 million. Bristol city council set a budget of £56·6 million. The Secretary of State believed that it should spend only £49·2 million. That requires a cut of £7·6 million. The poll tax capping proposal for Avon is that it should cut £27 million in the first stage from its budget.

The standard spending assessment failed to take into account certain considerations. In Bristol the cost of collecting the poll tax has escalated to £8·5 million, an increase of £6·5 million over the cost of collecting the rates. The reason for the high cost is that Bristol is one of the largest authorities in the country. Only six other authorities in England and Wales are comparable in size. Bristol has to collect the poll tax from a vast population, which costs a lot of money.

When the Government compare Bristol with other authorities, they fail to take into account the fact that the total figure includes money for administering the rebate system. That costs about £2 million a year. Bristol has provided for collection through Girobank and local shops. It covers the cost of that collection because it believes that it makes it easier for charge payers to pay their poll tax.

A vast expansion in the number of staff to administer collection of the poll tax was needed, so new offices had to be found. Many of the administrative costs are out of political control because the registration officer has the power to decide what resources are needed to collect the money. The increase of £6·5 million in the cost of collection costs each poll tax payer in Bristol £24 a year. Yet the Government poll tax-capped us for £26 a year. It is crazy.

Bristol also has its own dock and a capital debt to be serviced. Under the previous arrangements, under GREA and revenue support grant, the Government agreed a forward funding restructured debt and the entire debt would have been paid off at the end of the debt period. The Government have refused to allow that consideration to continue under the new poll tax legislation. That has added £7·2 million to Bristol's bill as a direct result of Government legislation.

The Government's legislation has directly increased the charge to poll tax payers in Bristol by failing to recognise its continuing commitment to restructuring the debt for the dock, which is municipally owned. The Government also refuse to recognise the cost of collection.

The Government failed to recognise that Avon's precept for the joint Somerset and Avon police authority is considerably higher than the SSA allowed for. The Government assumed that the county council received income of £12 million a year in interest fromitsinvestments. That is not the case. The county council has increased costs of £6 million for implementing the Government's Education Reform Act 1988 and of £2·9 million for implementing the new community care provisions. The Government are forcing up expenditure and penalising local authorities for spending more. They came up with an incredible formula which poll tax-capped 19 Labour authorities and one hung authority on which Labour is the largest political group.

The Conservative group on Avon county council came up with various suggestions to reduce the cost of its services. I shall give one example because it illustrates my point about the true cost of services. It echoes some of the points of the hon. Member for Amber Valley (Mr. Oppenheim) when he criticised Derbyshire county council. The Avon Conservative group proposed that the council should charge £3 a week for home care, which is free at present, 50p a week for transport to day care centres, and 10p more for meals on wheels. An elderly person who has home help, receives meals on wheels five days a week and goes to a day care centre once a week would pay £208 per year for services which are currently provided free. Such people are already on a severely reduced income. That reveals what the poll tax is about. It is about making the poor pay so that the rich can have more money to spend. It is not about supporting local services.

The Government gave notice of the SSAs in November, and the measure went through the House in January. Local authorities did not have enough time to respond to the criteria. When they met the Department of the Environment and attempted to have their SSAs changed, they were told that they could not negotiate their SSA because Parliament had already agreed the formula. The Government told councils that they would be poll tax-capped from the beginning of the financial year, but that they had a right to appeal.

The Government created a conflict between two principles for local authorities. Members elected to a local authority must spend the authority's money in the best possible way under the duties laid on them and regulated through the Audit Commission. They must bear in mind the best expenditure for their local authority. They also have the right to appeal. They exercised that right to appeal, but limited though their right was under the poll tax legislation, Conservative Members castigated them for doing so.

I ask any Conservative Member of Parliament for a constituency in Avon or anyone outside the House to tell us where £57 million can be cut from Avon's education budget and why Bristol should be penalised because its expenditure has increased as a result of the Government's legislation. The arrangements are profoundly unfair and undemocratic and should be challenged in the highest court in the land. The legislation is inappropriate, unfair and discriminatory and the Government should be ashamed of themselves for claiming that they introduced it in the name of democracy.

7.58 pm

Within the last few weeks, Mr. Speaker was gracious enough to grant me an Adjournment debate, when I spoke at some length about the effect of charge capping, and especially of mismanagement, on education. I was not consulted by the local authority when it set a community charge of £450. I was not consulted about the safety net and the low rate assessment that reduced its community charge to £290. Nor was I consulted by my right hon. and hon. Friends on the Front Bench at any stage before capping was imposed. I delivered messages on behalf of my local authority, pointing out to Ministers that there was and still is a budget on the table that would bring Calder Valley's expenditure down to a figure below the charge-capped rate with no loss of services or jobs. According to an extensive survey by the Halifax Evening Courier, 75 per cent. of Calderdale people want charge-capping.

As the hon. Gentleman and I share the same local authority, will he spell out where £7·5 million of cuts can be made? I have seen only an exercise involving secondary heads of expenditure, which involves picking off other people's jobs, not those of the individuals making the proposals. The hon. Gentleman is short on detail.

If the hon. Lady will refer to the minutes of the meeting of Calderdale council held in March, she will see the proposed cuts set out exactly. If she does not have that information, that is her fault, because it has been available since March. It is the responsibility of the local council to make reasonable and sensible cuts of 5 per cent. from the total budget of £1,020 per head. It is required to make a saving of only £52, and most of my constituents are eager to see charge capping, believing that is a correct and reasonable method of control. Some are already demanding that local councillors be surcharged for the £50,000 that they have wasted in pursuing their arguments through the courts.

There is some question whether the Government could be more generous in respect of highways, but that is a matter of priorities and has nothing to do with the overall figure of £1,020. Calder Valley is the most prosperous manufacturing area of West Yorkshire. Unemployment there is down to 3·5 per cent. It has some tourism, but it is mostly concerned with manufacturing industries that are increasingly more sophisticated. "Business in the Community" and other programmes have revitalised the area. However, there has been a sea change, in that Labour has rejected all that has occurred over the past 10 years. The party's official spokesman says:
"In the last 10 years the destiny of our district has been largely dictated to us by people from outside".
Those are the words of a begging bowl councillor who is after every penny that he can get. He goes on:
"We have been available to anybody with a few bob to take their pleasure of us when it suited them."
Inward investment is now despised. He continues:
"The coming of tourism may have brought cleaner buildings and the much vaunted Business in the Community partnership has created interest from speculative developers".
What an arrogant load of nonsense. And having seen employment increase to nearly 97 per cent., that Labour spokesman says:
"Our need is not just jobs".
That sea change has manifested itself after many years of a Lib-Lab pact involving rate rises year in, year out, at a figure way above inflation. This year, it has manifested itself in a community charge of £450, alleviated by the Government's £160 safety net. At the time of the world cup, and of the remarks by a High Court judge about refereeing, it also manifested itself as Halifax Town 5, children 0, and as Indigenous Voluntary Groups and artistic endeavours 0, somebody else's ballet 4.

There is now a threat that Calderdale schools will be put on a four-day week and a proposal to take all the children down to the Shay. I know that you, Mr. Deputy Speaker, are a great football supporter. If you want a free ticket for the stand, come and join the other 800. I am a shareholder. It has been suggested that the children should be taken down to the football ground once a week to be taught, or to Springhall, which we are giving away.

The local authority is appalling. It persuaded a ballet company to come to Calderdale when Manchester could not afford it. The ballet company had a deficit of £250,000. I enjoy ballet, but not at a cost to the community charge and to my children's education. The council's priorities are wrong. Of course there should be equal opportunities, but they should not cost £250,000. We do not want a budget that includes another £500,000 and involves 109 new jobs since community charge capping was introduced. A budget is available that will meet all the requirements. It is not for me to spell it out.

The budget is available for the hon. Lady to scrutinise if she wants to. There is none so blind as she who will not see.

An appalling, unreasonable and unnecessary threat is being posed to Calderdale schoolchildren and voluntary groups. The suggested budget still puts Calderdale's charge £110 above the standard spending assessment, and it cannot be that far out. Calderdale council and the Labour group have entirely changed direction. They have slipped back into something circa 1972. They should not be allowed to get away with it, and they will not be allowed to get away with it.

8.6 pm

As there was some question at the beginning of the debate about Labour's position, I make it clear that I speak as someone who spent 37 years serving on borough councils, the greater London council and the Inner London education authority under both Labour and Conservative Governments, both as a member of the majority and minority groups. The principle that I followed throughout that period was to support the rights of local authorities to conduct the business that they had been elected to conduct by their electorate, without central Government intervention or interference.

When, in 1972, a Conservative Government under the right hon. Member for Old Bexley and Sidcup (Mr. Heath) introduced the Housing Finance Act, which forced local councils to increase rents, I opposed it. I consistently opposed central Government's stranglehold on the rights and responsibilities of local government. That process accelerated with each passing year. But for all my complaints about the actions of the Government of Jim Callaghan, who imposed a major series of cuts in local government support and spending, together with increasing controls under section 106 of the Housing Act 1974, that all pales into insignificance compared with the vicious series of measures taken year after year by the present Administration.

We have reached the point where local government has almost been squeezed to death. The options open to councillors, be they Labour or Conservative, are minuscule. They are caught between a Government who have taken dramatic new powers and made massive cuts in central Government support for local government and their local electors, who want an improved quality of life. I have noticed among Labour and Conservative authorities a continuing falling off among the best and brightest local authority members. It is increasingly difficult for all political parties to find people prepared to stand for election, given that Britain is increasingly being run from Whitehall.

The point has almost been reached when the only decision left to councillors is whether they should have hard or soft toilet paper on council premises. It is an absolute disgrace. While the rest of the world is moving towards decentralisation and devolution, the Government end up controlling almost everything. It is an obsessive form of centralisation that has more in common with the regimes now being swept away in eastern Europe than with a modern western democracy.

Over the past 11 years, we have seen a series of new measures as central Government sought to tie local authorities down. There has been absolutely disgraceful contempt for democracy. When councils are elected committed to improving services, the first thing the Government do is to claw back the various grants given to them.

The Labour-controlled Greater London council was elected in 1981 with a clear commitment to reduce fares, but within a month the then Secretary of State for the Environment said that all the remaining rate support grant would be withdrawn from the GLC if it carried out the policy for which the people had voted. The Government have dragged in more and more complicated, ludicrous and damaging measures as councils have fought to defend the services for which they are responsible. I am not surprised that, over the past year, increasing numbers of Conservative councillors have resigned the whip to express their disgust. This capping is the final straw.

I yield to no one in criticism of Brent council when it has been wrong, when its services have been inadequate and when it has made mistakes. I do not believe that I should be a public relations mouthpiece for a council simply because it has a Labour majority. My job is to represent the views of the people of Brent to the council and when it made mistakes, that is what I sought to do. However, many of the Government's charges are wide of the mark. I complained about Brent's cuts, not because it has not made enough cuts.

Two years ago, when Brent council finally gave in to Government pressure to restrict its spending, it made devastating cuts. I remind the House of the cuts that have already been made as we consider whether we should pass orders that will demand another £5 million-worth of cuts which, because they must be made in little more than half a year, will effectively be cuts of about £10 million.

Two years ago, £17 million was cut from Brent's budget under Government threats of surcharge. Two thousand jobs were lost. Four years ago, the council employed 13,476 staff. Today, it employs 9,785. That is a 25 per cent. cut—one job in four has been lost. How many more jobs do the Government want to see lost? We cannot deal with a further cut by a little administration or central bureaucracy. All that is left is to cut teachers' and social workers' jobs and the jobs of those wonderful people who provide home help and the direct support services. That is the scale of the cuts that Brent has already made by complying with the Government's demands.

As well as the 2,000 jobs that were lost two years ago and those that have been lost since, seven day nurseries have been closed and there was a £7 a week rent increase. There was a massive increase in rent arrears because many people could not afford another £7 a week. There were also reductions in refuse collections and street sweeping. All the public conveniences were closed in the borough. There were cuts in home helps for the elderly and residential homes were closed. There were major reductions in the grants to voluntary organisations, and 300 teachers left schools following the cuts in school budgets.

Discretionary grants are vital to an inner-city area. They were cut back and back. Last year and this year, while Brent received applications from 1,500 young people for those grants, it has made only about 150 grants. Only about one in 10 people are receiving grants in an area in which many people have missed their first educational opportunity and therefore desperately require a chance to catch up.

The Government should not tell us that the problem will be solved if we no longer declare Brent a nuclear-free zone. It does not cost anything to administer a nuclear-free zone. We do not have to employ people to take away nuclear missiles or trundle through the nuclear waste. The nuclear-free zone is a propaganda ploy against the Government's nuclear policies. It does not cost anything.

The Government should not tell us that we can save the necessary amount of money by closing down and getting rid of the remaining one and a half staff working in the ethnic minorities unit. It is no good telling us to close the women's unit, because that was closed two years ago. If the Government press ahead with the £5 million cut, they will cut into the key services upon which the most deprived and disadvantaged sections of the community depend.

I have a feeling that Brent was included among the capped authorities simply because it is an easy target after four years of rubbishing by the media. In real terms, Brent's budget four years ago was £174 million. At constant prices, it is £158 million this year. Were it not for the change to the poll tax system, if we had retained the rates, the rate in Brent would have been reduced this year. I would not have been in favour of that, given the need for services.

Brent is the eighth most deprived borough in the country. It is being forced to make a contribution of more than £17 for each of its residents to the national safety net. The eighth most deprived borough is supporting and subsidising people in Westminster and Wandsworth to provide the bribe which paid off so well for the Government. That is a disgrace.

It is estimated that it will cost £400,000—nearly half a million pounds—to recalculate the new poll tax.

I was interested to hear the hon. Gentleman say that Brent was subsidising Westminster through the safety net. Can he square that with the fact that Westminster is paying £75 to the safety net?

The hon. Gentleman is right. I should have stuck to Wandsworth. Westminster got its bribe almost directly from central Government. I wish that we had had the same level of bribes in Brent. Anyone can win an election if £27 million or £29 million is poured into a small area.

If a limited company in Britain operated on the principles adopted by the Government in allocating grants, the people running that company would be inside for fraud for a very long time. If a Labour Government had operated the system in that corrupt way, the Daily Express, The Sun and the Daily Mail would be screaming that we were turning Britain into a corrupt banana republic and that that sort of thing happens only in the third world. We can imagine the abuse.

No one in local government can plan. No one can know from one year to the next how the system will be changed. Many of the best people in finance departments are leaving because they are not prepared to work under those conditions. However, there is an alternative. The Labour party is still discussing the matter, but I can tell the House what it should be arguing for. It should not be arguing for this poll tax nonsense with its capping and other paraphernalia. We should give local government real independence. There should be a shift of power away from Whitehall down to local government. Local government should have a taxing power. I should be much happier if we could sweep the poll tax away and return to the old rates system in which central Government support for local government was adequate to the task. Or, and this would be my real preference, we should have a local income tax with a redistribution element organised by central Government.

There are alternatives. The poll tax is just about the worst possible system that anyone could devise. Given the unpopularity that the Labour administration in Brent managed to achieve two years ago, we all expected that Labour Brent would be swept away. I do not think that we expected to win 20 seats. We won 29 seats and had a hung council in Brent because the poll tax became even more unpopular for the Government than the mismanagement of the administration at Brent town hall.

The election in Brent was a race between the unpopularity of the council and the unpopularity of the Government. Everyone canvassing in the area was aware that people did not know who to vote against. They wanted to vote against almost everyone. I should like central Government to pull back so that local government —whether Labour orConservative—can be judged on what it does and on its abilities, given the resources that it takes from people.

Over the past decade of increasing central Government control, no one has been responsible or accountable. How can we blame councillors for the poll tax mess? They cannot control the resources and they often know what is happening only at the last minute. I was leader of the GLC when we saw the earlier example of this sort of nonsense, in the form of rate capping. At least with rate capping we were told in December what the cap would be. We had time to launch a legal challenge and to get a budget through. By the time the decisions are reached on poll tax capping, we will be almost halfway through the financial year.

The Government are rushing this through for the most venal of electoral reasons. At the end of the day, they will reap the whirlwind as the most deprived areas erupt. Everything is cut to the bone and there is nothing left to cut that will not cause the most acute pain to the most deprived sections of our communities. The Government must know what they are doing before they insist on this.

8.19 pm

Mr. Michael Shersby
(Uxbridge)