House Of Commons
Tuesday 26 November 1991
The House met at half-past Two o'clock
Prayers
[Mr. SPEAKER in the Chair]
Oral Answers To Questions
Employment
Mature Women
1.
To ask the Secretary of State for Employment what measures his Department has introduced to help mature women get back into the work force.
Some 2·5 million more women are now in work than in 1983. That encouraging development has been assisted by a wide range of measures undertaken by the Government. They include the deregulation of labour markets, where there has been a 29 per cent. increase in female part-time employment and an almost threefold real-terms increase in Government-funded training programmes, in which women participate extensively.
I thank my hon. Friend for that reply and understand the Government's appreciation of the need for mature women in the labour market. Will he find time to consider the plight of my constituent, Mrs. Christine Williamson, who, after 25 years at home nursing a severely disabled child is now able to go back into the labour market, but finds herself in a Catch-22 situation? She cannot get a job without training and she cannot get training from the Basildon authorities so as to make herself available for work.
Order. That would make a good Adjournment debate.
That, she tells me, is because the training is given to school leavers.
I shall be happy to talk to my hon. Friend about her constituent's case. On the face of it, my immediate response is that, first, she should contact the local training and enterprise council, which will do its best to help. Secondly, I draw her attention to the career development loan scheme which the Government are funding. That is a helpful and positive scheme which has been developing successfully in recent years.
Is the Minister aware that the occupational apartheid that exists in this country is clearly the result of over-costly and inadequate child care facilities and inflexible and unsatisfactory training provision? Precisely what do the Government intend to do to ensure that mature women have access to the proper sort of training and the necessary child care to allow them to play their full role in the labour market?
I know that the Labour party is likely to conduct a vendetta against part-time workers, many of whom are women, although when women are asked what they think about part-time work, they reply that they very much appreciate it. We are doing more for training than any previous Government and the Labour party is in no position to lecture us on that subject.
Ec Social Charter
2.
To ask the Secretary of State for Employment what assessment he has made of the effect implementation of the EC social charter would have on unemployment in the United Kingdom.
Much of the proposed legislation under the European Commission's social action programme would be very damaging for the United Kingdom. The working time directive alone would impose crippling costs of more than £5 billion on United Kingdom employers. That assessment is confirmed by analysis from business and independent academic organisations.
In view of my right hon. and learned Friend's comments about the £5 billion cost of implementing that programme, will he give a categorical assurance that there is no way, in any circumstances, in which the present Government—or any Government if they were acting responsibly—could possibly accept the social charter? Would not it be a recipe for disaster in the offshore oil industry, in agriculture and in the hotel and catering industry? Would not it be a disaster for part-time workers, women workers and, indeed, all workers in Britain?
My hon. Friend is right. I assure him that the Government will do all that they can to resist the imposition of such measures on this country. However, I must tell him that it is a draft directive, which has been brought forward by the Commission, utterly spuriously, on grounds of health and safety. As such, it is alleged that it is appropriate to be dealt with on the basis of qualified majority voting. Although we shall do our utmost to resist it, I cannot give my hon. Friend a guarantee that we will be successful in that endeavour.
Is the Secretary of State concerned that some workers in Britain get such low wages that they are forced to apply for social security benefit? Does he believe that bad employers should be subsidised by the state in that way? If not, why will not he accept the provisions of the social charter which would attack the problem of low pay?
In fact, the social action programme does not contain proposals related to low pay, as the hon. Lady suggested. Family credit is one of the great advances of social legislation. It is one of the ways in which we ensure that, so far as possible, people are better off in work than out of work. If the hon. Lady would read some of the reports from the OECD and other reputable organisations, she would see the extent to which those organisations commend our practices in those matters.
My right hon. and learned Friend said that he would do all that he could to resist those directives. In view of his assessment of the damage that they are likely to cause to employment in this country, will he say under which article of the treaty of Rome they have been proposed? If the Government do not have the power of veto and we risk having those directives imposed on us, it is an extremely serious matter.
I agree that it is a serious matter. The directives are proposed under article 118A, which is subject to qualified majority voting. I am doing my utmost to persuade my colleagues in the Council of Ministers that it would make no sense, for the European Community as well as this country, if the directives were promulgated in their present form.
Is not the real reason why the Secretary of State makes those absurd and fictitious claims about the effect of the social charter, which bears no resemblance to the reality of the proposals, that he dare not admit that the Government are opposed, not just in detail but in principle, to the idea of binding employment standards across the Community? Will he now answer the question of the hon. Member for Brigg and Cleethorpes (Mr. Brown) and confirm that when the Prime Minister goes to Maastricht he will sign no treaty that allows qualified majority voting on any aspect of employment law?
What the hon. Gentleman said at the beginning of his question was entirely wrong. I refer him to the independent Centre for Economic Policy Research, where Professor Denis Snower recently published a document saying:
This year's Employment Institute economic report on the social charter found that"Implementing the social charter may be expected to hurt precisely those workers it seeks to help, in addition to raising unemployment and reducing investment".
As for the hon. Gentleman's question, the Prime Minister made the Government's position entirely clear in a debate on that matter in the House last week."attempts by the Government to foster labour market flexibility … will be undermined by the directives presently contained within the Social Action Programme."
Training And Enterprise Councils
3.
To ask the Secretary of State for Employment what representations he has received from the Transport and General Workers Union about training and enterprise councils.
None, Sir.
Does my right hon. and learned Friend agree that the Transport and General Workers Union has been wrong on all the major issues facing the country in the past 12 years? It has been wrong on unilateralism and trade union legislation and wrong about the man whom it picked to lead the Labour party. Will not it be wrong yet again on the training and enterprise councils?
I agree with my hon. Friend. It is noteworthy that, last July, the TGWU voted to boycott youth training, employment training and the training and enterprise councils on the day before the Leader of the Opposition went to its conference and said that, in so many ways, that union was the Labour party. I hope that the hon. Member for Sedgefield (Mr. Blair) will, in the House this afternoon, condemn the antediluvian attitudes of the TGWU, which sponsors him, and which turns its back on help for the unemployed made available by the Government.
Does not the Secretary of State understand that it is precisely because the TGWU is so committed to effective training and the future expansion of British industry that it is not prepared to give credence to the Government's sham arrangements? When will the Government provide effective training with effective allowances? Do not the Secretary of State's earlier answers make it clear that his vision of Britain in the future is a low-wage economy with the worst employment conditions in Europe?
That is an interesting question. The hon. Gentleman obviously does not think that training and enterprise councils should be supported. I shall be interested to discover whether that view is shared by the Labour spokesmen who trail round the country assuring training and enterprise councils of their support. Which is the true view of the Labour party? The hon. Gentleman criticised youth training, when almost 90 per cent. of those who complete youth training go on to a job or further education and two thirds of them obtain a qualification. How dare the hon. Gentleman cast a slur on the training arrangements currently in place in this country?
Is not the problem with the TGWU the fact that the only objective that it regards as important in the House is to support the Labour party? That is why the TGWU will not invite to any of its meetings in the House any Member of Parliament who is not also a Labour party member. That shows how biased the TGWU has become in its policies.
I am grateful to my hon. Friend for that example, which I had not previously come across. It demonstrates that there is no limit to the idiocy of the TGWU in such matters.
Bank Holidays
4.
To ask the Secretary of State for Employment if he will list the total number of bank holidays in each of the EC countries.
Only the United Kingdom and Ireland have bank holidays as such. A detailed list is available in the Library, but the number of public holidays varies between seven in the Netherlands and 14 in Spain. Most countries have nine.
The Minister has different figures from the official figures in the Library. Will he confirm that Britain, with eight bank holidays, has fewer national public holidays than any other European Community country? Given that we hear so much from the Government about level playing fields, is not it time that we had a level playing field in employment conditions? Will the Minister introduce in the near future proposals enabling us to have at least as many national holidays as other European countries?
It is interesting that the hon. Gentleman is anxious to bribe the electorate with yet another promise. He was incorrect to say that we have fewer national holidays than any other European country—the Netherlands has fewer than us. He also ignored the fact that the majority of other European Community members do not give a compensatory day off when a national holiday falls at a weekend, as is normal practice in the United Kingdom. I wonder whether the hon. Gentleman has made an estimate of the cost impact on British business or the United Kingdom economy of the proposal that he apparently makes so glibly. If his suggestion is yet another example of the well-thought-out policies of the Labour party, we should he given a carefully calculated costing of such a proposal before it is introduced in such a casual manner.
Is not there a case for introducing a statutory bank holiday between the August bank holiday and Christmas, which is a long period? Should not there also be a statutory holiday to coincide with half-term?
I am aware of a wide body of opinion that exactly supports my hon. Friend's proposal. However, there is an equally wide body of opinion, expressed mainly by manufacturing industries, which oppose such a move because it believes that it would disrupt the long period of uninterrupted production between the August holiday and the Christmas break. It is a finely balanced argument and so far we have not been persuaded by my hon. Friend's case.
Unemployment
5.
To ask the Secretary of State for Employment what is the total increase in uneployment throughout the countries of' the Common Market during the past year; and what was the percentage of that increase in the United Kingdom.
No comparable estimates are available on the numbers unemployed in European Community countries or on the proportion of the increase in European Community unemployment resulting from rises in unemployment in the United Kingdom.
The right hon. and learned Gentleman knows that he is avoiding the reality because it is so embarrassing. We had a slump in 1981—long before anyone else—which was when our unemployment problem began. We are now in a second slump, which will continue for a long time yet, and unemployment is rising. Will the right hon. and learned Gentleman admit that more than 80 per cent. of unemployment in the whole of Europe during the past year was in this country?
That is a misleading statistic. Far from avoiding reality, I was merely seeking to answer the hon. Gentleman's question. If he is interested in what is happening in the European Community, he could do no better than cast his eyes across to France where a socialist Government have just announced that country's highest-ever unemployment level.
Can my right hon. and learned Friend tell the House of any European Community country with a higher proportion of its adult population in work than the United Kingdom? Will he tell us which European country enjoyed the greatest growth in the number of jobs during the 1980s?
My hon. Friend is right. Between 1983 and 1989, the latest period for which comparable figures are available, more than twice as many jobs were created in Britain compared with the rest of the EC.
Why is it that in the 12 months to September this year unemployment in Europe rose by 7 per cent., but in the United Kingdom it rose by 40 per cent? Why is it that among men in the 11 other EC countries unemployment rose by 86,000, but in the United Kingdom it rose by 609,000? Why is it that among women in the 11 other EC countries unemployment fell by 32 per cent., but in Britain it rose by 172,000? Is not that the result of the Government's characteristic incompetence? Does not that show that on the European front we are moving towards not convergence, but divergence? We have supplied the answers that the Minister refused to give to my hon. Friend the Member for Sheffield, Hillsborough (Mr. Flannery) this afternoon.
The hon. Gentleman is wrong. If he wants to make European comparisons, I refer him, as I referred the hon. Member for Sheffield, Hillsborough (Mr. Flannery), to what is happening in France. I hope that the hon. Gentleman recognises that the increase in unemployment last month was the lowest for almost a year, that it was the third successive fall in the rate of increase and that it shows that the rate of increase in unemployment in Britain is now coming down fast. I hope that the hon. Gentleman will welcome that development.
Would it not be reasonable to be a little more objective? I think that it is an open secret that if the misfortune of a Labour Government being returned at the next election were to befall Britain there would be the mother and father of financial crises, which would lead to an increase in interest rates of at least 2 per cent. What effect would that have on employment in the United Kingdom?
My hon. Friend is right, but he is characteristically modest in his assessment. He referred to only one of the Opposition's policies that would wreak havoc on the British economy. In addition, there are the policies that they have been advocating from the Front Bench this afternoon on the European social action programme, a national statutory minimum wage and trade union law reform, which would make it easier to strike and to have more frequent and more damaging strikes. All that would reinforce the particular policy to which my hon. Friend referred and would damage tremendously the prospects of the British people and destroy countless jobs.
Does the Secretary of State agree that the recent announcement of 300 pay-offs in Harland and Wolff, which has just had an increase in its order book does not augur well for the economy? Do not the Government need to give more attention to devising a regional strategy within Europe?
I especially regret those redundancies, as I regret all redundancies. However, the hon. Gentleman will know that the Government have gone to great lengths to help the Northern Ireland economy and I am sure that the measures that my right hon. Friend the Secretary of State for Northern Ireland is taking will continue to alleviate the situation in the Province.
Small Businesses
6.
To ask the Secretary of State for Employment when he next plans to meet representatives of the small firms sector to discuss the problem of small businesses.
My right hon. and learned Friend and I have frequent meetings with representatives of the small firms sector and will continue to do so.
Can my hon. Friend confirm that it is the Government's intention to continue to reduce taxes and deregulate, both of which will help small businesses? Is he aware that the Opposition claim to be the friend of the small business man? How does my hon. Friend think that they square that with their policies of imposing a payroll tax on small businesses and of gaoling small business men who fail to pay a socialist minimum wage?
My hon. Friend has made some important points. It is correct that Britain has one of the lowest rates of corporate tax in the developed world, something from which our businesses, large and small, have benefited enormously over the years. The Government are committed, when possible, to continue to drive down burdens on industry and rates of tax. It is equally true that Opposition Members seem obsessed with pursuing the business community with prosecutions and they frequently question me about that across a wide range of Government policies—something which I regret, but with which I have become rather familiar. The Government are committed to increasing the possibilities for businesses, large and small, and to encouraging the growth of businesses and self-employment. Our policies have been a huge success up to now and we are determined to ensure that they will continue to be so.
Does the Minister accept that in a recession in which many small businesses have gone to the wall, their failure is often identified with the late payment by large companies of their debts? What steps, other than expressing sympathy and exhortation, will the Minister and the Government take to enforce interest payments on debt and to streamline court procedures, so that it will not be too burdensome for small businesses to pursue their creditors?
There have been a number of business failures over the past, very difficult, few months, but I hasten to add that the level of new business start-ups remains resilient and robust. Under the national enterprise allowance scheme administered by the new training and enterprise councils, 1,000 new businesses have been coming into existence every week this year. I am conscious of the late payment problem, which is something to which we are devoting great attention.
Recently, we issued a new package of measures, "Making the Cash Flow", in consultation with the Institute of Credit Management and the Confederation of British Industry. I have personally written to the chairmen of the country's 100 largest companies urging them to regard prompt payment as a matter of best practice. However, I remain to be convinced that legislation would be beneficial. As yet, the bulk of the country's small business organisations are not persuaded either, but I will keep a close eye on that matter.
Does my hon. Friend recall that I was the first Minister to have responsibility for small businesses—even before the hon. Member for Bradford, South (Mr. Cryer)? Will my hon. Friend do as I did and haul the leading debtors among large firms before him, to tell them that unless they jolly well pay their debts, Government legislation to force them to do so will follow? Will my hon. Friend also bear in mind—
Order. One question, please.
In his discussions, will my hon. Friend bear in mind the fact that small firms want, more than anything, a reduction in interest rates?
I am constantly conscious of my illustrious predecessors and daily find it difficult to fill their shoes. As I said when answering the hon. Member for Orkney and Shetland (Mr. Wallace) I have written individually to the chairmen of the 100 largest companies urging them to pay close attention to settling their debts on time. I have received personal replies from most of them, giving me assurances that that will be done. I extend a standing invitation to any firm that is not being paid on time by any of the country's 100 largest companies or Government Departments to allow me to take up its case individually. I have already done so with some success in a number of instances and I hope to continue doing so.
The Government are supposed to support small firms, but is not the reality that they have been betraying them? High interest rates have driven hundreds of thousands of small firms out of business over the past 10 years and the loss of more than 2 million jobs in manufacturing industry has carried with it, to their doom, many small firms that depended on larger businesses. Is not it the case that the sooner the Government face a general election and are defeated, the sooner small firms will have a decent chance in the economy?
I am surprised that another of my predecessors—I choose my words very carefully—should show such ignorance about the small business sector. My figures show that although there were 34,000 business failures in the first nine months of this year, every week 1,000 new businesses have come into existence under the enterprise allowance scheme alone. The National Westminster bank, for example, opened 76,000 new small business accounts in the first six months of this year, which suggests a robust small firms sector. Although I would be the last to claim that small businesses are without their problems, it is a great tribute to the entrepreneurs and to the small business men of this country that they can deal with difficult circumstances in such a way. We pledge to continue to support them in that. I invite them to examine the Opposition's policies to see how they would fare under a Labour Government.
Is not it true that a large number of small firms are in the tourism sector? Will my hon. Friend confirm that he received representations from both the British Tourist Authority and the English tourist board about the damage that would be done to the industry by the restrictions on part-time working and on working hours which are so beloved of Labour?
Only yesterday, my hon. Friend and I met a number of eminent representatives of the tourist industry from across the European Community. They expressed the unanimous view that the proposals contained in the working time directive, which is to be considered by the Council of Ministers next week, would be extremely damaging to the tourist industry throughout the Community.
We in this country are very much aware of the problem. My right hon. and learned Friend the Secretary of State will take the case to his colleagues in the Council of Ministers and ask them to look again at the proposals, which would be damaging not only to British industry but to industries—including tourism—right across the Community. We hope that we shall be able to make sense prevail.Employment Statistics
7.
To ask the Secretary of State for Employment how many people are in employment in Leeds, West.
The most recent estimates of employment by parliamentary constituency are from the September 1989 census of employment, when there were 25,100 employees in employment in the Leeds, West constituency.
Unemployment in my constituency has risen by 43 per cent. in the past year, and there has been a marked increase in temporary and part-time working. Is the Minister aware that the cracker he pulls this Christmas will probably have been packaged by a home worker, as will the Christmas cards and gift tags? Does he realise that home workers in my constituency receive as little as 40p an hour? What action will the Government take to ensure that home workers obtain well-paid, reasonable employment—or does the Minister intend to revel in the Christmas season while home workers cannot afford to do so?
Yet again, Labour is demonstrating that it is engaged in a vendetta against part-time workers. I hope that part-time workers will take note of that. Labour's policies would eliminate the part-time and home-working jobs that are available. I wonder whether the hon. Gentleman really appreciates the consequences of the policies that he supports.
Catrine And Dalmellington Offices
8.
To ask the Secretary of State for Employment what representations he has received regarding the proposal by the Employment Service Agency to close the offices at Catrine and Dalmellington.
I have had three representations, including the hon. Gentleman's own.
Cumnock and Doon Valley district council was grateful to the Minister for holding a meeting with the council and with me. Does he recall, however, that at that meeting we pointed out that unemployment in Catrine and Dalmellington is about 14 and 15 per cent. respectively, and that male unemployment is about 18 and 19 per cent. respectively? Is this not a strange time to close offices which provide assistance for so many unemployed people? Will the Minister think again?
I very much appreciated the opportunity to meet some of the hon. Gentleman's constituents in a delegation. We had a very useful discussion, as a result of which steps have been taken—particularly in Dalmellington, where there is an asbestos problem, making it unfeasible for the building to be reopened, but we are extending the outreach facilities there following the meeting, and I think that the hon. Gentleman is making progress. We are improving what the employment service has to offer in the new integrated offices, as all hon. Members who have been to see them will know. That includes offices in the hon. Gentleman's constituency.
Unemployment
9.
To ask the Secretary of State for Employment what was the level of unemployment in 1979, 1983 and 1987; and what it is now.
On the consistent seasonally adjusted basis. United Kingdom unemployment was 1,052,500 in October 1979, 2,819,200 in October 1983, 2,641,900 in October 1987 and 2,472,900 in October 1991.
Does the Secretary of State imagine that such figures could have been given to any other Parliament in the European Community—especially in a country that had enjoyed a North sea oil bonanza over the years? Is this not utterly disgusting? Can the Secretary of State tell us the real social cost to our country of the devastation of our manufacturing industry and our economy? When will the Government retire from office so that something can be done?
Unemployment is higher in a number of other European countries. In socialist France, it is now higher than it has ever been in that country's history. Unemployment is rising in every European country except Spain, where it is nearly twice as high as it is here, and in every European Free Trade Association country, and in every G7 country it is higher than it was a year ago. Those are the facts which the hon. Gentleman should remember when supporting his own party's policies, which would destroy countless jobs in this country.
Is the Secretary of State aware that every Labour Government since 1929, bar one, has doubled unemployment? Has he any evidence that Opposition policies could convince us that a future Labour Government would be any different from past ones?
My hon. Friend is entirely correct. The one exception to that doleful list of Labour Governments who doubled unemployment during their term of office saw unemployment increase by 50 per cent. The raft of policies that the Opposition are putting before the British people would be devastating to job prospects, and so ashamed are they of the consequences of their policies that four Labour members of the Select Committee on Employment last week voted down a proposal to hold an inquiry into the effects of national statutory minimum wage because they wanted to hide the truth about that policy from the British people.
As the Secretary of State introduced employment action as an emergency programme for the jobless almost six months ago, since when unemployment has risen by several hundred thousand, can he tell us precisely how many people are on employment action?
Employment action is making excellent progress. The last time the hon. Gentleman raised the subject of employment action in the House, he criticised the Government for providing funding for only one year. The funding is now secure for three years.
But how many people are on it?
If the hon. Gentleman is seriously concerned about unemployment—[Interruption.]—he ought to have a word with his hon. Friends on the Select Committee who tried to cover up the consequences of his policy. [Interruption.]
Order. Noises of this kind are very unseemly.
Is my right hon. and learned Friend aware that in 1983 unemployment in my Leicestershire, North-West constituency was 14 per cent. and that now it is 6 per cent? Is he also aware that we lost 6,500 jobs due to mine closures and that 1,000 additional jobs have been created—a total of 7,500 extra jobs since 1983? Does that not show that the Government's policies over the years have been courageous?
The experience in my hon. Friend's constituency is typical of the experience across the country. There are more than 2·5 million additional jobs now, compared with 1983. That is the result of the policies that have consistently been followed by this Government. A large number of those jobs would be destroyed if the Labour party were ever in a position to put its policies into practice.
London Weighting
10.
To ask the Secretary of State for Employment what is the average level of London weighting allowance paid to employees in (a) inner London and (b) outer London at the latest date of which figures are available.
The Department does not collect data on London weighting allowances.
The Minister is probably aware that the additional cost of living in inner London is more than £4,000 per year and in outer London more than £3,500 per year. Given that the private sector median allowance is £1,500 extra in inner London and £1,000 extra in outer London, will the Government ensure that their public sector pay policy follows the private sector and that they compensate people who work in London for the substantial additional cost of living in London?
It would be fascinating to speculate on why the cost of living in inner London is so high. The hon. Gentleman and I might be able to agree that it is not unadjacent to the fact that so many inner London authorities are controlled by the Labour party. The hon. Gentleman knows that questions relating to civil service pay determination and detailed pay arrangements are a matter for my right hon. Friend the Chancellor of the Exchequer. I am therefore unable to answer this question today, but I will bring the hon. Gentleman's point to the attention of my right hon. Friend the Chancellor.
Does my hon. Friend agree that London is only one of several areas where costs are wildly out of line with the national average—sometimes higher and sometimes lower? It would be healthy for public services and for dole queues if we could move away from national wage bargaining in a variety of areas.
My hon. Friend makes an important point. Average earnings in London are about £100 per week higher than in regions outside London. The marketplace has, therefore, already taken some account of the differentials. My hon. Friend is correct—it must make sense to have pay bargaining as near as possible to the point and location of work so as to make the labour market work as efficiently as possible and to reward people as fairly as possible.
Small Businesses
11.
To ask the Secretary of State for Employment if he will make a statement on the economic prospects for the small business sector.
There are now unmistakable signs of the end of the recession. Business starts continue at a high rate, with more than 1,000 per week throughout the spring and summer under enterprise allowance alone. Interest rates have been cut eight times since last October. Inflation is at its lowest level for three and a half years.
The Government's past success in transforming the economic environment for small firms has been further reinforced through the efforts of employer-led, locally based training and enterprise councils and by the recently announced seven-point package of measures to help small firms and enterprise.I am grateful to my hon. Friend for that good news and for the justifiable concern that he expressed earlier about late payment of debt. He will be aware that there is still a problem in my constituency and the south-west with the burden of the business rate, but is not the last thing that small businesses want the layers of bureaucracy that would result from 10 new regional assemblies, new sex and race discrimination legislation and the hundreds of new quangos that Labour would put into practice in its first year of office?
We shall draw the attention of the business community, especially small businesses, which are such an important part of the economy in my hon. Friend's part of the world, to the policies being espoused by the Labour party and make some estimate—if the Labour party will not do so, we certainly will—of the real burdens that they would place on business and the devastating impact that they would have on self-employment and employment throughout the country.
Mr. Speaker, Sir, ever since this Minister filled his predecessor's boots, he has been talking a load of rubbish. His party and that lot behind him have crucified small businesses, and the end result is the loss of many jobs. He wants to get out of that office, get out into the areas, find out what is going on and do something about the problem, or I will kick his backside for him.
One of the great regrets, I am sure, of all hon. Members is that because the hon. Gentleman has chosen to leave us at the next election he will never have the opportunity to be a junior Minister. Had he been one, he would know that a large part of the duties of anyone holding my office is to meet business men and their representatives to discuss their problems and concerns. My colleagues and I spend much time doing that. I assure the hon. Gentleman that we are fully aware of the difficulties of the business community and that we shall continue to listen carefully and to tailor our policies to its needs. Perhaps the hon. Gentleman could persuade his colleagues on the Opposition Front Bench to do the same.
Wage Levels
12.
To ask the Secretary of State for Employment whether he has received any representations from the Confederation of British Industry concerning wage levels.
I have received no formal representations from the CBI, but I am aware of its view that pay settlements need to be more realistic if competitiveness is not to be damaged.
Does my right hon. and learned Friend agree that Labour's proposals for a national minimum wage may seem superficially attractive but would be deeply damaging to business, particularly small business, and to job prospects?
I agree entirely with my hon. Friend, and so does every independent study and assessment that has been made of this matter. As the Leader of the Opposition has joined us, perhaps he will use his influence on the four members of his party who voted last week to cover up the truth by refusing to permit the Select Committee on Employment to conduct an investigation into the true consequences of a national minimum wage.
Is it not the case that although the wage increases of British workers have come down the benefits of that have been dissipated, and that due to the recession induced by the Government productivity has gone down although it has gone up in Germany and as a result unit labour costs in the year to the second quarter of 1991 went up by 3 per cent. in Germany but by 11 per cent. in this country? With a fixed exchange rate, has not this country badly lost competitiveness?
It was the hon. Gentleman's casting vote as Chairman of the Select Committee on Employment which last week prevented that Committee from looking into the truth of these matters. If he had been seriously concerned about the competitiveness of British industry, he would have welcomed that inquiry and not blocked it.
Autumn Statement
13.
To ask the Secretary of State for Employment if he will make a statement on how he proposes to spend the additional resources announced in the autumn statement.
The additional resources planned will be directed towards helping unemployed people, improving the skills of the work force and assisting small businesses and enterprise.
Will my right hon. and learned Friend contrast the £500 million that he has added to his Department's budget and last month's fall in unemployment in Merseyside, Lancashire and Cheshire with the squabbling of the Opposition Front Bench, which cannot decide whether employment and training are priorities in their programme?
My hon. Friend is absolutely right to raise that matter. The last time the hon. Member for Sedgefield (Mr. Blair) expressed his concerns, he gave a list of our programmes which he said were to be destroyed and eliminated. In fact, they will all be maintained and will play an increasingly important role in helping unemployed people.
Prime Minister
Engagements
Q1.
To ask the Prime Minister if he will list his official engagements for Tuesday 26 November.
This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.
Can the Prime Minister remember those heady, happy days a year ago when his predecessor was tossed out of office? Now that his policies, the economy and everything around is in disarray, and with the right hon. Lady making a comeback, who will be the first to put him out of his misery in Downing street—the people at the election or his right hon. Friend?
The hon. Gentleman has clearly not observed that in the last year inflation has fallen to 4 per cent. and the interest rate to 10·5 per cent., the tax burden on business has been lightened, there is a pay review body for teachers and better standards and choice for parents—all of which were opposed by the Labour party. When the time comes, the hon. Gentleman will have the pleasure—if he holds his seat—of staying on the Opposition Benches.
Does my right hon. Friend agree with the comment made on Sunday that we should not commit ourselves now in advance of 1997 to a single currency as a point of agreement that all sensible people could hold? Will he contrast that with the words of the Leader of the Opposition to the effect that Labour would sign up to a single currency now, irrevocably?
My hon. Friend makes a pertinent point. That was certainly the view of the right hon. Gentleman in the debate last week, but it was flatly contradicted by his right hon. and learned Friend the shadow Chancellor on television at the weekend. Of course, he did say that not committing ourselves to a single currency was the point of agreement that "all sensible people" would have.
Does the Prime Minister still take the view, as he told the House last Thursday, that he has the full support of his predecessor?
My predecessor supported me in the Lobby last week, as did the vast majority of the House.
That answer demonstrates just how hollow was the vote for the right hon. Gentleman last Thursday night. Does the Prime Minister not remember saying just a year ago on the steps of Downing street that the Conservative party was
and is that not patently false now when, in the approach to the vital meeting at Maastricht, the Tory party is in a state of open warfare?"fully united for the future"
It is within the recollection of the House that there were around 28 Labour abstentions in the Division last week. We also know from the honest remarks of the right hon. Member for Bethnal Green and Stepney (Mr. Shore) that around two fifths of the Labour party opposed its Front Bench's policy on Europe.
Is my right hon. Friend aware that this is the first time that I have asked him a question since his appointment, and I intend to enjoy it? Is he further aware that he carries the good wishes of the party behind him in the difficult few months to come and should go to the talks in great confidence, knowing of the great contribution that this country has made to Europe since the days of William Pitt?
Will the hon. Gentleman get on with it, please?
Does my right hon. Friend realise that in dealing with things that we hold so dear we want to make sure that the European Community gives us a good bargain and that what we give to it will be given back to us?
I am grateful to my hon. Friend and I am pleased to be in a position to answer his question. He is entirely right about the British contribution to Europe, both in the long term and in the past few years when much of the present shape of the Community has arisen from initiatives by this country. We can play a role in developing Europe or we can turn our backs on the Community. By turning our backs, we would forfeit our right to influence what happens in the Community and I am not prepared to do that.
As the Prime Minister approaches the first anniversary of his move into his new home, will he spare a thought for the tens of thousands who, because of his policies, are now losing theirs? Does he realise that mortgage repossessions were 16,000 in 1989 and 44,000 last year, and that this year they are predicted to rise to 120,000, or 1 per cent. of all mortgage holders? Does he realise that he cannot sit on the fence on this one, and what does he intend to do about it?
As the right hon. Gentleman should have noticed, a few days ago my right hon. Friend the Minister for Social Security and Disabled People announced further steps to help all those in receipt of income support who have mortgages. The right hon. Gentleman says that that helps nobody, but it costs £400 million a year, so it must help rather a lot of people.
Will my right hon. Friend contrast the judicious, prudent and honourable way in which he and his right hon. Friends are negotiating in the European talks with the cynical sell-out proposed by the right hon. Member for Islwyn (Mr. Kinnock)?
It is the case that we have set out our position perfectly clearly so that our European partners know what is acceptable to the House and what is not. The Labour party's position is now perfectly clear. If somebody else in Europe wants it, it will sign up to it.
Q2.
To ask the Prime Minister if he will list his official engagements for Tuesday 26 November.
I refer the hon. Gentleman to the reply that I gave some moments ago.
Will the Prime Minister consider the abolition of standing charges to pensioners by the private monopolies? Does he agree that with the massive increases in salaries for those bodies' chairmen and the ridiculous spend on advertising that we are witnessing, those companies can well afford to drop the standing charges? Why does not the Prime Minister arrange to meet pensioners' representatives at No. 10 Downing street and listen to their powerful case on the matter?
The abolition of one or other of the energy standing charges has been a popular mission for many people for many years, but abolition would undoubtedly lead to a higher unit cost and as many of the most vulnerable people use the most electricity or the most fuel generally, they would in fact be net losers and not net beneficiaries.
Will my right hon. Friend join me in congratulating the chairman, trustees and staff of the Aintree national health service hospital trust on the establishment of a new £7 million project that will give it the largest accident and emergency unit in Europe? Is that not the best possible example of how the Government's commitment to the NHS is working?
I am grateful to my hon. Friend. I was not aware of that investment, but I very much welcome it. It shows the huge investment currently being made in the national health service and the excellent way in which many trusts are using the resources available to them.
Q3.
To ask the Prime Minister if he will list his official engagements for Tuesday 26 November.
I refer the hon. Gentleman to the reply that I gave some moments ago.
How does the Prime Minister justify sending his son to a private school where nearly £4,000 a year is spent on each child when at present half the children in Tory-run Cambridgeshire's secondary schools receive only half that amount and when that authority is currently reducing its budget by almost £2 million? [HON. MEMBERS: "What about choice?"] I ask that question in terms not of choice, but of equity for all children.
Our party believes in choice. I note yet again the Labour party's hostility to any persons exercising any choice in the interests of their family. I believe that millions of people in this country will acknowledge that there would be no choice for them if there were a Labour Government.
Will my right hon. Friend remind the House that the 1992 legislation does not come into force until 31 December 1992 and that the same is true of the 1986 Single European Act? Will he confirm to the House, the country and the international community that he will then be in his second term as Prime Minister of the United Kingdom?
I am happy to confirm that to my hon. Friend. One reason why that will be so is that we have a coherent approach to Europe, not one that changes every weekend.
Cyprus
Q4.
To ask the Prime Minister what plans he has to visit Cyprus.
I next plan to visit Cyprus for the Commonwealth Heads of Government meeting in 1993.
As Cyprus is a Commonwealth country and we are one of the guarantor powers for that island, how does the Prime Minister justify the ongoing occupation of much of that island by the Turkish army? Against that background and the highly critical comments of the Secretary-General of the United Nations on 8 October about the attitude and behaviour of Mr. Denktash. when will the Government—and the Prime Minister in particular—show some evidence of active involvement in the affairs of Cyprus for the benefit of both communities, Greek and Turkish? When does he intend to do that?
I am happy to tell the hon. Gentleman that I have had a number of meetings with President Vassiliou during the year and that I have already met Turkish Ministers, as has my right hon. Friend the Foreign Secretary. We continue to give support to the United Nations Secretary-General's efforts to promote a comprehensive, just and lasting settlement. The United Nations is soon to resume discussions with both sides. I hope that sufficient progress can be made for the Secretary-General to convene an international meeting soon, as endorsed by a number of Security Council resolutions. We shall continue to do all that we can to resolve the problem.
Will my right hon. Friend confirm today that the Conservative Government are planning to spend more next year on local—
Order. The question is about Cyprus.
Engagements
Q6.
To ask the Prime Minister if he will list his official engagements for Tuesday 26 November.
I refer the hon. Gentleman to the reply that I gave some moments ago.
Does the Prime Minister agree with his right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler), who said on Friday
yes or no, please?"We are not accepting the principle of a single currency"—
It is entirely clear from the documents in front of us in the treaty that we are enabling ourselves to have the option to opt in. We are not committed to opting in by anything in either clause 2 or any later part of the treaty.
Q7.
To ask the Prime Minister if he will list his official engagements for Tuesday 26 November.
I refer my hon. Friend to the reply that I gave some moments ago.
Does my right hon. Friend agree that any proposal to double the European Community structural funds will inevitably result in higher tax bills for the British taxpayer? Will he therefore assure the House that that proposal, which is supported by the Labour party, will be resisted most strenuously at Maastricht on the basis that one man's subsidy is another man's tax bill?
I can give my hon. Friend that assurance, although the issue is not directly on the table at Maastricht. We have made it clear that we see no case for a further massive increase in the structural funds. They are already substantial. They were doubled in real terms in 1987 over a five-year period. The contribution from some member states represents as large a share of gross domestic products as Marshall aid did after world war two.
Q8.
To ask the Prime Minister if he will list his official engagements for Tuesday 26 November.
I refer the hon. Gentleman to the reply that I gave some moments ago.
Has the Prime Minister had time to study the excellent article in the Glasgow Herald yesterday by the last Conservative leader of Glasgow district council, reflecting on the problems facing the Tory party in coming to terms with the need to give Scotland its own Parliament? If the Prime Minister gets a chance to read it, will he accept that it more accurately reflects the views of the people of Scotland than his Front Bench team does?
The strict answer is no, Sir, I have not yet studied that article, but in view of what the hon. Gentleman says I will most certainly do so. I do not believe that people in Scotland wish to break the Union. That is the direction in which the Labour party's policies are going.
Local Government Finance (England)
3.32 pm
With permission, Mr. Speaker, I should like to make a statement about the local authority finance settlement for England for 1992–93.
I told the House on 23 July that, in the Government's view, local authorities in England will need to spend £41·8 billion in 1992–93. That is 7·2 per cent. up on the equivalent figure this year. Central Government will distribute £33·1 billion in support of that expenditure. That also is up by 7·2 per cent. Today I am issuing a consultation paper setting out how we propose to distribute those totals. As I announced on 6 November, the business rate multiplier next year will be 40·2p. This is in line with the annual increase in the retail prices index to September of 4·1 per cent. The total burden on businesses would have been £600 million, or 5 per cent., higher if the business rates had continued to rise in line with local authority spending. I propose to set the distributable amount of non-domestic rates at £12·3 billion. We will continue to pass on all receipts from business ratepayers to local authorities to support their expenditure. I will shortly be laying a draft order to increase the rate at which businesses gaining from the introduction of the uniform business rate and the 1990 revaluation receive the benefits of the new system. The effect will be to release £100 million to the benefit of about 150,000 ratepayers, typically in manufacturing industry in the north and midlands. I propose to pay nearly £309 million in area protection grant. That will continue to provide help to those areas where introduction of the community charge would have otherwise resulted in an undue burden on charge payers. There will also be a grant of £50 million for education authorities in inner London to assist with overspending inherited from the Inner London education authority. I also propose to pay a special grant of about £86 million to meet 75 per cent. of local authorities' costs, excluding capital spending, on preparing for the council tax. I recognise that these are exceptional costs which authorities would not otherwise need to incur. Accordingly, that special grant, which I propose to distribute on the basis of the number of domestic properties in each charging authority's area, with an adjustment to reflect the higher costs in London and the south-east, will be outside the settlement totals. I am today sending authorities an exemplification of that proposal. I propose that the total of revenue support grant for 1992–93 will be just over £16·6 billion. In addition, about £3·8 billion of specific grants will be available. After allowing for specific grants, the total of standard assessments will increase by around 6·8 per cent. The consultation paper issued today gives details of the proposed standard spending assessments for all authorities. In considering how SSAs should be calculated, I have been conscious of the need to maintain stability from one year to the next. I am, nevertheless, proposing some minor changes to improve the basis of distribution. There are three, in particular, which I should mention. First, we will use more recent data which have become available on overnight visitors and the information will be extended to include foreign visitors. Secondly, we will discontinue the adjustment in respect of revenue support for bus services in London. We have now devised a new methodology which removes the need for the separate adjustment. Thirdly, the counties have rightly pointed out that they have relatively less scope to generate interest receipts than other authorities. For next year we will, therefore, change our methodology so as to make separate assumptions about the ability of different classes of authority to generate interest receipts. Those changes are designed to deal with long-standing grievances from particular groups of authorities without introducing too much disruption to SSAs. Under my proposals, the community charge for standard spending will be about £257. Efficient authorities should be able to set charges which are even lower. Actual charges, however, will depend on authorities's budgets and on their efficiency and determination in collecting the charge. Many people will, of course, pay much less than £257 because of help through the community charge reduction scheme and the community charge benefits. Entitlement under the community charge reduction scheme will be based on the difference between the rates and this year's community charge; and people who moved home this year and lost their entitlement to a reduction may be able to qualify at their new address. The total value of the reduction scheme will be similar to this year—that is, about £1·1 billion. I told the House on 23 July that if authorities did not budget sensibly next year, I would not hesitate to use my powers to curb excessive budgets or excessive increases in budget and to protect charge payers from the consequences. I am today announcing my provisional criteria. As last year, I consider it reasonable to allow smaller increases for those authorities whose budgets are well above their SSAs. Where budgets are very substantially above SSA, as is the case for some authorities brought within capping for the first time following the abolition of the £15 million threshold, I intend to seek budget reductions. In such cases, I consider it right to expect the greatest reductions from those authorities whose budgets exceed SSA to the greatest extent. But in all cases I intend the reductions to be achievable, albeit demanding. My intended criteria are therefore: any increase of more than 6·5 per cent. over the previous year's budget will be considered an excessive increase if it gives rise to a budget over the authority's SSA.On a point of order, Mr. Speaker.
I have not heard anything out of order.
My point of order is this. Is it correct —[HON. MEMBERS: "Order."]
Order. If a point of order is raised with me, I must hear what it is. Otherwise, I cannot rule.
Is it correct that members of the press have been issued with a copy of the statement from the Secretary of State? I have just been to the Table Office, where it is not available to hon. Members. Is that not wrong? Does it not show a disregard for the House?
I have no idea whether that is correct. [HON. MEMBERS: "It is."] Order. The whole House knows my view about this.
Any increase of more than 4·5 per cent. over the previous year's budget will be considered an excessive increase if it gives rise to a budget over 5 per cent. above the authority's SSA; and any increase of more than 2·5 per cent. over the previous year's budget will be considered an excessive increase if it gives rise to a budget over 10 per cent. above the authority's SSA.
In addition, I intend that any budget more than 12·5 per cent. above the SSA will be considered excessive, save that an authority will not be designated if its budget is 30 per cent. or less over SSA and is no more than that set for 1991–92; if its budget is 60 per cent. or less over SSA and is 5 per cent. or more below that set for 1991–92; or if its budget is 10 per cent. or more below that set for 1991–92. In 1990–91 there was a de minimis provision allowing authorities budgeting only a small amount above the criteria for excessiveness not to be designated. In 1991–92 the criteria included a principle that no authority was to be designated if its budget was excessive by £10,000 or less. Local authorities should not assume that there will be any such proviso or principle for 1992–93. I intend to make special provision for the particular circumstances of the inner London boroughs which still bear the cost of inherited overspending by the Inner London education authority, and for the City of London. These criteria are necessarily provisional, as was the case with the criteria which the Government set out last November. When I come to make my decisions on capping, I will, of course, take into account all appropriate considerations. I have placed a paper in the Library and Vote Office setting out my intentions in detail and have sent a copy to local authorities. The provisional criteria which I have announced are tough, but manageable. We are determined that all authorities should exercise expenditure restraint arid use the very considerable extra resources we have made available to keep charges at reasonable levels. Well managed authorities will be able to achieve effective service provision with budgets at or below the level of the provisional criteria. My proposals for local authority spending and for external support are fair and realistic. The rate of inflation now stands at 3·7 per cent. per annum. Local government cannot expect to stand apart from our determination to exert continuing downward pressure. Against that background, this settlement should enable authorities to deliver local services of the quality people expect and deserve, at a level of charge which they can afford.Does the Secretary of State recall in May last year castigating universal capping in an excellent article in The Times, when he said it would
Does the Secretary of State feel any sense of embarrasssment at so quickly abandoning that stance and introducing today precisely the universal capping that he rightly attacked just 18 months ago? Does he feel any embarrassment at further undermining what little remains of local government democracy by imposing through central Government a straitjacket which means that every local council budget henceforth is his budget, that every cut in services henceforth is his cut and that every poll tax bill be his bill? When those bills arrive in March and April of next year, every one will bear the Secretary of State's fingerprints. Can the right hon. Gentleman explain why the statement has been so long delayed and is three or four weeks later than in previous years? How is local government, already hard pressed by the horrendous problems of collecting the poll tax and the preparations for the council tax, to grapple with this further delay? Will it mean that the consultation period will be shorter, or will the final RSG settlement also be delayed, or both? Was the delay because of a defect in the computers or a defect in Ministers? Does the Secretary of State recall his predecessor's admission that SSAs were fundamentally flawed and should be reformed? How does he respond to the Audit Commission's warning that"negate accountability and be an act of centralised political power outside our experiences… Local authorities should be free to set and account for their own budgets."?
Why are we stuck with an unfair system which, without any supporting evidence, concludes, for example, that it costs £857 per adult in Wigan for a standard level of service but 69 per cent. more, at £1,448, in Manchester? What confidence can there be in a system which does not include economic deprivation—surely a fundamental factor—but does include visitor nights and is now to be extended to include foreign visitors, something that can be considered only as a renewal of the Westminster benefit? How can local government trust an arbitrary and capricious system which measures the number of days when snow lies on the ground and concludes that Harrow, at 15·4 days, has more snow than Cumbria, at only 12·6? Why, given the increase in the business rate, is £100 million less being distributed from the national business rate to local government than is the case this year? Is that yet another effect of the recession, or is there another explanation? Does the Secretary of State expect the damaging cuts demanded by his capping criteria to be effected without any real impact on services or those who depend on them? Is Derwentside, for example, to be expected to make cuts worth 10 per cent. in cash terms and 17 per cent. in real terms, and is Tory-dominated Elmbridge to be expected to make cuts of 8 per cent. in cash terms and 15 per cent. in real terms, without deep and damaging consequences for services? Has the right hon. Gentleman checked with the Home Office whether single-service police authorities can finance their Home Office-approved levels of police stablishment? If he does, he will be told that the answer is no. Is the right hon. Gentleman's £257 prediction of the average poll tax not predicated on the same fanciful assumptions about 100 per cent. collection as earlier vitiated and equally over-optimistic predictions in the last few years? Is it not the same fairy-tale exercise as we saw in 1990 and 1991? With this reminder that the poll tax is still alive—I was going to say, and well, but that would be a misrepresentation—and that the bills will arrive yet again next year, and with this abandonment by the Secretary of State of all principle in introducing universal capping, is this not yet another black day for local government? Our only consolation is that, for the Secretary of State, nemesis is close at hand."The Government should not underestimate the lack of confidence in SSAs among local government politicians and professionals"?
The hon. Member for Dagenham (Mr. Gould) asks me whether I feel any sense of embarrassment about the capping levels. I have given him the answer before. I believe that the Chancellor of the Exchequer was extremely generous in giving £140 per community charge person to lower the level of community charges. It seems to me absolutely essential to protect that benefit to the community charge payer, and I know of no other way to do it but to cap the local authorities which would otherwise spend it.
The question flowing from that lies in the fact that, if we do not cap, it is automatic that there would be approval from the hon. Gentleman for increases in expenditure. So I therefore want him to say how much authority he has from the shadow Chancellor for the increases in public expenditure that lie behind every question that he has asked me today. How much would it cost in extra community charge and in extra tax rates to add to the 59p in the pound with which we are already threatened by the Labour party? We were then asked to listen to the case of the hard-pressed local authorities. It might be helpful if I tell the hon. Gentleman how hard pressed they really are. In 1980–81, the cash available for the financing of relevant grants and expenditure was £19,307 million. In 1991–92, it was £39,892 million. At 1991–92 constant prices, that is a 5 per cent. real-terms increase in the expenditure of local authorities, so there have not been cuts as the hon. Gentleman claims. The hon. Gentleman asked specifically about bringing foreign visitors into the calculations of SSAs. If a local authority is confident and keen to attract tourists to its area, foreign visitors are just as attractive as domestic visitors. We have simply updated the calculations on the basis of later information available to us. All that is explored with my Department by the local authority working groups. I confirm that my right hon. Friend the Home Secretary fully supports the increase in expenditure on the police provided by the settlement, whereby it will be increased by 12·9 per cent. That will pay for the excess of 16,000 extra police officers who have come on to the establishment since the Government were elected, and the extra 1,000 police officers announced by my right hon. Friend recently. When the hon. Gentleman asks so many questions about the changes in SSAs in one area as opposed to another, he should ask why it costs on average £255 more per person to deliver services under a Labour authority than it does under a Conservative authority. If one considers the whole of London, why does it cost a Labour authority £131 per person more to deliver services than it would cost a Conservative authority? It is not just a London phenomenon. In every class of authority, voting Labour costs a large sum of money. In the shire districts, it costs £70 and in the metropolitan districts it costs £61 per community charge payer to vote Labour. Taking the whole of local government in aggregate, the cost of voting Labour in an area controlled by that party as opposed to the Conservative party is, on average, £83. The only lesson is that the Labour party is extravagant, profligate and totally uninterested in the benefits to its community charge payers. It is interested only in the Labour-dominated, trade union-restricted services, which it seems to want to increase regardless of cost.
rose—
Order. We have an important debate on further and higher education in Scotland later this afternoon, so I shall allow questions on the statement until 4·30. I hope to be able to call all hon. Members who wish to participate if they ask brief questions.
Will my right hon. Friend explain why provision is made for local authorities with a history of overspending but not for local authorities with a history of underspending, which may have very expensive problems in rural areas, and extensive school networks and social services, to a level which cost far more than in the authorities which have a history of high spending?
I know that my hon. Friend feels strongly about the interests of his constituency. However, SSA methodology, like all previous methodologies for distributing grant from central Government, is discussed with great care by my Department with the working groups of the local authorities. A statistical analysis is carried out and formulae are arranged to bring about that distribution. The characteristic reaction of local authorities is that each of them and every class of them has been disadvantaged, but none of them can ever reach a formula which the others will accept.
Does the Secretary of State agree that, now and in the next financial year, local authorities will be spending much money needlessly trying to collect the poll tax from people who can ill afford to pay it? Does he not accept the Government's responsibility for that? He has asked the local authorities to collect the council tax the following year, so is not now the time to say that the Government will pay the whole cost of the introduction of the new council tax? Does the Secretary of State agree that the percentage increases that he announced today do not cover such legislation as the Children Act 1989, the introduction of care in the community and the extra police officers announced by the Home Secretary? It is not much good the Government saying that police authorities may appoint police officers if the Government then stop them from doing so by capping the authorities.
I do not agree with the hon. Gentleman that we should give 100 per cent. grants in such circumstances, because that would remove the authorities' incentive to deliver effective and cost-conscious services. As to the substance of the hon. Gentleman's question on the collection of the community charge, I have looked into the matter. It is interesting to note that it is not necessarily Labour authorities that cannot collect the charge.
Of the top 10 community charge collection authorities last year, three were Labour: Cannock Chase collected 110 per cent. of its budget, Copeland collected 105 per cent. and Gateshead collected 104 per cent. The only conclusion to draw from that is that the authorities that do not collect their community charge are ineffective and inefficient. That is why, if we consider the authorities with the worst record of collecting the charge, we find that in 1990–9I Labour had a clean sweep—the worst 10 authorities were all Labour-controlled. Of the 10 worst authorities in 1991–92, only nine are Labour, but the one clear characteristic of all the statistics is that the Labour party is ineffective and inefficient in collecting its bills. If the worst Labour authorities had behaved like the best three, they would not have encountered a problem.Has my right hon. Friend any plans to help those charge payers who, perhaps because they were too young, were not rate payers, and who now derive no protection under the reduction scheme?
It is quite difficult to help people who were not paying a specific bill when the new system came into existence. We can only introduce schemes—we have done so on a generous basis—for those people whose bills suddenly increased from a lowish level to a much higher one. We have introduced transitional schemes for them. I do not think that we can introduce schemes to help people who never had a bill.
Is not the Secretary of State's own bill far less than most people's, particularly in London, where, under the new council tax, he will pay less than people who occupy garages in eight London boroughs? Should he not have come to the House and said that he would make arrangements to help those who cannot pay the poll tax and are forced to pay the 20 per cent. minimum contribution? Should he not have said that he would get rid of the minimum 20 per cent. rule?
The hon. Member will want to give us every help in getting the new council tax on to the statute book as quickly as possible, as it does exactly what he suggests.
Will my right hon. Friend bear in mind the experience of my borough council, Reading, which is near his constituency, which blew all the reserves immediately the Labour party came into control by placing bollards all over the bloody town—
Order. That is inelegant, I think, for Reading.
The bollards, which I shall not describe, were placed throughout the town. The council blew all its reserves and failed to collect the community charge, so that everyone has had to pay an extra £48 on their community charge this year because of the level of non-collection.
I very much sympathise with my hon. Friend and his constituents. I hope that, under the present regime, the local authority will collect the community charge and save a great deal of money for those who would otherwise have to pay excess bills.
When the Secretary of State announced the figures today, he made it clear that he expected the extra expenditure to be used on reducing the charge—the poll tax—not increasing services. What proportion of SSAs to local authorities has been allocated for increased expenditure for the implementation of the Children Act 1989?
The hon. Lady will know that we never give specific breakdowns of individual figures, but she will also know that service increases are given. For example, the increase for personal social services is 7·7 per cent., education 7·1 per cent., police 10·9 per cent., fire and civil defence 8 per cent. and other services 9·2 per cent., with a total of 7·2 per cent.
Will my right hon. Friend confirm that, under the new regulations, there is no need for any local authority to be capped, even the most irrational Labour council, because new targets have been set and the councils are required to meet those new targets only from the current starting point?
My hon. Friend makes a valid point. We have clearly told local authorities where the capping regime could bite after consultation, and they now have plenty of time to adjust. It is important to make the point that, across the country, businesses, which pay vast sums of money towards local authorities, are having to make such adjustments all the time.
Will the Secretary of State explain why my local authority of Durham has an SSA which is half that of Hove, an authority similar in functions and population? Is it perhaps because Durham is Labour-controlled and Hove is Tory-controlled?
The hon. Gentleman will know full well that, in a statement such as this, we cannot look into the details of every one of the hundreds of authorities. However, all the information is available to him and to his local authority, and the answer will be because the methodology of the SSA system delivers the results that he has suggested, if those are in accord with the real world. The hon. Gentleman is perfectly able to write to my Department and seek any further clarification that he wants.
Does my right hon. Friend agree that a council such as Derbyshire, which spends nearly £14 million a year pegging school meals to 1981 prices but which at the same time sacks hundreds of teachers and which has increased its work force by 8,000 in the past decade but cut the number of police, can have no credibility in its ritual whining about underfunding?
My hon. Friend puts his point with extreme eloquence, and I very much support the thrust of what he says.
Is the Secretary of State now prepared to meet the seven authorities which have wanted to meet him for months to discuss their problems with their SSAs? Will he now come off his high horse and meet those people rather than shove them on to his Minister of State?
The hon. Gentleman will realise the pitfalls of responding favourably to a suggestion that the Secretary of State should receive a delegation, when there are still 28 minutes to go in which every other right hon. and hon. Member could make the same request. I can at least say that we meet delegations, we carefully consider all applications that are put to us, and there is no reason why his should automatically be turned down.
Is my right hon. Friend aware that one of the best bits of news in his statement today was his announcement that the business rate increase would be kept to no more than the rate of inflation in the coming period? What prospect is there that the Government will be able to go further than that in due course and reduce the rate of increase in the business rate, which bears hard on many new small businesses in my constituency and elsewhere?
I am aware that a strong body of opinion wants us to look at the matter again. My hon. Friend will realise that a revaluation is scheduled for, I think, 1995, which might address some of the problems. Another important part of the background is that, as the economy recovers, so the pressure on many of those businesses will be eased.
Is it not the case that the errors which have been apparent in previous SSAs have been repeated in this year's statement, in that the SSAs are still being calculated on the 1981 census data and many of the factors are simply irrelevant to local authorities such as my own?
I addressed that question earlier as fully as I could. The distribution of central finance is always a controversial issue, with arguments between individual authorities and classes of authority to the effect that it is unfair or does not provide what they want. That will be the case whatever system operates. The working parties presided over by my Department, but deeply involving of course local authorities and other Government Departments, consider all the evidence and try to reach agreement on a practical way forward. Ultimately, it falls to the Government to take decisions; otherwise, no decisions would be made.
I congratulate my right hon. Friend on his excellent statement. Does he agree that nothing can excuse the wanton and vicious extravagance of so many Labour authorities, and that it is about time that the costs of non-collection were met by forcing local authorities to reduce their expenditure rather than imposing them on virtuous citizens who pay their community charge?
I understand my hon. Friend's indignation, which is widely shared throughout the country. Far and away the best solution would be for all local authorities to be determined to collect the proper entitlements of the bills they issue. That would enable many of them to deliver a far better service.
Is it not a fact that, under last year's standard spending assessment, Merton received only an 18 per cent. grant, the lowest in London, whereas Wandsworth received the highest, at 24 per cent.? Is that not repeated in this year's assessment, which reveals a similar divergence? Does that not prove that the Government are providing more funds to Tory-controlled authorities than to Labour authorities?
The hon. Gentleman selects his authorities carefully, and fails to point out that Lambeth and Hackney are at the top of the list of distributions. It has nothing to do with the unfortunate party political point that the hon. Gentleman seeks to make: it is a matter of trying to allocate resources according to the needs of individual authorities.
Is my right hon. Friend aware of the problem of workers and others in tied accommodation, who do not pay any rates and who are thus ineligible for transitional relief?
I understand that difficulty, but my hon. Friend will appreciate that we are in the last year of the community charge. Also, a large number of people who let their properties on a service tenure to the individuals occupying them pay the consequential community charge, in the same way that they previously paid rates.
Given the Conservatives' claim to be the party of law and order, does the Secretary of State agree with Merseyside police authority that capping will cause the loss of 400 to 500 policemen on the beat in Merseyside?
The hon. Gentleman will want to consult his authority in the light of today's announcement. One cannot escape the fact that more than 16,000 extra policemen have joined the establishment since this Government were elected, and a further 1,000 are to come as a result of the announcement by my right hon. Friend the Home Secretary. That cannot be construed as anything but a dramatic commitment by the Government to law and order.
Many of us felt that the old regional development grants were arbitrary and unfair to certain cities. Can my right hon. Friend illustrate by the figures that he has given today how the distribution of the unified business rate will operate more fairly and helpfully to the benefit of towns and cities in the north, such as that which I represent?
I am very interested by my hon. Friend's comment. I do not have to hand a breakdown of the distribution of the non-domestic rate, but I am sure that my hon. Friend will welcome my statement that, because more was collected from the national business rate than was expected, we have been able to release the benefits—particularly to manufacturing industry in the north and the midlands. That has made available about £100 million more than expected, which will be shared by 190,000 ratepayers.
Although the right hon. Gentleman's own Department acknowledges that Wigan metropolitan borough provides services comparable, in terms of their value, to those offered by local authorities such as Wandsworth, again this year Wigan has a standard spending assessment of less than half that applying to comparable authorities. Is it not a disgrace how the SSA operates against the interests of local authorities that provide, in the words of the Secretary of State, value-for-money services? Should they not receive the same level of grant that authorities such as Wandsworth receive?
The hon. Gentleman has returned to an issue that we have explored exhaustively. The fact is that local authorities do not agree among themselves on any alternative method of distributing central Government funds. Each class argues for more for itself, and, inevitably, each authority within each class argues for more for itself. In the end, someone must make a decision, and, as central Government distribute the money, it is not surprising that the Secretary of State will present their proposals to the House.
What consideration has my right hon. Friend given to the expense that is now being incurred by certain authorities with major ports of entry in their areas in connection with the care of refugees and asylum seekers?
My hon. Friend has raised what I know to be an important and difficult issue. It is indeed a growing issue, which concerns us all. Within the standard spending assessments are indicators measuring social hardship and the incidence of social problems. They would, in part, impact on the difficulties that my hon. Friend has described.
Has the Secretary of State the nerve to admit that, in the past two years, grants have been allocated to ensure that Tory flagships such as Wandsworth and Westminster are safe for Tory control, and that this year he has decided to fiddle the figures to save all the Tory marginals for the general election—or, at least, in an attempt to do so? Is it not ironic that a Cabinet Minister should be taking over the budgets of all the local authorities in Britain, while at the same time his Cabinet colleagues are handing power over the national Budget to the Common Market?
Some of us would rather see the Budget handed over to the Common Market than see it handed over to the hon. Gentleman's party. As long as my party remains in power, however, there is not the slightest chance of either the Common Market or the Labour party getting it.
Let me help the hon. Gentleman. He is trying to suggest that grant has been distributed in a "party" way. He must explain the fact that, over the past two years, total standard spending has increased by 27 per cent., and aggregate Exchequer finance produced by central Government by 43 per cent. There is no conceivable way in which that could be described as a party political allocation.My right hon. Friend must be aware that £50 of the £140 concession was swallowed up by the failure of many people to pay their community charge. In my Labour-controlled area, only £90 was returned.
A curious advertisement has been placed in the local papers, asking people to pay their community charge. Part of it states: "The Southampton Labour group does not agree with the poll tax"—and that is in the middle of an advertisement whose aim is to make people pay up. Does my right hon. Friend know about that, and does he know about the four pages that I have sent to his Department, which deal with wasteful products and wasteful propositions in Southampton? Will he ensure that Labour-controlled Southampton city council is scrutinised and capped?My hon. Friend rightly feels strongly about the inability of some authorities to collect their community charge, while nevertheless spending large sums. It is, however, the democratic responsibility of local people to carry out checks. I have no power to intervene in the internal affairs of the local authorities; that is a matter for the local democratic process or, as a last resort, for the Audit Commission.
How can the Minister justify asking Carlisle city council to reduce its budget by £400,000 when Government spending is out of control? Carlisle is probably one of the best district councils in the country. That was acknowledged by the Minister, who recently appointed its very able leader to the Audit Commission. How can we expect the Secretary of State, sitting in Whitehall, to know what is best for the people of Carlisle? Time and time again, they have democratically elected a Labour council. When will the Secretary of State give democracy back to the people?
The hon. Gentleman will realise that, having given £140 per community charge payer to the people, it is my responsibility to protect that generosity by the Chancellor of the Exchequer and to ensure that it is not mopped up by the extravagance of local authorities.
I know that the subject has already been raised once before, but it is so important that I want to ask my right hon. Friend whether there is any possibility of the Government reviewing the step-by-step increases in the business rate for small businesses. These large increases are putting many small businesses, not only in my constituency but throughout the country, in a very difficult situation.
I understand the strong feelings of my hon. Friend and many other hon. Members. The situation has undoubtedly proved much more difficult because of the strain of the economy on small businesses. I very much hope that, as the economy recovers, as it is now beginning to do, that pressure will ease. My hon. Friend knows that small businesses are protected from excessive increases by the limits that we have introduced. That is the limit of what we are able to do.
Is the Secretary of State aware that, because of the rules changes that he has instituted, some local authorities could have to make cuts of up to 10 per cent.? Derwentside is one example. The Secretary of State says that there is a need for stability. Is there not a case, therefore, for looking at those local authorities where the impact has been exceptional?
The hon. Gentleman will know that, in the capping regime that I announced, we recognised that there was a limit to the speed at which we could expect change to come about. We have said that, when local authorities begin the process of adjustment, there is a point beyond which, in a given year, no further pressure will be exerted. However, to become an overspender on the scale of some authorities means that money is being spent on a dramatically larger scale than by equivalent authorities providing similar services.
Did I mishear my right hon. Friend? Did he say that the rules for people who qualify for rebate may be changed if they move house? If so, will he elaborate? Nothing causes more ill feeling and resentment in my patch than the fact that people lose their right to rebate solely because they move house.
My hon. Friend will find that, where people have moved, there are some opportunities for them to claim rebate. I should be happy to look into the cases of any specific constituents if my hon. Friend would care to write to me.
First, why was it absolutely necessary for this statement on English business to be made today, before the debate on Second Reading of the only Scottish Bill this Session? Secondly, will the right hon. Gentleman explain, given the fact that he is the string that pulls the Secretary of State for Scotland on these matters, how the business alleviation that he proposes will compensate businesses for the inflationary and recessionary consequences of the 2·5 per cent. increase in VAT that he was responsible for imposing on businesses in the first place?
The hon. Gentleman is confusing many different issues. We arranged to make this statement now in order to give local authorities plenty of time. There is always, as the hon. Gentleman knows and as my right hon. Friend the Leader of the House constantly explains, pressure for time on the Floor of the House. I must therefore leave it to my right hon. Friend to determine the appropriate moment at which I should make a statement.
I must tell my right hon. Friend that, in my experience, Liberal Democrat-run councils are every bit as incompetent as Labour-run councils. I warmly welcome my right hon. Friend's statement. The level of grant to local authorities is considerably higher than the rate of inflation. More particularly, I welcome his statement about the inclusion of visitor nights in the standard spending assessment methodology. That will help many authorities. I am grateful to my right hon. Friend for having listened to the representations that were put to him.
I am very grateful to my hon. Friend. This has been a source of controversy with local authorities, but we now have more up-to-date information. The previous information stretched back to the early 1970s. We have been able to help significantly, but I am only too well aware that, when we have done so, the authorities that have lost have complained that we have switched to an unacceptable new system, although I have no doubt that it is a better one.
What account has the Secretary of State taken of the representations that Staffordshire made to the Department of Health, which we understood would be relayed to the Department of the Environment? What is his advice to parents whose children live in Staffordshire's residential homes or homes for the mentally and physically handicapped, which need £19 million to bring them up to the standards laid down following pindown and the Utting report? Does not Staffordshire's standard spending assessment mean that the county will be nowhere near able to meet its statutory responsibilities?
The hon. Lady will know that we consulted on the matters that I have announced today. The capping regimes are essentially a consultative process. The working parties that my Department organises include representatives of local authorities and of the Department of Health. The information to which she drew our attention will have been considered by all the people concerned. That is not the end of the story—there is still a chance for it to happen—but it is fair to point out that a range of other authorities will have their own views on why they should be given more money, which is always to be found at somebody else's expense.
I am sure that my right hon. Friend will agree that one of the worst examples of overspending must have been the unlamented Inner London education authority. He said again today that he has had to compensate the new inner-London education authorities. In considering the figures, has he found that Conservative-controlled authorities—Westminster, Wandsworth and Kensington and Chelsea—have moved much faster and more efficiently in cutting overspending than Labour-controlled authorities?
That is a difficult question.
No, it is not difficult at all. I cannot entirely accept my hon. Friend's suggestion that the Inner London education authority was the worst of the authorities that we got rid of: I always thought that the GLC was a close competitor for that claim. However, we got rid of both, which is a help.
All I can do is point to the stark contrast between the community charge bills of Labour and Conservative authorities in inner London. The figures are quite startling. The average community charge of an inner-London Conservative authority is £98. Under a Labour authority, it is £353—a cost of £255 per community charge payer for voting Labour.Does the Secretary of State agree that education is critical to breaking the cycle of deprivation? Will he therefore ensure that the additional £50 million for inner-London education is spent on inner-London education?
The hon. Gentleman has missed the point. We are compensating London boroughs for ILEA's excess costs to enable them to adjust over a phased programme. That is the purpose of the £50 million.
Does my right hon. Friend agree that it is a matter for congratulation that he has announced today a real-terms increase in local authority spending? Nevertheless, does he accept that real choices will have to be made by local authorities and that it would have been dishonest to announce a catalogue of spending promises when perhaps he had failed to obtain the extra money from Treasury colleagues and had privately briefed councillors that that spending could not be made? Have not we discovered from today's newspapers that that is what the hon. Member for Dagenham (Mr. Gould) has been doing? Is not that dishonest, and totally typical of him?
Order. That word will have to be withdrawn. The term "dishonest" is not to be applied to hon. Members.
I replace it with "an unlikely proposition".
My hon. Friend is right to say that the total standard spend will rise by 7·2 per cent. next year, whereas inflation is currently running at 3·7 per cent. Therefore, as far as one can forecast, that is likely to be a real-terms increase in local authority expenditure consistent with the pattern throughout the 1980s of a 5 per cent. real-terms increase in expenditure. However, every time the settlement is announced to the House, one hears endlessly from the Opposition about cuts. In the real world, there has been a 5 per cent. increase.
Why can we not have a fundamental review of the standard spending assessment, which is the second great evil of the poll tax? Of 296 non-metropolitan districts, North-East Derbyshire finishes 295th in terms of standard spending assessment per poll tax payer, but the people of north-east Derbyshire are not filthy rich, so there is clearly something very peculiar about the formula. Even at this stage, they are being asked to pay 30 per cent. of the total standing spending assessment out of the poll tax moneys, although, at the beginning of the poll tax, we were told that only 25 per cent. would have to be raised in that way. Since then, there have been massive increases in value added tax. As we know—
Briefly, please.
As we know something about these matters in North-East Derbyshire, could we—like my hon. Friend the Member for Barnsley, West and Penistone (Mr. McKay) and his constituents—meet the Minister?
The hon. Member fulfils my expectations. I realise that, if I were as generous to the hon. Gentleman as it is in my nature to be, it would be only a matter of time before other colleagues sought to expose that weakness in my character and to obtain extra meetings. We do meet delegations—although not from every hon. Member—but if the hon. Gentleman cares to make a submission, we shall consider it carefully.
Would my right hon. Friend reconsider the position of people who become 18 after 1 April? Surely it does not make sense for such a person to pay more community charge than the parents with whom he lives?
I understand the circumstances that my hon. Friend outlines, but I do not wish to leave any doubt. We shall not be able to reconsider the matter in the context of the last settlement for the community charge. We have considered so many exemptions and have helped so many people that we must now proceed with the settlement and recognise that it will be the last one.