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ON THE RECORD
RECORDED FROM TRANSMISSION BBC-1 DATE: 1.5.94
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SHEENA MCDONALD: Good afternoon and welcome to On The
Record.
...but first, Thursday's local government
elections. A MORI poll in The Times yesterday showed the Tories in third place
behind Labour and the Liberal Democrats. But despite its big lead Labour is
taking no chances. It's running a mainly defensive campaign, apparently vying
with the Tories to claim the lowest level of council tax rather than boasting
of better services. Why so cautious? I'm joined now by the man with the
answer, Jack Straw, the Shadow Environment and Local Goverment Secretary from
our Oxford studio. Good afternoon Mr Straw.
JACK STRAW MP: Good afternoon.
MCDONALD: Now, you do seem to be trying to out
Tory the Tories here, whatever happened to old Socialist principles when it
comes to campaigning?
STRAW: Old Socialist principles are alive and
kicking but what we've done in this campaign, far from being defensive, is gone
into the areas which the Tories previously regarded as their own, taken them on
their own ground and beaten them. It happens to be a fact that the average
household in a Labour area does pay a council tax which is forty pounds less
than in Conservative areas. The Conservatives walk away with the prize when it
comes to inefficiency, waste and corruption, whether in Conservative controlled
Westminster City Council or in Conservative quangos and central government.
But we're also concentrating very hard
on the fact that we do provide better services. The flagship that we have, if
you like, is nursery education where a parent has three times the chance of a
nursery education if they were educated in a Labour area than if they're
educated in a Conservative area. I'll illustrate that just by one comparison
of two boroughs which are adjacent - Conservative Croydon and Labour Merton.
Both have the same average household council tax of four eighty three, it
happens for Sir Norman Fowler's benefit that Labour Croydon has a lower Band D
council tax by thirty pounds but in Labour Merton fifty seven per cent of the
children get a nursery education compared with under twenty per cent in
Conservative Croydon.
MCDONALD: Now of course there is some dispute
about the facts, Sir Norman Fowler is not here to respond to that particular
aspect of campaigning. I'd like to ask you more about what you see as an
improved way of providing local services and you've written, you've thought a
lot about this. In your own recipe for improved services and efficiency and
accountability is to extend local authorities own powers to raise revenue and
of course to spend. If you were Environment and Local Government Secretary you
would allow local authorities greater discretion would you not.
STRAW: Yes, the first thing we do is to adopt
the policy of John Major and John Gummer and Michael Portillo, the three of
them. The policy which they enunciated in a White Paper in 1988 where they
set out - John Major was Chief Secretary to the Treasury at the time - they set
out the case for not controlling that part of local authorities' revenue which
is raised.. local authorities' expenditure which is raised from local
authorities' own revenue. And they've pointed out that no other industrialised
country actually controls public expenditure as we did before that White Paper
and as we do now. So local authorities would be.. have a discretion as to how
much they raised from their local revenue but there'd be far greater local
accountability for that.
First of all, we would introduce annual
elections with a retiring third of councillors every year so that each year the
elections would, as it were, be a referendum on councils' own spending plans.
Secondly, we're consulting on whether to shift the date of the local authority
financial year to co-incide with the schools' academic year, so that where a
council did change control in the May then that change of control could be
reflected immediately in the spending plans of the authority come the new
financial year in late July.
MCDONALD: Now, just for clarification Mr Straw,
you're suggesting that local authorities should be able to raise as much as
they please. I mean there is no limit on this, at the moment it's twenty per
cent.
STRAW: At the moment the limit is set by
central government capping. And yet the moment you have complete control of
what local authorities spend, this is a policy which most cabinet ministers,
Conservative cabinet ministers have at one stage or other, themselves opposed.
Margaret Thatcher's own memoirs...
MCDONALD: But explain what you would do with..
STRAW: If we could just make this clear. No
other Western industrialised country controls local government in the way that
this one does. In 1988 John Major, in a White Paper, pooled a new public
expenditure planning total, himself set out the coherent case for not having
the capping of authorities. And our policy is a policy which he adopted in
1988 which we would then continue.
MCDONALD: So no capping, no capping in your
strategy.
STRAW: The control would be a new and much
better bargain between the locally elected councillors and their electorates.
We want much more transparent information about local authorities' performance
and efficiency and for that to be the key issue at local elections annually.
Now people complain about, for example, the level of democracy in London. We
have been pressing Conservative ministers for years to end this ludicrous
situation where Londoners can only vote for a new council once every four years
and go for annual elections with retiring councillors by thirds.
MCDONALD: So, you're monitoring an accountability
mechanism is Annual Elections. But, otherwise, Councils may raise as much as
they please and you will not cap - in your strategy?
STRAW: We would not cap - and, as I said, that
was John Major's policy. But, it's not a question of as they please. It's a
question of them raising what they and their local electors agree. That's the
essence of local democracy. But, one other thing we would do - very clearly -
and, that's being set out as well. We would clearly cash limit and control the
amount of Government grant that was given to Local Authorities each year. And,
if the authorities wished to raise spending levels above what we assume to be
reasonable that would be fine but they would not have that increase legitimated
in any subsequent year.
MCDONALD: What about borrowing? Can they borrow
as much as they please?
STRAW: Certainly not and, at the moment, at
least Local Authorities are only allowed to borrow to invest and that's why the
Conservatives claims about levels of Local Authorites borrowings have turned
out to be such a own goal. I don't know whether viewers realise but John
Major - just last year - borrowed forty-five thousand million pounds - mainly
to cover a Revenue deficit, which Local Authorities are banned by Law from
doing. That's twice the total level of borrowing by Labour-controlled councils
which they have built up over a period of sixty years.
We'd have very strict prudential
guidelines on borrowing by Local Authorities but we also going to look at
the shift to what's been called Resource Accounting, which is already taking
place in Government because it may give a better basis for borrowing by Local
Authorities than the current system.
MCDONALD: You see, I wonder if viewers won't see
this as a return to the tax and spend policies that they're familiar with, that
they still think characterise Labour's image too often. And, that, of course,
the modernisers in your Party are very keen to shed?
STRAW: There's no reason, on earth, why they
should see that because people now know that the Conservatives - first of all -
straight-forwardly lie about Labour's record. People know the facts of the
situation: which is that the average household pays forty pounds less if they
live in a Labour area than if they live in a Conservative area. And, no amount
of wriggling by Norman Fowler - either over the last three weeks or in your
programme - has enabled him to challenge the accuracy of my figures.
MCDONALD : But, leaving the campaigning out of it..
STRAW: Secondly - can I just say this?
MCDONALD: On your specific strategy it does sound
as if you're giving the kind of discretion to local authorities which voters
are not at all enthusiastic about because they see it coming on to their bills.
STRAW: No, far from it because the voters would
have a chance in May to vote either for higher spending on higher Council
taxes, or lower spending and lower Council taxes and that would be translated
into political decisions in the following June or July. It would be a far
better system of accountability than either you have at the moment, or that
went before - and I just make this point: that although capping has been very,
very disruptive of individual Local Authority's own spending plans, over time
it has not led to any overall reduction in the levels of spending by
Councils. And, that was underlined by an independent study by Tony Travers, a
Local Government expert, who's pointed out that what has happened with capping
is that in place of a situation before where Local Authority spending was,
really, round a normal distribution curve, some spending a lot, some spending
less.
It's all now being concentrated around
a norm which means that the average has not changed. And, what we want to do
is to end this system of inefficient and Draconian undemocratic central
government control which most Tories have been against, and, John Major
himself, and Michael Portillo were against it six years ago, and replace it by
a far more vibrant system of local accountability, where people can decide
whether they want what is on offer. But, also, if they don't like it, instead
of having to wait four years - which is what Londoners have to do at the
moment - they can change it year by year.
MCDONALD: But, of course, not all voters actually
pay Council Tax. So, that accountability mechanism is a, is a flexible one,
as far as..
STRAW: What?
MCDONALD: ..who decides what the Local Authorities
spend money on and how much.
STRAW: I don't, I don't think, I don't..
MCDONALD: But, would you specify how - what the
Local Authorities can spend money on, or again would you give complete
discretion in that area?
STRAW: No, of course not. It has to be by Law
and Local Authorites are constrained by Law, by specific powers as to what they
could spend their money on and that would remain. And, I don't think you're
suggesting - are you - that we go back to the Poll Tax, which is the only way
in which you could have a flat rate tax, everybody pays the same amount..
MCDONALD: What I'm suggesting is there is a
danger of a return to what your rivals call Loonie Leftism and all over
Lambeth.
STRAW: I think the danger these days is not of
Loonie Leftism, which, in any event, was only confined to a couple of Local
Authorities. The danger these days is of Loonie Rightism - the kind of deep
corruption that we've seen in Conservative controlled Westminster. And,
there's this other difference: that when there have been problems in Labour's
back yard, Labour leaderships have sorted them out.
What we've seen over Conservative
Westminster, instead of Norman Fowler and John Gummer and the others - and John
Major - standing up and saying: this is disgraceful. What has already emerged
as a fact in the District Auditors provisional report and what should have
emerged in the BBC Panorama - if the BBC had the guts to show it - what has
already emerged is disgraceful.
We're going to sortie this out. It is
outrageous that twenty-one and a half million pounds of Local Council
taxpayers' money to be spent on political gerrymandering (I quote from the
District Auditor). And, it's also preposterous for the grants system to be
rigged in Westminster's favour so much that of every hundred pounds' of
spending by Westminster, only four pounds comes from Council taxpayer.
Instead of all of that, they've sort to cover their tracks of their colleagues
in Westminster. That's one of the differences.
MCDONALD: Well, Jack Straw, we shall see what
happens on Thursday. But, thank you for joining us this afternoon.
...oooOooo...
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