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ON THE RECORD
HILARY ARMSTRONG INTERVIEW
RECORDED FROM TRANSMISSION BBC-1 DATE: 2.11.97
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SHEENA MACDONALD: And I'm joined now by the Local
Government Minister Hilary Armstrong. Hilary Armstrong, the message is very
clear from that film. While you were very vocal about the folly of
over-centralisation when Labour was in Opposition, there is now great suspicion
that in government you're beginning to cool off on the whole idea of giving
Local Government more power over the most essential thing, finance. Is that
the case?
HILARY ARMSTRONG: No. We've been very clear that... and
we've made a start. We can't do everything that was done in the last eighteen
years overnight, and indeed the last time a government tried to do things
overnight we ended up with the horrors of the Poll Tax, and with many many
people being turned off Local Government for a very long time. We lost two
million people from the register and they've still not come back in as
voters. So we do want to move, we have made a start, and people are very
clear about the way that we're moving. But we have to do that in a way that
takes people with us, and the real thing isn't decentralisation to Local
Government, it's decentralisation to local people, so that they feel they have
more influence and control over what happens, not only in Whitehall but in the
Town Hall.
MACDONALD: Well, let's audit where you've got so
far, and look at some of the hoped for changes. Now, getting rid of Council
Tax capping is a Local Government priority, looking at it from their
perspective these are people that will be meeting tomorrow. Now, you've got
tax and spending pledges which I guess could rule that out for the next two
years, so could you confirm that capping will end in nineteen-ninety-nine?
ARMSTRONG: We made pledges at the General Election
that Local Government were involved in developing, but also they are part of
delivering. One of those pledges was prudent fiscal activity, and we made it
very clear before the election that we would live within the Tory spending
plans for the first two years. Gordon Brown said in his budget in June that
capping wouldn't go this year, but what we're doing is we are working with
Local Government in a working party now to produce a consultation paper which
will come out later this year, I hope before Christmas, so that there can be
full discussion and debate about how we will remove capping, and that debate
will then lead into a White Paper later in the year and hopefully in the White
Paper we'll be able to signal very clearly how and when we'll remove capping.
MACDONALD: So capping will be removed within the
time of this first parliament?
ARMSTRONG: Oh, it certainly will move within this
first parliament, it's a Manifesto commitment that we will get rid of crude
universal capping, and it's my job to make sure we deliver Manifesto
commitments.
MACDONALD: Just a point there. Crude universal
capping. That doesn't mean you're going to get rid of capping entirely does
it?
ARMSTRONG: Well, what I said is, we will debate
with Local Government and with the wider world how and when we will change the
relationship, but nobody pretends that Central Government is simply going to
abdicate responsiblity. We too have a responsiblity and that is why it's a
partnership, that's why we talk about working in partnership with Local
Government.
MACDONALD: Well, what is that responsiblity. Is it
a responsibility to settle government's own pledges, in other words - I know
you said what councils spend is accounted for in Central Government spending
totals - which actually means that in effect Central Government has to limit
the increases of all councils does it not?
ARMSTRONG: Well, Central Government has an interest
and we believe that we can declare that interest in a sense in a very different
way. Crude capping at the moment is as councillors have said on the film,
something that limits what they are able to do in response to local people.
MACDONALD: So, we're talking about sophisticated
capping?
ARMSTRONG: Well....
MACDONALD: It's capping by another name really
isn't it?
ARMSTRONG: No, it's working to make sure that we
have a proper relationship where Central Government is able to maintain its
commitment to the people, that we are governing on their behalf. As we are
able to bring in our other reforms for Local Government so local people will
have much more of a say in what their local council spends, on what and how
much. And we need to bring all of those things in at the same time, so what we
can do next year will not be the same as what we can do in three or four years'
time.
MACDONALD: Well, that's clear then. Your
commitment to ending crude universal capping stands, but you're not going to
entirely give over responsiblity for finances to Local Government in this area.
There will still be reserved powers to, if you don't want to use the word cap,
to ....
ARMSTRONG: Well, there will certainly still be
reserve powers so that Central Government isn't abdicating its responsiblity to
the taxpayer.
MACDONALD: And will this just be for maverick
councils that set huge increases for whatever purposes, or will there be a
Goverment-set ceiling, a universal for all councils above which they may not go?
ARMSTRONG: The actual methodology, and that is
exactly what we're going to...
MACDONALD: ...is to be worked out. Okay, let's move
to another thing that we saw in that film there, which is the desire that Local
Government has to control local business rates. Now you know how enthusiastic
they are about this. You know how very unenthusiastic - and we got a flavour
of that in the film as well - business is. Labour is now the business-friendly
party, so once again you're not going to divolve complete power to local
councils to set local business rates are you?
ARMSTRONG: Well, we've already started to discuss,
both with Local Government and with business how we fulfill that determination
that locally more money is raised and accounted for locally, but we've also
given business the reassurance that local councils won't simply be able to, for
example, use the business rate and let council tax payers not have any
increases. So, in other words we have said very clearly that business people
will not have to compensate what councils are frightened of asking from council
tax payers, so there will be some mechanisms to control that change.
MACDONALD: Can you say clearly now, will Local
Councils have the freedom to set the level of business rates?
ARMSTRONG: I can't say that clearly because, again,
we are consulting on the methodology and we'll put another consultation paper
out on that. We want to be able to make sure it happens in some way. But if
Councils don't have the support of their local business, they're never gonna be
able to deliver for local people because local people need thriving,
interesting but, also, successful economic town centres or job opportunities.
So, the business community is a very important part of a local community and
the Council can't afford to be at loggerheads with their local businesses.
MACDONALD: So, the bottom line there is that the
Government is not going to give up control of business rates to Local Councils.
ARMSTRONG: We are going to change the way it's done
but we are going to hold in safeguards so that local businesses are reassured
that they won't bear the whole burden.
MACDONALD: But, once again, as with the whole issue
of Council Tax capping, you are reserving centralised powers that - that remove
power from Local Councils?
ARMSTRONG: Well, we may be giving more power to
local businesses and to local people. That really depends on the option that
we come out with. But, what we want to make sure is that everyone in a
locality experiences their local taxation as fair and experiences that they are
much more involved than they are at the moment.
MACDONALD: That's very interesting. I mean, you're
the Local Government Minister and here you're stressing that it may be business
and local people, rather than local councillors, elected representatives who
take responsibility for setting business rates.
There's an interesting shift of emphasis, isn't it?
ARMSTRONG: Well, we politicians have had to learn
that unless we are far more open to the people we seek to represent and we
actually identify with their fears and anxieties as well as hopes and
ambitions, we're going to get nowhere. The Labour Party's learned that in the
last eighteen years.
MACDONALD: But, if accountability is the name of
the game, surely it is elected representatives who represent the citizens and
the consumers.
ARMSTRONG: Yeah. And, that is exactly why we want
to tie in many more means of accountability in every local area, in every local
Council area, so that councillers know that they are working not to Central
Goverment's dictate but to local people's aims and ambitions. You see, it's
turning that round - that's what the revolution's about - it's actually turning
it around so that local people have got the power and the influence.
MACDONALD: But, I'm still hearing a mixed message
because, I mean, for instance, with the replacing compulsory competitive
tendering with a new system called best value, again, Central Government is
reserving the power to go in and say: hang on, you've got to bring in the
private sector in a way that a Local Council may not be doing. So, once again,
power remains with the centre.
ARMSTRONG: What we're saying is, it's up to local
authorities to decide what is best value for local people? But, local people
will also - they will have to know what the performance targets are and they'll
be able to judge those each year. But, the Council will be responsible. But,
what we're saying is: that if a Council is not responsible, if a Council
blatantly ignores what local people are saying then we - and they are not
delivering good value services upon which local people depend, then Government
does reserve the right to move in. We've already done that on education in
Hackney and that has got support from local people because they know the
education of their children is very important.
MACDONALD: Now, underpinning all this, is the fact
that it's actually citizens who are blatantly disregarding Local Councils and
one of the arguments - which is what we've been talking about - is that they
don't see that local authorities are sufficiently in control of financess to be
able to deliver, as Alun Walters said. Now, there's another aspect to this
which is the degree to which local councils are representative. Now, from a
citizen's perspective, they see PR being introduced at Scottish
Parliament/Welsh Assembly level - it'll be in place at the European Elections -
what's wrong with PR for Local Government? Wouldn't that make authorities more
representative and, therefore, wouldn't people be involved as voters or as
participants more?
ARMSTRONG: Well, there are lots of things that need
to happen in order to make local councils more representative and the first and
more important things is to increase the number of people votig and that does
mean that all of the other things that we're talking about, whether it's
finance, alternative forms of delivering service; whether it's democratic
accountabilty; all of those are important in exciting local people and giving
them the feeling that they can be more involved.
MACDONALD: Is PR up there as one of the options?
ARMSTRONG: PR isn't one of the options, at this
stage. We feel we've got an enormous agenda on the - on the table at the
moment that we've really got to pursue and we are pursuing.
MACDONALD: So, what will excite people to vote and
participate?
ARMSTRONG: Well, I know, that many people - most
people - do care about whether their local school is delivering for their
children, whether they can get the care they need for their elderly relatives;
whether they do have a modern transport system; that means that their town
isn't polluted. There are things that people are excited about and they want
to be involved in all sorts of different ways and when Councils really do get
involved - one of the applications that we have for a best value pilot, four
thousand people in that Borough had been involved. So, they are interested.
We've to to find the means of engaging with them and bringing them back into
real representative democracy.
MACDONALD: But isn't the fundamental means giving
people control over their finances via elected representatives who control
those finances-
ARMSTRONG: Yeah.
MACDONALD: -by having the freedom to do it? In all
the incidences we've been looking at - the reappraisment (phon) of CCT, the
local business rate and Council Tax, Central Government is still maintaining
powers to over-to supervise and overrule Local Government. Now, surely, the
only way you're going to get people involved is by giving power back to their
representatives?
ARMSTRONG: The real issue is how do we establish
trust again?' One of the problems is that local people have lost trust in both
Local and Central Government. I believe that since May the 1st we have begun
to re-establish the trust of British people in government. That's our job of
Local Government - a modern Local Government - it can establish these new
relationships of trust. That means that as we go down the road that we've
already started on of giving more responsibility back to Local Government in
finance, so that trust will be re-established and-.
MACDONALD: But you need to trust Local Government.
They must do what you want them to do?
ARMSTRONG: Well, Central Government will be able to
unwind those tapes as this trust is re-established. So we're beginning on a
road. I can't say where the end of that road is but I think we've made it very
clear that we do want to give local people much more power. We want modern
Local Government that will really respond to local communities in the next
century.
MACDONALD: But not complete control over their own
finances?
ARMSTRONG: Not at this stage, no.
MACDONALD: Hilary Armstrong-
ARMSTRONG: We'll get there eventually, but not yet.
MACDONALD: Hilary Armstrong, thank you very much
indeed.
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