§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Malone.]2.32 pm
§ Sir George Young (Ealing, Acton)
I welcome this opportunity to develop on behalf of ratepayers in the London borough of Ealing the case for the Secretary of State to rate-cap the council in 1988–89. My hon. Friend the Member for Ealing, North (Mr. Greenway) hopes to catch your eye, Mr. Deputy Speaker, for a couple of minutes at the end of my remarks. We are both delighted by the response of our hon. Friend the Minister for Local Government, who has first-hand constituency experience of the damage wreaked by Left-wing Labour councils.
For eight years, until last May, Ealing council was Conservative controlled. In the last four of those years, rates increased by only 13 per cent. in cash terms due to prudent budgeting, contracting services out to the private sector where that made sense, making realistic charges for rents and other services, keeping a tight control on manpower and developing a partnership with the private sector to harness its energies to regenerate rundown parts of the borough. Those policies bore fruit and the new town centre opened by the Queen two years ago brought fresh heart to the borough. In my constituency, the Park Royal industrial estate, which had been declining for many years, began to sprout new offices and factories. Attracted by the combination of low rates and good services, businesses in Ealing expanded, others moved into the borough, and more discerning people, including the Leader of the Opposition, chose to make their homes in the borough.
Last May, Labour took control and the policies that I have described were thrown into reverse. As democrats, we live by the ballot box and accept the verdict, but with one or two comments. First, it is now remarkably difficult to find anyone in Ealing who admits to having voted Labour last year. A random poll in the Red Lion in Acton earlier this week found no volunteers. Had people known last year what they know now, Labour would certainly not have got in. The Labour party now running Ealing is an entirely different animal from that which ran the borough in the 1960s and 1970s, for which a number of people mistakenly thought they were voting.
The biggest cost increase is in the number of additional staff and the office space needed to house them. Sadly, many of them are political appointments. Since coming to power, the council has taken on 750 extra staff, a figure which is due to double by May next year to about 1,225. The majority provide no actual services—they are not teachers, social workers or refuse collectors. Many are political appointments.
There is a large number of press and publicity officers, personal assistants and clerical support to the chairman of committees. We have large numbers of people running the animal rights sub-committee, the gay and lesbian subcommittee, the nuclear disarmament sub-committee, the anti-apartheid committee, the women's committee and the race equality committee—all the municipal apparel that the well dressed Labour council now feels obliged to wear. Those people have to be accommodated, and a new office block has been hired at a cost of £3.1 million a year, to the enormous relief of the developer who put it up. That represents a long-term commitment by the council.
666 Where else has the money gone? Some £1.3 million a year goes to the GLC in exile. £1 million goes on the de-privatisation of street cleaning, we are to have an antiapartheid festival in Ealing in July at a cost of £12, 000 and we have a race equality commit tee with a campaigning role budget and grants of £200,000. The cost of stationery has increased by 44 per cent., and attendance allowance for councillors has gone up by 400 per cent. They, at any rate, do not propose to be worse off.
Last Thursday, the bill for one year's Labour administration in Ealing was added up. The council voted an increase in the domestic rate of 65 per cent. and in the industrial rate of 57 per cent. An alternative Conservative budget involving an increase of up to 10.6 per cent. was voted down. I pay tribute to the Conservative opposition on Ealing council under the dynamic leadership of Councillor Martin Mallam.
I attended part of the council meeting at which the director of finance described the path down which Ealing council has now embarked as an exceedingly high-risk strategy. A higher increase was avoided only by a dubious practice of charging to capital account a number of items conventionally charged to revenue account.
By adopting that strategy, the council has ignored its own research into the acceptability of a rate rise. Independent research funded by the council and carried out last year in four Labour wards and one Liberal ward showed that 48 per cent. wanted no increase at all and that 38 per cent. were prepared for a small rise if it meant an improvement in services in their area. Only 5 per cent. were prepared to fund a big rate rise.
The average rate rise for a council tenant will be more than £4 a week and for the average owner-occupier nearly £5 a week. For industry, the problem is even more acute. I should like to quote from a statement by the Industrial and Commercial Ratepayers Consultative Panel, the energy and initiative of which I applaud for bringing home to the council the consequences of what it has done. After the rate increase, it said:We would reiterate our view that the damage to the industrial and commercial sectors in the London Borough of Ealing will be considerable.There is an impact on the health authority, which has to pay rates. I have a letter from the director of finance which outlines how the more than £250,000 extra rates might be found. It involves a delay in opening 12 geriatric assessment beds, converting a children's ward to a five-day ward and a reduction in the mental health unit's budget, all of which would cost 21 jobs in the Health Service.
- 1. Some smaller traders have already advised that they will go out of business as a result of such a large increase.
- 2. With regard to the larger businesses employing in excess of 1,000 people, such an increase will affect their overheads and their competitiveness. It would require a substantial increase in turnover just to stand still. It would also make such companies less competitive arid could have a knock-on effect on their ability to create further employment opportunities.
- 3. There is no doubt that some other companies will be affected by such an increase which could result in a reduction in the number of people employed, or curtailment of investment, or both.
- 4. Businesses in general would be severely affected and some have already indicated the possibility of relocation to areas more conducive to industrial and commercial development."
I have just opened a letter from Landis & Gyr which says: 667Further to your recent visit to Landis & Gyr we have learnt through the newspapers of the appalling rise in rates in Ealing which I believe to be 65 per cent.As we discussed, the effect on our company is extremely unpleasant to say the least, and we calculate that it will cost us approximately £150,000 a year. Put another way, that is worth at least 15 jobs or we must sell another £2 million worth of goods to pay for it.Will you please use your best endeavours to resist this outrageous increase or at the very minimum ensure that it does not occur next year?That is what I am doing at the moment.
The point is well made by the panel to which I referred a few moments ago, which said:We would ask the council what is the net gain to the local economy if additional jobs in the public sector (as the council is proposing) are at the expense of jobs in the private sector.
It is not just the Conservative party that is fed up with Ealing council and would like to see it restrained. The hon. Member for Bassetlaw (Mr. Ashton) was quoted in The Sunday Times as saying:I was told to keep quiet after the Bermondsey by-election. I kept quiet after the miners' strike. I kept quiet during the Militant Tendency but I am not going to keep quiet any longer.Neil has got to take on these councillors. We can't win with 65 per cent. rate rises in Ealing and stories about banning boxing in Hackney.They are not fighting an election in Ealing until 1990 so they don't care. We are fighting an election this year…The right hon. Member for Birmingham, Sparkbrook, (Mr. Hattersley) wrote in The Mail on Sunday:Nothing can be more damaging to a political party than small groups of vocal zealots who think they know best—better than the leader, better than official party policy, better even than the voters whose support they hope to win.We all know of the views of Patricia Hewitt, who said:The 'loony Labour Left' is taking its toll…The gays and lesbians issue is costing us dear.
The equal opportunities programme in Ealing will cost the ratepayer £7.5 million. There are national implications of what is happening in Ealing. Two leading councillors are trying to get into Parliament, presumably so that the national taxpayer can benefit from the treatment which is being allocated to the Ealing ratepayer. They are not alone in London. They represent the new modern Labour party in London—dogmatic, humourless and expensive.
Not only is spending out of control, with unpopular policies being pursued and senior officers leaving, we now have the first ever white-collar strike in Ealing. It is not possible to pay rates in Ealing because the town hall is on strike. Houses and businesses cannot be sold in Ealing. If a bill is sent to the local authority it will not be paid. No urgent housing repairs are being conducted, the switchboard is on strike, the homeless families unit is not working and even the incontinent laundry service is out of operation. That is the administration that my constituents are having to put up with.
I ask my hon. Friend the Minister for Local Government for help. I want to put the problem in perspective. Previously, Ealing had enjoyed eight years of Conservative administration. We have had eight years of Conservative Government, and we are all looking forward to the Budget. The undoubted damage which is now being done in Ealing can be reduced if, next year, Ealing is rate-capped and if it is known, as soon as possible, that that is the course of action that will follow. For some, one year 668 of Socialism will be one year too many, but the rest of business in Ealing might survive if we knew that help was on the way.
We in Ealing are not asking for the cavalry: one horse will do, as long as it is mounted by my hon. Friend equipped with his rate-capping gear. The people of Ealing are looking to the House to protect them from the local tyranny that we now have in the London borough of Ealing.
§ Mr. Harry Greenway (Ealing, North)
I am grateful to my hon. Friend the Member for Ealing, Acton (Sir G. Young) for allowing me two or three minutes in his debate. I congratulate him on securing it and on the excellent case that he has made out, which I second with all my heart and determination.
The House should note that the alliance is opposed to rate capping, so it will not support any efforts to rate-cap this high spending and evil council. The Ealing rate is the highest in the country. As my hon. Friend has said, the borough has been brought to a standstill within 10 months of the accession of this council. In addition to the services that my hon. Friend said had been affected, schools are being closed throughout the borough and children are being sent home on account of the strike. It is a most serious situation.
Can my hon. Friend the Minister answer a question that is on the lips of everyone in Brent? By how much could rates in Ealing have been raised without the council incurring penalties? My hon. Friend and I both know Whitton avenue, because it runs between our constituencies. Previously, rates on the Ealing side have always been half of those on the Brent side. From 1 April this year the Ealing rates will catch up at a stroke. Ealing council says that rates have been too low, and that is part of its justification for raising them.
An elderly lady, who is well into her nineties, lives in a small house and pays rates of £210. She has been told that they will go up by no less than £136, and she will have no increase in her income, apart from a rise in her pension, to pay those rates. The rates of the Leader of the Opposition will go up by £333 a year. We need not feel sorry for him, but we should note the facts.
People from all over Ealing want to take round petitions against the rate increase. Mrs. Penny Talbot of Northolt brought me a petition signed by 1,000 people. It says:We the undersigned bitterly reject Ealing council's planned 80 per cent. rate increase and their wasteful expenditure behind it, compared with a reduction of 4 per cent. by the previous council. We demand no further rate increases for ten years. We particularly reject the wasteful expenditure on homosexuals, lesbians and other such wrongful expenditure.There has been a great deal of such expenditure.
The rates of Lyons, which employs 2,500 people in my constituency, will go up by over £600,000 a year. That means that porridge, tea, coffee, ice cream and other basic necessities of life will cost much more or people will be made redundant or there will be a combination of the two effects. The CDS laundry tells me that its rates will rise by £8,000 in a full year, which will hit mums, dads and single parents in their laundry operations. Carhill Roller Shutter Services wants to move from its present 3,900 sq ft of premises to a new place of 5,600 sq ft, but the rate 669 rise is likely to rule out such a move. As a result, six people who would have been employed by the firm will not now get jobs.
The situation is serious and we look to my hon. Friend the Minister for Local Government for the succour of rate capping.
§ The Minister for Local Government (Dr. Rhodes Boyson)
I have listened carefully to the excellent speeches of my hon. Friends the Members for Ealing, Acton (Sir G. Young) and for Ealing, North (Mr. Greenway). There is no doubt about how strongly the people of Ealing and their representatives feel about this matter.
I am grateful to my hon. Friends for raising the subject. I trust that we can influence public opinion, even if we cannot do anything about rate capping this year. I shall refer later to rate capping.
Ealing is just one of a number of London boroughs that have recently fallen under the control of the hard Left. Once a haven of sensible Tory administration, it has now been infected by the Brent disease spreading across the Great West road and Whitton avenue. Hilary Benn and his cohorts are, by their antics, giving new life and meaning to the noble traditions of Ealing comedy. Life in Ealing, once the heartland of fine old English comedy, has reverted to tragic farce.
The situation is doubly horrifying because Ealing has a long history of responsible, moderate and Conservative administration. It has spent within 2.5 per cent. of its grant-related expenditure assessment in every year since the block grant system was introduced and in every year expenditure growth has been consistently below the rate of inflation. During that period, when there were targets and penalties for overshooting them, the council budgeted prudently and safeguarded its ratepayers from the loss of grant penalties. That is not to suggest that service levels have been low; on the contrary, Ealing has the sixth highest grant-related expenditure per head of outer London boroughs.
Rates have been held closely in check, with rate poundages last year among the lowest in outer London. That increased the shock that Ealing ratepayers faced this year. The rate increase in 1985–86 was only 0.1 per cent. Now, as Ealing ratepayers dig deep into their pockets to find the extra 72 per cent. that the council is asking for, they will come to look on the time of the previous Conservative administration as a veritable golden age.
This year the Government have given authorities an extremely reasonable RSG settlement. Indeed, throughout the country there has been an increase in RSG of £1.2 billion, which represents an average of 9 per cent. so nobody can say that the Government have not done their share to help hold down local rates. The majority of boroughs have taken the opportunity to budget sensibly and levy modest rates increases. So far, the average increase in the country as a whole is about 6 per cent. In outer London Conservative boroughs the restrictions on expenditure have been such that the average rate increase is only 5 per cent. What a difference from the Ealing scene!
As my hon. Friend the Member for Ealing, Acton has said, the council is blaming the Government for the increase. It is arguing that grant reductions have forced the increase on the council. It would have been interesting to note what the rate levy would have been had the Conservatives been elected last year — no doubt the 670 wisdom of the electorate will increase as a result of this year's events. It is complete nonsense to say that Government grant cuts have caused the rate increase.
This year had the council increased spending in line with inflation—as the previous Conservative administration constantly achieved or bettered — the block grant entitlement would have been £73.2 million and the rate increase 3.6 per cent. On top of that, ratepayers would have had to find about 2.4 per cent. for teachers' pay, but, even so, the rate increase would have been only 6 per cent. I should add, as my hon. Friends know, that the council is also receiving extra balances from the London residuary body, and grant that it did not budget for this time last year — in total about £4.4 million. Had the council sought to use this extra for the benefit of ratepayers, the rates could have been lower still. In fact, overall, Ealing's local rate need not have risen at all if the extra balances had been used in such a way.
Instead, ratepayers in Ealing are having to face a massive increase. My hon. Friends have said that that increase is driving business out and bankrupting people of all ages. I listened with great care to the effect that the increase is having upon old-age pensioners within the borough.
§ Mr. Greenway
I apologise. I was not seeking to intervene, but was passing some papers to my hon. Friend the Member for Ealing, Acton (Sir G. Young).
§ Dr. Boyson
I thought that my hon. Friend was so excited that he sought to intervene. I thought that the spirit of intensity had moved him.
I am grateful to my hon. Friend the Member for Ealing, Acton for giving us full details of Ealing's final budget and rate for 1987–88 so that we can compare it with previous years. Neither I nor my officials had, until now, succeeded in obtaining this information since Ealing town hall appears to be out on strike and is incommunicado at this time. One cannot phone, write, or make personal approaches.
Personnel management does not appear to be one of the strong points of Ealing's Left-wing council as, apparently, there is no contact with that council. To the Leftists presumably, these are just teething problems before their view of Utopia is achieved.
I had feared that the grave problems relating to management efficiency, recently highlighted by the Audit Commission in certain Labour-controlled London councils, might spread to other authorities. However, I never dreamed that it could spread as quickly as it has to Ealing. It is a great sorrow to me that this year the Government have no power to protect ratepayers from such swingeing increases—except where an authority is rate-capped.
My hon. Friend the Member for Ealing, Acton, who served as a distinguished Minister in the Department which I now have the honour to serve, knows the basis of rate capping. As hon. Members will be aware, selection for rate capping is on the basis of budgeted spending in the previous year in relation to GR E, not on the basis of rate increases in the year itself. Rate capping for 1987–88 is based on expenditure in 1986–87. This year we have 671 selected 20 high-spending authorities for rate limitation. All of them were budgeting to spend at least 12.5 per cent. above their GRE—the Government's objective assessment of what an authority needs to spend to maintain a standard level of service—and all have increased their spending significantly in recent years.
Ealing was not selected because its spending was very close to the GRE—in fact, slightly below it in 1986–87—nor had it shown any significant increase in previous years. Needless to say, it was at that time under a Tory administration. I should add that where an authority budgets below GRE, as Ealing did in 1986–87, the Rates Act 1984 specifically provides that it cannot be selected for rate limitation. That is to acknowledge that in such circumstances the authority is clearly run economically with the interests of its ratepayers in mind.
Four London councils fell to Labour control in the 1986 municipal elections — three from Conservative control and one from hung Conservative control. Those boroughs were Waltham Forest, Hammersmith and Fulham, Brent and, of course, Ealing. One could consider them the unfortunate boroughs in last year's election. Their ratepayers certainly feel that they were. For 1986–87, ratepayers in those boroughs were protected by the modest rate set by the previous administration. Unfortunately, no such protection is available in 1987–88. Apart from Ealing's local rate increase of 71.8 per cent., increases of 67 per cent. and of a staggering 127 per cent. have been announced by Waltham Forest and Hammersmith and Fulham respectively. Only in Brent, thanks to rate capping, is a modest increase proposed—7 per cent.—a testimony to the value of rate capping if ever there was one. Any hon. Member who doubts the use of rate capping need only look at those three boroughs to see the necessity for it.
Even in these three boroughs, however, some protection is afforded this year by the capping of the precepts levied by the Inner London education authority and the London fire and civil defence authority. This reduces the increases in actual rate bills in the high-spending Labour authorities. In Hammersmith and Fulham the increase at ratepayer level comes down from 127 per cent. to 50 per cent.; in Waltham Forest from 67 per cent. to 62 per cent; and in Ealing from 72 per cent. to 65 per cent. If it were not for the rate capping of the precepts levied by the ILEA and the London fire and civil defence authority, the ratepayers would face larger increases.
If the 1987–88 selection criteria had been applied to Ealing's latest budget, it might have been a different story. It appears that the council is budgeting to spend £179 million, as against last year's budget of £144.6 million—a phenomenal increase. It would have meant Ealing would easily have met the growth criteria for selection. If £179 million is the correct figure, the council is proposing to 672 spend 18 per cent. above GRE, and would also have met the other GRE criterion for selection—GRE plus 12.5 per cent.
As regards the case for rate capping Ealing in 1988–89, I can only say that my right hon. Friend the Secretary of State for the Environment has not yet decided what criteria should apply for selective rate limitation in 1988–89. Before deciding on the appropriate criteria for excessive spending, he will, of course, need to have regard to all relevant considerations. It is intended that he will make an announcement on selection in July in the usual way for next year, in the same way as there was an announcement in July last year for the rate-capped boroughs which were selected for rate capping in 1987–88.
I feel strongly on the matter, both as a Minister and as a Member of Parliament, as my constituency is adjacent to that of Ealing, North. Brent, as well as Ealing, has a hard Left authority. I should like to mention Brent, and I cannot let this opportunity pass without commenting on a leaflet about the police now circulating in the borough, which came to light this week. I believe that it is also circulating in Ealing. It was distributed by the Brent hard Left Labour council throughout the borough. The chief superintendent of police in Brent issued a statement against it this week.
The leaflet is entitled "How to make a complaint against the police and take them to court". It is an outrageous and completely irresponsible document. In an area in which the police are working hard to build better relations with people of all races and creeds, the leaflet is designed to create an atmosphere of distrust and fear among all the people. The tone of the leaflet is clearly demonstrated by a cartoon on its opening page. It shows the boot of a policeman crushing the head of an individual stretched on the ground. Another cartoon and the text of the leaflet seek to undermine confidence in the independent police complaints procedure. I hope that the House will join me in condemning that leaflet, which can do nothing but harm. I am sure that there is unanimity on that on the Floor of the House this afternoon.
When in control, the hard Left spends money as if there is no tomorrow, and, by attacking the police, it hopes to undermine law and order in society. Those people are the wreckers of the late 1980s. Ealing, Brent, Waltham Forest and Hammersmith and Fulham show the whole country what Britain would be like if Labour won the next general election. We did not volunteer to suffer, but at least the warning is going round the rest of the country. The lesson is being learnt every day by more people as to what happens when the hard Left takes control, as it has in Brent, Ealing and the other boroughs. We see the misery of the ratepayers. That misery cannot be revenged but it can be ended nationally by our victory at the general election—
§ The Question having been proposed after half-past Two o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
§ Adjourned at two minutes past Three o'clock.