HC Deb 04 April 1974 vol 871 cc1444-53
The Prime Minister (Mr. Harold Wilson)

With permission, I should like to make a statement about Clay Cross.

The situation there and elsewhere has arisen from the entirely unprecedented situation created over the past two years by the fact that the measures in the Housing Finance Acts were forced upon local government with unreasonable speed—indeed, under the guillotine—and with considerable lack of understanding.

The House will be aware that this matter has greatly exercised those concerned with democracy in local government, particularly the national conference and the National Executive Committee of the Labour Party. Because of our deep concern with the problem forced upon local authorities by the former Government's policies, decisions were taken by the Labour Party conference when we were in opposition about the question of the penalties involved for certain local councillors—financial liabilities and also penalties in terms of civic disqualification.

It was the view of the National Executive Committee and of the Labour Party conference that efforts should be made to secure a reimbursement to the councillors concerned, in the case of Clay Cross only, for the financial liabilities that they have suffered. At no time was any commitment given that this would involve a charge upon public funds, and we do not propose to do so. Indeed, this proviso was made clear when we were in opposition.

It will be a matter for those associated with the decisions taken at the relevant conferences to consider how funds, not involving a charge on the Revenue, can be raised for this purpose—[Interruption.] I am surprised that hon. Members who were responsible for this whole tragic situation should be laughing.

We are committed to removing the civic disqualification which the Conservative Housing Finance Acts have involved. On this question, we have to consider Clay Cross in a wider context, because Clay Cross and one or two other councils decided on the policy of total non-implementation. A number of other local authorities who finally implemented did so only after a considerable delay. Their accounts are, I understand, now being examined by the district auditors in the course of their annual audits and the result of this examination may lead, although possibly on a limited scale, to further problems in different parts of the country, which might involve the question of disqualification. Only when we see the full extent and magnitude of the problem will it be possible for us to make our recommendations to the House and this we shall do.

I must repeat this: my right hon. Friends and I have always made it clear that the law of the land, however unfair, however divisive, must be obeyed until it is repealed. My right hon. Friend who is now Lord President made this absolutely clear at the Labour Party conference—[Interruption.] If hon. Members cannot accept that, it must be because they cannot read. If any hon. Member who is barracking will write to me, I will send him the text and ask him for an apology.

Mr. Skinner

They cannot read either.

The Prime Minister

As I was saying, my right hon. Friend said: …the NEC could not possibly advise councillors to act unlawfully. We cannot… He went on to spell out the reasons why that could not be accepted.

The matter was taken further by my right hon. Friend who is now the Foreign and Commonwealth Secretary when, as Chairman of the party, he opened the Labour Party Local Government Conference at Birmingham in January—a speech which also I heard. He said then: The Labour Party has always taken the view, and I still hold it, that the way to get a bad law changed is to change the Government. That is what has happened.

The Government believe that the divisive effect on local democracy caused by the Housing Finance Acts should be resolved with fairness to all concerned, including fairness to those who reluctantly implemented the Act, and in a spirit which will diminish for the future the bitterness engendered by legislation whose repeal we shall shortly recommend to the House.

Mr. Heath

I thank the Prime Minister for coming to the House to make this statement. We recognise the dilemma of the Government and of the Prime Min- ister in view of the undertaking they gave to their party conference and the basis on which they fought the General Election. Perhaps the right hon. Gentleman's statement would have come rather better from him if he had not tried to dress it up as he has done but had said frankly that the Government faced a dilemma and what they proposed to do about it.

I cannot accept, of course, the opening part of the statement, that the legislation was forced upon local government with unreasonable speed. I say that for the simple reason that the great mass of local government authorities, whether they agreed with the legislation or not, accepted it and were able to implement it—[An HON. MEMBER: "They had no alternative."] If they had no alternative, there would seem to be no reason for the Clay Cross affair to have arisen at all.

What the Government are now saying, I understand, is that they will carry out their undertaking that the fines should not he paid from public funds. At the same time, I hope that the Prime Minister will now agree that it is undesirable for a party, at its conference or elsewhere, to say that if local authorities defy the law the councillors will then have their fines paid for them by means arranged by that party or by the members of that party.

Second, as I understand it, the Government now wish to see what they say is a review of the effects on other local authorities. There were of course very few. At the Labour Party conference—I have read the speeches carefully—the present Leader of the House said that in fact Clay Cross was a special case. As I understand it, the Prime Minister is now saying that Clay Cross is not a special case but that it will be dealt with in accordance with the views on the proceedings in respect of other authorities.

I hope that the Prime Minister will accept what we understand to be the advice of his Law Officers and recognise that it would be scandalous to pass any Act which, by retrospective legislation, would remove these disabilities on councillors which arise from what the Master of the Rolls described as a "determined, wilful disobedience of the law"—[An HON. MEMBER: "Scandalous."] I agree. Would it not be scandalous for the Government to try to pass legislation which would remove those disabilities?

The Prime Minister

I am sorry that the right hon. Gentleman did not like the wording of my statement. It is difficult to please everyone in the House, at least on this subject. I thought that when he referred to local authorities who were opposed to the Act, who objected to it, but who nevertheless carried it through, as having been forced to do so by the Government, he was making our point. They were forced they were opposed to it but they felt that they had to do it because of the law that the right hon. Gentleman introduced.

In his little sermonette about the resolutions which party conferences should pass, I recognised his difficulty in not understanding the workings of a democratic party conference. But he will understand that this is indeed what happened, and in my statement I have made no bones about what happened. When my right hon. Friend the present Leader of the House—I am now referring to the right hon Gentleman's quotation from him—referred to Clay Cross as a special case—the right hon. Gentleman then said that I was not regarding it as such—he was saying that specifically in the context of whatever financial assistance could be given. That was in the financial context.

In relation to the re-enfranchisement of those who have lost their civic rights, I have said that we shall act in this matter. It is right that before we put a proposal before the House we should see the extent of the problem, how many people are involved and what is the best way to handle it.

Mr. Thorpe

Is the right hon. Gentleman aware that we accept his confirmation that the Government intend to uphold the rule of law? Does he agree that if ambiguous statements had not been made in the past his statement of today would have been unnecessary?

The Prime Minister

Sir, I do not agree that the statements were ambiguous, but I agree that a difficult situation arose. The right hon. Gentleman may have learnt, or he may learn as he attends future conferences of his own party, that difficult situations arise when the party's constitution allows conference to take decisions of that kind. I do not agree that misleading statements have been made. The Leader of the Opposition referred to advice from the Law Officers. My right hon. Friend the Leader of the House—who has been most unfairly treated by the House on this matter—made that statement as the result of a meeting between the present Lord Chancellor—the then shadow Attorney-General—and myself, and we all agreed on the form of wording.

Mr. Speaker

Mr. Skinner?

Mr. Swain

On a point of order, Mr. Speaker. These are my constituents. My hon. Friend the Member for Bolsover (Mr. Skinner) and I are the best and dearest of friends, but Clay Cross—

Mr. Speaker

Order. That is not a matter for the Chair.

Mr. Swain

Further to that point of order. Are you aware, Mr. Speaker, that Clay Cross is in the constituency of Derbyshire, North-East? Many of the ignorant community on the Opposition side of the House may not be aware of this, but I hope and trust that you are. Is it not customary that, after a statement, the Member representing the constituency to which the statement refers is the first to be given an opportunity to ask a question?

Mr. Speaker

It certainly is my intention to call the hon. Member for Derbyshire, North-East (Mr. Swain) to ask a question. Mr. Skinner.

Mr. Skinner

I am sure that my hon. Friend the Member for Derbyshire, North-East (Mr. Swain) will be asking a pertinent question. Is my right hon. Friend fully aware of the circumstances in which this case arose, inasmuch as there were several courses of action that could have been taken under the Housing Finance Act, but the then Secretary of State for Employment decided on a punitive course of action, namely, to use the public auditor to impose a surcharge on the elected councillors, when other measures were taken by the Secretary of State for Wales, and in other cases?

In view of the punitive action that was taken, will my right hon. Friend look again at this matter? Will he also consider the case of Conisbrough and all the other authorities that at the beginning failed to implement the Housing Finance Act? Bearing in mind those considerations, will my right hon. Friend come to an understanding that if the National Executive Committee passes on a message to the Cabinet—which includes seven National Executive Committee members—one body should act in accord with the other?

The Prime Minister

Yes, I am certainly aware of the circumstances which arose and of the many difficulties that were created by the legislation. I am aware of them because I have studied them and met delegations from the area. I have also met my hon. Friend's brother, who played a leading part in these matters. As my hon. Friend says, mistakes were made by the Government quite apart from the basic responsibilities of the Act. In the previous Parliament, my right hon. Friend now the Secretary of State for the Environment, once the House had passed the Act and the Government had set up the Housing Commissioner, criticised the Government for not sending the Housing Commissioner in earlier. If they had done so many of these difficulties might not have arisen.

Mr. Teddy Taylor

In view of what the Prime Minister said about public funds, will he say what will be the position of Clydebank ratepayers who have been asked to pay through their rates public funds amounting to thousands of pounds for a fine imposed on the local authority because of its failure to implement the Act?

The Prime Minister

My statement refers to Clay Cross but, as I said in my concluding remarks, we need to know more about the position of other areas where there was either non-implementation or slow implementation before we can lay further proposals before the House.

Mr. Speaker

Mr. Swain.

Mr. Swain

I thank my hon. Friend the Member for Bolsover (Mr. Skinner) for asking my question. Is my right hon. Friend aware that Clay Cross is a special case for one reason, which is that the ex-members of the local authority are the only people in the country who are suffering the penalties of surcharge and disqualification? [An HON. MEMBER: "Why?"] I am asking the Prime Minister a question, not a bloody fool like you.

Mr. Speaker

Order. Will the hon. Member reflect upon that remark?

Mr. Swain

I apologise to all the fools in the country for bringing them down to the level of the hon. Gentleman.

Clay Cross is a special case for the reason I have stated. There are 54 other local authorities which may in the near future suffer the penalties of surcharge and disqualification. It is possible within the next fortnight that my friends at Clay Cross will be not only disqualified but taken to court on account of the surcharge. Will my right hon. Friend give an assurance that the fund will be set up immediately, and that my right hon. Friend the Secretary of State for the Environment will make a statement about when a start will he made on legislation to amend the Local Government Act 1933 and to remove all the penalties in accordance with the Labour Party conference composite resolution No. 191?

The Prime Minister

I have said, quoting my right hon. Friend the Lord President of the Council, that Clay Cross is a special case in the context in which my right hon. Friend referred to it. It is for that reason that the National Executive Committee of the party—of course there is no ministerial responsibility for it here—agreed to treat it as a special case in the financial sense.

As I said, we intend to act in the matter of disqualification, but we want to see the extent of the problem. My hon. Friend referred to other councillors who may be affected. My right hon. Friend the Secretary of State for the Environment will keep a close watch on this situation and in other parts of the country, although I cannot give an undertaking about legislation amending the 1933 Act, or the timing of it.

Mr. Rippon

Why does the Prime Minister say that the law of the land should be respected and yet give an undertaking to remove retrospectively the penalties for breaking it?

So far as the conduct of the then Secretary of State for the Environment is concerned, will the right hon. Gentleman beat in mind the judgment of Lord Denning in the Court of Appeal in the action against the Secretary of State for the Environment, when the Court of Appeal said that the proper procedures had been followed and that the councillors concerned had gravely embarrassed the conduct of good government, were not fit to hold office and ought to be removed?

The Prime Minister

Yes, Sir, I am aware of the judgment. It is the duty of the courts to carry out the law as it stands—even the bad law—which the right hon. and learned Member for Hex-ham (Mr. Rippon) kept on commending to the House when he was most recently in office. I think that the right lion. Gentleman is a lawyer, but I cannot quite understand his argument, when he mentioned my reference to removing the civic disqualification by saying that this is to be done retrospectively. I am not clear how one removes retrospectively penalties of that kind. Financially it is possible to understand the situation If disqualification is removed, it will be removed from now on, not retrospectively.

Mr. Heath

I must press the Prime Minister on this matter. In my opening question I acknowledged the dilemma facing the Government. We all know about party conferences. The problem which the Prime Minister faces is due to the fact that the Lord President of the Council accepted the resolution passed by the Labour Party conference. Therefore, he is now in a position of responsibility in respect of that resolution.

The Prime Minister reaffirmed in his statement that the Government should maintain the rule of law, yet at the same time he apparently proposes to put legislation before the House to remove penalties imposed on the Clay Cross councillors because they had broken the rule of law. I must ask the right hon. Gentleman not to try to have it both ways. May I remind the Prime Minister of what the Master of the Rolls said? He said: Each of these councillors had deliberately broken the solemn promise he had given when accepting office. Each had flagrantly defied the law. Each was determined still to continue to defy it. The Master of the Rolls went on: The time had come when the councillors must be told quite firmly that the law had to be obeyed. Their disobedience could not be tolerated.… Any attempt by the Government to get through the House legislation to remove the penalties which were imposed, on a matter which went to the Court of Appeal and on which the Master of the Rolls adjudicated, would be abhorrent in a democracy.

The Prime Minister

The right hon. Gentleman referred to my right hon. Friend the Lord President of the Council. I want to make it clear that the Lord President is no more responsible and no less responsible in this matter than I or my other right hon. Friends. I cannot accept the situation that when the Conservative Government were responsible for this whole business, those same Conservatives should now seek to pin the responsibility on my right hon. Friend the Lord President. We accept collective responsibility in this matter. The right hon. Gentleman the Leader of the Opposition quoted what was said in the Court of Appeal. I repeat that the Court of Appeal were construing the law which the right hon. Gentleman and his Government had enacted. He seems to be totally incapable of understanding the situation when he speaks as he does—and that was the hallmark of the Conservative Government which produced this Act of Parliament.

Several Hon. Members

rose—

Mr. Speaker

Order. This matter cannot be further debated now. Business Questions.

Mr. Crouch

On a point of order, Mr. Speaker. May I suggest to you, Sir, that, quite apart from the rule of law, there is here a question of the authority of Parliament. I have done some research into what is said on this subject in Erskine May and, having read that publication, I believe that what we have heard this afternoon appears to constitute some form of indignity to this House. I quote from page 143 of Erskine May: Other acts besides words spoken or writings published reflecting upon either House or its proceedings which, though they do not tend directly to obstruct or impede either House in the performance of its functions, yet have a tendency to produce this result indirectly by bringing such House into odium, contempt or ridicule or by lowering its authority may constitute contempts. I suggest that what we have heard this afternoon has brought the House into contempt by lowering its authority.

Mr. Speaker

Is the hon. Gentleman raising this as a matter of privilege or contempt?

Mr. Swain

He does not know.

Mr. Crouch

I was asking you, Mr. Speaker, to consider that it was a matter of contempt.

Mr. Speaker

We have a rule laid down that if an hon. Gentleman raises a matter as a point of privilege or contempt it must be raised at a later stage in our proceedings, when I will consider it. But that time comes later. However, if the hon. Gentleman has finished, I will say here and now that I will consider what he has said and if necessary, rule on the point.